As technology continues to grow and the internet becomes a more common platform for business (believe it or not, many businesses still haven’t harnessed the internet), the amount of money spent on online ads has become, as you can imagine, fairly substantial. Although online advertising can be a more efficient way to target certain demographics than traditional media outlets, this does not always lead to greater results. According to a new study from MIT Sloan School of Management, the same search, and other technology, that has enabled advertisers to target particular audiences, such as men between 25 and 35 who work on Mac computers, is also creating greater online competition for the same audience, thus reducing profitability of advertising on any targeted web site.

If you think about it, this all makes all the sense in the world. And it isn’t enough that many online advertisers have only themselves to blame for fragmenting their own markets by hopping from one sexy technology or site to another, but now there is evidence that there is a finite amount of scree-estate available to compete for the attention of the viewer.

MarketingVox data suggest that the study’s findings take on greater relevance as vertical and hyper vertical ad networks continue to grow. Adify’s Vertical Gauge for Q3, brand advertising CPMs for various verticals continue to rebound from early 2009. Also, food CPMs are up 91% from last quarter and Real Estate CPMs are up 17%. As far as vertical brand advertising, both automotive and healthy living and lifestyle verticals contracted substantially.

Clearly this article suggests to advertisers and consumers alike that targeted ad dollars don’t necessarily create more efficacy or revenue, in fact, evidence, in this case, shows more targeted ad dollars are less profitable. It is critical that advertisers note the importance of integrated marketing strategies in their marketing communications campaigns…more to come.

1. Engage - People who join your group or fan page want something. Find out what it is and give it to them. Give them coupons, suggestion, offers, new, meetings, rallies, contests…what ever it is, you must keep your network engage or else you risk loosing it…or worse, having a stale network.

2. Aggregate - Social networks allow you to bring people together around your issues, products and services. Once you build your relevant network, you can engage by polling, conducting market research, delivering offers, and so on.

3. Measure Online - Measuring your activities on your social networks. For example, how many people joined your group. How many people are attending your events, how many people saw your event, and how many comments are made.

4. Measure Offline - Use every opportunity to drive your “offline” audience to your online social networks. So if have a quarterly magazine, or conduct monthly direct mail, or advertise in print or television, invite people to join your online network. Now you can measure what’s happening offline and at the same time grow your influence in your social network.

Social networking is no panacea.  But, done right, it can be a slice of heaven, even though it takes hard/smart/inspired work.

Here’s a brief interview with FIOS1 about social networking.

I was on fakeation (that’s a working vacation for the uninitiated), when my eyes turned to the television to catch Ford’s new advertising campaign.  The new ads feature Ford’s new tagline, “Drive the Ford Difference.”  But that’s not all, “Different is good,” they say.  Now with all the hurdles that Ford has to overcome, Ford is selling us “Driving the Ford Difference.”  I don’t know what that means, but I’m a good sport, I’ll play.  OK Ford, what is driving Ford difference?  If you can explain it beyond a tagline, I might be interested.  How does the Ford difference engage the customer? Was anyone at Ford’s advertising/MarCom department asking this question?

Once again we’re subjected to mass communications lip service, the same came from General Motors‘ recent “inspiring” video.  In this video, accompanied by iconic images of American flags, city scapes, Pittsburgh Steelers Ben Roethlisberger’s Superbowl pass, GM seeks to “to be completely honest…start over in order to get stronger.” And another thing, GM wants us to know that they are “not going out of business,” but instead “is getting down to business…”

Once again, Madison Avenue and those buying Madison Avenue to continue to fail both the Auto Industry and the American Public.  Here’s how it probably went down (with the GM video):

Madison Avenue:  (this guy is wearing a pink open collar shirt with hair a little messed up, cause he’s creative…speaks real fast) Look, we need to appeal to the American public, so we’ll need a video of the Superbowl, Detroit skyline, and a bunch of robots building cars, sparks everywhere.  Strong, deep voice, authoritative.  We’ll use technology like Youtube, and it’ll be viral…and it’ll show the government and our investors we’re serious about this. What do you think?

GM Marketing Guy:  We’ve gotta do something fast, yeah, sounds good…

GM Marketing Guy’s Staff: (this is probably what they were thinking, but they didn’t say anything, because if they did they wouldn’t be team players)  Dude, what about the actual product, our finances, and actually selling cars? How do we do that, Madison Avenue?

I would be wary with businesses who lead with communications instead of good products.  Rebuilding brands, if that indeed is your direction, starts with rebuilding your products and business, not a one hit wonder PR video release. In Amazon’s most recent shareholder meeting, CEO Jeff Bezos said: “Advertising is the price you pay for having an unremarkable product or service.” Now, some may consider this media fodder, and Madison Avenue may have been offended by the statement, but as it applies to the American Automotive industry…if the shoe fits.  And now, the American Auto industry seems to be taking it’s own advertising to an unremarkable, new low.

Here some suggestions to ponder:

1. With all the technologies and brainpower resources available to both the automotive industry and their advertising firms, Ford and GM ought to invest business driven MarCom initiatives that engage people and drive people to their hard working dealerships.

2. Redefine the objectives of these campaigns to create more connections with the consumer.

3.  Develop a serious strategy to convert non-customers (meaning non-GM or Ford customers).  This would an on and offline strategy, and may or may not be advertising driven.

4. Continue to reach newly minted drivers. Get them young, satisfy them, and perhaps they become your brand champs.

5. Capitalize on the dealer’s strong local relationships by spending local dollars more effectively - perhaps helping local dealers upgrade dealer TV commercials produced by cable companies, that undermine both the national brand and the dealer’s brand. Or assisting the dealer by vetting marketing plans & not advertising plans to help drive business.

One last thing…I’d like to suggest that the American Auto Industry needs a chief marketing officer who is more connected to the products and consumer than Madison Avenue.  This person, let’s use the vernacular of the day to call him or her, the Auto Marketing Czar, would be responsible for the deployment of business driven MarCom initiatves to communicate the real value of American cars to the public, and perhaps that will make all “the difference.”

The American Auto Industry has the responsibility to its dealers, customers, and investors to step up their marketing strategy to truely reflect its business aspirations, and it has the resources to do it.

Come on Detroit, step up…take the challenge…we want you to succeed.

The proliferation of social networking sites is advancing at an impossible pace. For businesses, these sites offer the Holy Grail, the opportunity for engagement of their customers. This particular race is reminiscent of the race for eyeballs in the early days of the consumer Internet between Yahoo, Excite, iWon, Alta Vista, DogPile (yeah, remember those guys) and the countless search engines, turned portals.  Then Google appeared and poof, most of those guys are gone or relegated to the Internet’s C-list - in the business sense of course.  Some of them still retain their web presences, others have morphed into something else.

The similarities between the portal races and social networking race are many, let’s look at some of them:

• Market share competition - This is done by creating useful tools that are meaningful to users.  More relevant tools, more people join, use, stay, and proselytize…at least that’s the way it’s supposed to work.
• Viral growth - portals and social networking sites relied heavily on their users for growth, although Yahoo delved into traditional advertising to drive growth. Interestingly, advertisers are creating their own space on Facebook, and bypassing their own corporate sites by driving consumers directly to their Facebook page through traditional advertising.
• Relevancy rules the day - the survivors of the portal wars won on their space’s relevancy to the user. Yahoo finance was created making it robust and useful, Yahoo mail kicked it up a notch after Hotmail was bought by Microsoft. And as much money iWon vowed to give away, users rejected  its business model because users care about the things important to them: 1. relevancy, 2. usefulness…iWon delivered neither.

Based on these lessons, let’s look into the crystal ball and see what shakes out for the social networking world:

Like the portal proliferation of the mid to late 90s, Facebook, Linkedin, Plaxo, MySpace, Youtube, Twitter, Friendster, et. al. are in an arms race to create useful tools in order to attract and keep market share.  One thing that must be considered here, and only one…who will be left standing when the user bandwidth becomes depleted.  In other words, why would I have a Plaxo and Linkedin accounts? Or Facebook and Twitter accounts?  Who has time for all this stuff?

Still, let’s assume businesses have the resources to sign up for these sites. Your business at Facebook, Twitter, Linkedin, is only as important as your network on those sites.  Imagine managing several networks, building your client database, and then working the networking by pushing out content.  This would involve high level strategy, definition of marketing tactics, PR strategies, and a solid implementation plan…I’m getting winded just thinking typing out these words.

Now on to Twitter…

Twitter’s growth, largely organic, press and celebrity driven, is understandable. I can understand how people would want to know what Brittany Spears is thinking about while on the checkout line at Walmart - well not really.  But why would I migrate my network from Facebook to Twitter. Ok, I can update my Facebook status via Twitter, but I can do so much more with Facebook and Linkedin. I can create groups, post videos, create events, and deliver status updates, so why would I recreate or duplicate my online world on a largely one dimensional site?  What is the relevance of Twitter to my business is the question we all must answer.  And so, if  we’re tweeting to no one or an irrelevant bunch of followers, than who cares.  But if we’re serious about tweeting as a social networking medium that can help advance business objectives, then we have to take time to create a relevant pool of people that either needs or wants to hear from us on  a consistent basis.  And if I’m on Facebook or Linkedin doing this very same thing, I am not inclined to dilute or distract my network by sending them somewhere else for a singular function, like a status update.

According to a recent article in Slate, citing a study by a Harvard Business School professor, showed that 10% of Twitter users were responsible for 90% of tweets. The article also referenced a study by Nielsen, the media research firm, which asserted “that 60 percent of Twitter users do not return from one month to the next.”

So what’s Twitter to do?  Simple.  Provide more useful functionality to continue to survive. Attracting visitors is one thing, keeping them engaged on a long term basis is another.

More to come…

The rush to social networking is an interesting phenomenon. We watch with amazement as people flock to facebook, twitter et. al. and the offline social pressure that ensues to get on these sites. The business implications are plenty, from the demise of newspapers, to the rise of social networking, how does capitalize on these sizemic shift in the tectonic plates of media?  Here are some ideas to ponder:

1. Social networking online is like social networking offline. I can’t tell you how many people I know attend trade shows, networking events and come back with a stack of business card that just there. The key to any networking, on or offline is the “next.”  What do you with that valuable information? How do you use it? When? For what?  So online social networking is more about your behavior than the technology. If you’re a natural networker offline, you’ll probably know just what to do online.

2. “Own” a social networking site - like a good media planner, aggregate your efforts on where your market is and focus on learning the social networking environment and make it work for you. Own the medium.  For example, if the majority of your target market is on Linkedin, get on that site and work that site. Do not dilute your efforts by attempting to do the same on facebook, myspace…your market simply isn’t there.

3. Social networking sites have become destinations with emotional attachments. People will have a hard time leaving, unless something drastic happens like a serious breach of privacy or the sites become fee driven. Even if that happens, I believe that these properties will prosper (perhaps not financially, but will be around in one form or another as utilities).

4. Your network is key - building your online network on social networking properties is the foundation for everything you will do.  If you have relevant contacts whom you can engage, then you have a distinct advantage.

5. Do not abuse your network - remember you do not have a right to your clients, so bombarding them with emails, and offers may turn them away from your online network. Respect that this is their space too.

6. Integrate social networking sites where possible to get the biggest bang for the buck - for example, facebook has a twitter app that allows twitter to be updated whenever you update facebook, saving you time and extending your reach.

There is so much more to share, I am thinking of launching a social networking advisory for our firm. I’ll keep you posted.

I had an opportunity to speak about marketing practices in front 50 or so dentists and in the course of discussion we began talking about incentivizing the market place to generate interest in their services.  “But wait a minute, why if I put out an offer, my existing clients will use it and it’ll cost me,” one of them said.  That echoed, verbatim, another client’s sentiment’s - this who’s in the hospitality space, said to me as we discussed his marketing plan about a month ago.

What makes a customer “your customer”?  What you think that you are entitled to your clients?

Let me share a very recent experience I had with Verizon. I’ve been a loyal Verizon Wireless customer for over 10 years. In that time, between my wife and I, we’ve spent about $2,400 per year with Verizon Wireless, so that makes about $24,000 over the past 10 years.  Two weeks ago, I lost my air card ($60 monthly service), so I went on Verizon’s site and saw the same exact card for $29.99.  A couple of days ago, I was driving by one of their stores so I decided to get my replacement card. The gentleman who was helping said that because I lost the card, I had to pay $155 for a replacement with some kind of rebate that brings the cost down to $100. And the reason they have this policy, they said, is to prevent people who want to upgrade sooner from taking advantage of the system…Let me get this straight, I bought the card…I paid for it. I lost it and want to purchase the same exact card that it being advertised for $29.99, but because I lost the card, I have to pay ungodly sum?  So I asked him how much it was going to cost to break my contract for the service…he said $155…I gladly paid to break the contract and the next day, I went to At&T and picked up a new air card and a new 2-year contract. Let me do the math for Verizon.  I’ve their air card and service for 2 years at $60 / month…$2,400…puff, gone, see ya…and by the way, Verizon will loose my phone service once my contracts on those are up on 7/19/2010. And for $29?  In a market with over 90% saturation, Verizon Wireless chose to loose a loyal customer.

In a tough economic environment, we advise our clients not to take their clients for granted. We believe that good marketing is keeping your existing clients excited about doing business with you. This is a great time to advance your brand with the folks with whome you already do business. It’s certainly much more expensive to acquire a new client, than keeping the ones you have happy and close to you.  The fact is, no business is entitled to their clients, and in times like these, businesses must incentivize clients, new or existing.

Think of it this way, let’s say you’re a restaurant with a loyal client base, but in these times, business is slowing and you are not seeing these clients as often as you would normally.  If your competition is incentivizing the market and your clients are in the same catchment area, chances are your clients may be going, or considering going to the competition. If you are not doing the same, your clients may be wondering why you are not reaching out to them, and that can errode your business and brand.

They may be customers whom you serve, but they are not your customers…more to come…

At a recent fund raising event, I stood in a circle talking with a bunch of people, when I overheard a tired question to a member of our group to whom I was not yet introduced. “So What do you do?” went the question. “I’m in advertising, I build brands,” he replied with a smug confidence.  So I took that as my cue to ask a follow-up question, “What does that mean, you build brands?”  The gentleman went on to describe “branding programs” that his very successful 25 year old firm produces for clients. “We’re image builders,” he continued.  So I went on to ask him what the average length of client engagement happened to be, “oh, about 3 years,” he said.

More Wine…

Yeah, more wine was just what I needed, so I pondered “Mr. Branding” on my way to get a Cabernet.  While brands are important, I’m thinking that this guy’s advertising firm is with a client for about 3 years and he’s telling me he’s builds brands?  Think about the venerable brands like Coke, Intel, Sony, Dunkin’ Donuts. How long did it take to build their brands?  But, I guess this is the trouble with branding. As I’ve said before, branding has become a  package to be sold, partly because it’s easier to sell to the client, it’s sexy, and partly because the client is looking for a quick and easy hit to sell the boss, the board, etc…and who’s to blame them? The most recent studies showed that the average CMO is around for under 24 months in their position…And what can you accomplish in that period of time?

Even More Whine…

I got my wine and went back for more questions. I wanted to learn about how he builds brands.

“Advertising.”

“What else?”

“That’s it”

“That’s it?”

“Yup.”

“What about integrating your advertising with the web?”

“Well, that’s up to the client, we’re in advertising.”

“What happened to your brand building?”

“Yeah, we do that through advertising.”

“Oh…I think I get a Merlot this time…If you’ll excuse me”

And that’s the problem!  We’ve got advertising guys or creative guys calling themselves brand builders. While that is in-part true, it is only part of a larger picture.  This is like the company who supplies the plane makers with seats for its planes calling itself an airline…But I digress.  As if I have to state the obvious, advertising is only one component of branding, it’s a cog in the wheel?  So why do advertisers and graphics people call themselves brand builders?  You have a great logo, now what?  You’re on the radio? Now what?  GEICO’s advertising is impressive, engaging and now interwoven in our culture, still that is only part of the GEICO brand experience.  Call GEICO, speak to them, get their insurance, file a claim, interact with their people. That is their brand. I would consider their advertising, at this point, to be for brand awareness, which is part of their brand distribution strategy.

Why does this happen? Why do people continue to sell branding as a product? Because it’s appealing to talk “brand building” rather than advertising, it’s appealing to hear about how “your brand” can propel your business.  So if branding is a result of a bunch of market driven communications, interaction with the customer, connecting with the customer, and developing an emotional attachment to the customer, why do I continuously hear people present it in a simplistic manner, as a singular activity that happens over brief periods of time?

This is what I am now branding the selling of branding, as I define it here, as the “Madoffing of Branding.”  The Madoffing of branding is all about getting the account and selling your stuff. The times of managing quarter to quarter are over, they should have never started. And marketers need to become smarter about how they invest their resources. Suppliers of marketing services ought to partner with clients, as many industry on both the buyside and vendor side have been calling for years now. And when we partner with clients, their business becomes our business - yeah, that’s a bit scary and perhaps risky, but it is crucial for marketers, in this or any other enviornment, in order to stay relevant and deliver real value… It’s time for businesses to understand that while they are marketing for both today and the long term health of their business.  In addition, the buyers of marketing services ought to bear some responsibility by making sure that marketing programs they are purchasing are relevant to their business plan and more importantly, their customers..more to come.

By Abe Kasbo

I met my friend Jim Barrood for lunch today. Jim is the Executive Director, Rothman Institute of Entrepreneurial Studies Silberman College of Business at Fairleigh Dickinson University. Jim is one of our nation’s brightest business minds, and an expert in innovation. We were talking about a mélange of business topics when the conversation took a turn down Interesting Street. We got on the topic of marketing and branding and that’s when I blurted “Jim, branding is bullshit!” He bit through a French fry and gave me a skeptical stare, a “Wachu talkin’ bout Willis” kinda look.

Jim asked for an explanation. “Look,” I argued, “companies invariably approach branding as an activity. ‘We’re embarking on a branding campaign’ or ‘we’re rebranding our product line’ and what they really mean - usually - is a new logo, collateral, website…that is not branding. And this is especially acute in companies that range from $5 million to about $500 million in revenue. It’s reality.” Jim was intrigued and so I continued explaining my position.

A brand is a result of integrated activities that happen over a period of time bringing together various parts of the enterprise to achieve consumer preference, affinity and ulitmately drives growth. Launching a brand is one thing, but becoming a brand is entirely different. I believe that when businesses talk about branding, they mean “becoming a brand” but act as if they are “launching a brand.” And so team are mobilized, resources allocated…launch, then what? It’s the “then what” part where brands are built and real value is made.

Charlie Rose recently Jeff Bezos, CEO of Amazon and Jeff spent a good potion of the interview talking about his obsession with his customers. Specifically with customer experience. Think about it, Amazon got most of its press because of its high flying stock in during the internet boom. Very little advertising, very little “branding,” The internet bust came, and Amazon continued its course - very little advertising, very little “branding.” How did it attract customers? First of all, Amazon.com kept refining its customer experience and understood that by building a superior online shopping experience, customers would return and new customers would be had. It’s that simple. Think about it, when was the last time you’ve seen an Amazon commercial or received a direct mail piece. Yet, time and again, when I think about buying books online, I go to Amazon. That is a brand strategy.

Yes, branding is about your image, the look and feel of your stuff, but more importantly, branding is about the total experience your customers have with your company, and it’s that experience that will tell them to choose you, recommend you, or not. A brand is about forging an emotional connection between you business and the customer. And that takes long-term commitment and vision…we all know these days business is largely driven by short-term expectations, quarter to quarter.

Moreover, branding has now been entrenched in the corporate dictionary and has become essential to anyone conversant in corporate lingo. So you want to impress your boss and your peers, say this in the next meeting “we need deliver on our brand promise,” and you’re on your way. Unfortunately, everyday good businesses stake fortunes on what they believe are branding campaigns (becoming a brand) that turn out to be nothing more than glorified advertising campaigns.

I will discuss how to businesses can work their way into becoming a brand in my next post…