In Marketing - Go Big or Cut Big

Every marketing dollar counts and should be spent wisely.  Return on marketing investment should always be measured.  Cutting a marketing campaign's budget by some small sliver, say 10%, makes no sense at all.  Any campaign not working should be cut all together.  Any campaign delivering the desired return on investment -- should be increased.  

Here are a two thoughts and one exception you might consider when evaluating marketing spend:

Go Big:  Double anything that is returning above your baseline performance threshold.  Graduate from measuring overall ROI to ROI from incremental new spend.  Grow systematically until the ROI curve flattens.

Fail Fast:  It should only take a few weeks to know if a campaign is never going to get to the baseline.  As soon as you know a project is failing -- kill it off.  The key is to make sure people know that good people can have failing ideas, and separate the campaign failure from person failure.  A list of new ideas to try with whatever budget is left often helps here.

One Exception:  When building a platform, some of the foundational levels may be necessary for the future performance of the platform.  An investment in certifications may enable bigger deals or higher margin deals.  All of the warning flags should go off when you find yourself justifying poor current performance in the hope of greater future performance -- but some campaigns should survive if they are necessary steps into the future.

So the next time you sit down with your budget, resist the urge to trim around the edges.  Go big or cut big.

Meaningful Marketing: 3 Must Haves

To some people the words "meaningful" and "marketing" just should not be found together.  I prefer to think of this as an opportunity instead of an oxymoron.  Rarely does a day go by without hearing someone discard ideas, thoughts, or proposals as worthless with a dismissive comment like "oh, that's just marketing".

Despite this flood of popular sentiment against the value of marketing, it is possible for marketing departments to do something meaningful.  Take Google Fiber for example.  Google and its fiber network in Kansas City is bringing super high speed internet connections to an entire community will have some engineering value, but really it is brilliant marketing.  Meaningful Marketing in fact.

Here is where I set the bar on achieving meaning in marketing:

New Revenue:  No way around it, Marketing must create new revenue.  This is the same measure everyone else uses, so I thought I would put it first.  Don't roll your eyes yet, the next two do propose less traditional measures of meaning.  And after this item I am not going to include "building the brand", "supporting the key messaging" or any other marketing mumbo jumbo.  In the case of Google Fiber, the 25% of the population in the Kansas City community that do not now use the Internet -- will clearly be a new revenue opportunity for Google.

Bi-Directional:  Just like the Cluetrain Manifesto said over a decade ago.  Marketing should be a conversation.  A full page advertisement is a megaphone blasting away at customers - not bi-directional at all.  The Google Fiber idea is bi-directional because Google will see what the customers decide to do with their connection.  Even if they do nothing, that in itself is a communication to Google.  Some people will say that a company like Google is not good at meaningful marketing because they have no phone number on their web site and no call center to call.  I disagree.  Google watches every communication customers send -- as they use Google's search engine -- and make daily improvements to the algorithm in response.

Intrinsic Value:  Finally, and very few people do this today, marketing should have some intrinsic value of its own - and that is value to the customer.  Marketers often think that even if their campaign does not drive revenue, it does support the brand, or generates goodwill.  This is not of value to the customer.  Google Fiber does have intrinsic value because a free fiber connection to the internet does benefit those that are connected.   

I am on the hunt for other examples of Meaningful Marketing initiatives.  Feel free to send them my way.

Cool or Fool?

Some time ago I wrote a post about the Apple Brand Promise where I proposed that the magic of Steve Jobs was making his customers feel cool for buying his products.  I still think people buy Apple products because of the way it changes how others view them.  People feel cool when holding an Apple device and not because it makes them more productive or smarter and clearly not richer, but because the Apple brand promise says cool people buy Apple devices.

Cool is almost impossible to fake, and there is no formula for becoming cool.  Just ask any rock band, super model, or San Francisco restaurant owner -- cool is as impossible to predict as stock price.  

Cool is also impossible to copy.  Fake Rolex watches will never be cool.  No one is going to remember the band that tried to be like A Flock of Seagulls.

Those who have been touched by the ferry godmother of cool all know down deep that the chances of becoming cool are about the same as winning the lottery.  Feel lucky if you win, but don't start thinking it was because you deserved it.

Which brings us to Microsoft.  Microsoft makes people productive and enables them to keep more of their money in their pockets.  It is rare that one feels cool with a Microsoft product, but who cares!  I will take smart over cool any day.  Smart matters, smart is lasting, people who are smart got there on more than the luck of the draw.  The Microsoft brand promise should be associated with smart -- not cool.

I think many of us have lost track of what the Microsoft Brand Promise is.  If you know, feel free to post a reply.  

When using W8 the other day (I mostly use W7), I did not feel smart or cool!

Could This Possibly Work for Amex and HP?

“I love money. I love everything about it. I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too.”

-Steve Martin

I try to make these posts positive.  The world has enough negativity without me adding to the stinking pile.  However, not long ago I got the most unbelievably dumb direct mail piece from American Express. Not wanting to go negative, I held my tongue.  

Today, I got an equally rediculous piece from HP, and here I am -- joining the screaming hoard!  

That is right, American Express sent me a 30 inch long remote control speedboat!  To buy an equivalent item on Amazon?  $30+!  

Any company doing a direct mail campaign where the item shipped is over $30 must have over $50 invested by the time it hits my door -- particularly with the custom box, shipping...  Any company spending that kind of money per item, must have done their targetting homework... right?

WRONG!

I am already an American Express customer!  One would think that before sending this list off to the mailing house, Amex would have done a quick compare to the current customer list.  

Hmmm... maybe they were targetting current customers specifically.  After all, the name and address matches exactly to my statement.  Why would anyone spend that kind of money to reach out to their current customers?  I have no idea.  American Express must have one talented advertising agency.

According to AdAge, Ogilvy and Mather New York is the agency of record for American Express, who is the 9th largest advertiser in the country with an annual budget of over $2 Billion.  These guys must be super smart -- do you think this campaign could possibly work?

HP and BBDO - Just Keeping Up

Not to be left out, HP sent me a remote control Ferari.  Now this is a bit more modest, less that a foot long, and probably in the under $20 price range.  Also, we are an on again, off again HP customer and partner, so getting in front of us could make a difference in our purchasing habits.  Lower cost, more upside... but I still have a hard time believing that this campaign could even pay for itself.  Incidentally, HP's ad budget is only $1 Billion.

I didn't respond to either and my kids looked at the plastic crap and shrugged.

What on earth will the big spenders think of next?

More Drinks and Less Advertisements Please

I like movies.  All kinds.  I like watching them and talking about them and recently I have gotten into documentaries, but that is another story.  

On this the day of the Oscars however, I am thinking about how much worse the experience of actually going to the movies has gotten.  One would think that in the face of increased competition the movie studios and theaters would try harder to attract customers.  Instead they have come to the conclusion that I am going to sit there and watch half an hour of crap before the movie starts.  I don't know about other people, but I don't respond well to being force fed advertisements while strapped into an airplane seat, but have you ridden the train lately?

I don't respond well to the previews that cannot be turned off on DVDs either.  And when the movie on Netflix just starts -- without advertisements or previews -- I get a warm feeling of calm and satisfaction.

Yes we have more options than ever before and no, the movie studios are not giving me any compelling reason to go to the theater.  My house being a mess and my wanting to get out of it and go to a movie does not count as something the movie studios has done to be more competitive -- but if you give me a minute I bet I can come up with a reason my messiness is their fault.

There is one exception however.  Just about every big city now has a handful of theaters that have comfortable chairs, serve food and drinks, and charge a fortune -- but they have reserved seating, so you can hang out at the bar right up to the start of the actual movie.  That way if they are silly enough to try to force advertisements on you, there is an escape.  I really hope this trend continues and the number of movies available at this kind of theater goes up.  

Oh, and one more thing, there is a scene in Argo where the army guy at the airport picks up the phone and just dials Hollywood from Iran -- in 1979!  Come on, really!

Dirty Electric Cars

Electric cars are clean in that they produce no emissions.  The dirt I am referring to in the headline is on the cars.  Why is it that so many electric car owners fail to clean their cars?  Could it be that car washes are at gas stations?

There are several other ways that electric cars are disrupting the way things work.  Here in Washington we pay 37 cents per gallon in taxes - largely used for road improvements.  Electric car owners pay nothing for gas and therefor nothing for road improvements.  I know I use about 25 gallons of gas per week, so my weekly tax is about $9.25.  Over a year then I pay $480 for road upkeep.  ​

In response to this our legislature passed HB 2660 charging each of the electric car owners $100 per year for road upkeep.  Sometimes I am amazed at how fast certain bills get passed (tax increases) and others drag on forever (anything having to do with education).  So this year, our 1,600 electric car owners will contribute $160,000 to road maintenance in Washington and the three million other vehicles will pay through the gas tax.​

As the cars on the road change, so will the business opportunities   Edmunds reports that 5% of all new car registrations in Washington State are for electric cars.  Since electrics make up just 1/20th of a percent of registrations now, change is clearly coming. Who is going to wash all of those electric cars?

Bitcoin on the Rise

Trying to assess Bitcoin during this frenetic flurry of activity in the ecurrency is like ​trying to get a squirmy dog to sit still long enough to read the weight on the scale.  Since January the value of a Bitcoin has grown from 20 USD to today's 46 USD.  This week there was a spike involume at Mt. Gox, the largest bitcoin exchange, where 170,000 Bitcoins changed hands in 24 hours and the price ranged from $49 to $33.  

It is true that $7.5M of volume in a 24 hour period is not going to seem like much to traditional markets that regularly trade the equivalent of $4 Trillion per day, but this mosquito may soon get the elephant's attention.   

Here are a few stories from this week for those of you that are interested in virtual currencies and Bitcoins.​

• Wired on a Bitcoin Heist
• ​Tech Crunch on the same theft
• Forbes ruminating on a government ban on Bitcoin​
• CNN on the run up to $50​
• PC Advisor on the history of Bitcoin​
• Forbes on the first Bitcoin denominated hedge fund in Malta​
• Business Insider about how to mine Bitcoins and make money
• Poker site adds Bitcoin to payment options​
• TechHive on Amazon.com and Bitcoin​
• The Guardian on Bitcoin's rise to legitimacy
• ​Knight News on the same rise

​Quite a week for a currency that was only invented 5 years ago and has not ever actually been seen (it's not printed money) by anyone.