Monthly Archives: October 2015

Recipes

This Foodie Friday, I’d like to talk about recipes.  Every family has them, as does every great chef.  Obviously, the difference between the results those two types of cooks deliver is large, even if the recipes they use aren’t really all that different.  What’s the difference, then?  The answer is a good business point.  

Let’s think about music for a second.  The musicians are combining their ingredients – the various sounds their instruments can make – based on a recipe given to them by the composer – the sheet music.  Just because you have the sheet music doesn’t mean you can play the tune.   Listen to even an accomplished high school orchestra and compare the results of their playing a symphony to the New York Philharmonic or any other world-class orchestra playing the same piece.  They’re quite different.  Successfully completing the recipe – making beautiful music – takes practice and technique.

It’s the same with food.  You might wonder why many great chefs share their secret recipes so freely.  It’s because they can give you the recipe, but that doesn’t mean you can cook the meal. You make lack their skill, you may lack the quality ingredients they use, you may be missing the tools they have (try comparing a steak done in a home broiler which might be 500 degrees to a steak house steak done at 1000 degrees).  I can almost guarantee you that what you produce and what they produce, even following the same recipe, will be very different.

That’s the business point too.  Just because you think you understand a successful business doesn’t mean you can replicate it.  I can explain my business in great depth, but that doesn’t mean you can start one up to compete with me.  The key for any of us in business is to develop the things that are difficult to steal.  Your team, your culture, and your relationship with your customers and partners are good places to start.  Amazon didn’t have the first online store, but the product they produced from the same recipe as others was just better.  The iPod wasn’t the first MP3 player, and there were many issued after it, but none with the same success even though the recipe was basically the same.  There are many other examples.

Great recipes are a basic requirement for success in the kitchen and in business, but don’t make yourself crazy protecting them.  Focus on what makes you really better.  Agreed?

 

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Filed under food, Thinking Aloud

Intruders

You can’t read anything having to do with marketing these days without running into some mention of ad blocking. It seems as if the entire industry is wringing its collective hands about the revenues lost due to the blockers. It doesn’t seem, however, that there has been a great deal of discussion about how the problem came to be. I’m not going to regurgitate a blow-by-blow of the last couple of years in ad tech, but there are a few important points that are worth pointing out.  

The first, and foremost, is that actions have consequences. You probably tell your kids that all the time but as an industry we seem to have forgotten. Publishers are cramming more and more advertising onto a page. But that action may be the result of the downward push of pricing that’s a function of the rush to programmatic buying. Rather than paying for quality, marketers seem more concerned with a lower CPM. That’s a nasty set of actions.

The consequence of popups, cluttered pages, and slow load times, married to incessant retargeting (which means we’re being tracked!) is ad blocking. According to one survey, 51% of US internet users agree that companies are too often intrusive on social media. Another survey says they feel all of the push notifications we send out are not relevant or are intrusive. There is that word again: intrusive.

The single biggest change in marketing and media over the last decade has been that consumers have all of the control. They don’t watch the prepackaged lineups that networks have been feeding for almost a century (if you take the dawn of commercial radio as the beginning). The world is now user-controlled and curated. Why would an intruder be welcomed?  Why are marketers and consumers in conflict, when one’s entire mission is to help the other to make informed buying decisions?

No answers today, just guidance.  We need to stop intruding.  Even the best creative messaging is intrusive when you see it for the 23rd time in a week.  We need to help publishers provide an environment in which the consumer feels welcome, and the only way to do that is to reduce clutter by paying for the value the publishers provide.  Not every empty space is screaming for an ad.  Some folks are getting it – Turner says they’re reducing ad time on some networks.  Let’s see who is wise enough to follow.

I’ve admitted to using ad blocking myself.  It’s not a great experience – pages break or won’t load fairly often – but it’s better than the minute and a half load times I’d face otherwise.  It’s doing a decent job of keeping the intruders at bay, and the odds are the walls are going to get higher if we don’t change as an industry.  Our actions have consequences and those consequences are becoming more clear every day.

Thoughts?

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Filed under Consulting, digital media

Misreading Their Minds

Every so often a piece of research comes along that asks the same questions of consumers and marketers and then compares the answers.  It’s instructive to see the differences in how the folks who are responsible for knowing how their consumers see the world vs. how those consumers themselves see it.  The latest example of this comes from the folks at Spong, and their 2015 Brand Reputation Study.  Their release on the information begins with this:

An organization’s brand is one of its most valuable assets. Greatly influenced by the reputation of the organization, the strength and weaknesses of a brand can have a direct impact on every aspect of the business, including the bottom line. But when it comes to evaluating what is most important or least important about a brand, a new brand reputation study from Spong indicates that marketers may not really understand what consumers care about and think.

Hmm.  That doesn’t sound particularly good, but what does it mean in real terms?  First and foremost, it turns out that marketers overestimate how often consumers talk about brands.  Marketers seem to think that consumers chat about what companies are doing a poor job, with 88% of marketers saying they think consumers do so daily or weekly.  The reality is that fewer than a third (31%) do so.  While a little paranoia is a good thing, I suspect this thinking leads into another data point the survey found.

Marketers underrate editorial and overrate social as a source of information, with 14% of consumers calling editorial a top source of accurate brand information.  Only 6% of marketers think consumers see it that way.  Conversely, we’re smarter than most marketers are about the accuracy of social media.  27% of marketers think consumers use it as an accurate source of brand information; the real number is less than half that (13%).

Consumers also put more importance on whether a brand is local far more often than marketers think consumers do. 30% of shoppers said they would always or most of the time choose local over national brands, all things being equal while only 12% of marketers would expect that sentiment. I guess the point is that once again, those of us who are supposed to have our finger on our customers’ pulses have missed the boat. As they summed up:

The research paints a picture that should serve as a wake-up call for marketers, whose stock in trade is understanding what triggers consumer behavior. As the research reveals, marketers over-valued a few key customer concerns at the expense of the wide range of other issues affecting their decision-making.

I agree wth that.  You?

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Filed under Huh?, Reality checks

A $24 Billion Secret

If you use any sort of connected device – a computer, a tablet, or a cell phone – you’re probably (hopefully, anyway) aware that someone is watching.  Maybe that’s a bit of an overstatement, but it’s accurate.  Everything you do, and everywhere you go if it’s a mobile device, is logged, along with some sort of device identifier.  It’s not hard to link a device with a person and that person with behaviors.  That’s really what the targeted advertising business is about.  

In that context, this article from Ad Age shouldn’t come as a real shock, but it’s always a little disconcerting to get a glimpse inside the factory where they make the sausage:

Under the radar, Verizon, Sprint, Telefonica and other carriers have partnered with firms including SAP, IBM, HP and AirSage to manage, package and sell various levels of data to marketers and other clients. It’s all part of a push by the world’s largest phone operators to counteract diminishing subscriber growth through new business ventures that tap into the data that showers from consumers’ mobile web surfing, text messaging and phone calls.

That’s why Verizon bought AOL and some ad tech companies, paying over $4.5 Billion for them.  Think that’s a wise investment?  Well, the global market for telco data as a service is potentially worth $24.1 billion this year, so it seems like it might be to me.  What’s less wise is that most consumers have no clue that all of this information about them – their surfing habits, their travel habits, potentially numbers they’re constantly texting, etc – are being packaged and sold without their consent.  Oh sure – when you sign the contract to use any of the carriers there is a lengthy terms of service agreement you probably clicked right through, and it contained language that said your data may be anonymized and aggregated and sold.  I’m not sure most people understand what that means in real terms.  Try getting phone service without agreeing.

Unlike most apps, which are opt-in, you really have no choice about this.  Are there benefits to the consumer?  Maybe.  In theory, you don’t see ads for things in which you have no interest, and you don’t get information about companies and services that aren’t in your area.   There is a huge downside, however, aside from the creepy factor.  Hackers can steal information that might allow them to know when your home is vacant on a daily basis, for example.  In fact, this sort of thing doesn’t go on in the E.U. countries because of the strict data protections those countries enforce.

The “tell” I see is that the phone companies don’t want to discuss this data business and the revenues they make from selling off our data.  If there wasn’t something nefarious going on, why isn’t it more out in the open?  Maybe if we all knew what was being gathered (300 cellphone events per day per subscriber by some counts), we’d be more curious?  Maybe we’d take steps, as some of us do with tracking blockers on the web, to maintain control of our own data?  What do you think?

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Filed under Huh?

Clickbait

I am sick of the clickbait mentality. You know what I’m talking about. Many of the articles you see in your Facebook news feed are one example: “The Dog Ate My Homework And You Won’t Believe What Happened Next!!”. I’ll admit that Facebook is getting better about having their algorithm eliminate a lot of the most egregious offenders, but there are plenty of other sites out there whose entire business model is predicated on getting some sap to click through and then to page through a slide show or a multipage article.

What really bothers me is that the mentality is spreading. The teases for upcoming stories in news programming seem to be more clickbaity (did I just make up a word?) in nature. They’re called “teases” for a reason – to get you to stay tuned through the commercial by teasing you with upcoming content. They’ve changed, though. When a news anchor ends a tease with the Upworthy phrase “and you won’t believe what happened next”, I cringe. There’s a business lesson in the reason why, even if you’re not in the content business.

Poynter interviewed Nilay Patel of Vox about the subject:

“Most clickbait is disappointing because it’s a promise of value that isn’t met — the payoff isn’t nearly as good as what the reader imagines,” Patel said.

None of us in business should be making promises to our customers what we can’t keep.  Doing so repeatedly is a recipe for disaster.  Maybe that’s what you’re after, but I don’t think so.  Our desire for traffic, clicks, engagement, whatever can’t supersede the value we deliver to our customers.  I get that in some businesses, the user isn’t the customer, but they are the basis for what you’re ultimately selling, so alienating them makes no sense at all.

We develop and keep customers n the basis of promises made and value delivered.  I think clickbait is, most of the time, the very opposite of that.  You?

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Filed under Consulting, Huh?

On Cooking

This Foodie Friday, I’d like to take a moment to express my appreciation for what goes on in my kitchen.  I know for many of you, time spent there is a painful, sometimes bloody, reminder that cooking is a chore.  I don’t see it that way, and as I’m thinking about it I’m realizing that there is some business thinking that goes along with my point of view.

I love cooking.  It’s therapeutic in many ways to me.  Even though one rule in my kitchen is that an appropriate form of music is playing (as loudly as I can get away with) as I cook, it’s actually quiet.  Appropriate music, by the way, is something that corresponds to the food being cooked: zydeco when I’m cooking Cajun, country when we’re making barbecue, and the Big Night soundtrack when an Italian meal is in the offing.  Try it – your food will be better!

Back to the quiet.  Most of us have a hundred thoughts rattling around.  It’s the collateral damage of our multitasking world.  When I’m cooking, I have one focus at a time – doing my mise en place or the smells as a dish is cooking.  How often have you taken the time out of your busy business day – even 30 seconds – to do something similar?

I appreciate the physical act of cooking, just as I appreciate that I’m constantly learning, finding better ways to do things, and getting better.  I don’t like making mistakes, but I do learn from them and rarely make the same one a second time. Those are the business points too.  My cooking is improving because of experience, not because I took a few years to go to culinary school.  I have friends who did, and they’ll tell you that the reality of the restaurant kitchen is nothing like the CIA.  It’s the same with every young person, fresh out of business school.  Doing beats almost everything.

I read someplace that kitchens are where we create community, and food is all about community.  I like to think of business that way too – a community of my team, the other teams that make up our enterprise, and the customers, partners, and suppliers that make up the community as a whole.  What are your thoughts?

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Filed under food, Thinking Aloud

The Tip Of The Iceberg

I”m not sure why, but a lyric from the Rush song “Distant Early Warning” popped into my head this morning:

I know it makes no difference
To what you’re going through
But I see the tip of the iceberg
And I worry about you…

I think that’s something we do in business – see the tips of those icebergs – but we also do a very human thing and ignore them. I’ve been part of organizations that were just as guilty. I can clearly recall a sports sales meeting in the 1990’s in which the sales staff laughed at competing with this little cable sports network called ESPN. Buyers were talking about it, even though their numbers weren’t much at the time. It was the tip of the iceberg, except we didn’t worry.

Those tips surface all the time. A decade ago, no one was “worried” about social media taking dollars from mass media (although what could be more “mass” than social media these days?). Having a highly profitable media business disrupted by consumers watching TV on demand and on a mobile device? A good way to get a room full of executives to laugh.

It’s not just the media business. How many businesses have a written disaster plan in case a server goes down, a system gets hacked, or a natural disaster occurs? Why written? Because there is a high likelihood that you won’t have the time to figure it out on the fly, and it’s possible that members of the team will lose communication. We see the tip of that iceberg in other businesses struggling with floods and hacker incursions, but what do we do about it?

You might also ask yourself about the distant early warnings of burnout. Many of us are stressed, and that constant strain can lead to burning out – a state of mental, physical, and emotional exhaustion.  When was the last time you looked inward as well as outward for signs of those icebergs?  Ignore the distant early warnings at your own peril.

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Filed under Music, Thinking Aloud