Monthly Archives: April 2014

April 17, 2014 · 10:12 am

In The Zone

We all do complicated things effortlessly.

If you can think back to when you were learning to drive a car, for example, it seemed incredibly difficult.  You thought about how hard to push the pedals.  You had to remember to turn on your blinker and to look in the mirrors.  Coordinating your brain to hold the wheel steady while looking away from the view in front of you was a challenge.   Yep, driving a car is pretty complicated and yet most of us who have been doing so for any period of time do it effortlessly.

Athletes get to a similar place.  You’ve probably read some post-game interview in which an athlete described being “in the zone.”  That’s a state of mind where they feel as if everything has slowed down.  Their focus became incredible and all external noise seemed to vanish.  They feel invincible.  Psychologists call this “flow” and as Wikipedia states:

Flow theory postulates three conditions that have to be met to achieve a flow state:

  1. One must be involved in an activity with a clear set of goals and progress. This adds direction and structure to the task.[11]
  2. The task at hand must have clear and immediate feedback. This helps the person negotiate any changing demands and allows him or her to adjust his or her performance to maintain the flow state.[11]
  3. One must have a good balance between the perceived challenges of the task at hand and his or her own perceived skills. One must have confidence in one’s ability to complete the task at hand.[11]

This, of course, isn’t limited to athletics.  In fact, it’s a pretty good roadmap for business success too.  Clear goals, losing track of time due to your total focus on the moment, intense focus on the task you’re doing, and constant, real-time feedback that allows you to adjust your game plan all are places where good businesspeople live.

I’ll add one caveat.  While getting to, and living in, “the zone” is a wonderful thing, we all need to venture out of that zone every so often.  Maybe it’s more about distinguishing a comfort zone from a flow zone.  I’m way less fond of the former than I am the latter.  Have you ever been in that zone?  Does this make sense?

 

 

Enhanced by Zemanta

Leave a comment

Filed under Consulting, Thinking Aloud

Tagged as , ,

April 16, 2014 · 8:39 am

Digital’s Dirty Little Secret

A few days ago, the media trades (especially the digital media trades) were filled with self-congratulatory fervor over  the

Kakashi And Yamato

(Photo credit: lyk3_0n3_tym3)

achievement of a milestone.  This story from Cynopsis is typical:

For the first time, digital ad revenue is surpassing traditional TV revenue. According to new research from Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers, online advertising revenue climbed 17 percent to $42.8 billion in the U.S. last year, compared to the $40.1 billion generated from TV advertising. Although mobile ad spending increased by 17 percent to $7.1 billion, it was still just about 10% of the $74.5 billion cable and broadcast spending reached last year. Variety reports that digital video alone produced $3 billion in ad rev, while search reeled in 43 percent of the total online rev at $18.4 billion.

Woo hoo!  Way to go digital ad sellers – even you robotic ones.  The folks at Venture Beat did a really good overview of what has occurred and I’d encourage you to spend a minute and check it out.  Of course, there was one thing at the end that intrigued me:

Interestingly, performance-based pricing models are down slightly from the previous year. CPM, or cost per thousand views, was up slightly to 33 percent, while performance-based models like CPA (cost per acquisition) dipped slightly to 65 percent. CPM pricing is at its highest point since 2010, the IAB said.

Why is that of interest?  CPM pricing is impression based.  Now let’s look at digital advertising’s dirty little secret.  This is from the Wall Street Journal:

About 36% of all Web traffic is considered fake, the product of computers hijacked by viruses and programmed to visit sites, according to estimates cited recently by the Interactive Advertising Bureau trade group. So-called bot traffic cheats advertisers because marketers typically pay for ads whenever they are loaded in response to users visiting Web pages—regardless of whether the users are actual people.  The fraudsters erect sites with phony traffic and collect payments from advertisers through the middlemen who aggregate space across many sites and resell the space for most Web publishers.

In other words, between $6 billion and $18 billion is stolen every year in the US  because of ad fraud.  So while there is no question about the impact digital has had in the advertising landscape, it probably has a ways to go to catch broadcast TV.  The bad news is that a lot of that catching up involves breaking up criminal enterprises. The good news is that imagine how much better off the legitimate business will become with those ill-gotten gains redistributed to the legitimate players.

It’s always good news, bad news, isn’t it?

 

Enhanced by Zemanta

Leave a comment

Filed under digital media

Tagged as , , , ,

April 15, 2014 · 8:27 am

The Bottom Line

A business thought for Tax Day found in some dance music!  If you were following music as the punk movement hit in the late 1970’s, you were quite aware of The Clash. You might have even shed a tear when Mick Jones, one of the guitar players and a key songwriter, was kicked out of the band. This TunesDay we’ll use a song from his next project – Big Audio Dynamite – as our jumping off point to discuss business. It’s called The Bottom Line and it’s a fun listen if only for the wacky, mid-1980’s video:

This lyric raises our business thought:

A dance to the tune of economic decline
Is when you do the bottom line
Nagging questions always remain
Why did it happen and who was to blame?

It always amazes me how many smart people forget that “margin” is at least as important as “revenue.”  They spend a lot of time generating revenue from unprofitable activities while ignoring a part of the business that might have a high margin although the revenues aren’t much.  I thought we had all learned about that sort of thing in the dot-com bubble long ago (internet years are like dog years – the intervening 15 years are like a century in real-time).

It takes a fair amount of courage to abandon unprofitable customers or segments of your business which are generating decent revenue.  Revenue is always just one aspect of the business story.  Cash flow and profit are two others which are far more important.  Sure, revenue is the fuel that makes the business engine go, but a leaky gas line almost always results in disaster.

There is also the mistake some folks make in thinking about margin.  They forget that in addition to the gross margin (basically the cost to the customer minus the cost to you) there are other things that are “indirect” costs such as advertising and overhead that should be factored in to prevent the business from losing money on many sales.  Of course I see the need to scale – to build a customer base and generate cash flow – but if it’s not done in a sustainable manner, it’s just an exercise in futility.

The “gross revenue” line is where the head of sales lives.  The bottom line is where great business people reside.  Where are you?

Enhanced by Zemanta

Leave a comment

Filed under Consulting, Music

Tagged as , , , , , ,