strategy

Idea Writers Still Needed. What ChatGPT Can’t Do.

~ K. Quesenberry ~ Leave a comment

We’re going in on digital. If anyone doesn’t want to learn the Internet, pack up your desk and leave.

We heard this from the president of our ad agency during a Monday morning employee meeting. This may not be scary today when  65% of all ad spending is digital. But in the late-2000s it caused worry. Why?

As a mid-career advertising copywriter, I built my expertise on traditional mass media ads. I instinctively wrote print ads, billboards, 30-second TV scripts, and 60-second radio ads. That’s what I learned in undergrad, at Portfolio Center, and what I had created for 10 years. I honed my skills and was good at them. My campaigns with art directors helped clients meet sales objectives and won creative awards.

The Internet Experiment

I still remember that feeling. For us who built our careers on mass media ads, it was like the rug was pulled out from under our feet. Did I spend all those years in school and years fine tuning my craft only to be replaced by Internet experts? Would they need us traditional ad copywriters anymore? I remember Goodby, Silverstein & Partners, known for creative traditional ads, announced they were no longer an ad agency – they’re a digital agency. Advertising Age even ran an article with a subhead, “The Advertising Age Is Over.”

Source: “Digital Set to Surpass TV in Time Spent with U.S. Media,” eMarketer.com, August 1, 2013, http://www.emarketer.com/Article/Digital-Set-Surpass-TV-Time-Spent-with-US-Media/1010096 Note: Hours and minutes spent with each medium regardless of multitasking.

What did I do that Monday morning? I looked at a picture of my wife and kids on my desk. I needed the job and income, and decided to learn Internet marketing. I did and created many successful digital and social efforts for clients including PRSA social media word-of-mouth awards and OMMA online media marketing and advertising awards. Today I’m a professor, researcher, and author of digital and social media marketing. By 2017 AdAge ran another article, “Desktop and Mobile Ad Revenue Surpasses TV For The First Time.”

ChatGPT Experiment One

That feeling came back when ChatGPT was released. I had ChatGPT write a blog post for me, “Top 10 Tips For Successful Social Media Marketing: ChatGPT Wrote That Article In Less Than A Minute Then I Spend Four Hours Writing The Rest.”  It scared me how quickly it wrote an article that may take me hours based on years of experience.

I concluded that human-written articles do offer benefits beyond A.I. We form connections and develop bonds you don’t feel from a chatbot. Having a chatbot create your content can’t replace the rewards of learning on your own and developing your voice and unique perspective. Writing and creating are learning. That anxious feeling subsided.

ChatGPT Experiment Two

Then the editor of our student magazine approached me with an idea. He wanted ChatGPT to complete a class assignment. I convinced myself I could do better writing on my blog, but what about a student report? If ChatGPT could do it why am I needed as a professor? There was that feeling of the rug being pulled out again.

Create A Situation Analysis for Spotify

For Marketing Principles, a key assignment is to write a situation analysis for a company. Students select the company with stipulations to ensure they’re accessing the kind of data that professional markers use to create their marketing strategies. Our university has databases such as Mintel and Statista so students can learn more by doing. Below is a general description:

Select a US product/service you’re interested in and conduct a situation analysis on the current marketing environment. Write an introduction, access a Mintel report (define the market, describe key trends, select one company in the market), assess the internal environment, assess the external environment, create a SWOT summary graphic, create marketing objectives (following SMART guidelines), a value proposition, and a conclusion. Use APA format with all sources cited in APA Style.

He instructed ChatGPT to write a situation analysis for a company in the streaming audio market in APA style and gave it my specific requirements. ChatGPT chose Spotify.

Introduction

For the introduction, ChatGPT wrote:

The streaming audio industry has experienced significant growth in recent years, driven by increasing demand for on-demand audio content and advancements in technology. As a result, companies like Spotify have been able to capitalize on this trend and achieve impressive growth in terms of user base and revenue.

From this intro., it sounds like ChatGPT is accessing the right data and understands the purpose of the report and assignment.

Access Mintel Market Report

While what ChatGPT said is true, I would look for more in a student report. I ask them to summarize some of the latest trends that would be important to form a marketing strategy. According to the latest Mintel report “Streaming Audio – US – 2022,” there is more a marketer would need to know. Even the first paragraph of Mintel’s report highlights trends in the market that may influence Spotify’s marketing strategy:

  • 2/3rds of customers want help choosing what to listen to via curated content.
  • Exclusive/early access to new music, podcasts, and audiobooks can differentiate.
  • 62% of adults try to support services that fairly compensate artists and creators.

Internal Environment

For the internal environment, ChatGPT did a good job pulling the company mission statement from its website and describing the basic service. It even provided what looks to be an APA citation:

Spotify was founded in 2006 in Stockholm, Sweden, and has since become a leading global streaming audio platform. The company’s mission is to “unlock the potential of human creativity by giving a million creative artists the opportunity to live off their art and billions of fans the opportunity to enjoy and be inspired by it” (Spotify, n.d.). Spotify’s primary product is its music streaming service, which is available to users on desktop and mobile devices, as well as through connected devices such as smart speakers.

ChatGPT does go on to provide some marketing performance numbers:

Spotify has over 365 million monthly active users, including 165 million premium subscribers (Statista, 2021).

The first number seems accurate, but there are more current numbers as of Q4 2022 from Statista of 489 million monthly active users (MAUs) and 205 million premium subscribers. I would expect students to find the latest data. A 124 million, 34% increase for MAUs and 40 million, 24% increase for premium subscribers is significant.

Then ChatGPT reports a revenue number:

The company has experienced significant growth in revenue, with a 16% increase in 2020 to $7.88 billion (Spotify, 2021).

The revenue number looks correct until you do some research and find the number is in euros, not US dollars. Spotify is a European company, but the assignment is to focus on the US market. To report revenue with a US dollar sign, which ChatGPT did, it should be around $8.47 billion. I also found a more recent 2022 revenue number of 11.72 billion euros or roughly $12.41 billion US dollars. The conversion difference is $59 million, the date difference is nearly $3.94 billion.

Lastly, under the internal environment, ChatGPT names Spotify’s main competitors:

However, Spotify faces challenges from competitors such as Apple Music, Amazon Music, and Pandora.

This sounds reasonable, but in Mintel’s report a graph shows Spotify’s close competitors as (1.) YouTube Music and (2.) Pandora. Because ChatGPT isn’t using real citations it’s hard to know where it got this and how old it is. Understanding current competitors is important to any strategy.

External Environment

For external environment, ChatGPT wrote:

Political, legal, and economic factors impacting Spotify’s marketing performance include issues related to copyright law and licensing agreements, as well as the impact of the COVID-19 pandemic on the music industry. Demographic, social, and cultural factors impacting Spotify include changing music consumption habits and the increasing popularity of podcasts. Technological factors include the development of new platforms for streaming audio, as well as advancements in artificial intelligence and machine learning that are used to make personalized recommendations.

This is a good general list of issues that may affect Spotify and the streaming audio market, but there are no details that could turn into insights actionable in a marketing strategy. COVID-19 impacted the music industry, like all industries, but how? Mintel’s report explains how and indicates its negative impact was less than expected:

  • Growth slowed, but people found ways to listen to their favorite music and podcasts.
  • The low barrier to publishing helped artists publish even from home.

An important external factor missing from ChatGPT’s list is inflation – something Spotify needs to consider for product, pricing, and promotion strategies. The Mintel Report warns that high inflation of 8-9% in the past year could lower household spending on streaming audio with a large percentage of adults worried about rising prices.

The next requirement was to summarize what was found in a SWOT graphic of internal strengths and weaknesses, plus external opportunities, and threats.

SWOT Summary Graphic

Below is what ChatGPT provided:

The SWOT analysis for Spotify is presented in the figure below.

Obviously, it didn’t draw the graphic. I am not sure what it tried to access from Imgur.com. If It did find a Spotify SWOT from Imgur it wouldn’t meet my requirements. That would be someone else’s SWOT based on their opinion and data, not a summary of what the student found in their situation analysis.

Marketing Objective

Next, ChatGPT wrote a marketing objective:

To continue its growth in revenue and premium subscribers, Spotify should set the following marketing objective: “Increase premium subscribers by 20% over the next marketing budget year, from 165 million to 198 million, through targeted marketing campaigns and promotions.”

This objective meets some SMART guidelines. It’s specific, measurable, achievable, and time-bound. But it’s not relevant since there’s more recent data. They’ve surpassed this revenue objective.

I would also coach students about using global numbers versus market-specific numbers. Typically, marketers set objectives for different markets like the US or North America vs. Europe to set unique marketing plans for each. From Statista 28% of Spotify’s premium subscribers are from North America (57.4 million), from which you could set a more accurate marketing objective.

My bigger apprehension about ChatGPT’s marketing objective is that it might not be right based on what we learned from Mintel about concern over inflation. If most people are worried about rising prices can Spotify convince 33 million more people to add a premium subscription while not losing any existing premium subscribers?

A revenue or market share objective may be better to grow all users by promoting free and premium accounts. Spotify makes advertising revenue from free accounts. You don’t want a loss to competitors. This would depend on what we find out about the main competitor(s) and what they are offering, which ChatGPT didn’t describe.

Value Proposition

For the value proposition, ChatGPT wrote:

Spotify’s value proposition is based on its ability to provide users with a comprehensive library of music and audio content, delivered through a user-friendly platform that enables easy discovery and sharing. With a focus on user engagement and social sharing, Spotify encourages loyalty and helps users discover new music and artists that fit their tastes, while also providing access to popular hits and classic tracks.

At first, this sounds like a good value prop. But it’s more a general product description that could apply to any competitor in the streaming audio market. From a student, I’d look for a more nuanced understanding of the current market, consumer trends, and competitors. The value proposition should take into consideration Spotify’s unique place in the market in comparison to what competitors are offering and what consumers are currently looking for.

Conclusion

This was ChatGPT’s conclusion:

In conclusion, Spotify is well-positioned to continue to succeed in the rapidly growing streaming audio market, despite facing challenges from competitors and changing market trends. Developing effective marketing strategies and objectives is critical for Spotify to maintain its position as a leader in the industry. By leveraging its unique value proposition and focusing on key marketing metrics, such as premium subscriber growth, Spotify can continue to drive revenue and capture market share.

This sounds like a good conclusion, but there’s no real understanding of the current streaming audio market. It makes it sound so easy! Yet, if marketers relied on past/current offerings and never made adjustments based on changing market conditions, consumer trends, and competitor actions they wouldn’t be well-positioned to continue to succeed.

References

This was ChatGPT’s references:

References

Spotify. (n.d.). About Spotify. Retrieved August 29, 2021, from https://www.spotify.com/us/about-us/

Spotify. (2021). Spotify Technology S.A. fourth quarter and fiscal year 2020 financial results. Retrieved fromhttps://www.sec.gov/Archives/edgar/data/1639920/000163992021000014/spotify2020q4ex991.htm

Statista

It hasn’t provided references to the multiple Statista data with URL links. The required Mintel market report is missing. ChatGPT seems to be mimicking some aspects of APA citation but missing a lot.

My Overall Assessment?

This report looks into the past, describes Spotify as is, sets a higher premium subscriber number, and says to keep doing what you’re doing to succeed! There’s no real understanding. It feels like a collection of incomplete facts organized into categories and written to sound like a person talking. I wouldn’t base my marketing strategy on it! If a student was hired into the marketing department at Spotify and their manager asked them to submit a situation analysis, I would not want them to submit this.

From my experience so far ChatGPT answers lack human nuance, insight, and refinement. Plus, if ChatGPT can answer it alone, why would a company, client, or audience need you? That’s what we all need to figure out. ChatGPT can be a great tool to jumpstart your thinking, but what are you good at that ChatGPT can’t do?

What Am I Good At?

Back in the late 2000s, I found the answer in Teressa Iezzi’s book The Idea Writers. She reminded copywriters and art directors (creators) that we weren’t experts at traditional ads. We were really writers and designers of ideas that connect brands to consumers no matter the tool. We’re experts in human truths and crafting stories that connect with target audiences through emotion to meet marketing objectives.

I could have had ChatGPT write this entire article, but I don’t think it would have the same relevance, reach, and resonance. Can you relate to the feelings I’ve had (in my past and current career)? How’s your anxiety over ChatGPT as a writer, designer, creator, marketer, student, or professor?

Look for Ethan Dyril’s article coming out in the Swinging Bridge on March 31st.

A Simple Guide to Calculating A Social Media Marketing Budget.

~ K. Quesenberry ~ 4 Comments

You have worked hard in researching and developing a social media strategy and plan, but how much will it cost? Budgeting is an important part of social strategy and probably needed if you want your strategy to be executed. Few managers or business owners will approve any effort without first knowing the cost. Understanding expense is also an important step to calculating return on investment (ROI).

Click here for an updated version of this article and template.

To help make the budgeting process easier follow the Social Media Budget Template shown above. It breaks down costs into five expense categories and divides each category into in-house costs (to be performed by employees) and outsource costs (to be hired out). It also calculates the percent of each line item under a category and the percent of each category out of the total budget to understand where you are spending most of your money. As you understand how each category is contributing more or less to business objectives you may want to adjust percentages to match contribution level. Each item and category is calculated as a monthly expense and percent of total per these categories:

Content Creation covers in-house or outsourced time to write and design plus any fixed costs such as stock photos or video production. Estimate time to create the content needed for the strategy in a month. You can get an idea of how much you need from a Content Calendar. For in-house employees divide salary into an hourly rate. For outsourced help calculate by their hourly rate or their cost per piece or project. Global brands may need to consider cost such as cultural partners and consultants plus language translation.

Social Advertising is paid outsourced costs for reach per social channel such as Facebook, Twitter, LinkedIn, etc. Again, start with a Content Calendar and estimate how many posts will be paid social ads or promoted/boosted posts. For an idea of what is available see this guide to paid social. Then calculate costs based on current rates per social media network. Because much of social advertising works on a bidding process many managers set per day limits. Thus, this category is estimated based on spending per day, per network multiplied by the number of days you expect to be running social ads in a month. In addition be sure to include costs for influencers. Influencers are paid a variety of ways such as per post, free product and commission. For more on how these campaigns are structured see this guide to influencer marketing.

Social Engagement is the cost for employees or contractors to listen and respond to brand talk per channel. Listening and engagement are important activities in social media. They cannot be planned ahead of time, but you can estimate how much it may cost based on current activity. You could go back to or perform a Social Media Audit to get an idea of the level of customer activity on brand social media channels. Are there hundreds or even thousands of posts everyday day or a few dozen? From there estimate hours per day needed to engage all or a percentage of those customers per channel. Multiply number of hours by employee or outsourced rates. Depending on the business management may also require costs for social media strategy planning and reporting as a percentage of a full-time employee salary or the salary of dedicated social media staff. However, some include this as a part of the overall operating budget as overall marketing budgets don’t normally include the salaries of the marketing department employees.

Software/Tools covers monthly costs for social media monitoring and other automation software services. These software services and tools can help save time and thus money in other categories such as content creation and engagement. There are a lot of free tools, but to get access to advanced features and enterprise level service many organizations have to pay. This budget category is broken down into monitoring, scheduling, reporting, and analytics as a first step. You may find it useful to add additional categories such as consumer research, automation, or artificial intelligence (AI) software. Some tools may have one time costs but most are billed as monthly access fees. Another consideration is accounting for the cost of training for these tools. This may be one time upfront costs to get up to speed on a new software package. Yet, social changes so quickly you may want to estimate a monthly amount for ongoing training of staff to keep up to date.

Promotion/Contests are costs for prizes, discounts, etc. Besides buying reach through social ads, many businesses build audience and engagement through special offers, discounts and contests. Whether they are executed through a Facebook app, hashtag or unique offer code promotions, contests, sweepstakes, coupons and discounts have hard costs associated with them. In this category estimate those expenses per campaign. For example, you may have a summer campaign and a Spring campaign or campaigns that happen around specific holidays. If you have a social campaign built around a live event, don’t forget to include those costs as well.

Finally, add totals per month, per line item and category. Also calculate percent of each category and category percent of the total budget. This social media budget template is a good way to calculate how much a social media strategy will cost to execute, but how do you know if the total is too much or too little overall?

One way to put total social media budgets into context is to compare to competitors. In a Social Media Audit you may have uncovered insight that a main competitor is much more active in social media and seeing business success as a result. Your strategy would be to increase your social activity to compete and your budget is an estimate of what it costs to match that level of engagement.

Another way to put your total social media budget into context is to compare to industry standards. In an analysis by Content Factory they estimate that outsourcing professional social media marketing can cost anywhere from $1,000 per month to $20,000 per month. Admittedly this number is very broad. Another approach is to look at typical percentages of overall marketing spending and social spending. In other words, take your existing marketing budget and estimate social media spending based on current standards.

Nick Rojas of The Next Web points out that businesses spend an average of 10% of revenue on marketing. Yet, this could vary by industry. For example, B2C products companies spend an average 16% of revenue on marketing. For social spending the CMO survey indicates businesses now spend an average of 9% to 15% of their marketing budget on social media (expected to increase to 20% by 2024). Thus, a general guideline would be to take your marketing budget as a percent of revenue (such as 10%) and then calculate a percent of the marketing budget (9%-15%) dedicated to social media.

Seek additional research to narrow this estimate further. The CMO Survey reports social media spending by sector including B2B Products (9%), B2B Services (12%), B2C Product (13%) and B2C Services (15%). Companies with over 10% of sales from the Internet spend more on social media (14%) compared to those with no Internet sales (11%) and small companies (<$25 million revenue) spend the most (15%). If your estimated social media marketing budget from the template above is significantly off from this general number you may want to go back and adjust the plan.

Budgeting in social media can be complicated. But taking a step back and calculating costs based on categories and in relation to marketing spending averages can simplify the process. If you are budgeting against a solid social media plan tied to real business objectives with the right metrics in place a return on investment (ROI) will be justified.

To consider the bigger picture in measurement see Why You Need A Social Media Measurement Plan And How To Create One. To consider the bigger picture in social media marketing Ask These Questions To Ensure You Have The Right Strategy.