Rocket-fuelled Hi-tech Growth

Rocket-fuelled Silicon Valley!

We’ve spent a few hours looking at the recent Q2 trading reports from some of the key players in Silicon Valley and while we’re all aware of some positive trends, our edited version here makes for Rocket-fuelled reading!

Rocket-fuelled Apple!

Apple is now the biggest tech company in Silicon Valley. Its phone business with the iPhone has gone stratospheric – iPhone sales have grown hugely, giving an overall growth in Apple’s iPhone business of around 200% year on year. iTunes is also on the up with the strongest sales quarter ever with revenues of $1.1 billion dollars. iPod retains a 70% market share, which continues to grow year-over-year in every country. From the queues outside shops we all know that iPad demand has been strong, fuelled by the die-hard Apple aficionados – (half a million already sold of the Wi-Fi only version to date). Lest we forget Apple make computers, they sold 2.94 Mac computers representing a 33 per cent increase on the same quarter last year.

Nipping 5 miles East across to Santa Clara, we come to Intel. Standing by…for Q2 2010 reported second-quarter revenue of $10.8 billion, up 34 per cent year on year. The company reported operating income of $4.0 billion, net income of $2.9 billion and earnings per share of 51 cents. Intel achieved the best quarter in the company's 42-year history.

Let’s drive north up the 101 to Mountain View to read Google’s results

Google reported revenues of $6.82 billion in Q2 2010, an increase of 24% compared to the same quarter last year. Shipments of smart phones running the Google-backed Android operating system grew at an incredible rate of 886 per cent, driven by key products from HTC, Motorola, Samsung, Sony Ericsson and LG – analysts estimate the annual growth in the smart phone business to be over 60% this year.

From a relative new kid on the block to an old kid on the block, Hewlett Packard’s Q2 revenues were up 13% from a year earlier with net revenue of $30.8 billion. One interesting point arising from the Q2 announcement was that non-US revenues now account for 66% of total worldwide revenue.

Rocket-fuelled Autumn

From these stellar results, it’s clear that both business and consumers clearly understand the value of innovative technologies for business productivity and lifestyle enhancement. Rocket Fuel Marketing is looking forward to a busy September working with both an established player and a couple of new entrants in hi tech. We’ll be fuelling growth for our technology clients with our mix of experience, left-field thinking, irrefutable logic and creative insight.

A marketing foray into Cloud Computing - Part 3 - So who's doing the numbers?

Some very bold and large industry forecasts are flying around for cloud computing. Worldwide sales of cloud services are forecast by Gartner to be $68.3 billion in 2010 growing to $148.8 billion in 2014. Interestingly, the UK is forecast to achieve sales of $43.15 billion or about £28 billion in 2014. Hang on! Do I believe that? £28 billion is almost 2% of current GDP. That’s massive.

Gartner estimates 2009 cloud service income to be $58.6 billion so who’s doing the business? We can follow a thread here. Here’s a chart from an analysis made by Gartner in June 2009 described as “Magic Quadrant for Web Hosting and Hosted Cloud System Infrastructure Services”:




So if we go to the upper right part of the quadrant and look at the company’s current earnings statements we can form a view of how well Cloud is doing.

We couldn’t establish earnings for AT&T on hosting and cloud computing, as these services don’t appear to be identified separately in their accounts.

Savvis and Rackspace are active in the UK. In Q1, 2010 Rackspace’s worldwide cloud income was $19.3 million or 11% of total revenues. Savvis’s cloud income for the same period was $2.8 million roughly 1% of their revenues for the first quarter.

Terremark’s annual revenues were $292 million in the prior year of which some 58% - $169.4 million came from managed services.

As at Q4 2009, IBM told us that whilst their cloud operations were well advanced in Germany, they weren’t as yet fully operational in the UK. We’re sure IBM’s cloud operations are fully implemented in the USA and that they have the financial strength, capacity and agility to move quickly on European Markets.

Then there’s the much-reported Amazon Web Services (AWS). AWS is coy about disclosing its cloud numbers but recent analysts’ reports (Citibank) estimate AWS earnings to be running out annually at around $600 million, which is less than 3% of Amazon’s annual income.

Microsoft’s Azure Platform does not appear in the “magic quadrant” since it’s “a cloud application infrastructure, not a cloud system infrastructure.” And presumably other SaaS providers do not appear for much the same reason. We should mention the very successful salesforce.com in the context of SaaS as their 2010 revenues are likely to come out at circa $1.5 billion that’s a bigger number than any other company appearing in the analysis here.

So who’s not there that should be? Noticeable omissions are Fujitsu who recently unveiled their new massive IaaS data centre in North London, HP who have claimed to be making a $250 million investment in cloud this year, BT Global Services who launched their VDC platform after the Gartner report was produced in October 2009 and possibly CA.

Anyone else? And how does one arrive at that $68 billion number? We’ll try and find out.

We’re sure that there will be new strong market entrants and considerable consolidation amongst existing vendors. New players may emerge from the managed hosting market too. To coin some more Geoffrey Moore chasm doctrine, cloud computing has yet to “cross the chasm” to the mainstream market. It’s still an early stage / early adopters’ market that offers strong prospects of growth.

Up-and-coming managed hosting players will need to consider and differentiate their offers cleverly to succeed (and that’s where Rocket Fuel comes in). I wouldn’t fancy their chances with a generic heterogeneous hosting offer against the likes of the big IaaS potential players. They may not have the scale of infrastructure, low cost base and financial strength to compete with the bigger players. Nevertheless, opportunities abound for the company able to build a presence with a cleverly positioned offer or that’s based on a market niche in which they can gain effective control. In the UK, Gartner predicts that SaaS will fuel market growth. We tend to agree. There are attractive business opportunities for the managed hosting business to generate growth from partnerships with SaaS providers with which they share compatible business goals. Other opportunities might lie in building a following in target market segments in which the hosting provider can build and exploit specific expertise, or in changing a target industry business model. There is any number of combinations and permutations to build success in the cloud, but differentiation is key in a market where there’s strong convergence of pricing and supply, increasing commoditisation and fierce competition.

In our next piece, we’ll talk about what’s really happening on the streets, customer issues and concerns and current supplier positioning to market. There’s still a long way to go. We’re excited about the prospects for cloud and look forward to developing profitable growth opportunities with you.

A marketing foray into Cloud Computing - Part 2 - Riding the Hype Cycle

Let’s start to take a look at the bigger picture of what’s happening in cloud computing.

As Gartner says, “The hype is deafening” or as one old-hand salesman told me, “As for cloud, there are more people out there selling PowerPoint presentations than anything else.”

It’s unsurprising, therefore, that cloud computing is at peak of Gartner’s Hype Cycle, what they call “The Peak of Inflated Expectations” “in which a frenzy of publicity typically generates over-enthusiasm and unrealistic expectations. There may be some successful applications of a technology, but there are typically more failures.”

For the vendor, it’s important to associate their business with the new upcoming technology, to position themselves for the future. For the customer, it’s a maze of bewilderment and confusion where it’s difficult to discern what’s real and what’s hype.

From a Rocket Fuel perspective, we believe it’s important for technology companies to balance their bold, exciting visions with practical offerings that customers can buy into now. This is the place where you need to build up a head of steam to withstand the stormy seas that follow. So it’s “head in the clouds and feet firmly on the ground” time for us.

The next stop on the Hype Cycle is the “trough of disillusionment” where companies having failed to meet expectations, see the market fall away from underneath them. Getting through the trough is a hard slog and may call for some “strategic re-alignment” but keep your stake firmly planted in the ground of the new (but temporarily discredited) technology and go back to re-stating core benefits and customer value. The technology will be back. This is just the swing of the pendulum away from the hype in an opposite and equal direction. Steel your courage and stand your ground and remember that this is what negative hype feels like. It’s still hype. Not all companies survive the trough. Some of the early trials end in highly publicised failures. Media interest wanes, except for a few cautionary or sensational “bad news” tales. A significant amount of vendor consolidation and failure occurs.

Here’s Gartner’s hype cycle as at August 2009 with cloud computing at the peak of inflated expectations:



There are some companies hyping cloud that describe it as a “disruptive technology”. It’s not. It’s the same server, mass storage and applications technology that one might buy and use in-house deployed via a disruptive business model. The cost arguments for customers are very compelling. We’re aware of some IT-based businesses that have made savings in direct and indirect costs of over 40% of their total cost base by implementing a cloud strategy.

Cloud has sufficient market impetus to change the computing landscape forever. There will be traditional hardware (and software) product vendors who resist or fail to rise to the cloud challenge. During the last major shift towards client / server PC-based technologies back in the 1990’s, there were some very big name computer vendors that became casualties of the market change. They tried to hang onto the “mini-computer” IT business model that was being supplanted by client / server. If you’ve been doing this as long as us, then you’ll surely remember names like DEC (Digital), WANG, Data General, Prime and Tandem. Most of those companies disappeared from view in a two-year period in the late nineties.

There is a way through all this turmoil of change. And it’s through excellence in marketing, both at the strategy and execution levels. Rocket Fuel can help your company ride through the change and succeed through to the mainstream market. The hype cycle can be a choppy ride and we’ve been through it before. We know what you need to do now and what you need to be selling to succeed in this market. There are some fortunate businesses that may be able to force their way through with financial muscle. Others will fall by the wayside. We can make a difference, so why not get in touch to discover how we can help.

In our next piece we’ll look at key issues for both customers and vendors approaching the cloud based on our own detailed research. Why not subscribe to our blog by e-mail to stay in the picture and keep in the game.

A marketing foray into Cloud Computing - Part 1 - What's it all about?

We’ve been working in cloud computing for over a year now and it’s been one of the most exciting periods in my long IT and marketing history. To-date, I’ve been involved in five or six different projects – helping to bring providers to market and a user-based technology selection exercise (RFP screening). Our work has ranged from market entry for one of the world’s leading IT companies to a fast-growing, hosting company aiming to break into cloud. We’ve also been involved in a provider selection exercise that we gained because of our industry and market knowledge. That’s unusual territory for us but it helped provide us with a perspective from the customer’s viewpoint and what an eye-opener that was!

Cloud computing has sparked a degree of interest that we haven’t seen since the introduction of client / server technology. We believe it’s an early stage / early adopter market where most of the new providers still have much serious work to do in perfecting their market offerings. But that’s what we help them do and we love it.

Nevertheless clouds are murky places and there’s some dense fog out there. There’s much hype and vapour too. In our customer-facing project, we were offered managed hosting, leased product based managed data centre solutions, bespoke clouds (how can they be?), co-location and every other form of externally managed solution that ever was, real or imagined. We were offered imaginary cloud too – the ideas of a zealous salesman on what his company might provide as and when they decided to do so. But it was sold to us as if their cloud offering was available now and it was no small or obscure company either.

We’ll go on to talk about our market and customer findings but first, for the sake of our non-technical readers, we’ll talk about what cloud is in ordinary language.

So what is Cloud?

Gartner’s definition works well for us:

“A style of computing where scalable and elastic IT-enabled capabilities are delivered as a service to customers using Internet technologies.” We also describe five defining attributes of cloud computing: service-based, scalable and elastic, shared, metered by use, uses Internet technologies. A key to cloud computing is an opaque boundary between the customer and the provider. Graphically, that looks like this:




When the customer does not see the implementation behind the boundary, and the provider doesn’t care who the customer is, you have a public cloud service. So what is private cloud?

Private cloud is “A form of cloud computing where service access is limited or the customer has some control/ownership of the service implementation.” This may also be taken to imply the exclusive use of dedicated external physical resources.

We like the President of CSC’s definition that I’m going to paraphrase from memory. “Cloud computing is the delivery of computing facilities whenever you want, wherever you want, however much you need for as long as you need without cost penalty.”

That works well for us. Gartner’s diagram is helpful too.

But there are lots of businesses trying to jump on the cloud bandwagon that, in fact, are not offering cloud. Consider this assertion:

“Cloud computing is about providing computing as a utility…over the Internet.

The difference with Cloud is in the way computing is delivered:
- we provide you with infrastructure as a service IaaS
- supply is on demand
- delivery is via the internet
- costs are rental, based on usage.”

It’s true that one of the differences is the way it is delivered but it’s not the only one. Scalability and elasticity together are one of the five defining attributes of cloud. They are not present here since what’s being sold is simply managed hosting.

So is virtualisation a defining attribute of the cloud? Many hosting suppliers say so. They claim, “managed hosting + virtualisation = cloud computing.” That’s simply what it is. It’s managed hosting with virtualisation and not cloud computing.

As this is my introductory piece I’ll say what virtualisation is for the majority of suppliers. Virtualisation here means “server virtualisation” which is about partitioning one physical server into several virtual servers or machines. Each virtual machine can interact independently with other devices, applications, data and users as though it were a separate physical resource.

Hypervisor software is the magic ingredient that makes virtualisation possible. This software sits between the hardware and the operating system and decouples the operating system and applications from the hardware. The hypervisor assigns the amount of access that the operating systems and applications have to the processor and other hardware resources, such as memory and disk input/output.

Virtualisation can mean much more than this but that will do fine for now. There’s nothing new about it. Virtualisation was first introduced in the 1960s by IBM to boost utilisation of large, expensive mainframe computers by partitioning them into logical, separate virtual machines that could run multiple applications and processes at the same time.

Virtualisation, which is one of Gartner’s “top technologies for 2010”, is not necessarily synonymous with cloud, although it may offer significant cost benefits in the deployment of cloud technologies. Cloud technologies that offer elasticity and scalability also present cost benefits in themselves. To put it more simply, you pay only for what you need and use. You don’t pay for under-utilised in-house server networks.

And what do all those initials mean – IaaS, PaaS and SaaS?

Kate Craig-Wood, managing director of Memset very kindly provided me with this helpful diagram that she produced as part of her work on the Government (G-) cloud programme:



Kate writes, “The diagram shows what we agreed we mean by Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (right hand side) and the areas encompassed by the individual terms infrastructure / platform / software on the left. A better term than “software” might be “application” since the platform part is also really just software, but SaaS has already gained wide acceptance.

It is assumed that “as a service” means all services within the definition are fully integrated up to and including the respective level, thus incorporating any sub-levels. Therefore, SaaS providers could either sub-contract to a PaaS provider, or would incorporate the PaaS themselves and provide it as part of the SaaS “stack”. In turn the IaaS could be sub-contracted or incorporated. The customer would see an integrated service.”

This works well as a schematic but practically speaking, Platform as a Service is frequently addressed by the Infrastructure as a Service provider and the virtualisation layer may or may not be present, although it usually is. Interestingly I have yet to see a cloud provider describe their offering as PaaS.

In our next posts, we’ll look at some of the commercial and market issues around the cloud and what’s going on in the front line.

Geoffrey Wilkins

Making marketing investments in a recession – some facts!

It’s a truism that marketing costs are frequently the first to be cut in a recession. We’ve often thought that this was a reflection on the quality of marketing being performed within organisations - that in these businesses marketing has become detached from its primary purposes of innovation, driving profitable growth and acquiring customers.

This week, we’ve literally just completed a piece of live communication with a series of road shows for a leader in the Food Service industry.

We thought that we’d share some interesting insights from their Finance Director on marketing expenditure in a recession. This information carries some substantial weight as his company’s brands feature in 8 out of 10 of the UK’s domestic refrigerators

He had two key headlines based on his own, recent experience:

1. Investing during a recession helps you emerge from the recession in a stronger position

2. Brands should continue to invest in advertising during a recession

Studies from past recessions have shown that companies who sustain investment during recessions are better positioned when the economy recovers. Brand owners need to look on recession as an opportunity to reposition their brands for growth in the long term. Here’s some research from McGraw Hill:


Brands should continue to invest in advertising during a recession

The Finance Director is persuaded that communicating with consumers during the current turmoil is more important than ever to maintain brand loyalty and faith.

The board decided to focus their increased investments in their leading brands and not on their second tier brands, investing more in above the line advertising, especially TV, to put disproportionately more focus on product innovation and lastly to adapt messages to reinforce core associations (for example, in this case – British-ness).

Interestingly, by following this strategy they can testify to their top brands growing at 4.5% in a grocery market that is growing at 3.8%.

This organisation invests substantially in innovation and it shows. The Finance Director is usually the first to favour marketing cuts. Marketing deeply integrated within all aspects of its culture drives the spectacular success of our client’s business. Marketing is never a dispensable luxury except in those businesses that are doing it wrong.

Marc Balhetchet

“It wasn’t the strategy that failed…its execution was flawed”

The role of “fair process” in product and service launches


All management is a process of continuing negotiation, leadership and channelling disagreement. I’ve long had difficulties with the idea of consensus management, since in my experience, managers who claim to operate with consensus are frequently bullying tyrants with whom everyone agrees – that’s consensus. Of course, there are benevolent tyrants as well as malevolent ones, but the tyrannical approach, whatever it is, tends to blame and scapegoat others since it’s unable to accommodate human difference.

What took me here this morning was thinking about strategy and that well-worn dictum, “It wasn’t the strategy that failed. Its execution was flawed”. And that’s usually about your people and how they’re managed.

If people don’t understand change then they may fear or resist it, no matter how sound your strategy is. It’s an issue for us since frequently we’re involved in strategic change but not the day-to-day management of its implementation. Major product and service launches need everyone’s buy-in.

An idea we like that comes from an old favourite of ours, Blue Ocean Strategy, is that of "fair process". Fair process is based on the idea that people care as much about the process through which an outcome is achieved as they do about the outcome itself. It also recognises, unlike some consensus ideas, that difference is healthy and that difference can build improvement.

In the Blue Ocean world, it’s called the three E Principles of Fair Process where the Es stand for Engagement, Explanation and clarity of Expectations.

Disagreement is very healthy. “Engagement means involving everyone in the strategic decisions that affect them by asking them for their ideas and allowing them to refute the merits of one another’s ideas and assumptions. Engagement communicates management’s respect for individuals and their ideas…(it) sharpens everyone’s thinking and builds better collective wisdom. Engagement results in better strategic decisions by management and greater commitment from all involved to execute those decisions”.¹

It’s a funny thing about these blog posts but sometimes I question why I write about the subjects I do. Then like a self-fulfilling prophecy I walk straight into a client situation where the issues apply. It’s as if I see them coming. We rarely get introduced to situations that are green fields, usually there’s some underlying difficulty and recently I encountered a communications issue around a new service launch. Everyone was thinking and acting in different directions. Everyone was also very committed to the company’s success but day to day pressures meant they were all acting according to their own perceptions of operational priorities in their own business areas (aka “silos”). Suffice to say they were not making progress towards their new goals fast. They’d planned to hold a strategy development workshop but the strategy looked clear to us even if it still needed work on the detail. We changed that workshop to “vision-sharing” that hopefully will unite the team around the vision rather than encourage individual interpretations and actions based on what they perceive the strategy might mean for them.

…which leads us on to Explanations. I know it’s obvious but too often the obvious is the thing most frequently taken for granted and therefore overlooked. Explanations are about developing a common understanding as to why decisions are made the way they are. It also provides important feedback that enhances learning and development. For the manager, the key factor is making the explanation with their ears wide open! Taking the time to explain the rationale is both involving for the employee and demonstrates that the decisions have been taken impartially in the best interests of the company.

Finally, in a point that’s closely linked to the situation we found ourselves in recently, there’s Expectation clarity. To achieve fair process, it matters less about what the goals, targets and responsibilities are and more that they are clearly understood by people in terms of what the development means for them. When people clearly understand what is expected of them, far less time is spent in political jockeying, clearing the way to make rapid progress with the new launch project.

This process is fundamental to change. It’s also a cornerstone of managing product and service launches. The three E Principles must be applied together. It’s no good encouraging engagement in the belief that explanation and clarifying expectations will follow naturally. They won’t. Fair process is important in shaping people’s attitudes and behaviour. It provides people with the intellectual and emotional value that sustains them. It recognises that people deserve to be treated with respect and dignity wherever they work in the organisation, and it builds trust. I’d rate that a whole lot healthier than achieving blind “consensus”, wouldn’t you?

¹ Blue Ocean Strategy by W Chan Kim and Renee Mauborgne, Harvard Business Press 2005, pages 175-176

A serious outbreak of Return-On-Investmentitis - Making the case for live events

What strange things humans are. We’ve been amused, perplexed and ultimately stimulated into writing this blog in response to a newish trend of making the financial case for live events/communications. Okay, so we know we’re in an era of austerity and that we must all make every penny count but that does not mean that spending on a conference is wayward, rash and irresponsible.

As dozens of live event agencies rush to make the business case for live communication – there’s a whole lot of ROI calculations out on the Internet; designed, presumably to appease or persuade “procurement” that “doing this live event is a good thing and yes, we really can show a return on investment”.

How do you measure value?

But we’re left wondering “how do you measure the ROI on a company conference, a press and public launch or an AGM?

We’ve created only a few events in our lives out of thousands where we can genuinely attest to a measurable ROI. The most memorable was a large-scale analyst meeting for a major tech company on the east coast of the United States, where we outlined the company’s roadmap, staged a host of live demos, showed presentations that had been editorially scrutinised for almost a month and where the most onerous Q&As had been thought through and exercised. The net result after this one day analyst event was a share price which closed at $19:53 cents (it had begun that day at $11.65) on the back of the huge number of “buy” reports from the analysts attending our event. Our client was delighted as several billion dollars were added to their capitalisation. Now that’s what we call ROI!

Our point is that these types of live events are rare where true measurable results can be obtained at the time or in advance as a cost justification. No one could have forecast the market response from our prize analyst event.

Of course, we create exceptional value and massive benefits but how does one calculate the financial value of persuasion, motivation, inspiration, influence, enthusiasm for your business and its products and a real press and analyst buzz? Value can only be demonstrated by what follows from the event , how the audience acts as a result, not by attempting the impossible – calculating ROI for the event itself.

So don’t be persuaded into nonsensical thinking.

Of course, you should define your Critical Success Factors with a clear mind, make sure you know what you want to spend and what you want to spend it on; plan early and execute in a compelling fashion. But when you come to think about live, face-to-face communications, remember that humans love to meet other humans, that they love to see and experience new things and learn and yes, they even will do more business with you if your event is done right.

Next time I’ll be writing about “partner power” in live communication.

Marc Balhetchet

Is Your Corporate Culture Ready for Social Media?

A Rocket Fuel colleague and I were involved in our own strategic discussions on our business earlier today about, in particular, where we stand on social media marketing. My own view is informed by two major corporate communications’ assignments with large clients. Both were failing organisations; failing to the extent that their operations put public lives at risk. One recovered far more quickly than the other. It’s not possible, nor would it be ethical to relate their difficulties but they were significant. Both suffered major disaffection of the workforce. In one case, the communications function was almost redundant since its demoralised employees fed the media bad news stories every day. Every day we faced a rearguard action having been slammed by the media on the day before: newspapers, television and radio.

Here we managed to bring communications back into equilibrium by seizing the initiative and improving relationships with journalists and at the same time ramping up internal communications and employee engagement.

Ironically, the second organisation, which was in a far worse state, made more rapid improvements. It had a new, very competent CEO who understood the power of his people, the press and the public. He engaged with communications directly. He agreed to the appointment of an excellent PR whose sole job was to address employee communications and involvement. She did an amazing job. We and Fred (not his real name), the new CEO, opened up channels of communications including company forums with the senior team, a fortnightly newsletter, a CEO same day response service, “Ask Fred”, a reinvigorated intranet site, open access to information, valuing feedback and other engagement initiatives. Fred faced up to all the issues, both internally and externally and did whatever he had to do in order to address them. He was an inspiring leader who took time out to be visible to all his employees. Fred and our two-person communications’ team transformed the culture. We did it quickly too, in a matter of a few months.

In Fred’s operation, we also set up customer focus groups and worked directly with customers on how we should improve and what they saw as our key priorities. We acted on their views involving them every step of the way. It worked like magic. Interestingly, we never got the bad press that we probably deserved as everyone was working on the same side to build, improve and empower the business and its employees.

In the first organisation, we recommended customer focus groups too, although none were set up due to management difficulties. Also we had to close down intranet chat facilities that were being abused by those with a disruptive political agenda. Customer issues also went unheard and unheeded. Eventually, the entire senior management team was replaced. Change continued at a slow pace. These two organisations that faced identical threatening challenges responded in different ways with markedly different results. Fred’s business with its empowered and involved employees will no doubt go on to be one of the finest of its type in the UK. We’re completely convinced.

So let’s be clear about the difference here. It wasn’t only about Fred, the excellent leader, but his understanding that employees are central to everything. Employees are the brand, the corporate values and the customer experience. They stand for the business and what it means to its customers. Our buying experience from a business is qualitatively differentiated by its corporate culture and its people.

Coming back to social media - corporate culture, style and collaboration are likely to be fundamental in determining whether or not social media implementations succeed or fail. It would have been foolhardy in the extreme for us to have promoted a social media initiative in either of these clients' organisations, no matter how involving it might have been. Any attempt to implement social media in organisations with difficult or dysfunctional corporate cultures will invariably fail. The implementation of a social media programme involving customer dialogue is a not a means of driving corporate culture improvements.

The development of a healthy corporate culture requires management commitment, healthy internal communications and a notion of fair process that builds execution into strategy. These are all required to build trust, collaboration and buy-in to change.

In a later post, we’ll say more about fair process and what that means to a business and all of its employees. Fair process to us is the cornerstone of building execution into strategy.

Geoffrey Wilkins

Reports of Marketing’s Death Have Been Greatly Exaggerated

The web is awash with pundits proclaiming the death of marketing so we set off to find out what these claims are about, who was making them and why. Besides, we hadn’t noticed any signs that marketing was in demise. Marketing is our business and despite recessionary pressures, it’s alive, well and thriving.

We made some important discoveries. We made a brief call to Harvard and London Business Schools to see what they were teaching on their marketing courses. No change there; it was marketing as we knew it and understood it to be.

So who are the mourners at marketing’s graveside? Unsurprisingly, many of them came from the ailing worlds of traditional promotions, old-style PR and advertising.

PR and advertising are not marketing. Digital content and social media are not marketing either. It’s simply media, no matter how well and how skilfully it’s written and developed.

Historically, PR and advertising formed the major part of the marketing budget. They were two ways of getting the message out to markets and as it transpired, they were often ineffective.

Joe Wanamaker, a father of modern advertising quipped wittily, “Half the money I spend on advertising is wasted, the trouble is I don’t know which half.”

Traditional advertising and PR are the old way of marketing. The world has changed, but the some of the same people are still making the same mistakes albeit via a different medium. For them marketing is the media, not the message.

A focus on promotion is tactical. Tactics removed from strategy don’t work. It’s what some of the old-style advertising and PR guys sold and frankly, they failed.

Real marketing starts before the product development process. It doesn’t start with a sales lead.

Frequently, the new riders of web promotions misquote Drucker often in an attempt to focus their clients away from strategy towards tactical promotions. Here’s a favourite, Drucker said, “…the aim of marketing is to make selling superfluous.” What Drucker was talking about was not marketing replacing sales, but that the product itself should come from a point of true understanding of the customer, their problems, interests, behaviours and needs. Marketing begins at the point of product conception. Product conception, for Drucker, is about innovation, about finding new ways to deliver value to satisfy the customer and the market.

The marketing doomsayers often claim that product development is not the role of the marketer, but that of the engineer. The notion that engineers and R&D develop products is a false and dangerous premise. Engineers and developers are problem solvers. They love a technical challenge. It’s why they do what they do. The role of marketing is to provide engineers with a problem to solve; a problem based on real market and customer issues, not just a technical challenge.

So what’s real marketing?

Real marketing is the conception of unique product value based on a deep understanding of customer values. It’s about listening to and understanding customers. It’s doing research and testing ideas. It’s about understanding the mass market and the price levels it will support.

If we’ve done our research well, then positioning the product to market is the easy part, as is promotion, since we can talk to people about their problem, issue or interest and tell them how we can address it.

Marketing is about selecting channels to market that have the coverage, reach and motivation to sell our products. It’s about understanding the competition and not trying to beat them at their own game, but doing something better. It’s also about distribution and mode of supply. Innovation may mean changing the business model to reach customers in a way that others have overlooked and finding new ways to reach non-customers. There’s branding, developing brand personality and a customer-centric culture…

That’s a little, but not all, of what real marketing is about.

Sure enough marketing has changed and continues to evolve. Harvard Business School says it well, “The current economic crisis is changing consumers' current and future purchase and consumption patterns. Search engines have changed the way consumers obtain information and make decisions and they are also dramatically changing the advertising industry. Social networks and user-generated content have opened a new way for consumers to engage with each other as well as with brands and companies. There are significant changes in the attitudes of consumers and companies about social issues (including the environment). Consumer preferences and choice of products are increasingly influenced by social factors.”

Finally, there’s an acid test for buying marketing services – see if your prospective supplier puts customer research high on their service list. If they don’t, then walk away no matter what they say about social media and engaging in customer dialogue. Customer engagement is imperative: dialogue is only meaningful when you can talk on your customer’s own terms. If the marketer doesn’t relate to customer issues before the conversation, the chances are that they don’t believe in dialogue at all.

Marketing is alive and well. Traditional promotions, whatever the medium, are dying on the vine. Promotions are one small part of tactical marketing implementation. Without clear and well-articulated strategic intent, positioning, strong messaging, and compelling, meaningful, consistent branding, promotions are like a football team without a goal at which to aim.

Marketing is evolving as are advertising and PR. They are being transformed by the world of the Internet, the redistribution of global economic power, the informed and empowered consumer, and an unpredictable economy. Its best practitioners and there are many of them, some brilliant, are reinventing themselves, us included. The new marketing reaches out beyond the material and tangible world…from the rational and the functional towards emotions, values and behaviours…to how one feels about a company, its brand and a product, rather than the intrinsic nature of the entity itself. There’s a significant growing body of research that shows that cognitive decisions are based primarily on emotions qualified by an act of post-rationalisation. Emotions become the key differentiator in a world that offers increasingly convergent product identities and functionality. Emotions are the reaction to the brand and quality is the subjective evaluation of its customer and the audience. That’s important. Quality and value are not something you build into products, that’s reliability. Quality and value are what you feel about the product or brand and it’s entirely subjective.

Finally, I’ll lighten up and let someone else do the talking. It’s Rory Sutherland, Vice Chairman of the Ogilvy and Mather Group, a brilliant advertiser, who’s becoming an equally brilliant pioneer of the “new marketing”. Here he talks about perception and intangible value. It’s engaging and entertaining to watch and contains some big lessons presented in a very amusing way. It’s worth your time.



Geoffrey Wilkins

The Positioning Claim - The Elevator Pitch is Alive and as Well as Ever!

I’ve never been one for slogans, mantras or corporate exhortations but recent experience of technology launches has restored my faith in the “elevator pitch”.

We understand reservations about the elevator pitch that can be as predictable, vacuous and vapid as speeches made at a beauty contest, but the principles and objectives still hold good. What’s more, where it’s well delivered the elevator pitch can instil confidence, passion and enthusiasm for a product launch.

We probably prefer the version proposed by Geoffrey Moore in his classic work on product launches, “Crossing the Chasm”. Here’s its structure:

For (target customers)

Who (have the following problem / need)

Our product is a (describe the product or solution)

That provides (cite the breakthrough capability, innovative qualities)

Unlike (reference competition)

Our product/solution (describe the key points of competitive differentiation)

This approach works. Its immediate focus is the customer and what our product does for them so it’s externally directed. It moves on to establish clear utility, distinguishing qualities and competitive differentiation. That’s not a “Miss World” speech but the nub of communicating a product’s raison d’être to the world.

The exercise is dismissed commonly because a company feels that it’s passed a certain point of maturity and doesn’t need anything as basic as an elevator pitch anymore.

There is stuff out there particularly in the consumer space that defies description and communicates nothing. But this is more often in mission statements that are meant to attest to a company’s values and beliefs. Here’s one that makes me want to shout out loud and run for the hills:

Starbucks: To inspire and nurture the human spirit - one person, one cup, and one neighbourhood at a time.

And I thought I was just having a cup of decent coffee…

That’s an aside.

Back to the elevator statement that’s the basis of our product positioning claim. Without the claim, it’s difficult, if not impossible to communicate our product offering concisely by word of mouth. It’s more than likely that marketing materials will be all over the place with each presentation picking up on a different aspect and generating a new version of positioning. The marketplace will be uncertain about what’s being offered and become confused and hold back until it's clear. There are implications for virtually every aspect of a company’s business – for its employees, its channel partners, its investors, its R&D and its communications.

Failure to establish a clear positioning claim is not simply a problem for new businesses. We see it all the time and we’ve seen it in the last month too: great companies with competent professional staff and a great product idea whose launch event has been little more than a general treatise on the state of some new technology or other. There have been analysts, media and investors in the audience who’ve walked away asking the question, “Where does X product fit?” or worse, "What is X product?" and customers asking, “Is X right for me?” They don’t know as no one told them. This may or may not have anything to do with a company’s core competence in marketing. It may simply be that external event organisers had little understanding of the brand, the product claim or their client company’s strategic intent.

Finally, developing a good “product claim” isn't easy. Not only does it need to be simple, clear and easy to comprehend; it needs to be realistic, defensible and true. It needs evidence to support its veracity. If there’s no evidence, the competition will drill holes through it. Invariably the product claim won’t be right first time. You’ll need to communicate the claim and listen and respond to feedback to get the messaging right. You may well have to make adjustments to its language so it sits well with your audiences and their vocabulary. Competitors will pick at the initial claim and it will need adjustment and fine-tuning probably throughout the entire life of the product. It’s this aspect that makes positioning a dynamic process rather than a one-off event. As Geoff Moore puts it, “(this) means marketers revisit the same audiences many times during the life of a product. Establishing relationships of trust, therefore, rather than wowing (the customers) on a one-time basis, is key to ongoing success."



Geoffrey Wilkins

Competitive Analysis - What's really going on?

The lion was asked why he was the king of all the beasts. He replied, "Because I can roar the loudest, and when I roar, everyone else is silent." At that point, the thrush stood up and said, "That may be true, but if we go a mile or so from where you are roaring, your roar is not heard. However when I begin to sing, all the birds chirp along with me and the whole forest is filled with song."

The Talmud

“What is competitive intelligence?


Competitive intelligence (CI) is the process of monitoring the competitive environment and analysing the findings in the context of internal issues, for the purpose of decision support. CI enables senior managers in companies of all sizes to make more-informed decisions about everything from marketing, R&D, and investing tactics to long-term business strategies. Effective CI is a continuous process involving the legal and ethical collection of information, analysis that does not avoid unwelcome conclusions, and controlled dissemination of actionable intelligence to decision makers.

Why is CI important?


The pace of technological development and the growth of global trade mean that today's business environment changes more quickly than ever before. Executives can no longer afford to rely on instinct or intuition when making strategic business decisions. In many industries, the consequence of making one wrong decision may be to see the company go out of business.

Society of Competitive Intelligence Professionals”

Competitive intelligence (CI) is of crucial importance in new marketing initiatives and product launches. It’s a part of our service that almost every technology client asks us to undertake.

What’s interesting to us is how often a business’s perception of its competitors is founded on a mythical assessment rather than on fact. In a recent assignment we were asked by a massive IT client to research X and Y Corporation’s activity in Z area. Z was important. They were investing hundreds of millions of dollars in a new technology concept. It transpired that X and Y Corporation had no offerings in Z and did not intend to develop in the area (at that particular time). Nevertheless its sales force believed that X and Y were competitors and planned their sales campaigns accordingly. Their activities were based on nothing but hearsay and folklore. Consequently, their “competitive marketing and positioning” was flawed. It happens. CI was vital to our client as it informed them as to who their real competitors might be and what their offerings what might look like. It guided them to develop their own solution to achieve thought leadership and attract the attention of analysts who had previously regarded them as non-players. CI really works.

But don’t let competitive activities guide your own. Lead and don’t follow. Your first goal is to satisfy your customers. It’s what they want and think that matters more. Focusing on competitors tends to stifle innovation. It also encourages “me too” marketing that ultimately focuses on costs rather than better ways of serving customers. Competitive Intelligence is important but it’s not the Holy Grail.

Competitor-based marketing frequently makes claims like “We can provide it, it’s of higher quality, it offers more functionality than Y Corporation and it’s at lower cost.”

There are some real dangers here. We’ve done competing on costs that leads to convergence, poor differentiation and commoditisation of supply. Enough said about that one. Quality is not an attribute of a product; it’s a customer perception of utility. And that increased functionality presents a dangerous trap. More often than not, it leads to over-specification. Over-specification means increased engineering and production costs and takes attention away from the customer again. Believe us? If not, think about the massive functionality on your mobile phone. The writer’s phone has an FM radio. Does yours? Ever listened to it? Who listens to FM radio on their phone? Whose idea was that?

The interpretation of CI is what counts and first, it presents an important opportunity to take stock of where exactly you stand in a market. The advantage of using Rocket Fuel comes from its independence and its intelligence. We have no axe to grind and we’ll tell it like it is. We won’t filter information and present it in a way that suits your company purpose. We’ll enable you to make real plans based on what’s actually going on in the market.

The next step is to put our grey matter to work, not simply to see if you can do better than a competitor, but to work out if there’s real scope for innovation to produce a different value curve that improves your buyer appeal and provides real marketplace differentiation.

We also encourage our clients, not only to look at what their customers want, but also what their non-customers want. It’s new customers that drive growth. Customer retention is crucial but it’s not the be all and end all of growth, nor is it an indefinite source of growth. As well as looking at your competitors, there are other interesting sources of information that may present valuable growth opportunities. Looking across other industries for applicable business models might provide valuable insights that can be put to work profitably within your own industry. Where do you believe the idea of the first budget airline came from? The airline industry? We doubt it.

Three, two, one…Ignition…Blast off!

Welcome to the Rocket Fuel Blog.

2nd June 2010 sees the official launch of Rocket Fuel Marketing, a technology marketing business specialising in product and service launches. It’s not all new but a collaboration of marketing specialists who have been in the business for twelve years or more. We bring together a full range of strategic and tactical capability in marketing that works from before the point of product conception, through development, planning and live launches to full market adoption. We embrace traditional and new marketing methods in a way that’s different and challenging. We bring enjoyment, stimulus, creativity and interest to your work. Our belief is that if we’re not stretched by what we’re doing and it’s not taxing our grey matter, then we’re probably not doing it right!

Why now?

Good question!

It’s a truism that the marketing function will frequently be cut back during an economic downturn. We’ll not debate the rights and wrongs here. It’s a fact.

Marketing creates customers, innovates and drives sales. For most organisations of any size, it’s impossible to do without it; therefore marketing resource is bought in. Consequently, a technology business may be forced to manage multiple agencies with different approaches, methods and skills…not to mention egos. Launching a new product is stressful enough. We’ve seen this multiple agency mash-up more than once of late; situations that are not only difficult to manage but where expertise is mismatched to the task in hand and strategic intent is overlooked in key aspects of the marketing and launch process. What was meant to achieve cost-savings becomes an inefficient money sink. Rocket Fuel delivers and takes responsibility for any and all marketing activities associated with a launch. Efficiencies are gained by being able to select the services you need, as much resource as you need, whenever you need it without cost penalty or wasteful inefficiency.

Another answer to the “why now?” question is to do with changes taking place in the marketing industry itself. There’s a whole new wave of marketers proselytising digital and social media and content (“content is king”) as the be all and end all of marketing. We recognise that it’s vital too but it’s not the whole story.

There are the new soothsayers of marketing doom proclaiming that marketing is dead and that it’s only purpose is lead-generation. True, the ultimate purpose of marketing is to drive sales, but again it’s not the whole story. Imagine selling the wrong product at the wrong price to the wrong customer via an inappropriate channel-to-market. You can generate as many sales-leads as you like but without a well-executed marketing strategy, you won’t make sales. Interestingly, some of these new wave experts claim that strategy is outdated…that it’s dark and medieval, that it takes place outside marketing and that it’s engineers exclusively who (should) manage product development. So is this new world one where the sales-lead generator doesn’t so much as consider the customer or their values, beliefs, attitudes, behaviours or needs? There are no brand values either, since the only point of a brand is…what? You guessed it – lead generation.

At the other end of the spectrum, there are the traditional marketing specialists selling hope and promise wrapped up in methodological and scientific rigour. This group may be characterised by their claim of superior knowledge, mystification of the subject or a remedial approach. They appear to work on the assumption that they have a conduit to superior market wisdom or offer the “cure” to a company’s marketing malaise.

At Rocket Fuel, we’re not career consultants or new wave advocates drawn from website design, advertising or PR. Our client service directors have worked the streets opening, negotiating and closing multi-million pound technology deals. We respect sales people and we’ve done their job too. Forging a close alliance with a sales team is, for us, a fundamental part of building a successful marketing campaign. Their views are frequently the closest to the customer and demand our respect. We’re not all theory, but we know our discipline backwards. We take pride in being practical and pragmatic, of generating ideas that connect with our clients and their customers as well as initiatives that drive sales revenue and profit growth. And at the end of the day, that’s all that matters.

The Rocket Fuel Marketing Team