"The changing media landscape" ... of Retail

The other day at an offsite conference center, my client was running two big meetings, one focused on Marketing and the other on Sales. (Marketing and Sales are really the same thing, but exist as separate departments in most companies.)

I was in the Marketing meeting where we strategized about how to invest next year’s budget. There are a lot of options in mass media, retail, digital, et cetera. Every year the options multiply.

During a break I ran into a client who was attending the Sales meeting. How’s the discussion? “Great,” he told me. “It’s just that the retail landscape is changing so fast. Keeping up takes real effort.”

What’s he keeping up with? The largest mass retailer is rethinking its store layout and the number of brands it carries. The next-largest mass retailer is riding out recessionary price pressures. One of the big players in the Food class of trade is struggling. Shopper marketing as a discipline grows more sophisticated. Customer loyalty database analytics are being leveraged more strategically. The Dollar stores are evolving. Last but not least, online retailing continues to grow.

Clicks-and-mortar gets a lot of buzz, but bricks-and-mortar retail is no less of a changing landscape. The options are multiplying – and so are the opportunities. Keeping up takes real effort.

(Please use the comments section to suggest your most reliable online resources for news and analysis about retail.)

Quick! Define "advertising" in one sentence

Last month a Philadelphia marketing executive posed this question to the Advertising Professionals group on LinkedIn: “In one sentence, what is advertising?”

As of today there are 195 answers – and counting.

The answers have ranged from academic to streetwise, and a few discussions broke out along the way. There’s even been a whiff of consumerism.

My own answer was: “Advertising communicates between buyer and seller, and in the modern day it’s successful when it starts a dialogue.”

Some other interesting ones were:

Erudite. “Creating an equity position among a target market that reaches and motivates a sufficient number of consumers so a business can realize a specific growth objective.” (James E. Friedman)

Mercantile. “The equivalent of having 5,000 sales people on the road.” (David West)

Uncomplicated. “The art and science of enticing buyers to purchase a particular product or service.” (Ted Rossman)

Personal. “Advocating for a product, service or social movement, etc., the practitioner believes in.” (Doreen Dvorin)

The protagonist, John Cooley, said he was asking for material to include in a presentation. I followed up with him this week to see how it went, and above all, what definition did he use?

The answer: "Hey Steve, It was perfect because my talk was about how many definitions we have for Advertising. I used many of them (quotes) from around the world and with the brightest minds in advertising. Thanks for asking."

At some risk, I offer you the opportunity to comment below. In one sentence, what is advertising?

The best ad

"The best ad is a good product."

It drives word of mouth.

Canada and its consumers

TORONTO -- In my international role it’s a privilege to work with my clients and colleagues in Canada. They have an amazing operation here. It’s a fascinating country with interesting consumers.

Sadly, Canada is a gigantic blind spot for most American business executives. Part of this is cultural since most Americans don’t know much about Canada at all. Corporate culture does little to change that. The Canada strategy of too many companies is to treat it as part of the United States: ship them the same products, air the same advertising, and let them try selling it all to the three retailers who dominate the trade.

To be sure, this strategy has its benefits, most of them related to cost efficiency. One of our clients generally follows this strategy with some success. Yet beyond the U.S.-made TV commercials for U.S. brands we also create many Canada-specific programs in retail, promotion and digital.

These efforts are justified by the opportunity we find in such a vibrant consumer population. There are many sources available where you can gain a deep understanding of Canadian consumers so we won’t try to duplicate them. Instead, here are some personal observations, vetted just a bit at dinner last night with my agency colleagues.

Mosaic, not melting pot

The first thing that strikes you about Canada is its cultural diversity. Immigration has been rich and abundant, particularly from China and South Asia. There is still strong European immigration, too. My friends distinguished between the U.S. melting pot and the Canadian mosaic; that is, American immigrants tend to assimilate while Canadian immigrants maintain stronger senses of national identity. On that point...

Quebec is not Canada

French Canada is an amazing, confounding jewel. Chicago-to-Toronto feels like a domestic flight while Toronto-to-Montreal feels like an international flight. It’s not just that Quebecois speak French almost exclusively. The customs, daily routines and value systems are unique to Quebec. You could say it is “European” but that would miss how unique Quebec really is. That's saying something, too, since Canada in general is unique...

Canada is not the U.S.

My question at dinner: What makes Canada unique? The first response was: “You mean versus the U.S.?” No, what makes Canada unique. Canadians, a very polite bunch, bristle at comparisons to the U.S. because a lot of Americans and other foreigners see only the similarities. There are indeed vast differences between the two societies – chronicled in the Canadian analysis Fire and Ice – even while they share a strong friendship and a 5,525-mile border.

Resourcefulness

This one didn’t get much traction at the dinner table but I’m sticking by my view. Through the people I meet, the stores I shop and the marketing I see, there is a resilient resourcefulness to Canadians. Perhaps it’s left over from the frontier era or it comes from all the new immigrants. Maybe it’s the spirit of cooperation we see in every meeting. My clients and colleagues move their business forward in a distinctly Canadian way, even while they also follow the marketing plans sent up by their American counterparts.

They’re an amazing bunch of people. I’m eager to come back and see them soon.

Pictures and Sayings

A previous post, Brevity takes a lot of work, espoused this maxim: "The longer you think, the shorter the presentation." Today a topic in the news is that last word, "presentation", as in "PowerPoint presentation".

NYTimes.com reports today on how PowerPoint has infiltrated the military. You can also read this insider perspective from an Army captain. One of his observations is that "PowerPoint is everywhere--not only in the military, but also in the government and private sector."

And how. You've doubtless had some really bad PowerPoint experiences, either as an audience or perhaps as an author. Let's be honest, we've all used PowerPoint as a crutch, and the results aren't pretty.

One of my colleagues tells a good story about one of her mentors starting out at a local agency in Kentucky. The advice given about using PowerPoint was simple and straightforward: "Pictures and sayings."

Authors or presenters who follow this advice make it a joy to be in the audience. Keeping your content reduced to "pictures and sayings" usually means you have made your message exciting and sharp. As such, you can ad lib easily because your story is clear in your own mind.

Sometimes a PowerPoint presentation (or "deck" in the vernacular) really does need to have a lot of words, usually because it's meant to "travel" electronically so people can read it at their convenience. Fair enough. In most cases, however, PowerPoint gets presented, and perhaps should be written that way. With "pictures and sayings".

Your comments: Use the space below to tell us your worst PowerPoint nightmare or your best PowerPoint suggestion.

A newspaper with business acumen -- and a sense of humor

You may have seen this video satire of integrated marketing award entries. It hilariously sends up the type of kitchen-sink, social-media laden program that seems to guarantee a trophy from any ad industry awards show jury.

The perpetrator in this case is a Swedish daily financial paper, Dagens Industri, published by Bonnier AB. After satirizing emerging media frenzy for a couple of minutes, they claim their newspaper is “Still the most effective way to reach your target audience”.

A friend and colleague in Sweden tells me the video is part of a larger print campaign from by Storåkers McCann, which continues the message that Dagens Industri is an effective way to reach business people.

Laughing all the way to the bank

There is a great deal of city-room concern these days about the business side of newspapers. Just this past weekend I met another unemployed editor for a great metropolitan newspaper. A lot of publishers are struggling.

In this case, however, prospects aren’t so dim. The Wikipedia entry for Dagens Industri describes it as “the most profitable daily newspaper in Sweden”. In any case, Bonnier entered the U.S. market three years ago by acquiring several magazine titles from Time Inc. They’re doing well.

Why? They are smart enough marketers to know that advertisers who want to reach their paper’s subscribers may be represented by agencies savvy enough to get the message via social media.

The other reason is very simple: they publish an excellent newspaper. As my colleague told me, “I read Dagens Industri everyday. It’s the best way to follow our business climate in Sweden. They are perceived as very trustworthy and professional.” U.S. publishers of daily fluff, take note.

Your results are worth more than your time

This tweet made me stop and think this morning: "Hourly billing is unethical and dumb. The quicker you can help, the more you're worth." Credit goes to Alan Weiss of Contrarian Consulting.

It's all about business results

Alan voices a principle I've espoused at our agency over the past four years. During that time we negotiated global contracts with large clients, merged with a sister company to create the first channel-neutral, through-the-line agency on a single P&L, and packaged our capabilities in dozens of new business pitches, many of them successful.

The proposition we make to clients and prospects is about results, or Return On Ideas. The number of hours we spend developing a campaign means little if the client's business isn't moving forward.

No -- it's all about timesheets

Yet we and almost every other agency agree to labor-based compensation agreements. To put it more bluntly, we charge by the hour, not by the idea or by the result.

Here's my version of how ad agencies got to this point.

(1) For most of the 20th Century, clients paid agencies a 15% commission on the media they placed. The agency P&L could support a high level of client service.

(2) In the 1980s and 1990s, competing agencies accepted lower commissions -- same model, but at drastically reduced prices. The agency P&L didn't allow the same level of service.

(3) Eventually, clients wanted to know what they were paying for and agencies wanted to ensure they made a profit, so the parties agreed to hourly fees that fixed the agency's staffing levels -- and fixed the agency's profit margin.

Agencies got lazy about two things

Throughout the above history, agencies worked hard and created good ideas, but got lazy about two important things.

One is appreciating the value of our ideas. Many advertisers succeed or fail based on what their agencies provide. A really good idea can lead to global or national prominence, #1 market share and a strong balance sheet. Yet many of us show up for work just hoping to get the ads out on time and on budget.

The other is estimating the value of our ideas. It's probably not hard to appreciate the value of our ideas, but what's that worth to a client? Here is why Alan Weiss' tweet this morning is so important. If you drive the client's business forward, shouldn't you be paid more than a fixed hourly rate?

Your results are worth more than your time

If you are compensated in any way based on the results you bring to your client, congratulations. This is a big step toward providing value rather than just providing advertising. Otherwise you may want to rethink your compensation agreement.