State of the Media

Broadcasters pulling the plug on Free TV?

The trend away from free content is gaining momentum, this time in the area of TV.  An Associated Press article today reported that the broadcast industry is thinking seriously about following Rupert Murdoch's lead from last fall and eliminating advertising-supported media altogether.  ABC, NBC, CBS and Fox are all considering the very real possibility of going dark on public airwaves and broadcasting strictly on private broadband networks.  This will mean higher cable and satellite bills.

This would be an earthshaking move for the information industry altogether and there are several possibilities that could arise.  Those who refuse to pay for broadcast will lose access to sporting events, news, and general connection to pop culture.  That will reduce the potential audience for all of those areas and reduce revenues.  On the plus side, those affected will have to return to older communication paradigms, like print and radio for their information... or base all their understanding on the flood of news releases on Google.

But it also means the death of another industry... advertising.

We live in interesting times.

Telemarketing. Really?

Did a proposal a few weeks ago for a company looking to break into a new geographic market.  They asked for several ideas, wouldn't state what their budget is but they wanted a full, soup-to-nuts agenda.  So that's what we gave them.  Broke it out in nice digestible chunks, but all of it surrounding a social media core designed to build a community around their specific niche.

Today they let us know they decided to go with a telemarketing campaign only.  No web, no social media, no research, no collateral development.  Not even PR.  Telemarketing for lead generation.

Really?  In the 21st Century their are still companies out there -- companies with maybe 50 potential customers -- that think hiring a third party to do cold calls is still the best way of growing a business.  Boggles the mind.  And they think this is going to get them a 1-2 percent market share of a $6 billion industry in one year.

Every research report for the past 20 years states that basic PR beats the snot out of telemarketing; that trade shows beat the snot out of telemarketing; that online marketing beats the snot out of telemarketing; and that social media marketing beats the snot out of all of them combined.

But I will give them this: telemarketing is damn cheap now.  And you get what you pay for.

AT&T throws business away with bad social media outreach

Is anyone paying attention to how horribly AT&T is doing in it's pissing contest with Verizon?  Who the heck is in charge of their marketing?

In case you've been ignoring the commercials, Verizon has been dissing AT&T's 3G coverage with map comparisons showing the Verizon coverage beating the crap out of AT&T.  AT&T has come back with pitchman/actor Luke Wilson saying, "nuh uh, we're better."  All typical stuff.

But then AT&T is using Facebook pages to build good will by CUTTING OFF people who say their service sucks.  WTH!

That's a great example of how not to use social media.  You're supposed to listen to complaints and do something about it.

For the record, I don't use either AT&T or Verizon.  I'm a TMobile guy.  Yes, I know it's number 3 in the US and I don't get to have an iPhone.  But the reason I stay with TMobile is how they do customer service through social media, telephone, web presence, etc.  Every time I call up with an issue, and it isn't often, the person I'm talking with does a review to see if they can get me a lower rate.  

There was a time I could not get cell coverage in my home.  It took a while, but after a couple of call, TMobile sent out someone to adjust the tower in my neighborhood and, boom, coverage in the home.  When I go to Europe, while I'm waiting for my luggage I turn on my phone and, boom, coverage, all while I watch AT&T customers curse at their phones because they can't get a signal.  How do they do that, because they use social media program to get real customer feedback, not just try to seem responsive.

You can't control your messages anymore. Your market controls the message.  And if you don't listen to them, you won't be able to enter into the conversation.

Why you don't (or do) like social media, Part Three

When you boil down attitudes toward and execution of social media practices, it's all about leadership.  Real leadership, not the popular definition that rises from the horrific misinterpretation of Geoffrey Moore's book, Crossing the Chasm.  Let me explain that reference a bit more in depth first.

Moore stated fairly simply that for a technology company to be successful, it must attain the perception of leadership in a market niche.  The misinterpretation of that concept is what screws up the marketing for so many companies.  Moore's statement was an indicator of success and a strategy, not a tactic.  If you are the perceived market niche leader, Moore explains, THEN you know you successfully crossed the chasm.  Therefore your marketing strategy must revolve around developing the perception of leadership.  However, most companies believe that saying you are a leader in your marketing documents, even when you are clearly not the or even a leader, is a strategic leap forward.  And that is when the horror begins. Why is that? Well, as Margaret Thatcher said, being a leader is like being a lady.  If you have to tell someone you are, then you aren't.

Marketing is all about knowing where you stand in your market, but most start-up companies ... well, most companies ... don't really have a clue.  There entire focus is on their product or service and how they can get someone to buy it.  They started out solving a specific problem in a specific sub-niche arena and now they have to recoup that invested time.  So they start jamming their answer into customer engagements without even knowing the questions being asked.  That brings me next to a new axiom (new to me) that I heard a couple of weeks ago attributed to a social media guru names Clay Cotton.

Fall in love with your market, not your product

Are you old enough to remember when fax machines were technological marvels?  Are you old enough to still consider fax machines important pieces of office equipment?  There are companies out there still trying to make a living of of selling and servicing fax machines.  That's my definition of being in love with your product: They are willing to enable their dwindling customer base in ignoring the advance of technology, just so they don't have to really pay attention to what is going on in the world.

Those kind of companies don't like the social media paradigm.

To be successful in this world, you have to really understand that Geoffrey Moore wasn't saying you have to create the illusion of leadership, you have to demonstrate it in order to be perceived as a leader.  It's kind of the difference between being a cattleman and a sheepherder.  Cattle are driven to slaughter, never to be seen again.  Cattle don't trust cowboys, they fear them and cowboys curse their herds.  Sheep are lead to be sheared on a regular basis and they find comfort and protection in the shepherd.  They follow shepherds and shepherds care for the flock.

Social media is a shepherding process.  It provides valuable feed back from your customers that you can use to adjust not only your messages, but your technology and services.  It's interactive. It creates the perception of leadership, if done right.  And it changes your perception of your business as well.

Which is why you don't (or do) like it.

Hearst going after Embedded Market... in Europe

Got a note from Bill Barron about a new venture between Electronikpraxis and Hearst Business Media.  The two publishing companies are joining forces on Embedded Designer, an online publication to be unveiled at Embedded World in Nuremberg, Germany in March.  This will be the German language equivalent of the US site.  

The embedded technology industry is one of the few that is drawing interest of B2B publications, United Business Media, included.  UBM's Embedded Systems Conference (driven to success by Paul Miller) has become a bicoastal phenomenon with continue year-to-year growth when other conferences are struggling to break even.  And Embedded World continues to draw a great deal of interest worldwide.

You can say the reason for this interest is because embedded is such a vibrant industry.  But publishing companies and conference organizers are not in it for altruistic reasons.  The industry is still investing marketing money in the effort, maybe even more than in recent years. So that's where the press is going.

Is this a turn around in the economy or the tech industry?  I don't really think so.  I've been watching the embedded industry for several years now and while it was affected by the downturn, it really never experienced the kind of disaster most tech industries suffered.  Part of it might be because it draws from several hundred niches, from software and semiconductors, all the way to services and connectors.  But it also might be because it has real marketers running marketing, leaving the engineers to do what they do best--build innovative technology.

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.

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...