Marketing Classics (And Still True)

From the “Corner On the Market” Series, November 2000 – By Ronald Burgess.

We have gone back through our classic writings to highlight early Internet trends that are still true. In this case, you know it is classic because it has double spaces between the sentences. Originally this was published (in print) in the Inland Empire Business Journal.

Marketing By The Numbers – The High Cost of Content

So many costs are buried in traditional income statements that the true costs of marketing are rarely exposed accurately.  Most medium and small businesses have a line item for advertising, but this is hardly the cost of marketing.  Depending on industry, an advertising budget may be between 2% and 10% of revenue.  But if the company has a sales staff, the employee or contract labor cost is in another expense category, usually in labor and sometimes lumped in with cost of goods sold.

But neither of these expense line items include other costs of marketing such as strategic planning, research, distribution or content development.  These costs are largely “buried” in salaries, or other departments.  Some experts put the total cost of marketing (including order entry, fulfillment, distribution, promotion and all planning) at closer to 30 to 40 percent of revenue.

One of the toughest costs to understand and appreciate is the cost of content development. Content development is the basic language and imagery that communicates what you do and why your customers should buy.  This is usually exposed the first time a company develops and prints a substantial brochure;  a 4 to 10 page six color piece that can cost $8.00 each to print.  This is an $8000 bill for 1000 brochures.  But the cost of printing is only the starting point, many businesses inadvertently bury the cost of developing the content.

Mature advertising agencies pause when they find out that a client or prospect is working on their first “glossy” piece, because they know by experience, that the novice company does not know what it takes to write copy, develop imagery and tell the story.  It is not uncommon to spend double the cost of printing on the development of the creative and content.

While an agency will charge for this service, if a company chooses to be directly involved in this process, the cost is buried in salaries, usually expensive executive or owner salaries.

It typically starts when the initial copy job is delegated to a salesperson or designated “marketing” director.  When the initial draft is passed to the VP’s, President, or owner, the copy gets drastically revised, because the initial copy writer was not deeply involved in the marketing positioning of the company.  The first round leads to a second, third and fourth round. By now the finance department and marketing are fighting over grammatical opinions and the initial sell is watered down.  Sometimes the process completely fails at this point or, if the brochure must be produced by a certain time, tempers flair and professional help is invited in and the outside costs soar.

One of the primary reasons for this is that the company has never done the necessary preliminary work to properly state the mission and determine the marketing positioning of the company.

Most  businesses owners and managers believe they know what business they are in, until they try a collaborative approach to an expensive brochure.  They don’t really know what they want to say, to whom, for what and why?

And so what seems to be a discussion about cost containment, is really one about strategic marketing.

The High-tech Version of an Old Issue

Today this age old marketing issue has manifest itself in the development of Web sites as well.  For the same reasons as above, a site that might cost a few hundred dollars ends up costing in the thousands of dollars. Content development is the major cost of most projects.  Companies that believe they have the content often find they don’t have a clear message for the Internet.

Unlike a brochure, a web site is fluid and easily changed.  Mistakes can be quickly corrected, however this flexibility can justify a hasty start up project, that needs revision, and then costs and tempers flair due to lack of planning on the part of the company.

Because few Web site development companies have the talents of ad agencies, they tend to simply do what is asked of them.  Then as a site it is corrected and changed several times, they begin to realize that they must charge for the additional labor.

The cycle of changing the site, proofing and then making another change is incredibly wasteful.  Here is a real life example:

The product development head, or executive secretary gets saddled with the responsibility of the Web site.  He or she is very busy so finds a competent Web company to assist in the development.  They outline a few starting pages from existing literature for the site, but find that the company has no image policies or plan.  With a limited budget, they hire an inexperienced recent graduate to head up marketing.  The site is built based on initial content but now the new “marketing” director wants to change the image and some copy. The 20 something kid on the block has built a Web site in one of his college classes and convinces his 50 something product development head that he can be the Web master.

The non-professional marketing director provides copy to the Web company that is grammatically incorrect.  The Web company notifies the development head that the copy is not appropriate, so the executives all begin to send copy changes to the Web company.  As each change is made, they each view the site each evening and begin to change each others’ copy.  You get the idea.

The problem:

The company did not take the marketing or targeting of the site seriously and delegated the project to an executive who does not understand the media and has only a cursory interest in the project.  Then they were fooled into believing that (any) young techie could fix the fact that the company did not do the initial strategic work.

The solution:

Every president of a company should sign off on the aesthetic plan of the company.  This includes image, statement of mission and market, a carefully drafted marketing statement, and finally publishing standards (fonts, colors, key selling language etc.) With out this information the cost of marketing will always be more than is necessary.  “If you have no destination any road will do.”  Yet when the wrong road is taken by well meaning employees and outside vendors, its the boss who is to blame.

When working on Web sites, brochures and advertising, make sure the aesthetic plan is provided to all on the project.  Clearly state the goals of the Web project, i.e.… Selling brochure directed for a specific market, customer service, or web project to provide specific product specifications in print for customers.

Provide (or hire) complete copy and image concepts that have already been approved by appropriate executives.  Require a sign off on the Web site or brochure design and format before any copy or layout is completed.  When the project is completed, ONE revision is allowed—ONLY ONE.  Make sure everyone knows this prevents very expensive “creeping perfectionism” from occurring.  The final sign-off verifies the final changes are made, and the project is ready for the press or to be published on-line.

Finish each phase before continuing onto the next phase. A Web site can be built one chapter at a time, unlike the book in printing, so plan on building in an organized fashion so it tells a story. You don’t have to travel the distance all at once, but you should pick the road unless you want to travel a leisurely first class.

Ron Burgess is a management consultant specializing in marketing management and technology.

Other posts you may enjoy, Marketing by the Numbers – Customer Data

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