Brand Central Station

In a recent poll conducted by our company, we found that 78% of small and mid-sized B2B marketers did not use an outside marketing service provider when it came to planning, creating or implementing their marketing plan.

That’s bad news for ad agencies, PR firms and marketing consultants.

It’s even worse news for small and mid-sized B2B marketers.

When we asked why, the answers were fairly predictable. And as complaints lodged against an industry go, pretty valid. Marketing service companies, especially ad agencies, are famous for not performing – or if they do perform, being totally incapable of tying the results of their actions to some tangible measurement on the bottom line.

This is the bane of ad agencies and PR firms everywhere: Return on Investment. And while I’m not going to debate or discuss ROI this time, rest assured, I will at some point. Ad nauseum.

Right now, I think it’s important to make clear why more B2B marketers should consider working with an outside service provider when it comes to developing their marketing plans and implementing marketing programs down the road. But first, let’s review the three major complaints lodged against outside providers:

1.) Outside marketing service companies are too expensive. This is the classic price versus value complaint and it’s not exclusive to marketing service companies (see complaint #3, below). The fact is, any outside supplier is too expensive if you don’t see a value in what they provide.

Furthermore, if you’re experience with ad agencies, PR firms and other marketing consultants is one of duplicated services, obvious insights, late work and blown budgets – you have had to endure the absolute worst these professions have to offer. I would hate to tell you how many times I’ve heard those kinds of charges made by clients against both former and current suppliers.

2.) Outside marketing service companies don’t know my business as well as I do. This complaint originates from an ignorant statement many agencies make when they pitch a new piece of business and clients lap up like puppies. I absolutely hate it when an agency says: “We know our client’s business (or “XYZ” industry) as well or better than our clients do.”

Boy, I sure hope not.

When I work with a client to select an agency, I try to find agencies that know the business of crafting well-targeted and highly effective communication, not making widgets. Ad agencies need to keep up on an industry (communications) that is exploding at a rate defined by Moore’s Law – and that should be a full-time job in itself. Any agency that tells you they are more up-to-date on your industry than you are actually saying either they can’t/won’t keep up on their own industry and/or they don’t respect your own knowledge of your industry. Either answer is unacceptable at best and disingenuous at worst.

3.) Outside marketing service companies, especially ad agencies, take unwarranted sales commissions for work we can do in house at a significantly lower cost. This is a related argument to the first (see above) but has a nasty, envious tone to it. I’ve heard this complaint lodged most frequently by mid-level marketing personnel who view the addition of an agency or consultant as a threat to their own job security. The root of this complaint often stems from previous agency-side experience of corporate marketers and a definite under-appreciation of the media planning/placement, print buying or media pitching tasks taken on by most agencies on their clients’ behalf.

Not to say the complaint isn’t warranted from time to time by unscrupulous (and often boastful) agency types.

The problem here stems from the ill-conceived and antiquated media commission structure most “old school” agencies rely on to generate a profit margin. I won’t get into the finer points of agency management and finance here, but let’s just say that media commissions and mark-ups on printing and production are quickly becoming a thing of the past. Any client who feels they are going to get screwed by an agency or consultant in this area needs to spend some time online or on the phone with agency search consultants who can explain the intricracies of agency compensation negotiation.

So, why should you still consider working with an outside service provider?

If they are sourced and used correctly, an ad agency, PR firm or marketing consultant can be a tremendously productive – and profitable – investment for your company. If you can identify the parts of the marketing mix that aren’t covered effectively with your internal personnel/capabilities, that’s where you need to consider bringing in outside help.

Be sure to write the job description for an agency, freelancer, PR firm or consultant carefully and completely. And, most importantly, keep an open mind to their recommendations and observations. The key value an outside service provider brings to a client relationship is objectivity. By the very nature of their business, they are frequently in contact with a wide variety of businesses and business situations that may relate to the dilemas you face on a daily basis.

Failure to find and hire the right outside marketing service providers will cut out this objective perspective on your business – and that could have a severely limiting effect on your long-term brand value and success. You may spend less in the short-term, but growth will be retarded and advantages will flow to your competition.

And there could be hell to pay as a result.

(c)2004, Brand Central Station – all rights reserved. To learn more about BCS, please visit our website.

It’s become a classic marketing case study. First, Coca-Cola jacked with its famous formula. Then there was a revolt among customers: “How dare you mess with a product and flavor that has become part of the American landscape over the past 100 years?”

Coke, to their credit, reacted quickly and decisively. They introduced “Coca-Cola Classic” which was, basically, the original formula. Eventually, Coke Classic replaced “New” Coke and the world of soda returned to something like an equilibrium.

Now Jack Daniels has announced it has reduced the alcohol content in its classic sippin’ whisky from 86 proof down to 80 proof. The Daniels distillery and Old No. 7 have been around for many years (over 100) and this is the first significant change in their product in recent memory.

Consumers are, of course, upset by this whole turn of events. Apparently, there are several well-educated pallets that can distinguish a 3% change in alcohol content.

Actually, that’s pretty doubtful.

What isn’t doubtful, though, is that people feel betrayed by a trusted brand. Formulaic changes to an entrenched brand like this can cause major problems in terms of perception – even if in “blind” taste tests consumers can’t tell the difference.

Problems have more to do with the perceived “promise” made by a brand people trust and the emotional impact breaking such a promise has on those long-established relationships. Consumers will mourn and grieve their “loss” – some will even switch brands to a competitor, never to return. For those consumers, nothing Jack Daniels will do will make up for this perceived slap in the face.

But the brand’s long-term success or failure will have everything to do with how JD-parent, Brown-Forman handles this situation. Undoubtedly, there’s a room full of MBA’s back at headquarters somewhere who are completely perplexed by this “brew-ha-ha” – but some brand manager in the organization is going to be watching customer attrition rates very closely over the next few weeks.

I have no doubt that B-F will play this situation out as quickly and intelligently as possible. Part of the problem, of course, is that product turn on something like Tennessee whiskey is a bit slower than 12-packs of Coca-Cola. But that may serve as a blessing to the folks at Jack Daniels, allowing them to develop a sense of perspective before making a rash move with this long-established brand.

It would make sense that JD can withstand a gnashing of gears once or twice, but too much indecision or inept handling could cause long-term damage. Let’s watch and see what happens.

And if you order a Jack Daniels, you might want a little extra Coke in it to put the kick back into it.

Later.

1010 WINS – New York’s All News Station : Jack Daniels ‘Waters’ Its Famed Whiskey

If you haven’t noticed that even though there are literally hundreds of television channels available to most of us (after all, over 60% of Americans have cable television), there’s almost nothing worth watching.

This is not just a rant about the sorry state of television. I promise. (Please note that the operative word in the above sentence is “just.”)

Television ratings, from those friendly folks at Nielson Media Research helps advertisers evaluate the audience reach and demographic make-up of television programs on a market-by-market basis. This is more than just a popularity contest, though. Based on the data collected from Neilson’s statistical sample of 5,000 television-watching households, marketers are able to evaluate the income level, demographic make-up, buying preferences and a host of other key factors about the people who might see their ads. A more complete explanation of how it all works can be found on the How It All Works website (makes sense, doesn’t it?).

More importantly, the same information – as well as information on viewing and channel-changing habits – are available to the producers, studios and broadcasters who create, produce and air the programs in which the ads air.

And I’m not so sure that’s a good thing.

History seems to confirm my suspicions. The demographic and viewing data has been available (and used) for years. I suspect the reliance on this and related information has been the driving factor behind the persistent lowering of the “common denominator” that is the standard of broadcast fare.

Just look at the symptoms. Everything is starting to blend together. There is a cross-platform blending of themes, genres and story lines that makes more channels equal “more of the same.” Dramas, for example, are promoted as featuring stories that are “ripped from the headlines” – sometimes covering on-going news stories that have not yet worked through to their conclusion. Broadcast journalism, talk shows and reality television are converging and have become virtually indistinguishable from one another.

It’s interesting, isn’t it, that the only part of network programming that has remained fairly consistent over the past twenty years has been late-night programming (maybe because people fall asleep rather than switch channels resulting in a decision to continue providing what’s worked in the past). And the grand irony of it all is that a recent political survey showed regular late-night viewers as being more aware of key political issues and differences of opinion than self-professed news junkies.

So, what’s happening here?

It appears that producers and programmers have fallen into the same trap that befall many marketers who consider themselves “at risk” of losing out big if they make a risky or wrong decision …

… they’re relying too heavily on market research to give them insights.

As a result, product quality is sacrificed to create the broadest possible appeal to the most people. That is why, to such a large extent, all of the prime time programming in America looks the same. That is why the Laci Peterson, Michael Jackson and Kobe Bryant and stories featuring celebrities or telegenic victims get coverage while most stories about spousal abuse, child endangerment and date rape are relegated to positions deep inside the daily newspaper.

You have to wonder if television was so much better back in the 1950′s and 60′s not because the writing was better (which, in many cases it was) or because the actors were more talented (which I doubt) but rather because the people calling the shots as to which shows were to get produced and which were to be cancelled had to rely on their own tastes and sensibilities rather than demure to the wishes of the perceived masses.

And they wouldn’t get caught dead producing schlocky reality television shows or allowing their newsmen to run stories based on half-baked, unconfirmed allegations. No, instead they had to satisfy a much tougher customer, themselves.

Need proof? Just look at Gilligan’s Island. No kidding. That show was a ratings hit. Renewed by CBS, some programming genuis used the sitcom featuring Bob Denver, Alan Ladd, Jr. and others as a replacement for the freshly-cancelled western drama, Gunsmoke.

Huh?

Yeah, that’s what CBS president William Paley said when he got back from vacation. In a matter of minutes, the schedule was adjusted and Gunsmoke, Paley’s favorite show and a top-notch drama (ok, it was a western) was back on the schedule.

The fact is, Paley had a clear idea of what CBS stood for from a programming point of view and was willing to sacrifice a better-rated show to stay true to the vision. Are we worse off for suffering a premature end to Gilligan et al.? I don’t think so.

Why all this matters to you …

The question you should be asking about your company and the brand you stand behind is this: “Are we true to who we are or are we trying to appease everybody and as a result, we don’t really stand for anything special?”

The latter usually occurs when you’re too reactionary to customer feedback or off-hand comments about your company or brand. The interesting thing is that people are (generally) attracted to things they understand and that means you have to clearly communicate what your brand stands for and your position in the market.

Avoid the trap of acquiesence and strive to do better. Great

This information is (c) 2004, Brand Central Station, all rights reserved. If you are interested in receiving news and analysis directly from BCS, please log onto our website (www.brandcentralstation.com) to learn more.

There are so many “truths” in marketing that you could create a virtual library of book titles. But some truths seem to be more reliable than others – especially as the landscape of communications technology shifts and changes in dramatic fashion.

One marketing axiom worth living by is that careful planning of marketing activities, strategies and positions saves time, effort and money on the part of your in-house team and the outside professionals who help you build value into your brand (for fun and profit). Steve McKee (from McKee Wallwork Henderson) touches on this in his BusinessWeek article: Sow Now, Reap Later.

McKee encourages companies to take the long view on planning and to invest a significant amount (20-50%) in creating a campaign that delivers both short- and long-term results. That might sound a bit extreme to some business owners, especially those who have been around the block a few times, but there is a rational, business-oriented explanation of the benefits resulting from a deliberate, planned approach to marketing.

Consider some of the common mistakes made by most companies when it comes to setting marketing budgets or determining marketing/advertising strategy:

1.) Companies set their budgets as a percentage of sales. This is a common practice among many sales-driven B2B marketers. Why isn’t it effective? Because this method of setting budgets fails to take brand momentum (in existing markets) and brand inertia (in new markets) into account.

2.) Companies set their budgets according to what they spent last year. This is the number one problem for most small businesses who can’t understand why they’re not growing like their larger, better funded competition. Setting budgets to last year’s level is usually just the first step in doing everything “just like last year.” The problem is, however, that the market is not the same as last year. Marketing programs rarely work better the second time around.

3.) Companies set their budgets at a fixed level over last year to reflect increased costs or projected sales growth. Ok, this is a little better (but not much). To call this “planning” is a misnomer. This only goes half way and is really nothing more than a budgeting maneuver. You will still need to work through the communications issues facing your brand(s) in each market to figure out where the money should go and what you should say.

4.) Budgets or plans are set according to planned new product introductions. Still a little better, just not all the way there. After all, what happens if there’s a product recall or if the competitive landscape shifts due to a new product introduction by a rival brand. B2B marketers get their budgets blown out of the water all of the time by planning this way.

5.) Major marketing programs (e.g. co-op/distributor programs) are cut because of under-utilization over the prior year. I’ve included this because it is indicatave of reactionary planning in many mid-sized and large OEM companies. Legacy programs, especially co-op programs, grow organically and require maintenance. Sometimes that maintenance is more like a good weed wacking than a trim around the edges. But cutting a program out entirely without the benefit of research into the attitudes and opinions of the affected market is a huge mistake.

One thing all of these approaches share is a failure to understand the market/markets they are intended to address. Research is a key part of the planning process (just as it is a key part of the product development process). Asking distributors, retailers and customers questions and review prior years’ data are just two of the many research projects that can yield critical insights into marketing obstacles and potential communications problems.

So, what should you do?

First, start with a clear understanding of where you want to end the year (assuming you budget and plan on an annual basis).

Next, do the research to identify all of the major issues and obstacles in your way. What’s going to hold you back?

After that, determine the financial benefit of making it to your stated goal/objectives on time. What’s the bottom-line impact if you’re an unqualified success?

Next, decide how much of an investment you’re willing to make in a solution that will get you there. This is how you set your budget. It should be determined by what kind of ROI you hope to achieve as a result of your marketing efforts.

Finally, once the budget and timeframe are set and the obstacles to success identified, brainstorm and come up with the best possible way to get from where you are to where you want to be.

Chances are you’ll get there more efficiently than before and learn some new things along the way.

Consider it a dividend.

Ad Strategies: Sow Now, Reap Later

I’m not much of one to blog about blogs – it seems self-serving and hopelessly redundant – but this is an exception.

And that’s because it’s a blog about an exceptional person.

David Monroe was my friend and he passed away very suddenly on Sunday. A number of us have contributed our memories to a blog about him and how we feel. (Thanks to Greg Brooks from West-Third for pulling the site together.)

But there’s something else happening here that’s pretty interesting. You see, many of us who have contributed to this memorial have never met. I was fortunate enough to meet David face-to-face along with his girlfriend Elly Trickett – but I would hazard to guess that most of the people who are blogging on about what David meant to them saw his face for the first time when they went to the memorial website.

David, Elly and most of the rest of us subscribe to the Young PR Pros bulletin board on Yahoo! Groups. It’s a great source of information and inspiration for young and old PR professionals – but more than that it’s become a great online community of people who care for and about each other.

It’s ironic, actually, that many of the people I consider to be my closest advisors and friends in the PR world have come from this online community. Many of us, in fact, make a point of getting together when an out-of-towner (like me) comes to visit.

So maybe, just maybe, one of the most enduring legacies David Monroe will leave behind – beyond the loving relationship he had with Elly and his young son who now lives in Houston with relatives – is a virtual community that David helped to start and shepherd with his advice, insights and frequent job postings.

We’ll all miss you David. Safe journey, my friend.

Later.

Remembering David Monroe

OK, I know this may be hard to believe – but I have a soft spot in my heart for the Miss America pageant. It’s not some weird, I-like-smart-girls-in-swimsuits thing … although, my wife is exceptionally smart and, well, TMI.

But back when I was in high school, my first brush with “show biz” was working and singing in the Miss Iowa pageant. We were all teenagers back then (the singers and the dancers) but we worked with professional musicians and a couple of “C” or “D” list celebrities who would come in and serve as the host.

Still, it was enough to give this kid the bug and convince him that he wanted to work in television, music or film.

So, it’s just a little more than painful to see how the Miss America brand has become so in-grown and distorted by its own devices. Check out the Miss America website now and this week the site is dedicated to the annual pageant – which, I suppose it should be. But included in there are plenty of opportunities to purchase merchandise, apply for an affinity credit card, etc. All revenue generators intended to support the Miss America organization and support a mission that is not easily definable or blatantly obvious off the site.

Too bad. The Miss America program does a lot to help promote the education of young women and has, I think, contributed greatly to society.

The problem is that darn pageant, low television ratings and the fact that the Miss America brand has been allowed to become passe. Look, the Miss America beauty pageant was one of the original “reality” television shows. I remember, as a kid, staying up late to watch it and rooting for Miss Iowa who always got cut in the first round. Apparently, playing Camptown Races on a corn cob xylophone just didn’t impress enough judges.

Whatever.

But by the mid 1970′s and early 1980′s, Miss America was in trouble. Bert Parks was getting old – literally and figuratively – and the pageant format, content and brand promise was nothing short of a 1950′s throw-back. The Miss America pageant jumped the shark when they hired Ron Ely, television’s Tarzan, to host the show. Yikes.

Now, if it’s at all possible, the powers that be at MAO properties have jumped back over the shark and straight into its gaping maw. By signing a 2-year deal with Speedo, MAO has gone from flash to flesh and put contestants in bikinis. The talent competition has been cut waaaay back to allow for more “physical fitness” exhibition.

Yeah, right.

I think Miss Utah’s physique looks fine and fit to me, too. She won on the third night of competition. Miss California, who has also won a preliminary talent competition (doing a jazz dance) is also highly ranked/rated. There’s no word if Miss California’s scholarship will be awarded in one dollar bills or if she’ll actually get a bonus scholarship by table dancing for some of the judges.

Oh brother.

How could it get this bad and what’s this mean for businesses who are into something other than beauty pageants? Well, the beauty of this whole thing is that there are direct implications for business owners and managers to keep in mind.

1.) You have to keep your brand’s promise fresh and relevant. By keeping Bert Parks and a crusty, out-of-step format for too long, MAO surrendered the high ground and has failed to re-claim it.

2.) You have to remember who your audiences are and make sure you spend as much time understanding them as you hope they spend getting to know you. MAO and several of the state pageants have had more than their share of ups and downs with political infighting which took their collective eye off the ball.

3.) Look at the potential threat posed by new competition in and out of your favorite medium and understand the long-term social issues. You could say it started with Playboy Magazine, but the Miss America pageant (and specifically the swimsuit competition) was doomed as soon as Sports Illustrated finally figured out the real appeal of their annual swimsuit edition. Add everything from Maxim Magazine to Victoria’s Secret catalogs and it all spelled trouble. As for pageants as entertainment vehicles – their days were numbered as soon as variety television shows started biting the dust. Actually, it’s remarkable the Miss America pageant has lasted this long.

So, what should Miss America do? Is cutting back on material (literally and figuartively) during pageant week a smart move? I think it may be relying on “too little” too late. Titillate or not, these girls and the pageant they represent are in trouble. It’s too bad a great brand has to die such a long, lingering death.

I fear it is too late to save it.

Later.

CNN.com – Less talent, more skin at pageant – Sep 17, 2004