Is the Blog Replacing the Tombstone? 

(Why Would Investment Bankers Embrace Social Media During a Downturn?)

By Brad Fleisher, Managing Director, Focus Enterprises

The recession has hit nearly all industries across the economy and investment banking, leading the pack, has certainly not escaped the grief. What used to be the largest and most profitable group of investment banks on Wall Street, commonly referred to as the bulge bracket,  is now the busted bracket, consisting of just two bank holding companies - Goldman Sachs and Morgan Stanley.

Although the consensus among mainstream economists is that we’re in the trough and will see positive growth in Q1-2009, albeit probably mild, M&A (a lagging indicator)  is still weak because of ongoing discrepancies in middle market valuations Buyers are fishing for distressed deals, and sellers still have the misconception that an offer should start at 8x EBITDA (and be increased for average performance) rather than 5x, which is the long-term, broad economy historical average.

Taking a page from Rahm Emanuel’s book, and not wanting to waste a good crisis, a few partners and I took advantage of the slow down to re-think and execute a new business strategy. We’re seeking to capitalize on three long term trends in the economy.

Social Media Marketing v. Traditional Media Marketing. While there is still no more effective way to reach 90 million potential customers in 30 seconds than through a Super Bowl advertisement, there is no better way to communicate an esoteric point on intellectual property valuation to 140 professionals who are seeking this information than through LinkedIn, Facebook or Twitter.  You don’t have to “tweet” every hour to take advantage of social networks. And the trend has just begun. Social networks are becoming platforms to distribute customized services to highly fragmented communities rather than just a vehicle for information exchange.

Applying these trends to investment banking, the hypothesis for our practice group at Focus is that we can build our brand and grow our business quicker by leveraging the Internet and social media than through placing traditional tombstone advertisements in industry magazines and attending industry and networking meetings.

That’s why, earlier this year we launched Intangible Insights (www.intangibleinsights.com), which is our online Community of Practice where we blog, podcast, conduct surveys, publish research, and otherwise communicate with and expand our target market.  We’re even discussing strategies for streaming video to micro-niche audiences through a branded Internet TV channel, which may be a number of years out, but is certainly on its way.

Intangible v. Tangible Assets. There currently is an enthusiastic debate within the Intangible Asset professional community whether intangible assets compose “upwards of 80% of listed companies’ values” (according to a Brookings Institute report), or just under 50%.  For us, the point is this: Intangible property accounts for a significant amount of a company’s valuation.

This is a long term trend, if not a permanent change,that will accelerate in the post-recession economy as developing countries use labor advantages and decreasing communication costs to offshore commoditized tasks, both manufacturing and informational.  In order to compete, the U.S. will have to enhance its intangible asset capabilities through R&D, workforce productivity, distribution networks, and stretch its tangible resources, which will further diminish the reliance and value of hard assets

Intangible assets compose the largest share of value, by far, in Internet-reliant companies. Of course, there is significant value in the intellectual property assets of the knowledge economy company — the patents, copyrights trademarks, and trade secrets — but the real value resides at the next layer, in the methodologies that convert the intangible assets into revenue — culturally-ingrained process to attract and retain talent, strategic measurement and execution processes, brands, databases, social networks. Our group is working on a valuation rating system for these intangible assets so our clients can better understand the intrinsic value of their company and their acquisition targets. Just identifying and analyzing these assets, not to mention exploiting them, will help our clients with post-transaction integration plans or accelerated growth, which is the arbiter of a successful corporate transaction.

Generalist vs. Specialist.  Since its inception in 1982, FOCUS Bankers has been a middle market, generalist investment bank and has long debated the generalist v. specialist strategy. There are benefits and drawbacks to each, but it’s difficult to toe the middle line.  During my five year tenure at the firm, I’ve worked on deals in industries ranging from highly-engineered manufactured products, transportation and logistics, and electronic parts distribution to the information industries, including software, Internet, IT, and digital media, which is where most of my career experience has been.

The recession gave us the opportunity to transition into one carefully defined market: the Internet-Reliant Industry with a focus on intangible assets, and start a practice group within the firm. The key was to define the space large enough to have an active and growing marketplace, but small enough to have end-to-end domain expertise. That it’s highly dynamic, indispensable to information industries, full of cutting-edge growth opportunities, and just a lot of fun, doesn’t hurt our commitment.

The silver lining in this recession for us is that we took the opportunity for introspection and execution. Our strategy is fluid, but our practice group has staked its future on these trends, which we believe will shape future markets and US competitiveness.

About Brad Fleisher

Brad Fleisher is a Managing Director at FOCUS Investment Banking in Washington, DC and publisher of Intangible Insights. Brad is an experienced investment banker, entrepreneur and attorney with over 15 years M&A, corporate finance, and business development and advisory experience in the Internet, software & information technology, media, and education industries. Contact Brad at Brad.Fleisher@focusbankers.com.

London, Ink is proud to sponsor an exciting event on March 27 - 28: Government 2.0 Camp (http://gov20camp.eventbrite.com/).  Here’s a brief description of the event and the “camp” concept:

What is Government 2.0 Camp?

Government 2.0 Camp is the unconference about using social technologies (aka web 2.0/social media tools) to create a more effective, efficient and collaborative U.S. government on all levels (local, state and federal).

Government 2.0 Camp will bring together the leading thinkers from government, academia and industry to share Government 2.0 initiatives that are already in process and collaborate about Government 2.0 ideas that are currently just visions.

There is also a wiki for the event where attendees and other can discuss topics and other themes: http://www.barcamp.org/Government20Camp

Why is London, Ink sponsoring this event?

1. I’m very dissatisfied–to the point of taking action–with the lack of efficiency and abundance of waste in government and am a big believer that new Web technologies, Web 2.0 applications and social media/networking applications can help.  Trimming the Federal budget by a quarter of one percent over the next five years could pay for a lot of fixes (long-term) to our educational system or seed the nascent but promising field of alternative energy.
2. I fully support transparency in government, particularly government spending–it’s our money after all–and again believe that Web 2.0 technologies and social media/networking apps can enable this.
3. I believe the Gov 2.0 arena will yield good business opportunities for London, Ink, long-term.
4. Sounds like a great event!  (I like the participatory BarCamp approach.)

Hope to see you there.

Great info from destinationCRM.com and supports why companies should consider solutions like e.SSENTIALS from London, Ink, a fixed-price bundle of online/social marketing programs.  See e.ssentials.net for more info.

Given the state of the economy, Lamba writes that social networking is a relatively low cost solution that could help in fostering, “steady communication with existing partners, and clients as well as incubating new relationships” — a function both desired by consumers networking with friends and with employees in the workplace. The aforementioned IDC social networking survey, in fact, indicates that the majority of social networking users list communication as their number one reason for usage of such sites.

http://www.destinationcrm.com/Articles/ReadArticle.aspx?ArticleID=51944

Announcing e.SSENTIALS, from London, Ink: A new, fixed-price online marketing program including development of five essential initiatives: marketing database, e-newsletter, Google AdWords, search engine optimization & social marketing presence.

Potomac, MD, December 11, 2008-London, Ink, (www.londonink.com) a full-service, on-demand marketing and communications firm, today launched e.SSENTIALS, a fixed-price program of online marketing services for small- and mid-size businesses and non-profit organizations.

Designed to meet the budgeting predictability requirements of small- and mid-size organizations, the London, Ink e.SSENTIALS program includes the development and execution of five essential online marketing deliverables for one fixed price.

The London, Ink e.SSENTIALS Program Includes:

• Marketing Database: Compilation of an organization’s key contacts, including prospective, nurture (long-term), and existing customers/clients and partners. Regularly communicating to a house list can be the most cost-effective way to for an organization to maintain or increase mindshare-a critical step towards being “short-listed” when prospects are ready to buy.
• E-Newsletter: Development of a web-based newsletter template that will be emailed to one or more segments of the Marketing Database, plus execution of one prototype e-newsletter.
• Google AdWords/Analytics Test: Development of a test of the Google AdWords pay-per-click online advertising program, the world’s leading online advertising platform.
• Web Site Search Engine Optimization Audit: Assessment of content, page titles and other factors for search engine “friendliness” and recommendations for immediate enhancements.
• Introductory Social Marketing Program: Development and implementation of a program that leverages free distribution of an organization’s message, via at least one of the following tactics: company/product blog or leading social networking sites.

“Running any business today without online marketing tools such as database marketing, search engine optimization, pay-per-click advertising and basic social marketing, is like making an omelet without eggs,” said London, Ink president, Bob London.  “These tools are lower cost and easier to measure than traditional marketing tactics, but too often they fall off the priority list due to a lack of resources and expertise to properly plan, implement and maintain them.”

“Now with e.SSENTIALS, London, Ink provides small- and mid-size organizations with a practical, cost-effective and low-risk way to implement these fundamental programs as they enter 2009.”

What about Content?

The e.SSENTIALS program leverages an organization’s existing content, such as news releases, white papers, articles and other subject matter or thought leadership content.  New or additional content can be created for an additional fee.

How is the e.SSENTIALS Program Priced?

The fixed-price, all-inclusive cost of the London, Ink e.SSENTIALS program is based on the size of the organization by annual revenue.  Please contact London, Ink at essentials@londonink.com or 240 994 7644 for more details.  The cost of the program is billed monthly in five equal amounts.

“Teaching Organizations to Fish”

In addition to the development and execution of the above programs, for an additional fee London, Ink will provide training for managers and staff on how to continue to leverage and maximize the above tools.

Additional details are available at e.ssentials.net.  To sign up for this program or to learn more, please contact Bob London, president of London, Ink at essentials@londonink.com or 240.994.7644.

About London, Ink

London, Ink is a full-service, on-demand marketing and communications firm based in the Washington, DC metro area, that develops and implements marketing and communications programs for mid-size and growing businesses and non-profit organizations.

Bob London, president of London, Ink, serves as a Virtual VP of Marketing for organizations that need hands-on, interim leadership in marketing strategy, planning and execution.  For more on London, Ink please visit www.londonink.com or contact Bob London at 240 994 7644 or essentials@londonink.com.

Question on LinkedIn Answers: “What should a B2B marketing department do to improve the results it’s generating?”

http://www.linkedin.com/answers?viewQuestion=&questionID=336562&asker ID=9584467&browseIdx=0&sik=&report.success=vfLh7ZiQxNtkwQoO3efsNN1zA gQ8WXmCT24lKBBmlHq_pfcN7JydQUoVP_zdv4b8

Response from Bob London:

Great question–which begs several precursors: (a) what are the goals? (b) how are “results” defined? (c) what measurement tools are in place today?

Probably safe to assume a B2B marketing department is charged with generating demand (leads) and in many cases educating/priming the market while positioning the company as a thought leader.

Here are some ways in which a B2B marketing department can improve results and not get lost in the characterization that “we’re not sure what marketing does relative to the business.”

*Philosophical/Management*

• Commit to the challenge of contributing ROI for the overall marketing budget–so that the department pays for itself at least 15 - 20 times over each year.
• Exert internal marketing leadership–take on the business’s longstanding challenges/dilemmas, whether it’s “why do we churn customers?” or “why don’t we know which marketing programs work and which don’t? or “where is our most profitable 3-year growth going to come from?”
• Improve accountability–measure everything that moves (and everything that doesn’t for that matter). Every weekly update should include a review of 30 days previous results and forward projections. Integrate all systems (CRM, marketing automation, accounting) that will provide an end to end view of the data.
• Assume a budget of zero (regardless of how uncomfortable this may feel)–then implement programs in order of priority and results. This will force you to orient the marketing budget and department around the company’s goals.
• Listen to the rest of the organization–don’t bump heads with it.

*Tactical Suggestions*

• Devote/redirect as much budget as possible towards lower cost, online lead gen and thought leadership initiatives. For each business challenge, ask the question: how can we address this via online strategies and channels vs. traditional. This will make the entire budget work harder on a dollar for dollar basis since it will be easier to track results.
• Every B2B marketer should use Google AdWords; at least do a significant test using .05% of your total annual marketing budget. Do not run a generic ad pointing to your home page; rather offer a white paper or other valuable subject matter content, and point the ad to a specific landing page dedicated to that offer.
• Optimize your site content so that it shows up in targeted searches for whatever you are marketing.
• Make sure you are using some form of prospecting/hunting to bridge the gap between lead gen programs and sales. Prospecting (i.e. outsourced or in-house telemarketing) serves as a lower cost way to qualify leads as well as gather market data on prospect hot buttons and what competitors/ substitutes/alternatives your prospects are using.
• Implement a simple but formal prospect nurture process whereby you treat every inbound inquiry as a long-term suspect and stay in touch via e-newsletters, white paper offers and webinars.
• Have an intern or staffer collect all stray business cards that have not been entered into the marketing database and enter them as part of your nurture process.
• Have an intern or staffer mine LinkedIn for prospect names using company names and job titles. Relevant contacts should be fed into an outbound teleprospecting process to qualify; interested contacts should then be added to the nurture process.
• Add a “living” FAQ section to your site and regularly publish your answers to client/customer questions. Your answers will invariably include relevant keywords that can bolster your natural/organic page rankings on Google, et al. Also, we all tend to get the same questions from multiple people, so rather than rewriting the answer each time or searching your hard drive, just send the link to your blog/site where your answer already resides.

Hope this proves helpful!

Best regards,
- Bob London

Bob London
President
London, Ink
On Target. On Site. On Demand.
www.londonink.com

Anyone who is lonely or bored enough enough to notice would have seen that, a few months ago, my LinkedIn contacts recently went from over 300 to below 270.

Was I suddenly abandoned by almost three dozen contacts? No, I did something we should all do 2x per year: LinkedIn Pruning. (Note: I’ve since climbed back over my original “unpruned” total.)

(UPDATED–See this LinkedIn Answers page for feedback from others on this topic: http://www.linkedin.com/answers/using-linkedIn/ULI/330103-131735)

As a “Virtual VP of Marketing” (a/k/a outsourced CMO or, if you prefer, “marketing consultant”) for growing companies, my policy is to use LinkedIn and Facebook for “knowing” not for “showing.” My criteria for adding/keeping someone on my list is that I know them well enough to reach out to them with a question, introduction or even a favor. With rare exceptions, I do not put people on my list simply because they are well known or have 500+ contacts themselves. (See a tongue in cheek riff on “professional networkers” by clicking the graphic below.)

So from time to time I look at my LinkedIn list specifically with the goal of pruning those with whom I have lost touch or with whom relationships simply did not develop over time as expected.

Try it, it’s quite refreshing!

(By the way I unintentionally coined the term pruning to apply to the act of occasionally trimming one’s social networks. Commenting on a recent Jeff Pulver note about the limits of Facebook friend lists, people used a variation of the word “pruning” eight times after I used it. See http://www.facebook.com/note.php?note_id=25322506668&)