Category Archives: The New Marketplace

A Frog in Boiling Water: are Fortune 500 Clients all They’re Cracked Up to Be?

First published January 21, 2010 in Mediapost’s Search Insider

P&G’s new CEO, Bob McDonald was asked, in a recent interview with Ad Age, what keeps him up at night:

The biggest thing is the parable of the frog in the boiling water. That’s why today, of the Fortune 50 from 1955, only nine of those companies still exist. P&G is one of them. I want P&G to be on that list 172 years from now, because that means we’re touching and improving more lives. The only thing that can kick us off that list is complacency or inability to learn new things or unwillingness to change.

The Allure of the Trophy Client

In search, we love to deal with marquee clients. We love to put the brag badges on our Web site, the list of logos showing the Fortune 500s we all deal with. A quick non-scientific survey shows that every digital and search agency in the world has worked with HP, IBM, Microsoft, P&G and GE. If one is to believe the plethora of logos slathered over the Web, these companies have more agencies of record than employees.

I get the temptation. I really do. In search, we all struggle for credibility. These clients bring the sheer mass of immediate credibility with them — if you’re good enough for P&G, you’re good enough for me. Come on, admit it! We’ve all done it. We’ve all slipped the logos into our PowerPoint “About Us” slide.

But McDonald’s observation deserves our attention. The Fortune 50 in 1955 only had an 18% survival rate. I suspect the toll will get even greater as the digital landscape accelerates the pace of online marketing evolution dramatically. This means that dinosaurs will be dropping right and left. And as the lumbering behemoths keel over and crash to the primordial forest floor, might we SEMs be caught under them?

How Do You Steer an Elephant?

Look at McDonald’s trio of evolutionary sins: complacency, the inability to learn new things and the unwillingness to change. My suspicion is, despite the reams of rhetoric to the contrary in the typical annual report, that McDonald’s fears represent the norm rather than the exception for the average Fortune 500 corporation. I applaud his self-awareness, but can’t help but wonder if even a tuned-in CEO is enough to overcome the inertia, bureaucracy and legacy investment that typify many mammoth multinationals.

And if the CEO can’t change a company’s direction, how the hell is a search agency expected to? For a puny little search agency (and let’s face it, compared to the sheer bulk of a Fortune 500, we’re all puny) to try to change the direction of one of these corporations is like a spider spinning a web to stop a stampede of pachyderms before they plunge off a cliff. I give it an “A+” for intention, but an “F” for grasp of reality.

Where Do You Invest Your Time?

So, this brings up an acutely pertinent question: What is a better investment of an SEM’s time and resources, fighting the inertia of those marquee clients so we can use their logos on our Web sites, or instead, actually doing something with the clients that will eventually replace the dinosaurs in the inevitable march of marketplace evolution?

It’s a good question to ask. And, philosophically anyway, not a hard question to answer. But in practice, well, in the words of Hamlet”: “Ay, there’s the rub.”

Perhaps, for a select few companies, the two categories are not mutually exclusive. Perhaps the answer lies in CEOs like Bob McDonald, who can steer at least some of the Fortune 500 safely into a new digital reality. Let’s hope there are more where he came from.

Everyone’s a Critic: The Splinters of our Discontent

First published January 14, 2010 in Mediapost’s Search Insider

I had a bout of inbox convergence today. Just as I was speculating what this week’s Search Insider might cover, two separate emails surrounded a juicy little topic and delivered it to me on a platter. First, a post from Ad Age about how marketers are reluctant to use online conversations as a source of customer feedback: “‘Listening’ ostensibly has become the rage in consumer research, but the Advertising Research Foundation is finding that many marketers view what would seem one of the digital age’s biggest gifts to marketers — the torrent of unsolicited consumer opinion — as more of an added expense item than a blessing.”

And then, a small blog post on Echouser got me thinking: “It’s a concept for what an iPhone app designed to measure experiences (any experiences, from surfing a website to hopping on BART) could look like… Can you imagine if we were able to rate experiences on the fly, all day every day?”

Customers are Talking…

There’s been a lot of talk about the shift of control to the consumer and empowerment. As 2009 drew to a close, I talked about the shape of marketing to come. One of the key foundations I identified was participation — actively engaging in an ongoing conversation with customers. The two posts in my inbox start to get at the potential of this conversation.

In the first post, ARF laments advertisers’ reluctance to tap into ongoing online conversations as a source of customer feedback. Valid point, but I can understand their reluctance. This is unstructured content, making it qualitative, anecdotal and messy. Marketers balk at the heavy lifting required to mine and measure the collective mood. Some tools, such as Collective Intellect, are starting to take on the hard task of migrating online sentiment into a dashboard for marketers. The easier it gets, the more likely it will be for marketers to actually do it. Until then, we’re stuck with consumer surveys and comment cards.

…Anytime, Anywhere…

But it’s the second post that really got me thinking. Always-on connections have already given a voice to consumers, one that’s heard loud and clear. But what if we did indeed have a convenient and commonly structured way to provide feedback on every single interaction in our lives through mobile connections? What if marketers could know in real time what every single customer thought of them, based on the experience he or she just had? Some cringe at the thought. Others are eager for it. The second group will inevitably prevail.

Given the level of investment required on the part of the user, I suspect this channel would only be used in extremely negative and extremely positive circumstances. We don’t tend to take the time to comment on things that come reasonably close to meeting our expectations. But even so, it’s a powerful feedback channel to contemplate, giving the truly user-centric company everything they could ever wish for.

…So Listen!

Last week, I talked about the mother lode of consumer intent that exists in search query logs and how we’ve been slow to leverage it. This week, we have an equally valuable asset rapidly coming down the pipe — a real-time view of our customers’ sentiment.  That’s a one-two punch that could knock the competition out cold.

Winning Through Tweaking or How to Screw Up Successfully

self_adjusting_wrench1We spend our lives looking for a revolution. But the more I learn about the world, the more I realize that everything is evolutionary. Our lives are lived through a million tweaks here and there, pushing the world ahead a little bit at a time.

The difference between success and failure in evolutionary change comes down to something I call the Rate of Tweaking (giving us the unfortunate and misleading acronym ROT). Some of us have a high rate of tweaking, and for some of us, our ROT is almost zero. The same is true for companies. Some are constantly tweaking. Others do everything in their power to discourage tweaking. In fact, as a rule of thumb, the bigger the company, the slower the Rate of Tweaking.

Four Factors determine ROT….

Passion

If we don’t care about something, there is little motivation to tweak it. Tweaking comes when we can’t leave well enough alone – and I mean that in a good way. Tweaking requires an unwillingness to settle for the status quo, a drive to make it “just a little bit better.”

I could care less about the storage room in our basement. In the 10 years I’ve lived in the house, I’ve spent a sum total of 2 hours improving this room, consisting of putting some cupboards up after a prolonged persuasion campaign on the part of my wife. For me, this is a room that, under drastic circumstances, I go to, seeking some obscure possession that we suddenly have need of, with the goal of spending as little time possible in the room. My strategy is seek – secure or surrender – scramble. My motivation to tweak this room = zero.

But our yard is a different matter. for the first 6 years we lived in the house, it benefited from minimal tweaking. But in the last 4 years, once I started to invest in it, landscaping has suddenly become a passion. I have a picture of the ideal yard in my head and I won’t rest until it’s realized. I hate winters, primarily because it keeps me out of the yard. From late March to October, I’m constantly outside, digging, trimming, pruning, building or cutting (although I’ve yet to develop a passion for weeding). I’m not saying I’m good at it, but I am passionate. The result? Our neighbours are considering dropping the petition to have us driven off the block.

Being Willing to Make Mistakes

One of the biggest obstacles to tweaking is a fear that the tweak will be a mistake, that it will move you backwards rather than forward.

This fear is not irrational. The odds for successful tweaking is less than 50/50. I suspect it’s closer to 1 in 3 or 4. So, for every success, you will have at least 2 or 3 failures.

The biggest mistake most people make, however, is in reducing the rate of tweaking. They believe by spending more time thinking about each tweak, they can improve their success rate. However, when factoring in time, you quickly realize their math is faulty.

Tweaking Scenario A – Cautious Tweaking

Company ABC decides that they will carefully deliberate each tweak, which because of the resources required and control systems in place means their ROT drops to 4 tweaks per month. However, through deliberation, they achieve a 60% success rate on their tweaks.

4 x .6 = 2.4 successful tweaks

Tweaking Scenario B – Aggressive Tweaking

Company XYZ takes a different strategy. They endorse wholesale tweaking throughout the company (it’s not, however, a free-for-all, due to point #3 below) and achieve 25 tweaks per month, a not unreasonable number when the restrictions and bottlenecks are removed. The success rate, however, drops to 33%.

25 X .33 = 8.33 successful tweaks

By being willing to make mistakes, Company XYZ out tweaks Company ABC by a 4 to 1 margin. But, you counter, what is the cost of failure? Good question.

Ability to Learn from Mistakes

In the scenario above, Company XYZ had 4 times as many successful tweaks, but they also had almost 12 times as many failures (1.4 vs 16.33). Surely, these mistakes come at a cost. They do, but the ROM (Return On Mistakes) is far greater than the investment, if you’re smart about making mistakes.

If a company is going to increase it’s ROT, it has to build a process for dealing with failure, and the fact is, failure can be tremendously valuable. In fact, it might be more valuable than success. Why? Because you learn more from failure than success. Failure dictates your future direction.

I’ve been doing market research in one form or another now for almost a quarter of a century. And one thing has never changed in all that time. You always learn more from the negative results than the positive results. Positive results don’t cause you to change direction. Negative results do. They allow you to adjust course, or, in extreme cases, do a 180 and head in an entirely new direction. In a Darwinian contest, without losers there can be no winners. That’s why the words “winnowed” and “winners” share the same etymological roots. And everything (EVERYTHING!) in life is a Darwinian contest.

Course correction through failure has three fundamental requirements:

  • The ability to quickly tell when you’ve made a mistake
  • The determination not to let mistakes slow down your ROT
  • A process to make sure you don’t make the same mistake twice

For the ultimate case study on how these three requirements can make being mistaken your best investment ever, let’s turn to the ultimate arbitrator of winners and losers, evolution.

How to Tell When You Make a Mistake

There’s a pretty clear judge of winners and losers in Nature – it’s called differential reproduction. Winners have more offspring, generation after generation. Losers don’t. Winners thrive in the population. Losers die out. The judgement is brutally effective, if somewhat long in duration.  To introduce effective evolution in an organization, you have to be just a brutal. You need a crystal clear metric to measure success or failure by, similar to differential reproduction and you have to be brutal about holding your efforts up to this metric, cutting the losers, then taking your lessons learned and investing that in your winners.

Don’t Slow Down your ROT

Nature doesn’t deliberate about evolution. Evolution happens by chance. Richard Dawkins called Evolution the Blind Watchmaker. There is not master plan or blueprint. And so, there is no predetermined timeline for evolution. Mutations and adaptions just happen, allowing the very few successful ones to thrive and the far greater number of failures to be winnowed out. But the incredibly high ratio of failures in evolution does nothing to slow down the overall rate. It grinds on relentlessly, paying no attention the scoreboard of winners and losers. The ROT in nature remains constant.

You have to adopt a similar approach in your organization. Create a mandate for experimentation and tweaking. Embrace failure and make it clear there’s no repercussions for it. Find ways to reward all tweaking, good and bad. Separate the judging of winners and losers from the motivation to try in the first place. In nature, we have the comfort of having, at a minimum, years or even generations in between the initial tweak and the ultimate determination of success or failure. We don’t have the same luxury of time in our corporations, but we can build organizational buffer zones between the initiation of tweaking and the judgement of effectiveness.

Don’t Make the Same Mistake Twice

I said above there’s no blueprint for evolution. Actually, that’s not entirely true. There is a blueprint. The difference is, the blueprint is not planned out in advance. It’s created “on the fly” through constant tweaking and then passed on for further rounds of tweaking. When it is passed on for more tweaking, at least in some species, half the blueprint is arbitrarily thrown away and then remaining half is “mashed up” with another blueprint, just to see what might happen. If there is a time in evolution where there is an opportunity for what would be a tweak that would represent a relative “leap forward”, it’s during these mash ups. I’m speaking, of course, about DNA and sexual reproduction. The point, however, evolutions successes and failures are tallied in our DNA, reducing the odds of making the same mistakes over and over. Success is, over time, coded into the DNA that’s passed on.

Organizations need corporate DNA. They need a way to tally success and failure and save it for further reference. Here is where we have an advantage over evolution. Evolution has no intelligent agent to review all the DNA prior to a mutation or a reproductive combination to make sure that this particular genetic tweak hasn’t been tried before. We do. Once we embed our history of success or failure in some form of corporate DNA, whether it’s procedures, documented process, product specs or corporate culture, we have the luxury of being able to review prior to future tweaks, keeping us from making the same tweak over and over again.

Our Environment

The final element that dictates our Rate of Tweaking is the environment we’re in. In nature, environmental factors have a direct correlations with the ROT.  The pace of evolution has been found to pick up dramatically in environments that require rapid adaptation. Here, we can learn a lesson in corporate survival from Galapagonian finches.

Peter and Rosemary Grant have spent a good part of their lives since 1973 on a tiny speck of volcanic rock in the Galapagos called Daphne Major. They’ve spent that time catching and measuring birds and recording their diets. The payoff is that they’ve seen evolution happen before their eyes. In 1977, a severe drought on Daphne Major forever changed the nature of food available there. The vegetation withered and the seeds of that vegetation, the primary source of food for the native population of finches, became much scarcer. The softer seeds were quickly eaten by the finches, which left only the harder seeds. Finches typically didn’t have beaks powerful enough to crack these seeds. On Daphne Major, nature was going to be an incredibly harsh judge of tweaking.

When our environment becomes adverse, as on Daphne Major, it’s not the initial rate of tweaking that changes. Evolutionary changes happen at random. What happens is the pace at which the losers are winnowed from the winners picks up dramatically. The Grants found that on Daphne Major, the finches with less powerful beaks died off in a generation, quickly altering the nature of the Galapagonian finch population.

The lesson we can learn here is that adverse environments force a harsher judgement of tweaking. While that might seem like a drawback, it actually speeds up evolution. For example, the adoption of digital marketing has been accelerated because of the adverse economic conditions over the past two years.

The Tweaking Reading List

If you approach corporate management from a Darwinian perspective, you’ll find evidence of the success of the approach in all of the best books, from Drucker to Peters to Collins. But three books in particular have focused on the benefits of evolutionary tweaking:

Dealing with Darwin – Geoffrey Moore

The author of Crossing the Chasm tackles the question: How do great companies retain their appetite for innovation throughout their life cycle? The evidence shows that start ups, by their nature, realize the importance of constant tweaking but the Rate of Tweaking drops dramatically as companies mature. Moore shows how to fight this tendency.

Survival is Not Enough, Why Smart Companies Abandon Worry and Embrace Change – Seth Godin

Godin directly applies the logic of evolutionary biology to the corporate arena, borrowing from notables including Richard Dawkins, Jared Diamond and others. This is one of the lesser known of Godin’s works, and that’s a shame.

Do It Wrong Quickly – Mike Moran

My friend Mr. Moran does a great job of applying the benefits of tweaking to digital marketing, a niche where the pace of change has accelerated so dramatically, winners and losers are determined in a fraction of the time typical in the offline world. Call digital the Daphne Major of marketing.

Marketers: Shift Your Paradigms

First published December 3, 2009 in Mediapost’s Search Insider

I think I know what I want to do with the rest of my life. I want to shift paradigms.

Now that I’m older and arguably wiser, people sometimes ask me for that “one piece of advice.” Usually, it involves stepping into someone else’s perspective and seeing things from their viewpoint. With each year that passes, I find myself doing that more and more, leading me to dole out that piece of advice more frequently.

You see, there is no truth or ultimate reality. There is only our perception of it. We have a lens we see the world through.  And everyone else has his or her own lens.  Paradigm shifts happen when we suddenly see reality through another lens, and the best way I’ve found to do that is to try to understand what another person’s view of reality looks like.

In one of his books, Stephen Covey tells a story of a ride home in a New York subway. In the same car was a father with his two children. The children were running wild through the car, jumping on seats, jostling other passengers and fighting with each other. The father sat oblivious to the actions of his children, staring straight into space.

Suddenly, Covey could take it no longer. Someone had to rein these children in and the father didn’t seem to be doing anything. The reality through Covey’s lens was that the father’s obvious lack of parental discipline had resulted in two rude, ill-mannered children. Finally, he could take it no longer. He moved over to the father and said, “Your children seem a little rambunctious.” The father looked at the children, then, turned to Covey, “I guess they are. I’m sorry. We just came from the hospital. Their mother passed away this morning.”  Needless to say, Covey’s paradigm shifted in an instant.

The Paradigm of the Marketer

Most of the problems I see in marketing result from the fact that marketers see the world one way and their prospects see the world another way.  We have two different paradigms. And marketers have a difficult time putting their lens away long enough to try the view through their prospect’s lens.

About a year ago, at the Search Insider Summit (I’m actually at it again as I write this) I saw this clearly in a session on mobile advertising strategies. From the audience, which was made up entirely of marketers, there was frustration that the carriers wouldn’t allow targeting of mobile users through their account information. “You have all the information, why don’t you allow us to use it to target our messages?” was the cry from more than one frustrated marketer. I asked for a show of hands of all who thought, as marketers, that this would be a good move on the part of the mobile providers. Every hand shot up.

“Okay, as mobile users, who still wants to have ads targeted to you by your personal information.” Several hands suddenly wavered, hit by the force of shifting paradigms. Many went down. Others dipped noticeably as their owners realized their own hypocrisy. Suddenly, they were seeing the world as a customer, not as a marketer.

Analyzing campaign data and crunching numbers is not the way to shift a paradigm. Our personal lenses are stubborn things. It’s very difficult to swap them for another.  The best way carries the fancy title “ethnography” but it simply means “writing about people”. Ethnography, a branch of anthropology, seeks to understand people by observing them “where they live”, in the full context of their lives. In this setting, one gets further removed from your reality and more embedded in theirs, making paradigm shifts easier. I don’t think we, as marketers, spend enough time in the lives of our customers. And unfortunately, the Internet and the flood of data available is only making the problem worse.

The Survey Says…

Here’s my last analogy. I’m a huge “West Wing fan,” and I recently watched an episode from season two where President Bartlet’s staff was polling five red states on their attitudes towards gun control.  Not surprisingly, the percentage approving came up short of expectations. Josh Lyman, a White House staffer, was disappointed and frustrated.  “That’s it!” he said, “We have to dial down our gun control rhetoric.”

The pollster, played by Marlee Matlin, responded, “I think you have to dial it up.”

“That’s not what the data says,” Josh said.

“How do you know what the data says?” said the pollster. “The data says whatever you want it to. It depends on how you ask the question, what they had for breakfast and whether a gun control lobbyist pissed them off yesterday.”

Data tends to reinforce paradigms, not shift them. It’s the understanding that comes from personal contact that shifts paradigm. It’s sitting beside an apparently delinquent father and learning that he just lost his spouse.

Predicting Innovation

innovationSmallIsaac Asimov once said “The most exciting phrase to hear in science, the one that heralds new discoveries, is not Eureka! (I found it!) but rather, “hmm…. that’s funny….”. Based on a 30 year study across 300 product categories and 225 countries, the phrase might actually be “Hmmm…. that’s what I thought.”

A new whitepaper from Phillip Roos from GFK sums up 30 years of findings started by product guru Robert McMath. The paper deserves a deeper dive – (which will be coming in some form or another) but I’ll try to share the highlights with you at least:

The Chord of Familiarity – Great innovation builds on what comes before it. This lines up with something I have long believed – there is no such thing as revolutionary innovation, just a series of incremental evolutionary innovations that at some point reaches a tipping point and appears to be revolutionary. I’ve used the iPhone as an example before.

Great Innovation does not require people to make radical changes in beliefs or behavior – Again, with incremental innovation, the market must understand the innovation and relate it to something they’re used to. The iPhone made smartphones smarter, more fun and more useful. It didn’t require us to make a great leap of understanding (unlike Apple’s ill fated Newton, which was too far ahead of it’s time).

Consumer Needs evolve in predictable ways – Innovation tends to mirror a natural evolution in consumer needs.

Innovation “news” that addresses consumer needs gets adopted in predictable ways – Smaller players generally lead the way (as they naturally are more innovative), as competition picks up others build on the original innovation (witness what’s currently happening in mobile technology with Android, the Palm Pre and others) and then finally we reach the tipping point of mass adoption (we’re getting very close to this cusp with mobile technology).

Roos also shares some drivers of winning innovation:

Business Dynamics – Supporting innovation with strong business practices and process. A.G. Lafley built a culture of innovation at the core of P&G. 3M, Apple and Google are other corporate cultures that have injected systemically into their core.

Consumer Dynamics and Insights – It’s essential for innovative companies to consistently maintain the customer’s perspective and approach product development from this frame of reference. Again, Apple is brilliant at this, due in no small part to Steve Jobs amazing intuition about what Apple’s customers want. Intuit and P&G have robust customer insight programs that bring them to where the customer works and lives, outside of the market research lab.

Creativity and Design – Innovation specialists tend to be creative and design enthusiasts. They typically have a great ethnography process that keeps them squarely aligned with their customers and then excellent design teams that can translate this understanding into innovative products….

BUT

Roos says even if you do all these things well, it may still not be enough. Apple gets check points beside each of these prerequisites, but they still turn out clunkers. In the end, innovation in product design is a bit of a crap shoot and the trick is to stack the odds in your favor. Innovative technology, even if it’s superbly designed, is a failure if no one uses it. And it’s this last point that Roos says is critical. You have to understand the patterns of innovation adoption. You have to find the right place on Everett Roger’s Technology Diffusion curve. And it’s here where the same patterns have emerged with successful innovations over the past decades. Here are the steps Roos recommends:

To understand the patterns, you have to understand the drivers of the product category. Historically, why have customers come to this category. This will boil down to some primary human drivers: safety, convenience, gratification, productivity & well being/wellness. These needs don’t change. They represent the first wave. Example: The telephone introduced instant voice communication, offering convenience, gratification and safety. It wasn’t an “out of the blue” innovation, as it built on the consumers understanding of telegraph communication.

The second wave is when innovation allows these drivers to be satisfied in new and better ways.Typically, innovation is fragmented at this step. Single innovations drive forward one aspect of the product and yields a temporary competitive advantage. Example: The introduction of the mobile phone took all the drivers satisfied by the telephone and suddenly unanchored it. We could take those advantages with us anywhere.

The third wave is fusion of the drivers. Single point innovation is no longer enough. We want the advantages to merge into a more holistic experience. Example: The SmartPhone. Mobile voice communication was now supplemented by texting, web access, digital cameras and PDA functionality.

The fourth wave is where secondary needs come it. We extend the functionality of the innovation. Example: The mobile device, and the iPhone in particular, is suddenly become core to our lives. It ceases to be a single purpose product and becomes a personal platform. Computers have also gone to this level.

The fifth wave is addressing new targets in new occasions. Taking the innovation and extending it into all parts of our lives. Example: The iPhone becomes a GPS device. It becomes a shopping assistant.

All too often, I think we regard innovation as something magical and mysterious. Innovation is something predictable and replicable. It can be planned for, encouraged and fostered.

Rupert, meet Reality. Reality, meet Rupert.

rupert_murdoch_tokyoRupert Murdoch’s rantings are so out of touch that they’re bordering on lunacy, or, at a minimum, stupidity. He’s mad that his old revenue model isn’t working anymore. Maybe, Rupert, that’s because we’re in a new era and people have changed their minds. It has nothing to do with search engines being kleptomaniacs. It’s people doing what they do..finding the easiest path to information. This boat has sailed, dear Rupert. You can jump up and down and stamp your feet, but the only people to really get made at are your readers. They’ve found a new way to get information, and unfortunately, it bypasses your monetization model. You are no longer in control.

Murdoch’s answer is to throw a subscription model in on all his publications and stop Google and other engines from indexing it and “stealing” his precious content. Hmm..let’s see now. The entire world navigates through search. Every day, billions of eyeballs go to Google seeking content. You have content. So what do you do? You lock Google out. And you try to lock customers in by hijacking their wallets and leaving them no choice. Let’s recap: Lock the world out and lock your customers in. Isn’t that what East Germany tried to do with the Berlin Wall? Let me know how that works out for you Rupert.

Murdoch’s not alone in this. Wall Street Journal editor Robert Thomson took Google’s Marissa Mayer to task for encouraging digital promiscuity. Apparently, Google has built a virtual “red light district”, threatening the stability of the sacred union of readers and struggling publishers. Again, maybe it’s because the readers aren’t finding what they’re looking for at “home”.

This denial of a dying industry is nothing new. History has repeated itself over and over again in discontinuous shifts in the marketplace. Yet somehow the behavior of the terminal industries never changes. George Bernard Shaw nailed it a century ago:

” If history repeats itself, and the unexpected always happens, how incapable must Man be of learning from experience.”

I guess it’s understandable, really. We’re looking at evolution and when the environment shifts, dinosaurs can’t suddenly decide to become gazelles. Somehow, it helps to rant, rave and rail against the unfairness of it all. Oh..and perhaps it’s also beneficial to call the gazelles names like “kleptomaniacs”.

THIS JUST IN…

Techdirt has a gritty little post showing all the Murdoch owned sites that “steal” content as an aggregator. So, apparently it’s okay to be parasitic as long as you’re on the right side of the relationship.

A Great Question: Why Don’t Big Companies “Get It?”

At our event in the Bay area last week, Marketo Marketing Director Jon Miller gave a very compelling presentation about how they’ve put a comprehensive sales and marketing strategy together that not only blows away performance benchmarks in his category, but outstrips what would be considered “Best of Breed” campaigns. At the same event, someone from a huge company asked who were the companies that were “doing it right” in B2B. A panel of very smart B2B marketers looked at each other, struggling to come up with a single name. Finally, Jon said “Well, I think we’re doing it pretty well.” It might have sounded boastful, but Jon had the numbers to back up his claim.

I’ve thought about that a lot in the few days since. Why can a small company like Marketo put together a digital campaign that integrates all the right pieces and gets them to click while a Fortune 500, with all their resources available, can’t?  Why are smaller companies much more likely to “Get It”, with a big G?

“Getting it with a Big G”

First, I should explain what I mean by Big G “Getting It.” When I look at the most successful marketers in the digital ecosystem, they have a unique ability to position themselves at exactly the right place on the digital adoption curve. They can read where their markets are going and seem to be there at the right time with the right offering. They offer something so compelling that adoption is a no brainer. These companies have a magical ability to combine the promise and advantages of game changing technology with a intuitive sense of what the market wants. Think Amazon, eBags, NetFlix & Zappos.

Hmmm..you say. No B2B companies in that mix? I would put Salesforce there, but after that, it gets difficult to think of B2B marketers who have found the sweet spot of the adoption curve. That’s why our panel was stumped when asked for examples of B2B companies that “Get It.”

I think the answer lies in the inherent nature of the companies that “Get It”. I suspect there are things that are natural here that it’s almost impossible for bigger companies to emulate. This follows up an earlier post about companies that seem to naturally benefit from SEO. As I thought more about it, I realized it comes down to a few common things:

Top Down, Bottom Up Buy In – Getting a company aligned and on the same page is just a whole lot easier when an executive meeting consists of leaning back in your chair and yelling across the hallway. There’s immediacy of communication and, through this, agreement, that’s intoxicating in a smaller company. If you get executive commitment to an initiative, the entire company can know about it and start executing in minutes if required.

Nimbleness –  With quicker communication comes nimbleness. Smaller companies move faster than big companies, and in the digital marketplace, that’s a vital advantage. If you get that rarest of animals, a small company with seasoned executives who have “been there, done that”, you get a tremendously effective execution machine: a company who knows what to do and can actually do it without dealing with energy sucking inertia.

Growing Up Digital – The handful of companies that I see have almost all grew up in a natively digital market. The online marketplace is baked right into their DNA. Another important point: they get technology, but they’re not star struck by it. If they’re chasing a social media strategy, it’s because they understand that it’s because conversations are happening and they need to be part of them, not because they’ve been caught up in the buzz and hyperbole of it.

It’s Not Marketing, It’s How We Roll – The idea of marketing as a separate department or discipline seems to belong to a past generation. In the successful new breed of companies that “Get It”, marketing best practices are so deeply woven into the fabric of the company that it’s impossible to separate them from all the other stuff the company does. They just do the things that are right for the customer, and everything good seems to naturally flow from that. If you want to call it marketing, fine, but it’s not the first label they’d put on it. They tend to use words like “culture” and “core values.”

Living Closer to the Customer – This ingrained ability to anticipate customer needs comes from living closer to the customer.  There is very little distance between everyone in the company and all their customers in smaller businesses. The CEO knows and understands at a gut level what the customer wants from them. And, if you have an executive that knows how to execute (rarer than you might think) you’ve got consistently happier customers.

Those are my observations after a few days thought, but this question of why smaller, newer companies seem better positioned to evolve in the new marketplace is one that needs more thought. If you could take a few minutes to share any examples of companies that you think embody these characteristics, I’d be grateful. Just add a comment to the blog and I’ll start compiling a list of examples to both share and to take a closer look at.

The Cult of Technology

We held our B2B Expert Face-to-Face event yesterday in Redwood Shores, CA. Yes, we asked people to drive to the west side of the bay the same day the Bay Bridge was closed. Needless to say, it impacted our attendance somewhat. But it was also a smaller, more intimate opportunity to really talk about the challenges common in B2B digital marketing. The common themes that emerged what a tendency to “peg” search as direct response marketing, the realization that B2B is slower to adopt digital than B2C, the difficulties presented by the fragmentation of the B2B marketplace and why we’ve tended to silo off our digital strategies from the rest of our marketing. Most of the discussion came from the findings of the BuyerSphere Project, the extensive research we conducting into B2B buying behaviors.

Every timeI talk to a group of assembled search marketers, I can’t help but feel the palpable frustration in the air. The gulf between those that understand digital (particularly search) and those that don’t can seem impossible to bridge. We feel tied down by those within our organization that seem mired in the old way of doing things. Why the hell can’t everyone see the world as clearly as we can. Also, I mentioned that as marketers, we tend to focus too much on technology and not enough on the people that interact with that technology. Few companies invest in qualitative research As we chatted at the Hotel Sofitel In Redwood Shores, a thought struck me. One on the problems may be that we’re all too much alike. We’re suffering from cultural homogeneity.

If you look at most elements of human nature, there it a typical normal distribution curve, otherwise known as the Bell Curve. The majority of the population clusters around the mean, at the center of the curve. As you move further out, you have more deviation from the mean. The diversity of us humans: whether it be intelligence, wealth, behaviors, physical abilities or size, tends to spread out on this curve.

bell_curve

The same is true, as Everett Rogers discovered, about how quickly we adopt technology or (one supposes) adapts to change. His technology diffusion curve followed the typical Bell Curve model. A few of us adopt technology almost as soon as it becomes available. A few of us avoid adopting technology until it becomes common place for everyone else. The vast majority of us fall somewhere in the middle.

technology diffusion
But what happens when you’re constantly surrounded by people at one spot on the curve? What if everyone you knew had an IQ of 123, or you lived in a town where everyone was 6 feet 3 inches tall? Soon, you’d fall into the trap of thinking this represented the norm. If you never saw diversity, you’d start to forget that it exists.

This is almost never a healthy state of an affairs. A common ideology amongst the heads of Nazi Germany lead to a drive for cultural homogeneity. The unbelievable wealth that surrounded the French aristocracy (or the Russian, for that matter) led to revolts of the masses. History has not proved to be kind to groups that are too much alike in one aspect. At best, this homogeneity gives you a skewed view of the world that may cause you to make decisions that don’t map well to the general population.

And that, I realized on Wednesday morning, may be exactly what is happening to us digital marketers. We are in this business because we all love technology. We are all classic early adopters, lying at least one (and I suspect closer to two) standard deviations from the norm, here at the thin leading edge of the Bell curve. And because we are surrounded by others like us, we start to lose sight of what the large bulge in the middle is doing. We chase technology with an obsession worth of sex starved teenagers. Every digital marketer I know has a smart phone. More than half the digital marketers I know have iPhones. If you travel in the same circles as I, you would soon think that everyone has an iPhone. Yet the iPhone market share in the US is  still only 11% (although it’s growing quickly). Like I said, we live on thin edge of the curve.

I think this skewed view of the world makes us exactly the wrong people to be planning digital marketing strategies aimed at the general public. We live in a cult of technology. We’ve forgotten how the common person lives with their hopelessly antiquated mobile phone and without a Linked In profile that includes at least 500 connections. There are many, many people out there who have never Tweeted, don’t have a blog and are unsure what RSS means. They include almost all my relatives. Yet we never seem to take them into account where we’re salivating over the latest strategy for generating buzz on social networks.

So, how does a digital marketer keep their perspective when they’re so far removed from normality? They have to become digital anthropologists. They have to live with their prospects, watching them in their daily routines. They have to discover the way we were meant to discover, by watching other people, helping us to understand and empathasize with them. Evolution has equipped us with some very subtle tools for understanding other people when we’re face-to-face with them. To my knowledge, however, it hasn’t given us an inherent ability to generate pivot tables in Excel. Maybe we should spend more time doing what we were meant to do: hang around with real humans instead of technology.

The Pressure’s On and the Cracks are Beginning to Show

First published September 10, 2009 in Mediapost’s Search Insider

Some time ago, I wrote a column saying the fallout of the economic crisis would be a rapid evolution in marketing practices, speeding the transition from the old way of doing things to a much more dominant role for digital. In that transition, search would play a bigger role than ever. In the past few months, I’m seeing exactly that come to pass. People are serious about search, from the bottom right up to the top corner office. This isn’t playtime in the sandbox anymore; we’re suddenly moving front and center.

“I’m Ready for My Close Up, Mr. CMO”

The reason people are so interested in search is that it comes with the reputation of being highly measurable and accountable. This isn’t anything new, but lately, it’s coming with some additional baggage. Now that the C-Level is involved, performance isn’t being judged simply on a trial campaign with a limited budget. Suddenly, search is being tested to see if it’s worthy of taking a starring role in the marketing mix. And that is adding a lot of pressure to those of us toiling down here in the search trenches.

Search, by its nature, isn’t all that scalable. It comes with a built-in inventory limitation. You can only reach people who have raised their hand, indicating interest in something. Once you tap out that inventory, search loses its bright shiny luster. Search is effective because it’s a signal for consumer intent. You can’t use search to create intent where none exists.

“You Bid on What?”

Management of search isn’t very scalable, either. It’s a lot of heavy lifting and obsessing over thousands of tiny little nitty-gritty details, which, if you overlook them, can suddenly blow your ROI right out of the water. Just ask the PPC manager who forgot to set the appropriate budget cap and comes in on a Monday morning to find they’ve just spent several thousand dollars of a client’s money on a broad match for the word “lube.”

Also, the new breed of client is expecting more than just a limited tactical approach to search. Suddenly they’re using words like “integrate” and “holistic” because, well, because those are just the kind of words you use when you get to the top of the corporate food chain. You get paid the big bucks because you can toss “synergistic” around in a board meeting and actually be serious at the time.

Back to the Drawing Board

Right now, people across this great land are pulling out their white boards and sketching out the rudiments of “Marketing Plan 2.0.” They know something important has shifted in the marketing landscape; the economic belly flop has made it all too apparent that there must be a better way of doing things.  I haven’t seen any huge waves of budget pouring into search yet, but I know there’s a lot of talk out there, and much of it is about search.

Generally, I think this is great news. I’m the first to complain about the tactical bias of search marketing.  I think search has a much greater role to play — but I feel it’s only fair to warn search marketers that this isn’t going to be a painless skip down the path to a lucrative retirement. Anytime there’s a big shift, it comes with an accompanying pendulum effect. After being restrained too far on one side of equilibrium, the pendulum has to correct by swinging too far in the other direction. As budgets start to come into digital channels, including search, we’ll learn that, in many cases, it comes with a set of expectations that are seriously out of whack.

Survival of the Fittest

There are some search marketers that are ready, willing and able to take search to the next level, the one it rightly deserves. There are many others who will use impressive words in the sales pitch (words like holistic, integrated and synergistic) but fall seriously short on delivery. The path ahead is going to have a lot of casualties, both on the vendor and client side. But then, evolution has never been a particularly gentle process.

Just ask any ichthyosaurus.

Get It or Die: Online is Your Core Business

First published June 11, 2009 in Mediapost’s Search Insider

In a recent survey, we asked B2B buyers how they prefer ordering the things they order all the time. Sixty-three percent said they prefer to order them online. The next largest group was the 15% who would go the traditional route of ordering from a local office over the phone. Another 12% said they’d prefer to order from a real live sales rep. In a recent presentation to a client, I kept that pie chart of results up for a while, allowing it to sink in, because I think the implications are astounding.  After it sunk in, I asked what I believe to be a fundamentally important question: “Look at the chart and ask yourself, how closely does your company’s strategic direction and resource allocation match that pie chart? That’s where your customers are going, and they’re moving fast. Are you going to be there when they get there?”

“getting it” vs. “Getting It”

Lately, I’ve also talked a lot about “getting it.” To me, there are two levels of getting it.  There’s the safe level: the proficient e-business unit that understands search and executes effectively, realizes that online strategies have to be planned across channels, is struggling to put attribution models in place that work, and is continually testing and optimizing landing pages. If we look at digital marketing alone, they understand it and are skilled practitioners. This level, “getting it” with a small “g,” is rare, although there are several examples to look at.

But then there’s “Getting It,” with a capital “G.” This is the company that realizes that online forms the core of the customer experience and that everything else has to support that — if not today, then in the very near future. This is the company that is rapidly and aggressively moving to digital as its primary way of doing business, that is already making the painful but required transitions and is willing to cannibalize its traditional core in order to support the move to online. Outside of pure online plays, this level of “Getting It” is so rare as to be basically nonexistent.

Digital Butt-Covering

Companies pay lip service to “getting it,” but they’ve hedged all their online bets. They have treated online as an incremental revenue channel, putting in rigorous ROI thresholds so that it can be separated from the core business and risk can be balanced against returns and investment, thus minimizing it. E-business is a siloed sandbox, relegated to the sidelines so it doesn’t rock the mother ship.

What these companies fail to realize is that this safe, incremental approach to moving online is probably the riskiest thing they can do. Here’s why.

Online is a discontinuous innovation in consumerism of all kinds. It’s a huge step forward for the buyer in almost every way imaginable. It’s easier, more convenient, more useful and more effective. If people aren’t buying online, they’re researching online. And no matter how much they’re doing both those things, they would like to do more. The only thing holding them back is a lack of destinations or a quality user experience on the destinations they do have to choose from.  Your customers are adopting online at an incredibly fast rate.

By easing towards online at a safe, incremental rate because you’re mitigating risk to your core business, you’re allowing your critical mass of customers to get in front of you. Whenever a mass of customers is underserviced, someone will fill that gap, and you can bet it will be a nimble, online pure play that’s moving at light speed compared to you.

Internet Speed Defined

Jim Lecinski from Google’s Chicago office has a chart he loves to show in client presentations. It slaps you upside the head with the reality of “Internet speed.” He first recounts a typical conversation with a client that falls squarely in the first category of “getting it.”

Jim: “What are you doing with your online campaigns?”

Client: “Oh, we have a lot happening. We’re expanding our keyword list next quarter and we’ll optimize that campaign over the following quarter. In Q3 and 4 we’re going to run some experiments with social media that we’re excited about. For the next fiscal, we’ve built more into the budget for better tracking and attribution. That will help as we move to cross-channel optimization because we’ll get great data showing us what’s working and what’s not. That will also allow us to step up our landing page testing and optimization.”

Jim: “So, you’ve got your plans set out for about 18 to 24 months ahead?”

Client: “You bet. We’re moving very quickly.”

Then Jim shows them the Google Trends graph that reminds them that both YouTube and FaceBook went from zero to Internet domination in under 24 months. Further, few people had heard of Twitter 12 short months ago.

That’s Internet Speed.

That’s “Getting It.”