marketing | The MarketFarm

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A new perspective on the media meltdown

I’ve spent a lot of time describing why advertising and traditional media are on a downward curve. To be sure, the curve has been exaggerated this year by the recession. But it was exaggerated by the last recession too and there’s no doubt that traditional sponsor-based media models are like the classic rollercoaster: in between the highs and lows, the ongoing trend is down.

In a recent blog post, marketing guru Seth Godin puts his own take on the trend. The issue in his mind is that there is a sudden attention surplus — too many people spending so much time looking for all kinds of information that marketers don’t know what to do about it. He calls these micromarkets and says the old media models couldn’t serve them; social media marketing does — though he doesn’t use that terminology

Godin and I come at this from different ends of the business, and in the end reach the same conclusions.

I’m coming at it from the perspective of the media business, where decisions are based on the requirements of the paying customer — the advertiser.

I’m not claiming the audience is ignored; I don’t believe that for a second. But the changes that we’re seeing in old-line businesses — magazines rushing to digital-only editions, newspapers trying to figure out how to charge for online content, etc. — are not at all driven by the opinions of audience. They’re driven by the spending desires of advertisers.

Godin’s perspective is consumer based: He’s observing what the audience wants — and notes the challenge for marketers who are on their way toward getting it.

His explanation strikes me as novel, true, and worth sharing: http://sethgodin.typepad.com/seths_blog/2009/08/the-massive-attention-surplus.html.

When you buy Zappos, what are you really buying?

In his blog, marketing guru Seth Godin asks the question, what is Amazon really buying when it spends a reported $847 million ($807 in stock and $40 million cash) to buy Zappos?

And then he answers it.

Amazon has plenty of shoes, plenty of technology and a world-class distribution capability, he writes. What it’s acquiring is:

A corporate culture that’s not the same (and where great people choose to work)
A tight relationship with customers that give you permission to talk with them
A business model that’s remarkable and worth talking about
A story that spreads
Leadership

I’d say he missed a key point: the brand. Zappos is the No. 1 brand among online shoe retailers.

Amazon has a great brand too, but not for shoes.

Amazon sells everything: shoes, music, software, consumer electronics, toys… But its brand — despite its strategy — is not that of an online department store. Amazon is a bookstore that has diversified. Its brand is all about books. That’s part of the reason the Kindle Reader has taken off so well; it’s not just a nice technology that people were ready to use; it’s a natural outgrowth of Amazon’s brand.

If Amazon introduced some innovation in shoes that was just as notable as the Kindle, I doubt it would have the same impact. But Zappos would have a chance. You expect Zappos to do stuff related to shoes; you expect Amazon to do stuff related to books.

Maybe the folks at Amazon realize that the many people who buy shoes online would rather buy them from Zappos than from a great online book store that happens to sell shoes. Perhaps they realize the most efficient way to become the leading online vendor of shoes is not to be like Zappos, but rather to be Zappos.

How Zappos became such a powerful brand is another issue. It took a lot of hard work, good planning, flawless execution and cash. But in recessionary times like these, when so many businesses don’t have the patience for branding and would rather spend their marketing resources solely on generating leads and sales, there’s a lesson in the power of a good brand. An $847 million lesson.

The latest ain’t the greatest in new publishing models

Printcasting.com has launched the latest in an all-out salvo to find a business model that works for media in the digital age.

It’s community-based publishing. Here’s how Printcasting describes it:

If, like us, you’ve always wanted your own publications but you didn’t have the time, technical expertise or talent — no problem! We’ve made it as easy and fast to start a magazine as it is to start a blog… We do this by separating apart the three primary roles that exist in any magazine or newspaper: the publisher, the content and the advertising. Instead of one person or organization needing to be responsible for all of that, anyone can participate in any one role.

More specifically, if you’re a writer, you can have your blog’s RSS feed picked up by Printcasting as available content. If you’re a publisher, you can choose any subject you like, pull content from people who have written about it, punch it into a template and you’re done.

You don’t have to sell any ads, according to Printcasting, because, “We’ve built an extremely simple self-serve advertising tool that makes it as easy for a small business to advertise its wares as it is to write an e-mail. Because Printcasts are niche, the ads are extremely affordable, starting at only $10 per ad.”

Printcasting is supported by a grant of more than $800,000 from The Knight Foundation, which puts a lot of money into media projects of all kinds, and which is especially interested in development of new media models. But that doesn’t mean it’s an idea that’s going to fly.

I’ve said to a lot of people, since the day I first tried to sell content online (1996), that if the Internet is going to prove one thing over time, it’s that people need editors. At the most basic level, that’s what Printcasting is all about. It’s about giving would-be editors the opportunity to practice their craft: identifying content around a theme, pick the best of it and packaging it for like-minded souls.

Here’s what’s wrong with it:

The content is just repackaged from stuff that’s already available if anyone is actually looking for it.
Being able to amass enough credible content to empower the would-be publisher of super-niche topics will be an obstacle.
Printcasting’s view of what publishing is all about is simply wrong. Stating that there are 3 roles to a magazine — content, publisher and advertising — is like saying the principal components of water are ice and a heat source. In Printcasting’s world, audience doesn’t matter; publishing becomes a vanity that is all about picking up someone else’s words, plunking it into someone else’s template, running a few ads (maybe) that someone else sold, and getting to put your name on top of the masthead. The website says it benefits publisher, writer and advertiser alike. But that’s only if a large number of players in all three groups play their roles exceptionally well.
And speaking of advertising, the message I’m getting here is that the problem with advertising is that it’s been too expensive and too hard to buy. So if you can knock down the price to almost nothing and make it self-service, businesses that have never advertised before will suddenly start. Nobody who has actually inhabited the world of advertisers — large or small — could actually believe this.
Especially if the products they have to choose from are a bunch of magazines that haven’t been through the painful and fundamental process of creating an audience and demonstrating its desire for a publication.
And finally, the ad rate is fixed, no matter how many or how few copies of a publication get printed. That’s a contradiction that can’t be overcome: Publishers need to develop an audience to prove the publication is wanted and read; but they have every incentive to print as few copies as possible, because they can’t recover printing expenses with an increased rate base.

There is some nuance here. Printcasting could add value — as The New York Times describes it — at the hyperlocal level where a more traditional publication could never offset its costs. The local softball league, for instance, could have its own publication.

But is this new? Or is this just a slicker package around the same newsletter that the softball league already publishes — with sponsor ads from local bars and the guy who won the trophy concession.

Maybe Printcasting.com will prove viable over time. But if it does, it won’t be as a serious media model or as a meangingful marketing outlet for advertisers. At best, it will be a success in the spirit of those websites that let you design your own greeting cards. It may serve a certain purpose for a certain number of people, and it is one more interesting idea of the Internet Bubble 2.0.

New study says consumers like ads. And it won’t change a thing.

Adweek Magazine and its parent company, Nielsen, have released a study that shows consumers believe in advertising, they accept advertising as a way of subsidizing other content and, in some cases, they actually like it.

They’ll use this to try to change the rush of money out of traditional advertising, and they won’t succeed.

In an article announcing results of the study, Adweek states that: “67 percent of respondents agree …. (including 14 percent agreeing “strongly”) that ‘Advertising funds low-cost and free content on the Internet, TV, newspapers and other media.’ Likewise, 81 percent agreed (22 percent strongly) that ‘Advertising and sponsorship are important to fund sporting events, art exhibitions and cultural events.’ ”

The only thing startling about this is that such a large percentage of people seem to understand the media business model.

Adweek also wrote: “Respondents also acknowledged that advertising is useful to them personally as they navigate the marketplace. For example, 67 percent agreed (14 percent strongly) that ‘By providing me with information, advertising allows me to make better consumer choices.’ Respondents even confessed to enjoying advertising, at least some of the time, with 66 percent agreeing (13 percent strongly) that ‘Advertising often gets my attention and is entertaining.'”

This means two things:

1) Adweek is doing its job; it is, after all, a magazine for the people who produce ads, plan campaigns and buy space for them. This study will be a tool used by readers to convince advertisers to shift money back from the new and social to more traditional ad campaigns.

That’s especially evidenced by this finding in the article: “And there was a lackluster rating for ‘ads served in search-engine results,’ with 4 percent trusting these completely and 37 percent somewhat. Ratings for old media were closely bunched, with TV getting a typical rating for these of 8 percent “trust completely” and 53 percent “trust somewhat.”

In other words, Google’s astoundingly ascendant paid search model — traditional media’s Great Satan — isn’t as effective as many believe. At least, that’s the kernal that media reps are likely to grab onto and use.

Which raises the second meaning of the information:

2) There are lots of highly respected voices in media and advertising who still don’t get it. The epochal media meltdown we’re experiencing has nothing to do with the opinions of consumers.

Advertisers aren’t pulling campaigns because they don’t work; they’re pulling campaigns because they can now do what they’ve always wanted to do: reach consumers directly without an intermediary media.

Back in another era — the Internet bubble of the late 1990s — this was called disintermediation.

Disintermediation is why people book flights directly with airlines rather than through travel agents; it’s why Progressive and Geico have a higher profile than the independent insurance agents who used to do most of the selling in their industry; it’s why people will visit a magazine advertiser’s website instead of filling out a reader-response card in the back of a magazine.

Disintermediation is a simple process of applying new technology to eliminate an old and costly middleman. Heck, media is the root of the word; is it really a surprise that media is now a target?

So it doesn’t matter if old advertising works; it ads a layer that is no longer necessary. Just as there are still travel agents and insurance agents, there will still be media — as we recognize it today — far into the future. But it will be smaller than it used to be, and it will find its success by serving niches.

You can download the full Nielsen study here: http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/07/trustinadvertising0709.pdf

Selling what your customers want v. what they need

Content marketing guy Newt Barrett turns around conventional wisdom, suggesting that instead of working to develop a unique selling proposition, you develop a Unique Buying Proposition. This is more than a semantic turn. The UBP forces you to think like your customers. It changes the question from “Why should they buy from me?” to “Why do they WANT to buy from me?”

You can read Newt’s complete case here.

Would you do a better job buying this...

In the meantime, I’ll add this thought on selling: People will spend more to buy something they want than something they need. The corollary is that they’ll do whatever they can to avoid buying what they need, whereas they enjoy buying things they want.

So even if you’re offering business-to-business products or services, there is a benefit to communicating in a way that helps people WANT to buy what you’re selling.

... or this?

If they feel the product has value-added benefits, some kind of cache, or is exciting and transformative, they’ll buy more readily (and tend to be more pleased) than if they buy something because it has the lowest price or simply fills an urgent need.

That’s the beauty of Newt’s concept of the UBP: It helps your prospects to see your product as something they WANT to buy.

Most small biz doesn’t qualify leads or track marketing ROI. Surprised?

In B2BOnline, Christopher Hosford reports on a study by the Sales Lead Management Association that indicates “nearly 63% of small-business marketers say they can’t track the return on investment of their marketing programs.” And 56% say they don’t qualify their leads before sending them to sales. SLMA observed the prevailing attitude among marketers that sales should qualify their own leads.

The survey was conducted online, B2B writes, and of the 140 respondents, all had fewer than 250 employees and three-quarters had fewer than 25. The conclusion of the study: these companies are allowing sales and marketing to operate independently of each other without aligning their objectives.

I’ve observed it myself at one industrial business after another over the past decade, when interviewing marketing teams as part of the media sales process. The vast majority will say that leads remain their primary metric for measuring the effectiveness of their work.

And yet, they will also admit to doing nothing with the leads because:

They aren’t very good;
Their distributors don’t follow up on them anyway;
There is no mechanism in place to qualify leads for sales.

What a cynical way to do a job: on one day demand that your media partners provide more leads to improve your ROI, and on the next day hide that “ROI” into the bottom drawer, pulling it out only when your boss comes around and asks, “What exactly do you do around here?”

It was just such a prospect who once told me, “I don’t think our marketing efforts are half bad.” Now armed with an actual benchmark, I could now reply to him, “Actually, they’re 63% bad.”

On the art of ‘followership’

In his dependably brief and insightful blog, marketing guru Seth Godin writes about this video of a spontaneously developing community at a dance festival: “My favorite part happens just before the first minute mark. That’s when guy #3 joins the group. Before him, it was just a crazy dancing guy and then maybe one other crazy guy. But it’s guy #3 who made it a movement. Initiators are rare indeed, but it’s scary to be the leader. Guy #3 is rare too, but it’s a lot less scary and just as important. Guy #49 is irrelevant. No bravery points for being part of the mob.
“We need more guy #3s.”

There are lots of lessons you can take away from this. The one it most illustrates for me has to do with starting a business or launching a new product. More than once I’ve found myself dealing with a leading-edge product that I thought was brilliant. Too often, the response from the target market was, “Interesting. We’ll wait and see.”

The first copycat to come out with a similar product validates it, and makes it easier to sell. The next competitor helps flip the switch among customers from “wait and see” to “hurry up and buy.”

One’s an innovator; two’s competition; three’s a movement.

American Pie send-up on media

Anyone living through the media meltdown will enjoy this clever 9-minute rewrite of the old Don McLean anthem.