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Today he sent me a link to an article in Fast Company entitled “Print Media Is Dying. Online Revenues Are Tiny. What If the Ads Are to Blame?” As always, it got me thinking and writing.

My emailed response to my Dad ended with a terse “systems that don’t work die.” And as I wrote it, pessimism washed over me. My Dad, a smart guy, is freaked out by the idea that the activity he has spent his whole life doing will simply vanish. And, Cliff Kuang (the writer of the piece and also, assumably, a smart guy) clearly doesn’t see things the way I do. I’m a fairly confident individual, but it’s easy to falter when those we lean on stumble.

What seems so incredibly obvious to me is that the value of information is changing, and as it does, it is dragging media monetization models with it. The value of scarce, immediately relevant, actionable information is quite high―that’s why Google pockets about one out of every two dollars of online ad revenue. The value of non-scarce information is practically nothing. That’s why inexpert opinion (i.e. national reporting from just about any local newspaper) isn’t worth the quarter consumers now refuse to pay for it, and instant-expert bloggers aren’t any better. On the other hand, want to know what a real expert like Warren Buffet thinks about the economy? You can trust the Wall Street Journal to pry some quotes out of him, or you can subscribe to Buffet’s Twitter feed and keep tabs on him yourself. That sort of access is unprecedented and having it changes everything.

As magazines, like my Dad’s evolve, they may be hard to recognize in their new incarnations. But, I really believe they won’t die when they transition to digital as long as they continue to do what they are supposed to―provide valuable information to their readers at the precise moment the reader needs it most, and occasionally before they even know they need it. Valuable information is usually monetizeable. As long as my Dad can figure out how to satisfy this demand for information from consumers, while making it easier for his advertisers to get to future customers through him than it would be to do so directly (setting up their own content distribution via Twitter, email newsletters, etc.) then marketing revenues won’t dry up and the magazine gets to stay in business as an information middle-man, or if you prefer, an expert.

Too often, publishers used to CPM (cost-per-thousand impressions) pricing models let advertisers take over the online publication and plaster ads everywhere–essentially spamming the audience with unwanted ads. That system just doesn’t work any more. On the other hand, pricing models that promote good advertising practices, such as CPA (cost-per-aquisition) or CPC (cost-per-click) make sure everyone stays happy. The publisher makes money, the consumer gets the info they want without wasting time, and marketers get access to hot leads they would otherwise have trouble finding. I call it the win/win/win scenario, and think it should be the goal of anyone interested in the future of media or marketing―myself included.

I’m not saying that if everyone switched to a CPC model tomorrow, all our troubles would go away. What I will emphatically say is that we, as an industry, need to come to terms with the fact that the old ways of doing things aren’t sustainable. The systems we rely on, the models we employ, the metrics with which we measure, and even the language we use must all change. I don’t have all the answers, but because of what I do, I’m able to collect thousands of great ideas and present the best ones to you. For me, the future of media is a personal matter. Let’s make it work.

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According to the Wall Street Journal article, the profit was “aided by cost cuts.” (Starbucks Swings to Profit, Aided by Cost Cuts – WSJ, 7/22/09) Well, I submit that the article my be more aptly phrased as “Aided by Marketing.” Marketing appears to have played a significant role in helping Starbucks hold their own against an economy that’s running from even the smallest luxuries en masse, competitors that are offering cheaper “me too” products in the specialty coffee department and the general ‘cocooning’ behavior that’s keeping Americans at home and out of their favorite ‘third places.’

Mr. Schultz said the company has benefited from its own marketing campaign, which has included print ads and communication with consumers using social media Web sites. Last week Starbucks became the most popular brand page on Facebook with more than 3.5 million fans.

In fact, I would argue their are four elements in the marketing equation that have contributed to their “resurgence” in the last year:

1. Starbucks’ crowd sourcing of consumer ideas via their My Starbucks Idea site – With thousands of ideas submitted, thousands more votes on this ideas that followed, and a few actual innovations that have made it into stores that have provided genuine benefit to Starbucks consumers, this is one of the things that has kept me personally loyal to the brand
2. Their intelligent use of data through the Starbucks cards and the vast email database – While Starbucks didn’t really have much of a “loyalty” program to speak or until the Gold Card (yes, I have one), they’ve built a great email database that they’ve used as recently as this week with the “free pasty with a drink purchase and this email” campaign. One only had to look at the sheer volume of empty pastry containers and the large stack of emails at my local Starbucks to see the email is a steady staple in their marketing plan that’s working for them.
3. Starbucks made waves with social media - They currently have the largest Facebook group (3.5 million users) of any of their competitors.
4. Finally, Starbucks has stuck to their knitting using traditional marketing - Using vehicles like print ads and (seemingly) more prolific and effective in-store marketing, while integrating them into the overall digital strategy to reach customers at all ends of the spectrum, Starbucks has truly “met people in their medium” to ensure that no customer is left behind.

More to the point, even competition has helped Starbucks to carve out a stronger position in the coffee market.

In recent months, Starbucks has faced increased competition from rivals including McDonald’s Corp. and 7-Eleven. McDonald’s recently launched a national marketing campaign behind its McCafe specialty coffee drinks.

Rather than hurt Starbucks, Mr. Schultz said the added attention has helped his chain. “It appears that the various marketing campaigns, and all the media coverage about coffee, has created unprecedented awareness for the coffee category overall, and has actually had a positive result on Starbucks business,” he told analysts.

While I admit, this is a complete outsider’s view of the situation, I submit that as a daily customer, who better to see the effects of their marketing that us! I further submit that Starbucks’ marketing efforts have done as much for them, maybe more, than any of the cost-cutting and operational efficiency plays that they’ve made over the past year.

This story illustrates what marketers all over the country know and Schultz said it himself in the article when he said “No company can save themselves to prosperity.” Exactly! Prosperity comes from being competitive, engaging in smart marketing, crafting a holistic strategy and a driving that strategy to execution. Me, I’ll take marketing over cost cutting any day!

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I installed an HP K8600 printer in my office this weekend. Having spent a good bit of time working with my partner on a retail experience problem, I realized while I was installing this very complex piece of office machinery that I was staring at the solution right before my eyes. While I was installing the driver, of all things. And this is the point – and the minor epiphany – of customer experience.

There are times in the lives of your customers when they’re waiting for you. While there are ample reasons to reduce or even eliminate unnecessary bottlenecks in the delivery of your service, there comes a time when you either can’t or don’t want to skimp. You need to do something correctly, customized for the specific needs of your waiting customer. In my case, this software won’t install itself. As the old proverb says, “we count the faults of those we wait for,” so this can be a problem.

As with any immovable problem, the best and often only way to deal with it is to embrace it and “make the bug a feature.” So how do you make a wait not just bearable but actually valuable? How do you create a brand-enhancing mini-flow-state when you simply need them to wait for a moment? Much like the magician using temporary distraction to draw your attention from his sleight of hand, you create a “trance state,” letting your customer temporarily lose themselves in your micro drama while you deliver the goods.
For HP’s software install, this is done with a well developed slide show of branded messages that reinforce the benefits of the product line (an up-sell), the technical characteristics of the printer purchased (education), providing a web-based ink purchasing site link (e-commerce) and other messages.

Key Takeaways:

Make the bug a feature. If you can’t eliminate the bottleneck, don’t try to cover it up – use the time so well that the wait becomes an event in and of itself, worthy of mention.

When you make people wait, remind them of what a great decision they just made. The immediate post-purchase moment is exactly the moment to remind your customer that they were wise to decide on your brand. We all believe our judgment is sound and typically over-estimate our confidence in our decisions immediately after we’ve made them. So give them the pat on the back they want.

No one is as fervent as the recently converted. Your brand experience doesn’t stop with the packaging, as I’m sure I don’t need to remind you, but it’s always worth repeating. We can all agree that the brand experience continues through the product’s lifecycle with you, as the user; but those first critical moments, from installation through initial mastery, will determine the trajectory of your brand experience with that user throughout the user’s total lifetime of loyalty. Let’s spend a lot of time and energy on getting it right up front.

Does your brand experience have a stalling point? A time when you simply can’t do something as fast as your customers want? Take this as a challenge, then, and make the wait better than bearable. Make it word-of-mouth worthy. How would you create a trance state for your brand?

Regards.

P.S.: How would you have improved upon HP’s experience―or your own experience―in creating a trance state? I’ve posted more thoughts on this subject over at Note to CMO, so feel free to comment here or there.

I am excited for this to happen, I can’t wait for this to happen, I am completely convinced this is going to happen. In fact I am beginning to see seeds of it happening right now!

Facebook Connect has been generally available now for a while and quietly we are seeing sites begin to take advantage of it. So far I have noted on Inside Facebook …

• YouTube Integrate Facebook Connect to Auto share Uploaded Videos
• PageReach Launches First “Content Network” Built On Facebook Pages
• Microsoft Xbox Games to share Games with Facebook Connect

Users can update their Facebook status, post photos, and play games with friends directly within Xbox Live. In addition, Electronic Arts announced that Tiger Woods PGA Tour 2010 would integrate Facebook Connect on Xbox when it is released this fall, marking the first Facebook Connect integration on a gaming console ever!

Websites will also present themselves very differently if you use your social profile on them though Facebook Connect. They wont say – “Talk to us on Facebook” or “Connect with us on Facebook” they will say use your social profile to get a completely customized experience on our website or navigate our website based on what your friends found important.

These are new an exciting ways you can spend all that Social Capital you have been building up in your Twitter or Facebook account. Increasing Social Capital will become more important than ever to you and your web experience. It will be the way to find things, buy things and experience things on the web.

The time is now to build your Social Capital, synchronize and prune your Social Networks so that followers you have in Twitter are also friends you have in Facebook and connections you have in LinkedIn. Bottom line is you should build your Social Capital now before you need it!

This week, Toolbox.com and PJA released the fourth wave of our survey on social media in IT. Check it out: social media usage spiked dramatically, particularly among executives, and Twitter is beginning its adoption curve in IT. But the most interesting findings have to do with attitudes around vendor involvement.

Our earlier research found that communities such as Slashdot are among the most trusted sources of content related to purchase decisions, precisely because the chatter you hear about companies and products is unfiltered. It is information direct from peers who, for the most part, don’t have a vendor agenda or ax to grind. So we were curious what community members thought about the role of vendors. Do parties with an explicit commercial agenda—and clearly a less-than-objective point of view—belong in the conversation? We have seen that open source developers are deeply ambivalent about the role of corporations in the Linux space. We figured we’d hear a lot of the same skepticism and mistrust. We were wrong.

The biggest finding? Vendors are more than welcome. Not only were respondents open to vendor involvement in online communities, most people felt they had a critical role to play. A full 76% of respondents said it was important that vendors participate in online communities. When you dive deeper into the research, it makes sense. We are talking about professional networks: large, vibrant communities of people banding together online to get work done, get information to make better decisions, and further their careers. Professionals commit time to communities because they have important, concrete tasks to accomplish. And they want vendors there because effective corporate involvement can help them accomplish those tasks.

Toolbox is a global IT community, and for technology products, complexity reigns. When users want vendor comparisons, they trust their peers. But when sorting out product or platform questions, users wrestle with product specs, roadmaps, workflow, integration, etc. And they are sophisticated enough to recognize disinformation, spread by people who don’t know the facts. This clutter is confusing and a time-waster, and community members know that a product manager from the vendor can provide real answers. We saw a lot of verbatims like the following:

“Vendors bring insight and authoritative knowledge to discussions of their products, thus reducing having to speculate on the validity of information provided within the community.”

The second biggest finding? You don’t get credit for just showing up. How vendors participate in the community makes all the difference. This from a survey respondent:

“There is nothing worse than over-commercialization. Venders must know how to communicate information that actually matters and help along the community rather than just set up shop to beef up their internet presence and attempt to push their products.”

What do members want from vendors? Respondents value transparency, responsiveness, (improve products based on feedback), and relevant content. Interestingly, they don’t care that much about give-aways or members-only benefits. Participate on the same terms as everyone else, and enrich the community as a whole rather than a chosen few. Egalitarianism, not exclusivity, is the dominant ethic in communities.

The thread across all the research is that vendors are welcome if they participate in the give-and-take spirit of the community. And there are strong suggestions that the rewards are there, they just might not be the ones companies expect. Many marketers I talk to evaluate investments in communities against traditional media or demand gen programs. Communities will never stack up as lead machines, certainly not short term. The rewards of effective vendor involvement are two-way. The community gets the information it needs, while the vendor is saved from the outcome of “a misinformed community who may lose faith in a product due to incorrect information.”

What the research says about communities characterizes the relationship people want with companies in the age of transparency and consumer-driven marketing. Companies are welcome to participate, they just need to strip themselves of their marketing layer. They need to leave a narrow, parochial corporate agenda at the door. Start with a sense of honesty, responsiveness, and transparency. The rest will follow.

I’m curious whether your experience with communities supports the survey results, or has been different. Let me know here or on twitter @motoole1.

Having said that, the really smart companies take this very much to heart. Especially in times like these. Real corporate leaders—especially in struggling companies and in tough times—understand that their employees can make or break their businesses.

Another inspiring leadership article in Forbes magazine: “How Employee Engagement Turned Around Campbell’s,” proves the point in concrete, quantitative terms.

The gist: when current CEO Douglas Conant arrived at Campbell’s from Nabisco in 2001, he found himself involved with a “beleaguered old brand.” Declining sales, increased competition and disengaged employees spelled potential takeover, if not doom. Sound familiar? At some point, many brands, including great heritage ones, experience these issues.

Conant’s strategy? In his own words: “To win in the marketplace, we believe you must first win in the workplace. I’m obsessed with keeping employee engagement front and center and keeping up energy around it.” How did he implement his strategy? By instituting the “Campbell Promise.” Conant replaced 300 of the company’s 350 management level people within the first three years. Half of the new leaders were promoted from within the ranks. The message resonated.

In the most memorable quote from the article, Conant stated: “I saw that in all of the elements related to culture building, engagement correlates closest to shareholder returns. We can use engagement as a tool to measure our progress in building a high-performance culture and to set higher standards for our leaders.” That’s what I call focus—not to mention a breath of fresh air.

The number #1 criterion for managers who are evaluated yearly: their ability to inspire trust from their employees. The company also surveys all of its 580 work groups annually. Managers review survey results with their superiors, also updating them on their progress in achieving clearly defined goals.

Employee achievements are celebrated “at a high level.” Conant personally sends out roughly 20 thank-you notes daily to employees. He has lunch with about a dozen employees once every six weeks, to engage with them, getting their feedback, hearing their problems and perspectives on the business.

Results?

• Campbell’s has gone from the worst Fortune 500 company ever polled for employee disengagement to one of the best. In 2002, 62% of Campbell’s employees said they were not actively engaged and 12% stated they were actively disengaged. Today, 68% of all Campbell’s employees consider themselves to be actively engaged. Just 3% state they are actively disengaged. “That’s an engagement ratio of 23-to-1, and Gallup considers 12-to-1 to be world-class.”
• Campbell’s has increased earnings by up to 4% per year over the past eight years (excluding acquisitions and divestitures); earnings per share are growing 5% to 10% per annum.
• Cost-cutting measures, smart innovations and increased marketing have played a role in Campbell’s success, but the evolution of a new company culture is the #1 reason for the company’s dramatic turn-around.

Conant: “Besides our improved financial and market performance, the biggest benefit has been the revitalization of our whole culture. We’re performing at a higher level, we’ve become more innovative and we’ve become more self-governing. That all contributes to our being on track to have one of our best years ever, despite the worst economy of our lifetimes.”

Questions:

• Do you think, especially in these hard times, companies would benefit from adopting Douglas Conant’s strategy of valuing employees, increasing employee engagement and building a unique culture?
• Do you think employees are the most important asset in businesses? Or do you rate other assets: financial working capital, cash flow, innovation and controlling costs as having equal or greater importance? If so, why or why not?
• Do you know of other companies that have enjoyed success because they are committed to employee engagement?

I’d love to hear from you.