The opportunity isn’t in Marketing Services, it’s in using media competencies to solve marketing problems

by drm on June 22, 2011

Marketers are willing to look to their media partners for marketing services.  Is that something that media partners want?

In an effort to do a real-world reality test  of corporate buzzwords, Crain’s Media Business Magazine went out and asked a bunch of marketing heads whether they wanted the marketing services solutions that their media partners are going out aggressively to acquire or build.

The logic from the media company side is sensible.  Advertising spend has been down, the business is changing and their are broader opportunities to partner with their clients.

The challenge is in finding the right way to define this activity.

When a media company says that it provides marketing services, the danger is getting sucked in to low-margin, labor intensive activities.  The unique capability of a media company is to leverage content and marketing know-how to solve marketing problems, not building ads or writing SEO copy or managing e-mail programs.

What’s different today from the past is that digital technologies and changing consumer behavior has changed the core process of content creation, content delivery and distribution.  The lines between marketing and publishing have blurred.

What a media company can do that a traditional marketing agency can’t even begin to dream of is use their traditional skills, transported into the digital environment, to create seamless bridges between the digital footprint of their brand to their clients’.

That’s not providing a marketing service.  That’s extending the media platform to solve the problems of visibility, engagement and conversion for marketing partners.

That’s far from being a commodity solution.

The challenge is finding a simple and direct term to describe this service and to develop fairly standard and efficient ways of delivering the solutions.

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From print to online isn’t a death knell

by drm on June 17, 2011

When news breaks that a traditional magazine company is looking to eliminate print and go all digital, the reflex assumption is that it’s a last ditch effort to keep a flagging franchise alive.

Take the report in yesterday’s Telegraph that Emap is looking at making some of its trade mags online only.

Editors from across the trade media and events business, which is jointly owned by Guardian Media Group and private equity group Apax, have been asked to examine “the best way of delivering content to users” between now and 2015, and to consider how they could reduce the frequency of print publications or phase them out altogether.

Emap to make weekly trade magazines monthly or online onlyIs this a death sentence for the magazines that are told to cut back their print copies, or suspend them all together?

Not necessarily.  The article notes one Emap title that’s already made the change:

In 2010, Emap changed film industry magazine Screen International from a weekly to a monthly title, prompting a jump in profits and reader satisfaction.

Before you shake your head at the battering that traditional print takes, let’s spend a second celebrating the vibrancy of good brands.

I read this story on the web from a U.K. newspaper.  It’s primary journalism, sourced and cited, reporting on a development at an important company in its market.  When I saw that the story was from the Telegraph I assigned it more authenticity and credibility than I would have from another source.

Those are all attributes of the brand that were established over time, in the traditional world, and transferred into a digital world.

That’s a basic reason why we shouldn’t discount the efficacy of a brand shifting from print to digital.  As the article cites, readers experience a lot of satisfaction when they encounter a good digital content experience.

So what’s the problem, beyond the nervousness that those mired in traditional media experience when they contemplate a world without the processes they are familiar with?

The business model, or  lack thereof.

A decade or so of dis-intermediation, of booms and busts, of market re-invention, of unthinkable valuations, of technology usurping tradition, of automation, self-serve and free has cast a pall over the traditional ways of serving markets.  But what publishers are realizing, as they re-engage in conversations with marketers and look for ways to intersect with, educate and entertain readers, is that the combination of new technologies, consumer behavior and marketer demands has created a new foundation for building profitable targeted media businesses on digital platforms.

That those are common buzzwords I just rattled off doesn’t make the observation any less true.

When you combine a flexible content platform with a targeted and interactive digital distribution program, you are able to give marketers solutions that deliver high-quality connections and drive business results.  You can package solutions that enhance multiple elements of their marketing program, from brand advertising to lead generation to education to content marketing to web traffic.

A traditional print platform can’t offer the flexibility or breadth of the digital platform.

So, the examination that Emap has mandated isn’t a death knell, it’s an opportunity for a group of long-tenured brands to focus their resources on meeting their market where they can have the most impact: online.

Does that mean print is dead?

Not at all.  The printed product continues to offer high impact, engagement and value.  It just is the highest fixed-cost aspect of the integrated media model, and because of that needs to be able to justify its place in the media mix not just for the advertiser but for the publisher as well.

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A Question & An Answer

by drm on June 15, 2011

I got this question in my in-box from a market rep the other day.

 

Hey Dan,
I am just trying to figure out here who is the enemy here.The recession or to much free media for the realtors ?
While other busineses are fighting the recession only, and will come back. We are fighting free platforms all over the place. What say you ??

Here’s my answer.

NewImageCharles,

I’m sorry for being so slow in getting back to you on this. I’ve been swamped and then lost track of the e-mail.  I apologize.

We’re fighting heavy headwinds and they are coming from multiple directions.  It’s frustrating.

The proliferation of free web listings makes it easier for agents/brokers to say that they don’t have to do any paid advertising.  That works for them when they aren’t making any real money from commissions.

But it doesn’t help them stand out.  It just gets the listings out there, into a bunch of different searchable database, just like every other listing in the market.

When I search the homes for sale in my home town, more than 100 are returned in just one price bracket.

How do I pick the agent?  What makes them stand out?  Do I want to spend all that time researching 100 homes?

There’s still a place for marketing solutions that help agents stand out so that they get more than their fair share of the business.  That’s what The Real Estate Book offers.

Our challenge today is that agents aren’t seeing their incomes rise.  So they don’t want to spend for high-visibility, quality advertising.  As a result, a lot of people are saying there’s no need for that kind of advertising.  Those people are being self-serving.

There’s a need.  There just isn’t enough business to justify it.

When the market turns, we’ll see our fortunes turn.  That will be a good thing.

Dan

The challenge is being able to wait through the downturn.

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What’s your web site?

by drm on October 18, 2010

Our work in lead generation and social media marketing give us a unique perspective on two different dynamics that are at play in the world of interactive marketing.

The first is the idea of creating a brand online.  This is like going shopping for a new set of fancy clothes.  You start with the intention, I want to look good, and then you keep trying on clothing until you look pretty much the way that you want.  (Or, you think that you look the way that you want, but that’s another story…some of us can’t ever quite get there.)

For web marketing, this means getting the kind of look and feel, feature set and whiz-bang cool things that let you say that your web site is a pretty cool looking set of duds.

NewImage.jpg

Of course, you factor in practical considerations.  After all, just like when you go shopping for clothing, you’ve got to stay reasonably close to your budget, and you’ve got to be able to sit down in it.  But, when push comes to shove, you are going to err in the direction of your heart.

The second is the challenge of converting online visitors into prospects and customers.  This, after all, is the paramount benefit of the internet, that you can provide prospective customers with the kind of information that they need in order to determine whether to work with you or buy your product.

This is nothing like buying a suit of clothes.  This is like trying to find recruit athletes to a Division III college.  You can’t give them a scholarship, you can’t influence admissions, but you need them to believe that you can give them a better experience than anyone else.  It’s about capturing interest, holding on to it and closing the sale at the right time.

That’s an entirely different kind of web experience.  Your web site isn’t designed on the basis of aesthetics; it has to be designed on the basis of data.  What are the images, information points and links that cause your users to take an action that is of an economic  benefit for you?

For most of us in business, that action is a phone call or a visit to our place of business.  And when the prospect already has gotten information that is important to them and decided to reach out and contact you, you have the highest odds of making that  prospect a customer.

As we’ve worked over the past year and a half with local businesses, we’ve discovered that there is a tremendous lack of understanding as to how to use a web site in order to create qualified prospects.  And, as we’ve  built social media footprints for our clients, and developed broader distribution of their content that has elevated their natural search traffic, we’ve found that very few have reliable processes for tracking and capturing those users.

Where do you start as a small business?  With taking the time to understand the simplest attributes of web tracking.  Anyone in business can use the Analytics tool from Google in order to track the activity on their web site.  That is your starting point.  If you are able to answer how many people are visiting your web site, what kind of things they look at most frequently, and how many of them are sending you additional inquiries, either in person, by phone or on e-mail, then you have the beginning of the information that will help you decide how to make your web site more than a pretty set of clothes.

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The current foreclosure crisis is a bad joke on the economy

by drm on October 18, 2010

The headlines announcing that Bank of America has stopped processing foreclosures in order to assess their internal controls are difficult to process.  On one hand, this sound like a good thing, because if the pace of foreclosures slows it will diminish the number of families under stress and lighten the overhang of foreclosed properties on the housing market.  On the other hand, you don’t get foreclosed on until you’ve stopped paying your mortgage, right?  So what’s the big deal.

To sort it out, I recommend you follow the five-part series that kicked off today at Barry Ritholtz’ The Big Picture.  The post is authored by Mike Konczal, a fellow at The Roosevelt Institute.

The big question at play isn’t just whether the mortgage processors have been playing fair with homeowners.  It’s whether the financial institutions actually know where the original mortgage documentation is.   Can they produce the piece of paper they need to have to demonstrate the lien on the property?

The issue is captured neatly in a two-part graphic, reproduced below.

NewImage.jpg

As the post points out, the issue of whether or not the mortgages can be found has significant implications for the financial players.

So keep these frameworks in mind when you see the debate unfold in the next weeks. It is a problem of systemic risk, and it is a problem for the currently cratered securitization market. It will need to be addressed, the sooner the better.  But how?

What should we all make of this?  Consider it a last, bad joke on the part of the financial services industry.  This new “foreclosure crisis” has nothing to do with home values or the ability of home owners to make payments of mortgages.  But, it has a lot of potential to slow down the housing market, at a point that the market doesn’t need any more headwinds.

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Housing: a good long-term bet

by drm on September 13, 2010

I’ve been preparing for a conference this week held by the investment bank DeSilva & Phillips. The concept is intriguing: the principals, Reed Phillips and Roland DeSilva, have invited eight CEOs of mid-market media companies to talk about the transformations in their business to an audience of about 100 members of the private equity and media banking community.

Ironically, the context for transformation is crisis, as the publishing segment of the media sector has been under extreme duress during the recession. While this duress has taken a toll on the capital structure of media companies, it has also forced business to focus, identify where their customers are and develop more flexible and web-centered business practices.

In preparing for my presentation, I’m forced to answer two basic questions: what is attractive about our company, Network Communications, Inc., and what is attractive about our market.

When you are positioned squarely against the housing market it’s easy to fall in to the trap that your market is a problem.

Perhaps the best way to disabuse people of that notion is to show them two charts.

housing market.jpg

The first looks at home prices since 1970. It is the simplest way of capturing the impact of the housing bubble. For a short period of time,home prices soared irrationally. What we know now is that the loans made against those soaring house prices helped fuel a fever in lending to the entire building market — resale, new homes, multi-family and commercial — that created an unimaginable glut of capacity just when demand was going to decline.

When we take a long view of prices, it is easy to conclude that the market has fallen back close to the norm, and that with a little more correction, the housing market will be where it need to be.

The drama of the price drop over-simplifies the dynamic impact the housing market has on the economy. The best way to measure that impact is to look at the effect of housing on Gross Domestic Product over time.

The second chart captures all components of housing as a percentage of GDP since 1970 and plots the ratio against the logarithmic trend. This analysis shows that housing as a percentage of GDP is significantly below its trend over the past couple of years.

Closer analysis of the number shows that the driver for reduced production in the housing sector is the overhang of excess capacity, coupled with conservatism in the lending markets.

The most volatile component of the housing sector is residential fixed investment, which includes the cost of building new homes and multi-family units, improving existing homes and paying commissions on the sales of homes.

From 1995 to 2005, residential fixed investment increased $319 billion to more than $700 billion.

Between 2005 and 2010, residential fixed investment declined $424 billion.

Historically, residential fixed investment has been about 5% of GDP. Currently it is at 2.7%. At the normalized rate, residential fixed investment would be around $650 billion, or 85% higher than current levels and 15-20% below the peak.

Has anything happened to change the long-term structural dynamics around residential investment? Not really. There are more efficient building techniques, and the overall size of structures is likely to diminish, but the demand for residential fixed investment is driven by the population’s housing need. Population grows, existing housing stock ages, bylining costs come down, and new capital pours in as part of a virtuous cycle.

The current challenge of the housing market is that the alignment between supply and demand still is not set. Demand is suppressed because of the weak employment market and frozen lending channels; supply is too strong because of the overhang of building during the housing boom.

Each quarter the housing market regulates a little bit more, and a recovery in the housing market is not that far away.

At that point, it will be clear that housing is a good market opportunity, with steady growth characteristics that will distinguish it during a particularly challenging decade for our transforming economy.

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Twitter is a high-impact social hub for marketers, research shows

by drm on August 9, 2010

Of all the social media platforms, Twitter is the one that puzzles marketers the most. The typical observation is that they don’t get it and can’t figure out why it’s important.

EMarketer shared some research recently from ExactTarget that provides an easy answer: Twitter gives you a way to reach people who have loud and active voices online. Once you’ve gotten their attention around your message, you’ve got a good chance that they will redistribute that message somewhere on the web.

How’s that work? ExactTarget shows that the 26 million monthly users of Twitter are three to five times more likely to comment on blogs, post to forums, participate in view sites and blog themselves than the average Internet user.


“Consumers active on Twitter are clearly the most influential online,” said Morgan Stewart, principal at ExactTarget’s research and education group, in a statement. “What happens on Twitter doesn’t stay on Twitter. While the number of active Twitter users is less than Facebook or email, the concentration of highly engaged and influential content creators is unrivaled—it’s become the gathering place for content creators whose influence spills over into every other corner of the internet.”

The conclusions suggest that the time spent investing in an audience on Twitter is likely to have an exponential impact. This is the crux of social media marketing, and provides a simple justification for using a service that at first seems fragmented and chaotic.

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