BOOK EXCERPT: Hard selling on the Net

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After taking a pretty healthy swipe at the ad business in "The End of Marketing As We Know It," why devote an entire chapter in this new book to advertising? After all, companies and agencies are now rethinking and retooling their relationships. Not a week goes by without Procter & Gamble or another giant announcing yet another new way of judging the performance or computing the compensation of their agencies.

Agencies are under tremendous pressure to become a more serious partner in reaching a client's sales and marketing goals. Under the thumb of unhappy clients, the agencies are hiring consultants of their own and executives from nontraditional agency backgrounds to help change the dialogue in the industry.

So things are looking up, right? Wrong. "The End of Marketing As We Know It" was published before the beginning of e-marketing as we've come to know it. And e-marketing has taken advertising to new heights -- of stupidity. As we work with startup Internet companies at Z Group, we find that things are worse in the world of advertising than we thought they were even a year or two ago.

Creativity defined as finding creative ways to communicate a highly relevant and differentiated sales message is on the decline. Creativity defined as finding obscure ways to tell jokes on network TV at a cost of hundreds of thousands of dollars a minute is on the rise. . . .

So far, advertising created in the e-commerce space just hasn't taken the industry seriously. It's had its tongue in its cheek: "This is just a joke between us cool people, huh?" Advertising in e-marketing has taken the same cavalier attitude toward closing the sale that many CFOs have taken toward turning a profit. "Yeah, sure . . . someday." This advertising generally assaults convention and insults anybody who goes to work in a suit.

It brings to mind the supposed sequel to Apple's famous "1984" Super Bowl ad. After doing the best commercial in the history of advertising, Apple did one of the worst. The ad, called "Lemmings," ran during the 1985 Super Bowl. Research had been done after the 1984 ad that showed that thousands and thousands of PC users (at that time "PC" meant the IBM/Microsoft DOS-based personal computers, the dominant format) had been caught up in the Apple revolution, a lot of them motivated by that commercial. There was only one obstacle between those PC users and Apple: They simply felt they weren't really invited in.

Apple's previous advertising had developed user imagery that showed it to be the property of people who wore casual flannel shirts and jeans to work years before Casual Fridays. It was the property of people who worked in lofts, while most people were still in office buildings. It was the property of the young and restless. The rest of us, the poor jerks in business suits (remember, this was 1985) and serious shoes, just didn't feel we were welcome there, much as we wanted to be.

All Apple had to do was lower this obstacle and reach out and invite the PC users in. With this information in hand, the agency developed Apple's highly anticipated next act at the Super Bowl. "Lemmings" showed IBM types (according to the agency), businessmen and businesswomen wearing dark suits and carrying dark briefcases, walking off a cliff, somehow or other following IBM over the precipice."Lemmings" slammed the door on those very people who wanted only to be invited in and all but stopped this market insurgent's incursion into the IBM franchise.

At one point, Scott almost convinced Steve Jobs to run "Compliments of Apple Computer" on a white card during the Super Bowl, but was wrestled to the ground by the agency [Chiat/Day, Playa del Rey, Calif.]. Remarkably, it was the very same agency that only one year before had not only made history, but, maybe more rarely in the ad business, actually made something happen in the marketplace.

Think about the brilliance of Burger King's "flame-broiling vs. frying" campaign against McDonald's. This had the people in Oak Brook running for cover. Fortunately for them, Burger King seems to lose its way every year or two and departs this solid marketing ground for something more creative and more ephemeral -- and a lot less effective.

Most of the advertising for Internet companies is aimed at the early adopter market, the techies who dominated Internet usage five years ago. So it's aiming behind the true nature of the market today. It's like a duck hunter shooting behind the bird that's flying away: Most often, it's a miss. And in e-marketing, it's got to be all hits all the time. There's no time for the big miss. Not many companies will get the second or third or fourth try at the market that Apple has had. As we mentioned before, F. Scott Fitzgerald said in America "there are no second acts," and we think maybe he was predicting life on the Internet.

Advertising has to do what the product does -- it has to perform. Below is a typical briefing we give an ad agency. It defines the job an ad must do. And it's a tough job.

* The ad has to create awareness for the brand, not just for the ad.

* The ad has to define the product. What's it for? If it's a new idea, what's it like?

* The ad has to define why the consumer should care about the product.

* The ad has to define the rational and emotional benefits of the product.

* The ad must help define the user, usage, product and associative imagery of the product.

Good tactical marketing programs are firing on all cylinders. The next time you see an ad or promotion or PR release, ask yourself: Is it doing all that? Is it doing any of that (beyond the awareness the company gets for pasting its name up in public)? Is it doing any of that in a way that's truly arresting and involving? If it is, give it your own personal award. It's very unusual these days.

The Chinese had it right more than 2,000 years ago when they said, "Tell them and they will forget. Show them and they will remember. Involve them and they will understand."

The Internet businesses we work with at Z Group and Core Strategy Group consider the Web very serious business. Yes, we see a lot of fresh, young faces. Plenty of Tevas. Their offices are often filled with toys and games. In fact, those offices look a little more like dormitories than offices. But they're dead serious about the business at hand. They have built their successes on a foundation of business fundamentals. These are ambitious people with a focus on wide success: They don't see the Net as the exclusive frat house of young people. They see it the way AOL sees itself -- as an appliance that will be as ubiquitous as, but much more useful than, the telephone. They see this as the way business and communications will be conducted by most Americans in the very near future.

They envision Internet users as people who are mature and sensible -- more mature and sensible than the current means of measuring success in Web marketing. Currently, the only measure is an eyeball count -- determined by how many people click onto your site. But how many are just passing by? How many are learning important marketing information about your brand? How many are moving closer to purchase decisions? Those are the important measures.

Eyeball counting became the key Web measurement because the measuring companies assumed the Web was going to be a traditional advertising medium, like matchbook covers or magazine pages. Early Web business plans assumed that advertising revenue would be a key element of profits. They predicted torrents of money. They got a trickle. The ratings agencies on the Net like to measure eyeballs because it's the easiest thing to measure -- not because it's the most important measure of the effect of the site.

Ad agencies love to measure reach and hate to be held accountable for sales. But reach is way short of results. Ad agencies also love to measure awareness, because even low awareness assumes they must be on the air or in the magazine -- meaning they're getting paid to be judged, even if judged poorly. Bad awareness results just end up in more advertising and more commissions. But awareness isn't results; awareness doesn't even get you halfway there.

Measuring visits alone is a poor way to understand the power of Web marketing or the value of various Web businesses, because they are about interaction and involvement more than sight or sound. It's just like awareness is a poor measure of the effectiveness of e-marketing. That's why we looked at purchase intent in the study of Super Bowl ads [discussed earlier in the book].

Indeed, our clients in the Newspaper Association of America are heartened by a key aspect of the pervasive effects of the Internet: the resurgence of language over graphics and symbolism in communications. There's a parallel resurgence in reading to get information, reversing the trend of simply watching and listening to information on TV. The Internet isn't a "talking lamp," as TV has been called. On the Net, the user is in an active conversation, the dynamics of which are constantly changing. The user has to be active, clicking and typing, to keep the conversation going. The Net is closer to direct advertising than other forms. Indeed, it's helping to revive direct advertising in print.

But the Net is still closer and more personal in its relationships to the user. Tallying unique visits isn't enough: In more and more of the market information we see, there's a widening gap between site visits and commercial activity. That's a bad sign for building brandwidth. As e-commerce develops, sales or click-throughs to sales will be a much better measure of the Net's effect. That's as it should be. Traffic is good, but it doesn't guarantee commerce anymore than driving past a McDonald's guarantees buying a Big Mac. The speed of the Net also demands speed in developing relevance and hastens the perishability of the relevance you develop. You need to refresh it over and over again.

Better ways of measuring the results of noncommercial sites and the effect of advertising will be developed. We're big fans of Seth Godin, the innovative Net marketer, and his concept of "permission marketing." This is e-marketing that understands the nature of the medium and the relationship between the Web service and the consumer. It seeks to take that relationship far beyond awareness. Why judge a site on the basis of who saw it, rather than on what it did to who saw it?

Web users come in every size and shape. Who's buying all that stuff on eBay.com? It's grandmothers, uncles, farmers, city folk, husbands and wives.

It's everybody. And the appeal has to be for all of them, but developed one at a time, personally. The great advantage is that you don't depend on discovery while driving around the neighborhood, just clicking around the Net -- everybody can and does play. This is a general population getting more general all the time as Net penetration grows. These are the same folks, by the way, who are buying the shares that support the e-business revolution.

Why is it that much advertising for Internet companies depicts the user as uni-dimensionally cool, young, and hip? It seems that the "liberation of creativity" in advertising has consistently been accompanied by the closing of advertising minds to the realities of the marketplace.

In the late 1970s, the Coca-Cola Co. was in deep trouble, and McCann-Erickson brought in a very avant-garde creative group to help develop new thinking on the account. Coca-Cola and its agency were busy making love to the hearts and minds of America and the world, and consumers told researchers they loved the brand. One little problem: They weren't buying it. They weren't translating their affection into transaction. The agency's solution was to bring in "new creative blood." These creative people had done breakthrough work in TV advertising, and Coca-Cola anxiously awaited their concepts. At the time, Coke advertising was typified by warm and tender "Happy Valley" situations. Kids on a farm. Mom and Pop and Gramps and Sis and Bobby.

When the creative team presented their work it was shocking: It was the same old Mom and Pop and Gramps and Sis and Bobby.

"What's this?" we asked.

"It's Coke advertising," they answered.

For Coke, they had decided, you do Coke advertising. We wanted new, but got refried beans. They assumed this is what people expect of Coke advertising, particularly people at the Coca-Cola Co.

Today ad people undoubtedly feel the same way about Net advertising -- this is what you do; the irreverent, edgy and hip. The true liberation of creativity on the Net will be seen in advertising that builds on the fundamentals the way the best sites and services have done. That means advertising that does the basics, and then some.

As the competitive crowd continues to grow, the e-entrepreneurs will recognize the need for marketing messages that are highly relevant to consumers and clearly differentiated from those of competitors. They're going to look for ways to make sure consumers know exactly who they are, where they fit into their lives, and what makes them better than anybody else in the marketplace. In other words, they'll be looking for the basics in every tactical application of their marketing messages.

They're going to learn to build brandwidth. The hard sell will hit the Net -- indeed, if you look at the land grab sweepstakes at Iwon.com, it's already hit. Hard sell is the opposite of lazy marketing. It doesn't just work hard; it's also hard to do. It rolls its sleeves up and works up a sweat. It's no different in the world of clicks than in the world of bricks and mortar. The job just keeps getting tougher. When "The End of Marketing As We Know It" was published, it was available on Amazon.com, of course. But within weeks, it was also available on Books.com, KingBooks.com, Borders.com, BarnesandNoble.com, FatBrain.com, Powells.com, Booksamillion.com, ComputerLib-rary.com and Booksnow.com. Half of them we hadn't even heard of before.

Amazon.com's space has gotten very, very crowded. And as Amazon continues to expand what it sells into more and more categories, its brandwidth will be harder to define in its original category. By the time this new book has been on the shelves (shelves??) for a few weeks, there will be 20 more booksellers in the market. Prices won't be the innovation -- everybody will be forced to meet the lowest prices. New "see you"s and "raise you"s will have to be developed in the book business, and they'll have to be communicated in new ways.

It's the same or will be the same in every category of e-business. It's more crowded than a Hong Kong slum. There will be more and more similarity in the products offered, the pricing and the positioning of these companies. It's a natural herding tendency. Barriers to entry are low and getting lower all the time. Right now you can hop over most of them.

In that gathering crowd, how are you going to distinguish your business? If it's going to be on the basis of price, you'd better be ready to hit the bottom like you dove off a 3-meter diving board into an empty pool. On sites like PriceScan.com, consumers can check the prices in your category instantly. On sites like Deja.com, they can see all the options in a category rated side by side. Why should a consumer go anywhere but to the lowest priced competitor? And if you keep telling them price is important, that's exactly where they'll go (marketing is education, after all).

The answer to that question will be provided by e-marketing -- and only the best of it. Advertising will have to do a hell of a job. And it won't be easy. It won't be the most fun you can have with your clothes on anymore. It's business. It's about selling stuff and making money.

About time, we say.

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