About two-thirds of our agency’s business mix is B2B. The remainder is B2C and Public Affairs. We do digital marketing work for all of our clients and also provide an ongoing program of social media for each. I thought it might be instructive to share some of the observations and conclusions we have made in discovering some of the relevant distinctions between B2B and B2C social media.

First, I think a key difference in B2B is the added edge social media offers the sales team. Its ability to connect marketing to sales – and support lead generation – is proven and we are seeing B2B companies shift their budgets away from traditional media (like print ads in trade publications) to social media. Since a key goal of B2B marketing is to convert prospects into customers, the ability of social media to cost-effectively support a longer, more complex, bigger ticket sales process highlights the other key advantage in B2B – more manageable scalability.

Scalability is a permanent challenge for social media in my mind. A key benefit of social media is customer engagement. It is easier from a scale perspective to offer consistent and meaningful customer engagement to B2B clients because the audience is generally much smaller and thus it is more manageable to keep things at a personal level. Much of the social media programming I see on behalf of B2C companies is in reality broadcasting, not interacting.

Despite the clear benefits of B2B social media, we find more natural executive buy-in with our B2C client companies for a couple of reasons. First, they are very quick to grasp that it is a cost-effective way to engage with consumers. Secondly, user-generated content from brand enthusiasts often helps expand the reach of their B2C social media campaign and reduces some of the major B2C scalability challenges. Consumers don’t need to be engaged directly with the company to engage with the brand.

Conversely, most of our B2B social media audience really likes receiving access to very specialized custom content (such as an ongoing blog on adhesives), but is less inclined to overtly engage or share information because often they are using our social media platform for their livelihoods and don’t want to reveal to competitors what they are up to.

Now that I’ve pointed out some of the key differences, it’s important to point out that I see far more similarities between the two. For both, you’re probably better off  demonstrating thought leadership or supporting a relevant cause than just pushing product. Also with both, you need to realize that although the tools are free, it’s far from a “free” venture, as it takes a lot of effort to keep your social media campaigns current and relevant – and thoughtfully respond to your followers. Finally, with both you need to have a strategy and reason for doing it.  For example, a B2B company may not get any value in having a Facebook page that focuses on their products. But if they want to recruit better employees, they may find value in creating a Facebook page that shows they are a fun place to work with a dynamic culture.

Whether you’re in B2C or B2B, we have found social media to be an effective vehicle for reaching and engaging your target audience on a differentiated, authentic basis. We use the same SCG Digital Content Flow model as a starting point for both. 

-Patrick Strother

There are two critical responsibilities in managing any crisis. The first is to resolve the material issues. The second is to communicate effectively to the impacted publics. The core crisis team is generally charged with executing both responsibilities (resolving and communicating) simultaneously.

I have been closely watching the BP disaster as it has unfolded very badly on both levels of these critical responsibilities. The first level failure was driven by how ill equipped BP seems to be in resolving the primary material issues of the crisis; namely, plugging the hole and mitigating the damage that the leaking oil is causing. On both material issues they have failed and continue to fail. But why?

BP obviously did not have a workable plan for addressing a spill of this magnitude. Despite that lack of a plan, one can also reasonably conclude that they are implementing their ad hoc solution poorly. Poor planning combined with poor execution equals trouble. It also means the company is functionally incompetent.

Even so, this functional incompetence does not fully explain their almost inexplicable ongoing blundering in the realm of communications. It’s as if they gave not one thought to how they would be perceived, how effective communication could help them or even who they should assign the role of spokesperson to.

In my view hapless Tony Hayward is simply ill suited to the task of spokesperson – especially for a U.S. spill of epic proportions . Tony has an ‘arrogant twerp’ quality that combines poorly with his British accent and flippant comments to gain the trust of Americans. For example, his statement on Tuesday  May 18^th “I think the environmental impact of this disaster is likely to have been very, very modest” followed his equally preposterous prior statement from Friday May 14^th that “The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.”

These statements seeking to minimize the problem cornered Hayward into a no-win position. Not only did it cost him his credibility early, it made him appear aloof and disengaged with reality. When he lost his credibility so early it became increasingly obvious that he lacked the leadership qualities necessary to handle the crisis. His leadership has been under question since these inane and downright stupid comments and rightly so.

To be fair to BP, it is unlikely that any other Big Oil company would have handled the material issues BP faces any better. None of them have clean-up plans that give confidence in their ability to handle a leak at a mile below sea level. That leaves the communication even more critical. In that regard, I think BP has made a dire situation much more potentially fatal to their future survival.

I personally hope that BP can survive this so they can fully pay for the damage they caused. But Pavel Molchanov, an analyst at Raymond James, estimates the total legal cost, including criminal fines, at $62.9 billion, which would dwarf the $20 billion escrow account to be used to pay claims of economic loss.

Disasters like this are all too easy to second guess. The U.S. government’s lax regulation combined with its own lack of capabilities in cleaning up an oil spill enabled this spill to reach its disastrous critical mass in many respects. But ultimately I believe this will go down in history as one of the most poorly executed crisis resolutions by a corporation – ever. And that results from BP failing on both of its two critical responsibilities: resolving the material issues and communicating effectively to the impacted publics.

-Patrick Strother

One week ago, the new Social Media Marketing Magazine launched with the innovative editorial approach to feature the expertise of a number of marketing leaders from business, publishing and academic communities. The publication’s mission is to help you navigate through the social media maze and emerge with a more clear understanding of how to achieve your marketing goals by applying effective strategies, tactics and best practices. Our founder, CEO and Chief Creative Officer Patrick Strother, is featured in the Viewpoints section of this inaugural issue. Patrick also gets a little “ink” in the Top Marketing Professors on Twitter section, with his more than 10,000 followers. Since you are reading this blog, chances are you already find social media valuable. So explore the publication’s site or follow Patrick on Twitter if you aren’t already.

By now, you have probably heard quite a bit about Arizona’s very controversial “Show Me Your Papers” Senate Bill 1070, which Governor Jan Brewer recently signed into law.

What you may not be as aware of is that the bill, like many major political decisions, seems to be having unintended consequences. This is a bit ironic because if anyone should have been able to anticipate the likely economic fallout of this law – it’s Arizona. Arizona has faced the wrath of other American citizens over their politics before, most notably in their decision to refuse to recognize Martin Luther King Day in 1987.

ABC News noted that the boycott over Martin Luther King Day was devastating to Arizona’s tourism industry. “Tourism officials estimated that Phoenix alone lost almost 170 conventions and an estimated $300 million in benefits from the five-year-long controversy.” Pressure eventually fell on the NFL, which in 1991 pulled the 1993 Super Bowl from Phoenix. Voters finally approved the holiday in 1992 and Tempe, Arizona was awarded the 1996 Super Bowl. 

The current boycott is moving fast. U.S. Congressman José E. Serrano, (D-NY) is already calling for Major League Baseball to move the 2011 All-Star Game from Phoenix; a move that alone could cost the city up to $60 million in lost revenue. Serrano calls the Arizona “Show Me Your Papers” law “unjust, wrong-headed, mean-spirited, and unconstitutional.” Serrano himself cited the National Football League’s decision to move the 1993 Super Bowl from Phoenix, as his precedent.

The New York Congressman correctly points out that a large number of Major League baseball players are of Latino origin. “I think Major League Baseball, with 40 percent Latino ballplayers at all levels, should make a statement that it will not hold its All-Star Game in a state that discriminates against 40 percent of their people,” he said. 

Other groups, such as that led by Leone Jose Bicchieri, said he was urging baseball teams (such as the Cubs) to move their spring training headquarters out of Arizona.

And that’s just the current fallout with baseball. It certainly appears that there’s a lot more coming at Arizona. For example, cities such as Denver, Oakland, West Hollywood and Saint Paul are already recommending a travel ban on public employees traveling to Arizona. With the instantaneous speed of communication and social networks, the boycott could become so economically painful very rapidly that five months, (not the five years like last time), might be enough time to force Arizona to reconsider the law. This is in spite of another irony: 70% of Arizona citizens currently support the law. 

Reasonable people can certainly debate the fairness or even the morality of this boycott tactic, but there is no debating the effectiveness of the free market in swiftly and surely exerting a powerful force on our nation’s politics. It will be interesting to see how new media accelerates the impact.  

-Patrick Strother

The Coffee Party is a new movement of individuals whose stated purpose is to seek compromise and cooperation from their government, not obstruction. They want a society in which democracy is treated as sacrosanct and ordinary citizens participate out of a sense of civic duty, civic pride, and a desire to contribute to society.  The Coffee Party is a call to action based in the principle that our founding fathers and mothers gave us an enduring gift—Democracy—and we must use it to meet the challenges that we face as a nation.

The Coffee movement pledges to support legislators who put their energy toward solutions and call out those who use their power to block progress. Members encourage citizens to engage in political discourse and work together toward achieving solutions to the nation’s problems. Chapters have been forming virtually overnight since the movement’s inception and, if the meteoric rise of its Facebook fan base is any indication (at the time of this writing about 65,000 members in the space of one month, and growing), there soon may be Coffee Parties in every area of the country.

Growing mainly through a Facebook fan page, the party pledges to “support leaders who work toward positive solutions, and hold accountable those who obstruct them.”

It will be interesting to see if this movement stays virtual or actually becomes real. At this point it doesn’t seem to have the same passionate, organic roots as the Tea Party movement—at least to me.

 What do you think?

-Patrick Strother

There is widespread concern that the recent 5-4 Supreme Court Decision to roll back restrictions on corporate spending in federal campaigns could unleash a torrent of corporate-funded attack ads in upcoming elections.

On behalf of the majority, Justice Anthony Kennedy wrote: “Because speech is an essential mechanism of democracy—it is the means to hold officials accountable to the people—political speech must prevail against laws that would suppress it by design or inadvertence.”

In his dissent, Justice John Paul Stevens accused the majority of judicial activism and attacked the use of corporate personhood in the case: “The conceit that corporations must be treated identically to natural persons in the political sphere is not only inaccurate but also inadequate to justify the Court’s disposition of this case.”

Good arguments can be made on both sides of this issue in regard to whether it captures the spirit of the constitutional mandate to protect political speech. But personally, I don’t think advertising is the problem. A strong case can be made that there is not enough spent on political advertising in relation to how important these election results are and how almost completely inept our political leaders have been at responsibly managing the approximately $3 trillion federal budget. Larger communication budgets to promote campaigns should help us hold political officials more accountable for what they promise during their campaigns and for their actual behavior in office.

Much has been made about the rising cost of campaigning to become President. According to the Federal Election Commission (FEC), a total of 148 candidates for all parties and candidates who ran for President in 2008 raised a collective total of $1,644,712,232 and spent $1,601,104,696 for the primary and general campaigns through the 2008 election. The amounts raised and spent by the two major candidates, according to the same source, was:

Candidate (Party)   $ Raised               $ Spent                  Votes              $ per vote

Barack Obama (D) $ 532,946,511    $ 513,557,218      69,498,215           $ 7.39

John McCain (R)     $ 379,006,485    $ 346,666,422      59,948,240           $ 5.78

These expenditures, in part, led to the highest turnout of voters (63%) since 1960. Not a bad result. Including all the candidates’ expenditures, around $20 per vote was spent on the 2008 Presidential campaign. By commercial standards, and given the importance of the purchase decision, that doesn’t seem unduly high, especially when compared with the amount we each spend to fund the government.

Political marketing suffers some structural disadvantages that the commercial world does not. First, in general elections, voters usually see only a pair of realistically viable candidates to choose between. That’s a key reason turnout is low. In just about any other product category, there are many more choices. As a result, consumer interest—and consumption—is higher than political interest and consumption.

Second, the voter’s enthusiasm is episodically crushed by having to accept what the majority decides, no matter how far out of alignment that candidate’s values are from the voter’s.

Additionally, in the U.S. we can only cast a vote on a specified date once every two, four or six years, except by absentee ballot. Given the vagaries of voting, there might be a line to wait in, foul weather, a sudden crazy schedule to deal with or even a level of mistrust over whether an outdated voting machine will actually work. The commercial marketplace is vastly more efficient and convenient. Consumers cast their votes in millions of purchase decisions every day, increasingly online. We still operate under voting laws that existed when you might have had to ride a horse two days to get to the polls.

Finally, many politicians understand that they need to develop a personal brand with a distinctive, appealing message, delivered consistently over time. But it is often difficult to be this consistent and actually win. Politicians have to win a majority on Election Day, and doing so often makes them believe they need to parse words, trying to have it both ways, and thus become perceived as flip-flopping on issues. In addition, our win-lose system often forces candidates to undertake destructive tactics such as negative advertising to tear down their opponents rather than promoting their own virtues. When both candidates participate in this approach, both brands suffer, as does the entire political category.

What’s needed in politics is not less advertising but better marketing and branding: focusing on current and emerging “customer” needs, developing “product” and credible service solutions, informing interested citizens about them and making themselves easily accessible in person and through social media and other communication channels. But the real key is for politicians to understand that making unkept promises, while common, is what is hurting them most.

Perhaps a good starting point would be for politicians to view citizens not as occasional voters, donors and taxpayers but as their “customers” who are much, much more intelligent than most politicians seem to think. Voters remember what you say and if you keep your promises, especially if you are running for President.

President Obama won the past election, in part, with much better marketing than his opponent. But his brand strength and place in history will ultimately be defined by how well he delivers on his campaign promises. The brand promises are half the brand, keeping them is the other half. If politicians want to know why they are held in such low regard, they need look no further than their trail of broken promises. That is the problem, not advertising.

-Patrick Strother

Thanksgiving is upon us! It’s time to pile our plates high with turkey, yams and pumpkin pie.  But before we do, we asked ourselves, “What are you thankful for this year?”  Here’s how we replied…

Steph is thankful for her clarity and sanity.

Whitney is thankful for her family. “They can always make me laugh and have given me such unwavering support throughout this year.”

Trevor is most thankful for “my beautiful, healthy baby girl Luella. I am also thankful for how stinkin’ happy she is all the time!”

Joy is thankful that, “even though my family lives in three different states, we will all be together for Thanksgiving!”

Patricia is thankful for the trust our clients have placed in us during this challenging 2009.

Patrick is thankful that our agency was able to withstand the economic downturn and that our clients have generally weathered the storm very well.

Carol is so thankful for Makarei, her little granddaughter. “We get up at 4:30 in the morning to get ready for work and school.  On Saturdays she has piano lessons and choir practice.  She goes with me to Lay Organization and Missionary Society meetings and stays in a separate room dancing and singing.  Makarei is the joy of my life and I am so happy to have her in my life.”

Chad is thankful for his family.

Randy is thankful that his cousin Trent returned safely from Djibouti, Africa, after spending a 7-month tour of duty in the Marines.

Jenny is thankful for the small group she joined recently through her church. “We meet each Sunday night for a time of faith, fun and fellowship. It has already been such a gift and a wonderful way to start a new week. And our host is truly Rachael Ray Jr. so I leave each week with lunch for Monday!”

Jeron is thankful the economy has reminded him (and certainly many others) how much more valuable family, health and friendships are than material items.

Jane is very thankful to have a wonderful, big family that surrounds her with love and support. “I am also thankful that both Dan and I are employed and that our family is healthy and happy. And I am thankful to have been fortunate to have adopted such an amazing, loving dog to add to our family…we are so blessed to be able to share every moment of Lily’s life.”

What are you most thankful for this year?

We hope you enjoy your holiday with family, friends and those closest to you. Happy Thanksgiving from all of your friends at SCG!

Photo courtesy of KSFY News

My favorite sports column is Patrick Reusse’s annual “Turkey of the Year Award” that he writes every Thanksgiving. In 1992 he appropriately awarded the Turkey to the Golden Gopher Football team for 25 years of futility. In the ensuing 17 seasons since this quarter century milestone, the Gophers are essentially in the exact same spot. Mediocre. On second thought maybe I am being too kind to use the word mediocre, after all this is a team that finished 11th in the Big Ten as recently as 2007.

It wasn’t always so. The Golden Gophers won 18 conference Championships and 6 national titles in their first 85 years. The past 42 seasons (or about one third of the Gopher football team’s history) have represented a remarkable period of consistency. They have been mediocre or worse every single season since. They have not won a Big Ten title since their three-way tie in 1967.

The Minnesota Gophers football team just wrapped up their regular season on Saturday with a 12–0 loss to Iowa. This is a significant improvement from their 55-0 loss at home to Iowa the prior year. But looking at the combined score of 67–0 for the two games is a good lesson in Gopher Football prognostication. Unless the cycle is finally broken, history says they will be every bit as mediocre next year and here is why.

Clearly the defense was better this year, but the offense completely collapsed and the only touchdown the Gophers scored in their last eight quarters was by the defense. Next year the Gopher’s graduate 9 of their 11 starters on defense and also lose the best player on the team: wide receiver Eric Decker (recruited by Mason). This year’s team was 3–5 in the Big Ten. The current Gophers are coached by Tim Brewster who is the 7th coach since the Gophers last won a Big Ten title. His three-year record with the Gophers is 14–23 with a Big Ten record of 6–18. Personally, I like Brewster, and think he is a good (but over-rated) recruiter. I also think he might have the potential to be a good head coach, but clearly is not one yet. Losing key assistants has been disastrous for the program’s continuity and progress and is a major red flag of continuing deep, underlying problems. The transition this turnover caused lead the team to a pro-style offense this year which also turned our quarterback, Adam Weber, from a good performing QB to at best a mediocre one. Despite the ongoing and now likely issues with the coaching, I don’t see that as the core problem. I believe the problem we have with the Gopher football program is much bigger than just the coach. This is demonstrated by the University’s 0-7 record with coaching changes to try and fix this team.

Here’s the question I keep coming back to. How could a storied football program like Minnesota’s suffer such a long and unique drought of success? There are two theories that are worth considering. The first is that the arrival of the Minnesota Vikings eventually lead to the Vikes becoming the star attraction to the great detriment of the media coverage and focused excitement surrounding the college program. In 1967 the Vikings attendance exceeded that of the Gophers for the first time, coinciding with the last year of success the Gophers had. The other theory is that the pre-1968 Gophers were successful because they were big and strong and played a good power game. When the game shifted to speed in the late 60’s, the Gophers were unable to recruit the types of elite athletes that a speed game required. These theories are rational and would be plausible if Wisconsin, Iowa, Northwestern, Purdue, Penn State, Michigan State and even Illinois (in addition to the domination by Ohio State and Michigan) had not experienced Big Ten title success during the same period of time. Indiana is the only Big Ten team that hasn’t won a title since we tied with them and Purdue in 1967.

I believe the problem with the Gopher Football program is systemic. The previous administrations have not been committed to the program and the faculty largely ignored it as an unimportant distraction. The students have taken the queue from the culture and are seemingly apathetic about football. Even with a brand new, world-class, on-campus outdoor stadium the student section was barely half full the last couple of home games.

Despite the seeming hopelessness of the situation, President Bruininks has taken the vital first step necessary to restore the program. He invested massive amounts of political capital to get a new stadium located in Stadium Village on the campus. The new stadium serves as a symbol of the University and state’s renewed commitment to excellence in the marquee sport of college football. I believe this institutional systemic support for the program means much more than the interim success of this coach. It will take time for athletes to believe that Minnesota is a place they can come to and win a Big Ten title or play in a meaningful Bowl game. In the meantime, the stadium will at least get many of them to give the U of M a second look.

My belief is that we should let Brewster complete his contract despite a deteriorating, inept offense and a team that mainly disappointed from the Wisconsin loss on.  His recruits will begin to define the flavor of the program next year. A coach probably really needs seven full years to turn a program this stale around, but I believe we will know next year if he is the right coach or not. If he can deliver a credible, winning team with many of Mason’s seniors graduating, it will demonstrate the direction of both his coaching and recruiting aptitude. The burden of failure he inherited with the Golden Gopher’s program was deeply entrenched and unbroken for more than four decades. (Mason did not turn the program around, he restored it to mediocrity by adding cream puff games to the schedule to inflate his won loss record and get in meaningless third tier bowl games. His Big Ten record was a very average 32-48, never placing higher than a tie for 4^th in the Big Ten.)

So despite Coach Brewster’s very limited success he needs a reasonable chance with a full recruiting class to fix it. More importantly, I believe the beginning of a real turnaround is in place with President Bruinink’s leadership in orchestrating the new stadium and his commitment to the program. Next year will tell the tale for Coach Brewster, and I hope it means Reusse won’t have to award the Gophers another Turkey in 8 years for 50 years of futility. It will save a lot of time if Brewster wins next year and he’s the guy, but there is finally some hope even if he doesn’t. The stadium will be too painful a reminder of failure for the University not to finally find a way to succeed– no matter what it takes. 

-Patrick Strother

- John Wanamaker, US department store merchant (1838 – 1922)

Advertising has always had an art component to it. That includes the measurement of its effectiveness. Is this mystery still true in the digital world, where everyone leaves a footprint and every click is measurable? The answer appears to be yes, and further— easily measured click-through advertising actually appears to be in deep decline.

Remember Pareto’s Law? The law is generally referred to as the Pareto Principle (and also more commonly known as the 80-20 rule). It is also referred to as the “law of the vital few” and even more exotically referred to as “the principle of factor sparsity.”

So now that we know the various names for the theory, what is it? And how does it relate to digital advertising? Basically what the Pareto Principle states is that for many events, roughly 80% of the results come from 20% of the causes. The theory was named after Italian economist Vifredo Pareto by a business expert of the time named Joseph Juran. The original idea emerged from Pareto’s observation in 1906 that 80% of the land in Italy was owned by only 20% of the population. Fast forward to today and it has now become a common rule of thumb in business. For example, 80% of your sales come from 20% of your sales people, or 80% of your profit is achieved with 20% of your customers.

There has been a lot of discussion in places like Twitter that marketing has changed forever. Some even suggest that the old rules of marketing no longer apply. So let’s test this idea with the dynamics of click-through advertising on the Internet.

The first observation is that only 8 percent of Internet users now account for 85 percent of all clicks. This is down from 32% of Internet users in July of 2007. It’s a bit of Pareto’s Principle on steroids.

If most of the folks on the Internet are completely ignoring all opportunities to click on an ad link, what is the point of trying to advertise on the Internet with such an extremely limited reach rate?

According to ComScore, a global leader in measuring the digital world, “A click means nothing, earns no revenue and creates no brand equity. Your online advertising has some goal – and it’s certainly not to generate clicks,” said Starcom USA SVP/Director, Research & Analytics John Lowell. “You want people to visit your website, seek more information, purchase a product, become a lead, keep your brand top of mind, learn something new, feel differently – the list goes on. Regardless of whether the consumer clicked on an ad or not, the key is to determine how that ad unit influenced them to think, feel or do something they wouldn’t have done otherwise.”

Despite how hard all this is to measure, at SCG we couldn’t agree more. Your digital strategy needs to be integrated into your entire marketing program so that the target of clicks is to a well understood portion, not all of the digital advertising effort.

We’ll be discussing more of our approach to digital content flow in upcoming Monday Marketing blogs.

-Patrick Strother

In the wake of an economic downturn driven in large part by capitalism’s excesses, it is refreshing to see a large company like Proctor and Gamble lead the way to a more healthful economic recovery through a commitment to driving their business with values.

One of the biggest myths in American business is that values are soft. In fact successfully executing a shared values culture is one of the most rigorous, disciplined approaches a company can pursue. It is different than a strategy in that values are permanent and do not shift with events such as 9/11 or the recent near depression level economic turmoil. Rather, a strong shared values culture allows you to build a more stable foundation from which to navigate successfully through these types of unplannable challenges.

Another mistaken notion that many have is that values have a moral component. They don’t. Values are simply a prioritization of principles that an organization’s employees share. Values are morally neutral. The mafia for example, might share the value of secretiveness, and a communication company might share the value of openness. These values help align these organizations to achieve their mission.

At SCG we have shared the same six values for the past ten years. These values are knowledge, creativity, putting others first, collegiality, mentoring and partnership. The first three are on behalf of our clients and the latter three are on behalf of us.

SCG offers a proprietary approach for companies looking to define and introduce a shared values culture into their organization. It is called Values that Work™. We often use values in combination with our Brand Vision™ Approach.

-Patrick Strother