Business Quests in the Information Age

Blog Ad Network by Six Apart helps monetization of smaller blogs

Six Apart is one of the few companies of the so called web 2.0 wave whose focus on sustainable business models is a major strength. Using their position as a blogging platform to structure and manage an ad network is really a no-brainer from a business standpoint, while it is also in keeping with Six Apart's consistent policy of offering easy-to-use solutions to its customers. They are uniquely positioned to generate substantial business value from this initiative. I am very curious about their pricing mechanism and about the degree of visibility they will allow into their profit margins from this activity. And perhaps even more than those aspects of the scheme, I will be interested to understand their targeting philosophy (serving the relevant ads to each micro-audience) because that's one of the big battles of tomorrow's advertising.

clipped from www.marketingpilgrim.com Six Apart Launches Blog Ad Network, Blog Services clipped from www.marketingpilgrim.com Blog software company Six Apart acquired creative agency Apperceptive, a company that built blogs for sites such as The Washington Post, The Huffington Post, BoingBoing, and iVillage. Now they’re launching an advertising network for blogs. They are also venturing into design, programming, and blog marketing services. As an ad network, Six Apart is competing with Federated Media Publishing, Glam, Blogads, and others. Here’s how it will work - they will get advertisers, bloggers put the ads up, and the two share revenue (not sure what the payouts are like, but I believe it’s typical to get 20-30%). Six Apart is working with Adify to provide back end support so bloggers can see their payouts and manage their account. they are targeting their services to the little guy The ad network is currently in invitation-only beta and it’s just for bloggers who use Six Apart’s Vox, TypePad, or LiveJournal.

P&G challenges in interactive and digital marketing

Currently attending a great presentation by P&G's Michel Lambert who is telling us about challenges and achievements in interactive and digital marketing. With an experience of 20 years in marketing 9 of which at pan-European level, a strong background in direct marketing, having gone through the great school called P&G and basically a combination of analytical capability and common sense, he's got a contribution to make.

In fact I was lucky to meet him yesterday and I was impressed with the stuff he told me about how P&G is clearly putting a great emphasis on interactive and digital factors throughout their organization, not only in the field of marketing. He clearly gets the transformative power of information technologies in the field of communication as well as in all the processes of any company that wants to be successful in the coming century. Michel does have a good and no-nonsense grasp of the ways in which organizations need to transforms their structure, practices, approaches, ways of assessing success versus failure, recruiting, building relationships... In fact it's quite impressive. While I prefer to respect a degree of confidentiality, I think the presentation of today reflects very well the state of play at P&G's end and this presentation certainly looked like a call to agencies to finally start offering stuff that make business sense rather than just surfing on the latest online fad and fashion.
Michel has a non nonsense approach: "is my brand prospect and brand customer online? Sure. But what do they actually do there? how can I understand them better?". His take is that the consumer, the person that is potentially a customer, the complex individual should be at the center of every single thought people  have about interactive and digital marketing. Platforms, tools, communities, practices, plugins, widgets... will proliferate and they are not really relevant if one does not understand the consumer.

Here are some of the very interesting things Michel shared with the audience today:

1. understanding the on-line behaviour in fine detail: motivations, participation, influencers, self-expression, context rlevancy, how they search, what are their expectations from search, why are they searching, where are they searching...
2. take a more strategic view on things: define roles and make choices. Here key performance indicators are key of course since they eventually feed back into the formulation and execution of strategy
3. how do you actually build valuable and intense relationships with people: the magic of relationship marketing
4. generate content or leverage existing content?
   • we compete for an audience, for the attention of people. So our competitive set includes media and entertainment
   • calls for production of higher quality of conten
   • why don't I invest in mobile marketing? There is no usable content!"
5. Risk taking
   
   • culture of data and measurement. Gut feeling is not really the core strength of P&G: if an ad does not test well in pre-release it will not be aired. Online things are considerably more difficult and require more risk-taking
   • risk taking needs to be managed in new ways and in particular by doing more iterations and working on shorter cycles (one year is an eternity online)
     
6. Cost of reach is too high right now.
   1. There is no way in the world P&G will invest crazy amounts to go full steam ahead with a pan-European campaign without understanding the ROI and how the campaign fits into a broader five-year strategy
   2. clear directions, reach goals and glide path: it may be possible to achieve results in year one simply because there was nothing before, but results in future years come only at the price of having a disciplined approach, not by throwing good money after bad. Back to basics again.
7. the challenge of mass individuals
   • consumers are in control
   • consumers want proximity and a relationship with the brand
   • segmented advertising vs one-size-fits-all even though offering a relationship on an individual basis is not an option because it costs too much and drives ROI down the drain
   • agencies should support brands in achieving mass customization in the relationship with their consumers and prospective customers
8. the sweet spot of balance between tools and approaches
   • starts with the consumer and drive scale from them, not from tools: e.g. in search and keyword advertising if I don't understand my consumer I end up translating ad keywords on a global basis on various platforms!
9. growing importance of retailers as media
   • retailers are increasingly building relationships with consumers  in particular by exploiting their huge databases and by developing content
   • P&G could develop a relationship with retailers considering them as media, but they need to develop missing capabilities in particular to assess the financial value of each contact
   • out of 25 retailers surveyed only one had proper online capabilities to achieve that. Quite frankly this is a shell-shocking picture! That's some potential business quest for someone in the field and with access to the decision makers of top retailers.
10. the need for constant optimization
    • in traditional media: concept test, develop content, pretest, go on air, wait to get results, plan for next year. The cycle is therefore one year. In the digital world, the cycle is much shorter and analytical skills are in very short supply in-house
    • transform pre-test into post-optimization: a complete shift in the mindset and probably one of the biggest challenges P&G is facing
11. integration
    • how do we integrate different platforms and media? how does the mix work together?
    • understand the relative ROI because the budget will not increase; in fact, it might even decrease. If there are more ways to execute a marketing strategy, then the money must be shifted from somewhere. New media need to prove the case and a better collaboration between online and traditional, between search and influence, between interactive and non-interactive... That's a key challenge

Michel also mentioned education of people inside P&G as being a major area of focus today because marketers need to reassess many of the practices they used to consider as world-class. Furthermore the relative differences between markets makes it necessary to have a decentralized approach and in that respect the world is very far from being as flat as Friedman tends to suggest. The world has changed in a major way.

Who are you in The Matrix?

While doing some research I cam across a test that will help you determine who you would be in The Matrix. It's fun and it does remind me of more or less weird exercises often used in branding and communications workshops to facilitate the emergence and definition of a brand personality. That's based on patterns that we humans seem to have more or less hardwired into our systems. Carl Jung called them archetypes. Here's my result for what it's worth with a link to the site where you too can discover who your Martix character would be.

 

What Matrix Persona Are You?

You are Neo, from "The Matrix." You display a perfect fusion of heroism and compassion.
Take this quiz!

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Great insights from Kevin Roberts

Here's a great interview from Kevin Roberts' the iconic CEO of Saatchi& Saatchi and influential creator of the concept of lovemark. Roberts' intelligent insights show that established agencies have caught up on the core issues of today's marketing and communications, something that will increasingly be a true competitive challenge to the new palyers who emerged during the past 5-8 years. In fact, these new players emerged as a result of radical change in the business environment and for many of them success was predicated on their ability to get to the future first. That was easy because they had no legacy practices, but that is no longer the case and hence their survival is entirely dependent on their ability to reach critical mass or to remain on the "bleeding edge" of innovation in marketing and communications.

Some highlights:

• consumer is king and an empowered one, which has led to a dramatic shift in the power balance between brands and consumers. To me that echoes my belief in the primacy of people in business, one of the central tenets of Business Quests' approach.
• there are three critical dimensions to lovemarks, none of which is discussed in MBA programs as Roberts correctly points out: mystery, sensuality and intimacy
• agencies need to move closer to consumers on an individual basis rather than in the traditional "mass market" kind of way. In doing that they will need to combine "right brain" and "left brain" thinking: analytical insight into the ways individuals "operate" and creative foresight to actually understand the consumer's behavior. "If you want to know about lions you have to go to the jungle, not to the zoo", says Roberts;
• we are in the screen age: people spend an incredible proportion in front of screens that are increasingly networked, interactive and mobile;
• 85% of consumer decisions are made in store and in an age when differences in product quality is less and less significant the emotional connection between an individual and a brand will actually tilt the balance of consumer decisions;
• "it's all about getting to the future first".

Roberts' also made a point about access to information and knowledge no longer being limited to the chosen few and therefore access alone is not a competitive edge as it used to be. To me, this means that the life of service providers like big name consulting companies, well-known agencies and other advisors has become considerably more complex. Their success hinges more on how they'll use knowledge rather than on how much access they have to it. That does create an interesting world.

Chaotic influence or why my cat could be a VIP

There's been quite some noise when Gladwell published "Tipping Point" and it's a well written book with an interesting theory about Salesmen, Mavens and Connectors. But does the theory really work? Are there always Salesmen, Mavens and Connectors in all fields of human activity? Can the process be "artificially" triggered and guided to help someone deliver a targeted message to a given audience or achieve a specific kind of behavior in a population (e.g. buy something)?

Considering the vast and increasing sums of money invested by marketeers these past few years one would think that yes is the answer to all of the above questions. Maybe not quite... no make that "definitely not". So argues Duncan Watts who challenges the very idea that influence can be "remote controlled" by creative types working for ad agencies. He makes the case that influence is in essence a chaotic process such that anyone could in fact and perhaps unbeknown to themselves, exert influence. He goes even further to claim that influence happens by accident more often than not. So according to Watts, my cat could very well be a VIP, i.e. a Very Influential Person (yes, my cat is a Person)! The article of Fast Company is worth reading. Interestingly, Watts speaks of a chaotic process and argues that influence happens mainly by accident (see graph below scanned for Fast Company). he seems to have reached that conclusion by programming artificial populations with hundreds of different combinations of parameters in the models of "influence" or transmission he used. There was no conclusive evidence as to the existence of influential individuals who are supposed to be able to trigger the spread of a message of behavior across a large proportion of a population.

Now, the very concept of "influentials" is something that drives me nuts because there is a hell of a lot of talk about them in all sorts of campaigns, yet nobody seems capable of giving a rigorous definition of what that new animal is, nor how to characterize and measure the phenomenon. Bottom line: there is considerable lack of precision and quite some BS in the stuff being told to people attending seminars and to advertisers who are so desperate to actually make an impact that they are willing to trade the unmeasurable means they know for supposedly better means that will deliver better ROI. And in fact the early adopters have been quite successful, but as the number of "influence marketing" operations increases, the impact of each of those campaigns will become lower and lower. So unless online marketing professionals actually tackle the imprecision regarding the very concept of "influence" I have hard time seeing this business become sustainable in the long run.

If I were in that business, I would invest some research money into building a minimalistic model of the influence phenomenon based on a model coming from the field of complex adaptive systems and I would relentlessly test and refine it to reach a point where entire campaigns could be structured in a more scientific way with the end objective to be able to identify fields in which campaigns can actually rely on "influence" and if so to make those campaigns as efficient as possible.

Great User Generated Content in the US Primaries

Here's a piece I think is a shining example of user generated content and a strong indication that open online platforms give real power and influence to the people. Now sure whether that validates Gladwell's tipping point, but it does show that the people can wield some influence. Now the question is whether this influence will be stronger than that of insiders of a system, in this case the US political establishment. Something interesting to watch for marketeers and communication pros.

WPP building the next generation agency?

Currently attending a panel with Lance Maerov, the SVP Corporate Development (read M&A) for WPP and Trevor Kaufman, the CEO of Schematic, a company they bought last year as part of their string of nearly a hundred acquisitions and investments in 2007. They're talking about how traditional agencies are acquiring and investing to stay relevant in the years ahead. I have a short excerpt in the video below, but here is a summary of interesting points:

• traditional agencies realized sometime last year that they were quickly becoming less relevant and being challenged by new players. Their response was pretty much that of any incumbent: buy what you can't match. The interesting question is how will they actually address the challenge of truly integrating the acquisitions and achieve a fundamental transformation of the DNA of the traditional agency business;
• topic of building the next generation agency seems to be in the CEO's agenda at WPP, which is a good sign and pretty much what is also happening at Publicis;
• choosing for acquisition targets they went first for companies they had been in touch with for a number of years;
• big focus on BRIC countries and North America;
• the traditional agencies are choosing companies for acquisition based on their size and business potential, looking for good management teams in place because they don't have the skills and resources to take over the management of these companies. In Maerov's words "if an entrepreneur thinks that WPP people will start running his business once the acquisition is done, that's a red flag for us and the deal will not happen";
• areas of interest include behavioral targeting, analytics, interactive capabilities, integration between online and off-line spaces;
• in the video below they mention 24/7 Real Media, another acquisition of WPP in 2007, which they said was interesting because it allowed them to optimize campaigns both online and off-line;
• Maerov said despite the purported slow-down of the economy he sees no sign of budgets being reduced and that WPP will pursue an aggressive strategy of acquisitions, something that is confirmed in this article of the NY Post;
• in the same article they mention a recent acquisition through JWT of 75% of Belgian Tagora, positioned as a dialogue marketing agency, with annual sales of 5.3 m$ (3.6 m€ with gross assets of 2.74 m€ end 2007). Could not find the acquisition price, but I would be interested in getting it...

OnMedia_NewNewAgency
Video sent by alexpapa

 

Direct from AlwaysOn OnMedia NYC 2008

Just got to the OnMedia conference and glad to be here for a new edition meeting friendly faces from previous events. Same posh location and already a couple of very striking facts for the marketing & communication industry or at least stuff I found quite interesting and worth commenting:

• found a flyer of IBM Global Services giving their analysis of the momentous changes this industry is undergoing. My take: if IBM GS is around looking for business the changes could be even greater than we think in the field of media & marketing;
• fact from a KPMG survey of 300 CEOs,executives, VCs and insiders of the industry: 64% of them feel between 26% and 50% of media time and spending is to shift to new media;
• fact from the same survey: 91% feel advertisers have not figured out how social media fits into marketing mix;
• search engine marketing voted most effective form of online advertising by 71% of those surveyed;
• large majority see mobile marketing effort increasing within the next couple of years.

Interesting trends don't you think? Of course as a friend of mine keeps saying surveys can be twisted to convey the desired message, so they have to be taken with a pinch of salt, but nevertheless the field is ripe for some momentous changes, all of which may not necessarily be in favor of Google. For example I doubt AdWords will be successful in its current form in the long run... but that's for another post :-)

What makes a commercial powerful and lasting?

Since I am in Canada these days and since I am most interested in the momentous changes that have been going on in the field of marketing for the past couple of years, I 'd like to comment a beautiful advertising campaign. It's the Molson campaign that was released many years ago and which plays very well on the existence of stereotypes commonly held by Americans about (did I say a-boot?) Canadians. Quite clearly this is an ad that captures human attention mainly because it's fun and light. See for yourself:

But there are other aspects to it that are interesting amongst which is the fact that it lends itself to sequels and to further exploitation of the dominants stereotypes. Here's a second film that illustrates this:

On the same theme, a couple of friends told me about (a-boot?) somebody who produced a derivative version of the Molson ad that makes huge fun of the cultural divide between French speaking and English speaking Canadians.

Perhaps a good way to bring sterile debates to a fairer proportion than politicians would like to and perhaps a good inspiration for somebody to do something analogous in Belgium because the people of that country deserve a much better political leadership IMHO.

So, what makes a commercial powerful (i.e. capable of seizing human attention in a world of content overload)? What makes it last and get a second life in a radically transformed media environment? I wonder whether there are other ads from past years that could be exploited by modern day communication agencies in the interactive space as shaped by the Internet to deliver high impact campaigns...

Remember Coke & Mentos? Watch this one!

Coke and Mentos experiments by Eepy Bird had been a great buzz with one movie having been watched over 5 million times just on Revver in the 5-6 weeks following May, 31st 2006, while Grobe and Voltz, the creators,  appeared on TV shows like "The Late Show with David Letterman" and NBC's "Today". Interestingly a couple of guys are trying to piggy-back on the success of the Coke and Mentos stint to generate some buzz for Carlsberg.