WARNING: Rant ahead. Read at your own risk. Don’t complain to me later.
This post is about marketing, corporate transparency, and yes, pink slips.
Marketing Dresses to Kill
Good marketing creates a positive impression (desire) in the minds of consumers/clients/ advertisers. But it also has an effect on the competition. Marketing is, in part, an art of war to defeat your competition– “See, we’re better than you and we’ll beat you”. Done well, it keeps them on the defensive, deflates their corporate ego and incites self doubt in their workers, perhaps to the point of jumping ship. Everyone wants to play on a winning team. Good marketing brags that you’ve got the winning team. My brand can beat up your brand (and our stock options will pay off handsomely).
Marketing is about perception– leading folks to believe you have the secret sauce to make them money, solve their problems, ease their pain or make them happy. The goal is to get people to come running to check it out (and tell their friends). Marketing dresses to sell– like the woman sitting at the bar with the tight sweater and glossy lipstick (no honey, I’m not talking about a real woman– it’s only a simile). Now, perception is not necessarily deception. It is a promise, a promise to be fulfilled. But without good vibes to bring the folks, there can be no fulfillment. (no dear, I’m not talking about the woman at the bar)
Transparency May Not Be Pretty in Pink
Unlike marketing, transparency is about exposing information, even if negative, and getting behind the perception to the truth (the perception may or may not be the truth). It is the magician explaining his trick. It is the Wizard of Oz peeling back his curtain to show he is merely a man. Some Web 2.0 companies have joined the church of transparency in the belief it is good for business to bear your corporate soul. To a point, I agree.
But is transparency always good marketing? Will it fill the seats? Some folks with book contracts have told us so, but I remain skeptical. I submit transparency is not always good marketing. Transparency can, in fact, be bad for business– bad for your customers, bad for advertisers, bad for your brand. Why? For one reason, transparency, by its nature, requires the disclosure of negative information. For another, it creates the problem of degree– are we talking fig leaves or the Full Monty? And lastly, who decides how much the public gets to see? Why, the company, of course.
I submit the case of the Wizard of Z Rich Barton’s recent announcement that Zillow was laying off 25% of its dedicated workforce. To many, Barton’s public apology was a transparent tour de force (much like a Kelman confession). But the way I saw it– Rich Barton went front and center and pulled down his pants to show the world the holes in his underwear (yes, figuratively speaking, I’m sure he has nice underwear). I will pontificate.
Transparency and The Doors of Perception
Two weeks after Barton’s blog post, my Google Alert on Zillow was still bringing me citations on the Zillow layoff. Having your highly visible CEO announce a big layoff in the Web 2.0 world is a lot different than it was in the good old Web 1.0 days– the growth of social media insures his message will ripple through the net pond for awhile. And the longer the ripple, the more opportunity for folks to (mis)interpret reality. The message gets distorted, like in that game where messages are delivered ear to ear– the more ears, the more distortion. In effect, a good intentioned transparent act can create a misperception of reality. This recent tweet is an example of what I mean:
I can’t help but wonder if Barton, under his apparently perpetual transparency trance, made an awful marketing blunder by publicly announcing to the world wide web Zillow’s waylaying 25% of its smart talented team.
IMO, RB’s pink slippage may have singlehandedly diminished the Zillow brand in the eyes of real estate professionals (87 million bucks, 1/4 of the team let go? Maybe this guy’s 2 years real estate experience is showing), made for a more difficult ad sell to advertisers (Let me tell you folks, the economy will suck for a long time & we just let go a bunch of our wiz kids– wanna buy an ad?), and rattled current employee morale (Is this a sinking ship? Maybe I can get a job at T rulia, they’re hiring). Color me old school but public airing of your laundry is rarely a good thing, unless we are talking real pink slips.
But I think the greatest harm is in the perception he gave to Zillow’s competition– we’re vulnerable. Did you notice that shortly after Barton’s Blunder, T rulia announced it was doing just dandy and NOT laying off?
In fact, T rulia referenced it in its recent email newsletter :
As a company we have been operating lean from the start and have targeted the $10B US real estate advertising spend that is mostly spent offline. Based on our current revenues, growth rates and operating costs, we are well financed for many, many years to come. While some real estate technology companies have recently announced layoffs, we see this as a time to increase our market share and help consumers, advertisers and our industry partners when they need us most. (emphasis added)
It’s like in boxing when you show you’re hurt– your opponent gets renewed vigor and confidence and comes in for the kill– and you end up on the mat. Just my opinion folks.
Spinning Transparency:
Of course, the reason Barton went public with the layoff was to spin the news FIRST and play the sympathy card. Mea culpa marketing, I call it. If this transparency spin works, it says a lot about the quality to social commentary– that it can be successfully manipulated. Eventually, folks will see through this too.
The Bottom Line of Transparency
Before this post gets misinterpreted due to my inartful rendering at 2 a.m and 2 glasses of Chianti, let me make it clear that the reason I believe corporate transparency like Barton’s is ultimately ineffectual and, in fact, counterproductive, is because it is not total transparency or, should I say, it lacks transparency where it counts most– the bottom line.
If Barton & Co’s decision is not based on decreasing revenue (he says revenue is growing “at a rapid pace”), why hasn’t Zillow published their financials? Heck, a simple graph showing this “rapid pace” revenue growth would suffice. Otherwise, folks like me are gonna doubt it.
Consider that Zillow is more than happy to disclose visitor counts (5.4 million), traffic growth (42%) and listings (over 3 million) but has remained tight-lipped on actual losses and revenue growth. Show me some bottom line transparency, Rich. It’s ironic–Zillow will tell you what your house is worth — but not theirs. If you’re going to play the transparency game, be prepared for strip poker— you just can’t hide behind a pink slip.
We can, of course, argue …. well, no one wants total transparency. OK, but I’d say a financial statement is Transparency’s Holy Grail. Anyone in the real estate business knows financials are key– otherwise you’re justing taking folks on guided house tours. If a real estate agent can reasonably ask a buyer to show they’re qualified to buy, why can’t they expect it of Big Z? Whatcha say Mr. B? Can you show us your bottom… line?
Post Rant
Big Z’s mea culpa provides a perfect marketing opportunity for the giddy T rulians. If, indeed, they are on the brink of black ink, they can put Big Z on its back by going public with its numbers. Do you have the knockout punch Pete or are you covering some holes in your drawers?
End of rant.
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Zillow Executive Shuffles Off to Amazon
Technorati Tags: zillow , transparency, real estate marketing
