With billions of dollars of venture capital residing down the street from Stanford University on Sand Hill Road, two professors are attempting to answer a fundamental question, “why does it always take longer and cost more to build a hi-tech company than anyone ever expects?” For all the intellect, experience and graduate degrees in the venture capital industry, the sad truth is that 80 percent of venture capital investments do not pan out.
While the reasons for this high attrition rate are too numerous to list here, a simple fact defines every successful investment: the company figures out how to bring in more money than it spends.
The secret to solving this fundamental equation these two professors believe lies in the Sales Learning Curve. With the reemergence of interactive marketing, the pace of innovation will only accelerate venture investment and technology investment focused on internet-based marketing tools. Studying the learning curves associated with formerly new tools such as rich media advertising and search marketing can be instructive as new tools like behavioral targeting move into the mainstream and completely new technologies also emerge. Some of these insights can also be applied into non hi-tech products.
Mark Leslie -- an entrepreneur turned Stanford lecturer who took a startup company, Veritas, from nascent stages to over one billion dollars in revenues and a recent 13.5 billion dollar merger with Symantec -- and Charles Holloway -- the Kleiner Perkins Caufield & Byers Professor of Management at the Stanford Graduate School of Business -- have developed a framework that goes a long way toward answering the question “why it always takes longer and costs more?”
Leslie and Holloway call this framework the Sales Learning Curve (SLC) and believe that it will prove as powerful a construct in the high tech sector as the Manufacturing Learning Curve (MLC) was to the manufacturing sector at an earlier time. Today, manufacturers wouldn’t think of running their operation without tracking the MLC because of the dramatic improvements in productivity that it offers. Similarly, Leslie and Holloway believe the SLC holds the potential to change fundamentally how high tech companies are managed, and the believe that it will lead to more high tech companies reaching the promised land of “positive free cash flow.”
Increasing the number of cash flow positive companies should lead to greater venture capital returns, more capital being allocated to the sector by Limited Partners, more early stage company formation, more innovation, more jobs, and increased productivity.
So what is the Sales Learning Curve?
As illustrated above, the Sales Learning Curve tracks the contribution margin per sales rep (sales yield) against the number of customer transactions. The shape of the curve will be different for every company and every sector, but the central tenant of the SLC remains constant -- the “go-to-market” phase is when companies should “Go Slow to Go Fast.”
This is also the advice from a Nordic skiing expert that I recently received when I asked for some tips on improving my performance prior to an upcoming race -- run a Google search on the phrase and you will find that triathletes, grade school teachers, executive coaches, swimmers, and karate instructors are all well aware of the Go Slow to Go Fast benefits,
Leslie and Holloway believe the “organizational learning” that occurs as sales reps interact with customers to close initial sales is crucial to the ultimate success of the organization. The classic “go-to-market” strategy involves hiring a vice president of sales once the beta product is complete, and then hiring as many reps as the balance sheet will allow in order to “drive revenue and get to break-even.”
According to Leslie and Holloway, this strategy is doomed to failure because the company has failed to take the time to understand the shape of the SLC for its product in its market. Some reports generated over the last two years by Fenwick and West, a prominent Silicon Valley law firm, bear out their assertion. There is a consistent pattern of inflated B-round valuations; the percentage of down rounds for C and later rounds is always greater than B rounds. As Leslie and Holloway state, “One inference from this is that both entrepreneurs and VC’s underestimate the cost and time required to move up the SLC after completion of the Beta product. VCs and entrepreneurs often assume that the company is ready to gain market traction at this stage, when in fact the company is only ready to begin the SLC learning process, which, like product development stages, has a somewhat indeterminate duration.”
When moving from beta release to first release, Leslie and Holloway argue that only a few technically versant sales reps should be hired. These sales reps should serve as a conduit between the initial customers and the engineering team, and should be compensated not on revenue targets but on the “organizational learnings” that are achieved. Only after enough of these learnings have been incorporated into subsequent releases of the product, and only after the entire organization knows how to sell the product (defined as the point at which each sales rep’s contribution margin is twice their fully burdened cost), does it make sense to hire additional sales reps aggressively.
Leslie and Holloway posit that the SLC is immutable and can point to numerous theoretical models and concrete examples that indicate that the capital invested in hiring additional sales reps is simply wasted until you have reached this pivotal point on the SLC.
Tomorrow: Applying the SLC.
Dave Chase is a partner with Altus Alliance, which specializes in driving revenue traction for emerging businesses. He publishes a blog entitled Chase Market Velocity that focuses on how emerging businesses can gain market traction via the Enterprise Sales Learning Curve principles espoused by Mark Leslie. Before joining Altus Alliance, Chase spent nearly 20 years in the industry with over a dozen years at Microsoft in various senior marketing and general management roles, including his role as MSN’s managing director for industry marketing and relations. In that capacity, he was responsible for MSN taking a leadership role within the Interactive Marketing industry to grow Online’s share of the overall ad market in concert with AOL, CNET, Yahoo!, Google and other market leaders.
Chase played leadership roles in launching several new businesses within Microsoft including Microsoft’s entry into the enterprise software and server business which is now an $8B business. This included co-leading Microsoft’s first vertical marketing efforts where he grew the Healthcare vertical market from virtually no presence to a market leading position. The healthcare business now represents nearly $500M in revenue for Microsoft.
From there, he was integral in Microsoft’s entry into consumer Internet businesses that achieved both critical and financial success. These included Sidewalk, Encarta and HomeAdvisor, which were among the first profitable consumer Internet businesses for Microsoft. He has contributed to iMedia via articles and Summit presentations.
The short-term impact will be immediate, as advertisers are yearning to break free from the constraints of current mobile advertising. This change refers to limitations of current mobile application development platforms, such as BREW. While many programmers complained when Steve Jobs announced that the iPhone will only take third-party applications developed for Safari -- Apple’s proprietary web browser -- this still allows programmers to leapfrog current offerings. Web 2.0 applications that run on the current Safari browser will be viable for the iPhone.
The first such offering optimized for the iPhone is "OneTrip," a web-based shopping application. As other apps emerge, they are sure to offer suggestions for alternative products based upon shopping or browsing behavior. Admittedly, much of this performance is contingent upon the speed of the iPhone’s EDGE connection, which has not received rave reviews at this time. Though other smartphones offer good browsers, such as Opera Mobile, I still contend that power business users are much less likely to look to their phones for rich mobile internet browsing. They will still prefer to access information from more efficient, less engaging WAP sites.
However, the iPhone is not totally in step with the increasingly sophisticated push-pull technologies used by mobile marketers to reach consumers on the move. Over the past few years, most U.S. users have become adept at using SMS (Short Message Service) capabilities on their phones. "American Idol" has been identified as the tipping point in the U.S. for its massive use of SMS for voting and interacting with the program. Marketers have developed opt-in databases of customers whom they communicate with via SMS for promotional opportunities. Users have complained that the iPhone succumbed to AT&T's revered revenue stream of charging for each SMS and not allowing iChat on the phone. Elsewhere, the iPhone starts to stray from emerging uses of mobile advertising in its lack of MMS (Multimedia Message Service). Some of the most acclaimed advertising campaigns from last several years were MMS-enabled, whereby users could upload their pictures via MMS to outdoor boards. According to its technical specifications, the iPhone does not have this capability.
What this means for marketers and advertisers
In the final analysis, can the iPhone be a category killer for current mobile advertising?
Yes. As consumers become accustomed to sophisticated browsing and coverage increases to combat slow connections, the days of the simple WAP banner and mobile links are numbered. This isn’t to say that consumers won’t readily click on links and banners that are relevant to their searches, but simplified versions offered by AdMob and Enpocket are going to lose their luster quickly.
The premise that the internet experience cannot be ported over to a phone is losing its validity. It is true that ads will need to be modified for a phone environment, but the distinction will become less apparent. Much of mobile advertising is based upon relationships with the carriers, who feel that they own the customer experience. Apple’s relationship with AT&T will bear out the true owner of the mobile experience beyond voice transmission. With its Web 2.0 capabilities to take the user from browsing to buying, the iPhone will go a long way to eliminate the need for third-party vendors to manage the "soup to nuts" mobile marketing experience.
The evolution of devices such as the iPhone will give the term "mobile" a vestigial distinction. We are merely looking at format sizes appropriate for larger or smaller images. DVRs have continually crept into the marketplace, causing increasing skepticism about simultaneous commercial exposure or even the fear of total skippage of all ads.
iTunes is featuring more and more video content for download, which will likely include every major small and big screen release. All content will be accessible by an iPhone-like device, transferable to an Apple TV-like device and consumable by HD TVs and home stereos. This is not just an Apple-centric future because there will be many competitors that offer nuanced advantages, and open-sourced devices always drive innovation. But the current suite of Apple offerings points toward a future where media can be accessed and consumed at any point among your home, office and leisure destinations. Marketers and advertisers must be prepared to create holistic communications that can convey their value proposition within any of these consumption points.
What this means for marketers and advertisers
Convergence is a term that has lost much of its meaning as it continues to fail to come to fruition. The computer-centric entertainment room does not yet exist in most homes. The adoption of an iPhone or possible Google Phone will invariably help to accelerate this convergence. Apple TV and Joost are all much more attractive if we are constantly using the push-and-pull capabilities that are inherent with these new phones. They can become the true universal remote controls that feed our big screens and speakers for movies, video chatting and aspiring deejays. And we can skip all the intermediary steps that are now involved. Even the savvy consumer is overwhelmed by downloading on the internet, setting up their TV schedules, arranging their song lists and then morphing into a "lean-back" experience.
As advertisers, we must contemplate what will compel the consumer to ever willingly be exposed to a marketing message again. Brand placement is having its challenges for ROI, and branded content will be undesirable if we can get it by another means. It becomes a true exchange of value for consumers' ever shrinking time in their personally controlled content environments. Current offerings such as Free411, which enables callers to avoid steep information charges if they listen to a short commercial message, may be the currency of the future. Advertisers have to increase the tangible value we give our target audience in exchange for their time and attention. Why would a phone trigger such a revolution? It is the most personal of all devices and most people would lend you money for a call before they would let you use their phone.
If the iPhone lives up to half of its promise, then we are on an even faster ride for emerging behaviors in media and marketing.
This first innovation blocker is easy to spot: An agency walks into a client's office and pitches an "innovative" program. It requires unproven technologies and an unproven strategy, but it is so "innovative" that the client gets excited and signs off on it. It is the ego of the client -- not the needs of the business that the client works for -- that often results in such a project being approved. The client wants to bask in the glory of its brilliance for recognizing opportunity; unfortunately, what the client is usually basking in is the glow from a blazing inferno of crap.
The problem is that the program, campaign, or product is often surrounded by massive delays and difficult implementations. By the time it launches, the final product is a pale reflection of the original idea. Inevitably the campaign launches with a fizzle, complete with angry consumers, frustrated clients, and ignorant agencies.
These types of failed campaigns are almost always the fault of a specific team within an agency. Often, the people involved in the ideation and pitching phases do not have the technical understanding of what is possible within a given platform, but their egos get the best of them. But knowledge and competency levels vary greatly among teams within a given agency, and too often clients hire based on the reputation of the agency as a whole -- not the abilities of the team that it will be handling its campaigns.
Unfortunately, if our industry is to move forward and innovate, a version of this death cycle is necessary. Our industry is too new. Only through failure do we learn what doesn't work. However, failure is not necessarily the problem. It's how we fail. When we experiment recklessly and subsequently fail, we wind up with clients that are so burned by the experience that they will never approve another "innovative" program again.
It is no longer about one big program -- so stop brainstorming them, pitching them, and creating them. All you do is suck money out of the client, launch mediocre campaigns that you represented as brilliance, and ensure that digital marketing is viewed on the client side as a crapshoot for effectively reaching the consumer.
Rather, create a framework. Design smaller ideas that launch off the same basic platform so that initiatives are more nimble and adjustable. Be efficient with the client's money. Act like it's your own personal money. Build failure into the system. Expect that only a couple of ideas will gain traction and that 80 percent of them will fail. When ideas do gain traction, use the learnings to feed the flames and expand the success.
Each client is unique. And although you can apply lessons from one client's programs to another's, you can rarely duplicate success. Unfortunately, marketers attempt to wholly replicate successful programs all too often. Instead, they should be taking what they learned and adapting it for their new clients.
When an agency pitches, it demonstrates how a given strategy or tactic worked for another client. The new potential client gets excited because it likes the look of the program and would love those kind of results. The problem is this: The results and goals that the agency presents to its new client, based on a past program success, are not the results and goals that the program was originally created to achieve. In other words, only with 20/20 hindsight was the agency able to surmise why the original campaign was surprisingly successful. Its original client did not set out with lofty expectations.
In short, don't set the client up for expectations you can't meet. Be honest.
As I explained to one agency I was working with, "I want to be the best follower in the world, but I want to follow ideas that are adapted -- not replicated -- for me." In other words, I do not want to have an agency use my company's money to learn big things; I want to learn and adapt small things. Revolution is a painful process, but innovation builds on what has worked before.
Break down what has worked in the past and plug it into a toolbox of options. But always start by asking the question, "What does success look like?" Seek to answer that question. Look outward first in terms of what will help achieve success, and then look inward and dig into your toolbox to see what you already have.
Too often, agencies turn first to their toolboxes to see what has already been done. It makes sense. It's easier. But as a result, marketers often tack irrelevant elements onto online projects -- they fall back on the "send to a friend" link instead of looking into something innovative like Tynt.com.
When you see a great campaign and are jealous that you didn't come up with the idea first, don't be amazed by it -- be amazed that some client approved it. There is a substantial knowledge gap on the client end in terms of what constitutes innovative marketing. It is an offshoot of the first-mover disadvantage. A client, due to its lack of knowledge regarding available technologies, might be amazed and approve something. Or, more likely, the client will force you to jump through so many hoops that the proposed program is no longer cost effective. Immediacy is the problem -- the need to have results now! But in many cases, corporate structures have grown into massively risk-averse entities. The client does not get a raise or promotion for doing something great -- rewards are only doled out for not doing anything bad.
This has resulted in a cult of client-side mediocrity.
Once again, stop going after the big idea. Educate the client on what's possible. Make your client a subject matter expert. Your client contacts know their business way better than any agency ever will -- they just don't know what media will most effectively reach their consumers. Set up education seminars at your agency on at least a monthly basis. Bring in vendors, technologists, and visionaries, and share information with the client. If you create an internal advocate, it's much more likely that your riskier ideas will get approved as they move up the food chain.
Start small. Build on small successes, and you will create a relationship where innovation is possible.
Also, request that your client create the same type of opportunities for you to learn its business. Trust me, the scope of what you do not know about your client's business and how it operates would stun a herd of buffalo.
"All animals are equal, but some animals are more equal than others." -- George Orwell, "Animal Farm"
A truer statement could not have been written when it comes to innovation as a result of "ideation by committee." During the last two decades of political correctness, we have reduced corporate culture to one in which everyone has a voice in the decision-making process.
Unfortunately, some people are smarter, some are stronger, and some are infinitely more creative and innovative than others. However, companies across the country pile people into rooms and say, "We're going to come up with a great idea." Seldom have these sessions done anything more than create a feeling of inclusion -- a sense that everyone's voice is being heard.
Some people have the natural ability -- or have been taught -- to think differently. Unfortunately, we are suffering the effects of two decades of M.B.A. programs that didn't teach people how to think. But luckily, that trend is shifting. According to a great article in The New York Times, we're seeing a move toward multicultural critical theory.
The current system of communal happiness works against innovation. Change is a violent and disturbing act, and you need people who think that way. What we have now is the system that, through focus groups, ended up with the Ford Edsel. The client, the vendor, and everyone else, down to the receptionist, gets involved in coming up with the next innovative idea. But you see, when everyone's voice is heard -- even the banal ones who don't understand the nuances of need-states of consumers, media distribution and formats, and word-of-mouth transference -- you end up with mediocrity.
If you want to innovate in advertising, take the smartest people you know (yes, even the ones that piss you off) and send them off in pairs, much like Noah's ark. Create a competition for the best idea, campaign, or product. And then designate a "change agent" -- a person who has the ability to pick ideas that really work. That's the person who selects the best idea to present to the client.
Oh no, wait -- that's how traditional advertising worked for years. And it did work. But somewhere in the new age of the internet, that culture was lost -- and internet advertising has suffered as a result. Not everything in traditional advertising can be applied to digital, but this system did work and still does.
I could go on to list additional marketing innovation blockers. I could rail against focus groups and group think, which result in ads that offend no one. (And if your ad does not offend anyone, guess what? It impacts no one.) Rather, we wind up with watered down versions of brilliance that crash and disappear without even a whimper.
But regardless, in the end, overcoming all of these innovation blockers requires a focus on mitigated risk. Not no risk. The key to innovation is setting up a system in your company that encourages small teams to go off and ideate by themselves -- without layers upon layers of corporate mediocrity screaming, "We can't do that!"
Over the past decade, we have witnessed a fundamental shift in which agencies have started to be run by CFOs and account teams. If we want to start innovating in this industry again, we have to restore the creatives as the heads of agencies. Sure, many more agencies' financial structures will become completely screwed up -- they will not be as profitable, and in fact, many will fail as a result. But we will innovate.
Seriously, if I have to see another droll banner ad, click-here piece of creative crap, or homepage takeover that has no relevance to the product it's advertising, I'm going back to traditional.
Sean X Cummings runs his own marketing consultancy, sxc marketing.
On Twitter? Follow iMedia Connection at @iMediaTweet.
Trendsplosion 1: Omnichannel marketing
Remember that scene in "Men in Black," when Tommy Lee Jones blows that alien's head off, and it immediately spawns a new one and keeps right on talking? After many decades of board room combat, marketers have evolved the same ability, except that the new head also spouts a new vocabulary. It replaces "banner" with "display," "geolocation" with "LBS," and "multichannel" with "omnichannel." In this way, it survives several board meetings.
I know, I know, "omnichannel" is meant to express the full integration of the customer experience across all channels, in a way that "multichannel" cannot -- because "omni" means "all." Please. Please. Just stop. Every multichannel campaign worthy of the name is integrated across all channels, and "omnichannel" is just a way of strip-mining an already barren marketing landscape for a last little nugget of "now"-ness. Allow me to dramatize how this nonsense word spells pain for marketers:
CEO: "So I just came from a conference that was all about omnichannel. Imagine my embarrassment that we still do multichannel."
Marketer: "It's the same thing. Our campaign is integrated across multiple channels. What's different?"
CEO: "'Omni' is obviously better. It sounds way better."
Marketer: "It's not."
CEO: [Glares meaningfully]
Marketer: [Sigh] "I will get us some omnichannel."
CEO: "Thanks. Good talk."
How about we resolve to spend less time this year engaging in term inflation and more time actually solving the pernicious and mostly still-unresolved problems of multichannel attribution? That might actually be worth something.
Trendsplosion 2: TED talks
"I need to tell you a personal story. It's about my creative and intellectual struggles and how they led to my big breakthrough, which will disrupt the way you think about reality. I cannot really explain this big breakthrough to you in any meaningful way, either because it is too complex for a 20-minute format, or because it is so general as to be utterly meaningless, and so not really a breakthrough at all. But trust me, it can change your life. Maybe. Even. Change. The. World."
By providing the TED template (or "TEDplate") above, I've spared you the need to waste any of 2014 watching TED Talks. But if you really can't help yourself, may I recommend art professor Benjamin Bratton's fox-in-the-henhouse take-down of TED in front of a live TED audience. I could construct a lengthy anti-TED screed and never come close to the rapier perfection of Bratton's "middlebrow megachurch infotainment" rant. It might be the one time that TED's $7,500-a-pop audience got its money's worth.
Is there irony in a "Top [fill in the blank]" list article complaining about the shallowness of someone else's observations? Yes, there is plenty of irony. See, this article's got everything!
Trendsplosion 3: Teen abandonment of Facebook
These kids today. Who can keep up? First it was the MTV, and then the internet, and now all of a sudden the Facebook, the Twitter, and now the Snapchat. Why won't they just sit still in front of the TV and let us blast ads at them? Hey kids, those "Family Ties" reruns are maybe worth a second look. That Alex P. is a charmer.
You have heard by now that those fickle teens are abandoning Facebook. Except that they aren't. About a year ago, a social media consultant told me conspiratorially that teens were about to abandon Facebook in droves and head straight over to Google+. Let me just check on how the Great Migration is going. Let's see here -- hm. According to Pew, 94 percent of teens who use social media use Facebook; by comparison, Google+'s 3 percent share is lower than the study's margin of error.
A fresh round of doom-saying was touched off by Facebook CFO David Ebersam's comments in the Q3 earnings call, in which he acknowledged that while the teen population on Facebook is stable, daily usage had declined over the quarter. At which point the ghost of Myspace could be heard turning in its grave.
Daily usage declines; membership doesn't. What's happening is that teens are settling into habits in which more natively mobile tools like Instagram and Snapchat are used for instant sharing, but Facebook keeps them connected to established friends and family relationships. They're not about to give up one type of connection for the other, like that time Alex quit his job at the family-run grocery store to work for a mega-chain, but ended up hating it.
As Pew acknowledges, teens' relationship with Facebook is complex and evolving, which pretty much describes all of their relationships. Facebook has been and will continue to be essential to my company's efforts to reach our core audience of teens and their parents. But we don't trade one channel for another either; we're also heavy on Instagram, Twitter, Pinterest, and yes, Google+, which we like for its Hangouts. New platforms are additive until the old ones wither away. You might even call it an omnichannel strategy.
Trendsplosion 4: Search engine optimization
I hesitated to include this one because I really don't want hate mail from search engine consultants; frankly, you guys scare me a little. But then I remembered that you'll never see this article because I've done nothing to optimize it. Ha ha! Now I'm really in trouble.
OK, back-pedaling. I don't really mean to say that SEO is dead, but certainly the old ways are dying. Our industry's obsessive Google algorithm-watching reveals one persistent meta-trend: Google would like you to please stop trying to game its search results and focus instead on producing relevant and accessible content that users love and share.
The much-ballyhooed Hummingbird algorithm update put a nail in the coffin of keyword-based optimization with its emphasis on semantic search -- attempting to understand the intent of a user's full search query rather than simply trying to match keywords. It privileges original, authoritative content and turns up its long beak at anything that looks like SEO fodder.
Look, I'm as queasy as you are about the folks at Google schooling me on how to be a more stand-up marketer. Pot, meet kettle; they can have their moral authority back when they stop reading my Gmail. But the bottom line is that we'll all need to adjust quickly to this new reality in 2014. When you log in to your Google Analytics account and discover that you no longer have access to your keywords, you'll know Big Daddy's not messing around; he's gone and taken away the car keys. Time to straighten up.
Trendsplosion 5: Twitter Q&A bombs
I have mixed feelings about this one too. When a big brand with low social engagement and some reputational baggage behaves as though it just discovered this whole social media thing, the resulting carnage is often killingly funny. And we marketers need these disasters to help us feel better about our own social media stumbles. After all, who among us did not thrill to the butt-clenching horror of the Ryanair CEO drooling over women's Twitter profile pics during his Q&A, and then discovering how to use hashtags to make his leering easier to follow? Or British Gas' decision to hold its Q&A on the day it rolled out a 9.2 percent rate hike, generating 16,000 smacks upside the head?
Of course, the best of all was JP Morgan's stunningly ill-considered #AskJP Q&A, which generated 19,000 Qs and not a single A because the company's vice chairman James Lee ran screaming from the 140-character carpet-bombing before its scheduled start. The incident utterly restored my faith in the acerbic wit of the American people, which had been badly damaged by our love of TED Talks. (Samples: "At what number of Billions of Dollars in fines will it no longer be profitable to run your criminal enterprise?" "As a young sociopath, how can I succeed in finance?")
We are truly a nation of smart-asses. I'm tearing up a little.
But no. Delightful as these disasters are, I am duty-bound to repeat some basic bylaws of social media engagement. Social forums are not neutral territory. They belong to the consumers, and when you come into their house, you play by their rules. Nothing but goodwill toward your brand constrains consumer behavior in these settings, so when ill will is pent up, bloodbaths are not merely a risk; they are inevitable.
Some pundits have credited brands like British Gas with courage for facing consumer scorn head-on, but there is nothing particularly courageous about jamming your head in a badger's den to ask how the badger feels about having you there. The bandwagon effect of a social media bloodbath drowns out any hope of dialogue, so both parties end up worse off. Twitter Q&A seems to be most effective when 1) it's an extension of longstanding engagement in the channel, so that brand promoters are also part of the dialogue, 2) it's framed around a highly specific sub-topic that followers actually care about, and 3) you're not JP Morgan. You guys should probably just go away.
Trendsplosion 6: Native advertising
I would very much like to meet the wit-wizard who coined the term "native advertising." He or she is the Bernie Madoff of digital marketing, generating lots of hype among people with lots of money for something that doesn't actually exist. I would like this person's help in replicating his or her feat for my new concept, "digital homesteads," which are websites in which the brand's name appears in the URL (Sears.com is a great example), and you can direct traffic to them. Consumers are sick to death of traditional websites; digital homesteads are the wave of the future.
Native advertising is yet another example of meaningless term inflation -- the equivalent of the amplifier that can be turned up to 11 in "Spinal Tap." In most usages, the term appears to cover various forms of sponsored content, but it roams widely enough to include such advertising staples as Google AdWords, in which case this hot new trend has been around for about a decade and a half. My editor Lori Luechtefeld has thoroughly sandblasted the term from a publisher perspective, arguing that it blurs advertising-editorial lines that are finally coming into focus. For marketers, it's either bad or useless, depending on whether it describes new editorial formats that mask their sponsored origins or a bunch of stuff we're already doing.
On my marketing team, we buy advertising, which we call -- wait for it -- advertising; we disseminate original content through our social channels, which we call content marketing, and we gain coverage from media outlets, which we call PR. What exactly does native advertising do that's distinct from any of those categories?
Marketers, you have plenty on your plates for 2014. As a basic rule of time management, you can safely avoid spending time on things that don't exist. That's just going to get you into trouble in the board room, and then you'll have to grow a whole new head.
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"Handsome business man closing his ears" image via Shutterstock.