Vol 3 Issue 22

Published biweekly for members of the American Marketing Association, this online-only newsletter describes what is happening in marketing and why a marketer should care. A typical issue includes news analysis, a Q & A, numerous features, tips on how to do your job better and links to other relevant sources of marketing information.

News: Search keyword prices drop in January
The price that advertisers paid for keywords dropped an average three percent More...

News: DM and sales budgets to rise
Companies are planning to spend more money on More...

Feature: A year after Can Spam, junk e-mail worse than ever
In January 2004, the sweeping federal anti-spam legislation More...

Column: Karl Hellman, author
Integrating Marketing, Sales, and Benefit Delivery: Cooperation to solve customer problems More...

Q&A with James Panagas
Vice President, Marketing More...

AMA internet radio
Live!! More...

News: Search keyword prices drop in January

The price that advertisers paid for keywords dropped an average three percent after the $23 billion online shopping holiday season, according to Fathom Online, a search engine marketing company.

Keywords in the Telecom-Wireless products and services category dropped 28 percent from $1.09 to $.79, possibly reflecting the trend to give cell phones as a gift during the holidays. Keywords in the Consumer-Retail category also decreased significantly by 11 percent from $.58 to $.52 per keyword, evening out some of the huge gains that category registered early in the fourth quarter 2004 when the frenzy to buy shopping keywords was at its peak.

As mortgage rates drifted downward, mortgage companies apparently seized the opportunity to persuade homeowners and first-time buyers to refinance or purchase properties, which increased the cost from $3.17 this past September to $4.93. "Advertisers are learning that the unique bidding marketplace in Search allows them to price ads by leveraging real-time changes in the market," said Matt McMahon, executive vice-president of Media and Marketing for Fathom Online.

The company tracks keyword to spot trends and look for advantageous buying opportunities. The keyword list consists of the top 500 most popular generic keywords in eight marketing categories, as measured by total search inquiries across the top five-ranked position on tier I search engines, and weighted accordingly.

News: DM and sales budgets to rise

 

Companies are planning to spend more money on direct marketing and sales programs in 2005 than last year, according to Customer Connect Associates Inc. The technology and consulting firm's most recent Customer Relationship Management Trends Census found that respondents who invested heavily in CRM technology are focusing on using and improving existing processes rather than implementing new technologies. Those who did not keep up with the CRM technology curve are investing in technologies that are more affordable and stable.

"We're seeing that companies are still investing heavily in marketing data marts and sales automation technology," said Geoff Ables, president of Customer Connect Associates. "Those companies that completed implementing those technologies are now reaping the rewards. They have moved on to developing tighter processes and spending more on sales and marketing programs."

The percentage of respondents reporting more emphasis on direct mail doubled in the past 12 months. Results indicated a continued trend toward using the Web as a main communication channel, with about 70 percent reporting greater emphasis. But while respondents view the Web as the most important method to communicate with customers, few use systems to manage Web content or capture important information such as clickstream data.

The quarterly census surveyed executives and managers at small, midsize and large businesses.

Feature: A year after Can Spam, junk e-mail worse than ever

 

In January 2004, the sweeping federal anti-spam legislation known as Can Spam went into effect, intended to stem the deluge of junk e-mail into personal and business inboxes. Instead, unsolicited e-mail is at an all-time high twelve months later, and some even argue Can Spam has exacerbated rather than helped the problem.

Despite Can Spam and increasing levels of anti-spam measures, companies received more spam e-mail in 2004 than they did prior to the law's enactment, according to Postini, an e-mail security and managing firm. The New York Times reports that unsolicited junk e-mail on the Internet has come to total of 80 percent or more of all e-mail sent, according to most measures - up from 50 percent to 60 percent of all e-mail before Can Spam went into effect. Industry analysts also estimate that the global cost of spam to businesses in 2005, in terms of lost productivity and network maintenance, will be about $50 billion ($17 billion in the United States alone).

The problem is even worse for small businesses: Postini found that smaller companies such as those with 100 users or less received up to 10 times more spam per user than large businesses. "Spammers are finding smaller companies more susceptible to attack since they typically have fewer and less sophisticated defenses in place than larger enterprises," Smith said.

The Postini report concluded that most legislative measures in the United States, Europe and Australia have had little impact on the problem. Many anti-spam activists believe Can Spam has made the spam problem worse by effectively giving bulk advertisers permission to send junk e-mail as long as they follow certain rules. "Can Spam legalized spamming itself," said Steve Linford, the founder of the Spamhaus Project, told the Times.

Postini also found that even as attention to the cost and prevention of spam reached a high point in 2004, threats to e-mail systems grew worse as virus attacks grew threefold, and directory harvest attacks -- virus bombs that wrest working e-mail addresses from Internet service providers -- continued to plague corporate e-mail servers. Analysts predict more viruses will commandeer more personal computers as zombie spam transmitters. "We've thrown everything but the kitchen sink at this problem," said Chris Smith, the senior director of product marketing for Postini. "And yet, all of these efforts have yet to make a significant dent."

Not everyone agrees that the Can Spam law is to blame, and lawsuits invoking the new legislation - along with other suits using state laws - have been mounted in the name of combating the problem. Microsoft and other large Internet companies like AOL and Yahoo have used the federal law as the basis for suits.

The law's chief sponsor, Senator Conrad Burns (R, Montana), said that it was too soon to judge the law's effectiveness, although he indicated in an e-mail message that the Federal Trade Commission, which oversees its enforcement, might simply need some nudging. "As we progress into the next legislative session," Mr. Burns said, "I'll be working to make sure the F.T.C. utilizes the tools now in place to enforce the act and effectively stem the tide of this burden."

The F.T.C. has made some recent moves that include winning a court order in January to shut down illegal advertising from six companies accused of profiting from thousands of X-rated spam e-mail messages. But so far, the spam trade has foiled most efforts to bring it under control.

The Postini report predicts an intensified battle against spam that will continue to escalate as e-mail threats evolve at a faster pace. "Postini's predictions for 2005 are consistent with what we see ahead in the e-mail security landscape," said Matt Cain, industry analyst with the Meta Group. "More sophisticated, phishing style attacks will proliferate as bulk spamming scams decrease in effectiveness. We see dynamic, fast moving threats such as zombie networks posing particular challenges to corporate systems."

As a result, solutions will need to take a more holistic approach to e-mail security in the coming year, spanning anti-virus, anti-spam, and network level attacks such as DHA's according to the Postini report. "Filtering on e-mail contents will continue to diminish in effectiveness, giving way to more sophisticated sender behavior analysis," added Smith.

Column: Karl Hellman, author

 

Integrating Marketing, Sales, and Benefit Delivery:
Cooperation to solve customer problems

A great salesperson is a force of nature, someone who has a way of making the sales target no matter what.  Nothing the marketer can do helps or hinders all that much.  Just stand back, admire, and don't be late with the commission checks.

These great salespeople integrate the marketing and sales functions intuitively:  They find prospects who need the product, learn who in the prospect's organization must be convinced  of the product's benefits, identify and overcome access barriers, motivate, and orchestrate the purchase-in many cases they are the brand in the customer's mind, and the deciding, differentiating factor.

Unfortunately, most sales forces have only a few truly great performers.  If you have a hundred salespeople and you have five great producers, count yourself fortunate.  Find these people and learn how they are overcoming their prospects' purchase barriers.

On the other end of the productivity s! pectrum are the marginal salespeople.  In many sales forces, the bottom 50% or 60% of the sales force accounts for less than 10% of the sales volume.  And this is as it should be.  This bottom half includes new employees as well as talented people who are learning that sales is not their strength.  No amount of scientific screening eliminates them.

Marketing has the greatest impact on the remaining 35% or 40%-the B+ salespeople.  They do a lot of things right, they barely hit or barely miss their targets, and they want all the help they can get. Your marketing strategy and sales support activities makes its greatest contribution among these eager, willing and basically capable sales performers. Graphically, here is how the relationship between sales performance and number of salespeople looks.

The Relationship Between Percentage
                                                        of Sales and Performance of Salespeople                                                    
 

                                                     Percentage of salespeople                       Percentage of sales

"A" salespeople                                        5%                                                    50%

"B" salespeople                                      35%                 &! nbsp;                                  45%

"C" salespeople                                      60%                                                     5%

Don't Expect The B+ Sales Person to Do It All.
The B+ sales person is not the best marketing tool for overcoming many awareness barriers (e.g. branding), traditional channel barriers, competitive parity in products, prospect inertia, and many of the other marketing issues. 

Marketing's job is to pinpoint the specific barriers prospects are facing, and design specific programs to help them over these barriers.  These targeted programs make the B+ sales person's job easier by giving them access to prospects who are already aware of benefits and who are motivated to engage in the sales process.
However, the sales force is the ideal marketing tool for orchestrating and closing the sale.  This is their job.  And marketing can make them better at it by telling them the answers to the three questions every sales person wants answered:

1. Who do I call o! n?
2. What do I say and do?
3. How do I get paid?

Reconciling marketing strategy and sales strategy
Most companies have sales plans:  The numbers of each product to be sold into each market segment.  This is all the A+ sales person needs.  Marketing can learn from watching how she makes her numbers.

But the B+ sales person needs help taking the product, market segment, and communications strategies and programs and converting them into a strategy of how he is going to allocate his time.

The answer is dialogue-early and often.  Product, Market, and Communications strategies need input from sales-what is the A+ sales person doing, and what barriers are the B+ sales people encountering?  Sales needs the marketing fact base, insight into customer values and issues, guidance on how best to focus, and the creativity of branding and motivational programs.

More than just reconciling the marketing objectives' numbers and sales objectives' numbers-though this re! conciliation is necessary and often overlooked-meeting to talk about how all departments can cooperate to solve customer problems, is the essence of integration.  Cooperating to help customers is the super-ordinate goal that coordinates the functional silos and makes each more effective.

Q&A with James Panagas

 

Vice President, Marketing
Taxware
Salem, Mass.

Taxware is a leading developer of global transaction-based tax calculation and compliance systems. Its software solutions simplify tax accounting procedures so that businesses around the world can minimize the risks and costs associated with sales/use tax, consumer's use tax, and value added tax compliance. As part of the company's marketing efforts, Panagas has developed a corporate video to help audiences understand more about Taxware.

Who are your target audiences?
We target larger corporations who are doing business in multiple tax jurisdictions across state and country lines. We cover industries all across the board, and there are three sets of people I'm trying to reach: the corporate tax department, the IT people, and the C-level officers. We previously only targeted the tax department. Now, though, there are more legal and regulatory issues appearing on radar screen, which are gaining the attention from higher-level execs. And from a technology aspect, companies are looking for enterprise-wide solutions.

When did you first start thinking about using a corporate video?
I joined the company nine months ago, and the first thing I did was schedule interviews with various people on the management team to get a sense of what the company is about. I quickly realized each person had a different piece of the story. This is a very complex company to explain. We have a technology aspect, a tax aspect, and a government rules and regulations aspect. We created a 10-minute video to put all these pieces together and tell the entire story.

Any company that has a complicated or complex story to tell can benefit from a corporate video. The more complex your story, the more the video can help. Ours is exclusively talking heads - the president, VPs of the company, and other senior level managers telling their pieces of the story.

About six months ago, we burned it onto DVD and supplied it to the sales force and business development people in quantity. The sales force embraced it immediately, and it is serving its purpose. You can hand it to any person, and at the end of ten minutes, they have a working knowledge of your company. We're about to launch new website for the company and put it up as a Windows Media Player file. On both the DVD and website, the video is divided into chapters, so people can play only the piece or the spokesperson and topic they want. This feature also has been helpful in pitching some of our executives as speakers for tradeshows.

How does video compare in cost to other marketing media?
The cost was roughly equivalent to two full-page magazine ads from our schedule. For me, it was an easy decision because it's not a backbreaking expense, and the video has some shelf life. That was a really important part of the preplanning - making sure we give this the longest possible shelf life. We worked carefully to avoid any time-sensitive statements, so this should have the shelf life of minimally one to two years and perhaps longer.

I'm a big believer in merchandising whatever you create. The primary use of the corporate video is to arm the sales force, but there are a number of secondary uses like employee training, or when we bring customers in for product training. Here they are coming to learn about how to use the software, so we're taking the opportunity to give them insight into the company that 's providing it. There are multiple ways to use the video. We always ask, "Who else can have it? How can I circulate it?" We hand it out liberally and put it on monitors at tradeshows. It's the same material being merchandised in various ways.

How else are you reaching your audiences?
We traditionally have used printed collateral, direct mail, and a lot of trade shows. We recently have been trying newer approaches like e-mail marketing and webinars. We started webinars a couple years ago, did four last year, and are doing 12 this year. We're finding it's a very valuable medium for us, a very non-threatening way for people to get information. We put tax experts and technology experts on these webinars, and they go into real depth and take questions. We're getting a good response from it and see growing demand.

We still use a lot of our traditional marketing methods, and I think it's important that we do. Every time you introduce a new medium or a new venue, you still need to keep the old ones that work. I'm of the school that you have a broader array of methods to use today. You can pick and choose which ones you use in your marketing plan. Being successful is all about balance.

AMA internet radio

 

The AMA is pleased to announce its newest effort to promote and communicate leading marketing concepts and issues -Marketing Matters LIVE! - a live Internet radio show that will feature forward-thinking topics and key marketing thought leaders throughout the field.

Conventional talk radio has gained popularity over the last decade, providing a vehicle for consumers and businesses alike to share vital information and resources.  We are excited to break new ground in this "Internet Talk" radio space by bringing live content and discussion specifically to the marketing world. 

AMA's Marketing Matters LIVE! debuted on January 19th and broadcasts live, one-hour shows via the Internet every Wednesday at 11:00 am CST.  These shows also will be available as archived files for access anytime, anywhere.  --- www.wsradio.com/marketingmatterslive

Marketing Matters LIVE! is just one more way the AMA strives to empower marketers through the sharing of education and information