February 13, 2011

Penney / Search Fluff-Up: Is Marketing Bankrupt?

By now, you're read all about JCP and their little organic search fluff-up, as reported by the New York Times

In essence, JCP's search vendor participated in an epic series of black hat practices.  The NY Times article clearly states that JCP is distancing itself from the practices of the search vendor, SearchDex, firing the vendor last week, placing accountability squarely upon the vendor.

Allow me to draw a parallel.  Last night, I entered tasty treats in a dessert competition.  Folks paid $5 to sample treats, then were given the opportunity to vote for the treats they liked best.  The entry with the most votes would be declared the winner.

There were three ways to win the contest.  
  • One way was to have the best merchandise, to create something so delicious that voters had to vote for your product.
  • A second way was to present the merchandise in such a way that people were compelled to try the product ... fancy wrappers, spectacular containers, colorful toppings, that kind of thing.
  • A third way was to invite your friends and family at a cost of $5 per person, then ask friends and family to vote for the treats you made.
Guess which method won the contest?

The winner invited friends, friends voted as expected, and the entire team celebrated their victory while fifty other participants quietly left the building.

As business leaders, we're constantly being sold a seductive message.
  • Winning is easy.
  • You can win, now.
  • Nobody remembers losers.
  • Follow a simple set of best practices that anybody could employ.
  • Push the boundaries of "what is right".
  • Ask for forgiveness if you're caught.
  • Find ways to blame others when you are caught.
What's sad is that Penney didn't catch this, nor did Google.  An outsider caught the problem.
 
This story really isn't about JCP.  It's about us.  What the heck are we doing? 

Is Marketing Bankrupt?

4 comments:

  1. Anonymous12:58 PM

    The short answer is yes, and it’s not just marketing it’s the nature of business. JCP is taking a PR hit today, but the vast majority of their customers will never hear about this story, and even if they did, should they care? It’s not like JCP broke any laws, exposed customer data or deceived their customers in any way. Any PR hit will be short lived.

    They will also take a search engine ranking hit, but after some changes Google will restore the trust in their site. I’d be an interesting analysis of the sales gained from the unapproved practices compared to the sales lost by being exposed.

    I would argue morally or ethically JCP's behavior was a lot less deceptive than many other big successful companies. Think about how many businesses operate on recurring subscriptions where their customers get no use from their products or more likely do not even remember that they are being charged. Some of the practices in the online marketing and affiliate space are much worse than crossing a line that Google has arbitrarily set.

    Google could enforce their rules more strictly, but they are scared of the bad PR this would bring on themselves.

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  2. Early in the industrial revolution, owners realized that we were over-producing goods. The two options were:
    1. Reduce work hours
    2. Keep work hours artificially high by stimulating artificial demand

    #2 was the chosen route, as it ensured greater profits for owners.

    The past 100 years have seen an unprecedented growth in disposable income and, accompanying that, artificial demand creation to soak up the extra supply. The problem isn't production capacity; economic surplus is a wonderful thing. The problem is that we've taught consumers to disconnect completely from the impact of their purchasing decisions.

    Diamonds are marketed without regard to conflict overseas. Fuel is consumed without regard for lives lost in warfare. Studies show 90% of childrens' food products marketed through cartoons are, essentially, junk food.

    On the other end of the spectrum, business leaders glorify profit creation with little regard for the impact behind that profit. Nike tracks labor costs to the thousandth of the penny and marks up labor costs as much as possible. Apple's factories have notoriously harsh working conditions and high suicide rates. Planned obsolescence creates excess environmental waste for the sake of greater profits. A nation kicked out of homes is chalked up to free market corrections, and too big to fail is used to privatize gains and socialize losses (through taxation).

    PR glosses over all of these difficulties to keep the gears turning.

    The problem isn't just in consumers, or business owners, or legislators, or bankers. The problem is that all of us need to be more mindful in our approach to life. Often times, the greatest profits come with the least humanity. We need to reconnect economics with common-sense morality, and we can all start by making little improvements to our daily purchasing decisions.

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  3. Marketing's not bankrupt.

    Penny's still had to use marketing to convert those visitors to sales.

    They played the game and got caught.

    Whether we're paying for links or begging for links we're still gaming the system. We shouldn't hate Penny's or anyone else for playing the game.

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  4. We are trying to help businesses maximize the bang for the buck they spend in marketing and advertising. We help them make educated decisions.

    Did SearchDex advise JC Penney as to what they were doing? Or, was JC Penney in a position to understand if/when SearchDex did show them what they were doing? I don't know.

    It does touch upon the fundamental idea of creating value that's sustainable. That's only what stays around for long term.

    I wouldn't say marketing has gone bankrupt. Not yet.

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