The new digital landscape and modern consumers are dramatically different

The new “digital landscape” is dramatically different from the environment into which TV, print, and radio ads were launched no more than two decades ago. Even today’s Web 2.0 environment is different than the Web 1.0 environment of a decade ago. As the Internet led to the more facile accumulation and dissemination of information and as social networks brought even mainstream consumers online, the power of consumers has increased significantly relative to advertisers. For example, they will search for information when they want it and ignore all other forms of interruption media pushed at them. They will look for independent and objective reviews of products or services and distrust brand messages put out by advertisers touting their own virtues. And they will rely on the actions of the community to help them filter and prioritize the best “stuff” from the ocean of available content.

Audience fragmentation caused by the proliferation of niche cable channels (e.g. the fly fishing channel) and abundant online video channels means that “mass media” is not so “mass” any more — there are no longer massive audiences tuned into a single television program at the same time. “Media” is now two-way or many-to-many — i.e. consumers tend to talk amongst themselves. But many advertisers and their agencies still rely heavily on one-way tactics - pushing a carefully crafted message out at target customers.

Globalization, information proliferation, and socialization have irreversibly changed industries

Other macro forces are also re-shaping the industries, in particular the advertising, marketing, and communications industries.

Globalization means that, for example, coding can be outsourced to India, graphic design to Australia, or television production to Asia, all at a fraction of the cost of “in-house” resources. The wide availability of tools like online photo editing tools (picnic.com), video editing sites (motionbox.com), and even high-end 3D and special effects software (Blender.org) — all of which are open source and free — fuel the perception that such digital capabilities and services should be lower cost, if not free. These trends mean that agencies whose revenues were derived from these services are facing constant downward pricing pressure.

The proliferation of information has also irreversibly changed the perceptions, behaviors, and habits of consumers. The abundance of information online conditions users to search for information and form their own opinions through research. They also expect more detailed information than can be typically delivered through TV, print, or radio ads — e.g. they want to see the product brochure online, do price comparison shopping across dozens of retailers, and read peer and expert reviews before buying. And they will do the above on their own time (e.g. planning a family cruise vacation at 1 am when the kids are asleep), which destroys the concept of targeting using day-part or show content.

The socialization of consumers online means that the conversations that used to happen among a few people around the watercooler are now happening online for all to see. The collective complaints or praises of products and services now become inputs to many other users doing research online before their next purchase. Furthermore not only is the spread of information much faster online, but the impact could also be dramatically larger —  for example, 1) by the end of opening weekend, hundreds of user reviews of a movie can immediately determine its fate — a mega hit or a “straight-to-DVD” movie, and 2) the action of a single person who found an unsavory clause in AT&T’s Wireless’ “fine print” and posted it online caused such a community uproar that AT&T made a public statement that it would be removed.

Traditional agencies rely on old business models (and other challenges for traditional agencies)

Despite the new landscape conditions of no more mass media and consumers doing their own research online, many advertisers are still doing traditional advertising. And many of their agencies are still relying on old business models (agency of record) and being paid for production. Creative ideas are still being given away for free during the pitch process; if the pitch is won the agency then gets to bill against production of assets. But freely available tools or production and abundant lower cost producers are causing clients to question costs.

Other challenges plague traditional agencies. All clients want to “go digital;” but digital is seen to be a “bolt on” capability among big agencies and smaller agencies are perceived to be more digitally savvy. Further, “clients find it hard to know how much digital stuff costs,” says Peter Cowie, Managing Partner of Oyster Catchers, a search consultancy based in London. “Many clients are using in house capability to save costs and retain control.” Cowie continues, “many clients are deeply insecure about digital marketing” partly because of its novelty, but also, practically because of the wide array of new disciplines, including for example, social networking, mobile, gaming, search, analytics, user interface, Flash, AJAX, e-commerce, online ad networks and media buying, etc.

The new digital agency plays the role of a strategic advisor and subject matter expert

So what is the role an agency can and should play in this new landscape? We believe, the role of a strategic advisor to calm clients’ insecurities and ensure a cogent and smooth incorporation of digital. Smaller agencies that grew up in digital may not have the expertise in traditional disciplines nor a global footprint and enough staff to handle large global clients. However, large traditional agencies, with a few key changes to business model, organizational structure, and internal processes will be able to guide clients through the shift towards digital, by changing the marketing mix and ensuring that all channels are integrated, working together, and reinforcing to each other.

These changes may include 1) managing a network of independent specialists (who serve on SWAT teams for client projects) instead of in-house FTEs, to account for the wide variety of new skills and disciplines 2) shifting away from the business model of being paid for production to being paid for managing a network of geographically disperse low-cost providers, and 3) providing thought leadership as subject matter expert in digital disciplines, strategies, and tactics.

Recently there have been a lot of articles regarding the decline in the popularity of CPM and Banner (read brand advertising) on the web. I think its obvious by now that the scarcity model that drove impression based pricing in TV, Radio, and Print doesn’t work on the web now because its a two-way channel that anyone can contribute to.
Surely this will continue to be unsettling for many publishers that are used to this model, but their inventory is still of value and usable with performance pricing, so there shouldn’t be too much panic on the train at this point. Advertising has finally evolved to what marketers have always sought (at least on the web): Pay for performance.

There is nothing wrong with this evolution for online media and there is a lot of money to be made (look at GOOG). If publishers can learn to live with the new rules of performance pricing and become experts in inventory management, they will learn lessons from this evolution in pricing and potentially apply it to older media channels.

If publishers are willing to evolve and admit that these pricing changes will dramatically change the model, then there can be a smooth transition. However, if they continue to try to foist old models on new media, then its going to be a multi-stop local with pain in every car.

Here are a few of those link referenced above:

Silicon Alley Insider: Online Display Ads Will Fall Sharply In 2009

Life2Beta: The slow death of CPM on the web

ClicketyClack: Thoughts On The Display Ad Market And Monetization

What do you all think?

I have the great privilege of moderating a panel at >play Conference 2008 at the Haas School of Business at UC Berkeley on November 15th. The panel is called “Brands that Break Through” and it is about how large brands are using the social media and web 2.0 landscape to engage with their consumers. Panelists include execs from Universal McCann, Del Monte Foods, OMD, Ruder Finn, Gingerworks and Goodby, Silverstein & Partners. In a nutshell, we’ve got some amazing heavy-hitters here.

Part of this gig is preparing questions for the guests that will stimulate a lively and informed discussion. I have some that I have been working on, but I’m curious to know if you have thoughts - what would YOU ask them if you had them all in a room? As part of the marketing team here at MediaTrust, I’m always looking for new ways to connect with brands and customers that may be interested in what we do. I know that many of you are in that same boat. So, let’s hear your thoughts!

Meet up with the New York City Advaliant Affiliate Team on Friday, October 3rd from 5-7 PM at Rodeo Bar. You bring the good conversation and enthusiasm and we’ll buy the drinks and some appetizers. Not an Affiliate yet? Sign up now, then come chat with us over a cocktail.

Rodeo Bar is located at 375 Third Ave. @ 27th St. in Midtown.

RSVP@advaliant.com to insure a seat upstairs on the 2nd floor.

Slide:ology - Quite possibly the best book ever written on presentation design.

I met Nancy Duarte many years ago. We were both working for agencies that supported Apple. I was at Web Associates as a strategic account manager, and Nancy was at the company that has her name above the door - Duarte Design. We took a few meetings together, explored ways that our companies could work together, and even had dinner with her family at their home. More recently I stopped by her office to chat about emerging media, and her new way of building teams and planning the future of her business. She had mentioned that she wanted to be sure that everything was ready before her agency was moved into a more visible market role. Kinda cryptic, right?

About a year or so later Al Gore’s An Inconvenient Truth began to make the world stop and take notice about the issue of Global Warming. We also noticed the work of Duarte Design for the first time on a global scale. Nancy’s team worked with Al Gore on the presentation deck he used, the one that won him a couple of Academy Awards as well as The Nobel Prize. And with that, the world of presentation design changed overnight.

And then Nancy wrote the book. Slide:ology is without a doubt the best book written about presentation design. In fact, it is so much more than that. Sure, she talks about the “tools” and the “techniques” as do many authors in this space. She also talks about the passion, and the art and the truth and all those other things that make a presentation great! Her book examines not only the “hows”, but the “whys” through a series of case studies and first hand knowledge from working with some of the most compelling presenters in the world.

As I mentioned in my video piece - just go buy it. If you read this blog, at some point in your career you will be required to make a presentation deck. This book will show you how to do it well. As for me, I am a month or so away from beginning to re-examine how we present at MediaTrust and I can’t wait to tear our slide deck apart and utilize the things I have learned from Slide:ology.

Here are the links I promised - Click here to go to the blog post about Nancy’s work with Guy Kawasaki, and click here to purchase the book from Amazon. Enjoy the read. Trust me, you will become excited about presentations again, especially your own.

Today was the first day of the New Media Expo and it’s been incredibly productive. We interviewed the Founder of the New Media Expo, Tim Bourquin, yesterday. Then today we shot interviews with Gary Vaynerchuk of Wine Library TV, Michael Geoghagen of the Disneyland Podcast, and Suzanne Norman of Emma. We also talked with some interesting companies including mDialog and Podcast Tuneup.

It will take us some time after the Expo to edit and produce the final interviews, but be sure to look for them here on Relevantly Speaking in the coming weeks.

We’re here in Vegas at New Media Expo and having a great time. So far, we’ve interviewed Tim Bourquin, Founder of the Expo and Internet phenom Gary Vaynerchuk of Wine Library TV. Our photographer, Manuel Sanvictores, snapped this photo of our interview.

If you’re in Vegas, please reach out to either @groovemonkey or @americancliche to say hi.

It occurred to me the other day that many of you may not understand the relationship of how MediaTrust, RS, and Advaliant go together. I thought I’d take a minute to introduce the family and tell you about our new little brother, the Advaliant Blog.

MediaTrust is the parent company of Relevantly Speaking. This blog/podcast started out as an experiment to see if we could create a legitimate voice in the digital marketing space. Our mission was that we would write and talk about nearly anything relating to doing business in a changing digital world. With the steady growth of our audience each month, you’re telling us that we’ve succeeded!

Advaliant is our pay-for-performance platform. If you’re interested in affiliate marketing - either as an advertiser or an affiliate, then Advaliant is the place for you to be. Over the next couple months we’ll be redesigning that website, but for now, feel free to hang out in our comfortable well-worn home.

The newest member of our family is the Advaliant Blog. Before we launched last Friday, a few of you had asked me what the difference would be between that new blog and RS. I think its fairly obvious now - Advaliant is all about pay-for-performance marketing and RS is the kitchen sink of digital business.

What can I expect on the Advaliant Blog? Well, I’m glad you asked! First, we’ll be writing about trends and happenings we see going on in the affiliate industry (as you see here from Mike Carney). Second, we want the blog to be a place where newbies can come and take the intimidation out of getting started with affiliate marketing. So, to that end, we’ll be offering tips and tricks. You can see Richard Okolo’s excellent advice HERE. Finally, since it is OUR blog, we’ll be pimping our own stuff. For example, did you know we have an insane series of contests going on? For August we’re blowing our several prize packages of the Ultimate Gaming System!

In a nutshell, Advaliant’s here to make money. That is the name of the game in the pay-for-performance space. We think we can help you make money too. Along the way we’ll show you how to do it efficiently and ethically - ’cause that’s how we roll.

Stop in and say hello!

Sprint is my current mobile carrier in Santa Barbara California. For much of my area their coverage is pretty decent. In my enclave, the coverage is awful. The neighborhood I live is in an established one, about a mile from the ocean and the tourist areas, city college, and downtown. With the greater-Santa Barbara population somewhere in the range of 200,000 people, I should have adequate coverage. I don’t.

About six weeks ago I started working more out of my home office. Because my wife and I’s mobile phones are the only household phones, it meant more conference calls, more phone meetings with my boss in New York and with my partner in crime, Christopher, in Grover Beach. Suffice to say, the service is awful. Calls are dropped. Some never ring through to my phone. Others are unintelligible because of the “Luke, you know I’m your father” Darth Vadar voice.

So, I called Sprint. Oh wait, the service is so bad that the call kept dropping. Wait, maybe if I hold onto a sheet of tinfoil in my backyard with my right arm raised at 45 degrees above my head I can get a signal…nope. Ok, I’ll email them. I get the automated “Thank you for contacting Sprint Online. Customer E-Care has received your email and will respond to your request within 24 hours.” Ok, fair enough. I wait two days and never receive a response. I write again and get the same automated response. 25 hours later I get an email asking me when this problem started, was it just on my phone, and was it just at my home or everywhere? I responded to the questions and waited another 22 hours for a response. This time “Harold” called me. He asked me the same questions the previous person had asked me in email and said he would have to consult their technical team and call me back in 15 minutes. I waited for his call and after two hours received a voicemail stating that he couldn’t get through to me (no signal) and that I should call their 800 number for support. Again, because I can’t make a decent call from my house, I email again explaining the problem. Wash. Rinse. Repeat. This goes on and on for 10 days and 15 emails.

I finally reached my breaking point and asked to be let out of my contract. I have a year and half left on a service plan that I can’t use 99% of the time. They have conveniently ignored that request and have continued to promise me tech support and resolution of my issue within 24 hours.

We all have horror stories with companies we deal with everyday. So why do I bring this one up? I think Sprint is missing a customer relations opportunity and one for positive branding. Here’s what I think Sprint has done badly in this situation:

1. They impose a deadline on themselves of getting back to you within 24 hours. In the flurry of emails that have been sent, they’ve only honored that timeframe twice. The rest of the time I had to send follow-up emails asking when I could expect to receive support. Don’t set an arbitrary goal that you can’t reach. It makes your service look bad and it gives customers a false sense of hope.

2. After a customer has exchanged 15 emails with you, offer a direct line to a supervisor instead of the general service pool. I’ve already spent 3 or 4 hours of my time answering questions. Don’t make me waste another hour sitting on hold. This is especially true in my case where I may have to drive to a park or somewhere that I can find a signal to make the call. Respect your customers’ time.

3. Assign a service rep to a complaint and let them own it. If that’s not possible, at least keep better records of the interaction thus far. Every time I emailed I was assigned a new case number and a new rep that asked me the same questions. This meant I had to respond to them and then wait 24 hours (or more) for someone to get back to me. We’re now 11 days into this mess and I’m not a single step closer than I was after the first email.

4. When a customer is in limbo for a long period of time with unusable service, offer them a refund or significant credit. When I asked for something like that I was given 40 bonus minutes. Seriously? I pay for 2000 minutes a month, unlimited data, text messaging, and my service is dead in the water and you offer me 40 bonus minutes? I was beyond insulted.

5. No carrier wants to let customers out of a contract, but if you can’t resolve a customer’s service issues, let them out of their contract. I realize in the fine print they have every legal right to make you pay a termination fee, but that’s not ethical (especially since I paid nearly full retail price for my phone, not the subsidized promo rate). Plus, there are really only four major carriers in the U.S. With number portability there is a good chance that you may see this customer sign up with you in the future. Don’t make a bad situation worse by holding them hostage and insuring that they’ll never do business with you again.

How will this all turn out? I have no idea. I do know that the economy is in a downturn and businesses are hurting everywhere. You need every advantage you can get to position your brand in the best possible light. Handling a situation so poorly so that it ends up on a blog is certainly not helping Sprint in the eyes of potential consumers.

In the end, I believe that if companies just did the right thing and acted in good faith, the rest would probably take care of itself. Sprint, do the right thing.

The subject of good design has been popping up a lot recently both in our business and out on the web.

In 2007 Apple went from 0% to 27% market share in the smart phone market via the introduction of well designed hardware and intuitive software that the average person can access and utilize. Further, through both software and hardware design differentiation Apple maintains a gross margin of 33.6% versus Dell’s GM of 18.5% .

A nice visual analogy of Apple’s design approach versus Microsoft’s is depicted below:

An even more interesting stat comes from a January Reuters article:

In data provided to the New York Times, Google disclosed that it received more traffic from iPhones this Christmas than from any other mobile device, despite owning only 2 percent of the smart-phone market and less than 1 percent of the overall mobile-phone market. That means that while fewer people own iPhones, those who do possess the device use it to access the Internet much more than those with competing handsets.

Apple is essentially a design company. Their hedgehog principle is good design. They innovate and command market share by making technology simple to use by everyone. The simple fact that both of my parents are making active use of the web, web services and multiple (and synced) devices illustrates that with good design, you can teach an old dog new tricks (sorry Mom and Dad!).

As the world becomes more technically complex, design is commanding a more important role in our lives. Tech has been notoriously bad at making its amazing advances and productivity tools accessible by a mass audience. This is changing rapidly. The devices of yesterday are becoming real products before they come to market by necessity…the market is demanding it. William Davidow wrote a great book about the difference between devices and well designed products years ago…and its a worthy read for any marketer, product manager, engineer or CEO.

From a January article in the Journal:

With all the fuss, PC makers have begun hiring more people with degrees in industrial design and related disciplines — and listening to their opinions. “We found people designing from the outside in, not the inside out,” says Mooly Eden, vice president and general manager of Intel’s mobile systems group. “This was the revolution.”

So as we go about marketing our customers campaigns and offers via our Advaliant performance marketing platform, we are seeing the fruits of this ‘differentiation by design’ ethos.

Our customers come to us with a simple goal in mind: acquiring new customers. Many of them have their own creative that they wish to use and some of it is very well designed and the user experience is well thought out. Generally, we have seen these campaigns perform better than the lesser designed ones that make their way onto the platform.

Recently, we have been taking some of the offers that don’t convert well into our design studio and creating an alternative design direction and user experience (with client approval, of course). We then split-test these offers versus the original. Nine times out of ten the re-design performs better. The reason: we have taken the time and effort to make sure each campaign is designed to more simply communicate the benefit to the customer.

Not surprisingly, our expertise in the area of helping our advertisers generate more appealing campaigns has kept their loyalty and engagement with our platform. Further, because the campaigns perform better, our affiliates and publishers are happier because better designed campaigns help improve their bottom lines.

While direct response performance marketing can be a complex process, the same principals in the use of design to differentiate has enabled us to deliver our business constituents more value from our platform.

Got any other examples of good design making a “direct to bottom line” difference? Please share below!