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OK, I'm a few days early to ring in the New Year, but wanted to take a few sentences to thank my readers for an awesome 2006 blog-wise and preview more to come in 2007. I've been in hiatus for a few weeks for a great mind-clearing vacation. Which translates into lots of family, reading, and Xbox time.
But now the muse is back and I've got lots of good topics on the way...
Sorry to my loyal readers for the rapid drop in regular posts...It's pitching season again and clients are eager to line up work for the year ahead in the final weeks of 2006. I'm looking to catching up and getting ahead next week...
In the meantime, I had to build on my recent post on Delta's flawed new strategy. Recall that one of the ways they are "rebuilding" is by screwing their competition - and customers - with slower, older prop planes.
Today I got an email from Delta that outlined its post-bankruptcy plan. At the same time, they have started a campaign to encourage customers to "Keep Delta My Delta" via an e-petition. This is an effort to fight back against U.S. Air's hostile takeover bid. Interesting that Delta expects the customers they are screwing with slow planes and higher fares are now expected to save the day...
In case you didn't get the memo, we are officially in the midst of a global marketing and advertising revolution. An explosion of digital media choices means that consumers today are harder to gather together, and many of them are paying to avoid our messages. Most marketers have "felt" the revolution, but many say that they still are not sure what is or isn't working and why. They see their kids playing Xbox and retired parents surfing the Net, but someone has to be watching all those ads... right?
Well, a few weeks ago there was a minor breakthrough in the advertising industry when media agency Starcom announced that it would start buying second-by-second television ratings through TNS Media Research. Second-by-second ratings are important because they offer real data into how consumers tune out ads during commercial breaks - either by getting a beer, switching channels, or fast-forwarding with DVRs. Instead of paying for the viewers who watch a given show, advertisers will now be able to see how many eyeballs actually stay tuned to their sales pitches.
This is a great example of how open information on the "score" of a contest can drive a challenge and improvement. By showing such data, advertisers will be able to compare which networks are really delivering, and move their dollars to those who do a better job keeping viewers' attention. And if it shows that television is less effective than networks promised, then the networks will feel pressure to improve their offering.
Further, commercial ratings will be able to help advertisers judge the quality of the ads themselves. They will be able to learn whether their creative is breaking through the clutter in real time, rather than trusting focus groups and expensive pre-testing.
What's even more remarkable about this story is that Starcom and TNS teamed up to buy this data, mainly because reigning ratings leader ACNielsen suddenly shelved its own plans to provide such ratings. ACNielsen bowed to pressure from its customers, the television networks like NBC and CBS. These networks live in fear of data that show consumers turning away from commercials in droves, thus potentially driving down advertising rates they can charge as well. But Starcom works for marketers, not networks, and it is buying the data to provide a better service for clients like Procter & Gamble, General Motors, and Miller Beer.
The challenge of second-by-second ratings might allow TNS to start pressuring ACNielsen, which has been a monopolist to date. And it will pressure other media agencies to match the service of Starcom. The result could be better efficiency, pricing and service in this historically unresponsive market.
I experienced the gradual fall of traditional advertising in my previous job as a brand manager at Procter & Gamble. As my career went on, I grew more concerned with my consumers' shift away from television. In focus group after focus group, our subjects increasingly said things like: "I don't watch television anymore...it's on in the background...and I spend more time on email or with friends." As I spent hours niggling a 30-second television spot with a dozen other client and agency managers, I increasingly felt like we were simply re-arranging deck chairs on the Titanic.
Meanwhile, hits kept coming to our web sites, and consumers snapped up millions of samples that we offered online. As I told a friend from my old job, who I was speaking with today, making the move to an agency with interactive as its focus was a "no brainer".
It was a challenge for me to step away from a promising future at a marketing leader, but the decision led to my improvement as an advertising and marketing professional, and I'm having a ball helping other marketers make their own leap into the digital world.
Last week's BusinessWeek includes an in-depth look at Delta Airlines and its struggles to redefine its business amidst bankruptcy and a hostile takeover attempt by U.S. Air. Its management team, led by CEO Gerald Grinstein, seems to be making some progress.
However I question whether their strategy is going in the right direction, mainly because the moves seem to be focused on everything BUT the number one key to success in any business: customer service.
Most of the moves to improve seem to involve things like cutting back fares as well as charging for meals and upgrades. Perhaps most frustrating, and telling of Delta's approach, is this quote from BusinessWeek:
"Partly to tamper with the on-time performance of rival JetBlue Airways Corp., [Delta] added slower Dash-8 turboprop planes at LaGuardia Airport in New York to time slots just ahead of JetBlue planes.'"
Think about this for a moment...Delta is fighting for survival by using dirty tactics to fight its rivals. The loser in such tactics? Maybe JetBlue...but surely Delta's own customers - who get to "enjoy" a slower flight on noisier planes. It is absurd to me that such a tactic would even be considered by a company that is attempting to re-make itself. Obviously Delta remains mired in a mindset that frames customers as mindless sheep lucky to just get to their final destinations.
At the end of the day, the challenges that all airlines face is leading to improvement. Fares on average continue to be lower each decade, and many new routes have opened up. Best of all, the winning airlines with the highest market capitalization are those with the best customer service. Whether it is the quick turnaround and fun nature of Southwest, or the leather seats with personal TVs of JetBlue, this challenge is leading to improvement for us fliers.
As a Silver Medallion member (only because I live in Cincinnati, where the company has an effective monopoly on flights), I sure hope Delta wakes up to the need to re-focus on customer service. Otherwise, bankruptcy will be permanent.
(UPDATE: I notice from my traffic reports that this post is getting a lot of hits from a Flight Attendant message board. Unfortunately, this board costs $15 bucks to join. I can cough it up, but I wish that the flight attendant readers out there would post comments in this space as well for all to see.)
In many ways, I believe we have only scratched the surface when it comes to how the Internet can change our lives overwhelmingly and forever for the better. Many of these benefits of the Internet are a direct result of The Challenge Dividend. For example, the Net makes it easy for companies to launch and exploit innovation niches. We have a more vibrant, global economy that is continually working harder to make our lives better.
I am also continually amazed that the Internet brings the power of easy access to information. Through the Net, we are able to uncover the best and worst companies, products and people. The Internet gives anyone a voice, and through search and cache, the stories are saved forever. The challenge of this open, eternal information is pressuring people and organizations to be better and more honest, a dividend for both the economy and society.
In recent weeks, I have discovered three specific, unfolding examples of how the Internet is further opening up the world to the challenge of public exposure.
First, Google's Eric Schmidt announced back in October that the Internet could soon serve as an instant lie detector for politicians' statements. According to Schmidt:
"One of my messages to them (politicians) is to think about having every one of your voters online all the time, then inputting 'is this true or false.' We (at Google) are not in charge of truth but we might be able to give a probability."
Second, last week Slate magazine highlighted new claims of plagiarism that are resulting from comparing passages within Google Book Search. New authors are now subject to a instant comparison to millions of pages on file, and even historic authors are not immune. Herman Melville, for example, seems to have borrowed several naval technical passages from Henry Cheever in Moby Dick more than 100 years ago.
Third, the Internet is becoming the ultimate hoax buster. Yes, in some ways it has increased the spread and awareness of hoaxes. I remember first going online in 1995 and receiving emails about vanishing hitchhikers and free money from Bill Gates. But today a more sophisticated online populace is more apt to check facts and less likely to forward unproven emails. Urban legends and rumor busting sites are quick to get the real facts. There is even some data to suggest that the rise of the Internet has been a direct cause of the decline in UFO reports - as millions of skeptics are unleashed to dig into the real truth of doctored photos and questionable stories.
Information is power. And absolute information challenges absolutely. Once again, the dividends of challenge improve our economy and our society.
