Friday, December 12, 2008

Marketing What You Are, Not What You Are Not

Paul Moran’s article, where he said that we are not NASCAR, or football, or other sports; that we are a gambling game and we should sell it as such, has sparked some chatter. It is kind of fun actually. Since very few are actually speaking of racing, at least someone is.

In Jack Trout’s 22 Immutable Laws of Marketing he outlined rules that have stood the test of time. One of them describes racing perfectly: "Success often leads to arrogance, and arrogance to failure." We had success, and we were arrogant. Unfortunately our success was based on a fallacy. We were a monopoly and people flocked to the track to gamble, not because they were die-hard fans. It was the only place to gamble. If your city mandates that only one restaurant is allowed in town, and it has to serve Iranian food, we would never conclude that the food was good and the population loves Iranian food. But somehow we came to these conclusions with racing. It was a huge mistake.

This was, in my opinion, the catalyst for our failure in marketing racing for the last 25 years. We were dead before we spent a cent. In the words of Mr. Trout again - if you do not know who you are, you are doomed to fail at marketing your product.

Gibson Carothers, a marketing executive and bettor said it perfectly: "At BBDO Advertising, an agency where I spent some time, identifying a product's prime prospect is Step No. 1. That may sound obvious, but it's amazing how many advertisers confuse their real market with the market they would like to have. In all my years in advertising, I can't recall a client [racing] who was so conflicted about its own product."

We would like to get new "fans". We want them to come to the track, sit for five hours and come back for the entertainment. This is a mistake. It is not happening and not going to happen. Those days are over. So what should we do? Balloons, how about a rock band, what about free giveaways? They never work long-term and have not worked for thirty years.

We must stop trying to gain fans by advertising what we are not, or by hoodwinking our prospects. We must start marketing what we are - a gambling game. As Mr. Carothers ably puts it: "So, the first big step for racing is to agree that its product is a game, and that it should be marketed as a game. Not as a sport. Not as entertainment. Forget using promotions unrelated to the game. Forget adding shopping malls. Forget performances by the Laker Girls. Those are bad props. You need people coming to the track for the right reason, to play the game."

How many times have you seen a poker site offer you a shirt for signing up? Never. They sell the game. Their game. They sell that you can win at that game with some luck and some skill. And that the game is fun and affordable.

They had something else on their side of course, and it had nothing to do with interruption marketing, or other 20th century marketing. They were built for the Internet. Web 2.0 is building an application, product or web design that takes advantage of what the world wide web is. It is building something for the market - not what the company may want to do, but what the market tells them they want them to do. The Internet is not hard to understand, and is not hard to understand what works and what does not. It is interactive, it is always on, it is deflationary, and the product (if it is 2.0) markets itself:

"Remember that old stuffed bear I had? I just sold it on Ebay for $25!"

"Hey, look at me, join me on Facebook!"

"Do you want to play a game with me online?"

"Hey, check this out, I am playing on a poker table right now with five others all from different countries, come play."

Poker was viral, interactive and no marketing was needed. If there was no pocket cam, or Phil Hellmuth it still would have grown because it was built to grow. ESPN's coverage of the WSOP was not because they had a bright idea, it was because poker was already a force.

Other large companies were letting the product sell itself, and positioning themselves properly, so it was no surprise poker grew. In 2001, Amazon CEO Jeff Bezos told his board that they were suspending all marketing spending and offering lower prices and free shipping. The lower prices and free shipping sold the product - in fact, in less than one year Amazon registered its first non-holiday quarter of profit. In 2008 and beyond the product is your marketing.

I have had the pleasure to consult with hundreds of web companies. We get requests to take the accounts for many others. We turn down most of them because if they are not set up correctly, or are not in a position to grow with marketing help, we believe that they will be wasting their money with us. We tell them to try something else, or try another avenue to grow. We would never have grown our company from a start-up if we took people's money, made false promises and have them fail. If racing came to me tomorrow I would tell them they are a potential client. Racing, in my opinion, with some investment and repositioning, could thrive. It is a 19th century game that is built fundamentally for the Internet; and with a 21st century race goer in the live setting, too. I think it possesses the innate characteristics to grow.

All we need is racing to understand who they are. And to stop selling themselves like they did when they were the only game in town.

7 comments:

Anonymous said...

Just got done looking at Flamboro, Windsor and Cal-Expo. The handle at Flamboro and Windsor was terrible. At Cal-Expo it was just so-so. If I was to come up with a business plan for Windsor and Flamboro I would suggest getting rid of the racing and use the purse money to hire world class chefs and put out 1st class meals for maybe $5 and pack the place and hope there is some trickle over to the slots. Grow something.
RG

Pull the Pocket said...

RG,

Good food at Windsor? That would be strange :)

Windsor and Flammy race about 325 dates between them. I think everyone agrees that it is tough to market that many days with that type of quality of stock.

Allan said...

I think you are missing one difference betwen racing and other activities such as poker or even casinos; it is they report to racing commissions.

Racing commissions control most facets of racing (assigning dates, licencing of participants, the types of bets you may offer; simulcasting agreements charity days, etc.). Poker and other gambling products are not subjected to as much regulation.

I am not suggesting no regulation; there is still a need for racing commissions (assign dates and deal with licensing and policing the races). However, until they are allowed free reign, it is hard for them to market themselves.

Winston...not really said...

The problem, as I see it, lies not so much with the marketing-which is terrible when it exists-but with the dysfunctional and schizophrenic structure of the game.

The NTRA could come to you tomorrow and say, "PtP, help us out. We are in your hands."

The problem would be that they have too many constituents to answer to. Nobody is willing to pull in the same direction.

It's just stupid and sad and stupid. It's also sad and stupid.

Pull the Pocket said...

Allan,

Agree.

You are a harness guy. Why when we go to g'vt we only go looking for cash? Why don't we go looking for regulation change to help us? we have a monopoly on the web, times have changed - there are simply not enough hours in a day to be patrons at 84 racetracks four days a week. Why have we not made a strategy to take advantage of societal changes with gvt?

WNR,

Agree. The NTRA (I think) is in good hands (I do hope they market us as a game, of course, but they have a good firm from what I can tell) - but as we saw from the headlines "Churchill pulling out of NTRA". Who's next?

What a mess.

We need a vision, and everyone to follow that vision. The NFL did that in 1960. What in the hell are we waiting for?

dana said...

I'm starting to become convinced, as WNR alluded, that the root problem is the us vs. them mentality in racing. It's so entrenched in every facet of the game. I hope the new NTRA alliance can start the long journey to build an "alliance" across areas of interest.

Pull the Pocket said...

Most people who have followed the business talk about how fractured it is. Take the Cummings report (linked at horseplayersassociation.com if you are interested). Paid for by racing to make recommendations. As Jeff Platt said in Bloodhorse - they paid for it, they read it, then they chucked it in the trash.

Seth Godin had a blog post recently about selling things and the ease, or difficulty in getting things done. He said that if it does not fit a worldview, it is impossible to sell. I think that is why we do not change and the status-quo rules the roost - our worldview has never been forced to change.