Twitter’s Facebook Smackdown


…that had more than its share of technology issues…

…and no clue about what business model would enable it to actually generate revenue…

…and some firm came along offering me $500 million in stock for my company…


But faced with the (well, kinda) same set of circumstances, Twitter decided to pass on a $500 million stock offer from Facebook.

Is this a reflection of Twitter’s belief that its worth a lot more than $500 million? Possibly, but I would hope not.

All Things Digital reported:

It’s more about timing,” said one person familiar with Twitter’s motivations. “There is a strong feeling that there is still an opportunity — even with the economic downturn — to blow this thing out.”

One commenter on the site remarked: “In my opinion, the two communities just wouldn’t mesh well.”

Just my opinion, but neither of these views nails the real issue (Facebook can hardly be considered a single community, and the overlap between Facebook and Twitter users is huge, so the commenter is really off-base).

My take: Twitter’s rejection reflects its take on Facebook’s future valuation.

I said this during the dot-com boom eight years ago, and it holds true today: For all these (now Web 2.0) firms to succeed and thrive, advertising is going to have to account for a greater portion of GNP than healthcare and financial services — combined.

And that’s simply not going to happen.

It doesn’t add up. On one hand, to garner a multi-billion dollar valuation, a Web 2.0 firm needs to have mass appeal. But on the other hand, the pundits yell that “mass media advertising is dead!” If shoving advertisements in the face of people on TV, in magazines, and on other Web sites doesn’t work, then why would it work on Facebook?

 Even Google is diversifying its revenue stream, and has seen its licensing revenue (which admittedly only accounts for about 3% of revenue) grow by 2.5 times its 2007 level through just the first three quarters of 2008.

Twitter is making a smart move by passing on this deal. Not because it’s worth more than $500 million today, but because that $500 million might not be worth as much in the future with Facebook as it would be with some other firm.

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Report Card Advertising

Dear McDonalds:

So you’re advertising on report cards now, eh? May I remind you that we live in a one-to-one, personalized marketing world now? It’s not enough for you to just offer free happy meals on kids’ report cards. Instead, you need to customize and personalize your offers. May I suggest:

“We’re sorry that you haven’t done real good in English. Come in to McDonelds for a free order of frys anyway.”

“Only a C in Math? No problem, come to McDonalds and buy one Quarter Pounder and get the next one for double the price.”

“At McDonalds, we don’t put chemicals and preservatives in our food. Not that you would know the difference considering you failed Science.”

“Only a B in Gym? Get into shape with our Asian Salad With Grilled Chicken.”

I’m sure you can come up with some more. Good luck.


Ron Shevlin

p.s. I almost forgot, I have one more suggestion for you. STOP DOING THIS.


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Random Thoughts From Ad:Tech

Thought I’d share some of the stuff that went through my head (and in one case, out my mouth) during my trip to NY for the Ad:Tech conference.


[On the subway to the hotel] “New Yorkers are freaking amazing. How the hell can they sleep on the subway, and wake up just in time for their stop?”


[On the exhibit hall floor] “It’s now official. There are more lead gen companies out there than there are leads.”


[On the exhibit hall floor] “Mobile better be big, or this show will be half the size in two years.”


[On the escalator at the hotel] “C’mon escalator, getta move on here, the creepy guy behind me is wearing yellow sneakers and has question marks all over his suit.”


[On the exhibit hall floor] “Twenty million little companies, all promising to deliver ‘new and innovative’ ways to stick crappy advertising in the faces of consumers who don’t want to see it. What an industry.”


[Over a cup of coffee w/ the Trabianites] “I wonder if people think I’m cool, cuz I’m hanging with these guys. Nah, nobody’s that stupid.”


[Milling around the hotel] “If Wall Street and Madison Avenue had a conference at the same hotel at the same time, and a wrecking crew mistakenly tore down the hotel, would that be good or bad for the economy?”


[On the exhibit hall floor] “Everybody and their mother is an expert in search engine optimization.”


[On the exhibit hall floor] “Gee, it’s awfully quiet at the web analytics vendors’ booths. The term ‘analytics’ must be scaring people away.”


[To Charlie Trotter on the way back from lunch] “You never know when you might see somebody famous in NY.”


[On the walk back to Penn Station to catch the train home] “Hey, there’s ex-Knick Bill Bradley walking towards me. Told you, Charlie.”


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An Inconsequential Typo

Got the following email from MediaPost this morning:


Anything catch your eye? I’ll tell you what caught mine: Insurers spending $980 BILLION on online advertising. And if TV ad spend garners two-thirds of the total ad spend, then this $980 billion represents, at best, only one-third of their total ad spend! So let me get this straight: Insurance firms plan to spend, what, $4 TRILLION dollars on advertising this year?

Needless to say, I clicked on the link. Only to find that the article, on the Web site, reported $980 million in online ad spending.

There’s one way to improve your email clickthrough rate.

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Subliminal Messages

A recent article on MarketingProfs on the “wrongheaded claims against advertising” asserts that:

Subliminal advertising, the alleged ability to motivate action with messages that are below are threshold of perception, doesn’t exist. Explicit, above-threshold messages in advertisements are what sell; hidden, muffled, or unperceivable messages do not.”

Oh really? Well, it turns out that…

Research done by Bahador Bahrami
Of the University College London has found
New evidence that invisible images attract the brain’s attention at a
Subconscious level. These findings challenge long-held
Hypotheses about consciousness. Apparently, we see things we’re not
Even aware of. There’s a brain response in the primary
Visual cortex to subliminal images. I guess the brain takes in a
Lot of things we’re not even aware of.
It’s exciting to see
New research come out on this topic.

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Advice For The New Volkswagen Chief Marketing Officer

Adweek reported a while back that Volkswagen dismissed its Chief Marketing Officer. While I’m generally loathe to offer advice to CMOs in industries I don’t usually work with, in this case, the urge is too tempting:

Give all the money earmarked for advertising to manufacturing.

Why? Steve Johnson at Pragmatic Marketing wrote:

“…and then there’s my son’s Volkswagen GTI. The windows fell off when he was driving. The windows… fell… off. The dealer said, “Yeh, that happens sometimes.” That happens sometimes?!?!? Good grief. While they fixed the VW they loaned us a Toyota; we liked it so much that we bought a Camry.”

Just one more proof point that a poor customer experience will ruin a branding effort faster than you can say Fahrvernugen.

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You Should Only Hope For Frequent Contact With Your Customers

As part of a special section on “Building A Better Customer Experience,” American Banker re-published an article (pw req’d) yesterday that reported the extent to which consumers viewed financial firms as acting in the customer’s best interest (in contrast to acting in the interests of its own bottom line). A quote from the managing director of a New York-based consulting firm, explaining why banks scored lower than other types of FIs, caught my eye:

Most people interact with their banks more often than they do with an insurer or a brokerage, so there is more opportunity for error. People have more frequent contact and more types of contact with their bank, so things like hours and fees seem onerous.”

My take: Frequent contact with customers is a blessing, not a curse.

A few years ago, I was speaking at a conference about the impact of online banking on customer loyalty, and I presented the results of a study that Bank of America did that showed that — all else being equal (e.g, demographics, tenure with the bank, starting balances) — over time, online bill pay customers grew balances and number of products owned faster than other customers.

I wondered out loud why that would be — after all, what was it about paying bills online that made someone more loyal to his or her bank?

I found that there are (at least) two possible answers. The first has to do with consumers’ motivations and expectations. For some consumers, the strength of the relationship they have with their bank is predominantly driven by factors relating to convenience. As a result, the convenience that they experience by paying bills online strengthens their emotional connection to their bank.

But the second explanation — the one most relevant to this post — came from someone sitting in on my presentation that day. Neal Burns, a University of Texas at Austin professor of advertising, told me that according to research he’s done, “repeated, positive interactions with a brand strengthen a customer’s connection to that brand.”

Insurers get few chances to create that positive impression — but when they do, they’re usually good opportunities, since insurance claims are typically high emotion interactions. Brokerages — particularly discount brokerages — may get that chance even less frequently, especially if they don’t have an advisory relationship with the customer.

Banks should be thankful for the frequency of contact they have with their customers. That their scores in the survey are lower than other FIs isn’t because of “opportunity for error”. It’s better attributed to:

  • Organizational conflict. The product-centric nature of most banks creates conflicting goals and incentives that make it difficult for those firms to always act in a customer’s best interest. Can we really expect a mortgage specialist to tell a checking account customer that he might get a better deal on a loan by going across the street?
  • A focus on the wrong experiences. I don’t mean to downplay the importance of customer service interactions, but I believe that the scores reported in American Banker reflect the dissatisfaction and missed expectations that consumers have with their sales experiences. It’s in these interactions where they receive product recommendations that they perceive to be best for the bank and not for them, and where their expectations of what it’s like to do business with the bank are established. Expectations that, in some cases, are not lived up to.

Banks that build trust with their customers earn forgiveness when (and if) they do make a mistake. Having the opportunity to build that trust through frequent interactions is a bank’s advantage — not handicap.

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Tips From A Client To A Copywriter

I came across this post called Ten Tips From A Copywriter To A Client and just had to respond. I’ll reprint the blogger’s (copywriter’s) tips in italics [with some editing for the sake of space] followed by my (the client’s) comment/reply.

1. Please read a book and watch a good movie from time to time. No matter how busy you are, you can still make time for such a thing. [Y]ou SHOULD know who is David Lynch and what type of music Beastie Boys make.

OK. And in return, please put someone on my account who has read a book written before 1975 and who knows the difference between Fergie from the Blackeyed Peas and Fergie the Duchess of York.

2. You have no right to tell me HOW to write a headline and WHAT WORD I should use as long as you’re incapable of writing a correct phrase in your native language.

As long as I’m the one paying, I’ll tell you what I want to tell you. But if you think I’m wrong, then tactfully and factually tell me why you think I’m wrong. Tell me why you would suggest using a different word and why the word I’m suggesting “might” not be the most effective one to use.

3. If you already have a headline that you know you’ll use no matter if it’s shitty or not, just go ahead and tell that to the agency. No need for the copywriter to come up with hundreds of headlines that you know you’re gonna turn down.

Please re-read the reply to tip #2.

4. Please don’t write a brief with specific instructions on what image to use, where to use it, what the text is and exactly how the ad should look. You’re talking to an ad agency not a production shop. You do your job, let us do ours.

My “job” is to be accountable for results. If you view your “job” as simply writing headlines and copy, then we have a problem. I’ll repeat: If you don’t like what I’m telling you, then tactfully and factually tell me why you think I’m wrong and why you would suggest a different course of action.

5. If you’re not sure that you’ll actually do an ad then please don’t waste the agency’s time by making them do a final version just so you can say: “Yeah, it’s very good, but we’re not gonna do anything.”

On behalf of my firm, and others like it, let me apologize to you. Shit happens (usually political shit). Budgets come and budgets go. Plans — even those supposedly set in stone — change. I’m not intentionally jerking your chain.

6. When you kill an idea, kill it with arguments. Even if you don’t have any arguments just pretend that you have and make something up.

Make something up just to make you feel better about it? My trusted relationships aren’t built on lies designed to assuage each other’s egos. I’ve been in my business for a long time — I have strongly developed opinions and theories about what works and what doesn’t. But sometimes, those opinions and theories are so deeply ingrained, I’m not even aware of them. Ask smart questions to help me elaborate on them and uncover the arguments I have — but might not have related to you — for killing an idea.

7. Never fire an agency without any reasons. Word tends to get around and you’ll soon end up working with the lowest of the low since all the other agencies will refuse your account.


8. Treat the agency exactly as you want to be treated by it. An agency is a client’s partner, not a client’s slave. I’ll repeat that one: AGENCY = PARTNER.

Get real. I’m paying you for your work, while I take all the responsibility and accountability for the ROI. You’re not a partner — you share NONE of the risk. The smart agencies know this. (And by the way — take my firm’s logo off that slide you have in your new client pitches that lists me as one of your “partners”).

9. Never ask the agency to do an ad exactly like the one you saw done by some other agency for some other client. That’s not the agency’s job. It’s offensive even to think that an agency will copy some other agency’s work just to get your account.

Please understand that when I ask you to do that, that I’m giving you a clue to what I want. And again, if you think I need something different, then tactfully and factually tell me why you think I’m wrong.

10. The last tip is this: LISTEN. Listen to what the agency has to say. It’s our job to make great ads for you, ads that work, ads that sell, ads that awe. So listen to what we have to say. Trust us. We know what works and what doesn’t.

Nobody knows what works and what doesn’t. Your experience has helped you form opinions about what works and what doesn’t — and unless you give me rational, factual, and mature arguments for why you think I should be doing something differently, then you haven’t earned the right to be listened to.

I listen to the firms that earn the right to be my trusted advisors. I’ll listen to you when you demonstrate that you understand my business, understand my issues, and go above and beyond the letter of our contract to help me manage, grow, and improve my business. Your tips from a copywriter to a client showed none of the traits I’m looking for in a trusted advisor.

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[Note: Thanks to Adelino for his help with this]

Starbucks’ Memo To Turner Broadcasting: Here’s How To Generate PR

Howard Schultz’ memo to the Starbucks’ leadership group, published in the Wall Street Journal, and now covered all over the blogosphere, is a textbook lesson in how to generate PR and awareness that supports the brand.

Interestingly (to me at least) was that, although a Starbucks spokeswoman confirmed the authenticity of the memo, nowhere in the WSJ article did it say who provided (or leaked) the memo to the Starbucks gossip Web site. Hmmmm……

The brilliance of this PR ploy is that by admitting that the customer experience — which, of course, the firm has built its reputation on — is slipping, Schultz’s memo reaffirms the firm’s commitment to the experience (and improving it) in a manner far more convincing to its customers than if the firm had simply tried to assert its commitment in TV and print ads.

And all for free!

Sure beats sending two guys through Boston with lite brites, who get arrested, and then having to pay out a couple million dollars, eh Turner Broadcasting?

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