The Difference between the Power of Word of Mouth and Advertising
In mid-2010, National Public Radio officially changed its name to NPR to reflect its presence online and on digital devices. In an article for The Nieman Journalism Lab about how NPR is measuring the value of their Twitter followers and people who “like” it on Facebook, Justin Ellis writes, “It…makes sense that NPR wants to monitor its emerging platforms as they try to transform into a digital media company. Facebook and Twitter combined now account for 7–8 percent of traffic to NPR.org, an amount that has doubled in the last year.” More and more people are finding their way to the NPR website through links they see on Twitter and Facebook because of the social context that surrounds those links, a context created when consumers opt to receive NPR updates through their newsfeeds, or when they see the content because it was posted by a friend. You’ll pay attention to or interpret a comment about an NPR story from your mother or a coworker whom you respect far differently than you would if you found the article through a Google search. That social context and connection gives the content weight and importance that it wouldn’t otherwise have. The difference between how people respond to search engine results or a banner ad versus how they respond to Twitter or Facebook feeds parallels the difference between how people respond to advertising and how they respond to word of mouth. One is a random, faceless encounter that is easily forgotten; the other is a meaningful exchange worth passing along and sharing with others.
How Fear Blocks Innovation
It’s becoming more unusual for a big consumer brand to really innovate and create a great product. Vitamin Water didn’t come from Coke; Pom didn’t come from Pepsi. Too many big companies get stuck in the muck of their own fear and short-term concerns, which prohibits them from taking risks and following through on great, creative thinking. They’re too wrapped up in meetings and procedure and stock value, or worst of all, the politics of keeping their jobs, whereas smaller, scrappier companies are often still ruled by passion and have the freedom to experiment.
Agendas
There are a lot of people with a vested interest in making sure that brands don’t start using social media. You can point out plenty of weaknesses in social media metrics, but you can find just as many in traditional media. The reality is, however, that brands will eventually be able to track every consumer online—there is no truer metric. What would happen if brands started demanding the same metric standard from traditional media? What if they realize that they can spend their money more efficiently and effectively online than on television? There is a lot of marketing and advertising money—not to mention thank-you-for-doing-business-with-us gifts like baseball-game tickets, shows, fancy dinners, trips to Cancún, and cases of Dom P—at stake, and a lot of people will denigrate social media’s influence for as long as they can so they can keep their hands on it. In addition, those gifts are often exchanged between people who genuinely like doing business together. This means that even if another agency were willing to give them a better deal, they’d still spend their money with the agency that has treated them preferentially over the years. To say that business isn’t personal is ridiculous. P.S., you can start to create some of these relationships on Twitter, Tumblr, and Facebook. Who said social media isn’t B2B?
Changing Strategies
I usually see parallels between marketing and interpersonal relationships, but lately I can’t shake the thought that there are also parallels between how we market and advertise and how we wage war. The world wars were fought with blanket fire—big planes dropping many bombs from the sky, battleships, tanks. Everything was big and meant to overwhelm the enemy. Then we got into Vietnam, and we couldn’t use the same tactics—we had to fight one-on-one. More recently, in Iraq and Afghanistan, troops went from village to village, tribe to tribe, trying to stabilize dangerous regions all while winning the trust and the hearts and minds of the populace. I’m not passing any judgment on how we fought these wars, nor do I believe that the decisions we make in the marketing world can compare to the decisions the leaders of our armed forces must make every day or to the sacrifices made by our troops. I do think, however, that just as our strategies on the battlefield had to change, so have our strategies in the business world. There was a time in business when we had to fight big, and so it was necessary to rely on a big platform like television. TV was a tank; radio was a fleet of planes. Now that we are trying to go local, it’s been a real struggle for some companies; big isn’t going to help them win. Carpet-bombing Afghanistan wasn’t going to get us anywhere, nor will spending $44 million exclusively on a TV campaign, some billboards, and radio spots.
Defending Social Media Throughout My Career
I was the baby-faced kid at the conference table surrounded by wine experts and old-timers who thought my video blogs were a joke, even an embarrassment to the industry. Even when it became clear that my methods were yielding profitable results for Wine Library, my family liquor business, and I started getting media attention as I proved my entrepreneurial chops, I faced constant skepticism and condescension. I got used to it a long time ago, and I actually enjoy the debate. I’m not scared to defend and debate the value of this emerging shift in the Web, because “I told you so” may be one of the most delicious flavors in the world. Now, if I’m wrong, I’ll deserve the “told you so,” but I won’t be sorry that I said my piece. Too many people are scared to share their visions and thoughts in public or even in board-rooms. Having a strong vision is important for your personal brand. Don’t be afraid to say what you think. Ever. That said, don’t forget to listen, either.
Drawing Lines in the Sand
I think it’s sad when someone who says he or she wants a fruitful career refuses to try something new because the numbers don’t seem promising. I understand that people crave security, but I don’t understand the complete lack of curiosity I sometimes see. Every time you draw a line in the sand, you’re robbing yourself of a learning experience that could serve you well in the long run. Lines in the sand will only box you in.
The ROI of Emotions
The ROI of a social media user is deeply tied to that user’s sense of community and the emotional attachment he or she associates with a product. You could offer me a Jets T-shirt for eighty bucks and a Cowboys T-shirt for a dollar, and I would still never buy the Cowboys shirt. My emotional attachment to the Jets is that strong. A teenager who loves Vitamin Water enough to follow the brand on Facebook isn’t going to be satisfied with a gift card from Snapple if Vitamin Water treats her better whenever she interacts with them online. She may be appreciative and grateful for the gift, but the second she has her own money she’s going to spend it on the brand that means something to her. The heart wants what the heart wants. Snapple might get the initial purchase, but Vitamin Water has the relationship, which will translate into far greater revenue in the long run. Those who are willing to look (and there are too many marketers who are not) are witnessing the humanization of business; it will have one of the greatest impacts on commerce we’ve ever seen.
How Nielsen Ratings Work
Let’s review how the ratings system works. Selecting for demographics that best represent the country as a whole, a computer program randomly targets households with television sets and asks the inhabitants to monitor their television-watching habits. Only about 50 percent of households agree to participate, so the ratings companies then have to try to replace the uncooperative homes with homes that best match the same demographic makeup. In 2009, there were about 114,900,000 households with televisions. Of those households, only about 25,000 homes were monitored. That means 99.9 percent of American households were completely ignored.* This is not necessarily news to the marketing, advertising, and media-buying community.
The sample does get broader during the sweeps months of November, February, May, and July, when Nielsen asks about two million people to submit diaries. Paper diaries. Sent through the mail. You don’t have to be a psychologist t
o think of any number of reasons why these diaries might not accurately reflect a person’s TV-watching habits. On top of that, only about 50 percent of the diaries can be used, because so many are never returned or are filled out improperly. A quick search on the Internet will hit many articles written by Nielsen participants revealing, albeit sheepishly, that they thought about fudging their reports and altering their TV-watching habits (and some of them actually did). Those confessions are just from the raters who bother to share their experience; how many others could be out there?
Nielsen admits there are weaknesses in its process. In 2009, the company released a report that stated its ratings might have been inaccurate by as much as 8 percent. The reason? Participants weren’t using their People Meters correctly. Ultimately, no matter what corrections and adjustments it makes, Nielsen still has to rely on the accuracy and honesty of the individuals in the mere 25,000 homes it is monitoring. Someone has to push the button identifying herself as the viewer; someone has to remember to mention that she spent ten minutes during a half-hour program chatting with the Girl Scout who came to the door.
In addition, as we all know, television-watching habits have changed drastically in the past few years. Nielsen issued a 2010 report stating that 59 percent of people watch television and surf the Internet simultaneously, 35 percent more than the number of people who did so in 2009. Thirty-five percent more in twelve months! Nielsen assures us that it has systems in place to account for the swell in cable and digital channels, DVRs, and the fact that people are watching TV on their iPhones and playing around with all kinds of multimedia while the television plays in the background. I would love to know what kind of technology could make tracking so many platforms possible, but that information is proprietary and confidential to Nielsen, and I can understand why. Still, if this is how social media was tracked and I tried to sell it to a room full of executives in 2011, don’t you think they might point out some big holes in the system?
It’s important to remember that The Nielsen Company was not always the only game in town. In the 1940s and ’50s, Nielsen competed against five other ratings companies: Videodex, Inc., Trendex, Inc., the American Research Bureau, C. E. Hooper, Inc., and The Pulse, Inc. The Claude E. Hooper company was the market researcher during the radio golden age and became enough of a presence in TV, until Nielsen acquired it in 1950, that it was common for television series producers to ask each other, “How’s your Hooper?” But Hooper sold, the other guys disappeared, and advertisers, ad agencies, and media buying companies put their faith in Nielsen.
What Touches People
People laugh at me because I get so pumped about the New York Jets. Well, how is that any sillier than standing in line for nine hours to get the first copy of the newest book in the Twilight series? Or six hours for the new video game, Sneakers Smart Phone? Now that brands are touchable, there’s no reason to think that with some creativity, they can’t create the same emotions as a sports team or a pop culture event. The brand that touches and creates the most emotion wins.
Campbell’s knows this to be true. In a complete revamping of their marketing strategy, they are investing heavily in biometric tools—measuring skin moisture, heart rate, breath, and posture, for example—to help measure the subconscious, emotional reactions consumers have to their products. This research resulted in big changes to the look of their condensed soup cans, which they hope will evoke more emotional reactions from shoppers.
The Broken Corporate Game
The CEO of BP left with a multimillion-dollar bonus. He’s in charge during the worst environmental disaster of all time, and he leaves with money spilling out of his pockets. When a leader’s worst-case scenario doesn’t look that bad, there’s no reason that person should care desperately about the fate of his or her company. If that CEO’s contract had said that the stock price needed to be at a certain level or he would lose everything, he would have treated the whole oil-well situation differently. When the worst-case scenario is pretty, you’re never as scared or antsy as you should be. Period!
Playboy Corporate America
Corporate America is rewarded for hookups and one-night stands, and that’s how much respect most corporations show toward their customers. Don’t hate the player; hate the game.
Billboards
There is no chance in heck that as many people as the companies tell you are viewing billboards are viewing billboards. People are so distracted with their mobile devices they’re barely looking at the roads, much less looking at billboards. Oprah is right about this one—cars should be no-phone zones. I’m scared to share the road with other drivers!
I Like TV
Just to make it really, really clear: I am a fan of traditional media; I just have issues with the creative work and the pricing. I see what people are putting out there in print, on radio, and on TV, and I don’t believe they are pushing the creative envelope enough. And, because of the massive changes in viewership, I don’t think I should have to pay for this media as if it were still 1994 and radio, TV, and print were the only mediums getting people’s attention.
Surveys and Customer Cards
When you ask a consumer to fill out a survey or comment card, you’ve already influenced the answer you’re going to get. As soon as people are asked for their opinion, they filter their replies. Maybe they’re afraid of getting someone fired. Maybe they want to sound smart. Maybe they don’t want to hurt the feelings of the person asking the question. Maybe they are mean. But on social media, you’re seeing people’s unfiltered conversations, reactions, and opinions. That’s a gold mine of information for the brand brave enough to look for it.
“Most Brands Still Irrelevant on Twitter”
While I was writing this book, Ad Age published an article called “Most Brands Still Irrelevant on Twitter: Marketers Are Certainly Tweeting, but Users Are Barely Listening.” Maybe someone at your company sent this around saying, “See, I was right to insist that we not waste our time on Twitter.” I’d like to point a few things out about this article:
1. The article actually explains the problem: “While marketers such as Dell, Comcast, Ford and Starbucks have been, at times, clever participants on Twitter, the majority of marketers use it as a mini press release service. Only 12% of messages from marketers are directed at individual Twitter users, meaning marketers still see it as a broadcast medium rather than a conversational one.” So you see, it’s not that Twitter doesn’t work; it’s that most brands aren’t using Twitter correctly. It’s like saying that a trumpet is broken because the first hundred people who try to play it suck. You can’t have a relationship with someone if you won’t shut up and let him or her get a word in edgewise. Brands have to realize that it’s not all about them. When they do nothing but push product, there’s no reason for the consumer to say anything back. It’s like that friend you have who always talks about herself and never asks how you’re doing. Eventually, she gets tiresome, and you lose interest in keeping up the friendship.
2. “Brands only engage 18%.” Well, whose fault is that?
3. Twitter is four years old, and we should treat it like any four-year-old. Give it a little time to grow up and mature before dismissing it.
Getting Started
You don’t have to be Michael Phelps, but for God’s sake, put on a bathing suit!
Jeff Bezos’s Missed Opportunity
Bezos bought two of the few companies that have most interested me—Zappos and Woot. Woot.com is a site that sells one cool, discounted electronic item per day. When the item runs out, the sale is over, and everyone has to wait until midnight of the following day, Central Time, to see what new awesome thing is on the market. When Woot launched in 2004, I said, “Shoot, I should have built that! I soooo get it!” It’s the site that inspired me to branch out of wine retail. Amazon bought it in June 2010, but it should have bought the company three or four years ago. I’m a little surprised that it took Bezos so long to see Woot’s potential, since the sin
gle-option, restrictive buying trend seemed so obvious. And I am really disappointed in myself for not taking action and launching a startup around the same idea. I made a half-assed effort with a site called Free.WineLibrary.com, but it didn’t take off. It took me until 2009 to get the formula right with Cinderella Wine. Kudos to the founders of Groupon and Living Social for running headfirst into the opportunity and executing so successfully.
Apologies
LeBron James was apparently counting on the public’s capacity for forgiveness when he decided it would be a good idea to announce on live national television that he was dumping his hometown team, the Cleveland Cavaliers, to play for the Miami Heat. Talk about stabbing the people that love you in the back! Still, Cleveland will probably eventually forgive him. But if he were smart, he’d have taken note of his fans’ anger, put together another live TV appearance, and say, “I had my reasons for going to Miami, but Cleveland, I’ve been a jerk, and I’m sorry.” And if his handlers or agents had been smart, they would have been watching Twitter while LeBron made his announcement, seen the public reaction, given him a talking-to during a commercial break, and allowed him to express his regret on the spot for upsetting so many people. That would have been news! In any scenario, however, his apology would have to be genuine. There’s never a time when real doesn’t work.
Hiring and Firing
I value good teamwork more than almost anything. Though I rarely fire anyone, over the years I’ve had to let go of five of the most talented employees that have ever worked at Wine Library, because they just couldn’t play nice with the other boys and girls. That was culturally unacceptable in my company.
Leadership and Culture
Bill Parcells is the best coach of all time. Screw Phil Jackson—I could have won a few championships with Jordan, Shaq, and Kobe on my teams. Parcells is the greatest coach in history because he went to a rotten New York Giants team and won two Super Bowls; went to the New York Jets, who had won four games in two years, and in two short years got them within one game of the Super Bowl; went to the Patriots, who were one in fifteen, and took them to the Super Bowl; went to Dallas and made them a consistent playoffs contender; and then to Miami, where he coached the biggest turnaround in one season in NFL history. He wins through building team morale, hiring the right people, and instilling the right culture. He brings his DNA. In this new world where people can communicate more freely with not just customers, but with employees too, the Bill Parcells style of leadership will become more and more necessary.
The Thank You Economy Page 16