Lairig Marketing

Google’s Achilles' Heel

Most people think of Google as a search engine. Not surprising, given its near-70% market share. In reality, Google is a media company, a platform to attract advertisers. It has used its hard-earned cash to acquire companies like YouTube that either produce or deliver content. Google is using a “string of pearls” approach to near perfection to cover the ways users and advertisers interact with the Web.

Advertisers get sophisticated treatment from Google. For the unwashed masses, Google makes it as easy as pie. And therefore free. To keep costs down, Google has to leave out an important element, the one I believe is its Achilles' Heel - customer service.

As one of the unsophisticated and unwashed, I use a simple (free) tool to publish this blog, from a company called Blogger. I also use a simple (free) tool to allow readers an automated way to access the blog, from a company called FeedBurner. Google acquired both companies.

One of FeedBurner’s great features is the ability to track my meager readership on a real-time basis. Last evening that feature became inaccessible.

“Trouble at the mill! (Some sort of problem occurred; we’re terribly sorry for the hassle it’s causing you.)
HTTP Error Code: 500
Detail: [left blank]
You may have tried to visit a page at FeedBurner that does not exist. Head back to the FeedBurner home page and try again.”

How uncute and unhelpful.

On its “Contact Us” page: “FeedBurner does not offer technical support via phone. If you have a support need, please use the form shown over there.” The form addresses only two specific issues, neither of which relate to system availability.

The “Help” section is a collection of useless FAQs, along with a forum where you can whine and see if other users will help you. Last night there were a ton of postings about the mysterious “error code #500.”

FeedBurner has a blog, which has a posting about once a month. “Recent Press” has a story from October 2007 and one from last July. Prominently featured on the home page is the “announcement” of Google’s takeover…which is now over one-year old.

Are you getting the sense Google doesn’t really give a shit about FeedBurner? What will happen when more people start using Google Apps who haven’t had their learning curve on Excel or Word? What happens when your doctor goes to get your electronic medical records from Google Health while you are bleeding to death at 6 PM some day and she gets “error code #500” ?

Things to watch for:
1) Adoption rates for Google user-side tools and applications start to fall
2) Competitors provide these tools in a way that at least one employee is watching over them 24/7 to make sure they are running
3) Someone invents Web technology for real-time, affordable customer service

Yes, the Web is the future. But free isn’t. Customer service is a requirement, and it costs money. Always has, always will.

Ford Shows Those Elves A Little Focus

OK, so Ford won’t make a profit THIS year either. But we can at least give management some credit for understanding, however belatedly, that $4.25-a-gallon gasoline will cause new car buyers to look away from SUVs and pick-ups. Ford’s little Focus model is selling like hotcakes.

U.S. sales went well over the 20,000 count in April. Year to date, Focus is closing in on 100,000 units sold, more than 30% higher than last year at this time. I’m no auto expert, but I can’t remember too many models that have seen this kind of recovery (Focus sales were already on the decline in its second year!).

A car won’t sell without attractive features, and at the top of the Focus list are the sporty look and the Sync technology, all for an attractive price ($17,000 neighborhood).

But it also takes some great marketing to get the kind of results Ford is seeing with the Focus (pun intended?).

Here is a good recap of what Focus has been doing on the marketing front.
http://publications.mediapost.com/index.cfm?fuseaction=Articles.san&s=82310&Nid=42580&p=907870

Customer Segmentation
Match affordability, recession, and limited spending power. What do you have? Millenials.
“Ford has been marketing Focus to younger consumers with a Web-heavy program that touts its Sync telematics and entertainment system as much as the car itself.”

Value Proposition
Make Sync the differentiator, the thing that puts this car over the top as far as fun goes.
“Scott Kelly, digital marketing manager for Ford, says the company has been focusing on getting younger buyers to look at Focus with music-themed activity that aligns with the fact that the car is the first featuring Ford's Sync technology.”

Engagement With Virtual Product
Set up an interactive way to introduce prospects to the Focus, making the product a centerpiece of the engagement.
“…themesongatron.com…lets you upload a photo, choose from among 25 songs, watch yourself shimmy in front of a Focus, and send it to friends and enemies.”

“ ‘It was funny because we put this together when Elf Yourself came out, so that was on our minds'…the company tried to avoid the trap of a lot of impressions with no brand or product context…”

Real Results
Ford claims that more than half of the 500,000 people who “Songatroned” themselves went on to view Focus content, and that the percentage of Focus buyers who are 20- to-35-years-old has increased from 26% to 30%.

And one other thing. If you want to see what a real social network looks like, skip Facebook and go to http://www.focusfanatics.com/ for some inspiration.

HP & EDS: Mark Hurd Jumps The Shark

Mark Hurd should be a household name. After amazing turnaround work at NCR, he came to Hewlett-Packard’s rescue in early 2005, to right Carly Fiorina’s sinking ship. Hurd has taken HP (or “Hewlett,” as those dim bulbs at The New York Times call the company) past IBM and the $100 billion-annual-sales mark. HP’s stock price has outpaced the S&P 500 by a multiple of five.

Hurd fixed what was broke. But then…

On May 13th, a week before quarterly earnings were to signal all was still well, HP announced its acquisition of Electronic Data Systems. EDS is a $22 billion company, focused on IT services - long-term, multi-million dollar deals to manage data, transactions, gear, etc. Think outsourcing.

Please, someone, call the whole thing off.

Business Momentum - Bad
EDS’s growth has been anemic and its share price treading water. After all this “globalization,” strangely its business is still mainly U.S. and Europe. EDS does one thing very well. Most everything else goes sour - remember AT Kearney?

Brand Synergy - None
“EDS - an HP company.” Sexy, eh? If you remember that EDS was founded by Ross Perot in 1962, you know all you need to about the EDS brand essence.

Meeting the IBM Challenge - Good Luck
HP wants to be like IBM, which long ago recognized what IT services could mean to overall growth and profitability. If you’ll forgive the PricewaterhouseCoopers thing, IBM has grown a stellar spectrum of service offerings. Buying EDS will get HP one seat at a very big table.

Customer Value Proposition - None
HP built up $16 billion of IT services revenue of its own, under long-timer Ann Livermore. Bringing EDS in does what for the customer? Like most outsourcers, EDS claims “vendor neutrality,” which means you pick the gear. Will HP force new EDS customers to choose HP servers? Doubt it. 1 + 1 = 2 here, not 3.

Channel Proposition - Danger
Whatever service revenue HP wasn’t getting for itself was being obtained by its channel partners. How happy do you think they are now, with EDS in the picture as a potential threat to their livelihood?

This is a bolt-on acquisition. A strategic alliance in another form. Tack on the revenues. Cut some heads.

And no marketing angles to play. No good ones, at least.

It’s 10 AM - Do You Know Where Your Children Are?

A company called e2Campus has been doing landmine business selling emergency notification systems to colleges across the U.S. Formed in late 2003, its basic proposition is to provide “mass alerts” when an emergency takes place - to students, teachers, and administrators - to get them (hopefully) out of harm’s way. The more-recent campus shootings at Virginia Tech and Northern Illinois have motivated many a college to get on board with e2Campus, and the company claims to have over 500 customers.

The safety alerts can be sent in many ways, but cell phone “text blasts” are most common. According to a 2006 Pew study, more than 70% of 18-to-29-year-olds own a cell phone, of which 92% text message. So it would seem logical to think of this as a perfect storm - a compelling solution delivered in a way today’s youth most often communicate. You would guess the “opt in” rate for students with cell phones might be near 100%, right?

Guess again.

Then guess again. And guess again. And guess one more time.

As of a few weeks ago, e2Campus reported the sign-up rate for students was a meager 39%.

This article has some interesting student explanations as to why some haven’t signed up.
http://spectator.seattleu.edu/news/story.aspx?ID=24850
P.S. Many schools are attempting to backstop text alerts using Facebook.

Anyway, I couldn’t care less as to the reasons for such low participation. My point is this. Next time you read an article like this one:
http://www.latimes.com/business/custom/admark/la-fi-teenphone23-2008may23,0,2679094.story

…that includes embarrassing commentary like this:
“…[teen girl‘s name] receives daily text messages from Seventeen magazine about fashion, including tips about what to wear to the prom. She planned to take the magazine's suggestion to wear a brightly colored outfit and be prepared for "dress malfunctions." ‘When the texts recommend a certain look that sounds good, I will try it…’ ”

…compare it to the e2Campus sign-up rate, then tell me how far you think this country is from collapsing in on itself, sort of like a black hole.

A cell phone can tell you the exact time, but it can’t tell you how to exactly spend it.

We Are All In This Together

Strange how you often can’t remember what you had for dinner last night, yet some event that occurred thirty-odd years ago rises up from the deep recesses of your memory bank, clear as day.

My introduction to the real working world was in the summer before college. I say “real” because my previous summers working at a beach club weren’t going to win me any resume points. Based on some connections with a neighbor and my Uncle John, I landed a job in the warehouse of a local industrial company. The work was both fun and challenging - I took a turn at everything from cleaning to packing to clerking to driving my first forklift.

I remember something else about it though.

I would come to find out years later that the “first-day paperwork” was a Human Resources requirement. But way back then it seemed odd to me that I would be asked to fill out all these forms when I was already assured of the job. One of the questions asked if I knew people who worked at the company. Being a smart and obedient young lad, I listed my neighbor and my Uncle John.

It didn’t take one day before I heard about my “mistake.” Why had I listed my Uncle’s name? Didn’t I know he was a union boss at that company? Couldn’t I see how this would reflect poorly on me with the management folks reviewing my paperwork?

Well, shit, no. None of that occurred to me. Admittedly I knew little about labor relations back then, but I don’t think it would have changed anything. He was my uncle for God’s sake. How could I hide that? WHY would I hide that?

The thoughts ran through my head - a family man, with loving wife, children; a community man, welcomed anywhere; a hard worker, representing his employees with conviction; a fun-loving guy, with so many leisure interests. I convinced myself I’d done nothing wrong.

I don’t know if I ever told Uncle John that story. I wish I had.

Uncle John passed away last evening. He waged a valiant fight against a vicious cancer. It was hard for the family these past couple of years, but Uncle John never made it seem anything other than just another day at the salt mine. Like he always had.

Funny that it is Memorial Day weekend, for I will always remember Uncle John’s lesson. Whatever we are - union or management, marketing or sales, black or white - embrace it and share it with others. Save the fighting for the important things in life.

While The Recession Burns On…

While economists and Wall Streeters piss about, debating whether our economy has passed the technical requirements for a recession, I’ll take my cues from real people. I had lunch this week with a friend of mine who does part-time accounting for a wholesale florist upstate. He’s down to about a day a week. The reason? Retail florists aren’t buying like they used to. Doesn’t seem “housing related” to me. Based on what I heard, I’m guessing if you have more than four florists in your town, expect to see at least one hanging an “out of business” sign on the door after Mother’s Day.

I mentioned one recession strategy back on January 18 - to put a fence around your existing customers and focus marketing efforts on keeping or increasing their loyalty. Now we have some examples to look at.

First up, wireless carrier Alltel. It has a sweepstakes underway for which the grand prize (three of them actually) is a four-day, three-night trip for a current subscriber and his or her “circle of friends.” The circle refers to Alltel’s plan that allows a customer to select a number of people in or out of network for unlimited free calling.

“We're trying to thank our My Circle customers and show them we appreciate their loyalty." That you are. The winner and his or her circle will also each receive a new wireless phone and a $200 Alltel gift card.

But wait, there’s more. All two-year customers can add one more number to their “circle" plan.

But wait, there’s more. Every two years hence, the step above gets repeated.

But wait. THERE’S MORE. If you become an Alltel customer with a “My Circle” program by May 31, you are eligible for the sweepstakes. That’s right - loyalty PLUS acquisition marketing. Brilliant. And maybe the second best marketing strategy of the year.

Today’s other example is a bad one. Data from a survey done in late February/early March by Catalog Success asked 71 B-to-C and 60 B-to-B catalog executives a bunch of questions, two of which stuck out like a sore thumb.

Do you have an ongoing frequent-buyer program in place to target and reward the best buyers on your house file?
B2C: yes = 30% no = 70%
B2B: yes = 27% no = 73%
If you have such a program, is it profitable?
B2C: very = 43%; somewhat = 43%
B2B: very = 43%; somewhat = 31%

Forget that marketing to existing customers is a basic strategy. And a recession strategy. Solve this riddle: Close to three-quarters of catalogers don’t do something that those who do find to be profitable.

Anyway, hurry up and buy some flowers for Mother’s Day. It’s good for Mom, and good for the florists.

OKI Data Not OK With Retail Channel

Paper paper everywhere. The technology revolution was supposed to make us all-digital, yet annual growth in printer sales continues unabated. If you work for a large company or agency you might not notice (however, life without parole for those who print out e-mails !!!). But if you are a small or medium size business, I bet you keep a close eye on your printers and their use.

There are a number of companies offering printers, yet most Americans would think of only the two market-leading brands - Hewlett-Packard and Xerox - and maybe one other, the lower-priced model they actually purchased ;)

One of those “other ones” is worth learning from. OKI Printing Solutions is the U.S. brand for Japan’s OKI Data. Recently, it announced it would no longer be selling its products through Staples’ brick-and-mortar locations. The full story is here:
http://www.crn.com/hardware/207200563

“OKI Data's exit from retail began last year when it ended its relationships with other office-centric retailers like OfficeMax and Office Depot and it was painful for the company from a market-share perspective…However, as retail sales built brand awareness that the company hoped would spill over and help it build its share of the small/medium business market, the results were disappointing.”

Pulling your product from retail shelves - a tough decision, right? Maybe, but I’m not convinced of a couple things the OKI CEO mentioned in the story.

To paraphrase, he said the retail presence was a proxy for brand awareness campaigns (which HP and Xerox can afford, OKI can’t), and that retail sales people had been helpful in recommending OKI over competitors. Maybe I go to the wrong locations at the wrong times, but my most recent visits to these “office superstores” revealed poor inventory management and no floor help.

The real insight in this story is the parallel path OKI has been on, and will now accelerate - the reseller channel. There are tens of thousands of small technology companies out there who work closely with their customers designing solutions to problems. An OKI printer would be one component in a bigger package that might include other gear, software, and services such as installation and maintenance. The customer, reseller, and OKI all win.

OKI’s strategy is to find capable, hungry resellers and partner with them in the same high-service way it treats its customers. And one other thing that is not really new to the technology space, but still a major strategic effort to undertake - segment and address the market by industry. This allows OKI to prioritize resellers, products, and marketing.

The channel part of marketing strategy is so often overlooked or taken for granted. OKI seems to have remembered one other essential too - a thorough plan of execution. Without that, it’s just another strategy.

Another Missing Tape Discovered - Ballmer & Gates

SETTING: Late Friday night, May 2nd, basement “get away” room of Bill Gates. Gates and Steve Ballmer are quietly nursing vodka tonics. Not a word has been spoken for the past 15 minutes. Finally, Ballmer reaches for his BlackBerry.

GATES: What are you doing?

BALLMER: Sending a text message to that beyotch Kara Swisher.

G: No, I mean with this Yahoo situation.

B: F*ck it Bill. Vista is killing us. We need something to take the media’s mind off it.

G: No more “we” kimosabe.

B: OK. Vista is killing ME.

G: Well, this “Microhoo” story doesn’t seem to be helping you much either.

B: F*ck that. It’s that Jerry Wang who looks like a peckerhead.

G: Yang.

B: Wang, Yang, PuddinTang. Whatever.

G: Steve, look, Microsoft is a software provider. Look at the financials. We…

B: Oh, now it’s “we”?

G: OK. You. YOU don’t make jack sh*t off the internet businesses. They are 5% of your total sales, and every dollar of revenue earns you negative 33 cents in operating income.

B: What the f*ck? Who the f*ck are you all of a sudden? You made that big speech, Pearl Harbor Day, 1995 - “embrace and extend the Web blah blah blah.”

G: Yeah, and how did you read “pillage” into that?

B: I was born to pillage. [chuckles nervously]

G: [grimaces] Anyway, here’s what happened. I’ve come to see what Google really is - an advertising company. And I’ve come to see what Yahoo really is - a content portal. It’s no surprise their recent search partnership was a big success, right? We are simply not their kind of media company.

B: But everyone says all software is going to be free in five years and we’ll be out of business!?!?

G: Consumer side, maybe. But businesses are still going to pay for good operating systems, security, design and business applications. And that is what Microsoft is about. Or should be, anyway.

B: You mean I should be focusing on our CRM software? And our server products? And developer stuff? And Xbox? And our mobile systems? And our design software?

G: [claps hands in rhythm] Developers, developers, developers, develop-

B: Cut it out!

G: Seriously, focus on the stuff that is 95% of your revenue. And 100% of your brand equity. Seems like there would be plenty of companies you could buy in those areas.

B: So…what are you saying?

G: Walk away from Yahoo.

B: Bill. You can’t be serious. After all this? I’ll look like an idiot.

[Gates pulls up YouTube video of the Monkey Boy dance.]

[Ballmer stands up, grabs his chair, and hurls it across the room.]

E-Mail Advertising - Messaging Can Be Gooder

A Brief Follow-Up Before Today’s Topic
Just a few days ago, in my post about being more discriminating with market research, I mentioned I had contacted The New York Times about its use of a common but inaccurate number of U.S. cell phone users. On Sunday the Times printed the following correction:

“A brief item on April 13 about developments in homeland security gave a misleading figure for the number of Americans who subscribe to a mobile phone service. The number of subscribers was recently estimated by M:Metrics, a research firm, at about 226 million, not more than 255 million. The higher figure is used by the International Association for the Wireless Telecommunications Industry to estimate the number of subscriptions. A subscriber can have more than one subscription.”

As Larry King says, “You can thank me later.” Hah!

Today’s Topic
For all the e-mail and e-newsletters we get, the amount of advertising revenue produced via this format is small, just one-tenth that of display ads. Seems underleveraged to me, and when I look at some of the advertisements, I get the sense marketers aren’t really giving it 100% focus.

Let’s look at a real example. This one is from a technology e-newsletter of American Banker.

“Cognos, part of IBM's Information on Demand solutions for business optimization, delivers the most comprehensive planning, forecasting, consolidation, scorecarding, reporting, and analysis on a single platform, connecting relevant financial and operational data. With our best-practice solutions we can help you improve your operational efficiency and increase profits.”

The good news is this has the “Who We Are, What We Do, and What You Get” necessities. But it doesn’t pull you in, excite you, or feel compelling enough to make you want to “click through.”
[Disclosure: I have worked with various IBM business units on messaging in the past.]

Who We Are
Cognos is a recent $5 billion acquisition, IBM’s biggest. To call it a “part of” something vastly underplays the Cognos asset. In addition, the need to brand the “on demand” offering creates a clunky introduction (“solutions for business optimization” brings to mind this old gem). How about…

Cognos, the newest addition to IBM’s Information On Demand suite…

What We Do
“Delivers” is a strong verb, “most comprehensive” is a good differentiating phrase, and “single platform” stresses efficiency. But the six items in between? That’s like throwing the kitchen sink at us. P.S. When did “scorecarding” become a word? How about…

…delivers the most comprehensive reporting and analysis tools for financial and operational data, on a single platform.

What You Get
The closing sentence could come from any company, any offering. What a let down. When stating benefits, it’s nice to show the ultimate end point (profits), but it is not very credible when you’re just meeting someone in an e-mail advertisement. Stick closer to the topic at hand, which in this case is Business Intelligence and Optimization. How about…

With Cognos, we’ll help you make critical business decisions quickly, accurately, and effectively, taking you to a new level of performance.

KICCC: Keep It Clear, Credible, and Compelling.

Hey UK - Are You Ready For Some Football?!?!

Now that the Rangers lost to the Penguins in overtime yesterday, there’s no reason to watch any more hockey this season. And with the National Football League draft just concluded, we are barely two months from the opening of pro football training camps. So a major announcement, right about now, from the marketing folks at the NFL would seem appropriate.

Except that it would have nothing to do with the “National” part. International, maybe?

“The National Football League appointed Octagon to help promote the sport and its business initiatives in the U.K. Octagon will work with the NFL to promote its year-round programming on Sky Sports, which includes the airing of 130 games and its online community of nearly 200,000 U.K. visitors to NFL.com.”
http://promomagazine.com/agencies/news/octagon_pushes_nfl_uk_0422/

One thing that will certainly help the NFL’s case this year will be a better match-up at Wembley Stadium. Last October, spectators had to suffer the Miami Dolphins. This year they get New Orleans against San Diego.

Some points to ponder.

Octagon’s Scope
The deal with the NFL is focused on sponsorship. What special insights will Octagon, a global sports marketer under the IPG umbrella, bring to the table? Will sponsors be the usual cast of characters - the global beer companies (SABMiller), the worldwide technology companies (IBM) - or will Octagon bring some unique knowledge of the U.K. sports fan?

Online Marketing
We all know how online properties can drive brand equity and interaction. What will happen if someone has a great idea on how to better engage the U.K.-based nfl.com visitors? Will Octagon be able to do more than strike “multichannel” deals with the TV sponsors it signs up - or will the NFL find it must also bring in and manage a media agency and perhaps an interactive shop?

Business Growth
Sponsorship is, of course, a sports marketing staple. But is it the key to growing the NFL’s U.K. fan base? How does the NFL prevent Octagon’s output from subsuming the development of a comprehensive marketing strategy and investment in more-traditional communications tactics?

The world being more global than ever, it is an important time for Marketing (with a capital “M”). The opportunities to influence how companies grow are countless. As always, the biggest challenge will be prioritization.

In any case, the effort to convince the British that a football is not round continues. Now, if the NFL could just get them to stop calling potato chips “crisps."