Big Data vs. Big Money…and the Winner Is?

Posted on December 13, 2012 by Lyn Bunch

Sometimes things don’t turn out the way everybody thought!

The election is over, and the team clothed in Blue won, and the margin was large. After such a contentious election cycle I’m sure all would agree -no more. The question that I raised in my last post on the eve of the election was “Will Nate Silver be a god or a goat?” Well we now know that he was spot on in his predictions for the outcome of the election with Obama winning nearly all of the contested states.

How did Nate Silver call the outcome? He did it by an algorithmic review of all polls (he does not conduct any polls of his own) weights the averages, and then forecasts the likelihood of winning the electoral votes in a given state. No punditry, shear match, some science, and enough sense to lower the values of what were the outlier polls like Gallup and Rasmussen that did not fit the general results of the other polls. Viola, we have a whole new way to pick the winner.

So, what happened to the Republicans, who were still forecasting victory right up to the last minute which gave us some memorable moments when Karl Rove had a meltdown on Fox, and Mitt Romney had to write a last minute speech that no one thought he would need since it was obvious to them that he was going to win…ouchers.

So this election came down to a couple of very big things – Big Money and Big Data. On the Big Data side the Democrats used all of the data tricks learned in the ‘08 election, and then brought in a number of new wrinkles. They built a large team in Chicago to manage the data, armies of staff and volunteers to use the data to blanket the targets with multiples of messages. No stone was unturned in reaching and motivating their target audiences. They had a mission and it was about turnout, and they did it, surpassing their efforts of 2008. I expect now that major elections in the future would be based on these efforts.

On the losing side, the focus had been on Big Money, mainly big donors who gave directly to the party, and to the Super Pacs. The Koch brothers and Sheldon Adelson were the big whales contributing an estimated 250 million between the two. These efforts were supposed to be all that was needed to blanket the airwaves with TV buys that would sway the election in their direction. In the past this has done it, and more money was spent – over a billion dollars in this heroic effort to carry the day.

The funny thing is that the Obama team also raised huge dollars – they also hit the billion-dollar mark, much by large donations, but a huge portion came from donations, mostly over the Internet. Their strategy was to go after small sums from a large pool, and then to hit them again and again. They test all kinds of messaging, and guess what, nearly all of the messaging worked – and the donations flowed. The public was really in the dark on the effectiveness of this effort until well after the election – certainly the Republicans were in the dark based on their surprised look at the end of the contest.

I’m not here today to talk politics – my interest lies in the technology and the application of the technology. I have friends, who are political consultants, and “I forgive them for that, they know not what they do.” My interest is in understanding how we best influence decisions, mainly commercial or business decisions through communications. Would the brute force application of traditional print and broadcast media work in todays world – certainly one side thought that it would. They were experts in direct mail fundraising with golden lists that delivered the manna in each election cycle. On the other side, with a new digital toolbox that worked last time, could it keep up with the promise of a sea of paid media that would not end? Could they do it again since the other side knew how they were going to proceed?

They did it again…and in my next post I will go into more detail on just how they did it and what this all means to us in our business practices. Big Data and the Digital World are real and anyone who does not utilize these tools in whole or in part will probably not make it until the next election cycle. More on Monday!

Driving a New Leadership Paradigm

Posted on October 5, 2012 by Lyn Bunch

Ursula Burns, CEO of Xerox

I was intrigued to see a number of articles recently in various media that all touched on some themes that I find are continually playing out in our new digital world. The trends mirror what I’ve been seeing with my clients as well, but these seem so stunning. What are they? In our change from a physical world to a digital and social one, we are seeing some of our premier companies making that transition under the leadership of women. Apparently there is no glass ceiling in the digital world, and as Martha would say…”that’s a good thing.”

Who are some of these leaders – the heads of IBM, Xerox, and HP. Some of the bluest of the ‘blue chip’ companies and all facing great challenges, and most are doing well…extremely well! I was taken by this trend because I started my career as a sales rep at Xerox in the early 70’s. Xerox then had just recently started then to hire women in the sales force. They were a novelty to most of the managers, all men, who wondered if they should treat them differently than men. Xerox had a culture very similar environment to my old fraternity house. Men got yelled at when they didn’t perform. Could they do the same with women. Could they take them into their offices and counsel then=m, with the door closed? What if they started to cry? The good news is that everyone learned and adapted quickly and within a short period of time, a couple of years, half of all hires were female, and many of the new managers were also women.

At IBM who we competed with in the copier marketplace we noticed a similar trend taking place and I knew a few of the early female sales managers, and they were great, and they prospered and grew quickly up the ranks as IBM was very interested an taking advantage of the new resource.

At HP, the course was a little different and men were still the dominant group and they intended to stay that way. I knew a number of HP managers later on in the 80’s and they still acknowledged that it was still mainly a man’s world. How the world has changed.

In these three organizations, leaders in their fields, are now headed by women, a fact a rarity in the corporate world of giant organizations. All of these women, and many others, too numerous to list here, have changed the paradigm forever. Now, a quick look at these three outstanding women.

At Xerox , Ursula Burns, is now the CEO. She started at Xerox as an intern, then an executive assistant and then succeeded Anne Mulchay in 2009. Now that is amazing, for a woman to succeed another woman in a technology company.

“I took over a company that was solid, but every day was becoming significantly less important in the minds of people,” Ms. Burns said.

This transition happened all while Xerox was moving from selling copiers to selling services and providing backoff support. A big change from 40 years of growth, but they are pulling it off. This is not something easy to pull off – “That transformation is earth-shattering for our company,” she said recently To cement it, Ms. Burns led Xerox’s $6.4 billion acquisition of Affiliated Computer Services in 2010.

“What we do well, unlike these really sexy companies like Googles or Apples that have these great things you can see and touch and feel, we actually work in the back office of large companies,” she said. “So most clients don’t really know we’re there.”

IBM built the computer industry, and dominated the word processing field when it was all about typewriters, and later copiers. Now computers are everywhere, but few are in the ‘clean rooms’ of old where IBM was the dominant player. They now exist on desks, the cloud, your pocket – they really are everywhere, and IBM is leading that charge to conquer the world of ‘big data’. This is now the third wave of computing they will discover and and learn on their own – just like “Watson” the supercomputer that conquered Jeopardy. We are now in the age of cognitive computing!

Virgiani Rometty, CEO, Chairwoman of IBM

Leading the charge as CEO and Chairman of the Board is Virginia Rometty who has spent her entire career at IBM. Under her watch IBM’s stock is now at its highest point in its history. IBM is now a consulting company and sifting through all of the ‘big data’ that is spewing forth all over the world. The key for IBM is constant reinvention. A good metaphor for all of us to keep in mind. Change is the new constant.

“Part of it is I get the honor of taking over a company that is a strong company,” she said.

But, she said, she knew she could not coast on their success, and instead charted a clear way forward, including work in cloud computing, analytics and growth markets.

“One of the great things I learned from Sam and Lou is no matter what, you always have to focus on reinvention,” Ms. Rometty said. “Never love something so much that you can’t let go of it.”

Meg Whitman, CEO of HP

Meg Whitman now CEO at Hewlett-Packard, is facing different challenges – survival. After a great career in consulting and early leadership at EBay where she cemented her reputation. Meg Whitman is now heading HP in trying to turn around a company that has suffered over the last several years of a revolving management team and rapidly changing focuses.

HP is struggling to find its focus in software and hardware and to become relevant in a word this is now incresingly mobile focuses and led by Apple and other tablet makers. After launching their own tablet in 2010 they quickly killed it…too soon many said. The current forecast is grim for 2013, and Meg is looking for enough time to turn this around.

Though Meg attempted a run in politics in California, losing to Jerry Brown, she maintains close ties to Mitt Romney. If HP doesn’t work out there could be something in Washington for Meg, if Mitt were to win. She is a continual winner, and given enough time, she will find a way to win.

Why are these women import to this narrative? We have entered a new era, and everything is different. Business is different. Old legacy businesses including all media is rapidly going digital. Mobile communications has changed how we communicate, and when we communicate. Barriers are being broken down that perpetuated the status quo. Through all of this we have discovered whole new ways of living and working, whether we want to or not there is no going back. Women are now fundamentally a part of business, and rightfully a part of management. We are all the better for all of these changes.

The End of Newspapers…or a New Beginning?

Posted on June 16, 2012 by Lyn Bunch

The Orange County Register

With all of the discussions regarding the future of newspapers, and I am a big participant in those discussions, I found perhaps one of the best pieces by Matthew Ingram, yesterday in GigaOm – “The Hard Truth: Newspaper monopolies are gone forever.” This is one of the better pieces on what is getting to be a big discussion. This is almost as big a discussion as the state of the U.S. and world economy. There are lots of opinions, but not a lot of energy on what to do about it. Both seem to be heading on their own course, like a mighty river in a flood. Get out of the way and wait until it subsides. Truth is the newspaper business is subsiding, and now we are seeing the results.

…And the results aren’t pretty! Revenues, advertising revenues really, are in decline. Subscriptions are in decline. Page counts are down, and the news hole – real news, is down. Content is up, but we really don’t buy newspapers for content do we? The truth is, and Matt Ingram catches it well – newspapers succeeded because they were ‘the only game in town – monopolies who could charge whatever the market would stand.

Over the course of the next several days I will try to make sense of what I think all this means to the larger constituencies – readers, advertisers, and the general community. Can newspapers survive? Do we care? Are we worried about the loss, and how can it be replaced. Is it the loss of the daily paper, the habit we all grew up with, or is it the loss of real journalism – news we care about, and news that enlightened us that we fear losing?

I’ve been wrestling with this for a long time…and I need to get it out – for myself, and for my clients, many of whom come from the same generation and don’t like the changes they see coming.

Next post- from the home turf – The end of Freedom Communications and the OC Register, the Libertarian paper in a Libertarian/Republican county.

Love Letters from Washington to the USPS

Posted on May 9, 2012 by Lyn Bunch

In the manner in which it can only do, the Senate has passed legislation aimed at solving some of the problems the USPS is facing. As only they can do…they punted, and now the House will have the ball for the rest of the game. On May 15, time will be out so they need to act soon.

What did they accomplish? According to most who care about the issue – not much. Lots of posturing, and little action. Retirement incentives for nearly 100,000 postal employees, a ‘study’ of dropping Saturday delivery, a return of $5.5B in ‘overpayments into the retiree health plan along with not having to continue the onerous advance payments they had been conscripted to do in 2006. They would also allow the USPS to find some new revenue sources like the delivery of wine and beer which they are forbidden by law to do currently.

Wow – study Saturday delivery. Oh, and they also sent a strongly worded letter to the Postmaster General not to do any post office or distribution center closings, please, until they got back to them. Our top 100 legislators in the U.S., and this is all they can come up with. Now it’s on to the House.

The House is going through its ‘due diligence with no due haste of any many. With their view they also want to punt the issue down the road. After having asked for bold solutions and suggested that the Postmaster General and his staff run this like a business, they are now saying ‘ wait a minute.’ It is obvious from their public comments that they in the House intend to do just that…for many minutes.

Notes have been passed back an forth Senate to House to USPS in a never ending cycle and now some news is coming out as of today that the USPS has agreed not to close any post offices for now. The threat of closing many rural post offices was too much for all of the Senators and Congressman. We’ll effectively deal with that after the fall election. Surprised, not so much on my part.

The USPS has many problems, but the courage to create a ‘business plan’ that could stem their losses was not one of them. They came up with one, but it meant pain, and we don’t do pain well in an election year on any house or on either side of the aisle. Change will have to come in 2013. But what kind of change do we really want.

It is absolutely true that we communicate differently now than in the past. Old legacy media and forms of communications are being changed to newer digital forms. Mail, newspapers, land line telephones are not the key means to reach out and ‘touch someone’ that they used to be. Get over it, and move on! We still need all of these to have total access to information and a free dialog that is so important to our way of life. We need the USPS, but we do need to trim its costs just as newspapers have had to trim theirs to stay alive. Let’s hope our national legislators have the real courage to tackle this issue and to help place the USPS on a solid footing for the sake of our future. I’ll be putting out a Mothers Day card tomorrow, and I hope I’ll get a couple of Fathers Day cards next month – we need the cheer that only they can bring when you pull them out of the envelope.

The USPS is NOT a business, it is a real part of the American way of life, and I for one want it to stay, even if I don’t like all the grumpy clerks down at my local P.O. here in Irvine. Heck, even I get grumpy once and a while. I welcome your comments, email or even drop me a card in the mail. Our friends at the post office will appreciate it too!

AT&T Exits From the Yellow Pages – check it out on Yelp

Posted on April 10, 2012 by Lyn Bunch

It was announced this week that AT&T has agreed to sell a majority stake in its Yellow Pages business to Cerberus Capital Management. The price was reported to be $950 million dollars, for a declining business that AT&T was happy to jettison and get on to more important areas of their business.

The deal was for primarily cash with AT&T receiving 750 million in cash, with a 200 million note on the backend. AT&T will maintain a 47% stake in the business, but Cerberus will handle all day-to-day operations. Cerberus has pulled a number of rabbits out of their hat in the past, but this one looks to be particularly difficult.

During its heyday through the 1990s the Yellow Pages franchise, which included AT&T and a number of other telephone companies, and even a number of independent publishing companies, had a wildly profitable business. Recently the business, as a print operation, has become a boat anchor. Revenue was down 30% in just the last two years. The goal for Cerebus is to help turn the business into a digital operation that will compete with a number of newer players including Google and Yelp.

It has been a number of years since my family has kept or used a printed Yellow Pages directory at home. Like so many our tendency today is to simply Google what we are looking for hit the return and we have our answers. If we are looking for additional information, we’ll take the time to go to yelp for additional feedback from users where have actually used the service were looking for. In Orange County, CA where I live, Yelp is helpful but certainly not the powerhouse that I found when I was working in the San Francisco Bay Area. There looking through Yelp was like reading a novel, and I discovered a number of incredible writers who took the time to elaborate on their personal experiences at the various restaurants and shops they wrote about.

AT&T will use the time and the money to help grow their electronic portion of the communications field. With their growing competition this would seem to have been a good move. Cerberus will attempt to do something I that seems impossible, but they have done the impossible before, and I’m confident they have a plan to do it again. As a private equity firm they don’t have to meet the needs of the market and shareholders and that is critical for them to have the time and hard efforts to pull this off.

Good luck to both AT&T and Cerebus, we won’t hold our breath, but we wish you well. I wonder if Cerberus would also like to buy a few good newspapers, I know of a number that can be had for well under $950 million. In fact they might be able to purchase several former large newspaper-publishing groups for the same figure. There is one that is headquartered in Orange County (Freedom) that I hear can be had for well less than a billion.

Postal Reform Now…Will Congress Act to Save or Kill USPS?

Posted on March 27, 2012 by Lyn Bunch

Is the Postal Service going downhill??

“Industries Fear the Ripple Effects of Proposed Postal Service Cuts” – Was the title of the article in by Ron Nixon in the New York Times yesterday. It is a good statement of some of the key issues that are being taken up starting this week in Washington. All sides are lined up to help shape the final outcome. Today ,CCN Money has picked up the story as well. It seems that all eyes are on Congress as they take up the issue of “postal reform.” All this while all the ears are on the Supreme Court as they take up the issue of ‘Obamacare.’ We certainly do live in interesting times. As the pace of change and disruption our world picks up we must expect many more battles in the future to go along with these two.

Congress has begun work on their vision for Postal Reform, if reform is what they really have in mind. All of the various constituencies are lined up on both sides of the issue. Some want more, and others want the USPS to do less. On the plus side are the wine and beer lobbies that want to be able to use the USPS to ship their products, something the USPS is prohibited from doing by law. On the negative side the insurance and banking industries are lined up to ensure that the USPS not move into their fields, as some in Congress has suggested they do to create more revenues.

Like the newspaper business which is also undergoing its own transformation, the USPS is a huge enterprise that employees nearly 600,000. Beyond that the entire direct marketing field, including mailing companies, printers and direct marketers employees over 10 times that amount. This is a big deal, and we need to get it right. As was noted in the article the field supports over $1 trillion in annual economic activity. It helped to put both of my sons through college, so it is still dear to me.

Nearly every business relies on the post office to deliver packages, advertise services and send out bills. This postal supply chain supports millions of American jobs in fields as diverse as banking, agriculture, media and manufacturing. This is an urgent issue since the USPS is losing nearly $36 million a day. As volumes of mail have decreased with former users now going to digital methods of delivery. Even the USPS has said that it does not expect to get those missing volumes back in the future.

The USPS is also saddled with a Congressional mandate to pre-fund future retirements, the only government agency to have to do so, to the tune of $5.5 billion. Relief from this mandate would cut the shortfall in half. A sign that this is a big deal is the nearly $300 million spent over the last three year by those lobbying on all sides of this issue – both the USPS employee unions and industries who work in the direct marketing field.

Postmaster General Patrick Donahoe has proposed closing half of the post offices, approximately 3700 and shutting half of the mail processing centers, 250 there. Both changes, along with stopping Saturday delivery, would also help to bring down the shortfall. In a world that has gotten to email and instant messaging for time vital business and personal communications, there would seem to be some wiggle room for printed mail – derisively called ‘snail mail.’ A big question is how fast do we need to be, especially if we want to price reduction, or at least fewer price increases. And yes, the USPS is also asking for a 50 cent first class stamp.

Postmaster General Donahoe said in prepared testimony. “If Postal Service were a private company, we would be engaged in Chapter 11 bankruptcy proceedings.” The Senate is beginning the process now, and the House will begin deliberations, probably next month. A key deadline for consideration is May 15, when a moratorium on closing postal facilities will expire.

Currently under consideration is a bill that passed a Senate committee in November that would tap the overpayment of the future retirement benefits, currently at $10.9 billion to pay down postal service debt (to the U.S. Treasury) and use up to $2 billion for incentives to get a number of long term employees to retire. The USPS has also planned to open its own health care for employees in hopes of cutting their costs, but there is pretty widespread opposition to that from Congress and the employees.

The USPS is a legacy system with a long history. Like so many of our other ‘legacy’ systems, including newspapers, they are in deep trouble with the change in the economy in our broadening digital age. Change is great for some, though it sucks for others. I live in both worlds, and yes, I still want things the way they used to be. The question is how much am I willing to pay to have that. We make those choices each day, and we are making those choices now regarding our postal system.

In the face of the current situation I have to applaud Postmaster General Donahoe and his staff, though that is a strange position for me. I prospered under the USPS, and endured a lot of petty regulations as well. They clearly understand where they are today, where the world is going, and have surfaced a plan that will help them to move forward under their current legal and financial burdens. Congress has the keys to open doors for them to endure and preserve the current levels of service many still desire. They also have the keys to the vault and say no more. I compliment the PG for a real and thoughtful plan, and I hope our elected officials will make the right choices. In the face of the coming elections later this year – this should prove to be good theater, and maybe even good politics.

A Death by Inches for Newspapers

Posted on March 13, 2012 by Lyn Bunch

Sometimes you see a chart that stops you dead in your tracks. I saw one today in The Atlantic that graphically displayed growing and shrinking industries. My sons both inhabit the top-growing field of the Internet…and I, still have my past linked to the bottom industry – Newspapers. Ouch!

This is a great chart because it shows growth and size of the industry losses or gains in terms lost at a single glance. I hope we can see more of these from the suppliers – LinkedIn Analytics.

As I deal with clients and prospects this will be part of my kit bag to help explain key opportunities, and the pockets of pain at the same time. This is why the recession has been both so deep, and so persistent. As employment shifts from the old sources to the high growth areas it is easy to see that needed skill sets must be transformed or much of the pain for those who have lost jobs will find it to be permanent.

A Last Chance for Yahoo?

Posted on March 6, 2012 by Lyn Bunch

It’s hard to think that having come so far in just such a short period of time that Yahoo is in so much danger. Major cuts are being aimed their large products organization, as well as other arenas in which the company has lagged. Like many in similar situations they are also cutting: Public relations and marketing, research, marginal businesses and their weaker regional efforts.

Yahoo struggling for some time just hired PayPal President Scott Thompson as its new CEO. Scott was most recently in charge of the large eBay online payments unit.

He starts next week, but big changes are coming fast. Staff conference have already begun and an all-hands meeting on Yahoo’s main Silicon Valley campus is scheduled ASAP.

Thompson also hired Boston Consulting Group to help focus the company on “growth” initiatives and to find the best path for Yahoo going forward.

Scott appears to be looking for areas to quickly jumpstart Yahoo after a failed turnaround over the last round of turnaround leadership. Cuts are likely, but the focus will also be looking for new areas to move into. That what consultants can do for you, find the costs, and find the new directions. Let’s hope that BCG has a great compass to find that new direction.

Adding to Scott’s woes is the news that Prabhakar Raghavan,the head of its labs unit will be departing for Google. His research at Yahoo focused on search technologies, with particular interests in text, web mining, and algorithm design.

Sources said was spurred by the likelihood of major job cuts in his research unit.

Staff cuts will happen, and they could be significant. Staff at Yahoo have been through this before, or their predecessors have, but the effect is still chilling, and these could be larger than ever before. With 14,000 employees and a large contingent of software contractors not in that count, the ‘dead pool’ is significant, but costs must be slashed if Yahoo is to survive.

In a conference call to analysis Scott said “Our leadership is engaged in a process that will generate significant strategic change at Yahoo, but final decisions have not yet been made at this point. Beyond that, we will not comment.”

In other words, get ready for some big shoes to start dropping and very soon.

Whether we are talking about the USPS, newspapers or older digital media like Yahoo, the future will go the quick and nimble, and the adaptable. There is no longer any ‘legacy’ left in media…’what have you done for me lately’ is now all that matters.

The Pony Express Collides with 21st Century

Posted on March 5, 2012 by Lyn Bunch

Tomorrow, Patrick R. Donahoe, USPS Postmaster General will be addressing a gathering of key postal businesses from throughout Southern California at a Postal Customer Council event at Knott’s Beery Farm Resort Hotel. The location is fitting since Knott’s was built on framing images of life in the old west, stagecoaches and railroads – just like our vision of our Postal Service. I think that is a key to our discussion about how to handle the transformation of the USPS in the 21^st century. The USPS like newspapers, printers and mailers are in the midst of a major reshaping as increasing numbers of businesses and all people are moving to digital forms of communications. The world will never be the same as it was when I started my career selling for Xerox in the 70’s.

Facing great change and pressure the USPS has done a good job in creating plans to bring the service in line with the needs of the 21^st century, and stagecoaches are not in the mix. The Postal Service drafted its business plan with analysis from Boston Consulting Group and Accenture. Based on my reading of the plan, they have gotten good advice, though it has not been well received in Congress, though nothing really is anymore…but that is another problem that modernization needs to impact.

In the last quarter of 2011 the USPS lost $3.3 billion. The forecast for a full year-end is a $14.1 billion loss for the year ending Sept. 30. The losses will continue, and continue to grow if nothing is done

First-class stamped mail has declined more than 50% in the past 10 years, from 52 billion deliveries in 2002 to 26 billion in 2011. According to an email from USPS representative Sue Brennan, the drop in mail has resulted in significant excess capacity.

Among the recommendations from the USPS, and their consultants in the new plan to cut losses are:

Rate increases – The U.S. Postal Service wants Congress to help it raise the price of a first-class stamp to 50 cents, an 11 percent increase, as part of its strategy to avoid annual losses as high as $18.2 billion by 2015. The fact still remains for the USPS is that we are the least expensive postal service in the world- we could even say that we are under priced for the service that we deliver. A price increase would seem to be in line all things considered, including real value.

Staff and facilities reductions – Closure of a number of local post offices and half of the larger mail processing centers would save significant dollars, and would also reduce staff by over 35,000. This would be a tough call in the middle of a financial downturn, and a national election. Nine states will see eight or more processing facilities closed. Almost half of the 223 plants scheduled to be shuttered are located in nine states, including mine. For the most part, these states, which include California, New York and Texas, have the largest populations in the country.

Curtail Saturday delivery – The Postal Service says it would save $2.7 billion annually by cutting mail delivery to five days a week. Those of us in urban areas are likely to see this as positive, but rural areas have tended to see this a problem.

Manage Their Own Health Care Benefits – The USPS states that they could save $7.1 billion a year by managing their own health-care benefits. This, along with not prefunding pension benefits, would be significant, but are a large political football for both sides. The USPSwould have lost only $200 million if not for payments it had to make toward the $5.5 billion it is required by law to set aside for future retiree health benefits annually, something no other government agency needs to do.

Our transistion to a post industrial society is hell for those who still provide the bulk of our labor. The USPS has dramatically changed over the last couple of decades and automation has made it a model for most of the world, but not even that is not enough well production volumes decrease. Savings from automation aren’t there any more, and now we have to remove some chairs from the table. Like newspapers, the transition is painful, but it is still inevitable. The USPS plan is a good business plan, and Congress should adopt it for the most part.

I wish I could hear the Postmaster General tomorrow. Unfortunately, I have a previous engagement with a client dealing with digital marketing issues and their competition. Doesn’t it just figure – new media trumping old media once again. I hope the USPS gets their way in the end. The plan is real and reflects the medicine we all need to take now. In an election year this will drag out and become another political football. Shame on us for allowing that to happen.

No More “Kodak Moments”

Posted on February 10, 2012 by Lyn Bunch

There are those things that are touch points to our past. This was a big week for key events that highlight how far and fast we have gone over the last several years. Growing up with a Brownie camera and Kodak film I was the model of American youth. The advertising phrase – ‘ A Kodak Moment’ was the catch phrase for time to store a happy memory that only film could do. Movies had many scenes of hapless dads and moms trying to capture their ‘Kodak moment’ while their kids were going crazy to get out of the scene. While working at Disneyland in college there were signs at various locations that encouraged people to take advantage of a Kodak Vantage Point with a sign in Kodak yellow. Kodak film was sold on Main Street and shops all over the park.

This week we got the news that Kodak, now in bankruptcy for reorganization, was going to drop most of their last links to photography. This is a sad story, and one we have seen repeated many time over in our ‘ industrial digital transition.’ Old services, products and companies are in decline as our economy, and lives, are changing in this new ‘digital’ world. Yesterday’s business leaders are tomorrows canon fodder…do they still ‘make’ canon fodder?’

The shame for Kodak is that it saw it coming and did not take the steps needed to survive. They saw the digital revolution in photography early on, and made some minor adjustments, but in the end the effort was staged to protect their lucrative film business, even when the ‘digital barbarians’ were at the gates.

What will Kodak do now? Their next phase, if they can survive the bankruptcy courts, will be to continue as a provider to online and retail photo printing services – like Costco, where I get my prints done. They will also continue in the desktop printer arena, but with heavy competition from HP, Canon and others. Selling printer paper is also a key factor, but that is a commodity business, and margins are shrinking there as well.

What does the Kodak transition mean for us? I guess we have great role model for change – or at least what happens when you fail to adapt or change. Strong brands with years of earned equity in their brand can flame out just as easily as the next brand. Twinkies and Ding Dongs are still trying to find a new home since their founding baker has faltered.

Kodak shows us that the allure of circling the wagons and protecting the flanks because of high margins for existing core businesses will not work in this new world. Being both ‘digital and flat’ will be the keys to new high margins. Kodak saw the light coming down the tunnel and didn’t think it was a train. Everyone should be alert for their own ‘trains’ being aimed at them now.

My own experience in marketing and advertising has been in the publishing field – newspapers and shoppers, and in the direct marketing – mail. Think I don’t know the numbers and schedules of all the trains coming down the track – I do now.

My clients, mostly those with strong roots in the pre-digital world, are learning and alert to the transition. However, the force is strong with those who want to protect what they have built up, and that causes many to falter and lose sight of the pending changes. Now is the time for reinvention, for all of us. No more ‘Kodak moments’ will be coming, at least for Kodak in coming months.

Analog Sherpa

Media, Marketing & Management For A Digital World

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