Thursday, July 30, 2009

More Quick Posts

In the past couple of weeks, there have been some great posts on Techcrunch -- the kind of news you probably won't see if you aren't following the site and linked into the tech world.

Internet and Security
There have been posts like this one, The Anatomy of a Twitter Attack, talking about how Twitter's core operations were infiltrated by a hacker. It's a great lesson in the challenges facing modern internet security and a cautionary note for how you deal with your passwords. I would call it a must read (but you may not be able to sleep afterwords).

Marketing to the Premium Segment
Another post recent post highlighted some analysts numbers about Apple's marketshare -- and is an excellent stepping stone into some exploration on branding and product lines. The Mac Versus PC Debate Has Never Been Clearer deals with how Apple, while it dominate in overall marketshare, totally dominates the 'premium' market for PCs (over $1000) with 91% marketshare.

One interesting aspect of this article is how it highlights how all of these voices outside of Apple that keep saying Apple needs to create a low cost product. Contrast that to Apple's actual position in the market. One my consulting MBA students tells me that this was also a topic theme in a recent class. When Mercedes introduced the C-class, it's low-cost entry level product line, overall sales and revenue were impacted:
  • Profits dropped as high-end, high-margin product (S-class, AMG models) sales dropped.
  • C-class unit sales took off, but profit from these lower cost, lower margin sales did not make up for the drop from the high end.

  • Buyers who liked the exclusivity of the brand found themselves drawn to 'more exclusive' brands like BMW with a higher entry-level price.
  • Overall market perceptions of quality went down. Concerns about quality carried across all model lines.
Now keep in mind that I don't have the specific data that supports these points, so I may be misrepresenting some of the data. However, the key message is that selling more isn't always better and that reaching out to a lower price segment can have a negative impact on your premium customer base. I'd love to hear your comments and anecdotes.

Astroturfing: Health Care and Insurance Reform

I happened to come across an interesting article from Think Progress on the battle for health insurance reform earlier today. The article, EXCLUSIVE: Infamous Astroturf Lobbying Firm Behind New Anti-Health Reform Group, by Lee Fang does a deep dive into some of the PR groups behind some astroturfing of the issue.

Here's a quote:
The new anti-health reform front group known as the Coalition to Protect Patients’ Rights, is being managed by the lobbying firm known as the DCI Group. After being contacted by ThinkProgress this afternoon about its sponsorship of CPPR’s press conference last week, DCI Group staffers acknowledged that they coordinate PR for the front group. Not be confused with Conservatives for Patients’ Rigths, another front group opposing health reform, CPPR has been organizing lobbying efforts against health reform and publishing op-eds across the country with misinformation about the public option.

Tom Synhorst, a former staffer to Sen. Chuck Grassley (R-IA) and Bob Dole, joined fellow right-wing operatives Doug Goodyear and Tim Hyde to form DCI Group in 1996. The firm quickly flourished working for the tobacco industry, coordinating a sophisticated astroturf campaign to build public opposition to tobacco regulations. Ironically, before helping to manage this “patients’ rights” campaign, DCI founded “Smokers’ Rights” groups across the country for the tobacco lobby. Indeed, DCI has specialized in manufacturing “grassroots” support — using telemarketers, PR events, and letter writing campaigns — to achieve policy results for narrow corporate interests:

Guilt by Methodology
Assuming that there is some legitimate business justification for astroturfing, the approach leaves a bad taste in my mouth. I think it's worth understanding the mechanics and the practices because you may find yourself faced with a situation where people are asking you to implement programs that -- if they come to light -- could be considered astroturfing. One good resource that I've found for this is PR It's an interesting read, and I apologize if it carries a political message that conflicts with your personal ideology; regardless of your view, the site is a good exploration into 'black hat' and 'gray hat' PR.

Monday, July 27, 2009

Wendell Potter, Health Care PR, CIGNA, and What It Means to Have Ethics

I referenced this story in a previous post on health care reform, but I'm just listening to the replay of this morning's Forum program on KQED (here's a link to the page with the audio). They have Wendell Potter, former head of Corporate Communications at CIGNA. The broadcast (and some other things that I've heard) refer to him as a whistle-blower, exposing the secret workings of the insurance industry.

The show is worth a listen. Beyond that, I think that it brings up an important topic point -- how do ethics intersect with the products and the messages that you're promoting? Does your job enable you to feel honorable?

'Chapeau!' ('hat tip' with a Tour de France spin) to Wendell Potter for work he is doing now -- here's hoping that, like a great start-up, he will help change the world.

Tuesday, July 21, 2009

Late Night Music Posts

Here it is, another late night. While I started to crank out a bunch of marketing posts, I found myself in another late night of downloading and listening to music. On my listening list for tonight is David Bowie.

One of the things that I've always liked about David Bowie (at least, through some of his hit songs), is the way that he structures the song. Bowie really understands the classic structure of a rock and roll song, building tension to a dramatic primal scream moment, then... "ah... wham, bam, thank you ma'am", you get the classic rock and roll scream moment... and release. The classic feel is supported with rich full sound and a nice blend of guitar, keyboards, and horns -- depending on the tune. Each little clip is a story, an event, a trip from one place to another.

Sadly, when I've tried to watch things like the Ziggy Stardust concert movie, it doesn't really work for me -- it just seems to wander into spaces that I don't go. And it's not like watching it I can figure out why. It just doesn't work for me. In an odd sort of way, that's one of the cool things about Bowie -- I think that there's a bunch of things that he does that don't work. But whether it works or not, Bowie goes forward, planting fields of sod, looking for that special fruit -- or reinterpreting the things that he does or has done, seeing if it will yield fruit in a different light. There is a core art to everything, even the things that don't work.

Seriously though, take a song like "Suffragette City". While it's sound certainly draws upon the roots of rock and roll, it's new, different and unique. It captures one of those essential elements that makes Bowie so cool -- a classic feel that takes you some place entirely new and also noteworthy in it's own way.

An Interesting Bowie Juxtaposition
Recently, I happened to catch Bowie performing for an Isle of Wight festival on one of the HD channels. I caught an interesting song performance that my "old Bowie" sensibilities had missed. "I'm Afraid of Americans" is an interesting song. Contrast it with "Young Americans". The whole comparison/contrast is full of surprises, but possibly the biggest one is that, while "I'm Afraid of American's" seems like a Bush-era protest song, it actually goes back to a 1997 album. That being said, the performance that I watched in the Isle of Wight Festival rang deeply as a Bush-era protest song.

Here's hoping that your music library keeps you up later than you expected...

Tuesday, July 7, 2009

Real Grassroots and Why the folks in DC are Underestimating the Support for Reform with Public Health Care

We just went through open enrollment on my health insurance. I probably have what get's labeled in the media these days as "really good health insurance". But before the annual 'open enrollment', every year businesses have to go back and renegotiate health insurance coverage, securing rates and renegotiating what is covered and what isn't.

In a perfect world (like the one portrayed in the media-spin of the anti-healthcare reform), the open enrollment transition would be seamless, but in reality, it isn't. Even as you move from coverage year to coverage year, aspects of your insurance coverage changes.

Consider this quote from an actual letter that I received today:
Our records indicate that you recently filled a prescription for Fill-in-the-blank-medicine. You will need to discuss one of the different prescription options listed above with the health care professional who wrote your prescription. He/she has been notified of this change.
Just for fun, I'm going to list some of the arguments that that this letter debunks.
  • We don't want health care reform because we don't want the government coming between you and your doctor.
  • What difference does it make? The medicines are all the same, right?
  • "We appreciate the opportunity to serve you and strive to provide the best customer service and the highest quality benefit plans for you and your family members." (quote from the first paragraph of the letter)
Imagine if you were a manufacturer, and once a year, your supplier said, "I've decided to switch you from 10mm bolts to 7/16" bolts. They are almost the same size. You won't be able to tell the difference."

Why It's Viral and the Folks in DC Don't Get It
One letter, one medicine, one time. That's my story today. But think about how many people get these, have gotten these letters -- not just at open enrollment, but also when they get a new prescription. For me, it was frustrating enough to prompt me to write this post. It wasn't frustrating enough to publish a blog saying Fill-in-the-blank health insurance provider sucks. But I haven't had to talk to them on the phone yet. I haven't had to go through customer service, trying to explain why, after years of taking these medicines, this one works and the other one doesn't -- having to prove it to them, once again. Just like the other medicine and the last insurance company. Or the time before that.

Now imagine how many people have been affected by this same kind of thing. Or worse. Sure, it may just be a minor nuisance, but it's one of those straws that add up in terms of brand perception. And, in that way, there's an aspect of the whole health insurance that gets grouped together into a collective brand. And while twenty years ago, there was probably a percentage of people who were willing to buy into the idea that "the industry may be bad, but mine's okay", what we've seen play time and time again is that they really are all the same. At least in terms of their bad behavior.

On one level, forcing you to switch medicines could be put on the level of a restaurant that only carries Coke or Pepsi. You can probably put up with that choice for one meal, but if you've gained any sense of connection to your brand (assuming that the products were essentially equal), you're still likely to be resistant to being forced into a long term switch. Now imagine if you had worked with a 'highly trained, soft drink professional' who carefully matched your drink to a list of requirements. In that scenario, most people won't just be 'slightly irritated', they'll be building a level of anger and resentment that will be hard to quell.

What's more, think about the underlying reason for imposing this switch. It isn't because the product that you're choosing is no longer available or difficult to get. In fact, it isn't done with any sense of customer focus or customer awareness -- it's done simply because they have negotiated better rates with a different set of medicines and they can earn larger profits by forcing a switch. And they are going to force this upon you because you don't have a real choice.

Closing Thoughts
If the health insurance industry was really a competitive marketplace and their goal was to "win" customers, then you would probably have a handful (or at least one) insurance company with a standout reputation and brand ID. As sucky as most airlines treat customers, you still hear about standout companies like Singapore Airlines, companies that deliver on their 'commitment to customer service' message, that really WOW customers and generate real word of mouth.

For the health insurance industry, people are like gasoline in your car -- an expendable resource designed to take you to a destination (destination profits). If you know one that's generating real WOM buzz, let me know -- I'd love to find out that I'm wrong. Ultimately though, I don't think that there is an organization like that -- and I think the awareness of that fact is much broader than people realize. And that's why, when this current 'racket' with the health insurance industry starts to collapse, it's going to fall hard. Whatever they do, they haven't done anything to earn any brand loyalty.

Monday, July 6, 2009

Another Health Care Reform Post or Why We Need a Serious Overhaul of the System

First, a couple of links to some articles that I came across a few weeks ago, then some commentary.

Here's an interesting article from the Ezra Klein, blogging for the Washington Post. He summarizes the Congressional appearance of Wendell Potter, the former head of Corporate Communications for Cigna. Potter worked in the industry for more than 20 years, and this PDF reads like the testimony of someone who decided to break loose from the tobacco industry. To quote from the Klein article:
What drove Potter from the health insurance business was, well, the health insurance business. The industry, Potter says, is driven by "two key figures: earnings per share and the medical-loss ratio, or medical-benefit ratio, as the industry now terms it. That is the ratio between what the company actually pays out in claims and what it has left over to cover sales, marketing, underwriting and other administrative expenses and, of course, profits."

Think about that term for a moment: The industry literally has a term for how much money it "loses" paying for health care.

The best way to drive down "medical-loss," explains Potter, is to stop insuring unhealthy people. You won't, after all, have to spend very much of a healthy person's dollar on medical care because he or she won't need much medical care. And the insurance industry accomplishes this through two main policies. "One is policy rescission," says Potter. "They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment."

And don't be fooled: rescission is important to the business model. Last week, at a hearing before the House Subcommittee on Oversight and Investigation, Rep. Bart Stupak, the committee chairman, asked three insurance industry executives if they would commit to ending rescission except in cases of intentional fraud. "No," they each said.

Potter also emphasized the practice known as "purging." This is where insurers rid themselves of unprofitable accounts by slapping them with "intentionally unrealistic rate increases." One famous example came when Cigna decided to drive the Entertainment Industry Group Insurance Trust in California and New Jersey off of its books. It hit them with a rate increase that would have left some family plans costing more than $44,000 a year, and it gave them three months to come up with the cash.
Beyond the health care questions, it's another interesting insight into the challenges of having to be a spokesperson for a product or an organization that violates your moral sensibilities.

On a side note, while looking for the link to this article, I came across a bunch of other interesting Ezra Klein posts including this one that references the South Park Underpants Gnomes. Based on that alone, Ezra's probably worth following just for the writing.

A PR and New Media Test Case - Where do you get your news

Techcrunch had an interesting post about PR. Michael Arrington fired out an interesting post about this article by Clair Cain Miller in the New York Times (now behind the NY Times registration engine - I would have used it as source material for more direct quotes but I'm a bit too busy to go through the reg process, so you and they now get the "to the best of my recollection" version of quotes).

The article centers around the launch of a company named Wordnik, and it highlights some aspects of how their PR team operates. According to the article, the launch of the company (and a great deal of modern PR) was being done strictly using word of mouth communications across social networks. One section has an exchange between the PR pro and the client. The strategy goomer says, "we should let someone at fill-in-the-blank know something." And the PR goomer says, "I'm linked to Big Named Tech Goomer there on Facebook or Twitter. I'll send him a note."

While they try to spin it differently, there's an aspect of this type of PR that is pretty much the same as PR used to be -- some people with a big Rolodex of people talking to some other people who are characterized as notable, influential or may otherwise possess some large 'potential' audience. The real difference is simply in the names and the communication platforms.

No More Gatekeepers
In Meatball Sundae, Seth Godin frames the concept as the end of the gatekeepers -- when everyone can publish, you are no longer limited by the traditional gatekeepers, the publishing media that got to choose what they published. The Internet enables this technology, and it gets rolled up into RSS, blogs, and a host of methods for pushing your 'news' out into the stream. As an example, the article cites Redfin, and notes that they didn't do any media outreach -- they simply published news on their site.

From that basic premise, you have an interesting problem. One theme of Michael Arrington's post surrounds a section of the article where, in preparing for the launch, the Wordnik team0 decides to avoid the tech blogs. Here's the quote from the original article:
Ms. Hammerling, while popping green apple Jolly Ranchers into her mouth, suggests a press tour that includes briefing bloggers at influential geek sites like TechCrunch, All Things Digital and GigaOM.

But Roger McNamee, a prominent tech investor who is backing Wordnik, is also in the room, and a look of exasperation passes across his face at the mere mention of the sites.

“Why shouldn’t we avoid them? They’re cynical,” he says, also noting his concern that Wordnik would probably appeal more to wordsmiths than followers of tech blogs. “That’s where I would be most uncomfortable. They don’t know the difference between ‘they’re’ and ‘there.’ ”

Without missing a beat, Ms. Hammerling changes course, instantly agreeing with Mr. McNamee’s take. “I love you for that,” she intones. “I’ll leave the tech blogs out. Let them come to me.”

Instead, she decides that she will “whisper in the ears” of Silicon Valley’s Who’s Who — the entrepreneurs behind tech’s hottest start-ups, including Jay Adelson, the chief executive of Digg; Biz Stone, co-founder of Twitter; and Jason Calacanis, the founder of Mahalo.
To which, Arrington counters with this:
The result? Not much. Wordnik is flatlining at an abysmal amount of traffic. Comscore and Quantcast don’t even register the site as a blip.

Compare Wordnik to Topsy, another recently launch service. Topsy launched on TechCrunch exclusively. The domain now has 577,000 results on Google, compared to 56,000 for Wordnik. And the traffic difference is stunning:
So much for the great power of content, social networks and end of the gatekeepers, right? Techcrunch is a gatekeeper. Well, that's where all of this gets kind of funny.

PR and Bloggers vs the Main Stream Media
A couple of weeks ago, On the Media had a clip on Michael Arrington and Techcrunch that was pretty amusing. OTM took aim at Arrington for posting stories that might originate from little more than rumors shared between VCs at a Silicon Valley lunch. The question was whether Arrington and Techcrunch handled these types of rumors (stories that could potentially be used to manipulate stocks) appropriately, along with how that decision was impacted by any financial connections, etc. You can make your own judgment about how impartial some of the mainstream publications are, but what I liked about Arrington's comment on OTM could be boiled down to loose quote, "When I hear it, I call one of my friends there at the company. If they say that it's true, or worth looking into, I publish. As news unfolds, we update."

Think about that for a moment -- millions of dollars in investment and stock, thousands of web site impressions, the success or failure of some emerging companies and technologies might potentially revolve around whether Michael Arrington has a good feeling about the news. Techcrunch and Michael Arrington have become gatekeepers. All because he started his blog. And people read it. And it didn't suck. And it had news that was interesting to some people. And so a bunch of the people who were at the old party, the one with the bland food and the boring entertainment, went to the new place with the spicy content and the happening atmosphere.

The Evolution of a Gatekeeper
The voices that people listen to are not always the voices are polite, on message, or even accurate. When I was in the PC components industry, one of the review sites that mattered was Tom's Hardware. While it was always great to see them review your product or compare it to others, they often got things wrong. Still, they had a strong audience following among PC power users.

As a reader and a content consumer, I benefit from the Gatekeeper function that Techcrunch provides. For me, the content and editorial brings me news and opinion that I might otherwise miss, and it's one of the few sites that I try to follow everyday. Admittedly, I've not tried to push some Yet Another Web Startup Company through the promotional gateway, but maybe that's the underlying question that's missing from the conversation between the article and the Techcrunch post. Is Wordnik a purple cow or another me-too solution to an unimportant problem? Ask my gatekeeper.

It's probably also worth noting that, if it weren't for Techcrunch, I wouldn't have had any exposure to the original article -- or if I did, it didn't rise above all the other noise to reach my attention.

Searching for a Job in in the Recession

Here's a little something that I came across on Crooks and Liars. The post from Susie Madrak describes how the recession is affecting the job search market. The emphasis of the post is that, when we fall into a recession, employers become increasing selective about the candidates that they look to hire. Not only does the hiring market become a 'buyer's market', providing employers with substantially more leverage over a prospective hire, but it also shifts the employer's behavior. Here's a quote about what employers say that they are looking for:
they would prefer to fill positions with “passive candidates” who are working elsewhere and not actively seeking a job.
While we're all familiar with that old axiom about it being easier to find a job when you have a job, think about what this means, extracted into some sort of theoretical expression of marketing, economics, and buyer behavior. Using the "Blue Ocean" metaphor, as the market gets more tense, this group of decision makers would rather increase their fishing in a place that yields fewer results (assuming that the quality of the result will be higher) than using a broader net and then perform an actual analysis of quality.

Turning the Posting Fountain on

I've come across a bunch of interesting stuff and I want to post, but I've been so buried with some pressing deadlines for next week that I haven't had time. I've decided to knuckle down and crank a bunch of these out. Without further adieu...

Wednesday, July 1, 2009

My day of learning about Agency Programs at Google

From my Twitter posts, you'll see that I spent last Thursday at an event focused on ad agency programs over on the Google campus. All in all, I think it was a great event, and I really appreciated the opportunity to participate. As with any event like this, the first question is really where to start -- particularly when there is probably a series of posts that I could put together to cover the day's topics... but we've got to start somewhere.

First impressions
It's hard to suppress a level of excitement when you get to visit a place like the Google campus. While there's a level of excitement when you visit any campus-level organization (Microsoft, Apple, HP, EA), the Google campus still carries a unique aura and brand impression. Whether it's all of the great things that you've heard about -- the cafeterias and the food, the other amenities, or just the culture -- there's just something about stepping into the environment that has been ranked as the best place to work. In that way, when it comes to branding, the investments that they have made in workplace environment are probably worth more than a series of Superbowl commercials telling everyone about how great that they are.

Beyond the simple wow factor of going to the campus, I was also struck by how big the campus actually is. As an long time Mountain View resident, I've probably been to the Shoreline business park more than most, but I was still a bit surprised by the size and capacity of some of the buildings over there.

The Day's Events
The event was focused on programs for ad agencies, providing a dog-and-pony of all of the different tools ranging from Advertising programs to support tools to help you track, monitor, and optimize your content. The day was divided into three overall events.
  • Introduction and Keynote
  • Tools and Programs Review Sessions
  • Hands-on Demos of Tools and Products
The Keynote Presentation
After a friendly welcome including some background on our location and the campus, the Google team launched into the keynote presentation (I would site names, but I didn't capture them in my notes). The keynote focused on the history and evolution of the Internet, and how that evolution was reshaping the way that we engage with customers. The presentation was packed with a bunch of great stats and tidbits on the volume of Internet traffic, but one concept that I liked was the speaker's approach to dividing up this history of the web into three periods:
  • 1.0 - Brochureware: the web is used basically like an electronic brochure with phone numbers and some contact info.
  • 2.0 - eCommerce and the Internet as a sales channel: the emergence of companies like Amazon and eBay, and an increasing comfort with the concept of engaging in online commerce
  • 3.0 - Engage with the customer: the rise of social media, video, community sites, etc.
While I felt like it was odd that many of the aspects typically ascribed to "Web 2.0" were actually "3.0" in this presentation, I think that his breakout still managed to capture and underline some important aspects (and still prevalent misconceptions) of business and the web. This wasn't a "you should get into social networking and 'web 2.0' because it's the latest trend", it was more of a "here are some trends (like purchasing habits and search) that shape the web and how Google's toolbox can help you reach customers and measure programs across a broad spectrum of media".

The Presentation Sessions
What was underscored by all of these presentations was that Google is all about providing you platforms that enable you engage with these communication paths in a cost-effective, measurable way. We went through an overview of Google's search advertising programs, their content network, and a session on some of the tools available to help you manage these programs. If, like me, you've run an some of these campaigns before, some of the content of some of these presentations was a little too entry-level, but as with most things if you can extract a kernel or two, it was probably worth your time. Two take-aways for me (beyond looking at some of the tools), were some strategies for image advertising campaigns an understanding of what Google is doing with television advertising.

The Hands-on Demo Sessions
The demo sessions were a chance to get a detailed drill-down into some of the agency tools and platform options with product managers for the different tools. While Google offers some options for old-school, blanket-exposure marketing, the most powerful aspect tends to revolve around putting your information in front of a potential customer during those moments when they are most likely to be looking for it.

There's also the web site and metrics tools like Web Site Optimizer and Analytics that Google provides to help you improve your content focus. One of the best things about Google's platform of tools is that virtually all of them are free. Everything is wrapped around making your website and your programs more efficient.

Initially, I was working a longer analysis that was a much more in-depth look at why modern commerce, the web, and search marketing and optimization require a different mindset than the traditional marketing/sales path. This was one of those moments where, as you write and focus on analysis, your writing takes you down a path you didn't expect to go. I wrote a big chunk, but it read like a big left turn in the middle of this post, so I've cut it out of here and I'll post it separately. So if this post seems a bit flat on analysis, keep checking the blog -- I should have more in the coming days.