Tag Archives: John Andrews

Change is Good

Written by John Andrews

In the business world, change brings enormous opportunities for value creation as old business models give new and more efficient ways of doing things, and unless companies are really good at managing change (or have a butt-kicking change agent, ahem IBM), they tend to get displaced.

Behold the media industry and a full on, Godzilla Tokyo style beat down change era.  Media companies are actively driving change and using piles of cash to do it.  However, it seems to me that the investments are still being deployed against the prevailing business model; you know, get a bunch of eyeballs and show them ads.  That worked well when you could control the channel but now, consumers really don’t consume media that way.  They choose the media they want, when they want it, how they want it and switch channels incessantly.

Instagram and Tumblr have huge amounts of eyeballs but neither have anything like an identifiable revenue model and it’s likely that anything resembling an ad will be roundly rejected.  Ads in the new media world aren’t really ads at all, they are content that the user WANTS to consume because it’s interesting, funny, helpful, etc. The content itself is the ad and like all content, crap tends to be ignored or worse, ridiculed. Even with accepted social platforms like Facebook, there is doubt among marketers about the advertising effectiveness.

I suppose you are looking for a point.  Here it is, ready?  There are a bunch of new media companies (one that I work for included) that have robust, growing, viable revenue models producing content-based social advertising with measurable results!  Many have business models that are focused on dislocating specific types of inefficient traditional media (big pot of money) vs. taking share from other forms of digital (smaller pot of money).  This is where marketers need help as most of their investments are STILL deployed in print and broadcast and they welcome investments that help them engage with consumers, not advertise to them.

 

The Media Insurgency Has Begun. Viva La Revolution!

Written by John Andrews

I’ve been thinking about Daniel Morgan recently.  Mr. Morgan was a warrior charged with defeating the most powerful, organized and efficient military force of his time: the British Army.  Having served in the aforementioned organization, he knew he didn’t have a chance and needed to approach the problem from a different angle.  Fortunately for all of us, he found a solution by combining technology with innovation.  Perhaps his greatest strength however, is that he realized that technology alone was just a tool that would accomplish little without a strategy to account for the paradigm of the current power structure.

Outmatched by the British war machine, Washington began to employ insurgency tactics and Morgan was a perfect man for the job.  Having assembled a rifle company and using the relatively new tech lightweight rifles with grooved barrels, he was able to employ a simple strategy to disrupt the British command and control model.  His snipers would target the Indian guides the British employed for navigation in the American frontier.  This slowed the British movements and then Morgan’s men could easily remove the officers effectively leaving the directionless soldiers helpless.  Without guidance, the overwhelming superiority of the British Army was useless.  You know the rest of the story, raise a tankard and thank Morgan.

Thanks for sticking through the two paragraph history lesson.  This is today’s media landscape: a big, well-equipped force that is being attacked on all fronts with all manner of emerging technology.  The only thing preventing a complete collapse of the industry as a whole is the lack of a thoughtful and organized strategy by the various rebels.  Traditional media, represented by the armies of print, broadcast and even “old-school” digital (the display ad) are faced with their Trenton moment (Google it).   Those armies are still marching on the reliance of massive scale but are buckling under their own supply lines.  Furthermore, the incentives to change are often hard for industries to realize as core “cash cows” still generate gobs of revenue and margin.

In the prevailing model, media is still largely controlled by the access providers.  As content providers (the part that matters) gain access directly to consumers, this model will, and is, collapsing.  There is of course resistance to change on the incumbent side but consumers are moving on.  They are consuming social content at a rate not seen in the history of the media world.  This is mainly due to the fact that since Gutenberg, they haven’t actually been able to choose or control their media world.  Simply put, media connection is now available to almost every human on the planet thanks to a host of connected devices from smartphones to TV’s.  The best part is the content is provided by other humans connected to the same nodes.

The skirmishes that are happening today will become full battlefields in the very near future as the economics of the existing models, much like the British command units, collapase under the tactical reality of the shift in consumer behavior.

User generated content marketing is on the march and will not be denied.

Influencers versus Inserts: Is the Writing on the Wall for Print in 2013?

Written by Ted Rubin

The co-founder and CEO of Collective Bias, John Andrews, recently told Marketing Daily that there are changes in the wind regarding shopper marketing and the last bastion of print media advertising to still be alive and kicking, the Free-Standing Insert (FSI) .

It’s amazing to me the amount of money that’s still dumped into coupons and inserts in the retail space. According to the global market research company Kantar Media, more than $419 billion in consumer incentives were delivered via FSI coupons, with retail giants Wal-Mart and Walgreens taking top position. However, with print newspapers shutting down circulation and the shift in consumer focus from print and television to internet and social channels, I think the writing’s on the wall. It’s just that brands don’t know where to put those dollars yet, and it’s comfortable to hold onto whatever print vehicle is still giving somewhat of a return—especially during tough economic times.

Marketing folks predicted a faster shift to digital mediums, but circulars are still a stubborn holdout. John thinks the “Print Cliff” is coming, and he predicts 2013 will be the year everything starts to change.  So where will brands shift their current FSI marketing dollars?

With people spending more time online, sharing on social platforms and accessing information using mobile devices, the smart money will be in attracting influencers in the digital media space to recommend products and services. However, that requires a different mindset than the traditional “interruption advertising” mentality. Today’s consumers like interesting, contextual content, recommendations, reviews and information when they’re seeking to buy something—and they can find pages and pages of it by searching online. That’s where brands need to be. While their customers still use coupons and incentives, they’re looking for them in the digital space—not in print circulars.

That’s why Collective Bias was formed— to create New Media options that position brands in the space that’s gaining the most traction with today’s shoppers. Taking advantage of the power of the social graph (and integrating it with what we call the “Family graph”) for generating, at scale, targeted, contextual influencer content in a story telling narrative. Done in a way shoppers like to receive it… such as blog posts, how-to videos, attractive photo montages. We’re seeing brands increasingly grow returns on their marketing dollars in this format as they make a gradual shift away from print.

I don’t think it will be too long before the FSI will go the way of the dinosaur. In a few years most of them will not even be available, but digital influencer content can serve as a viable alternative. Established bloggers and other influencers concentrate on giving value, and their audiences trust them to keep providing that value. That’s where today’s consumers are going. By developing relationships with micro-media publishers, who as a group create content strategically, and shifting to “advertorial” content rather than advertising pitches, you can avoid throwing marketing dollars off the fast-approaching print cliff, and begin using those dollars more efficiently and effectively.

Inserts still have some life left, so I don’t think this is going to take place overnight. But trust me—it’s only a matter of time. Smart brands are already moving in the direction of emotionally connected content, social sharing and relationship building… and seeing dramatic results. Feel free to reach out and let us show you at Collective Bias… or read about some of them in my new book, Return on Relationship.

To Understand Social Advertising, Eat a Bologna Sandwich

Written by John Andrews

In the late 60′s, some leading biologists received anecdotal proof that life simply couldn’t exist in extreme environments (read the story by Bryan Appleyard here). They retrieved a sandwich and apple that had accidentally been dropped ten months earlier in 1500 feet of water (along with an exploration submarine named Alvin, clumsy scientists) and found the food to be perfectly preserved. They concluded, since no microbes had helped themselves to the lunch, life didn’t exist there (as everyone knew already).

It didn’t occur to them that the local life forms might not eat bologna sandwiches because they had never actually seen one before. They’ve since discovered multitudes of life in all kinds of environments, including one that can withstand 1000 times the radiation that would kill a human that happily makes its home inside nuclear reactors instantly. Conventional wisdom in the scientific community has been altered by changing the definition of what life actually is versus where it could live.

This story reminds me of today’s advertising environment. None of the leaders responsible for brand marketing and advertising have ever seen the bologna sandwich of social media consumption and have no idea how it tastes. This is not a criticism, it’s simply the reality of a media landscape experiencing a rate of change faster than anyone has ever seen before and to be successful marketers must learn to appreciate some new flavors. We have to change the form of advertising as an interruption to media consumption to perhaps actual media itself, something to be happily consumed.

Part of the challenge is that many of today’s marketing leaders cut their teeth in the dot com boom. Advertising has simply migrated from traditional media to become banner ads attached to a channel, and poof a new model was born. It worked ok while there were few producers but as everyone piled in, open rates and click-throughs went to crap and consumers built mechanisms to avoid constant messaging (who doesn’t maintain an old Yahoo or AOL email for commercial sign-ups?).

Here’s the thing, Social is not digital. It may ride on digital rails, but social media is the people who make, modify and move the content. Ad driven models simply won’t be successful long term because strangely, people don’t really like ads. We all put up with them because there was an exchange of value (or because we had little choice), but now we don’t have to. Search across not only search engines but also Twitter and Pinterest can easily help us find any content we like and the most valuable content tends to rise to the top.

To understand how consumers are using these tools, marketers must use and absorb them also. You might not find Twitter or Path or Instagram personally useful but literally tens of millions of people do. They are using them in engaging ways that have huge potential for brands, just not as a deal delivery vehicle or ad tool. Consumers have a desire to build relationships with brands they love (and even those they don’t).

For a great example follow Rod Brooks, @NW_Mktg_Guy, the CMO of Pemco Insurance. Rod actively blogs, tweets and attends social media conferences, but more importantly he is building a first-person understanding of the new opportunities presented by the ability to develop real relationships with Pemco customers and non-customer’s alike (probably a great source of growth). More importantly, he’s learning about what social means for an insurance company and how to use it to deliver value to Pemco customers.

Rod is taking a bite of the bologna sandwich; we need to all join him. Pass the Grey Poupon please.

Are FSI’s and Direct Mail the Original Spammers?

Written by John Andrews

Spam, a tasty meat product and the scourge of email inboxes everywhere. But Spam lurks in many other media channels and seems to get a pass, yet the effects are much more insidious. The waste of resources and unsustainable business practices really call into question this marketing tactic. Additionally, the continual discounting and deal promotion of brands and services is destructive to brand value as consumers discount the actual value. Consider this, have you bought a full-price pizza lately? If you answered yes, Google (enter pizza company here) coupon and save yourself five bucks.

What’s your daily trip to the daily home delivery of fresh made spam, the mailbox? I don’t know about yours, but mine is full of credit card offers (10 this month so far), coupon books, mailers and the like and I occasionally get a letter from a person I know. I long stopped receiving bills as my bank, utilities, etc., realized there is a huge cost savings to not send me paper and it’s just more convenient for me, leaving me a few extra minutes of my life each month to play Angry Birds.

Here is the real problem with physical spam. “Good” conversion rates for coupons are in the .0025% range. This means a nationally distributed coupon and an FSI (free standing insert, a.k.a. all that stuff that falls out of your newspaper) of 40 million or so yields a redemption of 100,000. Good for a brand if those customers are new users switching from a competitive brand. In fact, heavy coupon users are frequently disloyal users and why wouldn’t they be? Unless your an Apple user, who wants to pay full price?

Each week hundreds of FSI’s hit newspapers across the country resulting in a huge use of newsprint, ink, transportation, etc. But the brands are paying the freight, right? Not quite, who pays for 99.75% of these that hit landfills? You do, you pay local taxes right? But there’s more, newspaper circulation is falling faster than Colts tickets without Peyton playing. Maybe you’ve heard, the US Post Office is now losing over $7 billion a year as the prices it charges its customers does not cover the expenses incurred.

Again, you and I will be the ultimate funding source for this shortfall, including the hidden costs of disposal.

Sam Walton had a big idea, simply take all the gimmicks (his word) out of the retailing process and buy the products that Walmart carries for an everyday low cost (EDLC).

Pass that along to consumers with an everyday low price (EDLP) that eschews High/Low pricing (a great deal on Corn Flakes one week supported by excess margin on other basket items). This means no Triple Coupons, Green Stamps, Reward Cards or anything else that requires the consumer to do part of the work. Simply come into the store, buy your basket of items and on the whole, pay the lowest price.

Considering the average wage in the country is around $17 an hour, time spent sorting, clipping and handling coupons found in FSI’s is often a break even prospect at best. It’s time to stop the spam and make the best products possible and sell them at a fair price every day. May the best products and services win!

Q&A: How to drive measurable ROI from social media NOW

Courtney Velasquez, Social Fabric Community Director, interviewed John Andrews, Collective Bias (CB) Founder, and Ted Rubin and Dave Henry of the CB Board of Advisors to understand how brands and retailers can measure social media ROI, engage in shopper listening and receive shopper feedback.

1. How can brands drive measurable ROI from social media now?

John: This is such an important question! ROI is usually addressed from a longer-term perspective, and with the immediacy of social media interactions (and exponential growth and adoption), we really do need to see measurable ROI in the shorter term.

Ted: Social media is so popular and effective as a marketing tool because it focuses on the customer experience instead of just throwing an advertisement at them and hoping the impression will stick. The key, then, to driving measurable ROI is in customers’ shopping experience. JUST by listening to what shoppers want, you can improve their shopping experience (e.g. in-stock position, proper assortment, promotion placement, etc.) and grow your sales by a measurable effect immediately. Be a socially-focused organization.

2. Shopper listening: what is it and how should brands do it?

John: Shopper listening is exactly what it sounds like, AND so much more. It is listening to what shoppers want, but it is not just a passive gathering of information…it is an interactive, two-way feedback loop with shoppers (and potential shoppers).

Ted: Effective shopper feedback includes an ongoing cycle of asking questions, listening to the answers, asking clarifying follow-up questions as necessary, and then TAKING ACTION based on the answers.

Listen carefully to shoppers’ answers regarding the following questions:

    • What are their likes, and equally importantly, their dislikes?
    • What are their expectations of your brand and products?
    • What experience are they hoping to have because of your product?
    • What would delight them enough that they would want to tell their friends?

Apply those answers by making changes to in-stock product placement, or creating new promotions tailored to shopper preferences, or even removing certain products from the shelves to make space for a different assortment that your shoppers are asking for.

3. Who benefits from shopper feedback?

Dave: Just about everyone! Shoppers definitely benefit because they get the products and customer experience they want. Brands benefit because when shoppers get what they want, they not only purchase for themselves, but tell others to purchase also.  And don’t forget your retail partners – they also benefit by becoming known as the retail shop that stocks the products (your products) that shoppers actually WANT. The retail location itself then becomes part of the positive customer shopping experience, influencing repeat sales and adding fuel to positive Word of Mouth.

4. Do shoppers really pay attention to brands via the social media channel?

Ted: Absolutely. Consumers now have “the channel of me” – their opinions now create the reality of the brand, and they are watching to see which brands are truly paying attention to them. Shoppers want to know more than just which brands are offering worthwhile promotions; they also want to know which brands are open to being influenced by shopper opinions and behaviors. Those are the brands they will purchase from.

So yes, shoppers definitely are paying attention, and brands need to show that same amount of attention back to the shoppers. How? By listening!! (see #2).

Dave: The truly fantastic thing about the power of social feedback (the full definition of that term), is that the interactions your brand has with shoppers and potential shoppers now can influence their purchase decisions IMMEDIATELY. Show them you are genuinely paying attention and you can quickly become the recipient of their buying power.

5. How much time should brands invest in “shopper feedback”?

Ted: As much as you can. I can’t stress enough the importance of this LISTENING. It benefits all parties in the marketing channel at a comparatively very low cost, and the ROI shows up quickly.
When your brand is committed to shopper feedback, you give yourself the information needed to be able to:

    • Give your shoppers exactly what they want
    • Hone your product offerings to those that shoppers WILL buy
    • Turn on a dime to innovate quickly and in a way that will keep your shoppers happily along for the ride
    • Be welcomed into the consumers’ “channel of me.”

6. Is there any long-term benefit to shopper feedback?

John, Ted, Dave: Yes!
When brands truly listen – and respond – to shoppers, those shoppers become loyal customers and then go even further to become advocates for your products and ultimately your brand.  Base your product innovations on shopper listening and show them you are supportive of influencers and shoppers will become YOUR shoppers… advocates who can’t wait to tell their friends about their experience with your product and brand, simply because you delighted them.

 

 

 

In other words, the long-term benefit is the building of powerful relationships, and the ROI there is relationship commerce, or ROR (Return on Relationship). Listening allows for action and action can be measured.

Social media can be measured easily, quickly and efficiently, but many focus on the wrong measurements. Impressions and Share of Voice are important data points but what do they really do to move your product at retail? It’s very wise to move some allocated dollars in media into social media, and at the same time, move research dollars to measure.

Shopper media not only generates content, awareness and impressions but integrates your shopper’s voice into your retail planning and execution. Imagine launching a new campaign, and 24 hours later have REAL feedback from the field as to what customers are seeing and saying! DATA leads to INSIGHTS that lead to ACTION that demands MEASUREMENT. The most effective ROI is one that makes the shopping experience better.

Remember, the success and impact of our product is not about how much we love it, but about how much our customers love it. What they love, they purchase – you can’t get much better measure of ROI than that!

 

About John Andrews

John Andrews, Collective Bias Founder/CEO, has over 14 years experience with leading brands like Sara Lee, Eastman Kodak Digital, Newell Rubbermaid, and of course Walmart, where he is perhaps best known for the creation of its award winning social media platform Elevenmoms, an industry-leading online customer advocate program.

About Dave Henry
Dave Henry, Collective Bias Board of Advisors, has over 40 years of marketing and advertising experience. He most recently served as Senior Vice President of Marketing at Winn-Dixie, where he spearheaded the successful launch of its customer reward card and played a key role in the Getting Better All the Time marketing campaign. Since entering “semi-retirement”, he serves on a number of Advisory Boards both for business and non-profit organizations.

About Ted Rubin
Ted Rubin, Collective Bias Board of Advisors, has a deep online background beginning in 1997 with Seth Godin, as CMO of e.l.f. Cosmetics, & recently as Chief Social Marketing Officer, OpenSky. Rubin became known for his active use of social media to build relationships and brand advocacy. During his time at e.l.f. he coined the term Return on Relationship (ROR) and doubled its customer base while increasing sales with a limited budget.

About Collective Bias
Collective Bias, LLC, facilitates the creation of real shopper media by connecting groups of social media influencers to the brands and retailers they use in their daily lives. Our Social Fabric™ community drives conversations on a wide variety of social media platforms in order to build consumer engagement and brand loyalty that ultimately lead to sales conversion.