Christopher S. Penn – Marketing AI Keynote Speaker

Category: Marketing

Social media marketing is not cheaper

Much has been made of 2009 being a year of frugality for marketing departments and social media becoming the new darling for budget constrained companies. That said, I want to throw a contrary viewpoint out there: social media marketing is not necessarily cheaper than other forms of marketing.

What social media marketing achieves is a trade of time for cash. If you’re capital constrained, you’re going to be trading big cash spend for big time spend. If you’re okay with that, if you have the personnel resources to spare, then social media marketing is going to work well for you.

Social media requires a hefty investment of time, and even in the best of times has a squishy ROI. You can’t load up a social media marketing plan like you can an email marketing plan and say that if we post this item to Facebook or we Twitter this web page, it will result in 354 clicks to our product page and 14 purchases. You can do that with reasonable confidence with email marketing – you know what your open rates are, you know what your clicks are, and you know the revenue behind a click. There is no such formula or set of statistics for social media.

One of the catches in tough economic times is a stronger demand for ROI – making sure scarce resources are well-allocated. How do you calculate social media’s ROI?

We do know the market value of some items in social media; an inbound link from a certain class of web site carries a market value (in terms of what it’d cost to buy that link) so if you can get one for free, then that inbound link’s value can be directly attributed to social media’s ROI if the link couldn’t be obtained any other way. I know that if Chris Brogan twitters this blog post, there’s an audience of 26,566 that will briefly see it in their Twitterstream; on a CPM basis, I know that I would have to pay a certain amount for access to the same size audience. If he went a step further and asked you to link to it from your web site, then I’d have additional hard ROI I could build into my numbers.

Even with that, the ROI is tough to crunch. I wouldn’t necessarily make a business decision for social media based on those numbers, would you?

If you’re looking to get impact out of social media marketing, take a hard look at what you’re doing right now inside your company using more expensive channels and see where social media marketing might make a difference. For example, in my own work at the Student Loan Network, we’re always looking for great partners to work with; having a prominent LinkedIn network (cspenn at gmail dot com, all requests accepted!) is a great, low-cost way to find new partners to work with. Twitter has transformed from a big chat room to an honest-to-goodness source of lead generation and link building. Blogging is pure SEO food, podcasting has built the name of the company in the industry far beyond what should rationally be possible without massive ad spend, and the connections made through events like PodCamp, Podcasters Across Borders, and other conferences have driven incredible business connections.

I would argue that social media marketing isn’t cheaper per se. What I would argue is that it opens new, different doors and gives you opportunities you might not otherwise be able to generate without far more cash resources than you have access to, and therein lies its true value.

If you’re in marketing, how are you presenting why social media marketing is right for your company? Comment below! (comments are moderated but will be approved pretty fast)

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December 16, 2008
The soul of marketing

So here we are. The economy’s down, business everywhere is in trouble, prospects for the future look dim at best. What’s a marketer to do?

The thing to do is to take a moment and strip away everything in marketing that doesn’t matter. Put down for a moment ROI, analytics, metrics, conversation, social media, direct mail, campaigns, all the buzzwords that we insist upon. Put all that away because it clouds our vision.

The soul of marketing transcends all of this, all the technology, all the distractions. The soul of marketing can be boiled down into a simple three part creed. If you work for a great company, this is a formalization of what you already know.

I believe in myself.
I believe in my community and our ability to mutually succeed.
I believe in what I have to share.

I believe in myself. This is where you start. I believe in myself, I believe that I am larger, stronger, more powerful, more capable than any downturn, than any financial crisis or sagging economy, because I believe that I can make things happen in any environment, but especially in a challenging one. I believe that worry, doubt, and anxiety are largely mental limitations and I believe in my ability to go beyond my limitations.

I believe in my community and our ability to mutually succeed. I believe in my coworkers, that we share a common purpose to be successful, to do good, to help each other succeed. I believe that the more I share with my community inside and outside of my company, the more I receive in return unasked. I believe that giving is the greatest pathway to gain, and what I have, I have to share in order for everyone to prosper.

I believe in what I have to share. I believe in the company I work for and the products and services we have to offer. I believe that our goods and services legitimately improve the lives of the people who use them responsibly, and I believe that the company I work for stands behind our shared ideals. I believe that at the end of the day, our community, our customers, and our world is better for us having done business in it, and prosperity will be the natural by-product of the true value we create.

If you can wake up every day and affirm this creed truthfully to yourself, if you can look a coworker, colleague, or supervisor in the eye and feel these truths in action, then no amount of economic hardship will be able to slow you down.

If you wake up one day and you can’t affirm this creed, then you have to either change how your company does business or you have to change companies to one that does business in alignment with your ideals.

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December 9, 2008
The cold call receives the cold shoulder

I got yet another cold call at the office today. The sales drone on the other end, as soon as they confirmed they got a live human being, immediately launched into their pitch.

“Mr. Penn, I’d like just 15 minutes of your time to go over your telecom needs and introduce you to SomeRandomCompany, a leading national provider of…”

I lost him after the leading national provider. I think he went on for about 2 more minutes before pausing to ask when he could schedule an appointment to waste even more of my time, after which he got a polite and very brief “thanks for calling, please remove me from your call list, happy holidays, good day sir”.

Another mutual waste of time. Even if I had telecom needs, I wouldn’t use his services. Why? I despise being interrupted at work (we’re busier than ever at the Student Loan Network!), and nothing is worse than cold calling, whether on the phone or in person. (office supplies sales drones, I’m looking at you)

These folks are trying old school interruption marketing and it just doesn’t work any more. Why? If I don’t have telecom needs, then you’re just wasting everyone’s time. If I have telecom needs, I’m not going to wait for someone to interrupt me. I’m going to go to Google, type in telecom companies near 02169, and see what comes up. Simultaneously, I’m going to use Twitter or LinkedIn to ask trusted business associates who they use for their telecom and if they’re happy with them.

Are you still using interruption marketing techniques? You shouldn’t be – partly because I’m sure you’ve seen their effectiveness decline, but also because there are better ways to market. I had another guy leave a spam comment on my blog advertising his expert SEO services. I guarantee if I Google SEO expert, he won’t be in the top 3 results.

The very best thing you can do as a business looking to make a marketing move is to have something worth talking about that’s amazing. Do something amazing. Do something useful. If you’re a telecom who wants my company’s business, fine. Do something so incredible that I won’t ever look anywhere else.

Look at a company like Hubspot and their Web Site Grader. It’s a great, free tool that is amazingly good at what it does, and if I ever needed inbound marketing services, I wouldn’t even bother calling anyone else. If their free product is this awesome, their paid products must really rock the house.

I love the service I get from Blue Sky Factory for email. (full disclosure, they sponsor Marketing Over Coffee and PodCamp, and the Student Loan Network is a client) Name another email service provider that lets me IM tech support AND the CEO whenever I need help, and has a Twitter outpost that lets me hit them up for non-urgent stuff. When I was doing due diligence pricing research recently, one email provider’s live chat was with a customer rep who had no interest in answering my question about price. They stuck to script despite the fact that their answers had nothing to do with the questions I was asking that they didn’t even make it onto the short list. As my friend Chris Brogan said, customer service is the new PR – and your customer service has to be amazing.

Part of my work at the Student Loan Network is to bring a little of that magic to the student loan industry. We crank out eBooks like candy, like the new FAFSA line by line eBook and the Scholarship Search Secrets eBook, plus participate on all the major social networks so that we can be found. If you’re not interested or looking for student loans, that’s fine. I don’t want to interrupt you. If you are looking for student loans, then it’s my aim to have built presence of mind with our free goodies that will put us at the top of your short list.

The takeaway for you is simple: what can you do that’s amazing? What can you do that will absolutely dominate mindshare in your vertical and make you the painfully obvious choice for anyone who needs your products or services?

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10 most recent blog posts of mine:

December 8, 2008
Web design and photography assessment tip

How effective is a web design?

How effective is a photograph?

Here’s an easy way to tell. Load up your web site of choice on a mobile browser. Hold the device at arm’s length. If you can’t immediately pick out the call to action and get a sense for what the site is about, then your web design isn’t amazing.

The same is true of photography. Load up your photos in iPhoto or Picasa or the thumbnail browser of your choice. If at a glance not a single photo stands out, then your photos don’t have the famed Tom Peters’ Wow! factor.

The very best way to test this out is to do it with other people. Load up your sites or photos on the mobile device and ask someone to quickly take a peek. If they’re not getting the message you want, then it’s time to go back and sharpen the pencil.

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10 most recent blog posts of mine:

December 7, 2008
I endorse Truffa brand bottled water!

Check it out.

Truffa brand purified drinking water delivers refreshment like few other bottled waters. Inspired by the Italian village of San Pellegrino in Terme, Truffa starts with delicious cold water from the same source as the famed Ice Mountain waters, a highly publicized and recognized source of great water.

We don’t stop there, though. Truffa is triple filtered in a unique processing system for bottled water, involving state of the art styrene methyl methacrylate copolymer filtration systems, food-grade activated carbon, and ion resin exchanges.

After that, in yet another advance in purified drinking water, Truffa brand purified drinking water is energized with a powerful 21% oxygen mixture to provide a clean, crisp taste.

Unlike other bottled waters, Truffa brand purified drinking water is artisan-crafted, all natural, and strictly supervised by experts throughout the purification process to ensure that you get only the best, most refreshing water possible.

Once crafted, Truffa is bottled in elegant solid glass to ensure that no impurities from manufactured plastic corrupt the purity of our water on its way to you.

Of course, a water this sophisticated and pure isn’t for everyone. But for those who choose Truffa, it’s unparalleled refreshment.

Does this sound good? Would you buy this?

Here’s the part that you don’t see.

Truffa does not exist. It’s an Italian word for scam. Bottled at the same source as Ice Mountain? That’s Framingham tap water, courtesy of the MWRA. The SMMC filtration system? Styrene methyl methacrylate is the long name for the plastic that a Brita pitcher is made out of. 21% oxygen mixture? That’s the natural amount of oxygen in the air. So here’s what’s behind this bottled water:

1. Put tap water into the Brita.
2. Pour filtered tap into a glass bottle.
3. Shake briefly.
4. Resell at ridiculous markup.

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November 12, 2008
Crystal clear, sparkling bottle of marketing

I’ve often said that cutting bottled water out of your budget will save you money, and it’s a topic that’s come up on the Financial Aid Podcast, but I’m really amused by this story in the Metrowest Daily News.

The water coming out of the sink in my kitchen is Ice Mountain’s source as well – the MWRA municipal source for metrowest Boston, filtered the same as I filter my water at home.

I got a real kick when I saw the marketing on the Ice Mountain web site:

Slick, well made, and the claim that you could have Ice Mountain delivered to your door for just a dollar a day was awesomely funny – when you do the math, 4 bottles of 5 gallons each for $32 works out to$ 1.60 per gallon. Why? Because that’s my tap water, and the tap water of just about everyone who lives in the metro Boston area.

Figure that you can buy Brita filters on Amazon for $16 or so for 120 gallons of capacity (more, actually, since these filters can easily do 80-100 gallons). That puts your cost per gallon around 13 cents if you go by manufacturer’s filter life ratings. Add in the cost of water -$ 763 for 61,000 gallons, and you’re at 1.3 cents per gallon.

So do the math. $1.60/gallon for home delivery of the same water you can get out of your Boston-area faucet WITH filtration for 14.3 cents.

Only marketing can make a 10x markup like that work and still get consumers to buy product by the truckload.

Oh, and those individual bottles? If you pay $1 per bottle at 16.9 ounces, you’re talking about paying$ 3.78 per gallon of the same water – a 26x markup.

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November 11, 2008
What marketing should learn from the Obama campaign

Barack Obama won the presidency on a combination of many factors, but one often overlooked by marketing is the absolutely essential use of data. Obama’s campaign under manager David Plouffe was a data machine. Consider:

1. Web sites, social media, blogs, etc. – all with Google Analytics, which you could see on page load.

2. The Biden SMS play was brilliant. Get a bunch of people to sign up for your text messaging service by revealing your VP pick on mobile first, and you’ve populated your database.

3. The iPhone app was brilliant. In this Newsweek article, the app’s back end arranged the “call a friend” by states where the campaign wanted to focus. What might have seemed random or casual was in fact well thought out.

4. Email, email, email. Think email marketing is dead? Tell that to the campaign, which sent out more email than I could count, with different voices, topics, subjects, and every combination you could imagine.

5. Word of mouth. The Obama campaign actively encouraged word of mouth at every opportunity, from telling supporters at rallies to call and text friends to encouraging sharing of media by posting to YouTube, broadcasting on UStream, every avenue available to it.

The clear winner in the Obama campaign was marketing. It helped that the product was worth talking about, but without the massive, well-run marketing machine, we’d be talking about a very different president elect today.

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November 7, 2008
The press release I wish I could send out

When I looked at my marketing campaign brief for October, one of the items is the $10,000 scholarship. This press release immediately came to mind:

Student Loan Network $10,000 Scholarship Will Be Awarded on Halloween

Quincy, MA —

The Student Loan Network blah blah blah blah blah blah blah blah industry leading blah blah blah blah blah blah leader blah blah blah blah affordable blah blah blah blah blah blah blah blah blah blah blah blah landmark blah blah blah blah historic blah blah blah blah serving families blah blah blah blah blah blah blah blah blah blah customer service blah blah blah blah blah blah

We’re giving away $10,000 on Halloween to one lucky student. www.StudentLoanNetwork.com/10K.

blah blah blah blah blah blah blah blah blah blah blah blah President and CEO said, “blah blah blah blah blah blah leadership blah blah blah we care blah blah blah number one priority”. Blah blah blah savings blah blah blah blah blah blah thought leader blah blah blah blah blah blah competitive blah blah blah blah blah blah blah blah full suite blah blah blah blah oh my god are you still reading this blah blah blah blah blah blah blah blah Internet blah blah blah blah blah blah blah blah serving tomorrow’s blah blah blah blah blah blah blah blah.

Sadly, this isn’t quite the level of professionalism expected in a press release, even if it’s 100% accurate and gets the point across nicely. Why is it most press releases are full of fluff?

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September 30, 2008
How World of Warcraft can make you a better marketer

I’ve been playing World of Warcraft (WoW) for fun the past couple of weeks or so. It was a fun game in the beginning, but now it’s a useful game, at least in the sense of honing two vitally important skills, arbitrage and information asymmetry. (two skills, I might add, come in handy in today’s economy)

To the right is a screen clip of WarCraft as it appears with a few pricing plugins installed. By itself, the doesn’t look at all like this, only with some plugins. (Auctioneer, if you’re a WoW gamer) Take a look at what’s in there.

Pricing
Median buyout price
Buyout prices at the extremes
3, 7, and 14 day moving averages of prices
Item availability from vendors and pricing
Resale valuation and estimated ROI

Bear in mind, the average player of WoW doesn’t install this add-on software, which means they don’t have access to this information.

What does this have to do with marketing? There are two concepts at work here.

Arbitrage is unequal pricing for equal things. In this example, I can tell what items are good deals and what items aren’t, what items are a bargain, what items are overpriced. Arbitrage extends to marketing and new media as well – concepts that work in proven systems can be adapted to new media, and the result is information arbitrage. I can take a concept like a proven sales letter template and adapt it for a blog.

Information asymmetry is even more important in this case. I have access to information that the average WoW player does not. This allows me to be more effective as a WoW gamer, because I can earn rapid profits from better information, especially competing against players with less information or lower quality information. Marketers in new media have an information asymmetry advantage that marketers outside of new media don’t enjoy. Marketers in new media have access to the Twitter stream, to blogs, RSS, podcasts, and so much more. If you can know what your target market is thinking and saying about your product, service, or industry, you have a massive advantage over marketers who lack that information and either have to compete by spending more or can’t compete as well.

Arbitrage and information asymmetry – all from a fun game.

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September 29, 2008
The market crashes, turns to ashes

“The market crashes, turns to ashes that you’re dancing on while some fat lady cues up for a song.” – Matthew Ebel, Better Off Dead

Well, folks, the great unraveling is picking up pace, with more banks failing, Fannie Mae and Freddie Mac taking up hundreds of billions of taxpayer dollars in a bailout, and companies like Lehman Brothers essentially saying “Everything for sale, cheap! We need cash fast!”

What does this mean for you, the new media professional, the marketing professional?

It means that flash cash for new media is dwindling fast. Companies can’t afford Bubble 2.0 any more.

You’d better have a revenue stream that isn’t dependent on just advertising – MarketingVox recently cited sharp declines in expenditures.

You’d better have a revenue stream that isn’t dependent on discretionary income – that’s going away real fast.

You’d better have a revenue stream that isn’t dependent on corporate largesse – budgets simply aren’t there.

So what should you be looking for?

Look for pay-for-performance revenue streams like affiliate marketing that pay a cut of the sale. Take a look at Shareasale, for example. (Full disclosure: PAID link that supports the Financial Aid Podcast.) As long as you make affiliate publishers money, you make money.

Make premium subscriptions for irreplaceable content. Your content has got to be so valuable, so top-notch, that it’s no longer discretionary spending, but mandatory spending.

Above all else, if you’re not building your database, you’re dead meat.

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September 10, 2008

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