Winner of the 2012 Presidential Election: Data

Now that the contentious 2012 election has finally ended, we get a chance to look back and assess what happened and why. Regardless of who you voted for, it’s impossible not to acknowledge that the real winner of the 2012 election was data.

Now that the contentious 2012 election has finally ended, we get a chance to look back and assess what happened and why. Regardless of who you voted for, it’s impossible not to acknowledge that the real winner of the 2012 election was data.

For the first time in history, this election demonstrated the power of using analytics and numbers crunching for politics. What I find most remarkable is the rapid evolution of this change. If you look back just a few years ago, Karl Rove was widely regarded as the political mastermind of the universe. Rove’s primary innovation was the use of highly targeted direct mail campaigns to get out the evangelical and rural vote to win the 2004 election for George W. Bush. Fast-forward a few short years, and not only did Rove’s candidate lose, but the master strategist was reduced to challenging his network’s numbers geeks live on the air, only to be rebuffed.

In every way, the old guard was bested by a new generation of numbers crunchers, nerds and data geeks who leveraged data science, analytics, predictive modeling and a highly sophisticated online marketing campaign to poll, raise money and get out the vote in an unprecedented manner.

On the subject of polling, I was intrigued by Nate Silver’s incredibly accurate FiveThirtyEight blog that used a sophisticated system to synthesize dozens of national polls in a rolling average to predict the actual election results. In the run-up to the election, he even received a lot of flak from various pundits who claimed he was wrong basing on their perception on voter “enthusiasm,” “momentum” and other non-scientific observations. At the end of the day, however, data won out over hot air and punditry big time. Silver’s final tally was absolutely dead on, crushing most other national polls by a wide margin.

I especially love his Nov. 10 post in which Silver analyzes the various polls and shows which ones fared the best and which ones weren’t worth the paper they were printed on. It’s shocking to see that the Gallup Poll—in many people’s mind the oldest and most trusted name in polling—was skewed Republican by a whopping 7.2 points when averaged across all 11 of their polls. Ouch. For an organization that specializes in polling, their long-term viability must be called into question at this point.

One thing I find highly interesting when looking at the various poll results is that when you examine their methodologies, it’s not too surprising that Gallup fell flat on its face, relying on live phone surveys as the primary polling method. When considering that many young, urban and minority voters don’t have a landline and only have a cellphone, it doesn’t take a rocket scientist to conclude any poll that doesn’t include a large number of cellphones in its cohort is going to skew wildly Republican … which is exactly what happened to Gallup, Rasmussen and several other prominent national polls.

Turning to the Obama campaign’s incredible Get Out The Vote (GOTV) machine that turned out more people in more places than anyone could have ever predicted, there’s no doubt in anyone’s mind that for data-driven marketers, the 2012 U.S. election victory was a watershed moment in history.

According to a recent article in Time titled “Inside the Secret World of the Data Crunchers Who Helped Obama Win,” the secret sauce behind Obama’s big win was a massive data effort that helped him raise $1 billion, remade the process of targeting TV ads, and created detailed models of swing-state voters that could be used to increase the effectiveness of everything from phone calls and door-knocks to direct mailings and social media.

What’s especially interesting is that, similarly to a tech company, Obama’s campaign actually had a large in-house team of geeks, data scientists and online marketers. Composed of elite and senior tech talent from Twitter, Google, Facebook, Craigslist and Quora, the program enabled the campaign to turn out more volunteers and donors than it had in 2008, mostly by making it it simpler and easier for anyone to engage with the President’s reelection effort. If you’d like to read more about it, there’s a great article recently published in The Atlantic titled “When the Nerds Go Marching In” that describes the initiative in great detail.

Well, looks like I’m out of space. One thing’s for sure though, I’m going to be very interested to see what happens in coming elections as these practices become more mainstream and the underlying techniques are further refined.

If you have any observations about the use of data and analytics in the election you’d like to share, please let me know in your comments.

—Rio

The Marketer’s Code of Conduct for Disasters

I live in New York City so, as you can imagine, the past week has been anything but normal. Fortunately, I live in a part of the city that was relatively unaffected by Hurricane Sandy, suffering only some knocked down trees and no cable or Internet for a couple days. Compared to many other in the city and surrounding region who are still facing no heat, a lack of electricity and unsafe drinking water—not to mention unspeakable damage from the storm surge—I feel extremely lucky.

I live in New York City so, as you can imagine, the past week has been anything but normal. Fortunately, I live in a part of the city that was relatively unaffected by Hurricane Sandy, suffering only some knocked down trees and no cable or Internet for a couple days. Compared to many other in the city and surrounding region who are still facing no heat, a lack of electricity and unsafe drinking water—not to mention unspeakable damage from the storm surge—I feel extremely lucky.

I’m also a big runner. To my disappointment, the City of New York decided to cancel this year’s NYC Marathon. No, I wasn’t going to be running in the race this year—I didn’t run enough local races to qualify automatically and didn’t win the race lottery. But I do know that the race provides nearly half of the New York Road Runner’s annual budget and generates millions of dollars in charitable donations ($30.8 million this year). Plus, for a city still recuperating from the storm, the event would have generated boatloads of business for companies large and small across the city. One study by the consulting firm AECOM estimated this number to be in the neighborhood of $340 million a year.

Although he wanted to let the race go on, Mayor Bloomberg caved in to public pressure and pulled the plug just two days before big day. A major reason for his decision was the large public outcry that took place in the days following the storm. News coverage and the social networks were buzzing about the race, the tone overwhelmingly in favor of canceling it. I even received emails from friends excoriating the mayor and asking me to sign an online petition to cancel it. I checked the poll a couple days ago and saw that more than 15,000 people had already signed it.

On Facebook, I got involved in some conversations and asked some people why they felt the way they did, and did my best to change their minds. I easily debunked the argument that resources that could be used for recovery would somehow be diverted, because NYRR and the sponsors were going to foot the entire bill for the race, including paying for generators and security. I also explained how much money the race generates for charities and businesses in the city, to no avail. I even brought up the amazing role baseball played in the healing process for the city following 9/11 … All I got back was the snarky reply: “That was after 9/11!”

What it came down to for many was the issue of respect. “How can the city run a race when bodies are still being pulled from Staten Island?” one friend wrote me. For many New Yorkers, the thought of us dedicating any resources to something as trivial as a race during such tough times was simply beyond the pale. Now I may not agree with this rationale, but I suppose the people have spoken and the mayor has listened. No race this year.

But the issue of respect made me think about our role as marketers. What effect should tragedies and national disasters have on the way we ply our trade? Following a tragedy, is it safe—or even right—to market at all? Moreover, is there an appropriate waiting period—a specific amount of time we need to let pass—before we can again try to convince people to drink the Kool-Aid, so to speak?

I’m not sure if you saw the coverage, but a handful of firms were absolutely blasted for trying to profit from the storm. In case you missed it, there was a great post on Business Insider titled “The 9 Biggest Brand Fails Exploiting Hurricane Sandy” that gives some great examples. This one by Urban Outfitters is a personal fave: “This storm blows (but free shipping doesn’t)!” How crass can you get, right? People are cowering in their homes in fear and you’re trying to shill your products with an unfunny pun? I’m all for edgy marketing, but give me a break—all the jokers in these examples more than deserved all the bad press they received.

But tasteless ads aside, obviously there’s a right way to do things. So with that being said, I’ve done my best to come up with a Marketers Code of Conduct for use following an event like Hurricane Sandy.

  • Don’t ever try to profit off of the tragedy
  • Go the extra mile to be sensitive regarding people’s feelings
  • Save the jokes for after it’s over
  • Don’t mix commerce with condolences
  • Use your network and marketing skills for good, not to push your products
  • If you decide to help, don’t use it to toot your own horn
  • If you screw up, apologize at once

I think that list is a pretty good place to start. If you have any other ideas or items you’d like to add to the list, please let me know.

Finally, I’m curious to see what others think about Bloomberg’s decision to cancel this year’s NYC Marathon. To get your feedback, I’ve created a LinkedIn poll. Please click on this link to vote today: lnkd.in/yFtmDi.

—Rio

Creepy Marketing and Social Media: How to Scare Away Your Customers for Good

Halloween is around the corner, so for this week’s post I wanted to turn to a topic that is most definitely apropos: creepy marketing. No, we’re not talking about marketing for Halloween. What’s creepy marketing, you might ask? Creepy marketing is what happens when personalization goes horribly wrong—when good intentions morph into, well, disturbing communication that has the opposite of its intended effect and, instead of helping a brand push a product or service, sends recipients running for the hills.

Halloween is around the corner, so for this week’s post I wanted to turn to a topic that is most definitely apropos: creepy marketing. No, we’re not talking about marketing for Halloween.

What’s creepy marketing, you might ask? Creepy marketing is what happens when personalization goes horribly wrong—when good intentions morph into, well, disturbing communication that has the opposite of its intended effect and, instead of helping a brand push a product or service, sends recipients running for the hills. With the rise of social media and its nearly universal adoption by marketers, it’s high time that marketers learn what not to do when they engage with their customers and prospects.

Fact is, marketers use personalization because it works extremely well. How well? Generally, the more you personalize a message the better it will perform. In a landmark study by Banta Corp. on multichannel marketing, it was reported that incorporating three or four personalized elements in an email boosted its clickthrough rate by 63 percent, and seven or more elements lifted it by an amazing 318 percent!

Wow! With stats like these, you can see why marketers of all stripes have been jumping on the personalization bandwagon like it’s going out of style. During the past few years, we’ve witnessed an explosion of personalized content across the marketing spectrum—direct mail, email, SMS, landing pages … all spiced up by including personalized content or messaging. Out of all of this personalized communication, some has been good, some has been great … and some has been downright creepy.

Last year, I put out a post titled “Creepy Marketing—When Database Marketing Goes Awry,” in which I defined creepy marketing as “if it looks creepy and feels creepy, then it probably is creepy and you shouldn’t do it.” I then go on to point out that an actual example of creepy marketing includes writing out a customer’s name along with other personally identifiable information anywhere visible to the general public. I also include displaying a customer’s age, marital status or medical condition in marketing messaging.

Turning to social media, avoiding creepy marketing takes on a new urgency in the medium where stakes have been raised considerably. The reason why is two-fold: First, because social media involve networks of individuals with public exposure, it’s way easier to creep people out. Second, if you do offend someone on social media, then good luck handling the ensuing social media disaster. Offended parties now have the ability to let everyone on their social networks know right away just how unhappy they are—and they usually don’t hesitate to do so.

So how do you avoid creeping people out in social media? On a strategic level, a thoughtful post by Laura Horton that appeared on VentureBeat.com offers five pointers:

1. Be helpful but not pushy;

2. Be a thought leader, if you can;

3. Be careful what you say, even if you know a lot;

4. Reach out if you see active interest in your brand; and

5. Stay on top of social marketing best practices and trends.

I think this list is a good place to start. More tactically speaking, in her blog Kristen Lamb gives us five examples of social media marketing tactics that not only creep individuals out, but probably don’t work very well, either. Her list includes automatically adding people to your firm’s Facebook fan list, and sending out annoying automated promotional messages on Twitter to random people who might have tweeted about topics you think are relevant to whatever product you’re trying to push. Yuck.

Again, I think this list is a good starting point. Though of course, the possibilities for abuse by marketers are probably endless. Have you ever been creeped out by a company on social media? If so, I’d love to hear about it. Please let me know in your comments.

Happy Halloween and happy marketing!

—Rio

4 Attribution Models in the Age of Big Data

For marketers, attribution is the Holy Grail. For those unfamiliar with the term, attribution means determining what marketing channel or budget was responsible for generating a particular action. Without proper attribution, it’s pretty darn difficult to perform any kind of meaningful ROI calculations on your marketing spend. In fact, I wrote another post about attribution earlier this year or so ago titled “The ‘A’ Word—Learn It, Love It, Live It!,” which pointed out that in today’s marketing world, attribution isn’t always what it’s cracked up to be.

For marketers, attribution is the Holy Grail. For those unfamiliar with the term, attribution means determining what marketing channel or budget was responsible for generating a particular action. Without proper attribution, it’s pretty darn difficult to perform any kind of meaningful ROI calculations on your marketing spend. In fact, I wrote another post about attribution earlier this year or so ago titled “The ‘A’ Word—Learn It, Love It, Live It!,” which pointed out that in today’s marketing world, attribution isn’t always what it’s cracked up to be.

Now it’s no secret that attribution analysis is rather difficult to perform in an age of proliferating media, multichannel customers and, drum roll … Big Data. Think about it, how do you gauge which marketing channel was responsible for generating a sale when a customer was sent and read an email, received a direct mail piece and visited a microsite, Googled the company name and found the homepage, but clicked on a sponsored link leading to a landing page, went to and Liked a Facebook page, became a follower on Twitter, tweeted about it to his friends … and ultimately made a purchase using an App on an iPhone. Which channel gets credit? Email, direct mail, organic SEO, mobile, social? All of them? None of them? Some of them? It’s enough to make your head spin.

Now enter Big Data. In this column, I’ve written extensively about the challenge to marketers posed by Big Data. I know, it’s the meme du jour … seems like you read about it everywhere you go these days. Basically, Big Data is the massive accumulation of information that’s taking place across organizations as they market and engage with their customers and prospects across an ever-expanding proliferation of channels.

As customers and prospects interact with firms across different channels, the data continue to pile up. It’s this deluge of information and how to make sense out of it that is being referred to as Big Data. But, as I’ve written before, Big Data is really the problem—not the solution, per se. The fact that organizations are collecting all of this information is great. It’s what they are doing (or not doing, as you’re about to see) with it that’s most important.

I recently read a study done by the Columbia Business School and the American Marketing Association titled “Marketing ROI in the Era of Big Data.” The study was a survey of 253 corporate marketing decision-makers, director-level and above, at large companies. The results were striking.

They found that 91 percent of senior corporate marketers believe that successful brands use customer data to drive marketing decisions. OK, fair enough … couldn’t agree more. But, among those who are collecting data, a measly 39 percent admit they’re actually unable to turn this information into actionable insight. Pretty surprising, huh?

That’s not all. A whopping 65 percent of marketers admitted that comparing the effectiveness of marketing across different digital media is “a major challenge” for their business. An astounding 57 percent of marketers are not basing their marketing budgets on any ROI analysis whatsoever. And to add insult to injury, 22 percent are using brand awareness as their sole measure to evaluate their marketing spend. That’s right, as their sole measure. A direct marketer by trade, I almost spit out my coffee when I read that last stat.

But the shocking thing is based on my experience, I do not find this to be out of the ordinary. In fact, I met with one client recently and was shocked to learn that the client had basically thrown in the towel when it come to defining attribution, and had created hyper-simplistic ROI analysis by using a control customer group to whom the client didn’t market at all, and compared how much this group bought against the rest. Sounds pretty wonky, right? The crazy part is that even the simplistic model is astronomically better than the 57 percent who don’t even bother with ROI in the first place.

So, what are some solutions to the attribution conundrum? Well, there are several popular models that marketers are experimenting with, and each one of course has its plusses and minuses.

1. First-click attribution—credits the channel where a customer first engaged with the firm. On the plus side, this model actually attempts to discern where the customer journey actually began. The downside is that in today’s environment where marketing is often run in silos, it can be challenging to track customer engagement in a multichannel manner.

2. Last-click attribution—credits the channel where the last action took place (i.e., where the conversion occurred). On the plus side, this model is super easy to track. The downside is that it only measures the channel that’s best at generating the sale itself, and completely disregards how the prospect was initially brought into the fold.

3. Equal-weighting attribution—tracks all of the touchpoints where the customer engaged with the firm, and gives them all equal weight in terms of generating the conversion. The advantage of this model is that it takes a holistic view of the customer-vendor relationship. At the same time, this model overlooks the disproportionate role one channel may play over another.

4. Custom-credit attribution—a hybrid model created by the marketer based on its marketing strategy, customer base, and so on. If done right, a custom model can be highly effective, as it’s designed based on facts on the ground. The only downside is, well, you’ve got to create and test it—which is often easier said than done!

Okay, guess I’m out of room for this post, so I’ll end it here. In any event, I’d love to hear about what if any attribution model you’re been using, how it has worked out, and so on. Let me know in your comments.

— Rio

Numbers Don’t Lie: Gen X, Can You Handle the Truth?

If you’re a Gex Xer, chances are since you’ve been in the workforce, for better or for worse you’ve lived in the shadow of the Baby Boomers. They’re the ones who have hired you, fired you … and most certainly always held the best jobs. The more I think about the marketing world, the more I realize that there’s an important undercurrent here, one that will have a tremendous impact on Gen X, and quite possibly Gen Y, as well.

If you’re Gen X, that means you were born in the ’70s, grew up in the ’80s and came of age in the ’90s, or something like that. You grew up listening to music like Van Halen, Run DMC, The Smiths and Nirvana. You went to school, and probably began working sometime during the second Clinton Administration, beginning to pay off your student loans. It was an exciting time to enter the labor force, just as the digital revolution was beginning to take hold.

Like many others in my generation, I entered the labor force in the mid-’90s. My first job was with a marketing firm. I was hired by a Baby Boomer, a nice woman named Stephanie about 20 years my senior. Marketing at the time was still pretty old school, but it was there where I was given my first work PC, set up with my first email address, and taught to surf this new thing called the World Wide Web using what was then the state-of-the-art browser called Netscape.

If you’re a Gex Xer, chances are since you’ve been in the workforce, for better or for worse you’ve lived in the shadow of the Baby Boomers. They’re the ones who have hired you, fired you … and most certainly always held the best jobs. The more I think about the marketing world, the more I realize that there’s an important undercurrent here, one that will have a tremendous impact on Gen X, and quite possibly Gen Y, as well.

You see, last time I talked about a transition that’s taking place in the marketing world, as an older generation of brand stewards gives way to a new generation of digital marketers. I explained this trend was set to accelerate in coming years due to the rapidly changing nature of marketing itself, which is becoming more data driven, technology focused and operational in nature. In case you missed it, you can read about this topic in “3 Ways Rank-and-File Marketers Matter to the C-Suite in a Brave New Marketing World.”

In the marketing world (not in tech, but most definitely in the rest of corporate America), most high-level roles are still staffed by Boomers. What I find very interesting is that for the most part, the vast majority of Baby Boomers (with some notable exceptions, of course) are not especially digital people. Many have learned to live and work in the digital world and quite well, but when I see my dad fumble around on his feature phone I most definitely can see a huge gap.

So the transition I mentioned above will essentially be a passing of the baton, as the Boomers recede from the picture and are replaced by the next generation of marketers. Now here’s where it gets really interesting. According to the U.S. Census Bureau, a Baby Boomer is someone who was born between 1946 and 1964. Ranging in age from 48 to 66, Baby Boomers aren’t getting any younger. Generation X spans the years 1965 to 1983, more or less, while Gen Y is from 1985 to 2003. Now let’s take a look at the size of these three generations:

  • Baby Boomers: 79 million
  • Gen X: 41 million
  • Gen Y: 85 million

What this means is that in the marketing world if you’re a Gen Xer, your time to lead is coming. If you look at the numbers above, you can see there will there be a huge leadership void that will need to be filled as the Boomers retire during the next few years … as a small generation replaces a huge one. The economic crisis during the past for years may have postponed their retirement. But any way you slice it, the Baby Boomers will soon begin retiring more or less en masse during the next few years. When they go, they will leave huge leadership vacuum behind.

But that’s not all. In today’s marketing world, playing a leadership role will require both digital and managerial experience. This means that if you’re a Gen Xer with digital marketing and managerial experience, you’re literally going to be worth your weight in gold in coming years as the generational transition accelerates.

Don’t believe me? Just wait and see. And if you’re not ready to rise to the occasion, guess what? There are 85 million hungry and talented digital natives in Gen Y itching to move up ahead and take your place. If anything, they are the most digital generation yet. At this point, they’re still young and have yet to acquire the years of on-the-job experience it takes to succeed in a high-level marketing job. But give them some time and that will certainly change.

So, Gen X, are you up for the job? To quote Jack Nicholson is the classic 1992 movie A Few Good Men, “Can you handle the truth?” If not, Gen Y will be there waiting in the wings, happy to swoop in and take your place.

Any questions or feedback, as usual I’d love to hear it.

—Rio

3 Ways Rank-and-File Marketers Matter to the C-Suite in a Brave New Marketing World

A couple weeks ago in my post titled “Wanted: Data-Driven, Digital CMOs,” I wrote about the enormous pressure CMOs are finding themselves under as the world digitizes, requiring a new type of leader, one who understands and feels comfortable in the digital space. The result of this changing dynamic has been a dramatic shortening of your average CMO’s tenure. I’m not the first to observe this trend—it’s been covered in many places over the past few months, including this great article from Fast Company. In response to this post, however, many colleagues have asked me “What does this mean for the rank-and-file marketer?” I thought this was an excellent question; one I’ve not seen discussed elsewhere.

A couple weeks ago in my post titled “Wanted: Data-Driven, Digital CMOs,” I wrote about the enormous pressure CMOs are finding themselves under as the world digitizes, requiring a new type of leader, one who understands and feels comfortable in the digital space. The result of this changing dynamic has been a dramatic shortening of your average CMO’s tenure.

I’m not the first to observe this trend—it’s been covered in many places over the past few months, including this great article from Fast Company. In response to this post, however, many colleagues have asked me “What does this mean for the rank-and-file marketer?” I thought this was an excellent question; one I’ve not seen discussed elsewhere.

By any standard, it’s certainly not an easy time to be a marketer. Over the past decade, nearly everything we know has changed, as new technologies have arrived in a dizzying fashion, upending the established order. The result for most firms has ranged from confusion to clarity, from paralysis to paroxysm—very frequently all at the same time! Working in an environment like this is definitely no picnic, as firms flail around like a hurt animal trying to figure out what to do, reducing head count, hiring, outsourcing, in-sourcing, you name it.

It may not be an easy time to be a marketer, but I think it’s a good time. The reason why is that marketing has evolved in four very important ways:

1. Marketing has become data driven—in the digital age, information is power. Contemporary marketing requires learning about who your customers are, what they look like, what attributes and affinities they share, and so on. Success means becoming fluent in the new language of the digital age—understanding what terms like “impressions,” “clicks,” “likes” and “followers” mean. But that’s not all: Success requires a deep understanding of and familiarity with campaign analytics, what they mean and signify, and how to interpret and improve upon them.

2. Marketing is technology-focused—it’s no secret that a large portion of marketers’ budgets are now being allocated to digital. Anyone who’s worked in the digital marketing arena knows that success in the space means understanding the new technology ecosystem. The other major technology trend is the fragmentation of the IT infrastructure as the SaaS/Cloud model gains traction. In this new service model, it’s marketing that’s mostly responsible for buying, using and maintaining these new tools.

3. Marketing is highly operational in nature—unlike the brand strategists of yesteryear, today’s marketing department is almost entirely focused on operations, with a heavy emphasis being placed on creating, testing and launching, tracking and optimizing numerous marketing campaigns across various channels using different tools.

In this new environment, the DNA of the rank-and-file marketer has changed radically, morphing from that of a brand steward into, well, something else entirely. Any way you look at it, today’s marketers are highly trained and qualified specialists, possessing a wide range of skills and knowledge, which can take months, if not years, to master.

Moreover, success in any given marketing role requires a deep understanding of various marketing program details, familiarity with firm’s marketing technology, systems and tools, not to mention the prevailing corporate culture. All in all, it’s a tall order.

Over the years, I’ve consulted with dozens of large firms, and I can tell you firsthand that most marketing leadership stakeholders are not digital people. In other words, the only people in the firm who really “get” what the firm’s marketing department is actually doing are the marketers themselves. Interesting, huh?

So what does this all mean? Well, in coming years I foresee a shift in the balance of power as the old generation of marketers gives way to a new generation of younger digital specialists. Now, of course, one generation passing the mantle to the next is the natural order of things. But, based on what’s going on, I see this trend accelerating dramatically in coming months and years, as those who don’t get it are replaced by those who do.

If you’re a marketer, all if this is undoubtedly good news, meaning you’re not only much more important than you think, but your trip up the proverbial corporate ladder is that much shorter. So go forth, young man (or woman), it’s a brave new world!

Any questions or feedback? As usual, I’d love to hear it.

—Rio

The Data Show: #NBCFail, or What Happens When an Industry Faces Digital Disruption

Like it or not, NBC must accept the fact that its monopoly on broadcast content has been disrupted by the emergence of new technologies, most notably the Internet and the DVR. Instead of creating a business model that leverages and monetizes on this new reality, they’ve instead tried to ram an old business model down the throats of consumers across the U.S., essentially missing the forest for the trees. As a result, they’ve pissed off millions of people, devaluing their brand in the process.

Like most Americans, I’ve spent a lot of time watching the Olympics during the past couple weeks. Probably way more than I should. To be totally honest, I haven’t been the biggest fan of NBC’s coverage, and on this I’m definitely not alone. Look, for example, at the #NBCFail Twitter campaign that erupted online during the past couple weeks. Led mostly by bloggers and new media pundits, the campaign has relentlessly lambasted NBC for its poor coverage.

A major criticism by the #NBCFail folks has centered on topics ranging from showing only American competitors, to endless and annoying human interest stories, from snarky banter with condescending hosts, to strangely jingoistic flag-waving commentary. I must say I agree that it’s generally been an unpleasant experience. But, beyond poor coverage itself, NBC has also been taking a ton of flack for its new media “strategy”—if you can call it that—that includes no live streaming content on the Web. They have an App with some live coverage, but it’s only available to those with an active paid cable subscription that includes NBC already.

Now of course many in the industry have rushed to NBC’s defense. In his recent article in Ad AgeThe Truth About #NBCFail,” Simon Dumenco states quite correctly that “NBC is not a charity.” He then goes on to explain that NBC paid about $1.2 billion for the rights to broadcast the games. That’s a lot of greenbacks. Dumenco’s point is that because NBC is not listed as a 501c3 (non-profit) organization, it has every right to run in the Olympics in a manner it sees fit in order to recoup and hopefully make a profit on its hefty investment. Fair enough.

While on one hand I tend to agree with some of the points made by Dumenco and other critics of #NBCFail, on the other I really do feel that NBC has completely bungled its new media strategy. Like it or not, NBC must accept the fact that its monopoly on broadcast content has been disrupted by the emergence of new technologies, most notably the Internet and the DVR. Instead of creating a business model that leverages and monetizes on this new reality, they’ve instead tried to ram an old business model down the throats of consumers across the U.S., essentially missing the forest for the trees. As a result, they’ve pissed off millions of people, devaluing their brand in the process.

This is eerily reminiscent of what happened to the recording industry a little more than a decade ago. Remember Tower Records? Sam Goody? Virgin Megastores? All gone. And I could continue and list off dozens. Well, guess what happened? The world changed and the recording industry lost its monopoly on distribution of its primary product. What was their master plan? Suing Napster. And all that accomplished was putting off the inevitable by a couple years at most. Today, all the old players are gone and iTunes is the world’s largest retailer of music worldwide, and has been since 2009. The craziest part is that it was only launched by Apple in 2001. It happened so fast.

Well, why was Apple, a company with no experience selling music, able to swoop in and within a few years totally dominate a legacy industry, displacing existing firms? Two words: Disruption and Innovation. Disruption caused by the emergence of new technology—namely, the Internet as a means of Distribution—enabling firms with the best new ideas to unleash Innovation on an industry ripe for transformation.

NBC and the other legacy broadcast networks are now facing similar dilemma. With the emergence of the Internet as a viable distribution channel for broadcast media, their monopoly is over. Don’t like NBC’s coverage? Well, all you need to do is locate a proxy and you can watch awesome uninterrupted streaming coverage on BBC, or China’s national network CCTV, among many others. And as if this ignominy weren’t enough, Digital Video Recording (DVR) boxes in most homes mean that almost no one is watching commercials anymore. Sure, NBC can crow about its impressive ratings while it blacks out live coverage and force millions of people to watch their broadcast in primetime. But how many of these people are tape-delaying coverage by an hour and skipping the ads? Way more than they want the advertisers to think.

What this all means is that the landscape has radically changed for the networks, though they don’t seem to realize it. How long is it before most advertisers realize that the 30-second commercial is functionally obsolete? My guess is it can’t be too long. And when they do, guess what will happen? No more 30-second ads. That will mean a HUGE revenue stream dries up for the networks as the advertisers pull their campaigns en masse. In my estimation, because the networks seem completely unprepared, this shock will be even more devastating than the loss of classified ad revenues was for newspapers.

The only solution for networks, of course, is instead of fighting change and pissing off your customers with inane blackouts and insulting restrictions that don’t work, to be the harbinger of transformation and change instead of the victim. Can they do it? It’s certainly possible. Take, for example, this past year’s absolutely brilliant Final 4 strategy by CBS/NCAA. While the tournament was broadcast on regular TV by CBS without blackouts or restrictions, there was also an amazing App you could buy that offered uninterrupted access to all the games. Sure the App needed to be purchased—but the user experience was so awesome I sure didn’t mind ponying up a few bucks to install it on my iPad.

Experience after experience has shown in an effort to prevent cannibalization of their existing business model, legacy firms miss the forest for the trees and fail to innovate in time, allowing new competitors to swoop in and change the rules of the game for them. By that time, of course, it’s way too late and they’re toast. Ask Kodak about digital photography. Bet they now wish they had started the transformation to digital a few years earlier, don’t they? Or ask Borders about eBooks? I could go on and on …

So, do you think the networks will figure it out? Let me know in your comments.

—Rio

Wanted: Data-Driven, Digital CMOs

There was a time, not so long ago, that the firm’s CMO basically acted as the chief brand steward, running a marketing department that focused on maintaining brand equity and making sure the company was sending out the right message to the masses. Data and analytics? They were usually scoffed at … That was the purview of the down-and-dirty world of the direct marketer, right? Direct marketers were the ones who obsessed over response rates, cost per order, lifetime value and so on.

There was a time, not so long ago, that the firm’s CMO basically acted as the chief brand steward, running a marketing department that focused on maintaining brand equity and making sure the company was sending out the right message to the masses. Data and analytics? They were usually scoffed at … That was the purview of the down-and-dirty world of the direct marketer, right? Direct marketers were the ones who obsessed over response rates, cost per order, lifetime value and so on.

Well, suffice it to say that those days are over—marketing in today’s multichannel environment is about much more than just cute creatives and killer copy. Today’s marketing is increasingly digital and data-centric. A recent article appearing in Ad Age explained that “real-time data-driven decisions, enabled by technology, have made the marketer’s job much more measureable and accountable.” Interestingly, the same article also points out that the average tenure of a CMO is a meager 28 months. No coincidence.

What it boils down to is that today’s CMO is expected, de rigueur, to be a pro when it comes to all things digital. We have two important trends to thank for this fact. The first one of these trends is the general transition to digital. Look, it’s no secret that over the past few years there’s been an incredible shift of marketing spend from traditional over to digital media. It’s the scale and speed of this transition that’s so breathtaking.

According to a June 2012 survey by RSW/U.S., 44 percent of marketers report that they are now spending at least half of their budgets on social and digital media. This represents a 42 percent increase from 2009 alone! And this is not the end of the process. I think it’s safe to say now that the proverbial tipping point has been reached—this trend will only accelerate in coming years.

Anyone who’s worked in the digital marketing arena knows that success in the space all really boils down to data: Impressions, clicks, conversions, opens—this is the vocabulary of the digital world. Well, guess what? Today’s CMO needs to have a deep understanding of these terms, what they mean and how the underlying technologies work—at least on a high level—and be generally comfortable playing in the digital space. Think about it: without a significant digital background, how on Earth can a CMO possibly be expected to run a marketing machine where at least half of the marketing dollars are being spent in the digital space? Not happening.

The other major trend is the inexorable fragmentation of the IT infrastructure within enterprise firms. Basically, what’s happening is that because technology has evolved radically over the past 10 years, it’s giving different stakeholders at companies the ability to purchase and use technology outside of their organization’s firewall, and often without IT’s involvement. Very often, in fact, IT is even without IT’s knowledge!

This is huge shift. Just a few short years ago, mind you, software was what you ran on your computer or on the company mainframe, and it was pretty much always purchased and managed by IT. Well, those days are most definitely over. What’s happened is that the emergence of the SaaS/Cloud model of software delivery has turned that world on its head.

Today, any marketer with a credit card can sign up for, say, a CRM tool or a marketing automation tool and be off to the races in seconds flat. Ask any marketer and they’ll explain how this has been a huge boon to their departments, liberating them forever from the clutches of IT.

Now, of course, a big reason for this excitement is the oftentimes frosty relationship between marketing and IT. Personality types side, in its essence this rocky relationship actually has a lot to do with conflicting mandates. It’s the IT department’s mandate to act as the stewards of the firm’s information and technology infrastructure. Essentially, it’s their job to keep internal systems running and make sure they’re secure. That’s about it. No, it’s not their job to build you a new landing page, or set up a new email campaign for this fall’s reactivation campaign.

Today’s marketing department, on the other hand, is much more focused on operations than anything else. Today marketing is about creating, testing and launching numerous marketing campaigns across various channels using different tools, and evaluating their performance using real-time analytics. And running an operationally focused marketing team requires the ability to build, dispatch and analyze lots of campaigns in rapid succession. Until recently, this heaped loads of pressure on the IT folks, who groaned under the strain. So you can see why marketers have cheered and embraced the emergence of Web-based SaaS marketing tools.

Okay, I got a little sidetracked there, so I’ll get back to the central point, which is that because marketing is rapidly becoming the de facto owners of their own IT infrastructure, this mean that they now control the technology itself and the data contained therein. It’s a big responsibility, requiring marketers to manage and safeguard this vital corporate infrastructure and information, taking on the dual roles of chief marketing technologist and data steward. But with this responsibility comes great power—to use these awesome tools and information to really, truly understand who customers and prospects are, and send out highly personalized and effective marketing campaigns with demonstrable ROI.

But evaluating performance in this environment means not only using new marketing tools and digging through mountains of data. Just as importantly, it also means understanding what it all means. In other words, just because you’re a CMO does not mean you don’t need to know how many opt-ins you have in your company database, or how many fans on Facebook.

And guess what? It’s hard to be comfortable with digital if you’ve never played in the space. But how many CMOs are also digital pros? Not too many. So not surprisingly, firms are finding that it’s incredibly difficult to find leaders with the hard-to-find combination of senior management leadership and digital marketing experience. Given this reality, it’s not too surprising to discover that many companies are running through CMOs in a conveyor belt-like fashion.

Do you know any data-driven digital pros with senior marketing leadership experience?? If so, bet your bottom dollar these executives will be cashing in big time in coming years.

—Rio