Wednesday, October 6, 2010

The InfoSphere1: Communication Infrastructure-Paid Media

1.       Media Types
a.       PAID MEDIA
Where we are:
·         Currently our primary paid media is Google AdWords. We have never run a television add or coordinated traditional print media campaign.
·         We experimented briefly in advertising in a printed Military contractors guide, however, we found that the military business we received still came from Google and that no one was using the printed guide.
·         In a related amusing advertising situation we ran an add in the GCI phone book. While the ACS phone book is more widely used the GCI phone book was trying to gain market share and notoriety and was offering substantial rate discounts on its ads. We took advantage of the initial offer and part way through the year were contacted by GCI to do an order for GCI for a promotion they were rolling out. The kicker? GCI had found us not by using their own widely touted phone book but rather by using Google like everyone else. Needless to say we did not renew our ad campaign with them.
·         We also have some PPC (pay per click) campaign with emerging search platform Microsoft’s Bing and a few business oriented search vehicles like
·         We give to various charitable organizations throughout the year. Occasionally we receive an ad in a program, or magazine, in return for the donation. This “paid media” though really is primarily a donation to a worthy cause as we have found there to be little to know business actually generated through these printed adds. On that note I think many of these organizations need to update the advertising they offer.
o        We are constantly receiving phone calls from organizations looking for donations. Frequently they offer a business card ad, half page ad, or full page ad in exchange for sponsorship at various levels. The idea of course is that the company that is being solicited is receiving something of value in return for their monetary, or physical, donation. For tax purposes only the actual expense of the items being donated can be deducted by the company. So if the company donates money then the money itself is of course tax deductible. However, if they company donates a physical item then only the costs of creating that item may be deducted. This is the same costs that would have already been deductible for the company for tax purposes. But if the company had sold that item they would have had the same tax deduction but also would have received income for the item. And intern has additional deductions that could offset the income. Thus the donation of the item results in a loss to the company either in the form of cash or lost revenue. Given the corporate structure companies are not, as a general rule, altruistic entities. Companies operate to make revenue and increase the value to the shareholders. It follows then that if a non profit wishes to be successful on a large scale with their donation solicitations they must be offering something that will offset the companies loss, a value added service.
o        The pitch is usually made that the program or magazine will be seen by X number of people who will be attending the event/convention etc. The programs are the epitome of the old advertising. Your ad is one add in a book full of ads, usually printed in poor black and white quality, which no one reads. Not only is the program book or magazine a poor advertisement for the business but also represents an unnecessary cost for the non profit. As some of the donation from the companies goes to subsidize the organization seeking the solicitations, as well as the charitable function that organization completes, it is also an ineffective use of the corporations funds.
o        Building on the concept of social marketing, the new celebrity, and the infosphere as a place- a more effective use would be to leverage the non profits celebrity to promote the corporation through social marketing in the infosphere. So, for example, if a non profit is bringing up a musician for a performance and would like to use that event as a fundraiser. They could feature that event on their website and promote it through their facebook page and local media generators. The corporation would receive an appropriate sized link/logo with corresponding placement based on the size of the donations. The placement would occur for a limited time linked to the event wherein the business could choose to renew or not for the next upcoming event. This may also be mutually beneficial as the company could provide a link to the event it was helping to sponsor. The company would be establishing its legitimacy and charitable nature; gaining increase traffic from the non profit leveraging its members but also gaining links and search engine rankings. The non profit likewise may gain some traffic and support from the corporation. Both entities would also easily be able to track the success of the campaign through analytics to determine whether or not the campaign/event was successful. The non profit would also have an edge as it could then build on the success of previous campaigns to solicit for future campaigns. Another benefit of this system is that the resources required are front loaded. Rather than having to employee, or outsource, constant maintenance of a special separate event solicitation program the solicitation program blends with the other programs- website etc that is already being maintained. It is twice the millage, possibly exponentially more, out of an existing resource.
o        Finally non profits should consider expanding their presence in the virtual world. Zynga makes games for facebook wherein real money is exchanged for virtual goods. If a non profit could partner with a company such as this there are phenomenal possibilities for substantial profit. For example Zynga partners with a non profit where with a donation to the non profit you receive say a special virtual product not available through other means. Zynga will get to deduct the money donated, an advantage as there were relatively no expenses associated with the virtual product, and gets to create a scarcity of a product to drive sales of accompanying products. The non profit will gain funds and notoriety. As far as I can tell the virtual world is a far under utilized resource for non profits.

What we can do to improve immediately:
·         Paid media has not yet caught up to the new media and the new celebrity. So how do we operate most effectively within the current paid media options to leverage our owned media to earn media? How can we capitalize on the new celebrity?
·         Facebook adds. Google has started advertising on Facebook, why shouldn’t we? It will require some investigation though as to how the juggernaut of Facebook advertizing works. With Google we are simply making our information available to those searching for it. Some one types in “custom printed mouse pads” and we want to be there. We want to be readily in the scope of view as a resource and while we have great natural rankings we also pay for the right to be at near the top of the sponsored links as well. But the Google campaign is, at this point, highly refined for us. We don’t advertise under mouse pads the general term as the clients that general term attracted may or may not be looking for customized mouse pads. The majority of them ended up being personal clients who were a waste of time and resources. Likewise we no longer advertise under the term coaster as it was bringing up folks who were looking for roller coasters and then clicking on our link out of curiosity. We have carefully monitored where our Adsense ads are being posted and have, over time, weeded out those placements that were not advantageous. The backend analytics has resulted in a campaign that is effective and well managed. So what of Facebook?
o        Facebook is a different conversation then Google. The Google customer knows what they are looking for whereas on Facebook you have to know the customer you are looking for. It is a role reversal of sorts from an advertising perspective where now we are trying to choose the client rather than making it easy for the client to choose us.
o        Facebook is a data mining wizard. The level of information available about the customer is mind blowing and frankly a bit scary. While larger business with more complex CRM software, or customer interfaces, may be able to tell you precisely who their clients are, we simply can not. Our systems thus far have not been able to track the average age of our customers, income level or even sex. Geographically our clients span coast to coast and range from small orders of 25 to large orders of 50k. So who exactly are we marketing to? This seems like an obvious question that would have been answered eons ago in the protozoal stage of our business but that is not the case. It the prior days when business were entirely local you would have a good sense of customers because they were physically coming into your store to purchase goods. With the online world your customer could be anyone from anywhere. When our business was much smaller I still had an effective pulse of some purchasing patterns simply because I was involved in every sale. When you are the only sales person it is easy to know at very least what has been sold and in general have some idea as to who you are selling to. As the business has grown the sales become numbers, not people, and we lost what little pulse we had. I still have great relationships with my customers, however, I have less of an understanding of what those relationships mean from a financial standpoint. There has been some disconnect between our systems.
o        We have various systems for tracking information for our customers, accounting and CRM etc, but we don’t even have an input for the types of questions Facebook can answer. I suppose in the immediate time it will be a trial and error process to advertise on Facebook.  Try an ad, track the response and gage its effectiveness and then try another. However, in the long term the bigger questions are going to become increasingly important. How are we going to enter into the conversation if we don’t even know who we are having the conversation with? We are asking for entrance into the walled city of our customers but are we asking for entrance into the upper class neighborhood or the slums?  
·         Leverage non profit donations. While non profits have not yet figured out how to market themselves effectively in the new info sphere we hope to be able to leverage their celebrity to our advantage. We are going to make a page of our site dedicated to donations as well as post those affiliations on our Facebook form. While not as effective as the coordinated campaign proposed above would be it will be infinitely more effective then our current method of advertizing our donations, which isn’t. Currently we have been relegated to the printed program version of advertising which, as mentioned, is highly ineffective.

Where we are headed:
·         Somehow paid media will evolve to exploit and leverage the new celebrity.
·         Paid media will find out how to leverage the social media marketing in a way other than pop up and banner ads or stealth marketing.
·         There is a growing sense that there will be another force yet unseen in the online paid media. In late September marketing experts agreed that in three years there will be a decline in the dominance of Facebook and Google. There will be an “other” source that will take up 25% of the market. This report has been debated by some as irrelevant due to the small sampling of experts used and the “other” is undefined as to whether it is a single entity or a conglomerate of smaller entities. However, the point is still valid. The browser as a platform may, or may not, be decrease but there is obviously a surge of apps and stand alone platforms that are causing the paid media world to become increasingly fragmented. I agree that there will be an other force in this marketing world as the development of technology and the infosphere continues to exponentially increase. The question is not if, but is when any by who?
·         An amusing side note is in my thinking of paid media traditional printed and television media weren’t even part of my thought process. I think newspapers and traditional print media are essentially dead. Not that they aren’t relevant, which is debatable, but rather that they aren’t profitable. When a vehicle is supported by advertising, and the ROI falls on that advertising so sharply that it is no longer a good economic choice, then the advertisers will eventually cease. When the advertisers cease the profit will cease and when the profit ceases the business will cease. Old print media is an antiquated business model that is no longer relevant in our my media age. There will, of course, be a place for paid media advertizing, as above, but it will not be here.   

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