I was twenty-three, sitting in a conference room in Buffalo New York being trained in the P&G way. “Plan your work and work your plan,” was a phrase I would hear repeatedly during training. Planning in an Internet marketing time fueled by constant and accelerating change is difficult and different because:
- Speed
- Web 2.0 and King Customer
- Fast Feedback Loops
- Moore’s Law
- Golden needles
Speed
It is not just that the world is faster. It is. What makes a company fast is changing rapidly.
Platforms vs. Websites explains how Amazon’s massive scale and search engine marketing tuned content engine makes Amazon the fastest draw in the Internet’s west. It may seem counter intuitive that hundreds of millions of pages of content could make a company fast, but networks and search engines change the equation. One of the logical extensions of Chris Anderson’s Long Tail is the ecommerce merchant who understands Infinite Inventory (see my 2008
Infinite Inventory post) wins. Infinity is an important Internet marketing concept. Amazon, with 300,000,000+ pages in Google, creates infinite content to sell infinite products. In a digital world adding more costs pennies and may net dollars – the ultimate Internet marketing arbitrage at the core of the new economics. Speed happens when systems are built for massive scale AND quick manipulation. One without the other is insufficient.
Web 2.0 and King Customer
In the MadMen marketing days customers were important but tolerated as long as they did what they were told. It is good to be the King until the peasantry revolts. Revolution is what digital tribes want, live for and are good at. There is a scene in the movie Khartoum where the Mahdi rebels overwhelm Charlton Heston’s beloved city. Swarming rebels overtake Heston’s staunch British imperialism (you may be laughing at the idea of Heston as a British officer but he pulls it off and the movie, though old and odd isn’t bad). Digitally empowered customers use web weapons such as reputation economics (soon everything and everyone will have easy to find reviews), Google’s lightening search results and more computing power for less money (Moore’s Law) to swarm and devour MadMen’s crops. Fully toppled dictators and middlemen are relearning what Customer Is King really means.
Fast Feedback Loops
Almost ten years ago I joined a direct marketing catalog company. Their marketing was intelligent, highly objective, based on testing and doomed. They would drop a catalog, wait six weeks, evaluate data for another week (or so) and then form new tests. Web 2.0 means testing is easier, faster and required. Going to market without real world feedback seems beyond stupid. Feedback loops are so fast they change how to plan. Marketing plans need to do a little something, get results and do a little something more. Creating A to Z campaigns without Tweeting, throwing it up on Facebook, polling and testing is crazy.
Moore’s Law
Moore’s Law, named after Intel co-founder Gordon Moore, explains the WHY of our new digital economy. Moore’s law is computes get faster as they get cheaper. Anything related to computers does well. Well means margins increase as costs go down. The further you get from computers the worse business is becoming. Computers is too general a term. Companies related to computers who understand network marketing gain (Amazon, Apple, Google). Companies that may be close to computers but don’t understand quickly evolving network dynamics can be pummeled (AOL, Yahoo, Pets.com). Companies who don’t understand networks or how to put integrated circuits to work in new ways are in serious trouble (print media, Microsoft, American car makers, any airline, Eastman Kodak).
Golden Needles
Hidden inside of vast data haystacks are golden needles. Companies who mine, curate and reshuffle user-supplied data via platforms are in GREAT shape (Facebook, Twitter, Netflix, Mashable, Huffington Post). Companies developing small, static web sites are in trouble (RedEnvelope, American Red Cross, Barnes and Noble). Platforms encouraging user generated content (UGC) and easily manipulated data feeds are our Internet marketing future.
How To Plan
How do you create a plan in such an environment? A: very carefully and with the understanding nothing is written in stone and three years is an eternity. Some “evergreen” strategies require longer planning cycle. Evergreen, those projects that both take a lot of time and last a long time, is a huge gamble, Limit the number of evergreen projects. Three evergreen projects is a lot, five is betting the entire company on a positive outcome for all five and ten is insane. Evergreen is a crapshoot because they require the world to stay too still
Planning surprise and change in may be the biggest planning change. Internet Marketing Relativity explained how hard it is to know anything in a mixed up, fast and confusing world. Arbitrage Internet marketing by betting on many numbers (create many, varied campaigns). Read web analytics and watch fast feedback to learn how and where to concentrate marketing capital. In a twelve-month Internet planning cycle spend one quarter hedged as widely as possible. In the second quarter eliminate 90% and bet on the “best performers” limit to no more than 10%. In the third quarter keep 5% of the best performers and at least double their spend and create and test three times as many new projects. In the fourth quarter jettison all but the best performing 2% and at least double down on your spend. In the fifth quarter start all over again:
1st Quarter: Create as much and as varied Internet marketing as you can.
2nd Quarter: Eliminate 90% of what was created, keep 10% “best performers”
3rd Quarter: Keep 5% “Best Performers”, double their spend, create and test 3x as many new projects (3x the number of Best Performers)
4th Quarter: Keep 2% of best performers, at least 2x the spend
5th Quarter: Start All Over Again
Gordon Gecko’s Lesson
“Yeah but we finally know what works,” I can hear my Internet marketing friends say. Wall Street’s Gordon Gecko shared sage advice when he said:
It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.
The Internet, like all marketing now (and possibly everything else), is arbitrage, a network arbitrage. Last year’s winners can easily be this year’s dogs. Restarting marketing assumptions is the hardest thing all marketers (or people) do. Internet marketing exists in a perpetual NOW. What you did yesterday is interesting but its ability to predict what will happen today is less than zero. The only way to know what will happen today is to do something and watch. Use statistics and analytics to shape and create Internet marketing then assume nothing.
Muscle Memory Change
Tossing out and distrusting winners seems downright un-American. Networks only know an ever-expanding world of 1’s and 0’s. Our perceptions, how we read the infinite array of 1’s and 0’s, is relative. Observing network marketing behavior changes it. The only way to stay ahead of the creeping bias all Internet marketing creates is to toss out the winners and restart the arbitrage.
I can also hear friends saying they aren’t Wall Street traders. They are Consumer Products Goods Brand Managers and Internet marketers. Internet marketers must develop the ability to plan by not planning. Planning by not planning is creating campaigns and actions constantly trued by fast feedback loops and new perceptions, tested, reformed and re-launched. Internet marketers are day traders trained to arbitrage an infinite number of flexible positions.
Even if this theory of Internet marketing arbitrage is only half right traditional marketing is irrevocably changed. Most sentient beings believe marketing and sales are substantially changed, but we continue to try untangling a bowl of marketing spaghetti so complex attempts to unravel it only make it more complex and so less known. Our observations change the results and so must be limited and on the move. In the old days we believed we could, through force of will or intelligence, create space. When marketing worked we repeated it, and repeated it and repeated it.
Perhaps there never really was any space, or not nearly as much as we thought.. When customers are Kings space comes from customer involvement, advocacy and protection. The fastest way to lose recently won customer hearts and minds is to mindlessly repeat. King customers want an ever increasing cycle of relevant communications. Advocate King customers have core beliefs about companies that probably include:
• Company X is creative
• Company X cares
• Company X listens
• Company X is connected
• Company X understands me, my family and friends
Torch enough of these beliefs and advocacy is withdrawn. Torch enough of these beliefs and advocates become loud detractors. Torch enough of these beliefs and planning anything will be the least of the problems your company faces.
Programmers are smiling. Programmers recognize this new marketing paradigm as similar to “agile software development”. Agile software development is emergent. Solutions emerge and evolve through collaboration as Wikipedia outlines:
Agile software development is a group of software development methodologies based on iterative and incremental development, where requirements and solutions evolve through collaboration between self-organizing, cross-functional teams. It promotes adaptive planning, evolutionary development and delivery; time boxed iterative approach and encourages rapid and flexible response to change.
Think of the Internet as a collaborative agent, an organic thing with emergent properties too complex to be adequately or accurately forecast. Internet marketing is statistical modeling. Sounds like weather forecasting right? Internet marketing is weather forecasting with an arbitrage overlay. You aren’t just predicting Internet marketing weather you bet on it. If you bet on sun and it is pouring down rain you grab an umbrella and place another bet.
Achieve baseball stats; get 3 hits for every 10 at bats, and you are in the Internet Marketing Hall of Fame (currently in my garage). Have a year where you hit .500 and do two things. First have a huge party congratulating anyone and everyone who contributed in any way. Next CHANGE EVERYTHING because you are about to regress to the mean. Every marketing bone in your body will scream, shout and yell at you. Doesn’t matter, the only way to follow such an amazing Internet marketing year is to creatively destroy everything.
The network only has one truth – CHANGE. Network marketing’s one truth makes all Internet marketers day traders; a year is a “long term” plan, evergreen projects are another way of saying “never” and you are only as good as your last trade. Plan your work and work you plan, but understand and react to the Internet’s constant NOW, don’t be fooled by history’s seductive call and recreate your plan as many times and in as many ways as is needed. HINT: No matter how many times you reinvent, modify and change your Internet marketing plan it isn’t enough by half.
The most relevant experience of my life came early. When we lived in Dallas my parents converted our two-car garage into a playroom for my brother, sister and me. I loved to play with wooden building blocks so much my mother built in two large cabinets with large wooden dump bins on rollers full of blocks. I could roll my blocks out, build all day, destroy what I built and roll the blocks back into their cupboard at night. Sometimes I worked on building large abstract cities for several days. We might leave those up for a day or two before knocking everything down and tossing the blocks back into their bins. I’ve created thousands of Internet marketing campaigns, hundreds of sites and made million of online dollars for my employers. Almost everything I’ve built over the last fifteen years of Internet marketing shares one common trait – they’ve all been knocked down, thrown into the Internet archive’s bin and rolled into the cupboard. This, as Michael Corleone said, is the business we’ve chosen. The next time a senior manager asks for a five year plan share this post. If, after reading How To Create Marketing Plans In Uncertain Times, they still want a five year plan RUN FOR YOUR LIFE.
Picture above is of Claus Oldenberg's FREE next to Cleveland's City Hall.
Books To Read BEFORE creating An Internet Marketing Plan
How by Dov Siedman
Purple Cow by Seth Godin
Crowdsourcing by Jeff Howe
The Mesh by Lisa Gansky
.