The tendency in tough times is to shut off marketing. But bad times actually are the best time to promote a business, says Grace Ueng, founder and CEO of Cary-based Savvy Marketing Group.

This is the tendency. Revenue is down. Profit is down. So a very natural instinct for many small business owners is to go lean and come out of the recession alive and on the other side. But if you can stomach the opportunity to go against this instinct, you can come out of the recession better than you were when it started.

The Cereal Wars of the 1920s and 1930s

Looking back to history brings a glaring example of how to weather an economic storm. In the 1920s, Post and Kellogg had entered the breakfast conversation and were looking to make a splash against oatmeal and cream of wheat as breakfast of choice. However, the products the cold cereal companies offered were not viewed as a real alternative to the more popular warm cereals. As the 1920s drew to an end and the depression began, the two cold cereal companies took separate paths. Post took the instinctive route – shrunk into a ball, stopped marketing and advertising as a way to reduce overhead, and decided to weather the storm. On the other hand, Kellogg saw the storm and bravely stepped into it – they doubled their advertising budget and aggressively positioned themselves into the somewhat new radio market.

What Kellogg did was actively advertise their best-selling product – Rice Krispies – in a new and inventive way. It was during the early 30s that the still famous characters of Snap, Crackle, and Pop appeared. Even as the depression worsened and hit bottom in 1933, Kellogg saw profit increase to the tune of 30% and had established itself as the industry leader and has maintained that position ever since. (Hang Tough – The New Yorker Magazine).

But that was the 1930s… lets fast forward to the last big recession.

In a study of 600 business-to-business companies, McGraw-Hill Research found that businesses that maintained or increased their advertising expenditures during the 1981-1982 recession, averaged higher sales growth during the recession and in the three years following. By 1985, sales of aggressive recession advertisers (those that either maintained or increased spending) had risen 256% over those that cut-back on advertising. (Innovating Through Recession)

Spend it wisely

So it makes sense to advertise. Study after study confirms this. But when it comes to spending scarce marketing dollars, the tendency may be to go back to your tried – and somewhat true – methods, be it direct mail, radio, newspaper, or yellow pages. Not that spending money in these areas is necessarily wrong, but because marketing dollars are scarce, you may want to look to another area that requires less overhead – the Internet.

When using traditional marketing methods, you are often targeting a large group of people of which only a subset – sometimes a small subset – may be actually interested in your product. If you’re airing a radio commercial advertising your landscaping business it very well may be the case that 10% of the listeners are actually interested in your product. So, essentially, you’re wasting 90% of your marketing dollars by blindly broadcasting a message across a medium.

Enter the game changer – the Internet. The Internet allows us to know much more about an audience than we have ever been able to know before. With the miracles of modern technology, we can microtarget and customize the reach of your marketing campaign according to those who may be most likely to positively respond – and hopefully with money. With a traditional method such as direct mail, you can microtarget, but to a much lesser extent. In the case of our landscaper, he may target wealthy neighborhoods who may be more apt to use his services with a direct mail campaign. But with the Internet, that same landscaper can intercept a person actively looking for landscaping services! In this way, we’re not wasting marketing dollars on homeowners who may already have a landscaper. Additionally, the landscaper can still target the same neighborhood but use the Internet to only advertise to those who are looking for landscaping services.

What the Internet allows us to do is bypass a reflex that we as consumers have developed since the dawn of advertising – and that is to naturally object to being advertised to. We hate commercials. Period. We hate them on the radio, on the TV, billboards, junk mail, etc. But if we can disguise an advertisement as being helpful information, then we can get around that reflex altogether. The Internet is about conversation. If we can engage in that conversation – and offer up our services at the same time – we’re talking conversion rates that are much more favorable than any other type of marketing there is.

So if you can muster the strength to overcome the go lean method, be sure to spend your marketing dollars wisely.

To date, Favre has passed for 1925 yards, 68% completion, 16 touchdowns to a scarce 3 interceptions and has posted a quarterback rating of 106.0. His average fantasy pick was 110! Talk about a steal…

Of course, much of his success can easily be attributed to Adrian Peterson. Favre himself has stated that he’s never played with a guy like Adrian (and few have, really). So this turn in events has caused us to rethink some things and restate our initial post.

It seems that Favre is hitting on all cylinders. Like Firefox, he’s add-on friendly (plays well in a variety of teams), is not the most popular of NFL quarterbacks (the Manning brothers or Tom Brady probably take that crown while the dastardly IE still has an overwhelming amount of browser marketshare), and he never crashes (his streak of starts is amazing… and this may be the one place he does differ from Firefox).

And thus, we apologize to Brett (we know you read this blog).

Microsoft’s goal is to challenge Google in its search dominance. Google has become an international household name and Microsoft badly wants that. Microsoft has happily sat on their success for the better part of the 90s and 2000s. But with market share shrinking, its competitors popularity increasing, and Vista crashing, Microsoft needs a crutch and it hopes that… Bing… will be it.

We will see. But like our test of Wolfram Alpha, I don’t see anything that Microsoft can do to drive a wedge into Google’s market. It’s almost an ironic dose of its own medicine: Microsoft dominated the personal computer market for almost two decades with little that could be done to stop it. Apple came up with an ingenious little device called the iPod that was a complete game changer for the company. The iPod single handedly thrust the company back into relevance and it hasn’t stopped since.

Although Microsoft is in no danger of going under, they are looking for that “game changer” that will set the company back into technological relevance. A dominating search engine could be the way, but that hill is very, very steep.

We will see.

New York Post article: http://www.nypost.com/seven/05262009/business/microsoft_bing_ing_it_on_google_171003.htm

Now there has been quite a bit of discussion on the ripple effect the Kindle DX might cause. Currently, on Capitol Hill, lawmakers are trying to decide whether or not the newspaper industry deserves a bailout. The New York Times/Boston Globe is in a serious heap of debt and bankruptcy looms. With readership down and ad revenue shrinking, the newspapers want a lifeline from Good Ole Uncle Same (aka you and me).

In my opinion, the Kindle could make or break the newspaper industry. Lets face it, the Internet is much easier and much more efficient of an informational medium then the half-millennium old newspaper. Plus, it’s free. Or is it?

Although many newspapers receive revenue from online advertisements, the industry may shift gears and offer subscription based services (similar to the newspaper paradigm of today) for their online content. This has a few consequences, namely:

• The diminuation of reliable sources of online information
• The proliferation of unreliable sources of online information (blogs, like this one!)

Without free information from reliable sources, blogs will quickly become the de facto standard of information in our newspaperless society. Newspapers have to make their money or else shutdown. They’ve been able to fund their ventures through subscriptions in the past, but we’re too accustomed to free online news. Will the American public have the will to pay for online news?

If the Kindle model prevails and people actually pay for their subscription to a paper via Amazon.com, then the Kindle might well save the industry. For this to happen, the Kindle must rapidly increase its sales and popularity to the level of the iPod (another industry saving device). Will it happen? Time will tell. It may very well be too late for some papers. The Kindle DX is the real thing. Newspapers? Just kindling.

Website: http://www.amazon.com/Kindle-DX-Amazons-Wireless-Generation/dp/B0015TCML0/ref=amb_link_84277971_5?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=gateway-center-column&pf_rd_r=0PHVGYXV6F2EH9CF98XY&pf_rd_t=101&pf_rd_p=476842251&pf_rd_i=507846

Wiki: http://en.wikipedia.org/wiki/Kindle_DX

Stay tuned and check back Saturday night for the transformation.

Geocities was bought by Yahoo in 1999 for a whopping $3.6 billion dollars. At that time, Geocities was hosting 2.5 million websites. Doing the quick math, that made each site hoted on Geocities worth $1,000! And we all recall the quality of sites that were hosted on Geocities…

The founders, David Bohnett and John Rezner, were smart and sold at the peak. Unfortunately, the corporate world got ahold of Geocities which many attribute for its massive decline. To this date, Geocities never made a profit…

Nonetheless, Geocities holds a place in Internet lore and a special little place for me. As a young lad, 12 years old or so, Geocities gave me one of the first free forums to do what I do today: develop content for the Internet. Things have changed and Geocities couldn’t manage to keep up with that change, but for what it provided millions like me, Geocities deserves a round of applause. R.I.P Geocities, 1995 – 2009.

News Story: http://news.bbc.co.uk/1/hi/technology/8016211.stm

Wiki: http://en.wikipedia.org/wiki/Geocities

]]> http://www.o3strategies.com/2009/05/rip-geocities/feed/ 11 http://www.o3strategies.com/2009/05/the-internet-is-closed/ http://www.o3strategies.com/2009/05/the-internet-is-closed/#comments Fri, 01 May 2009 20:34:40 +0000 Brian Onorio http://www.o3strategies.com/?p=365 I was browsing the Internet today looking at some news sites and I saw this off of FoxNews.com.

Internet users face regular “brownouts” that will freeze their computers as capacity runs out in cyberspace, according to research to be published later this year.

Experts predict that consumer demand, already growing at 60 percent a year, will start to exceed supply as early as 2010 because of more people working online and the soaring popularity of bandwidth-hungry Web sites such as YouTube and services such as the BBC’s iPlayer.

It will initially lead to computers being disrupted and going offline for several minutes at a time. Beginning in 2012, however, PCs and laptops are likely to operate at a much reduced speed, rendering the Internet an “unreliable toy.”

When Sir Tim Berners-Lee, the British scientist, wrote the code that transformed a private computer network into the World Wide Web in 1991, the Internet appeared to be a limitless resource.

However, a report being compiled by Nemertes Research, a respected American think-tank, will warn that the Web has reached a critical point and that even the recession has failed to stave off impending problems.

http://www.foxnews.com/story/0,2933,518405,00.html

I don’t exactly see how Internet traffic could freeze your computer since your PC is not a part of the world wide web, just a client to it. But this does make me think of contingency plans in case this whole Web Design thing is archaic by 2010…