When it was difficult to create and distribute news stories (i.e. before the advent of the PC and the internet) generally speaking a lot of thought went into the creation of an article that appeared in the major newspapers (OK I know there are glaring examples that debunk this statement but notwithstanding some journalistic crap there was a time when people spent a lot of time considering a story).....
Fast forward to the last 5 years (last 2 or 3 actually) when we had the creation of the blog post. Most often short (400 - 600 word) posts which did not always result from a lot of time spent considering what was being written..It was like a stream of consciousness (much like my blog!) that provided the writer with an ability to create and distribute something as if they were a global media empire (even if nobody actually read the post)..Still the blog post does provide interesting insights into products, people, industries and companies...They do serve a purpose that seems useful...albeit not in the ilk of the major newspaper story but value nonetheless.
Then over the last year we have been introduced to the 140 character (not word!) twitter post. Kind of like a group SMS but to VERY long (in the cash of Ashton Kutcher - 1m followers) list. I have been really interested in what wisdom people provide in 140 characters...The answer is not much..Things like....
"L.A. really hot today"
"Trying to get a cab downtown but none around"
"Check out the new photo of XXX"
"Stop press. Britney Spears got her period and used....a tampon. First woman to do so, obviously" - this is another real one...I am not making this stuff up.
"6 year old Xbox console blew up in a cloud of smoke. MSFT are sending me a brand new 360 pro for only $160 (RRP $300). Good outcome."
While I think this is all pretty BORING lots of people are both twittering (not surprising as everyone likes to pretend to be important and broadcast their thoughts--like I am doing in this blog! and I twit as well.) more amazing is that people are signing up in droves to follow people issuing 140 character pearls of wisdom like the ones above....The following of mindless banter bit I don't get....Ok if it was something like....
"cured cancer this morning. cure is at http://www.curedcanceryippee.com/"
then I can see why someone would follow this guy...or perhaps
"Guarantee that the ASX will go up 100 points tomorrow" and they were accurate day after day then again I get it but things like Ashton's latest posts today......
"If you could pick one body part to have a spare of what would it be? check this out .." Or
"it's sad that ppl don't C pirating movies off the net as stealing. its eventually going 2 reduce the quality of films"..Do these really add anything to anyone??
More importantly where next...I suspect we follow the existing trend and the next big thing will offer media savy people the ultimate short hit of cool and incisive content...Here comes the 8 character post...insightful things like
"Work?"
"Think!"
slowly giving way to
"Poo"
"Fart" etc.
So you heard it here first....
"bugger"
Tuesday, April 28, 2009
Friday, April 17, 2009
Buying books online and more......
Years ago business travellers would return from the U.S. with all sorts of new gifts/toys and clothes that were not available in Australia. You were an instant hero with your wife/daughter/son (assuming your taste is not in your bum) with purchases of items that were the latest cool thing to have.... Yet as the net started to encroach on the cosy world of monopolies and "protected" markets things started to change..
For instance there used to be a huge delay between when a movie was released to video/dvd for puchase in the US and then in Australia...Due to this delay people would happily go to any of a large number of US video and DVD online stores and buy the movies well before they were released in Australia....Over time I suspect the collective brains trust of movie distributors locally worked out that the delay (which was the product of lazy scheduling and not much else) was costing them alot of lost revenue and (drum roll please) suddenly the timing of release between US and Australia is generally short...
In other ways it seems as though some businesses don't seem to know that the internet actually works outside Austalia...Books are a case in point...For many years (like just around the time everyone was aughing at the prospect of John Howard becoming Prime Minister - come on...that boring man stuck in the 1950's...don't be ridiculous) Amazon has been selling books and CDs/Videos/DVDs online. Their service has been mature (ie well developed on the basis of user feedback etc etc) for more than 10 years and they dominate the US (and global) retail book selling world. To get an insight into what their service is like you do not have to take a flight to Seattle via LA and sneak into a store carefully disguising yourself. All you have to do is turn on your PC, open up your internet browser of choice and type in www.amazon.com. That's it. So while sitting in your pjs in your study/family room you can avail yourself of the complete service offering of Amazon...
So why, why, why is the online offering from local resellers (you know the big ones) so poor...It is not as if it is hard for these guys to see what the best in the world has to offer..I mean 1hr of viewing the amazon sight will give you a pretty decent view on how the best in the world present book selling online...Any yet the local offerings are so bad it is nearly funny.
Assuming the people at our large local book retailers understand that the internet is global (side point to these guys - you do know that there are these massive cables from Australia to the rest of the world that takes and receives internet and other data traffic?? Just want to be clear on this) then there has to be a good reason to offer such an appalling service online.
It could be that they think Australians will not like annoying features like user reviews, recommendations, inside look, lists of bestsellers from the NYT etc. Or it could be that they are following the creed of anything good in life must take effort..Therefore given buying a book online is a joy then they need to make it hard so that we appreciate the experience all the more..
Perhaps they are hoping that we find the online buying experience so bad that we are forced to get in our cars and go to the shop to buy the book (sneaky and perhaps relevant if you are a franchise network). Or it could just be that our local businesses have fallen into the same trap as many Australian businesses...Which is to compare your service offering to that offered by other domestic competitors and not compare your self to the best in the world...Consumers deserve the best offering in the world and until the internet arrived it was hard to even know what the "best in the world" looked like...Now we know and a message to the local guys goes something like this (cue Peter Finch from the movie Network with slight edits from me)...."I'm as mad as hell with your crappy local offerings and I am not going to take it anymore so I am buying from world best suppliers wherever they are!".
Hundreds of thousands of people are doing the same. Amazon ships an incredible number of books and DVDs into Australia. It's not that the Aussie consumers are not patriotic. It is just that they want to use an online store that is well designed, has compelling features and is easy to use.
Ohh...and by the way...(please no comments on my reading material)...Why is it that (insert local book retailer name whose site I just went to) offers The History of God by Karen Armstrong for $A34.95 (plus shipping) and Amazon offers it for $A15.64 (plus shipping)? Pricing disparity is something I'll come back to on another post...
For instance there used to be a huge delay between when a movie was released to video/dvd for puchase in the US and then in Australia...Due to this delay people would happily go to any of a large number of US video and DVD online stores and buy the movies well before they were released in Australia....Over time I suspect the collective brains trust of movie distributors locally worked out that the delay (which was the product of lazy scheduling and not much else) was costing them alot of lost revenue and (drum roll please) suddenly the timing of release between US and Australia is generally short...
In other ways it seems as though some businesses don't seem to know that the internet actually works outside Austalia...Books are a case in point...For many years (like just around the time everyone was aughing at the prospect of John Howard becoming Prime Minister - come on...that boring man stuck in the 1950's...don't be ridiculous) Amazon has been selling books and CDs/Videos/DVDs online. Their service has been mature (ie well developed on the basis of user feedback etc etc) for more than 10 years and they dominate the US (and global) retail book selling world. To get an insight into what their service is like you do not have to take a flight to Seattle via LA and sneak into a store carefully disguising yourself. All you have to do is turn on your PC, open up your internet browser of choice and type in www.amazon.com. That's it. So while sitting in your pjs in your study/family room you can avail yourself of the complete service offering of Amazon...
So why, why, why is the online offering from local resellers (you know the big ones) so poor...It is not as if it is hard for these guys to see what the best in the world has to offer..I mean 1hr of viewing the amazon sight will give you a pretty decent view on how the best in the world present book selling online...Any yet the local offerings are so bad it is nearly funny.
Assuming the people at our large local book retailers understand that the internet is global (side point to these guys - you do know that there are these massive cables from Australia to the rest of the world that takes and receives internet and other data traffic?? Just want to be clear on this) then there has to be a good reason to offer such an appalling service online.
It could be that they think Australians will not like annoying features like user reviews, recommendations, inside look, lists of bestsellers from the NYT etc. Or it could be that they are following the creed of anything good in life must take effort..Therefore given buying a book online is a joy then they need to make it hard so that we appreciate the experience all the more..
Perhaps they are hoping that we find the online buying experience so bad that we are forced to get in our cars and go to the shop to buy the book (sneaky and perhaps relevant if you are a franchise network). Or it could just be that our local businesses have fallen into the same trap as many Australian businesses...Which is to compare your service offering to that offered by other domestic competitors and not compare your self to the best in the world...Consumers deserve the best offering in the world and until the internet arrived it was hard to even know what the "best in the world" looked like...Now we know and a message to the local guys goes something like this (cue Peter Finch from the movie Network with slight edits from me)...."I'm as mad as hell with your crappy local offerings and I am not going to take it anymore so I am buying from world best suppliers wherever they are!".
Hundreds of thousands of people are doing the same. Amazon ships an incredible number of books and DVDs into Australia. It's not that the Aussie consumers are not patriotic. It is just that they want to use an online store that is well designed, has compelling features and is easy to use.
Ohh...and by the way...(please no comments on my reading material)...Why is it that (insert local book retailer name whose site I just went to) offers The History of God by Karen Armstrong for $A34.95 (plus shipping) and Amazon offers it for $A15.64 (plus shipping)? Pricing disparity is something I'll come back to on another post...
Thursday, April 16, 2009
The great marketing ripoff...
Recent data from Nielsen shows that increasingly people are spending less time reading newspapers and watching television and more time on the net..In fact the younger generations (ie < 40) are spending significant less time watching TV and this been going on for years.....Go into any household in Australia and ask them if they are watching more or less TV than they were 5 years ago..The answer will be less and where has the time gone...on to the internet.
In the normal world advertising dollars follower consumers...I mean what idiot would pay for a bill board in a park where no one came or what genius would increase their TV advertising spend over the past 5-10 years when their audience has been moving to the net?
Interestingly total $ allocated to digital advertising is around $1.3b and to television around $3.5b. Strange given the behaviour of consumers does not map to this allocation. So why is there this enormous discrepancy between where people spend their time and where ad dollars are spent.
The simple answer is that for a large number of people it is not helpful to have money shift from television to the net. This group includes (obviously) the TV networks, the ad agencies (who would much prefer creating a big budget TV commercial filmed off the coast of Cuba with Russian dancing bears) then having to create something on a lower budget that actually drives people to act, Media planners (who have a much easier and less complex life allocating money between a few TV networks with limited and laughable measurement metrics as opposed to the more complex and intellectually challenging process of finding out where on the web people are and how to engage them) and finally (and sadly) the marketing directors.
It is understandable that the TV networks, ad agencies and media planners hate the idea of less money being spent on TV but why are the marketing directors in on this game....Firstly it is because it just feels nice and comfortable (kind of like going back to gran's house when you are an adult and sitting in the chair you did when you were smaller eating a piece of her special cake)relaxing back in an ad agency board room with a bunch of black skivvy creatives going through their show reel while the TV ad exec spins stories of engaging audiences etc etc..This is so nice and easy just as long as no one mentions the cost per actual viewer or (heaven forbid) the cost of acquisition of someone who will actually buy the advertisers product compared to the web then all is OK.
The second issue is a darker one...The currency of the marketing director is the size of their advertising budget. This is the cache of their world...Unfortunately what the web shows us is that we can spend less money to achieve better outcomes...In simple terms this means that to achieve the SAME advertising outcomes (reach, brand recognition, sales) we can spend LESS money than in the past..In real terms this means that you can take a bank/auto/FMCG ad budget of $30m reduce it by 40% (with most of the cut coming out of TV and display newspapers) and allocate half of this to the web and put the other half to the bottom line (that would be the profit line for people who have spent too much time in the marketing department).
This is what is happening in the US...why?? Becuase marketing directors that want to be employed in 5 years time can see the writing on the wall and CEOs are taking a more active interest in the efficiency of the marketing spend...In Australia we are seeing a few examples of this breakout but in most cases the marketing director stays coddled in the loving arms of the TV/Ad agency/media planner family while hoping that the CEO doesn't start asking some hard questions any day soon...
Is such a strategy sustainable??? No. It is a strategy that will result in the marketing director being out of a job. If you as a marketing director and you are not on the front foot cutting wasteful media spend, really understanding the power and efficiency of the web and providing your CEO with more margin points then your goose is surely cooked.....
In the normal world advertising dollars follower consumers...I mean what idiot would pay for a bill board in a park where no one came or what genius would increase their TV advertising spend over the past 5-10 years when their audience has been moving to the net?
Interestingly total $ allocated to digital advertising is around $1.3b and to television around $3.5b. Strange given the behaviour of consumers does not map to this allocation. So why is there this enormous discrepancy between where people spend their time and where ad dollars are spent.
The simple answer is that for a large number of people it is not helpful to have money shift from television to the net. This group includes (obviously) the TV networks, the ad agencies (who would much prefer creating a big budget TV commercial filmed off the coast of Cuba with Russian dancing bears) then having to create something on a lower budget that actually drives people to act, Media planners (who have a much easier and less complex life allocating money between a few TV networks with limited and laughable measurement metrics as opposed to the more complex and intellectually challenging process of finding out where on the web people are and how to engage them) and finally (and sadly) the marketing directors.
It is understandable that the TV networks, ad agencies and media planners hate the idea of less money being spent on TV but why are the marketing directors in on this game....Firstly it is because it just feels nice and comfortable (kind of like going back to gran's house when you are an adult and sitting in the chair you did when you were smaller eating a piece of her special cake)relaxing back in an ad agency board room with a bunch of black skivvy creatives going through their show reel while the TV ad exec spins stories of engaging audiences etc etc..This is so nice and easy just as long as no one mentions the cost per actual viewer or (heaven forbid) the cost of acquisition of someone who will actually buy the advertisers product compared to the web then all is OK.
The second issue is a darker one...The currency of the marketing director is the size of their advertising budget. This is the cache of their world...Unfortunately what the web shows us is that we can spend less money to achieve better outcomes...In simple terms this means that to achieve the SAME advertising outcomes (reach, brand recognition, sales) we can spend LESS money than in the past..In real terms this means that you can take a bank/auto/FMCG ad budget of $30m reduce it by 40% (with most of the cut coming out of TV and display newspapers) and allocate half of this to the web and put the other half to the bottom line (that would be the profit line for people who have spent too much time in the marketing department).
This is what is happening in the US...why?? Becuase marketing directors that want to be employed in 5 years time can see the writing on the wall and CEOs are taking a more active interest in the efficiency of the marketing spend...In Australia we are seeing a few examples of this breakout but in most cases the marketing director stays coddled in the loving arms of the TV/Ad agency/media planner family while hoping that the CEO doesn't start asking some hard questions any day soon...
Is such a strategy sustainable??? No. It is a strategy that will result in the marketing director being out of a job. If you as a marketing director and you are not on the front foot cutting wasteful media spend, really understanding the power and efficiency of the web and providing your CEO with more margin points then your goose is surely cooked.....
CEO salaries - This is such a joke...well not really a joke...
So it seems the criteria to pay Joe 15 gzillion dollars to take on a CEO role is because some other company paid their Joe 13 gzillion dollars for a similar role. Often the comparisons that Australian firms are eroneous comparing firms operating in larger, more competitive markets to those operating in a smaller and often less competitive market in Australia.
Many of our top banks and companies are paying their CEOS north of $5m (or $10m including share options) a year...Does anyone seriously think we would get a much less capable person if we paid them maybe $3m instead of $10m??Seriously this is such a case of kids in the lolly shop with no adult supervision....However expecting our boards to start to behave appropriately and cull back these ridiculous packages is a waste of time...Often they are too busy developing the justfication to increase their board fees to waste time on a munane matter like exhorbitant CEO salaries...
Many of our top banks and companies are paying their CEOS north of $5m (or $10m including share options) a year...Does anyone seriously think we would get a much less capable person if we paid them maybe $3m instead of $10m??Seriously this is such a case of kids in the lolly shop with no adult supervision....However expecting our boards to start to behave appropriately and cull back these ridiculous packages is a waste of time...Often they are too busy developing the justfication to increase their board fees to waste time on a munane matter like exhorbitant CEO salaries...
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