We had an interesting article get submitted to our site that is pushing for a movement to stop unsolicited delivery of Yellow Pages. I have blogged a couple of times over the last year or two making the point that the Yellow Pages of the 21^st century are the Search Engines. This post showed how this is the year when searches on local businesses were done more via the Search Engines than even print yellow pages — Marketing experts: “Reallocate at least 50% of your Yellow Pages budget”

I also posted one where the end of Yellow Pages was predicted -  Bill Gates on local advertising: Yellow Pages gone in 5 years. Despite being well aware of these stats, I was stunned with one datapoint from the 3^rd party research we commissioned on our audience. That is, with the SunValleyOnline audience which makes up a healthy chunk of the valley’s populace plus many 2^nd homeowners they stated that huge majority of them didn’t use the print yellow pages at all.

The reality is that the yellow pages industry is facing the most formidable competition possible. If it weren’t enough that Google was out to eat their lunch but Yahoo and Microsoft are investing massive sums of money to compete with Google. The yellow pages industry is simply collateral damage. The convenience and effectiveness of the search engines is improving dramatically. Call 800-GOOG411 (800-466-4411) and check it out yourself. It’s free and will connect you to the business and/or text message the details including a map of the businesses location. As phones such as the iPhone become ubiquitous and have GPS built in, this only accelerates the trend. I hardly know a person over 15 who doesn’t have a mobile phone on them at all times.

The local ordinances this movement is recommending (see article link above) sound pretty onerous. I wonder if they’ve gotten any traction. Has anyone heard about this movement and know if they are having any success? I have a hard time seeing too many cities taking this on right now with the other challenges facing cities but maybe I’m wrong. What do you think is the yellow pages future? I’m curious what business owners think.

Update: I was recently preparing for a presentation on the growth of the Internet as an ad medium and came across this. Even though it is over 2 years old, it still has some stunning data worth revisiting such as the data about how much of Google’s use was searching prior to purchasing during the holidays. I would imagine the growth of the Internet has continued over the last 2 years making the #’s below even more impactful. With the slowdown in the economy, ad budgets usually constrict. Thus far, the reports have been that the move from offline to online media has accelerated as people are seeking more accountable places to put their ad budgets and as a consequence, online ad growth has continued as the excerpt from a UBS analyst released yesterday mentioned.

From MediaPost: And although ad budget cuts will affect both online and offline spending through 2009, “we think that the continuing shift to online will be somewhat accelerated by the macro weakness,” wrote Shachter. 

Original post follows:

I just returned from an advertising conference that represented a major portion of all advertising spent in our country. Even as one who has been in the Internet media business since 1994, I was still floored by some of these stats. If you have a business that advertises, you’ll find the following factoids of interest:

• % of adult evening viewers who can name a brand advertised in a TV show watched last night has gone from 34% in 1965 to 9% in 2000. Source: Neilsen
• In 1965, 80% of 18-49 year-olds in the US could be reached with three 60-second TV spots. In 2002, it required 117 prime-time commercials to do the same.” Source: Forrester
• 70% of (Association of National Advertisers) advertisers feel that DVRs (e.g., TiVo) will “reduce or destroy” the effectiveness of :30 spots.
• While the average American spends 65 mins/day online, many key demographic groups spend far more time…Mothers (113 minutes), Teenagers (150), 25-44 year olds (120), Business executives (137). Sources: Harris, Gartner
• Two-thirds of online households connect via broadband (52.2M households). Source: OECD
• Did you know that household penetration of the Internet is roughly 50% greater than newspapers (77% vs. 53%)? Source: Harris
• 79% of US Internet users now access the Web for entertainment. Source: Neilsen
• Benefits of online advertising according to American Advertising Federation

o Ability to complement and enhance the use of traditional media: 95%
o More precise targeting: 84%
o Ability to demonstrate an ROI: 75%

• Millions of weekly visitors to top TV and online news channels
  • Internet: 15.9 Yahoo News, 11.2 MSNBC
  • TV: 8.1 NBC News, 7.6 ABC News
• The Web is the 2nd most used medium after TV (Radio is #3, Newspapers #4 and Magazines #5). It’s the # 1 medium for those under 30 and business decision makers as well as all demographic groups while at work. Source: Ball State University. Update: I’ve since seen data that says the Internet has surpassed even TV.
• Over 70% of Global marketing executives believe online will determine how major campaigns are planned and executed by 2008. Source: Economist Magazine
• 78% (122.2M) of the 156.8M online users go online before they shop for a product. 66% (102.8M) shop online. Source: eMarketer
• During Holiday 2005, 25% of all Google use was search prior to purchasing (37% bought online or 63% bought offline). Source: Comscore
• 89% of new-vehicle buyers use a search engine or portal at some point in their research, and 94% of used-vehicle buyers do so. Online advertising in Automotive is fastest growing segment with 116% year over year growth. Source: J.D. Power & Associates, 2005
• Online advertising is growing at 6 times the rate of all other advertising due to its accountability. Source: TNS, eMarketer
• “We are at the tipping point of dollars sailing out of traditional media and into Internet or emerging media.” Source: Mark Rosenthal, CEO, Interpublic Media (largest ad agency holding company in the world)
• Advertising Research Foundation: 73% of advertising leaders think digital delivers higher ROI than traditional media

Update: I have referenced this post in a couple of recent seminars and it continues to be one of the most popular blog posts so I have updated information below since this was originally posted nearly 2 years ago.

I’m a fan of Top 10 lists (maybe it’s my first name) so when I was asked to come up with a list of actionable recommendations for those attending the Hailey Chamber Business Round Table on Internet Marketing, I thought a top 10 list would be a good way to convey it. I recapped the first session that looked at the dramatic changes in consumer behavior that have taken place in the last 10 years and thus why businesses that don’t update their marketing plans are bound to waste a lot of their marketing spend. So here’s a summary of the recommendations I discussed with the attendees of the Business Round Table sans the commentary on people’s specific business challenges. That interactivity is what made the session most interesting for me but this list should be useful as well.

1. Fish where the fish are – The Internet is the #1 or 2 most used medium surpassing all but even TV (it has been #1 with both Business Decision Makers and people under 35 for nearly 5 years). Take advantage of imbalance between media consumption and spend to stretch your dollars. A typical business in our Valley spent less than 1% of their advertising online yet over 3040% of their customers time is spent with the Internet.
2. Internet Advertising is working – Unlike the dotcom era, the most discriminating and biggest advertisers in the world have shifted major portion of their budget to online resulting in 30% year over year growth for Internet advertising vs. essentially flat or declining for other mediums. E.g., Procter & Gamble (the largest advertiser) shifted 15% of their TV advertising to online.
3. “Daytime is primetime” for the Internet – i.e., the Internet is the only medium that reaches a critical mass of people during the workday if you want to reach people during lunch, when they are on their way home, etc.. Corollary: take advantage of what’s unique for each medium. That is, every medium has its own advantages (e.g., magazines visuals are great for high fashion).
4. Stephen Covey “Begin with the end in mind” – Being clear on your goals make for much more effective marketing whether in print, online ads or website development. E.g., is your goal brand awareness, referrals, open house visits, etc. The Internet can be like a Swiss Army Knife and can do several things. You need to be clear on what it should do for you business.
5. Learn from Hansel & Gretel – Leave breadcrumbs to get people to you and your website. Here are a few search optimization rules of thumb – 1)know the high frequency keywords you want to “own” (see http://inventory.overture.com for those terms that are high frequency) and incorporate those terms into your header, headlines, metatags, text, URLs – analyze whether it’s worth paying for placement 2)frequently updated sites get indexed much more often (a key benefit of blogs) 3)have high traffic/pagerank sites link to your site (e.g., SunValleyOnline is a high traffic website, your business partners may have substantial traffic, etc.). [Note: Search Engine Optimization techniques change pretty rapidly so I've listed ones that have stayed relatively stable but it's important to recognize SEO is a journey, not a destination]
6. Lead, don’t follow – The key to standing out is doing something unique whether it’s in sponsorships, advertising, customer service, etc. Realtors may be the most guilty of mimicking their competition vs. doing something unique. In contrast, look at Sherry Daech (well known local realtor for those of you who don’t know her) and how she did some unique things several years back (e.g., being one of the first to have her own website, etc.) that raised her visibility above her competition.
7. Think like Madison Avenue – Maximize the cost effectiveness of your reach and frequency to affect key brand metrics such as brand awareness, brand recall, brand favorability, message association, intent, etc. The best way to keep your ad rates down is to have your media providers competing for your business.
8. When it comes to sponsorships, you can be Visa or Panasonic. Which one do you recall as an Olympic sponsor? See Sponsorship Series to see how you avoid being Panasonic. A rule of thumb is you should spend $1 on advertising for every $1 you spend on media sponsorship in order for people to realize you are a sponsor. Being one of the NASCAR vehicle-like logos is a guarantee to not get noticed by the vast majority of the audience.
9. Once you have your prospects attention, give them incentives to establish a relationship with you via email (e.g., tips, discounts). “Permission marketing” is consistently the most cost effective and reduces your dependence on advertising. You set the tone with your initial responsiveness. Leads coming from the Internet have a short lifespan. Do this before your competition as people generally only sign up for one newsletter per category. This is why SunValleyOnline focused early on building what has become, by far, the largest email subscriber list in the valley (over 11,000) reportedly 10-50x greater than its competition.
10. Help non-profits you support in our community by sharing these tips. Have them read How non-profits benefit from blogs. Many of these tips apply to businesses.

Bonus Tip – Ben Franklin: “When you are finished changing, you’re finished.”

During the talk, I referenced several books. These included the following:
1. The World is Flat by Thomas Friedman
2. Naked Conversations by Shel Israel & Robert Scoble
3. Permission Marketing by Seth Godin
4. Stephen Covey – several books
5. Life after the 30-second spot by Joseph Jaffe [Later: Joseph's latest book "Join the Conversation" has become a best seller and is also geared towards marketing]
6. Guide to Sponsorship by IEG

Update: Since this was posted nearly 2 years ago, the Internet has surpassed TV as the #1 most consumed medium for all age groups. It had been #1 for those under 35 and Business Decision Makers.

About 100 years ago radio tuners started to be used and changed the ways families spent their evenings. Roughly 50 years later television started trickling onto the scene and had another dramatic change not only on families but the world of advertising. It eventually grew into the medium most used by consumers and advertisers. Again, we are seeing another dramatic shift with the emergence of the Internet as a mainstream media vehicle. Unfortunately, for many small businesses TV is out of the reach of their non-Madison Avenue sized budgets. The Internet is now the #1 or 2 (after TV) most consumed media so it’s fortunate that Internet advertising isn’t out of the reach of Main Street sized ad budgets.

During a session hosted by the Hailey Chamber of Commerce, I outlined the dramatic shifts in how people are consuming their media these days so that area businesses are aware. This is critical if they are going to be efficient with their ad spend. Consider the following:

1. Over 30% 40% of all time spent consuming media (i.e., adding up time spent listening to the radio, watching TV, reading magazines/newspapers and the Internet) is with the Internet. For those under 30 (a critical age when brand preferences are established) and Business Decision Makers, the percentage is even higher making it the #1 medium they consume.
2. Unlike 5 -10 years ago when the Internet was emerging, Internet is proven and working resulting in the biggest, analytical advertisers (e.g., Proctor & Gamble, Pepsi, Toyota, etc.) moving substantial portions of their ad budgets from TV/newspapers to the Internet. While all other major ad mediums are flat or in decline, the Internet is seeing over 30% year over year growth. For a business, ad recall is critical and the Internet has proven to be as strong or stronger than other mediums especially with the rise of TiVO where 80-90% of TiVO owners skip through ads.
3. Google and Overture (now Yahoo Search) had their initial growth driven my Main Street Marketers, not Madison Avenue Marketers who were late to the game showing once again that small businesses can be more nimble than the big guys. That said, only about 1% of small business owner ad budgets are going to online resulting in a 30:1 imbalance between where their customers are spending time and where they are allocating their budgets. Local businesses such as Zou75 are bucking this trend and are spending much of their media budget online resulting in a 25% increase in their business.
4. The Internet is mainstream and no longer a fringe activity. Roughly three quarters of all households have Internet connections while 53% of households receive newspapers (down from 98% 30 year ago).
5. For the Internet, “Daytime is Primetime” with the heaviest usage happening during the lunch hour. For the first time, businesses have a medium that has a critical mass during the workday. This is especially important to retailers and restaurants that would like to reach people when they are at work and before they head home. I call this “Brand 360”. That is, being able to reach an audience throughout their day.

If you want to see the future of media consumption, watch someone under 25. It is night and day with how many of us have consumed our media. That said, the following graphics shows that the prime advertiser target audience has shifted their preference to the Internet.

If you’d like a copy of the presentation I gave, please contact me at [dave} at (sunvalleyonline) dot - com. There are many more details beyond the summary outlined above.

At the opening of the session, I asked the audience what they were hoping to get out of the two sessions. I received the following responses:

“I’d like to learn how to drive people to my website”
“What are some rules of thumb for websites – e.g., 4 or 5 things I need to have”
“What are the biggest changes in the last 6 to 12 months on the Internet”
“I’m a Physical Therapist. I get clients from doctor referrals. Do I need a website?”
“I’m in a relationship based business. How can I tie the Internet in with that?”
“Can you give me examples of small businesses that have had success with the Internet?”

Update: These questions have been answered at subsequent seminars. If you are interested in attending future seminars, email me at the address above.

Editor note - About the authorDave Chase has spent the past 20 years as a marketing executive and general manager in the tech industry including 12 years at Microsoft where he was recognized one year as “Marketer of the Year”. He’s been involved with the Internet since 1994 including his role as Microsoft’s board representative to the Interactive Advertising Bureau (IAB) along with executives from Yahoo, AOL, Google and others. The IAB is the industry association for the online ad industry. Since leaving Microsoft, he has been working exclusively with tech entrepreneurs and small businesses to help them grow their bottom-line.

Update: On Earth Day 2007, I found a couple links related to the environmental impact of what Brits call “freesheets” (i.e., free newspapers) including a movement to get publishers to pay for the waste they are generating that was kicked off by this article in The Ecologist Magazine. The idea of manufacturers of products being responsible for their recycling/recovery isn’t new. Tire companies have this responsibility. Increasingly PC manufacturers are taking this step voluntarily (i.e., they’ll pay for the disposal of old PCs). Perhaps those newspapers who consider themselves “green” will take that voluntary step if they want to walk their talk. In more and more countries, product manufacturers of all types are expected to be responsible for the disposal of their products at the end of their lifecycle which incents them to produce them in a way that doesn’t create waste issues later.

Residents of Blaine County treasure the environment that surrounds us. Many in the Valley consider themselves to be environmentalists yet are unwittingly adding to the pollution issue (read on to see if you are part of the problem or part of the solution). Why then is there no outrage at the massive waste that is generated by two newspaper companies – the $1.1 Billion Iowa-based Lee Enterprises (NYSE: LEE) and Ketchum-based Express Publishing, the owners of the Wood River Journal and Idaho Mountain Express and accompanying free publications (e.g., Sun Valley Guide, Real Estate Guide, etc.). Annually, the two organizations combine to generate as much as 5 Million lbs of waste not prone to break down in landfills each year (even factoring in recycling) as well as an estimated 500,000 lbs of carbon burned each year (driving their product from the printing plants to the hundreds of distribution points) contributing to climate change. The amount of carbon burned is roughly equivalent to what 40 average Hummer owners combine to burn in a year. This doesn’t take into account the resources consumed creating the paper and the accompanying chemical waste.

This paper explains the process of creating newspaper though it doesn’t quantify the enormous amount of trees and other products used to create the newspapers. It’s even worse for freebie magazines such as the Sun Valley Guide (the Express’ copycat publication of the Sun Valley Magazine) that are more difficult to produce and recycle. The following is an excerpt from the paper:

The number of trees and other vegetation cut down in order to make paper is enormous. Paper companies insist that they plant as many new trees as they cut down. Environmentalists contend that the new growth trees, so much younger and smaller than what was removed, cannot replace the value of older trees. Efforts to recycle used paper (especially newspapers) have been effective in at least partially mitigating the need for destruction of woodlands, and recycled paper is now an important ingredient in many types of paper production. The chemicals used in paper manufacture, including dyes, inks, bleach, and sizing, can also be harmful to the environment when they are released into water supplies and nearby land after use. The industry has, sometimes with government prompting, cleared up a large amount of pollution, and federal requirements now demand pollution-free paper production. The cost of such clean-up efforts is passed on to the consumer.

What is most unfortunate is that it is almost completely unnecessary. Everything that is generated in the newspapers has been or can be replicated online. It’s also no longer a matter of availability of the medium. Household penetration of the Internet far exceeds Newspaper penetration (75% vs. 53% in the U.S.) and grows wider every day (Source: Editor and Publisher Yearbook data). For example, adults 18-54 selected the Internet as their #1 media choice (46%) while they selected Newspapers as their #1 choice with only 3.2% of that population (Source: OPA study). On a local level, it’s likely that Internet household penetration is even higher given the correlation to income levels and Internet household penetration. It’s also not a matter of being able to reach more people in the Valley as the rapidly growing SunValleyOnline now exceeds the reach of any of the local papers on a daily (with the possible exception of Wednesday), weekly or monthly basis.

Having spent much of my career buying advertising, I always pushed back on newspaper ad salesmen when they touted their circulation (do this “Newspaper Circulation Overstatement” search on Google to see the many examples of overstatement). Perhaps they aren’t wasting as much as outlined above in which case they are overstating circulation. There has not only been rampant circulation overstatement but the notion of circulation is flawed for an analytical business person. I wanted to know whether my ad would be seen not how many copies of the product had been made. With many sections of a paper getting 50% or less readership (Source: Mediamark Research Inc., 2004), the total numbers were meaningless. Consequently, even if every issue was picked up (looking at the stacks of papers on the weekend would suggest otherwise), a huge swath of the paper isn’t read. Ask yourself, do you open up every page of every newspaper that you pick up and see every ad? This is a key reason why Newspaper advertising is in decline while the Internet is growing > 30% year over year – i.e., it’s the difference between theoretical ad delivery and actual ad delivery.

Are you part of the problem or part of the solution?
When businesses and consumers place display and classified ads, they directly contribute to the issue. For those not familiar with the newspaper business, they determine the number of pages they will print based upon the number of pages of sold advertising (it’s one of the reasons you’ll see AP articles as they didn’t create enough article inhouse to support all the ads to be placed in an issue so they dig up content to create additional ad pages). In other words, each ad placed adds to the amount of resources consumed and waste going to the dump. One related effort to address that issue was the launch of the ERC Exchange on SunValleyOnline – no trees required. Both consumers and businesses are the newspapers’ customers and can do something about it. Ask them to print fewer copies, vote with your feet/eyeballs in where you get your news, place fewer ads in print only. In every business I’ve been involved with, when customers ask for change “we’ve always done it this way” doesn’t cut it as an excuse. It would be unrealistic to think the newspapers will stop printing their paper overnight but they could cut it back by 75% and not necessarily lose any readers if they moved to their online product. While it would certainly bring SunValleyOnline some competition, any Internet-based business expects boatloads of competition – something newspapers traditionally haven’t had to contend with. Perhaps that is the real issue.

I first heard about the “Wisdom of Crowds” book on an NPR segment and then have heard about it repeatedly as the idea of “collective intelligence” has risen in popular consciousness. I liked this book so much I wrote a book review originally published on iMedia . iMedia is the “Ad Age” of Internet marketing so it was written with a marketer’s point of view. You can get the book here at Iconoclast Books (in their store or online). Though I read and reviewed this about a year and a half ago, the notion of “collective intelligence” has risen in prominence quite a bit and I thought these principles would be useful in a variety of planning exercises businesses, municipalities and non-profits are undertaking in the weeks and months ahead.

If you look beneath the surface of some successful companies, you’ll see they employ strategies espoused in James Surowiecki’s book. A great example is a company run by my friend Ian Morris — the CEO of HouseValues. There’s much more than meets the eye that drives their success. The full title of the book is “The Wisdom of Crowds: Why the Many Are Smarter than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations,” by James Surowiecki.

Surowiecki aims to be the next New Yorker Magazine contributor to have a mass appeal book, ala Malcolm Gladwell. He clearly wants to position this book as the next “The Tipping Point” — combining cognitive science and other disciplines into a book addressing business, politics, society and economies. The book’s relevance to business and marketing may not be as obvious as The Tipping Point, although there are examples from our industry. As Surowiecki states, “Google is built on the wisdom of crowds. The core of the system is the PageRank algorithm — a calculating method — that attempts to let all the Web pages on the Internet decide which pages are most relevant to a particular search.” He goes on to say “With most things, the average is mediocrity. With decision making, it’s often excellence. The idea of the wisdom of crowds isn’t that a group will always give you the right answer but that on average it will consistently come up with a better answer than any individual could provide.”

While the stakes in business may not be as high as space shuttle missions or stock markets (two of Surowiecki’s other examples), there are lessons in this book that business people could apply in a variety of ways. Whether you’re making business strategy decisions or developing a marketing campaign, many of us have seen the ill effects of “groupthink” versus bringing together diverse groups within an effective framework. Fortunately, the Internet can enable the elements of a “wise crowd.”

This book made me think about how collective wisdom could affect decisions such as ad campaign development (creative decisions, media buying, etc.), product development decisions, and many other decisions made within your company or across teams. From my own experience working with technology companies targeting the marketing community, I can see many ways to apply principles in this book to product development, sales and marketing.

Corporations, government bodies and non-profits have generally been unwilling to improve their decision making by tapping the collective wisdom of their employees and members. Those who can harness the potential for wisdom that exists within crowds of people will have the world as their oyster.

Perhaps the most significant point for readers isn’t the perspective Surowiecki provides to the inward-facing, organizational structure/behavior perspective, but rather the outward-facing: how businesses can better understand their customers — how they think, why they think that way, and how their ability to communicate with each other (rather than just with customer service and technical support) raises their collective IQ.

It could be said that the wisest crowd out there is the billions-big horde of Internet users, who consistently use the Web in smart ways that neither technologists nor marketers would have dreamt up. The organizations that grasp the implications of this will in turn develop products and services more in tune with their customers’ needs, as well as have the accompanying Web sites and marketing campaigns to harness these insights.

While our society often trusts experts and distrusts the wisdom of the masses, Surowiecki argues that “under the right circumstances, groups are remarkably intelligent, and are often smarter than the smartest people in them.” He uses a variety of examples ranging from simple challenges such as a crowd guessing the weight of an ox to incredibly complex: another crowd located a lost submarine where the best approximation was 20 miles wide and thousands of feet deep. It was eventually found 200 yards from where the group estimated it would be. This despite the fact that no one knew why the sub sank, no one had any idea how fast it was traveling or how steeply it fell to the ocean floor. Other compelling examples include how SARS was solved, and a method for predicting election outcomes with great accuracy.

The author outlines four elements required to have a wise crowd:
• Diversity of opinion: Each person should have private information even if it’s just an eccentric interpretation of the known facts.
• Independence: People’s opinions aren’t determined by the opinions of those around them.
• Decentralization: People are able to specialize and draw on local knowledge.
• Aggregation: Some mechanism exists for turning private judgments into a collective decision.

He also cites examples of groups where these elements are missing with sometimes disastrous consequences. Small groups can make very bad decisions because influence is more direct and immediate and small-group judgments tend to be more volatile and extreme. Large groups missing the four elements can also have disastrous results.

One significant example that Surowiecki describes concerns the Space Shuttle Columbia’s Mission Management Team (MMT). The team violated nearly every rule of good group decision making. As Surowiecki outlined, “the team’s discussions were simultaneously too structured and not structured enough. They were too structured because most of the discussions — not just about the debris strike, but about everything — consisted of the MMT leader asking a question and someone else answering it. They were not structured enough because no effort was made to ask other team members to comment on particular questions. This is almost always a mistake, because it means that decisions are made based on a very limited supply of analysis and information.”

One of the consistent findings from decades of small group research is that group deliberations are more successful when they have a clear agenda and when leaders take an active role in making sure everyone gets a chance to speak. In small groups, diversity of opinion is the single best guarantee that the group will reap benefits from face-to-face discussion.

Conversely, in a stock market bubble all the conditions that make groups intelligent — independence, diversity, private judgment — disappear. Whether it was the dot-com bust or the run-up of bowling stocks 40 years ago, stock markets have the potential to lose key elements that make them generally effective. As the 1929 stock crash remind us, we need to remain conscious of the limits of the risks when all the elements of a wise crowd are absent.

The following are additional ideas from this useful book that are salient to the four elements of “wise crowds” — Diversity, Independence, Decentralization and Aggregation:

Diversity of opinion and background
• When there is a lot of uncertainty, such as in the early days of an industry where the winners and losers haven’t been sorted out, it’s key to have a system that encourages, and funds, speculative ideas, even though they may have only slim possibilities of success. Even more important is diversity — not in the sociological sense, but rather in a conceptual and cognitive sense. What makes a system successful is its ability to generate lots of losers, recognize them as such and then kill them off. Sometimes the messiest approach is the wisest.
• Diversity helps because it adds perspectives that would otherwise be absent and because it takes away, or at least weakens, some of the destructive characteristics of group decision making.
• We know that the crowds that make the best collective judgments are crowds where there’s a wide range of opinions and diverse sources of information, where people’s biases can cancel themselves out, rather than reinforcing each other. Individual irrationality can add up to collective rationality.
• Decision markets are well suited to companies because they circumvent the problems that obstruct the flow of information at too many firms: political infighting, sycophancy, and a confusion of status with knowledge. The anonymity of the markets and the fact that they yield a relatively clear solution, while giving individuals an unmistakable incentive to uncover and act on good information, means their potential value is genuinely hard to overestimate.
• Studies have found that groups of smart and not-so-smart people almost always do better in decision making than a group just of smart people. The development of knowledge may depend on maintaining an influx of the naïve and ignorant, because competitive victory does not reliably go to the properly educated. My take-away: Teams I’ve worked on always benefit from the fresh perspective of a newcomer.
• Homogenous groups are great at doing what they do well, but they become progressively less able to investigate alternatives. It also fosters the palpable pressures toward conformity that groups often bring to bear on their members.
• Diversity contributes not just by adding different perspectives to the group but also by making it easier for individuals to say what they really think.

Independence
• Paradoxically, the best way for a group to be smart is for each person in it to think and act as independently as possible.
• Independence doesn’t mean isolation but it does mean relative freedom from the influence of others.
• Independence is critical for two reasons 1) it keeps mistakes that people make from becoming correlated; 2) independent individuals are more likely to have new information rather than the same old data everyone is familiar with.
• If you want to improve an organization’s or economy’s decision making, one of the best things you can do is make sure, as much as possible, that decisions are made simultaneously rather than one after another.

Decentralization
• What do we mean by “decentralization?” Power does not reside in one central location, and many of the important decisions are made by individuals based on their own local and specific knowledge, rather than by an omniscient or farseeing planner.
• Decentralization’s greatest strength is that it encourages independence and specialization on the one hand, while still allowing people to coordinate their activities and solve difficult problems on the other.
• A decentralized system can only produce genuinely intelligent results if there’s a means of aggregating the information of everyone in the system.

Aggregation
• Groups generally need rules to maintain order and coherence, and when those elements are missing or malfunctioning the result is trouble. Groups benefit from talking to and listening to each other, but, paradoxically, too much communication can make the group as a whole less intelligent.

In the first 4 parts of this series, I explored Why Sponsorships Fail, How to avoid controversies, what the Primary Goals and Impact of Sponsorship and Keys to effective sponsorship. In this last segment, I’ll focus on how to select the sponsorship that is most likely to be successful for you.

It all starts with having a clear idea of what your own business/marketing goals are. While that seems like an obvious point, it’s not always agreed upon within an organization. Having differing goals within an organization is a recipe for a failed sponsorship.

There are various sponsorship evaluation methods developed by major marketers. Many of these methods, like what Sprint has implemented includes both a pre and post evaluation. This process as been named the Sprint Sponsorship Vision Project. The system rates certain criteria which have been weighted accordingly. Criteria include: (a) the revenue opportunities for the company; (b) the ability to integrate the product into the event; (c) the costs of the sponsorship; (d) the exposure to the company’s target market; (e) the company image enhancement gained from the sponsorship; (f) the company’s competitive advantage gained in the market place through the sponsorship; (g) the hospitality/ entertainment opportunities for the company that are gained through the sponsorship; and (h) the sponsorship opportunity to show the company’s commitment to the community. Through this process, sponsorships can be evaluated and ranked in order of perceived effectiveness.

In Canada, a study was conducted on the study of the exchange between corporate sponsors and sport groups to gain a better understanding of the decision making process. Corporate exclusivity was the m