Being Peter Kim

An Agency's First Step To Getting "Connected"

When queuing up this entry, I noticed that there's no category for "agency" related posts.  That's OK because Mary Beth Kemp, my colleague and co-author of The Connected Agency report, has taken the lead on a new Forrester blog called Agency Futures.  So I'm cross-posting this, there.

A lot needs to happen before agencies get Connected.  The clear first step for most shops is building digital acumen.  So I've published a new piece called "Agencies Must Build Digital Skills To Survive" - pretty much to the point, eh?

Here's a [long] excerpt:

Traditional advertising agencies -- marketing services providers that have built global brands through mass media -- need to prove their digital mettle now more than ever. Although late 90s startups like Scient, Viant, and ZEFER flamed out, firms like Critical Mass, Organic, and Avenue A|Razorfish have risen high above the dot-bomb wreckage and are well-positioned for success today.

Clients are shifting business to digital shops, and consumers have turned away from media channels that built the agency industry and toward emerging Internet media. Ad agencies must build new interactive competencies quickly in order to succeed. How? They must build digital skills with a three-tiered approach of establishing digital commitment at the executive level, retraining existing staffers, and building a pipeline of future talent.

So what's the secret to success?  Hire a chief digital officer?  Tell all your staffers to get on Facebook?  Go 2.0 with your web site?

Maybe all that and more...

P.S. Our Forrester Marketing Blog Feedback Survey needs your feedback just like that first cup of coffee Monday morning.

Setting up a home office - any advice?

I've been busy with a lot of things, haven't had much time to blog.  One of those activities has been moving into a new house - and now I have an empty home office to fill.

If you work from home - what advice can you give on setting it up well?  Your insight is appreciated.  Thanks!

Some smart money bets

I had lunch with Cue Ball Group last Friday, a Boston-based VC firm.  You may be aware that there's quite a bit of money out there sitting on the sidelines.  So I'm interested when I hear where people are placing bets and why.

Here are some of the portfolio companies we discussed:

• Miniluxe (think Starbucks meets nail salon)
• Cruxy (if MySpace had kept it real)
• Knovel (it ain't sexy but it works)
• Epic Burger (soon to open in Chi-town South Loop, organic burger joint)

And some interesting ideas they're keeping tabs on:

• 23AndMe.  For only $999 discover to whom you're genetically linked.
• radiusIM.  Think Twitter with GPS.
• Naver.  A Google-killer in action - it's the localization.

Cue Ball was founded by Tony Tjan, who founded digital strategy firm Zefer back in the dot-boom; Red Herring wrote a case study series on them.  Not sure whatever happened to the other management team members.

Notes on Luxury - Giorgio Armani keynote

I was in New York this week for a couple of events related to the Luxury Interactive conference.  This morning's keynote address was delivered by Bridget Ryan Berman, CEO of Giorgio Armani.  Her message to the audience:  "Customers are in control."  It's a mantra that most of us have bought into (well, more or less) - but it's one thing to hear from the CEO of a FMCG company and quite surprising to hear this from the CEO of one of the world's preeminent luxury brand portfolios.

Berman's draws on experience from Federated/May, Ralph Lauren, Apple, and Armani:

- Federated:  You must be on the retail selling floor.  It gives you the opportunity to speak directly to the source - an unfiltered pipeline to consumers.

- Ralph Lauren:  A brand that brings experience to life.  The intent: to evoke an emotional response to detail, e.g. Ralph designed it or has the piece in his own home.  Backbone of customer intimacy and authenticity.

- Apple:  Dedicated store space to customer activities, instead of traditional product-focused merchandising.  Lets customers experience products for themselves - empowers them, gives them control.

- Armani: Mining global customer CRM; tons of existing data that had never been used.  Enhancing the retail experience by focusing on physical space and customer/associate interaction.  Aligning brand and customer perception.

Berman says she realizes that the next generation are quickly becoming "power consumers" and has started setting up the company for future success.

A little more Mac for your PC

I'm a pretty big Firefox fan.  But today Apple announced that the Safari web browser is now available for PC's, with claims of better performance than IE, Firefox, and Opera.

Worst case scenario, PC users can pretend they're Mac users when browsing the web, just like when using iTunes.

Digital Agencies at ARF re:think

The second panel of the day at ARF's re:think conference was "The Agency of the Future" including R/GA, Avenue A|Razorfish, Nitro and Digitas.

Continuing on the one-of-these-outfits-is-not-like-the-other theme, Nick Law, Chief Creative Officer from R/GA shows up in short sleeve shirt, jeans, and swooshes in stark contrast to other panelists in standard business casual.  Interactive is the new traditional and its agency executives appear to have followed suit, so to speak.

Get it?

Followed suit?

Ok moving on, Rance Crain of Ad Age did a nice job of moderating and stirring up the pot.  He suggested an alternative title for his panel as well:  "Digital:  Just Another Silo?"  BTW, I'm guessing he's not a big fan of subservient chicken, either.

Torrence Boone of Digitas described his company as a "full service agency" with roots in direct marketing and capabilities today in integrated and digital marketing.  Which is a good thing because I'm planning a Forrester Wave on integrated agencies later this summer.  Torrance defined a big idea as a filter on what to do or what not to do.  It's built out of consumer insight, media context, and consumption patterns, along with a good dose of gut and intuition.

Steve Marrs of Nitro spoke about his company's small size and global reach.  They have three main offices, in London, New York, and Shanghai (the largest).  Shanghai as largest is intriguing (unless I heard wrong).  Steve said that his agency approaches work by separating strategy from advertising - the way it used to be.  Nitro defines a big idea in part as something that drives business results.  Note to Nitro:  a good place to start would be SEO for "nitro."

Clark Kokich of Avenue A|Razorfish described his company as a "full service interactive advertising agency."  He mentioned that he's been in the agency game for a long time and left his first stint because of a feeling that what matters to client businesses happens inside the core of their firm - untouched by agency projects.  He brought this focus back to AARF to focus on what's "crucial to the client's business."  Clark also mentioned that his agency's purpose is to drive business results, because "you can't build a brand through advertising." 

Nick Law of R/GA showed how the "Agency of the Digital Age" is helping one client - Nike - beyond advertising.  Their work on Nike+ gets deep into product as well as promotion - these being "wearable, networked computing devices."  Not much more to say, because Nick showed how R/GA is doing it.

These agencies are certainly well-positioned for the future, especially given the way consumer behavior is shifting to digital.  However, as interactive agencies compete for strategy work, they are going to run into formidable competition - traditional management consultancies.  We've been here before and last time the old guns won.  This time around...?

Putting CEO styles into context

Just musing today on some of the similarities and differences amongst some of the CEO's I've worked for.  Not sure if you'd ever see these three names put together in any other context...

• George Colony (current)
• Jochen Zeitz
• Jeff Dachis

Some things they have in common:  a drive to WIN.  An entrepreneurial spirit.  Creativity and brilliance.  Ability to make tough decisions.  Passion for the brand.

Two of those brands (PUMA and Razorfish) have been reinvented.  We're currently extending another one (Forrester) into new areas, i.e. marketing.

It's pretty easy to rally around a brand when it starts from the top.

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!

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.

What's the state of the interactive marketing organization?

I've got some thoughts.  But my colleague Shar VanBoskirk is currently fielding a survey of interactive marketers and will write a piece of research in Q4 on this topic.

To contribute your experience and receive a copy of the completed research findings (whether a Forrester client or not), follow this link:

http://www.gmi-mr.com/survey/s.phtml?sn=56456

Yahoo + [insert social network here]?

Google + MySpace

Microsoft + Facebook

Yahoo +

• Bebo?
• Classmates?
• Cyworld?
• Faceparty?
• Friendster?
• H15?
• Tagworld?
• Youtube?

Brand partnerships ala Jerry Maguire

One way to build a brand is via partnerships with others that share similar ideals.  What's interesting is when you string some brands together and see where it gets you.  Pictured at right is the JetBlue Shut-Eye Kit from bliss.  Let's actually start this chain with the in-flight coffee:

Dunkin' Donuts + JetBlue + bliss + W hotels + PUMA + MINI + Mandarina Duck = "lifestyle."

Make sense?  Let's try another one:

Nike + Apple + BMW + Intel + Skype = "performance."

Seems like we're move towards a persona-based world where brands help define Jerry Maguire-style customer segments, where our target is "holding a beverage, wearing a shoe, playing a video game, singing a song in a commercial starring her/himself."

Reinventing The Marketing Organization

Late last week, I published my biggest piece of research yet at Forrester, called "Reinventing The Marketing Organization."  I posted about it on our official marketing team blog and have been getting some great feedback.  If you're not a Forrester client, you can visit the landing page for an excerpt from the report that will give you a good idea of its content and structure.

Unfortunately this isn't PGM (i.e. Pete Generated Media), so I can't give it away for free - but if there are particular points you're interested in discussing from the summary or otherwise, feel free to comment or drop me a line!

Google Checkout vs. Paypal - $100 is the magic number

Lots of posts today about Google Checkout - best analysis by far from my colleague Charlene Li.  For a more tactical angle, by breaking out some algebra - unlike Shaq's game, which is hard to figure out - it's easy to see what this means to your bottom line vs. using Paypal.

Google Checkout is free up to 10x of your monthly Adwords spend.  Thinking realistically about a business budget, this should pretty much seal the deal, assuming that you're spending money on paid search placement.  Focus on net margin, not revenue and expense separately.

So if you don't buy AdWords (ignoring the fact that integration is the whole point) - say you're a niche seller with great organic results - what to do?

If you do under $100,000 a month, use Google.  Otherwise, solve for x in this equation:  $0.20 + 0.2x = $0.30 + 0.19x.

If your average selling price is above $100, then you should use Paypal instead.

Two likely actions:  Someone will develop a user-friendly FAQ on how to integrate implement Google Checkout with  into eBay auctions now that it's banned.  Then the Paypal fee structure will change to be more competitive.

Tags: google checkout, paypal  :: Add to del.icio.us

Google completes 3 of 4 pieces in its web office suite

Various sources report that Google will announce a web based spreadsheet application on Tuesday.  This means that they offer a free web-based version of 3 of the 4 components of the standard version of Microsoft Office:

• Spreadsheets:  Excel vs. Google's 6/6/06 app Spreadsheets
• Email:  Outlook vs. Gmail
• Word processing:  Word vs. Writely
• Presentations:  Powerpoint vs. [The Missing Link]

Given the challenges that many people have with good ppt usage, the 4th link could be grounds for a true revolution.  In the meantime, there are resources like Presentation Zen to help us make the best of what's around.

Looking forward to one hell of a product announcement tomorrow.  Get it?  6/6/06?  Anyway, at least it's not my birthday tomorrow.

Tags: google spreadsheet  :: Add to del.icio.us

Amazon.com Restaurants

Have you ever noticed restaurant listings on Amazon.com?  They aren't available from the home page or any of 32 product categories.  There isn't any mention in the press releases or investor relations.  However, you can search the site for "restaurants" and something interesting shows up - menus from local dining establishments.  Don't search for "restaurant" without the "s" - that'll give you a regular product search.

As far as I can tell, there's no affiliate revenue involved here for Amazon.  Here's the FAQ.  It looks like they're extending their business model into information delivery and not just online sales.  Prior moves, such as "search inside" were still driving to a sale.  In this case, I'd expect to see the affiliate business model evolve eventually (e.g. restaurants pay to have their menu published - they may have already), but for now there's no way of tracking if a customer calls to make a reservation as a result of viewing the menu on Amazon - same phone number (click to call would be nice here too).

I stumbled across this content - in thinking about a trip to New York later this week, I was wondering how far away I'd be from this great pasta place, Lamarca.  I remembered it was near Irving Place.  Then I checked for "lamarca" on the map.  Clicking on the first link, the restaurant's address card showed amazon.com as the source of its contact information - which was interesting.

Amazon.com may not be as sexy as Web 2.0 newcomers - but don't count out the company that revolutionized e-commerce just yet...

Tags: amazon, local search :: Add to del.icio.us

Verizon wireless - why don't you want my money?

I had a visit to marketing's Theatre of the Absurd yesterday.  Although Verizon Wireless's slogan is "we never stop working for you," apparently that does not include me.

Now that things are all good between RIM and NTP, I'm ready to make a switch from my Treo 650.  Although my "new every two" $100 credit comes up in July, I was ready to pay for a new handset now without the credit and re-sign for another two years.

After being bounced around three customer service operators, I was given an 800 number for the "early upgrade department."  In VZW terminology, this is the "continuity marketing" department.  I was told that, despite the fact that I was ready to pay $300 for a new handset and sign up for another two years (adding 18 months to my current contract), I could not do so.

me:  "do you realize I am trying to pay you $300 now and extend my contract for 18 months?"
VZW rep:  "yes, but I'm sorry, you are not allowed to upgrade at this time."

This went back and forth for a while, until the "continuity marketing" supervisor made it clear that "she was not authorized" to do anything about this and her department handles "mailing out postcards and flyers."  So...I'd need to call customer service.  I called customer service and they said..."there's nothing you can do."

me:  "don't you see I'm trying to buy something from you and you will not let me?  how is that good for your business?"
VZW rep:  "yes, I can see that but we cannot help you at this time.  I recommend you buy the handset you want from eBay and call us back to activate it."

These interactions were actually not frustrating to me, but rather amazing, as Verizon Wireless is clearly unable to serve their customers because of the roadblocks established by their own processes.  I'm currently working on research regarding the future of the marketing organization and this was a clear example of how today's marketing is broken.

So if you've read this far and are a Verizon customer, here are three things you should know that aren't readily apparent to the public and might help:

• The Consumerist has an entire Verizon thread
  
• VZW has a "three strikes" policy:  if you have three issues with your phone, you are eligible for an early upgrade at steep discount to a new model.
• VZW has a three year calling plan:  if you are willing to lock in for this long, you will get bonus minutes, among other things.

As for me - if I can wait until July, I might as well hold out until October and switch to Cingular or T-Mobile!

Tags:  verizon wireless, customer service :: Add to del.icio.us

"Poor man's first class" gets legit

This isn't surprising - in consulting, we always referred to the exit rows as "poor man's first class."  So now that Northwest is charging for the seats, the phrase is justified.  This obviously has potential to get quite out of hand - as Jackie Huba states, "...but really, what's next? Inserting quarters to keep the overhead light on?" 

The management consultants are hard at work again at the legacy carriers, first removing blankets and pillows to speed boarding and free up space - then introducing fees for crappy headsets and 7-11 quality snacks - moving into "zone boarding" that's thwarted by all of the frequent flyers who get on early anyway - disallowing families with infants to pre-board - and eliminating stand-bys.

Why can't airlines try to improve profitability by improving customer experience?  Rather than taking things away, figure out how to make things better!  Last time I flew somewhere (Delta, ATL/BOS) - I was definitely an optimized revenue mile...as a thin profit margin hurtling through the atmosphere in a metal tube.  Contrast that with JetBlue, where I've almost always had a great experience - even when a flight was delayed for mechanical for 3 hours.  B6 makes it worth your while.  And they always smile.

Tags:  northwest, exit row, jetblue

When did Google become a sieve?

Does anyone else wonder why secret stuff at Google has been leaking so much recently? 

First it was GDrive.  Then it was the 2006 financial target.  Then Google Calendar or CL2.

Inadvertent?  A result of hyper-growth and lack of controls?  Or for all you conspiracy theorists out there, a strategy to communicate bad news without having to communicate the bad news?  Alternately, is it a strategy to communicate alpha products to keep brand and stock momentum going?  Like the new beta releases that seem to last forever, this goes in the opposite direction - and techies are biting hard on every bone that GOOG throws their way.

Tags:  google, gdrive, cl2

You decide: 1 Berkshire Hathaway or 231 Google?

If you had to guess, what percentage of investors in Google right now are "smart money" (vs. dumb money)?  I'm intrigued by corporate statements that seem to be driving recent changes in GOOG share price:

• "Clearly our growth rates are slowing..."  CFO Reyes, 2/28/06:  closes down 6.8%
• "I'll leave it as an exercise to you as to whether Google means $100 billion in revenue or valuation.''  CEO Schmidt, 3/2/06:  closes up 3.2%

This isn't guidance - no EPS estimates or financial results from product lines - just talk.  Do you think smart investors heard these statements and went back to their valuation models, coming up with new targets and changing their positions?

Probably not.

What struck me was a side link on the SJC Mercury News article - a pdf of the Google "owners manual."  Clearly modeled after the Berkshire Hathaway owners manual.  But the differences between the two - diversification of BRK vs GOOG in particular - are night and day.  Their websites are both simple, yet on opposite again:  brochureware vs. one of the most powerful tools in the universe.

If you had to decide, which would you choose:  1 share of Berkshire Hathaway Class A stock or 231 shares of Google?

Disclosure:  I do not own any BRKA or hold a direct position in Google.  Don't consider anything you read here as financial advice - even if you have some dumb money burning a hole in your pocket.  This post is provided for informational purposes only and does not constitute an offer to sell or a solicitation to buy any security or other financial instrument.

Tags:  Berkshire Hathaway, Google, BRKA, GOOG

monopoly - delivered

Source:  Wikipedia

Well, this game of RBOC monopoly started on January 1, 1984 and now at&t is only two (giant) steps away from reclaiming the entire board.  But the game has changed - technology has changed the  board from analog to digital.

Great article at Wikipedia for a trip down memory lane with the carrier you grew up with (more or less - both Southern Bell and South Central Bell are missing).  As for the carrier that the next generation grows up with...maybe the death star will survive, but the right answer maybe none of the above.

Although the term "monopoly" carries a negative connotation today, it's clear that the economic natural monopolies evident in network industries are not mutually exclusive of a Laissez-faire market structure.

Tags:  at&t, bellsouth, ma bell

Starbucks and one-way brand expansion

Thinking about Starbucks recently - reminds me of a theory I have on how brand extensions can work.  It's much easier for a premium brand to extend "downscale" and retain its core/prestige than it is for a mass market brand to reposition itself as upscale.

I recalled this after reading a couple of interesting mentions about Starbucks.  The first was a post on Laura Ries's "Origin of Brands" blog, discussing the SBUX distribution of Laurie Berkner DVDs.  The other was a news article about increased presence in New England and Northeastern grocery stores.  Reminded me of their kiosks popping up in airports and highway rest areas.  Taking a quick look at their FY05 10-K, 85% of revenue was derived from company-operated retail, the core of the brand.  These business model extensions appear to be successful as the company reports consistent margin and ROE growth since 2002.

It seems pretty clear that Starbucks should be a brand to emulate when considering business model expansion; they continue to grow their "core of coolness" (own stores) while monetizing the brand through licensing and alternate retail outlets.  So why isn't anyone crying "foul" or "sell out?"  Because the moves make sense and allow them to successfully retain their premium brand while enjoying mass market distribution.

Brands RARELY succeed trying to claw their way upscale.  More on that some other time.

Tags: starbucks, stop & shop

Helio + MySpace: more light than heat

I thought this was an interesting announcement, coming so close on the heels of Mobile ESPN's launch the day after the Super Bowl.  There's been a flurry of press but I'm not seeing a lot of analysis, even from some names like Om Malik...maybe people are holding their breath until the service actually launches.

Going after new customers with these types of co-branded services makes sense.  For existing customers, the switching costs would be steep - especially if you've already invested in equipment and accessories along with a long-term service contract.  So the experience needs to be pretty enticing, right?

On the same day as the Helio/MySpace partnership announcement, the Wall Street Journal published a review of Mobile ESPN.  Some interesting facts:  IM and email are disabled; access to some sites is blocked, e.g. the competition; and the service can cost up to $224.99 a month[!].

Don't get me wrong - the Hero and Kickflip are pretty cool looking phones.  But it looks like Helio will fall short of the level of integration that Mobile ESPN has with Sanyo.  There were no quotes from MySpace in the press release - don't both parties usually want air time in partnerships like this?  I think we'll see that this is a temporary exclusive and the portal will expand to other carriers and devices.  No way News Corp will limit MySpace's over 50 million users to one type of device - the community would inevitably force expansion once users get turned on and demand a mobile interface.

Airport security programs need to understand the customer

A couple of weeks ago, I was down in Orlando for the WOMMA conference.  Great event, met lots of interesting people.

Near my gate, I noticed a kiosk designed a lot like Amex Blue.  It was setup for Clear, a service that intends to expedite travelers through airport security.  It's only operating in Orlando, but expanding to IND and SJC soon.  According to the Globe, Boston's Logan Airport will implement a similar program this summer.

So here's the deal - you pay $79.95/year and submit biometric and other info to the TSA so they can monitor you.  Currently in MCO, there isn't a separate Clear line, so you wait with everyone else, in addition to the iris and fingerprint scans.  Clear only exempts you from "additional" security screening.

I think it's a cool idea, but right now there aren't any tangible benefits for the costs.  Sounds like Logan's thinking in the right direction by putting together "premium" benefit packages - but they better be enough to overcome privacy concerns as well.  Partner with the airlines to expedite check-in.  Give me a guarantee of less than 10 minutes to clear security, even at 7 am on Monday morning.  Unless Clear offers real value, it's going bankrupt.

Tags:  airport security, clear, logan airport