What a Drummer Can Teach Us About Business?

So that headline grabbed you.... if you look at other areas of the world you can see bits of brilliance which can be transferred to marketing.  Take for instance Fede Rabaquino -- a drummer from Europe.

If you check out his video channel, you'll see he takes current or old songs and adds his own "drumming flavor" to each song.  Not only does is change the way you experience the song, but in my opinion makes the songs sound fresh -- in otherwards, utilize what's already worked and just put a new spin on it.

In an age of business budget constraints, pressure on margins, etc.   Why do we insist on coming up with a "new" campaign or initiative everytime?  Why not be like Fede and look at the work from a different perspective...

Enjoy his latest video.... a new take on AC/DC's "You Shook Me All Night Long"

Scott

What Kind of Business Should You Strive to Be?

It’s questionable today whether the economy is actually getting better.  But regardless, one thing I was taught was how you should focus your business for not only the short but long term. 

Good Companies -- cut costs

Great Companies -- cut costs AND increase gross revenue AT the same time

Outstanding Companies -- cut costs AND increase gross revenue AT the same time AND CONTIOUSLY over time.

Which are you today?  And more importantly what kind of company do you want to be?

Scott

Are Our Metrics Focusing on the Right Things?

It seems like every other email newsletter I receive has articles regarding metrics about social, mobile, engagement, likes, content views, GRP’s and the like.  And I’m not disputing the point of each of these are important in their own universe…. And if you can connect them, all the better.

However, let’s go back to the fundamental reason for marketing.

“All marketing investments, across ALL areas/functions/businesses, etc. is to do one thing…SELL”

     

If the above weren’t true, why would the board of directors, management and shareholders agree to marketing budgets?  Marketing is a fundamental investment with both short and long-term financial goals.  Short-term – sell product immediately, drive leads for sales, increase eCommerce traffic…. Long-term – build the brand, create advocates for the brand, drive high value leads, increase price, etc.

Which brings me to my concern…it seems to me we’ve taken our eye off the ball on the metrics which truly matter and support the reason for marketing investments.  So what top-level investment metrics should we regain focus on?  My key ones include:       

1.  Incremental Gross/Net Revenue per total marketing dollars spent

2.  Customer Acquisition Cost

3.   Both #1 and #2 but revenue per marketing employee

4.  Customer Cross Sell Ratio

5.       Recency/Frequency/Monetary Value customer model – check out Don Libey’s extensive research on this model

6.       Customer Satisfaction Levels – get down to specific detail items you’re working on and track them consistently

7.       Customer Lifetime Value

8.       Marketing Investment Payback Time

9.       Customer Attrition Rate

10.   Customer Segmentation Model and Marketing Investment

Certainly, I have additional ones I could list, but keeping things simple--the above 10 help focus your investments, strategy and executions on the things which matter.  In addition, when the boss calls you in the office, you speak management language vs. the marketing babble.

Scott

What Does Bezos See in the Washington Post?

Why would the king of online buy an “old school” media property?  Everyone is scratching their heads – from Wallstreet to Ad Agencies. 

However, look deeper and you can begin to see opportunity:

1. The Washington Post is a household name after the Watergate Scandal – and that is relevant to the older demographics who value the journalism

2. The Post has tons of content – which the younger demographics (and many older demos) flock too.

3. Amazon has the distribution tool – The Kindle… which it has leveraged to drive digital book/content sales

You put those together and you get brand, content and distribution.  Revenue opportunities abound:  

-          white branded content to sell to others

-          firewalled and valuable content sales model

-          free content to drive the sales of more Kindles

-          cross sell opportunities – too many to even think of

-          potential to create advertising sales on Amazon.com company based stores

Bezos is brilliant.  Don’t underestimate this buy out.

Scott

Publicis & Omnicom

Publicis & Omnicom

$23B in revenue;  130K employees – that’s the anticipated top line numbers on the proposed Publicis and Omnicom merger.  Compare it to WPP at $16.5B in revenue.  And the rest of the players, at 50% less in revenue to WPP.

The combined company gives Publicis/Omnicom a gigantic footprint in every area core area:  creative, media buying/planning, digital, events, direct response, ecommerce, web management, etc.

And we can prognosticate all day about the merger, whether Publicis/Omnicom can keep focused, not erode their customer base, get the estimated $500M in savings out of the combination. 

But what intrigues me is what happens to the rest of the players.  

1. A WPP/Interpublic merger would put WPP back on top in terms of revenue by a $1B or so.  However, it would shift the possible merger revenue back to the US.  WPP has consistently said, and frankly done a great job, moving revenue overseas, thus going to higher growth markets.  Chances of a merger between the two giants – 40% Interpublic is large, but it has been well documented the agency holding company has had…is that too much of a distraction for the laser focused Sir Martin Sorrell?  China is the big bet… who owns the market and more importantly who can drive additional revenue share in the country.  My gut, WPP wins… WPP has had a longer time to focus and invest in China.

2. Japan – Dentsu and Hakuhodo continue to have a lock on the country.  They won’t necessarily gain revenue, but they won’t lose it either.  The bigger question is whether Hakuhodo is able to drive a wedge between the big players and Dentsu on any internal client competitive issues.

3. Wildcard – WPP’s international focus could make Dentsu a very interesting combination.  Owning Dentsu completely locks all media inventory with Dentsu and provides a WPP/Dentsu merger with the ability to gain media revenue every time Publicis/Omnicom purchases media in Japan.  Leveraging Dentsu’s model in China and across Asia Pacific could allow WPP to gain big market share in Asia.  It also fills the appetite clients have to continue to drive business in Asia.

This one is a power struggle in my view.  Dentsu is a very, very private agency and sharing information isn’t a strong point of the agency.  Then there are the diverse cultural differences with the Japanese.  But, if anyone can pull off a large international deal in Japan its Sir Martin.

4. Rest of the Bunch – given scale, the rest will need to settle with their place at the table, prove they can provide better creative, service and prices and fight for the scraps.  But let me say this…. You can make a ton of money picking up the “scraps” from the big dogs.

Scott