State of the Media

Why you don't (or do) like social media, part 2

As I said in part one a few weeks ago, Social media attacks the tradition mass communication paradigm with a natural flow of communication, which is why marketers and journalists often chafe at embracing the practice.  What I've seen happening through this paradigm shift (geez, I never thought I'd hear that phrase again) is the rise of the value of talented, trained and experienced communicators within corporations and organizations that are making an effort to figure this stuff out.  That probably doesn't include your company, though.

I was describing what is happening in social media to a friend who has no connection with high tech (they do exist, you know).  He thought a bit and then said, "Sounds like their going at it like they're killin' chickens."  It was a great analogy.  When you slaughter chickens (and yes, I have done this) it involves a lot of running about, noise, flyiing feathers and blood.  Total chaos.  And when you sit down to eat them, you wonder if it was worth the effort.

That well describes how most companies are going after social media.  Chaos. It looks like it might be important, but at the end of the day you have to wonder, was it worth the effort.The reason for the buyer's remorse is that most companies are still trying to apply to old paradigm's interpretation of media to the new paradigm's infrastructure.  And it doesn't work.

Most corporate communications involves a bunch of people sitting in a room with a white board and trying to figure out "messages" that will convince customers to buy their stuff.  David Scott Meerman calls it an MST (making stuff up) meeting.  That is translated into news releases, brochures, white papers, press pitches, trade show signage, etc.  Then when it doesn't work they call the customer stupid or fire the PR agency.

Social media steps into this mess and says, "Hey, why don't we ask the customer what he thinks."  This concept is completely foreign to most marketing people, and anathema to the sales people.  Remember, the customer is stupid.

But companies that adopt the attitude of listening to, rather than talking at the customer... they're the ones that go at social media the right way. The bottom line is that those customers understand that social media is more than another communication medium, it is a way of communicating.  Until you understand that, your social media effort will resemble an abattoir more than a virtual marketplace.

Happy Thanksgiving, BTW.

Media. It's back. And you aren't ready.

I was sitting at my desk this weekend sifting through a bunch of material on social media and it came to me like a flash.  Media isn't dying, disappearing or shrinking. It's fracturing.

Marketers are being besieged by new media concepts and offers that go against pretty much everything they are used to doing.  And they are coming so fast that no one know what to do with them all.  In the past week I reviewed presentations from the well known media houses (Techinsights, Reed, Hearst) media hybrids (Extension Media, Tech Focus Media, RTC Group), new media (Techbites, IBSystems) and a host of social media consultants offering to set up Facebook pages, Twitter accounts and blog sites.

 I've seen a lot of interesting concepts, most of them badly presented.  Out of all of it is only one sure thing.

There are more choices, good and bad, than ever before.  And very few people are equipped to know the good from the bad.

In the 1980s and 1990s print and online media exploded along with marketing budgets.  That was a good thing because you could spend a lot on a lot of things and it all seemed to work.  In 2000 media started to contract along with budgets, which was a good thing because when you have a limited budget and nothing is really working like it used to, you don't need all those choices.

But this year the debate whether social media is going to be a serious contender for budget is over and the answer is, yes it is.  It only leaves the question: how much will it cost and how will I know if it is working.

Communications is no longer a magic toy for marketers.  They days are gone when you could throw out a press release, set up a few meetings and BAM! instant market penetration.  And the days are also gone when you could sit a bunch of engineers down around a conference table, come up with a clever company name, a set of messages and a basic website that would drive business to you.  Now marketers are being told, they actually have to listen to what customers are really saying; they have to say something interesting that's not directly tied to their messages; they have to be concerned what one single engineer with a popular blog actually thinks about their company and technology.  And in the past 20 years, none of them have been trained, prepared or even understand how to do any of that.

But as I said, the media is fracturing into a galaxy of bits and there are people out there right now who do understand how to do it and have been training for two decades on how to do it.  You know who they are.  Go find them. There are no more guarantees only ideas.  It's time to go exploring.  You can ask for directions, but be prepared to pay for them.

Why things don't work...anymore

I just got off my fourth phone call in the past week from someone asking my to help them get some media attention on another partner release.  I've told them the same thing I've been telling everyone for three years: Unless it is a painfully slow news month the chances are virtually zero.  Here's why:

 First, there are 5,000 private technology companies in early to mid stage funding in the US at any given time, according to Dow Jones,

Second, All 5,000 of those companies are negotiating with at least on Fortune 500 company on some sort of partnership/joint agreement.  All of those companies will issue at least one news release about the agreement and will be seeking media coverage.  That means the technology press are dealing with, on average 13 partnership announcements every week.

Third, none of these agreements will mention what specific customers are being served by these agreements, nor what products will be made available to customers as a result of this collaboration, nor will they contain anything more than a very general, high-level and superficial endorsement of the private tech company's involvement.

Finally, the target audience for these announcements is always a very limited part of the entire market, possibly 10-50 people total who are directly affected by the relationship between the two companies.

The press are part of what is called mass media.  Their goal is to produce information that is valuable to the largest possible number of people in a given industry.  10-50 people does not meet that requirement.  On top of that, the press is given the responsibility of finding out information that is out of the ordinary and 13 announcements a week that virtually say the very same thing, with changes only in the players and the names of the products, do not constitute what is callled "news."

Partnership announcements are good for three things: filling out space on websites, keeping the name of your company active on the web, and for salesmen to hand out to the 10-50 people that really care.

There is gold in them thar hills

The biggest question I hear now is "Can you make money off of media?"  That question isn't just about social media, but all kinds of media.  For traditional media, most people are leaning toward a "no" answer, even though many people are still trying.  For new media (blogs, social networks, podcasting) most lean toward "no" but with a question mark because they are hoping they are wrong.  they think they might be able to, but they can't figure it out.

Speaking from personal experience now (experience over the past 6 years since I got into this, I've decided upon a definite "yes" for both.  There is a "however" attached to it.

Media can be a profit center, but only when you change your definition of what a profit center is.  There was a time when revenues were directly attributed to media investment (primarily advertising) But there was never a direct correlation.  The more you invested in media, the greater your revenues grew.  That seemed to be a direct enough correlation for any company.  Then the internet came along and people believed that it would be able to give that direct correlation that everyone really wanted.  Well, not everyone.  Just bean counters and engineers.  And what's more, investing in internet media was going to be a lot cheaper than print or broadcast.

Well, the last part was definitely true.  It was cheaper.  And because it was cheaper, companies started investing in internet media while dropping their overall investment in media in general.  The result was that revenues started to drop and when the companies started using the wonderful measurement tools the internet promised them, they could not find the direct correlation between revenue and media investment.  So they cut their budgets even more.  And revenue dried up even faster.

The media industry went into recession long before the rest of the world and it started when they began telling customers that they could give them the detailed information and connection they needed with the most important customers that would raise revenues.  They were wrong and they shot themselves in the foot, ankle, kneecap and hip in the process.  They may never recover.

Unless they, and all the rest of us decide to relearn what media does for the bottom line:

It engineers opinion in the marketplace of ideas.

The keys in that phrase, that has been around for more than 100 years, are "opinion" and "ideas."  Neither of those two phrases are concrete.  They are abstract, wibbly wobbly balls of concept.  For some people they can be very clear, for many others they cannot.  But both are incredibly powerful tools for driving success, and they are influenced more by emotion than intellect.  You can't really measure it.  You can't really control it.  It's not science.  It's art.  And that makes bean counters and engineers very nervous and wary.

As I said, I've been kicking around the world of social media for about 6 years.  I sat back and stared at it for two years before that.  About three years ago I started sharing what I had figured out about social media with friends and colleagues.  Something really strange started happening for some of them who decided to take what I was saying bout it to heart.

They started to make money.  They got better jobs.  Their companies started turning around.  They started hiring employees.  Then one of them finally came to me and said, "Lou, you really should be charging for this kind of information."

Physician, heal thyself.

For the next few weeks I'm going to start sharing some things that I've discovered in the past few years.  It will be enough to get you interested, but not enough to get you to the other side.  I've decided to stop giving away what I know.  I now have a couple of clients who are actually paying me to share this information, and you may be hearing about them in the coming months.  

It can be done.  You can make money off of media investment.

Of hubris and market share

A tweet from Brian Fuller led me to a new blogger that had a great post on why FPGA start-ups fail.  Not only was it a good review of the basic problem from a technology it also gave a good overview of the business challenges.  Oliver Coudert, who has been banging around the EDA world for quite a while, including chief technologist at the infamous Monterey Design (arguably the most spectacular flame-out in the EDA industry) pointed out that no FPGA start-up provides a significant enough advance in FPGA technology that Xilinx and Altera can't overcome it at the next process node.  He also points out that with those two holding 87 percent of the market, it's tough for any company to get a serious toehold against the giants.

One thing is missing though.

Neither Altera nor Xilinx really compete directly against each other as much as they do against the ASIC world.  In every presentation I have seen from either company, neither ever mentions the other.  What they do talk about are the misconceptions about the limitations of FPGAs vs ASICs, and the inherent advantages of FPGA design.  On the other hand, every FPGA start-up pitch I've ever heard target both the market leaders.  The cost of developing a new ASIC is killing SoC startups, even when they provide a giant leap forward in performance, while the cost of developing an FPGA system is fractional by comparison.  Both Xilinx and Altera attack that market and are successful. 

What seems to be a constant in the FPGA start-ups is a preponderance of EDA marketing acumen.  EDA start-ups target the market share of of established EDA companies, not the unserved market segments of the semiconductor and electronic systems world.  The underlying belief of this practice is that they can be successful by stealing away just a few customers of the market leaders.  On the other side, the EDA leaders work very hard at undercutting the startups, so they don't grow their own market either.

So the basic failure I've seen in both EDA and FPGA start-ups is more of hubris than of technology or market share.  

It's a start...

    Just finished  the launch of a social media program for a public company in the electronics sector and it was a great experience.  We had a packed room with about 50 people live and around another 10-20 on line around the US.  Got a few pointed questions and answered pointedly with several stepping up and say they want to learn more... even in marketing!

    That's an important statement.  In 2007 Time magazine reported a study that 55 percent of technology customers used social media to decide what to buy but only 34 percent of marketers in technology companies were using social media to reach their customer base.  Last week, PR Week put out a study showing that decisions makers are only increasing  their dependence on social media, yet marketers in tech are at best, still holding at 34 percent.  In fact, the survey showed on 6 percent of companies using social media are incorporating input from customers on social media into customer service efforts.  So when marketers step up to adopt social media in an electronics company, that's big news.

    I'm particularly encouraged.  This was the first of several projects I'm planning to help companies create effective social media efforts, all of them with companies that might be considered in financial distress or, in the least, with very little market visibility.  The marketing chief of the company I just started with said he thinks we are entering a period where sociologists and communication experts will be doing important studies on the effect of social media on the economy and business that will be rewriting how business is done on our world.  In a couple of years, certain segments of the electronics industry will have new leadership and it looks like social media will have a real impact on who those leaders will be.

    Like I've said before.  It is a brave new world...

The view from the boys in the press room

I did a boatload of podcast interviews with EDA companies at DAC in July and on my last day I got together with Dylan McGrath and Nic Mokhoff of EE Times regarding the issue of how the industry is communicating with its customer base. I think it’s interesting to note that while Dylan kinda agrees with me that he doesn’t see the evidence that engineers get all the information they need by talking to each other amd getting it off press releases, Nic generally agrees that engineers can get all the information they need off the web now, and will be able to do it even better in the future. What that means for traditional media, they aren’t sure. Note: The sound level on this is a bit wonky because my computer was trying to balance my big mouth with Nic’s soft basso. You’ll probably have to turn up the sound to hear Nic.

Learning to communicate better

It's been one of those really intense weeks.  So to save some time, I decided to do an podcast on this issue, rather than write it up.

My activity in European startups looking for funding brought me into contact with Irish entrepreneur Anton Mannering in 2008 and we had a pretty good connection at the time.  He popped up again this week with a new venture in New York called, The Audience Conference.  Considering I was talking earlier this week about how engineering-based companies need to learn how to communicate better with their audience, I thought the reconnect with Anton was providential.  Here's the interview.

Proctor and Gamble Raises the stakes in advertising

New Media Age reported that in the UK Proctor and Gamble is going to start paying publications based on how well people respond to advertising and promotional efforts.  It's called "pay for engagement" as opposed to pay for clicks or visits.  If a reader plays a game, downloads information, signs up for newsletters, they get paid for it.

This is a very new approach and some publications are balking, but it makes a lot of sense to me.  The real value of any media now is not that it reaches a lot of people, but that people respond in a positive manner by engaging with the sponsor.  This plays well into the social media world, especially when you offer materials that can be downloaded for later review, including podcasts.

Something to think about.

Not in the whirlwind, but in the still small voice

So I spent a great deal of my morning trying to get into the EE Times Virtual Conference on SoCs.  I was able to get into the exhibit hall to see really bad demos and webinars,  I could get into the resource center and download a lot of badly written marketing material and a few good articles.  But the meat of the conference... the panels and keynotes ... was unavailable to me.  Even Tech support couldn't figure it out.

So I wandered into the chat room and found a half dozen people with the same problem.  And since they were all engineers I figured they weren't using a Mac like me, so my tech couldn't be the problem.  We all had a lovely chat about the conference as it was shaping up and learned something very interesting:

Engineers don't like marketing materials (who does?), they don't like presentations, and they don't like webinars.  

Webinars?  I thought webinars were the be-all and end-all of marketing.  That's where engineers talk to engineers, virtually. 

The knock on webinars were that they were too long and too filled with marketing BS, which is really interesting since most webinars are written up and produced by engineers, not marketers.  Marketers get to make suggestions in content, but it's the engineer that is the editor in chief.  So if the engineers are in charge of the vehicle that is supposed to be the most popular way of reaching engineers, can engineers really talk to each other?

Well, yes, but not in a controlled environment.  What the engineers in the chat room said was the most valuable part of the exhibit hall was the chat room with other engineers, not all the controlled messaging of the virtual booth.

Hence the title of this post.  There is a great deal of time and money spent on trade shows, virtual and otherwise, that all goes for naught.  The only thing that matters is the personal interaction.  That's what makes the sale.  The most valuable tool in a company's marketing arsenal is anything that creates a conversation, not a blind blasting out of information and noise.

Think about it.