Lairig Marketing

In-The-Trenches Marketing: Skate To Where The Puck Is

It is an infrequent occurrence to see and/or hear clients debate each other in a meeting with agency partners tuning in. Typically, if there’s any disagreement going on, it’s the agency taking the bruises from a team of locked-arm-and-ready-to-pile-on clients.

How refreshing, then, to listen in on this aside (paraphrased here) last week:

Client #1: “I’m just frustrated that our company doesn’t seem to acknowledge where consumers are going. Five years from now, no one will be reading newspapers, yet right now we still spend a significant amount of our media budget on print.”

Client #2 (with higher seniority in the client’s Marketing department): “You might be correct in your assessment of the future. Who knows – it might even happen sooner. But right now we need to run a business that brings in the most customers possible. So right now we’re going where a lot of them still are – print.”

Too bad this wasn’t a videoconference, for Client #2 would have seen us trading high fives, turning cartwheels, and raising the roof (although, we suppose Client #1 would not have been amused).

The lesson here is illustrated all day, every day in the marketing trade press. Take the Google Fiber story (please!). Now that the venture has tapped Austin as its second city for build out, well, “Google Fiber Is Destroying The Cable TV Companies” blah blah blah.

Except that, right now, the cable companies lead Google by something like 110 million to 1 million. Five years won’t be near enough to close that gap. (Especially if Google continues to [over]price its premium packages like HBO - with NO to go option ! - at a 25%, er, PREMIUM to the local competition, as it just announced it would in KC, build out area #1.)

The people who sop this “the future is now” stuff up are the same people who love that shopworn maxim, supposedly coined by Wayne Gretzky: “I skate to where the puck is going to be.”

If you're going to be that naive, at least keep your head up, right now, to see what’s skating in your direction.

Online Media Still Working Out The Kinks

In their efforts to report the sad yet important-to-know news from Monday’s tragedy, various online media providers revealed some weaknesses worth addressing over the near term.

[Caveat: This post is not meant to directly address, nor make light of, the Boston Marathon bombing and the ongoing investigation. Rather, our focus is on media, one of the most important components of Marketing.]

Comments
Way back when, we heralded 2010 as “The Year of the Commenter.” True to form, comments became a more formal part of media, with service providers such as Disqus upping their commenting tools capabilities, and publishers taking advantage of them. Another key form of user-generated content gained significant traction.

Yet, we wonder, should online media leave comments open for all stories, all the time? Within minutes of the first reports of Monday’s bombing, comment fields on “mainstream” sites like CNN and Huffington Post were burgeoning with vitriol – anti-everything: Obama, Tea Party, Muslim, IRS, Liberals, gun control, you name it.

It attracted the worst of the worst of the great unwashed, uneducated, and unedited. There is absolutely nothing positive that can come from this sort of expression and “sharing.” Yes, there is a First Amendment – media owners should feel free to shut down comments under such situations as Monday’s, and advise people to start their own blogs if they think they have something others should hear.

Videos – Not The News, But The Ads
Want to see video of what happened? Please wait 30 seconds, while we show you an online video commercial, aka a “pre-roll,” of a family happily bouncing along the countryside in a new SUV ! Or perhaps a housewife happily whipping up some dinner for her happy family with some nifty new food product!

OK, now that we've put you in the right mood, please enjoy this tragic news video...

How is it, in the supposed era of “real-time advertising” and “Big Data,” that no one has come up with an algorithm that stops online video ads from running during times like these? It should take roughly one second to accomplish. Shameful.

Quantity, Not Quality
You could jump on any old Tweet to see that, allegedly according to The New York Post, a dozen people were killed and hundreds wounded. Then retweet it – as fast as you can.

Compare it to the in-depth, quality reporting that The New York Times has published (paper and online). It even took down its paywall.

When, in reality, it should be charging double.

Gen Y and Gen Z won’t know what they’re missing when quality media finally disappears, in more ways than one.

DISH Network’s Mad Sprint For Relevance

Way back in the day, late in our inaugural year of 2008, as we plowed through our “How Would You Save” series, we featured this one on Sprint. At the top of our list of recommended strategies to turn around Sprint's fortunes was a marketing partnership with a meaningful hardware player.

Well, today we got one. But not the able hardware company we assumed (see Samsung). Instead Sprint received a gazillion-dollar buy-out bid from satellite pay-TV provider DISH Network, and its wingnut chairman Charlie Ergen.

We’ve recounted several times over the past few years DISH’s weird business dealings (such as here), as well as its terrible advertising (such as here).

Before today, Ergen found himself with a bunch of wireless spectrum he wasn't quite sure how to "monetize." Granted, he had plenty of thoughts on what to do with it, but deep down Ergen knows that DISH has neither the capital, knowledge, or customer-acquisition capabilities to make any idea – satellite broadband, wireless broadband, whatever – come to profitable fruition.

Compare the track record just in DISH’s core industry. Over the past five years, here is its scorecard versus larger satellite TV rival DIRECTV:

- Growth in revenues: DIRECTV at 34.2 %, DISH at 22.8 %
- Growth in revenues (CAGR basis): DIRECTV at 7.6 %, DISH at 5.3 %
- Growth in subscribers: DIRECTV at 14.0 %, DISH at 2.8 %
- Average monthly revenue per sub: DIRECTV at $ 96.98, DISH at $ 77.10
- Growth in avg rev per sub: DIRECTV at 15.6 %, DISH at 11.3 %

As for shareholders, they seem to be far better off with DIRECTV, whose stock price has increased 118.0 % from 2008 to the end of 2012. Ergen has rewarded his investors with a five-year return of a paltry 9.8 %.

Headline alarming, pay-TV hater Henry Blodget touts the potential DISH-Sprint deal as a “partnership [that] could change the telecom industry forever.”

Laughable. DISH dishes a very weak hand, for an even weaker wireless player.

The three-legged race starts now.

CMOs, Lies & Surveys (Part 2 of Many…)

Welcome back to what could be our longest series yet – an under-the-hood look at the February 2013 update to The CMO Survey. If you missed the background, see Part 1 here. Today, we continue to tear apart the survey’s specious and foolish conclusion that “traditional ad spend is plummeting.”

In Part 1, we dissected the survey’s poor construction and analysis. Today we take what we call an “external” perspective – looking at real-world indicators for where marketers are allocating their scarce budgets.

We constantly trawl the trade press for stories about new marketing campaigns, keeping our eyes peeled for “first time ever” TV advertising. If “traditional ad spend is plummeting,” we shouldn’t expect, then, to see a story like this:

“For the first time in a decade, Just Born is using TV to advertise its Peeps, those fluorescent-yellow marshmallow critters that are a staple of America’s Easter baskets. And for the first time ever, it says it will keep ads running all year long…”

Or like this one:

“Moe’s Southwest Grill has launched its first national television campaign.” Moe’s has been around for a dozen years, long enough to figure out it needs some more “traditional” marketing to get the revenue growth out of its ongoing expansion into more than 30 states.

Or like this one:

“The farmers’ cooperative Organic Valley is using a television ad for the first time.” The co-op has existed for TWICE as long as Moe’s. Yet, it states that it is “poised for its next phase of growth.” Just like Moe’s, there’s that “G” word again.

Or like this one:

“…in the coming year, Gatorade Perform beverages will be the focus of TV ads, while Prime chews and pouches, as well as Recover beverages and shakes, will be hyped in print ads…’We are investing more in print than we have at least the last two years. It's really about using print to articulate the product benefits’…[Gatorade] is also increasing its investment in grassroots and various locker room and sidelines programs, boosting its presence at summer camps and year-round competitions.” The latter are, of course, traditional forms of advertising. Since cave men.

Or like this one:

“On-demand music service Spotify is launching its first advertising campaign, focusing on U.S. television to hook additional listeners. Spotify is spending more than $10 million on commercials…” For that's what it will take to win its fight to the death with Pandora, et al.

Lest Professor Christine Merman, er, Moorman ! , is not appeased by this evidence, all of which is from the past 30 days, then let’s take a look at the reputable media-spend data collectors.

Kantar media recently tallied up the results for full-year 2012. TV spend was up nearly 8% over 2011. Radio was up almost 3%. And out-of-home, which Lairig Marketing has been pounding the table on since 2008, was up over 5%.

One other interesting data point from Kantar: Spanish-language TV ad spend reverse-plummeted, if you will, surging 20% in Q4 and up 15% over the whole of 2012. We are repeatedly told that Hispanics are overindex on digital tech savviness – Qué pasa con eso?

In Part 3, we will explore where The CMO Survey claims all this “plummeting” is being offset. Get your sunglasses ready, for we shall head to the land of Shiny New Toys – social media.

It makes Disney World look like a yard sale.

CMOs, Lies & Surveys (Part 1 of Many…)

OK, so it’s missing the “Sex” and the “Videotape,” but we consider it a fair exchange as there are more “CMO Surveys” than “Sex Videotapes” nowadays.

Loyal readers know we have been here many times before, most often with our friends at the CMO Council, poking holes in survey after survey. Today we introduce a new source, one so plagued with faults it might take us two weeks to step through them all. Dust off your seismometers!

Welcome to “The CMO Survey,” which can be found at CMOSurvey.org. Now in its sixth year, this semi-annual survey is pure academia, sponsored by Duke’s Fuqua School of Business (we shall resist cheap shots on the name as long as possible), and piloted by Professor Christine Merman, er, Moorman.

Before we tackle our first CMO Survey fault, allow us to raise two higher-order issues.

>>> Issue #1: As part of its 13-word tagline, The CMO Survey claims it “[predicts] the future of markets.” It is a strange, illogical promise, sounding more like something your stock broker would say. We’ve looked through all 60 pages of the most recent survey (the “February 2013 survey”), and find no predictions of anything, “markets” or otherwise.

>>> Issue #2: Just like the CMO Council, The CMO Survey’s effort isn’t confined to CMOs. We’ve said it a million times, but there just aren’t enough CMOs, nor hours in their days, to take all of these so-called “CMO” surveys.

To wit: from the February 2013 CMO Survey report’s methodology page:
- 4963 top U.S. marketers were sent the survey (emphasis ours)
- of those that took part, 95% were VP-level or above (emphasis, again, ours)

“The VP Survey” or “The Top Marketers Survey” would be (more) truthful, but wouldn’t have the je ne sais quoi quality that “CMO” does.

With that out of the way, let’s place our scanners on fault line #1: “Marketing spending on traditional advertising continues to plummet.”

So says the headline on page 21 of the survey, as well as the opening title in a video short of Prof. Merman, er, Moorman, summarizing the survey results.

Let’s look at this from the inside first, then from the outside.

Sh*tty Question
Let’s say you are a “top marketer,” who agreed to take a 50+ question survey. Without any preparation, nor resources at hand, one of the questions asks you to parse your entire marketing budget by type of spend, by %. How could you possibly get the answer correct?

Loaded Question
One of the categories of spending comes with loaded terminology: a la, how much will you change your spending on TRADITIONAL ADVERTISING ? All the other choices have sweet-sounding words like “digital” and “brand building” and “new.” You remember reading somewhere, on a content farm like Mashable or LinkedIn, that traditional advertising is dying. So you answer that yours is too.

Skewed Analysis
Only one historical graph is shown for the “spend by type” results discussion: yep, you guessed it, that of the expected change in “traditional advertising.” And, at that, we are shown only the prior four surveys’ data points, which yield a line sloping smoothly downward.

From an expected GAIN in spending on traditional advertsing of 1.3% in August 2011, the number has fallen to -0.8%, then -1.9%, then -2.7%. Note the difference between the last two is a drop of 0.8 percentage points. Yet, the same survey participants said their digital spend would fall by 1.3 percentage points from the last survey to the current one. Plummet much?

In Part 2, we’ll take an “outside” view, looking at actual marketing spend figures. They don’t corroborate The CMO Survey’s findings at all.

The only thing plummeting is our tolerance for bad marketing research.

The Not So Super Super Bowl Stock Portfolio Redux

Back in 2008, we debunked research that concluded Super Bowl ads were a guaranteed booster to stock prices for the companies that ran big-game TV spots. We did it again last year. Now, third time’s a charm.

[As an aside, we are saddened to learn that the professor who originated Super Bowl stock return research, Chuck Tomkovick, retired this past December to focus his efforts on a battle with brain cancer.]

As we noted last year, the analysis is tedious:

• Determine which spots ran nationally during the game
• Tie each spot to a parent company
• Determine if parent is a public company
• If the parent is non-U.S., determine if it trades U.S. ADRs
• Obtain the proper stock symbols
• Adjust for anomalous events
• Track the S&P 500 index as the benchmark

We ended up with 25 companies in our 2013 Super Bowl Stock Portfolio, five more than last year. Since each announced its media buy at various times throughout 2012 and 2013, we set two arbitrary “buy” dates for our portfolio – one on the Monday before Super Bowl Sunday, and one on that Friday.

We then set two sell dates – one at the close of the Monday following the game, to determine immediate impact of ads on stock price, then at the week’s close to measure residual impact, if any, from YouTube viewings, social media hype, etc.

We removed BUD as the stock plunged 6% due to a negative FTC ruling on its Modelo acquisition. PVH was dropped, as it received an anomalous 3% bump due to its announced addition to the S&P 500 Index. Finally, BBRY was removed due to its catastrophic January 30 press event and immediate smackdown from Wall Street (> 10%).

Here, then, are the results of the remaining 22 advertisers (SBSP = Super Bowl Stock Portfolio).

Jan 28 thru Feb 4
> S&P 500: down 0.5%
> SBSP: down 1.5%

Jan 28 thru Feb 8 (Prof. Tomkovick’s original holding period)
> S&P 500: up 1.0%
> SBSP: flat (0%)

Feb 1 thru Feb 4
> S&P 500: down 0.2%
> SBSP: down 1.3%

Feb 1 thru Feb 8
> S&P 500: up 1.3%
> SBSP: up 0.2%

In 2012, the Super Bowl Stock Portfolio lost out to the S&P 500 after accounting for transaction fees (i.e., the cost to buy and sell 20 different stocks). This year, we don’t even need to go that far to conclude that buying stocks in Super Bowl advertisers was a waste of money.

Back in the day, Professor Tomkovick and team declared that the Super Bowl was a “tradable event.” This year it was also. But only if you shorted the stocks of the companies that advertised during the big game.

The opposite of how marketing investments are supposed to work.

The Sponsored Content Fraud No One Talks About

"Sponsored content” is a newish euphemism for “advertising.” A marketer writes something and pays a publisher to, um, publish it. It’s up to the publisher to mark the content so the reader knows it is there for marketing purposes, not as a piece of real journalism.

It’s been going on for a million years. Those multipage “articles” you suddenly come across near the tail end of a magazine, that boast how great the business environment is in, let’s say, Tunisia? Advertorials. Or, to sound hifalutin, sponsored content.

So how funny was it to watch the explosion of bunched underwear last week when online readers of The Atlantic couldn’t figure out that an “article” about the Church of Scientology (for Chrissake !!!) was “sponsored content”?

“This is fraud,” they cried. And the cowards at The Atlantic buckled and removed the advertorial.

Ignorance does not connote sponsored content fraud.

But outright deceit does. And we found it in what, at first blush, appeared to be a promising method for marketing. This isn’t “60 Minutes” stuff, but something no one else has exposed. So allow us.

A fairly new method of sponsored content involves getting a place on someone’s media property to put just the link to your content. Much cheaper than buying an entire page on The Atlantic. If readers see your link, and its headline is catchy enough, off they go to your website, for just pennies a click.

But the pennies add up, as they always do, when you’re talking fraud (see Richard Pryor in "Superman III"). Phony clicks = fraudulent clicks.

There are ad companies that claim they can speed up this process via Twitter, and make your link – thus your content – “go viral.” These middlemen tap into the thousands of Twitter users who exist just for this purpose. These Twitterers don’t Tweet about eating a ham sandwich or taking a dump. They Tweet your link, seconds after they receive it from the ad company/middleman you gave your money – up front – to.

That first Tweet of your link costs you nothing. The real money gets made (and deducted from your upfront payment) when the Tweeted link gets clicked on.

Who does all this clicking? The Twitter “followers” of the original Tweeter. And here is where the fraud takes place.

Almost all of those followers are fake Twitter accounts. Hundreds upon probably thousands. Either manually or by bot, your link gets clicked once every minute, nonstop, until your ad payment has been run dry. (You will also note that none of these “visitors” ever stay on your site long enough to read your content piece, nor visit any other page on your site.)

Let’s take a look at one such Twitter player the middlemen tap. Check out @CliffOwens3.

Open Cliff’s list of followers and at #4 you will find “Lala Woodall.” A beautiful looking gal, who has Tweeted ONCE, has 31 followers, and is following 2004 others.

Right below her is "Lamonica Wentworth," another beautiful looking gal, who has Tweeted ONCE, has 25 followers, and is following 2004 others.

Right below her is "Lana Ellingson," another beauty, with one Tweet, 26 followers and following 2006…then Lanelle Stock…Lanette Gault…Lane McGlone…and on and on for hundreds upon hundreds of fake names and fake Twitter accounts.

They exist solely for the purpose of Cliff clicking on Cliff’s original Tweet of your link. So that Cliff collects a sh&tload of pennies (which he splits with the ad company you gave your money to).

We found dozens of Cliffs, each with hundreds of fake followers. Who will instantly eat up all your sponsored content budget, fraudulently.

One often hears the gripe that Facebook’s reported user numbers are not believable. We wonder now why no one has asked the same question about Twitter – just what proportion, exactly, of Twitter’s “user base” is simply ad-bot-like objects?

Consider yourself one of the fortunate handful who will ever be tipped off to this shady practice. Tread carefully when entering the dark world of sponsored Twitter links.

Else you might find your content isn’t being sponsored, but has been taken hostage.

Doritos Fans (Again) On Crash The Super Bowl “Fan” Ad Spots

The Super Bowl will be played on Sunday, February 3rd. As will 112 million Americans. But, because you read this post, you won’t be one of those being played.

In the weeks leading up to Super Bowl Sunday, viewers will be led to believe that two Doritos advertising spots, each clocking in at a media placement cost of roughly $3.8 million, were made by Doritos “consumers.”

You, on the other hand, being a Lairig Marketing reader, will mumble to yourself “What bullsh&t. These ads were made by professionals, who probably wouldn’t pee on a bag of Doritos if it was on fire.” (see Dirty Harry / Clint Eastwood, pre empty chair)

Doritos just announced its five finalists from a pool of “thousands of fan entrants” to its now-7th annual “Crash the Super Bowl” user-generated-content contest. One of them has a chance to win $1 million.

Consistent with years past, none of the finalists is a rube with an old Flip video camera. To a whitish man, they are all film professionals. As follows:

- "Goat 4 Sale" (P.S.: a horror show) by Ben Callner…who is a PROFESSIONAL director at Pogo Pictures, and a prior Doritos Super Bowl ad contestant

- "Road Chip" by Tyler Dixon…who is a PROFESSIONAL independent writer and director, who will count this as his THIRD appearance as a Doritos Crash finalist

- "Fashionista Daddy" (P.S.: so gay that the gays won’t like it) by Mark Freiburger…who is a PROFESSIONAL writer and producer, with two quasi-major movie releases, an IMDB listing, and his own Wikipedia entry!!!

- "Express Checkout" (P.S.: unwatchable) by Sasha Shemirani…who is a PROFESSIONAL writer and director on the festival film circuit, as well as an “award-winning” photographer

- "Fetch" by Joe Taranto…who is an “award winning” director of short films and commercials, currently completing a master's degree in film and television

As an illustration of how these are not your garden-variety UGC contestants, the “Goat 4 Sale” post-production roster includes Beast, Company 3, Method Studios, and Tunewelders, all of whom are high-end video/audio production outfits (Method has contributed to a million movies, not the least of which is the superb Argo !!!).

One quick aside: we predicted here in our December 20th post that (1) at least one of the Doritos finalists would be a spot with a dog, and that (2) the Doritos “dog spot” would be the winner of the 2013 Best Super Bowl Commercial.

So, mark us now, “Fetch” will be the 2013 Best #1 Super Bowl Ad.

But back to our main thesis. If it is public knowledge that NONE of the five finalists is a rookie camcorder-wielding chipster, then how cheesy, paneery even, is this statement from Ram Krishnan, VP of marketing at Frito-Lay:

"Every year, we're simply overwhelmed with the quality, creativity and talent behind our fans' ads…Each of these five finalists brought their A-game to the contest…”

Wake up, Ram. These ain’t no fans. They are pros. A-game is all they would ever bring.

The 2013 Crash The Super Bowl winner will be in the chips. Even if he doesn’t eat them.

What Happens At CES Stays In Vegas

We are two days into the second boondoggle of the year (National Retail Federation’s “Big Show” takes top honors), the 2013 Consumer Electronics Show in Las Vegas. The prominent theme of what’s on display is already clear.

And disappointing.

We are now at a moment where the biggest “electronics” innovations are not new devices, but the ability to move information between them – without cables or wires – wirelessly. As if, oddly enough, each device on its own was not satisfactory. We fully expect by the end of CES 2013 to have seen this scenario:

1) You don’t want to drive while staring at your smartphone screen, so Company A has the technology to beam phone info to the graphics screen on your dashboard.
2) You want to share your trip with your family, so Company B lets you beam the info on your car screen to your TV at home.
3) Your family could give a rats as& about your trip, and instead wants to watch a regular TV program (remember those?), so Company C introduces technology that lets them beam the TV data to your laptop.
4) You want all your laptop data to be with you at all times, so Company D transmits it – wirelessly – to your smartphone. Which you are holding in your hand as you drive your car!

Realizing you are caught in an infinite data loop, your head explodes.

The consumer electronics market blew up in 2012. Research firm NPD reported that holiday sales of “core” electronics (leaving out tablets and smartphones) fell 7% in 2012, the third year in a row that sales slowed as the season progressed.

[The Consumer Electronics Association, which does count tablets and smartphones, released its own data at the start of CES 2013, saying 2012 was up 5%. Yet it forecasts a scant 3% increase for 2013.]

Remember e-readers? Stunning technology that, just six years in, appears finished. Research firm IHS iSuppli claims that worldwide shipments of e-readers fell 36% last year.

In a make or break year for the CE industry, we see a lot of stuff that doesn’t follow true innovation principles at all:

- Little new ground covered; just topping off the near-full tech buckets

- Nothing grounded in consumer “wants and needs” insights

The latter should scare any consumer electronics executive half to death. Especially as another study from NPD revealed that two-thirds of U.S. consumers say they don’t want any new devices. We are, apparently, “teched out.”

For those of us of a certain age, we were told as children that we would live like the Jetsons when we got (much) older. It looks like, based on what’s transpired at CES 2013, we will simply be chasing Astro’s tail.

Marketing’s Four Questions For 2013 – Part 3

Now that you have decided to leave your media mix “as is” for next year AND invest in some rigorous customer research, let’s move on to the next big marketing question for 2013. The answer to which, unlike that of question #2, is going to be a lot of fun for you.

The Third Marketing Question For 2013 goes like this:

Are we going to create an absolute sh&t load of video content about our business in 2013, or what?

We’re feeling generous for the third time in a row, so once again we’ll give you the answer:

Yes.

That is the only correct answer, because you just can’t say no to these “subquestions”:

>>> Does the time spent by consumers watching video outpace consumption of all other types of media combined? More time than some people spend sleeping?

>>> Is video content easily digitized and uploadable to our own website, YouTube, Facebook, et al.? “Self” viral?

>>> Are we now finally convinced that every other way we have tried to express our brand personality and authenticity, including asking customers to make videos, is bollocks?

>>> Would we rather spend a few hours making a dozen 90-second videos about how to use our products or services versus spending three months in an endless series of rewrites just to put together a stupid newsletter jammed full of watered-down slop that no one reads?

The answer to the Third Marketing Question of 2013 – why aren’t we making video content left and right? – is easy. We have been intimidated and afraid. But now we are not.

We have seen the light.