Technology Marketing Ideas

Marketing thought of the week – I just love magazine ads, so let’s do more of them. HUH?

In an article entitled “Marketing budgets in flux,” that appeared in a recent issue of BtoB Magazine a marketing representative from Citrix was talking about how the recession has affected their marketing expenditures. He was quoted as saying, “A down economy is a good time to take a scalpel to programs, and we’ve certainly done that.” So good so far – but he continued. “The important point is that we now use data and ROI metrics to guide us to things that work or don’t work. It’s not based on emotion but on data.” The underlining is mine.

 

I don’t know why but that sentence conjures up some strange imagery. I have a vision of the Citrix marketing team sitting around a conference table opening up about how radio ads during drive time make them feel. Or how one of them has had a long-time crush on direct mail. I just find that sentence strange.

 

Before the economy tanked was Citrix basing their marketing investments on emotion? How would one do that? If someone cried harder about using a particular tactic would they win? I know my take is ridiculous, but is it any less so than that statement? Only now, when times are tight have they started to analyze what works and what doesn’t? Interesting. So many firms have tightened their marketing belts – I wonder how many of them based their cuts on emotion?

Marketing thought of the week – Confucius was pretty spot on, change is constant

Two articles in the Wall Street Journal this week raised the theme of confronting change. One was about a product that’s been around since the 1930’s; the other about a much younger offering. 

 

The first was an announcement by Eastman Kodak that they planned to cease production of their Kodachrome film. Once the choice of many professional photographers, today sales of the film account for less than 1% of Kodak’s traditional film revenues. The film is expensive to produce and the adoption of low-cost digital photography made it an unnecessary luxury. How many years will it be before no one understands what Paul Simon was singing about?

 

The other article was about how Netflix CEO Reed Hastings is already planning for the demise of the DVD. Although recent months have seen significant growth in their subscriber base for their DVD rental business, he has seen the future, and the DVD isn’t part of it. Remote downloads/access will eventually eliminate the need for the medium. He understands that for Netflix to continue to prosper he needs to embrace another delivery model – and he’s already started the process.

 

These two articles illustrate how important it is to keep anticipating change and evolving. Those firms that focus solely on the next couple of quarters without a longer term perspective often find themselves dying a premature death. I’ve seen it happen.

 

By the way, if you’ve got some useable Kodachrome around you might want to go ahead and shoot it. There’s only one place in the world that still processes it (in Kansas) and they probably won't be offering that service for much longer.

Marketing thought of the week – why wouldn’t software firms conduct email marketing campaigns?

Back in November SoftLetter conducted a survey of its readership (which is paid subscription and made up almost solely of software firms) and asked this question: “Does your company conduct e-mail marketing campaigns?”. 68% of the 175 respondents said they did and 32% said they did not. At first glance I thought the 32% to be shockingly high given how inexpensive email marketing can be. Could that many software firms not  be using email as a campaign tool?

 

A few questions about that 32% come to mind: 1) if we took the survey today, given how firms have trimmed their marketing expenses I wonder if we’d find that more of that group has embraced email campaigns? 2) Do they not use them because they believe there is something related to their software offerings that make its use inappropriate (e.g. complexity of sale, price of software, etc.), 3) Do they not use them because they believe there is something about their brand that makes them inappropriate? 4) If the question had been phrased differently, say to ask about the use of email for marketing purposes, would the responses have been different? I guess I find it interesting that a third of those software firms surveyed would not be using such a low-cost technique, especially in the face of our current economy.

Marketing thought of the week – The coming explosion in Web video

It seems to be that everyone that prognosticates about such things believes that there will be dizzying growth in the use of video via the Internet. One self-interested prognosticator, Cisco Systems, has released a study claiming that by 2013 Internet traffic will increase fivefold with more than 90% of this growth coming from video (mobile growth in data usage will grow 66 times according to the same study). If we assume that at least some of this video will be newly produced footage for corporate use, who will produce all this video? Will the price of video production fall through the roof?

 

The Internet has, for the most part, created a pretty level playing field for smaller firms looking to compete with their larger brethren in terms of quality of  Web-based marketing. The playing field becomes a little slanted when it comes to video production. We have gotten pretty spoiled from watching so much high- quality produced video that when we see something with lower production values we tend to form negative perceptions. Compromise a little with your web site or brochure quality and you might get away with it. Create a video that doesn’t meet viewer standards and you’ve shot yourself in the foot.

 

Quite fortunately the price of high-quality video production and editing hardware/software has fallen. At some point in the not-too-distant future we should also see more emphasis on video scripting. Perhaps we should also brace ourselves for a tidal wave of bad video.

Marketing thought of the week – Can smaller firms establish themselves as thought leaders?

Firms that are perceived as thought leaders usually enjoy more business opportunities and often command a higher premium for their offerings. Smaller firms can be intimated by the requirements of becoming a thought leader. Thought leadership programs entail a commitment to writing and speaking on a topic of interest to their target market; requirements that some technical people are not comfortable with. Additionally, there can be substantial time requirements in establishing and maintaining a position of thought leadership. Larger firms with more resources can divide some of the responsibilities – or have sufficient confidence in the value of their program to make the often significant investment of time and dollars to engage in thought leadership activities. Smaller firms often have to devote the time of someone who could be “ringing the cash register” to spending their time on activities that are overhead – with no certainty that they are ever going to pay-off – and probably good confidence that they’re not going to pay-off quickly. It’s not that this dilemma is unique to thought leadership programs. I believe it is this uncertainty combined with the discomfort about doing some of these activities that ties some smaller firm’s hands when it comes to engaging in thought leadership programs.

Marketing thought of the week – The price is right? Think again.

What do you do in an era of diminishing demand? How about slashing prices? Or at least changing your pricing model? There seems to be a lot of this going on.

Although it doesn’t appear to be widely embraced just yet, attorneys are broaching the idea of moving away from the billable hour – hold off on the obit. They, like ad agencies, are looking at value pricing – linking their fees to results. Their one-time deep pocketed clients have seen their revenues diminished to the point they can no longer afford paying big monthly retainers or sky-high hourly rates. The firms either have to consider revamping their fee structures or risk losing clients to less pricey competitors.

For the first time a major league baseball team, the San Francisco Giants, is using software to set game prices – on game day - based on the quality of the competition, the weather, the pitching matchup, and other elements. Just like the airlines they are looking at “load factors” and making pricing decisions on the fly.

Are these types of structural changes to pricing going to last or will we gradually see their use erode as the economy strengthens? I guess time (and results) will tell.

Marketing thought of the week – internal debates over spending during the downturn force creative approaches

An article in yesterday’s Wall Street Journal recounted stories of clashes taking place amongst board members at various technology start-ups as to whether they should be conserving their limited cash or spending in the hopes of grabbing attention and market share from their competitors. Besides the statistic that VC investment in Silicon Valley start-ups was down 57% from last year, a couple of things struck me about the article.

 

The first was a comment by Ken Comee, the CEO of Cast Iron Systems, a 100-person software company, who I thought had a great line when he said, “Companies can’t save their way to success,” and then went out and fashioned a number of partnerships with prominent firms including Google, Microsoft, and Oracle. What struck me was how little I hear about focusing on creating partnerships during a downturn. The downturn provides an excellent opportunity to build relationships with complementary firms. Everyone is more open to taking steps to build their business – even the big guys.

 

The other thing of note in this article was about the battle to conserve or spend at Jaspersoft Corp., an 80-person software start-up with $15 in cash reserves. The Chief Executive, Brian Gentile, ultimately convinced a divided board to spend by making a presentation that provided data showing a healthy sales pipeline. What struck me was that he also presented a contingency plan on how the firm could scale back spending if sales projections weren’t realized. I wonder how many firms would be open to more aggressive spending during the downturn had they fashioned detailed contingency plans on which they could rely if their efforts failed to meet expectations?

 

You can read the entire article here.

Marketing thought of the week – strategy in the backseat?

For the past two years at least we’ve witnessed many technology firms focus their marketing resources away from strategy toward tactics – especially on-line tactics. When revenues started to decline as the economy tanked ever more attention has been placed on generating revenues quickly – with strategy often the neglected stepchild. There is often-cited statistical evidence that firms that continue to spend on marketing during an economic downturn outperform firms that curtail their marketing spending after the recovery starts. I wonder if we were to examine the marketing expenditures of these “outperforming” firms what we would find regarding a breakdown of their spending between strategy and tactics. I find it hard to believe that static strategy, even with maintaining tactical spending, has resulted in optimum results for these firms over the course of the downturn and through the recovery.

Marketing thought of the week – do VCs typically get the insight they need regarding marketing?

In their book Marketing That Works, Leonard Lodish, et.al., cite a survey of venture capitalists that had them rate the importance of various business functions to the success of the endeavor. The marketing function ended up with a rating of 6.7 on a scale of 7 – the highest rating of any function. In-depth follow-up interviews found that venture failure rates can be reduced as much as 60% using pre-funding marketing analysis.

 

This finding can’t be unknown or a surprise to the VC community. A focus on technical wizardry or novelty without a rigorous examination of the marketing plans and resources of the venture-backed firm seems shortsighted. Are most VCs capable of performing this type of analysis? Once funded who performs the function of monitoring the firms’ marketing planning and tactics? Do they relinquish total control over marketing to whoever is handed the function internally or just ignore it out of the belief that a “better mousetrap” will always prevail? Should they take more of a hands-on approach? Have things changed much regarding the assessment of marketing since the dot com bust?

Marketing thought of the week – is the tech sector rebounding?

So is the tech sector on the cusp of a rebound? After HP and Microsoft both saw small, but positive revenue growth in their last quarterly reports over last year’s results, IBM just announced earnings exceeded expectations and Intel issued a statement indicating that it believed the home computer market had bottomed out. Are these indicators that the worst is over for the tech sector? Are we on the upslope of the curve, and if so, how steep is the grade? From what I’m witnessing it’s still a little hard to believe the tech sector is in recovery mode. Even if we’ve bottomed it seems the slope of the uptick is going to be long and gradual.