Marketonomy

Experiential Marketing: SeaWorld vs. Legoland

I need to get out more. After a day at SeaWorld and a day at Legoland, I’ve gained an entirely new perspective on marketing. I know. Some of you will say, “wow, you need to let go”, but I can’t help it. The only vacation where I can really tune out is backpacking, where there’s little sign of human intervention. Put me in a resort or an amusement park, and to me it’s like swimming in a Petri dish of marketing. I constantly absorb all the packaging and spin and reverse engineer the intended segmentation and positioning. It’s fun. My son’s getting good at it too. “Daddy,” he said to me in line for Shamu, “SeaWorld must be targeting the NASCAR demographic.” Okay, maybe that was the voice in my head.

So for all you parents making a trip to San Diego this summer, let me put it in terms your kids will understand. SeaWorld kind of sucks. Legoland rocks. Only now I’ve ruined it. Because the reason SeaWorld sucks and Legoland rocks, is because the experience is entirely the reverse of their reputations. I came to SeaWorld expecting Disney World in a giant fish tank, and although you can’t help but be impressed by a whale doing a back flip, the small moments of awe are like diamonds strung on a necklace made of cheap string. The expectation of a world class amusement park simply doesn’t match up with reality.

Legoland, on the other hand, has a reputation of being an amusement park for third-graders, an impression that grows when you first enter the park. My son was giddy with excitement at every sight of a Lego dinosaur or giraffe. And after a kiddy coaster and a storybook boat ride, I steeled myself for an entire day in It’s A Small World™ hell. But I turned out to be wrong. Legoland is like a bird trying to break out of a thick shell. The vestiges of a 1960s kiddy park are everywhere, but there also a lot of really cool hands-on activities, and some new rides diabolical enough to attract adrenaline junkies—including a row of huge manufacturing robots that twist and spin their hapless victims like parts on an assembly line. While the riders are flipped and dangled over a pond, spectators control small cannons that shoot water at the riders. Time it just right, and someone being flipped at three Gs over the pond gets a blast of water in the face before they’re whipped back around and flipped over the next cannon. Oh, and riders choose their own ride intensity. Can you handle Extreme?

As a marketer, seeing these two parks back to back—huge revenue generators stoked with millions of dollars in targeted packaging and spin—was its own amusement experience. They’ve both been around so long that you can clearly see how they’ve dealt over time with a changing culture and with the growing challenge of a massively over-stimulated video generation. And in this, they’re polar opposites. As two prime examples, let’s take their respective approaches to environmental consciousness and audience engagement.

At SeaWorld, you’re constantly reminded of their dedication to conservation and environmental protection. By big signs co-branded with corporate sponsor Anheuser Busch. But they seem to miss every opportunity to make it part of the experience. In the long meandering walkway that threads through the very cool Shark Experience, there is an endless opportunity to educate visitors with interactive displays and video—the kind of thing you’d expect at a real aquarium. The kind of thing that says, “this is what we’re all about”. Instead, the walls are completely empty, reminding you that you’re just waiting line, until you get to the big sign trumpeting SeaWorld’s conservation partnership with Anheuser Busch, reminding you that beer and funnel cakes are waiting for you just outside.

You get the same sense of window dressing with the performances. The animals are beautiful, but the trainers seem like Richard Simmons devotees on steroids, clapping and dancing with 1000-watt smiles. No one comes to SeaWorld to see synchronized wetsuit dancing, but that’s what you get. I suspect animal rights regulations have eliminated the triple-back-flip-gainer-through-a-ring-of-fire performances. Now you get a couple of high jumps and a lot of audience splashing, as if they went to the Gallagher school of comedic performance. Oh, and the constant sound tracks with syrupy voices. They sound like they were written by a real estate ad writer dabbling in new age religion. “…where those that swim the oceans touch those that walk on land…” It’s worse than getting seasick.

Legoland faces the same challenges in a completely different way. The park makes up for a lack of issue-driven window dressing, with creative ways to engage and interest the same audience. Instead of spouting off about environmentalism at every turn, Legoland engages socially conscious visitors by offering healthy food. When you walk into one of their markets, along with the cappuccinos and lattes, they have fresh fruit, yoghurt and cereal. They have salad bars and pasta. They have juices and lots of plain old water. Yes, they still have burgers and coke, but the alternative is equally available, and that realization carries a much more effective message than a self-congratulatory billboard.

The same ethic holds true in their approach to engaging visitors. They don’t have a ton of new rides, but the ones they have are exciting, and they’re doing some interesting things by making the rides interactive—a number of rides have features where spectators can shoot water at the riders. It’s subtle, but you get the sense that they’re starting to let the same excitement for engineering and imagination that drives their product innovation seep into their park. It’s not broadcast from overhead speakers while you’re waiting in line, but the impression comes through loud and clear.

In all, the back to back experience of Legoland and SeaWorld seems like a metaphor for companies dealing with the big changes in consumer expectations. Some companies throw a lot more money at plastering messages and packaging over their problems, while other companies focus on digging down to find and explore the real value they can offer that will engage their market. The experience speaks for itself.

Today we’re heading back north and stopping at the LeBrea Tar Pits. You know. Dinosaurs. Stuck in tar. Wonder what else we’ll find.

Marketing Needs Geeks, Not Gurus

Someone introduced me the other day as a marketing "guru". It was one of those moments where you drift off mentally and start watching the discussion like a detached observer. You could almost see the thought bubbles popping out my head. "Hmmmm. Guru..."  It was someone I respect, so I was kind of flattered. Guru. Someone with answers. A man with a plan. But the more I started to think about it, the more I started to suspect my sense of flattery was misguided. I mean, how many words do we have to describe someone who spends too much time thinking and then pontificates about the most grinding minutiae? Like, what "guru" really means. The only other title I can think of that's equally vague on the professional value I provide to the world is "consultant". And who wants to introduce a consultant when you can introduce a guru?

A few hours after basking in the afterglow of misplaced flattery, I got schooled on how tenuous the domain of gurudom can be. I submitted an article to a friend's newsletter on Marketing ROI, in which I took my usual stance of flogging marketers for flaunting buzzwords and failing to grasp deeper meanings. That's kind of like an old baseball mitt for me. Fits nice, usually does the job. Except this time I got called on it. Jim Lenskold, who publishes mROI Insights, sent back my draft with some very diplomatic editorial comments. Translated into the vernacular, he said "Dude. You're beating a straw man. Add some substance." That started the very beginnings of a useful conversation about the current state of Marketing ROI thought, and demonstrated how deeply many individual threads of marketing thought are being mined by people like Lenskold. How could I be a guru when there's such a vast amount of knowledge I don't know?

And that's when a lightbulb went off. Why do marketers focus so much on elevating gurus? And why don't we have more geeks? A guru is always supposed to have an answer, while a geek is just someone who's really really interested in finding out how to make things work. The irony, of course, is that the single most ancient rule of Guruhood is that it's not having the answers that matters, but getting the questions right.

But gurus don't ask questions--at least not the kind they really want answers to. If I'm a guru, I can't let Jim know that I may need to be brought up to speed on the latest in Marketing ROI. I Must Know All. On the other hand, if I'm a geek, I can just say "Cool. So how do you do that? What else do you know?" In a business world that is changing so blindingly fast, with a constant flood of new technologies, new ideas and new opportunities how long can any one guru conceivably last before they're obsolete? And how long before we notice they're obsolete and stop listening to their pointless babble? You don't have that problem with geeks, because geeks are always focused on learning--well, at least as much as they like to show off--and are always interested in gathering with other geeks to learn. Everyone wins. Well, everyone except the marketer who thinks an answer from a guru will save him from getting his ass kicked at the next board meeting.

I know it will be really hard to shed this deeply engrained need for the certainty that comes with the spouting of pundits. But what marketing really needs today is more geeks, not gurus. Everyone can be a marketing geek, while marketing gurus, if there really are any, are bound to look stupid in the long run. Why run the risk of having them take you along for the ride?

Direct Marketers are Insane

One of the pop definitions of insanity is doing the same thing over and over again and expecting a different result. One of the pillars of direct marketing is running continuous campaigns that hit the same consumer numerous times. That means any direct mail campaign that does not evolve and adapt over time is insane by definition. Today, I received in the mail my regular dose of United Airline's credit card campaign--the same exact ugly piece of mail I've now shredded every couple of weeks for something like two years. It has *never* changed. I will *never* get a United credit card. People wonder why United is on the rocks? These people couldn't market their way out of a paper bag.

Marketers love to measure campaign metrics, and every marketer knows that a successful campaign entails multiple impressions, often over many weeks. A good Direct Mail campaign might return conversion rates of only 1% and still be successful, but that rate typically goes up when the marketer adjusts the campaign with different messsages and offers. What marketers often ignore, however, is the equal and opposite measure of conversion. A vulgar but effective name for this might be the Peeing in the Pool metric. For every 1% of the market you convert, you annoy, anger, and alienate some percentage of your potential future market, which makes it more expensive for you to market in the future.

Although few actually track this metric, it's probably close to the inverse of your rate of conversion on successive campaigns. As the curve of conversion drops, the curve of alienation grows. And I strongly suspect this effect is magnified when the repeated campaign goes on forever unchanged. Each repeated drop of the same message to an unresponsive customer becomes an annoyance associated with your brand. It's like you're actually paying to alienate future potential customers. And that is insane.

The Impact of MTV

A lot of people were talking about MTV's big 25-year anniversary this week--though not MTV, since they don't want to remind their 14-year-old prime audience that they've been around so long...

If you didn't catch it, NPR's Talk of the Nation did a great show on the meaning of MTV and it's impact on society and culture. You can find a link to the story, with an audio file and lot's of supporting information at this link. It's well worth the listen. Two of my favorite snippets:

1. MTV, despite its name, has perhaps had a greater impact on society with its introduction of Reality shows, than its music videos--notwithstanding its music successes, including its service as a vehicle for rap to hit the mainstream, along with black pop artists.

2. MTV doesn't age. Every year they spend a lot of resources researching their 12-18 year-old target audience and tweaking their content, such that every 4-year cycle of high schoolers will no longer resonate with MTV by the time they graduate from college. They of course have launched parallel channels to hold on to some viewers, but at the core, they have a single-minded focus on their primary audience.

There are some troubling aspects to MTV's success, exemplified today by the disturbing implications of the runaway success of shows like "The Hills". But that's another thread. What's interesting to me, good or bad, is the ability of a media institution to have such a tremendous impact on our culture, and this is a decent overview by NPR.

Speaking of which, I'm quite impressed by NPR's production quality. They make very effective use of the Internet to augment their stories, by adding useful supporting content and outtakes they can't fit into the broadcast. It's not the fluffy crap you usually find as extra material--like on most DVDs--but information that expands the experience. Great stuff.

 

The Future of Marketing

While I was away, I had an article out in Executive Decision and an interview with Investor's Business Daily discussing various opinions on the road ahead for marketing. If I could always be this productive while on vacation, I'd never come home.

The Executive Decision article is probably the most succinct discussion I've written in the past few months about the challenges marketers face in today's business environment. The crushing day-to-day requirements for most marketing departments puts the lie to all the best-selling pap about "customer-centricity". The ugly truth is that the average marketer today doesn't have nearly enough resources to spend time worrying about the customer--there are far greater pressures to reshape the marketing function into an omniscient analytical machine. 

The interview with Investor's Business Daily isn't all that illuminating on the surface. Just a few quotes on background in an article about Dell's recent misteps, with a focus on the impact of marketing. What's interesting is that the discussion about marketing's shift toward an analytical framework was so fascinating to IBD, and they saw it as a lens for understanding significant challenges facing companies like Dell. If marketing got that much respect in the boardroom... You can find the IBD article here.

What does all this have to do with the future of marketing? Marketing is at this very moment in the middle of a massive re-engineering. The focus on building an analytical foundation for marketing that utilizes technology to track customer lifetime value and weigh opportunity value is important, and will certainly shape marketing for decades to come. But it's not an overnight transition. The shift has been underway already for at least five years, and will be another five years before the expectations business managers have today for useful dashboard measurements will be realized in any intelligible form. In the meantime, the incredible pressure to effect this transformation is taking marketers away from their primary task: knowing and serving the customer.

The immediate future of marketing will be marked by two basic types of marketing organizations: those that get so distracted by a focus on the promise of emerging analytics that they completely abstract the customer (Dell?), and those that manage to keep a firm grasp on knowing and serving customers first (Apple?). For now, it seems there are far more companies in the former camp than the latter.

Targetted PR Messaging

A couple of people responded by email to my post about Segway--where a PR rep at an obscure industry vertical tradeshow made Segway sound like an obscure product for an obscure vertical during an interview with National Public Radio. What *should* she have done--give up the opportunity to get Segway's name out over the national airwaves?

No. The problem is more strategic than tactical. If you're making an investment in PR, you should be working with a company that understands targetted messaging and how to deliver it. The message you position with a trade press journalist is not the same story you deliver to the general business media, much less a mainstream consumer audience like NPR. You and everyone who represents your company should have a playbook of targetted messages for different media outlets and journalists, and you should have it memorized.

When a reporter from NPR showed up at Segway's booth, Segway's representative should have had a message ready for a national audience, or she should have phoned home for support. Instead, Segway blew an opportunity to connect with one of the nation's largest audiences of educated, affluent and environmentally aware consumers--exactly the audience Segway needs to connect with. Those are the kinds of mistakes you can follow right to the bottom line.

How Do You Market a Miasma

I guess I wasn't so afar afield with the posting on Barry Bonds after all. Turns out, now that Bonds is only a handful of homers away from breaking Babe Ruth's home run record, Major League Baseball and the marketing heads of sponsor companies are wringing their hands about how they should participate in the celebration. Tough branding moment here. Do you continue to attach your product to a taintend pitch man? You can just see the gears grinding. Steroids: Bad. Spotlight: Good!

MLB's top marketer took a bunt, saying they wouldn't pop the cork until Bonds passes Hank Aaron's record--which conveniently puts the pressure off most likely until another season, if not permanently. "The big record is 755," said Tim Brosnan, executive vice president for business. "That's when we go national. That's when we bring in sponsors and create national campaigns in celebration." So, basically, MLB will keep it's finger in the wind until public opinion moves decidedly in one direction or another.

Pepsi's president, however, said they would celebrate Bonds' breaking of Ruth's record, but, ahem, "in a muted way." I guess Pepsi is the brand of nuance. Maybe they're banking on some share-of-mind points by being on the fringe of controversy. And what exactly does "muted" marketing mean? I'd pay good money to see that Creative Brief.

Taking the path of easy expedience, Home Depot said they would celebrate only if Bonds is cleared of all steroid-use allegations. Only Bank of  America took a firm stand, saying they would not participate in celebrating the achievement in any way. "A company like ours is always going to choose the untainted opportunity," Bank of America's Cathy Bessant told Bloomberg News.

A company like ours... Interesting way to phrase it. So, what are the other companies like?

The Future of Marketing?

This story has been rattling around in my head ever since it was reported a couple of weeks back, but I haven't seen a lot of commentary on it. AdAge reported that Ford has hired Accenture to audit its marketing plans for major car model launches. Without getting into a discussion on the merits or failings of Accenture, or the particuluar challenges faced by Ford, it's a significant sign of the fault lines emerging in the marketing industry.

Businesses have been griping for years about the failings of the agency model--largely to no avail. But when a major U.S. corporation hires a business consulting firm to audit it's marketing plans, you can no longer ignore the obvious fact that marketing agencies have let a tremendous void grow between themselves and their clients. I would lable that void: Boardroom Credibility. And business consulting firms like Accenture have obviously determined it's a void they can drive a Brinks truck through.

Ford takes pains to say that this isn't a creative issue--that Accenture won't be replacing their other agencies--but that only rubs salt into the wound. It's like saying, "you creative types, don't worry your little heads about this, just go on making pretty pictures, or whatever it is you do, while the grownups talk business." Clearly Ford has major concerns about its marketing investment which their agencies have failed to mitigate. Now Ford is looking beyond the agency for strategy validation.

Talk about dropping the ball...

Engineering Upselling Opportunities

I have a theory about Starbucks. For being the world's most successful coffee shop, they sell the worst coffee in the world. How is that possible? Have you ever tasted Starbuck's coffee? I'm not talking about all the flavor-laced Dope-accino drinks, but the coffee. That burned and bitter sludge you have to drown with milk and sugar just to choke down. It's awful. But through the brilliance of Starbucks' marketing, it's also guaranteed to be the closest caffeine fix to anywhere you happen to be in the world at any given moment.

For years I've stayed loyal to the neighborhood roasters with good coffee, and limited my Starbucks visits to those times when I was away from home. And it would annoy the hell out of me every time. You can't order a "medium" coffee. It has to be "Grande". And it's not just some pre-career Goth taking your change, it's a Barrista. I'd stand there in line listening to all those abbreviated insider codes "double-quad-nowhip-mocha, extrahot", convinced I was on the fringes of some cult. The dependency. The special language. The willingness to donate handfuls of cash with a vacant happy stare. I finally realized the bad coffee was a way to separate the skeptics from the true believers.

When a Starbucks opened right next to my office, I found myself buying more of their crappy coffee, and then upgrading more frequently to a Latte just to avoid the torture. When I finally graduated completely from coffee to the poodle drinks, it struck me: Crappy coffee is an upselling opportunity. It's what everyone initially comes for, it's the cheapest thing on the menu, and it sucks. But for just a few dollars more, you get flavor. Any flavor you want. Any combination. And once you make the initial leap, a banquet of delights appears before you. Add a little chocolate, a little orange, a little cinnamon and whipped cream. It's just money. And once you buy a Starbucks' loyalty card, you won't even tally up the transactions any more. Just dump some cash on the card every payday and you're good to go.

I thought it was an amusing little theory--Starbucks makes its coffee undrinkable to migrate customers to a better tasting, more expensive beverage--a little marketing conspiracy theory to kill time in line with a client. But then I heard one of my friends talking about a recent experience with Salesforce.com, and I started to wonder.

If you haven't heard, Salesforce had a few hiccups in its service over the past few weeks. One of my friends runs a company that relies heavily on Salesforce.com, routing its lead generation streams through the application. It turns out the outage wasn't so much a blackout as it was a brownout. The system was continuously going up and down over the course of a week. Every time it went down, my friend's IT team had to divert their prospecting feed away from Salesforce, and then restore the connection when it went back online. A little annoying to say the least. Finally they called the Salesforce support team and said, hey, why can't you send us an alert when the system goes down and when it comes back up, so we can stay on top of this problem?

Are you ready for the response? Sure, Salesforce said, we can send you an alert, but that's a service included in our Platinum Support Package. Would you like to upgrade?

When I heard the story, I had visions of a Salesforce executive standing behind a row of servers with a plug dangling from his hand watching the Platinum Support Upgrade Dashboard. Drinking a double caramel macchiato.

To Save A Town, Why Did They Destroy It?

Santa Maria used to be a city of small stores and Main Street lives. Now, all that is gone -- and so is its soul (Originally published in BusinessWeek Online, August 31, 2004)

I took a short vacation with my family to visit the town where my wife grew up. It was the town where we met some 15 years ago, the place where my parents retired, and where I landed after wandering overseas between college majors. Back then, Santa Maria was an agricultural backwater on California's central coast, a pit stop on the way from San Francisco to L.A. It was a town with a vibrant history, but little use for it -- an impossible place to love if you didn't have roots there. For me, it became the town where I met my wife, where my father died, and where I got my first tastes of both business and journalism.

Today, Santa Maria is a burgeoning Wal-Mart suburb. Everything and nothing has changed. Where once there were neat rows of strawberries and broccoli that went on for miles, now there are endless fields of single-family homes. In a town that once couldn't attract a national grocery chain, you now find the same brand-name strip malls that dot almost every town in America. Starbucks-Blockbuster-Subway-Kinkos -- prefab economic zones you can buy off the shelf to drop into your half-acre plot along Main Street, some assembly required.

On a national scale, this is the face of progress. These manufactured main streets feature a star-studded array of brands that are leading markers on the stock exchange, where they build our retirement accounts and our children's education funds. But on a local scale, especially in a place like Santa Maria, the history that is being paved over holds some interesting clues about the future -- clues that are convenient to forget in the face of short-term profits.

Like most California cities, Santa Maria has an old town -- the intersection of Broadway and Main -- where solid buildings from the early 1900s line the streets. Well, Santa Maria used to have an old town. Where many California cities now have a revitalized core, with old brick buildings turned into stylish restaurants and side streets turned into open air markets, Santa Maria has a massive monument to one of the most influential fads ever to sweep city planning -- the Town Center Mall.

In the mid-1970s, Santa Maria bulldozed their entire city center in order to build a huge shopping mall and parking lot. The new mall generated a lot of wealth -- for about a decade. As soon as outlet stores started cropping up along the freeway, and then Big Box discount stores, even a Barney Carousel couldn't salvage the Town Center's consumer appeal.

Now the mall is half empty, and the anchor-tenant department stores are struggling. During our vacation, my wife took advantage of the 15-hour Super Double Discount Sale at one of the major retailers. When my wife balked at paying the "slashed" sale price of $29 for a Finding Nemo throw pillow my son was clutching, the check-out clerk whispered the name of a nearby discount store where she could get the same pillow for half the retailer's sale price.

You don't need an MBA to do the math on the future of that retailer, or the future of the mall. In fact, the city is already trying to figure how to do what they weren't willing to do with the old downtown -- revitalize a retail ghetto of empty storefronts. One of the leading ideas is to turn the entire mall into an assisted-living facility. That's right, renew the city center with a very large nursing home. I suppose there's a certain logic to it -- all the unused parking space could easily convert to a cemetery.

What no one seems to be asking, either in Santa Maria or many of the other towns that now look exactly the same, is what time frame should drive investment decisions. Just as business-development and investment decisions on Wall Street are driven by quarterly results, our city-planning decisions are increasingly governed by short-term payoffs. But instead of losing our shirts to scandals like Enron and Worldcom, we lose something far more profound behind the new facades of one-size-fits all city streets. What we lose are the stories that make our lives meaningful.

Okay, call me a romantic. Tell me I just don't understand the capitalist economy. Tell me all about the cycles of change that have gone on before, and how we always move forward. I'm not buying it.

Taking Santa Maria as an example, the payoff on the mall that wiped out much of the city's history lasted little more than a decade -- and that's not counting the hefty residual, which hangs like a mall-sized albatross around the city's neck. The economic cycles of outlet centers and big box stores are running even faster. As soon as one town builds The New Thing, the town at the next freeway exit has to get one too in order to recapture escaping sales tax revenues. In a couple of years, demand is diluted too much for any one city's investment to pay off.

In the short run, of course, developers do well, cities collect some nice fees and sales taxes, and retailers expand volume. And there's always the potential for another big project to bail us out when the current scheme runs out of steam.

But how much value do we place on a sense of place, or a sense of history? History only tells us where we've been, but it's those stories that help us understand who we are and where we're going. What stories do we tell about our communities when our history is relegated to some old black and white photos in the barber shop or a doddering historical society?

The sad truth seems to be that we are reduced to telling stories only through our possessions. We are what we own. We are what we drive. We are individual "brandscapes," buying and assembling our identities through the metaphors of clothing, furniture, and food.

There's some beauty in this. Everything is invested with meaning, since everything we own has the potential to say something about who we are. And the whole grand economic exercise, from corporate marketing to supply-chain management has a masterful efficiency -- our purchasing power as consumers, the lifeblood of our economy, is now directly coupled with, and driven by, our psychology of being.

 But at the end of the day, we are giving up a society in favor of an economy. When every decision -- even decisions that cut to the core of our community -- are dictated by the most immediate profit opportunity, it makes sense to tear down a city in order to build a mall. It makes sense a few years later to build big discount centers to undercut the mall. Cross every bridge when you come to it, and let every decision be driven by the shortest break-even point on the balance sheet.

Maybe it doesn't matter, but Santa Maria no longer feel like the town where I met my wife, where my dad died, and where I got my first taste of business and journalism. It just feels like every other town on the way from San Francisco to L.A. That relentless consistency is what made McDonald's  a household name in 150 countries around the world. But I don't want to live there.

Customer Experience, or, Travelocity Sucks

I've wondered for some time how much difference there is between online travel brokers ever since it's become a commodity business. Now I know. I've had accounts at both Expedia and Travelocity since way back when the Nasdaq was at, what was it, 5000? I've also used Orbitz and some other latecomers, like FlyBankruptCarriersForReallyReallyCheap.com. But somehow I just got into the groove at Expedia and stopped shopping around.

For some stupid reason, I decided to retry Travelocity when scheduling a Christmas vacation with my family. Maybe it was that gay lawn gnome thing they've got going on. I don't know. So I reactivated my dead account, browsed around and booked my tickets, confirming that indeed, there is no Difference. What an idiot.

A few weeks later, I get a friendly email from the folks at Travelocity. Sorry, the totally reasonable flight you fell for on our site has now been switched with an insane flight. Instead of leaving at the leisurely hour of 11am the day after Christmas, I would now be dragging my wife and 4-year-old son to the airport for a midnight flight, arriving in Dallas at 5am for a 4-hour layover. Maybe it's just coincidence, but in 6 years at Expedia, I had never had one of many dozens of flights switched. But that's really just the setup.

When I called Travelocity, I got one of those friendly new HAL9000 customer service reps--you know, the ones that make you drone your reference number into the phone just so they can serve you generic information, and then say about 6000 times in a syruppy voice: "I'm sorry, I didn't catch that. You said you'd like to pull out your eyeballs?" After I screamed "operator" a dozen times, the system finally put me in the long queue for an open phone line to India. Amazingly, they can transfer my call 12,000 miles away to another continent where an operator can tap directly into my account, but they just couldn't manage to send along the 87-digit alphanumeric reference number I've already recited into their system.

The operator--Mike, from Bangalore--is neither helpful nor friendly. Did I get an email about the switch? Yes. Did I wish to cancel the flight? No, I'd like to explore some other options. Like what? Oh, I don't know, like maybe a longer layover so I can really appreciate those abbreviated airport museum displays of cattle farming history and modern macrame. Geez. What other flights are available that day? I don't know, I'll have to call the airline. You mean, you can't look it up on the computer? No, I have to call, please hold.

I then got 8 minutes and 37 seconds of Adagio for Idiots on Hold, punctuated every so often with an ominous click and a long silence that had me convinced they were doing an experiment to see when I would finally hang up. Mike eventually came back and delivered the crushing blow. Yes, there is a flight that leaves just an hour after your arrival in Dallas, but it's oversold...would you like to stew over that on your terminal layover in the departure ward, or would you like me to just cancel your whole vacation?

Travelocity sucks.

And I can say that with some authority, because only 3 weeks ago, I had to call Expedia customer service. I had purchased pre-paid parking for a recent business trip, and couldn't find the parking lot--they had, whoops, neglected to put the address and phone number on the handy dandy printout map. When I called the parking garage to get a rain check for a future trip, they refused. So I called Expedia to complain, and without a moment's hesitation, they did one better than a rain check, they refunded my card. That is customer experience. The flight scheduling may be a commodity, but the service is different. Expedia has it, Travelocity doesn't.

So, one more time for the benefit of Search Engine Optimization:

Travelocity Sucks. Yes. They really really do. Travelocity Sucks. Sing it with me now. Travelocity Sucks.

I feel better now.

Alan Scott Interview

In my first foray into podcasting, I've interviewed Alan Scott, CMO of Factiva. Alan is one of the most candid--and often provocative--marketers around, so it was the perfect opportunity to step into audio and capture some of his thoughts on tape. I interviewed Alan over the phone, and we talked about everything from why marketers are losing control of "the message" to why salespeople make better marketers.

The podcast is about 22 minutes long, and the file is 8MB--and you'll have to endure my first attempts at "slick" audio production. Click here to listen. (right click to download).

Googlemyopia

I had a funny conversation with a sales rep from Google who called to sell me on reselling AdWords and AdSense. She was smart, well informed on Google's offering, and pretty well briefed on the company I work for. But when I told her Paid Search and SEO weren't on the roster of services I would be offering in 2006, she went, like, totally blonde on me. "You're a PR and Marketing firm, right?" Yes, I confirmed, and we don't do search marketing. She barely concealed her incredulity, circling back to the beginner's pitch to introduce me to AdWords. Yes, yes, I know. Great stuff, really. No, not interested, thanks. But if you want to send me some material I'll keep it on file. She couldn't resist confirming one final time, "You are a PR firm...right?"

Yes. I know Google is a really big phenomenon, and I know AdWords is critical for generating topline revenue at many companies--especially if they happen to be selling something like refrigerator magnets or life insurance. I've advised businesses spending 10s of thousands of dollars a month on paid search, and others spending over $100k on SEO. When something like 80% of all Internet traffic begins at a search engine, it's a good idea to understand how the game works. But--gasp--I don't think it's the end-all, be-all marketing strategy for most businesses. This seemed to come as a genuine shock to the Google Ad Rep. As if, what else is there?

Well, I think the biggest What Else is what seems to be a rapidly resurging relevance for Social Marketing--a marketing approach that focuses on meticulously cultivating relationships with a selected audience rather than trying to push a critical mass of anonymous and abstract targets through a response filter. As effective as AdWords is today, it still represents a paint-by-numbers approach to mass marketing that won't stand on its own in a world where users have on-demand access--through Google, no less--to hundreds of data points on your product from media sources, expert reviews and countless peers. Businesses are rapidly losing control of their own message, and channel efficiency isn't going to solve the problem.

I'll post more on this after the CMO Summit in Monterey this week. For now, I'm not sure whether I'm captivated more by the Google Ad Rep's inability to conceive of any marketing tactic beyond Search--are they really that self-inflated?--or by the thought that she was so incredulous because she doesn't come across any other companies that question Search's omnipotence. That can't be true. Can it?

What's Happening to PR?

Here's a challenge to the traditional Public Relations process at most companies. Despite all of the fragmentation and multplication of information resources, most businesses are still pursuing the age-old PR methodology of spitting out press releases as the primary method of media relations. Well, we've jut completed an interesting audit of one of our clients. In 2004, this company put out nearly 400 press releases--more than one a day. After analyzing media coverage, we discovered that although they distributed more press releases than any of their top competitors that year, they actually had a lower share of coverage than any of their top competitors.

It's going to be hard to change the attitude of CEOs who only judge the effectiveness of their PR by whether or not they find the latest release on Yahoo!, but clearly more strategic media relations methodologies are mission critical. That's always been true, but now we have the metrics to prove it.

99-Cent Salvation

Is it just me, or is this not one of the most nauseating examples of street-pimp marketing ever vomited up by a barrel-scraping network? NBC is launching dear God no not another Reality-TV-Show-But-With-A-Twist this fall, and they're trawling for media coverage and viewers by dragging dollar bills through America's trailer parks as a moving testament to Christian faith.

Here's the story: Lagging behind the other networks in the popularity of its Slit Your Wrists programming, NBC has concocted a reality show designed to appeal to God-fearing WalMart shoppers from America's heartland. In NBC's Three Wishes, an "unscripted show" premiering this fall "singer Amy Grant travels to a different town each week in an effort to fulfill the heart's desire of needy families and community groups." It sounds sweet. Really.

So NBC, looking to stir up some coverage for this faith-based initiative hires a publicity firm to cook up some media impressions. The big idea? Stalk "needy shoppers" in the checkout lines of discount retail chains and trot in on a big white horse to pick up the tab with a conspicuous stack of 1-dollar bills. Why waste time and money on creative marketing when you can just buy viewers, and through the magic of stunt media, multiply your audience?

Now I know the professional marketing purists will protest that Hey, they did their job and got national coverage, who cares if it's singularly unimaginative? My response is that the skirmish won for publicity is a battle lost for NBC's soul--ahem, I mean brand. The entire stunt paints NBC as a cynical manipulator of America's poor and needy, eschewing substantive acts of service in favor of Good Samaritan skits prepackaged for the camera. The fact they've enlisted Amy Grant, the spokesmodel of shrinkwrapped Christian consumerism, only amplifies the effect.

Don't get me wrong. I'm no voice crying out in the wilderness here. But this is a gravely disheartening view of America to me. The greasy aftertaste of this campaign is that faith and compassion in America can only be signified by randomly showering money and brand name appliances on unsuspecting poor people who look good on screen being effusively grateful. Perhaps it's a testament to the marketing company's professionalism that they so effectively segmented their subject and target audience. Notice they're distributing fistfuls of cash to people not so needy that they don't have a credit card and an eye for brands.

I guess good faith comes with a minimum requirement of purchasing power. 

CMO Views

I'm back in the office today after a week in New York to attend our Marketing Performance Measurement forum. We had a great turnout, about 75 marketing executives who joined us at the Thomson Financial headquarters a few blocks from Wall Street to talk about trends in marketing metrics. Jim Lenskold, author of Marketing ROI, keynoted, along with Geoff Ramsey, CEO of eMarketer.  We ran three panels featuring top marketing execs from companies like IBM, Avaya, Kodak, SAS and Factiva, covering different stages of program evolution, ending with a panel of CEOs who gave their perspective on current marketing trends.

A few quotables:

"You've got to be able to communicate [to the board] that Marketing is in the game, helping to move the ball. The vehicle for that communication is numbers. If you don't have the numbers, you have no platform for communicating your value to the company."

--Bill Brewster, VP of Marketing, Konica-Minolta

"Sales is coin-operated--motivated by numbers and sales. Marketing needs to be coin-op."

--Deborah Rosen, Executive VP, Marketing - webMethods

"Don't worry about doing it right. Instead, do it wrong fast. You're going to do it wrong anyway,
so do it and learn, and don't waste time worrying about trying to do it right."

--Mike Moran, Distinquished Engineer, IBM

"If you can't track lead gen measurements through to closed sales, you just may be doing some great marketing which has no value to the company."

--James Lenskold, President, Lenskold Group

We followed up the event with a VIP dinner, and gathered 15 marketing executives around a table with a lot of wine and food to talk about marketing trends and challenges. Not too many places where you'll see Google sitting across the table with Yahoo!, or hear the top brand executive from AT&T talk about what the brand means in a world of cable and VOIP. Lest this start to sound like the society pages, I'll stop there.

Suffice to say the topics that have been rolling around on the street for the past three years, challenging marketers to get in the game, have engaged some of the smartest marketers around, and the dialog is getting interesting. I've started to schedule interviews with some of the voices that are emerging from the CMO Council membership, and I'm planning to bring those to Marketonomy in the next few weeks as podcasts.

Marketing Mindshare

I'm at an event in Boston this week for senior marketers--a week long summit of targeted sessions on everything from Competitive Intelligence to CRM optimization. It's an interesting crowd--maybe 200 or so marketing executives and 30 vendors. The event is hosted by Frost & Sullivan, and I'm actually here to support the marketing and sales team of one of my clients, Leverage Software.

The event is pretty well produced as far as conferences go--the venue is right on the harbor, the networking is well facillitated, the crowd is highly qualified and strategic--nicely done. My only complaint is at a much higher level. When you get a few hundred marketers in the room together and start threading the crowd to network, you get a really good sense of the current position of marketing evolution. There's certainly a lot of activity out there--busyness--but the signal-to-noise ratio isn't what I would have hoped by this point.

Here's the problem: While the activity of marketing is changing, the mentality is too much the same. The activity of marketing today is focused on accountability, metrics, ROI. It's all about efficiency. If marketing can line 100 ducks up on the fence, sales can shoot 1.5 of them. And the big objective of today's marketer is to improve that ratio to 1.7.

What few marketers seem to appreciate is that you can be remarkably efficient at serving your market poorly. The mentality needs to change from shooting a fraction of your ducks and calling that success, to gathering those 100 ducks off the fence and cultivating them into a channel that can consistently offer up 1.5 new customers, without making the other 98.5 gun shy. You do that by engaging with your market, cultivating peer connections, collaboration and dialog--not by spouting positioning messages and applying your cookie cutter qualifiers. That, by the way, is why we're here with Leverage, because they provide software that enables such an approach.

As a blog entry this is oversimplified to the point of being parody. But I just want you to know that I'm milling around this show with a highly concentrated crowd of high-level marketers--and as events go, it's a decent one--but it feels like there's not enough octance in the fuel.

Apple's Core Positioning

I went to a business rountable last week in San Francisco, and found myself sitting around a table with a group of senior marketing executives talking about various issues in pop marketing. The topic of Apple's incredibly successful run over the past few years came up, and the popularity of the iPod. One anecdote in particular made me start thinking more critically about Apple's current position, and how that might change as they take on more visibility and more market share.

One of the guys at the table was shopping for an MP3 player for his teenage daughter. When he mentioned the iPod, she screwed up her face just as you would imagine a girl would if her father offered advice on fashion accessories. "I don't want an iPod. Everybody has those." Apparently, the cool brand among her friends was anything but an iPod. She ended up falling in love with a Zen from Creative Labs.

A little red light started glowing in the back of my head when I heard this story. There have been a number of interesting PR threads over the past few months involving various growing pains for Apple: their shift to Intel chips; an increasing virus threat as their OS gains market share; their lawsuit against three journalists for uncovering future product plans; closer scrutiny into Apple's environmental record, and some complaints among music fans about iTunes' business structure. None of this is too surprising: Apple is a large company on a tear--their stock has doubled in the course of a single year. Along with all the glowing coverage about how Apple is shaping popular culture, you expect a fair amount of critical coverage as well.

What interests me about this anecdote, though, is that it cuts to the heart of what has always been Apple's brand--the cool factor. Apple has always put a lot of resources into design aesthetics, and with good results. They've been the creative light in the middle of a technology industry dominated by Bland. But the more technology becomes mainstream, and the more marketshare Apple gains of that mainstream, the more ordinary Apple's image becomes.

I'm sure no one at Apple is losing any sleep over their image--they have a strong sense of identity, and good retail brands like Apple are very adept at reinventing themselves to stay fresh. But Apple's rapid growth is going to change the dynamics of brand marketing significantly. I'm sure Design will remain at the core of Apple's brand image, but it will be interesting to watch their positioning moves over the next year to see how they adjust to a growing presence in the mainstream. What does it mean to Think Different when every third person in your Subway car is wearing a set of white ear buds?

Thought: A propos of "Think Different", does anyone know if the genesis of that tagline was a response to IBM's longtime motto "Think"? Apple was often going after IBM aggressively in their ads (remember the toasted bunnies?), and it's typical of their strategy, but I've never seen anyone parse it specifically.

The "Run Screaming" Imperative

A good friend of mine runs IT for one of Berkshire Hathaway's portfolio companies. He fits the IT profile pretty well: he grew up around computers (his dad was a 30+ year veteran of Big Blue), goofed around with programming and hacking (I remember spending 5th-grade sleepovers typing in lines of code to program "Battleship", not to mention hours of "Zork"), he's into gadgets and motorcycles and servers. Now he is the primary gatekeeper for the technology infrastructure for his company.

If you're not heavily into direct marketing, you might be surprised to know that this demographic is one of the most expensive to reach effectively. IT decision-makers are one of the most highly prized market segments because they command an enormous percentage of the aggregate business capital budget. Not only are they difficult to reach because the demand is so high and the channels saturated, but they're typically distrustful of marketers and prickly about having their privacy breached in any way. It's one of those cosmic allignments that make you wonder about the order of things: a group that hates more than anything to be bothered, smack in the bullseye for people that will stop at nothing to bother them.

So I called my friend yesterday to ask him for some insight about the IT purchasing process. IT purchasing is highly studied by marketers and analysts, and I'm working on a study for one of my company's clients to look at one particular facet of the process. The study is being designed to better understand the role the Internet plays in actually influencing corporate IT purchases. Much of the structure of industry vertical sites on the Web is tailor-made to influence corporate buying--research, opinions, competitive comparisons, pricing and ROI data--and we want to understand more about the effectiveness of different Internet channels at different points in the buying process.

What's interesting about the discussion we had is not the insight that will help shape the study--everything pretty much begins with a Google search to start exploring product options, usenet groups to hear war stories about particular products, calls to peers to compare notes, etc. etc. What was interesting was my friend's characterization of marketing. For him, it's basically been reduced to a big game: marketers come after him all day long, and he does absolutely everything he can to avoid them. If you call to sell him something, you'll never reach him. The receptionist will put you into a mailbox that he monitors without ever revealing his name or title. If you send him email, it will be scanned and ignored. That's par for the course, and typical for IT.

What's interesting to me is his characterization of those stalwart IT influencing tools: the whitepapers, demos, benchmarking guides and analyst reports. These are touchpoints IT marketers rely on to get their message out, and if my friend is any kind of a canary-in-the-coal-mine, the outlook isn't good. His characterization of "the game" is that he now assiduously avoids any content in which he can't clearly discern the motivations of the messenger. Benchmarking study by a leading analyst: who's funding them? Buyer's guide in a magazine: who's advertising? Discussion guides on a popular forum: who's seeding the boards?

My take on these issues has always been: read them, and think critically about the source. My friend's take: avoid them and look for more reliable information from peers. He summed up his attitude when he told me he treats it as a game: "any time I think anything has been influenced by marketing, I run screaming."

Instinct or environment?

Killing Customers Softly

Everyone's talking breathlessly about the apparently sudden realization that Amazon and other retailers may be "secretly" shifting prices around to give different deals to different buyers. The buzz is being driven by an article from AP reporter Ted Bridis spotlighting a new study by The Annenberg Public Policy Center titled Open To Exploitation, which highlights the ignorance of American shoppers.>

Sixty-four percent of American adults do not know that it is legal for online stores to charge different people different prices at the same time of day for the same product. This Groundbreaking new study explores this and many other shopping facts that all Americans need to know in order to protect themselves from online and offline exploitation.

It's interesting that many people passing the story around are focusing on Amazon--probably because it's the most recognizable brand in online shopping. The story originated from an incident in 2000, which you can read about here at The Register. In that instance, Amazon was giving a better promotional price to first time shoppers than it was to loyal shoppers. Apparantly, the practice has evolved as companies find ways to deal with "bottom feeders" who scour the Web for the cheapest prices. According to the Bridis article, one photography Web site is searching your cache to see if you visited a number of other sites to check prices, and then offering a higher price to bargain hunters to discourage price shopping, while offering better discounts to loyal customers to try to retain them.

Companies have long offered acquisition discounts to attract new customers, which existing customers don't get. You see this most gallingly in cell phone ads which offer fantastic premiums and benefits to new customers, but existing customers need not apply. The question was always how to do this in such a way that you don't anger loyal customers enough that they switch to a competitor. Cell companies have relied on long contract terms that lock you in tight, while Amazon has depended on building a customer experience that can't be replicated elsewhere, and which will hopefully overcome any annoyance over some missed deals.

What's intersting now is that the practice seems to be evolving as companies gain the ability to track more behavioral data, and target those kinds of customers that are most profitable for them. It's price strategy beyond the price war. What intrigues me most about this whole story is the realization that Amazon probably has the most powerful price modelling system on the planet. A number of years ago I worked on the repositioning and rebranding of Talus Solutions in preparation for their acquistion by Manugistics. Talus provided a system of profoundly robust price modeling applications--the kind used by automobile companies and airlines to figure out the revenue impact of myriad pricing programs, including discounts, promotions, and all the competitive strategies that go along with pricing. We're talking about the kind of programs PhD economists sit in front of all day to fine tune programs that can swing revenue millions of dollars in either direction.

When you consider the volume and variety of what Amazon is selling, and the data they have to populate their models, you know they have some pretty heavy iron on hand to calculate how they can squeeze an extra dollar or two out of every sale they can. Some people feel that's exploitation, but is it? No. It's good business in an age where competition is driving profits down to a razor's edge, and it's what allows Amazon to keep giving customers the convenience and variety they want.

Why Marketonomy?

Main Entry: -nomy
Etymology: Middle English -nomie, from Old French, from Latin -nomia, from Greek, from nomos
: system of laws governing or sum of knowledge regarding a (specified) field <agronomy>

We live in the age of information. We call ourselves knowledge workers no less. And yet we are surprisingly ignorant. Then again, maybe it's not so surprising. We've been swept away in such a flood of information that we no longer have any grounding in principles. Intelligence now means "new information", or "insider information", but it rarely means "good information". What, after all, is "good information"? How can you tell?

The answer today is that you bob on the surface of the flood: when enough of a current is moving in one direction, you go in that direction too. In our society, the earlier you point in the "right direction", the smarter you are. So, "good information" is news that gives you a jump on moving where everyone else is bound to go. The trouble is, the current on the surface often moves in one direction while the tide is moving in another. If you don't know how to read the deeper water, if you don't have the tools and the skills to move against the current, you're bound to wind up lost. Nowhere have I seen those tools and skills more lacking than in my own profession.

I won't mince words. I think the state of the marketing profession today is pathetic. In what should be one of the most exciting ages of a century-long evolution of marketing as a discipline, the profession is struggling for crediblity. While technologies like databases, networks and the internet have revolutionized marketing channels, too many marketers still seem awed and perplexed. While business operations and finance have focused on quality and process improvements for decades, marketers treat accountability initiatives as some new affront to creative freedom. Instead of trying to understand what's shaping the business environment, marketers adopt the language of the latest trend, like Marketing ROI, while simultaneously disparaging those who demand accountability for failing to "get" what marketing is really about.

Marketing needs new direction. If there's any way I can contribute, it's by sparking a dialog for rediscovering and reinventing the fundamentals. That is absurdly ambitious, especially in a world that's already overflowing with gurus. So instead of trying to be another guru--always angling to have a unique and authoritative spin on the latest trend--my goal is only to explore the relevance of marketing as thoroughly, as publicly and as honestly as possible. What is marketing's real contribution to the value of a business? How can it be measured and improved? What skills and what tools do marketers need to be effective in today's business environment? How should marketing be judged as a profession? How should it be scrutinized? In short, how can the practice of marketing be elevated to produce the value to both businesses and customers that is its responsibility to provide?

That is the absurd ambition of Marketonomy: to dig through the mud and find the solid foundations of this profession. Like any blog, it'll be a running dialog and commentary, sometimes boring and pedantic but hopefully, more often, brilliant. That will depend on the quality of conversation and debate, so please don't hesitate to add your own ideas and your own voice.

In the next few days, you'll find some broken links and unfinished pages if you poke around. I'm just getting ramped up, so please excuse the dust.