Classic Example of What eLink preaches to clients....

General Mills Sees Profits Climb 49%

Marketing Outlay Increased 37% in Most Recent Quarter

General Mills confounded Wall Street this morning, with profits up 49%. Part of the food company's secret sauce is meaningful marketing increases, about 37% for the most recent quarter. Augmenting its well-worn strategy of supporting big-name brands, General Mills has focused ad dollars on "high ROI areas," such as multicultural consumers and the digital space.

During the fiscal second quarter, U.S. retail sales grew 5%, with Big G cereal sales up 10%.

Chris Growe, an analyst with Stifel Nicolaus Equity Research, estimated that the 37% increase translates to an additional $40 million on marketing during the quarter, and a 20% increase on year-to-date spend.

"Consumers are shopping our categories and appreciate the nutrition, the convenience and the value of our leading brands," CEO Ken Powell said during a call with analysts. "We continue to reinvest in our businesses at increasing levels. Advertising spending was already planned to be up by double digits and we're adding more."

General Mills' results are particularly impressive given the tough comparison of a year ago, when the company's U.S. business grew 11%. During the fiscal second quarter, U.S. retail sales grew 5%, with Big G cereal sales up 10%. Pillsbury and other baking sales increased 4%, as did Yoplait and other snacks.

During the fiscal second quarter ended Nov. 29, General Mills profits soared 49.5% to $565.5 million, from $378.2 million the year before.

Chief Financial Officer Donald Mulligan vowed to continue General Mills' reinvestment strategy. While media spending grew 37% in the quarter, he said General Mills is targeting at least a double-digit increase for the full fiscal year. That's a relatively conservative estimate given the rates of increase already on the books, but spending can vary dramatically by quarter. For instance, the holidays usually represent a tough comparison because that's when most consumers do the bulk of their serious cooking.

"We're focusing our spending on high ROI ideas with particular emphasis on multicultural consumers and digital marketing, and we're investing strongly in international markets to build our global brands," he said.

It will have to increase elsewhere as well. After four years of decreases, General Mills will have to modestly increase its in-store merchandising spending. Jeffrey Rotsch, exec VP-worldwide sales and channel development, said the company has worked hard to keep a lid on promotional spending. General Mills has leaned on its marketing to support necessary price increases, but the company's trade cost per case, related to retail promotions, has fallen in each of the last four years. Now, Mr. Rotsch said, there are areas where the company will have to gin up merchandising activity "in order to protect market share."

Mr. Rotsch also conceded that General Mills' advertising support for Progresso dropped off during the most-recent quarter, and sales slipped. He added that the company tried to spread its soup spending evenly throughout the year, rather than concentrating it more heavily into soup season. Less spending on a category that is down as a whole, he said, explains much of the difference." He also hinted that the brands' comparative ad battle with Campbell's Soup may still be weighing on sales.

"There may be also be some overhang from the negative advertising that we saw on the category last year and we expect that to recede over time," he said. "We view this as a big category and a great consumer category and so we're quite optimistic going forward." Shortly after the ad battle with rival Campbell's Soup Co., both marketers reported increasing soup sales. The increases were, however, driven primarily by price increases.

For the next two quarters, General Mills will be focusing on its "Biggest Loser" integration and supporting the movie sequel "Shrek Goes Fourth" in a variety of tie-ins with its cereals and snacks. In early 2010, the company will launch Wheaties Fuel, Chocolate Cheerios, Greek-style Yoplait yogurt and a Nature Valley Dark Chocolate granola bar. Mr. Powell said the company has not held launches back during the recession, when consumers are less likely to take chances on new products.

What your Search guy is basically telling you....

Most products & services that are marketed online leverage some kind of search channel. With some kind of SEO/SEM initiatives always being dubbed "the best source of traffic" or "the life-blood of our online traffic."

Here is an article that gives a couple of excuses why you should just not bother with any other forms of online advertising. Apparently if your genius Search Director can't make your online marketing work, it's no one else's fault but yours. Your content sucks, or your design sucks, or the best is...your product sucks and you should close the company. Read below...

Don’t Beat Up Your SEO for Slow Sales

When you finally reach that point where you want to introduce search engine marketing and optimization in your overall marketing strategy it is important to understand how SEO fits into your overall marketing equation. Even though there are many different approaches and SEO service providers out there, it is important to understand that SEO is a form of inbound marketing.

If your website visitors do not convert you have to realize that this is not a direct problem from SEO service provider. Remember you can lead a horse to water but you can’t make them drink. If your website is set up poorly than all the SEO in the world will not help you become successful. Unless you hired a firm or a person to do more than just search engine optimization this should not be looked at as the problem. The problem is most likely many other factors.

Take a look at the following factors that might be affecting your website conversion:

1. Design: When was the last time your website has been updated? Is the design on par with your audience? Put yourself in their shoes for a moment and try to anticipate what you would like a website to look at. Does yours look this way? You cannot not be in denial here, if you are targeting a young demographic and your website hasn’t been updated since 2001 than it might be time to freshen things up a bit. Good design elements keep people engaged and wanting to know more.

2. Conversion Aspects: Does your website traffic need to figure out how to use your website? If your website makes a visitor work on how to contact you than you are already loosing the race. If you are an e-commerce site you have to make multiple entry points into your store from every single page. If you are a service based business you should have a phone number and lead form located almost everywhere so that you pave the way for that visitor to create some sort of action. The goal of your business needs to reflect immediately in your design otherwise you might lose that visitor forever.

3. Products: Everyone wants to think their service or products are the best but at some point you have to ask yourself if people really want what you’re selling. It might just be that your product isn’t cutting it. If this is the case you are better off to realize this at an early stage than spending a lot of money marketing a product people might not really be interested in.

4. Content: Remember your content should be written for the visitors that come to your website and should not just be written for the search engines. If your website content is poorly written (with weak call to action) then this could be a major reason why people are leaving your website and are not converting.

To close out here, make sure you take a moment to properly analyze your website if you start to see organic visitors (from your SEO efforts) are not converting as much as they should.

Holiday Advertising Effectiveness

In Holiday Retail Sales, the Best Ad Doesn't Always Win

New Survey Says Favorite TV Campaigns Have Limited Influence on Consumer Spending

Retailers shell out big bucks on holiday ads. And while consumers like them, that doesn't mean they're influenced by them. A new survey has found that half of consumers say they're not inspired to shop at the retailer whose holiday TV commercial or online promotion they liked best.

TOP TEN MEDIA INFLUENCERS
Coupons	45%
Word-of-mouth	27%
Advertising inserts	27%
Broadcast TV	23%
Newspaper	22%
Direct mail	21%
In-store promotion	18%
E-mail advertising	16%
Cable TV	12%
Magazines	11%
Internet advertising	11%
Radio	10%
Source: Retail Advertising and Marketing Association

"It goes along with the old adage that I know half my marketing dollars are wasted, I just don't know what half," said Mike Gatti, executive director at the Retail Advertising and Marketing Association survey, which was conducted by Big Research. "[Consumers] probably still get a kick out of the commercials, but there are a lot of brand loyalties out there. ... [But it] does position [retailers] in the minds of people whether they shop there or not."

When asked to choose their favorite holiday TV commercial, 26% of consumers chose one from Walmart, upsetting Target's holiday-ad dominance. Target had taken the top slot on the survey for the past three years, but this year it only garnered 16% of the vote. Perhaps that's not surprising, considering that consumers took to Facebook to complain about one commercial that seemed to cast doubt on the existence of Santa Claus and another that put a damper on Christmas morning with talk of finances.

The Martin Agency is Walmart's creative shop, while Wieden & Kennedy handled Target's holiday ads. Crispin Porter & Bogusky had the best showing of any agency, as it works with three of the retailers found on the Top 10 list: Best Buy, Gap and Old Navy.

Still, only 17% of consumers said their favorite ad motivated them to shop at a particular retailer, while 50% said it did not. One-third of consumers said their favorite ad didn't have an impact, because they already shop at that retailer.

Walmart again took top billing online, with 20% of consumers saying it had the best online holiday promotion. Amazon came in a close second, with 18% of the vote.

Again, half of consumers said the promotions didn't influence their shopping, while 22% said the promotion they deemed best caused them to shop at that retailer. About 28% of consumers said they weren't affected, because they regularly shop at a particular retailer.

When it came to what does influence holiday shoppers, coupons emerged as the most influential, with 45% of consumers citing them. Word of mouth and advertising inserts influence 27% of consumers, while broadcast TV and newspapers influence 23% and 22% of shoppers, respectively.

"Shoppers aren't only relying on traditional advertising to find the best deals," said Phil Rist, exec VP-strategic initiatives at Big Research. "Whether they were saving on shipping or using an in-store coupon, shoppers dug through every avenue of potential savings before choosing to commit."

Top ten holiday commercials
RETAILER	AGENCY
Walmart	Martin Agency
Target	Wieden & Kennedy
Best Buy	Crispin Porter & Bogusky
Gap	Crispin Porter & Bogusky
Macy's	JWT
Old Navy	Crispin Porter & Bogusky
Kmart	DraftFCB
Sears	Y&R
Hallmark	Leo Burnett
Kohl's	McCann Erickson
Source: Retail Advertising and Marketing Association

Direct mail, radio and outdoor billboards were all deemed more influential this holiday season, while newspapers, advertising inserts, broadcast TV, word of mouth and in-store promotions were less influential with shoppers.

"There's so much more out there to decide from," said Mr. Gatti, explaining why more areas fell in influence than gained. "This could also be due to the shift over the last year away from some traditional media into a lot of the new media."

In terms of the rise in direct mail's influence, Mr. Gatti suggested that retailers could be doing a better job of targeting consumers or they could be offering attractive pricing incentives and promotions through direct mail.

QVC finally steps into the vertical arena...

QVC Hires Zimmerman for Social Media, Digital Work

Shopping network QVC has hired an outside agency, Zimmerman Advertising, to help with interactive and social-media efforts.

The move is an unusual one for the home-shopping cable network because QVC has historically handled marketing in-house, and because the Omnicom Group agency, while known for its retail expertise, is hardly top of mind when it comes to agencies with experience in the increasingly popular social-media space.

"We do everything ourselves here, but every once in a while we tap someone to help us," said Peter Farrell, QVC's director of brand development and strategy. "When [Zimmerman] came in, they had a single-minded point of view around the importance of branding in the retail space. They will help add bandwidth to our team."

Zimmerman, Ft. Lauderdale, Fla., was selected by the marketer thanks to recommendations, not a review process. "I'm not into quote-unquote pitches," said Mr. Farrell, who prior to arriving at QVC nearly three years ago had an agency-side career in New York at shops such as McCann Erickson and Grey Advertising, mostly in account-service roles.

"I had a couple of possibilities who were good fits culturally, and, based on their experience, came in to meet with us. I've pitched and have been pitched too, and generally I don't like doing that because often times who seems to come in [from the agencies] during those pitches are not the times you are working with."

Mr. Farrell added: "You're asking agencies to spend a lot of time, energy and money developing stuff that will probably never get to market. I think it's better to slowly and carefully do some due diligence and meet with them."

Beyond cable
The move to hire Zimmerman comes as QVC, which began as a TV-based home-shopping network, has been evolving its business model to capture more consumers online. It's also adjusting its marketing mix accordingly.

The Liberty Media Corp.-owned company's programming is distributed to nearly 170 million homes worldwide via subsidiaries in the U.K., Germany and Japan. It plans to launch in Italy next year. According to TNS Media Intelligence, West Chester, Pa.-based QVC cut measured media spending from $21.4 million in 2007 to $12.3 million in 2008. For the first six months of 2009, the marketer spent $4 million.

In the past it has devoted the bulk of its marketing budget to TV (it airs between 20 and 30 different spots a year on cable), limited print executions and, periodically, outdoor. Direct marketing is another chunk of its marketing spending, which is now mostly e-mail and online search.

Mr. Farrell declined to provide the proportion of QVC's marketing budget that it plans to devote to social media in the future, but said it will increase, as "this space has become important to our business."

Among its first efforts for QVC, Zimmerman has been asked to engage QVC shoppers online and in communities such as Facebook and Twitter during the holiday season. The agency will also be reaching out to bloggers and "influencers" to offer interviews with product experts or discuss deals that QVC is offering.

"Social media isn't just about amassing huge quantities of friends and fans, it's about leveraging that following and eventually converting it into sales," said Scott Thaler, exec VP-chief interaction officer at Zimmerman.

NBC is a perfect example of how marketing doesn't fix problems...fix your content, then adjust your marketing strategy.

Memo to Comcast: How to Fix NBC

Throw Money Back Into Programming (Read: Drop the 'Leno' Experiment) and Push the Envelope Creatively

Weighed down by lackluster programming and declining ratings, NBC has been a problem for many different people: programming honchos Kevin Reilly and Ben Silverman; NBC Universal CEO Jeff Zucker; GE chief Jeff Immelt; and even one-time top-rated late-night comic Jay Leno. Now the hot potato is soon to be passed to Comcast -- which, oddly enough, doesn't see the broadcast network as a burden at all.

Media buyers use NBC's current position to secure berths on popular programs such as 'The Office' for lower prices than they might expect to get if the network was faring better.

"The network, the broadcast station, and then TV production -- when you look at those three as kind of an ecosystem, it's a good business," said Steven Burke, Comcast's chief operating officer and the executive who will oversee NBC Universal once Comcast acquires it. "It clearly is not a business that is without its challenges, but it's a good business," he said in remarks made at an investor conference held in New York last week.

Yet NBC's flagship broadcast network enjoys a tarnished reputation. The Peacock has failed to keep its pipeline stocked with new hits after enjoying great success with such fare as "The Cosby Show" and "Seinfeld" back in the day. Want proof? A recent episode of "Saturday Night Live," NBC's own late-night comedy program, poked fun at the transaction, suggesting that "The final sticking point to the deal was GE convincing Comcast that it's still 1996."

In 2006, NBC pulled in more than $6 billion in ad revenue, according to TNS Media Intelligence. Through October of 2009, it has taken in about $3.65 billion, hurt by the economy, audience erosion and the lack of an Olympics telecast.

During the 2000-2001 TV season, top-rated NBC programs such as "ER," "Frasier" and "Friends" lured anywhere from 17 million to 20 million viewers on average. During this season so far, only broadcasts related to "Sunday Night Football" are bringing in more than 10 million viewers. Season to date as of Dec. 6, NBC's top entertainment programs, "Law & Order: SVU" and "The Biggest Loser" brought in an average of 9.64 million and 9.98 million, respectively.

Criticism for cost-cutting

NBC's attempt to keep viewers tuning in without making a splashy investment has garnered criticism. Since instilling Jay Leno every weeknight at 10 p.m., NBC has managed to lose ratings and ad dollars, and has caused many affiliates problems by providing a lackluster lead-in to late local news. NBC "has lost about a third of its viewers in the 10 p.m. time slot year over year given the switch to Jay Leno," wrote Wells Fargo Securities analyst John Janedis in a Dec. 9 research note.

Indeed, media buyers suggest they like particular properties on NBC, but they use the network's current position to secure berths on popular programs such as "30 Rock" or "The Office" for lower prices than they might expect to get if the network was faring better.

Now, NBC appears to be reversing course. "Our priority at NBC is to invest in quality content. We have been very aggressive this season with additional pilots and high-profile projects with such marquee producers as J.J. Abrams and Jerry Bruckheimer," Jeff Gaspin, chairman, NBC Universal Television Entertainment, said in an e-mailed statement.

But media observers suspect a substantial effort is required. "Overall, NBC needs to make the investment necessary to compete. If Comcast takes a cheap and gimmicky approach, they are destined to remain in fourth place. Worse yet, they could be challenged ratings-wise by some of the cable networks," said Jeff McCall, a professor of media studies at DePauw University in Greencastle, Indiana.

Jeff McCall, a professor of media studies at DePauw University, called the Leno experiment 'a weak attempt at saving money.'

"NBC needs to be more like Fox Entertainment, HBO and Showtime, by going for searing, powerful, taboo-breaking series that really push the envelope of television narrative," said Paul Levinson, a professor of communication and media studies at Fordham University in New York.

'Abandon the Leno strategy'

One recommendation: Removing "The Jay Leno Show" from prime time. "They need to abandon the Leno strategy and make the investment in the 10 o'clock hour that it will take to be competitive," Mr. McCall said. "NBC could use Leno less often, but with more effectiveness in weekly broadcasts, or with special stunts. The Leno experiment was a weak attempt at saving money. With the exception of reality TV, cheap won't get networks very far in prime time."

With technology rapidly snatching viewers away from traditional linear TV watching, one theory that has emerged is that audiences and advertisers may not be able to support five broadcast networks. And while the idea of venerable NBC -- once the dominant force in advertiser-coveted Thursday-night prime time -- as one of those outlets that might be thrown to the scrap heap would have shocked many not so many years ago, these days, the thought doesn't sound so implausible. Such talk hasn't been helped by NBC Universal executives floating such notions as making NBC a cable outlet or talking about managing for profit margins rather than ratings.

For its part, Comcast is throwing cold water on those ideas, even as it admitted that the majority of NBCU's cash flow comes from operations other than broadcast or film. "It has never been the case that we have thought about selling the broadcast business," said Mr. Burke, because it is "integral to the way NBC operates" and boosts all operations through creation of programming and promotion of content to a wider audience. Any push of NBC toward higher ratings, meanwhile, could result in better finances, he suggested.

The overall consensus is that it takes money to make money on TV. Content that attracts sizable groups of audience drives everything from ad dollars for first-run programs to web viewership to international and aftermarket sales.

"If I were directing Comcast's program interests, I would give [NBC] free rein to go make great programs. They have the money to get talent and great writers," said Len Shyles, an associate professor of communication at Villanova University. "Give them free rein, and then [Comcast] will deliver it, repurpose the hell out of it."

Customer Intelligence Gathering...

There has never been greater demand for marketing accountability. Consumers have never been so technologically and socially empowered, and we have never had the level of consumer data that we have today. The implications and challenges for understanding customers and marketing to them are enormous. Transforming customer data into actionable intelligence and measuring the business impact of marketing will be key success imperatives for tomorrow's CMO.

But while some claim that the age of the left-brain marketer has arrived, too often we see customer data buried in the direct-marketing department, manipulated and modeled by propeller-heads to create a campaign file. And yet, in a small number of firms, we find customer intelligence elevated into a strategic command center for the business. In these firms, customer knowledge drives decisions across the enterprise -- from marketing planning and strategy to product development, and from risk analysis and staffing to business operations and corporate strategy. And most of these firms point to a broad range of benefits, including improvements in customer acquisition, retention and satisfaction to increased revenue, profitability and customer lifetime value.

What defines these leading firms? They treat customer data as a strategic asset, put the customer at the center of all decision making and use data-driven insight to tailor all customer communications. It sounds simple, but can you name five companies that do it? Our research shows that fewer than 15% of firms have a strategic customer-intelligence operation. These firms leverage customer intelligence broadly throughout the organization, they value customer knowledge as a corporate asset and they frequently have an evangelist in the C-suite. They continually demonstrate that customer intelligence drives overall business growth.

So how do you become one of these firms? Start by looking at your corporate culture. Almost every company we speak with claims that they are focused on their customers and many even describe themselves as customer-centric. But very few follow through on that philosophy with any meaningful results. To do so, you need to break down organizational silos, align compensation structures, establish customer-listening programs and implement an enterprise-wide customer-contact strategy. This last element -- the contact strategy -- is a road map that ensures customers receive the most relevant message at the right time and in their preferred mode. Consider Disney, which uses what it learns from every customer interaction to stay one step ahead of customers at every turn. Disney's success is enabled by its information-driven and highly dynamic marketing practices, but it all starts with a corporate culture designed around the mantra "know me and be relevant."

After understanding the cultural changes that are needed, CMOs must hire the right people with the right skill sets. You need critical thinkers who can challenge the status quo and translate business problems into questions that can be answered with deep customer knowledge. In our research, we found that a high-performing customer-intelligence organization needs a centralized team comprised of people from four disciplines: 1. customer strategists 2. marketing technologists 3. marketing scientists and 4. marketing practitioners. These four archetypes each play very different but invaluable roles in the organization. While every firm has someone in the practitioner role, most firms are missing the customer strategist.

Not all customers are created equal, and by some accounts, your bottom 20% of clients may be draining 80% of your profits. Do you know who they are? Does your executive team? Do you have a strategy for changing that equation? Customer value isn't just a marketing metric, it should be a key performance indicator for the business. As CMO, you will have to help reconcile customer value with line of business and brand managers that are tasked with growing revenue for their corner of the world and make enterprise customer value a high-level metric for the organization. Some firms, such as Farmer's Insurance, take this further and use customer knowledge to predict the lifetime value of prospective customers and target high-potential value prospects accordingly.

Once you have figured out the cultural element and addressed the people component, you can start to think about technology. Customer intelligence relies heavily on technology. It requires a data-management and analytics framework that centralizes customer data, listens across channels, automates processes, and enables intelligent "push" and "pull" interactions with customers. But all the technology in the world will be wasted unless it is being pointed in the right direction -- on facilitating the organization's ability to put the customer at the center of everything they do -- and not just talking about it.

CMOs have always cared deeply about their brands and the emotional connection that they create with their customers. They absolutely must continue to do so, but that kind of connection will be nearly impossible to create with increasingly empowered, connected customers who have limited tolerance for marketing. To succeed, the next-generation CMO must help their organizations to truly understand their customers; they must act as the customer advocate within the organization; and they must focus on building customer value at every interaction.

Value Marketing with NASCAR....

Here is an example of an organization collecting and spending tens of millions of dollars, and not taking the steps to monetize those spends.

"...My experience over the last six years has been working with clients to develop data-capture programs to activate the Nascar fan with interest in a brand or driver. This will drive loyalty and actually drive fans to make purchases.

If you like Kevin Harvick, will you buy Pennzoil at AutoZone or get an oil change at Jiffy Lube? A value exchange has to be determined. Consumers will give you information about themselves and permission to contact them if they perceive a value exchange. Would you rather have an e-mail from Kevin Harvick or from Pennzoil? Would you like to get an e-mail from the Jack Daniels race team every Monday and also be invited to a special Jack Daniels tasting in your city? The viral and buzz factor is invaluable -- a simple e-mail is not.

When my agency pioneered electronic data capture for Crown Royal in 2006, we captured over 170,000 names. We activated customers right from the footprint. These names were 100% accurate and 100% opted in. Follow-up was within 48 hours via e-mail. The research on purchase behavior and brand preference was invaluable. That's the good news; the bad news is that Crown Royal did virtually nothing with those names.

Sifting through data

Here is the disconnect. Currently, only a few sponsors have any sort of data capture. Chevy and Jack Daniels have kiosks at races in which the consumer has to self-administer data by filling out forms. Most consumers can't be bothered. Most sponsors still use paper and pencil. Imagine the cost of data entry, the degree of data error, and by the way, six months later you might get a follow-up.

A more troubling issue is the relationship-marketing follow-up. Would you not want to know that a consumer is ready to buy a Chevy truck in the next three months so you could connect him to a local dealer? Would you not want to pre-qualify him for the truck loan via one of the credit services?

If you invest in Nascar as a marketing platform, you need to understand the ROI. Event-marketing agencies have sold impressions and traffic with no actual ROI metrics. In this economy, no marketer can afford to not connect the brand with the consumer and find every way possible to build sales. Electronic data capture is one tool, but mobile and interactive digital signage can also be very effective.

Track attendance may be down this year, but the Nascar nation is still estimated at 40 million-plus strong, which presents tremendous opportunities for advertising, online, mobile and interactive marketing. Now is the time for sponsors to engage with this passionate and loyal audience and leverage their investment.

Here are some questions that CMOs and CFOs should be asking before investing in sponsorship and event marketing regardless of the sport or event:

Will this reach our target customer in a meaningful way? Will we be able to connect with this consumer and capture his or her data? If we want customers to give us permission to contact them, what is the long-term value exchange? What are the ROI metrics against this investment? How can this investment provide drive to retail programs that can be tested? What digital platforms can we use to engage consumers and build a database?"

Words to think about, for sure.

Online Ad Spending in the U.S. versus International

Top 100 Global Advertisers Heap Their Spending Abroad

Focused 62% of Budgets Outside U.S. Last Year, With Much Going to China

If you want to follow the money in advertising, get a passport.

The Top 100 global advertisers spent 62% of their measured-media budgets outside the U.S. last year, according to Ad Age's Global Marketers study, which covers more than 90 countries, territories and regions from Algeria to Zambia. Eleven of the 44 U.S.-based companies among the Global 100 rely so heavily on international sales that they do more than half their ad spending abroad.

Coca-Cola Co. allocates just 16.5% of its $2.67 billion measured-media spending to the U.S. market but spends nearly three times as much in Europe. Three-quarters of Coca-Cola's sales come from outside the U.S.

Procter & Gamble Co., the world's biggest advertiser since overtaking Unilever in 2002, devotes 65% of its $9.73 billion measured-media spending to international markets, slightly ahead of the 61% of P&G revenue that comes from outside the U.S. P&G is the biggest advertiser in all regions except Latin America and Africa, where Unilever reigns.

The biggest marketers are investing ad dollars wherever they can find revenue or potential for growth in a tough global economy—and increasingly, that's China. And some 39 of the Global 100 had measured-media spending in China last year. Five of them already invest more than 10% of their budgets there—Yum Brands, Pernod Ricard, Avon Products, Colgate-Palmolive Co. and P&G. For fast-food seller Yum Brands, China represents 20% of the company's worldwide measured spending of $1.41 billion. The parent of KFC and Pizza Hut generated 31% of 2008 revenue from its China division, where sales surged 36%.

Leaner, Faster, Better & eLink Media...

When Wm. Wrigley Jr. Co. dumped Digitas, Tribal DDB and Agency.com for a trio of smaller, production-centric digital shops last week, it did more than deal a setback to three global interactive agency networks. It raised the question of whether big digital agencies are being outflanked by leaner, faster, more-creative shops.

Those agencies and their peers routinely hire the likes of Big Spaceship, Firstborn and EVB -- the troika that swiped Wrigley -- to help execute highly technical creative projects the agencies dream up for global-scale clients such as the gum maker. Now those little shops are moving into direct relationships with marketers such as Pepsi, Microsoft, Adidas and Pernod-Ricard, and leading some to wonder whether the biggest digital players are becoming unnecessary, pricey middlemen.

And that's not the only squeeze going on. As old-line agency networks build better digital units, they're increasingly competitive with the bigger digital shops because they can offer similar scale. Case in point: Havas' Euro RSCG 4D's recent takeaway of IBM's digital account from Digitas. These developments, to be sure, don't indicate the same kind of disintermediation that's gone on for traditional ad agencies. However, they do point to the intense level of competition for marketers' digital dollars and acts as a reminder that no one agency model is likely to dominate. That's cold comfort for the holding companies that have laid out big chunks of money for digital agencies in the hopes they'd become the solution much in the way BBDO and McCann were in a previous era.

Different structures
Mr. Lebowitz said Big Spaceship is fast because it's "flat" and not organized around the traditional cascade approach, where strategy flows to production to design to technology.

"We're in a transitional phase where larger digital shops have huge infrastructure that some big clients need, and in a lot of cases [have] grown so large that they don't have the creative capabilities that we or our peers have," said Benjamin Palmer, cofounder-CEO of 70-person independent Barbarian Group. Last week Barbarian was the subject of talk that it was being purchased by Cheil Worldwide, the South Korean-based agency network partly owned by Samsung. Barbarian denied the rumors; a staff memo from President Rick Webb said the shop is looking at several options. Barbarian has had a mix of largely project-based work both in direct-client relationships and as a production partner to agencies.

Big digital agency CEOs acknowledge that budget-conscious marketers -- a group that certainly included Wrigley -- are going to be tempted to cut out the middle man if they think they can get the same quality of work. "I think the primary driver is cost," conceded Tribal DDB CEO Paul Gunning.

Mr. Gunning and his big-digital peers said that marketers who go that route risk getting what they pay for, arguing that, as companies invest more in digital, their needs in that area will require more service than production-centric agencies are equipped to offer.

"Being a standalone production-oriented company isn't going to cut it in this increasingly complex world," said Tom Bedecarre, CEO of AKQA, a 750-person independent digital agency with six offices globally. "Great shops like Barbarian and Firstborn will be pressured to do more services in more places."

Added Razorfish CEO Bob Lord: "If you want a company to do banner ads and microsites, there are agencies that can do that and well. But if you want a comprehensive experience, to bring your brand to life in digital -- it could be retail -- you want a company like Razorfish."

Big agencies still a threat
Mr. Lord instead thinks the real threat comes from traditional agencies with sophisticated digital sub-brands, as evidenced by IBM's move from Digitas to Euro RSCG 4D. John Kennedy, VP-corporate marketing at IBM, said Euro's "deep digital expertise" and "broad global footprint" influenced the decision to shift.

"We definitely compete more in the traditional area," Mr. Lord said. "My competition is those bigger agencies that have full-service suites." According to a Bain/IAB marketer study, most marketers use the same agency for online and offline creative and tend to be more satisfied with online than advertisers that use separate agencies.

Then there's the overarching question of digital strategy and understanding how individual projects fit into a client's larger picture, a capability still widely seen as an advantage big digital shops hold, owing to a relentless focus on ROI that comes from years selling big clients on an emerging medium. "We have the tools in place to watch that behavior and make conclusions, that's strategy," Mr. Gunning said. "The type of people Tribal looks for is strategic and big idea thinkers. It's a fundamental difference."

To some extent, AKQA's Mr. Bedecarre agrees. Wrigley's category, he said, is impacted by "cool and current" work for young audiences. "It sounds like [Wrigley was] shopping for creativity," he said. "They can because of the audience and the product, there isn't a lot of backend."

PepsiCo is another big brand leaning toward production shops. The soda maker recently tapped Brooklyn-based Huge to build a platform for brand Pepsi. With nearly 200 employees, the agency is larger than the digital boutiques, and was recently acquired by Interpublic Group of Cos., but it has a strong heritage in website development. Pepsi also dropped Arnell Group for Sobe and brought in Firstborn to lead digital. A review for an interactive agency for Amp might be another nail in the coffin for big digital. It's pitting Wrigley winner EVB against loser Tribal and two other agencies.

Production companies?
Execs of big digital shops continue to call these boutiques "production companies," which underscores their disbelief that they can pair that creativity with big-picture strategic thinking for clients. "Why are we still talking about the production structure, if everything else has changed?" asked Mr. Lebowitz. "Because we do production doesn't mean we're production companies."

The boutiques have a history of working with lead agencies -- Firstborn with Tribal for example, tBarbarian with BBDO recently for HBO -- to come in and polish or extend a creative idea into digital. From those relationships, lead agencies came out viewing boutiques only as highly skilled in executions, while the boutiques maintain that they did influence strategy in those roles, and picked up a few pointers along the way.

"We've had the good fortune of learning from our many relationships with big agencies," said Michael Ferdman, founder of Firstborn. "And we have been doing a lot of strategy and thinking and not getting paid for it."

Slowly though, agencies such as Firstborn and Barbarian have been staffing in new ways to attempt to build strategy muscle. Firstborn has brought on account planners and its first copywriter, and is considering adding a strategist with traditional agency experience.

"The natural growth has been that we have a client-service department," said Barbarian's Mr. Palmer. "We hired a person here and another there, and all of a sudden you see we're completely capable of handling a bigger client."

Nevertheless, Firstborn's Mr. Ferdman tempers recent direct-to-client wins on Wrigley and Sobe by underscoring how central work through lead agencies remains to his business. Relationships with agencies such as Team Detroit and Ogilvy are a key part of his growth strategy. "By no means am I interested in not having that balance," he said. "We still have a lot to learn."

And it's not the only one. "It's time for the big agencies to be much more nimble," said Seth Solomons, chief marketing officer for Digitas. "I think big, costly and slow is not something clients are looking for."

Wrigley's agency dilemmas & eLink Media...

In the ever widening war to both acquire new clients and retain existing clients, the newest large Brand advertiser to jump ship is Wrigley.

Wrigley is yanking digital agency-of-record duties from Tribal DDB, Digitas and Agency.com and shifting to a creative shootout strategy between a roster of agencies including independents Big Spaceship and Firstborn, and Omnicom majority-owned EVB, according to executives familiar with the matter.

Yesterday, a memo went out to the confectioner's agency partners that Wrigley will not maintain digital agency-of-record distinctions in 2010 for the majority of its confections, gum and mints brands. Instead, the roster shops will present strategic recommendations across brands and participate in brand planning and execution for particular assignments as needed across websites, display advertising and mobile. The decision was made following a recent review of Wrigley's agency relationships, and the roster was compiled without a pitch.

"The multi-agency roster creates the best opportunity to drive innovation, value and breakthrough execution," said the Wrigley memo.

According to one person familiar with the matter, the digital agencies will work directly with Wrigley's individual brand teams on projects, rather than through its main Omnicom creative agencies, DDB and BBDO.

The roster shops, especially Firstborn and Big Spaceship, have a heritage in digital production work and have often partnered with lead agencies to execute highly technical creative ideas. Recently, these small independent operations have been winning increasingly more direct-to-client work.

What does this say about the current state of advertiser-agency relationships? If you're not being proactive and innovative in digital, you had better be ready to defend.

IAB/Display Standards & eLink Media

The Interactive Advertising Bureau is pegging its members' future growth on the likes of Procter & Gamble, L'Oreal, Kraft and Pepsi. The problem? Most online media companies don't know how to sell to them.

Those advertisers represent the brands that are most focused on brand-building and yet spend the least on the internet, according to a study by the IAB. The idea is that while direct response has been thriving, both before and during the recession, brand advertising on the web has not, and it represents the greatest growth upside.

The IAB has developed for media companies is a series of mandates: improve display creative, agree on new brand-friendly metrics, refine targeting options and build industry-specialist sales and marketing teams. Oh, and make the buying process easier, too.

Buyer's market

In 2007, you could go to publisher's site and it was a seller's market, $12 CPMs. But as big brands like Verizon and Charles Schwab, you name it, started understanding ad networks, it became more of a buyer's market. You weren't going got get $12 CPMs for vanilla inventory. CPM refers to the cost to the advertiser for reaching 1,000 viewers.

But, he added, "being able to attract brand dollars will be important to maintain premium pricing and value of contextual environments."

A big part of the problem is the dearth of effective and engaging online creative -- it's an industry that's beginning to reach maturity but with immature inventory that looks, in many cases, like it did years ago. It's full of small format, non-interactive 2D display ads on often-cluttered pages. And when marketers and agencies can't create those assets, the onus might fall on media companies.

"Agencies also have to think about how to take advantage of the medium," said Sherrill Mane, senior VP-industry services at the IAB. "If an agency isn't able to produce the creative that captivates and does more for brands, then media partners will."

New metrics

It is also suggested that a new set of performance metrics that look more like what brands are used to in TV and other media, such as unduplicated reach and frequency, and proposes moving to new currency standards that involve engagement and brand-equity measures.

The people who are making these decisions of how much to allocate to online and how to think about that in relation to TV buys are people who've grown up with TV. ... They think online has digital-specialty metrics and they want metrics that speak a common language with the offline world."

Another recommendation? Sellers should realign their sales and marketing teams into industry-specific verticals that sell across multiple platforms, whether those be a combination of online video, TV, print, display or search. According to the survey, the most important qualities for marketers seeking an online ad partner are deep knowledge of the marketer and industry, effective targeting and a strong relationship with the marketer. And over the next three years, they plan to increase their spending on cross-media campaigns.

Interestingly, the reason for the change in advice about integrated-selling approach came from marketers' own structures. It found that most use the same agency for online and offline creative and, across the board, marketers with that arrangement tended to be more satisfied with online capabilities than marketers who used separate online-offline agencies were.

Marketing & The End of the Recession....

Here at eLink Media, we agree with the ANA in that if you're waiting for Federal money to bail you out, do yourself a favor and get out of business now...

If someone is going to lead the U.S. out of recession, the Association of National Advertisers made a case that it should be the marketers, trotting out a group of CMOs to detail how they've led major turnarounds or fueled record growth during the group's annual conference.

This is the second year the ANA has pushed the growth theme. Last time, the idea was swamped by a global economy teetering on the brink of utter collapse. With things less dire, the message became easier to believe this year.

eLink Media & Client Advice...

At eLink Media, we are used to giving clients advice as to where the market is going and how to stay 2 steps ahead in the competitive world of online advertising. For about a month, we have been advising clients that they should plan early for Q4 because the DR (Direct Response) model is now being following by traditional advertisers who have to be more ROI concious than ever.

This morning, this announcement came over the wire: Expect to see less of Snuggie and ShamWow on TV in weeks ahead as one of the best-ever markets for direct-response buyers lurches in the opposite direction.

A rapidly tightening scatter market is leaving Snuggie and other DRTV marketers in the cold as traditional advertisers snap up the remnant time slots once left to them. "This is probably the tightest time I can remember in my history with direct response," said Scott Boilen, president of Allstar Marketing Group, the company behind the Snuggie. "We were the industry that took what's left," he added. "And there's not a lot left right now."

Mr. Boilen dates the shift to July and said it's continued into the fourth quarter, an apparent outgrowth of deals made in an unusually contentious upfront, when the networks held back more scatter inventory than normal.

The tightening is a result of some established advertisers adding to their upfront buys, along with networks having to offer inventory as "make-goods" to make up for ratings shortfalls over the past years. Larry Novenstern, exec VP-director of national and local broadcast at Publicis Groupe's Omnimedia called this "a combination of slightly reduced supply and slightly increased demand."

The networks are not at all displeased to see DRTV advertisers getting knocked out of some of the roosts they've enjoyed during an economic downturn, because they typically pay lower prices than the norm. "In the malaise that was out there in the first six months of the year ... you saw a lot of direct response popping up in network prime time," said one media-buying executive. "Well, not right now."

Shorter spots with fewer cracks at affordable TV slots, Snuggie, which had launched last year behind primarily 60- and 120-second spots, has down-shifted to 10-, 15- and 30-second commercials, Mr. Boilen said, noting that other DRTV advertisers are also moving to shorter forms.

With fewer affordable slots available, Snuggie has been running shorter commercials. Gerald Bagg, CEO of Quigley-Simpson Brand Response Advertising, likewise has noticed the tightening, but believes the market is already starting to shift again and will normalize by the first quarter now that direct-response time is no longer a bargain.

Media sellers probably discounted their pricing too much in upfront negotiations, he said, leaving more marketer money on the table chasing a shrinking amount of scatter inventory now. "I think everybody overreacted to market conditions," Mr. Bagg said. "It's akin to the stock market collapsing and people, instead of holding onto their shares, selling and losing value. ... But it's a short-term hiccup, and I don't think it's going to prevail much longer."

"All the consumer-products companies and other big advertisers have renegotiated their rates, so they're able to buy more time, and things are back to where they were [before the recession] or even worse for us, because people are advertising more at the lower rates to try to make up for lost sales," said A.J. Khubani, CEO of TeleBrands, marketer of such products as PedEgg and JupiterJack.

Direct-response marketers are still being helped by retailers giving their products more prominence as other categories have softened, Mr. Boilen and Mr. Khubani said. Mr. Khubani said the "as seen on TV" category has surpassed cold and flu as the second-largest category, behind prescription drugs for major drug retailers, and the strength of DRTV products has helped make TeleBrands a vendor of the year at such accounts as Walgreens and Target in 2009.

Advertisers With Agencies or Versus Agencies....

At eLink, we believe in working with the client, not against them or ignoring their input. We ask our clients to trust us, and we in turn trust them. When that trust and rapport is not established, the whole relationship is doomed. Case in point, UPS....

Citing frustration with the client, WPP's JWT has pulled out of contention of shipping giant UPS' $200 million-plus global advertising review, according to executives familiar with the matter. Left as finalists are WPP sibling shops Ogilvy and Y&R, and Havas' EuroRSCG.

"UPS is a big business with a very big problem to tackle," said JWT Chairman CEO Bob Jeffrey in an internal e-mail. "They need to treat us or any agency as a partner and it doesn't seem that is in their culture. We've invested significant time and energy in pitching this business so we are not taking this decision lightly."

Representatives for JWT did not immediately return calls. UPS declined to comment on "the details of the process, or about where the shortlist stands."

But JWT's withdrawal comes as a decision on UPS' new global agency of record has been delayed for several weeks -- a consequence, some people familiar with the pitch say, of procurement being heavily involved in the process. UPS' domestic incumbent, Interpublic Group of Cos.' Martin Agency, initially said it would defend the account when it went into review this spring, but later pulled out of the pitch. Whatever the outcome of the pitch, managed by AAR Partners in London, UPS will part ways with Martin and its global incumbents, McCann Erickson, Universal McCann and MRM as of early 2010.

UPS spent nearly $140 million on domestic measured media according to TNS Media Intelligence, but its outlay globally is thought to be more than $200 million.

eLink Media & Social Media...

Recently, Heidi Browning left MySpace to return to the agency world at Universal McCann. In a recent interview about the subject she was asked and answered the following interaction:

"What did you learn at MySpace that has equipped you for this role?"

Ms. Browning: A lot, like the notion of how, when and why to think about social in campaigns and what it actually takes to deliver on that, because, as we know, a lot of people think about social media on a campaign-by-campaign basis and it's really much bigger than that. It's infused into your entire business: how you communicate with customers, how you influence your product, how you market and how you do promotions. There's so many different aspects that touch your business that are social and so taking that experience and knowledge and knowing what works and doesn't work and being able to apply that to Universal McCann's clients is going to be enormously useful.

Well that's great if the objective is brand extension or brand awareness. The concern coming from a practicality standpoint is "where in that statement does the terms results, focus, or ROI appear?" Social media may be the next new frontier, but until someone can demonstrate how an advertiser can truly monetize the traffic, this remains a shot in the dark.

eLink Media vs. "Traditional" Ad Agencies

Chief creative officers at large U.S. agencies, on average, billed $964 an hour to clients in 2008, while top account and media executives billed an average of $533 and $478 an hour, respectively.

Those are just a few of the enlightening figures contained in a soon-to-be widely available 117-page survey conducted by the 4A's that details labor billing practices at ad agencies around the country.

In the past, the trade group has compiled and distributed such information for its membership, but never shared it broadly. Tom Finneran, exec VP-agency management services at the 4A's, said the decision to spread the data comes partly because the organization has been inundated with requests for information about labor billing rates. It also wants to provide credible benchmarks for these fees -- which, for all the talk of value-based models -- are still the predominant form of agency compensation today.

"Everyone is seeing requests for proposals more and more ask for rate comparison data ... clients are looking for ways to do their due diligence and to have some kind of market-based information," said Neal Grossman, chief operating officer at TBWA/Chiat/Day in Marina Del Rey, Calif., who also serves as chair of the 4A's large-agency finance committee. At the same time, agencies are increasingly under pressure to show that the labor rates they charge are competitive with the marketplace, as clients' procurement departments play a bigger role in selecting agency partners.

The 4A's culled data for the report from its members between May and August 2009, asking them about hourly rates billed to clients in 2008 for some 130 positions across 14 service departments, such as creative, media services, account planning, research and print production.
Bigger pictureOver 230 marketing agencies of varying sizes, geographies and specialties responded to the survey, though the majority netted out to be full-service shops. Among the ones represented in the study: BBDO, TBWA/Chiat/Day, Crispin Porter & Bogusky, McCann Erickson, Digitas, MediaVest, JWT, Y&R and Carat.

It's important to note that the rates reflected in the survey are what agencies quote on their "rate cards," and the rates actually negotiated by clients may come in lower. Still, it's a pretty comprehensive snapshot of how much marketers are paying for agency labor. It offers data points for four different regions of the country, average labor-billing rates and mid-range data for rates (kind of like Olympic scoring, it knocks off the 20% of the highest rates and 20% of the lowest rates).

The survey reveals just how much geography can affect billing differences for highest-level positions, though that doesn't seem to make much of a difference for mid-level or junior positions.

In 2008, a director of client services in the New York Metro area billed an average of $453 an hour compared toh $260 an hour at agencies in the middle part of the country, while an account supervisor billed clients between $140 or $150 on average, no matter where they were located in the country.

Some other geographical differences: An executive director of account planning in the New York Metro area billed $545 vs. between $315 to $355 in other parts of the country. Research directors in the South made about $277 per hour vs $520 in the New York Metro area last year.
With a top creative, the disparity in billing rates is huge: A chief creative based in the New York Metro area billed an average of $751 an hour last year -- more than double what a chief creative in other parts of the Eastern U.S. or in the South billed, at $319 an hour. In the central part of the country, a head creative billed an average of $420 an hour, and in the West, an average of $461.

Not typicalDavid Beals, president-CEO at industry consultancy Jones Lundin Beals, estimates that "very senior positions at large agencies are rarely billed out for more than a percent or two of the person's time ... if a person at this level bills more than 25 to 50 hours of time to a given client, it would be rather unusual for most of the agency's client relationships."

Based on the 4A's survey, that nets out to a minimum of more than $18,000 billed to a client for a top creative in the New York Metro area.

For all the talk about media agencies becoming a more valued partner during the recession, they're not compensated nearly as much as other positions: An executive media director at a media agency bills a mid-range high of $500 and low of $281, while a media buyer makes a mid-range high of $100 and a low of $65.

According to Mr Beals, the numbers track with agency labor-compensation trends for several years: "Typically, the creative folks make the most money on a per-hour basis -- though sometimes a really good strategic planner will be right up there too -- followed by account services, then media services tend to be the lowest paid."

As digital talent continues to become more sought-after, the trend is probably more in a state of flux, Mr. Beals said. In 2008, the range of hourly billing rates at digital specialist agencies was between about $400 an hour for the senior-most roles and $85 an hour for the most junior.

eLink Media & Display (or lack thereof)...

The number of people online who click display ads has dropped 50% in less than two years, and only 8% of internet users account for 85% of all clicks, according to the most recent "Natural Born Clickers" study from ComScore and media agency Starcom. As the pool of people who click on banner ads rapidly decreases, it begs the question: Is the long-used click-through rate now officially useless?

Clickers only represent 16% of U.S. internet users, according to ComScore data from March. The study initially found that 32% clicked on display advertising in July 2007. If that first study, released last year, crystallized skepticism that click-through rates weren't the be-all end-all success metric for display, this most recent report might just be the last nail in the digital coffin.
What's more, the 8% of internet users that compose a majority of clicks is also down by half from the last study, which found 16% are responsible for 80% of clicks. The 2008 study found half of all clicks come from lower-income young adults, so prizing clicks ignores the vast majority of internet users, especially the types of users many marketers want to reach. This year, the study focused more on alternative measurement, suggesting that a low number of clicks doesn't necessarily mean banners don't work, but that marketers are looking at the wrong success metrics.

From client studies, ComScore found that display ads, regardless of clicks, generate significant lift in brand-site visitation, trademark search (searching for, say, Toyota or Prius) and both online and offline sales among those exposed to the ads. Within one week, consumers exposed to a display ad were 65% more likely to visit the advertiser's site than users who never saw the ad. Even at four weeks, people exposed to displays ads are 45% more likely to visit the brand's site.
"The click has always been of dubious value," said Joshua Spanier, director of communication strategy at Goodby, Silverstein & Partners. "But clicks are easy to understand and easy to measure. We still know that display advertising has unequivocal value; your search performance improves as well. Together, search and display are much stronger than apart."

So what your agency is basically telling you is that it's not that display doesn't work, it's that the entire value of the measurement system is wrong. But keep dumping money into a channel that now delivers very little to no metricable results.

Agency/Reference Reviews...

Clients want agency & reference reviews. The question now becomes, why? The review process is meant to be a screening format to put your best foot forward. What actually happens (for the most part) is what is revealed by Ignited about the recent Zappos.com agency review:

Zappos' agency review, launched this summer, quickly attracted widespread interest from the agency community, as the marketer has been a darling of the advertising world with much-admired customer-service smarts.

Zappos had worked with Ad Store, New York, and Gotham Direct. Originally, the retailer contacted 16 agencies but later opened up the process to more respondents, eventually attracting more than 100 shops.

One of the participating shops, called Ignited, tracked the amount of time Zappos spent reviewing its submission. With the help of Google Analytics, Ignited found that the retailer had only viewed five pages of its 25-page submission, with an average page-view time of 14 seconds. Ignited then publicly criticized Zappos for what it felt was an inadequate review.

14 seconds per page on the first 5 pages of a 25 page review? I wouldn't even call that skimming. It's like anything else when it comes to marketing. The more real you are, the best response you get.

If you not testing and trying, you're dead....you're just not broke.

Luxury Marketers Move Online but Most Lack Digital Cunning

NYU Stern Study Shows Recession Pushing Brands to Belatedly Innovate Web Efforts 'Out of Necessity'

Despite an increased number of luxury brands finally moving online, most luxury brands lack digital savvy, said Scott Galloway, an associate professor of marketing at NYU Stern School of Business who looked at 109 luxury brands across 11 categories, including fashion, electronics, jewelry, hotels, and automobiles.

During the flush years, luxury brands seemingly cemented their exclusive status by shunning one of the ultimate mass mediums, the internet. According to a new study, only 33% of luxury brands were selling online a year ago, but the recession has had a profound effect, as 66% of luxury brands are now peddling their wares on the web.

Ralph Lauren has bested many of its luxury peers in the mobile space with its iPhone app. But, despite the increase, most luxury brands lack digital savvy, said Scott Galloway, an associate professor of marketing at NYU Stern School of Business who looked at 109 luxury brands across 11 categories, including fashion, electronics, jewelry, hotels and automobiles.

"It was fine when revenues were growing 11% a year. And then everything changed. They've woken up and said, 'Last holiday season sales were down 34% but traffic to our website was up 61%.' Brands are innovating out of necessity."

In his study, Mr. Galloway awarded brands designations of "Genius," "Gifted," "Average," "Challenged" and "Feeble." He found that the high-end automobile and electronics categories tended to have more digital savvy, while the cruise and tours segment, along with jewelry, were the least savvy.

Luxury marketers' fear of losing control of their brands, when coupled with a lack of digital and social-media skills, has contributed to the dismal state of the category online, Mr. Galloway said. But he expects that will change dramatically over the next 24 months, as brands realize they can't ignore technology. The days of a tightly controlled brand, with beautiful merchandise and flagship stores at tony addresses, along with ads shot by high-profile names in Vogue and Vanity Fair, are over, he said.

But some brands have been rolling with the times, and it's probably no surprise that Apple and Sony have been at the forefront with robust digital presences that utilize search and incorporate video and user-generated content. In the auto category, more than half of the brands in the study are reaching consumers via mobile devices. BMW sends text messages to remind owners to purchase winter tires, while Ferrari's mobile game lets users customize and race vehicles.
There are other bright spots. Ralph Lauren has been aggressive in the mobile space, with the launch of an iPhone app. And Estee Lauder has a makeover widget that allows users to upload a photo and virtually test products on their faces.

When it comes to Twitter and Facebook, luxury brands are making a showing but have not had nearly the same impact as other marketers. The Four Seasons and Fairmont hotels have separate Twitter accounts for each property and post updates with special events and promotions. And Trump Hotels, tweeting via Twitter, boasts the largest number of followers, just shy of 260,000. After Apple, Lamborghini has the highest Facebook fan count, with about 1 million fans.

Still, less than half of the brands included in the study purchase search terms.
Mr. Galloway suggests that the excuse that luxury customers are not online is dated, pointing out that 40- to 55-year-old women, a sweet spot for these brands, is the fastest-growing segment on Facebook. Likewise, Generation Y, a growing group of luxury consumers, is poised to outnumber baby boomers by 2010.

"Luxury has become very complacent, as they've had the curse of being monstrously successful over the past 20 years. There hasn't been a great deal of urgency around innovation," he said. "All of a sudden the model has become very broken."

Breaking down the digital IQs:

BEST IN CLASS:
Automobiles: BMW
Beauty & Skin Care: Clinique
Credit Cards: American Express
Cruises & Tours: Orient Express Hotels
Electronics: Apple
Fashion: Louis Vuitton
Hotels: W Hotels
Home & Design: Viking
Jewelry: Tiffany
Watches: Tag Heuer
Wines & Champagnes: Veuve Clicquot

'GENIUS' BRANDS
Automobiles: Audi, BMW, Porsche
Electronics: Apple, Sony
Fashion: Louis Vuitton, Ralph Lauren
Watches:Tag Heuer

'FEEBLE' BRANDS
Beauty & Skin Care: Stila
Credit Cards: Coutts & Co.
Cruises & Tours: Windstar Cruises, Abercrombie & Kent, Travcoa
Fashion: Bottega Veneta
Hotels: Waldorf Astoria, Trump
Home & Design: La Cornue
Jewelry: Buccellati, Faberge, Graff
Watches: Franck Muller, Bulova
Wines & Champagnes: Korbel

eMail Loyalty Programs....

Every retailer claims they are engaged in data-based marketing and CRM programs, and indeed, the oft-repeated mantra of retailers is "focus on keeping existing customers over acquiring new customers."

According to David Frankland, principal analyst at Forrester, 33% of marketers cite relevance as a primary factor in the method of communication used to reach existing customers; some 47% say it's often a factor. Yet, he said, "I'd call bullshit on that," pointing out that almost one-third of marketers who capture at least one type of preference data on existing customers take no action based on it.

Indeed, the disconnect is in using data. Retailers have access to or could develop data that is transactional, behavioral, demographic and attitudinal to customize communications, said consultants in the space. But most don't, for many reasons, among them disparate databases running on varying technology platforms, a murky understanding of who owns the data and should be using it and, in some cases, an unwillingness to tackle what can be an expensive and time-consuming project.

Studies have found only 4% of retailers are using purchase histories and transaction data to personalize the content of their customer communications.

"Very few retailers are actually doing a good job of retention and loyalty marketing. Everything else is fundamentally acquisition driven or promotion driven, which is just spam against loyal customers," he said. "That's why you get three to four e-mails per week from every retailer you shop with. Very few retailers understand your behavior and are rewarding you for it."
For many retailers embracing an opt-in loyalty program and then mining that data is the first step toward a more functional data-based marketing program. Best Buy, Neiman Marcus and Sephora,for example, have developed extensive loyalty programs that allow members to earn points and receive targeted communications and special offers. Others, like Amazon, iTunes and eBay, have succeeded at sending specialized offers based on previous selections without the benefit of loyalty programs.

eLink Media says goodbye to display ad networks...

Google is opening its own display-ad exchange today in a bid to bring the technological approach derived from its search-advertising success to the display ad market.

The DoubleClick AdExchange is a rebuild of DoubleClick's old exchange using Google's technology and the first big product launch out of the search giant's $3.1 billion acquisition of the company, completed in 2008.

The new system, under wraps and in testing mode for months, is key to making that acquisition pay off for Google and to helping it take a bigger bite out of the unruly display ad market, which Google has found difficult to tame.

Google's search market matches ad buyers and ad impressions in real time, based on advertisers' bids and a set of targeting criteria. The AdExchange works similarly, but for display advertising. It also includes integration with Google's search ad-sales system, with the idea that it will let search advertisers move money more easily to display and vice versa. In addition, all of Google's network inventory will be available as part of the exchange, not just sites that use DoubleClick for ad serving.

Social Media Snake-Oil

Social Media Marketing:

Recently my colleague and I found ourselves in close contact with a "social media expert." The problem was this expert was sucking in the feed of my blog without permission, attribution and had more holes in his resume than a slice of Swiss cheese. So how do you separate the social media snake oil from the vinegar?" It's not easy, but here's a few pointers:

My last job was selling junk bonds. As I mentioned in social media's dirty secrets, there's a bandwagon to be jumped on. As you do background checks around the people you choose to partner with in social business, you should be able to see ties from the past to what they are doing now. Has this person been working in community- or internet-related fields? That's a good sign. Was this person selling pre-paid calling cards? Maybe not so good. There are no hard rules here, but some previous positions transfer better than others. Use common sense.

I'm an expert, just see the testimonials. Actually there really isn't anything wrong with self-identifying yourself as an expert in a field or including things people said about you. However, it's up to you to leverage tools like Google, LinkedIn, etc., to see what others have said or investigate further -- don't just take them at their word.

I can guarantee you X number of followers. Anyone who starts their pitch by promising friends, followers, or even positive word of mouth is suspicious. This tells you they're looking to "sell you" a quick fix, which is probably in response to people placing such a big emphasis on metrics such as this. A social way of doing business is often a slow burn with complex problems that need to be addressed. There are no silver bullets in an industry built on connections, relationships and the direct empowerment of citizens.

Social media will save you. No it won't. Anyone framing social media as the solution to the world's problems is either drinking Koolaid or looking to make a buck. That said, the prospect of doing business in a socially calibrated fashion is bigger than a new communication channel, it's a shift that's causing changes. However, never confuse shift with salvation.

Build it and they will socialize. Be wary of anyone selling a point solution that promises instant social interactions, conversations, collaboration, etc. Many businesses fail because they were built at the wrong time, in the wrong place or with the wrong tools. Any respectable practitioner will try to investigate where fertile ground is before building anything -- and will tell you if there isn't any.

Bottom line, there's unfortunately a short-term business model for hucksters out to make a buck at your expense. That's because the field is still young and there isn't much that's been established -- it's a bit of a Wild West scenario. This, ironically, is the period in time when the snake oil salesmen thrived.

Facebook Profitability....

Scratch Facebook from the list of web 2.0 startups that don't make money. The world's largest social network said today that it has become profitable.

Co-founder and CEO Mark Zuckerberg said Facebook had crossed the 300 million registered-user milestone and that it had become "cash-flow positive" in the second quarter, ahead of schedule. Previously, Facebook had said it was targeting profitability "sometime in 2010."
Facebook's brand pages, such as this one for Pizza Hut, are popular with marketers.

This is significant for a number of reasons, but mostly because it has done so without a fully developed advertising business. Indeed while Facebook pages and groups are popular among brands, Facebook itself is still figuring out the right ad model for social networking, beyond low-cost display ads. Facebook's other revenue models are also nascent, including virtual gifts, commerce and a payments system now in testing phase.

The problem being now is that will this profitability for Facebook translate into actual returns for advertisers using social media. So far...not so much, but will this trend change?

eLink Media, GM, CEOs, and Ads....

It isn't a new idea for General Motors to star Chairman Ed Whitacre in advertising, but is it a good one? For too long now, the consumer public has heard "heart-felt" confessions and ads by CEOs in a vast array of verticals. But trotting out your CEO to pitch is like playing with hand grenades. If you come out unscathed, you're a genius....if not, don't be around when the first one explodes. Will this tactic work for GM?...only time will tell, but in the day and age when foreign competition exudes a confidence and youthful spirit, rolling out a 70+ CEO of a bankrupt and federally funded conglomerate hardly gives the same impression.

Flexibility & Strategy in Marketing...

Great Interview with Best Buy CMO Mike Linton about flexibility....


Given that innovation is the only sustainable advantage these days, advertisers need to allocate at least 10% of their marketing budget to foster it, even in these economically challenged times, said former eBay and Best Buy CMO Mike Linton, who spoke to an audience at the Aberdeen Group's Chief Marketing Officer Summit here yesterday.



Mike Linton Innovation, by Mr. Linton's definition, is any action taken by the brand that changes consumer behavior in favor of the company, and that can range from a new product to a new way to service customers. While it's no surprise that Starbucks has managed to build a massive social-media audience, considering that it gives away latte coupons on Twitter and Facebook, innovation is also when a toilet-paper brand can get consumers to tweet about how soft its product is and show brand in a new light.

Any marketer standing still at a time when the consumer is ahead of the brand is bound to lose, said Mr. Linton, now a Forbes columnist. And amid the wide array of choices that consumers have today, fickleness represents a greater challenge than ever and loyalty dissipates that much more quickly. "Without innovation, you end up in a defensive position," he said.

Yet at a time when marketers are challenged to produce immediate returns, how can they balance the need to innovate against the pressure to produce bottom-line quarterly results?

Mr. Linton offered a few tips for driving innovation that don't require rich resources:

1. Just go for it.
If it's true innovation, you won't know everything about it, including how to measure it. Don't spend precious resources planning and testing your new approach or product until everything's in perfect alignment, he said. Though it can be a bit scary to navigate in uncharted territory, the price to pay for holding back is that your competitors may be on the verge of launching the next big thing that could render your brand passé.

"You have to keep pace with the market, and [that means] the marketers have to get comfortable with the ambiguity," Mr. Linton said.

2. Give your team incentives to innovate.
One tactic Mr. Linton has leaned on is to compensate his teams not only by how they measure specific functions, but by the totality of the customer experience, such as store sales, customer complaints and other metrics.

"I paid my team on total ROI first," Mr. Linton said.

If you pay your search-engine optimization guru solely by click-throughs or the media buyer strictly on media efficiency, you're encouraging them to think in silos and not outside the box. For example, if you set the success metric for customer-service reps to handle incoming calls within five minutes, you could be compromising their level of care in handling more time-consuming, complex customer-service issues.

3. Make sure you have at least one new thing every year.
As you prepare your annual business plan, ask yourself if you have anything new in the roadmap that wasn't there last year. You have to constantly ask: "Are we on the offensive? Who's our real competition?" Mr. Linton said.

"What are you doing that's new this year? If you don't have something new, someone else will," he said.

4. Use the 70% rule.
If your team feels there's a 70% chance that an out-of-the-box initiative based on rough math and intuition will deliver significant learning and success, you should go for it. "You have to have a belief that it's going to work for you," Mr. Linton said.

5. Don't be blindsided by the competition and get lost in what innovation is.
Record labels still believed they were each other's competition even as they engaged in legal battles with music download, peer-to-peer sites and the consumers who used those sites. They didn't see that consumers were bypassing the $19.99 CD en masse while Apple created a colossal digital-music franchise.

By the way, innovation isn't printing $1 coupons when the 50-cent coupons don't work. "If you temporarily buy your way to greatness, that's a problem and it's not going to solve the long-term problem," Mr. Linton said. "Pricing only solves long-term problems if you only compete on price."

Stop Talking Marketing-ese....let's talk about BUSINESS!

Salespeople understand the concept of deadbeat conversations and avoid them like procurement-driven RFPs, but marketers haven't yet learned a very critical lesson: A lot of the conversations we engage in aren't worth the effort.

Conversations that don't go anywhere drive me crazy. You know, the customer service rep who never sends you that critical e-mail he promised. Or that prospect you take out to lunch once a month who never hires you. Or those 2,000 people who follow you on Twitter but never even glance at your website.

Yet for some reason, we marketing folks worship the conversation. If the economy ran off of talk, we'd be rich. But it doesn't. We can talk with an audience forever, but if we can't get them to take an action that helps get money into our pockets, our business is dead.
Salespeople understand the concept of deadbeat conversations and avoid them like procurement-driven RFPs, but marketers haven't yet learned a very critical lesson: A lot of the conversations we engage in aren't worth the effort.

Most conversations are wastedMost marketers fail to build a strategy to get what we want from our conversations. The main reason we tend to ignore conversation strategy is because most of us have been raised in marketing silos. Brand advertising may not drive sales right now, but sooner or later everybody buys, right? That's what we've wanted to believe.
But the proliferation of addressable media is giving us the ability to highlight, for the first time, the conversations that meet the goals of our strategy and, perhaps more importantly, those that don't.

My team is just as channel-agnostic as I am, and we work with analysts who can pick up the faintest signal in the most chaotic of background noise in any channel. You put these two together, and you begin to see patterns: People who are exposed to a bunch of brand impressions, banner ads, magazine articles and social media messages about a product have a much higher propensity to buy.

We've been studying and practicing this for years. We might, in the best of all worlds, get as many as 10% of targeted prospects to make a purchase over a five-year period. And we're giddy from that. Slaps on backs all around.

But then think about the inverse. Nine out of 10 of those conversations we had for five years didn't get us any financial return.

Marketing drives sales, not conversationsI see evidence that marketers are paying more attention to what is worth doing and what is not. Gian Fulgoni, chairman and co-founder of ComScore, speaking at the OMMA conference on July 31, said we should stop using clicks as the primary measurable unit in interactive marketing. Why? Because display ads and search ads play off of each other in ways that mere clicks won't capture.

He's a smart man, and he's right. But I think he'd agree it's much, much bigger than clicks.
In the new world of marketing, agencies are more like orchestra conductors than musicians. No channel has much value on its own and good ol' Internet Protocol (IP) can tag nearly everything from banner clicks to TV commercials, which allows clever analysts to discern whether the guy on the freeway who's looking at your billboard is going to buy your product. What really excites me in all this is our growing ability to identify and filter out the deadbeat conversations.
From the perspective of business strategy, all media and communications are the same. There are conversations going on all the time, some of which mention your product and influence sales but that aren't directly due to anything you've done. That's the background business as usual, the sales you'd have if you stopped doing any marketing at all (in the short term anyway -- the background sales would also slowly fade without marketing support). But then there are stimulated sales that result directly from some action we've taken.

Is there an equivalent of stimulated sales in social media? Absolutely -- it's the conversations we have that spur a sale. Even more pointedly, can we measure it? The answer is yes, we can. There are lots of companies out there doing it, including my own. We're getting better at it all the time. And while details are proprietary to our clients, I can say with certainty that social media mirrors all other conversational channels -- about 98 percent of conversations are really just people talking, the business as usual background noise that defines modern society.
And that's fine. There's absolutely nothing wrong with that. It's admirable to sustain all the conversations you can, but if you're doing it for business reasons, you must realize that there is zero return on your investment for nearly all those conversations, regardless of where you have them.

The trick is to identify the wasted conversations before you have them, or at least as soon as they become obvious. The good news is we marketers have been doing that for decades in channels from telephones to email. Now we just need to start doing it in social media using the same business rules.

All it takes is knowledge and the discipline to hang up the phone on unhelpful support reps, stop buying lunches for prospects who will never help or hire us and unfollow those Twitter people who do us no good. Only then will our conversations start being worth our marketing effort.

Don't Give the Client what they think they want...

...Give Them What They Never Dreamed Possible!


“Isn’t that why they hire us in the first place?” I remember it like it was yesterday. My first real mentor at a client showed me a creative philosophy that he wrote. His philosophy had ten simple ideas about how to run a department. This was one that really stuck with me. It also forced me to ask this question at least a thousand times through the years in this fantastic, frustrating, exhausting and exhilarating business. "Why are we so quick to give a client good when great is out there waiting to be found?"

Creativity and accountability are alive and kicking, so how do we surprise our clients and prove that we’re worth our salt? I believe the answer is simple: Stop trying to just solve advertising problems and start solving business problems.

Cut to the chase to find out what the real problems are with our clients' businesses. What keeps them up at night? What are they not getting from their other strategic partners? We stop trying to come up with the next cool creative, and instead help them understand how to transform their business. Ironically, most of the time, a subject line or creative comes out of it. When all is right in the ad world, all of these things are working together.

Marketing Do's & Don'ts...case in point, VW.

In the marketing world, be it online or offline expectations are key. Working with clients is challenging in not only meeting expectations, but having those expectations change. Advertisers are great in understanding what they think they want. What they don't really have much understanding is how to get to where they want to be. Case in point, Volkswagen. Volkswagen wants to triple its US market share in the next 5 years. With a serious of 'edgy' ad campaigns both on TV and online, they have become a serious auto play in the consumer market. So what's the next logicial step? Fire your agency. At eLink, we stress to clients that consistency is king. Whether it is being consistent in messaging, or in campaigns, hitting the panic button and pausing existing campaigns is not in anyone's best interests and gives the client a bad reputation in the market.

Keys to success for advertisers:
1) Be Consistent
2) Stay on Point
3) Remember that marketing is trial and error, not an exact science.

eLink Media and confirmation of the value of email marketing...

Growing businesses need to increase their measuring of email marketing metric in order to improve their results, according to one expert. One chief strategy officer, claims most email marketers only measure aspects such as open rates, click rates and bounce rates.Writing in a post for DMNews.com, the expert added that other aspects of measurement need to be implemented, including asking what proportion of site traffic came from email marketing and "how much revenue" that extra traffic brought.Other essential metrics include knowing how long people brought to the site by email marketing stayed there and which "landing pages and products" were popular among them."The fundamental shift that web analytics integration brings to your email marketing is clear and accurate visibility into financial results. You'll find your thinking will change from driving behavior at the beginning of the sequence to driving revenue at the end," he stated. More competitors need to follow eLink's advice and find out information about industry trends and new approaches in order to remain competitive.

CMO positions influx!

eLink Media prides itself on better service and better client support than anyone else in the industry. With so many CMOs under fire at large advertisers (PepsiCo, GM, etc.) our position has been what we always preach: Consistency. Consistency in the market, consistency in service, consistency in campaigns. When will big players understand that the strategy is a plan, and you need to stick to it in good times and in bad?

Record August!

With all the talk about economic conditions, and the lack of quality publishers available in the marketplace, eLink Media has broken our company record! Thanks goes to all staff and campaign managers, but most of all to our clients. You have instilled faith and trust in us and we have not let you down. In beating expected targets, this month gives us the resources and flexibility to be able to provide you with more data, more services, and even better results. A great job by all!

eLink Media and Character

At the start of 2009, and continually throughout the year, eLink Media management had laid "very clear" expectations while listening to what his employees believed to be the firm's strengths and weaknesses.

Then, along with other firm executives, we established a sense of accountability, a core expectation of "consistent delivery" and goals for the company, which included becoming highly competitive; delivering on "the promise of our name"; and starting to develop a more challenging mind-set.

Results: The most consistent atmosphere in company history and the best client roster we've ever had. Great job to all, and let's keep that consistency going!

eLink Media & Marketing Mergers

With the ever-changing world of online marketing, mergers happen all the time. What will be the effect of the buyout of Zappos.com by Amazon http://tinyurl.com/m8p3eh ? Our stance is what it is always been: to give consistency in an inconsistent market. The players may change, the game may adapt, but we're committed to rolling right along with it.

"The SalesMan"

Salesmen are a big problem to their bosses, customers, and wives, to credit managers, hotels, and sometimes to each other. Individually and collectively they are cussed and discussed in sales meetings, conventions, behind closed doors, in bathrooms, bar rooms, and under one's breath from many angles, and with much fervor.

They make more noise and more mistakes, create more cheer, correct more errors, adjust more grievances, pacify more belligerence, and waste more time under pressure, all without losing their temper, than any class we know - including ministers. They live in hotels, cabs and tents, on trains, buses, and park benches, eat all kinds of food, drink all kinds of liquid - good and bad - sleep before, during, and after business with no more schedule than the weather bureau, and with no sympathy from the office.

Yet salesmen are a power in society and in the public economy. In many ways they are a tribute unto themselves. They draw and spend more money with less effort, and with less return, than any other group in business. They come at the most inopportune time, under the slightest pretext, stay longer under more opposition, ask more personal questions, make more comments, put up with more inconveniences, and take more for granted under greater resistance than any group or body, including the U.S. Army. They introduce more new goods, dispose of more old goods, load or move more freight cars, unload more ships, build more factories, start more new businesses, and write more debits and credits in our ledgers than all the other people in America. With all their faults, they keep the wheels of commerce turning, and the currents of human emotions running. More cannot be said of any man. Be careful whom you call a salesman, lest you flatter them.

"The Salesman" was sent by a reader and it says a great deal about a particular profession.