Another fun Super Bowl marred by tedious simultaneous broadcast commercials here in Canada. While Americans are watching inventive, high-budget commercials that are arguably more entertaining than the game, we get stuck with endless iterations of the same truck commercials we have been watching in every regular season broadcast all year. The advertisers are not served well by this phenomenon at all, because they miss out on the one time of the year when Canadians would stay glued to the tube, paying attention to the message. Instead, everyone rushes to YouTube to see what he is missing. So advertisers are unhappy and Canadian viewers are unhappy. Who is served? The broadcaster thinks he is, but I think even that is in doubt.
The CRTC rules on simultaneous broadcasting exist to force advertisers to pay Canadian broadcasters for air time, rather than just paying the American network then picking up Canada for free when the Canadian broadcaster runs the show. The premise is that Canadian broadcast companies would collapse without the American advertising dollars. This is probably true of the existing companies that have been built around the present regulatory regime. But what we see in the Super Bowl is that most American companies don't bother to buy time in Canada anyway. Whatever the CRTC and broadcasters are trying to do isn't working. They aren't even successful in driving the prices up. Commercial slots in the last Canadian broadcast were going for $115,000 - 3 percent the cost of time on the American broadcast, which is about a third what we should expect to get given the difference in populations. Yes, yes, the Super Bowl slots are special because it is an international phenomenon and the spots will be seen all over the world for much longer than the program runs, but the Canadian price still seems too low. Canadian ratings are weaker for football, but I bet a lot of that comes from Canadians seeking ways to watch American broadcasts in order to see the commercials.
Isn't at least possible that Canadian broadcasters could get a better deal by negotiating with the American networks for a slice of the advertising revenue in return for beaming those ads to 30 million relatively well-off viewers? Why wouldn't the American advertisers pay extra for an extra 10 percent coverage?
Of course, any negotiation requires the possibility of failure, but we have competing networks in Canada and if one doesn't pick up the broadcast, another can. You know, market forces. If those are what the CRTC is trying to protect Canadian broadcasters from, all they will achieve (and have achieved) is a weaker industry.
Now that bunny ears are a relic of the past, Canadian broadcasters have pretty much total control over what their viewers see. They already negotiate exclusive broadcasting deals with the American network that carries the Super Bowl. They have an audience, and exposure to that audience has a value. My guess is that Canadian broadcasters are actually seeing less of that value now than they would if they just got a slice of the U.S. revenues instead of trying to sell Super Bowl ads all over again to advertisers that have already maxed out their budgets.
Showing posts with label advertising. Show all posts
Showing posts with label advertising. Show all posts
Wednesday, February 9, 2011
Thursday, February 3, 2011
Core plus marketing
This article caught my eye.
The comment is about marketing to mothers, but I wonder if there isn't some food for thought here for manufacturers as well. How often do you talk about aspects of your business that surround your core product? If there's one mistake that industrial marketers make reliably, it is focusing exclusively on product at the expense of building an overall brand.
When I started out selling machine tools, I was handed a stack of brochures, given a primer on what these machines are and what they do, and sent out to beat the bushes for leads. From what my bosses had told me and what I was reading in the brochure, I assumed the conversations would be all about the product specifications. Instead, almost everyone wanted to talk about service. When I relayed this to my bosses, they waved it off. "Sure, we have service. Tell them we have great service." The fact was, no one had thought very much about how to present the service side of the company.
Part of that phenomenon comes from the distributor/OEM distribution model that exists in industrial machinery sales. OEMs want to make machines and let distributors take care of the service because it is time-consuming and requires constant attention to the customer and the daily bottom line. Distributors want OEMs to take care of service because the OEMs have deeper pockets and access to the product knowledge and parts. Good machine service techs are very, very hard to find. The result often is that the service arrangement between the dealer and the OEM is poorly defined and one or both parties are uncomfortable and pushing up against the boundaries in one direction or another. So no one is comfortable talking about service to the customer because no one is quite sure what they can or want to deliver.
Given all this, it isn't surprising that the machine tool company, Haas, that kicked everyone's butts through the '90s, was the one with the strongest service story. Haas kept service in-house, for one thing. The techs were OEM employees that drove around in Haas-branded vans full of spare parts. This meant the dealers made less money because they didn't get the higher discounts that came with a service contract, but it also meant they sold more because customers liked the Haas service story a lot. Haas' approach led to an overall brand impression of a company that really understood what its customers wanted and was going all-out to provide it.
In the industrial machinery and supplies game, it is rare that you are offering a truly unique product. Actually, that is true in just about any business. Even if you do have a proprietary technology, you are automatically limited to companies that have to have specifically that technology, if all you do is focus on the unique nature of your product. For continued growth, you have to have mass appeal, and that means offering something everyone wants, like great prices and service.
Don't keep hitting your customers with the same tired message about how great your best line is. Talk about your service. Your parts inventory. Your financing options. Your friendly, beer-buying salesmen. Your easy-to-use web portal. It isn't just mothers who want to know they are getting the whole package when they deal with a particular vendor.
So while chatting with this group of mothers, I considered this lesson: when spreading the word about your product or service, it is just as important to promote all of your ancillary offerings as it is to promote your key features. Companies often promote just the core offering, but when selling to mothers, it is often the broader offer that will activate the sale.
The comment is about marketing to mothers, but I wonder if there isn't some food for thought here for manufacturers as well. How often do you talk about aspects of your business that surround your core product? If there's one mistake that industrial marketers make reliably, it is focusing exclusively on product at the expense of building an overall brand.
When I started out selling machine tools, I was handed a stack of brochures, given a primer on what these machines are and what they do, and sent out to beat the bushes for leads. From what my bosses had told me and what I was reading in the brochure, I assumed the conversations would be all about the product specifications. Instead, almost everyone wanted to talk about service. When I relayed this to my bosses, they waved it off. "Sure, we have service. Tell them we have great service." The fact was, no one had thought very much about how to present the service side of the company.
Part of that phenomenon comes from the distributor/OEM distribution model that exists in industrial machinery sales. OEMs want to make machines and let distributors take care of the service because it is time-consuming and requires constant attention to the customer and the daily bottom line. Distributors want OEMs to take care of service because the OEMs have deeper pockets and access to the product knowledge and parts. Good machine service techs are very, very hard to find. The result often is that the service arrangement between the dealer and the OEM is poorly defined and one or both parties are uncomfortable and pushing up against the boundaries in one direction or another. So no one is comfortable talking about service to the customer because no one is quite sure what they can or want to deliver.
Given all this, it isn't surprising that the machine tool company, Haas, that kicked everyone's butts through the '90s, was the one with the strongest service story. Haas kept service in-house, for one thing. The techs were OEM employees that drove around in Haas-branded vans full of spare parts. This meant the dealers made less money because they didn't get the higher discounts that came with a service contract, but it also meant they sold more because customers liked the Haas service story a lot. Haas' approach led to an overall brand impression of a company that really understood what its customers wanted and was going all-out to provide it.
In the industrial machinery and supplies game, it is rare that you are offering a truly unique product. Actually, that is true in just about any business. Even if you do have a proprietary technology, you are automatically limited to companies that have to have specifically that technology, if all you do is focus on the unique nature of your product. For continued growth, you have to have mass appeal, and that means offering something everyone wants, like great prices and service.
Don't keep hitting your customers with the same tired message about how great your best line is. Talk about your service. Your parts inventory. Your financing options. Your friendly, beer-buying salesmen. Your easy-to-use web portal. It isn't just mothers who want to know they are getting the whole package when they deal with a particular vendor.
Friday, October 8, 2010
Internet marketing
When I was at the magazines, I'd often accompany our sales guys as they worked the floor at trade shows. We'd meet up with marketing directors from the various suppliers exhibiting and go into our song and dance about the magazine and its audience and its circulation. Eventually the discussion would wind around to our sales guy asking about the customer's plan for marketing in the upcoming period. Answers varied, but one thing I heard all the time was, "We are really only interested in online right now." I used to shove my hand in my pocket to prevent it from spontaneously darting out and smacking the supposed marketing expert in the forehead.
Marketing is the process of creating demand for your product. It means reaching out to people who haven't heard about it, or don't have all the information about it, or have the wrong impression about it, and giving them messages that will cause them to want it. It is different from sales, in that sales is about fulfilling demand. In its pure form, sales is only concerned with negotiating the transaction. Sales only happens once the customer has contacted you and expressed an interest in your product. Marketing is concerned with finding the customers and getting them to that point.
When it comes to sales, the internet is a fantastic tool. Once a customer knows he wants your product, there is no easier or cheaper way to meet his demand than to have him browse your website, get your pricing (without any ability to haggle), place his order and pay to have you ship it to him. From a sales perspective, a good website beats everything about a physical store except for the instant gratification element, which is actually pretty important. In my opinion, the only reason there are still physical stores selling things that could be shipped is because people do not want to wait to receive something they have paid for. I guess some people enjoy the activity of browsing in a store, so there is that element as well.
As a marketing tool, the internet is far less effective. The central problem is the self-directed nature of the user's experience. In old media, the user tuned into a channel and received whatever was being broadcast. He got the commercial you bought whether he wanted it or not and you automatically had at least some part of his attention. In terms of creating demand, this was genius. You could count on thousands of viewers seeing your message every time you ran it, whether they had ever heard of your company or not. All you had to do was attach your message to a source of content that had your desired audience's attention. Some of these same principles are at work on the internet; there are sites with content that attract users who could serve as a potential audience for your message. But internet users are much more focused on consuming only the content they want. There are sharp limitations on how much of a web page can be used for advertising without alienating users, and I think even that advertising is usually ignored as users focus in on finding just the content they want. TV viewers, radio listeners and print readers accept that their content consumption will be completely interrupted for short periods by an advertising message, and most of them don't mind. But interruptions to the flow of content on the internet are viewed as a highly irritating barriers to the use of the medium itself. As a wise man once said, "People often pick up a magazine to look at the ads. No one ever went to a website for the same reason."
So there's the issue. The internet is narrowcasting instead of broadcasting. Even within your target market group, many of the people you need to reach are not where your message is. You can't create demand unless you have eyes looking at your message, and the eyes on the internet are spread out over too many places. On a TV or radio channel, or in a magazine, the content is spread out over a period of time or a number of pages for people to take in sequentially. Audience participation can be measured in terms of time spent, during which time it receives whatever messages the broadcaster wants to give it. Internet participation is measured in terms of hits; people go straight to the content they want, then go somewhere else. A person consuming media the old way will see your message whether they are aware of you or not, which gives you a chance to create demand where there was none, or very little. A person consuming content on the internet will only see your message if he is purposefully looking for it, which means he already has demand for your product. In order for the internet to work for you, the demand has to be created somewhere else, leaving the internet to play its strongest role as a fulfiller of demand.
Marketing is the process of creating demand for your product. It means reaching out to people who haven't heard about it, or don't have all the information about it, or have the wrong impression about it, and giving them messages that will cause them to want it. It is different from sales, in that sales is about fulfilling demand. In its pure form, sales is only concerned with negotiating the transaction. Sales only happens once the customer has contacted you and expressed an interest in your product. Marketing is concerned with finding the customers and getting them to that point.
When it comes to sales, the internet is a fantastic tool. Once a customer knows he wants your product, there is no easier or cheaper way to meet his demand than to have him browse your website, get your pricing (without any ability to haggle), place his order and pay to have you ship it to him. From a sales perspective, a good website beats everything about a physical store except for the instant gratification element, which is actually pretty important. In my opinion, the only reason there are still physical stores selling things that could be shipped is because people do not want to wait to receive something they have paid for. I guess some people enjoy the activity of browsing in a store, so there is that element as well.
As a marketing tool, the internet is far less effective. The central problem is the self-directed nature of the user's experience. In old media, the user tuned into a channel and received whatever was being broadcast. He got the commercial you bought whether he wanted it or not and you automatically had at least some part of his attention. In terms of creating demand, this was genius. You could count on thousands of viewers seeing your message every time you ran it, whether they had ever heard of your company or not. All you had to do was attach your message to a source of content that had your desired audience's attention. Some of these same principles are at work on the internet; there are sites with content that attract users who could serve as a potential audience for your message. But internet users are much more focused on consuming only the content they want. There are sharp limitations on how much of a web page can be used for advertising without alienating users, and I think even that advertising is usually ignored as users focus in on finding just the content they want. TV viewers, radio listeners and print readers accept that their content consumption will be completely interrupted for short periods by an advertising message, and most of them don't mind. But interruptions to the flow of content on the internet are viewed as a highly irritating barriers to the use of the medium itself. As a wise man once said, "People often pick up a magazine to look at the ads. No one ever went to a website for the same reason."
So there's the issue. The internet is narrowcasting instead of broadcasting. Even within your target market group, many of the people you need to reach are not where your message is. You can't create demand unless you have eyes looking at your message, and the eyes on the internet are spread out over too many places. On a TV or radio channel, or in a magazine, the content is spread out over a period of time or a number of pages for people to take in sequentially. Audience participation can be measured in terms of time spent, during which time it receives whatever messages the broadcaster wants to give it. Internet participation is measured in terms of hits; people go straight to the content they want, then go somewhere else. A person consuming media the old way will see your message whether they are aware of you or not, which gives you a chance to create demand where there was none, or very little. A person consuming content on the internet will only see your message if he is purposefully looking for it, which means he already has demand for your product. In order for the internet to work for you, the demand has to be created somewhere else, leaving the internet to play its strongest role as a fulfiller of demand.
Friday, October 1, 2010
Beat 'em with marketing
One of the biggest threats industrial suppliers perceive is the flood of products arriving on our shores from China, Taiwan, India, Brazil and various other places with low labour rates and enough technological know-how to make a product North American manufacturers will accept. These imports have been arriving here for a long time now, since the early '90s at least, but many suppliers still seem to be at a loss as to how to compete against them. Quite often, they have simply ceded the low end of the market to the cheap imports and shifted to selling more expensive, higher quality lines.
Analogy time. Just about anyone would agree that McDonald's makes a crappy food product. And it is not really that cheap; you can get a better meal in a Mom-and-Pop diner for less. But McDonald's is everywhere and it's easy. You can do drive-through and you always know exactly what you are going to get. The company keeps itself in front of you all the time with a constant drone of brand messaging. To put it quite simply, McDonald's has demonstrated that you can acheive margins at the lower end of the market with a strong, long-term advertising and promotions strategy.
Industrial suppliers, on the other hand, panic the minute someone beats their price. And well they should, because they have not laid the groundwork to claim there is anything better about them or their products that would justify a higher price. Chinese imports often have a lot of weaknesses. Even if the product is OK, there is often little or no local support if it breaks or you need help using it. I don't want to say the documentation is weak, but you would probably learn more about how to maintain your Chinese product from reading a bubblegum wrapper. China has come along way on the quality and support it offers with its industrial equipment and supplies, but at the same the prices are — you guessed it — rising. Many Chinese manufacturers are outsourcing work these days to even lower-cost countries such as Viet Nam. There is ample fodder here for a marketing campaign aimed at neutralizing the effect of the Chinese price advantage. Manufacturers are willing to spend more on products, but they have to know why they are doing so. They must be shown, convincingly, that the Canadian distributor has a product that is better and better in ways they need it to be better. If that case is not there to be made, time to start looking for another product to sell.
If North American suppliers have weak marketing strategies, Chinese marketing in North America is even worse. It is often impossible to get even basic, necessary information about the product from the company, even with direct contact. The language barrier is a problem, as are the low margins themselves which don't allow Chinese suppliers room for a marketing budget. Also, from what I have read and observed, Chinese businessmen tend to place great stock in networking and personal contacts. This makes them less likely to think an impersonal message in a magazine or brochure is going to be effective. This leaves North American suppliers an avenue of attack they can use to protect their margins and prices: superior marketing. Too bad most won't use it.
Analogy time. Just about anyone would agree that McDonald's makes a crappy food product. And it is not really that cheap; you can get a better meal in a Mom-and-Pop diner for less. But McDonald's is everywhere and it's easy. You can do drive-through and you always know exactly what you are going to get. The company keeps itself in front of you all the time with a constant drone of brand messaging. To put it quite simply, McDonald's has demonstrated that you can acheive margins at the lower end of the market with a strong, long-term advertising and promotions strategy.
Industrial suppliers, on the other hand, panic the minute someone beats their price. And well they should, because they have not laid the groundwork to claim there is anything better about them or their products that would justify a higher price. Chinese imports often have a lot of weaknesses. Even if the product is OK, there is often little or no local support if it breaks or you need help using it. I don't want to say the documentation is weak, but you would probably learn more about how to maintain your Chinese product from reading a bubblegum wrapper. China has come along way on the quality and support it offers with its industrial equipment and supplies, but at the same the prices are — you guessed it — rising. Many Chinese manufacturers are outsourcing work these days to even lower-cost countries such as Viet Nam. There is ample fodder here for a marketing campaign aimed at neutralizing the effect of the Chinese price advantage. Manufacturers are willing to spend more on products, but they have to know why they are doing so. They must be shown, convincingly, that the Canadian distributor has a product that is better and better in ways they need it to be better. If that case is not there to be made, time to start looking for another product to sell.
If North American suppliers have weak marketing strategies, Chinese marketing in North America is even worse. It is often impossible to get even basic, necessary information about the product from the company, even with direct contact. The language barrier is a problem, as are the low margins themselves which don't allow Chinese suppliers room for a marketing budget. Also, from what I have read and observed, Chinese businessmen tend to place great stock in networking and personal contacts. This makes them less likely to think an impersonal message in a magazine or brochure is going to be effective. This leaves North American suppliers an avenue of attack they can use to protect their margins and prices: superior marketing. Too bad most won't use it.
Tuesday, September 28, 2010
"Early to bed, early to rise, advertise, advertise advertise"
The title of this post is a quote from Warren Buffett, and industrial suppliers would do well to take heed. When I was selling machine tools (before I got into advertising), I thought advertising didn't work. Advertising was transparent manipulation that could only fool stupid people. Smart people would never rely on such an obviously biased source for information of any kind. I'm smart (I thought) and my clients are smart, so advertising has no role in industrial equipment sales. I guess my model of the world involved me and some friends sitting at the top of a tower in flowing robes and pointy hats looking down with disdain at the drooling masses below.
My bosses were not too far off this position. They knew they were supposed to advertise, according to Accepted Business Practice, but they had severe doubts about its effectiveness. The only justification for advertising they found even partly persuasive was, since everyone is doing it, your company will look weak if it does not. They advertised when they felt they had "extra" money to do so, and it was the first thing on the block as soon as things got tight, which they frequently did. As it happens, this was precisely the opposite of the right thing to do.
When I got into advertising and did some reading on the field, I often ran across the assertion that advertising always works on everyone if it is properly executed. At first I scoffed at the idea that advertising worked on me. Then, one day, I caught myself drooling over an ad for a new video game and clicking on the link. "But that doesn't count," I thought, "because I like video games and want to buy them already." Then the penny dropped. I was in the target market for the video game developer and its well-designed ad campaign had shown me a message I found interesting through a channel I was paying attention to. Most of the advertising I sneered at was not directed at me at all — of course I found it irrelevant and manipulative. I don't buy fabric softener so any message attempting to interest me in a fabric softener is going to utterly fail to persuade me and actively annoy me in the attempt. Most of the advertising I had seen in my life had missed me in this fashion because I was in my early 30s and only recently entering a phase of life where I had any money. The bulk of advertising at that time was still aimed at Baby Boomers; the shift in focus to 18 - 35 was just beginning. I had the wrong idea about advertising. I thought every ad was trying to sell to everyone, therefore an ad failed to the extent that it failed to sell me. Since most ads people see fail to sell them, advertising as an industry must be a scam.
That was just youthful self-centeredness and ignorance of the way advertising really works. But there is a another reason why people, especially industrial suppliers, are skeptical about advertising's effectiveness; there is a great deal of bad advertising out there.
Remember what I said about the ad that worked on me being properly targeted? And delivered through a channel to which I was paying attention? And conveying a compelling message? Industrial advertising usually fails in at least one of these three elements.
The targeting is usually not bad; industrial suppliers know enough to avoid blowing money on ad placements that will not reach their clients, though sometimes I wonder if they could be more creative in finding channels that will reach their clients where their clients aren't expecting it. Could local TV in industry-heavy areas work? Don't know, no one has ever tried it, to my knowledge.
The advertising channels for industrial suppliers are weak in terms of arresting audience attention. I wrote in my last post about the failings of trade media and I don't need to rehash it here. An engineer friend was telling me on the weekend that there is simply nowhere for him to go to get a comprehensive look at all the industrial suppliers out there with details of what they carry. How, in the Information Age, in a sector that probably uses the internet more than anyone, is this possible?
While the channels may be weak, they are there, which brings us to probably the most common downfall of industrial advertising: execution. Industrial advertising is so mind-numbingly boring, it is a miracle anyone is able to pay attention to it long enough to finish producing it. Pictures of the product often dominate the ad — why? You can't tell much about how a piece of machinery or a tool performs from a picture, and every competitor is running attractive-looking pictures, too. The ad often neglects to say why someone might want to buy the product. Claiming you are the biggest and best is just chest-thumping and the advertiser speaking to himself, a message that can become comical when it appears in something less than a full-page ad. Claiming the product is high-quality is an unnecessary step back from the actual benefit. Will it last longer? How much longer? If you can't say, then how can you make the quality claim? An even better question is, why bother? Everyone else is doing it and if you believed everything you read in a trade magazine, every single advertiser has the highest quality in the industry. What if you ran an ad saying, "Our machine will make a million widgets per hour, guaranteed"? Would this attract more or less interest than an ad saying "Our machine is really great"? These are very basic, fundamental principles of ad writing, but they are violated all the time in industrial advertising. Industrial suppliers might as well take the money they spend producing and placing most of their ads and flush it down the toilet for all the good it is doing them.
Of course, they have a sense of this, which is why they are skeptical about advertising. But the answer is exactly the opposite of the typical response. Retreating from advertising just leaves the field to companies who understand it. The answer is to actually spend a decent amount of money on ad creative, getting professional help to do so. Yes, I have a dog in this fight, but you can go ask Warren Buffett or any professor at any business school if you don't believe me. Then companies actually have to spend money on a sustained ad campaign, not one placement. Ad spending should go up as sales go down, not the reverse. Ad spending exists to drive demand and create sales; why on Earth would a company take away a sales-generation tool right when it needs sales the most? Spending money that isn't in the bank account is why credit exists. Companies that are afraid to go into debt to reverse a decline in sales will soon be dead from lack of sales anyway. Might as well hang for a pound as a penny.
My bosses were not too far off this position. They knew they were supposed to advertise, according to Accepted Business Practice, but they had severe doubts about its effectiveness. The only justification for advertising they found even partly persuasive was, since everyone is doing it, your company will look weak if it does not. They advertised when they felt they had "extra" money to do so, and it was the first thing on the block as soon as things got tight, which they frequently did. As it happens, this was precisely the opposite of the right thing to do.
When I got into advertising and did some reading on the field, I often ran across the assertion that advertising always works on everyone if it is properly executed. At first I scoffed at the idea that advertising worked on me. Then, one day, I caught myself drooling over an ad for a new video game and clicking on the link. "But that doesn't count," I thought, "because I like video games and want to buy them already." Then the penny dropped. I was in the target market for the video game developer and its well-designed ad campaign had shown me a message I found interesting through a channel I was paying attention to. Most of the advertising I sneered at was not directed at me at all — of course I found it irrelevant and manipulative. I don't buy fabric softener so any message attempting to interest me in a fabric softener is going to utterly fail to persuade me and actively annoy me in the attempt. Most of the advertising I had seen in my life had missed me in this fashion because I was in my early 30s and only recently entering a phase of life where I had any money. The bulk of advertising at that time was still aimed at Baby Boomers; the shift in focus to 18 - 35 was just beginning. I had the wrong idea about advertising. I thought every ad was trying to sell to everyone, therefore an ad failed to the extent that it failed to sell me. Since most ads people see fail to sell them, advertising as an industry must be a scam.
That was just youthful self-centeredness and ignorance of the way advertising really works. But there is a another reason why people, especially industrial suppliers, are skeptical about advertising's effectiveness; there is a great deal of bad advertising out there.
Remember what I said about the ad that worked on me being properly targeted? And delivered through a channel to which I was paying attention? And conveying a compelling message? Industrial advertising usually fails in at least one of these three elements.
The targeting is usually not bad; industrial suppliers know enough to avoid blowing money on ad placements that will not reach their clients, though sometimes I wonder if they could be more creative in finding channels that will reach their clients where their clients aren't expecting it. Could local TV in industry-heavy areas work? Don't know, no one has ever tried it, to my knowledge.
The advertising channels for industrial suppliers are weak in terms of arresting audience attention. I wrote in my last post about the failings of trade media and I don't need to rehash it here. An engineer friend was telling me on the weekend that there is simply nowhere for him to go to get a comprehensive look at all the industrial suppliers out there with details of what they carry. How, in the Information Age, in a sector that probably uses the internet more than anyone, is this possible?
While the channels may be weak, they are there, which brings us to probably the most common downfall of industrial advertising: execution. Industrial advertising is so mind-numbingly boring, it is a miracle anyone is able to pay attention to it long enough to finish producing it. Pictures of the product often dominate the ad — why? You can't tell much about how a piece of machinery or a tool performs from a picture, and every competitor is running attractive-looking pictures, too. The ad often neglects to say why someone might want to buy the product. Claiming you are the biggest and best is just chest-thumping and the advertiser speaking to himself, a message that can become comical when it appears in something less than a full-page ad. Claiming the product is high-quality is an unnecessary step back from the actual benefit. Will it last longer? How much longer? If you can't say, then how can you make the quality claim? An even better question is, why bother? Everyone else is doing it and if you believed everything you read in a trade magazine, every single advertiser has the highest quality in the industry. What if you ran an ad saying, "Our machine will make a million widgets per hour, guaranteed"? Would this attract more or less interest than an ad saying "Our machine is really great"? These are very basic, fundamental principles of ad writing, but they are violated all the time in industrial advertising. Industrial suppliers might as well take the money they spend producing and placing most of their ads and flush it down the toilet for all the good it is doing them.
Of course, they have a sense of this, which is why they are skeptical about advertising. But the answer is exactly the opposite of the typical response. Retreating from advertising just leaves the field to companies who understand it. The answer is to actually spend a decent amount of money on ad creative, getting professional help to do so. Yes, I have a dog in this fight, but you can go ask Warren Buffett or any professor at any business school if you don't believe me. Then companies actually have to spend money on a sustained ad campaign, not one placement. Ad spending should go up as sales go down, not the reverse. Ad spending exists to drive demand and create sales; why on Earth would a company take away a sales-generation tool right when it needs sales the most? Spending money that isn't in the bank account is why credit exists. Companies that are afraid to go into debt to reverse a decline in sales will soon be dead from lack of sales anyway. Might as well hang for a pound as a penny.
Thursday, September 23, 2010
The war isn't over
When I interviewed for my last job at W.I. Media, the editor, Kerry Knudsen, asked me what I thought of trade magazines. I told him they seemed to be primarily shills for advertisers, with the advertisers controlling most of the editorial content. "Yep," he said. "And that will never, ever happen here." I knew right then that I wanted to work on his magazines, Wood Industry and Coverings.
I owe a great debt of gratitude to Kerry for showing me the right way to do trade magazines and proving to my satisfaction that it is the only way that stands a chance of becoming profitable. Unfortunately, marketers are trying hard to kill print right now out of the mistaken belief that online channels can deliver the same thing for less. I share Kerry's conviction that one of two things will have to happen; either online channels will have to take on many of the characteristics of print (owned by companies with addresses, paying full price for content and charging full price for advertising, subscribing to standards of accuracy and accountability), or we will see a revitalization of interest in print in the not-too-distant future. Even in the first scenario, an online channel that becomes a respected and profitable content provider (still waiting for that one) will likely decide to offer a print edition to deepen its penetration in its market — a perfect reversal of what is going on now. Print as we know it will only truly become irrelevant when electronic document readers become so cheap as to be nearly disposable, which may not be that far off. Even in this case, print will not so much have gone away as morphed into another form. Instead of receiving a new magazine each month, you will simply update the one you have with this month's content.
I wish the Canadian trade media would see the wisdom in keeping a clear separation between editoral and advertising, and I wish Canada's industrial supply marketers would see it, as well. Some do, but most view their task as being to obtain as much "free" (nothing is, it's just a question of who pays) editoral coverage as possible. If they really took the big view, they would have exactly the opposite approach. The role of editorial is to engage the audience and deliver its interested eyes to the advertisers. People sense, instantly, attempts to manipulate them into buying something. Decades of infomercials have trained us well. When people are looking to buy something, they don't mind having to sift through a sandbox full of empty platitudes, half-truths and red herrings to arrive at the message; that is all part of the time-honoured game, established around the same time as the invention of make-up. However, when people are looking to be informed, they intensely resent ulterior motives skewing the information. When they sense the attempted manipulation (and they do), they view the content a very different way, if they keep paying attention at all. Trade magazine editors are often teased that no one reads what they write anyway. This is probably true in many cases, often because the editorial was not written by the editor but instead placed by an advertiser and written by his PR agency. I know people read what I wrote at Wood Industry and Coverings because I got calls every time I made a mistake. Those magazines deliver the eyes of the industry to their pages whether the reader is already shopping for something or not. That's the magic of media, people look and get the advertising message even when they aren't ready to buy. That's why media with respected, engaging content can create demand rather than just fulfill the demand that is already there. And that is why marketers, who are supposed to be creating demand for a living, should want people to read honest, reliable, impartial, informative editorial instead of advertising in disguise.
I owe a great debt of gratitude to Kerry for showing me the right way to do trade magazines and proving to my satisfaction that it is the only way that stands a chance of becoming profitable. Unfortunately, marketers are trying hard to kill print right now out of the mistaken belief that online channels can deliver the same thing for less. I share Kerry's conviction that one of two things will have to happen; either online channels will have to take on many of the characteristics of print (owned by companies with addresses, paying full price for content and charging full price for advertising, subscribing to standards of accuracy and accountability), or we will see a revitalization of interest in print in the not-too-distant future. Even in the first scenario, an online channel that becomes a respected and profitable content provider (still waiting for that one) will likely decide to offer a print edition to deepen its penetration in its market — a perfect reversal of what is going on now. Print as we know it will only truly become irrelevant when electronic document readers become so cheap as to be nearly disposable, which may not be that far off. Even in this case, print will not so much have gone away as morphed into another form. Instead of receiving a new magazine each month, you will simply update the one you have with this month's content.
I wish the Canadian trade media would see the wisdom in keeping a clear separation between editoral and advertising, and I wish Canada's industrial supply marketers would see it, as well. Some do, but most view their task as being to obtain as much "free" (nothing is, it's just a question of who pays) editoral coverage as possible. If they really took the big view, they would have exactly the opposite approach. The role of editorial is to engage the audience and deliver its interested eyes to the advertisers. People sense, instantly, attempts to manipulate them into buying something. Decades of infomercials have trained us well. When people are looking to buy something, they don't mind having to sift through a sandbox full of empty platitudes, half-truths and red herrings to arrive at the message; that is all part of the time-honoured game, established around the same time as the invention of make-up. However, when people are looking to be informed, they intensely resent ulterior motives skewing the information. When they sense the attempted manipulation (and they do), they view the content a very different way, if they keep paying attention at all. Trade magazine editors are often teased that no one reads what they write anyway. This is probably true in many cases, often because the editorial was not written by the editor but instead placed by an advertiser and written by his PR agency. I know people read what I wrote at Wood Industry and Coverings because I got calls every time I made a mistake. Those magazines deliver the eyes of the industry to their pages whether the reader is already shopping for something or not. That's the magic of media, people look and get the advertising message even when they aren't ready to buy. That's why media with respected, engaging content can create demand rather than just fulfill the demand that is already there. And that is why marketers, who are supposed to be creating demand for a living, should want people to read honest, reliable, impartial, informative editorial instead of advertising in disguise.
Tuesday, September 21, 2010
Branding
This is one of the weakest elements of the typical manufacturing supplier's marketing strategy. Companies create a logo, pick out a paint colour and call the job done. If they want to get really fancy, they name their product line after some kind of ferocious wildlife (viper, tiger, wolverine). They have a vague idea that their brand can create an impression in the buyer's mind about the product, but they don't really believe it could ever influence someone's buying decision. They are engineers selling to engineers — surely the only thing that matters is the product specs, right? Branding, indeed all marketing, is seen as window dressing designed to attract attention to the product's good points and divert attention away from the weak points. There is a whiff of dishonesty about the whole thing that they would prefer to keep at arms length.
The best illustration I have seen for the power of branding comes from Ken Wong, a professor at the Queen's School of Business in Kingston, Ont. I was at a seminar of his where he held up the remote for his laptop and asked the audience to call out descriptions of the device just based on what they saw.
"It's black."
"It's made of plastic."
"It has buttons."
"It looks electronic."
Then Wong clicked the remote and the Fisher Price logo came up on the screen behind him. "Now," he said, "what if I told you it was made by this company?"
"It's durable."
"It's easy to use."
"It's cheap."
"It's for kids."
Those impressions, those assumptions about the product, were made instantly, by everyone in the room, the moment they saw the logo. Fisher Price had not had to spend an additional cent or print an additional word to communicate those facts; the message was conveyed simply by the sight of its logo. How long, Wong asked, would it take a salesman to convince a client his product possessed those qualities? And how long do salesmen typically get in front of a client?
Branding capitalizes a company's past investments in quality, service and communications, turning them into an asset the company can deploy again and again. Once these investments become capital, they can be used to leverage the acquisition of more capital. The marketer does not have to waste the audience's attention (which is currency, for marketers) reiterating basic facts about the product, he can turn their attention to a message about how the product will benefit them directly, or how it is better than the competition. Brands can and do work this way, but the company must make the initial investment to build the brand.
When equipment and supply manufacturers go back to their customers again and again with a chart full of specs, it is as if they are taking the time and money spent getting the customer's attention the previous times and flushing it down the toilet. Is the customer going to remember what spindle RPM your machine has from one visit to the next? Nope. Will he remember the colour? Maybe. Will he remember if you told him it was the best thing to come out of Germany since the BMW M class? Probably. He might even start thinking about your machine in terms of German engineering, German quality...German price. All's fair in love and branding, and borrowing from the hard work German auto manufacturers have done to build up their brands is just one of the weapons in the brand marketer's arsenal. Having established that brand impression, the next time the customer sees the product, he'll say "Oh yeah, the BMW machine," and move on to hearing more with those assumptions backing up his thought process.
That's an example of borrowing a brand, but a far better approach is to build an original, proprietary brand. This takes work, time and investment and is much more involved than just developing some fancy packaging. It starts with a real examination of what makes the company and product unique. This could be anything; brands have been built around where the product is made, the owner's moustache, catchphrases. The important this is to remember the meaning of the word unique. Saying a product is high quality and low price is a waste of oxygen. It has to be high quality and low price or no one is going to consider buying it at all. Every single competitor is making the same claim. A brand can choose to claim it is the highest quality or lowest price of anyone in the market, but it has to be able to back that up against myriad competitors vying for the same space. Many equipment and supply marketers opt to claim best value for the dollar, but this claim is toothless because it is muddied by so many variables. Value propositions must be clear and unambiguous: if you give me X, you will get Y.
Defining a brand calls for creativity and honest evaluation. It is as much a process of deciding who you are not going to sell to as to whom you are. Equipment and supply marketers often seem terrified of not appearing to be everything to every buyer. The result is bland, homogenous marketing campaigns that drive about as much demand as the Yellow Pages. Mad Men's Don Draper said it best: "Success is related to standing out, not fitting in." Companies should ask themselves why they decided to offer a particular product in the first place. Did it just seem like a good idea at the time? Or is there some real reason why you thought you could sell this thing? If the latter, tell people about it!
And, once you have told people, tell them again. And again. People have to see messages over and over, preferably from different sources, before they will absorb them. Building a new brand means shouting the same basic element of the brand over and over until everyone is ready to barf if they hear it again. Then it means toning down the first message gradually while using it to leverage the next shouted message. After shouting that for a while, briefly reinforce the original message, then start phasing in the third message; and so on until the whole brand concept has been communicated. Then a new campaign aimed more directly at driving sales and countering the competition starts, but the branding messages continue as a low-level background hum in the media forever. Have Coke and Microsoft established their brands? Just a bit. Have they stopped promoting and advertising them? Nope.
I think I'll be doing this a lot in the blog, but I have to apologize for offering what will seem to many to be Marketing 101-level comments. I have never, ever, seen an industrial supplier embark on the kind of branding campaign I've outlined above. If there are good reasons for this, I'd love to hear them.
The best illustration I have seen for the power of branding comes from Ken Wong, a professor at the Queen's School of Business in Kingston, Ont. I was at a seminar of his where he held up the remote for his laptop and asked the audience to call out descriptions of the device just based on what they saw.
"It's black."
"It's made of plastic."
"It has buttons."
"It looks electronic."
Then Wong clicked the remote and the Fisher Price logo came up on the screen behind him. "Now," he said, "what if I told you it was made by this company?"
"It's durable."
"It's easy to use."
"It's cheap."
"It's for kids."
Those impressions, those assumptions about the product, were made instantly, by everyone in the room, the moment they saw the logo. Fisher Price had not had to spend an additional cent or print an additional word to communicate those facts; the message was conveyed simply by the sight of its logo. How long, Wong asked, would it take a salesman to convince a client his product possessed those qualities? And how long do salesmen typically get in front of a client?
Branding capitalizes a company's past investments in quality, service and communications, turning them into an asset the company can deploy again and again. Once these investments become capital, they can be used to leverage the acquisition of more capital. The marketer does not have to waste the audience's attention (which is currency, for marketers) reiterating basic facts about the product, he can turn their attention to a message about how the product will benefit them directly, or how it is better than the competition. Brands can and do work this way, but the company must make the initial investment to build the brand.
When equipment and supply manufacturers go back to their customers again and again with a chart full of specs, it is as if they are taking the time and money spent getting the customer's attention the previous times and flushing it down the toilet. Is the customer going to remember what spindle RPM your machine has from one visit to the next? Nope. Will he remember the colour? Maybe. Will he remember if you told him it was the best thing to come out of Germany since the BMW M class? Probably. He might even start thinking about your machine in terms of German engineering, German quality...German price. All's fair in love and branding, and borrowing from the hard work German auto manufacturers have done to build up their brands is just one of the weapons in the brand marketer's arsenal. Having established that brand impression, the next time the customer sees the product, he'll say "Oh yeah, the BMW machine," and move on to hearing more with those assumptions backing up his thought process.
That's an example of borrowing a brand, but a far better approach is to build an original, proprietary brand. This takes work, time and investment and is much more involved than just developing some fancy packaging. It starts with a real examination of what makes the company and product unique. This could be anything; brands have been built around where the product is made, the owner's moustache, catchphrases. The important this is to remember the meaning of the word unique. Saying a product is high quality and low price is a waste of oxygen. It has to be high quality and low price or no one is going to consider buying it at all. Every single competitor is making the same claim. A brand can choose to claim it is the highest quality or lowest price of anyone in the market, but it has to be able to back that up against myriad competitors vying for the same space. Many equipment and supply marketers opt to claim best value for the dollar, but this claim is toothless because it is muddied by so many variables. Value propositions must be clear and unambiguous: if you give me X, you will get Y.
Defining a brand calls for creativity and honest evaluation. It is as much a process of deciding who you are not going to sell to as to whom you are. Equipment and supply marketers often seem terrified of not appearing to be everything to every buyer. The result is bland, homogenous marketing campaigns that drive about as much demand as the Yellow Pages. Mad Men's Don Draper said it best: "Success is related to standing out, not fitting in." Companies should ask themselves why they decided to offer a particular product in the first place. Did it just seem like a good idea at the time? Or is there some real reason why you thought you could sell this thing? If the latter, tell people about it!
And, once you have told people, tell them again. And again. People have to see messages over and over, preferably from different sources, before they will absorb them. Building a new brand means shouting the same basic element of the brand over and over until everyone is ready to barf if they hear it again. Then it means toning down the first message gradually while using it to leverage the next shouted message. After shouting that for a while, briefly reinforce the original message, then start phasing in the third message; and so on until the whole brand concept has been communicated. Then a new campaign aimed more directly at driving sales and countering the competition starts, but the branding messages continue as a low-level background hum in the media forever. Have Coke and Microsoft established their brands? Just a bit. Have they stopped promoting and advertising them? Nope.
I think I'll be doing this a lot in the blog, but I have to apologize for offering what will seem to many to be Marketing 101-level comments. I have never, ever, seen an industrial supplier embark on the kind of branding campaign I've outlined above. If there are good reasons for this, I'd love to hear them.
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