Tim Newhard, Business Development Manager
Wow! Social Media sure is popular. And its use as a marketing vehicle has greatly accelerated as social media networking sites like LinkedIn, Twitter, and Facebook have been inundated with Babyboomers. In fact, the research organization Forester predicts that spending on social media marketing will soon outpace spending for email marketing (which is in some circles a form of social media marketing).
So what does it all mean?
In short, since social media marketing has come about so quickly â€“ a lot of people probably donâ€™t know how to use it. As a result, there are lots of businesses wasting time and money on a medium that is rich with data and buzz, but no clear use for the average business.
The average dialogue regarding social media probably goes like this: Gosh, everyone I know uses social media, in fact, I read in an article that the average Facebook user spends ONE HOUR a day on Facebook (true fact). I should open up a Facebook account. End Quote.
This idea has good intentions, but it lacks direction, goals, and any resemblance to a strategy.
Like any new thing, people are bound to grope around for answers while other people will claim to have all the answers in an effort to lead the groping masses to higher profitability. In an effort to help the masses, while not proclaiming to have all the answers, here are some social media tips from a real marketing strategy consulting and design firm: Continue reading
According to studies by Kalyanaram et. al., Urban et. al, and Urban et. al., forecasted market share for consumer packaged goods and prescription anti-ulcer drugs divided by the first entrant’s market share roughly equals one divided by the square root of the order of market entry.
In other words, those who aren’t first to the market have significantly less market share than the first entrant into the market/industry.
The lesson to be learned is that being first counts for a lot.
See Hanssens, D., ed. (2009). Empirical Generalizations About Marketing Impact, Marketing Science Institute. Cambridge, Mass.
In a recent article published by Mediaweek, author Denise Lee Yohn postulated that the drive toward social media and analytics by CMOs was causing marketing to lose its creativity. Lee Lohn wrote:
All this focus on social media and analytics seems to be sucking the creativity out of marketing. Time was, brands developed big ideas and delivered and communicated them in unique and creative ways. Now it seems marketers are only interested in tactics and metrics…Certainly media and communications have changed, so a big TV spot or newspaper campaign probably isnâ€™t the right approach for transformational marketing.Â But lately it seems the pursuit of breakthrough marketing creativity has taken a backseat to work on more predictable and achievable efforts.
While there is no question to Lee Lohn’s notion that creativity plays a vital role in the effectiveness of marketing, the concerning part about Lee Lohn’s article is that it positions creativity as the finality of the marketing process. Continue reading
As a follow up on our recent post about standardized marketing metrics, we explore the conversation as it progresses within the marketing community. Marketing NPV published an interesting article furthering the case for (and against) a standardized set of marketing metrics. In particular, they argue that CMOs should be spending more time asking a set of difficult, yet critical, questions about their marketing strategies and efforts then working to develop a standardized set of marketing metrics. Continue reading
The publication touts the 100 most creative business people
It is only responsible for Fast Company to publish an article about a CMO’s balancing of creativity and analytics in its most recent issue featuring the top 100 creative people in business. After all, Serfwerks has been touting the need for using data and analytics to drive the creative process (see Unbounded Creativity parts I and II) in marketing since its founding. We’ve seen too many cool and creative ideas and approaches to marketing flounder when it comes to what matters most to businessâ€”driving bottom line results. Continue reading
A recent article in the Journal of Marketing (vol. 72) by Krasnikov et. al. finds a stronger correlation between marketing capabilities and firm performance (r = .35) than those for both R&D (r = .28) and operations (r = .21). The managerial implication is that “increase in marketing capability is associated with stronger improvement in firm performance than increases in operations capability and R&D capability (Hanssens, D, ed., 2009, Empirical Generalizations about Marketing Impact, p. 3).
Check out the article: Relative Impact of Marketing on Firm Performance
About Correlation (r)
Correlation is a statistical measurement that determines the “goodness of fit” of a relationship between two variables. It does not determine cause. Correlation is measured on a scale from 1 to -1. The closer the “r” score is to 1, the more positive the correlation is between the two variables. The closer the “r” score is to -1, the more negative the correlation is between the two variables. The closer the “r” score is to zero, the less correlation exists between the two variables.
Last week, Marketing Profs published an insightful article by Banks and Nahama calling for the standardization of marketing metrics. Banks and Nahama wrote the following:
We are chagrined to see marketers still putting forth hundreds, even thousands, of disparate measures for their specialized fields, with most of them stopping short of linking to financial return.
It saps years of progress from the marketing discipline to hear marketing specialists, many at the top of their field, still make passionate arguments that it’s all about viewers or listeners or impressions or eyeballs or click-through or brand or awareness or pass-along or engagement, etc.
That trend seems only to be accelerating in the age of digital and social marketing.
These thousands of measurements may have use for daily activity, but when they attract such, well, un-standardized attention, they hurt marketing and they distract CMOs from their main tasks.
In a previous article, I explored the difference between marketing tools and marketing strategy and described Tier I marketing in detail. This post continues in that vein by exploring the next step in an organization’s marketing sophistication, what we refer to as Tier II marketing. Where organizations engaging in Tier I marketing are tactically driven, Tier II marketing is driven by strategic goals and insights. The strategy drives the tactics. The characteristics of a Tier II marketing organization include the following:
- Key Performance Indicators
- Preliminary market research
- Customer segmentation
- Positioning strategy
- Strategy drives tools
- Touch Point Integration
- Performance measurement
- Marketing mapped to sales process
Marc Kramer wrote an article for Forbes Magazine last November. The title of the article is The 10 Questions You Should Never Stop Asking. The article is based in experiences the author had while trying to captain a sinking publishing business. Here are his 10 questions:
- What is our purpose for existing?
- Who is our target market?
- Does anyone need what we are selling?
- If there is a need for what we are selling, can we be profitable?
- What are our competitors up to?
- Can we reduce expenses without harming the product?
- Do we have the right leadership? Continue reading
The future success of your business depends on your ability to perform meaningful market research. Does this come as a surprise? It shouldnâ€™t. Market research allows you to:
- Measure customer satisfaction
- Make your marketing more efficient
- Find new customers
- Develop a customer-centric product development cycle
Assuming that you are selling a useful good or service, knowing any or all of the bullet points above would be considered useful by most business people.
A study done by an Australian research group discovered that firms that had strong market research capabilities had greater sales growth, profitability, customer satisfaction, and new product success rates were firms that had significantly greater market research abilities (Vorhies, Harker, Rao 1999). Continue reading