Making the Case for Platforms (Warning: Explicit Math)

In some recent posts, I’ve discussed the values of platforms over campaigns.   For those of you just joining us, platforms, or brand-owned spaces that foster long-term engagement with customers, offer an economical alternative to acquiring and re-acquiring customers via Facebook and Google.

Today, I’d like to discuss the economics.  There will be math.  I am not above putting pictures of puppies in this post to keep you engaged.

I will stop at nothing to get you to pay attention to numbers.

The basic equation shouldn’t hurt; you need to compare costs to build and maintain the platform against expected customer value over a relevant time period.  I have no hard-and-fast figures for any of the above.  As always, the devil is in the details.

Costs to build and maintain

Costs fall into two categories: costs to create the platform and costs to drive consumers to it.  Creative costs vary as widely as the forms they take.  These costs depend mostly on what the marketer intends the platform to do, which in turn depends on what’s right for the audience.  Figuring out platform functionality–and hence creative costs–will probably take up the lion’s share of strategy development time due to the open-ended nature of building a platform.

Driving customers to the platform, aka acquisition, also represents a substantial cost.  Yes, despite all I’ve written about turning away from campaigns, I will now discuss why platforms require campaigns.

Puppy reminds you to think about a cost per action model!

A platform won’t grow customers all by itself.  Just as with any other marketing tactic, marketers need to make sure their audience knows about it for it to succeed.  That said, bear in mind that the platform will have lower acquisition costs than, say, a campaign designed to sell something.  A relevant platform offers something useful or entertaining to the consumer, something of immediate value.  A timely article or a fun mini-game will have broader interest than a straight sell.

Expected customer value

Acquisition costs nothwithstanding, platforms ultimately must drive some measurable value such as sales.  Direct brands and retailers have no problem here since they can usually connect a visitor to a sale easily.  Other brands in sectors such as consumer packaged goods, automotive or consumer durables have some more math to do, especially in terms of attribution.  The same goes for direct or B2B brands that don’t rely on digital channels to close the sale.

In short, how the hell do you correlate activity on a cleaning tips app to sales of a washing machine?

It’s not “attribute,” it’s “attri-cute!”

As Bob Dylan would have said had he gone into marketing, “the answer my friend, is proxies.”  Well, he might have said it, at any rate.  Marketers need to find good proxies for purchase behavior.  Let’s use the cleaning tips app and imagine our client is GE appliances (disclosure: they were a client of mine before GE sold them off).  GE appliances could push a coupon through the app or encourage new purchasers to register their new appliances via the app.  From this proxy, GE appliances could use the cost of the appliance or some derivation thereof as the yardstick for value.

Relevant time period

Marketers can’t measure a platform’s success in the same relatively short time period that they might use for a typical campaign.  Platforms engage consumers at different points of their journey, so results may not happen in the near-instant time frames associated with digital campaigns.

As a starting point, the time period for measuring platform success should correspond to the customer journey in some way.  On a recent platform project for an automotive brand, for instance, I used three years as a period of measurement because three years represents a typical (if short) ownership period for a car.  For the appliance example above, ownership periods represent too long a period to wait; people hang onto major appliances for more than a decade!  Instead, it might help to look at a length of time related to the purchase cycle.  A typical CPG, on the other hand, has the opposite problem.  People replenish their pantries and supply closets weekly.  As a result, the measurement period might represent a typical timeline for a customer to go from new customer to brand-loyal customer.

That wasn’t so bad, was it?  Now, let’s talk long-term lease depreciation.

I’ve sketched out the math for platforms in very broad terms.  Hopefully, you can use this math as a framework for evaluating ideas that will allow you to break your brand’s dependence on the digital duopoly.  If not, I hope you liked the puppy pictures.

Facebook’s Revised News Feed is a Hint-and-a-Half for Your Ass

Pundits have not yet finished the volley of thought pieces in the wake of The Zuck’s decree that his kingdom’s news feed will focus more on posts by your friends and families and less on posts from publishers and, more to the point for our purposes, brands.  This move reminds me of the advice of noted marketing guru Eddie Murphy to people in horror films: “that’s a hint-and-a-half for your ass to get out.”

OK, maybe I exaggerate a little by suggesting that brands get out of Facebook (hey, clickbaiters gonna bait), but I think they should stop relying too much on Facebook for engagement and start building their own platforms.

It’s not an ark.  It’s a species diversity platform.

First, let’s acknowledge that no one, maybe not even Zuck himself, knows what the news feed change really means.  On the face of it, the change seems to limit opportunities for brands to buy their way into Facebook users’ consciousness.  However, Zuck didn’t become a gajillionaire by ignoring marketers’ and publishers’ wants.  Based on my studies of the Mafia and OPEC, I suspect that the Hoodied One wants to drive up margins by artificially limiting supply.  Take that as someone who grew up in the home state of Tony Soprano and Exxon.

Regardless of Facebook’s endgame, marketers should take this moment to acknowledge the media duopoly.  Facebook and Google account for 77% of all digital ad dollars spent.

As an alternative, look to create platforms rather than campaigns.  Specifically, I mean digital platforms such as The Wirecutter, an e-commerce platform owned by the New York Times or American Express OPEN’s Forum platform.  While campaigns and platforms both engage consumers around a brand, platforms seek long-term engagement rather than a limited time capture of consumers’ attention.  To put it another way, platforms help engage consumers when they’re interested in something, not merely when marketers have something to say.

Over time, successful platforms reduce the need to rely on Facebook or Google to snag consumers’ attention.  They become self-sustaining.  Facebook can restrict its news feed to French bulldogs for all your brand cares.  As my friend and mentor Tim Suther likes to say, “why rent your customers when you can buy them?”

Take the hint.  Build a platform.

Pro Bono Advice: Be Like the Watermelon

Marketers often turn to pro-bono or charity work to give back to the community, to use their skills for good or even just to get experience they can parlay into paying work.  I can’t tell you why you should volunteer.  However, if you do volunteer, I advise you to be like a watermelon: develop a thick but porous skin.

I am not even remotely above using pictures of babies to get you to read my blog

The watermelon analogy stems (sorry) from the realities of charities and not-for-profits.  Most often, people work or volunteer in this sector because they have strong feelings about the subject, whether it’s the environment, religion, an illness or civil rights.  Moreover, these people often have a difficult connection to that subject.  This connection both makes the work more meaningful and more difficult.

You need a thick skin to take on some of the more uncomfortable issues, yet you still need to let some of that discomfort in to remind you of why you take on the work.

Continue reading

So You’ve Painted Yourself into a Corner

Some articles by marketing strategists expand your horizons and render your giddy over the endless possibilities of our craft with soaring language and sparkling analogies.

This is not one of those articles.

Instead, this article focuses on one of the more grind-it-out aspects of our trade: what to do when you’ve got to provide strategic input for a purely executional project.

Rise and grind, kids.  Rise and grind.

You know the type: you have to direct your creative team to complete a very prescribed set of display ads, emails or social posts to meet a specific set of objectives, which usually boil down to clickthroughs, even if objective focuses on branding.  More often than not, someone else, perhaps at a different agency, has finalized the brand strategy and creative idea, aka “the fun part.”  More to the point, this project may not actually make sense to you.  For instance, in the above example about objectives, clickthroughs do not serve as an effective proxy for branding.

Or the task may involve picking existing creative assets to fill a role they weren’t designed for.  You’ve got the proverbial hammer all right, but none of the problems looks like a nail.

I liken this situation to the proverbial “painting oneself into a corner.”  It doesn’t matter what color you’ve used; you’re stuck.

Here’s the secret: don’t think of it as a chore, think of it as…ah, who am I kidding?  It’s a chore all right.  However, that doesn’t mean you can’t stretch your strategy muscles and make something as good as can be.  Hell, maybe you can even make it fun, as long as you have a flexible definition of fun.

Let’s assume “do something else” isn’t an option.  I’ll admit that I’ve often taken “no” for an answer when I could have pushed back a bit.  Mea culpa, but mea cupla minima as I’ve learned the hard way that pushing back ends badly more often than not.

Instead, try this approach:

    1. Clarify objectives and metrics.  Go over both thoroughly with the client or client manager.  As the strategist, you have to be clear about them even if the powers-that-be aren’t.  Pay close attention to any disparity between objective and metric, such as the branding/clickthrough inconsistency.  You better believe that when it comes down between the two, the metric will matter more than the objective.
    2. Find the most likely key.  Here’s where you earn your kibble.  Use whatever you can to establish which factors drive the metric that matters most.  In the best case scenario, you have previous results that you can parse for clues.  Fire up Excel and look for anything that you might compare.  These comparisons might include the basics (segment, offer) and any and all creative factors (headline/subject line length, call to action copy, image content).
      Unless you have really huge audiences, you’ll probably end up with anecdotal evidence.  But that’s better than nothing.  By the way, if you do have nothing, raid whatever you can for insight, including the overall brand brief, customer research or even insights pulled from competitive or desk research.
    3. Build your brief around the factors that emerge.  Present those factors to the creative team as puzzle pieces.  Encourage them to think of themselves as beating the brief; finding the tricks that will make the whole thing work.  Then let ’em rip.

 

While we pride ourselves as strategists and planners by our ability to weave together the whole cloth of new brands and platforms from the frayed threads of consumer insight, business requirements and cultural trends, we still have to pay the bills.  In this case, paying the bills means writing the quotidian briefs and offering the quotidian feedback on the long tail of client relationships.  Rise and grind.

How Soon is “Too Soon?”

How soon is “too soon” for promoting tourism after a terror event? Three weeks seems to be the norm.

While it may feel unseemly to talk of commerce in the wake of a murderous event, the question bears asking. For one, tourism drives the economies of many cities, meaning that people depend on it to make a living. For another, terror attacks show no sign of stopping.

Sadly, it pays to be prepared.  I would argue that a tourism-dependent business not thinking about this issue would be like an citrus grower not having a contingency for frost.

Times Square, Veteran’s Day 2014

This week’s cowardly attacks about five miles from my home and hard by my nephew’s high school (he graduated in 2016) prompted an article in the New York Times about how terror attacks have affected New York.

However, I also happen to have my own experience with this grim calculus.

On a recent assignment for a client who conducts large-scale event marketing, I had to ask–and answer–the “how soon?” question. The client had planned an event in a large U.S. city that they would promote in email and other digital channels.  It’s telling that I can maintain client anonymity due to the prevalence of terror activity.  So, while police combed the crime scene, I felt a duty to advise the client on the go/no-go decision.

In the absence of a social listening tool to measure consumer sentiment,  I used Google Trends.  If you’re unfamiliar, Google Trends tracks the popularity of a search term according to an index where 100 is the high water mark.  Researchers can filter results by location down to the city, by time and by other factors.

Specifically, I looked at search trends for terms that included “[city name] travel” and “what to do in [city name] this weekend” for several large worldwide cities over the past several years, before and after terror attacks.  I found some interesting things:

  1. Travel interest drops after an attack but returns to seasonal normal after about three weeks on the outside.  While the number of terror attacks hasn’t reached a robust sample size, I feel confident saying that the length of time before returning to normal roughly reflects the severity of the attack.  Interest in London travel rebounded more quickly after the Westminster and London Bridge attacks than interest in Paris travel after the Bataclan attacks.  As the kids say, YMMV.
  2. Counter-intuitively, interest in travel searches increases during and immediately after the attack.  I suspect the spike comes from people en route or about to travel who want to change plans or simply determine prosaic details such as whether the airport remains open.  I would call this more of a “huh” than a marketing opportunity, of course.
  3. Locals rebound faster.  Again, sample sizes preclude me from making broad promises, but weekend-related search terms get back up to normal within a week or so.  Speaking as a jaded New Yorker, I suspect that after the initial shock wears off, people still gotta get out of the house.

In the end, I recommended that the client go ahead with the promotion as the earliest mail date would come a month after the attack.  Without a doubt, I’ve never made a sobering recommendation.

(Non) Humblebrag

Hey, pals & gals!  I got someone else to publish my drivel for once.

Check out my article in Gamechangers, a publication of the Troyanos Group.

It’s my take on how rideshare companies like Uber and autonomous cars will create a passenger economy sooner rather than later.  Moreover, that passenger economy will have profound impact on retail, entertainment and even health and wellness brands.

Enjoy and tell your friends!

Tom Petty’s Death Signals Radio’s Approaching Sign-off

I don’t usually post about entertainment figures, because I don’t work in the industry.  However, the passing of Tom Petty brings up a salient point about marketing: he’s one of the last musicians from the era when radio mattered.

Image courtesy of Wikipedia

Commercially and critically successful, Tom Petty earned some scorn from rock cognoscenti because, they felt, radio had made him more popular than he deserved to be.  Whatever that means.

However, this criticism (fair or not), points to a conspicuous absence: radio can’t do that anymore.  Radio will no longer crown pop princesses like Madonna or Britney.  It will no longer unleash the Monsters of Rock.  Hip hop seems to have maintained a local radio tradition and maybe country has, too.

Sure, mass distribution of a sort exists in the form of YouTube and music streaming, not to mention satellite radio and alternate channels such as movie and TV soundtracks.  However, these channels have fragmented.  You never have to hear Tom Petty even if you like a lot of similar acts such as the Allman Brothers or Bruce Springsteen.  A high schooler today could live out the old joke of not realizing that Paul McCartney had been in a band before Wings.

We no longer have the social contract that radio wrote: you listen to music that someone else chooses and, every once in a while, you’ll be exposed to something new that you’ll like.  As marketers, Tom Petty’s death reminds us of a channel that offered distinctly emotional human connections for brands.

I offer apologies if this post comes off more as a Jeremiad than the usual “Everything Is Awesome” posts on LinkedIn (and, yes, I realize that in the world of “The Lego Movie,” that song was a radio hit).  I just want to call something out that we, as music lovers and marketers, have lost.

Marketing When Marketing Should be the Last Thing on Your Mind

We have had a rough time of it lately.

Hurricanes.  Riots.  Earthquakes.  Mass shootings.  Hardly a day goes by when a horrific event dominates the day’s news.

Times like these are the last times anyone should worry about marketing.  And that’s the point I’m going to make.

Outside the affected area, marketers still have jobs to do.  Would that we could back away from our laptops, don jumpsuits and go help the people who really need our help.  Outside of volunteer first aid squad members, National Guard personnel and the Cajun Navy, however, that means most of us still have to show up at the office.

Yet, as an ancient Rabbi told generations: “it is not your responsibility to finish the work of perfecting the world, but you are not free to desist from it either.”

I think this statement has implications for marketers.

A large-scale disaster that takes the lives of dozens or destroys a community cannot simply breeze by the rest of the nation–or perhaps the world–like the closing Dow Jones Index.  Things aren’t normal and don’t proceed like business as usual.  Even when seeking escape by watching TV or browsing our social networks for cat pictures, these events lay heavily on our minds.  Marketers can’t ignore a pall like this.  Who can think about which brand of peanut butter to buy when watching people begging for food?

That said, marketers who choose to respond to disasters face criticism of taking advantage of people at a vulnerable moment.  I won’t name names here out of respect for past tragedies, but some marketers have gone so far as to attach a sales pitch to a solemn or even grim occasion.

Let’s look at one who did it right: Verizon (disclosure: I’ve worked on various parts of Verizon in that past and I’m currently working with one of their competitors).

 

By highlighting the efforts of first responders–and moreover by not including any sort of sales pitch–Verizon shows both that they can appreciate the stress many of us feel and also that they’re doing something about it.

It took a lot of effort by Verizon to script and edit a commercial in what must have been days.  More to the point, it took some leadership from somewhere in the organization to handle the situation with care and compassion.

I would like to see more marketers do the same, to show that they have the humanity to acknowledge the suffering of others and, where possible, to address their role in salving the wounds.

More brands could do this if they thought about it.  Procter & Gamble dispatches mobile laundries and wifi service trucks to hard-hit areas.  What could a bank do to make emergency cash available?  How could a clothing retailer help those who have lost their homes and all the clothes inside?

I suppose I could also make the more bottom-line-oriented argument here.  I could show how programs like these have positive impacts on brand image.  However, I’ll leave that job to others.  For now, I’d just like to see more marketers think about how they can address audiences collectively waiting for the next big shoe to drop.

 

Amazon’s Customer Strategy: New HQ Edition

At the beginning of the summer, I posited that Amazon bought Whole Foods not as part of a distribution or merchandising strategy but rather because they wanted to cater to the mass affluent consumer.

Now that Amazon has begun the great HQ2 competition, I’d like to take a moment to extend the mass affluent factor to geography.  In other words, where would Amazon build its second headquarters if they wanted to keep the mass affluent consumer in mind?

At first glance, this question seems irrelevant.  After all, Amazon already sprawls across this country with major offices in places like Newark, NJ and Grand Forks, ND.  Myriad distribution centers fill spaces in between.  They once got me a router the same day I ordered it in NYC from Kentucky.

That said, companies often relocate to get in touch with an audience or a workforce.  Many car manufacturers have design HQs in Southern California to take advantage of the region’s car culture.  GE recently announced a move of their headquarters from Fairfield, CT to Boston to attract workers interested in a more cosmopolitan environment (or maybe because GE likes Harvard better than Yale).

So where would Amazon put HQ2 if they wanted to immerse themselves in mass affluence given that they want to avoid the West Coast and such wealthy citadels as Silicon Valley, Santa Barbara and Palm Springs?

Don’t try to make it here

I’ll cross New York City and environs off the list first.   Continue reading

Adventures in Biz Dev: Agile

I have to imagine that whoever named “Agile Development” may well regret it by now.  The approach of complementing a long-term roadmap with frequent, short-duration sprints has proliferated to marketing, retail and even urban development.  So I’m trying Agile business development, aka biz dev aka drumming up business.

In the name of transparency and in line with a lot of other Agile [x] practitioners, I’m simply stealing the name and the broadest outlines of Agile.  However, I have done some actual planning around Agile Biz Dev here that I’m sharing.

Step 1: The roadmap

As with everything, step one involves setting an objective and designing plans to meet it.  Not surprisingly, that objective takes the form of more business.  However, since “get more business” would result in simply dialing everyone in my contact list willy-nilly, I’ve refined the objective both to give clearer direction and to focus on specific measurements:

Drive leads (net new prospects and requests for proposal) with a focus on market research offerings

In service of this objective, the current roadmap includes units such foci on specific industries, branding and thinking big.

To accomplish the elements of the roadmap, I’ve created a series of two-week (-ish; lots of fall holidays may force me to extend timelines a bit) sprints.  Each sprint focuses on one unit to leave time for my business-as-usual work.

Step 2: Initial sprints

So far, I’ve got a few sprints already planned.  These initial sprints include a few units of specific industries, since it makes sense (to me, at any rate) to create a specific pitch for a specific industry and then rattle the cages of the appropriate contacts.  After that, I’m including one unit to review and revise key branding elements (website, LinkedIn, elevator speech) and another to dream up new opportunities.

Of course, management retains the right to change plans without further notice!

Step 3: Ready, fire, aim

Having defined what I want to achieve and how I will go about achieving it, I have begun executing the plan.  I really appreciate the built-in self-correction implied in an Agile methodology.  As much as I joke about making up the rules as I go along, I believe that flexibility underpins Agile.  If something ain’t workin’, it means going back to the drawing board and making adjustments rather than simply pushing ahead.

Accordingly, I’ve built in a measurement check-in at the end of each two-week sprint.  I’ll take time to tally up leads, to confirm next steps and to hone strategy and measurement.

I’ll keep you posted on how things work out.