Marketing Strategy

Are we being duped by word of mouth marketing? The government thinks so. So why regulate marketers’ efforts?

The Federal Trade Commission (FTC) has turned an eye to online word of mouth marketing, and has proposed revisions to the Guide Concerning the Use of Endorsement and Testimonials in Advertising report. Because the Web has become the go-to for advice on products and vendors, the FTC contends that these advisors need to be held to the same standards as traditional marketers: sponsored posts need to be positioned as such, etc.

This report hasn’t been updated since 1980, but the revised version should be available this summer. With that, the FTC will begin to monitor blogs. This is a good thing, although it seems like it’s a little late in the game.

Yes, there are countless spam-blogs that aggregate content in hopes of making some pay-per-click dollars. There are sham blogs posted by organizations to either promote the organization’s offerings or to shoot down its competitors. These are the blogs that will be easy pickings for the FTC. But the vast majority of blogs to which consumers turn for advice do practice transparency, because they don’t want to risk alienating customers or readers, or damage to the brand reputation. And it’s just the ethical thing to do.

Early in the game, the Word of Mouth Marketing Association (WOMMA) developed a code of ethics to define best practices, unacceptable practices and baseline rules for word of mouth marketing. While WOW is not a member of WOMMA, we do practice the principles outlined in the code and ensure that our clients do, as well. There are six main principles of this Code.

1. Consumer protection and respect are paramount
2. Honesty of ROI: Honesty of Relationship, Opinion, and Identity
3. Respect the rules of the venue
4. Manage relationships with minors responsibly
5. Promote honest downstream communications
6. Protect privacy and permission

These principles certainly seem like common sense to me.

Even the best marketing campaign won’t get results if people aren’t getting it. Often, clients fall into one of two camps: those who want to leverage every new medium and those who want to stick with the tried and true avenues of reaching their audiences. Of course, there’s a happy medium:  the secret is learning where your audience is most likely to look for information and reaching out with a message that rises above the static.

What works for one product or organization may not work for another. Certainly, many variables can affect the results of a campaign — from ad copy to design, to the economy to the weather. In fact, you develop an integrated campaign and then research, execute, and fine-tune to improve at each step.

• Evaluate Lead Sources – Where do your leads come from? Are they coming from the Web, from trade shows, from phone calls in response to direct mail?
• Set a Budget – The ultimate goal is to generate the greatest response for the lowest cost-per-contact, but there are always costs involved. Determine your revenue objectives and identify what resources it will take to hit the target. Be sure to account for all production costs, as well.
• Identify the Audience – Is your customer 65+ or 18-25? There’s a significant difference in how each consumes media, and which media to which each responds. The younger group is likely Internet-savvy, while the older group may be more receptive to direct mail or telemarketing.
• Ask – Your existing clients are likely to share with you, especially if you provide an incentive such as a thank you gift or discount. Ask them to participate in a survey – whether online or informally during a chat – and take the opportunity to learn about how they consume media and what appeals to them.
• Select the Mediums - The most widely used (but also the most expensive) offline marketing mediums are print advertising, radio spots, and television commercials. All of these mediums base their pricing structure on their levels of distribution, audience scope, and ratings. The Web has quickly achieved very broad reach, and will soon pass broadcast and cable television as the medium with the broadest consistent reach; this includes email marketing, banner advertising, and pay-per-click ads. And there’s always direct mail, event marketing, location-based promotions, and telemarketing, all still the tip of the iceberg.
• Refine the Strategy - Take the “Sniper vs. Shotgun” approach to branding, which certainly applies to effective marketing campaigns. The shotgun goes wide and has hit or miss results; the sniper is precision. Planning, research, and strategy will bring a higher return on your investment.
• Build the Argument – To be successful, it’s essential to create a campaign that’s differentiated from your competitors and addresses a market need. This is where market research can make the difference between swift action and a lukewarm response. Identify your audience’s pain and the language that will move them to respond.
• Develop the Appeal – Take time to do it right: great copy with a compelling call to action, great design, a good mailing list and/or thoughtful media buys, and a clear and easy way for the audience to respond. Test out different versions of each campaign element in each of your chosen mediums.
• Monitor Response – Is one version of an ad, a landing page, or direct mail piece getting better response than another? Keep the one that’s performing and go for round two. Are you not getting the volume of response you expected? Test out some tweaks to the message and the medium. Are you getting phone calls, but very few clicks? Maybe your audience prefers human contact to online interaction.

Marketing in a downturn can help position an advertiser ahead of its competitors who choose not to spend the dollars when things are tight. However, if your company is actually on the verge of failure and under intense scrutiny, it might be best to just step out of the advertising game for a while.

Case in point: In the wake of its bankruptcy filing on Monday, General Motors has introduced a new ad campaign. Positioning its bankruptcy as a rebirth/reinvention, a new 60-second commercial addresses some of the auto manufacturer’s past failings, references its current strategy, and proclaims its entrance into “Chapter 1.”

The spot opens with “Let’s be completely honest: no company wants to go through this.” It’s true. But GM is unlikely to garner much sympathy from consumers and stakeholders who will see ad buys as abuse of the taxpayers’ bailout money. However, according to USA Today, the ad is running on time purchased long before the bankruptcy, and GM has cut back on new ad buys.

The thing is, GM is taking advantage of low-cost social media – and doing it well. The company used social media as a crisis communications tool with which it could interact, explain and go deeper with audiences. It’s blogging. It developed a microsite for the “reinvention” of the company. GM is on Facebook. It’s even Twittering.

Really, it looks like GM is doing a lot right. But producing a flashy new TV ad isn’t probably what GM needed. While it’s admirable that the company wants to address concerns about its future head-on, it may backfire as consumers perceive GM as ponying up millions for production and placement of the campaign.

Are taglines necessary or not? If they are necessary, why and when? There is a wealth of folk wisdom related to taglines, but there aren’t many hard data sources to back up this conventional wisdom.

Taglines are your brand in shorthand; the good ones have staying power, often years after they’ve been superseded. Taglines can help explain what a company does when the company name or logo doesn’t make it clear. The WOW Factory’s tagline, “meetings + marketing”, does just that.

There has been a trend toward ditching the tagline over the past few years. Brandweek discussed this several months ago:

“For generations, taglines have served as the foundation for advertising—a short statement poised to deliver the brand message in a memorable way. Today, there is some consensus that the tactic is on life support. … Taglines are often more utilitarian and less emotional, experts say. They tend to be fed through the focus group mill until they’re watered down beyond recognition.”

I’ve looked and there are no numbers to support either side of the tagline argument. Have you seen a white paper or other evidence to support the folk wisdom? Let’s begin to establish some evidence – qualitative and quantitative data about how and when taglines are best used.

I’d love to for you to share your insight through a comment or a tweet.

Does Twitter drive business impact? Does your blog convert new customers? If you engage in every LinkedIn conversation in every group you participate in, does it leverage more leads than the banner ad you ran last month? More importantly, with the explosion of Web 2.0 Marketing, where should you put your efforts, you dollars, and your company message? And how?

Sound like a familiar conversation that’s been playing in your own head? Maybe with the added fear that everyone else seems to have a handle on it and you have somehow missed the boat! Well, you are not alone, and the race is on to get there faster and faster.

• According to a forecast from Forrester Research, Social media spending in the U.S. will increase from $716 million this year to more than $3.1 billion in 2014. Its recent “B2B Marketers’ 2009 Budget Trends” report finds: “Those who fail to embrace digital marketing face certain extinction by 2010 as new social buying habits and readily available online information shift purchase power from corporations to communities.”
• Joint research released by Ball State University, ExactTarget and E-mail Marketer’s Club found that 46% of e-mail marketing campaigns will use social media and e-mail in tandem this year, up from just 13% of all campaigns last year. The group rightly asserts that marketers who align their messaging with the distinct mindset of social network participants are likely to build a quality following in these environments.
• Eighty-one companies - 16% - of the 2008 Fortune 500 currently have public-facing blogs, according to a study by the Society for New Communications Research. Nora Ganim Barnes, co-author of the study, said: “It appears that those companies that have made the decision to blog have utilized the tool well. There is frequent posting, ongoing discussion and the ability to follow the conversation easily through RSS or subscriptions.”

So, as companies engage their audiences via social media tools, how do they measure their success? It’s difficult, because so many efforts don’t generate quantifiable results. But it can be done – only after objectives are set and the organization determines what they want to measure (corporate reputation, conversations or customer relationships, traffic, sales or SEO ranking, etc.).

Define relevant metrics for success and set goals based on those metrics. Quantitative metrics could include sales, leads, and qualified subscribers; qualitative metrics include satisfaction, loyalty, authority, interaction, and feedback. However, the goal is to participate in the conversation, to enhance the company’s relationship with its audiences and become a trusted member of its community, then the efforts’ measures should indicate whether they’ve successfully accomplished those things. The measurable objective that drives a measurement of ROI becomes the intangible thing — such as what came of the conversation, not necessarily a customer conversion.

There are companies working their way toward tracking social media ROI. Radian6, Brandwatch, SentimentMetrics, and others are helping to provide insights that allow companies to make more informed decisions about which social media tools to use and who they need to engage.

In the name of ROI, a handful of Fortune 500 companies are recruiting others to support a “pay-for-performance” model for their agencies. It is an approach that has been bandied around for a decade or more, but when Coca-Cola and P&G get behind it, others do, and will, take note, like Advertising Age did. Indeed, from a corporate perspective, it sounds seductive. The companies spearheading this new approach are proposing that agencies only earn a profit if they “deliver value.”  Otherwise, these agencies would only be reimbursed for their costs after they open up their books to the client. How remarkably fair that all seems!

Admittedly, it’s hard to say no to $3 billion in advertising dollars that reside with a giant like Coca-Cola, but the seductive logic is flawed at its core. It presumes that an agency is the sole responsible party for a campaign that exists in isolation. It assumes that once the corporation has hired the agency, the corporation completely resigns itself from any input or involvement in it, and therefore, has no responsibility for the success or failure of the campaign.

Setting aside all issues of partnership, shared objectives, and market conditions, let’s just talk about defining value. How is it defined? Who defines it? Is it realistic? How are you going to measure it? Even a senior executive at one of Coke’s agencies admitted to Advertising Age, “The tricky part is how you define value.”

If an agency agrees to go down this slippery slope, they permit their contract to be defined in such a manner that they are solely responsible for results. Agencies are hired for their creativity, their expertise, and their guidance to maximize ROI. ROI is never guaranteed. It is measured. It shows areas for improvement. It indicates where thinking was flawed. It allows for repeatable results. The entire approach reeks of complete ignorance of the value in measuring value in the first place, and instead sounds suspiciously like an attempt to NOT pay for the value actually provided…to the tune of nearly $500 million in “savings” that Coke is projecting.

It would be a sad day if all corporations adopt this model, because agencies would be relegated to no more than handmaidens, afraid to take risks and afraid to consult beyond the safe walls of iron-clad, assured success.

I was watching an interview with Donald Trump the other night and he asserted that he believes that the current economic climate is the perfect opportunity for “the new entrepreneur” to rise to the top. I certainly hope he is right. I am not a brand new entrepreneur, but my company is extremely entrepreneurial. The old is being peeled away, and companies are reinventing themselves and how they communicate. We are no exception. Not that long ago, we took a drastic step in eliminating an explicit sales role from our team. This resulted in the distinctive positioning of our production and creative personnel as the first touch for every client. We’ve been developing a new approach to marketing, too.

Traditional advertising – print ads, trade shows, sales pitches on the phone, and so forth – are no longer the norm… and they are often outside the reach of entrepreneurial budgets. IDC CMO Advisory’s 2009 Barometer study, “almost 70% of technology marketers indicate that they’ll be increasing their program investment in digital marketing in 2009, while 72% of companies will be decreasing their in-person events spend and 60% decreasing their advertising spend (print, broadcast and corporate sponsorships).” The study notes the three essential, fundamental marketing tools are still your website, email, and search engine marketing.

But there’s Marketing 2.0: a broad new range of opportunities to engage and differentiate your organization in the marketplace. This means reaching people via the format that best speaks to them, with a sense of timeliness, and personalization never before possible. For example, you may need to create a white paper and/or a webcast and/or a microsite and/or a video overview of the same content because different types of people will have different engagement preferences. The  Marketing 2.0 blog has some great pragmatic approaches to this.

We have been working with our clients on Marketing 2.0 for quite some time, and we’re incorporating it alongside traditional tactics in The WOW Factory’s marketing mix. We’re webcasting. We’re on LinkedIn and Facebook, and we’re getting on board with Twitter. We send very targeted direct mail. We have an email newsletter and this blog. We’re in the process of updating our website again to add more, valuable content. We engage in search engine optimization and marketing. And, of course, we’re networking with colleagues and clients: good old-fashioned word of mouth is still the best marketing you can get.

Many of you are doing even more up-to-the minute and edgier offerings in Marketing 2.0, and might even feel the LinkedIn, Facebook and Twitter are already old news. We’d love to hear what you are doing and seeing success with. Podcasting? Vimeo or YouTube? Digg? Ning communities? Facebook or LinkedIn? Tell us your pain and your successes.