How Groupon Could REALLY Break the Mold

Posted on February 9, 2011 by Paul

Groupon remained silent the second day after its offensive ad campaign ran on the Super Bowl. The Wall Street Journal quotes spokeswoman Julie Mossler as saying “we don’t really have anything else to say,” meaning that the defensive statement by founder Andrew Mason on the company blog on Monday would have to stand on its own.

Groupon is donating up to $100,000 to each of four charities whose causes were cited in the company’s ad campaign. That’s $400,000 (tax-deductible) against a Super Bowl Ad budget of at least $9 million, and that’s not counting all the media buys since then. So if Groupon has spent (conservatively) $10 million on media buys since Sunday and given $400,000 in matching donations to the causes it exploited, then its licensing costs amount to 4% of the total spend. Pretty good deal if you ask me. For a company that just raised $950 million in financing, it’s not even a rounding error.

Groupon likes to think of itself as working against the grain, so what if it REALLY broke the mold by challenging the model that has advertisers throwing absurd amounts of money at the TV networks for a football game every February? What if Groupon announced that it wouldn’t buy any Super Bowl advertising but would instead donate the $9 million ad budget as matching funds to those four charities? What if it further challenged the other big Super Bowl sponsors like GM, Coca-Cola and Annheuser-Busch to do the same? Do you think Groupon could get the same impact giving money to rainforests and Tibet as it got by sending the money to Rupert Murdoch?

I’m not sure, but it seems an interesting idea to explore, at least for an outfit that presents itself as a rule-breaker. How about breaking the rules of the world’s largest commercial stunt in the name of the environment and human rights while also challenging others in your community to do the same? Could it possibly have the same impact?

I’d sure like to see someone try it.

Groupon Digs the Hole Deeper

Posted on February 7, 2011 by Paul

It’s been a little more than 24 hours since Groupon aired the most offensive advertising campaign in history, and the company’s response to the outpouring of negative commentary has been a textbook example of how not to handle a crisis.

The Groupon ads, which were intended to be parodies, used celebrities to stage mock public service announcements that ended in pitches for Groupon’s coupon service. In the day since the ads were aired, we’ve learned that the messages were intended to raise awareness of the causes that were mentioned and to stimulate giving to those charities. Too bad Groupon didn’t mention any of those noble goals in the commercials themselves.

I haven’t conducted a scientific analysis, but in monitoring the mainstream media coverage as well as the chatter on Twitter and Facebook today, it appeared to me that commentary was running about 80% negative on the campaign. As of this writing, there are more than 300 comments on the blog entry CEO Andrew Mason posted just before the ads debuted, the vast majority of them critical.

Mason finally posted a response to the outpouring of commentary today. Rather than admitting that the campaign was a failure, he attempted to defend it. “When we think about commercials that offend us, we think of those that glorify antisocial behavior – like the scores of Super Bowl ads that are built around the crass objectification of women. Unlike those ads, no one walks away from our commercials taking the causes we highlighted less seriously.”

Actually, when I think about commercials that offend me, the image of Timothy Hutton using the suffering of the Tibetan people to sell direct marketing services will forever remain etched upon my mind. Andrew, you set a high-water mark for offensiveness. You’ve made the GoDaddy ads look like Dr. Seuss by comparison.

Mason goes on to explain why the ads are clever and innovative. Unfortunately, anyone knows that it’s pointless to explain a joke. If people don’t get the joke in the first place, then attempting to tell people why it’s funny just looks pathetic at best and arrogant at worst.

I don’t know who counsels Groupon about public relations. Its press releases cite Julie Mossler, who appears to be an employee, as the contact. This company clearly needs some help in crisis communications, though. Any experienced counsel would tell Groupon to apologize, make good with its critics and put this problem behind it as quickly as possible.

However, Groupon appears to be committed to moving ahead with this campaign. It’s tweaking the endings of the ads to make the tie-ins to charities clearer, and I suppose that helps a little. But it doesn’t change that fact that this campaign is tasteless, unfunny and now only borderline offensive. It is vaguely reminiscent of the Pets.com sock-puppet ads of the late 90s, the difference being that the sock puppet was at least amusing. These ads aren’t, and Groupon would be well advised to run screaming from them as quickly as possible.

Here’s another thigh-slapper from the video series for your amusement. Deforestation is a great tie-in to product discounts.

Groupon’s Advertising Obscenity

Posted on February 6, 2011 by Paul

In my 53 years on earth, I have never witnessed a more tasteless, vulgar and morally repulsive example of exploitative marketing than this Groupon ad that ran on the Super Bowl tonight. Can you imagine using the suffering of a repressed and brutalized nation to market online coupons? It’s mind-boggling. What’s next, Groupon? Perhaps an ad for discounted cigars made by the survivors of the Haitian earthquake?

Groupon should buy network TV time to apologize for this obscenity. How on earth did the management at the company allow this to happen? If you are as offended by this ad as I am, I encourage you to tweet your opinion to Andrew Mason, founder and CEO of Groupon.

Update: David Kaplan covers the outrage on Twitter in a good post on PaidContent.org. The ad “was in such poor taste, it makes the outrage directed toward Cole’s insensitive, tone-deaf tweet equating sales and the Cairo uprising against Egyptian President Hosni Mubarak seem mild,” he writes.

Update: In a posting on the Groupon blog, founder Andrew Mason explains that the ad is partly satirical. “What if we did a parody of a celebrity-narrated, PSA-style commercial that you think is about some noble cause (such as ‘Save the Whales’), but then it’s revealed to actually be a passionate call to action to help yourself (as in ‘Save the Money’)?”

Actually, we think it’s a terrible idea. If the ad is intended to raise money for Tibet, it would have been nice to offer diners the option of sending their savings directly to Tibetan relief. But the ad neglects that detail.

Groupon is saving face by matching donations up to $100,000 to The Tibet Fund. Take them up on that.

Social Marketing Hangover

Posted on January 6, 2011 by Paul

I was recently quoted on Internetnews.com making the following prediction:

“Look for marketing’s love affair with social media to give way in 2011 to the sobering reality that a Facebook fan page and Twitter account don’t solve problems of poor products or positioning. Stories of social media failures will become more frequent as practitioners realize that customer conversations are time-consuming to maintain and that peer conversations present as many problems as they do opportunities.”

A few of my more passionate social marketing friends contacted me and asked politely if I had lost my mind or something for issuing such a gloomy and pessimistic forecast at precisely the hour of social media’s triumph. I responded that no slight was intended. On the contrary, I think the hangover stage is necessary and healthy if social media is to achieve its realistic potential for change.

Anyone who’s watched technology for a while is familiar with the lifecycle of innovation. There’s a period of exuberance, followed by the cold reality that the new tool won’t shorten the work week or lead to permanent weight loss. Gartner famously labeled this blue period the “trough of disillusionment,” which is a perfect term for it.

Some technologies never exit this down cycle (handwriting recognition) and some dwell in purgatory for many years before finding their niche (tablets). Many return to achieve their potential after time and other technology advancements help them along (PCs, the Internet) and a precious few continue rocketing up the adoption curve without any slowdown whatsoever (smart phones).

Social media marketing can never match the hype that has been heaped on it for the last three years, so it must go through a correction stage. The discipline will be better for the experience, but only after a lot of business people realize the ugly reality that this stuff is really difficult.

Blaming the Tools

The souring of marketer attitudes toward social media first became evident to me last spring when I worked on a survey for B-to-B magazine that found that nearly half of 400 marketers surveyed were disappointed with the results they were getting from Twitter. A little further exploration revealed that those expressing the greatest disappointment were using Twitter for business less than once a week. That’s like blaming your lawnmower for making your lawn ugly when you only cut the grass every other month.

I’ve recently noticed that the questions marketers ask me have changed. A year ago, people wanted to know how to start social media campaigns. Now they want to know how to rescue the floundering campaigns they already have. Disillusionment is starting to set in.

As poorly conceived or badly executed social marketing campaigns begin to take their toll, people will naturally blame the tools. That’s an instinctive self-protection reflex. Over the past year marketers have decorated their websites like Christmas trees with Twitter and Facebook logos. Now some of them are wondering why Santa hasn’t appeared. Unfortunately, even Santa requires you to first spend a year being good.

While I don’t believe the popular attitude toward social media marketing is going to turn overwhelmingly sour, we will begin to see marketers pulling in their guns this year for three major reasons:

Lack of executive support. A lot of C-suite types never believed social media was all that big a deal in the first place, so they made half-hearted investments with unrealistic goals. Most of these initiatives will fail. Executives can then say “I told you so” until the market forces their hand.

Lack of patience. Social marketing is unlike traditional marketing in some pretty fundamental ways. Traditional marketing is campaign-oriented: Put a message in the field and then sort through the surge of leads and responses that come in. Social marketing is about building relationships over time. Like a good diet and a good supplement program from healthyusa.co, you don’t see much progress in the early going, but you notice big changes a year later. It takes patience to get there. Patience is becoming a pretty precious commodity.

Lack of understanding. I’ve talked to several companies recently that have information-rich community websites that are going nowhere. These companies have got half of the equation right: They’re producing solid content. What they don’t understand is the relationship side of the equation. They’re approaching social marketing like they approach conventional marketing: Blast out a message and hope that people respond. That was hard to do even three years ago and it’s almost impossible today. A much more effective strategy is to reach out to the people who already have the audience’s attention and get them engaged. One-to-one relationship-building is not a traditional marketing strength, but it must become one.

So Now What?

The social media landscape is vastly more crowded today than it was a year or two ago. The time when a clever blogger could amass an audience of 30,000 loyalists in a year has passed. People’s attention spans are shorter than ever and their willingness to find information is giving way to the expectation that information will find them.

Effective social marketing campaigns require commitment, patience and constant innovation. They also must be backed by an organizational commitment to creating delightful customer experiences. In many cases, the best group to run social campaigns is the customer service organization because they already understand one-to-one relationships. However, marketing usually carries the ball and turf wars prevent them from working cooperatively with other groups.

Social marketing is hard. It requires treating an audience as a collection of individuals rather than a demographic clump. Building relationships takes time and a tolerance for frustration. There are many blind alleys and few big scores. Success comes from building community one brick at a time.

Avaya’s Paul Dunay (left) said it best in a recent webcast. “We treat every customer as if he or she could bring down our company.” The key word in that sentence is “we.” Social marketing requires everyone in the company to embrace the idea of customers as individuals. Not everyone is up to the task just yet.

Social Media RFP Gets An Update

Posted on December 27, 2010 by Paul

One of the social marketing practitioners I most admire is Maggie Fox, whose Social Media Group was a pioneer in creating new-media campaigns long before it was fashionable.

About a year ago, Social Media Group published a comprehensive and intelligent template for creating requests for proposal (RFPs) for social marketing campaigns. Now they’ve followed it up with a second version that includes an “RFP Bill of Rights” that “will hopefully help provide guidance on how to do an RFP right and fairly,” Maggie says.

The Bill of Rights makes for interesting reading. It provides guidance for marketers to consider in publishing RFPs that are fair to the bidding agencies. With advice like “I will not issue an RFP ‘Cattle Call’”, “I will do my own homework and “I will give you feedback,” it covers the tactics that (intentionally or not) often poison the client-agency relationship. I get the sense that this guidance is born of some painful experience, which makes its teachings all the more relevant.

You can download the RFP template here or find it on the Social Media Group site.

Weinberger Wisdom

Posted on June 4, 2010 by Paul

My definition of a good speech is one in which the speaker tells you something you already know in a way that you’ve never considered before. That’s why David Weinberger is one of my favorite speakers.

Here are my notes from David’s presentation this morning to the Mass. Tech Leadership Council’s Social Media Summit. These are adapted from my tweets from the event, but hopefully are self-explanatory. They’ve been cleaned up and expanded for clarity:

The Web has always been social. The only difference with Web 2.0 is that it’s easier to build a presence.
The page-centered Web paradigm has yielded to a people-centered one.
Apple is about art. Google is about scale. We don’t know yet what Facebook is about. That’s unsettling, because Facebook is to the social Web what Google is to the Web.
Media is frequently mis-characterized as publishing. The definition of media is that which mediates between parties. Media isn’t content.
We are the media. We recommend knowledge to each other. New media transforms as it moves, unlike traditional fixed media like TV. Telegraphs are a fixed medium for sending messages. The Internet sends messages but it isn’t fixed. It changes every second.
We take on properties of our media and our behavior comes to reflect the media we use. For example: The phone is intermittent, interuptive communications driven by a reason to make a call. The Web is rolling sets of instantaneous, always changing fragmented networks. These networks may be transient or last a lifetime. This is a completely different model than traditional media.
Network sociality is more like a party than a phone call. Telephones are interruptive; the Internet is distractive. People interact with the medium differently.
In the days of broadcast, markets were abstractions created by advertising. Now they are real and social.
Transparency is now an imperative. For example, on Wikipedia you can always find out why an item of information is there. The entire process is open. More businesses will operate like this.
We are getting comfortable with fallibility. The most popular stuff on YouTube is about humans screwing up. This doesn’t embarrass us as much as it used to. This acceptance of our own weaknesses will change the way organizations operate.
People don’t buy drills or holes. They buy a nice place to hang towels to impress their relatives. Abstract to the level of basic human needs in order to understand behavior. This also works in marketing, BTW.
There are four types of transparency critical to Social Media: sources, self, humanity, interest.
Newspapers traditionally provided a curated mix of content reflecting a professionally derived combination of what we wanted to know and what we needed to know. News about Sudan is an “eat your broccoli” story. We don’t like it, but we need to know it. It’s not clear where we will get that kind of information in the future.
The social media generation now expects important information to find them. That’s a dangerous attitude.
Diversity is important but uncomfortable. Without shared interests, it’s hard to converse. When you have a truly diverse group, you get smalltalk because people don’t have a common platform for conversation. Nevertheless, diversity is important. We must fight the tendency to stick with people like us. Diversity requires conscious discomfort. We want to interact with like-minded people.
Media is increasingly an echo chamber in which we choose to listen to people who share our views. Echo chambers are bad for democracy and culture, but marketers like them because they say what marketers want to hear. Echo chambers aren’t necessarily bad, but if that’s the only place you ever talk, you’ll never hear other points of view.

The Decade That Transformed Media

Posted on January 7, 2010 by Paul

As we head into the second decade of the new millennium (okay, it technically doesn’t begin for another year, but stick with me), it’s worth remembering where media stood just 10 years ago.

In December, 1999, few people had heard of Google. Online advertising was banners and e-mails. Big media brands dominated the Web. US newspaper ad revenue would hit record levels in 2000. Newsroom employment would peak in 2001 as newsstand sales of the top 100 magazines approached 30 million. No one had heard of blogs. People used mobile phones to talk.

Fast forward to 2009. This year, people spent six billion minutes on Facebook, downloaded one billion YouTube videos and logged over 1.4 million blog entries every day. The iPhone became the first mobile phone to be used more for data than for voice. The Internet became the second most popular news medium behind television. Wikipedia posted its three millionth article.

Meanwhile, US newsroom employment fell to a 25-year low and magazine newsstand sales dropped to 63% of their 2001 peaks. Reader’s Digest declared bankruptcy. Comcast said it would buy NBC.

The statistics go on and on. In just 10 years, our century-old mass-market media model has given way to a new structure dominated by the economics of one. Customers now take their opinions directly to the market. Woe to organizations that don’t listen.

The contraction of mass-market media has brought plenty of pain. Tens of thousands of media professionals have lost their jobs in the past two years, crowdsourcing has sent some professional fees into a tailspin and veteran marketers are under threat if they don’t “get” social media. But this pain is necessary, even beneficial in the long run.

New Efficiency

That’s because media has historically been one of the least efficient disciplines on the planet. It’s a profession that declares success if only 97% of its audience ignores an ad or tosses the mailer into the trash. It gains one customer at the expense of annoying 50 bystanders. When department store magnate John Wanamaker said half his ad dollars were wasted, but “I don’t know which half,” he was being generous.

The new Internet has flipped the economics. As media control has passed from institutions to individuals, waste has begun to be worked out of the system. The cost of reaching a targeted customer will only decline in the years to come. Sadly, efficiency will also devastate those industries and professions that thrived on media’s historical inefficiency.

While mourning the loss of comfort and security that old media once provided, we shouldn’t get caught up looking backward. More competitive markets will bring new options for reaching customers. The marketers who survive will be those who put the past behind and move quickly to take advantage of these new efficiencies.

Let’s start the year not by mourning the losses of the last decade but by learning the skills we’ll need to survive the next.

What changes will we be looking back upon a decade from now? Post your predictions as comments.

Message to Marketing Graduates

Posted on December 8, 2009 by Paul

Photo by Shoshanah (click for Flickr page)

I spent 90 minutes speaking to Dr. Nora Barnes’ social media marketing class at the University of Massachusetts/Dartmouth this morning. I try to speak to college classes at least four or five times a year, in part to give back something to the next generation and in part to learn more about what’s on their minds.

I asked the students – all of them senior marketing majors – the same question I always ask college classes: How many of you subscribe to a daily newspaper? The response was pretty typical: three students out of a class of 34.

Here are some of the things I told them:

Much of what you’ve learned about marketing over the last four years will be irrelevant five years from now. The field is changing too quickly. You’ve been learning about how to tell a story and position a brand, but in the future your job will be much more about listening to customers and working collaboratively on brand definition.
You should discard much of what your teachers have been telling you about the media. Traditional media is collapsing and what emerges from the rubble will look very different than the institutions we now know.
The best skills you can bring into the marketing field today are resourcefulness and curiosity. You must be willing to reinvent your skills constantly because the playing field is in a constant state of turmoil. This is very exciting for you and it’s very scary for the people you will be working for. Be sympathetic, but don’t get stuck doing things the old way.
Traditional media was built upon a foundation of inefficiency. The clothing retailer who wanted to reach the .01% of the population who want to buy a wedding gown at any given time has had to pay for the 99.9% who don’t. That’s crazy, but it’s the only way we could get a message across in the past.
The worlds of media and marketing are undergoing enormous improvements in efficiency right now. Unfortunately, efficiency is usually painful because it destroys institutions that were built upon inefficiency – institutions like newspapers and magazines. In the end, we’ll be better off, but we’re still in the ugly destruction phase right now.
In the last decade, Americans have shift from browsing to searching for information. This has huge implications for the way decisions of all kinds will be made in the future. Search engine marketing and search engine optimization should be part of any core university marketing curriculum today.
The shriveling of traditional media creates new opportunities for organizations — and that includes businesses — to fill the trust gap that’s been left behind. Businesses can become media if they so choose. Most of them haven’t accommodated themselves to that fact.
Trust is complex in the new world because we are losing our traditional trusted brands. I trust Wikipedia to tell me the date the Yalta Treaty was signed, but not necessarily to interpret the poetry of Edgar Allan Poe. Trust is also situational. We are learning to trust some sources for certain kinds of information but not for others. It will take time for us to sort this out.
Today, individuals can choose to be celebrities all by themselves. They need to have something interesting to say and the knowledge to use new channels to say it. This is very cool. We no longer have to depend on others to decide if we can be important or not
This is a great time to be a college student getting into marketing. The old guard is struggling to learn the new tools that this generation intuitively understands. Companies like Edelman are going so far as to create reverse mentoring programs in which younger employees train senior executives. This doesn’t mean you young people know it all. Be open-minded about learning from the experience of others and be generous about sharing what you know.
In the old days, the marketer’s job was to media-train a few key executives. In the future, the marketer’s job will be to media-train the entire company. This will be enormously empowering for marketers.
Marketing’s traditional role has been to talk. Its future role will be to listen. Branding and positioning will be defined as much by a company’s constituents as by its employees. If you choose simply to talk, people will choose simply not to hear you. Marketers have an unprecedented opportunity to increase their importance in the organization by becoming listeners.
Messages spread from the bottom up much faster than they spread from the top down. Cindy Gordon’s story at Universal Studios is just one example. She told seven people the news and within a couple of days, 250 million others knew.

And finally: By the time you graduate, have a LinkedIn profile. And for goodness sake, clean up your Facebook profile!

Brand Marketing Due for a Makeover

Posted on October 28, 2009 by Paul

Luckies As corporate marketers dive headlong into the annual ordeal known as the annual budgeting cycle, Forrester Research has released an interesting new report that challenges some assumptions about brand management. It costs $499, so see if you can borrow a copy from a friend. This summary will give you the high points.

The October 9 report is entitled “Adaptive Brand Marketing,” but that’s really a fancy term for “turn on a dime marketing.” Author Lisa Bradner attacks several traditional assumptions about brand marketing. They include the notion that any individual can orchestrate all of the channels needed to deliver message, the primacy of channels over customers and the belief that just a few core messages are sufficient to communicate value.

Those simple concepts are becoming almost quaint today as channels of communication are fragmenting, customers are self organizing into affinity groups and the cost of switching continues to decline. Customers increasingly want direct contact with and influence upon the products they use. They are no longer satisfied to be spoken to as a mass; they want messages that address their individual needs. If they don’t get this, Bradner explains, they’re quick to take their business elsewhere. She quotes Forrester research showing that for consumer packaged goods, more than 80% of consumers now indicate a willingness to switch from their regular brand of product to a private-label alternative. The recession is no doubt pushing that trend along.

Start With the Customer

“Adaptive Brand marketing starts with the environment — customers and a deep understanding of their needs and behaviors — and then designs the most appropriate channel mix for engagement,” she writes in a sentence that nicely sums up the thrust of this research. “Spending and planning decisions are daily — not annual — events.”

As a longtime media professional, I found that last comment particularly meaningful. The end of the year is typically a time when media salespeople go into overdrive trying to get their events, supplements and special projects on their clients’ advertising schedules. This sometimes means trying to convince somebody in November that they should spend money on a marketing program that won’t run until the following September. The idea that anyone can predict their needs that far in advance was always a little silly. Today it’s downright ludicrous.

The Forrester report proposes a new model for brand marketing that embodies an iterative approach to planning. Frequent testing guides message development and the best ideas are funded almost instantly. It also suggests that analytics based upon the massive amount of data we can now collect about customers’ online behavior should guide tactics, not hunches and experience. In fact, the report is critical of the whole idea that past experience counts for much of anything. Rapid shifts in behavior driven by constant customer conversation have created an environment that changes too quickly.

Bradner concludes that the four P’s of brand management (product, price, promotion, place) will be replaced by four new Ps: permission, proximity, perception and participation. In a nutshell, this means that brand marketers will need to request permission to speak to their customers, listen and respond with customized messages and invite customers to collaborate on product evolution. She also suggests that the term “brand manager” is outmoded because no individual can coordinate all the necessary market conversations. She argues instead for brand advocates who live close to their markets and constantly experiment with new messages.

The timing of the research was a bit ironic coming, coming out the week after a PRWeek and MS&L survey reported that 70% of marketers say they have never made a change to their products or marketing campaigns based on consumer feedback on social media sites. Perhaps this is because we’re still early in the evolution of these new media, but with blogging now well into its fifth year of hyper growth, it seems odd that marketing pros should be taking so long to get the message.

I came upon this research in the course of an ongoing discussion with a household-name consumer goods company with which I work. The marketers there were quite taken with its conclusions, and this is the type of company that leads entire markets in new directions. We shouldn’t underestimate the scope of change that Adaptive Brand Marketing would require. On the plus side, we wouldn’t spend each November frantically assembling annual marketing budgets. But we would have to learn to live in a world of nearly constant change in plans and priorities. Welcome to the new reality of 21st century business.

Tweet Your Way to Luxury

Posted on September 30, 2009 by Paul

The Desert Springs JW Marriott Resort & Spa, in Palm Desert, Calif. has a clever Twitter-based promotion starting tomorrow. They call it “Tweet to Retreat,” and it requires followers on Twitter to answer a daily question about the resort to be entered in a drawing for a luxury three-day getaway package.

You don’t have to be a hotel guest to enter. All answers can be found on the resort website. Questions range “from the ingredients in the Angel Kiss cocktail at Oasis Bar & Grille (hint, hint), to the number of rooms at the hotel,” the press release says. Not sure what the (hint, hint) is all about. The release on the website also mysteriously leaves out the detail that you can find answers to the questions elsewhere on the site. That information was only contained in the release sent by e-mail.

Anyway, the hotel has only 280 followers as of this morning, so your chances should be pretty good if you make it a point to check out the daily questions. The prize: “A three-night stay at the resort, including: dinner at Ristorante Tuscany and Mikado Japanese Steakhouse, daily breakfast at LakeView, four 60-minute spa treatments, a VIP table at Costas nightclub, and a choice of tennis or golf lessons for two.” I’m there!

paulgillin.com

Social Media and the Open Enterprise

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