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The Danger of Confusing Spin With Strategy
By Patrick Di Chiro
Chairman and CEO
THUNDER FACTORY, Inc.
In the numerous post mortems that followed the bursting of the first Internet bubble, one factor was usually overlooked: The fact that management, investors and industry pundits too frequently confused "spin" with "strategy."
And, with all the recent hype surrounding “Web 2.0,” it is increasingly looking like we are hurtling toward a very similar train wreck. Just like the first go ‘round, too many people are confusing the “spin” of the moment with the sustainable and lasting foundation of real “strategy.”
Of course, when Google shells out $1.6 billion for YouTube, a company that has only been in business for a little over a year and still loses pots of money, the gravitational pull of spin is understandable and inevitable. But, that still does not mean that you should, or must, fall prey to it.
The reality check is that this is nothing new for marketers. We’ve been confusing spin with strategy for many years now.
There is a world of difference between spin and strategy. Spin is about superficial trends, "buzz," nonexistent planning, very little focus, and continual changes in direction. Strategy is based on rigorous planning, long-term value, making the hard decisions, focusing like a laser beam, and striving for consistency over time.
In recent years, marketers have been increasingly satisfied with taking the strategic path of least resistance - they have been adopting spin tactics rather than doing the hard work to come up with a real strategy.
One doesn't have to look too broadly to discover some real world examples of how spin has permeated every aspect of the marketing business for years.
Marketing's 30-Year Spin Cycle
Some would argue that the first Internet economy (Web 1.0) was a triumph of spin over strategy. Clearly, it was not our finest hour as marketers. It was a time when spin virtually replaced strategy. A time when marketers actually believed that you could "build a brand" by blowing half your annual marketing budget on one Super Bowl commercial. Or, by getting your CEO mentioned a few times in the now defunct and forgotten Industry Standard. (If you believe this is just a walk down marketing’s memory lane, take a look at GoDaddy’s ads at last year’s Super Bowl.)
Michael E. Porter, the Harvard Business School professor who is one of the world's foremost thinkers on business strategy, discussed the decline in the use of strategy in a March 2001 Harvard Business Review article entitled, "Strategy and the Internet." Porter commented: "Many of the pioneers of Internet business, both dot-coms and established companies, have competed in ways that violate every precept of good strategy. Rather than focus on profits, they have sought to maximize revenue and market share at all costs, pursuing customers indiscriminately through discounting, giveaways, promotions, channel incentives, and heavy advertising."
Think about our current state of business and marketing. As we move into 2007, have things really changed that much? The state of affairs outlined a few years ago by Dr. Porter could just as accurately apply to what’s going on in the increasingly overheated Web 2.0 economy. I know I am not alone in thinking that we are in danger of making many of the same mistakes as in the earlier dot-com era by again confusing spin with strategy.
The truth is that marketers began emphasizing spin over strategy long before anyone had ever heard of the terms "first mover advantage," “social networking” or “user generated content.” The seeds of this trend were planted in the 1960's, during the first major creative revolution in the advertising/marketing industry. This period is rightfully characterized by many as a Renaissance in the advertising business. It brought intelligence, light and humor to a business that too often treated consumers as if they were idiots.
But, there was a dark side to this creative enlightenment. The positive changes of the '60s led to a second creative revolution in the 1970's. Born in San Francisco and L.A, the second creative revolution is best known by its oft-repeated mantra, "It's all about the work."
The "work" stood for the creative output, which in itself became the hero and the end game. Not the product, the marketing idea, or even the client, and certainly not the marketing strategy. In this new spin-focused approach to marketing, the primary goal was to entertain and impress. Selling and building strong, value based relationships with customers and other stakeholders took a back seat.
To be sure, strong creative is a fundamental part of good strategic execution. Effective strategy engages customers, keeps their attention so you can deliver a persuasive message, and hopefully changes their behavior in a positive way. You cannot accomplish that by boring people. But, a marketing-advertising approach that principally emphasizes entertainment, mind share and buzz, is not destined to build long-term success. And definitely not growing, profitable revenues. That takes strategy, not spin.
Consider the new obsession with so-called “viral” or “buzz” marketing. Today marketers are being sold loony websites and videos that are designed for pure entertainment value. We’re told it’s all about building digital buzz and creating a viral effect online. One has to wonder, however, if this is not just another example of creative agencies (abetted by marketers who don’t want to be branded as digital Luddites) pursuing what they really love to do, which is to create entertainment, rather than sell things. Another victory of spin over strategy.
You can probably guess where I come down on this critical question of the new marketing era. Just because every other brand seems to be establishing an island (albeit a deserted one) on SecondLife, does not mean buying virtual real estate makes sense for your company or your marketing/business strategy. But, that has not stopped a lot of seemingly smart companies from jumping on the SecondLife bandwagon. Good for the folks behind SecondLife – not so good for the marketers who’ll one day have to justify the mostly non-existent ROI of this spin-driven marketing tactic. Again, a clear confusion of spin vs. strategy.
Spinning a "Press Release-a-Day"
At the height of the first Internet era, CEOs of hot public dot coms were known to instruct their marketing and communications staffs to issue a "press release-a-day." They believed that the quantity, not necessarily quality, of these releases would create the impression that their companies were dynamic, growing and successful. Never mind that the vast majority of their releases had no news or business value whatsoever. In fact, a common complaint amongst Wall Street analysts and reporters was that the only thing these companies were winning was the "press release war."
The dot com CEOs readily admitted that their daily press release edicts were solely about spin, and had nothing to do with business strategy. But they adamantly stuck to this practice because they believed it generated the desired results - boosting their stock prices and creating the all-important buzz. (Even today, a publicity loving high-tech CEO in San Francisco personifies this buzz-driven approach. He has been spinning so much for so long that he no longer even tries to distinguish the real strategy from the PR buzz. Not surprisingly, his company’s so-so results reflect this obsession with spin.)
Strategy Edging out Spin in the Political Realm
The term spin was actually coined in the political realm, and it has been enthusiastically practiced there ever since. The original "spinmeisters" were the political operatives who tried to gain competitive advantage for their clients by devising poll-driven messages - and even policies -- that purported to tell voters what they wanted to hear.
The good news is that strategy still does win the day, even in the spin-centric political world. Leaving aside the controversies of the 2000 presidential race, few would disagree that then Governor George W. Bush won the strategy war of the campaign. Many believe that Vice President Al Gore lost by his over reliance on spin.
From the beginning of his campaign, Bush established a clear strategy and deceptively simple messages to communicate his positions. He then did something that seems almost revolutionary these days: He consistently stuck to them throughout the campaign.
Whether or not you agreed with candidate Bush, you knew where he stood. More importantly, his steadfast adherence to his strategy and messages painted the picture of a disciplined, straight talking and even principled politician. One who knew what he wanted to do, and where he would lead the country.
In stark contrast, Vice President Gore was all over the map in campaign 2000. He constantly changed his strategy, and key messages, and thus reinforced a perception that he was just another superficial politician who did not really have any guiding principles. Someone who would "do or say anything to get elected." As such, whether by design or through lack of discipline, Vice President Gore's campaign was essentially run on spin, not a core strategy. The final result reinforced again the power of strategy over spin.
Sparking a New Strategy Revolution
What the marketing industry needs today is a new strategy revolution (and this goes for political marketers as well). In this revolution, facts on the ground would drive strategies, marketing campaigns would be built upon big selling ideas, and the "work" would serve to support the strategy, not the other way around. Spin would just be another tactic in a comprehensive strategic plan. Like the original creative revolution of the '60s, this new strategy revolution would reclaim the true business-building legacy of the marketing profession. It would be founded on the following strategic marketing tenets, all pillars of proven business strategy:
- Make the Tough Choices - Strategy is not about doing everything - it's about making hard choices and trade-offs, that differentiate and help drive competitive advantage.
- Focus on Profitability - Growth, market-share and mind-share are all great, but, without profits, businesses die. Marketers must develop strategies that drive the bottom-line as well as the top-line. Profits are not just the province of the CFO’s office. Marketers need to also take responsibility for creating profitable revenues.
- Deliver Real Value - This should be tattooed on every marketer’s forehead! If you develop and deliver a product and an experience that has real value, you can charge a fair price for it. That creates brands, and leads to higher profits and lasting success. It has nothing to do with spin.
- Listen to the Customer/Voter - This seems self evident, but it's forgotten all too frequently. Building an effective marketing strategy is, first and foremost, a bottom's up process, not top down. Learn first what your customers really want and need (their passions and priorities), and then plan from there.
- Define Your Unique Value Proposition - The essence of strategy involves developing a differentiated value proposition that drives competitive advantage. If you're having problems doing so, start over. No amount of spin, or marketing budget, will take the place of a strong value proposition. (NB: If you don’t get this one right, adhering to all the other tenets will be pretty much wasted.)
- Be Consistent - As marketers we all know that brands are earned over time. They are not bought - even with expensive advertising campaigns on the Super Bowl or Academy Awards telecast. But, that doesn't stop marketers from trying each year. To succeed in the long run, you've got to take the time and do the hard work to build a strategy, and then stick to it.
Great companies (and politicians, too) know that lasting success comes from having a strategy that is refined, reinforced and followed consistently over time. If you are willing to do the hard strategic work - and avoid the pitfalls of confusing spin with strategy - you too can build a business and/or political franchise that stands the test of time and competition.
About the Author
Patrick Di Chiro has nearly 30 years of international experience in marketing and communications. He has worked at, and for, some of the world’s leading brands and marketing-communications agencies. Di Chiro founded THUNDER FACTORY in 2000 because he felt there was a need for a new kind of idea-centric marketing firm, one that is totally focused on building clients’ businesses. Today, THUNDER FACTORY is one of the nation’s fastest growing integrated marketing firms, providing a full range of digital and offline marketing and communications services to world-class brands and corporations, including Johnson & Johnson, TD AMERITRADE, Dell, McKesson Corporation, Avery Dennison, Oakley and Vonage. Headquartered in San Francisco, THUNDER FACTORY also has offices in Los Angeles and New York City.
About THUNDER FACTORY
Since its founding in 2000, THUNDER FACTORY has built a national reputation for delivering integrated, big idea-driven marketing services that help clients build their businesses. The firm provides a comprehensive range of services in five key areas: integrated marketing strategy/brand development; communications (including online/offline advertising, public relations, blogs, collateral development and event marketing); digital/Interactive marketing (including web development, online/email marketing, mobile marketing, search marketing and online promotions); direct response marketing; and partnership marketing/sales promotions. THUNDER FACTORY's clients range from Fortune 50 corporations to leading mid-sized companies and start-ups, and include Johnson & Johnson, TD AMERITRADE, McKesson Corp., Match.com, Avery Dennison, Vonage, Dell and Dr. Pepper/Seven Up Company. Headquartered in San Francisco, THUNDER FACTORY also has offices in Los Angeles and New York City. For more information, visit www.thunderfactory.com, or contact Eric Granof, President at [email protected], 818.206.8306.
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