Inflective Havoc
Reflections on Our Big Entrepreneurial Times from Jan Horsfall

Marketing vs. Marketing

  I’ve been devouring current marketing thought processes related to seed-based start ups over the past few days and I’ve come to one conclusion: people are more confused than ever. Really confused. And as happens, the confused are making other people confused as well. Stop the madness. Please.

The tension is built on two axes: new media formats which allow for a supercharged direct marketing effort and traditional marketing formats which are heavier on traditional media vehicles.

The reason I say that people are more confused than ever is because certain thought leaders brilliant in many things – but who frankly don’t know jack sh*t about marketing as a true revenue and demand driver – choose to be overly provocative by suggesting that somehow things have changed so much in 10 years that all of the old marketing tactics are nothing more than old, yellowed photos and are now unnecessary. Ditto for the marketing leaders who don’t lead anymore. On the former I couldn’t disagree more vehemently (sorry, the basic ideas of positioning and impressions still matter). On the latter I couldn’t agree more completely (either keep up or fade away).

But it has NOTHING to do with marketing per se and its role in a start up company.

Just like engineers, developers, CFOs, customer service reps, and sales people have been introduced to plenty of new apps and methods by which their vocations have changed, so have great marketers. Can you imagine a modern sales leader not having an ass-kicking CRM solution – and one sitting on the Cloud?. The reality is that the great marketers – just like the great folks in these other vocations – either adapt by integrating the new methods/tactics with the stuff that’s worked for them in the past – or they simply become less than excellent.

So the issue to me isn’t so much about “Marketing Works” versus “Marketing Sucks” – or even “Marketing is Unnecessary in Startups” (Ugh) – it’s about being a great vocational leader by adapting to the times and understanding how to utilize the new tactics – the demand generation pallet if you will – which allows us to be so much more efficient than we used to be. Further, some have promoted the hipster idea that thought leadership is in and of itself a marketing strategy and replaces the old marketing activities. It’s not and it doesn’t. It’s just another marketing tactic, not a strategy or marketing plan in and of itself.

While running the marketing unit at Valvoline in the mid-90’s, we utilized $30M of TV, $10M of Radio, and $5M of Print – and some direct tossed in as the internet was coming our way. By the time I was done with my marketing leadership at Lycos in 2000, the mix had crossed over into more digital advertising and direct marketing, though the holy grail of ‘marketing to one’ was still not perfect. At Turbine in 2010, we crossed over into a budget which was heavy on the ‘funnel’ of digital acquisition – wholly integrated into social media and community – and we actually had a digital ad model which worked amazingly: the LTV of every ‘free’ Dungeons and Dragons or Lord of the Rings gamer coming through our doors was $8; Net income was $6 after tech costs; and we never paid over 90 cents to get them into the funnel. Holy grail arrived (which is why Warner bought the company).

So did we abandon old marketing methods completely because they weren’t hip enough? Of course not. We could blast open the top of the acquisition funnel by adding in a strong run of TV strategically placed and the results bore this out (even with the TIVO impact). Site wraps on key gaming sites boosted the acquisition numbers big time as well. When Warner bought Turbine, their penchant for TV kicked in and they supplemented the digital acquisition play even more and drove the hell out of the profitability for the games and the company they purchased.

So when I hear simple axioms which play more to the provocative sense than anything constructive for young companies, it chaps me because it really fails to mention the real issue: are you a modern marketer or have you failed to keep up with the tactics and methods now available to you as a demand generator?

You’re either with it or you’re old fashioned. In business, the latter is death. And it doesn’t matter if you’re talking marketing, sales or finance. Modern thinking wins – luddites say goodbye.

Finally, it’s worth noting that in the mid-1990’s at Valvoline we went from the #5 spot to the #1/#2 market share position; at Lycos we surpassed Yahoo’s web traffic and had 17 straight quarters of exceeding the streets expectations for sales and profits; and at Turbine we rattled off 16 straight months of revenue growth in a flummoxed game industry, leading up to a very successful company sale. In each case we utilized an integrated mix of old and new tactics to drive the revenue line at a faster pace than our competitors. In the end, that’s what marketing really is and nothing more: creating a positive ROI for the marketing and ad dollars using the best mix of tactics available to you as a revenue driver – which is what marketers are.

So to the thought leaders who objectively shouldn’t be thought leaders on this one: quit confusing people!  Sales doesn’t beget marketing even with the best product in the world. To the extent it appears that’s happening, it’s only because you didn’t understand how to get an excellent marketing leader on board who could have made those sales statistics look better by another order of magnitude.

I’ll call that a huge sin of omission. Maybe you should see if your hiring practices are still being lead by somebody who doesn’t understand that times have changed.

– Jan

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3 Responses to “Marketing vs. Marketing”

  1. Jan,

    I love this article. I just got out of a meeting with a startup CEO who told me finding the cost to acquire a customer isn’t realistic in the startup stage of a company. Really!

    We are now going about the arduos task of reading every way to bring an app to market, every cost of these ways, old and new. We’ll weigh those out and get to our number.

    Thank you for sending me the articles, and I hope we can stay in touch as we build the marketing plan, Proforma, and get moving towards initial funding.

    Best Regards,
    Laura

    • Arduous

    • Thanks Laura. I just sent off a host of mechanisms/examples of revenue generation techniques which are spot on for start ups to a newco in Denver which is doing $2MM/year in revenue. The reality is you can’t determine any marketing outcome until you do something, but you do need to be ready to measure and do a lot of A/B/C split testing. That’s clutch. Then that CEO would have his LTV pretty quickly and essentially could tighten it/update it monthly. Easy breezy if you’re measuring things.


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