The Marketing Relevance Imperative

NIGEL: You're on ten on your guitar...where can you go from there? Where?
MARTY: I don't know....
NIGEL: Nowhere. Exactly. What we do is if we need that extra...push over the cliff...you know what we do?
MARTY: Put it up to eleven.
NIGEL: Eleven. Exactly. One louder.

-Conversation between filmmaker Marty DiBergi and guitarist Nigel Tufnel, This Is Spinal Tap

In study after study, consumers have stressed that, regardless of the channel, they’d rather not see ads. 

   - A 2004 study by Forrester found that when people watch pre-recorded television shows, they skip an average of 92 percent of the commercials

   - Most Internet users block pop-up ads, screen for adware, and safeguard against spam.

Confronting an ad-averse audience, how have major advertisers and ad agencies responded?  With more unwelcome, and in some cases underhanded, tactics – pandering ads, manipulative word-of-mouth campaigns, contracts that require a publisher to pull their ads if the publication prints a negative editorial about them... 

As marketers, we’re all in the same boat: how do you get heard above the din? Where do you go, what do you do, when the volume’s already at 10? Well, if you have the clout – and believe “He who succeeds shouts the loudest” – you:  

   - Run something shocking at a moment of maximum exposure

   - Try to control (i.e., threaten) the presumably impartial media

   - Claim it’s in all the service of branding

One naturally wonders: “This is how you gain trust?” These advertisers and agencies – what we’ll call legacy marketers – are resorting to tactics that not only ooze desperation but are ethically suspect.

Let’s give legacy marketers their due. They’re struggling to survive as media budgets get butchered. John Wanamaker’s oft-quoted adage about 50 percent of advertising being wasted pales in comparison to what they’re facing.

A recent study found that most of these advertisers don’t measure the impact of their television media budget; instead, they relegate it to a black box called “branding.” CEOs and CFOs aren’t fooled – to them, it’s a rationalization for inadequate measurement (branding as a “get out of jail free” card).

To add to the irony, these marketers aren’t fooling – let alone engaging – the public.

You can spend millions on monologues that swamp your target market, only to be muted by a single consumer voice on the Net. Many marketers fail to realize that they aren’t moving closer to dialoguing with consumers or learning how to thrive in a world where consumers are savvy and empowered, where information can be shared in seconds.

Just visit Amazon.com. Who do you think the consumer’s going to believe? The carefully selected expert on the dust jacket or opinions posted by peers?  Google away – third-party, consumer, and consumer group reviews are a breeze to find.

When brand messages are Tivo’ed, pop-up ads and irrelevant email marketing is tuned out, how do you justify your legacy budget? How does a marketer become more relevant?

Well, first, you don’t make a spectacle of yourself. The kid throwing a tantrum in the grocery store knows this is a way to garner attention. The problem is, it isn’t positive attention. The more shrill advertisers and agencies become, the more they employ aggressive/intrusive/obnoxious techniques, the more they distance consumers.

Under a constant onslaught of advertising, consumers have adapted, evolved. In order to process information, they’ve learned to be more vigilant, more adept in tuning out predatory messages. In short, consumers see a shark fin and steer clear. They have unprecedented access to information and are less likely to swallow what they hear from marketers. 

But marketers can take heart. Consumers and business-to-business targets have shown they will listen – and be receptive – to a truly relevant message delivered at the right place and time.

It's a simple, but true statement, that it's time to really get to know who you're talking to. Stop messaging that screams “Notice me”; choose messaging that means something to your targets. Start connecting with them.

Allocating media budgets based more on old habits and silos than information is part of the problem.

As the internet becomes an increasingly popular media choice and televisions soon get IP addresses, the potential and expectations for marketing relevancy will only increase. . 

There are marketing innovators to look to as models who don’t treat consumers like a cage of white mice.

Google's approach to advertising is an excellent  example. Google methodically creates systems based on relevance. Google knows that, in an age where consumers and business buyers have information so readily at hand, compelling marketing is pertinent marketing. Through being relevant to users searches, page editorial content or personal email content.

Few media outlets and brands have the trust to scan a user’s email for keywords and phrases and deliver back related advertising, but Google does. It speaks louder than words that consumers allow Google to look at their personal emails in order to get more relevant advertising. It is a testimony to that the fact that targets will listen if marketers will only take the time to be relevant.

Few marketers have made strides towards relevancy as assertively as Amazon.com and, to date, it has paid off dearly.

Marketing relevancy takes a lot more effort, but the rewards are in the results. 

Resource : http://marketingtoday.com/marketing/0905/relevant_marketing.htm 

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Why Microsoft May Be a 'Classic Value Trap'

The early days of January are typically a time of unbridled optimism. This will be the year we lose 10 pounds and learn to speak French; Japan will turn itself around; Microsoft (MSFT) stock will pull itself out of a decade of doldrums.

Most analysts are betting that the Redmond computer company’s time has come. The company’s fiscal-year revenue has nearly tripled to $74 billion in the last 10 years. At $27, the shares trade right at their 10-year average and yield more than it costs the company to issue debt. Redmond has Skunk-Worked an exciting new tablet and operating system it’s eager to showcase. It’s all backed by ridiculous amounts of free cash and a fortress-like balance sheet. The 12-month price target on the stock forecasts a 25 percent gain.
Still, the company has attracted at least one major detractor with a big megaphone: Barry Ritholtz, an asset manager who runs a quantitative research firm and founder of the well-trafficked blog The Big Picture. He considers the company a “classic value trap,” not unlike what its customers Dell (DELL) and Hewlett Packard (HPQ) were at the start of this annus horribilis. The problem, he says, is Microsoft Chief Executive Officer Steve Ballmer. “As long as he is running the show—he has missed every major trend in tech over the past decade—I have no confidence in the company.”
He has company. Activist investor David Einhorn has wanted Ballmer out for more than a year and was long the shares in hopes that such an ouster would boost Microsoft’s returns. The stock is up 3 percent this year, compared with the S&P 500’s 14 percent gain. The 13 years since Ballmer became CEO have included the Vista debacle, a thankfully thwarted bid to overpay for Yahoo! (YHOO), the ceding of search supremacy to Google (GOOG), and Apple’s (AAPL) envisioning and dominating much of the smartphone and tablet markets. Meanwhile, where’s that “Skype Phone” in every palm?
‘Value trap’ is a funny term, says Bill Koefoed, Microsoft’s general manager of investor relations. Microsoft, he says, is trading in line with the big-cap technology sector, which has recently been out of favor with investors.
“Enterprise tech hasn’t been as sexy to the press. But our relevance to the enterprise has grown in a huge way. Our database business is growing faster than Oracle’s (ORCL) and IBM’s (IBM).”
Koefoed says people focus on Windows, which provides a quarter of Microsoft’s overall revenue, but not on the comparable 25 percent contribution from the company’s servers and tools division, which he emphasizes that Ballmer has grown, from a $3 billion business, to a $19 billion enterprise over the past decade. ”Over time, the stock price works itself out. We’re doing a whole bunch of things to be shareholder-friendly. Over time, that will be reflected in our share price.”
Meanwhile, Koefoed says, it was under Ballmer that the company initiated and consistently increased its dividend—with Microsoft shareholders overwhelmingly backing the CEO last month.
Ritholtz is unpersuaded “Think of the difference between what is revealed by a single snapshot of Microsoft today vs. an extended video. Yes, you can see the current situation of lots of cash, a low price-earnings multiple, name recognition, enterprise usage. But what about the trajectory and changes to the underlying market for their goods and services?”
He says that other than Kinnect for Xbox 360, “it’s hard to see what Microsoft gets for its billions of [research and development] dollars.”
“The competitive landscape has been moving against Microsoft,” wrote N. Landell-Mills of Indigo Equity Research after Microsoft’s “uninspiring” latest quarterly report, which involved the company raising its dividend 15 percent. The analyst called the organization “un-innovative and complex” and “a digital dinosaur.”
The full rollout of Windows 8 could, of course, change that state of affairs. Not that early signs are promising.
With the PC replacement cycle stretched out and assailed by competition that Microsoft failed to oppose, Ritholtz has taken to comparing its fate to that of Maytag (WHR). “It was,” he says, “once hugely successful and innovative and created lots of products and markets. Now you replace your dishwasher every 10 years; that’s the only time you ever think of Maytag.”
Read more: http://www.businessweek.com/articles/2012-12-28/why-microsoft-may-be-a-classic-value-trap#r=hpt-ls

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Parl passes banking bill, paves way for setting up more banks

New Delhi: Parliament Thursday paved the way for corporate houses to enter the banking sector by approving the banking bill, a key reform legislation pending for long.

Parliament also passed the amendments to the debt recovery laws or Sarfesi law after a reply by Finance Minister P Chidambaram on the combined discussion on the two bills in Rajya Sabha.

These two Bills -- Banking Laws (Amendment) Bill, 2012, and Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2012, -- he said, will strengthen the financial sector and help in establishing large-sized banks, besides promoting financial inclusion.

"We need 2-3 world-sized banks. China has three among the world's top 20. We have none. We need more banks," he said.

"Banks have opened 6,489 branches in 2011-12 alone that is around 18-19 per day. We don't have the capacity to open more branches. We need banks," he said.

The Lok Sabha had already passed these two Bills.

Chidambaram said the amendment was not intended to give banking licences to big corporate houses alone, but also to allow eligible public sector entities to enter the sector.

The Banking Bill was approved by the Lower House earlier this week after the government dropped the controversial clause concerning allowing banks to trade in commodity futures.

Referring to Thursday's strike by bank unions against reforms, Chidambaram said he could only request the bank employees to refrain from such activities.

"I don't know why they should go on strike. There is no longer greater public support for this (kind of) strike...I think any matter can be talked out. We are open to talks. Strike is not desirable," Chidambaram said pointing out that strikes have become "less and less frequent."

The Banking Laws (Amendment) Bill, 2012, which seeks to strengthen banking regulation, was passed by the voice vote in the Upper House.

The Bill will allow RBI to supersede boards of private sector banks and increase the cap on voting rights of private investors in PSBs to 10 percent, from one percent now.

Responding to queries by members, he said the government does not have any intention "at this point" to look for a new regulator alongside RBI.

The central bank wanted the government to amend banking laws before initiating the process of issuing new banking licences. The passage of the bill will prompt RBI to move ahead with the proposal of granting new licence.

The bill will keep banking merger and acquisitions under the purview of the Competition Commission of India (CCI) as well, Chidambaram said.

The bill, along with proposed legislations on pension and insurance, was one of the five key reforms measures on the government's agenda during the current session of Parliament.

The debt recovery bill is aimed at facilitating recovery of loans by banks.

At present, there are 14 Asset Reconstruction Companies (ARCs) in the country. As many as 64,000 cases are pending before the Debt Recovery Tribunal (DRT).
resource:http://zeenews.india.com/business/news/finance/parl-passes-banking-bill-paves-way-for-setting-up-more-banks_66721.html

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