BUSINESS PRACTICES: Six ways to fend off your biggest competitors

 
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Six ways to fend off your biggest competitors

EAMONN PERCY

Contributed to The Globe and Mail

Published Wednesday, Aug. 20 2014, 5:00 AM EDT

Last updated Monday, Aug. 18 2014, 3:41 PM EDT

Mobile internet, combined with cloud technology, has enabled U.S. mobile e-commerce (m-commerce) revenue to grow from $13.6-billion in 2011 to $46.7-billion in 2013, and is on track to grow at an annual rate of 28 per cent to an estimated $113-billion in 2017. Amazon and Walmart now both offer free shipping and same day delivery in some cities. For businesses, Amazon Supply is quietly targeting the fragmented trillion-dollar U.S. commercial and industrial business-to-business (B2B) wholesale and distribution markets.

Finally, technological substitution solutions are significantly disrupting entrenched competitors. Think of what Lyft and Uber are doing for on-demand car service, Google is doing for semi-autonomous vehicles, and Tesla doing to the traditional automotive sales, service and distribution value chain.Competition is also on for discretionary dollars, as growth of real after-tax income of middle class Canadian families has stalled, and grew by only 7 per cent (0.2 per cent per year) from 1976 to 2010. With globalization, capital has become more mobile, increasing income at the high end, driving the annual global demand for luxury goods to outstrip annual GDP growth by almost 50 per cent.

Your biggest competitor is not likely the traditional foe in your sector, but from e-commerce enabled global companies, competition for shrinking discretionary spending, technological substitution from new entrants, and existing players that are aggressively deploying technology to provide innovative low-cost and high-service solutions. Don’t be blindsided, be prepared.

1. Always operate from a strong base. Get your business fundamentals right, so you can grow from a strong base with a safety margin to withstand shocks. This includes scalable systems, access to capital, multi-channel business models, and solutions that serve an evolving market. Don’t leave anything to chance.

2. Plan to dominate, not just compete. Technology and globalization are massively expanding choice while lowering costs, so simply competing is no longer good enough. Intend to dominate your sector aggressively by building a strong market niche, selling globally, executing M&A options, innovating new product or service revenue streams, and owning the customer relationship.

3. Build a clear competitive advantage. Warren Buffett likes to buy companies that have a wide economic moat, i.e. a competitive advantage, such as low-cost production, brand name, or pricing power that enables a sustained market positon. Know your economic moat, and invest in it. If you don’t have one, figure it out quickly before your competition does.

4. Be fanatical about hiring service oriented staff. Hiring top talent is always a sure bet, however, opportunity is being created at the service-centric high end of the income scale, while Amazon is driving cost out of the low end. Make a service mindset a requirement for hiring all new staff. Cultivate a service culture at all levels.

5. Sell more, especially to your current customers. Make ‘more sales’ your mantra, and communicate its importance regularly. Ensure each employee knows and executes on his or her role in supporting sales. Start by selling more to existing customers, through new product and service offers, while constantly developing new markets that align with your unique value proposition. If you are the CEO, dedicate at least 50 per cent of your time to new or existing customers.

6. Probe for flaws and then improve. Each day your competitors are planning to put you out of business, so you should think like them. Probe your systems for weaknesses and fix them immediately. For instance, failed employees are not failed people, but a failure in your leadership or system. Work on the business, as well as in the business, and embrace a continuous improvement philosophy.

While changes are shifting the competitive landscape dramatically, well-positioned, innovative and agile companies can leverage these changes to build a better company by being proactive, service oriented and innovative.

Eamonn Percy Eamonn in an investor, business advisor and speaker on the topics of business leadership, entrepreneurship, innovation, turnarounds and accelerated growth of technical organizations. Follow him on Twitter@EamonnPercy

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SOCIAL MEDIA MARKETING: In photos: The path to a gorgeous Instagram food photo

• Marketing

In photos: The path to a gorgeous Instagram food photo

The Globe and Mail

Published Thursday, Jul. 24 2014, 4:51 PM EDT

Last updated Thursday, Jul. 24 2014, 4:59 PM EDT

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  A plate of shish kabobs rests amidst brushes, nail polish, and other tricks of the food prep trade before a product shoot at food marketing agency The Hot Plate's Toronto office.
  (DARREN CALABRESE FOR THE GLOBE AND MAIL)

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  An employee sears corn with a blowtorch in preparation
  (DARREN CALABRESE FOR THE GLOBE AND MAIL)

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  Employees work in the kitchen at The Hot Plate
  (DARREN CALABRESE FOR THE GLOBE AND MAIL)

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  An employee lays out food for a product shoot with exact precision
  (DARREN CALABRESE FOR THE GLOBE AND MAIL)

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  The Hot Plate sets up a backdrop for Welch’s grape juice
  (DARREN CALABRESE FOR THE GLOBE AND MAIL)

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  Amanda Riva, owner and CEO of The Hot Plate, critiques a recent shoot
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  A computer monitor displays a photo from a product shoot
  (DARREN CALABRESE FOR THE GLOBE AND MAIL)

SOCIAL MEDIA MARKETING: Food styling for social media, where the eye is bigger than the belly

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• Marketing

Food styling for social media, where the eye is bigger than the belly

SUSAN KRASHINSKY - MARKETING REPORTER

TORONTO — The Globe and Mail

Published Thursday, Jul. 24 2014, 7:14 PM EDT

Last updated Thursday, Jul. 24 2014, 7:19 PM EDT

A common knock against social media is that people simply use it to share photos of their lunch.

But in a sunny office in Toronto’s east end, where a food stylist arranges peas by hand one by one on a gleaming white plate, getting the perfect shot of lunch or dinner is an art – and a lucrative one.

At food marketing agency The Hot Plate, rustic distressed wood tabletops are stacked against the wall. A prop closet is stacked with colourful plates, bowls and ramekins in all sizes. Four refrigerators are needed to keep the test kitchen running.

For companies in the business of selling food, all those photos of lunch on social media are not an obnoxious trend. They are a golden opportunity: a digital culture where a kind of daily scrap-booking is cool, and where self-styled foodies see the perfect Instagram or Facebook photo of their quinoa salad as a kind of status symbol. That environment gives food marketers a way into the conversation on social media that often feels forced with other brands.The agency has built a growing business out of helping clients, such as Campbell Soup Co., Nestlé Canada Inc. and ItalPasta, to produce content such as photos and recipes at a faster clip than they have needed to before.

Food marketers have embraced the opportunity, producing high-resolution close-ups of doughnuts for Pinterest, zucchini fritters on Facebook, shrimp quesadillas on Twitter, and blackberry cupcakes on Instagram. By joining in on a growing culture of recipe-trading and vivid food photography, marketers are hoping to endear themselves to consumers who are more interested in playing with their food.

But it has created a challenge as well: all this content costs money. And with marketers under more pressure to control costs, the price of renting props and hiring food stylists, photographers, photo retouchers and recipe developers is a burden. And while giants such as Kraft Foods Group Inc. or Loblaw Cos. Ltd. can afford to maintain fully staffed test kitchens in-house, that is not realistic for many companies.

“We’re trying to produce so much content, and we have limited resources,” said Noemie Bessette, director of communications at organic food brand Nature’s Path and a client of The Hot Plate.

To keep consumers interested, the company needs to be constantly refreshing the photos and recipes it posts, she explained. That’s important for food companies, because recipes are a way to make consumers think about using the product more. Nature’s Path wants people not just to eat its cereals at breakfast; it wants them to makeVanilla Pineapple Ice Pops with its chia, buckwheat and hemp cereal.

Welch’s, another client, does not just want people to drink its juice: the brand is hoping they will use it more often during the summer to makefrozen treats.

“A few years ago, it was just Facebook and our website. Now we’re on Instagram, Pinterest, Twitter, we have a blog – we just have many more places where we can publish things,” said Erika Jubinville, PR and digital marketing specialist at Welch’s. “So there’s a constant need for fresh content. … When we had individual, isolated efforts, we didn’t have as much control over the cost.”

While she was still working as a freelance food stylist, The Hot Plate’s founder, Amanda Riva, heard these complaints often.

In early 2013, she launched the agency with the idea that she could offer marketers an easier and cheaper way to manage their digital communications. It started with her and a photographer, in a 750-square-foot condo. In just over a year and a half, it has grown to a team of 24 full-time employees in a 2,500-square foot office that they have already outgrown: a second office is under construction down the hall.

The payment model is different from many ad and PR agencies: there are no time sheets, and they never work on retainer. Ms. Riva decided to sell service packages to clients at a flat fee.

“Marketing budgets are not what they were several years ago, and the clients we’re working with are first in the line of fire when budgets are being slashed,” Ms. Riva said. “… They don’t want to feel like they’re in a big commitment [with an agency] that they can’t afford.”

That does not just apply to companies; commodities boards and other industry marketing associations have also gotten in on the action. The U.S. Popcorn Board recently approached The Hot Plate to produce a stop-motion video, for example.

“Pinterest, for us, is getting huge,” said Heather Nahatchewitz, marketing and communications director with Ontario Independent Meat Processors, which represents butchers and delis in the province. “To have professional recipe photography, it’s such a bonus.”

The control over costs has allowed OIMP to double the number of recipes it produces in just a year.

The group produces recipe books it distributes to members for use in their own marketing. Sharing recipes and photos on social media attracts food-savvy consumers whom the OIMP can then encourage to visit a local butcher or to consider locally-sourced meats.

“In the social space, people are there for themselves and to find out news about their friends and family,” said Ms. Jubinville at Welch.

“We want to tell our story in a way that doesn’t feel like we’re advertising to them too much.”

Food styling itself has changed dramatically, as well. The old tricks – lipstick on strawberries, motor oil to give a glossy sheen – have fallen out of vogue. Online photo-sharing has given consumers a new sense of the way food is supposed to look. The most appealing photography does not broadcast its high production values; it is more organic-looking.

“Consumers are more knowledgeable than they were, and they’re looking less for that picture-perfect, nuclear family experience,” Ms. Riva said.

Hitting the right tone of authenticity is critical for food brands.

“In the past, brands were kind of dictating a bit more to consumers what they should be interested in, and it was about a bigger brand message,” Ms. Bessette said.

“Now, the power has shifted a lot more toward consumers. It’s forcing us as brands to put much more interesting things together. There’s a lot more clutter. If we want people to be interested in what we have to say, we have to be interesting.”

Follow Susan Krashinsky on Twitter: @susinsky

SOCIAL MEDIA MARKETING UPDATE: Advertisers scramble as ‘non-human traffic’ eats up online budgets

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Advertisers scramble as ‘non-human traffic’ eats up online budgets

SUSAN KRASHINSKY - MARKETING REPORTER

The Globe and Mail

Published Thursday, Aug. 07 2014, 7:14 PM EDT

Last updated Friday, Aug. 08 2014, 2:28 PM EDT

The advertising industry is scrambling to combat the growing threat of “ad fraud,” computerized bots that fool advertisers into thinking they are reaching consumers.

By some estimates, this illegitimate online traffic means that for some brands, as much as 25 to 50 per cent of the money spent on online ads is wasted.

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“They’re trying to make decisions about where best to spend the money, and the illegitimate traffic is screwing up some of the metrics,” said Chris Williams, president of the Interactive Advertising Bureau of Canada.

Ad fraud takes many forms, but the most pernicious, many agree, is “non-human traffic” that leads advertisers to believe they are speaking to their target customers, when they are actually showing ads to bots that crawl the Web pretending to be human.

It’s a problem that does not just affect advertisers: It hurts legitimate publishers already scrambling for profit in a digital world. It further devalues an advertising medium whose rates already pale in comparison with traditional print media. And it hurts consumers, who are targeted with malicious software to create these networks of bots.

The trickery has become profitable because of a fundamental shift in the way advertising is bought and sold in recent years. Where advertisers used to buy ad space in a newspaper or during a television show because of the audiences that research showed were attracted to those media, now advertisers are able to target potential customers more Google, Advertising, non-human traffisdirectly. They follow behavioural patterns to create profiles of people online and on their mobile devices, and serve ads to them accordingly. (This is why you see ads all over the Web for shoes, after you’ve been browsing a shoe retailer’s website, for example.)

And the system for buying these ads has become increasingly automated. Just like the stock market or travel agents, companies are trying to make advertising transactions more efficient by eliminating the need for employees to pick up the phone to do deals. Ad space is traded online through exchanges where exposure to potential customers (such as young shoe fanatics) are sold to the highest bidder. Google has by far the biggest slice of this market. Other big exchange operators include AppNexus, OpenX, and Yahoo.

Now that the context of an ad – the pages of a particular magazine, for example – is no longer at the heart of the transaction, shady players are able to make money by using bots to behave like the consumers that advertisers want to bid on (by sending them to auto websites to look like a person in the market for a car, for example).

Because the system of online ad exchanges is not always transparent – and often includes intermediaries – advertisers do not always know their ads are on dubious sites.

“Sometimes people say ‘low-quality traffic,’ as if there was a gradient scale between a person and a robot,” said Ben Cormier, founder and former CEO of netProphets, a Toronto-based digital advertising technology company that was purchased in 2011 by advertising technology company AdGear. “Someone can spend $100,000 in online advertising and get incredible results and get a return on investment like nothing else. Someone else can spend $100,000 and get nothing.”

In April of this year, advertising technology firm TubeMogul published a list of websites where it said it had detected bot traffic. Ads paid for by major brands had registered fake views on sites such as tobe.tv and stylefactor.com, the company said.

Many of those sites are designed with content humans might plausibly look at, but not always.

Those who track the problem point to websites such as http://procpm.blogspot.com/. Its name refers to a metric used in ad buying: CPM, or cost-per-mille, which is the price advertisers pay for every 1,000 views of their ad. The site itself has little content on it at all, but visits this week revealed ads for brands including Ford, Aspirin, and Disney.

Big-name brands would likely not choose to advertise there. But the mere presence of their ads suggests that the site may be registered on digital ad exchanges as having more traffic than it likely does.

In February 2012, Tsavo Media, a unit of Toronto-based Cyberplex Inc. at the time, was required to pay Yahoo to compensate for 'low-quality traffic' to ads run on its websites. The sites were owned by Tsavo Media, which Cyberplex bought in 2010. The president in charge at the time of that acquisition resigned, and just two months later, Cyberplex soldTsavo Media. Cyberplex has since changed its name to EQ Works.

Because fake bot traffic is easy and cheap to buy from hackers online, sites can often make more on ads than they spend to attract visitors. Some more sophisticated operators create both the bots and the shady sites they visit.

In addition to bot traffic, disreputable sites can take the fraud even further by employing what is known as “ad stacking” – putting a number of ads on top of each other so that only one appears, but multiple ads are registered as having been seen. They can also shrink ads to fit inside a single pixel on a screen – effectively invisible to a visitor. It is also easy for disreputable sites to “spoof” a URL, mimicking the Web address of a well-known website to make themselves look legitimate.

SOCIAL MEDIA MARKETING: Keys to Successful Social Media Strategy

Keys to Successful Social Media Strategy

July 29, 2014 - Blog

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When I began my journalism career in 1985, my main tools of the trade were a reporter’s notebook, a Rolodex of sources and a lot of pens. Fast forward to 2014, and I would hazard a guess that young J-school students have never touched a Rolodex or even a reporter’s notebook for that matter.

Times have changed, and technology has ushered us into a “gotta have it now" society where online communities like Twitter, Facebook. LinkedIn, Instragram and Pintrest provide a platform to share information, ideas, personal messages and other content. And while we all use social media in some form or another, it has become an essential business tool for companies across the globe.

Most companies post content to social media sites, but attracting purchasing consumers as a result requires tight integration between social media efforts and the overall marketing strategy. When social media and other tactics like email marketing and advertising work together, brands are equipped to grow a loyal consumer audience. Companies whose products possess a nutritional benefit have even more social media influence when it comes to attracting consumers.

This topic will be addressed during the Food Product Design track of the SupplySide Education program, sponsored by BASF, Oct. 7 from 3-3:50 p.m. I invite you to join Todd Pauli, partner, The Shelton Group, and Suzanne Shelton, president, The Shelton Group, who will lead the “Three Steps to a Successful Social Media Strategy for Nutrition-Focused Brands" presentation.

The session will cover each of the three steps necessary for building a successful social media strategy: content planning, interacting with social sites, and using social analytics. Attendees will walk away with tangible, easy-to-implement tactics for building a successful social media program, including how to set up a content calendar that integrates across their marketing efforts, what to look for in choosing a person to post social content, and how to measure success with analytics.

To cover these concepts Pauli and Shelton will walk through building a social media strategy for a fictional food brand enabling attendees to easily relate the content to their own brands. The last portion of the presentation will address the advantages nutrition-focused brands have when it comes to social media, along with specific strategies that can be used to leverage these advantages.