rio_longacre

Rio Longacre is a veteran of the direct marketing space. He works at Capgemini Consulting USA as a Managing Consultant, Customer Experience Consulting, in the Life Sciences Market Unit. He is based in the firm's New York City office. Rio can be contacted at: rio.longacre@gmail.com. Or, you can follow him on Twitter at @RioLongacre. Any opinions expressed in the piece are his own.
rio_longacre has written 27 posts for Rio's Blog

Instagram: Does It Matter That It Will Make Money on Your Pics?

Instagram_logo

The new face of evil?

Instagram announced the company will soon begin using your content to sell targeted advertising products to the highest bidder. Does this bother you? Should it matter?

This new policy was announced in the firm’s recently published new Terms of Use, which go into effect on Jan. 16, 2013. The language that most irritates users states: “You agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you.”

This recent announcement has created a virtual firestorm, with bloggers and pundits rising up in unison to trash the company. A recent article on Mashable accused Instagram of “signing your life away,” and even the hacker group Anonymous joined the fray, calling for a general boycott of the service unless the new terms are revised.

I don’t know about you, but I love Instagram. I downloaded the app more than a year ago (the service has been around for just over two years) and use it all the time. If I’m walking around the city and see something interesting, I snap a quick pic and upload it to the service, sharing it with my community. I guess deep down I always thought it would be cool to be a photographer, but never made the time to follow up on it, buy the equipment learn the art behind the art, so to speak.

Prior to the digital revolution, let’s face it, photography looked anything but easy or convenient. I recall friends who were photographers spending hours in darkrooms, not to mention plunking down thousands of dollars on expensive film, chemicals and other equipment. The rise of the camera-enabled smartphone changed all of that. Armed with a smartphone a fraction the size of camera from 20 years ago, any aspiring photographer could take amazingly high-quality pictures. With smartphone adoption rates in the US now more than 50 percent, a whopping total of 119.3 million people are now potentially part of the club.

Haters?

Player haters?

For many professionals in photo industry, Instagram has been an annoyance from the start. A popular article appearing in the Guardian earlier this year accused the service of debasing photography, suggesting that its bevy of filters are in fact the antithesis of creativity, and make all pictures look more or less the same.  Personally, I thought this criticism was a bit unfair and smacked of professional snobbery. I wasn’t alone. A great article by Chas Edwards that appeared on Ad Age quipped that this predictable rant was what happens when members of a professional community are displeased because amateurs get a chance to compete.

So getting back to Instagram’s new terms, what they reveal is that Instagram is developing a revenue model, nothing more. This shouldn’t be too shocking to most readers. Let’s face it, it was inevitable that Facebook was going to want to monetize on its $1 billion investment at some point. While on one hand, I understand people are annoyed with the abruptness of this change, but on the other I think it’s much ado about nothing.

The evil genius behind the new TOS

The evil genius behind the new TOS

Now I’m sure many users who have been using the service for as long as a couple years probably feel like this is a bait and switch. But, don’t forget that they’ve been using the service for free all this time, while Instagram (and now for Facebook) has plunked down money to pay for developers to write code, servers to host their product, and so on. In order to pay for these costs, the firm needs to develop a revenue model.

So as a business, what is its options? Well, I see three possibilities. The first option is to charge the users for accessing the service. On the face of it, that’s a non-starter. Charging for access is the very antithesis of social media, so no way it’s going to fly. Could you imagine the ensuing firestorm if Instagram had announced a monthly fee for accessing the service? Not in a million years.

Another option would have been to create some kind of image selling service à la iStock Photo or Getty Images. In theory this sounds reasonable, but that would have required developing a an entirely new front-end Web presence to sell the photos, not to mention tons of marketing, lots of time to organize and classify the content, working out how the royalties would work, and so on. In other words, it would have been like starting a new business. After acquiring Instagram for $1 billion, do you think Facebook wants to tool around trying to experiment with a new business for this firm? No way.

The third option is selling targeted advertising, which is frankly a no brainer. Why is that? For starters, the model has already been proven by Facebook, which has made an art form out of monetizing on user generated content and lots of eyeballs. During Q3 2012, Facebook reported $1.3 billion in earnings, up 32 percent from the same period last year. Furthermore, seeing as Facebook is the parent company, it has a prebuilt and tested advertising infrastructure, not to mention trained and effective sales staff, ready to bring the product to market.

The way I see it, this option was a foregone conclusion the moment the ink was dry on the deal with Facebook earlier in the year. It was only a matter of time. So, still unhappy with Instagram’s decision? All I can say is if it bothers you so much, you should have left back in September when the service was officially acquired.

If you have any comments you’d like to share, please let me know in your comments.

—Rio

Winner of the 2012 Presidential Election: Data

Now that the contentious 2012 election has finally ended, we get a chance to look back and assess what happened and why. Regardless of who you voted for, it’s impossible not to acknowledge that the real winner of the 2012 election was data.

For the first time in history, this election demonstrated the power of using analytics and numbers crunching for politics. What I find most remarkable is the rapid evolution of this change. If you look back just a few years ago, Karl Rove was widely regarded as the political mastermind of the universe. Rove’s primary innovation was the use of highly targeted direct mail campaigns to get out the evangelical and rural vote to win the 2004 election for George W. Bush. Fast-forward a few short years, and not only did Rove’s candidate lose, but the master strategist was reduced to challenging his network’s numbers geeks live on the air, only to be rebuffed.

Karl had a lot to frown about that day

In every way, the old guard was bested by a new generation of numbers crunchers, nerds and data geeks who leveraged data science, analytics, predictive modeling and a highly sophisticated online marketing campaign to poll, raise money and get out the vote in an unprecedented manner.

On the subject of polling, I was intrigued by Nate Silver’s incredibly accurate FiveThirtyEight blog that used a sophisticated system to synthesize dozens of national polls in a rolling average to predict the actual election results. In the run-up to the election, he even received a lot of flak from various pundits who claimed he was wrong basing on their perception on voter “enthusiasm,” “momentum” and other non-scientific observations. At the end of the day, however, data won out over hot air and punditry big time. Silver’s final tally was absolutely dead on, crushing most other national polls by a wide margin.

I especially love his Nov. 10 post in which Silver analyzes the various polls and shows which ones fared the best and which ones weren’t worth the paper they were printed on. It’s shocking to see that the Gallup Poll—in many people’s mind the oldest and most trusted name in polling—was skewed Republican by a whopping 7.2 points when averaged across all 11 of their polls. Ouch. For an organization that specializes in polling, their long-term viability must be called into question at this point.

One thing I find highly interesting when looking at the various poll results is that when you examine their methodologies, it’s not too surprising that Gallup fell flat on its face, relying on live phone surveys as the primary polling method. When considering that many young, urban and minority voters don’t have a landline and only have a cellphone, it doesn’t take a rocket scientist to conclude any poll that doesn’t include a large number of cellphones in its cohort is going to skew wildly Republican … which is exactly what happened to Gallup, Rasmussen and several other prominent national polls.

Turning to the Obama campaign’s incredible Get Out The Vote (GOTV) machine that turned out more people in more places than anyone could have ever predicted, there’s no doubt in anyone’s mind that for data-driven marketers, the 2012 U.S. election victory was a watershed moment in history.

Pretty much sums it up for me

According to a recent article in Time titled “Inside the Secret World of the Data Crunchers Who Helped Obama Win,” the secret sauce behind Obama’s big win was a massive data effort that helped him raise $1 billion, remade the process of targeting TV ads, and created detailed models of swing-state voters that could be used to increase the effectiveness of everything from phone calls and door-knocks to direct mailings and social media.

What’s especially interesting is that, similarly to a tech company, Obama’s campaign actually had a large in-house team of geeks, data scientists and online marketers. Composed of elite and senior tech talent from Twitter, Google, Facebook, Craigslist and Quora, the program enabled the campaign to turn out more volunteers and donors than it had in 2008, mostly by making it it simpler and easier for anyone to engage with the President’s reelection effort. If you’d like to read more about it, there’s a great article recently published in The Atlantic titled “When the Nerds Go Marching In” that describes the initiative in great detail.

Well, looks like I’m out of space. One thing’s for sure though, I’m going to be very interested to see what happens in coming elections as these practices become more mainstream and the underlying techniques are further refined.

If you have any observations about the use of data and analytics in the election you’d like to share, please let me know in your comments.

—Rio

The Marketer’s Code of Conduct for Disasters

I live in New York City so, as you can imagine, the past week has been anything but normal. Fortunately, I live in a part of the city that was relatively unaffected by Hurricane Sandy, suffering only some knocked down trees and no cable or Internet for a couple days. Compared to many other in the city and surrounding region who are still facing no heat, a lack of electricity and unsafe drinking water—not to mention unspeakable damage from the storm surge—I feel extremely lucky.

I’m also a big runner. To my disappointment, the City of New York decided to cancel this year’s NYC Marathon. No, I wasn’t going to be running in the race this year—I didn’t run enough local races to qualify automatically and didn’t win the race lottery. But I do know that the race provides nearly half of the New York Road Runner’s annual budget and generates millions of dollars in charitable donations ($30.8 million this year). Plus, for a city still recuperating from the storm, the event would have generated boatloads of business for companies large and small across the city. One study by the consulting firm AECOM estimated this number to be in the neighborhood of $340 million a year.

Although he wanted to let the race go on, Mayor Bloomberg caved in to public pressure and pulled the plug just two days before big day. A major reason for his decision was the large public outcry that took place in the days following the storm. News coverage and the social networks were buzzing about the race, the tone overwhelmingly in favor of canceling it. I even received emails from friends excoriating the mayor and asking me to sign an online petition to cancel it. I checked the poll a couple days ago and saw that more than 15,000 people had already signed it.

On Facebook, I got involved in some conversations and asked some people why they felt the way they did, and did my best to change their minds. I easily debunked the argument that resources that could be used for recovery would somehow be diverted, because NYRR and the sponsors were going to foot the entire bill for the race, including paying for generators and security. I also explained how much money the race generates for charities and businesses in the city, to no avail. I even brought up the amazing role baseball played in the healing process for the city following 9/11 … All I got back was the snarky reply: “That was after 9/11!”

What it came down to for many was the issue of respect. “How can the city run a race when bodies are still being pulled from Staten Island?” one friend wrote me. For many New Yorkers, the thought of us dedicating any resources to something as trivial as a race during such tough times was simply beyond the pale. Now I may not agree with this rationale, but I suppose the people have spoken and the mayor has listened. No race this year.

But the issue of respect made me think about our role as marketers. What effect should tragedies and national disasters have on the way we ply our trade? Following a tragedy, is it safe—or even right—to market at all? Moreover, is there an appropriate waiting period—a specific amount of time we need to let pass—before we can again try to convince people to drink the Kool-Aid, so to speak?

I’m not sure if you saw the coverage, but a handful of firms were absolutely blasted for trying to profit from the storm. In case you missed it, there was a great post on Business Insider titled “The 9 Biggest Brand Fails Exploiting Hurricane Sandy” that gives some great examples. This one by Urban Outfitters is a personal fave: “This storm blows (but free shipping doesn’t)!” How crass can you get, right? People are cowering in their homes in fear and you’re trying to shill your products with an unfunny pun? I’m all for edgy marketing, but give me a break—all the jokers in these examples more than deserved all the bad press they received.

But tasteless ads aside, obviously there’s a right way to do things. So with that being said, I’ve done my best to come up with a Marketers Code of Conduct for use following an event like Hurricane Sandy.

  • Don’t ever try to profit off of the tragedy
  • Go the extra mile to be sensitive regarding people’s feelings
  • Save the jokes for after it’s over
  • Don’t mix commerce with condolences
  • Use your network and marketing skills for good, not to push your products
  • If you decide to help, don’t use it to toot your own horn
  • If you screw up, apologize at once

I think that list is a pretty good place to start. If you have any other ideas or items you’d like to add to the list, please let me know.

Finally, I’m curious to see what others think about Bloomberg’s decision to cancel this year’s NYC Marathon. To get your feedback, I’ve created a LinkedIn poll. Please click on this link to vote today: http://linkd.in/TsfzJG 

—Rio

Creepy Marketing and Social Media: How to Scare Away Your Customers for Good

Halloween is around the corner, so for this week’s post I wanted to turn to a topic that is most definitely apropos: creepy marketing. No, we’re not talking about marketing for Halloween.

What’s creepy marketing, you might ask? Creepy marketing is what happens when personalization goes horribly wrong—when good intentions morph into, well, disturbing communication that has the opposite of its intended effect and, instead of helping a brand push a product or service, sends recipients running for the hills. With the rise of social media and its nearly universal adoption by marketers, it’s high time that marketers learn what not to do when they engage with their customers and prospects.

Fact is, marketers use personalization because it works extremely well. How well? Generally, the more you personalize a message the better it will perform. In a landmark study by Banta Corp. on multichannel marketing, it was reported that incorporating three or four personalized elements in an email boosted its clickthrough rate by 63 percent, and seven or more elements lifted it by an amazing 318 percent!

Wow! With stats like these, you can see why marketers of all stripes have been jumping on the personalization bandwagon like it’s going out of style. During the past few years, we’ve witnessed an explosion of personalized content across the marketing spectrum—direct mail, email, SMS, landing pages … all spiced up by including personalized content or messaging. Out of all of this personalized communication, some has been good, some has been great … and some has been downright creepy.

Last year, I put out a post titled “Creepy Marketing—When Database Marketing Goes Awry,” in which I defined creepy marketing as “if it looks creepy and feels creepy, then it probably is creepy and you shouldn’t do it.” I then go on to point out that an actual example of creepy marketing includes writing out a customer’s name along with other personally identifiable information anywhere visible to the general public. I also include displaying a customer’s age, marital status or medical condition in marketing messaging.

Turning to social media, avoiding creepy marketing takes on a new urgency in the medium where stakes have been raised considerably. The reason why is two-fold: First, because social media involve networks of individuals with public exposure, it’s way easier to creep people out. Second, if you do offend someone on social media, then good luck handling the ensuing social media disaster. Offended parties now have the ability to let everyone on their social networks know right away just how unhappy they are—and they usually don’t hesitate to do so.

So how do you avoid creeping people out in social media? On a strategic level, a thoughtful post by Laura Horton  that appeared on VentureBeat.com offers five pointers:

1.     Be helpful but not pushy;

2.     Be a thought leader, if you can;

3.     Be careful what you say, even if you know a lot;

4.     Reach out if you see active interest in your brand; and

5.     Stay on top of social marketing best practices and trends.

I think this list is a good place to start. More tactically speaking, in her blogKristen Lamb gives us five examples of social media marketing tactics that not only creep individuals out, but probably don’t work very well, either. Her list includes automatically adding people to your firm’s Facebook fan list, and sending out annoying automated promotional messages on Twitter to random people who might have tweeted about topics you think are relevant to whatever product you’re trying to push. Yuck.

Again, I think this list is a good starting point. Though of course, the possibilities for abuse by marketers are probably endless. Have you ever been creeped out by a company on social media? If so, I’d love to hear about it. Please let me know in your comments.

Happy Halloween and happy marketing!

—Rio

‘SoMoBiDa’ Isn’t a Song: Like It or Not, the Confluence of Social, Mobile and Big Data Is the Future of Marketing

Are you familiar with the word “SoMoBiDa”? SoMoBiDa is an abbreviation for Social, Mobile and Big Data—a combination of the three great trends in today’s marketing world. In a practical sense, what does SoMoBiDa mean for marketers?

Social—it’s become cliché to say it, but social media has changed the way in which brands engage and interact with their customers. On one hand, social media has given marketers an incredible platform for disseminating content to the masses, and at an incredibly low cost. Social has given marketers the ability not only monitor what customers are saying and feeling about the firm and its products (social listening or monitoring), but it’s opened the door to actual two-way conversations with clients (social engagement).

Listening to, responding to and engaging with users on Social is a challenge that marketers will be forced to meet with increasing effectiveness in coming years. Recently, a host of new solutions has sprung up to help with the task. Using a Social CRM tool, for example, marketers can match Social Insight against existing customer and prospect data, creating a powerful marketing tool for acquisition, retention or customer service.

Similarly to campaign management, marketers are already starting to experiment with ways to automate some of their organization’s Social Engagement. In fact, some believe that a large portion of Social Engagements can be automated, and new tools have sprung up to fill the need. When it comes to the tone or content of the social conversation, however, many firms have discovered that Social Media is a double-edged sword where control of the conversation has shifted to the crowd—truly a frightening concept to any marketer! Ultimately, marketers who ignore Social do so at their own peril.

Mobile—if marketing is about sending the right message to the right people at the right place at the right time … Well then mobile is the right place. And marketers need to be there. More than simply a “channel” in the conventional sense, mobile is more like a way of life. This is because the mobile device has become hardwired into the way we go about our lives. How do you feel when you accidentally leave home without your phone, or when your phone dies and you have no way to charge it? Not good, right? Can you sit down for an entire meal without picking up your phone at least once to check your email, see what’s trending on Twitter or find out you’re your finds are doing or saying on Facebook?

Mobile presents marketers with an “always on” touchpoint with customers and prospects, giving marketers potential 24/7 access to them, the ability to monitor what they do and where they are, and so on. Now of course being an “always on” channel is both a blessing and a curse. Because the smartphone is used all day long for a variety of reasons, users are understandably hypersensitive with regard to uninvited or unwanted intrusions.

Big Data—“Yeah, yeah. Enough about Big Data, already,” you’re probably saying. At this point, I think it’s safe to say we’re all familiar with this über-meme on a high level. What it means for marketers, however, is another story. Try asking most marketers what benefit Big Data will have for their organizations and their heads will probably start to spin. The trouble with explaining the benefits of Big Data is that Big Data is the activity of analyzing and deriving insight from the mountains of unstructured data that are accumulating within and across today’s enterprise firm, on servers and in stacks, on PCs, in spreadsheets, on the Web and in the Cloud. Fact is, Big Data can tell us anything, or nothing—you just won’t know until you gotten down into the weeds and done the dirty work.

In a great recent post by Sandro Catanzaro titled “Taming the Wild West: 7 Trends Uncovered With Big Data,” the author identifies seven super-practical and highly impactful insights firms have gleaned with Big Data. Among the discoveries that Catanzaro highlights are a retailer who realizes that consumers browse higher-end lines before purchasing one tier down. Another was a discovery by a credit card company that consumers in urban areas viewing an ad for a new credit card on Tuesday are more likely to sign up on Sunday night. Catanzaro gives us seven real-world examples uncovered using the latest tools. These are just seven examples—the potential list is truly endless.

Beyond a sum of its parts, SoMoBiDa refers to the confluence of these three great forces and the immense power this combination unleashes for marketers. Standing alone, any one of these trends signals a momentous shift in the way we do business. When they’re combined together they can become truly transformative.

Let’s look at an example in which a potential customer walks into a retail location and looks at some merchandise. While doing so, let’s say he or she scans a QR Code above the device and learns more about the product using an in-store app. Because it is the first week of the month, using Big Data the marketer knows that this is when most big-ticket purchases are made, right after payday for most consumers. As a result, a special time-sensitive offer pops up in the in-store app asking the user to share the offer with his/her network. The customer then tweets about the product.

Using a Social CRM tool, the firm is able match the social engagement to the CRM database, which has been beefed with Big Data custom attribution modeling leveraging past purchase info combined demographic and psychographic data to identify this Twitter user as a repeat customer with a high lifetime value, who usually buys online from someone a couple days after an in-store visit. Using location services, the firm is able to discern at which location the customer is shopping. To help close the deal, the in-store sales staff is immediately sent over to assist the prospect, armed with complete customer order history and personal information on a tablet. Pretty awesome, huh?

Now of course this is just one example for one type of business. Nor am I claiming to have all the answers now—it’s way too early in the game and no one does yet. But just think for a moment of the power that marketers will have in their hands if they do SoMoBiDa right and incorporate it into their business model? If you project several years in the future, companies that get it right will be the ones that succeed. Those that don’t … well, they probably won’t be around.

Okay, looks like over my word count limit again and I’m out of space for this post. Got any observations or SoMoBiDa ideas for your company or products? If so, I’d love to hear about them in your comments.

4 Attribution Models in the Age of Big Data

Attribution: Holy Grail

For marketers, attribution is the Holy Grail. For those unfamiliar with the term, attribution means determining what marketing channel or budget was responsible for generating a particular action. Without proper attribution, it’s pretty darn difficult to perform any kind of meaningful ROI calculations on your marketing spend. In fact, I wrote another post about attribution earlier this year or so ago titled “The ‘A’ Word—Learn It, Love It, Live It!,” which pointed out that in today’s marketing world, attribution isn’t always what it’s cracked up to be.

Now it’s no secret that attribution analysis is rather difficult to perform in an age of proliferating media, multichannel customers and, drum roll … Big Data. Think about it, how do you gauge which marketing channel was responsible for generating a sale when a customer was sent and read an email, received a direct mail piece and visited a microsite, Googled the company name and found the homepage, but clicked on a sponsored link leading to a landing page, went to and Liked a Facebook page, became a follower on Twitter, tweeted about it to his friends … and ultimately made a purchase using an App on an iPhone. Which channel gets credit? Email, direct mail, organic SEO, mobile, social? All of them? None of them? Some of them? It’s enough to make your head spin.

Now enter Big Data. In this column, I’ve written extensively about the challenge to marketers posed by Big Data. I know, it’s the meme du jour … seems like you read about it everywhere you go these days. Basically, Big Data is the massive accumulation of information that’s taking place across organizations as they market and engage with their customers and prospects across an ever-expanding proliferation of channels.

As usual, Big Data is the elephant in the room

As customers and prospects interact with firms across different channels, the data continue to pile up. It’s this deluge of information and how to make sense out of it that is being referred to as Big Data. But, as I’ve written before, Big Data is really the problem—not the solution, per se. The fact that organizations are collecting all of this information is great. It’s what they are doing (or not doing, as you’re about to see) with it that’s most important.

I recently read a study done by the Columbia Business School and the American Marketing Association titled “Marketing ROI in the Era of Big Data.” The study was a survey of 253 corporate marketing decision-makers, director-level and above, at large companies. The results were striking.

They found that 91 percent of senior corporate marketers believe that successful brands use customer data to drive marketing decisions. OK, fair enough … couldn’t agree more. But, among those who are collecting data, a measly 39 percent admit they’re actually unable to turn this information into actionable insight. Pretty surprising, huh?

That’s not all. A whopping 65 percent of marketers admitted that comparing the effectiveness of marketing across different digital media is “a major challenge” for their business. An astounding 57 percent of marketers are not basing their marketing budgets on any ROI analysis whatsoever. And to add insult to injury, 22 percent are using brand awareness as their sole measure to evaluate their marketing spend. That’s right, as their sole measure. A direct marketer by trade, I almost spit out my coffee when I read that last stat.

No ROI is like flying blind

But the shocking thing is based on my experience, I do not find this to be out of the ordinary. In fact, I met with one client recently and was shocked to learn that the client had basically thrown in the towel when it come to defining attribution, and had created hyper-simplistic ROI analysis by using a control customer group to whom the client didn’t market at all, and compared how much this group bought against the rest. Sounds pretty wonky, right? The crazy part is that even the simplistic model is astronomically better than the 57 percent who don’t even bother with ROI in the first place.

So, what are some solutions to the attribution conundrum? Well, there are several popular models that marketers are experimenting with, and each one of course has its plusses and minuses.

1. First-click attribution—credits the channel where a customer first engaged with the firm. On the plus side, this model actually attempts to discern where the customer journey actually began. The downside is that in today’s environment where marketing is often run in silos, it can be challenging to track customer engagement in a multichannel manner.

2. Last-click attribution—credits the channel where the last action took place (i.e., where the conversion occurred). On the plus side, this model is super easy to track. The downside is that it only measures the channel that’s best at generating the sale itself, and completely disregards how the prospect was initially brought into the fold.

3. Equal-weighting attribution—tracks all of the touchpoints where the customer engaged with the firm, and gives them all equal weight in terms of generating the conversion. The advantage of this model is that it takes a holistic view of the customer-vendor relationship. At the same time, this model overlooks the disproportionate role one channel may play over another.

4. Custom-credit attribution—a hybrid model created by the marketer based on its marketing strategy, customer base, and so on. If done right, a custom model can be highly effective, as it’s designed based on facts on the ground. The only downside is, well, you’ve got to create and test it—which is often easier said than done!

Okay, guess I’m out of room for this post, so I’ll end it here. In any event, I’d love to hear about what if any attribution model you’re been using, how it has worked out, and so on. Let me know in your comments.

— Rio

Numbers Don’t Lie: Gen X, Can You Handle the Truth?

If you’re Gen X, that means you were born in the ’70s, grew up in the ’80s and came of age in the ’90s, or something like that. You grew up listening to music like Van Halen, Run DMC, The Smiths and Nirvana. You went to school, and probably began working sometime during the second Clinton Administration, beginning to pay off your student loans. It was an exciting time to enter the labor force, just as the digital revolution was beginning to take hold.

Like many others in my generation, I entered the labor force in the mid-’90s. My first job was with a marketing firm. I was hired by a Baby Boomer, a nice woman named Stephanie about 20 years my senior. Marketing at the time was still pretty old school, but it was there where I was given my first work PC, set up with my first email address, and taught to surf this new thing called the World Wide Web using what was then the state-of-the-art browser called Netscape.

If you’re a Gex Xer, chances are since you’ve been in the workforce, for better or for worse you’ve lived in the shadow of the Baby Boomers. They’re the ones who have hired you, fired you … and most certainly always held the best jobs. The more I think about the marketing world, the more I realize that there’s an important undercurrent here, one that will have a tremendous impact on Gen X, and quite possibly Gen Y, as well.

You see, last time I talked about a transition that’s taking place in the marketing world, as an older generation of brand stewards gives way to a new generation of digital marketers. I explained this trend was set to accelerate in coming years due to the rapidly changing nature of marketing itself, which is becoming more data driven, technology focused and operational in nature. In case you missed it, you can read about this topic in “3 Ways Rank-and-File Marketers Matter to the C-Suite in a Brave New Marketing World.”

In the marketing world (not in tech, but most definitely in the rest of corporate America), most high-level roles are still staffed by Boomers. What I find very interesting is that for the most part, the vast majority of Baby Boomers (with some notable exceptions, of course) are not especially digital people. Many have learned to live and work in the digital world and quite well, but when I see my dad fumble around on his feature phone I most definitely can see a huge gap.

So the transition I mentioned above will essentially be a passing of the baton, as the Boomers recede from the picture and are replaced by the next generation of marketers. Now here’s where it gets really interesting. According to the U.S. Census Bureau, a Baby Boomer is someone who was born between 1946 and 1964. Ranging in age from 48 to 66, Baby Boomers aren’t getting any younger. Generation X spans the years 1965 to 1983, more or less, while Gen Y is from 1985 to 2003. Now let’s take a look at the size of these three generations:

  • Baby Boomers: 79 million
  • Gen X: 41 million
  • Gen Y: 85 million

Slackers no longer?

What this means is that in the marketing world if you’re a Gen Xer, your time to lead is coming. If you look at the numbers above, you can see there will there be a huge leadership void that will need to be filled as the Boomers retire during the next few years … as a small generation replaces a huge one. The economic crisis during the past for years may have postponed their retirement. But any way you slice it, the Baby Boomers will soon begin retiring more or less en masse during the next few years. When they go, they will leave huge leadership vacuum behind.

But that’s not all. In today’s marketing world, playing a leadership role will require both digital and managerial experience. This means that if you’re a Gen Xer with digital marketing and managerial experience, you’re literally going to be worth your weight in gold in coming years as the generational transition accelerates.

Don’t believe me? Just wait and see. And if you’re not ready to rise to the occasion, guess what? There are 85 million hungry and talented digital natives in Gen Y itching to move up ahead and take your place. If anything, they are the most digital generation yet. At this point, they’re still young and have yet to acquire the years of on-the-job experience it takes to succeed in a high-level marketing job. But give them some time and that will certainly change.

So, Gen X, are you up for the job? To quote Jack Nicholson is the classic 1992 movie A Few Good Men, “Can you handle the truth?” If not, Gen Y will be there waiting in the wings, happy to swoop in and take your place.

Any questions or feedback, as usual I’d love to hear it.

—Rio

3 Ways Rank-and-File Marketers Matter to the C-Suite in a Brave New Marketing World

A couple weeks ago in my post titled “Wanted: Data-Driven, Digital CMOs,” I wrote about the enormous pressure CMOs are finding themselves under as the world digitizes, requiring a new type of leader, one  who understands and feels comfortable in the digital space. The result of this changing dynamic has been a dramatic shortening of your average CMO’s tenure.

I’m not the first to observe this trend—it’s been covered in many places over the past few months, including this great article from Fast Company. In response to this post, however, many colleagues have asked me “What does this mean for the rank-and-file marketer?” I thought this was an excellent question; one I’ve not seen discussed elsewhere.

What does it mean for HIM?

By any standard, it’s certainly not an easy time to be a marketer. Over the past decade, nearly everything we know has changed, as new technologies have arrived in a dizzying fashion, upending the established order. The result for most firms has ranged from confusion to clarity, from paralysis to paroxysm—very frequently all at the same time! Working in an environment like this is definitely no picnic, as firms flail around like a hurt animal trying to figure out what to do, reducing head count, hiring, outsourcing, in-sourcing, you name it.

It may not be an easy time to be a marketer, but I think it’s a good time. The reason why is that marketing has evolved in four very important ways:

1. Marketing has become data driven—in the digital age, information is power. Contemporary marketing requires learning about who your customers are, what they look like, what attributes and affinities they share, and so on. Success means becoming fluent in the new language of the digital age—understanding what terms like “impressions,” “clicks,” “likes” and “followers” mean. But that’s not all: Success requires a deep understanding of and familiarity with campaign analytics, what they mean and signify, and how to interpret and improve upon them.

Dave, I’m afraid I can’t let you do that.

2. Marketing is technology-focused—it’s no secret that a large portion of marketers’ budgets are now being allocated to digital. Anyone who’s worked in the digital marketing arena knows that success in the space means understanding the new technology ecosystem. The other major technology trend is the fragmentation of the IT infrastructure as the SaaS/Cloud model gains traction. In this new service model, it’s marketing that’s mostly responsible for buying, using and maintaining these new tools.

3. Marketing is highly operational in nature—unlike the brand strategists of yesteryear, today’s marketing department is almost entirely focused on operations, with a heavy emphasis being placed on creating, testing and launching, tracking and optimizing numerous marketing campaigns across various channels using different tools.

In this new environment, the DNA of the rank-and-file marketer has changed radically, morphing from that of a brand steward into, well, something else entirely. Any way you look at it, today’s marketers are highly trained and qualified specialists, possessing a wide range of skills and knowledge, which can take months, if not years, to master.

Moreover, success in any given marketing role requires a deep understanding of various marketing program details, familiarity with firm’s marketing technology, systems and tools, not to mention the prevailing corporate culture. All in all, it’s a tall order.

Over the years, I’ve consulted with dozens of large firms, and I can tell you firsthand that most marketing leadership stakeholders are not digital people. In other words, the only people in the firm who really “get” what the firm’s marketing department is actually doing are the marketers themselves. Interesting, huh?

Raise the roof! It’s a great time to be a marketer.

So what does this all mean? Well, in coming years I foresee a shift in the balance of power as the old generation of marketers gives way to a new generation of younger digital specialists. Now, of course, one generation passing the mantle to the next is the natural order of things. But, based on what’s going on, I see this trend accelerating dramatically in coming months and years, as those who don’t get it are replaced by those who do.

If you’re a marketer, all if this is undoubtedly good news, meaning you’re not only much more important than you think, but your trip up the proverbial corporate ladder is that much shorter. So go forth, young man (or woman), it’s a brave new world!

Any questions or feedback? As usual, I’d love to hear it.

—Rio

#NBCFail: What Happens When an Industry Faces Digital Disruption

Like most Americans, I’ve spent a lot of time watching the Olympics over the past couple weeks. Probably way more than I should. To be totally honest, I haven’t been the biggest fan of NBC’s coverage, and on this I’m definitely not alone. Look, for example, at the #NBCFail Twitter campaign that erupted online over the past couple weeks. Led mostly by bloggers and new media pundits, the campaign has relentlessly lambasted NBC for its poor coverage.

A major criticism by the #NBCFail folks has centered on topics ranging from showing only American competitors, to endless and annoying human interest stories, from snarky banter with condescending hosts, to strangely jingoistic flag-waving commentary. I must say I agree that it’s generally been an unpleasant experience. But beyond poor coverage itself, NBC has also been taking a ton of flack for its new media ‘strategy’ – if you can call it that – that includes no live streaming content on the Web. They have an App with some live coverage, but it’s only available to those with an active paid cable subscription that includes NBC already.

Now of course many in the industry have rushed to NBC’s defense. In his recent article in Ad Age ‘The Truth About #NBCFail,’ Simon Dumenco states quite correctly that “NBC is not a charity.” He then goes on to explain that NBC paid about $1.2 billion for the rights to broadcast the games. That’s a lot of greenbacks. Dumenco’s point is that because NBC is not listed as a 501c3 (non-profit) organization, it has every right to run in the Olympics in a manner it sees fit in order to recoup and hopefully make a profit on its hefty investment. Fair enough.

While on one hand I tend to agree with some of the points made by Dumenco and other critics of #NBCFail, on the other I really do feel that NBC has completely bungled its new media strategy. Like it or not, NBC must accept the fact that their monopoly on broadcast content has been disrupted by the emergence of new technologies, most notably the Internet and the DVR. Instead of creating a business model that leverages and monetizes on this new reality, they’ve instead tried to ram an old business model down the throats of consumers across the US, essentially missing the forest for the trees. As a result, they’ve pissed off millions of people, devaluing their brand in the process.

This is eerily reminiscent of what happened to the recording industry a little over a decade ago. Remember Tower Records? Sam Goody? Virgin Megastores? All gone. And I could continue and list off dozens. Well, guess what happened? The world changed and the recording industry lost its monopoly on distribution of its primary product. What was their master plan? Suing Napster. And all that accomplished was putting off the inevitable by a couple years at most. Today, all the old players are gone and iTunes is the world’s largest retailer of music worldwide, and has been since 2009. The craziest part is that it was only launched by Apple in 2001. It happened so fast.

Well, why was Apple, a company with no experience selling music, able to swoop in and within a few years totally dominate a legacy industry, displacing existing firms? Two words: Disruption and Innovation. Disruption caused by the emergence of new technology – namely, the Internet as a means of Distribution – enabling firms with the best new ideas to unleash Innovation on an industry ripe for transformation.

NBC’s Motto?

NBC and the other legacy broadcast networks are now facing similar dilemma. With the emergence of the Internet as a viable distribution channel for broadcast media, their monopoly is over. Don’t like NBC’s coverage? Well, all you need to do is locate a proxy and you can watch awesome uninterrupted streaming coverage on BBC, or China’s national network CCTV, among many others. And if this ignominy weren’t enough, Digital Video Recording (DVR) boxes in most homes mean that almost no one is watching commercials anymore. Sure, NBC can crow about its impressive ratings while it blacks out live coverage and force millions of people to watch their broadcast in primetime. But how many of these people are tape delaying coverage by an hour and skipping the ads? Way more than they want the advertisers to think.

What this all means is that the landscape has radically changed for the networks, though they don’t seem to realize it. How long is it before most advertisers conclude that the 30-second commercial is functionally obsolete? My guess is it can’t be too long. And when they do, guess what will happen? No more 30-second ads. That will mean a HUGE revenue stream dries up for the networks as the advertisers pull their campaigns en masse. In my estimation, because the networks seem completely unprepared this shock will be even more devastating than the loss of classified ad revenues was for newspapers.

The only solution for networks, of course, is instead of fighting change and pissing off your customers with inane blackouts and insulting restrictions that don’t work, to be the harbinger of transformation and change instead of the victim. Can they do it? It’s certainly possible. Take, for example, this past year’s absolutely brilliant Final 4 strategy by CBS/NCAA. While the tournament was broadcast on regular TV by CBS without blackouts of restrictions, there was also an amazing App you could buy that offered uninterrupted access to all the games. Sure the App needed to be purchased – but the user experience was so awesome I sure didn’t mind ponying up a few bucks to install it on my iPad.

Experience after experience has shown in an effort to prevent cannibalization of their existing business model, legacy firms miss the forest for the trees and fail to innovate in time, allowing new competitors to swoop in and change the rules of the game for them. By that time, of course, it’s way too late and they’re toast. Ask Kodak about digital photography. Bet they now wish they had started the transformation to digital a few years earlier, don’t they? Or ask Borders about eBooks? I could go on and on…

So, do you think the networks will figure it out? Let me know in your comments.

– Rio

Social Media and ROI: Strange Bedfellows, or a Match Made in Heaven?

Unless you’ve been hiding under a rock the past few years, you’ve noticed that Social Media has become the new norm in our lives, both personal and professional. For businesses large and small, what was initially a curiosity has rapidly emerged as a highly effective tool for interacting with their customers and prospects. In fact, according to Emil Protalinski in an article on ZDNet.com, a whopping 68 percent of small businesses say they use Facebook as their main marketing tool. Wow!

Bet he’s never heard of Facebook

As interest and investment in social media continue to grow, it’s inevitable that corporate stakeholders and bean counters across corporate America will begin to clamor for marketers to demonstrate ROI for their firm’s social media activities. And believe me, Social Media spending will most certainly continue to grow. According to an article on CMOSurvey.com, in the next five years, marketers can expect to spend 19.5 percent of their budgets on social media, which is almost three times more than the current level. That’s a lot of shekels. This year alone, in fact, marketers are already spending 10.8 percent of their budgets on it.

With increased budgets will undoubtedly come increased scrutiny. But as is the case with most things, the devil is in the details, and measuring social media success is much easier said than done. Unlike most marketing activities, you see, which can be traced back to number of leads generated, customers acquired or sales made, Social Media KPIs are anything but clear cut.

What does it all add up to, anyway?

Think about it for a moment. How much is a Facebook “Like” worth, anyway? How much would you pay to get a new follower or to be mentioned on Twitter? How much does each LinkedIn connection contribute to your company’s bottom line? Given this environment, it’s not a big surprise that there are some who simply shrug their shoulders and say that trying to pin ROI to Social Media is a complete waste of time. I don’t necessarily belong to that school of thought, but I do think that Social Media is an entirely new beast that needs to be viewed in a manner distinct from other places marketers spend their money.

Fact is, social media is not simply another advertising channel with a specific budget that can be attributed to a specific group of sales or other traditional marketing KPIs. This is because social media can be used by a firm for many different activities by different departments, many of which are not exactly under marketing’s purview or control.

For the customer service team, using Social CRM technologies and listening platforms, Social Media is an incredible tool that can be used to listen to and engage with customers on the Web, supplementing their phone bank and other customer service activities. For the sales team, Social Media presents yet another source of red-hot leads to be contacted—prospects that have expressed interest in their firm’s products or services and can be followed up on in real time. For marketers, social media may play a role in the department’s content marketing strategy, enabling them to disseminate awesome content to a large base of customers and prospects at minimal cost. And for a PR department, social media represents a unique way to broadcast company press and news releases to the press and public in a continuous feedback loop.

But as a direct marketer by trade, I must admit that I have a difficult time accepting that any activity run by the marketing department can avoid the inevitable ROI discussion. Sure, most ROI calculations I’ve seen in run-of-the-mill PowerPoints are 50 percent math 50 percent BS … I should know because I’ve made quite a few of them in my day! But that being said, I do think we’ll eventually get there. And I’m not alone: A recent study published by Mediabistro demonstrated that 64 percent of executives believe that social marketing will eventually produce a legitimate return on investment for their firms.

In many ways, this lack of clarity is a result of Social Media still being in its infancy to a large extent, and regarding ROI we’ve still got a ways to go. So what do I think the answer will ultimately be? I’m not completely sure, but let me leave you with this.

Your CMO?

Because Social Media is being used by different departments with different budgets for different things, when evaluating social media a firm needs to grasp a firm understanding of how Social Media is being used within the organization. For each department, success will need to be measured and tracked differently based on performance metrics that are relevant to stakeholders in each of those departments. Sales teams, for example, should use metrics relevant to salespeople, such as number of leads generated, conversion rate on those leads and so on. Customer service departments, not surprisingly, operate on entirely different systems and, therefore, need to evaluate Social Media according to an entirely differ set of KPIs. Ultimately, each department’s success measurements for social media need to be based on their specific goals and metrics.

Okay, I’m out of space so I’ll leave it there for now. Have you tried to work out KPIs or perform ROI calculations for your Social Media program? If so, I’d love to see what you’ve come up with, so let me know in your comments.

—Rio

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