Content Matters

What a Long, Strange Marketing Trip It’s Been

It’s no surprise that a key to innovation is rejecting conventional wisdom. And innovation thrives in many businesses, particularly those in the technology space. But whether in silicon valley or silicon alley, marketing is still largely done in the same way it has for decades. Companies hire PR firms who push out press releases, while marketers post product info to web sites and create factsheets for their sales staff.

Marketers may dabble with new approaches, sticking a toe into the social media space by creating a Facebook fan page or setting up an official Twitter account, but even then most apply old approaches to new platforms. Knowledge is shared through boring white papers which sit behind a registration wall while Twitter accounts push out links to bland press releases or staid marketing messages.

 When it comes to breaking the rules of marketing and rejecting conventional wisdom, David Meerman Scott (literally) has written the book. And now, he’s joined together with HubSpot CEO Brian Halligan to author a new book, Marketing Lessons from the Grateful Dead.

It’s not the first time that David has written about the Grateful Dead. Readers of his book World Wide Rave may recall a discussion framed by asking whether you wanted to be like Led Zeppelin, whose historic reunion show at the O2 arena was not made available in video format (and where YouTube was forced to remove clips posted by fans), or like the Grateful Dead who, long before the days of Facebook and social media, encouraged concert attendees to record their shows, even setting up special sections where they could plug in to the soundboard to get better quality recordings.

As the book pointed out:

If you want to remain relevant in an always-on, fan-centric, YouTube world, you need to embrace—not restrict—your most important supporters. You need to believe in the power of a World Wide Rave to sell your products and services.

In this new book, David and Brian take a look back at how the Dead worked to develop and nurture an active community of fans, then show how to apply many of those same techniques to today’s marketing platforms. For example:

Rethink traditional industry assumptions – Rather than focus on record albums as a primary revenue source (with touring to support album sales), the Dead created a business model focused on touring.

 (blogger note: if you’ve read what Fred Wilson and others have written suggesting media companies look to monetize the audience, not the content, this is a great example)

Bypass accepted channels and go direct – The Grateful Dead created a mailing list in the early 1970s where they announced tours to fans first. Later,they established their own ticketing office, providing the most loyal fans with the best seats in the house.

The foreword to the book is written by one of the biggest (literally and figuratively) Deadheads, former UCLA and NBA great Bill Walton. As he so eloquently describes it:

Their passion, creative spirit, imaginative soul, and industrious commitment to promote truth, fairness, justice, and the Grateful Dead way led them through the evolutionary transition where they went from playing for silver to playing for life. This book tells you how to make that transition for your own career.

David Scott’s books are always practical, insightful and a fun read. Fans of his prior books won’t be disappointed here. Marketing Lessons from the Grateful Dead may be his finest book to-date.

 

Has Microsoft Stopped Worrying and Learned to Embrace Free?

Just a week after the announcement of Google Chrome OS, Microsoft has struck back, announcing its plan to provide a free, web-based version of its Office 2010 suite, to be called Office Web Apps.

So, will Microsoft win the cloud document war, defeating Google Docs? I’m not so sure. Microsoft is certainly well-positioned for this. Microsoft Office is the dominant office application, holding a practical monopoly on corporate users, while Google Docs has barely made inroads to the consumer space. And, with the mix of both online and offline tools, Microsoft can offer benefits that no one else (including Google) can match today.

Yet, with its business model and culture, I think that Microsoft will have a difficult time balancing the needs of users with the desires of their sales & marketing organization. There’s a tough balance required for success in a freemium model. Looking at Google’s position, they are free to do anything they want with Google Docs. They can build in all kinds of bells and whistles and integrate that with the Gmail email platform, all without ruffling internal feathers. But Microsoft will be pulled in two directions. While their product teams will want to build the best possible Office application, it’s likely that they will run into constraints out of fear that expanding the online feature set could cannibalize sales of the traditional business.

Another big challenge for Microsoft is its development organization. Microsoft has used long development cycles, typically creating large, bloated applications. The lone exception has been Bing, where the team behind it as seemed almost nimble (even beating Google to showing tweets in the search results). But I assume that the dev team for Office Web Apps will be part of the Office 2010 group, which would not bode well for a light, simple application.

While it’s unlikely that a cloud-based Office app would steal users from large corporate systems, Microsoft generates significant revenue from small business, nonprofits, home office and individual users. These users would all be strong candidates to move to a free cloud-based application.

I believe that Microsoft will feel constant pressure to cripple its free version to slow the erosion of its traditional sales.

Will that create enough of a window for Google to win the (cloud) Office wars? That’s tough to project, especially considering the new Office Web Apps are still a year away . But while Microsoft may have all kinds of advantages in this competition, Google will have the freedom to build whatever it sees as the best product, which in the end just might give them the edge.

 

Five Questions for David Meerman Scott

This week, Content Matters caught up with e-marketing thought leader David Meerman Scott. David is a highly sought-after speaker and is author of the "The New Rules of Marketing and PR" and "Cashing In With Content". His newest book, World Wide Rave: Creating Triggers that Get Millions of People to Spread Your Ideas and Share Your Stories was published last week and is quickly moving up the marketing and e-commerce charts on Amazon. David can also be found @dmscott.

David is one of my favorite marketers to read or hear because he eats his own dog food. His speaking career was jump-started to some extent by the "world wide rave" started by his earlier eBook on the New Rules of PR (which he later turned into a full-length hardbound book). The ebook, which suggested that in the web environment, companies should target their PR efforts directly to end-users rather than to traditional media channels, was quite provocative at the time and set off a bit of a flame war on the PR and media blogs. That led to several hundred thousand downloads of the ebook and lay the groundwork for much of his subsequent work. So, when David speaks (or writes), I pay attention.

Content Matters: Your new book, World Wide Rave, discusses ways in which marketers can trigger the type of web buzz that typically happens only virally. Can you share a couple of examples of companies who’ve done that well?

David Meerman Scott: A World Wide Rave is when masses of people around the world can’t stop talking about you, your company, and your products. Whether you’re located in San Francisco, Dubai, or Reykjavík, it’s when global communities eagerly link to your stuff on the Web. It’s when online buzz drives buyers to your virtual doorstep. And it’s when tons of fans visit your Web site and your blog because they genuinely want to be there.

One of my favorite stories is Erin Weed, founder of Girls Fight Back!, uses her Web site, MySpace and Facebook groups, blog, and YouTube videos as a way to promote women's safety and self-defense issues.

Girls Fight Back makes safety education accessible, especially to young women in their teens and twenties, through her education Web site and live seminars conducted all over the United States. She teaches girls and young women why they are their own best protectors, and then shows them how to reduce the risk of violence and fight back if necessary. Amazingly, Erin has trained over a half million girls and women to fight back.

Anywhere from 200 to 1,000 people attend each hour-and-a-half-long seminar. Erin was having a hard time getting the teen and college girls to log on to her website after speaking gigs and paper sign-up forms to gather email addresses for 500 or more girls at a time was impractical. She realized she had to somehow get to them (as opposed to the other way around). So she gets all the girls to text message their email addresses from their mobile phones, which automatically load to a web page.

Get this... nearly 100% of the girls volunteer their email addresses. Clearly, Erin's understanding about how girls and young women communicate (with mobile phones) is critical. Yet how many organizations fail to understand this? All I have to do is look in my home mailbox and see all the junk mail that colleges, camps, and the like are sending to my teenage daughter.

Another favorite example is Lisa Genova. After her novel, Still Alice was rejected by publishers, she decided to self-publish her novel and received a stamp of approval from the Alzheimer's Association. Her blogs developed a huge platform and the book sold briskly.

As a result of Lisa's World Wide Rave plus the measurable sales success on Amazon.com and other online booksellers, Lisa generated buzz in the book world too. An agent contacted her and sold the book at auction in June 2008 for just over half a million dollars to Simon & Schuster. The book, that the publishing world initiall ignored, was a World Wide Rave and when the new edition was released in January 2009, it made the New York Times Bestseller list.

CM: You encourage companies to “Lose Control”, asking them whether they’re more like the Grateful Dead (encouraging sharing) or Led Zeppelin (total control). Publishers have been having this debate for 20 years. What are some simple steps that publishers, locked into a control mindset, might take to get outside their comfort zone? How can they go from being "Trampled Underfoot" to creating a "Ripple"?

DMS: If you step back and look at the ways musicians make money besides the recordings—concerts, endorsement deals, merchandise (such as $35 t-shirts), and “souvenir” packaging of the music (booklets included in a CD case, for example), not to mention royalties for the use of music in television, movies, and advertising—you start to suspect that clamping down with rigid controls may not be the best strategy. Think about that: the music industry is trying to prevent the spread of their product!

If I were a music executive (or musician), I’d make much of my music available for free online, and I’d encourage people to share it. I would have the confidence that providing music for free would drive sales of my other products. Many unsigned bands are prospering with this strategy through their own MySpace pages or Web sites, and some are finding absolutely tremendous success.

CM: You recently wrote about Century 21 real estate shifting its national television advertising budget to online. With current economic conditions, do you see more of this in 2009? Are there specific sectors or market segments where this seems more likely to occur?

DMS: Marketing on the Web can be free. It costs nothing to put up a YouTube video. It costs nothing to create a blog. It costs nothing to create a presence on Facebook. Yes, with the economic downturn, smart companies are looking to leverage the Web in new ways.
We’re living in a time when we can reach the world directly, without having to spend enormous amounts of money on advertising and without investing in huge public relations efforts to convince the media to write (or broadcast) about our products and services. There is a tremendous opportunity right now to reach buyers in a better way: by publishing great content online, content people want to consume and that they are eager to share with their friends, family, and colleagues.

CM: As marketing budgets get slashed, what are a couple of things that nimble marketers might focus on to maximize their marketing ROI?

DMS: Yes, you can harness that power and virtually anybody, if they're smart about creating something interesting, can generate something that will spread. Now, that's not to say that everybody can generate a million views of a YouTube video, or that if you do something, everyone in the world will know about it.

Within your marketplace, among the people you're trying to reach, if you have a niche product, it's still absolutely possible to reach a large number of your potential customers online with something very interesting. It could be a video, an e-book, some kind of chart or graphic, a photograph, some data or metrics, or an interesting way of looking at what's going on in the marketplace. It's possible to spread any one of those things. Yet most companies haven't been creating information with the idea that it's going to spread. Instead they've been creating information with the idea that they have to ram it down people's throats. It's a very, very different technique to create something that is primed to be shared.

CM: While there’s a lot of gloom and doom about, there are always bright spots. What are you optimistic about in 2009 (professionally or personally)?

DMS: I'm very optimistic. So are all of my smart friends. When there is chaos and fear, there is also a tremendous opportunity.

 

Do Tech Companies Need PR?

Marshall Kirkpatrick at Read Write Web started a bit of a meme frenzy today with his post Does Good Tech Need PR? The post got me thinking about my experiences using both internal and external resources for PR and what has worked and what hasn't.

First, PR for tech is often more than simply the traditional media relations. Most successful startups are staffed with great technical people but are typically weaker on the business side. If you're lucky, you've got a good product marketing/product management type, but it's rare to have strong marketing communications capabilities, particularly in the early stages. As a result, techs often look to their PR firms to help them create messaging and positioning material, developing decks and perhaps some marketing collateral.

Next, the PR firm will develop the communications strategy for reaching five key audiences:

1. Traditional media
2. Bloggers and alternative media
3. IT analysts; and, perhaps
4. Sales prospects (particularly for enterprise software)
5. Investors if the company is raising capital

Then, on an ongoing basis, the PR firm should be doing constant outreach, at least to the first three groups above.

So, should tech companies utilize PR? Of course they should, but with a few caveats:

First, keep in mind that while PR firms can craft and communicate your message, they don't understand your product or your market the way that you (hopefully) do. So, you have to work closely with your PR firm in developing the messaging, hopefully based upon real-world experiences with your early adopter users.  If you can't explain the benefits that your users are getting from your product, no PR firm in the world will be able to come up with those answers.

Next, it's important to match the capabilities of the PR firm to the audiences which you are targeting. Trying to get TechCrunch and Mashable to pay attention? That's a different skill set than reaching out to Gartner or the New York Times. You'll want a PR firm that has proven adept with social media marketing. But don't expect that approach to work with the Times or the Journal.

But do the alternative media want to be pitched? Scoble argues that he'd prefer to find cool stuff on his own or through word of mouth. That may be cool but if you're going to wait around hoping your technology will be discovered through serendipity, you'll probably be disappointed. And most bloggers are happy to have ideas floated to them, as long as the ideas are relevant to the world that they cover. So, I think that PR plays a solid role in the web 2.0 world.

But can't you do this stuff yourself? In theory, of course. But most startups don't have the resources, the know how or the bandwidth to do this effectively. A good PR effort consists of an ongoing outreach program, where someone is calling, emailing or Tweeting a couple of hours every day. Do your senior executives have the time to make that commitment? I doubt it. I've also found that founders tend to think their pitch is a match to every reporter's needs but a PR pro knows not to pitch off-target messages.

The challenge for companies is in hiring the right firms and matching their capabilities to your needs. Yes, there are a lot of mediocre PR firms out there but the bigger problem, in my opinion, is hiring good people for the wrong projects. A big agency may not yet understand PR 2.0 and may also put first year associates on your account rather than the senior executives who came in for the pitch. A firm adept at social media strategies may not have the relationships to get you into the Times or the Journal. Define your requirements, set realistic goals and measure and monitor and you'll find that your PR dollars are a solid investment.

For more on effective PR for tech companies, read Brian Solis' PR Tips for Startups and follow David Meerman Scott's blog and read his New Rules of Marketing and PR.

UPDATE: Scoble talks about what he (and other bloggers) want from PR while PR pro Jeremy Popper tells bloggers to STFU.

What's the Value of a Good Mossberg Review?

Via Blogspotting.

For the past twenty years, Walt Mossberg has helped business people navigate the complex world of computers and personal technology. His Personal Technology and Mossberg's Mailbox columns are relied upon by numerous readers. But, how influential are Mossberg's reviews?

That was the question posed in a recent paper by USC marketing professor Gerard Tellis and Joseph Johnson, Assistant Professor at the University of Miami. In the paper (final version to be published next month), the two examined Mossberg reviews from 1991 - 2001 and then analyzed abnormal returns for the parent companies of those products tied to those reviews.

In developing the study, the two utilized grad students to qualitatively assess whether each review was positive or negative and scored them on a 2 - 10 scale.  There were 765 reviews assessed, though only those whose parent company is publicly traded were included in the analysis, for a net total of 498 reviews.

The preliminary findings:

Firms with bad product reviews saw stock losses of $200 million, while those with positive reviews saw gains of $500 million

The full study is due out next month.

MarketingSherpa SoS

I'm posting from MarketingSherpa's Selling Online Subscriptions conference today. 
Two interesting sessions this morning:
MarketingSherpa research director Stefan Tornquist on "Paid Content research: stats on what works" and Flint McGlaughlin, Director of MarketingSherpa parent MarketingExperiments providing case studies of landing page optimization.

I'm waiting for them to post those presentations to the attendee site, but in the meantime, here are a few highlights:

Stefan Tornquist - Key takeaways from their latest survey of online publishing marketers:
What's working for b2b publishers? - No real surprises on this one - SEO, Paid Search marketing, online advertising (banners & sponsorships), viral marketing.

Web 2.0 - looking at b2b publisher respondents as compared to a year ago:
- 55% offer RSS feeds (up 2% over prior year)
- 50% offer blogs (up 8%)
- 35% are providing video clips (up 13%)
- 25% are podcasting (up 5%)
- 16% offering wireless (up 4%)

Interestingly, when they look at the consumer publishing side, many of the key indicators are flat.
- 45% offer RSS (flat to last year)
- 44% offer blogs (flat)
- 41% offer video (flat)

The video number for consumer publishing caught me by surprise. While the raw percent of sites offering video was higher (at 41%) than for b2b publishers, I'm surprised to see that there was no year-over-year growth in that number for the b2c publishers, especially with all the expected growth in that market. I wonder if that's due to sites being afraid to embrace video, a lack of enough relevant content or something else. Sounds like an opportunity.

More to come later...

MarketingSherpa Selling Online Subscriptions

Monday and Tuesday I will be at the MarketingSherpa Selling Online Subscriptions (SoS) conference at the Museum of Jewish Heritage in downtown NYC. They've got a solid lineup of presenters including speakers from Hoovers, Zagat, TheLadders.com, ShareFile, Phanfare and more.  The MarketingSherpa events are case study-based and provide lots of practical knowledge from content companies.

In addition to the case studies, there's also a lot of coverage of SEO issues and the obligatory Web 2.0 strategies session.

If you plan to be there, drop me a tweet @graubart or grab me at the cocktail reception. For those who can't make it, access permitting I will blog the sessions and post relevant tweets.

Hope to see you there.

A Conversation with Sharefile CEO Jesse Lipson

In a couple of weeks, Marketing Sherpa will be holding its 8th annual Selling Online Subscriptions conference. In line with the MarketingSherpa approach, speakers at the S0S conference share case studies of how they have improved subscription and retention of online customers.

Among the presenters at this year's conference will be Jesse Lipson, President and CEO of secure file transfer provider ShareFile. Jesse agreed to provide Content Matters with a snapshot of his case study in advance of the conference. The ShareFile case study shows how they were able to build the business from zero to more than 150,000 users in about two years, leveraging quantitative modeling in order to project subscription revenues.
Here's our conversation (conducted via email):

Content Matters: Tell me a little bit about ShareFile.
Jesse Lipson: ShareFile allows companies to exchange files with their clients easily, securely, and professionally. With ShareFile, companies can set up a password-protected area for clients where they can securely exchange files that are too large or confidential to be sent via email. Examples of such files include high resolution images, video, QuickBooks and other accounting documents, medical or legal documents, CAD drawings, and business plans.

CM: What are the primary markets that you serve?
JL: We primarily focus on the small business market to companies with 1 – 50 employees. We have a long tail of industries that we service (well over 50), but our top industries include consulting, advertising/marketing, accounting, and construction.

CM: As a startup, what has been your go-to-market strategy?
JL: We’ve focused primarily on online advertising with a special focus on paid search advertising to date. As we have continued to grow, though, we are beginning to do some industry-specific for the verticals that seem to get the most value out of our product.

CM: You’ve taken a more quantitative approach to projecting subscription revenues.  What’s the background on the development of this model?
JL: I have always been very quantitative in my approach to business plans. Whenever I look at a business (even if it’s not mine), I tend to naturally try to break the business into its core components to understand the variables that drive it. So when I started ShareFile about two and a half years ago, my first instinct was to try to create a simple model in Excel that could help me understand the business. Over the past couple of years, as I continued to look at other subscription businesses and attempt to model them, I realized that the key variables in the model I had created pretty well applied to all subscription businesses from magazines to gym memberships.

CM: Can you provide an example of how you’ve leveraged the model in driving business descriptions?  What were the results?
JL: One of the things I like best about using models is the ability to run “What If…” scenarios and quickly see what the impact of a potential decision would be on subscribers, revenue, and profit. About six months ago we decided to try to increase or free trial conversion rate by making a telephone call to each free trial to follow up and see how things were going. We ran a test for one month by calling 50% of our free trials and refraining from calling the control group of the remaining 50% of free trials. The test group (trials that we called) had a 61% conversion rate while the control group had a 57% conversion rate. I plugged this new assumption into our model along with the fact that calling each free trial effectively increased the cost of each free trial by a couple of dollars in employee time.

The result was that the change was a net positive for us, and this new technique will generate about $500,000 in additional profit for the company over the course of the next few years.

CM: One of the key values of modeling is to avoid making mistakes. Have you had any cases where your gut feel was to do something but the model helped you avoid making a mistake?
JL: Yes. We combine modeling with testing to help validate our theories. Modeling alone can help you understand your business better and can help you run “What If..” scenarios (which often help you figure out the most important things to test), but ultimately running a real-world experiment is necessary to validate the assumptions of the model. Likewise, just doing testing alone won’t give you a clear picture of the impact of a change, even if you can observe the “winner” of the test.

One example of a case where my gut seems to have been wrong is the price point of our product. I had been reluctant to raise our prices since our current price point had been working well and I was afraid that an increase in price would hurt our subscriber numbers. However, plugging some scenarios into our modeling tool helped me feel confident that  even with a fairly large drop in new free trials, we could make more revenue with less cost by increasing the price of our product. This type of decision is difficult to make by gut feel alone since there are many variables involved including revenue per customer, free trial conversion rate, viral growth rate, and churn rate.

CM: For companies who have always relied upon qualitative decision making, can you suggest some small steps they might take to introducing a more quantitative approach?
JL: The biggest objection I hear toward modeling is that there are many complexities to the business and so it can’t be captured in a model. My response is that a model is intended to be a simplification of real life and not to expect it to be a fully accurate way to represent the outside world.

My suggestion for qualitative companies is to start simple with just a couple of variables and the acknowledgment that the model is not fully accurate, and then drill down on those first couple variables and blow out the model over time as they become more comfortable and see the value of modeling.

For example, let’s say the company in question is a law firm. To begin at a basic level, the law firm makes revenues and has expenses. Revenues in law firms are typically a function of time billed. So, you could drill down on revenue and break that into the number of hours billed per month times the average hourly rate of your lawyers. The number of hours billed is a function of the number of attorneys in the firm multiplied by the number of hours that each attorney works per month multiplied by the percentage of their time that is billable.

So, just like in the above example, companies can start with a simple model in Excel and just continue to expand the model as they feel more comfortable with it. I think that even qualitatively focused companies will be able to look at models like the above and start to think of questions like “Why are our lawyers on 40% billable?”, “What can we do to increase their billable time?”, “If we could make 50% of their time billable, how much would that increase our company’s profits?”.

CM: Thanks for sharing your insights. I look forward to seeing your full presentation at SOS.

Jesse Lipson will be speaking at Marketing Sherpa's Selling Online Subscriptions conference May 12-13 in New York. I'll be attending the conference; if you plan to be there, be sure to say hello.

Dow Jones Acquires Generate

Dow Jones has acquired business intelligence technology company Generate, Inc.

Generate, led by identical twin co-founders Tom and Darr Aley, is among the leaders in harvesting web content. They have been able to productize and monetize this capability, where others like ZoomInfo, have struggled. They combine this with semantic analysis of text, to identify business events, which trigger alerts.

Combining Generate with Factiva Salesworks, should create a competitive sales intelligence application. Dow Jones has strong market penetration and many feet on the street; with this improved technology and content, they should make strong inroads into this market.

Congratulations to Tom and Darr, Debbie Perry and the entire Generate team.

NetProspex Releases Free eMail Marketing Tools

NetProspex, a sales intelligence startup, has just released a suite of free email marketing tools called the Sales Lead Toolkit.
The Toolkit consists of four apps:

• Email pattern lookup: trying to figure out the email pattern for a prospect? NetProspex uses their database of corporate email addresses to suggest the right pattern (e.g. firstna[email protected] or [email protected], etc)
• Email checker - most commecial email packages have this capability, but it's great to have a free web-based app where you can validate whether an email address is accepted by the email system.
• Lead by URL - just enter a URL and it provides you with a list of contacts which you can download/purchase.
• Custom search - by geographic region, job function, industry, etc.

NetProspex, founded in 2006 and run by former ZoomInfo president Gary Halliwell, is a fairly new entrant into the competitive prospecting and sales intelligence space.  Their approach seems to be a cross between the ZoomInfo and Jigsaw models. They claim 2.5 million contacts at 350,000 companies. The basic business model is a subscription model, though they are employing a Jigsaw-like offering where users can upload their own contacts in return for new ones.

I took a quick test run of the new tools. In a small and unscientific study, I found the data to be fairly accurate. Looking at the profile for Alacra, NetProspex had 12 contacts, as compared to nine on ZoomInfo.  Of the 12, there were a couple of good contacts that I would not have expected them to have and only one that appeared to be in error. They also incorrectly listed a few of our London contacts as based in New York, but that's a minor quibble.

The new Toolkit is a smart idea.  The lookups are limited to ten per day, so it's a freemium approach where they can show off their capabilities in hopes of getting users hooked so they subscribe. I've long been a fan of freemium, especially with products like this where power users will easily exceed the free version, but occasional users will bookmark it and come back for more.

The Toolkit is available on the NetProspex website.