Social Media is Hard Work

One of the signs that you’re with people who don’t entirely understand the effective use of social media is when the conversation turns into a lengthy discussion about what tools to use. Should we ditch our blog and go entirely to Twitter? What’s the best video site? What’s a better monitoring tool Radian6 or Spiral16?

Making the tools the primary topic of discussion reflects the habits of the broadcast media world.   A 1993 media plan started by weighing the advantages of TV vs. print vs. radio vs. out-of-home.  After that was decided, the messages and programs were then crafted for the channels.  

Social media is more about fitting the tool to the task than the task to the tool. To fulfill its promise, social media requires companies to engage with customers and prospects on a non-trivial level. It requires reaching out to people for their support and ideas. It requires responding to them when they respond to you.  It requires keeping up on conversations that are happening in multiple places.  It is not that the tools are unimportant, it’s just that the success of social media efforts depends less on the tools and more on the effort behind them.  It’s a bit like working out.  Assessing whether spinning, swimming, or Tae Bo is the better method for getting in shape is less important than any doing one of them vigorously and consistently.

In the broadcast world, if you forced me to choose between having the best message placement (e.g. the best programs, the best locations, etc.) or the best messengers, I would probably pick the placement. In the social media world, if you forced me to choose between the best tools and best messengers, I would definitely pick the messengers.

The most important step in planning a social media program is understanding who you want to engage and why they would benefit from engaging with you. When it comes time to pick the tools, there are numerous sources to guide you (with the practical, experienced guidance of Jason Falls’ team at Social Media Explorer being high among them). But your ultimate success will depend more on the commitment you put into it than the specific tool you use.

Ten Things Your Agency Prefers You Don’t Know: #2

The agency structure dictates the ideas you get.

Every agency makes the claim that they are media-neutral, fully integrated, 360, or some other catchphrase implying ideas that are bigger than any one channel. The intent is certainly there, but the very structure of the agency prevents it from happening.  Agencies have accumulated a full-time staff of people who need to be allocated if that agency is to survive as a business.  This is true for almost any type of agency, be it traditional, digital, or social. If you have a dozen copywriters on staff, you better be generating ideas that require a lot of copywriting. Similarly, it you have 3 Flash programmers on staff, you better be doing some Flash development.  So imagine a situation in which a traditional agency is on retainer with a client.  What is the likelihood that the agency will come back and recommend moving most of the budget into shopper marketing? Sure, the agency has shopper marketing in their holding company network, but moving the budget to them means the agency loses the bulk of their retainer. Will the agency reward the Account Director for slashing their retainer and putting agency staff in jeopardy? Of course not.  That’s why you’ll get the ideas that match the resources of the agency.

Related to this structural issue is the myth that agency creatives are focused on ideas that transcend channels. It reminds me of the “IT guy” that only shows up in movies. This fictional guy is equally expert at every computer application ever written, knows both hardware and software, has a PhD level understanding of encryption algorithms, and immediate access to every database on the planet.  Meanwhile, in real life, if you need help with a Mac version of Office, the PC guy in tech support can’t help you. Similarly, a creative brought up to think in terms of websites is not likely to start thinking about a marketing problem in terms of retail events. Another one highly skilled in the art of scripted :30 stories isn’t going to be comfortable crafting a social media program.

It is not a question of smarts, talent, or even intent. Architect Louis Sullivan expressed the adage that “form follows function.” In the case of agencies, function follows form.

The New Brand Building Materials

Interbrand’s annual survey of the top brands in the world always creates some interesting discussion around how best to define brands and their value.  By a proprietary (i.e., fuzzy) methodology, they attempt to put a financial value on the brand. Many of the most valuable brands near the top of the list are the ones you’ve come to expect: Coca-Cola, Microsoft, McDonald’s, Disney, etc.

But there is a different cut on the rankings that reveals a profound statement on the current state of brand building. There are only four brands ranked in the top half of the list in 2009 that were not on the list at all five years ago.  Based on this rise from nowhere to top 50 in the world, you might characterize these as the companies that did the most brand building  in the last five years. These four brands are:

• Google (#7)
• H&M (#21)
• UPS (#31)
• Zara (#50)

 As you look at these all-star performers, I’d ask marketers to consider one question: what do you remember about their advertising campaigns over the last five years?

You may remember more than a few things for UPS, and it is fair to say they have been active and heavy advertisers in the past few years.  But it is quite a different story for the others. Google sells ads instead of buying them. For Spain-based retailer Zara, it is a bit of a trick question because they pride themselves on their “zero advertising” business plan. They built their business on “fast fashion” by which they can design, manufacture, and ship to a new product to shelf in less than three weeks. H&M is also a fast fashion brand, that does some promotional product advertising, but attracts most of its ardent followers from a never-ending cascade of new fashions that promises a whole new store every month.

We hear lots of stories of smaller brands that have used innovative marketing approaches to build a successful niche or score a quick hit. These companies tell an even more powerful story of becoming among the most valuable brands in the world while using few of the techniques we’ve come to associate with megabrands.

So as some ponder the question about what kind of advertising they should be doing — broadcast, online, mobile? — they might also ponder the question if they should do any advertising at all.  To be realistic, advertising is and always will be a powerful tool. But it is no clearly no longer the default tool for becoming a major consumer brand.

The Purchase Funnel Fallacy

The Purchase Funnel is more than a metaphor. Many companies actually use it as a tool to shape their sales and marketing programs. It is simple, intuitive, and wrong.  At least it is wrong for most products in developed economies of the Western world.

It is like physics , in that Newtonian physics is accurate for objects much larger than atoms and much slower than light. But it falls apart for describing subatomic particles moving at great speed. Similarly, the Purchase Funnel is accurate for markets with a limited set of products and information sources. But it falls apart  in a world of overwhelming product choice and a constant bombardment of brand messaging.

Think about the last time you decided to try something new. Did you survey all the product choices of which you were aware? Did you narrow that list to a subset of products you would consider? Did you sample the products within that set, and then determine which one to adopt? You may have done something close to that for a new house or a car, but most people would not describe that process for how they purchased a new shampoo, soft drink, or candy bar.

If your own behavior doesn’t convince you, take a look at Y&R’s Brand Asset Valuator. Y&R has been a marketing laggard for the last decade, but their brand tool is the most comprehensive brand database in the world in terms of both the number of brands it tracks, how many countries it tracks them in,  and how long it has been tracking them (full disclosure: I used to work for Y&R). While they are hesitant to say it, it provides empirical proof that the sales funnel is flawed. Time and time again, it tracks the rise and fall of brands.  It shows a consistent pattern.  They track four main characteristics of a brand:

1. Knowledge – How well you feel you know the brand
2. Relevance – How relevant you think the brand is to you
3. Esteem – How well you think of the brand
4. Differentiation – How unique you think the brand is

If the Purchase Funnel were an accurate model, you would expect to see a brand’s profile to develop in the order they are listed above. First, you’d get to know something about the brand, then you would determine its relevance to you, and so on. But it turns out that is not the case. In almost every case, the first element that people register about the brand is Differentiation. That may seem counter-intuitive at first, but not after you consider our environment. We are overwhelmed by brand choices and messages. We don’t seek them out, we avoid them. We have to filter things out in order to stay sane.  So what gets through our filters? Something that is different, unique. That’s what we notice first. Only after we notice something different do we evaluate whether it is for us or not.

Forrester recently took on the Purchase Funnel as well, but they ascribed its demise to the internet (good discussion of this and McKinsey’s alternative model from Robin Grant at We Are Social) . That is true to the extent that social media helps us manage our filtering process even more efficiently. But the underlying cause is something deeper. In our world, interest comes before awareness.

Impressing vs. Connecting

As the world flocks to social media, it is important to remember that not every tool is right for every situation. On a tactical basis, Twitter is an excellent example of this. Just as nearly every marketer who wanted to look plugged-in 18 months ago was starting a blog, the same crew is now crushing on Twitter. Lost in this rush to appear like a modern marketer is even a cursory examination of what the tool is designed to do. As its heart, Twitter is an announcement vehicle disquised as a conversational vehicle.  It is ideal for passing along news, gossip, and funny quips. It is a mediocre vehicle for dialogue. Yet, I have heard many a marketer justify their Twitter efforts as a way to get closer to their customers.

This begs the larger issue of using social media strategically, as part of a plan with real objectives other than to use the latest thing. To make the point, I’ll go so far as to say there are some companies for whom social media in general is a bad idea. Social media implies an effort to open up your brand to your consumer. It is about providing more ways to connect with people. But there are some brands for which connecting more intimately with their consumer would work against their basic strength.  That is because the success of some brands depends more on impressing people than on connecting with them.

High-end luxury and fashion brands in particular succeed to a large degree on their aloofness. The democracy of social media promises a degree of access that undercuts the sense of elitism that is central to these brands. Many brands succeed by instilling a sense that they are our friends or our supporters. But some succeed by instilling a sense that they are our superiors. To use an analogy from the pet world, not every brand should aspire to be a golden retriever – fun, bouncy, always happy to see you.  Some brands succeed better as the Russian Shorthair cat, keeping an elegant distance that makes each encounter a hard-earned pleasure.

Ten Things Your Agency Prefers You Don’t Know: #4

The business model is backwards.

Somehow the agency business has evolved to a state where there is little relation between the value they add and the compensation they get. This is a historical problem of course. The original commission system charged clients a percentage of their media buy to fund not just their media services, but their creative and strategic services as well. The fee-based compensation that is most common today rewards agencies for how many people they can get to work on the account. Neither system is related to the strength or effectiveness of the ideas and programs that are developed. In fact, the most valuable thing that agencies do is given away for free in most cases. In the typical new business pitch, agencies get their best people to work feverishly on developing their best ideas to the point where they are ready to be executed. They do this for free, and then hope that if selected, the client will compensate them after the fact by paying a premium price to manage the production and execution of those ideas. It is like a restaurant giving the food away for free, and hoping to make it back on the valet parking.

This model may have made some sense when marketer-agency relationships averaged 10 years or more.  But now that the best relationships last only 3-5 years, it doesn’t make sense. Marketers may think they are getting something for free, and initially that is true.  But whenever the compensation model of the seller doesn’t match the business objectives of the buyer,  something is lost.  Do marketers really think they are getting the best service and advice from a provider who gets penalized if they can develop and execute programs more quickly and cheaply?

Agencies have been shy to take on results-based compensation because there are so many factors beyond their control, like sales and distribution, that effect the outcome in the marketplace.  But I would argue that the benefit of facing the same market risks and rewards as your client puts you in a far better business and financial situation than constantly justifying monthly retainers with procurement.

Ad Agency Production – Dead or Just Unneccessary

The entire ad agency production department model is unnecessary in its current form.  Agency production is a non-revenue producing endeavor.   Agencies keep offering it to their clients in an attempt to continue to control the process.  Clients continue to allow this to happen because it’s easier than the alternative – taking control back. 

The fly in the ointment here becomes the fact that agency production is the only true production-related business that is not controlled by production people but by the creative department.  Hence production costs always seem to be too high, the ‘flavor of the month’ directors still get a lot of work, the trendy hotels are still filled with hoards of agency types eating expense account dinners, which creates a very attractive recruiting strategy for “star” writers / art directors from other agencies.  But how is any of this in the brands’ best interests? 

Hollywood learned this lesson years ago.  You can count the number of ‘creative types’ on one hand that actually control pictures.  The top directors certainly get more creative freedom, but that’s because they have a proven sales track record.  They still don’t get to control the budget.  

Big production departments mean more overhead which translates to more cost to the client.  It also impacts the work by having the “best person available in the department” work on the business rather than the best person for the job.   These days that best person is typically some junior associate that is employed because they are inexpensive, not because they can contribute innovative solutions.

Several smart companies have started to buy creative from their ad agencies and then taken its production directly to producers on their own.  So far, there is no noticeable qualitative difference, just smaller budgets and shorter timelines.  While it is still the exception rather than the rule,  it is certainly a trend that bears watching.

Word of Mouth is Not a Channel

Word of mouth is the most powerful brand-building mechanism there is. This is not new, of course. The book on the left put rigorous data behind the idea that people were more influenced by their peers in marketing, politics, and fashion than they were by mass media. It is interesting to note that the book was published in 1955, and is well-known by most marketing researchers. That is why I am taken aback by people promoting word of mouth as the next big thing.

What is new is the means to witness, promote and harness word of mouth through digital social networks.  But this does not change the fundamental challenge to marketers, which is finding a way to generate genuine word of mouth in the first place. True word of mouth happens when a potential customer gets a sincere recommendation from someone they trust. True word of mouth cannot be generated directly by a company. If it is, it loses the sincerity and trust that make it so powerful. Instead, it has to do something that makes that trusted influencer want to recommend their product. High product quality might do that, mass media might do that, database marketing might do that, great customer service might do that, a viral video might do that. These are all marketing channels. They are all means to influence the influencers.

When new firms try to position themselves as Word of Mouth agencies, the trick is to find out what they really do. How do they generate word of mouth? If they say by creating buzz in the mediasphere, then they are a PR company. If they say by identifying influencers most likely to be the source of recommendations to others, they are a database marketing company. If they say by creating unique brand experiences, they are an events company. Word of Mouth is an end, not a means. It still falls on marketers to find and use the tools they need to make true word of mouth happen.

The Naming Game

At some point in every new product introduction, you have to come up with a name. Based on my experiences naming both products and companies, the naming process can be one of the biggest tail-chasing exercises a company can do. There is an unreasonable expectation that a 2-4 syllable combination can communicate on its face a list of a dozen qualities that various stakeholders think it is critical to convey. Brand identity firms create million-dollar projects out of this fallacy.

 The fallacy is quick to see if you spend a moment considering the brand names that are most familair to you.  Consider what the biggest brand names today would communicate if you knew nothing else about the company:

• Amazon: Online store or adventure travel company
• Microsoft: Software company or synthetic fabric manufacturer
• Nike: Shoe company or defense contractor (and you’re supposed to pronounce the “e”?)

The truth is that a name is what you make it stand for.  The power of the biggest brand names, including those listed above, came from the work that went into them.  Names do not make the brand, brands make the name. The most you can hope for is that:

1. You can own the name as a legal trademark as you expand and grow
2. You will not be confused with another well-known brand, especially a competitor
3. You don’t start by having to overcome an linguistic negative like being hard to pronounce or meaning something obscene in the languages of regions where you intend to do business
4. You can tell some story about the name for those who are curious in order to help build some of your brand lore

The only other rule is that nobody really likes a name that they didn’t come
up with. So be prepared for second-guessing no matter what name you choose.

Ten Things Your Agency Prefers You Don’t Know: #8

There is no real difference in capabilities between agencies.

The marketing services business in heavily saturated. There is no shortage of people willing to manage your social media campaign, make a TV ad, or facilitate an innovation workshop. There may be a brief window in the very beginning of new tool’s life, when there are a more limited number of people who can claim competency. Experts in search engine optimization were limited in 1996, as were television producers in 1938. But the pace by which people master new media has accelerated, such that those windows of scarcity are increasingly short. What that means is that there is no agency that is going to distinguish itself by having some capability that another does not.  Everyone has the same type of experts in the same fields. If not, they are easy to hire. While it is true that the very best in any field will always be rare, that true elite is probably not on staff at an advertising agency anyway. So agencies are not differentiated in terms of what they can do for a client, though a few may be differentiated in how they go about it.