Being Peter Kim

Argenti on Integration

Session with Dave Senay, CEO of Fleishman-Hillard and Paul Argenti from Tuck.  Lots of questions today about who's best positioned to drive integrated marketing communications.  Every agency wants to be in the position when in fact, it's the marketer that must be the leader.  Not a lot of teeth - most of it was a sales pitch, but there were some good examples.

But look at the challenges of marketing communications.  Going back in time - confidence in business has declined significantly since 1968 due to oil/gas crisis yet companies profiting big time, activism, political scandal.  Ads like this didn't help.

What's needed today is "strategic communication," defined as: communication that is completely consistent with the firm’s overall strategy and that enhances the strategic positioning of the corporation.  [really?]

Why is this necessary?  35 - 80% of corporate value is driven by intangibles; brand is becoming more important than plant, property, and equipment.

Some examples from firms that have measured the impact of "strategic communication":

• P&G.  Measured impact of PR vs. other marketing linked to brand sales volume.  Used an internal ROI analysis tool called PR Evaluate.  Project sponsored by procurement department.  Reviewed 18 month period for 6 brands.  Incorporated info on cost, scope, target audience, geography.  PR provides a higher ROI than any other marketing tool in use. 
• United Technologies Corporation.  Measured impact of external comm. on financial performance.  External communication contributes approx 27% to total market value.  5.7% of stock price change attributable to external communications activities.  Big part of new $20 million ad campaign.
• Southwest Airlines.  Measured impact of media relations on stock price.  3.5% of stock price movement on any given week attributable to media relations.  Dollar impact up to $687 million on annual basis.  Certain themes have a bigger impact, but cumulative effect builds over 2 to 3 months (i.e. momentum).

McKinsey & Company on Profiting From Proliferation

At Mplanet 2006, McKinsey's Tom French and David Court gave back-to-back presentations on the idea of "profiting from proliferation."  McKinsey has rallied around the theme and has written consistently on the theme in the McKinsey Quarterly.

In a nutshell, proliferation has changed the marketing game as consumers have a multitude of media options, product variants, and interaction channels to choose from.  Currently, most companies try to get ahead of the game by contributing to proliferation, striving for more GRPs/TRPs, page views, and rolling out product line extensions (e.g. 31 flavors of toothpaste).  It won't work.

Instead, marketers need to step back and make strategic investments where proliferation creates opportunity.  For example, the most obvious space today would be social computing.  McKinsey suggests looking at media from a "quality" perspective to determine the true cost of connecting with customers.  In one masked client example, they found that the true cost to reach 1,000 unique target consumers was:

• Print: 90 – 100
• Brand web site: 100 – 150
• TV: 250 – 350
• End of aisle store display: 510 – 550
• Customer relationship mgmt:  700 – 750
• In store demos: 930 – 980
• Internet ad: 1,000 – 1,200
• Bonus packs (addt product for free): 4,000 – 4,500
• Coupons in store: 10,000 - 12,000

This approach is what I cover in the third part of Reinventing the Marketing Organization:  shifting funds from media to technology in order to build out the customer relationship infrastructure.

P&G's Connect + Develop: A New Model For Innovation

Procter & Gamble's Larry Huston, VP Innovation, spoke about the firm's efforts to reinvent product design and development.

Q:  How do you move beyond the silos of a 9,000 person R&D organization while driving US$5 billion in growth annually?
A:  Simple.  You create a networked innovation model.

P&G faced a number of issues in 2000:  50% reduction in market capitalization, stalled top line growth, innovation success rate of 35%, only 10% of in-market ideas from outside the company.

To resolve this do-or-die situation, the firm put three innovation mandates into place:  growth (create US$5 billion in annual growth); do more with less (desired innovation budgets were higher than sales and profit); and be more external to overcome the internally-oriented culture (tap into a global network of 1.5 million high quality and available scientists).

Guiding principle:  "if you chase everything, you'll find nothing."  So here's P&G's strategy:

• Ready to go:  applications in products, devices, packages, and game changing technology
• Target adjacent opportunities:  extend brand equity elements into new spaces
• Identify top 10 needs:  determine for each business and integrate finding solutions into the strategy process.  "We believe there is a solution for all our top technology needs."
• Look across domains to find disruption.  Toys + Personal Care.  Autos + Makeup.  Military + Hard Surface Care.

These strategies drove implementation tactics:

• Built external innovation networks.  Over 3 million contacts with a physical hub and node structure.
• Established the P&G technology entrepreneur network.  Refocused global internal staff to help facilitate innovation.
• Leverage suppliers’ innovation assets. Don’t just have them take orders, tell them what you’re working on so they can supply your business strategically.
• Created E-R&D Networks.  Yet2.  Alibaba.  Yourencore. Innocentive.

Here's how to get started.

1. Vision. Leverage the world to drive innovation in marketing and commercialization. Ultimately, 50% of marketing ideas and capability will be insourced via shared risk/reward.
2. Identify consumer needs that will drive your business. Capture holistic consumer experience (mind, body, soul, task). Identify top ten needs – experience maps lead to discovery.
3. Focus on the 7 touchpoints. Consumer surrounded by: Awareness. Browse or trial. Purchase. Usage. Remembering. Repurchase. Advocacy. Build asset maps around these.
4. Develop your marketing innovation asset network. Where will the next big idea come from? Develop an information ecosystem across touchpoints (awareness, trial, purchase, usage, remembering, repurchase, advocacy).

The results:  Over past 4 years, P&G has seen share price double, free cash flow double, profit double, R&D productivity increase 60%, and innovation success rate top 75%.  Pretty convincing.

AMA's Winning Strategies For Success

Dennis Dunlap, CEO of the AMA gave this morning's Mplanet 2006 opening speech.  The heart of the message focused on five "Winning Strategies For Success:"

1. Start a fire, then carry the torch. Profitable growth challenge. Innovation drives organic growth. Take lead don’t follow. Be a builder.
2. Wear the customer’s shoes, create a path for them. It’s how you gain credibility and enhance value. It’s how you drive success. Creating the customer path.
3. Measure with precision and prove your mettle. CEOs expect it. Marketers must deliver on it. It’s hard but achievable.
4. Run a sprint AND a marathon. An inescapable reality – financial performance. Master dual agenda – dashboard with ST metrics and LT brand building. Optimize spending based on customer impact.
5. Know who you are and create who you want to be. Today’s marketing organizations are broken. Build around customer. Secure right skills and competencies. Rationalize value chain. Make IT your partner.

The fifth strategy in particular draws heavily on Forrester's research into Reinventing the Marketing Organization (and was cited many times).  I'll be going deep into the topic during my spotlight session on Friday at 10:45 am.

Live blogging Mplanet 2006

I'm in Orlando for the American Marketing Association's Mplanet 2006  conference.  There's a great lineup of main tent speakers and spotlight sessions and two of us from Forrester are here.  Our CMO/CSO Brian Kardon will be speaking today on Social Computing.  I'll be presenting tomorrow on Reinventing the Marketing Organization.

If you weren't able to make it, there are a some great alternatives to keep track of what's going on:

• The AMA's Mplanet 2006 blog
• Pictures on Flickr
• AMA live internet radio
• Individuals who are blogging here, like me and Ann Handley - among many others

Looking forward to sharing insights from here with you.

Pew: Future Of The Internet II

Hey - did you catch this report from Pew?  It's called The Future Of The Internet II and was released in late September, but was just recently brought to my attention.  The research inquired as to "how technology might evolve" and "the impact of this evolution."

Here are some of the thoughts I shared that were published in the report:

• Scenario:  A global, low-cost network thrives.  I disagree:  "Profit motives will impede data flow.  Although interconnectivity will be much higher than ever imagined, networks will conform to the public utility model with stakeholders in generation, transmission, and distribution. Companies playing in each piece of the game will enact roadblocks to collect what they see as their fair share of tariff revenue."

• Scenario:  The internet opens worldwide access to success.  I tentatively agree:  "I think this is feasible, but not in the timeframe. Government regulation will slow the pace of this change as political constituencies fight to keep revenue sources local."

• Scenario:  Some Luddites/refuseniks will commit terror acts…  I agree: "WTO-type protests grow in scale and scope, driven by the increasing economic stratification in society. Some fringe groups or even cults emerge that isolate themselves from society, using virtual private networks."  Unfortunately, this is probably already happening.

If you have some time, download the report (it's free) and let me know what you think!

links for 2006-11-28

• BrandTracker launch: Brandweek + Vocus
  Brandweek and Vocus launch brand monitoring service. Brandweek rolls up (eventually) to VNU. Nielsen Buzzmetrics sits down another branch of the VNU org chart...
  (tags: brandmonitoring)
• Brandweek and Vocus - Press Release
  The official spin.
  (tags: brandmonitoring)

Loic Le Meur - A day in the life of a [super-]blogger

Loic Le Meur spoke during the final session of the Forrester Consumer Forum EMEA 2006.  His presentation was humbly titled, "The day of a blogger."

LOL!  If Loic's life as a blogger is representative, then Davos would be a bunch of ordinary people sitting around chatting about the weather [is it already?].  I prefer to call Loic's discussion "A day in the life of a super-blogger."

Le Meur is EVP/MD of Six Apart Europe.  His presentation style is very engaging and entertaining - the audience was clearly hanging on every word from the stage.  Some insight on what it's like being Loic Le Meur:

• in: 100 emails from blog (not spam) – including corporate pitches, 100 comments, learnings, 2 requests to speak, 2 journalists
• out: 3 or 4 posts, 3 to 5 comments, 1 video podcast, 1 speech/paper/TV, 2 interviews
• why?  My ego (downplayed greatly) -  My brain’s memory assistant -  Pleasure to share (even if 100 people hate what I write, there may still be one who thinks it’s interesting) - Learn from the others - Collective intelligence -  Get background on anything/everybody - Self-promotion -  Business opportunities that come to you - Incredible opportunities (Davos, TV, press…) - Could be revenue (but I am not pushing it - approx. 3,000 euro/month) - International network - High level networking - Ability to do amazing projects in a short period of time

Le Meur's recommendations for the audience on how to approach bloggers:

• Read what they say!
• Identify the influencers and sort them (by influence, number of links, audience by expertise)
• Treat them as journalists

And conversely, how to NOT approach bloggers:

• lies
• fake blogging
• fake comments
• comments spam
• press releases in standard form
• ask for positive reviews
• no response to criticism
• no follow-up

But being successful means having to "unlearn marketing."

Traditional: imagine a product; market survey; test market; production; heavy marketing; success or failure

New:  share; create a community; understand what the users want, get feedback; launch ‘beta’; launch the product

Some glimpses into the future:  la Fraise, WoW, the Venice Project, SL, GooTube, Vox.

Overloaded with Vanity URLs?

Do you get the feeling that vanity URLs are everywhere?  I'm seeing at least two or three a day, maybe more.  According to Verisign, over 105 million domain names were registered at the end of 2Q06, a 27% increase over the past year.

But I have a problem with vanity URLs...I usually can't remember the addresses.  Vanity URLs are supposed to be clever and creatively relevant ways to drive site traffic - for people with good memories.  For example, while traveling between the US, UK and Ireland last week, I saw new executions for the HSBC local campaign - brilliant.  However, every time I got online and wanted to check out the full campaign, all I could remember was that HSBC did them, but not the URL.  (So finally I snapped a pic before my flight back to Boston and being tormented by trying to remember an address for seven hours.)

According to recent Forrester research, more consumers report visiting sites after seeing an address in something they can take with them - like on a product package or in a print ad.  Those "takeaway" media have about +20% effectiveness over outdoor and radio - more "atmosphere" media.  And for those of us who are forgetful, the cameraphone helps archive images and bridge the gap!

What do you think - do vanity URLs work for you?  [both as a consumer and for driving marketing ROI!]

P.S. I created the short Wikipedia article on vanity URLs in about 5 minutes early on Sunday morning - your help to expand the entry would be great!

links for 2006-11-22

• Web-Page Clocks and Other 'Widgets' Anchor New Internet Strategy - WSJ.com
  More on widgets - Paramount, Time, Reebok, Microsoft
  (tags: socialcomputing widgets)

Forrester's Consumer Forum EMEA - Reinventing The Marketing Organization

I spoke on Monday afternoon at Forrester's Consumer Forum EMEA on Reinventing The Marketing Organization.  Guess what?  Different geography, same questions.  I've posted answers to the Q&A on the event blog, cross-posting here.

Thanks to all who attended the session on Monday. In response to the questions from my session:

"What steps should you take to convince your company that an organizational change is needed?"

- Find out how many departments focus on 'the customer.'  Then figure out who's coordinating efforts so that everyone has the same vision of your customer groups.  This will give you a roadmap for the gaps that exist in your current organization and how far you need to go to drive real customer-centricity.  Bridging the gaps = the way to get started.

"The Forum content today has focused on social media in the consumer context.  What about B2B?"

- Customer-centricity is as important for B2B as B2C.  In B2B, this happens on two levels.  The first means focusing on your customers - the buyers of your products or services.  Ultimately, people make procurement decisions, not processes or departments.  The second means helping your customers better understand their consumers.  As your customers move to a CCMO to better reach their consumers, it will make your path to customer-centricity even clearer.  [BTW my colleague Laura Ramos will be extending the Reinventing the Marketing Organization idea into the B2B space.]

"Do you have examples of Customer-Centric Marketing Organizations?"

- Yes; look at the published examples of Best Buy, Starwood Hotels, and Procter & Gamble.  Other companies that have implemented elements of the CCMO are Fidelity Investments and The Gap.

"How do you centre around customers when you have many brands in different categories with different needs and benefits?"

- I think the CCMO is critical in this type of product-centric organization.  Focusing on customers will result in persona-driven groups that align around common lifestyle solutions.  This means that some brands may need to be pruned from a large portfolio, while others are added to reinforce the cohort value proposition.

"How do you apply the CCMO in practice?  What are the 1st steps to take to move to this org model?"

- The CCMO means changes must be implemented in structure, culture, technology infrastructure and partnerships/alliances.  The first step to take is convincing your CEO to make the leap - creating a charter to support the transformation.  This charter is supported by input from other function heads, including IT, finance, and HR, among others.

"If I'm making profits and my customers are happy, why should I take your approach into account?"

- Product- and channel-based organizations work - in the short-term. Once consumer preferences change, companies respond by reorganizing internally to address new requirements.  So profit and happy customers are typically a short-term proposition.  Long-term?  Moving to a CCMO means customers transition from one group to another as needs change, or break off the relationship once their needs are misaligned with your business strategy.  The result is good profit and growth.

For more information, check out the report or this post.

Forrester's Consumer Forum EMEA - Integrating Social Media

We're heading into the afternoon track sessions of Day 1 at the Forrester Consumer Marketing Forum EMEA - Integrating Social Media.  The sessions from this morning have been well-received and Michele Bouquet from our Amsterdam office is taking a different approach to live-blogging the event.  She's taking the unanswered audience Q&A cards and following up with speakers to post answers to the blog.  I'd say this is a manifestation of the agility concept brought up by David Armano.

Who's that on the left?  It's me, of course.  Actually, it's the avatar I created as part of MTV Flux, a social network started in the UK, with an emphasis on mobile and video.  After hearing Angel Gambino's speech this morning, I was inspired to join the community.

BTW I think MTVe needs some more "ethnic" avatar options...

links for 2006-11-19

• Marketers Wend Widgets Into Interactive Tactics
  Widgets going mainstream - brands cited include Target, Symantec, Purina, Acura, Jimmy Dean, and Johnnie Walker.
  (tags: socialcomputing widgets)

Sunrise to sunset in 6 hours

A funny thing happened on the way to London yesterday.  I'm over here for Forrester's Consumer Forum EMEA.

I've traveled to Europe a lot over the past five years, but always via red-eye (and usually to Frankfurt!).  BA has a flight that departs in the morning and arrives in the evening - which means that you go from sunrise to sunset in about six hours.  Practically speaking, I assume it's for making connections to Dubai and Bombay.

Kind of like living in Stockholm during the winter, I suppose.  If you lived in a metal tube, that is.

Keep an eye out for Flickr pics as we proceed.

Business lessons from F1

A couple of articles were published this week focusing on the lessons that companies can glean from Formula 1 racing.  The WSJ reported on how F1 has improved one hospital's processes and Time reported on the use of F1's decision analysis software in other industries.  With the precision involved in the sport, this isn't too surprising - but what's cool is the application of process and technology to other disciplines.  If you're not familiar with the sport, it's much different than a faster, non-US version of NASCAR...probably most akin to the difference between football [i.e. soccer] and basketball.

In case you were wondering, there used to be a Formula 2.  Not to be confused with Formula 51.

Deconstructing Borat

Marketers are deconstructing Borat the same way a college student would deconstruct Winston Smith or Bartleby.

Lessons learned so far:
- Why Borat goes where SoaP could not (Marketing Profs Daily Fix)
- How Borat's MySpace page is better than the average marketing shill (Adrants)
- Borat proves that WOM marketing really does work (Jaffe Juice)
- Borat shows that if you want success today, create something good (Lefsetz Letter)
- Borat's lesson: don't underestimate the competition (CNBC)

And I thought it was just a movie by a British guy who appears to be making fun of Kazakhstan when he's really making fun of the United States.  Why didn't Ricky Bobby get this kind of attention?

links for 2006-11-09

• DARPA challenge -- build the ultimate speech translation machine - CNN.com
  (tags: brandmonitoring)

Second Life and Manifest Destiny

Thinking through a post on Forrester's Social Media blog, I was struck by historical similarities between:

The westward expansion of the United States during the 19th century and the colonization of Second Life by marketers.

"Manifest destiny" was the term coined in the 1840's to justify the viewpoint that Americans had a self-evident right to take over the continent.  That philosophy can be updated to reflect the way marketers feel about virtual worlds two centuries later:

"And that claim is by the right of our manifest destiny to market and advertise to the whole of the virtual world which Linden Lab has given us for the development of the great experiments of social computing and driving sales entrusted to us."

Awkward but compelling, no?

UPDATE: poking around, I found this article from Wired 10/2006.  I see the concept of manifest destiny as a RL/SL issue.

links for 2006-11-08

• NameProtect launches brand monitoring service - Network World
  (tags: brandmonitoring)
• Reputation Monitoring for Corporate Internet Branding and Brand Management: iCrossing, we´re for finding.
  (tags: brandmonitoring)

Mobile blogging from Helsinki

I'm on the road this week in Helsinki - Espoo to be exact.  Check out my Flickr photostream while I moblog the trip.  Our hosts have graciously provided use of a Nokia N73 while here.

The phone integrates a Carl Zeiss 3.2 megapixel lens - which allows for some great pics.