Category Archives: Consulting

April 8, 2015 · 10:28 am

Influencers

Have you ever heard of influencer marketing?  You might not have used the term but I’m pretty sure that it’s a familiar concept.  Simply put, influencer marketing is getting people who hold sway over other people’s decision-making to endorse your product or service.  On a really basic level it might be the audiophile friend you consult before purchasing your new speakers.  Maybe there is another person you know who is very into tech and can help you choose a new phone.

Influencer roles throughout the decision process

(Photo credit: Wikipedia)

If you take that from the realm of your personal friends to more prominent people – journalists, celebrities, experts – you’re moving to more broad influencer marketing.  To a certain extent, influencers are simply people within a subject area who already have established trust with an audience.  Finding them and messaging them in the hopes that they will say nice things about what you’re selling is influencer marketing.

There are some big plusses with this tactic, the biggest of which is that there is a demonstrable effect on sales.  According to a Burst Media study, advertisers who implemented an influencer marketing program in 2014 earned $6.85 in media value on average for every $1 they spent on paid media for such programs.  That’s an excellent return.  Obviously, it’s not easy to find market specific influencers, especially as you drill down to the consumer level but there are firms that do this.  I could write a few hundred words more on how you can work your own data to do so but that’s not my thought today.

Instead, I have a couple of caveats should you be considering – or currently doing – influencer marketing.  The first is that there is a tendency to get fixated on quantity and not quality.  Maybe you identify someone who has a large social audience – lots of friends on Facebook, hundreds of thousands of Twitter and Instagram  followers.  That person may have  a large megaphone but very little influence.  One mom who can get her 5 close friends to buy your product is better than a mommy blogger that’s widely read but mostly ignored.

More important is that there are a lot of fake important people out there.  I can point you to several people who claim to have large followings and, therefore, great influence.  Having run their accounts through the tools that identify fake followers it’s pretty obvious that they’ve bought hundreds of thousands of them.  When 97% of your 1,000,000+ followers are fake, that’s not an accident.  Don’t get fooled!

Influencer marketing isn’t new – some people trace it back to the 1940’s.  As with so many things these days, the tools have changed but the marketing smarts that drive their use haven’t.  Stay smart!

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April 7, 2015 · 10:58 am

You Could But You Shouldn’t

You might have missed an item last week although you might very well have been the subject of the report.  Do you know about ad injectors?  I’ve written about them before, most recently when some genius at Lenovo thought purchasers of their laptops would want to have Superfish bundled with their machines.  Besides being a massive security risk it was annoying as hell, as a plethora of ads cluttered up users’ screens.  Well, it turns out that Lenovo doesn’t have a patent on either stupidity (at best) or maliciousness (more likely).  To wit:

More than 5% of Google site visitors have at least one ad injector installed. Of those, half have at least two injectors installed, and nearly one-third have at least four installed, per a study Google conducted with researchers at University of California Berkeley.

In other words, millions of people have code installed that will insert new ads, or replace existing ones, into the pages those people read.  You may be one of them.  How did this happen?  Generally, some miscreant bundled the ad injector with some other desirable piece of software which the user installed.  Tool bars (don’t install them!) and certain software download sites (download.com, for one) do this routinely.  As the Google Security Blog put it:

Unwanted ad injectors aren’t part of a healthy ads ecosystem. They’re part of an environment where bad practices hurt users, advertisers, and publishers alike. People don’t like ad injectors for several reasons: not only are they intrusive, but people are often tricked into installing ad injectors in the first place, via deceptive advertising, or software “bundles.”…Ad injectors are problematic for advertisers and publishers as well. Advertisers often don’t know their ads are being injected, which means they don’t have any idea where their ads are running. Publishers, meanwhile, aren’t being compensated for these ads, and more importantly, they unknowingly may be putting their visitors in harm’s way, via spam or malware in the injected ads.
So why does this happen?  Because it can and because some executive doesn’t have the moral courage to say “no” to an easy buck.  Any of us in business make choices like this all the time.  We could do things that are evil but profitable but most of us choose not to.  We should not be afraid to point out and shun those who do.
Business is hard.  Making the right decisions is part of what makes it so.  We don’t do some things just because we can.  Besides being immoral it’s myopic and as Lenovo found out the backlash can be worse than the original problem.  Make sense?

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April 2, 2015 · 11:30 am

The Coming Cable Shift

I got into a discussion with someone about the major shift that’s taking place in the cable industry. Specifically, we were discussing all of the ala carte services that are becoming available. Netflix, Hulu and Amazon Video are just the start. You’ve heard that major networks – CBS, NBC, ESPN, and others – are going to provide a streaming service via broadband. I wrote about that a couple of weeks ago so I won’t repeat myself . However, in a time when 13.5% of broadband households with an adult under 35 have no pay-TV subscriptions and 8.6 million US households have broadband Internet but no pay-TV subscription with millions more likely to cut the cable cord in the next year, the times are a changin’.

The person with whom I was discussing this didn’t think it was a big deal. First, the cable guys are also ISPs so they make their money (at higher margins) there. Second, people will find that paying a lot more for fewer networks isn’t so great after all. I told him he was missing a point.

When you pay the cable bill each month, much of that payment gets divided up among dozens of program providers. ESPN takes the biggest chunk, around $6 or $7 according to reports as does sports programming in general. Other networks get fees ranging from $1.50 down to a dime. That’s per household per month. You do the math.

The point he was missing is demonstrated by HBO. HBO is never a basic network, meaning it’s never just included. You pay $10 a month or so for it. HBO uses that money to fund a lot of spectacular programming. Now, so does Netflix.

When the model changes the cable guys are no longer distributing the pot to programmers as they see fit. Consumers are paying for what they watch.

Even if the out-of-pocket doesn’t change, the money goes to a much more limited set of content providers. They, in turn, will have the ability to invest in better content. Yes, I realize that 10 cents a month from 50 million homes is better than $2 from 2 million homes. The difference is that payment from the larger audience will never get bigger unless your network is moved to a bigger, more basic tier or you can negotiate your way to a bigger fee. Providing the network directly doesn’t cap your growth and developing a hit can provide a big growth in revenues. Think of your friends who will subscribe to HBO or Showtime just to watch a favorite series.

I would not want to be a minor network in all of this. I suspect we will see some bundling of like networks that don’t share ownership. I also think we’ll see many networks go dark or end up as free, ad-supported channels on some service – Apple TV, YouTube, whatever. One thing for sure – five years from now the business I grew up in won’t resemble the one we’ll be living with.

Thoughts?

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