The Rogue Marketer

If the advertising industry is so creative, why is the temptation of every marketer to play follow the leader.  The latest rush to conformity is the showcasing of consumer produced content (video).   Today's New York Times  Advertising Column  by Stuart Elliott describes the trend of advertisers to take the "Boobs" and put them on the Tube.  The article titled  "A CBS Take on the YouTube Madness"  describes how CBS through CSTV.com  is creating a rival video posting site to promote the upcoming Final Four NCAA basketball tournament otherwise known as March Madness.  An appropriate way to describe not only the broadcast, but the idea of "competing" with YouTube.

Most brand touts (is that what I've become) believe that brands are co-created.  The underlying thinking for user created video is that a brand is a collection of meaning.  It's meaning is derived from the perception of its constituents.  Video is an expression of user defined meaning.  The problem is that when trying to stimulate purchase, meaning cannot be arbitrary and undirected.  That is fine for the random YouTube video, but not for a car company that is trying to say buy your way to significance with a Porsche. 

In their wisdom, advertisers are missing this point and allowing the consumer to assign any meaning they want.  So if the video directors of future "You Boob" videos decide that they should submit vicdeo clips in the spirit of the acclaimed movie Jackass, then the meaning of March Madness will be stupid guy tricks.   You get the point. 

Dove  launched a user created commercial last night created by "real women" as opposed to the usual fake women.  Doritos did it on the Super Bowl and I'm sure there are 50 CEO's asking their CMO's to do it as well further shortening their career lifespan when the efforts fail.   The question is are advertising agencies desperate to break through with whatever the idea of the moment is, or are user videos a weak substitute for the inability of agencies to create persuasive brand produced and ROI measurable advertising? 

As for competing with YouTube .  An unknown online site competing with the millions that visit YouTube every day.  Another big idea from small thinkers.

Advertising Age  has an article by Beth Snyder Bulik  titled "Today's Sunrise is brought to you by..." that  describes how something as potentially boring as watching multiple sunrises on the Discovery Channel  can actually be turned into entertainment.   What's next, the paint drying show where every day we can watch a different color dry.

The Sunrise Earth  television series is actually part of a interesting approach to building integrated marketing campaigns called "build, watch and explore as described by  Derek Koenig, the Senior Vice President of Marketing of Discovery Communications .   The idea is to  use the audience building reach of video/television  and then move viewers to an interactive platform to explore, followed by an invitation to do it themselves.

The idea is similar to the themes discussed in a great book by Joseph Pine and James Gillmore on experience marketing called The Experience Economy: Work Is Theater & Every Business a Stage.   The idea is to think of every marketing interaction as an experience that someone would pay for.  The model has several steps:

• Invite Someone to the Experience
• Tease them with what they can expect
• Create a keepsake of the experience while they experience it
• Remind them of the experience they just had
• Invite them back again

Experience Marketing is a common tactic used by the Cruise Industry.  Tease with advertising or a placement on a TV show.  Before the cruise, send a map of the ship, an itinerary and other information that sets up the experience.  Take pictures while on the cruise and then remind passengers of the experience by sending them to a dedicated web-site.  Once they view their pictures (and share them with others of course), the cruise line tempts them into another cruise.

Kudos to Discovery Communications for airing a daring idea.  I can only imagine the pitch meeting....  Jerry Seinfeld did a show about nothing, so why not a show that just shows different Sunrises.  You know what they say, don't introduce me to the person that developed the idea, I just want to meet the person that sold it.

I'm a big Sirius fan.  No, scratch that.  I couldn't care less about Sirius.  I am a Big Howard Stern fan.  So when Howard said follow the leader over to Sirius, I like 6,000,000 other subscribers with $12.95 a month in hand followed.  Now Sirius is planning to merge the house of Stern with the house of Oprah.   Hell just froze over.

Now I am sure this deal as described by CEO Mel "my options are increasing in value" Karmazin makes perfect financial sense.   The question is, does  it  make marketing sense or any sense at all as described by Ian Austen  in today's New York Times.

Every market has a mathematical reality.  And the reality for Satellite Radio is not that good.  Satellite Radio has approximately 10,000,000 subscribers (14,000,000 subscriptions).  That is just under 10% of all households.   Products like Satellite Radio never get beyond 20% of any marketplace unless they are a major disruption.  This is not the case with Satellite Radio.

• Satellite Radio Doesn't Replace Anything - They aren't selling a refrigerator that doesn't use electricity.  It is a service that enhances what is already free and that requires new hardware.  This alone makes it a tough sell.
• Content Is Free - Listeners and viewers believe content should be free in every sense of the word.  No one writes a check to ESPN for Monday Night Football or to Oprah to watch her show.  Many would be pay for Howard Stern.  Depending on your point of view, there aren't too many Howard clones.  At best, a real star or musician would attract 1% of their audience to a subscription service.

Given the odds against Sirius and XM, the merger is a smart marketing move.

• Reduced Churn - The average subscription service does 1.5% to 3% in MONTHLY churn.  Between the two services this means 3,000,000 would be switching for the deal of the day.
• Lower Marketing Expense - Sirius and XM already got the easy subscribers.  The truckers, the boaters, the tech crazed, the early adopters.  Every incremental acquisition is expensive.  Now they can direct all marketing resources against acquisition without worrying about a competitor winning its fair share of people ready to subscribe.
• Pooled resources for Content - Listeners want content.  HBO figured out how to charge for it.  With more subscribers to amortize over, the combined companies can invest more in exclusive sports, live concerts, great talent etc.

My humble advice to Mel Karmazin  is to complete the merger, then disrupt the radio industry.  Accelerate adoption by testing new aggressive breakout pricing  and value models such as  free/low cost entry into the service or as suggested in the New York Times  by IDC  analyst  Susan Kevorkian change from a radio subscription service to a household level service (now you need a subscription for each car).  Resell the audience to advertisers and take more than your fair share of the $20 billion radio advertising market by making the case that satellite listeners are credit worthy (you need a credit card to subscribe).    Buy all the good content you can find.  And of course, with your new Satellite broadband capacity can you say Sirius TV. 

Marketing is a full court press every day balancing the vision of what you want to achieve against the realities of what you can implement.  After collapsing in my seat on the Long Island Railroad it was great to see a headline in today's  New York Post   in an article by  Holly M. Sanders declaring  "Put CMOs on List of Endangered Execs."   Oh good, yet another reminder that I have chosen a career path fraught with more failures than successes.  I can hear my mothers voice directing me at a young age to a job in an accounting firm like the rest of the family or something in civil service with good benefits.  What my mom failed to realize is either one is less attractive a career option than getting severe rope burns.

The Post article points out that while the CMO position carries great risk, it is now truly a "C" suite executive position.  Jane Stevenson  from recruiting firm Heidrick & Struggles is calling it the year of the CMO.  Wow, it's the year of the Pig and the year of the CMO.  Need to think about that one.

Some Happy Highlights:
- The Gap, Sears, Coca-Cola, T-Mobile, HSBC, VW, Verizon and ConAgra all blew through their CMOs. 
- The average CMO lasts 23.5 months.

It's clearly the job of the CMO to hold a mirror up to the organization and reflect it out to the world in a compelling and persuasive way  Our job is to clarify, define, and invigorate.  I'll never forget my first job as part of the AT&T "You Will" advertising team.  The television campaign used Industrial Light and Magic special effects to bring to life in consumer terms technologies that were deep in the laboratory, years away from fruition.  The campaign defined AT&T, focused the company mission and set their direction for years.  If they only stayed on it before going out of business and then being resurrected from the dead by SBC.  But that's for another blog post.   Long live the CMO.  It's the best job on the planet for people with 9 lives, a masochistic tendency or some form of mental impairment.

The Go-To-Market Strategies Resource center put out some great research on Business to Business marketing budget benchmarks.  They put together helpful guidelines on where your company falls in marketing spending as a % of revenue, how to calculate ROI and how to calculate Lifetime Value.

Great post today in Fred Wilson's  Musings of a VC  blog on the value of Patience and the succinct set of criteria FlatIron Partners  uses to evaluate a future investments:

"The most common proxies we use in the venture business are customer adoption, revenue ramp, the development of a strong team, the emergence of a strong brand, the creation of a robust and scalable technology platform, and strategic partnerships with other important companies in the target market."

Can't get much clearer than that.

In today's New York Times an article by Stephanie Saul describes the latest example of combining brands and entertainment.  Said another way, here is another example of taking a brand that no one wants to spend any time thinking about and then finding a way to get people to think about it.   Although the Times calls it brand entertainment, I like to call it brand content  since the purpose of a brand is to communicate, not necessarily to entertain.

Branded entertainment or brand content is nothing new.   The church has been engaged in brand content since the Middle Ages when they commissioned Michaelangelo to paint the Sistine Chapel.   Warning - Brand theory deep dive coming up.  Since brands are simple metaphors that stand for collections of complex meaning, they need the benefit of space and time to explore that meaning.  It's why a 30 second commercial feels thin and uninformative and something that is longer length feels complete.  Since people don't care about brands per se, but about the things that brands do for us - look young when we are old, look old when we are young, how to fit in, how to stand out... any communication that explores any of these bigger issues is interesting and will attract an interested self selecting audience.  Once attracted to the "content", the viewer is also attracted to those that represent the content or meaning they like.  The brand then becomes the summary metaphor for this collection of meaning (think Nike swoosh). 

If you survived the brand theory deep dive and didn't run for the next blog, you can appreciate the newest entries into the brand content arena by  Remicade and Toyota.  Remicade created a 58 minute film on autoimmune diseases (I can see the lines forming now).  The focus of the content is living with autoimmune disease, a topic that is obviously important to anyone with this infliction, a pretty good hook.  According to the Centocor spokesman (a Johnson and Johnson company), they are "trying to educate people with these diseases, They're not alone out there."

The only problem with the approach is the entry of other brands and diseases and the urge for everyone to develop their own movies.  I can't wait to see revenge of the zits, the story of a boy, a girl and the pimples that destroyed them.   Developing compelling content is not easy.  If it was, every movie would be a hit.  Then again, brands do not need hits or ratings or great box office.  They just need viewers.  If they connect with their audience, and they reinforce the meaning that they want associated with the brand, then I think it's great.   It will be interesting to see how Budweiser does with Bud.tv  as described by Carl Long in his blog Experience Curve and Advertising Age editor-at-large Matt Creamer.  Tune in to a future blog entry when I'll raise a glass to Bud and their ambitious attempt to create their own TV channel.

We use Webtrends to track our internet traffic.   Today I learned that there are two fundamental ways to tag our company's web-site depending on whether our site is housed outside the company or inside our firewall.  A new hire that specializes in internet technology pointed out that not only was our implementation done wrong, the data that was generated could be wrong.  Lesson learned.  I'll Blog about the differences once the situation is corrected.

I think the direct marketing strategy at American Express is to mail the same offer to me everyday in the hope that in a desperate effort to get the mail to stop, I'll relent and sign up for extended payment options or a Delta SkyMiles credit card.  Someone has developed a devious plan to fill my snail mail and email box with the same message week after week in the belief that I rejected their offer in a temporary bout of insanity. 

As a new blog feature I'm going to start listing every solicitation I get from American Express.  It will be interesting to track the mail frequency and offers.   Maybe they know something I don't.  There has to be a better way such as asking me what type of card and benefits I'm interested in.  They already track how I purchase and pay, just use it to tailor an offer.  Better yet, just ask me what credit cards I carry that aren't American Express and prove to me why their offer is better.

• April 14, 2007    
•      #10 Letterpack - Credit Card Solicitation for Delta SkyMiles Credit Card (repeat of a
       mailing I received in March)
            "There are Hundreds of Reasons to Pair Delta Skymiles credit card with your
            current  American Express Card" 
            Includes letter with "fake" plastic card
•      #10 Letter-pack - Credit Card Solicitation for an Upgrade to a Gold Card
       "You've Earned it"
         Letter and fake card - "We've made it easy for you to upgrade because you've earned
         it
•      6x9 Postcard - Bill Payment Made Simple
      "Introducing American Express Bill Pay, a new on-line feature that lets you pay your monthly
      bills, from cable to insurance, automatically"
• April 5, 2007
•      Email - American Express Travel
       Don't miss out on Going Once, a unique travel promotion from American Express
       launching on  April 17, 2007.
• April 4, 2007
•      Email - American Express Financial Advisors
       As a valued American Express^® Cardmember, you're entitled to receive 7,500
      Membership Rewards^® bonus points when you attend a complimentary financial
      consultation with an advisor from Ameriprise Financial.
• March 2007
•      Membership Rewards Catalog Mailing - 8.5x11
•      #10 Letterpack - Credit Card Solicitation - Upgrade to the American Express Rewards Plus
       Gold Card
       "I would like to remind you that with the XXX Membership Rewards points you already
        earned, you are getting closer to some of our best rewards.  But that's just the
        beginning, because starting today you can earn rewards even faster when you upgrade.
•      5x10 Saddle Stitched Catalog - Passport to Europe Offers - 16 pages
•      5x9 Postcard - Lake Austin Spa Resort and American Express postcard offer
•      #10 Letterpack - Letter + buck slip - Extended Pay
       "With your American Express Card, you pay your charges in full each month, so
       you  don't have to worry about carrying a balance.  But there are times when yo umay
       want to extend payment.  That's why we created FlexPaySM  ...
•      40 Page 5x9 catalog - "The Next Stamp in your passport should be as exciting as the first"
•      #10 Letterpack - Credit Card Solicitation for Delta SkyMiles Credit Card
            "There are Hundreds of Reasons to Pair Delta Skymiles credit card with your
            current  American Express Card" 
            Includes letter with "fake" plastic card
• March 20, 2007
• Email - Invitation to upgrade to an American Express Gold Card
  It is with great pleasure that we extend to you one of our highest standards of recognition — an invitation for you to upgrade to the American Express Rewards Plus Gold Card.
• March 13, 2007
• Email -  American Express Travel
  Discover extraordinary destinations around the world at a premium value.
  Offer: Double Points, Annual subscription to Travel & Leisure, $100 credit
• March 8, 2007
• Email - American Express Membership Rewards
  Membership Rewards Rewards Watch Newsletter - March
• March 6, 2007
• Email - American Express Card Payments Flexibility Offer for purchases of $200 or more
• March 4, 2007
• Email - Green Card Travel Benefits - Get away to South Florida
• February 27, 2007
  • Email - Take a Classic Vacation with American Express Travel - Double Membership Rewards Points for a booked vacation
• February 20, 2007
  • Letter pack - Flexible Payment Offer: "Of course I'd prefer if no Card member used another card -- especially when it means missing out on valuable Membership Rewards points.
  • Letter pack with brochure inside: Earn Double Membership Rewards if I pay my insurance premium on American Express
• February 19, 2007
  • Telemarketing Call - Hi Mr. Grill, how are you today.  I'd like to offer you flexible card payments.
• February 16, 2007
  • American Express Color of Florida Brochure - 12 page saddle stitch color 5x9 on Florida destinations and get more Membership Rewards Points
• February 15, 2007
  • American Express and Paris Hotel Postcard - See The Producers at the Paris Hotel in Las Vegas and save $40
  • American Express and the Ritz Carlton Self Mailer - Exclusive offer - receive an upgrade to the Ritz Carlton Club level.

I Came across an interesting concept in the book Mavericks at Work  One of the key ideas presented is "Architecture of Participation."  The concept is similar to open source where companies generate value for customers through user contributions.  Linux or the SIMS game is a great example of people contributing code or characters.   J.C. Hertz, a computer game developer and author of Harnessing the Hive claims that the brainpower of a distributed community is greater then the people at any one company.  Great concept.  Need to get moving on a Mimeo.com  user forum.