Marketing

Imagine you develop a product, and within a couple years 75% of all the hotels in the world endorse it.  In fact, they not only endorse it, they put attachments for it in all their rooms and market those attachments as a selling point.  My very unscientific survey of four and five star hotels indicates that most of them now equip the rooms with a clock radio, stereo dock, or iPod compatible charging systems.  What a huge testament to the power of that product and its popularity and iconic status!  It also speaks to the hotel’s belief about the long-term viability of the brand.  Spending $50 to as much as $300 for Bose Sound docks per room is a huge financial committment for a hotel chain that would not be taken lightly.

More input from the recent New York advertising conference (see last blog entry for Part One)…

The most interesting panel I observed at the BMO Thought Leaders Conference was titled “The Agency of the Future”.  CEO’s from large agencies around the country – many of them divisions of the big public agencies – layed out their vision of how advertising agencies will begin to look in the very near future.  A few bullet points from the discussion:

• Accountability in advertising will continue to be the mantra.
• To this end, there will be an increased push towards “media-led creative”, allowing actual response rates to dictate creative approach as opposed to the much more difficult to measure “brand hunch”.  (Actually, they didn’t say “brand hunch”, it is a cute term I just made up, but you get the idea.)
• This will neccessitate a change in the typical creative structure, that now usually includes a creative and art director and perhaps a writer, to include an analyst that will interpret advertising results to be implemented into creative.
• Tracking technologies will increase (see next point).

After this discussion, the next panel was called “The Race for The Digital Media Hub”, which in many ways was an extension to the “agency of the future” discussion.  Participants in this panel, many from digital agencies, discussed how the agency of the future will have a centralized tracking system that will be used to optimize all media channels.  As part of this process, and as mentioned in the earlier panel, this would involve greater interaction between creative and media, and really a fundamental shift in how agencies manage business.  The interactive-based crowd embraced this idea, but I suspect getting brand agencies to warmly greet the concept would be a little more difficult. The panelists also all agreed that performance-based media buying will become much more common, and is already common in almost every digital agency.

All this was facinating, but also a bit surreal, as the panel members seemed unaware that the agency structure and the “agency of the future” as they described already exists.  They are called Direct Response Agencies, and the good ones are media-centered and have sophisticated tracking systems to manage advertising based on performance.  Essentially everything the panelists thought would happen sometime in the future already happens right now, they just don’t seem to know it.

I felt like I worked for Toyota and was attending a conference called “the car of the future” in which participants described the “magical hybrid auto that someday will run on gas and electricity” while being totally oblivious to something called a Prius.

Ah, but I guess I should not take it personally.  Direct response agencies seldom gets the respect they deserve, but I have a feeling that is all turning around.  It feels good to be an “agency of the future” as opposed to one clinging to the past.

I’m going to digress from my usual whining about cell phones, politicians, banks, airlines, and assorted Weasels, and pass along some interesting information aimed at my friends in the advertising business.  If you have no interest in advertising, I suggest you peruse some back issues of the blog.  “How to Hire A Butler” is quite popular. If you are interested in advertising, read on….

Last week I was on a panel in New York at the BMO Capital Markets Thought Leaders conference on advertising.  There were many advertising big wigs much smarter than me pontificating on the future of the industry, and I thought I would pass along some of the more interesting thinking I heard.  First a few compelling statistics that came out:

• General Advertising is in the biggest decline since the Great Depression.
• Over the last three years advertising revenue has declined by $25 billion dollars.

Of course everyone in advertising is quite familiar with the fragmentation of media.  This business got a lot more complicated when three major networks and a few huge newspapers and magazines turned into hundreds of thousands of cable networks, streaming sites, blogs, online newsletters, and other media outlets.  But one speaker spoke of a media outlet I had not considered – the mega-retailer.  An interesting stat:

• In 1970 the most popular show on television was “All In The Family”, which drew 70% of household viewers.
• Last year the most popular show on television was “American Idol”, which drew 17%.
• Every week three time three times more people visit a WalMart store than watch American Idol.

So is the right strategy to drop advertising on American Idol and buy more space in WalMart?  Well, not necessarily, but this does speak to the transformative power of the mega retailer.  As media channels expanded at dizzying speeds, the retail market collapsed in many ways.  Hundreds of thousands of retailers were replaced huge “big boxers”, so the game was changing on multiple levels.

In-store marketing has taken a major role in the advertising world.  Consumer used to be “advertising driven” in their product choices, but now they often made decisions “in-store”.  Interesting switch.

In my next entry I will reveal the thought leaders vision on “the agency of the future”.  This was the most interesting part of the conference!

In a sign that karma does exist, a major business Weasel was sent to prison this week.  Steve Warshak, founder of Berkeley Premium Nutraceuticals (better known as Enzyte – the so-called hard penis people) was sentenced to 25 years in prison.  Warshak, his mother, and several others were accused of bilking customers out of millions of dollars via false advertising and bogus credit card transactions. In fact, they took so much money that they were also fined $500 million dollars in addition to the jail time! 

Viewers may remember the “Smilin Bob” Enzyte commercials that promised to turn every average Joe or Bob into a sexual powerhouse.  Warshak was indescriminate in his dishonesty.  In addition to stealing from customers, he would also refuse to pay his advertising agencies, claiming he was going bankrupt and tying them up for months in court in an attempt to delay and ultimately reduce payment.

It’s always good for the advertising business and consumers when these kind of scam artists get sent away, but although Warshak deserves it I was still a bit suprised at the severity of the sentence.  25 years!  He apparently underestimated how serious men are when it comes to their erections. ”Steve Warshak preyed on perceived sexual inadequacies of customers”, said the Judge when he handed down the sentence. 

One must wonder if there are any disgruntled customers where Steve is going. Perhaps the fact that Enzyte doesn’t work will make prison a less painful experience.   

Ah Comcast….  For many years I and many others thought you deserved the Yugo award for worst customer service.  Your technicians were late or didn’t show up at all.  Work was sloppy.  You acted like you just didn’t care.  Then a couple years ago things seemed to get better.  You operators were friendly and your installers were on time.  Your guys wore spiffy uniforms. You began advertising how much good you do for the local community. Your digital cable is just, well, COMCASTIC, and your broadband service is really fast!  We all had high hopes.

But somehow, someway, you have slipped again.  Perhaps into a much more evil place than just rude or incompetent.   Recently you came under fire for blocking your subscribers’ access to certain web sites, and then not telling them you were doing so.  In fact…. is it possible you are now being run by the Chinese government?  [click to continue...]

I’m on my way to Los Angeles to present to the 2008 Publisher’s Technology Forum this Thursday. The topic – Kontenting – an approach and concept that I think is about to change the advertising and marketing world.

The bottom line to Kontenting…… we have moved from a world where clever messages and flashy logos don’t determine a product’s success. Consumers have taken control – and they are changing the rules of marketing. They insist upon information – and honesty – before they buy a product. Broadband is leveling the playing field– offering unbelievable opportunities for everyone from entrepreneurs to major brands if they learn how to talk directly to consumers. [click to continue...]

Yesterday was the 30th birthday of that facinating plague of the internet, Spam. “The digitally inclined” are notorious Monty Python fans, and Spam was named for a famous Monty Python song in which the lyrics primarily consist of “spam, spam, spam, spam”.

Of course, we all have Spam to thank for our extrordinarily long penises, access to very inexpensive perscription drugs shipped direct from third world countries (primarily designed to keep our extroadinarily long penises erect), the Croatian spouses we met online thanks to Spam, and our enormous personal wealth handed down from fleeing Nigerian dicators.

Happy Birthday Spam! Here’s wishing you not very many more!

(First published in Forbes online – 2/28/08)

I’m usually a big fan of mega-retailer Target.  I prefer their stores over their often smelly discount competitors, and for the last decade their advertising has been consistently catchy and innovative.  But their recent faux pas on the net has me wondering if Target is falling behind the times.

Recently a blog called ShapingYouth.org wrote an email to the retailer critical of Target’s newest campaign – which apparently depicts the iconic Target emblem emblazoned across a woman’s crotch. A caveat here.  I have not seen this ad, and while it does seem odd to me, I theoretically don’t have a problem with corporations covering people’s crotches with their emblems if they really feel it is effective marketing.  (Just stay away from my crotch – I prefer to keep that area logo free.)  But I suspect a site called ShapingYouth, which is all about the media’s influence on kids, is less liberal about those things than I am.

The controversy aside, Target’s response was way off Target. When ShapingYouth complained, Target responded “unfortunately we are unable to respond to your inquiry because Target does not participate with non-traditional media outlets”.  C’mon Target – it’s not like ShapingYouth was trying to reach you on a CB radio. This internet thing is a pretty big deal and probably here to stay for awhile. When Target refused to acknowledge ShapingYouth – they used the net to really spread their complaint – until it was finally written up in The New York Times.  Target, is the NY Times traditional enough for you?

Target’s bonehead move is indicative of the lack of understanding many marketers demonstrate towards the internet – and more importantly, their ignorance of the new age of marketing.  We have quickly moved into an era where traditional advertising and messaging is eclipsed by the power of the consumer.  Perhaps having your logo on a pretty girl’s crotch will momentarily imbed your brand in my mind (or offend me) – but reading good or bad things about you ultimately has more impact on whether or not I will become your customer.  In this new age of advertising, consumers don’t blindly buy when they see an ad – instead they are inspired by the advertisement to go to the net and research.  They read peer and expert reviews – they consult blogs – they communicate with like-minded individuals before making the choice to buy.  Marketers that uniformly dismiss “non-traditional media outlets” are potentially ignoring their customers and wasting advertising dollars. 

Old style brand-focused one dimensional advertising campaigns will ultimately lose the sales battle.  This consumer-centric environment requires a completely different approach towards marketing that involves a combination of traditional and direct response advertising, the web, and increasingly new media outlets like cell phones and PDAs.  Advertising is a catalyst to peak the consumer’s interest.  Content then converts them into a buyer. Tell me all about your product.  Prove to me it works.  And ultimately I will believe you if happy customers support what you told me. Smart marketers must now spread their message in multiple platforms – with in-depth content.

And they need to be prepared for a much more intimate – and honest – dialogue with consumers and critics.  Dismissing complaints because they came from a “non-traditional media outlet” is equivalent to refusing to take a customer service call because the customer is calling from a cell phone.  Hopefully Target’s response was simply the misguided reaction of a harried PR person, and not indicative of their corporate attitude.  Otherwise another venerable retailer will soon slip. Anyone remember W.W. Woolworths?

This week Sears reported more troubles, and the CEO announced a plan of action to hopefully renew the chain to its former glory. During the holidays I visited a Sears store for the first time in several years, and I was shocked to see how far the legendary retailer had fallen.

My first real job was working for Sears, so I have a bit of a soft spot for them. In the 70’s when I was an employee, Sears was a powerhouse. The stores were squeaky clean, well-stocked with the latest merchandise, and the sales associates were professionals; well-trained and versed in their product lines. But the Sears I visited a few weeks ago was a mess; a dirty, disorganized, and smelly store that looked more like a third-world discount warehouse than one of America’s greatest retailers.

Certainly Sears has faced unprecedented competition and pressure from all kinds of sources, but it is also a lesson in how fast and far a brand can fall. And just like Sears, I am often reminded of how fast individuals can allow their personal brands to falter in the workplace. It is easy to let little things slide, without realizing the combined impact it has on how you are projecting yourself. A couple common examples of “personal brand erosion” I often see in the workplace:

• Lazy e mails. There was a time when it was acceptable to use a kind of “email shorthand” – but given the fact that e mails are now our primary business communication tool, and considering the easy access of spell and grammar check, it is a bad idea to send out e mails that appear to have been written by someone for whom English is a third language. Yesterday I received an e mail from a realtor soliciting my business. It was so riddled with misspellings and grammatical errors that I had to read it several times to figure out what he was saying. But unfortunately the real message he unwittingly sent was “I am unprofessional – don’t deal with me”. I often receive e mails from employees with the same kind of issues. If the e mail I receive from the former secretary to the Prime Minister of Nairobi promising me ten million dollars is better written than the one I receive from you – we have a problem. Another hint – unless your name is e.e. cummings you should use upper case occasionally. Your e mail is often the only representation of “you” that people see – so use the tool accordingly.
• Giving up in the battle for personal hygiene. Working at a company is not like moving into a dorm. Once you have the job you are not supposed to get all “comfy”, and show up for work in your tattered pajamas and bunny slippers. OK – I am exaggerating. I have never had anyone show up for work in bunny slippers. But, I frequently see employees take definite downward slides in the appearance department. Certainly every work environment has a different dress code – but I know of few companies where unwashed and sloppy is the desired appearance. My advice to employees is dress with pride – and in a manner that best fits the company culture. And you shouldn’t fear “overdressing” – especially where clients are concerned. Dressing professionally shows honor to your clients – even if their work culture is much less formal. Your dress and hygiene is your first indication to most people of your personal brand. Are you professional? Creative? Buttoned-up? Or are you wearing yesterday’s lunch on the front of your shirt?

Next month, for my 15th consecutive year, I will trek to Las Vegas for the direct response television industry’s annual gala, the Electronic Retailing Association convention. I attended my first ERA convention when the organization was in its infancy and called National Infomercial Marketer’s Association. Because the word “infomercial” conjures visions of screaming, steroid-pumped fitness gurus and badly coifed, get-rich-quick pitchmen sitting around pools, the board wisely changed the name. In the early days of NIMA, a couple hundred people would gather in Vegas to argue about juicers, ab-machines and the rising cost of media time. ERA has grown rapidly in size and sophistication, and thousands from around the world now attend. While they still discuss the above, the convention has become a good resource to meet DRTV’s players and service providers.

I have a love/hate relationship with the show, frequently vowing not to go and changing my mind at the last minute. This may have something to do with the location. Though I am pleased to see Vegas abandon ill-advised marketing toward families and return to its seedy, wonderful roots of gambling, nudity and excessive alcohol consumption, I have grown more sedate and don’t enjoy these activities as much as I once did.

Clients often express interest in attending, which I discourage. Though it has interesting vendors and good educational opportunities, it can be bizarre for someone unaccustomed to DRTV culture. Wild-eyed inventors stop you in the hall, begging to rub your leg with a solar-powered, cellulite-reducing wand or encouraging you to drink brown liquid from a filthy coffee mug that they claim will reduce the size of your prostate.

A craziness seems to infect all who attend. Competitive agencies are unabashed about trying to steal clients; they stop me in the hall to pitch my client in front of me. A decade ago I boarded an elevator with a Fortune 100 client when a well-known television pitchman saw his name tag, cornered him and began poking him in the chest, yelling “Stay out of the DRTV business!” For years, a strangely muscular old man known as Doc roamed the convention halls surrounded by buxom girls in bikinis. Clad in a skin-tight leotard like an elderly but fit Richard Simmons, Doc’s goal was to be discovered as the next Jack LaLanne. Jowly, sad celebrities last seen sailing The Love Boat hang out in the cocktail lounges, soliciting gigs as infomercial hosts.

Perhaps the freakiest and best experience is the awards ceremony. Most ad competitions stress creative execution, but the ERA awards tend to honor campaigns that succeeded financially. Winners can run the gamut from “awful but worked” to truly inspired.

Years ago I had two major clients attending the awards, both with campaigns nominated in the Best Corporate DRTV category. The host showed beautiful clips from the spots as my clients smiled, but their expressions turned to confusion as the final nominee’s entry was shown. Their competition was a spot for a new kitty litter box, and the screens around the room were filled with images of cats defecating on a tiny conveyer belt, the innovative system whisking away the offal into hidden poop containers. To my dismay, one of my clients tied with the kitty litter box. But in defense of kitty hygiene, I am told the box sold millions.

I am excited that this year’s awards ceremony features the musical styling’s of one of my favorite infomercial hosts, Esteban. He became famous on HSN and infomercials selling his guitar course.

DRTV has made enormous gains in popularity and acceptance the past few years, and every year the convention tends to reflect this. I suspect this year I am more likely to see major corporate executives roaming the halls than characters like Doc. While I applaud this professionalism, somehow I think an ERA convention without a few crazy inventors would seem lacking. Most of the products we buy originally came from the minds of slightly eccentric entrepreneurs with a vision, and I would miss their energy.