In the first six months of 2012, Google raked in more ad revenue than U.S. print newspapers and magazines combined.
Even though Google has more revenue than all U.S. print newspapers and magazines combined, direct mail is still the biggest single direct marketing channel, worth around $45 billion a year in the US alone. But it’s increasingly clear that printed marketing communications work best when used in conjunction with digital channels, with response and conversion rates improving by three or four percentage points respectively when printed direct mail is combined with email, personalized web pages (PURLs), database marketing, and mobile elements.
Larchmont Magazine is a free community magazine that will combine print and digital using variable data printing (VDP). Larchmont will initially be mailed to all the residential addresses in the 10538 zip code (Larchmont, NY) in August. We will follow-up in October by mailing Bronxville Magazine to all the residential addresses in the 10708 zip code (Bronxville, NY).
- Armonk, New York (17)
- Scarsdale, New York (18)
- Bronxville, New York (20)
- Chappaqua, New York (41)
- Rye (city), New York (50)
- Pound Ridge, New York (54)
- New Castle, New York (58)
- Larchmont, New York (60)
Our personalized community magazines will create real innovation and real value for local businesses by understanding people as human beings, not consumers. The basic idea is to build a close personal relationship with each customer that is based on quality, service, friendship, loyalty, and communications. And, not based on discounts and deceptions.
If You Don’t Understand People, You Don’t Understand Business
One hundred percent of customers are people. And one hundred percent of clients are people. And one hundred percent of employees are people. I don’t care how good your product is. I don’t care how good your marketing is. I don’t care how good your design is. If you don’t understand people, you don’t understand business. We are social animals. We are human beings. And our survival depends on our ability to form trusting relationships.
~ Simon Senek
Treating people as human beings begins with great content. Overwhelming clutter has made traditional advertising nearly worthless for most businesses. We live in a world that has become ad rich but idea poor. We are tired of being bombarded with ads—we want instead to be inspired by ideas that will change our lives. Ads may create transactions, but great ideas create transformations. Ads reflect our culture, ideas imagine our future.
Paul MacLean’s “Triune Brain” theory, whose basic idea is that every human brain contains three independent competing minds – the reptile, the early mammal, and the modern primate.
Another big problem with traditional advertising is that it mainly engages the “lizard brain.” Whether you know it or not, we all have what Seth Godin
refers to as a lizard brain. He says, “The lizard is a physical part of your brain, the pre-historic lump called the amygdala near the brain stem that is responsible for fear and rage and reproductive drive.”
“The lizard brain is hungry, scared, angry, and horny.”
“The lizard brain only wants to eat and be safe.”
Godin writes in The Icarus Deception:
[T]he lizard brain is the resistance. The resistance is the voice in the back of our head telling us to back off, be careful, go slow, compromise. The resistance is writer’s block and putting jitters and every project that ever shipped late because people couldn’t stay on the same page long enough to get something out the door. The resistance grows in strength as we get closer to shipping, as we get closer to an insight, as we get closer to the truth of what we really want. That’s because the lizard hates change and achievement and risk.
CLOTAIRE RAPAILLE, a French-born medical anthropologist and psychiatrist, is paid top dollar by American corporations to tell them what consumers want from their coffee, toilet paper, artificial sweetener, luggage, cheese and political candidates…. Consumers make decisions from the gut, not the brain, Dr. Rapaille maintains, based on the earliest memories of home and happiness.
My theory is very simple: The reptilian always wins. I don’t care what you’re going to tell me intellectually. I don’t care. Give me the reptilian. Why? Because the reptilian always wins.
According to Douglas Van Praet, author of Unconscious Branding
, billions of dollars of market research is being wasted because asking consumers what they want, or why they do what they do, is like asking the political affiliation of a tuna fish sandwich. We humans make the vast majority of our decisions unconsciously.
Even if we make the vast majority of our decisions unconsciously, does this mean that the reptilian always win? In contrast, Emile Durkheim described human beings as “Homo duplex,” or “two-level man.” The lower level is the level of the profane—the level of ordinary consciousness and self-interested pursuits. The higher level is the level of the sacred at which we lose our petty selves and become simply a part of a larger whole.
I mean that we evolved to see sacredness all around us and to join with others into teams that circle around sacred objects, people and ideas. This is why politics is so tribal. Politics is partly profane, it’s partly about self-interest. But politics is also about sacredness. It’s about joining with others to pursue moral ideals. It’s about the eternal struggle between good and evil, and we all believe we’re on the side of the good.
This perspective also helps explains the persistent undercurrent of dissatisfaction in modern life. Ever since the Enlightenment, modern secular society has emphasized liberty and self-expression. We exult in our freedom, but sometimes we wonder: Is this all there is? What should I do with my life? What’s missing? What’s missing is that we are homo duplex, but only our first-floor, profane longings are being satisfied.
The old model of advertising and branding was to improve public perceptions, and mainly focuses on our “profane longings.” The new model demands that companies improve public life and satisfy the needs of our higher sacred selves. To survive, companies must start nurturing ideas, not just pushing products and services.
Knowledgeable marketers understand that what worked in the past is not working (or not working well) now. A new approach is needed. As A. G. Lafley, the CEO of Procter & Gamble and author of The Game Changer, told his executives, “We need to reinvent the way we market to consumers. We need a new model.”
The Game Changer
Did Steve Jobs discover that new model?
A lot of people in our industry haven’t had very diverse experiences. So they don’t have enough dots to connect, and they end up with very linear solutions without a broad perspective on the problem. The broader one’s understanding of the human experience, the better design we will have.
~ Steve Jobs
In 1998, Bill Gates “couldn’t imagine a situation in which Apple would ever be bigger and more profitable than Microsoft.” Today, Apple’s market capitalization is $683 billion, more than double Microsoft’s current value of $338 billion.
Apple made $18.04 billion in profit and $74.6 billion in revenue
for the first quarter of 2015. Those are both records for Apple alone, but there’s more: The numbers mean Apple just had the most profitable quarter of any company ever, beating out
Russia’s Gazprom by a neat $1.8 billion. Apple now has five of the top ten most profitable quarters. ExxonMobil has three.
Steve Jobs unveils first iPhone
Steve Jobs took a near bankrupt company and turned it into the most valuable company in the world by understanding the importance of human psychology in designing products and services, and also by understanding the need to address our higher sacred selves.
Here’s to the crazy ones. The rebels. The troublemakers. The ones who see things differently. While some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.
So what does this all mean for our personalized community magazines?
We are developing a model to utilize the benefits of both print and digital, while also addressing the human element. And even though Google brings in more advertising revenue than all of U.S. print media, there is still weakness in Google’s model. In a TechCrunch interview Tyler Cowen proclaimed:
Google is an old business…. Google has never really been about human psychology.
Truly effective advertising is based on human psychology.
Whether or not you are convinced that reptilian does not always win, truly effective advertising is based on human psychology. There is very little human psychology embedded in Google’s technology and business model. Google approaches problems from an engineering perspective but what is needed to build an effective new marketing model is a human perspective.
Groupon and other daily deal providers give us more examples of a lack of the human perspective. In the year ending May 2014, Americans made 61 billion visits to restaurants
. That’s down from 62.7 billion in 2008
and flat compared to the last several year. Of the over 1 billion visits lost each year, the vast majority have been to independent establishments.
Groupon grew out of a social activist website called “The Point” to became the fastest growing company ever
with an apparently great idea that seemed to serve the needs of small business owners. “The Point” got its name from The Tipping Point: How Little Things Can Make a Big Difference,
a book by Malcom Gladwell: “The success of any kind of social epidemic is heavily dependent on the involvement of people with a particular and rare set of social gifts.”
The Groupon model lost sight of the fact that all businesses have Gold customers – a small percentage that provides 80% of their revenue and profit. The deep discounts of daily deals devalue these customers.
Instead of devaluing customers by offering deep discounts, small businesses can use database marketing campaigns. The basic idea in database marketing is to build a close personal relationship with each customer that is based on quality, service, friendship, loyalty, and communications. And, not based on discounts. You would not give a neighbor $5 for helping you move furniture. It would be an insult. Instead, you offer a cup of coffee or a beer, and 15 minutes of chat around the kitchen table. That is the kind of relationship that database marketing creates. Discounts send the wrong message: we are cheap guys whose basic product is overpriced. We want to buy your loyalty. We don’t care about you. We care about your money.
Database marketing campaigns identify Gold customers and develop programs designed to retain them. Resources that small businesses can not afford to spend on all of their customers. Profits come from working to retain the best, and encouraging others to move up to higher status levels.
We will help small local businesses identify Gold customers and develop database marketing campaigns.
We are willing to take the time to understand the goals of local businesses and become strategic partners. What we do is strategic integration, which means starting right at the beginning of a project by determining the needs of a client and then planning how to meet those needs by whatever functions are necessary. Effective marketing starts with a better understanding of the media plan that ties to consumer touch points more than it does to the creative idea. Effective marketing that results in greater profits is problem solving, it isn’t movie making.
Groupon became the fastest growing company ever by apparently serving the marketing needs of small business owners. What would happen if a business came along that truly served the needs of local business owners and local communities?