Newspapers: Canaries

Newspapers are currently the media bellwether or “canary in the coal mine,” as the accelerating recession takes their decline in advertising revenues due to digital competition and pushes it into free-fall. Josh Marshall had a post on this today.

Folks (including myself) are bemoaning this development, because they know that the digital competition felling newspapers actually depends in large part on the content resources—reporting bureaux, wire services, columnists, and research—newspapers provide. Talking Points Memo needs its AP feed, originated and supported by newspapers, for much of its own content generation.

So what’s going to happen? Will (most) newspapers wither and die, drastically lowering the value of the content we get in the digital media that are left, without most consumers of news realizing it? I think so, yes.

But eventually the digital media should step up and rebuild; because there is a need for high-value news content. One NALM thing that usually goes hand in glove with bemoaning the demise of newspapers is bemoaning the eternal dumbing down of John Q. Public. But just because most news consumers won’t notice the difference doesn’t mean that those who are left won’t, directly or indirectly, be able to pay for better news content. It may just take longer than I’d like for this market need to reassert itself. It had to assert itself to begin with in order for these great news content resources to be built in the first place.

This is worth noting, studying, and learning from. Because what’s happening with newspapers now will happen with magazines shortly, television later, and eventually, in its turn, the Internet as we know it today as well.

Dialing up and Down the Business Goals

In amongst a bunch of gobbledygook with a few decent points halfheartedly mixed in, Max Kalehoff at MediaPost’s Online Spin throws out a true nugget:

[A]dvertisers are garnering the power to dial up or down according to their business goals --- for no other reason.

This is put a little gobbledygookedly, but it really is what I’m writing this blog about.

1. Formulate a business goal
2. Work out the marketing model to address that business goal
3. Figure out how to track the model’s success (and not only with instant-gratification metrics, which will severely limit your tools, not to mention your ability to judge results)
4. Launch the model and tracking
5. Brutally cut or modify the model if your tracking shows that it isn’t addressing the original goal

Why else would you ever do any marketing at all?

Definitely Titillated, If Not A-Twitter

Lest I begin to irrelevantize myself (among my current audience of one) with a seeming dismissal of Twitter in my post from Wednesday, let me say that Twitter is a great, pretty well buttoned-up expression and extension of its communications medium, texting. As such every marketer should be looking at it. My objection was to a story that classified a kind of a “Twitter campaign” as a branding campaign, because on ROI grounds, it clearly failed miserably in that context.

No, Outsell reminds me today that for P.R. purposes, Twitter clearly shows high promise in the B2B space—which to my mind strongly validates its strengths in consumer marketing as well. But for what? Any marketing platform should be applied, particularly in today’s threatening environment, just to those areas where the ROI is clear (not directly measurable necessarily, but clear) and good.

What such areas are there for Twitter? As Kate Worlock at Outsell put it, The capacity of Twitter to reach a group of users with a guaranteed interest in what you have to say is the core appeal (emphasis mine). So, once you’ve got a group constituted in Twitter, your communications with its members will be highly effective, at least at first before they tire of the group, Twitter, or both.

And there’s the rub. How are you going to get ’em in that group to begin with, and how do you keep ’em there? Don’t bore me by thinking that once your incredible fantastic brand/‌product/‌idea is in Twitter, Lots of people will come—one of my least-favorite most-used statements ever in marketing. No, we still have to ditch utter reliance on viral marketing to make Twittering work. More on that later.

Marketing ROI Needed But Not Understood

The Conference Board: Pressure is increasing to show return on the marketing investment, but no one really knows how.

Money graf:

Many [marketing] executives say they lack the technological resources necessary to measure these programs. Others say they are facing strong cultural resistance.

This is the game. Winners will rise while most are falling.

The Media of Communications with the Consumer of the Future

MediaPost today: A firm selling something gross is doing cool viral marketing! Isn’t it great?

It’s not till the third-to-last graf that we find out that, actually, the pest-control firm in question has had no measurable results from its blogging, videoing, Twittering, etc.—and isn’t planning for any.

One certain measurable result is that the marketing community is now exposed to this company, Truly Nolen. (I’ve linked to the blog so you can see what some of the fuss is about.)

But anyway, the short version here is that Truly Nolen started a blog, created a Facebook page and YouTube videos, and joined Twitter (which happened Monday; maybe it’s Twitter pushing the story). Net result, as far as I can tell? 100 quasi-leads in three months; 400 video impressions (for one video, anyway) in two months; and 53 Tweets, many from media contacts.

Well, okay, as a public-relations effort, it has measurable value. But that’s it—it’s P.R.—it’s not brand marketing, which is the section of MarketingDaily (sub. req.) where it appeared. This example doesn’t show how these are the media of communications with the consumer of the future, as Truly Nolen’ P.R. head puts it in the article. Far from it.

Widgets

Are widgets good or bad investments in a time of marketing scarcity? Widgets—“bits of the Web” you can publish, and give people the means to put on their own sites—have those two seeming advantages usually attributed to viral marketing methods.

• They’re cheap to make.
• They’re cheap to promote.

But these actually should read:

• They might be cheap to make, especially if you don’t need them to be good.
• They’re cheap to promote, especially if you don’t care if they work.

My point is simple. After you get the idea of trying a widget, plan out the entire widget you want to create, cost it—including promotion—and estimate its effect (on traffic, leads, sales, or whatever). If you want to use it virally, make sure it’s cheap enough to make that you’re fine with it having no impact. And if it has to be too cheap to be good, scrap it.

Am I a Hack?

In my earlier post on why I created this blog, I said in part that it’s to counteract the likely shrinking of marketing during this downturn. But there are two ways to do this, and I want to explain which one I plan to follow.

One way would be the “squeaky wheel” method: By shouting loudly enough, my readers (if any) will either feel that I must be right or I wouldn’t dare be so loud, or will get tired enough to concede my point just to get me to shut up. This is fine in politics, but doesn’t really suit my personality. I am not a hack, much as I admire many of them.

So I plan to take the other way: I will make as many points in favor of my mission as I can find.

There’s a larger point here, by the way, one that may be obvious to some because it’s so often cited as a silver lining in times like these. In times of plenty, we get fat and lazy. It’s want that makes us work and innovate. This is a time of want. If anything, I hope this blog will help us innovate.

Factoring in Economies of Scale

In today’s SearchInsider at MediaPost, an SEMer by the name of Steve Baldwin says:

Outsource where possible. … In flush times, marketing staffs tend to grow organically—like barnacles on the hull of a ship—but at the cost of efficiency and flexibility. For the past two years, SEM has been increasingly insourced for a range of reasons that might have made sense when times were good. Today, this trend is impossible to justify, except for businesses that are merely dabbling in search (which is never a good idea).

Clearly overstating—the only time you shouldn’t outsource SEM is when you are merely dabbling?—Baldwin still fails to provide a reason to cut SEM staffing.

I assume flexibility refers to the ability of outsiders to bring a much wider range of experiences to bear on a problem, since they’re not limited to those experiences your own company has had. That’s fine. But efficiency is not ipso facto a good thing, if effectiveness suffers as a result. What I mean is that SEM might very well be better executed by those who know your industry through and through, rather than by SEM generalists (such as search-marketing firms). This can be a killer if you’re in a B2B market and you outsource to a firm that, while expert in SEM, doesn’t know sh*t about terms and jargon used in your industry.

This is so true of marketing as a whole that it’s worth generalizing and restating: Find efficiency through economies of scale, sure: but only up to the point where the cost that comes from less focused and effective marketing becomes too great.

Right now, of course, we’re Decoupling, so such niceties can go out the window. But understanding where economies of scale help and where they don’t will get you to the Opportunism phase as soon as possible.

Short- and Long-Term Shifts

In a generational occurrence like the present economic meltdown, we all want to figure out as soon as possible what the new models will look like: How we’ll invest, how we’ll finance our homes, how we’ll live our daily lives; what kind of jobs will be out there and how businesses will run themselves and prosper. For the purposes of this blog, we want to figure out what marketing is going to look like.

I think the first step in doing this is to know when we’re talking about. Then we can get to what is going to happen (during each “when”). The point here is that, rather than ask “How is marketing going to change in this new environment?” we need to first ask “How many times are we going to change?” The current changes are just initial reactions; short-term shifts. But our instinct is to see them as permanent long-term shifts.

Actually I think there are going to be four distinct time periods (or phases) to marketing in the downturn—each of which will have its own distinct marketing model.

Decoupling

Abandonment of previous marketing assumptions in reaction to the sudden change in expectations. This is going on right now, and hasn’t ended.

Austerity

Plans made in the expectation of little growth being possible.

Opportunism

Marketing techniques that seem to be successful under the new economic conditions become more widespread, and there are new winners and losers.

Hand-me-down

Economic times change, but the harsh lessons of the downturn continue to be applied.

Rebirth

Marketing techniques that seem to be successful during growth periods are rediscovered and become more widespread, and there are new winners and losers.

I’ve included #5 for completeness’ sake, but don’t consider it to be part of this discussion because it actually takes place after the downturn ends.

I think that the long-term shifts, what in the future we’ll call “marketing in the downturn,” as opposed to what we call that now, will start somewhere between #2 and #3, say a year from now.

No, Sponsorships Are Sponsorships

To answer my last post: I see no obvious difference in “level of waste” between the naming rights for the new Mets stadium and the sponsorship of the New York City Thanksgiving Day Parade.

Both a stadium and a parade provide public benefit. The costs of providing each can be partially defrayed by allowing one or more companies to add their name(s) to it. And either can be wasteful or efficient, provide more or less equal compensation to those employed by them, and so on.

The heart of understanding this NALM misjudgment is to realize that, since a stadium alone does not entertain, it’s easy to underestimate its communications impact. But sentimentality makes this particular comparison more uneven: Macy’s has been sponsoring the Thanksgiving Day Parade for so long that most people never consider the possibility of another company doing it, or of the parade not being sponsored at all. (I remember being pretty annoyed when Met Life took over the naming rights for what till then was the Pan Am building.)

I doubt that Citicorp will hold the naming rights to the Mets stadium 85 years from now, but if it does, it will seem very strange if another company takes it over. We can compare the marketing effect or degree of public benefit of sponsoring a parade vs. naming a stadium some other time, but it’s clear that they’re of a piece and not particularly different in principle.

There Are Sponsorships and There Are Sponsorships?

Happy Thanksgiving to all! Be safe, relaxed, and joyful.

My marketing note for the day is just this: If Citicorp’s naming rights for the Mets stadium are wasteful, what about Macy’s sponsorship of the New York Thankgiving Day parade? Where, exactly, is the difference? If you’re thinking that, in your bones, you know the Macy’s Thankgiving Day Parade is different, I advise caution.

Hint: Is a parade more or less of a public service than a sports stadium?

Marketing ≠ Victim

Marketers often complain that marketing gets unfairly punished in tough business or economic times. “Now more than ever is the time to invest in marketing, and keep sales up!” is the usual refrain. Whether or not this makes any sense, though, depends on whether you see marketing as a support function or as a generating function.

Actually, let me back up a sec and let you know what I mean by the term marketing, at least for the purposes of this blog. This word has a surprisingly broad application around the world and even around the block. What I mean by “marketing,” in this blog at least, is those aspects of selling that do not involve account work, i.e., the development of sales relationships. (More on this some other time.)

Anyway, the Internet particularly has severely altered how this function plays itself out. Prior to the rise of the Internet, the only non-account sales work was essentially mass communication—messages being distributed unchanged to hundreds, thousands, millions of potential buyers. Marketing was and is still generally seen as supplemental to the rest of sales (the account work) because without marketing, you could still imagine account work going on.

Let’s say you were a packaged-goods company in 1990, the beginning of the Bush I recession. Marketing creates your public ads (outdoor, TV, wherever), gets your products placed in movies and on shows, creates in-store displays, puts on publicity events—and also supports your salespeople by providing them with information sheets, brochures, presentations, etc. they can show distributors in order to develop sales. Well, everyone loves all the ads, placements, and so forth, but they only contribute to revenue in a kind of amorphous, tough-to-measure way; if you suddenly are looking at a drop of 30% in sales because of the rough economy, it’s easy to say to imagine doing without them. As long as you have in-store displays and your salespeople are armed with materials, you can get your product on the shelves and sold.

Thus for you, packaged-goods company circa 1988, marketing is pretty much a support function. It was difficult (if not impossible) to quantify the return on your, say, $10 million investment in advertising. Did this create $20 or $200 million in additional sales? Who knows? There were metrics to collect and research you could do—Dell Computer mastered this in the 1990’s to reach its dominant position of today—but in the end there was always a little horse-sense and faith that went into understanding the return on a marketing investment.

This is still true to a greater degree than anyone will admit. But the Internet has created so many ways for marketing actually to generate revenue directly, that it can actually become a bedrock company investment that can’t be cut. Or more accurately, parts of marketing can become so.

This was foreshadowed by the catalog companies before the Internet came along. In a recession they still mailed catalogs, because if they didn’t they gave no one any reason to buy. What are you going to do if you need new shirts, check your bookshelf for last year’s Land’s End catalog? No, you expect one in the mail or find a recent one in your catalog pile.

Today there are hundreds of electronic avenues supplementing the SCRW ways that marketing leads directly to revenue. E-mail, SEM, Web promotions, banner ads, and so forth all can put people on the path to buying, and using these programs the marketer can say, “In the fourth quarter we spent $2.00 per member acquisition, and made an average of $10.00 revenue from all members and $4.00 from new members.” In this scenario, in a downturn, marketing may say that reducing the marketing budget is equivalent to reducing gross profits.

This isn’t a perfect argument because if there are less sales to be had out there, you can’t keep your marketing investment level the same unless you’re taking advantage of the weakness of rivals to gain market share (which has nothing to do with a recession). But can you see how, once marketing can be cast as a “generating” instead of a “support” function, its essential role even in a downturn becomes obvious?

Why I’m Here

I’ve created this blog because marketing is likely to take a real hit over the next few years as an endeavor and as an industry—as marketing always seems to when times are tough. So I want to sing marketing’s praises, to counteract its cutbacks as much as possible, and give anyone who cares to listen arguments and ammunition to keep marketing going.

Naming Rights ≠ Waste

There was a lovely posting at Talking Points Memo yesterday with the NALM subtext that naming stadiums after companies is bad; wasteful.

The post’s topic was that Citicorp just got a ton more money from the government in order to stay afloat, and yet it’s still spending $400 million on naming rights at the new New York Mets stadium (which will be called Citi Field). Rachel Maddow also had a segment on this on last night’s show.

The disdain journalists can have for the sources of their daily bread can sometimes amaze a marketer who’s worked in media. I understand the need for distance from sponsors and advertisers, certainly; this distance enables integrity. And I rather admire those who bite the hand that feeds in the name of integrity—since sponsors and advertisers, including multi-billion-dollar banks on the dole from the Feds, support the marketing and media industries that pay most journalist’s salaries (even Blogads-supported journalists).

But these guys shouldn’t show such disrespect for an entire industry, in this case sports marketing, as to assume ipso facto that naming rights are so wasteful that no company receiving taxpayer money should be allowed to spend money on them.

Look, Citicorp is spending $400 million for these rights, which they will have for 20 years. $20 million a year. Let’s forget for the moment that some of this $20 million a year will go to employ people—that’s a complicated and I think ultimately specious argument.

No, the point of marketing is to make extra money by investing in it. Having the stadium of one of the best-known teams in the U.S. named after your company means that that name will be repeated over and over again, on TV, on the radio, in sports articles, on the train, in peoples homes, and a thousand other places. Will frequently hearing, reading, and thinking the word “Citi” cause consumers and businesspeople to go to Citicorp more often, enough so that the bank will gain more than $20 million a year in additional revenue? I don’t know, but it doesn’t sound outlandish to me; far from it.

Junkets for losers, on the other hand—now those are wasteful. Just a lot less expensive (usually).

→ Update: My buddy SK points out to me that it’s actually Citicorp, not Citibank, naming the stadium. So I’ve corrected the above.