Spyro Kourtis

on July 26, 2010

category: integrated marketing

President and CEO

3 reasons to start investing in mobile marketing now

I’m currently championing mobile marketing with our clients – and I have several good reasons for doing so, even though early results may not immediately justify my enthusiasm.

Did I say that? I don’t think I’ve ever told anyone to ignore results before!

However, in this case I believe our short-term thinking is likely to get in the way of our long-term profitability. In other words, we may be killing a good idea too soon.

One of our clients invested in a mobile campaign, and while they got a very low cost per call, the close rate wasn’t what they were hoping for. They knew that mail beat mobile in overall cost per sale – and they were ready to abandon their mobile program.

My counsel is to hang on. Don’t bail on this program yet. Here are three reasons why:

1. The medium isn’t fully developed. As people become more accustomed to mobile advertising, it’s a given that they won’t respond as frequently. Every new medium has a curiosity factor. The audience wonders, “Hmm. What’ll happen if I click this?” Once they figure that out, they stop clicking as frequently.

When they stop clicking as frequently, they’ll likely click only when they are truly interested in the product. The quality of response will go up and the cost per sale will go down.

2. You can “own” the space for your product. While marketers lament that mobile doesn’t really scale, the good news is that you can have a huge impact for a small cost – if you start right now. Last year the whole spend on mobile display advertising was about $250 million. This year it’s looking like $313 million. But by 2015 it’s predicted to be $1.2 billion.

This makes jumping in right now a very smart defensive move.

3. Pioneers get the benefit of early learning. If you wait until the mobile medium is mature, you’ll likely be playing catch-up for a very long time. Think of how many things – especially in the digital space – are relatively easy to understand and learn early on and then grow in complexity until it starts to feel like you need a Ph.D. in the specialty in order to succeed.

So that means test everything and keep testing. Test what you’ve already tested – because how people use their mobile devices will continue to change rapidly. Don’t focus in on the winners too soon. Keep it broad.

This is what will lead to long-term success in mobile marketing.

 

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Spyro Kourtis

on June 7, 2010

category: miscellaneous

President and CEO

Common sense in a crisis

I’ve been thinking about the BP oil spill – in part because I can’t escape its omnipresence in the news. In fact, this story is so ubiquitous even I was asked  by CNNMoney.com to give a quote about the new apology ad. If you’re interested, you can read my off-the-cuff response here.

Spending $50 million on an apology ad makes no sense to me. Tiger Woods called a press conference. That’s what every scandal-stained politician does, too. This story is enormous. BP would have gotten coverage – without the expense that seems so inappropriate right now. In fact, BP should stop spending money on advertising now.

So what would a good communications strategy be?

1. Certainly an apology is in order – and probably should have happened much sooner.
2. Communicate the plan you have.
3. Communicate that, while you’re optimistic, you have a plan B if plan A doesn’t work.
4. Talk about your timeline.

This approach would help build confidence. Instead of giving your entire communication strategy to the news organizations, BP would take more control.

But, the difficult thing for communicators to deal with is that nothing is going to help this PR disaster until the leak is stopped and the spill is cleaned up.

 

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Spyro Kourtis

on March 23, 2010

category: miscellaneous

President and CEO

Win-win agency compensation

A new Ad Age opinion piece, “Why Ad Agencies Need to Embrace Value-Based Compensation,” suggests that agencies should be “compensated above their basic costs if they achieve or exceed results as measured by agreed-upon metrics.”

This is an interesting approach – and my own agency is open to it. Yet it’s almost as full of pitfalls as the current compensation approach.

Most agencies and clients aren’t very adept at measurement. My agency specializes in testing and measuring marketing results – and, believe me, it ain’t easy. When compensation is at stake, people will find ways to game the system. We trust our clients and I’m sure they trust us, but when it comes time for giving out credit for results, we don’t want to have a financial axe to grind.

On the other hand, conventional agency practices are painfully inefficient for the advertiser. The two groups start out with goals, get agreement on how many FTEs that will take, come to a blended rate and – voila! – they have a retainer agreement. If the agency takes more time to do something than was planned, they may bill the client more. They will rarely bill less if they are more efficient. If the client looks like it will not reach the goals, they usually must pay a several-month penalty on the retainer to release the agency.

Hacker Group has always used a different model. We call it our “fixed-bid approach.” When a client comes to us with their goals, we determine how much it will cost to reach those goals and set a budget. If it takes more time or expense to get things done than we budgeted, we don’t charge any more to the client. This includes all outside expenses. We are responsible for tightly managing all outside expenses, so our compensation is tied to how efficiently we buy things.

If the client’s goals aren’t met, they can release us without penalty. In other words, Hacker Group is willing to accept more risk in the deal than most agencies are.

And another difference: We depend on the results to drive our strategy, but we don’t usually depend on it for compensation.

That way, if the client doesn’t reach their goal, they may still continue to use us because we beat past performance. Perhaps the goal wasn’t reasonable. That’s okay. We learned something and we can move on with our relationship intact. However, if it makes sense, and we can agree on the metrics, it’s easy to incorporate an additional performance-based incentive bonus to our fixed-bid model.

We believe this is one of the fairest methods of compensation. The client isn’t stuck with all the risk. No one needs to argue about the details or what was within our control and what was not. Win-win.

 

Comments:

5/11/2010 at 9:42 p.m.
Impressive
I really admire your “fixed-bid approach.” As you mentioned, it's risky, but it shows prospective clients that you're truly confident in your abilities as an agency.
>>Kim, Bellevue WA

Spyro Kourtis

on February 18, 2009

category: integrated marketing

President and CEO

Sandwich Board Agency of the Year

I wrote a guest column published in Adweek’s online edition yesterday that’s gotten some interesting reaction.

I suggest that awarding a "Digital Agency of the Year" is an anachronism, because we’re now at the point where every marketer needs digital tools and the digital world needs all marketing tools.

Some people agree, some don’t. A few miss the point (and must not have read the part about how, as a direct marketer, I love digital). 

One commenter says that online is an ecosystem unto itself. I couldn’t disagree more. People are online and offline. What happens in one "ecosystem" influences the other. And I have the numbers to prove it.

Another commenter made some very good points:

The old models help, but don’t have all the answers anymore. The problem with traditional marketers is that they keep coming up with command and control campaigns. Even the idea of media is different today.

Although I may not have articulated it the same way, I think we actually agree. I believe all agencies may, in fact, start looking more like digital agencies than traditional agencies in the next few months or years -- and that’s exactly why a Digital Agency of the Year award could look like a put-down, rather than a compliment.

One person who didn’t add her comment on the site emailed me with this:

THANK YOU! Having a "Digital Agency of the Year" now is like having a "Cable Agency of the Year" in 1980-something! Totally ridiculous and shortsighted. Your closing paragraphs say it all. Great article.

She’s clearly one of the best minds in marketing.

The conversation continues on Brian Morrissey’s blog. Take a look and see what you think.

 

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Spyro Kourtis

on December 23, 2008

category: miscellaneous

President and CEO

We're (still) hiring smart marketers.

I have enough self-confidence to know my company has done well -- and has always done well, even through some sticky economic downturns. But I’m of Greek heritage, so a small shiver of panic hits me if I think I might be bordering on hubris.

That’s why it takes some guts for me to come out publicly now and say Hacker Group is hiring.

I just read an article in ClickZ about staff cuts in the digital marketing space. We’ve been hearing about layoffs in general advertising agencies for a while. But everyone seemed to think digital would continue to grow in the new year.

There might have been a little hubris in that thinking. The truth is that digital is still a small portion of most advertisers’ budgets. And, worse, the income from digital marketing is -- for most marketers -- tiny.

Our company has been around since 1986. You might remember a stock market crash in 1987. We survived that -- and continued to grow. While the dot-com bubble expanded, we did, too. When it burst, we kept growing, because we had a diversified client list and weren’t that dependent on technology. We still have a diverse client list. When terrorists attacked in 2001 and someone was planting anthrax in letters, our company was much more direct mail focused than we are now. We managed through that crisis and grew in 2001.

We’re still planning to grow in 2009. I mean we’re planning to grow. We’re not assuming it will happen. We focused on making smart plans and working those plans. It won’t be an accident.

Part of the plan is not to lay anyone off. We won’t need to lay anyone off, because we’re doing everything possible to keep the business we have -- and to get more business. Since 1986, Hacker Group has never laid off an employee due to lost business. When we’ve lost clients, we’ve been able to replace them before resorting to layoffs. That philosophy has served us well, because the result is a smart, well-trained staff than understands our culture and our work methods.

I’ve had enough experience to know that everything doesn’t always go according to plan. Twenty-two years of continued growth doesn’t guarantee a twenty-third year. But this is important to me and the 153 other people here at Hacker Group. If we have anything to say about it, we’re going to keep hiring smart people and keep our business growing through the new year.

 

Comments:

8/24/2010 at 11:00 a.m.

Spyro, You should repost this, updated for 2010. It's a powerful statement and helps to differentiate Hacker from others in the market. Maybe it's worth folding this kind of message into your general website. Look forward to meeting you today.
>>David Camp, Seattle WA1/2/2009 at 3:25 p.m.
Great to hear
That's great to hear that your company is still hiring. I've recently applying for the Project Manager position and am glad a company of your caliber is still willing to hire. I love your company!
>>Arnold Arnan, Kirkland WA

Spyro Kourtis

on November 10, 2008

category: integrated marketing

President and CEO

Vindication! Sort of.

Back on June 16, I posted a piece about better targeting for cable television advertisers in response to a Wall Street Journal article. The article’s writer was concerned about tighter targets meaning less advertising dollars going to cable. I thought this was short-sighted. If I may quote myself here:

I see this as an opportunity for cable companies to keep their audience -- the audience that’s turning to the Internet for entertainment -- and perhaps turn the cable medium into something different from broadcast TV.  Perhaps, with targeted audiences and higher prices, cable companies can provide more entertainment with fewer commercials than the big networks.  The argument for higher prices would get marketers both a tighter audience and more attention.  Without ten or twelve other commercials in every pod, your ad will stand out more.

Now The New York Times has a piece about Hulu, one of the new online video sites. Apparently, Hulu sees it my way.

In the place of the long commercial pods that TV viewers have become accustomed to, only one ad is shown during each segment break on Hulu. Fewer ads make the ones on the site more memorable, Hulu executives say, allowing the site to charge higher prices for the ad units.

Hulu isn’t cable TV, so my idea about this happening off the Internet didn’t happen (yet). But I have to say, I think they’re brilliant.

“The notion that less is more is absolutely playing out on Hulu,” Jason Kilar, the chief executive of the site, said. “This is benefiting advertisers as much as it is benefiting users.”

As I said before, win-win-win.

 

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Spyro Kourtis

on October 2, 2008

category: direct marketing

President and CEO

Marketing strategy in a downturn.

Buy low. Sell high. Now that’s wisdom for the ages.

It’s pretty clear we’re going to be hitting bottom in the economy one day soon.  And we may be hanging out at the bottom for a while.

That’s an opportunity to buy.  As a marketer, you may be able to pick up market share on the cheap.  But it takes guts.  You have to believe you’re going to outlast the bad times. 

My company is in the same position as yours. We’re thinking about how to cut costs during the recession. But we’re still investing in marketing. In fact, one of our unbreakable rules is "Never Stop Selling." 

 

 

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Spyro Kourtis

on July 17, 2008

category: integrated marketing

President and CEO

Believing the hype about marketing ROI.

It’s not funny . . . but I had to laugh.  According to a study by Aegis Group’s Marketing Management Analytics (MMA) reported in Ad Age, nine in 10 financial executives don’t use return-on-investment metrics to set marketing budgets.  Why?  They don’t believe the numbers.

That’s not the funny or sad or even surprising part.  The shocking thing is that only 14% of marketers had confidence in their own forecasts. 

It sounds to me like both groups are pretty much in alignment.  The numbers suck and everyone knows it.

The headline in Ad Age says "Survey Finds CFOs Skeptical of Their Own Firms’ ROI Claims."  But is that the big idea?  ROI claims are rarely audited, so it’s no wonder they don’t meet CFO standards.  The news is that marketers in those companies are making ROI claims they don’t believe in or -- I’m betting -- even understand.

That discouraging piece of information isn’t the fault or responsibility of the CFO.  It’s an enormous credibility problem for the CMO.

 

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Spyro Kourtis

on June 16, 2008

category: direct marketing

President and CEO

Targeted marketing and advertising budgets.

The June 10 Wall Street Journal had an article about how six cable companies have developed new technology that will help advertisers better target TV watchers.

I think this is great news -- both as a marketer and as a TV watcher.  If I'm going to spend money on TV as a marketing medium, I want to know that the people who will see my commercial are actually likely to buy my product.  And if I'm going to spend any time in front of the tube, I'd prefer to see more relevant ads than the ones I'm watching now.

Here's what the Journal suggests is the downside:

Something that may concern programmers -- and damp enthusiasm: Because targeted advertising theoretically offers more bang for the marketing buck, advertisers may end up reducing their overall cable spend.

I honestly hope this doesn't damp enthusiasm.  If it does, it's short-sighted on the part of the programmers.

First of all, marketers ought to pay more for a targeted audience on a CPM basis.  This is how it's been done in direct marketing forever.  Smaller, more exclusive lists -- whether mail or email -- cost more per name.  On a cost-per-impression basis, direct mail could never compete with broadcast.  It's not about the costs so much as it's about the return on investment and the net profit you make from a campaign.

But, second, I see this as an opportunity for cable companies to keep their audience -- the audience that's turning to the Internet for entertainment -- and perhaps turn the cable medium into something different from broadcast TV.  Perhaps, with targeted audiences and higher prices, cable companies can provide more entertainment with fewer commercials than the big networks.  The argument for higher prices would get marketers both a tighter audience and more attention.  Without ten or twelve other commercials in every pod, your ad will stand out more. 

Wouldn't this be a win-win-win for cable companies, advertisers and the cable TV audience?

Even as I write this, I know it won't happen.  There's just too much fear and greed locking us into the current system.  But I can dream.

 

 

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Spyro Kourtis

on June 10, 2008

category: direct marketing

President and CEO

Customer churn.

One of my favorite marketing challenges is helping our clients find new customers.  But in an economic downturn we can't forget the enormous problem of losing current customers.

Formerly loyal customers can be tempted away by a competitor's lower prices. They may even decide to forego your product or service altogether, if the value proposition isn't clear to them anymore.  It's no good to continue to fill the bucket with new customers, when current customers are leaving through a hole in the bottom.

Patching that hole should be one of your top priorities.  And the first step is a detailed analysis of your customer file to answer questions like:

  • How do we identify which customers are most likely to leave?
  • What events seem to trigger the loss of a customer?
  • Is there anything that can be done to prevent the triggering event?
  • What can we do after the trigger is pulled to keep the customer with us?

Answer these questions and you have the beginning of a churn strategy.  Put it in place now -- and keep it going, even when times are good.

Here's another, counter-intuitive question that your analysis could help with:  Which customers do we want to fire?

Everyone knows the Pareto Principle, that 80% of your revenue is generated by 20% of your customers.  A parallel truth -- call it the Spyro Principle -- is that 90% of your problems are caused by 2% of your customers.

That may be a blog post for another day.

 

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Spyro Kourtis

on May 12, 2008

category: direct marketing

President and CEO

Food for thought.

What is it about fast food that makes people think corporations ought to sacrifice profits for creativity? 

I talked about Wendy's decision to (finally) pull their ads featuring a guy in a red wig a couple of months ago in The Madison Avenue Journal.  Now The New York Times is questioning whether Applebee's should have pulled its quirky talking apple and replaced it with a tried and true approach:

Early tests showed mixed results — some people loved the apple’s attitude, though others found it off-putting — but the real problem was that the fruit in question failed to give the company’s bottom line an immediate lift.

They go on and on about how this was an opportunity to make Applebee's cool.  (Yeah.  Good luck with that.) 

Hidden at the bottom of the NY Times inverted pyramid is the stat that should have been the lead -- the good news for Applebee's now that they've gone back to selling food:

The chain . . . reported a 0.5 percent increase in same-store sales for the first quarter. Among company-owned stores (and excluding franchisees), the increase was 2.1 percent.

“The first quarter release is our first positive same-store sales in two years,” Ms. Scott of Applebee’s said. “It’s safe to say this campaign is working for us, so we’re going to stick with it.”

 

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Spyro Kourtis

on April 23, 2008

category: direct marketing

President and CEO

Learn from your customers

This month the CMO Council came out with a new report suggesting that marketers are "struggling with amassing and strategically applying data and customer insights to effect substantive business growth and strategic gain."

In other words, they don't know their own customers well enough to keep them -- or make money from them.

(Those multi-syllable words sure make them sound a lot smarter, don't they?)

The report goes on to detail just how unhappy these executives are with their ability to collect data, to share data, to come up with actionable insights from the data they have and more.

It's a little depressing. These are supposed to be some pretty high-powered individuals -- and yet they come across as somewhat helpless.

There are a couple of ways to handle this enormous problem.

One approach is for the CMO to get the CIO on his or her team. The CIO controls the data. If they're focused on business results (as they should be), the CMO's request should be a priority. Many times the CIO and CMO just aren't connected -- so the CIO doesn't even know the CMO has a problem. What's more, the CMO could build a powerful alliance. It's an old saying, but a true one: You can accomplish just about anything if you don't care who gets the credit.

If that doesn't work, another idea is to completely circumvent the CIO. Start your own database with new customers -- the ones you bring in through your own marketing efforts. (Of course, I'm talking about direct marketing here. That's the only way you'll know who these folks are.) Make sure you track the data you need. Start building on the information and insights you gain with your own database, then extend it to the big group the CIO still controls.

Another truism, which applies in this case, is that it's easier to get forgiveness than permission.

If all this seems difficult, keep in mind . . . it's the CMO's job that's at stake. And that's why they call it work.

 

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Spyro Kourtis

on April 18, 2008

category: direct marketing

President and CEO

The only metric that counts

Ever since the beginning of online advertising, marketers have been trying to get a grip on measurement. We can all agree that there are too many data points to absorb and act on, if we're going to retain our sanity.

It's old news that click-through rates are not the key. (Marketers started saying that just about the time when click-throughs started dropping through the floor.)

Brandweek came out with an article last week saying that perhaps the new metric is "engagement." Of course, the people pitching this idea are the social media experts -- and social media are all about getting consumers to participate in a conversation . . . or pass along a widget to a friend . . . or make a video of themselves using the product . . . or create a commercial. You get the idea. Engagement.

Brandweek quoted some skeptics.

"There's always been a certain level of engagement as consumers click on a banner," said Jeff Hinz, svp/director of client services at ID Media, a digital services company in New York."

Of course, Jeff's company buys online media for banner ads.

Others said that brand recall and favorable impressions were more important.

I have my bias, too. I say none of it matters unless your marketing efforts make a profit for your company.

Net profit. That's the metric that counts.

 

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Spyro Kourtis

on April 7, 2008

category: direct marketing

President and CEO

Direct marketing in less-than-direct channels

One of the wonderful things about direct marketing is complete control one has over the entire selling process. We like to talk about "planning backward from the point of sale." And we actually can do that. If the customer is going to buy direct, the direct marketer can fine-tune every communication and transaction along the way. We create a breadcrumb trail of offers (if you do this, we'll give you that) and lead our prospects down a path that culminates in a purchase.

This generally makes direct marketers control freaks.

We're always tweaking headlines, testing offers and incorporating more value propositions into the copy to see what has a big impact on results at each step.

So when we're asked to use direct marketing tools and techniques to do something other than sell directly, we usually have a lot to offer our clients -- and not necessarily where traditional agencies would be likely to try.

If you ask a general agency to try to drive traffic to retail stores, you'll get a lot of questions about the products you sell and the consumer profile. The result will be a media plan and a new creative approach.

If you ask a direct marketing agency to do the same thing, you'll get a lot of questions about the whole process of the sale. If you're selling cars, for example, the process is a lot more complicated than if you're selling jeans. What are the steps consumers take before coming into the store? What happens once they're there?

The result from your direct agency should be a media plan, a new creative approach and a communication plan once you get a prospect to express any kind of interest.

A lot of us enjoy focusing on the creative aspects of our marketing campaigns. Don't forget that the changes you make to the sales process can have a far bigger impact on results.

 

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Spyro Kourtis

on March 27, 2008

category: direct marketing

President and CEO

What the voices in your head may be telling you

The articles about marketing mind-readers are starting to scare me a little. Brandweek just published another one . . . this time about using hypnosis in focus groups.

Why don't we just go ahead and implant a post-hypnotic suggestion to go out and buy the darn product right in our advertising? Oh wait. There's already a guy doing this.

Am I overreacting or could this kind of thing blow up on us?

Do marketers really want to be associated with the old "subliminal advertising" soap?

Tracking Internet cookies are one thing. Keeping your medical records secret is an even bigger deal. But privacy issues will be seen in a whole new light when people think you might be poking in their brains.

 

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Spyro Kourtis

on March 12, 2008

category: integrated marketing

President and CEO

Free is the new . . . marketing problem

It seems like everything is being offered free -- and I'm starting to get worried.

It started in 1984 with "information wants to be free" -- which, according to Wikipedia, was said by a computer hacker first. The guy actually said that the right information in the right context is extremely valuable, but our means of disseminating information is getting cheaper. Regardless of what he meant, the rallying cry was taken up by Internet users everywhere.

·	The Wall Street Journal is openly struggling with how to charge for its articles on the Internet.
·	Radiohead is practically giving its music away. (I talked about this in another context in The Madison AvenueJournal.)
·	The subscription offers I get in the mail are getting so cheap they're practically disappearing. Apparently, Inc. magazine is sending out a pay-what-you-want subscription letter.

This may or may not be a terrible thing. For example, Radiohead can go back to music business as usual anytime they want -- and they may have increased their audience by the stunt of giving it away.

I like free (or cheap) as much as the next marketer. But, in my experience, that works best when it's a buy-my-product-get-something-else-free idea. Aren't we damaging the whole value proposition for our clients when we offer the product itself for free?

Maybe we need to start charging to get access to this blog.

 

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Spyro Kourtis

on March 4, 2008

category: integrated marketing

President and CEO

What's your social media IQ?

Last week, Brandweek published an article saying ad agencies "don't get" social media.

I'm all for jumping on big, dumb ad agencies. You've seen me do it right here in this blog.

But who really does get social media as an advertising channel? Even the social media owners trip up -- as Facebook did when they decided to publish details about what you buy online to your friends. I'm sure it seemed like a good idea right up until the point where it blew up.

I may be completely wrong about this -- and I'm certainly out of step with what the marketers in the Brandweek article are saying -- but I'm not convinced social media make sense as a primary advertising vehicle. To my mind, this is more aligned with the public relations function.

The marketers surveyed for this article are hoping for more than MySpace or Facebook or LinkedIn or anyone else like them can give. Here's a quote from Brandweek:

Nearly 50% of marketers said social-media efforts needed to be handled at an executive level with "significant" resources. Another 30% agreed social media is a "revolutionary opportunity."

The executive level. Wow. I suppose so . . . in the same way that customer service is handled at the executive level, since social media is all about communicating with customers and prospects. But I don't think handled is quite the right word for that.

The Internet in all its power definitely is a revolutionary opportunity. I question whether the segment called "social media" is a big opportunity for most marketers.
 

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Spyro Kourtis

on February 6, 2008

category: direct marketing

President and CEO

All stakeholders are asking for accountability

"How do you know your new campaign won't suck as much as your last one?"

That was the big question on Monday when Wendy's International gave their fourth-quarter report on a conference call to stock analysts. When the analysts start asking about your marketing strategy, it's got to hurt.

The honest answer would have to be that they have no idea how good their new advertising is. It took them a full year to realize that their critically-acclaimed, red-wig campaign had failed with the masses.

I understand that advertising campaigns need some time to take hold. But this is fast food, not a considered purchase like a new car. If it doesn't move the sales needle within a month or so, that would be the time to start looking for a new answer.

Plenty of people will be questioning your judgment if you don't.
 

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Spyro Kourtis

on January 15, 2008

category: integrated marketing

President and CEO

What demographic data really means

Here's a piece of news from a recent Wall Street Journal. In an article about television media data analysts, they report a brilliant insight:

One evolving theory: that advertisers should pay more attention to people's viewing patterns than to their demographics, such as whether they are a twentysomething or a male. Fans of the NBC Universal show "Heroes," for example, whether they are 18-year-old men or 54-year-old women, generally tend to watch the show the same way — often clicking through ads, she says. The same has been true so far for NBC's "The Biggest Loser." That's a shift from previous years, when TV networks and advertisers were focused on reaching coveted demographics like viewers aged 18 to 34.

Direct marketers have been saying for, I don't know, forever, that behavior is really all that counts and demographics don't matter much at all, except as an interesting side note. In the beginning of things like Nielsen ratings and Starch scores, advertisers cared about demographics because age and gender were all they really could know about their audience. And even that was an inferred generalization. Because purchase behavior couldn't be directly measured in their mediated world, they quantified what they could quantify, not what really mattered.

If you ask someone in the creative department of an advertising agency why they care so much about demographics, they'd probably say it gives them a better mental picture of who they're trying to reach. With that image in mind, they can create more relevant messaging. I think that's probably a legitimate use of the relatively squishy data.

But if you ask someone in media, I bet they'd say they're looking for viewers aged 18 to 34 because that's who buys the product. These media folks honestly believe they're going through a targeting exercise that will generate less advertising waste.

It's all about behavior, baby. And the general advertising world is only beginning to figure out what that means.
 

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Spyro Kourtis

on January 10, 2008

category: direct marketing

President and CEO

Another reason not to advertise on the Oscars.

Last year I got some press for my contrarian views on media buys that focus on the Super Bowl and Academy Awards.

My view is that this is almost always a vanity play — often on the part of both advertiser and agency. I guess ego is as good a reason as any to follow a particular strategy . . . unless you have a good faith responsibility to do your best to bring in a profit for your company. Stakeholders like your employees might prefer that you put that wasted ad spend toward salaries and bonuses. Stockholders might like a growing bottom line better than viewing thirty seconds of glory on Oscar night.

Here's another reason. In yesterday's Wall Street Journal, they stated the obvious. The Oscars might not happen at all this year due to Hollywood's writers' strike. Many agencies create special commercials just for the Academy Awards, in order to make a big splash.

You may argue that stuff like this happens rarely and it's certainly not predictable. True enough. But, while a specific disaster can't be predicted, Murphy's Law says something is bound to go wrong sooner or later. Hurricanes come each spring. Summer brings tornadoes. Winter has its blizzards. And — possibly worst of all — 2008 is a presidential election year. I guarantee that people will get distracted.

That's why putting all of your eggs (or even most of them) in one fragile basket is usually a bad idea.

When we create marketing campaigns, we always spread the risk as much as possible. Every program involves tests, in case our control campaign doesn't work for some reason. We spread out the campaign over time so that if the whole country is completely focused on Britney Spears' custody issues for a day, it only makes a small dent in our ROI.

Mitigating risk is just one of the many things we consider when we're strategizing — and why we won't be buying any time for Oscar night.
 

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Spyro Kourtis

on November 28, 2007

category: direct marketing

President and CEO

The big media squeeze

It wasn't that long ago — just fifteen years — that all Hacker Group did was direct mail and a bit of telemarketing. Over the years we developed expertise in other media, partly because we were excited about the opportunities in the online space.

Now we must be multi-channel marketers. There's no choice in the matter. It's to the point where it's just about impossible to depend on a single medium. As media have fragmented, nothing scales the way it used to.

The good news is that most media have some sort of targeting, so there's less waste. Almost all media have become more measurable, and that means we're all more accountable for our marketing efforts.

The bad news is, by focusing ever more tightly on a particular target, all media are becoming far more expensive to use — and campaigns are harder to scale.

Marketers will need to become smarter and smarter to make their campaigns pencil.
 

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Spyro Kourtis

on November 21, 2007

category: miscellaneous

President and CEO

Be thankful for your customers.

Everyone loves Thanksgiving. This is a holiday no one can object to. You get to enjoy lots of great food with none of the pressure of gift–giving.

Lots of us will be giving thanks on the big day. But once a year doesn't go far enough.

A sense of gratitude — every single day — is a tremendously positive way to make your company grow.

I start with customers. The minute you start taking customers — or members or donors or voters or whatever your constituency — for granted, your organization begins to die. Even if your product is essential or addictive, people have a choice about whether they buy from you. Even if you have a monopoly on a vital service (and if you do, you're probably not reading a marketing blog), when you make enough customers unhappy, the government eventually steps in. Even government dictatorships get overthrown.

As marketers, we're more aware of the fragile hold we have on our customers than, say, Papa Doc Duvalier. But we can still get complacent. Just because revenue flowed into our accounts last month doesn't mean it will next.

We're grateful for our clients. We're delighted to be working with them. We're excited about helping them grow their businesses. I hope it shows every day.
 

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Spyro Kourtis

on November 15, 2007

category: miscellaneous

President and CEO

Where do you want to work?

If you could pick the perfect work environment, what would it be?

Hacker Group has a distinctive work culture. It works extremely well for some people. It's a little too intense for others.

Since the beginning, we've focused on win-win -- for our clients, for ourselves, for our employees and for our vendor partners. We do this by throwing ourselves into client service. That's where the payoff is. If we can help our clients solve their business problems, our company will be profitable too. Then we can compensate our employees. And our vendor partners benefit in the same way when they help us produce error-free work.

Our contract with our employees is about more than just money. Hacker Group is also a place to learn and grow professionally on a daily basis. Expectations are high. We want people on our team who will move us forward. We've had people wash out who were plenty smart enough and even worked hard, but were unwilling or unable to commit to the high standards of our company.

Here, even the big picture, strategy development people have to be able to focus on the details. And the detail-oriented need to be able to look up and get the full perspective, so they know they're going for the right goals.

I look around and see we have a great group of people, a very accomplished team and I'm proud I'm working with them.
 

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Spyro Kourtis

on October 31, 2007

category: lead generation

President and CEO

Walking away from lead generation.

Most of us tend to be either risk-takers or risk-avoiders. I see it in business all the time. In marketing, the risk-avoiders give me some version of "if it ain't broke, don't fix it." They run the same campaign over and over until it's run into the ground.

On the other team are those who always look for the breakthrough idea that will bring them fame and glory. If it's been done before, they don't want to see it. They're easily bored and assume their customers are just like them.

It's easy to poke fun. But we see both of these traits out there in the world because both approaches can be wildly successful. The trick is knowing when to use each.

Most of us will continue to use our preferred behavior pattern when we create our marketing plans. We may throw good money after bad, still hoping that the results will change. The reason we do so is that our selling systems seldom break. Instead they very slowly grind to a halt. Rarely do we reverse this trend by going with the same-old same-old.

What should you do if you find your lead generation programs producing fewer qualified results? If you've been tweaking your marketing here and there and nothing makes a big impact, maybe you need to walk away from lead generation entirely.

It sounds crazy. But it just might work.
 

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Spyro Kourtis

on October 17, 2007

category: integrated marketing

President and CEO

No more silos.

The lines are blurring — and that means it's an exciting time to be a marketer.

At the DMA, I look around and see some organizations still living in the 20th century and others who have definitely moved on. What's interesting is that the companies from an earlier era are great at defining who they are — they're list vendors or print vendors or even digital marketing providers.

It's the ones who can't define themselves so easily who have the jump on the rest.

That's because the biggest marketing hits nowadays are not as much about the medium you see them in, as about the idea they convey. It doesn't matter if you see a marketing message on Dancing with the Stars or on YouTube. It's the impact of the idea.

Shelly Lazarus, chairman and CEO of Ogilvy Worldwide, discussed this in her DMA keynote address. Listening to her, it really hit home for me how important it is that the ideas come first. Then you look for the media that are most appropriate for the idea.

She gave the example of the Dove Real Beauty campaign and how it started as a dialog on the Internet. When Dove learned that only 2 percent of women thought they were beautiful, they posed the question of what was real beauty. Then they developed a web site where women participated. That led to media attention, including interest from Oprah. A video was made — not a commercial, a YouTube video — and millions watched. The rest is history.

The lines are blurred, the walls are down. This is good news. Life is more interesting.
 

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Spyro Kourtis

on October 15, 2007

category: direct marketing

President and CEO

Going green at the DMA

Everyone's talking about the environment here in Chicago at the DMA. But is anything really happening?

After the first full day of the conference, we've certainly gotten an earful about going green. There were lunches and breakout sessions. John Greco announced 15 green initiatives on behalf of the DMA itself in a keynote address.

Those of us here from Hacker Group were ready to fill our notebooks with ideas. We didn't come away with much.

So let me take this opportunity to announce that Hacker is launching its own green action plan. We've been working hard to find ways to provide our clients with options to execute environmentally friendly campaigns. This includes:

• Sourcing recycled paper and environmentally friendly materials
• Partnering with vendors who are committed to protecting the environment
• Reducing waste through better targeting and data hygiene to reduce the amount of undeliverable mail

We are currently conducting environmental profiles of our approved vendors for:

• Documented environmental policies
• Material sourcing capabilities
• Manufacturing process (UV presses, soy-based inks, etc.)
• Recycling programs
• Renewable energy use
• Waste disposal and compliance policies
• Compliance with FSC and ISO 14001 Standards

These aren't empty words on a page. Hacker Group has always been committed to environmental responsibility in our own offices. We've been recycling, reducing waste and conserving energy here for all my 15 years here. I know we can make that a goal for our clients and vendors, as well. As is true in so much of what we do, it's all about execution.

 

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Spyro Kourtis

on September 20, 2007

category: miscellaneous

President and CEO

What this space is for

I work with some smart people. I’m not just talking about Hacker Group employees – I mean our clients as well. I like hearing from them all. That’s a huge advantage for me. I get to soak up some wisdom and pass it along to my team.

The reason for this space on our Web site is to get some smart people to talk about what they know best in marketing. It’ll come in bite-size chunks, so you can take it in, incorporate it into something you’re working on or decide it’s not helpful to you, all without taking a lot of time.

Some of the things we’ll talk about are tried and true. Some are opinion or speculation. We’ll let you know the difference!

The good thing about opinion is that they inform our hypotheses. Hypotheses are what direct marketing tests are all about. At Hacker, an interesting opinion doesn’t stay opinion for long. We test it. We get an answer. And, often, we’ll double-check our answer – or fine-tune our hypothesis.

So we’ll be letting you know what we’re thinking and what we’re testing. If you want to join in the dialog, you’re welcome to comment here in this space – or pick up the phone and call me. I enjoy talking with smart people about marketing issues.
 

Comments:

9/26/2007 at 4:46 p.m.
Congratulations
Nice job on your new site. I'm looking forward to reading more.
>>Ross Arnold, Seattle WA