The reconciliation of advertising and content.

The reconciliation of advertising and content.

Dec 21, 2018 | Branding, Marketing, Uncategorized

 

Self appointed digital marketing experts have for years been telling us that ‘Content is King’, and for a while it was. As a result, marketers have flung millions upon millions on the altar of ‘creating content’.

Piles of crap produced en masse with the odd gem well hidden, aiming at leveraging the reach of the web and social platforms, to deliver messages to consumers in a manner that demanded more attention than the ad breaks on TV, without the cost.

Google and Facebook developed a virtual duopoly, and so the dream of cost free reach has been squeezed out of existence.

To get reach you have to pay for it.

Isn’t this what we did when we paid for advertising?

Why pay for content aimed at ‘engaging,’ or some other cliché, if you are going to pay to have it delivered? You may as well make it an ad, that has as its objective generating a sale.

As Facebook and Google, and the other platforms as they evolve continue to squeeze organic reach, Content will morph back to something more like the advertising used in the 20th century to build the huge brands we all still buy.

Call it what it is, don’t be precious, it is Advertising!

Cartoon credit: Tom Fishburne of Marketoonist, who continues to express in simple drawings the complexity and hubris of modern marketing. I hope you have a great Christmas Tom.

As for me, I am taking a short break from my (unpaid) adverting disguised as content on this blog, to see if I can catch the elusive bloke in the red suit.  Thank you all for reading, sharing and often commenting on my  brainfarts, it is a privilege and pleasure to be able to communicate in this way.  Have a safe and merry Christmas and i will ‘see” you all in 2019.

 

 

 

 

 

What marketers can learn at church

What marketers can learn at church

Dec 19, 2018 | Branding, Marketing

Every religion, from the worlds great ones to the meanest cult with a few deluded followers has something in common.

They communicate their message, engage their followers, with stories.

In most cases they are setting out to explain the mysteries of the human condition, to get at the essential truths that underlay behaviour, to explain the complexity in a simple and memorable manner, that makes recall and retelling easy and consistent.

The story of Adam and Eve is set in a perfect garden, with a snake representing evil, and an apple representing the pressures of the human condition.

Try explaining that without a story.

Every story in the Christian bible, from Cain and Abel to Jesus walking on water and making a crippled man walk contains a message. It is the same in the Koran, Hindu Bhagavad Gita and Buddhist Tripitakas.

With effective storytelling, they have all succeeded at the marketers dream.

Brand differentiation, and effective segmentation within the brands

Longevity

Strong loyalty and commitment that is multi-generational

Sustained commercial success

It may be a touch insensitive to make these observations as we are about to go into Christmas, but think of all the stories around Santa, and traditions that have built up over generations about what you eat, how you behave, and who you commune with.

All communicated by stories that support the central proposition, and even if you do not believe it, the behaviour still prevails. 

You have to give it to the clergy, of every brand,  they have this marketing gig nailed!

 

 

 

 

 

The where, why and how of enterprise value creation.

The where, why and how of enterprise value creation.

Dec 17, 2018 | Governance, Management, Strategy

 

The balance sheet of an enterprise is a snapshot in time of the financial value of an enterprise. The comparison of balance sheets over time delivers a picture of the value creation, or destruction, of the enterprise over time.
The ‘Financial trio’ Balance sheet, Profit & Loss, and cash flow, together generate a picture of the performance of an enterprise, and are the foundations of performance management.
However, these are not enough for a thoughtful management.
To build a clear picture of the intrinsic value of a business, we need to look beyond the financial accounts, to the ability of the business to create sustainable value for customers. In other words, provide solutions to problems that cost less than the amount customers are prepared to pay for those solutions.
Therefore a closer look at the parameters of value may be useful.

Value cycles.
When the return on capital exceeds the cost of that capital in a given period, value has been created. Looking at the cycles in isolation can give a distorted picture, driven by seasonal sales mix, competitive activity, operational changes, product launches, and many other factors. These cycles always have in them a mixture of the short term challenges faced, and the longer term factors almost always driven by trends external to the business, such as technology adoption, regulatory changes, and the emergence of new competitive business models. Understanding the cycles of value creation and consumption can assist not only in smoothing them out, but doubling down on the good times, hunkering down in the bad, and ensuring that your strategic thinking is tuned to the evolution of the external environment.

Where is value created or consumed.
This can be pretty granular to geographies, product lines, market segments, brands, and so on. Understanding the variations, and applying pressure to them can dramatically increase the average value creation by isolating areas where it is routinely being destroyed, and fixing them. In many instances, the value destruction in the short term is deliberate in an effort to build value for the future. However, often the destruction is unseen in the mix of activities in every business. Innovation is in the short term generally a value destroying activity, but essential to the long term value creation, and this is a delicate balance that requires a strategic framework to be consistently applied to the allocation of resources.

Why is value created.
Linking the creation or destruction of value to specific assets and capabilities, again delivers the opportunity to optimise the investments you make. What makes you sufficiently different that you can create value? Is it short term or is it longer term, and how do you maintain the momentum, as superior value creation always attracts competitive capital in time.

How is value created.
Very simple to say, but hard to do. Value creation always comes down to solving a problem, or creating an advantage, for an individual, group, or enterprise.

Market position and long term decision-making obviously play a key role in value creation, and none of this happens by accident or over a short term. It is tangled up in your relative market position, the evolution of the market you are in over the lifespan of the market, and your competitive position in that market.
This sort of analysis enables a complete picture to be put together. If you have enough information to make judgement about your major competitors, those that might emerge from the pack, and those from the sidelines which are usually missed, this will inform the decisions you make that will impact on future value creation.

The root of all this is strategy.

The golden rule of marketing in regulated markets.

The golden rule of marketing in regulated markets.

Dec 13, 2018 | Governance, Management, Strategy

‘He who has the gold makes the rules’

I had to go to Sydney airport last week, and needed to park for a while, the plane was late.
It almost required an extension of the limit on my credit card.

It was just another brush with the cost of doing business with someone who has the inside running in a regulated market that I have had the misfortune to tangle with over the last few months. In this case, the airport is a monopoly, that was privatised. Governments seem to think that when they sell off a public asset to the private sector, the buyer will continue to price it at ‘social’ levels. They then act all surprised when the new owner with the regulated monopoly suddenly starts pricing at monopoly levels.

Consider what has happened to your power bills since the ‘privatisation’ process kicked in. Pretty obvious that the sale process included some sort of ring-fencing of competition to beef up the price so the press release looked better, as in the case of the sale of Port Botany and Port Kembla now being brought to court by the ACCC.

Pretty much all markets are regulated to some degree, from a very little to a whole lot, on top of the basics of incorporation, and paying taxes (which seems to be increasingly optional for MNC’s). Adding to the complication, there are three levels of government in this country all regulating different things in different ways creating an alphabet soup of bodies that have to be navigated before you can trade.

In highly regulated markets, it is reasonable to assume that most if not all incumbents will move aggressively and creatively to protect what they have. Claims of public interest, safety, loss of employment, are common, and are generally the reason the monopolies are there in the first place. However, what they have is a position that enables them to charge rent, rather than achieve success through a superior value proposition.

Understanding the structure of the rent seekers business model will help to see ways to invigorate or disrupt it.
The taxi industry is a classic. Around the world it was a regulated market that delivered regulated profits to the few who owned the licences, which therefore accrued a capital value, until Uber came along. Similarly, the milk industry in NSW was regulated until it became unmanageable to continue, and then there was a decade long 10 cents/litre levy to pay down the capital value of the regulated milk runs.

Having an understanding of who has the power in any market, the basis of that power, and the means by which it can be wielded, is vital to the construction of a viable business model and value proposition.

Header Photo credit: courtesy Jason Heller.

Focus delivers productivity

Focus delivers productivity

Dec 10, 2018 | Governance, Management, Uncategorized

When you fail to focus, you are scattering your capital.

Most importantly,  you scatter the vital Intellectual Capital it takes to succeed, as well as the financial capital that is a vital enabler of success.

Limited resources need to be focused on the point where they will do the most good, generate the most leverage.

The familiar investment advice to spread your investments, ‘do not put all your eggs in one basket’ holds when you are a passive financial investor.

However, when you are an active investor, not just of your financial resources, but of your limited time and energy, it is better to follow Andrew Carnegie’s advice to ‘Put all your eggs in the one basket, then do not take your eyes off the basket’

This advice holds equally as you consider your long term plans, what outcome do you truly want, to planning your day today. Ask yourself ‘What is the one thing I really need to get done today that will take me one step closer to the goal’

As Confucius is reported to have said somewhere around 500 BC, ‘Every journey starts with a single step’. That advice is as valid in today’s world as it was then, so make sure you take that step every day, and that it is one step closer to the goal.