Transcript Strategies For Developing And Deploying Market Intelligence For

Building profitable outdoor
advertising business
through strategic marketing
by
Chris Doghudje, frpa.
(Being guide notes for a lecture on this topic
at a Daniels Phritnol Workshop at Whispering
Palms Beach Hotel, Badagry, on June 2, 2011)
1. Starters
1.1. Quote
“I will float like a butterfly and sting like a bee.”
This is a remarkable strategy statement that came
from no less a world personality than Mohammed Ali,
when the legendary boxer was to fight Sonny Liston,
otherwise known as the bull, quite a while ago.
If you agree that that was a great strategy by a great
man, then half of the task of this lecture has been
done because we have strategies in all fields of human
endeavour – military, boxing, politics, football, love,
religion, business, marketing and advertising.
1.2.
Meanings or perceptions
The title of this lecture has words that
may mean different things to different
people, depending on the pictures in their
heads. To streamline these meanings or
perceptions. I am going to attempt to
define some of the words or phrases.
* “Building” in the context of this lecture
should be seen as (i) creating or (ii)
gradually adding to something as in
“the building of muscles.”
Meanings or perceptions Contd.
* “Profitable” stands for “gainful.”
In business it describes a situation in
which income is higher than
expenditure. If a business is not
profitable, it cannot be sustained and
it cannot grow.
* “Outdoor Advertising” stands for
what is now generally known as outof-home (OOH) advertising. And that
is advertising on billboards, buses,
taxis, lampposts, etc, etc.
Meanings or perceptions Contd.
*“Business” is an intriguing word which stands for
“enterprise” or “a commercial activity,” but which
today has been basterdised to mean virtually any
occupation. It is not unusual these days for politicians,
preachers, hawkers and even prostitutes to claim to
be businessmen or women.
(An aside: I remember a top politician from one of the
South Eastern states claiming that politics in the East
is business and another man from the same Eastern
states claiming that politics is an investment. To make
you laugh a bit, how about a prostitute arrested by a
police for wandering who claimed she was in the
business of building and demolishing erections! Ladies
and gentlemen, let’s see business as a commercial
activity engaged in so as to make a profit or as a
means of livelihood.
Meanings or perceptions Contd.
*“Strategy” simply means “a plan of action.” It
originated as a military term which stands for
“a plan as to how to deploy troops so as to gain
maximum advantage over the enemy.” Note
that “strategy” is different from “execution;”
strategy comes before execution – yes, the
former is a statement of intention to act in a
certain way, while the latter is the action itself.
*“Execution” must be based on a “strategy,”
not the other way round. A good strategy
ensures success, not only in the business of
marketing, but also in politics, football and
boxing.
Meanings or perceptions Contd.
*“Marketing,” as described by economists, is the
exchange of value for money, while those of us who
want to differentiate it from trading see marketing as
“a business process of identifying, anticipating and
satisfying customer requirements at a profit in the
long term.” These days, it is not uncommon for
marketing writers to describe marketing as value
creation, value delivery and value promotion.
We should not forget what Prof. Theodore Levitt, a
former editor of Harvard Business Review, says about
marketing. According to him, “marketing is where the
customer is for, in the end, it is the customer that
decides the fate of every business”
Meanings or perceptions Contd.
Nor should we forget how the famous marketing
guru, Philip Kotler, defines marketing lately as
“the art of finding, developing and profiting from
opportunities.”
*
Now, what am I going to talk about? It is
“creating a gainful out-of-home advertising
enterprise
through
planned
customer
satisfaction.” Simply put, it is “planning for
success in outdoor advertising.” And my task
henceforth
is
to
highlight
some
approaches/concepts/strategies that can lead to
success in the outdoor advertising business.
2.Marketing approaches/concepts/strategies.
There may be no less than a hundred
strategies at the moment just as there are
no less than one hundred outdoor
advertising formats. But I want to restrict
myself to only twelve strategies to serve
as an appetizer in your quest for
profitable strategies for going about the
business of outdoor advertising.
WARNING: There is considerable overlap
among the strategies; some are really two
or three strategies combined.
2.1.
Product strategy
The emphasis in this strategy is on quality
of product. You go into the outdoor
business ensuring that your billboards or
other outdoor formats are of the best
quality, strategically positioned and
premium-priced. You are the Roll Royce or
Omega of outdoor. You have a few sites,
but they are beautifully produced,
beautifully
sited
and
beautifully
maintained. Your slogan as for Rolls Royce
or Omega, could be “Quality Pays.”
Profitwise, the product strategy yields big
profits for comparatively little effort.
2.2. Production strategy
Adherents of this strategy believe in quantity rather than
quality. They engage in mass production and own many sites
and charge no more than the going rate or market price. Their
sites have no added value but they are satisfied with a low
margin on each site which, when added up for all the sites,
becomes big. They are the equivalent of producers of fastmoving-consumer-goods in normal consumer marketing and try
to have sites in all the nooks and crannies of the country.
Because of the expansive territory they like to cover, their sites
are not always beautifully produced, beautifully sited and
beautifully maintained. These are the outdoor advertising
practitioners who cause the clusters of sites that attract the
wrath of people like former Governor Razaki of Lagos State
and, of course, our indomitable LASAA.
As far as profitability is concerned, they operate profitably but
the profit is usually not commensurate with the efforts
involved. Or so I think.
2.3. Selling strategy
This strategy is adopted by highly innovative outdoor
advertising practitioners. They go abroad to copy
outdoor formats that have never been used in the
country. Without conducting market research to find
out whether such sites will win with big advertisers
and big advertising agencies, they go ahead to
introduce them believing in the power of selling. Like
insurance marketing, their success or failure depends
on their power of selling. If it is the only product they
have to sell, it can be quite a risk to embrace the
selling strategy. Yes, failure can be costly but success
can be very profitable.
Quite a lot of those who believe in the selling strategy
in the outdoor advertising business have had their
fingers burnt and their products withdrawn. The few
whose products have gained high acceptability, are
however known to smile to their banks regularly.
2.4. Customer or market-oriented strategy
Believers in this strategy might be
copycats like their selling strategy
counterparts. But unlike the selling
strategy believers, they do product
testing or test marketing before they
introduce the copied formats from
abroad. Their risk of failure is thus
minimized and high profits assured.
2.5. Customer relationship strategy
A business can thrive well or stay profitable through good
customer relationship. That’s why many companies have
customer relations or client service executives to take care of
the needs of customers as well as treat them like kings.
Remember what Prof. Theodore Levitt of Harvard says about
the customer: (1) that he/she decides the fate of every
business and (2) that we should see ourselves not as producing
goods and services, but as buying customers and doing all such
things as will win us customers and make them stay loyal.
Do you know that one dissatisfied customer can make you lose
nine prospective customers? So, how can your business thrive
if you don’t know how to take care of your customers.
Therefore, it makes sense to see customer care or good
customer relationship as a winning strategy.
2.6.
USP strategy
USP strategy believers go for outdoor products that
have competitive advantage over others. Theirs is not
the run-of-the-mill product. Something must be
unique about it. It may be in the design, it may be in
the positioning or siting or it may be in the
maintenance. It must have a unique element which
makes it stand out of the crowd. Owners of billboards
with reflective backgrounds, owners of boards with
cut-outs and owners of boards with Day-Glo colours
belong to this category. How about owners of boards
with neon signs or those that are backlit? How about
owners of boards with scrolling messages or those
who own rotating boards? Do they belong?
The USP strategy outdoor practitioners are assured of
high profits as long as the competitive edge in their
billboards adds value to the advertising. Hence their
premium charges are usually acceptable.
2.7. Image or emotional selling strategy.
This strategy is advertising-driven. For
consumer-goods advertising, you can talk of
“Tony the tiger” for Kelloggs cornflakes. You
can also “Put a tiger in your tank” for Esso.
Above all, you can also have “Come to where
the flavour is – come to Marlboro country” for
Marlboro cigarettes. But can advertising give an
emotional flavour to outdoor billboards?
Maybe. How about describing your boards as.
“The products of Japanese technology” or
“products
manufactured
to
German
standards”? Can such taglines bring about
emotional attachment to billboards? I suppose
they can; it only has to be tried? Who is
prepared?
Image or emotional selling strategy. Contd.
Let me quickly note the successful selling in
the past of some billboards with the
illustration of a beautiful lady with red lips
featuring the copy, “I am available.” There
was also an outdoor company ad featuring
an Indian male and female kissing in an
open field. The copyline was – “We do it
outdoors” – an impossibility among Indians.
I believe both were instant sellers. How
come we don’t have emotionally-charged
ads for outdoor companies anymore? Is it
that we have run short of ideas or we no
longer believe in corporate advertising for
outdoor companies?
2.8.
Innovative strategy
Ex Africa semper aliquid novi” was a regular
latin copyline on the title page of books written
by a popular English novelist of the 1950s and
’60s – Sir H. Rider Haggard. I am talking of
“King’s Solomon’s Mines” and “She.” Translated
into English, the tagline means, “Out of AFRICA
always comes something new.” Whether they
borrow from abroad or locally design and
produce
them,
outdoor
advertising
practitioners known to always come up with
innovative billboards have something positive
going for them. Properly exploited, however,
that is a strategy that pays huge dividends. Is
anybody willing to try?
“
2.9
Positioning strategy
This is not “We are number 2 and
trying harder” for Avis-rent-a car”
type of ad. It is rather a firm belief
and practice of siting billboards only
in solus positions. It guarantees high
viewership. When it was in vogue,
solus siting attracted premium
pricing. And those who believed in it,
made good money from it.
2.10. Multi-product strategy
This strategy ensures that you are into many
forms of outdoor advertising – billboards of all
types, transportation, street furniture and
alternative outdoor advertising types such
stadium panels, petrol pump stickers, airport
trolleys, sky-writing, small flying aircraft banners
and lamppost banners. Adopting this strategy
assures that your company is always busy. It also
assures that you earn good revenue whichever
type of format is the high-revenue-earner-of-themoment. It is the antithesis of the mono-product
strategy and a high profit earner at all times.
2.11.
Going-public strategy
This strategy assures that you have easy capital for
growth and expansion from shareholders’ funds. It
also assures that you can take hard-decisions of not
paying dividends for a year or two even when you are
profitable just because of the promise of huge
dividends in future. At the very beginning of going
public, the original shareholders cart home large sums
from the sales revenue of their shares or part of their
shareholding or equity.
Besides, nothing drives profitability like the
expectation of higher dividends each year from your
thousands or millions of shareholders. The
managers/directors of such companies are always on
their toes exploring ways and means of growing the
business and earning higher profits year after year.
2.12. Backward integration strategy
Those in the outdoor advertising business
are not only those who own billboards;
those who construct billboards as well as
those who print or paint the large-format
posters posted on them are also included.
Are you only in the business of ownership
of billboards? If so, you are making money
from only one arm of the industry when
you can make money from the three
arms. Going for integration is very capitalintensive, you may say. But it is worth the
effort if you want to be big and profitable.
3.
Conclusion
By design rather than by accident, I have not
discussed some strategies. Event-exploitation
strategy, branding strategy, mergers and
acquisitions strategy are some of those
deliberately excluded from this discussion.
Why? To give you the opportunity of brainstorming after my lecture and coming up with
additional strategies.
However a fitting conclusion is to summarise
the winning strategies I have discussed and
reproduce some famous quotes which I regard
as germane to the topic.
Conclusion Contd.
By way of summary, you can win with (1)
product quality strategy (2) mass
production or national coverage strategy
(3) aggressive selling strategy (4)
customer/market-oriented strategy (5)
customer relationship strategy (6) USP
strategy (7) image or emotional selling
strategy (8) innovative strategy (9)
positioning strategy (10) multi-product
strategy (11) going public (plc) strategy
and (12) backward integration strategy.
Conclusion Contd.
As to some relevant quotes, please note:
(1)
Kotler’s 9-point credo of winning strategies:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
Win through higher product quality
Win through better service
Win through lower prices
Win through higher market share
Win through adaptation and customization
Win through product improvement
Win through product innovation
Win through entering high-growth markets.
Win through exceeding customer expectations.
Conclusion Contd.
(2) Statement
of
Professor
Michael Porter of Harvard:
“Clearly there is no one marketing
road to riches. Instead of relying
on one major differentiation or
thrust, a company needs to weave
its own unique tapestry of
marketing qualities and activities.
It is not enough to do most things
a little better than competitors.”
Conclusion Contd.
(3) An anonymous proverb:
“There are three kinds of companies:
those who make things happen; those
who watch things happen; and those
who wonder what has happened.”
Ladies and gentlemen, what kind of
company is yours?
THANKS