Tweeting for Lower Pay

A constant in the life of marketers is the inevitable change in values and lifestyle among different age groups.  There are decided differences among the Silent Generation (age 65+), Baby Boomers (age 47 to 64), Gen X (age 30 to 46) and Millenials (everyone else).

 

A pointed example of why it’s necessary to stay on top of lifestyle demographics is found in the just-released Cisco Connected World Technology Report.  This report focused on college students and young professionals, seeking to understand how important a company’s social media policies are to this population:

 

The result: a whopping 40% of college students and 45% of young professionals would take a lower-paying job in return for more flexible workplace access to social media.

 

Looks like the Herzberg Two-Factor Theory of Motivation (positive motivating factors, and hygiene factors that become a negative when absent) has another entry under the list of carrots employers can use to attract employees.

 

It’s a good bet that we’ll start seeing online employment ads touting environments that not only allow, but encourage, the use of social media - all in return for a slightly lower salary.

The Power of Frameworks - Where do I Begin?

When Nobel Prize winners in science and economics are recognized for solving particularly elusive and important problems, the body of their work is taken into account;  Nobel laureates are not one-trick ponies.  Though a singular contribution may capture the limelight, these people demonstrate a pattern of repeated success in solving problems.

 

Highly valued managers are likewise highly effective problem solvers.  While they never find a successful solution for every problem they encounter, their “hit rate” is high.  Similarly, their  record tackling particularly difficult and thorny problems likewise stands out.

 

There are many attributes that make for effective problem solvers in business (or medicine, education, etc.).  One of the attributes that consistently effective managers share is their ability to learn, use and refine frameworks.

 

Framework Defined

A framework is a comprehensive problem-solving method, based on proven principles (as well as assumptions and rules) that can be applied reliably to find a solution.  A framework:

• is a structured approach - physical or conceptual
• shows the relationship among its components
• is prescriptive and repeatable

Frameworks work when used properly

Though we all use frameworks, it’s tempting to take shortcuts or alter the underlying principles of a framework to suit our circumstances.  Consider how many people opt for making over-optimistic assumptions and performing “generous” math in planning their retirements.

 

Like airplane pilots who rely on their flight instruments to guide them in bad weather, effective managers develop the discipline to rely upon proven frameworks to guide their decisions.  

 

Takeaway

Frameworks make the going easier - when they’re used correctly.  Stay tuned in the weeks ahead to see a few frameworks that have proven useful in managing marketing decisions.

Getting Sales and Marketing on the Same Page

Even on a good day, getting sales and marketing on the same page is a seemingly impossible task.  For starters, by the nature of their work, Marketing and Sales focus on different tasks and priorities.  Consequently, they are often assigned goals that only serve to widen the alignment gap that already exists.

 

No wonder CEOs and COOs are frustrated!

 

There are, however, ways to narrow the gap considerably.  One of the more effective methods lies in creating joint goals for both functions.  

 

Here’s an example that is relevant to any start-up or firm entering new markets (geographic or vertical - both work).

 

The metric: time to first customer reference.  

 

Acquiring a new customer is one thing.  Cooperating to acquire one to which is willing to act as a reference has spin-off benefits for both functions.  Among them:

• Continuity:  Marketing’s focus doesn’t begin and end with supplying qualified leads to Sales.  A satisfied customer’s experience can be used in PR, featured on the firm’s website, or published as a use case - all fodder for a broader marketing campaign.
• Shared skin in the game:  The stake of a shared outcome brings shared focus, priority, effort, scheduling and - importantly - commitment and willingness to work through problems and glitches that are bound to arise.
• Having the wind at your back:  Establishing that all-important first “win” in a new market eases the path to market penetration, and lightens the load for future campaigns and sales.

 

Joint Goals Must be Relevant and Actionable

Not every goal you could think of is going to be appropriate.  Those that lend themselves well to establishing joint sales and marketing goals must:

• yield an outcome that is relevant and important to each
• produce short term results
• be measurable

 

Takeaway

Getting sales and marketing to work effectively together is a difficult, but not impossible task.  Assigning a joint goal will make difference.  Take a test drive with one goal first.  Add 1 - 2 others and you’ll likely have what you need to solidly align sales and marketing functions.

What Occupy Wall Street is Really About

An analyst commenting on the U.S. Labor Department’s report that 80,000 new jobs were created in October (less than had been hoped) made this wry observation: U.S. corporations have increased hiring; the problem is that they are hiring somewhere else.

 

The Occupy Wall Street protesters are (the rioting fringe element aside) rightfully concerned that the good times are gone and showing no evidence of returning anytime soon.  Their frustration, vented on the financial sector and “the 1%”, though understandable, is directed at the symptom, not the problem.

 

The Problem: The U.S. is Losing its Competitive Footing

The United States is simply not the attractive mecca for business that it once was.  Just as water seeks its lowest level, dollars seek the most favorable commercial environment.  That environment, according to Harvard historian Niall Ferguson, lies in the East.

 

In his book Civilization: The West and the Rest, Ferguson describes 6 man-made institutions (he calls them “killer apps”) that explain the 5-century ascendency of the West to economic and political dominance globally. 

• competition
• science
• private property rights
• consumer protection
• modern medicine
• work ethic

He explains how these factors combined to contribute especially to the rise of the U.S.  He also goes on to illustrate how the East has been rapidly - and successfully - adapting these same methods to gain the upper economic and political hand. 

 

As this interview with Ferguson attests, it’s provocative stuff, and bound to fuel intense arguments at the dinner table.  If you accept his hypothesis, the link between the rise of the East and the economic difficulties in the West that are fueling protests like Occupy Wall Street is clear to see.

 

Implication: The Game is Changing

With the East catching up, the U.S. has to acknowledge the likelihood that it will continue to lose global economic and political leadership to China.  Unskilled jobs in the U.S. that have disappeared in the past 5 years, have disappeared for good.  The game has changed.  So have the stakes.

 

Takeaway

It’s not a Doomsday scenario; but it’s a very different story that the one we grew up believing.  Western corporations would do well to answer two questions:

• What are the difficult realities we need to face to think globally?
• What are the tough decisions we need to make to act globally?

Further Reading

A kinder and gentler view can be gleaned from ready Thomas Freedman’s two bestsellers, The Lexus and the Olive Tree, and The World if Flat.

 

Can an Orange Puppet Point the Way to Social Media Advertising?

A couple of interesting articles appeared on November 2, 2011 in both eMarketer and The Wall Street Journal regarding ad spending - with particular focus on Facebook.  It adds up in the form of fundamental questions facing marketers.

• How much of the ad budget should I shift to social media (SM)?
• Which SM sites fit our markets, if any?
• How can I tell if I’m getting bang for the buck?
• What happens if I move too quickly, or not quickly enough?
• Is there a way to “game” the system?

There are no easy answers.  But there is some intriguing data - and one clever use of Facebook.

 

 

The Shift to Social Media Ad Spend

By 2013 U.S. spend on social media is forecast to reach almost $5B (close to $10B globally).  That figure represents only an estimated 8.2% of all spend on online advertising.

 

But consider the estimates of U.S. advertising spend below.  Though forecasting is an inexact science, assuming these estimates are valid, though, online spend is expected to represent almost 25% of U.S. advertising within 3 years, with social media accounting for 8.2% of all online ad spending - over 2% of ad spend on all media.

 

Media	Share of 2011 Ad Spend	5-year CAGR
All media	100%	3.8%
Online	19%	14%
Social media	2%	35%

 

The Safe Bet is Facebook

Tallying $7 our of every $10 of social media ad spend, if marketers are going to play the odds - especially those for whom SM advertising is a grand experiment - Facebook is the handicapper’s choice (read the full eMarketer article here).

 

 

But Wily Firms Make Their FB Bets Prudently

As reported in the WSJ, comScore released data for 50 U.S. Advertisers in September, showing both overall impressions they received from the Internet, and the proportion of those received from Facebook - the familiar “Like” button.

 

The accompanying interactive graphic can be viewed here.

 

The article goes on to report how some savvy advertisers are finding novel ways to use Facebook to garner impressions, but without paying for FB ads (read the full WSJ article here).

 

Fox pure creativity and risk-taking, Ford goes to the head of the class with its Ford Focus ad featuring its new spokesperson Doug, an orange-colored puppet.  For close to $0 spent on Facebook advertising, Doug managed to pull more than 43,000 “Likes”.  Judge for yourself.

 

The Strange and Unforgiving Netflix Ecosystem

CBS Technology Editor Larry Magid summed up prevailing market sentiment by referring to Netflix’s 60% price increase in July as www.mercurynews.com-www.mercurynews.com" title="Larry Magid" target="_self">“clearly a boneheaded move.”  The decision to spin off its DVD rental business under Qwikster, quietly announced in CEO Reed Hastings’ blog, was arguably the bigger PR snafu.

 

However, as angry as some subscribers were, there’s no evidence to bolster the belief that Netflix acted to exploit customers.  Far from it.  Netflix was acting in its long term interests, and that of its customers too.  The issue lies in how Netflix made its choices.

 

Content Providers Not Making the Same Mistake Twice

This week, SJMN columnist Chris O’Brien wrote about the core problem facing Netflix: video producers have learned the hard lessons of the music industry and, aided by federal law, are not about to let royalty dollars slip through their fingers.  O’Brien points out two key factors that are shaping the streaming video business:

• There’s no massive black market sharing video freely as Napster did with music.
• Regulations that permit sellers to rent out DVDs do not apply to distribution of streaming video.

 

Consequently, the studios don’t “need” Netflix (or Amazon, Comcast, Apple, etc.); they have other routes to market.  The studios can set their own price, having distribution power protected by regulation.  And they do - so much so that streaming content purchases for Netflix could increase as much as 10X in two years.

 

The Bigger Picture

In Distinguishing Strategies and Tactics, the 5 C Framework was briefly described.  In brief, the framework depicts the factors that impinge upon a company’s ability to choose and successfully sell to its customers.  It is shown in the graphic below.

 

 

As the visual illustrates, the line connecting a company to its customers is not a straight one.  Collaborators (who supply to and work with the company) and competitors have a stake in winning customer dollars.  All of these operate within an environment (Context) in which uncontrollable factors - technological innovation, the economy, cultural norms, regulations and geography - affect the marketing landscape.

 

The simplicity and pleasing visual symmetry of the framework belies the complexity of what it models in the marketplace.  Applying the framework to Netflix yields a very different decision set than when it is applied to the company’s major competitors.

 

To illustrate the point, make these substitutions for the labels in the graphic:

• Company = Netflix
• Collaborators = Production Studios
• Competitors = Cable companies, Apple, Amazon, and so on
• Context = streaming technology + regulations governing content distribution

 

In fact, to be thorough, the Production Studios are also competitors (they can distribute directly as well as choose other distribution partners).  Likewise, in the case of cable companies, they are collaborators of Netflix as they own the “last mile” of cable that enables streaming content to reach customers’ flat panels.  As far as distribution systems go, this is difficult to navigate.

 

Harder to Get Right Than it is to Get Wrong

Netflix is nothing without the production studios; it simply would not otherwise be in business.  Adding to the challenges facing Netflix is the fact that none of its major streaming competitors has a physical DVD rental business, which is an entirely different animal.

 

The market is shifting to streaming video.  DVD rentals have reached maturity and are beginning to decline - in both volume and margin.  Netflix has a foot in both ponds.

 

So, in many respects, it chose to pass along future costs of its DVD rental business rather than subsidize it, enabling it to steer its margin toward expanding the much more costly acquisition of streaming content.  Its bet: that its customers could see the shift underway and would, with some reluctance, see their own best interests served by paying more today to ensure availability of a wide range of premium video content tomorrow.

 

It was a bet that has not paid off as hoped.

 

Takeaway

Frameworks like the 5C are not recipes for making better - or even good - decisions.  They do, as the name suggests, help “frame” the factors that shape situations in which decisions must be made.

 

Marketing 2.0 Infographic

Seth Godin popularized the term Permission Marketing to characterize how Web 2.0 technology is shifting marketing promotional tactics from a one-way, mass intrusions by marketers to two-way, buyer opt-in dialogues.

 

There is little doubt that marketing dollars are shifting from what we regard as conventional marketing to social marketing, or simply Marketing 2.0.

 

As it’s a complex landscape of change, understanding and keeping up with everything that is taking place is daunting.  So, here’s a simple visual which appeared on Mashable on October 31 that gives a good over-arching view of what is taking place (it appears below, but may be too small to read).

 

While I don’t agree with all implied conclusions contained within the infographic (its producer, Voltier Digital, has likely tilted it in favor of its commercial interests) as a general snapshot of the evolution that is taking place in marketing promotion it is certainly in the ballpark.