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Press Releases:
THUNDER FACTORY
Accelerates Growth
in Southern California
Fleetwood Rv, San José
State University Choose
Thunder Factory For
Integrated Marketing
Programs
Business Growth at
Thunder Factory Spurs
Headquarters Move,
Expansion into L.A.
and N.Y.
In the News:
Thunder Factory Wins
Fleetwood RV, San José
State University
Article List:
Confusing Spin
With Strategy
- Patrick Di Chiro
An Open Letter
To Al Ries, Ad Age
Columnist
Here's Where to Find
Integrated Marketing
- AdAge
Getting a Bead on 'Buzz'
- Virginia Postrel
Survey: Network TV
Does Worst Job of
Proving Advertising ROI
- Judann Pollack
Toughening Your Brand
- Lynn Upshaw
Coffee's For Closers
- Patrick Di Chiro
The Role of Key Opinion Leaders (KOLs)
in The Pharmaceutical Industry
- Joseph Gutman, MD
Playing the
Search-Engine Game
-Mylene Mangalindan, WSJ
At Last,
a Way to Measure Ads,
- Michael Totty, WSJ
Small Firms Can
Survive Sqeeze
By Revamping Marketing Efforts
- Jeff Bailey, WSJ
Study Says
Marketers Shifting
Toward Internet, Direct Mail
- Erin White, WSJ
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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 Internet bubble (It didn't "change everything" after all), one factor
was usually overlooked as being key to the Net economy's demise: The fact that
management, investors and industry pundits too frequently confused "spin"
with "strategy."
This is nothing new for marketers, who have 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 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 strategy.
One doesn't have to look too broadly to discover some poignant examples of
how spin has permeated every aspect of our business and marketing thinking.
Marketing's 30-Year Spin Cycle
Some would argue that the entire Internet economy 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.
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."
The truth is that marketers began emphasizing spin over strategy long before
anyone had ever heard of the term "first mover advantage." 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 itself became the
hero and the end game. Not the product, or 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 profits. That takes strategy, not
spin.
Spinning a "Press Release-a-Day"
At the height of the Internet craze, 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 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.
The real problem for these Internet companies and their shareholders was that
their buzz-loving CEOs ultimately confused spin with strategy. CNBC was crowded
everyday with glib CEOs who exhibited a dangerous habit of seizing the trend du
jour and promoting it with an almost religious fervor. Their strategic zig zagging
not only hurt productivity, competitiveness and employee morale, it wasted a huge
amount of money in the process. Shareholder value quickly went out the window.
Several of these CEOs continue to confuse their spinning with having a real
strategy. Evidently, they are hoping they can attract a buyer before their companies
simply collapse from too much spin.
Strategy Edges out Spin in Presidential Politics
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. In
this revolution, 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 built 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.
- Deliver Real Value - This should be tattooed on every marketer!
If you develop and deliver a product and an experience that has real value, you
can charge a fair price for it. That helps to build brands, and leads to profits
and success. It has nothing to do with spin.
- Listen to the Customer - 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, 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.
- Be Consistent - As marketers we all know that brands are earned
over time. They are not bought - even with expensive advertising campaigns. But,
that doesn't stop marketers from trying. 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 know that lasting business success comes from having a strategy
that is refined, reinforced and followed consistently. 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 franchise that stands the test of time and competition.
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