Doing business in a rapidly changing industry, marketing executives have adapted to and embraced new technologies and communication tools. They have braved the recession and have seen increased business in the past several months. Recently, executives representing marketing firms in Nevada met at the law offices of Holland & Hart in Las Vegas to discuss this changing industry and what the future holds.
Connie Brennan, publisher of Nevada Business Magazine, served as moderator for the monthly event that brings leaders together to discuss issues pertinent to their professions. Following is a condensed version of the roundtable discussion.
Do clients put marketing professionals in the same category as other professional services?
Scott Robertson: Absolutely not.
Sarah Thornton: It depends on who you ask. We did a roundtable with the public relations students at UNLV and the head of that group compared us to used car salesmen. She organized this roundtable of PR professionals and I was highly offended.
Stephanie Kruse: It doesn’t just depend on the client but also on what they hire us to do. If we’re doing branding strategy with market research on a real consultative based thing, then yes. Or crisis communications, you bet they consider us right up there. If they hire us to do an ad or publicity, then no.
Darcy Neighbors: I would say that we will only work with clients that see us as a partner at their level. We are seen completely at that professional level with our clients.
Brian Rouff: We try to do that. It’s like dating; starting a new relationship. We’ve gone into a few client engagements where we feel that we have that level of respect going both ways and then, as soon as they sign on the dotted line, there’s a lot of second-guessing. I agree that it depends on why they hire us. I think it’s extremely important to set the expectations up front.
Robertson: I’ve tried to build a business on having clients and retaining them for long periods of time, instead of always getting new business because they’re going out the backdoor every year. They have to trust you and they definitely have to value you. In trying times, clients are nervous. They wake up every day and look at their sales and they panic. In marketing, I like to say, you wake up every day unemployed. Literally, you’ve got to go prove ROI (return on investment) every day. I don’t put my dentist up for review or ask my accountant what the ROI on him is. I need him. I think marketers are made to dance and it keeps us on our toes.
Michael Coldwell: There’s also a real cavalier attitude towards marketing because we’re such a media-centered culture. Our clients are touching so much advertising and marketing on a daily basis that they feel they’re on par with our expertise. I can walk into a kitchen in any restaurant, stick my thumb in the soup and tell the chef that it needs more oregano. He’ll tell me to get the hell out of the kitchen. That same chef can sit in on a marketing meeting and have complete confidence to tell us, “That’s good marketing; I drive by that billboard every day. We need to be up there.” There seems to a duplicity between the level of expertise we can claim as marketing experts versus other professional services.
How competitive is the marketing industry?
Melissa Warren: There are now websites that you can pay $300 to get a logo and you get options, however many you pay for. These artists will submit to you, based on the information you provide them, logos of your choosing. We had a client do that. You don’t always get a quality product that way because you’re putting it out to the masses. But that’s the direction we’re headed. It’s like do-it-yourself advertising.
Robertson: You’ve got to find a client target that can pay for the services you provide. If you don’t get the job or let some go, refer them to someone that can do it at the price they want.
Jeff Wagner: It seems that one of the problems we all face is there’s too much competition and there’s always someone willing to do it for less because there is less overhead, or whatever the reason is. That’s a devaluation of the product in a sense. If we can create some sort of industry standard where everybody say’s, “It’s not going to happen for that.” For example, if there’s a monthly retainer, it’s $5,000 period. Then clients would start picking on merit. They would probably have more respect. In a sense, you get what you pay for. There was a year and a half period where it was really dark. You’d tell a client $10,000 and they’d say two. You’d say ok, but suddenly, you’re in a hole and you have a bad relationship. Those things kind of circulate and you take it only because you don’t want someone else to get it.
Do clients understand the difference between public relations and marketing?
Neighbors: I think it’s a continual education process. We train them up front. It’s a constant learning process and we show the advantages and benefits of each and how important it is that they work together for the greater whole.
Coldwell: Is there still a significant difference between public relations and advertising or has that line with branded content, advertorial and user-generated content blurred? It’s just this big gray area of the media landscape.
Solveig Thorsrud-Allen: I think there is still a difference. We work with clients and they want to do advertising, we refer them to someone because we don’t want to do that. We’re getting more and more requests for us to do the advertising and I don’t want to. We refer them out. On the public relations side, we try to work with clients that have a more sophisticated understanding of the difference in what they’re looking for. So, for your business model, we’re working more with clients on the strategy part. We don’t do as much publicity day to day that we have in the past. It’s more on the strategy and consulting side.
Rouff: We get more and more PR-only clients and that seems to be as of the last three or four years. When you talk about a retainer budget, we can do a lot better job for them as a PR client than we can for a traditional marketing client.
Thornton: My clients are mostly smaller business so they hire me for both. Sometimes I’ll do advertising, but I don’t make any money off that. They hire me for my time and my staff. So, most of the clients I have hire me for things that it takes time to do. I try to take on clients who understand what public relations is and that we can’t guarantee story placement. Shame on you if you do that. It’s not right.
Rouff: You also have to teach them how to leverage the story so that it’s not just a one day and gone.
How has social media changed your industry?
Wagner: It’s interesting because it’s come on so fast and it’s taken over all that we do. It’s a big part of our business and we’ve had to adjust to it. It’s also kind of a wild, wild west. Everybody is out there professing that it is the savior and is going to do everything. It doesn’t, it’s a component. I think what we’re trying to do is managing client expectations. You’re going to have advertising, PR and your strategy. You should have social media and a strategy behind it. Those 10,000 or 50,000 links are only as good as the program behind it. It’s hard to know exactly how it’s going to work unless you start dedicating a program. It is that expectation issue and the fact that they think it’s free so it should be cheap for us to do it.
Robertson: People avoided and disliked advertising prior to social media. That’s always been our challenge when people don’t watch our TV commercials or look at billboard and magazine ads. Now we’ve got this free channel where it’s flowing to them. It’s best served by brands that have an emotional bond with people. When you start connecting to all these brands, you’re going to get brand fatigue. You sit in your office and follow these companies. Who wants to have an emotional relationship with ACME Cement?
Rouff: It’s not good for selling things but it’s great for building relationships.
Jerry Kramer: Building them or hurting them? You have to monitor it because people start posting negative stuff. Other people read it and that’s the most credible kind of marketing communication there is. People go to blogs, you have to manage that and watch it.
Kruse: I think one of the most dangerous things is calling it “new media”. Television was new at one point. Everyone jumps on it like this is going to be the best thing since sliced bread. Some of our clients said, “Oh good, here’s social media, we can do this for free. We’re going to stop doing all these things now and focus on social media.” They didn’t consider it part of the mix. It was a bad decision and as much as you tried to counsel on the strategic use of channels, it was still thought of as the new savior on how to get messages to everybody. I think people more and more realize now that it’s just part of something as opposed to the end-all, be-all.
Kramer: They need to manage it themselves. I don’t think we can do it for them. I can’t be your personality.
Holly Silvestri: It depends. I think when it comes to a Twitter campaign or a following, we can manage the company. They need to have media copied for social media avenues. When it comes to a personal approach with a CEO or something, what they’re going through or dealing with, absolutely they should manage it on their own. One of the biggest challenges in social media is reaching the right audience, the audience that’s following and linked to you. So many people spew out information and a lot of people don’t care about it. It’s a matter of getting the right audience.
Robertson: There’s the engagement side too. One of our big clients, McDonald’s, decided they don’t want to do any social media on a local level. They have to pay us to do it and they’re like, “You can’t show me this. No one is going to buy a Big Mac at lunch because you made a joke today.”
Kruse: A lot of companies’ social media is no more engaging than their traditional advertising media. It’s strategy engagement. You have to have good strategy, good content.
Rouff: It has to be interesting, useful, informative and entertaining. Otherwise, if it’s just a pitch, people are going to tune that out the same way they tune everything out.
Silvestri: It has to be social and a two-way conversation. There are so many people that just put out information and don’t have a conversation.
Stephanie Forte: We represent a ski area, but we’re not in a ski town. Our skiers and snowboarders feel disconnected from one another. Social media for them is huge. It’s our job to create the community and keep everybody engaged, especially through the summer. We want to keep them interested and excited.
Paula Yakubic: Our biggest challenge is finding people, qualified people, that can handle social media and the digital space as well. I’m finding that when I’m interviewing them, they are either, right out of college and pretty young, or they’re older and come from a website kind of background. It’s really hard to find people that understand social media.
Is social media here to stay or just a fad?
Wagner: It’s going to keep morphing. It’s worked and certain industries will find that it works for them. Others will use it to communicate to friends. I don’t think it’s going away.
Robertson: You’re seeing big marketers migrating back some of their budget to TV and traditional stuff. In the old days, you just outspend everybody and they’re not seeing a return on that. Even an online budget is a vague line item. There are companies that just create pages and they have a staff who clicks on ads to report that someone clicked on them. It’s a vast wasteland of fraud online. That’s got to become more targeted in demonstrating ROI or it’s going to get hurt. There’s a lineup of how we should spend. It will always be there but people need to realize the old tools are the strongest.
What does the next generation of social media look like?
Rouff: It’s tough to predict. Look at how quickly MySpace became irrelevant. The days of being first in is not necessarily true with social media. I’m not sure if any of us know what the next big thing is.
Kruse: If you’re not in mobile space, you’re going to be missing out, especially for certain products. But, you really have to be conscious of mobile space. Unless you have a really good reason to use them, QR codes (quick response scannable codes) tend to be a little hokey. People are starting to realize that you don’t have to use everything that’s new. But, if you’re a consumer-based client, you’d better be thinking about mobile space in some way.
Coldwell: A lot of times we’re asked to do social media, the client really means Facebook. How deep do we go into that sphere? Is an Instagram campaign standard operating procedure for a social media client? There’s Four Square, Stamped and all those different platforms. You have to pick and choose which one is appropriate to demonstrate some ROI for that client.
Robertson: The term “social media” is a poor name altogether. All media, prior to it, was social. It started as a social network. I got into it because I knew it would be important to business down the road. As soon as advertising took over, which has become more and more the focus, I’m less engaged. The challenge of social media is keeping people using it. It’s just another form of media.
How do you demonstrate ROI for clients?
Kruse: There have been times when a client or prospect will come to us and say, “We need advertising.” I’ll tell them, “You don’t need advertising, you need to hire a sales rep.” They need to do direct marketing to a very narrow segment. Don’t use advertising money because you’re throwing it away to reach hundreds of thousands of people you don’t need to reach. You need a direct marketing rep who knows those industries and can get to them. We’ll do sales support materials for them but that’s what they need.
Coldwell: In this new economy, we find that the one true way to measure ROI is to measure it against the client’s business objectives. As cynicism grows about impressions, rating points and number of friends or followers, it comes down to, what’s your occupancy and what’s your ADR (average daily rate), for the hospitality industry for example. Look at the client’s business plan and measure activities against that.
Robertson: You definitely have to have your client meet or exceed their sales goals for the year. You’ve got to say, how much money am I going to have to charge if I’m literally going to have someone drill down to every channel [of media]. It get’s crazy.
Rouff: You’re only as good as your client’s reporting process. If their recordkeeping is suspect then it’s not very helpful.
Kruse: The spiffy thing is, now with analytics you can implant into client’s digital space. You can put measurement in. As you pull them down, you can see how you performed. Silvestri: Analytics is important but it just goes back to the basics of research, whether qualitative or quantitative. Getting research done, implementing a strategy, doing the implementation of the work and then getting results is what it goes back to. It’s the way to benchmark it. Grab a start at the beginning with a research project and at the end with a research project so you can see where you are.
Warren: Many clients aren’t willing to spend the dollars to do research. It’s hard enough to get them to understand the value of marketing, advertising and PR, let alone research. I think the old adage, “Without advertising, nothing happens” is how many clients quantify ROI. They know if they don’t have a presence in the marketplace, whether PR, advertising or social media, nothing will happen.
Robertson: I say to myself every day, “Am I providing value?” You’ve got to look at both sides and be honest and not always presume you are providing value.
Neighbors: The clients that you sit down and have a strategic marketing assignment with and are on a retainer get that they have to invest, not just short term, but long term. From year to year, they see results and they can see it in the bottom line every year. The clients that have grown in the last three to four years have been amazing, to see their growth in this economy. They stayed in the game and stayed in strong and hard. If they don’t get it, we don’t even take them on.
Do most clients have crisis communication management plans in place?
Silvestri: Most of our clients have it but we advise them. We even get callbacks of people that are just hiring us to review their crisis planner or create one for them. It’s crucial, no matter what’s happening in this world and how technology and social media avenues are evolving. Everyone can have a crisis, it’s important to address it.
Kruse: A lot of people in certain businesses don’t think a crisis could ever happen to them. It’s up to you to give them a couple of scenarios of things that could easily happen. If they could start to imagine that, then it’s a little bit easier for them to say, “Wow, you’re right. I could get sued and oh my gosh, that would be horrible.” There could be a lot of things where you can make them understand how important it is to prepare.
How is the marketing business doing lately?
Rouff: Much better. Much better this year than the last three years combined. A lot of it is just that we’ve gotten better at what we do. Some of it is because we’re playing outside the market and some of it is just that companies that have survived are jumping back into the game.
Yakubic: We’ve been in business for 14 years and this is our best year ever.
Warren: During the downturn, we didn’t skip a beat. Most of our clients where were cutting back, cut back in advertising, but not PR. While 2009 was flat, 2010 and 2011 have been our best years ever. We’ve grown by 25 percent.
Kramer: Marketing is an area, whether you should or shouldn’t, where you can cut your budget. Even when the price goes down, clients don’t want any less service. It’s very difficult. There’s a little bit of a reset. Property values are lower, salaries are lower and we’re still in transition. We’re doing better than we did last year, but we’re not doing great. We’re doing great work.
Roberston: People are looking for value and they’re staying home more and they’re looking for cheaper ways. So, there are business segments that are actually booming in the recession. People want HBO because they’re not going out to the movies as much. If you’re looking to grow it behooves you to see what categories are growing.
