Lairig Marketing

Mark Zuckerberg - Facebook C.E.No.

Facebook transitioned from the proverbial dorm-room start-up to a “business” some years ago. But as of last Friday, it must now be one, and not act like one.

The NASDAQ cock-up on the morning of the FB IPO ended up diverting attention away from serious lapses in Facebook’s management aptitude. Morgan Stanley was another scapegoat, eviscerated for the 11th-hour bump in share allotment and offer price.

But a seasoned team of executives wouldn’t have let it happen.

Friday’s claim that the IPO was “priced to perfection” was shattered on Monday, as FB fell quickly to $34. And stayed there for the next seven hours.

No, this is no longer about NASDAQ or Morgan Stanley. This is about the credibility of Facebook as a “real” business. And very soon, we believe, investors will sniff out the stinky fish smell. At the head.

Facebook will not be a successful publicly owned business with Mark Zuckerberg as CEO. His many talents do not appear to have any promise for turning around five straight quarters of decelerating sales growth.

Add to that a forward-earnings P/E of somewhere between 80 and 100, and a just-turned 28-year-old has more than met his match.

Take a look at the Facebook “Management” page, and see how confident those three little bios make you feel.

One of those bios belongs to Sheryl Sandberg, who as COO is supposed to play the role of “the real business CEO.” She was an opportunistic hire by Zuckerberg (a pattern that has repeated itself time and again – see Instagram). Her commercial background derives solely from eight years at Google.

She is no Terry Semel. Ring a bell? He was the “seasoned exec” Yahoo brought in to be CEO in early 2001 (albeit, a full five years after going public).

Sandberg is also no Eric Schmidt. Ring a bell? He was the “seasoned exec” Google brought in to be CEO in early 2001 (three years before the company went public).

Bringing in an “adult” to be CEO is an absolute and immediate requirement to solve for Facebook’s spiral downward in business credibility.

A CEO who wears the same clothes every day, especially at a $100-billion IPO, has a touch of mental illness. That in itself ought to be enough to get the CEO-recruiting pipeline stocked up.

He has taken a thrashing for it, but Geraldo was right – it’s not safe for young guys to wear hoodies. Especially rich ones.

Foursquare: Four Whom & Four What?

We've sat on this one for a few weeks. Admittedly we are stumped by this whole foursquare thing.

It only makes sense if you use the lens of (A) loyalty and (B) narcissism.

On the one hand, letting customers tell a retailer, "Hey, I'm here for the tenth time this month!", is an interesting way to alert businesses that can't otherwise track individual patrons they should be recognizing such loyalty.

On the other hand, that each notification should be sent to the world seems dopey, and the fact that (a reported) 20 million people would sign up to do it is frightening. This takes the famous "I'm having a ham sandwich!" tweet to the next annoying level – “…at Joe’s Ham Shop!” BFD squared.

As for the narcissism baked into foursquare, we know from our previous post the future supply of self-lovers is near infinite.

But what exactly are marketers being counseled to do with/on foursquare? Here, finally, is the story that made our heads spin.

“During late March 2011, Walgreens awarded foursquare check-ins with 15% off eligible items and 20% off Walgreens-branded products.”

In addition:

“Walgreens…is running the first nationwide coupon on the foursquare mobile app. Walgreens patrons who record check-ins at the brand's 8,000-plus stores via their smartphones get a scannable digital code redeemable in store for 50% off Arizona Ice Tea.”

Then the requisite marketing speak:

"We're using mobile technology and social media to better engage Walgreens customers, to give them convenient channels to interact with us and to deliver products, services and savings they truly value, " said a Walgreens Marketing Hack.

Hilarious, isn’t it? Walgreens customers already chose their “convenient channel” – by entering the store. You don’t need coupons for people who ALREADY shop with you, driving down your margins in the process. You need coupons to drive the people who AREN’T shopping with you.

And to prove targeting and segmentation have no home in social media, who says ALL Walgreens customers like and want (a) canned ice tea from (b) Arizona?

Nothing new here that you couldn’t do offline. Executed against the wrong target. With zero personalization. And no way to measure ROI.

Foursquares for four round holes.

NFL Pro Bowl To Be No Bowl?

To help undecided Commissioner Goodell make the right choice, here are ideas for what the NFL can do in place of its annual impersonation of a feisty home economics class, aka “The Pro Bowl.”

The NFL will never hold this event midseason, as the other major sports do. Who cares anyway? Baseball, hockey and basketball give infinite opportunity for individual players to shine – football does not. That’s why Sydney Crosby can score four goals every night, but Adrian Peterson can’t run for 100 yards every weekend.

So, Commissioner, cancel the Pro Bowl, but keep the focus on the end of the season. Let fans vote for first and second teams for each conference. With special-team players, we’ll end up with roughly 100 Pro Bowl “ambassadors.”

Rather than lean on each other for 60 minutes in Hawaii, consider these options. Each one aims to address the flat-to-slightly falling attendance the NFL has struggled with over the past five seasons.

Super Bowl Fun
Go nuts with our favorite social media tactic – user-generated content. Let fans submit videos explaining why they should get to attend the Super Bowl with one of the 100 ambassadors. Each winner gets four tickets. The NFL films the interaction between Pro Bowlers and fans, selling the rights to HBO or Netflix (or whomever).

If what they say about social media is true, those 400 winners will Tweet and Facebook and Tumble and Stumble and Pinterest like banshees, propagating their message to roughly a trillion people (feel free to check our math).

Public Service
Option 2 takes the good will path. Here, two players each are assigned to one of the 50 U.S. states. Again, fans submit videos, this time to win a “visit to your hometown” from Pro Bowler “X”.

Within that day is a four-hour exercise session, which bolsters the NFL’s focus on “PLAY 60” (in this case, PLAY 240). The Pro Bowlers could chase chubby kids around a running track for a couple of hours. If they have energy left, the kids will Tweet, etc., about how out of shape they are and recommend ways for a trillion other kids to lose about 30 pounds each.

Option 2 is an indirect method for attacking the NFL’s attendance issues. But think of it this way – if we don’t end child obesity, attendance will plummet in response to all the “0 to 0” final scores.

Because at the pace we’re on now, pretty soon NFL games will feature nothing but linemen.

Facebook IPO – It’s Pretty Obscure

We’ve not read Facebook’s S-1, but doubt very much that it would address this basic question – how many of the fundamental rules of marketing are Zuckerberg and Co. going to completely rewrite before next month’s IPO?

Since Facebook has most of the online marbles – i.e., daily users – marketers are falling right into line, regardless of the frantic changes being mandated these past couple of months. Here is a great illustration from Hy-Vee, the popular Midwest grocer.

“A Hy-Vee store [in Iowa]…used social media today to promote ‘mystery sale’ prices that will be available only on its Facebook page…‘These prices are so astonishing we can't print them!’…‘an added bonus of being our Facebook fans [sic] is that we will be posting the great prices for this ad on Facebook.’ ”

Beyond the observation that grammar still isn’t teached in Iowa – what kind of segmentation scheme is this?!? Targeting customers based on media channel went out of style a little after the Mad Men era.

Does Hy-Vee know who these Facebook “fans” are – really? Using crude overall demographics courtesy of Checkfacebook.com, we estimate that, at best, half of Hy-Vee’s customers belong to the social network. Of those, only half use the site daily. Roughly 60% of those are women. One-half of that group are in the “sweet spot” age range between 25 and 54.

That leaves Hy-Vee’s Facebook-only promo with coverage of just 7.5% of its customer base. Of whom the grocer has absolutely no idea what proportion behaves in a high-value manner. And of whom it won’t know anything about changes in individual shopping behavior at the end of each day.

All Hy-Vee will know is if its Facebook tactic can (a) increase aggregate sales (at a reduced profit margin!) and (b) increase more Facebook “fans.” BFD.

Brands on Facebook seem to be going to the woodshed willingly. The recent Timeline reset appears to be in direct conflict with networking fundamentals. For example, here is a quote from a Gen Y “guru” in relation to Macy’s evolving social media strategy (from MediaPost):

“ ‘The Gen Y mindset involves looking for a different kind of shopping experience,’ Dan Schawbel, of Millennial Branding, tells Marketing Daily. ‘They are looking for something modern, so Macy’s history isn’t that interesting to them.’ ”

Well, howdy-f&ckin-doodie. Macy’s history = Macy’s Facebook Timeline. Not interesting. Waste of space.

The capstone to all this mishegas is Facebook’s “Reach Generator,” too complicated to explain in this venue, but can be thought of as “ransom.”

An IPO can do wonders when a company is looking to maximize revenue opportunities. Facebook will generate a lot of “likes” among those who have the guts to get in (and out) in the first 30 days post-IPO.

Everyone else, Facebook marketers included, should plan on losing some Face.

Digital Coupons – A Rich Story

In a post about coupons way back in September, 2010, Lairig Marketing opined that we were at a tipping point of sorts – near fatigue with chits for price-offs and percent-offs drowning consumers. Mobile and social media (another new social term = “social couponing”…ugh) have accelerated the onslaught.

We noted that coupon use was slowing throughout 2010, odd given the economic times. But once again, marketers were biting the big hand that feeds. Lairig Marketing thus predicted:

“…come next April or so, we won’t be talking so much about coupons. We’ll be onto the next generation of whatever it is that social media marketers want to bring us.”

As is typical, we were a bit early with the call. But here we are in 2012, looking back now on 2011 coupon-industry data. Guess what?

“Food marketers drastically cut their use of coupons last year [2011], issuing 13.1% fewer coupons than they did in the prior year…reports NCH Marketing Services, a Valassis-owned company.”

One reason marketers cut back on coupons is that consumers are redeeming more of them – 12% more in value year over year. Devoid of strategy, couponing is expensive for marketers. Just ask any Groupon merchant-customer.

But you wouldn’t know a “reset” of coupon tactics was underway from Coupons.com, which has every reason in the world to publish research touting the benefits of couponing. And it has come up with research so feeble, we are awarding Coupons.com with our first “Research Hall of Sham” designation for 2012. (Shame on GfK's researchers for adding their good name to this one.)

“A soon to be released study from Coupons.com, in conjunction with GfK Knowledge Networks…shows that digital coupon users shop more frequently and spend significantly more during each trip than the average U.S. consumer.”

STOP! Said before, said again – anything “digital” implies “better off” consumers who can afford smartphones and tablets, and thus buy more of anything.

To wit: later in its press release, Coupons.com says that “Users of digital coupons have higher household incomes and are better educated…”

Good research would have analyzed spending level on similar items, rather than the whole shopping basket.

Coupons.com's research should come with a big coupon. Hardcopy or digital.

Fast Follow-up Week – Shocking TV

One of the popular memes we’ve been ridiculing for a couple years here at Lairig Marketing is the “death of TV” – all the blather about no one watches TV anymore, everyone is cord cutting Pay TV, digital will drop spend on TV advertising to zero, blah yadda blah.

Looks like the social media intelligentsia got our message. Similar to how they have slowly embraced other fundamentals of marketing – social CRM, social commerce, social influencer marketing, yadda blah yadda – they are now giving the world - * drumroll * - social TV.

And, once again, it is simply “digitizing” what people have been doing since Edison.

It is common wisdom that 1 of every 2 people in a group watching TV will talk throughout a program. Instead of laughing at a sitcom joke, the person must speak: “Wow, that dude is funny.”

Instead of gasping during a suspenseful moment in a drama, the person must speak: “Whoa, that dude didn’t see THAT coming!” On and on, for as long as you can tolerate it.

The beauty of social TV is that it allows that person to type these thoughts on a keyboard and annoy people OUTSIDE the living room – Facebook friends, Twitter followers, et al. Of course, if he also speaks while typing, everyone is screwed.

As always, one hand giveth, one taketh away. Dozens of companies – GetGlue, Miso, IntoNow – are looking to monetize this activity, to insert programmers and marketers (surprise!) into the conversation. It’s the Facebook model: twaddle infused with crappy ads.

The irony is that “gurus” aren’t emphasizing the “social” as much as the “TV.” This is the future of TV, they tell us. If programmers and station owners don’t get on board, they are toast. The viewers shall rule the airwaves.

The airwaves that we were being told two years ago were going the way of the dodo. Guess not.

A bigger irony: just to prove how powerful a medium TV is, one of the new players in the social TV space across the pond in the UK, Zeebox, is using TELEVISION ADVERTISING to promote its SMARTPHONE APP.

Too bad for Zeebox that the target audience is going to miss its commercial.

Procter & Gamble Gambles On Digital

This one has taken on a bit of the old “telephone” game (way before we had the Internet, kids). The last whisper in the chain has been garbled as “P&G has laid off everyone in marketing and will now use only social media, which it says is free.” Not exactly.

Here is what CEO Robert McDonald said on P&G’s Q2 earnings call, as he defended a reduction in ad spend as a percentage of sales:

“In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient.”

Because McDonald used the word “efficient” rather than “effective,” the world can only assume he said what he meant. Is that really P&G's challenge vis-à-vis social media marketing?

Let’s use Tide detergent as an example. Symphony IRI (and many other researchers) claim the brand has U.S. market share north of 40%. Let’s adjust that for heavy users – such as households with six or more kids – and estimate that Tide has 20% penetration.

That would be the rough equivalent of 23.7 million U.S. households. Now, let’s check Tide on the “Big 3 Social Media Thingamajigs”:

• Facebook – 2.7 million “likes”
• Twitter – 20,000 followers
• YouTube – 167 subscribers

If we assume they are all from different households of current Tide users, P&G's social media "pivot" (buzzword of the year!) looks to be a little over 20 million short. And, of course, if you think about the challenge to acquire NEW Tide users via social media, then we are short by somewhere between one and 94.9 million households.

All that pressure on Tide’s 2.7 million Facebook fans. The Old Spice Guy might be pressed into service as the Old Tide Guy.

All in the name of efficiency.

Guy Kawasaki – Marketing’s “Golden” “Guru”

After two upbeat posts in a row, we are feeling especially cranky. So ornery that we are going to cancel today’s traditional “Fast Follow-Up Friday” and instead take the piss out of one of Marketing’s top-five gurus. This is not to be confused with “taking the piss,” a favorite phrase of George Parker’s, which means “to take liberties.”

We take no liberties when dissecting the phenomenon known as Guy Kawasaki, as he has taken them all for himself.

As background, Kawasaki’s claim to fame are the six years he spent at Apple, first from 1983 to 1987 as a “Software Evangelist,” then from 1995 to 1997 as “Chief Evangelist.” Again, no liberties taken here – this is real. In fact, this is how Kawasaki describes the latter role:

“My job description was to protect and preserve the Macintosh cult by doing whatever I had to do.”

In addition to running a venture capital portfolio of many Silicon Valley-ish companies, Kawasaki has spent the ensuing years aggregating other people’s stuff. To wit:

- Established “Alltop,” a site that scrapes dozens of well-known blogs and sites into a crude directory.
- Established “Truemors,” a collection of the “most interesting stories” handpicked by "truemorists" around the world.
- Recently knocked out his tenth book, titled “Enchantment,” a busman’s tour of existing material that starts at Dale Carnegie and ends up nowhere (unless you don’t know what a proper handshake is).
- Churns out articles for American Express’s OPEN forum that are basically one-sentence introductions to the work and words of others (with fawning “Great post, Guy!” comments pouring in…WTF?).
- Auto-pushes roughly five tweets per hour, 90% of them pointing to someone else’s nonsense (example: “USDA to announce food recalls by Twitter”).

An admitted front-runner, who has twisted the Midas phrase to define himself as “Whatever is gold, Guy touches.”

For all of this and more, Guy Kawasaki is rewarded with 646,824 Twitter followers, within spitting distance of the #1000-ranking Un Curioso Dato (whatever that is). A master of the “self-promotion” part of marketing, still introduced as “former Apple evangelist” which as noted above is FIFTEEN YEARS AGO, guest speaking nearly 75+ times per year at an estimated $40k+ per, the rest of the time given over to interviews.

And what a doozy from Inc.com, repeated on Business Insider at the beginning of this week. Here are key excerpts:

- “You really can't spend money on social media unless you really try.”
- “It's very difficult to create goals and strategies for something…if you're not familiar with [it]…”
- “The start of all great marketing is to have a great product.”
- “I love that you can edit your posts and comments [on Google+] after you've posted…I edit almost every one I do.”
- “My recommendation for SEO is very simple. It’s Write Good Stuff.”

If you believe any of this flip batshit, then you have learned firsthand Guy Kawasaki’s biggest marketing lesson. You have been enchanted. You have been evangelized. You have been converted.

Not least of all – you have been aggregated.

Fidelity Says UGH To UGC

Sorry to come back to the “branded content” topic so quickly, after beating it to a pulp (!) last week, but this one is near and dear for a couple of reasons.

Firstly, we were there two years ago, so to speak, when Fidelity Investments gleefully launched a contest asking people (not customers, mind you) to submit their own videos. The task was to make your own commercial, in which you would present your take on the company’s “Green Line” brand theme.

The response was underwhelming – a handful of user-generated submissions, each one ten times worse than the other. Fidelity kept it hush hush from there, picking a winner with no fanfare and pulling all the videos down as soon as possible. A painful lesson.

The second reason another “branded content” piece is being posted on Lairig Marketing so soon is that it is once again about Fidelity. With a very different twist.

Pretty much everything we posted last week about best practices for branded content is being illustrated in a new video-based campaign from Fidelity. It took two years to get over the hurt of 2010’s UGC effort, but it was worth the wait.

Fidelity has gone DIY with this one. All the way. The company has launched a mini campaign called “Thinking Big.” The work will feature PROFESSIONALLY MADE videos of its equity analysts talking about common topics in very uncommon ways.

The first one has been launched on Fidelity’s YouTube channel here. It is about water supply, and the near- and long-term implications of poor quality and access across the globe. It is a bit overdone with infographics automation (infographimation ???), and dwells too long on the problems versus the solutions, but it is infinitely better than Sling Shot Baby.

Let’s set aside for the moment that Fidelity has overly large hopes for the campaign – no TV exposure (which we wager the CMO will rethink in six months), desire to “go viral,” etc.

Instead, let’s applaud the fact that a major brand has recognized that the best branded content isn’t going to come from “the people,” but rather from subject matter experts.

Unlike all the other UGC dilettantes, we should congratulate Fidelity for thinking big about “Thinking Big.”

Social Networking For Business – Jive Talkin’

The blogorrhea is so full of effluent about Facebook, one could be forgiven for missing the social networking wave among business users.

That's right. Corporate desk jockeys updating, blogging, microblogging, etc., all day long about work-related stuff. But all this SHARING isn’t done on Facebook or Twitter or Pinterest.

Turns out there are lots of entrepreneurial companies selling what is termed “ESN” (Enterprise Social Networking) by the SNC (social media cognoscenti). Even the big-ass guys like IBM, Cisco, and Salesforce.com are packaging their traditional software with social networking programs.

ESN vendors don’t rely on advertising or “virtual currency” (is it redundant to put that one in quotes?) as Facebook does. No FartVille here. Instead, these companies have an old-fashioned business model.

THEY CHARGE USERS A FEE TO ACCESS THEIR SOCIAL NETWORKING PLATFORM.

So things must be going swimmingly, yes? No.

First, let’s look at the financials for Jive Software, one of the few pure-play ESNs that is a public company (ESN’s contribution to sales for IBM et al. is so tiny it is not broken out separately for them). A license to print revenue. And a license to burn profits.

Lazy writers will point out that it is normal for subscription-based companies like Jive to lose money early on. They should take a look at the SG&A line, which has nothing to do with subscriptions, and watch how it has grown at the same rate as revenues.

Second, let’s see what users are getting from this. To do this, you need to absolutely tune out the white noise that comes from the press releases for users of Jive and other ESNs. There, all is good in the ivory tower.

But not on the ground, according to a study by the Altimeter Group.

On a four-point scale of satisfaction for a dozen key metrics *sarcasm* like “improve collaboration” and “share best practices,” not one scored over a 3. Over two-thirds of companies surveyed by Altimeter said their measurement of ESN's value was poor.

Right now, somewhere some corporate employee is Tweeting:

“Damn boss keeps telling us to use this bullsh&t social software during work hours. F&ck. Can’t people just call if they have something to tell you? Stop wasting my time.”

140 characters of just your jive talking.