According to "The Chaos Scenario," widgets, YouTube, and crowd sourcing has changed everything faster than you think.

"On the Media" radio host, troublemaker and professionally cranky AdAge commentator Bob Garfield is a media guru. Really. His latest project is a series of provocative essays that you should read for its trenchant analysis of exactly why it will be tougher and tougher to make money with media and information businesses, as well as excellently reported specific interviews and examples of where this business might go in the future.

In "The Chaos Scenario: Amid the Ruins of Mass Media, The Choice for Business is Stark: Listen or Perish "-- as well as the Web site, and downloadable chapters and a "30 Days of Chaos" international chat-a-thon run by a wide range of membership organizations -- Garfield wants the media and marketers of all kinds to know that "the many ways in which the simple exercise of listening enhances and even replaces business disciplines that have undergirded commerce since time immemorial."

Among Garfield's many compelling topics are:

-- Where widgets came from, what widgets really are, why they are a fabulous tale of the power of digital media, and by the way what they can and cannot do for your business.

-- The tyranny of crowds -- especially anonymous ones -- as a very real public harm that comes from the public good of the Internet. He calls this "a meditation on the implications of the Total Surveillance Society."

-- Capturing and summarizing word-of-mouth that is out there in the social networks - how tough it is and how necessary Garfield thinks it is to run any successful business or institution.

-- Crowd-sourced advertising and design -- and how that's working out for the clients and the creatives.

You know Garfield is smart -- and skeptical. And he doesn't shy away from exploring complex problems and the even more complex potential solutions throughout the book.

I appreciate how Garfield summarized the whole YouTube/Google ROI thing. Despite the fact that "it is, after all, Google we're talking about," Garfield sees Google's YouTube fortunes hinging on mostly stuff with no game:

1. Viral ads that produce no revenue
2. Annoying overlays that a prominent ad network insists are "proven not to work"
3. Pre-roll ads that send 22 percent of the audience running in the opposite direction and irritate the rest
4. Huge billboards advertising movies to people watching videos on computers
5. The Russian-roulette risks of appending ads to sketch user-generated content, rendering (as of 2009) 91 percent of inventory unsellable
6. Tracking/targeting technology that has already triggered the ire of the house Committee on Energy and Technology and is therefore undeployable

"And then there is a seventh little issue... The troublesome tendency of Joe Laptop to upload video content wholly or partially stolen from its rightful owners."

Indices and surveys demonstrating thought processes need correlation to purchase or other conversion stats to be really useful.

The RFIntent index is a newly launched effort by the New York PR firm Ruder Finn to publicize what they see as a comprehensive analysis of the underlying motivations that people go online. "The intent index underscores the emerging trend that people's online behavior is better explained and understood by similarities in intent rather than by demographic differences...."

Well, they may claim that the world of online marketing is now post-demos, but even the RF people bow to a cut of their intent info by the basic demographic cuts of sex and age. The study is new, so there is no time series information yet; perhaps the addition of change of intentions over time will make this metric a little more useful to understand the online usage zeitgeist.

More interesting and action-oriented is how voice-of-customer analytics provider iPerceptions is encouraging its customers to look at another measurement beyond selling stuff-kind of. On an iPerceptions blog the company wrote, "It's time to ditch the idea that conversion is the be-all and end-all of online marketing success. The fact is, not everyone comes to your site looking to buy something. Recent research shows that 84 percent of website visitors are not there to make a purchase; instead, they are looking to obtain information, compare prices, browse products, find out a store location or store hours, get product support, or simply look at pictures and watch videos....If your site visitors aren't able to complete the tasks they set out to do, they won't consider purchasing from you again, either online or in-store."

iPerceptions however, does go on to say that if customers are satisfied that they could perform the tasks they set out to do at your site, then this task completion measurement should ultimately be predictive of purchase of some sort. They imply that it all depends of course on very specific situations - the individual web sites and the products and services available on them. To spread this gospel, the company allows anyone to measure task completion through a survey available for free just for registering. The "core component" of the survey is the Yes or No answer to the question "Were you able to complete the purpose of your visit today."

Just like the Net Promoter score from "The Ultimate Question"-Would you recommend this product/service to a friend?-this is meant to be the single and simple metric that you can ask consistently over time and over any sites or products that will be predictive of sales and profitability.

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Exchanges for Specialized Marketing Tasks Give Great Value and Service.

When Virginia Reynolds founded Insight Quality, a consulting service that specializes in providing clients with expertise in IT quality assurance processes, she wanted a logo designed professionally for her start-up-but she only had start-up money.  

So she turned to a Web site that produces logos for customers in as little as seven days with sometimes hundreds of designs to choose from. And sites like this tell a two-sided story to marketers:

• The Internet is driving the cost of services for businesses to an unimaginably low level. Besides her time, Virginia's total cost was $412-a $12 fee and a $400 prize for the designer-although she could have run a contest for as low as $250.
• This cost structure is bad news for marketing agencies providing services such as logo design or other functions that are adaptable to expert sourcing.

Exchange sites like this have revolutionized the process of engaging in marketing services in many ways. Specifically in logo design:

• Virginia, in the parlance of the site, as the Contest Holder or CH, had to learn how to be articulate in describing the results of logos that were submitted in order to get the best possible outcome. She reported, "I got really sucked into the process in a good way. It might have been the fact that it was a contest or just the interaction with the designers." As designers submit logos, she can give very specific feedback to them and they are able to revise and get back to her. Also, all designers can see the feedback she gives to the other designers so they get the benefit of this intelligence for their own submissions.
• The breadth of submissions was stunning. "Not only did I get a really good logo, but I got 279 submissions which represented well over 100 different concepts (some of the submissions were variations in color or small tweaks.)"
• Geography of the client and the designer are irrelevant. The winner of Virginia's contest is Bordo who is based in Germany. She also got submissions from Canada, Indonesia and other very remote locations.
• If you can't find a winner among the entries received, the CH can extend the contest and invite some of the top designers to submit.
• You can send the URL with all the entries to friends and colleagues to get their feedback as well.

Virginia looked at a few other logo sites including one owned by HP, but ended up going with Logo Tournament. The information she gave to the designers, the winning logo [pictured] and some of the other entries are still available for a peak.  (Designers who didn't win have the option of withdrawing their designs from public view after the contest is over.)

Some other marketing sites that gather experts of interest are NameThis-you can guess what they do-and one of the biggest for deep-dive market research is Gerson Lehrman Group. In a slightly different twist, the publisher HarperCollins ran a contest for the book Freakonomics to get ideas for best guerilla marketing campaigns.
 
Note: This post was written with help from Anne Kinard, QuantumMedia.com

Like other CPGs, Maker's Mark is bypassing traditional publishing options.

It's troubling that more and more package goods companies bypass publishers of all sorts and become their own media, such as Kraft Food and Family magazine. Now Beam Global Spirits & Wine is in the business of BYOM-Bring Your Own Media.

Beam is the fourth largest spirits player globally (behind Diageo, Pernod Ricard and Bacardi.)  It controls brands such as Jim Beam, Canadian Club, and Maker's Mark. And Maker's Mark-I happen to be a Bourbon person-is where I personally experienced their excellent and thought-provoking work.

Rory Finlay, Beam's CMO, said in a recent interview that he put the company's entire ad budget-it spent $28.4 million on U.S. measured media last year in 2008-behind building word-of-mouth buzz for its brands in 2009. That obviously means different things for different brands, but for Maker's Mark, one of the things they are doing is creating their own media platform that has print product delivered to the home, social networking and Web communication-all bypassing traditional outside media companies.  

My media relationship with the brand started when I signed up to be an "Ambassador" for the distillery. The reward for letting the company capture my demographic and related information and for allowing them to send me marketing emails was having a specific barrel bear my name. How cool is that? Well for me, it is definitely cool enough that I am happy to engage with the brand through their invitation-only Web site that has a social media component as well.

In June I received  a fat, 8" x 11.5"  envelope with a compelling teaser-"HISTORIC BIRTH ANNOUNCEMENT ENCLOSED." Among the contents was an announcement and certificate commemorating what I think of now as The Ava Seave Memorial Whiskey Barrel; it had been filled and was now "resting in one of our aging warehouses."  (Hmmm...a lot like me, I guess.)   

In the letter, the President/Ambassador-at-large of the company mentions that it takes up to seven years for the barrel to become Maker's Mark bourbon. This sounds like a fairly legitimate license to keep in touch for a very long time. Let's see how well Maker's Mark handles the problem of communications fatigue as the years roll on.

Expensive must-have features of yesterday are today's can-live-withouts.

Marketers spend significant time and money on building databases with years of consumer of transactions and attitudinal information. It's a hard enough and expensive enough process to maintain as to be considered a real competitive advantage for those that have the data.

Some companies in travel or luxury goods have gone on the record to say that consumer behavior has changed so much that their historical data is useless in many cases. John Wallis, Hyatt's global head of marketing and brand strategy, said in a recent interview, "The customer who's traveling today isn't the one who was traveling in 2008. We've been concentrating on customers who've traveled since then, because that means they have a job and a budget."

Jim Motrinec, Senior Consumer Marketing Director, ProCirc Circulation Management, with whom I work, sees his company's clients affected by both the economy and the digital world. "Depending on your product, your core audience's buying habits may have permanently changed. Or there's no longer a demand for the old incarnation of whatever it was. Maybe a new market opened. Maybe the data you have is now more useful for suppression versus prospecting."

Yet, he still believes in maintaining historical data. "If data is uncertain or less reliable then you have to go back to the drawing board and get creative with educated testing to try to open up new opportunities. It's probably more crucial now to be recording as much data as you can while we're in such a transitional period."

The database marketing manager at Southwest Airlines, Steve Crowell has a similar viewpoint. He told AdAge that while the most recent and relevant data are important, if your model still differentiates among your customers accurately, you don't need to throw out the model.

Lorraine Shanley, a principal in Market Partners International, which produces the newsletter, Publishing Trends has had a similar experience. She says that all of her clients have noticed a definite shortfall over the last year, but that it was more a matter of degree. "If your customers still need what you have, but are only willing to pay for it at a lower price point, then it's important to factor that into your marketing plans going forward. Two-for-one, 50%-off, 3-months-extra have become standard in the perceived-value arsenal. If what you're selling is luxury, though, you've got a tougher row to hoe."

Although lower expectations and fewer customers plays a part in the score.

The American Customer Satisfaction Index, or the ACSI, is a national, cross-industry measure of satisfaction with the quality of goods and services available in the U.S. The index isn't just used by marketers to measure and benchmark how their company's customers and U.S. customers are feeling about their products, but its used by financial types as a predictor too.

ACSI's last quarterly report showed an unexpectedly high and improving number, but I wouldn't start counting on the recession bottoming out just yet. In fact, this number has given a number of experts pause because customer satisfaction typically declines in a recession as companies cut costs, according to a recent WSJ interview with Bruce Temkin, a vice president for Forrester Research. So what's going on? Why are Americans satisfied when in the past, under these circumstances, they weren't? (And I'm not cynical enough to believe it's statistical manipulation, mainly because the ACSI is run by academics at the University of Michigan, not some Federal employees who might be trying to prove the recession is bottoming out.)

Here are some reasons why marketers should not take this improvement in ACSI at face value:

• When folks are "satisfied" with a product or service, they are making an internal calculation of the benefit and the cost. With many items and services at the cheapest they have been for years, the satisfaction rating could mean it is the same old stuff, but at this price, it's hard to complain. So budget positioned items are looking particularly good.
• Although it is only anecdotal, companies seem to be protecting spending that affects customers more than they ever have in the past.
• Management commentators speculate that the investment in the software tools to help companies track customer satisfaction are actually showing their return on the investment at a time that is critical.
• The improvement in the ACSI could be an arithmetic anomaly. Consultant Andy Fromm of Service Management Group that runs satisfaction and loyalty programs for specific clients was consulted in a recent article and he indicated that improved satisfaction scores such as ACSI may reflect lower customer expectations and a shrinking pool of customers demanding attention.

Expensive must-have features of yesterday are today's can-live-withouts.

Marketing professionals think they know of the pitfalls of cutting back on research and marketing during a time of change in consumer attitudes and spending. After all, the perceived wisdom that I've seen in numerous articles and blogs is that companies that spend on marketing during a recession come out ahead as the economy rebounds.

Christian Shea, a marketing consultant in Philadelphia, tried to find the research that backs up this belief, and had a hard time finding much that wasn't 25 years old and that frankly made any sense at all.

His advice to his clients is what I would advise anyone in marketing in or out of a recession:

• Don't fight the futile battle of finding yesterday's budget
• Become smarter with what you have
• This means setting measurable campaign goals for each project.
• "Talk about the result first. If you can't confidently say you can launch a campaign within the allotted budget and achieve the desired result, scrap the campaign and move on to something measurably achievable."

Professor John Quelch of Harvard Business School also recommends ways to optimize the effectiveness of the spend. Many of his ideas adapt to print and digital media products.

• Since price elasticity curves are changing, consumers are more willing to postpone purchases, trade down, or buy less, so "expensive must-have features of yesterday are today's can-live-withouts"-and so you should make the stripped-down version (e.g., shorter subscriptions, fewer bells-and-whistles for b-to-b products) readily available
• Trusted brands are especially valued and they can still launch new products successfully
• Adjust product distribution to those channels which benefit from the downturn. As important as Wal Mart has been for magazine publishers over the last several years, for example, it has become even more important during the recession as consumers go there (and use the Web site for purchases as well.)
• Your vendors along the distribution value chain will feel the recession as much, if not more than you do. So to support these businesses, help them with their working capital as much as possible to share the risk of inventories, credit and financing.
• B-to-b customers prefer to see products and services unbundled and priced separately

Publicity, b-to-b communication and driving traffic to a Web site are more obvious media uses.

Martha Stewart's dogs and the media reporter David Carr both have Twitter accounts (@TheDailyWag and @carr2n). The only thing is, the dogs have a lot more followers, Stewart and Carr revealed at The Future of Celebrity Media conference.

So besides channeling your dog, what do media businesses use Twitter for?

• As a mini publicity engine for writers and celebrities to connect with their consumers or potential consumers and as an extension of their marketing and branding campaigns
• In the book business publishers use Twitter to interact with bloggers, journalists, bookstores and libraries and to post reviews (especially in non-traditional media.)
• For immediate customer feedback, particularly about a digital product or service
• Driving traffic to a new offering on the Web site
• Providing live coverage; this may have started as an ancillary service for news oriented sites,  but it is becoming less ancillary and more core
• Quick communication via the company intranet for groups and teams; updates could be set to private.
• Commentary during events-sometimes snarky, always fun, and potentially useful
• Ok, so this isn't the media, but it is my favorite newest use for Twitter: In law enforcement a Tweet can be used as a digital Wanted poster. The Tweet "Can you ID this armed robbery suspect?" posted by local police lead to footage of a robbery.  

Still, these uses aren't really central to the media business model. Julie Michalowski, an executive at Conde Nast, has a Twitter account-and has a sense of humor about her own addiction. She sent me this Jon Stewart clip: Old Man Stewart Shakes His Fist at Twitter

From the memorable commentary about the service: "Twitter offers real time access to some of our most important leaders' and news peoples' least important thoughts 140 characters at a time."

Inborn talent? Nah. Look for "deliberate practice" and organizational support

Geoff Colvin's recent book Talent is Overrated: What Really Separates World-Class Performers from Everybody Else has theoretical and practical ideas about improving performance in your chosen profession or in an avocation. The book is compelling, wonderfully written, and well worth buying (discounted to about $20 online). I particularly liked reading specifics about dozens of studies in support and opposition of his thesis. That being said, you can read an excellent summary of the book's key points and hear the author speak about the book.

But to quickly summarize: Colvin shows through a review of current scientific thinking that what apparently makes certain people great is not inborn talent, but rather something called "deliberate practice." This is a sustained, often life-long, purposeful effort that improves performance in a specific domain. Understanding that knowledge needs to be focused rather than general is a key point of the book.

Although this may seem obvious to publishing execs who would never be tempted to hire a circ jock to make sales calls at P&G, valuing specialized knowledge and expertise isn't so widely held. If it were, the recent TV advertisement for Intel wouldn't seem so hilarious. It shows Ajay Bhatt [pictured], co-inventor of the USB, who looks like your normal middle-aged engineer (accoutrements include a sweater vest and hanging id card) strutting to background music of heavy metal-ish guitar and drums into what is presumably an Intel cafeteria where he gets the rock star treatment: Pretty young women look faint when he pours coffee at the coffee machine, an employee shoves a pen into his hand for his autograph, photo flashes go off and a guy unbuttons his dress shirt to show a T-shirt with Bhatt's face printed on it. The commercial declares "Our Rock Stars aren't Your Rock Stars."

You can infer from this commercial a lesson related to Colvin's "deliberate practice"-that the environment and your colleagues are key to the success of the individual in his or her chosen sphere. A company that values and supports what makes great performances and products see the special, successful person as a "rock star."

Communications departments now work directly for the top exec and are responsible for product presence on social media.

AdAge's Editor-in-chief, Jonah Bloom, has said in a recent column that marketers are getting more excited about PR as a useful tool than they have in a long time.

I agree, and although I'm not sure exactly how Bloom measures excitement, here are some of my indicators:

• The effortless sounding "placements" have been re-branded to hard-working "earned media" as the newest description of the output that PR generates. They've taken a page from the successful 1980s TV commercial series for Smith Barney "We make money the old fashioned way, we earn it."

• Amy Binder of the public relations firm, RF Binder sees video earned media making a bigger and longer lasting impact than anyone ever thought was possible. Binder said during a panel sponsored by the Harvard Business School Club of Greater New York, "It used to be if there was a positive TV story, it would fade quickly, because TV is an evanescent medium. Now, anyone can see a video at any time."

• The Chief Communications Officer is higher in the corporate pecking order in recent years. The study, The Rising CCO, (conducted by a major PR agency and executive search firm-so admittedly self-serving) found that although 48 percent of CCOs reported to the CEO in 2007, the number increased significantly to 58 percent in 2008.

• The same study found that social media and blogging are the most frequently added functions to the corporate communications departments in 2008

• The findings of the Media Prominence Study which calculates brand value based on Interbrand's 2008 Best Global Brands report, show that on average 27 percent of brand value is tied to how often the brand name appears in the press. And for brands in the consumer electronics category-that are feature-rich, high-involvement and complicated-public relations efforts accounts for 48 percent of brand value.