Pew Marketing Research Explores Smartphone Usage

  

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The rise in mobile apps - especially among younger adults - gives rise to questions about the future of Facebook, Google and even Amazon.  Additionally, it has huge implications for marketers, even as we marketing researchers begin to find respondents using mobile technology.

Pew Research explored how people use mobile apps in a recent Pew Internet & American Life Project survey.  Completed by Lee Rainie and Susannah Fox and published on May 7, 2012, you can connect to the survey here. 

Just-in-time Information through Mobile Connections

OVERVIEW

The rapid adoption of cell phones and, especially, the spread of internet-connected smartphones are changing people’s communications with others and their relationships with information. Users’ ability to access data immediately through apps and web browsers and through contact with their social networks is creating a new culture of real-time information seekers and problem solvers.

The Pew Research Center’s Internet & American Life Project has documented some of the ways that people perform just-in-time services with their cell phones. A new nationally representative survey by the Pew Internet Project has found additional evidence of this just-in-time phenomenon. Some 70% of all cell phone owners and 86% of smartphone owners have used their phones in the previous 30 days to perform at least one of the following activities:

• Coordinate a meeting or get-together -- 41% of cell phone owners have done this in the past 30 days.
• Solve an unexpected problem that they or someone else had encountered -- 35% have used their phones to do this in the past 30 days.
• Decide whether to visit a business, such as a restaurant -- 30% have used their phone to do this in the past 30 days.
• Find information to help settle an argument they were having -- 27% haveused their phone to get information for that reason in the past 30 days.
• Look up a score of a sporting event -- 23% have used their phone to do that in the past 30 days.
• Get up-to-the-minute traffic or public transit information to find the fastest way to get somewhere -- 20% have used their phone to get that kind of information in the past 30 days.
• Get help in an emergency situation -- 19% have used their phone to do that in the past 30 days.

Overall, these “just-in-time” cell users—defined as anyone who has done one or more of the above activities using their phone in the preceding 30 days—amount to 62% of the entire adult population.

ABOUT THE SURVEY

The results in this report are based on data from telephone interviews conducted by Princeton Survey Research Associates International from March 15 to April 3, 2012, among a sample of 2,254 adults, age 18 and older.  Telephone interviews were conducted in English and Spanish by landline (1,351) and cell phone (903, including 410 without a landline phone). For results based on the total sample, one can say with 95% confidence that the error attributable to sampling is plus or minus 2.4 percentage points.  For results based on internet users (n=1,803), the margin of sampling error is plus or minus 2.7 percentage points.

With Panels, Diversity Rules: Research on Marketing Research

  

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Several months ago, Joe Adler (Managing Partner of The Angell Research Group) honored us with a provocative guest blog about sampling.  In my experience, marketing researchers have become cavalier about sampling and the issues that they bring to our projects.  Maybe because there is very little that we – as individual project managers – can do about our sampling challenges within the constraints of a given project, we just do the best we can and claim that the results are “representative” of the population of interest.  Indeed, given the overarching problem of non-response bias, what’s a little sampling bias?  So, in the interest of getting the project done (and not being paralyzed by bias fear), it’s almost as if we simply ignore these issues.

In the olden days – yes, even before me! – door-to-door interviewing was probably the best way to get a truly probability sample.  However, due to cost and the nearly ubiquitous penetration of telephones, telephone interviewing entered its golden age for sampling.  Online sampling then took over as our preferred methodology, and sampling issues came to the forefront because of course, not everyone had internet access.  And, of course, over time, as broadband capability increased among the general population, those concerns went away.  We still faced the issue of privacy and security concerns making people reluctant to respond to online surveys, so online panels created an appropriate alternative.  Cost efficient, representative, demographically balanced, online panels looked like a great solution for most of our sampling issues.

But there are so many panels – and they are all similar, but conduct themselves a little differently.  Does it matter which panel you use?

Federated Sample completed research-on-research in January 2012 that looked at one of these issues.  As they say, “The purpose was to understand sample source diversity in six sample sources.”  These six sources all used different remuneration programs to reward participants.  One used cash only, one used points for cash, one had a rewards program, one used Samplicious, one focused on social media and one used sweeps and cash. More than 1,300 hundred consumers participated in a 12-minute survey.  The results were quite interesting.

Demographically, all six sample sources were very similar, as you might expect. You might expect some age differences with the social media sample, but not so.  The rewards program and social media sample sources tended to be somewhat more likely to be employed full-time; otherwise the sample sources were strikingly similar.

Behaviorally, it’s another story.  Federated Sample looked at several measures of behavior, including type of phone ownership, home media consumption, game console ownership, video game activity, viewing movies in theatres, restaurant dining, and retail shopping.  On nearly all of these, sample sources differed significantly in the behavior measured.

• Phone Ownership:  Rewards program respondents were much less likely to own a home phone.  Respondents from the cash only source were more likely to own a smart phone, and sample sources were comparable in respondents’ ownership of cell phones.
• Home Media Consumption: Cash only respondents and social media respondents were more likely to use Blu-Ray DVD and Netflix/Hulu for home media consumption. Other sample source respondents were more likely to use Standard DVDs. (Cash only respondents and social media respondents used standard DVDs at levels similar to other sample source respondents, also.)
• Game Console Ownership: Rewards program respondents are less likely than other respondents to own all three types of game console (Xbox 360, Wii and PS3), although they are most likely to own Wii. Social media respondents are the most likely to be owners of each of the game console types.

• Video Game Avidity:  Rewards programs are also play video games with the lowest frequency of any of the sample source respondents, which follows their low ownership of game consoles.
• Theater Movie Going: Samplicious and social media respondents view movies in theaters more frequently than other sample source respondents, while rewards program respondents are the least likely to view movies in theaters.
• Restaurant Dining: Social media, cash only and points for cash respondents are the most frequent restaurant diners.

These kinds of differences could lead to strikingly different results, depending on the topic of your marketing research.  None of the sample sources are inherently good or bad, but it will be difficult for the individual marketing researcher to understand the effect that sample source will have on their data.  

Now, full disclosure – Federated Sample is in the business of aggregating sample sources.  So you would expect them to advocate for sample source diversity.  However, their willingness to invest in research on research speaks well for them and their results certainly give marketing researchers food for thought.  Clearly, the issue of sample bias is not benign and should be fully considered in choosing online sample for your project.

Thanks to Federated Sample for access to their report!

Federated Sample is a market research technology firm based in New Orleans that focuses on bringing efficiency and automation to sampling. By using our technology and routing infrastructure, our clients increase delivery, control costs, and gain global access to respondents. For more information, visit us at federatedsample.com or contact Michael McCrary at mmccrary@federatedsample.com.

What experience can you share on this topic?  Have you ever used aggregated sample and why?

For more information on sampling, check out Research LifeLine™! [insert link]

B2B vs. B2C: Six Key Differences for Marketing Research

  

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Stacy Williams, President of Prominent Placement, Inc. and Search Marketing Expert extraordinaire, sent a very well-considered email this morning about the differences in search marketing for B2B situations vs. B2C situations.  As I thought about her email, B2B Versus B2C: 6 Ways Search Marketing is Different, it occurred to me that those same differences are true for marketing research to those audiences. With her permission, I am using it as the basis for this blog. The Marketing Dialog (TMD) comments on her insights are inserted in italics:

"Selling to a business is typically more complex than selling to a consumer.  So it naturally follows that using search engine marketing to target the B2B buyer can be intricate.

TMD: Ditto for marketing research.  B2B respondents are more demanding, more time-deprived and often more informed about complex products and services than consumers.

1. Decision By Committee. There are often multiple parties involved in a business purchasing decision.  They may use search engines at different stages of the buy cycle - for example, the user may search using broad keywords when they're researching solutions.  Later, the executive who approves the vendor may simply search on the brand name to check out the company.

TMD: This impacts your decision about who to include in the research.  Who is the qualified respondent?  Do you want the person holding the purse strings - or do you also want all the people who influence that person?  Or do you want the end user?

2. Longer Sales Cycle. Business buyers often don't search, click on a site, and make a purchase in one fell swoop.

TMD:  Longer sales cycles impact the timing of the survey.  Do you want to measure along the sales process, or only once a decision has been made?  Or do you want to measure implementation or wait a bit and measure actual usage?

3. Complex Products & Services. Consumers usually don't have to do a lot of research before deciding which brand of soap to buy.  But a business buyer may have never bought, say, enterprise resource planning software before.  In fact, they may be aware of their need, but have no idea what product may fill it.

TMD: This is a very important consideration for designing the survey instrument.  How much do the qualified respondents actually know about the product or service?  Are there other individuals in the organization who know more or at least more about certain aspects?  How do you make sure that you are getting a good read about the organizations attitudes and beliefs?

4. Risk vs. Reward. Most of the time, consumers buy products for the reward they'll get in using that product.  Alternately, B2B purchasers may not personally benefit from the product, and even if they do, it's likely not going to be as fun or exciting as some consumer products are (for example, compare the thrill of buying a copier to buying a guitar).

TMD: Nonetheless, emotion does come into play in B2B decisions and should be included in marketing research programs.  Even if the emotion is pride in having made a good decision or relief that you get to keep your job another day, B2B respondents are still people.

5. Niche vs. Broad. Search marketing is often successful more quickly in the B2B space.  It's all about being in a narrow, defined niche.

TMD:  In both B2B and B2C marketing research, keeping the survey narrowly focused will yield better response rates and higher quality data.  Throwing questions into a survey just because they will be "interesting" or "nice to know" is the wrong approach.  By all means, keep it as narrow as possible.  If you don't know what you will do with the information you get from a question, drop the question from your project.

6. Offline Sales. While there certainly are e-commerce sites aimed at businesses, often in a complex sale, the actual purchase takes place offline.

TMD: In marketing research it is important to consider all of the relevant behavior options in B2B as well as in B2C projects.

Search engine marketing and digital content strategies may be more intricate with most B2B offerings as compared to B2C, but it's worth the extra time and effort to provide each buyer with the information they're seeking, nurture them along their path, and measure your return on investment.

TMD: Ditto for Marketing Research!

Let's think of 4 more ways that B2B and B2C marketing research projects are different for an even ten!

Research LifeLine is a great resource for all types of marketing research!

Changes in Marketing Research Industry Require New Approach

  

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Prior to 2000, the marketing research industry hadn't changed that much in it's practices and methodologies since its heyday in the 1950s and '60s.   In fact, conducting surveys on the Internet was one of those innovations and was considered very experimental as late as 1998.  That was the year Gordon Black and Louis Harris merged to form Harris Interactive and created the first online panel of consumers that was large and demographically-diverse enough to be representative of all U.S. households.  Since then, dozens of major panel companies have been created.  Any hesitancy in the industry to use online surveys broke down as costs came down dramatically compared to in-person, telephone or mail surveys.  

There has been a corresponding proliferation of online survey software offerings in the past five years, as well as pay-per-usage survey hosting companies.  Much of the growth in sales for these companies has come from client-side research buyers as they tried to continually stretch to "get more with less."

The New Marketing Research Reality

The Great Recession caused two distinct coping trends to emerge in marketing research:  Do-It-Yourself Research and "Good Enough" Research.  With the former trend, we witnessed more corporate clients using the abundance of cheap survey software tools themselves in order to save money.  So dwindling budgets and an abundance of affordable survey tools gave birth to the Do-It-Yourself trend.

Reduced funding also led to the second trend -- "good enough research."  Traditional heavy users of marketing research began to make forced compromises in their research.  Smaller sample sizes, fewer market segments, shorter surveys, highlights-only analysis all came into play in order to save money.  Directional data, much cheaper than representative findings, might just be “good enough” to support a quick decision to position an advertising campaign, adjust customer service or make other marketing decisions, especially if the choice is no information at all.  Thus "good enough" research has become another way to cope with  today's economic realities.

Polaris's Response

Obviously, these two trends created an enormous challenge for full-service research firms like Polaris.  Cutting costs and trimming staff only went so far to meeting this challenge, so we decided the best strategy was to go with the flow rather than fight it.  We decided to create a service to help clients with DIY and "Good Enough" research efforts, so that they make sure they get high-quality research results within their limited budgets.

Research LifeLine™ is Born!

Research LifeLine™ is a totally new website targeted at survey neophytes, Do-It-Yourselfers and even experienced marketing researchers who might need help with a survey task.  It is designed to help them quickly find exactly the kind of support they need for the project they're working on by offering three key services:

#1)  Research LifeLine™ Help Center

A plethora of free white papers, questionnaire examples and survey statistical calculators are available for free in the Research LifeLine™ Help Center.  We also have short video tutorials and in-depth webinars on a variety of survey research topics, as well as blogs, a newsletter, a directory of helpful survey-research reference websites and a glossary of common marketing research terms. All at no cost to the website visitor.

 #2) Ask an Expert

If you can't find what you're looking for in the LifeLine Help Center, you can submit your question on any research topic to one of our professionals.  We promise to respond with an answer within 48 hours.  We also clearly state that if the question is simple and doesn't require much time to respond, we will provide answer with no charge.  

 #3) Survey Services

For Research LifeLine™, we have "unbundled" all the individual tasks involved in a marketing research project and customers can purchase only the services they need.  Of course, these are all chargeable services. So, for example, a Do-It-Yourselfer who programs their survey themselves on Survey Monkey but who needs help creating the right questions and rating scales to use can call us for help with questionnaire design.  Or a busy researcher who has survey data in hand now doesn't have time to create the report, then you guessed it:  Research LifeLine™ to the rescue.

Research LifeLine™ brings traditional marketing research expertise to the new, more expedient world of today's marketing researchers.

What do you think of Research LifeLine™?  Have you ever needed these services?

Marketing Research Shows Trends and Strategies Driving CMOs

  

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"For Chief Marketing Officers, Being a Good Marketer is Just Table Stakes, Finds CMG Partners Study: New Report Which Identifies Trends and Strategies Driving CMOs in Today's Complex World

Strategic marketing consulting firm CMG Partners recently revealed the findings from its 4th annual CMO's Agenda. The study uncovered the emergence of an evolving chief marketing officer — no longer focused on the simple design and execution of marketing plans but rather empowered as "Marketing's CEO." Amid an increasingly complex backdrop of changing government regulation, corporate citizenship and a tightly interconnected world, chief marketers are now acting as the organization's marketplace authority and primary driver of growth. The CMO's Agenda is a first-hand look at the most vital issues and opportunities facing today's CMO, as told through in-depth interviews of 30 game-changing marketers whose companies represent a broad cross-section of U.S. enterprises. "The confluence of the lasting impact of the Great Recession, market volatility, technology innovation, customer empowerment and the inherent globality of today's business environment has rewritten the playbook for organizations," said Russ Lange, founding partner of CMG Partners, in a news release. "In the face of what could be a daunting mission, the CMOs we've spoken with have adapted into a super species we like to call: Marketing's CEO. No longer just the master of corporate advertising campaigns and promotions, Marketing's CEO is a true driver of corporate growth and strategy."The study identified five powerful trends affecting the Chief Marketing Officer:

• The CMO/CEO relationship is Strengthening — The study reveals the steps CMOs are taking to strengthen credibility within the C-Suite and specifically with the CEO. The respondents collectively laid down a set of best-practice operating principles for any CMO: frame recommendations in terms of ROI beyond the P&L of the marketing budget, educate to show how marketing can impact growth and business performance, show where opportunities exist and how they might be captured, highlight risk, show where it exists and how it can be mitigated.

• The Evolution to "Marketing's CEO" — CMOs have moved beyond the traditional job description from functional leader to strategic advisor. This shift encompasses CMOs carving out a new scope of influence for the marketing organization and in many cases taking responsibility for new business functions including operations, finance and public policy. For example, one CMO explained how marketing has become the strategic conduit for their organization and that now every single project that impacts revenue is run through marketing.

• Bridging the Social Media Generation Gap — CMOs are best positioned within the organization to lead the mission to master social marketing as an essential brand building and customer loyalty tool. Yet by virtue of their age and background, few CMOs are "native speakers" when it come to social media. Respondents are increasingly meeting the challenge of adapting and learning through a process of generational "seeding:" creating internal teams that include younger, cyber-intelligent employees.

• Managing the Millennials — Incorporating millennials into a seasoned group of marketing professionals brings challenges but also unquestioned value. One CMO noted how easy it is for his peers to dismiss the ideas of millennials, simply because they do not offer the crisp logic and presentation cosmetics that typically earn acceptance in a corporate environment. This CMO noted that it is often the presentation that is flawed, not the core ideas, and that the time and energy invested to "connect the dots" and develop this generation's thinking can unlock crucial learning for the successful CMO and the business organization.

• Demand Creation — If CEOs have internalized one thing about marketing, it is usually the lesson Steve Jobs demonstrated: the higher purpose of marketing is to create demand; to build the perception among customers that they need what you are selling before they know it themselves. The CMO's AgendaTM revealed how lead marketers are creating a higher level of need and thus leaving their own stamp on innovation - perhaps the hallmark of the most admired companies in the world."

What do think about the results of the study?  What are you seeing in your organization?  Is the CMO's perspective getting more respect?  Please comment!

Marketing Researchers React to Google Consumer Surveys

  

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Google recently introduced Google Consumer Surveys, which they tout as "custom marketing research made easy."  Whenever Google introduces something new, it sends shock waves through the media, and this introduction is no exception.  The marketing research industry is taking notice.

But what does this really mean?  We have previously written about the trend to DIY (Do It Yourself) marketing research brought on by the twin tsunamis of affordable and available online survey software and extreme budgetary pressure caused by the recession.  As marketing researchers, many of us have been waiting it out, thinking the magical thought that when the economy rebounds, marketers will come to their senses and go back to hiring third party marketing research firms for projects that have recently been DIY projects.  

Personally, I don't believe things are going to go back to the way they were pre-2008, at least for marketing researchers.  If the information and decisions resulting from DIY research have been effective, why would businesses give up that cost savings to go back to third party research firms?  Now, there may be more of the large, strategic projects initiated, and those project may be handled by third party marketing research firms due to their strategic importance, complexity and the lack of internal resources and experience.  But the 95% of marketing projects that do not fall in the category of "large and strategic" will continue to be completed via DIY methods.

Google's introduction of Consumer Surveys simply underscores this. While marketing researchers and marketing research firms can argue with certain aspects of the Google Consumer Survey approach (pricing per respondent per question; presenting only one question per respondent will limit analysis capabilities, limited targeting, etc.) the fact remains that Google's pervasive character, deep data resources and attractive analysis will overcome these limitations and will make Google Consumer Surveys a very persuasive tool. Besides, this is the way Google develops products - present a skeleton concept and then enhance based on consumer feedback.  You haven't seen the last of Google Consumer Surveys!

None the less, DIY marketing research still has its risks, especially when it is conducted by business people without strong marketing research training and experience.  So this trend will continue to be problematic for the marketing research industry - both due to its impact on our business as well as potentially to our reputation for producing sound and reliable insights.  The survivors will find a way to live with and profit from DIY marketing research (for example, Toluna's QuickSurveys and SurveyMonkey's Audience product).  The losers will continue to bemoan the lack of respect for traditional marketing research using rigorous statistical analysis.  Let's hope they can live on the large, strategic projects and that there are enough of them to go around.

Marketing Research Informs Buyer Personas

  

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I've been hearing a lot today about creating "buyer personas".  To me, that sounds a lot like market segmentation.  As researchers, we worked very hard to find catchy, descriptive names that encapsulated the essence of the consumers within each segment.  (For one study on stress, we came up with several personality types to describe the segments: Laid-back Lou, Stressed Out Sal...you get the idea)!

So are buyer personas just market segments brought up to date by a fancy new name?  Or are they really different?

Let's start with the Buyer Persona Institute.  (OMG!  They already have their own Institute? We'd better get on it and develop some!)  At any rate, the Buyer Persona Institute defines buyer personas as "an example of the real person you need to influence", which sounds a lot like a target segment.  Now, buyer personas do go far beyond the typical target market segment description ("women and men between the ages of 18 and 65" - yes, that is really how one of my clients describes their target audience!) but then, we've always been told that we should be more specific, anyway, so that is not really new.

Tony Zambito, President and CEO of Goal Centric who has created the Buyer Persona Playbook, would definitely disagree with my cavalier attitude about this, and gives "Ten Rules for Buyer Persona Development", which I have consolidated into five, including:

1. You Can't Make Them Up - Buyer personas must be developed following a rigorous methodology based on true insight into buyer motivations.  Buyer Persona Development Serves as a Way to Tell Stories about Customers, and for these stories to ring true, they must be based on real observations.

2.  Don't confuse a Buyer Persona with a Customer Profile - Buyer Personas go beyond the tangibles to the intangibles, or as Tony says, Buyer Personas Offer Insight into the Unarticulated and Not-So-Obvious.

3.  Get the Right People with the Right Attributes and Skill Sets - while many people claim to be able to create personas, make sure you are working with people who have a track record of developing and implementing actionable personas.

4. Buyer Personas are a Translation of Goals - Buyer Personas, like brands, must be linked to strategy to guide behavior.  In fact, buyer personas' Purpose is to Inform Goal-Centered Strategies.

5.  While it is difficult for a quantitative marketing researcher to admit, Buyer Personas Are Not a Quantitative Process.  At the heart, Qualitative and Experiential Analysis is the Foundation.  Additionally, while some quantification will be necessary, avoid over-emphasizing the behavioral at the expense of the motivational and emotional: Avoid Building a Wire Mesh of Data Points.

Still, except for the de-emphasis of quantitative research approaches, the intent and purpose of Buyer Personas sounds a lot like that good old market segmentation.  Except for the fact that actionability was always a challenge with segmentation, theoretically, the goals of both approaches are the same: to communicate more effectively with the customers you want to purchase from you.

So, finally, let's turn to MarketingProfs for tips on how to know whether our buyer personas are working the way they should.  Can your buyer personas guide the development of differentiated marketing programs?  Can they point to specific interests of the customer as they relate to strategic priorities?  Do they help you see obstacles or circumstance that could derail the sale?  Do they help you see a very defined customer?  If you can't say yes to all of these -- back to the buyer persona drawing board!

Clearly, buyer personas can help marketers more effectively craft messages and programs targeted to specific audiences.  And if they work better than market segmentation approaches, I have no problem with that! So whatever you call them, give them a try!

Can Marketing Research Technique Influence Insights?

  

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Brilliant Marketing or What? The Susan G. Komen PR ‘Fail’

  

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As our regular readers of The Marketing Dialog know, every month we like to devote an article to a brilliant marketing idea, more often, it’s those that fail rather than succeed.  Already in 2012 we’ve had the Nike sneaker riots and the Costa Concordia disaster – neither of which were PR successes by any stretch of the imagination – but they pale in comparison when it really hits close to home, such as when an established charity for women takes one on the chin.

The Susan G. Komen Cure is the most widely-known, largest and best-funded breast cancer organization in the U.S.  Since its inception in 1982, Komen has invested nearly $2 billion for breast cancer research, education, advocacy, health services and social support programs in the U.S., as well as through partnerships in more than 50 countries with their basic message – ‘early detection saves lives.’  Although only about 21% of the total budget goes to research, the organization has done a world of good, but even they aren’t immune to brilliantly failing.

A small ‘fail’ occurred in 2005 when Yoplait donated 10 cents to Komen for each lid mailed in by consumers – when postage was 37 cents!  Komen has partnered with American Express, Smith and Wesson and M&M’s in the past with varying results.  Most critics, including Breast Cancer Action, an advocacy group, say that such promotions are financially ineffective, such as the promotion with AmEx who donated one penny per qualifying transaction, regardless of the purchase amount. 

A 2010 partnership with fast food restaurant chain KFC raised criticism for promoting unhealthy eating habits, even though KFC contributed over $4.2 million to Komen, the largest single contribution in the organization’s history.  The M&M’s promo was criticized for promoting candies that are high in sugar and fat content, with sugar being one of the leading causes of obesity.  Ultimately, these promotions seem to benefit the partner more than the charity!

However, the largest criticism occurred when Komen decided to appoint Karen Handel, a very vocal anti-abortionist, as their Sr. Vice President for Public Policy, who immediately withdrew Komen’s support of Planned Parenthood.  Handel justified her action by invoking a little-used rule that Komen would not fund any group under federal, state or local investigation.  This is despite the fact that Penn State, in the wake of the Sandusky illicit sex investigation, still received research grants from Komen, and despite the fact that Planned Parenthood’s financial audits have never uncovered any wrongdoing, Planned Parenthood was the only organization to have its funding withdrawn by Komen.

As background, Planned Parenthood is the only place in dozens of communities where poor, uninsured or under-insured women can receive breast and cervical cancer screenings and some, not all, of their health centers perform abortions and provide counseling that includes information on abortion.  But I’m not getting into the ‘right to life’ debate – this is about a PR ‘fail’.

Komen knew exactly what they were getting since Handel repeatedly stated in her unsuccessful 2010 campaign for Governor of Georgia that she ‘…did not support the mission of Planned Parenthood’ and pledged to eliminate any state funding for the group if elected.  True to form, on January 31, 2012, soon after Handel was hired in 2011, Komen withdrew funding to Planned Parenthood and only that organization.

The action immediately drew sharp criticism from women’s health advocacy groups which accused Komen of putting politics ahead of women’s health.  Komen’s Director of Community Health Programs resigned in protest over the grant cut off and twenty-six U.S. Senators signed a strongly worded letter urging Komen to reverse its decision. 

To spite Komen’s decision, and in an impressive show of support, Planned Parenthood received more than $400,000 from 6,000 donors within 24 hours of the news breaking, followed by pledges of a $250,000 matching grant from New York Mayor Michael Bloomberg, as well as a $250,000 gift from the Bonanza Oil Co. 

In a classic case of ‘backpedaling’, on February 3, 2012, Komen’s Board of Directors issued a statement to apologize to the American public and said it would continue to support Planned Parenthood.  Four days later, Handel resigned while Komen founder Nancy Brinker said that “I made some mistakes” in the case and “mishandled” the controversy.  Really.

But the damage has been done to Komen, by far the largest brand in the cause marketing world.  As Robert Passikoff, founder and president of Brand Keys, stated, “The whole point is you don’t politicize cause marketing.  Now when people think about contributing, they’ll not just think about preventing breast cancer but they’ll have to think about what it says about their opinion on ‘choice’.”  With social media as immediate as it is, the furor on Facebook and other social media sites was intense, with two-thirds of the people saying negative things about Komen and that’s not easily undone.  Suddenly, Komen has associated breast cancer with ‘choice’ – probably the last thing they wanted.

For her part, Handel played the wounded party and (justifiably) declined a possible severance package.  After a press conference immediately after her resignation, which she blamed on a month-long orchestrated ‘shakedown’ by Planned Parenthood and again, denying that her personal politics played a role in the funding decision, she has maintained a low profile.  In a classic example of understatement, Handel said that “Komen doesn’t have strength in the area of social media.”  How can the best-known cause marketing organization in the world not have any ‘strength’ in social media?  If that’s true, they’d have been better off hiring a social media director than a lightning-rod for controversy like Karen Handel.

How will Komen recover from this debacle?  Some cause marketing experts say that they’ll never recover the esteem they once held.  Others feel that this ‘fail’ actually served a purpose by opening–up the dialog about women, breast cancer and reproductive health.  One thing is for sure, they’ve made everyone’s “Top Ten” list for 2012 PR fails!

What’s your opinion?

A Lesson In How To Make A Pet Story

  

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From time to time, we like to post outstanding articles that deal with our monthly topic. This  month's theme is New Product Research and the author is Thom Forbes.  Thom writes a daily column for MediaPost's Marketing Daily newsletter, where this piece originally appeared, and is owned by a pit bull, Sadie, and Ferris, his fearless black cat.

We all know that the backs of innovators and pioneers are often riddled with buckshot, which often dampens the spirit of others to dare to go where they have been. Those that do go forth often prosper, as I was reminded in a story about disposable diapers recently. Procter & Gamble’s Pampers weren’t the first mass-marketed disposable diapers out there. Johnson and Johnson had a now-defunct line called Chux that was trademarked in 1932 (note to fact-checkers: yes, we’re aware that Milkweed leaf wraps may have been used in ancient times but there’s little evidence of a global ad campaign).

All of this brings us to a different type of pampered sentient being -- our pets –- and the attempts to capture the potential vast online market of their enablers over the years. The New York Times’ Darren Dahl has a piece this morning about Petflow.com, which bills itself as “America’s favorite scheduled pet food delivery service.”

One of the entrepreneurs behind the site, Alex Zhardanovsky, sold an online ad company called AzoogleAds a few years ago and went looking for a new adventure. One of the things he’d noticed at AzoogleAds was that companies that had subscription models seemed to be more successful. Netflix is a case in point.

So, after Zhardanovsky and co-founder Joe Speiser tested the idea of whether dog owners would be amenable to signing up for regular deliveries of their favorite chow with a modest web page and receiving an “overwhelming” response, they launched PetFlow in July 2010. They took in 60 orders that month. Last year, they grossed $13 million and are looking to exceed $30 million this year. Sixty percent of the sales are from people who have signed up for regularly timed deliveries.

“I’ve come to appreciate that subscription models are, in so many ways, the holy grail of business,” Zhardanovsky tells Dahl, who also writes about other companies that are based on a subscription model.

Because of the “predictability,” factor, PetFlow maintains lower inventory levels and is able to negotiate better deals with suppliers, “who appreciate that PetFlow does not discount its sales and that its customers are much less likely than others to switch to a different brand,” writes Dahl.

“We have 60% of our customers telling us that they used to shop at Petco or PetSmart,” Zhardanovsky tells him. “Which means we’re taking a lot of people out of the traditional retail channel.”

And that, of course, is exactly what the poster website for the failed dot-com era -- Pets.com –- intended to do –- a point acknowledged not only at the top of this story but also in a piece by the Wall Street Journal’s Stu Woo on Tuesday that takes a look at “a new litter of Web-only pet-supply stores that have emerged in recent years, with some such as MrChewy.com and Wag.com sprouting just in the past few months.”

Why are they succeeding –- or on the wishful verge of succeeding -- when Pets.com failed, despite raising $110 million, going public and infesting the airwaves with its infamous sock puppet commercials?

Well, for one thing, the cost of entry has gone way down even as the customer base has expanded –- both in terms of people who regularly shop online, as well as in those who are kept by pets.

Julie Wainwright, the Pets.com former chief executive, tells Woo that it took $7 to $10 million to get Pets.com running, before acquiring inventory. Now she says it costs about $25,000 to $30,000 –- presumably the amount she spent in launching The RealReal, an online luxury-clothing marketplace, last year. Zhardanovsky estimates it took about $50,000 to get PetFlow.com going.

Forrester Research’s Brian Walker doesn’t see quite the differential that Wainwright does, but does say that it cost three to five times as much to launch a decade ago. "The technology to run the site, the physical warehouse, site hosting, and staff would require a significant investment before you were even live with the site," he says.

Not to mention those requisite Super Bowl ads.

One thing PetFlow doesn’t seem to have neglected is good, old-fashioned PR. “PetFlow.com Ships More Than One Million Pounds of Pet Food in January, 2012” went out on BusinessWire on Feb. 15.

“PetFlow.com Names Michael Lackman as Vice President of Operations; Online Pet Supply Retailer Hires New Management to Keep Pace with Growth” went out on BusinessWire on Feb. 21.

And pieces in arguably the most prestigious business sections in the country went out to the masses this week. I’m not saying that either reporter was prompted by the releases or prodded by a publicist. I’m just saying, “good job,” somebody, in getting what we used to call ink.

We'd welcome any comments on Thom's story!