Killing Marketing: How Innovative Businesses Are Turning Marketing Cost Into Profit

Killing Marketing: How Innovative Businesses Are Turning Marketing Cost Into Profit

by Joe Pulizzi, Robert Rose

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Product Details

ISBN-13: 9781260026429
Publisher: McGraw-Hill Professional Publishing
Publication date: 09/13/2017
Pages: 272
Sales rank: 528,473
Product dimensions: 5.90(w) x 9.10(h) x 1.20(d)

About the Author

Joe Pulizzi is founder of the Content Marketing Institute, which Inc. magazine named the fastest-growing business media company in 2012, 2013, and 2014. He is the recipient of the Content Council’s John Caldwell Lifetime Achievement Award for Content Marketing.

Robert Rose is Chief Strategy Advisor for the Content Marketing Institute. He has provided strategic marketing advice to some of the world’s most innovative companies, including Capital One, Dell, Caterpillar, Hewlett Packard, Microsoft, the Bill & Melinda Gates Foundation, and UPS.


Read an Excerpt

CHAPTER 1

Killing Marketing

BY ROBERT ROSE

"Most companies don't fail because they are wrong; they fail because they don't commit themselves. The greatest danger is in standing still."

— Andy Grove, CEO, Intel

"Quick, kill it before it lays eggs"

— Popular Internet meme

Did you know that the plane crash is an invention?

It is. It joins the automobile crash, burned microwave popcorn, and the hard drive fail as some of the more notable inventions of the twentieth century.

This idea comes from Paul Virilio, a French cultural theorist, urbanist, and "philosopher of speed." Virilio's concept refers to technology and how the invention of any new technology also simultaneously invents the disaster resulting from that technology. As he put it, "When you invent the ship, you also invent the shipwreck; when you invent the plane you also invent the plane crash."

All technology innovations, whether a ship, a plane, microwave popcorn, a computer hard drive, or even new approaches in business have corresponding disasters that have consequences on us as humans. And it is an excellent metaphor for where we are with the practice of marketing today.

In the introduction to this book Joe asked an important question: "What if everything we know to be true about marketing is actually what's holding back our business?"

What if we finally realized that we've invented the shipwreck of marketing?

Shouldn't we look? Shouldn't we redesign it?

What if we killed the marketing we know — so that we might reinvent something new?

It's certainly no great revelation at this point that the marketing and media landscape has fundamentally changed over the last 18 years. As Joe and I wrote in Managing Content Marketing, our first book together in 2011:

We're all in agreement that the influences of the explosive growth of the mobile and social Web are creating seismic shifts in all areas of business. We watch, as the Web threatens the existence of entire content-oriented sectors such as periodicals, newspapers, book stores, record companies, and broadcast television. ... Entire job categories such as HR benefits manager, travel agent, librarian, journalist, photographer, videographer, and Web designer are going the way of the linotypist, stenographer, and elevator operator.

The social and mobile Web has completely changed the speed, efficiency, and ease with which consumers can engage with each other and has had a tremendous impact on brands. This new need for consumer engagement now correlates to every single aspect of our business. Marketing now influences how our salespeople sell, accountants account, researchers research, developers develop, service people service, and even how leaders lead.

It's funny: As marketers, we've been so keenly aware of how the world has changed around us. But we haven't changed marketing at all.

Now, to be clear — we don't mean the purpose of marketing, or why it exists. Rather, we mean the function of marketing and how it works. The purpose of the business, as Peter Drucker said 60 years ago, is "to create and keep a customer." And, as he also said, "Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business." And as the unique and distinguishing function of the business, the purpose of marketing, is then to be that which creates and keeps customers. Joe and I agree with that wholeheartedly.

The only question is, how is that done?

Even with the fundamental changes in the world in which we live, we still haven't changed the function of marketing.

HOW DID WE GET HERE?

One of the things that's often misstated in this digital content and media revolution is that the creation of content has become democratized. This isn't true. The creation of original content isn't any easier today than it was before Gutenberg invented his printing press. It still takes specialized talent and time to focus on quality. What has been democratized to the point of overload is the production and distribution of content. What used to take special skills, expensive tools, and large, continuous investment in distribution now can be done ostensibly by anyone, with off-the-shelf tools and for free.

Interestingly, and paradoxically, as the production and distribution of content has become more commoditized, this means that the value of original, high-quality content continues to increase. The ability to garner and hold attention from an audience with original content becomes increasingly valuable to any endeavor that desires that the audience do something, whether that be to buy, donate, vote, become loyal, or spread the message.

In today's world, we as consumers have tools that filter through the noise for just exactly what we want. And once we consumers find and trust the source of the things we like, we tend to begin to rely on it as a continual source of that information or entertainment.

You can see this trend happening across the media landscape:

* HBO 's over-the-top service, HBO Now, is still only a small portion of its approximately 50 million subscribers in traditional cable. But it has added 2 million subscribers in less than two years, and is accelerating. In 2017, HBO plans to add more than 600 hours of original programming.

* Netflix, which started as a DVD rental service, has now gone from approximately 27 million subscribers in 2012 to more than 60 million subscribers in five years. Consider that within the next few years more than 50 percent of Netflix's content will be original productions.

* In a transformed news media environment, complete with "fake news" and mistrusted outlets, brands such as the New York Times, the Washington Post, the Atlantic, and others are seeing an exponential increase in subscription rates.

* Amazon, the world's largest retailer, has launched Amazon Studios, and will spend more than $2.6 billion on original content for its Amazon Prime service in 2017.

And we can see this trend happening in the value of original business content as well. When we plot the strategic value of content over time, we get a graph like the one shown in Figure 1.1. As the figure depicts, the perceived value of content started very high, and then plummeted as production and distribution costs decreased with new technologies. Now, that value has begun to increase sharply as content becomes a more meaningful way to connect with audiences and buyers. Let's walk through each of the phases.

ORIGINAL CONTENT: THE LOYALTY TACTIC

In the pre-digital, pre-web world, the value of original content to the enterprise was relatively high. Why? Because every piece of content was a considered purchase for a business. As we mentioned, it wasn't the creation of original content that was so expensive, it was the production and distribution of the content. Whether it was a print ad, a brochure, a billboard, or a consumer magazine, the cost was something that you needed specialists for. In the early 1980s (pre-digital), the average cost of producing a four-color, full-page advertisement was approximately $8,000. That is approximately $20,000 in 2017 money. Today, if you'd like to produce a four-color full-page advertisement, according to experts it could cost you somewhere close to $0 (assuming you legally license software) to open Adobe Photoshop and do it yourself. Or, you might go to an Internet-based, on-demand solution like 99Designs.com and pay $200. Or, you might contract with a freelancer or agency directly and pay anywhere between $1,500 and $30,000 on the high end.

Then, distribution was an even more expensive aspect of original content. The only means of distributing content were to leverage your own mailing lists, get the content placed (for purchase) in a retail outlet, or "rent" a media company's access to audiences.

So, the cost of original content (read risk) was high. And, when we look at owned media, we can see a definite trend. As Joe and I have written in our previous books, the idea of creating owned media for audiences isn't a new idea. It's been around for hundreds of years. But pre-digital owned media was most consistently used as a loyalty tactic. These were the magazines that you'd find in the airline seat pocket. This was the association magazine you received for being a member. These were the extra content-driven experiences you received after you became a customer. Why? Because at that point, the business knew that you would actually receive it. The company had your address, or your phone number. Or, the publication was quite literally dropped in the bag of the store you just shopped in. The company knew how to reach you, and thus the loyalty tactic was the one approach that had a low enough risk to justify producing the expensive content. It was a distribution channel that the brand controlled.

Then, as shown in Figure 1.1, the perceived value of content dropped precipitously as we entered the digital age, first driven by the word processing and desktop publishing revolution of the 1980s and 1990s, and then of course by the Internet and World Wide Web phenomenon of the early 2000s. Suddenly, you could produce your original content using prosumer (or enterprise) technology, and the cost of both production and distribution dropped. Thus the risk came way down, and businesses' appetite for producing more and more content went up.

CONTENT: THE MARKETING TACTIC

The early 2000s was a time when businesses decided to go around the traditional media. Digital technology enabled us to circumvent traditional media. We could use the technology at hand to build our own content destinations on the web. We could message customers directly using email, and then subsequently social media. We could deploy technologies to build communities. The only challenge? To be found. The mandate was to create optimized online destinations that were easy to find by Internet search engines. Traffic would be cheap (or even free), and we could reap the benefit by publishing as much content as we could to our websites.

And so the risk, and the perceived value of content plummeted — both in the production costs and in the value that the company placed on it. It became a simple marketing tactic. We gave responsibility for our websites to the "young people," our interns and our nieces and nephews. Businesses created separate digital marketing groups with the sole purpose of creating more and more digital reach and frequency. The separate groups, though, were given scant investment. The "real value" of media was still held in the traditional production and distribution channels. A famous quote from the early 2000s was that we don't want to "trade analog dollars for digital dimes."

But businesses leapt with great vigor at every new channel and content feed they could — and chased the technology voraciously trying to apply the classic rules of sales and marketing to the new digitized world. The theory was that digital content was always going to be cheaper to produce, easier to distribute, and more efficient than anything that came before. So, why not produce as much of it as we possibly can?

But it stopped working. It became more and more difficult to achieve results. What happened? The rules changed.

People started to consume even more media every day, jumping to more than 10 hours every single day. And we spend most of that on social networks. Facebook alone now commands an average of 50 minutes of a person's day.

And the tsunami of content compelled businesses to change their model again. Google changed its algorithms to reward "quality content" to try to improve the value of search to advertisers. Facebook and the other social platforms decided that organic reach wasn't going to be something attained for free any longer. New media suddenly looked a lot like old media — protective of the relationship with their audience and loathe to simply give access away. Suddenly, quality became the word. And, forward-leaning marketers realized that they too could compete in this environment. They no longer had to depend on traditional media for production and distribution. Businesses with smart marketing could leverage inexpensive production and distribution and aggregate their own audiences. The challenge to these marketers: they not only needed to create original content for the media — they had to become the media. The pressure for value began to increase, because this transformation required something they didn't have. Talent.

CONTENT: THE MARKETING STRATEGY

As we moved out of the Great Recession of 2008-2010, marketers began to see the increasing value of original owned media content as a means of creating greater trust with customers. Forward-leaning brands created publishing houses, producing original content in multiple forms. For example, General Electric created multiple digital magazines including GE Reports, which reaches 300,000 readers, putting it on par with many consumer-oriented science magazines. Another example is American Express's OPEN Forum, an educational source and community where small business owners can learn from business thought leaders and each other. This forum reaches more than a million unique visitors per month — and now represents the source for 50 percent of the company's small business credit card applications.

Both B2B and B2C brands recognized the power of content as a marketing strategy. Big companies such as General Electric, Lego, Kraft/Heinz, IBM, Cisco, P&G, Coca Cola, and Capital One all began creating owned media publications as a means of building strategic relationships with audiences. A renewed interest in "custom publishing" with an emphasis on digital began to provide media companies with new business models.

The Cannes Lion Awards, one of advertising's most prestigious events — and one that has been held since the 1940s — added "Branded Content" as a new category in 2012.

Content began to be referred to as a strategy. Content marketing, as a practice, grew in importance to marketing. It went from tactic to valuable marketing strategy. As Joe wrote in 2008, in his first book Get Content Get Customers with Newt Barrett:

Marketing organizations are now realizing that they can create content whose quality is equal to or better than what many media companies are producing....

By delivering content that is vital and relevant to your target market, you will begin to take on an important role in your customers' lives. This applies to your online, print, and in-person communications. And this is the same role that newspapers, magazines, TV, radio, conferences, workshops, and Web sites have played in the past. Now it's time for your organization to play that role.

And so, the value began to increase, but so too did the risk and the cost of acquiring new talent. The brands that chose to play the role found the inevitable challenges and realizations. High-quality, original content creation is difficult. To be successful means looking at marketing through an entirely different lens. This strategy was tempting, but original content required talent that the business didn't have, culture shifts that the business didn't want to make, and new measurement, governance, and processes that the business didn't understand.

And this leads us to where we are today.

CONTENT: THE BUSINESS STRATEGY

In 2015, Joe released his book Content Inc., in which he told of a different business model — one where companies build an audience first, and then determine what products should be sold:

In the future, thousands of businesses around the globe will be leveraging a Content Inc. go-to-market strategy. Why? Because having a singular focus on audience, and building a loyal audience directly, gives you the best understanding of what products ultimately make the most sense to sell.

In my previous book Experiences, written with Carla Johnson and released in 2015, we wrote of the coming evolution when we said:

Content — and the exponentially increasing quantities that every organization produces — affects our marketing strategy and should be dealt with as a component of that strategy throughout the enterprise. ... Content will affect business — it's just a matter of "how," not "if."

This is the state of owned media and marketing today. The potential value of owned media to the organization is increasing rapidly. Those forward-leaning businesses that have been along the curve, like Kraft Heinz, General Electric, and Johnson & Johnson, are no longer willing to simply accept the idea that they must continually rent access to audiences. They are no longer looking at social media as solely a means to try to organically build a community of loyal customers. They won't accept that content is simply a short-term investment meant to supplement advertising. They are looking at how owned media experiences — and the audiences they build — can add multiple lines of value to their businesses, and thus change not only their marketing approach but their entire business strategy.

(Continues…)



Excerpted from "Killing Marketing"
by .
Copyright © 2018 Joe Pulizzi and Robert Rose.
Excerpted by permission of McGraw-Hill Education.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Foreword Stephanie Losee, Head of Content, Visa Corporate Communications ix

Acknowledgments xi

Introduction Joe Pulizzi 1

Chapter 1 Killing Marketing Robert Rose 17

Chapter 2 Return on Audience Robert Rose 41

Chapter 3 Media Marketing Joe Pulizzi 63

Chapter 4 The Revenue Model Joe Pulizzi 87

Chapter 5 The Marketing Media Savings Model Robert Rose 119

Chapter 6 First Steps on the Road to Killing Marketing Robert Rose 139

Chapter 7 The One Media Model Joe Pulizzi 155

Chapter 8 Today: The Beginning Joe Pulizzi 183

Chapter 9 What Now: Lessons Learned Along the Transformation Robert Rose 209

Chapter 10 The Future of Marketing Robert Rose 225

Index 247

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