Bridging the gap: Madison Ave vs. Silicon Valley

BRIDGING THE GAP MADISON AVE | SILICON VALLEY AGENCIES | STARTUPS

“THE TWO CULTURES” - C.P. SNOW Scientists vs. Artists “...of a problem which had been on my mind for some time. It was a problem I could not avoid just because of the circumstances of my life. The only credentials I had to ruminate on the subject all came through those circumstances... Anyone with similar experience would have seen much the same things and I think made very much the same comments about them.”

MY CIRCUMSTANCES I’m an ad agency guy... At a digital agency... Who used to work at Internet startups... After I went to art school...

I BEGAN TO NOTICE... I was the only agency guy at a technology event I didn’t see marketing talent in startups I heard arguments about the merits of advertising and branding

I BEGAN TO NOTICE... I didn’t see startup folks at marketing events I heard programmers not interested in agency careers I saw good ideas die in agencies from lack of understanding

MADISON AVE VS. SILICON VALLEY Brand builders and Business builders Greater brand demands on Silicon Valley Greater technology demands on Madison Ave See themselves as distinct, but the lines are blurring

WHAT’S TODAY ABOUT? A simple premise... Startups need a little more marketing chops Agencies need a little more technology chops Focus on what’s working 5 lessons from each Begin the conversation

5 LESSONS FROM SILICON VALLEY

1. PROVE YOUR CONCEPT Ad agencies are often too stuck on the “big idea”, and sink huge advertising budgets into single campaigns What if you treated campaigns more like how startups create proof of concepts? Smaller, more “iterative” campaigns

EXAMPLE: BURGER KING

PROCESS ITERATION Much conversation about how agencies can adopt an “agile” methodology Created for software development How can it be adapted within an agency model? Client involvement

2. DRIVE EARLY ADOPTION Agencies are often fast-followers, not early adopters If you only look at what your customer are currently comfortable with, you’ll always be behind Silicon Valley is great at pushing adoption

APPLE AND APPS Downloading applications was a foreign experience Now, 27% of mobile phone users download apps Apps downloads surpassing iTunes music downloads Source: Deloitte, 2009; Asymco, 2010

THE WILDERNESS DOWNTOWN Arcade Fire HTML 5 the basis for the concept

3. MARKETING WITHOUT MEDIA Agencies are conditioned to believe media spending is how you drive traffic How can you explore more than just media spending? Silicon Valley looking more to partnerships, word-of-mouth and PR to drive growth

TWITTER AT SXSW SXSW in 2007 one of the tipping points for Twitter Partnership with SXSW to have Twitter on screens in the Austin convention center Tripled user-base over that weekend Source: Twitter blog, 2007

APPLE AND EDUCATION In the early 80s, Apple had huge success through partnership with education Donating a computer to every public school in California, prompting additional purchases

REVENUE WITHOUT MEDIA Startups exploring new ways to get revenue through partnerships as well Doesn’t have to be expected online “ad” formats Custom integrations that make sense

4. STRUCTURE FOR INNOVATION Agencies have a narrow definition of creative teams, that often doesn’t include technology Question standard “roles” Collaboration at every stage Give a vested interest in success

T-SHAPED PEOPLE “We look for people who are so inquisitive about the world that they're willing to try to do what you do. We call them "T-shaped people." They have a principal skill that describes the vertical leg of the T... But they are so empathetic that they can branch out into other skills and do them as well.” - Tim Brown, IDEO

HOW CAN THE CROWD HELP? Crowdsourcing doesn’t mean you have to get rid of the creative department... or lose control When might it be appropriate?

5. EXPLORE NEW PRODUCTS Agencies are service businesses... compensation is based on hours put in Many agencies create products to help them service clients Agencies have ideas beyond marketing Agencies need to explore new products, just as startups explore new products as they grow

TWITTER FROM ODEO “We were forced to reinvent ourselves. Reinventing the company started with a daylong brainstorming session where we broke up into teams to talk about our best ideas.” - Dom Sagolla Are agencies meeting on a regular basis to “reinvent” themselves? Or explore new products/services?

GOOGLE’S PRODUCT MACHINE Google’s commitment to r&d and lots of product releases and new iterations... not all are successful iGoogle Google Alerts Google Blog Search Google Images And many more...

NOT JUST PRODUCTS, BY-PRODUCTS Jason Fried, Rework 37 Signals and Coudal Partners a nod towards how agencies might branch out beyond a service business Zappos Insights is a by-product

LESSONS FROM SILICON VALLEY 1. PROVE YOUR CONCEPT 2. DRIVE EARLY ADOPTION 3. MARKETING WITHOUT MEDIA 4. STRUCTURE FOR INNOVATION 5. EXPLORE NEW PRODUCTS

LESSONS FROM MADISON AVE

1. MAKE BRANDING TOP PRIORITY You can build traffic You can build revenue But are you building a brand? Branding should be intentional... not figured out as you go

WHAT IS A BRAND? A brand is not a logo... A brand is not a tagline... It’s a promise It defines what you stand for It can drive preference, and adds value It can also begin to create culture

THE FACEBOOK BRAND Brandz - Millward Brown annual study of top brands Value a combination of earnings and brand perception Facebook usage is ubiquitous, but how strong is the brand?

THE ZAPPOS BRAND Zappos has a much clearer brand identity, but it’s a much stronger inward-facing brand “For us our number one priority as a company is company culture, and our whole belief is that if we get the culture right then most of the other stuff like delivering great customer service or building a long-term enduring brand will just happen naturally on its own. It's one thing to read about our culture, and it's another thing for me to talk about it, but really the best way to get to know what it's like is to come and take a tour.” - Tony Hsieh, NPR Marketplace How do customers understand the brand?

WHAT’S YOUR BRAND? What promise are you making? Are you meeting or breaking that promise? In every touchpoint? Is it part of your culture?

2. ADVERTISING WORKS It works as a way to build your audience When done correctly, it can return a measurable, positive ROI Many startups rely too much on word-of-mouth

ZAPPOS “I'd rather spend money on things that improve the customer experience than on marketing.” - Tony Hsieh But less reliance on advertising and marketing doesn’t mean NO reliance on advertising and marketing

WHY ADVERTISING? Advertising is a catalyst for word-of-mouth Some of the most successful “viral” campaigns had significant advertising budgets behind them “Viral” is what happens after you get exposed

YES, EVEN OFFLINE ADVERTISING Sometimes offline advertising might work best 10% advertising spent online, but 21% still spent on newspapers, almost 11% still spent on magazines In some cases, online isn’t always cheapest Source: eMarketer, 2010

REVENUE GENERATOR Advertising is also a revenue generator Shift in the business models being used by startups? Two biggest mobile ad networks bought by Silicon Valley firms, and companies slated to increase mobile ad spending dramatically over next several years Charge for your app, or get ad revenue? Or both?

3. BUILD RESEARCH INTO YOUR DNA Beta isn’t the only way to test Test BEFORE beta Agencies take consumer research seriously Focus groups, brand tracking studies and more...

FIND SIMPLE WAYS TO DO RESEARCH Small investments in research can have huge returns before you spend on advertising Market sizing Segmentation studies Price-resistance testing

A FEW TOOLS TO HELP Online surveys: E-Rewards.com Category research: Compete.com Usability testing: Usertesting.com Social Media Monitoring: ScoutLabs.com

4. GET PITHY Agencies are experts in communication Masters of the “pithy” Sometimes it’s not what you say, but how you say it

FACEBOOK’S COMMUNICATION ISSUES Facebook Beacon, 2007 - shut down Brought back as Facebook Connect in 2008 Facebook Open Graph - Instant Personalization

MOST RECENTLY... FACEBOOK PLACES **ACTION IMMEDIATELY** - Facebook launched Facebook Places yesterday. Anyone can find out where you are when you are logged in. gives the actual address & map location of where you are as you use Facebook. Make sure your kids know. TO UNDO: go to"Account", "Account Settings", ... See More."Notifications",...then scroll down to "Places" and uncheck the 2 boxes. Make sure to SAVE changes and re-post this! “There is a false rumor that Facebook shares your location without your knowledge or consent. You control your information on Facebook. With Facebook Places, you choose when to share your location by checking in or allowing friends to check you in. Your location is never given to anyone automatically.” - Facebook

5. MARKETING LEADERSHIP Most startup partnerships rely on technology and business talent, but marketing should be core leadership Agencies created a new role... account planner Bridge between business and creative Consumer insights and research Make advertising more relevant

THE METHOD STORY Method founded by an account planner, Eric Ryan Saw a need in the marketplace Began with brand building in mind and made a promise in the marketplace Creative as important as the product Different approach to working with agencies

WHO IS THE MARKETING LEADER? Many startups only consider advertising sales as the marketing leadership within the business “He said that in the early days Facebook made a point of hiring programmers even for jobs that would not ordinarily consist of programming, like HR and marketing.” - Paul Graham, What Happened to Yahoo Who is the CMO of the startup? If it’s you, should it be?

LESSONS FROM SILICON VALLEY 1. PROVE YOUR CONCEPT 2. DRIVE EARLY ADOPTION 3. MARKETING WITHOUT MEDIA 4. STRUCTURE FOR INNOVATION 5. EXPLORE NEW PRODUCTS LESSONS FROM MADISON AVE 1. MAKE BRANDING TOP PRIORITY 2. ADVERTISING WORKS 3. BUILD RESEARCH INTO YOUR DNA 4. GET PITHY 5. MARKETING LEADERSHIP

CONTINUING THE CONVERSATION

GREAT CONVERSATION HAPPENING Jason Fried Bud Caddell Bob Greenberg Paul Graham Tony Hsieh Tim Brown

CONVERSATION What other lessons are there for agencies or startups? Who else is doing it right? More feedback at LinkedIn Group: http://linkd.in/madisonvalley jkeehler@clickhere.com http://www.blog.clickhere.com http://www.randomculture.com @randomculture

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Bridging the gap: Madison Ave vs. Silicon Valley

by John Keehler on Sep 09, 2010

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Bridging the gap: Madison Ave vs. Silicon Valley — Presentation Transcript