Internet causing newspaper blindness!

The newspaper industry is in denial. It is myopic.

When I read the comments of newspaper man Rupert Murdoch and read the reports on the recent keynote speech by Mark Cuban in which he called Google a vampire that must be vanquished I cant help be reminded by the management thinker Theodore Levitt and his great HBR article Marketing Myopia which although written in the sixties has perfect applicability here. The death of newspapers is not the death of news, its just the death of news on paper.

Levitt was one of the founders of marketing as a concept and the key thesis of this article is that businesses and industries fail not because of a failure of the market but because of the failure of management. Management typically puts its own needs ahead of the needs of its customers, who because their needs are not being met move on and before long the industry is in decline, being replaced by another.

The classic is the story the demise of buggy whip manufacturers, who knows what would have happened if they had seen themselves in the transportation business.

Newspapers are dying not because people don’t want to read, because they don’t want news. Newspapers and book publishing are dying because there are better and lower cost ways of reading than ink on dead trees. In fact people are reading more and more, the massive growth of the Internet has actually translated into the fact that people are writing and reading more than they ever have – and its now much easier and cheaper to get the stuff to read.

If newspapers rethought their business and realised that they are not in the news on paper business but are in the news analysis business, or the news spreading business, or the entertainment business or the information business, they would see opportunity not problems.

The appropriate action is not to try to defend, because the forces are too big and inevitably the garrison will be overrun – the choice is to understand exactly what value you are bringing to customers and focus on that.

To borrow a thought from Seth Godin the art is not in the artifact, music is not vinyl or plastic so too is journalism and news not paper. The demise of newspapers will not bring an end to journalist – with more people reading I suspect the opposite.

NO we are not looking at the end of news, we are looking at less control in the news, cheaper news, more and wider analysis of the news, more people getting the news – we are looking at the golden era of news, of  journalism, of writing and of publishing.

. . . and of forests.

Photo Credit Greything

My photo in Seth Godin’s book – Linchpin.

See if you can find me in this photo – Its the inside front cover of Seth Godin’s new book “linchpin” its kind of in the centre right, at 2 o clock from the black square.

I can’t wait to read the book, my copy is on its way from amazon.

And its really cool to be in this picture.

Telling the truth – a killer strategy?

In the US Domino’s Pizza has come under a lot of flak for their new marketing strategy.

For admitting that their product sucks, that the pizza base tastes like cardboard and saying sorry and then as a response to what their customers said developing and launching a new recipe. Crazy stuff Dominos, say the critics, you are alienating your loyal customers who presumably love cardboard and you are damaging your brand.

You can read the criticism on eConsultancy and Advertising Age by clicking on the links. While you are there read the comments. and when I tweeted the article today almost all the responses were the same, surprisingly disagreeing with the criticism.

Traditionally you would have either defended the product and shored up the brand or launched the new recipe with a “you always loved the old pizza but we have made it better”type of line.

But actually in today’s market that’s a very risky strategy.

• Domino’s customers all know the Pizza sucks, they buy it for convenient fast delivery.
• Their friends all know it too.
• They are connected to their friends.
• If you lie they will tell their friends that you are a liar.

So this is what domino’s did:

Now’s time for another story. In the late 80’s I was Client Services and Strategy Director for one of the hottest agencies in South Africa. One of clients was the biggest wine and spirits distributor. They had a dog of a wine brand, it had been promoted on the basis of its heritage – it was named after the birthplace of man who had opened a refreshment station at what is now Cape Town for ships bound from Europe to the East Indies in the spice trade.

Only one of the products was doing anything, a sweet wine loved by drunks in the Eastern Cape.

The heritage positioning was so thin that I suggested that we should throw it out and call it what it was “a good everyday drinking wine” the kind of stuff you would drink with your friends, people whom you had no need to impress.

Much to the horror of the Brand Manager but with the support of the senior management, who had decided to give the brand one last shot. So we told the truth about the brand and implemented that positioning, won a Bronze Lion at Cannes and saved the brand.

The foundation of good marketing is not just great advertising its great product and great experiences. What’s the point of trying to tell your customers stuff they already know is bull. Why not show them a little respect, show them that you care, maybe they will give you the benefit of the doubt.

Maybe this campaign will get customers to have a fresh look.

Well done Domino’s – Telling the truth may just be the Killer Strategy.

Photo by cafemama on Flickr

The Digital Divide – Huh?

The notion that there is a divide between digital marketing and traditional marketing based on whether the technology used is analogue or digital is really a little ridiculous.

This thought was all sparked by a conversation I had with a prominent industry person yesterday. We were talking about the state of digital and traditional marketing in South Africa. During that entire conversation I felt that we were on different planets, as though our point of departure was entirely different. I concluded that I must be  communicating badly and when I thought about it I realized a reason.

The marketing, adverting and for that matter digital industry often think of digital as a medium. That your job is to have a smart idea that you push onto the customer and you use the media they use because then they will see it. This allows traditional ad agencies to think that because they have a digital or interactive section they are in the game. That digital is a channel. This is where the thinking is flawed.

Marketing needs to change because the way people find things out, how they learn, how they connect and so how ideas spread has changed. Its a fundamental behavioural change.

People are still people and brands are still brands, but neither behave the way they once did.

If you use new channels in the same way that you used old channels then the new channels wont work, they wont just work because they are digital You can rethink the way you use the traditional channels – so that they do work.

The divide is not between digital and traditional, or new media and old or anything like that. The divide is between those who cant understand the changing consumers and those who can. Its not a debate between media types its a debate about how ideas spread.

(2010) The year the penny drops?

The traditional marketing industry is based on two key assumptions. Consumers are ignorant and believe what they are told. Without this advertising can’t work nearly, not nearly, as well. Yet we have seen internationally that both those assumptions have proven to be false. 2010 could well be the year the penny drops, but probably not completely.

The assumption was once true: consumers were ignorant – they got their information from the company, from salesmen from advertising. Customers also used to believe what they were told; they trusted advertising – business controlled the brand message.

Not only does research around the world show that trust in advertising has declined but we also know that through the Internet and by their own connections, customers have access to an unbelievable mountain of information, opinions and comments. Just these facts have changed marketing forever. It’s with this backdrop that I make my predictions for 2010.

1. Someone will notice that, in spite of conventional wisdom, South Africans are connected. I mean, more than 30% of us access social sites on our cellphones alone on a daily basis. Everyone has a phone, even at the lower levels of society, with the majority capable of connecting to the Internet. But they won’t know how to use this information.

2. Marketers will be the first to cotton on. They will be influenced by their international contacts and will finally realise that the excuses of “but the majority of South Africans don’t use the Internet” and that we just don’t have the bandwidth are exactly that: excuses. With the new undersea cables coming into South Africa and Africa, bandwidth as a problem will soon be a thing of the past.

3. Local advertising agencies will be leaning back, secure in their misunderstandings but becoming slowly unsettled, as they listen to their international colleagues talking about the international media bloodbath and the need to rush to digital. They will see their international associates buy digital agencies – or even start a division of their own. BUT they won’t be the core of the business.

4. Agencies will still see digital and online as a media channel and start integrating into them more and more, not realising that the key characteristic of the Internet is that it’s a social creation. It’s about people connecting, not about the technology, or even the sites themselves.

5. Internationally, the lead will be taken by thought leaders – who realise that social media is not separate from the individual’s total life experience – making sure that digital eventually becomes the centre of the brand connection, not an adjunct.

6. From a technology point of view, manufacturers will be accelerating their efforts to make sure that connection to the Internet is ubiquitous and cheap. At the high end, Apple’s iPhone is already carrying more web data than any other mobile device; but there are netbooks, tablets, the Android phone and the soon-to-be announced Apple iSlate all making sure that, more and more, the web experience is accessible and separate from the technology.

7. The way people are finding stuff on the Internet is changing; this may start having an effect on traditional digital marketing. The filter that most users will place on getting the data they want will be their friends. SEO optimisation techniques will be under huge pressure from new search algorithms and as “friend” filters and real-time search guide web users.

8. There will be a lot of flapping in media circles as traditional media morphs. The resistance movement led by the News Corp relics will continue to resist and will become increasingly irrelevant. Media entrepreneurs led by the former journalist will reinvent the way the news is spread and the financial models related to that.

9. With every major change in society, new players will emerge, new approaches will take form and the cards in the pack will be reshuffled. I believe that we will see the first major signs of that in South Africa in 2010.

Marketing will change because consumers have changed. Consumers are no longer ignorant, whether they are 25 or 52 and living in Diepsloot or Dainfern; they have unprecedented access to information, they are buying online and are part of massive electronic networks.

Maybe the penny will drop, maybe it won’t. Then next year’s predictions will be to guess how big the splash will be as the dinosaurs fall into the marketing tar pit and their new competitors, more nimble, like mammals, create a new marketing ecosystem.

This post first appeared in Bizcommunity trends report.

Picture by The invizible on flickr

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Who is fit to lead your brand?

Its a question worth asking and the subject of my chat on the Internet economy on Friday, January 15, 2010.

Brand stewardship/ custodianship has traditionally been a space that has been claimed by the advertising agency, althjough we are seldom in a conversation in digital circles that we don’t hear the view that the “agencies just don’t get it”  so if they dont who does. Are the digital agencies ready to lead the brand?

My fellow “The Beancast” panel member Ana Adejelic wrote about this in Advertising Age and was ridiculed by both agency and digital groups. In her view digital are in exploratory mode and ad agencies focused on exploiting a tried and tested approach, in essence this means digital will shoot the lights out but generally cant be trusted with the whole brand, whereas the ad agency are so locked replicating a “safe” formula that they have forgotten whats good for the brand.

Traditional agencies and marketers are stuck in a marketing model which is hopelessly out of date, it is based on the idea that homogeneous groups of consumers exist which are called target markets, and that loyalty can be built in these groups by repeatedly interrupting them with brand messages until they listen and when they do they will believe what they see and read.

Digital agencies are often built around the concept of search engine marketing and the techniques of SEO. They drive the “direct marketing” concepts of measurability and conversions, turning interaction into sales.

Is either of them right?

The Internet has been alive for years with the view that Advertising is dead, and more and more we are hearing the view that SEO is dead. In the words of Mark Twain in both cases “The report of my death has been grossly exaggerated” although in both these cases there is a whole lot of truth tied up in those reports.

Lets propose a different set of views:

• The Internet is essentially a social creation.
• The Internet is not another marketing medium as little as a discussion around the braai (BBQ) is a marketing medium.
• The internet is not only about analytics and conversions – about OBSERVATION, it needs also to about a UNDERSTANDING of how people behave.
• The real strength of the Internet is that it connects people.
• Brands are created by the experience that customers have.
• Because of the network of connections ideas (good and bad) can spread faster than ever was possible before.
• There is too much information around and customers have too little time.
• People don’t believe advertising, they are starting to not even search in the way they did. They ask their friends. (Real time search)
• If it’s important,information will find me.
• The power in the transaction has shifted, brands are no longer the only source of information.

These thoughts fundamentally change the way we think about brands, branding and marketing.

New marketing is essentially understanding that the game has changed, that the connection created by the internet, however it is accessed, by computer or mobile phone has fundamentally changed the way that society operates in a way that will never be rolled back. Because brands no longer have control of the information that customers can access. Brands will be built in new and different ways. They will use all the traditional tools but in a totally different way. Brands will be built by experiences and interactions.

Modern marketing was only invented in the 60s to understand the use of the most important communications tools of the era. The character of the new tools are fundamentally different. Although paradoxically when we read the early ad men it seems they got it.

Marketing has always been about making stuff and creating experiences that people want, making it available to them and getting them to talk about it. Branding in the final analysis is what people believe about stuff, what they talk about.

Ad agencies don’t get it and will never get it because the agency model and the way they work does not fit the social interaction model; agencies were invented to solve a different problem and to use one way communications channels. The new boys, digital agencies will battle as the Internet becomes more and more a way to connect ideas and people and less like a catalogue, a searchable database and so the role of the search engine changes dramatically.

Brands are built around storytelling, there is a legend that surrounds every brand, that story was being told by brands about themselves, now the story is being told by customers, about their experiences. Customers who have the ability to connect to anyone, anywhere, now have the capacity to share and collaborate on a scale never before thought possible, to share and spread ideas and stories around the world almost instantaneously.

Although the fundamentals of marketing have not changed, because customers have the approach also needs to. Brands are still important and marketing now becomes more than just a box on the organogram, it becomes the entire business as seen from the point of view of the customer who don’t care where they interact with the brand as its all part of the same experience, an experience they tell their friends about.

The story that becomes the brand.

I see a totally new type of agency, one that understands the new customer that will guide its clients through the process of building the customers total experience and of engagement. An agency that has a fundamental understanding of how people buy, of all the communications channels and how to use them not to attempt to overpower customers into brand loyalty but assist them to spread the idea. The idea that is the brand.

This is part of the vision behind PiKE | The New Marketing Agency

Listen to what we spoke about Podcast Link Here

Are brands one thing and products another?

There was for me an interesting discussion on Twitter this morning @gennefer made a comment that RT @davetrott Brand is always emotional (right brain). Product is rational (left brain).”

That is just not correct and I responded to her.

The reason why I persisted with the discussion is that it such a fundamental but broadly held misconception which needs to be addressed and it gave me an opportunity to do so:

• You cannot separate a brand from the products that support it and I use the broad definition of products here that include services.

• Brands are according to Seth Godin “A brand is the set of expectations, memories, stories and relationships that, taken together, account for a consumer’s decision to choose one product or service over another.” The definition works for me and rather that face @gennefer’s  criticism of drawing on the academic foundations of marketing knowledge I shall not quote from a text book.
  

Underlying assumptions such as hers is the belief that you can build a brand independently from a product. This is seriously OLD SCHOOL thinking it is steeped in the advertising myth that you can manipulate customers to believe whatever it is that you are telling them.

Brands are the total set of experiences. They include both judgments of the performance of the product as well as the feelings associated with them. These feelings come from every touch point.

In this NEW world we have to understand that the days of thinking that we can separate the belief and feelings the customer has of the product from the product itself are naive.

We also have to understand that what our customers tell their friends is part of the brand.

There is a wonderful old advertising saying that goes “there is no better way to kill a bad product than good advertising” This is even more so today because people tell their friends.

By the way I concede that @gennefer and I may have got lost in the limitations of 140 character conversations, but this served as a spur for a blog post so I took it. ( and the conversation did continue after the screen shot used here)

Online stores still need to give service.

Is service important for an online store?

Zappos think so, Amazon think so but Kalahari.net don’t. Unfortunately it is the massive difference in service levels I have concurrently received from Zappos and Kalahari that has brought this home to me.

The Zappos story is in a previous post. suffice it to say that I sent the CEO a request for a book (his office is in USA) on a Thursday afternoon, by the following Tuesday first thing I had the book and had had personal and inspiring contact with four Zappos people.

The Kalahari.net story:

• December 3 – order two books from Kalahari.net
• December 16 – books arrive at Kalahari.net order is completed, money leaves credit card.
• December 18 – parcel completes long journey from where ever its packed to the courier. ready for 24hr delivery (although 48hrs of the 24hrs already expired.)
• December 22 call Kalahari  – long distance land line number (not toll free) hang up after 12 minutes, repeat 3 times leave message on system, send email from site no response.
• Finally get through to Kalahari reception, who put me through to agent, says that he will follow up and ensure delivery, admits that they are inundated with calls and just cant handle them
• Just before close of business (4:45pm December 22) contact Kalahari as no one has resolved query. Speak to new call center agent, she calls me back and guarantees delivery by end of today.
• December 22 @ 7:30pm – still no delivery.

Zappos understands that customer service is a culture. To be successful every person in the company has to live it. Its not something you can pass over to a junior call center agent.

• When a parcel takes longer to get down the hall between packaging and dispatch than it takes to get from the USA to SA that’s not living it.
• When a parcel takes from 18/12 to 22/12 to not yet arrive that’s not living it.
• To have a call center running only on long distance office hour phone rates (no shared call, no toll free) and forcing the customer into an expensive queue that’s not living it.
• To have an understaffed call center, with a desperate agent who says he has at least 50 calls waiting thats not living it.

When Amazon.com paid $1.2 Billion for Zappos they did it for the culture, for the service  attitude of the entire  company. Kalahari.net clearly don’t have the attitude so Amazon are not going to buy them but it also leaves the market wide open for an opposing online store in South Africa, maybe  loot.co.za and possibly even exclusive books do you think that they could learn?

Maybe its just a dream, maybe I should just forget dealing with the local incompetence and stay with Amazon.com till further notice.

Photo credit Martin Heigan from Flickr under a CC license.

UPDATE: The parcel arrived via FEDEx at 20:20 – but delivered by an under equipped driver whom I had to talk in for 10 minutes by cell phone, he didn’t have a GPS nor a map and had been driving around furiously hoping to chance onto the street address.

FURTHER UPDATE: Kalahari.net have a presence on twitter but they aren’t listening – see a screenshot from my tweetdeck. Ok I know people must take holidays but this is the busy time and they need to be able to react in fact its fundamental to new marketing that you do.

FURTHER UPDATE: My second order placed on December 12, one of the books has been removed and the order canceled on December 23, out of stock. Obvious comment: That took a while & there is no other supplier?

Amazon has it in stock Crush it

@kalaharinet has contacted me.

Final comment: Said enough about this – Kalahari.net – thinks are really not well with you guys – management issue not a support staff issue.

OK then another final comment: So the second parcel was dispatched 2 working days ago. Not arrived yet.

I created a col on tweetdeck to follow @kalaharinet – only complaints (except @jenty who won a prize.)

Runaway Viral in Jozi

Some weeks back I reported on a viral campaign which had gone wild. Gary Rom Hairdressing opened a store in Melrose Arch in Johannesburg and sent out a invitation to around twenty of their clients.

Sent out by email the invitation asked their clients to pass on to 10 of their friends and to claim a free treatment.

The take up was beyond any one’s expectations and responses were suddenly streaming in at an alarming rate. In fact so much so that they crashed the system.

I spoke to Mike Herbert the General Manager of Gary Rom Hairdressing about what he learned from the campaign. I could tell that he was under huge pressure from the client base some who thought it was a scam. They had had to close the promotion a few days after launch.

It wasn’t it was just an amazingly successful campaign that worked thousands of times better than anyone expected and worked right here in Johannesburg, South Africa.

Please watch Mike Herbert talking about what happened and  the lessons learned:

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Zappos walks the talk

If you had to ask my students to name a company that they think I particularly admire they would unhesitatingly say Zappos, the online shoe store recently bought by Amazon for $1.2 Billion.

Well I have just had my first experience with them and I am even more stoked.

On Thursday last week I listened to a talk given at LeWeb which was being live streamed by Ustream. Tony Hsiesh the CEO of Zappos.com  was talking about thier secret weapon, company culture. Its worth clicking on the link or here and listening to him, I promise. Toward the end of the talk he offered to send a copy of the Zappos Culture Book to anyone who wanted it.

So I sent him a mail. A short while later I got a mail to give me a link to the slides and to say that they would soon send me a copy of the book. The email was from one of Tony Hsiesh’s team, Stephanie, who introduced herself like this:

Thank you for contacting Tony! He reads every email he receives and asked me to respond on his behalf so you could receive a timely response.  Tony receives over 2,000 emails each day, and I am part of a small team that assists in answering them.  He would have responded directly, but he doesn’t have the hands necessary to type up 2,000 responses at the same time. We’re currently working on replacing Tony’s arms with spider legs, so look for more responses from Tony in the future!

Today is Tuesday, and this is South Africa, well this morning a real printed book of about 350 pages arrived and in it are a whole bunch of little comments from Zappos staff and people associated with Zappos about what Zappos means to them.

Just getting it to me at that speed is impressive enough. So I sent a mail back to the “spider -man” team answering Tony’s mails and tweeted to @zappos to thank him. Interstingly enough @Zappos was on of the first 20 people whom I followed on twitter.

So within a short while I get a reply from @Zappos_service “@walterpike Cool! Look for Christine B. and my silly entry about PBJ’s ” and sure enough on page 43 is Christine B’s take on the Zappos culture – so I respond and she comes back with “@walterpike I’ve made some pretty amazing friends working here… and some pretty amazing sandwiches.”

Then I get a mail in response to mine; “Thanks for taking interest in our company. I hope you enjoy the culture book. Each employee had the opportunity to write what culture means to them. If you get a chance to check out my entry, it’s on page #70 under “Jess B.”

And sure enough I find it (see the pic above) so I respond to her and soon Jess comes back to me with “I’m so flattered! We really do try our very best to provide exception service. Thanks for the mention on Twitter. If you have any questions for the case study please let me know, I’ll do my best to answer them. Happy holidays =)”

If I was a fan before I am even more now.

• There was no reason to get me the book from the USA  in 2 working days. That is just amazing, especially since it didn’t cost me a cent.
• Zappos doesn’t even operate here, so why would they care about me.
• The  mails I got were personal and real, from people empowered to interact with me.
• Both Jess and Christine are genuinely proud that they are part of Zappos, why would they want to share their thoughts in that way and to engage with me if they weren’t.
• I have to compare with another experience I have had in the the  same 2 days with Cell C (the mobile phone company) to whom I have sent an invoice for wasting an entire afternoon of my time trying to get them to stop billing me for a contract already canceled and also an online book store who have already taken since December 3 to not yet dispatch a parcel to me.

I hope that  the folks at Zappos don’t mind me sharing this with you, but I am really impressed and I am reading the culture book with real appreciation, and I can tell you Mr Bezos you would have got Zappos at a bargain at twice the price.

UPDATE: Jon from Zappos, in a comment on this post, invites anyone who also wants a copy of the book to email him.

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  Walter Pike is the founder and leader of
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  He is also the founder and Director of the Digital Marketing Academy and was the Head of Faculty: Marketing and Advertising at the AAA School of Advertising in Johannesburg, South Africa.
  
  
  
  

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