Lairig Marketing

March Updates & Highlights – Part 2

Turns out we will indeed need this post and one more to clear out March. This stuff is just way too precious.

Digg Is A Drag
Here is a great example of why I want Web 3.0 to be less “democratic.” The #1 marketing blogger (via sheep-link count) had this to say about the economy on March 15th:

“So, there's plenty of bad economic news floating around. From the price of oil to Wall Street to bailouts to the death of traditional advertising. Which is great news for anyone hoping to grow or to make an impact.

Change (and the fortunes that go with it) is almost always made during the down part of the cycle. It might not be fun, but it's exciting. (Where do you think Google came from?) The opportunity is to find substantial opportunities (in any field) that deliver real value and have a future. Those jobs/investments/companies/ideas are undervalued right now, but not for long.”

That’s it. Compare it to my recession posts of Jan 3, Jan 18, Jan 25 and Feb 1. Yet Seth Godin got 20 diggs, for 136 words of sleep-typing nothingness. TWENTY. And I got none.

Oh and by the way Seth, I wasn’t aware we were in a down economy in the late 90s when Google was born. Many have called it the biggest bull economy ever, but what do they know?

Silly Elf #1
So I get this semi-spam, but the headline grabs my attention before I hit delete:
“Bloggers, Meet Robert Thacker, SVP marketing, OFFICEMAX”

Turns out the guy responsible for the “wildly successful” Elf campaign is going to ride that pony until its legs turn to nubs. Thacker is holding a “Press Teleconference” (whuzzat?) this Friday.

The topic: “Changing Tolerance for Risk: …Learn …how taking calculated risks can lead to big returns.”
I’m signing up, because I want to see what returns he is measuring. See our February update where we analyzed OFFICEMAX financials and found negative returns. If they don’t let me heckle by phone, I’ll heckle by blog next week.

Thacker’s teleconference by the way is a “sneak preview” of what he’ll present at the topic of our final update for today (see next item).

Silly Elf #2
The Promotion Marketing Association is holding its annual conference on April 8, at which Thacker will present his Elfness. One of The PMA’s keynote speakers will be Carly Fiorina. That’s right – the woman who was sacked for single-handedly almost destroying the Hewlett-Packard brand. What she will have to say about “promotions” (other than promoting herself) is anyone’s guess.

The last of the March updates come tomorrow, including how close and yet so far I was on predicting the gate for Will Ferrell’s Semi-Poop, I mean Semi-Pro, movie.

March Updates & Highlights - Part 1

We’ve hit on so many hot topics, the March update needs two (if not three) posts, so we’re starting the review one day early. We’re actually updating some stories from January. Strap yourself in – here we go.

The REALLY Big Idea
Donny Deutsch’s show gets more surreal every day. Last night he had on Howard Stern’s 367-pound sidekick, Artie Lange. What this had to do with “millions and billions” is unclear, unless it was a count of the total number of grams of coke Lange has ingested. Anyway, new meaning has been given to “big.”

CEOs Right On Time
We busted on the CEOs in January for their inability to see the rough patch we peasants are going through. But wait…some of them must have noticed their landscaping bills were going up.
“The Vistage CEO Confidence Index — a measure of economic, market, and industry trends — dropped four points from 4Q07 to 1Q08, hitting a five-year low of 72.0 amid concerns about the economy…”

How’s that coffee smell, guys?

The Duller Image – Part 1
Remember our idea to redo the whole Sharper Image store concept, as it navigates bankruptcy? Check this out.

“Cellular South is updating its Ridgeland, MS retail store to push web offerings in an effort to emphasize its updated business strategy…The new store is designed to mirror the layout of the website. There will be a total of 26 computer terminals, and 23 employees will guide customers through the process of using the company's website…
Ultimately Cellular strives to become entirely self-service…”

It can be done. We have the technology.

The Duller Image – Part 2
When is a gift card not a gift card? When you can’t understand the redemption rules.

“Sharper Image said yesterday that it would immediately resume honoring gift cards and other vouchers that were suspended last month when the company filed for Chapter 11 bankruptcy…if customers use them in full during one transaction and apply them toward items costing double the value of the cards.”

Remember to bring a calculator when you go.

We Don’t Need No Stinking Airplanes
As you probably know, all those airline mergers were called off. But the race to the bottom we spoke of lives on. Not to be outdone by Southwest, both American and Delta said, “Oh yeah? Well we are going to put TWO HUNDRED unsafe planes out of service! So there!”

Don’t miss the updates coming Monday. Including not one, but two updates on those douchenozzle OfficeMax elves.

Have a good weekend. All 75 of you.

Sports Marketing: Hockey’s Chronic Black Eye

If you’re not a fan of Canadian Junior League hockey, you missed some great "athleticism" this past weekend. But if you are a sports fan at all, you probably saw the video clips from an on-ice brawl involving the son of Hall-of-Famer Patrick Roy. A travesty.

Check out the video on espn.com or YouTube. Not for entertainment purposes, but rather to see how low the game of hockey can reach. Watch Jonathan Roy, a third-rate goalie, skate to mid-ice, fight off a referee, then charge sans mask to the opposing goalie, rip off his mask and proceed to pummel him to the ice. And to continue the beating while the other goalie lies prone, with no help in sight.

"The Quebec Major Junior Hockey League finds the events which took place over the course of last weekend's games deplorable and unacceptable," QMJHL commissioner Gilles Courteau said in a statement. "We are deeply troubled by the incidents. In closing, I'd like to warn organizations that these types of incidents will not be tolerated and that should any more occur, steep fines [my emphasis] will be handed out."

Oooooh, they must be shivering in fear, Gilles. If I could have any job for 15 minutes…I’d like to be a sports commissioner when things like this happen. Jonathan Roy and his father-coach would never be allowed on the ice again, ever, if I was in charge. Players should not be allowed to serve seven-game suspensions for criminal activity on the playing surface. “Steep fines” is not much of a threat or consequence.

As a marketer or brand manager or media buyer, what do you do? Do you want your brand, or company, or client associated with this type of incident?

There’s a reason the NFL and Major League Baseball set attendance records every year, get advertisers to pay $2.7 million for 30 seconds of air time, and that naming rights for new stadiums in those leagues go for tens of millions of dollars. Sure they have their share of on-field brawls, and baseball's "doping" issue looms large. But fans, and advertisers, have seen evidence time and again that criminal behavior on the field will be dealt with in a way keeping with the modern age, not the Dark Age.

What a shame for hockey. There’s nothing better than watching the Rangers on the MSG channel, listening to the best play-by-play announcer on the planet, Sam Rosen, and his excellent color commentator Joe Micheletti. But to know, in the back of your mind, that at any minute, a mugging could break out on the ice with little consequence for the players involved seems all too weird.

I’m not usually so literal with my pictures at the end of each post, but I thought it might be appropriate to show Jonathan Roy in action. Let’s call it hockey’s “brand essence.”

How Would You Save RedEnvelope?

NEW UPDATE: Provide Commerce, Inc., the parent company of ProFlowers, Secret Spoon, Cherry Moon Farms and Shari’s Berries, has acquired the assets of RedEnvelope following a bankruptcy auction at the end of May, beating out original suitor Creative Catalogs. Provide Commerce will assume full ownership June 23, 2008. Red Envelope will remain a separate brand.

ORIGINAL POST:
Time for this month’s look at a falling star. Our take on Krispy Kreme from way back in January still gets a couple hits from search engines every day, which means either this is a popular college case study or people are worried about their donut Jonesing!

RedEnvelope (RE) is a dot-com survivor, an online and catalog retailer that started under a couple of different names until it hit its stride around 1999. Just in time for the bursting bubble. I feel as if I kept it afloat myself, with lots of gift purchases over the years.

Once again, though, the current economic times have exposed the proverbial skeletons in the closet:

- Holiday sales for Q4 dropped 20% from last year, taking RE to negative net income
- The catalog side of the business is stinking out the joint
- Average order size is declining
- Customer acquisition levels are running at 50% of prior years
- RE claims it doesn’t have enough cash to last beyond this June

Brand Strategy
According to its website, the name comes from an Asian tradition in which gifts are often presented in a simple red envelope, symbolizing good fortune, love and appreciation. RE claims to have re-launched the brand last year – “a great, inspired creative resource to our customer as she celebrates relationships and occasions through giving” – but I must have missed it. The site says “the place for unique and personalized gifts.” The imagery isn’t “she centric.” And the catalogs look the same as always.

“Gift occasions” seems a better focus. Relationships will be a stretch for such an underfunded brand. This slimmer positioning would also help to streamline catalog and web operations.

Catalog
Stop using the catalog as an acquisition source, unless you can afford to create smaller seasonal versions. The current catalog is too intimidating and confusing.

Web Site
If you are going to be about gifts and occasions, then don’t set up a site and navigation architecture that looks like every other e-retailer out there. Focus on occasions. For example, the current rotating flash ought to be featuring spring weddings.

Acquisition Marketing
Ever hear of search engine marketing? No sponsored links when you search on “unique gifts” or anything with gifts. Strange.

Customer Marketing
With all the money I’ve spent with you, I never received a letter or coupon or e-mail or call. There is so much obvious stuff to do here. And remember, existing active customers are very profitable.

There are more than a few catalogers and e-tailers in RedEnvelope’s situation (Lillian Vernon, et al.). I might need a few back-up plans for gift giving this coming December.

Ten Lonely Days Undercover on Facebook (Part 3 of a Series)

On a whim, I joined Facebook Friday, March 14. I had to see what all this social networking kerfuffle was about. And, if you remember, I was felling blue about my readership stats, so joining Facebook would surely be a way to drive some traffic. With over 40 million active members, surely I could lure a few?

Well, as they say on the Airplane movies, “No you can’t. And stop calling me Shirley.”

I signed up and entered my bio, my goofy blog picture, and two url references to this blog. I also noted some large groups in the marketing space, so I joined four of them:

Brand Marketing – 1185 members
Internet Marketers – 2069
The Ad Group – 6372
Marketing 2.0 – 7173

That’s 16,000 more chances to make friends, etc. Bring it on!

After 10 days, here are my stats:
- No traffic to my blog.
- Two new friend requests. One from a “career coach” who just happens to “want to network.” Another from a student from last semester who somehow found me on Facebook last night (thanks Jen!).
- Nothing on my “wall.” (which is an open posting area on your own profile where people can leave messages for you)

They also have walls in the group areas. They should call them “wams” for “walls of spam.” Below is representative of what you see:

“Jason (Toronto, ON) wrote: i just wanted to stop by and let you know , i am getting paid online by doing what i do at myspace , come join me @http:blahblah FEES TO JOIN , the owner is sharing the advertising revenue with the users, they pay worldwide by cheque or paypal , its a no brainer.”

Thanks Jason.

I went to a party with 40 million people, and no one saw me. I should change careers, and become a detective.

I’m sure someone will say you get out of it what you put in, so over the next couple of weeks I’ll take some advice to become more “proactive,” and share results mid-April.

I will give Facebook one kudo, though. Every time I log in, it serves me a tiny little advertisement for hair loss.

Exhibit A: Reason To Boycott Conference Panels.

It seemed like a good idea if you were running a marketing conference in the late 90s. In order to get so many big names on the stage, hold a “panel” where 3 or 4 executives could be interviewed by a moderator and build on one another’s ideas.

Ten years later, let’s put a fork in it and call it done.

We hit a nadir in panel discourse with this recent report from the Ad Age Digital Marketing Conference: “Using Customer Service as a Branding Opportunity.” :

http://adage.com/digital/article?article_id=125841

The discussion was supposed to revolve around a simple premise – can the customer service touch point be an opportunity for a company’s marketing function? Lest this topic makes you think of a conference in 2002, I will remind you this story is from last week.

Except for one panel member, this discussion was DOA. It might have been a bad write-up, an uninformed panel moderator, clueless panel members…or all of the above. Here are some lowlights.

Linnea Johnson, director-consumer services, Unilever, who called her division the "Stitch and Bitch Club," [!!??!!] said the … company should be doing more to take advantage of those types of interactions…”but what we're not allowed to do is take ideas from you…we have to shut them down because that's what legal tells us to do."

She believes the consumer-services divisions…could play a significant role in the development of marketing campaigns…“there's a lot of information we could help you with when you build your campaign or build your ads to deal with consumers."

Rick Clancy, senior VP-corporate communications, Sony Electronics…said Sony also had legal concerns about accepting unsolicited ideas from consumers.

Pinheads. Conversational marketing isn’t about developing new products or building better ad campaigns. We already have tons of customer input into those. Conversational marketing is a dialog that you prepare for and use to accelerate the marketing cycle. You should have listened to the third panelist, whom I am nominating for “CEO of the Year.”

Tony Hsieh, CEO and director, Zappos.com, said those interactions have been the force behind the company's growth. "We take the money we would have spent on advertising campaigns and instead put that back into the customer experience and grow through repeat customers and word of mouth.

And with that, let’s hope Mr. Hseih has put the last nail in the coffin for conference panels.

What’s The Value Of A Marketing MBA?

Before all you jokesters say “nothing,” let me tell you that this question, in one form or another, is a popular one on the Marketing Profs expert forum (although it lags way behind the #1 topic of taglines). The most common forms are as follows:

- Should I wait and get more work experience, or do it now?
- Should I choose Marketing as my major if I already have marketing experience?
- Should I get an MS instead of an MBA?
- Will an MBA help accelerate my career growth in marketing?

Sadly, like in so many other big life decisions, the answer is “it depends.” Here are some important considerations.

Where You Want To Work
Client side or services side? And if your preference is services side, is it a traditional agency, a digital agency, or a consulting-type firm? Each of these places distinct value on a Marketing MBA.

Scope of Career Change
Do you have a lot, a little, or no prior marketing experience? A wholesale career change gets riskier as you get older.

Breadth and Depth of Prior Marketing Experience
Are you building off a solid base or looking for a new track? This is important on a personal level, of course, but also keep in mind that many post-graduate recruiters will look for some sort of logical connection between your work background and your educational focus.

Personal Learning Ambition
Do you want to open your horizons during the education process? Getting the degree can be a grind, or it can add breadth to your current skill sets.

Type of School
Are you planning on a Top 20 program, a local night school, a distance-learning degree? Fair or not, the name of the school on the diploma can decide your options for you.

Each person addresses these considerations in his or her unique way. That’s why “it depends.” In a few weeks I will be announcing a fee-based, one-time counseling service for Marketing MBA students or graduates, as well as general MBAs interested in Marketing. Watch this space.

Any which way you slice it, the Marketing MBA discussion is really no different than that of any other secondary degree. If you don’t plan on learning anything, or if you do learn things but then resolve not to apply them, you’ve wasted precious time.

Better that a person stands with a degree, rather than behind one. ;)

The Magic Formula For Media Allocation

OK. I am ashamed of myself. That headline was, in part, a tease for the search engines.

It is also, in part, based on reality. Here is an article from the highly regarded Wharton School of Business:

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1892

“Americans spend an average of 14 hours a week online and 14 hours watching TV. But marketers spend 22% of their advertising dollars on TV and only 6% online, according to data compiled and analyzed by Google…says Wharton marketing professor Patti Williams…‘if you look in terms of the sheer amount of time most consumers are spending online and the amount of dollars being spent to reach them, it is still probably way under what it should be.’ ”

Alrighty then. Note to CMOs: split it 50-50 from now on.

And this gem from the same article. The CMO Council just can’t stop itself.

“…[CMO Council] says some of the lag in acceptance of digital advertising is due to advertisers’ long-term relationships with ad agencies…and with traditional media companies.”

Client-agency relationships are turning over faster than cards at a blackjack table. And the media “companies” (which the rest of the world calls media “agencies”) have clearly been getting the digital religion for the past couple of years.

Here’s why online spending doesn’t, and won’t, equate to consumers’ media time splits. Or if you prefer the CMO Council’s terminology, why digital is “lagging.”

Cost of Production (assume medium-size advertiser)
The cost of a banner ad is in the low thousands. The cost of a TV commercial is in the mid-hundreds of thousands.

Cost of Media
TV CPM is about 10x online CPM, ballpark.

Reach
Sunday night TV audience for 60 Minutes runs between 10 and 15 million. All of cbsnews.com gets half that in monthly unique visitors, so divide that by 30 and then give the 60 Minutes portion of the site about 10% of that.

Other Customer Touch Points
It would be nice if we only had to worry about TV and online. But there are about two dozen other non-media customer touch points an average marketer has to worry about.

I know this Marketing stuff looks easy. But the only Silver Bullet I’ve seen comes out of Golden Colorado.

Worst Marketing Strategy Of The Year

Would this fact surprise you?
First Class mail volume decreased 3.9 percent in the quarter ending Dec. 31, 2007.

How about this one?
For the first half of fiscal year 2007, overall First Class mail volume decreased by almost 650 million pieces, or 1.3 percent. Single-piece First Class mail, the U.S. Postal Service's largest revenue source, declined by almost 1 billion pieces.

After being positive since probably forever, annual “growth” in first class mail volume went negative in 2001. And there it stays.

A decade or so of stamp prices you and I pay looks like this:
1995 – 32 cents
1999 – 33
2001 – 34
2002 – 37
2006 – 39
2007 – 41
2008 – 42 cents (coming May 12th to a post office near you)

We’ve been pennied to death.

Of course there are other factors beyond (negative) price elasticity. E-mail, electronic bill payments, e-filing for taxes, electronic greeting cards.

The solution? Run a campaign with HBO to promote its John Adams series, with the message being “write letters.” Let me repeat that. WRITE. I love Luddite stuff more than anyone, but there’s not even a station here, never mind the train that already left.

Go to

http://www.poweroftheletter.com/

for a look-see.

The claim is that HBO is paying for everything related to this campaign, not us taxpayers. I would love to see how they account for USPS management time to oversee the program, maintenance for the website referenced above, and the labor to move all the point-of-sale materials around thousands of post offices.

Instead of trying to chase a dying segment through the worst call to action imaginable, wouldn’t a better USPS marketing strategy be to promote these promising service ideas, also coming May 12th of this year, all of which can be found on the USPS website?

- Express mail is switching to a zone-based pricing system, resulting in customers paying less for nearby destinations.
- Customers will receive a 3% price reduction by purchasing Express Mail online or through corporate accounts.
- Additional Express Mail price reductions are available for those who ship quarterly minimums.
- Priority Mail will have an average 3.5 percent savings for customers who use electronic postage…

I’d write my congressman, but…

Best Marketing Strategy Of The Year

What guts. You already spent a ton in 2007 launching a new corporate brand positioning, which critics were quick to denigrate. Now a year later, at the Oscars once again, you stare into the howling winds of a recession to launch a “premium” subbrand with a major integrated campaign. And the critics pounce again.

Remember that brand consulting genius, who said if two brands tie for number one then they are mere commodities? Here is his reaction to American Living, the new JC Penney brand developed by Polo Ralph Lauren.

“It’s an attempt to borrow equity from the Ralph Lauren brand, the absolute gold standard in fashion brands…you’re likely better off putting something like that into a Macy’s…May I remind you that Wal-Mart ran ad pages in Vogue? The ads were lovely, but no one would buy the clothing.”

He’s not done yet. Here’s more.

“There’s a certain degree to too-little, too-late in this move…[consumers say that] when making decisions about where to go to shop, the range of merchandise available” [is less important than it was a year ago].”

Let’s not try and force fit analysis of a poorly worded consumer survey to explain a thoughtful marketing strategy.

Try this instead. Draw three boxes next to each other. Label them left to right “high end,” “moderate,” and “low end.” Now draw a stick figure under each.

In a normal economy, you draw a straight line to connect each stick figure to the box above it. But during a recession the middle stick figure heads for the low end. It kills the guys in the moderate box. Compare same-store sales for Coach, JC Penney’s, and Wal-Mart over the past five months as an illustration. The middle stick figure did a “student body right” move.

To create a way to stand out at the higher end of the moderate part of the market, JC Penney is right on with American Living. As the recession ebbs, the stick figure in the middle will abandon Wal-Mart like it was poison. American Living could be the cure for many of those consumers.

Yeah, the American Living campaign is a bit too Bruce Weberish, preppy, apple pie, whatever. It’s a heartland campaign. Duh.

You go, Jacques Penné.