Timothy A. Koonce: Why do so many big companies lack marketing basics?

marketing basics

By Mark Schaefer

A short time ago, Verizon quietly folded its big-time venture into social content, a platform they started in 2015 called Go90.

The telecommunications company wanted to become a media company, and it bet big bucks to make it happen. With younger video viewers increasingly flocking to YouTube and social platforms instead of linear TV, the time was ripe for a new video platform competitor, especially one that could offer great content from the digital video creators and media companies that young people were already spending time with on their mobile screens.

The company acquired media companies and spent more than a billion dollars on original content. Less than three years later, it’s gone.

How could a strategic vision this big fall so far and so fast? This is a great lesson in a lack of marketing basics I see at many large companies …

Show me the data

According to a Digiday article, Go90 production partners said Verizon executives were so consumed with the idea of providing a large quantity of high-quality content, that they never showed any marketing focus. There was no indication that Verizon actually knew the audience that they were trying to reach. Meanwhile, YouTube and social platforms such as Instagram and Snapchat drew in younger users with formats and products that made sense for mobile screens.

“They thought people were going to come [to Go90] because they want to turn their phones and spend time watching a ton of videos,” said one longtime Go90 production partner. “But they haven’t asked if people actually want that. Where’s the market research that says this is worth spending hundreds of millions of dollars or a billion dollars — all on an experiment. It felt like no one ever did any research. It felt like they were creating a solution for a problem that doesn’t exist.”

The Skype we never needed

It’s hard to believe that a company would make a billion-dollar bet without research, and yet we see this sort of thing happening all the time.

In 2010, Cisco introduced a complicated $599 video system called Umi that turned your home TV into … well, basically Skype. The user interface was terrible. A client bought one for me to use and we returned it after six months. No mere mortal could operate the thing. One analyst said, “it was as if Umi was determined to repeat every mistake made by the videoconferencing industry over the last decade.”

Another analyst said it was a product without a market.

And yet, with great fanfare the company launched the product with a multi-million-dollar ad campaign. Within two years it was dead.

Any reasonable business person could see this was a loser from the beginning. Why would such a prestigious company make such an obvious mistake? “The company did no market research,” a Cisco insider told me. “None. They rarely do.”

Google Glass was half empty

Probably no tech product introduction in the last 20 years angered me more than Google Glass.

The company introduced their augmented reality headset with a PR blitz and charged customers $1,500 for a product they knew sucked. Even worse, they built up a hopeful community of “Explorers” with the promise of breath-taking innovation and rapid development of applications.

Google pulled the plug two years and 500,000 units later. It listed reasons for ending the program that could have been determined in a 48-hour consumer test — low battery life, the product got hot after 20 minutes of use, etc. They charged their best customers $1,500 to be test market guinea pigs. Needlessly.

I had a chance to meet one of the Glass marketing managers and he told me “Google doesn’t know marketing, we just don’t”

Back to marketing basics

There has been no area of business that has changed faster that marketing. And yet, many marketing basics stay the same. We need to create value among a consumer group big enough to matter, and it needs to start with basic research.

Not every product is going to be a hit but there’s no excuse creating an embarrassing failure due to a lack of simple diligence.

In all three examples, the marketing debacles could have been avoided with a month of decent market research. The “fail fast” Silicon Valley mentality might work on low-level software developments, but when it comes to national roll-outs of high profile new products, we need to stick to the basics, and that means starting with research.

Keynote speaker Mark Schaefer Mark Schaefer is the chief blogger for this site, executive director of Schaefer Marketing Solutions, and the author of several best-selling digital marketing books. He is an acclaimed keynote speaker, college educator, and business consultant. The Marketing Companion podcast is among the top business podcasts in the world. Contact Mark to have him speak to your company event or conference soon.