Remember part 1 and part 2 of my interview with Gordon Magee of Drs Foster Smith? It’s been a while and I’m back to wrap up sharing what I was able to learn from this pioneer of e-commerce video.  I probed Gordon for details on the strategic, long-term approach he’s using to drive multi-channel sales with video.  In all honesty I did not learn of the rigid, measured direct-response strategy that I had expected. What I did uncover was how important trust is to a company that is, yes, financially precise and metrics-driven.  Trust, as it turns out, appears to be the main driver in the company’s early, yet large, investment in video.

Uh oh, is this “branded entertainment”?

Now as many of you know I’m not a big fan of traditional, mass media “branding” advertising.   In fact, I view most of it as a poorly executed, glorified art form — not a science.   It thrives on waste.  How many times have you been in a meeting and fallen back on the comfortable excuse of, “well… it did help brand us.”  Unfortunately, many marketing failures are labeled “branding wins” when, in fact, the man or woman running the show (CEO, CMO, COO/CFO) knows better.

In many cases, a campaign’s tactics failed to produce a tangible, strategic business output.  It failed.  You can call it a win but they won’t when you leave the room.

I mention it because most use of video on the Web has been rather gratuitous.  They call it “branded entertainment.”  It has a tendency to be aimless eye-candy that marketers hope gets passed around and… and… and well… create attention/awareness, interest, desire and action (with the action piece being completely un-tracked and rather blindly assumed).

In this tough economy we need new, improved (ie. trackable, reliable, proven) strategies not glorified tactics.  Some call it marketing science and it’s time has arrived.

Now I’m not suggesting Gordon was or is wasting his marketing budget.  What I am suggesting is that the direct response metrics were left unclear to me and, perhaps, with good reason.  Maybe DrsFosterSmith.com is too early on to really use them or — heck — reveal them to the world.

Increased trust as a valid goal

Let’s assume “better trust” or “more trust” among customers (new and old) is a valid business output.  How tangible is it?  How measurable is it?  Heck, should it even be measured at all?  Now we’re getting into dangerous guru territory where some believe ROI to be a silly pipe dream.  But what if we could assign some tangible behaviors that customers demonstrate to “increased trust?”

Even more wild — what if we just assumed that part of a holistic marketing strategy was a foundation that must be built without expectation of measurement?

Gordon says…

“… we probably have more articles on pet care and more veterinary articles online than anybody in the country. So to go into video and do the same thing was just a natural outgrowth of what we have been doing for 25 years really.”

Why so much content?  Trust.  When it comes to pets and doctors (veterinarians) it’s not about price.  It’s not about color, flavor, speed, accuracy or anything that would be desirable (aspirational).  It’s about trusting someone to help you take care of your pet’s health, well-being or a disease.  Trust matters — in this case perhaps more than anything else.

Measurement: The details

Says Gordon, the future is all about…

“… a blending of a branding relationship development type strategy along with an ROI measurement.  The ROI will be much more difficult to measure in some respects. Certainly we can use analytics tools to find out what people are clicking through on and if they have watched a video and what they did and so on. But frankly some of that gets so granular, you can have data overload, that you’re better off looking at the larger picture to determine what’s going on.”

Now typically these kinds of comments fly red flags with me… but I’m starting to wonder at this point.  Gordon continues as I push him for details on what he measures, why and what it proves…

“Are our sales moving up? Are people spending more time on the site? What’s actually happening? If we then try to drill down to every little item — at some point it becomes impractical apart from what some speakers will tell you at the Internet Retailer or show.

The first thing I study when I want to find out how we are doing is… what did we sell yesterday? What were our overall sales? What products were selling?”

Now at this point I was really starting to wonder, I’ll admit.  This sounds like a branding campaign and perhaps so… one aimed at creating or fostering trust.  Gordon continues…

“Yes, we will look at email returns. Did this email do well? etc. Are people clicking through? What’s our click through rate? Those high level metrics are important so you have got a clue. But at the end of the day, if you have got all kinds of clever little analytical measurements that are telling you what people are clicking through and where they are going… well if you’re not selling anything that doesn’t matter.”

So I think you work from the other end of the pyramid, the sharp point of the pyramid being, ‘Did we sell stuff?’ Then drill down as far as you need to, to find out how you got there. Then stop before you drive yourself crazy.”

Ok… Gordon seemed to come back to measurement as being a worthwhile strategy at the end but it left me scratching my head a bit — but in fairness to Gordon and the company that’s just fine.  It sets us up to ask more questions later

User / customer generated video

And what about user generated content (UGC) — specifically video?  It would seem ripe for opportunity in the pet realm with all those cute cuddly little creatures of all sorts out there.  To my surprise Gordon said no.  His reasoning was remarkably sound and, not surprisingly, all about trust.

“Jeff, we will likely not get too much involved in that.. and part of the reason has to do with us being owned by veterinarians and people having that trust relationship with us regarding the information that they get.

We want to make sure that there are no misunderstandings about the veterinary pet care information that we provide. A misunderstanding could happen if we would have, let’s say, a customer quote something that isn’t the latest veterinary information from research and so on… have another customer read that and go, ‘Oh yeah, I should feed my dog X because customer Y said that’s the right thing to do,’ and maybe they didn’t read three entries later our analysis of, you know, ‘That’s actually not a good idea,’ kind of a thing.

I’ll give you just a quick example of something simple. We were on television here a few weeks ago. We brought pets down to Chicago’s In the Loop with iVillage. Had our veterinarians on, the question came up, ‘Is it OK to give milk to my cat?’  Of course, I’m from Iowa.  We grew up doing that. And one of the vets said, ‘Actually, you know, it’s really not a good idea because they can have digestive problems. It’s really not what you should be feeding them.’

So little things like that that seem to be so common knowledge but incorrect are the kinds of things that we would not want to have on the website.

So we probably won’t do that. Our goal is to brand us… and not the other customers. We may at some point have a forum… where people can interact with us, but the scale of that, at times, it becomes so huge that management becomes a challenge. We just started a photo contest this past week. Right now we’ve got 5000 photo entries already in one week, and we’ve got to manage those and determine the winners, and so on.  And I think ditto would happen with a forum.

Now, sounds like a really good marketing message to say, ‘Gordon, did you just hear yourself? If you can bring that many people to your site, wouldn’t you want to do that?’

Well, we do want to have them come but we want to have them be provided accurate information and not just have a cool Web 2.0 interaction with them . We want them to interact with information. At some point we might do the forum so they can interact with each other — I would say there’s some merit to that — but management’s part of the issue for us.

Candidly I think DrsFosterSmith.com’s approach is either a little from the hip or he is just holding back a bit.  In either case I hope Gordon might share more details with us in months ahead.  We marketers are living in historically difficult times where new tools are needed for marketing in the new economy.  As my loyal followers know, I have a decent nose for sniffing out marketing waste and I’ll continue to share my research moving forward.

Still not got your fill of Gordon?  Check out this short interview he was good enough to give me recently while in Chicago.

Click here to view the embedded video.

and answering your specific cost questions. After reading part 1 a good number of you wrote to me privately expressing hunger for information on cost.  Gordon didn’t get into the specific cost numbers with me but I can share some of his early struggles and “production / cost migration path” with you.  I wasn’t planning on it so thanks for asking.  I need to know what YOU need to know so keep comments coming please.

I’ll return to the overall measurement and “user generated content”  (use of video supplied by customers) questions in a few days.

Let’s first start by understanding the company’s multi-channel approach to advertising…

Gordon Magee: “This past year we decided we would go into television in a larger way. The owners decided to work on a broader campaign strategy for advertising. We have always done print media and that kind of thing as well but we kind of bundled print media and radio advertising. We haven’t done a lot of radio, but television as well.

So we created a television program. Then about a year ago or so I put in a proposal for us to get video on our website and create our own video studio. That got approved and we started building the studio this fall.”

It may be helpful for you to compare this kind of environment to your own when considering approaching cost and budgeting for e-commerce-focused video.  Next, Gordon shared the evolution of his company’s approach to Web video — specific to how they decided to build (invest internally) rather than lease (outsource).  It’s interesting to note that they were already “in video” by creating TV ads.

Gordon Magee: “We outsource in the sense that we use the production company, one in Los Angeles, one in the Twin Cities when we made the last, more recent commercials. We have used a California production company in the past. But the internal decision to create the video studio was definitely Web related as opposed to TV commercial related.

So they really were separate entities in terms of the business case. I think with the advent of higher speed Internet connections for most people these days – there are a smaller and smaller number that are still on dial-up – and then the infrastructure capabilities that the Internet has that’s going to make video just very, very common, even more so than it is now.

It seemed to be that it was the right thing to do. Our company’s ethos, Jeff has always been to do things internally and develop the expertise internally so that we are not dependent on outside sourcing whenever that’s possible. Because we are a catalog company and have essentially a pretty huge creative department, doing our own photography and that kind of thing forever since the advent of the company, the idea to move into video wasn’t a hard decision.”

So as it turns out Gordon’s approach was driven by the company’s traditional, long-standing belief in “owning” the creative production process and a realization that the distribution channel (the Web) WAS going to explode opportunity.

Gordon Magee: “Script development of course was helped greatly by our creative department who wrote script and art direction terms and then we tweaked those. So we had the internal expertise to try it and not be afraid to do it. So we just decided that we were going to go ahead with that.

I think it (the decision to outsource versus build your own competency) really has to do with people’s expectations. As you know, being in the Internet business, expectations on the Internet continue to rise for the consumer. I think the average consumer probably doesn’t realize the effort that goes into making a website very easy for people to use and all of the other things that are on there, ancillary things like video and articles and so on.

But I think with those expectations arising, we know that video is going to be huge. And certainly with things like YouTube and other sites like that, people are going to those sites. We wanted to be part of that for the educational side of the company.”

Yet there’s more to the company’s history that plays into it’s decision to invest in a PUBLISHING company within their direct response/e-commerce selling infrastructure…

Gordon Magee: “When the company started 25 years ago – this is our 25th anniversary literally this year – when they started we were owned by two veterinarians, Dr. Ray Foster and Dr. Marty Smith. When the company started, one of the things they wanted to do was educate pet owners to be able to use products better and to care well for their pet. That came out of their veterinary background.

Certainly that’s a good marketing strategy as well. But the primary thing was let’s make sure pet owners know what they are doing. They can make better buying decisions and so on.

When they started their catalog they went to catalog conferences. They were new at all this. The catalog experts said, ‘You know you guys are devoting way too much space to education in your catalog. You can’t do that on a square inch analysis basis and have it come out in a cost-effective way.’

They decided very early on to ignore that advice. They dedicated I think 10 to 15% of every catalog to educational articles. That really became our niche for the customer. It also provided a good marketing tool in that people kept the catalogs because the articles were in them.

Over time, that trust relationship developed with the customer. So we probably have more articles on pet care and more veterinary articles online than anybody in the country. So to go into video and do the same thing was just a natural outgrowth of what we have been doing for 25 years really.”

Like many pioneers, the founders were told “don’t do THAT!” when it came to innovating.  Much like Buy.com cut against the grain with its approach (proven successful by now?!) to mixing “media company” with “lowest price e-commerce company.”

What say you, ReveNews readers?  I hope this may help clear up questions regarding costs and how to approach them in strategic terms.  I’ll return shortly to wrap up with final thoughts on Gordon’s measurement approach and use of user generated video content.

How heavily invested in video is the company?  They produce all videos themselves, 100% internally and distribute video across the Web at e-commerce focused DrsFosterSmith.com and content-focused PetEducation.com and LiveAquaria.com.  The company’s efforts attracted the interest of Animal Planet which now distributes its Faithful Friends cable TV program.  The scope here is significant and capital outlay breathtaking.  They make for a perfect video-based social media case study.

First I asked Gordon — a former rock band member, iron worker and pastor — for his best advice to those starting out using video.

Gordon Magee: One of the things that I would say about online video is — for medium to large sized companies and to a certain extent even smaller companies — it’s critical for the company to recognize that as soon as they put videos on their website or park them on YouTube or whatever they are competing with everybody else who’s got a video out there… in terms of the quality of the video.

Early on — and I’ve seen many of these videos that companies are doing or people with a smaller business are trying to do — they get a reasonable camera… they go out and shoot a video.  They’re not doing any lighting… they’re not doing any sound balance… they’re not adding any graphics to speak of and they think by getting their name out there with that kind of video it’s going to be a plus.  In the long run that turns out to be a huge minus.

So videos need to be done super, super-well and they need to differentiate the company from other companies. And that’s what we’re looking to do.

Which is why, for example, we decided to invest in our own studio…y the end of the year, we expect to have 120 to 200 plus product videos and then maybe another 20 ‘how-to’ videos.

Jeff, these will all be shot in HD. We’ve got professional editing equipment, professional sound equipment and so on, so that the videos will be very, very high quality from day one. We will certainly learn more about how to do them well, but you want to shoot with the highest quality you can, have your scripting done properly, go with storyboards so you know precisely what you’re going to do, so you’re not just standing up in front of a camera and winging it. That will not work.

Humph.  It seems to me that much of this flies in the face of what most social media gurus tell us — that it’s easy, low-cost and high impact.  Just jump in and jump in now!  In fact Barry Silverstein just summarized research from Michael Stelzner that seems rather contentious to Gordon’s advice (he says as he stirs the pot).

So wait a minute.  Here’s someone giving his best advice” on social media, okay, so it’s reserved to video, and he’s telling us it’s actual work and requires polish, professionalism and planning.

I continued to ask Gordon how it was that the company got involved in video at all… how it started.

Gordon Magee: When the company started 25 years ago… we were owned by two veterinarians, Dr. Ray Foster and Dr. Marty Smith. When the company started one of the things they wanted to do was educate pet owners to be able to use products better and to care well for their pet. That came out of their veterinary background.

Certainly that’s a good marketing strategy as well. But the primary thing was let’s make sure pet owners know what they are doing. They can make better buying decisions and so on.

When they started their catalog they went to catalog conferences. They were new at all this. The catalog experts said, ‘You know you guys are devoting way too much space to education in your catalog. You can’t do that on a square inch analysis basis and have it come out in a cost-effective way.’

They decided very early on to ignore that advice. They dedicated I think 10 to 15 percent of every catalog to educational articles. That really became our niche for the customer. It also provided a good marketing tool in that people kept the catalogs because the articles were in them.

Over time, that trust relationship developed with the customer. So we probably have more articles on pet care and more veterinary articles online than anybody in the country. So to go into video and do the same thing was just a natural outgrowth of what we have been doing for 25 years really.

So now things started getting clearer for me — this was more of a cultural thing.  The company was really committed to production of high quality, educational content from the start.  They believe, at the core, in the use of content to a) drive sales and b) enhance brand loyalty.  The Web just offers a means to extend.  In fact, any new media does so long as it has a following and so long as it can be tracked using direct response tactics.

Next up I ask Gordon about user generated content and his use of that — video content supplied by customers.  You may find his answer rather surprising.  I also pushed Gordon on the issue of metrics and measurement to try and understand his use of them.  More importantly, I wanted to understand how he knew that what he was investing in was actually paying off.

Let’s be honest — when people start talking about marketers becoming publishers in a ’social marketing’ context it can quickly begin to smell like Web marketing snake oil or ‘branded entertainment’ hogwash.  One way of fighting this is to get, as Sam Decker of Bazaarvoice said to me, “operational, not conceptual” — consider less and do more.  But before we start doing it’s critical to justify and plan investments in what amounts to online publishing-with-a-purpose.

Picking up from my prior story, Rok Hrastnik of Direct TV marketer Studio Moderna, believes that “the content is your way in … your bargaining chip to win consumers’ attention.”

He says it’s the first step in a relationship with prospective customers that, someday, may result in profitable sales. “The emphasis being on ’some day.”

To me this was beginning to sound a lot like branded entertainment.  Someday?  Yet these are big questions and I knew Rok to be an experienced guy so I pressed him for more.  In fact, I’ll share a couple of examples — focusing on Studio Moderna’s Dormeo.com brand (mattresses and bedding) and Wisconsin pet goods purveyor, DrsFosterSmith.com.  Both companies report steady sales streaming in as a direct result of publishing efforts.

Setting Expectations

How fast have each of these companies managed to track back sales to efforts?  In a matter of months. Make no mistake these are direct response marketing companies that have been around for a while.  They know how to get things done on the Web (built for direct response).

Okay — so I’ll make quick work of how this gets done. First, this “marketing as publishing” model is not a short-term vehicle as evidenced by companies like Drs. Foster Smith whose PetEducation.com site produces audio-visual content internally (they don’t outsource).  That takes time to build and get good at production value yet Drs. Foster Smith have decades of content creation to lean on since they pioneered “magalogs” (content-heavy magazines).

On the other side, the Dormeo brand leverages outside writers to create e-mail newsletter content that establishes continuous, often viral relationships with ’someday customers.’  When I say ‘viral’ (another voodoo word) I’m referring to customers who love to pass Dormeo’s content to family and friends under promotional incentive.

“Content creation and publishing is the long term thing you do to gradually convert your prospects into customers in ways they may actually welcome,” says Hrastnik who’s busy selling products that consumers don’t exactly purchase frequently or on impulse — mattresses!

Yes, “It Depends”

Sure how fast you’ll see results and what those results look like will vary… but be assured the metrics are not “videos viewed” and/or “e-mail open rates.”  They’re far more serious — metrics that please CFOs and CEOs.  No, they’re not always focused on the immediate sales transaction.  Think “actions taken” that involve interaction with the brand itself like sign-ups, registrations, downloads etc.  Things you’re doing that help prospects move forward along their “chronology of purchase intent” — toward purchase.

Nobody expects immediate results these days.  They just expect you to have a plan that can be measured and adjusted as you execute it.

Don’t forget the most important aspect — making occasional calls to action.  Pitching content-lovin’ prospects what you’ve got to sell.  What’s the proper mix of content + sales pitching?  Again, that depends on what you’re pitching to a degree…

Talk Talk

What to talk about?  Stated plainly, Hrastnik suggests if you’re selling things like mattresses, don’t limit yourself to talking with customers about sleeping or your brand — “talk about sex, relationships, health, productivity, motivation, success and other things that people actually care about.”

How do you say it?

Although Bazaarvoices’ Decker is invested in the concept of customer-generated content, he admits, “Customers won’t create content in all the places you need to reach the market and at the times you need to hit your goals.”

“The key is to leverage their voices, either in the creation of your marketing or by using their words directly, to make your ‘talking-at-them’ more authentic, credible and relevant,” says Decker who recommends a listen-and-react model to creating content that could be published as text/email or video.

Again, Hrastnik outsources to a team of external writers and graphic artists to get the job done but holds on to the promotional and database marketing aspects.

Just Do It

“Get operational, not conceptual,” says Decker who worries that too many marketers invest time planning and not executing.

He also suggests creating an internal “council” focused on forward-thinking ideas — working to drive them forward across multiple functions and make them happen.  This, he says, fosters the required cultural shift that crosses multiple departments.  Essentially, “it takes a company” to plan and execute a content-driven lead or sales generation strategy.

In the end all of this can be a little scary.  Yet by tying even the smallest of “baby step” trials to their impact on sales — and ultimately profit and loss — progress can be made.  Marketers simply must take a little risk and definitely take a note from the book of direct response marketing.

“I’m working in the most interruptive ad industry of them all.  My idea of ‘cool’ marketing would be injecting the latest infomercial directly into the consumers’ vein,” jokes Hrastnik.

Actually.  He wasn’t joking — I was soon to find out.  He’s fairly hard core!

“Seriously… I can tell you that direct response TV advertising it not only alive but kicking, thriving more and more every month.”

While newspapers and broadcast media trail behind various forms of word-of-mouth (in terms of the customer trust factor) traditional forms of interruptive media are nowhere near dead yet says Rok who, bye the way, sleeps about 4 hours a day and is author of Unleash the Marketing Power of RSS.  (in addition to being Director of Internet for Studio Moderna)

Okay… I let go for a minute and assumed his statement to be true.  But if it is, what does that leave for the Web other than being a subservient channel to TV — as it drives people to the search box and browser bars?  Where’s the glory for Rok and his international Web marketing team?  I began to wonder if his team was all about pop-ups and banner buys… and to what degree he was doing anything original or creative on the Web side.  I suspected he was given his working for a direct response TV company!

Social Marketing: Fad or ‘Must Do’ Relative to Traditional Ads?

Rok and I both tend to question the validity of what most call “successful social marketing.”  (BTW “social marketing” is not a term either of us much care for but we’re forced to use it for the most part)

Yet it’s dangerous to ignore what’s going on behind the scenes — even in these early stages.  The fact is you’ve really got to look hard to find the success stories out there but when you do they’re startling in two ways:  1) how retro they are (what’s old is new again!) and 2) how simply they can be executed on minimal resources.

Hrastnik admits that infomercials are interruptive but the reason they work is — get this… “because they interrupt consumers in ways they welcome … entertaining them, educating them, thrilling them and just simply giving them a great story… which then actually goes on to sell something.”

“Yes, we interrupt but we also provide value with that interruption.”

That, says Hrastnik, is how marketing should be.  Humph.  ‘Nuf said and THAT is precisely the opportunity represented by “social marketing” if you think about it.

“Look, Jeff… most of us will always depend on interrupting consumers and pushing our message in their face. No way around that. But if we want lasting attention we need to interrupt in a valuable manner. For most businesses, that value may come in the form of relevant editorial content.”

And that, in my eyes, sets up a good bit of discussion.

Marketers as Publishers

Here’s where it gets both dicey and exciting.  Hrastnik and others believe that marketers must start becoming publishers of information and entertainment…  they’ve got to be storytellers.  Yikes!  Church and State issues.

Rok argues for marketers becoming actual publishers — providing relevant content that people want to consume.  Customers trust it for what it is (that’s key).  And no this is not “branded entertainment” where the ad is inherently a lie — an ad masquerading as something else.  That is, in his eyes (and I agree) nearly worthless.  It should be, very clearly, an ad.  Think infomercials.  Now things began to click for me — Rok was up to something cool.  I was sure of it.

“Contract publishers have been teaching people this for decades,” says ReveNews founder and GMD Studio’s Brian Clark.  “Advertising tries to make a point, marketing tries to induce an action and experience design tries to shift perceptions.”

Experts like Clark and Hrastnik suggest that content does not necessarily need be product related — may only be loosely related or not at all.  Essentially, marketers aren’t depending on that content to sell so much as they’re using it as… well… bait.

“The content is your way in … your bargaining chip to win the consumers’ attention, the first step to a relationship which someday may result in profitable sales.  The emphasis being on ’some day,’” says Hrastnik.

Okay.  So now it’s beginning to sound a lot like branded entertainment.  Someday?  I’m getting lost… but Rok brings me back on track through telling a story.  It’s one that I tell often at conferences and with clients and one I’ll share with ReveNews readers next!

I challenged a group of colleagues to provide social marketing adoption tips against my loaded backdrop: suggesting “interruptive” (aka traditional) marketing is dead.  I figure if it’s all but dead or dying then don’t we already have an urgent mandate to move and move now?  As it turns out I had a lot to learn.

We’re on Cusp of Dramatic Change
Okay, things are really heating up with this lousy economy — marketers are being challenged and things are, frankly, getting pretty ugly lately in the online sector (check out the Email Civil War as an example!).  Things are reaching a fever pitch.  Fundamental, core principals of marketing itself are being challenged and people are REALLY freaking out. (need more proof? test this one out!)

As a result of pressure from the inside (CMOs being held more accountable for spending effectiveness) and the outside (customers being better at tuning out ads) the practice of marketing is being forced to re-define itself in many cases.

How so?  Issues like ethics, transparency and authenticity are at the focal point.  Media-saturated, always-on customers are showing preference for new forms of what I’m calling non-interruptive marketing like “alternate reality” games, branded entertainment and permission-based lead generation.  They want to know when “an ad is an ad” and show a strong willingness to play along… but only on their terms.  Can you taste the change?

Humans: The Killer, Multi-Channel App

“It was never about the computers. It was never about the applications. It was never about the sales channels. The Internet was always about the people, which is why email, IM, multi-player gaming and similar developments have always been the ‘killer apps’ of the social Web,” says Brian Clark, founder of GMD studios and brainchild of Audi’s award-winning “Art of the Heist” campaign. He’s also the original founder of ReveNews.

Clark, who’s clients also include Ford and Sharp Electronics, is a leader in creating what’s being called “alternate reality” games that immerse willing consumers in brand-sponsored experiences.  These bold brands are literally using every form of digital and traditional media to create authentic, transparent and highly experiential experiences for customers who actually want to play along with advertisers.

“Social” online media are included in his approach, obviously, yet Clark spends a good deal of his time educating advertisers and their agencies on what integration *really* means (beyond inclusion of various media types).

In reaction to my disappointment (okay, I’ll admit — outrage) over self-proclaimed social media experts and their constant need to call old ideas “new and revolutionary”, Clark commented how it made him want to ask them…

“What were you doing with your time before you realized all of the Web is a social media?”

Indeed.

Traditional Media: Not Dead Yet!
So is interruptive advertising dead — in traditional media and on the Web (i.e. pop-up and interstitial ads).

“No. Not by a long shot,” says automotive sales lead generation expert, Joe Loll of RockMeJoe.

“But any savvy direct marketer will follow the ROI, not the Cleo. I look at social media advertising as just another channel to add to your marketing arsenal. If the ROI is there, you bet the direct marketing manager is going to be there too,” says Loll.

“You’ll have to go native to win friends and influence others by tuning your message to the context of the setting.  Interruptive advertising in a social media setting can be like a loud joke that falls flat at a party.”

Loll says another exciting (challenging) aspect of social media advertising that is the presumed endorsement by being in context.  He says it’s just like public relations — in that if it’s in print it’s perceived to be true.

“However this isn’t going to last long,” says Loll who warns, “just look at what happened to affiliate marketing to see where that is going.”

Loll says he’s excited about the tools he sees coming online and the opportunities for social marketing.

“However, I’m not going to give up on my current channels in any short order.  Direct Mail and direct TV might be expensive but they are effective and have the ROI to back it up.”

In fact, with the recession in full swing these media channels are becoming highly affordable for pros like Joe.

Hey, what DID happen to affiliate marketing?!  Hmm… and we have yet to hear from Rok who REALLY sets me straight.  Stay tuned!

While researching this column, I decided to pose the following question to experts who are truly in the trenches:

“In the end, mass communications, ‘talk-at-them marketing’ is falling out of fashion.  ‘Engage and talk-with-them marketing’ is becoming the rage… and slowly bearing fruit for some.  Is traditional, interruptive marketing dying?”

I asked each colleague to respond to this (I admit!) rather inflammatory question in a way that yields tips on convincing disbelievers to begin taking baby steps forward.  So here’s some ammunition to take to your CEOs and CMOs…

We Aren’t In Searchville Any Longer, Toto
First, social / experiential marketing doubters must be given the chance to appreciate how the Web is radically shifting power away from them and toward customers.  As a result, customers actively ignore and distrust advertising… and the marketers that push it.  Think about it — how many times do we hear about the latest trend in advertising which involves disguising ads to look less like ads?  In fact many believe that’s what social technologies should be used for (they call this aimless tactic that insults customers’ intelligence “branded entertainment”).

Media firms like Nielsen and Consumer Reports cite growing distrust of advertisements and marketing ploys among customers over the years.  In 2007, Nielsen noted that over two-thirds of survey respondents from across the globe cited “recommendations from others” as the most helpful, trusted form of advertising.  Surprised?  Well, to be fair, I was lecturing in Monte Carlo last year and a search marketing entrepreneur did point out that recommendations are hardly ads (why would they be considered in the same classification as a TV, radio or Web ad?!).  Point taken.

His retort was prompted by my pointing out that search engine marketing — now widely practiced by most Web marketers — is taking a hit.  Nielsen says only 34% of customers ranked their experience with search engine ads as trustworthy, reliable.  I think you can see why he stood up and said something

Yet another study from the University of Southern California cites a growing number of people characterizing search results as unreliable and inaccurate.  Only 51% of people trust information provided by search engines, down dramatically from 62% in 2006.  Even Almighty Google isn’t trusted by nearly half (49%) of people who use it.  What’s the point?  Customers realize that Web advertising is beyond interruptive – it’s pervasive, obstructive.  Separating ads from information is a chore and people don’t like chores!

I’ll stop there and not get all Eric Clemons on you but I hope ReveNews readers will hear me out a bit.

The Low Hanging Fruit
Beyond sharing articles related to customer empowerment and pointing to competitors practicing new principles, Sam Decker recommends bringing in speakers.  The CMO of customer review solution provider, Bazaarvoice also recommends marketers send negative reviews/blog posts to customer service — making them both accountable and actionable!

“Create ‘lunch and learn’ sessions with management to show them social networking tools, and show how people are talking about your products online already,” says Decker who cut his social marketing teeth at Dell Inc.

“The low hanging fruit is to bring user-generated content (UGC) into your site, right next to your brand.  This could be reviews, community Q&A, stories, polls or other forms of UGC.”

Decker gives three reasons to do this:

1. Customers put more trust in brands when they invite real customers to talk openly in their midst.
2. UGC meets the needs of visitors are already coming to your site. Visitors seeking product information, reviews and answers from customers who have experienced your products are more relevant and credible than marketing copy.
3. By bringing “customer voice” into your site, you raise the visibility and impact of this strategy to cross-functional teams and senior management.

Decker says while others in the company know word-of-mouth is occurring on the Web putting it on your site raises the cultural awareness of the “customer voice.”

I took time out to interview Sam at a conference recently and will be publishing that interview soon… stay tuned.  In days ahead, I’ll also be back with more from Sam, comments from automotive lead generation expert Joe Loll of RockMeJoe, ReveNews founder Brian Clark of GMD Studios and Studio Moderna’s Rok Hrastnik — who takes serious issue with my suggesting that interruptive advertising is unwanted  let along dying on the vine.

As promised in Part 1 of this 2 part series I’m back with 3 more strategies and easy-to-implement tactics.  One strategy I mentioned that generated some email was providing feedback loops to affiliates.  Too radical for some apparently but let’s clarify a bit.  You do take hands off the wheel a bit but in a balanced manner.

According to Paul Moss, formerly of Insurance.com and now of lead generation group Trouve Media…

“Before doing anything you have to give everyone feedback loops… letting them know what traffic is doing well, what traffic is performing poorly. Give them as much feedback as you can, either through pixel tracking or marketing source code tracking.”

He continues, “Allowing all of those opportunities… to tie it back into their Google spend or their Yahoo spend… and then once you give them all of the transparency to the data, you have to price them according to their own performance.”

Moss says you still need to hold all affiliates accountable to their own performance but, “you continually tell them what traffic is performing well and driving up their marketing allowable… tell them what traffic is performing poorly and driving down their marketing allowable… and hopefully… they adjust the mix. They’re always going to adjust the mix according to volume.”

In the end he says, “The key point is the sharing data as far down the funnel as you feel comfortable with. ”

Let’s jump back in with one of the most controversial topics of all time — how to work collaboratively (not competitively or with “co-opitition” in mind) with affiliates in search marketing.

Develop and communicate a clear, well-reasoned search marketing policy to affiliates.

1. Audit your affiliate program for confluence with paid (PPC) search advertising efforts.

2. Understand value driven by affiliates across various categories based on audit results that demonstrate “triggers” of sales transactions.

3. Create business rules that negate and approve affiliate commissions based on logical rules that are shared openly and pro-actively with affiliates.

4. Understand where your search engine optimization “sweet spot” is by identifying where you want to spend time, energy (money).  Assign “long tail” search terms/keywords (those able to generate less referral volume) to affiliates for their monetization efforts.

Says Moss, “Search engines have algorithm on what they feel is going to provide value to the search engine user and they rank those sites accordingly. From my perspective of having a product. I know that I can sell it best but I’ve got only X amount of core competencies. I want my affiliates to capitalize on areas that aren’t my core competencies or create more depth.”

Indeed, wider affiliate distribution — something I’ll be talking about more with a panel of experts at eComxpo in January 2009 and at SES Chicago coming up in December with the likes of experienced experts, Jeff Ferguson of Napster and Kris Jones of Pepperjam Network (more like empire lately!).  I hope to see you there.

Experiment with social media & content-focused affiliates.

1. Scale your most precious resource, Time: Use new tools, such as Syntryx, to rapidly prospect for qualified affiliates.

2. Provide affiliates with access to helpful, innovative Web 2.0 linking technologies like Linkshare’s FlexLinks or Amazon’s various tools ranging from “SiteStripe” to Widgets.

3. Give affiliates access to product data, coupons and other content via flexible, RSS (real simple syndication)-enabled technologies.

“We’re offering merchants the ability to maintain ‘on sale’ and ‘deal of the day’ RSS campaigns for affiliates to publish on their sites,” says AvantLink’s Gary Marcoccia. “And to take it one step further the affiliates can promote ‘subscriptions’ to the same RSS feeds.”

“The key in generating feed subscribers from their site (in addition to, of course, sales), is affiliate IDs being embedded in links from the deal feeds… for as long as they are in use,” adds Marcoccia.

Consider creative, new approaches to paying and bonusing affiliates based on performance.

1. Throttle up payouts among performers who drive volume at a reasonable cost considering channel confluence issues, etc.

2. Throttle down payouts among under-performers who’ve been given a fair chance but are not performing on a quarterly basis.

“Proactively give fee increases where it’s merited, and decreases where it’s not merited,” says a very level-headed Moss.

“But, make sure that before you give a fee increase that you have enough data to ensure that you have the best chance to be a sustainable price point… if not giving it a little bit of room to grow. Otherwise, people don’t respond well to fee decreases and that’s when they’re going to start shopping their traffic.”

“The loyalty response that you’re going to get from proactively raising somebody’s fee will create a loyalty that you won’t get anywhere else. Combine that with creating a genuine friendship and genuinely getting to know the people, genuinely caring about them, understanding their business.”

Stay tuned for more actionable tips and interviews with experts in a variety of performance-focused Web marketing strategies.  As always I welcome your feedback!

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Jeff Molander is a leading Web marketing expert, author and speaker.  He is CEO of Molander & Associates Inc., and can be reached at jeff_at_jeffmolander.com.

Stay tuned to ReveNews for candid interviews with these experts where they’ll “go deep” on their secrets to success.

Allow affiliates to access a knowledge-driven feedback loop to improve their ROI and, as a result, increase yours.

1. Let affiliates “connect the ROI dots” between their investments (media spending) and your ultimate success (sales or new customers).

2. Provide select, trusted affiliates with limited yet unfettered access to your internal metrics and customer behavior data.

Strengthen relationships with superstar affiliates and open doors for potential superstars by actively, yet cautiously, investing hard and soft dollars in them.

1. Invest in affiliates: Underwrite affordable, educational opportunities and conferences for them.  Sponsoring affiliates is very popular in the European realm.

2. Sponsor low-cost, virtual innovation forums and Webinars that offer training opportunities for top affiliates.

3. Provide limited access to Web metrics (ie. Google Analytics, Omniture) and optimization tools that are already at your disposal yet possess a high perceived (and applied!) value among affiliates.

4. Invest in affiliates: Subsidize the media buying of select, high-value affiliates by providing matching contributions to their expenditures or allowing access to your media buying prowess.

If you were paying attention that’s TWO strategies with supporting tactics.  That’s plenty to chew on and begin to take ACTION on.  I’ll be back in a few days with the final three.  Also, stay tuned for more actionable tips and interviews with experts in a variety of performance-focused Web marketing strategies.  I’ll be publishing interviews in the next few weeks.

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Jeff Molander is a leading Web marketing expert, author and speaker.  He is CEO of Molander & Associates Inc., and can be reached at jeff_at_jeffmolander.com.

Ok. I admit to it after Haiko dePoel rightly called me out. I’m asking loaded questions to affiliate managers… yet in doing so I don’t pretend to know what this industry needs or doesn’t need. I want to hear it from you all — and just over a hundred of you answered. Thanks for doing so! Let’s waste no time and get right to the response analysis.

“I need better recognition and respect internally among my superiors”

Nearly 2/3 of you said you need it with the other 1/3 being in the enviable position of NOT needing more recognition within your work environment. My take is that in an outsourced program management (OPM) role one is bound to have a LOT more success with this need. Unfortunately, I don’t know how many OPMs took the survey but I’m betting they played a role in the results data.

“I need better tools to do my job.”

WHOA! 90% of our community needs better tools. While I was anticipating this I am truly knocked on my bony hind-end when I saw the numbers. Okay, ReveNews readers and fellow poll-takers… let’s hear it and I’m going to let anonymous comments ride on this one — so as to allow people to make more bold statements that reveal WHAT they need. In fact, I’ll also take your offline comments at jeff_at_jeffmolander.com if you’ll share them with me. What kind of tools do you need?

“I need more autonomy — to be allowed by the boss to ‘get creative’ occasionally, try something new. “

Again, nearly 2/3 of you need to feel more empowered. Out of this group almost 20% are feeling desperate — you need it now! How can affiliate managers work to earn this from their superiors and/or clients? What can we do as an industry to help bring about change that creates better results for everyone involved?

“I need more budget to foster creativity. “

We hear a lot about clients “running out” of money to fund affiliate marketing from many of the networks and OPM agencies. Is this really true and if so why? It seems to make very little sense in a performance-driven environment. Why would marketers treat performance-based budgets as they would a banner buy or CPM (eyeballs based) media buy?

Nearly 1/3 of you said this is NOT a problem. There IS hope! But this leaves 2/3 of you saying that, yes, it IS happening.

“I need a team environment: less competition and more collaboration with search, email and other channels .”

Roughly 1/3 of you said this is needed… but not that much. Yet 43% of you went as far as saying, hey, this is really needed — a lot. 25% of you said it’s not really an issue which I’m confident it’s not… for a good number of people who believe that “internal competition” among all marketing channels is — and always will be — a healthy thing. Of course, I disagree but that’s another discussion

“A better compensation structure. (not necessarily salary but reward structure)”

What I was getting at here may not have been clearly worded enough. I’m trying to assess if people are happy with how they’re given bonuses at year end. I probably failed but… a majority felt that compensation structure change was needed but not critical. Just over 40% of respondents did, however, say it was an issue that’s very needed. I’ll leave it to commentators to analyze this response data. What do you think?

“I need better understanding from leaders in my company of affiliate marketing as an affordable customer acquisition tool.”

A majority of you said you need this “a lot”. Nearly 80% of you said that understanding at the highest level was lacking. So what can we do to change that? This gets to professional education in our space which I believe could stand to improve. As I see it, it’s been a very AFFILIATE-centric world when it comes to education. What about affiliate managers and executive marketers that they report to? There seems to be a clear void in terms of unbiased (not influenced by corporate sponsor dollars) professional education. Of course, there are public and private movements afoot to bring our industry together around things like certification, standards and plain old education.

“I need a place where I can go to learn from respected experts first, party second.”

Probably my most devious of questions . Sure, I have my feelings about conferences and professional education opportunities in our world but this isn’t about me. I’ll leave you with this: there was a bit of contention here over this question. Not everyone seems to agree and it was one of the few questions that demonstrated division. My analysis? There are some hard core party animals in our industry

Consider yourselves teased… I’ll release that data in days ahead. I’ll also touch on remaining answers to related questions:

“Do you need a trusted, ‘go-to’ resource on performance-based marketing of all flavors that’s up-to-date. “

and

“I want less whiners and negativity in our business — more doers, risk-takers and brotherhood.”

Until then what say you, fair readers?