The Pharmaceutical Marketing Society is today staging its ‘ABPI Code of Practise: Annual Review’ conference. I’m co-hosting a workshop on how the Code impacts on e-marketing.
If you’re attending, do say hello.
According to Neilsen Online, the number of Facebook users in the UK declined by 5% in January - the first decline since they started measuring traffic to the site in July 2006.
And whilst most websites see a dip in traffic in January thanks to people being on holiday, I suspect this heralds the start of a gentle downward trend which will continue for some time before plateauing.
Why the fall?
Although I’ve not seen any data, my hunch is that the drop will occur because for many - especially those over 25 - sites like Facebook are delivering a low level of ROI on their time while raising serious privacy concerns.
On the issue of time, whilst people were initially keen to be a part of the great social experiment of our age, they’re now tiring of having their lives interrupted by an endless procession of moronic chain letters, videos and applications sent by dull-looking strangers and friends they’ve chosen to leave behind.
What’s more, when it’s a toss-up between spending a few extra minutes with your kids or updating your current Facebook status, it’s a no brainer which one is going to win.
On the issue of privacy, it’s obvious why teenagers and twenty-somethings with a need to prove their partying credentials would want to share everything with the world.
But for older people focused on building their careers whilst juggling complex personal relationships, sharing your every move is clearly perilous.
Negatives aside, I’m sure that social networking is here to stay - but only when delivering experiences that are highly relevant to the user.
For example, Facebook is a brilliant tool for finding old friends to meet up with when traveling.
The opportunity for entrepreneurs in this space is to create social network applications that allow users to commune solely with people sharing a common interest using simple tools and a minimum of personal data.
In recent days, I’ve been re-reading Ogilvy on Advertising, the seminal book on effectictive advertising penned by the late communications guru, David Ogilvy.
Although written in 1983, it drips with pearls of wisdom that relate directly to the web.
In particular, Ogilvy underlines the fact that in order to maximise their return on investment, marketers must employ a scientific approach to the planning and execution of their communications.
In other words, rather than being led by gut feel or personal preferences, every step of the planning and executional phases of a digital communications campaign must be guided by empirical research.
For example, the planning of new activity should start with the undertaking of qualitative and quantitative research to fully understand the target audience and its needs.
And when a piece of communication activity has been created, it should be tested with members of the target audience to guage its effectiveness BEFORE it goes live in order to identify areas for improvement.
He then stresses that live on-going activity should be monitored closely to identify learnings which can be used to enhance its performance.
And that detailed post-campaign analysis must be undertaken to caputure learnings for use in subsequent activity.
Unfortunately, too little digital communications activity adheres to Ogilvy’s evidence-based approach.
Given digital’s unique ability to measure effectiveness, that’s a major lost opportunity.
The announcement yesterday that my old boss at BBC Radio Five Live, Bob Shennan, has been hired as Director of Radio at Channel 4 is a landmark event for the commercial radio sector.
Whilst commercial radio has tended to focus on churning out low-brow (and low cost) programming, Channel 4 plans to set up three national digital radio stations which will compete against many of the best bits of BBC Radio.
For example, one of its objectives is to create news and current affairs programming which can compete with the likes of Radio 4’s Today.
This is exciting as I find the sound of Today horribly tired - especially its obsession with goings-on at Westminster.
On that note, Bob has a superb track record of creating news and current affairs radio which is both informative and entertaining.
This rare talent saw him dramatically increase audiences during his seven years at Five Live.
Unfortunately, the one thing neither he nor any other commercial radio exec will be able to do is tell advertisers exactly how many people are hearing their ads - or track precisely how consumer behaviours are affected by them.
This week’s Economist features a useful article on measuring the effectiveness of online advertising.
As it points out, there are a plethora of ways in which ‘effectiveness’ can be measured, including the number of times the advertisement is published (i.e. page impressions), how much time users spend on pages featuring the ad (i.e. dwell time) or the number of unique users who’ve visited the pages where the ad sits.
Then there’s click-through rates (i.e. how many people have clicked on the ad), conversion rates (how many people who clicked on the ad actually purchased). And so on.
The key takeout for marketers is that before launching a campaign, they need to understand what the underlying objective is.
Only when this has been defined can the right measurement tools be identified.
For example, if the purpose of a campaign is simply to build awareness about a new product, then key metrics will probably include unique users exposed to the advertising and dwell time.
But if the objective is to drive sales of the new product, then the key metrics will be how many unique users clicked on an ad and how many then converted into buyers.
Of course, if the product can be purchased both online and offline, a sales-focused campaign should ideally be able to track how many people have seen the online advertising campaign and then converted into purchasing both online and offline in a bricks and morter store.
Identifying the right metrics and being able to track them isn’t always easy.
But if you invest thinking time at the outset, your campaign’s ROI will increase significantly.
Having spent much of the past 12 months poking around digital agencies, a common issue that I’ve detected is a lack of knowledge amongst most staff as to what’s happening in their industry.
For example, the typical digital agency staffer is blissfully unaware of what open source is - let alone the fact that it is re-shaping not just the digital marketing communications sector but every organisation on the planet.
Even worse is the fact that most staff have little idea about the key business or technical activities involved in creating powerful communications and applications.
This can be seen in the fact that most people have virtually no idea what their own colleagues actually do.
For example, ask the average account service executive to detail what a developer does and I guarantee you’ll be met with blank looks.
Meanwhile, quizz the average developer to explain what the business needs of their employers’ clients are - and you’ll be waiting until the cows come home for an answer.
The point here is that there is a great opportunity for digital marcomms agencies looking to stand out from the pack.
By launching a formalised learning program that draws on internal knowledge and resources, it is possible to bring your staff up to speed quickly and at low cost.
Needless to say, a knowledgeable staff able to deliver clients with industry-leading thinking and executions will generate more profit than one which barely knows which industry it’s in.
One great example of a marcomms business which is doing this is Edelman which brought in digital comms legend Steve Rubel to head up bolster its internal learning center, Me2Revolution.
Although I don’t know how Me2Revolution has impacted on profitability for Edelman, it’s mere existance has been a great way of showcasing the business’ digital strengths to existing and potential clients.
What’s the opportunity in your business?
I attended my first Pharmaceutical Marketing Society meeting yesterday.
Focused on marketing ROI, the key themes to emerge were:
- Marketing represents about 33% of the US pharmaceutical industry’s costs compared to an average of about 25% for all industries.
- Virtually all pharma marketing investment is focused on sales people who have face-to-face meetings with doctors and other healthcare workers able to write prescriptions.
- Industry revenues are flat, despite huge increases in sales staff numbers in the past 25 years.
- Many companies are failing to identify what the ROI on these expensive sales staff is.
- Digital marketing communication channels represent 1% of pharma marketing spend in the UK despite digital now representing about 15% of all marketing spend across all industries in the UK.
The obvious conclusions from all this are that:
- The industry will be forced to measure ROI more robustly in coming years.
- Digital communication channels will grow strongly thanks to (a) their effectiveness and (b) the ease with which that effeciveness can be measured.
After many a false dawn, I believe the mobile web is finally set to become an important platform.
Although still plagued by a host of technical and political problems, my gut feeling is that by the end of 2010, a significant minority of people in the developed world will browse the mobile web on a regular basis.
My conversion from mobile sceptic to enthusiast is based on a number of factors.
Firstly, the plethora of highly profitable business models spawned by the PC (i.e. traditional) web has increased the determination of mobile web players to take their own platform seriously (web surfing was an afterthought when the mobile platform was first being rolled-out).
Secondly, the sales success of the iPhone has demonstrated to handset manufacturers that there is strong demand for a quality mobile web browsing device.
Thirdly, the lack of browser standards that have dogged the platform from the beginning look set to be largely overcome by the end of the decade.
Fourthly, mobile networks (at least in Europe) have slashed the amount they charge users to access the web from their mobile phones.
Fifthly, the number of wireless hotspots continues to increase - whilst access is being simplified and made cheaper.
Sixthly, the rapid increase in mobile device ownership - especially in the developing world - means that there are now twice as many mobile devices in the world as PCs. As many of these users will never have access to the PC web, the potential for the mobile web to dramatically improve their ability to do business will drive strong demand for mobile web browsers - once device prices are slashed.
For those involved in planning, designing or developing websites, now is the time to start learning.
Meanwhile, your clients need to start thinking about the platform - and how they can be first to market with innovative new services that capture the unique opportunities offered by mobile surfing.
Yesterday I attended Carsonified’s excellent Future of Web Design conference in New York.
Although I’m not a ‘designer’ per se, my interest in attending was driven by fact that the design process is obviously a key part of creating stuff that works.
The line-up of internet rock stars included Ryan Singer from 37 Signals, Jeffrey Zeldman from Happy Cog, Jeffery Kalmikoff from Threadless and mobile guru Brian Fling (who’s curating next week’s The Future of Mobile event in London).
Key take-outs for me included a raft of thoughts on how to maximise site usability, emerging trends in the mobile space and thoughts on how to improve the effectiveness of HTML email.
Formal stuff aside, there were also loads of interesting attendees to talk with.
With the iPhone launching in the UK this Friday, it was especially interesting talking with people who already own them here in order to get their thoughts on it.
Surprisingly, while they all liked their iPhones, my sample of three users all said they’d happily go back to a Blackberry tomorrow if needs be - especially as the iPhone doesn’t push email or sync with business applications like diary.
Maybe I won’t get one after all.
Flying back from Australia yesterday, I started reading the excellent new book, Microtrends, written by Hillary Clinton’s chief strategist, Mark Penn.
Penn, who was profiled in a recent Economist article, is also the head of Burson Marsteller, the world’s largest PR group and President of his own polling company, Penn, Schoen & Berland.
Having advised people like Bill Clinton and Tony Blair, along with companies like Microsoft and BP, he believes that western society is changing rapidly as small but significant groups of people start to live non-traditional lifestyles.
The dozens of groups he identifies include ‘Sun-Haters’, ‘Extreme Commuters’ and ‘Aspiring Snipers’.
From a marketer’s perspective, his message is that once a group represents 1% of the community, it starts to have a profound impact on consumer preferences.
Each of the groups he describes in the book have now hit the magic 1% number - at least in the US.
And he argues that marketers need to start addressing their needs - or watch their products and services become increasingly irrelevent.
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