Tuesday, November 29, 2011

The Blending of Media Types

Why do we segment media by type when consumers don't?

We often speak in terms of {blank} media when discussing marketing plans and budgets.   But considering channel blur and fragmentation we're often left wondering just what a given media type is good for.   Here's some thoughts.

First, what is 'media' from a business or marketing sense?   Without the qualifying adjective like broadcast or social the term simply seems to describe 'a vehicle for conveying a message'.  This can range from buying a 1/4 page in a magazine to seeding a viral video.

Second, the different kinds of qualifiers need definition.   Some common classifications that center on the distinction between the control and reach of content include:
  • Paid Media: the exchange of value for the placement of a sponsored message.   Usually this is buying ad space in one or more outlets. Typically the tradeoff is in terms of content control and reach. 
  • Owned Media: the use of a firm's assets to cover both the content and the distribution; it covers everything from publishing to email and direct mail.  Typically we are sacrificing reach to control or tailor the content. 
  • Shared Media: the leveraging of others for both content and distribution.   Often, both the content and the distribution happen without any control creating a level of risk.   
  • Earned Media:  the value of a placed story, event or action or simply 'news coverage.'   It grew out of the need to place a value on public relations activities so that it could be compared/aggregated with Paid Media.  
Here's an example of the various media types associated with Facebook.  While limited in scope, it does illustrate the point that the categories can often overlap.  


The above discussion doesn't reflect a 'channel' per se and allows for some interesting debates.  If I pay you to blog for me and then distribute it via a number of vehicles is that 'paid', 'owned', 'earned' or 'shared' media?

The consumer probably doesn't care much about any of this discussion; we're gazing at our own navel.   Since she consumes whatever she finds interesting regardless of how we is classified we should think more about gestalt media: the net effect of surrounding a consumer with interesting content. 

Monday, November 28, 2011

Personalized Flyers: Direct Mail Catalogs without the Postage

Can we do direct mail without postage?

A recent discussion about integrating items promoted in a retail flyer into a direct mail/email piece - "this weeks' special chosen for you"-  gave way to a broader discussion when we realized that we could possibly take this idea one step further and create completely personalized flyers.  

Imagine the MUST-HAVES  listed below being selected based on where you live and what you've bought…. (image from the work done for Sears Canada by our sister group Totem).  To do that requires integrating three distinct marketing silos - digital promotions, direct-to-consumer marketing, and the database groups.     

Assumptions about the business functions: 
  • "Digital Promotions" typically manages the assets of a retailer's flyers.   The weekly circular is deconstructed and stored as a set of offers that can be served up to any number of delivery systems.  
  • "Direct-to-consumer programs" uses a high degree of personalization and customization to tailor email and direct mail to make it more interesting.   
  • "Database Group" often integrates various sources of data - internal and external - so that we can pick lists of people based on a wide number of characteristics and behavior.  It often incorporates sophisticated analytics (see Sagarmatha as an example) to align offer and consumer.
What if we combined the three functions?   What if we re-conceived the whole process and thought about a flyer as a form of direct communication to a household first and a distribution challenge second?

Basically, how can we do direct mail without the postage in order to deliver customized catalogs?

Today, retailers can:
  • Handle zone pricing and other distribution options, which effectively creates target groups. 
  • Map out multichannel communications and use business rules to populate various panels with different content.
  • Infer interest of an individual or postal area based on a wide variety of information derived from any manner of data - consumption and descriptive.
  • Integrate loyalty, transaction data into the process of defining a communication.
  • Serve up assets to personal communications that are described by a set of meta data, e.g. ad size, category and brand.
  • Interface the resulting packet of direct-to-consumer communications with both print and electronic distribution mechanisms. 
Based on the above, it appears we could:
  • Develop postal/zone/carrier route specific flyers for printing and distribution based on characteristics of people who live on the route itself.
  • Simultaneously tailor personal communication based on behavior (or lack of it) using the most appropriate subset of flyer elements.
  • Incorporate other interesting content into both the flyer and email/direct mail.
If we believe that relevant trumps generic then it seems that only silos are in the way of surrounding consumers with interesting content. 

Wednesday, November 23, 2011

Short Circuiting Decisions with Brand Ambassadors

What does an ambassadors do?

Buying an ambassadorship in politics is a common theme, albeit illegal, with presidents awarding up to a third of the posts to substantive contributors.  This pattern reflects the absolutely innate rule of reciprocity - we try to pay people back for what they've given us:  Cushy post for cash. 

In sales and marketing there is a lot of talk about 'brand ambassadors'.   Why are they important?    The book Influence: Science and Practice provides a clue:
You and I exist in an extraordinarily complicated environment, easily the most rapidly moving and complex that has ever existed on the planet. To deal with it, we need shortcuts.

So, by leveraging people's beliefs about and passion for a product or company it seems that 'brand ambassadors' play an important role in our ability to make a choice.   They simply short circuit the logical or rational process of search, comparison, and decision.   When faced the dilemma of choice, people ask "What do you wear/ride/use?" of the others.  Influence makes it easy. 

For any company, there are different constituents that could play the role of ambassador:  employees, retail sales, industry 'experts' and consumers.  I'm guessing the motivations for promoting or recommending a brand are very different, but the reward structures may be the same: 
  • Employees:   JouleX uses a 'frequent post' strategy to reward employees for communicating the company's stories.   Generally, the guidelines suggest hand picking the ambassadors and give them adequate training.  
  • Retail Sales: this is sometimes a contradiction; sales people are commissioned to sell - often items from different brands; so how can they be a brand ambassador?  To help sales people sell  3point5 is a platform that mixes sales training with rewards in terms of product discounts.  (The company name comes from the ideal distance for in-person sales.)   
  • Industry Experts:  Between sales and the consumer is the group that people turn to for recommendations, including writers, agencies, sponsorships or celebrities. Often people turn to those with some knowledge of the product and thus are willing to trust their opinion.  
  • Consumers:  the route to support of customers is often thru customer service, not sales or advertising. The goal is to give credibility to the 'story being told by corporate'. 
For brands based on passion, this suggests that all sources of ambassadorship should be brought to bear in a seamless way - they all share the same desire to tell their story.  Integrating such diverse groups requires a good understanding of their individual reward structures and WIIFM; not to mention a new organization structure for marketing.

Saturday, November 19, 2011

Evolution of Search (Paid)

Where is search going?

Search represents a growth opportunity within the overall marketing spend; and the opportunities aren't just online. 

Search and display – the yin and yang of online advertising, they each representing over 40% of online ad spending - $31b in 2011.  It used to be that display ads were the stimulus and search captured the intent when consumers went looking.  A recent paper from IMPAQT (attached) discusses how search is changing, particularly how it is being integrated into other areas of marketing beyond just acquisition – direct marketing and customer service to name two.    They also show how search can be used to understand retail shopping behavior for Back-to-School and Holiday periods.  Thus, coordinating flyers, direct mail and search should be the new order of business.  

Search as branding tool – it pays to use a branded term in both the query and the ad copy.    While the majority of spend (and traffic) is from non-branded terms, it is the combination of an individual using a branded term and that interest being reinforced in ad copy.  This suggests that print and other content should be used to reinforce the brand and its purpose or benefit. 

Search is mobile – while mobile search is growing, and is expected to be ~20% of search spend next year, the ROI isn't the same as 'desktop search' possibly because the intent of search is very different – find vs. transact.    And nearly 3/4 of mobile traffic for retailers is coming from tablets, and you might as well say iPad since they outsold Motorola+RIM +Samsung combined 5:1 in the last quarter.   The tablet isn't a desktop and it isn't a phone – this suggests that optimizing for the device will take on a new form and user experience. 

Search is automated – this is a ripe area for technical innovation.  Real time bidding systems exist for both display ads (infersystems) and search (finch) based on conversion.  Given the vast amount of data, these tools focus on setting bids based on what works.    These tools allow for either agencies or publishers to play in space that historically was owned by the folks with green shades because it can scale across properties.  

I'll leave SEO and attribution to another day….

Evolution of "Database Marketing"

What are we doing in our day jobs?

This post is about what we do at work - it came about after an integration meeting where we needed to explain what various business units do.

First, some background on what business we currently focus on here in Salt Lake.
  1. Direct-to-consumer – consider it 'database marketing' if you will, but all our work focuses on the distribution of owned media to individuals.
  2. Programs rather than campaigns – we're in it for the long term; think 'retention' and 'acquisition' where insights about behavior and events trigger the communication pattern.  
  3. Evolved from direct mail to multi-channel to address the needs of consumers. 
  4. Strong automotive industry experience rounded out with retail and education; not much in the B2B space.
To support our clients' needs we built our own platform - "PointCast" - which is named for the natural evolution from Broadcast to Narrowcast to 1:1 communication.   So, what makes us different?    What do we bring to the table?
  • Big Data: we created a metadata-driven architecture (not unlike the content management concept) space to deal with large, diverse data sets. These data are tightly integrated with the selection and distribution engines. 
  • Cohort Selector:  to get the most out of subscription data overlaid with syndicated data like ICOM and Environicx, we built a platform to create and export lists for use with clients (internal and external).  Key is the ability to implement calculated fields – like extrapolating category usage based on surveys to the whole population. 
  • Campaign Management:  rather than working toward 'self-service' and 'workflow' (crowded spaces) we went down the path of "granular customization" based on business rules, transaction data, and extreme customization.  We've invented….
    1. Packets:  a communication with a customer isn't always a single item; it may be a collection of things.   Consider a 'Simply Thanks' program for a pet store/veterinary practice that includes three items.   First, a note from the store manager thanking you for your business; second, an email with special offers and coupons; and finally, a vaccination reminder.   Each is a different form factor with different templates for a variety of business reasons including how to measure financial performance.   But we need to manage these from the same set of assets, data and business rules.   We're expanding to include SMS, FB and Twitter. 
    2. Panel Maps:   the concept of 'wire-frame' applies to all media, everything from a postcard to an email to a text or a Tweet can be divided into sections that are controlled by rules.   What offer goes where?  and based on what rules?   So, rather than have to work in multiple silos we're integrating the mapping process.  Concepts like 'Header' and 'Offer' now transcend form factor or channel. 
    3. Panels:  every pixel, character or space can be assigned content.   We go well beyond gratuitous personalization of Dear to allow the piece to be customized based on a detailed set of prioritized business rules.   So, if you haven't shopped in a while you get a different set of offers than if you haven't shopped in a long time.    Hard to explain, but this orchestration can lead to a large number of possible communications – for one client there are 88m possibilities (and this doesn't include simply things like 'name') which is 10 times the number of customers we manage.  
For a somewhat light-hearted view (the technology is web-based and not from the last century) we created the following video on our site to summarize our solution to the problem:  How do we surround a consumer with interesting content to help them choose when the path to purchase is unknown and we're in the world of social commerce? 

So, what are we thinking about going forward?   Some thoughts:
  • Personalized flyers – since we have the transaction data and the real estate mapped out, there is no reason we can't populate a custom flyer based on a list of alternatives and rules.  This could even extend to linking with social likes and recommendations (see Fresh & Easy's use of favorites).   It could also extend to integrating the various web properties we have:  jobs, auctions, autos – all in one place.  
  • Surround media – we know that search is the next thing people do after receiving a stimulus; so, how do we integrate something like a product launch with a change in the search budget?   It is just an API after all.    How do we integrate owned media with paid media?
  • Customized brochures – in several sectors consumers forget what they saw the minute they walk always (was that red A6 a 6-speed or automatic?)   So, we're working on creating customized brochures based on integrating QR codes with a publishing platform.   Imagine a brochure that included emotional (brand), promotional (incentive), informational (factoids), and communal (social) information for the specific cars or houses or stoves or snowmobiles you just looked at.  
Happy to provide to more detail…..

Tuesday, November 15, 2011

Managing the Circuitous Path

How do we manage a process with no end point?

Adding to the 'path to purchase' discussion, Yahoo! and McCann released their report:  "The Long and Winding Road".  And rather than a reference to the Beatles tune it relates to the customer path or journey thru various stages using one of three classes of tools:  Discover, Evaluate, and Socialize. 

The decidedly non-linear path, if we can even call it a path anymore, suggests that everyone has the potential to interact with everyone else – regardless of stage. The Path to Purchase blog lays out three major stages: Pre-shop, Shop and Post-shop, rather than the traditional linear funnel.   Since any media can be used in any situation it becomes a very dynamic and fluid scenario with the inclusion of after sale activity where customers become evangelists (see zuberance for a platform in that space). 

Of interest is the suggestion to 'create reward systems' - not necessarily to drive loyalty, but because shopping is now social and there is a sense of 'winning' that occurs with the use of coupons/promotions.  Research from GfK suggests the emergence of "Xtreme Shoppers" - those whose intent is to find the best value, and they use the smartphone to do it. 

This year's "Shopper Marketing Expo", sponsored by the Path to Purchase Institute featured Facebook VP Marketing Solutions Carolyn Everson and  Saatchi & Saatchi X CEO Dina Howell.  Their titles/companies should give us a clue as to what their keynote speeches were about. 

The following figure is from Forrester's "Emergence of Customer Experience Management Solutions" and does a good job of summarizing the current state.  Defining this space as:  A solution that enables the management and delivery of dynamic, targeted, consistent content, offers, products, and service interactions across digitally enabled consumer touchpoints.  (They are narrow in the choice of 'digital' touchpoints, IMHO)   

So, who manages this?   It isn't marketing and it isn't technology – it is a highbred that some are calling the Marketing Technology Office while others are going as far as suggesting that IT and Marketing merge.    Regardless of where it sits – what it does is clear:  Understand customer behavior/intent/interests in order to develop a plan to support them in their path to purchase.  

Friday, November 11, 2011

Innovating in the Light of Mobile Payments

What does 'pay by phone' mean now?

Phones are not for talking anymore; we proved that with music.     They will soon be the tool for conducting business and the use case typically offered is making payments by tapping your phone.   The credit card solved the cash problem over 60 years ago when the idea of extending credit and paying at multiple locations were merged.  And yes, this business was likely drawn on a napkin at dinner.   But it is likely that making payments per se isn't likely to drive adoption since the card is good enough – I have to carry a wallet and that piece of plastic isn't a burden; and with the penetration of  NFC-equipped phones  at sub-20% in 2012 we're still looking for the killer app.     In terms of payment, mobile will become useful when time and motion are at a premium – boarding a train for instance because my phone is often more accessible than my wallet or when the experience changes.  

So what is the added benefit of using a device instead of a card?

It seems that most of the talk and activity is around promotions and offers – something a plastic card simply can't do.   All the major players we're talking to are searching for solutions in that area: MasterCard has its Marketplace; Visa has perks, and American Express just announced a $100m fund for start-ups.    The most recent briefing from trendwatching is "Dealer-Chic: Why consumer deals are becoming a way of life, if not a source of pride."   The obvious benefit of promotions is the financial savings – the not so obvious is that this is now a social event as much as a financial one.     Using deals delivered in a cool way through technology is becoming an emotional activity/reward that is shared.  While only 1% of coupons are delivered online, a full 10% of the redemptions are from those coupons – this is a major shift worth capitalizing on. 

So the questions we should consider are: how do coupons/promotions get matched to consumers based on location, context, and life-time value (loyalty)?  How do we make this more of a social event?

Wednesday, November 09, 2011

Decision Making: Emotional vs. Rational

How does choice work?

We decide emotionally, we defend rationally.

Without a need to be satisfied we simply can't make a choice.   But once the inner brain decides the outer brain takes over makes the decision rational.  

"The car has 5-star crash test rating" - calling b******t on that, it made me feel cool - but I'm not going to say that, am I?

Saturday, November 05, 2011

Lessons from the Checkout Line

Why do we have two different experiences for the same thing?

While trolling around this morning I found this Google Analytics video on the ecommerce check out process on nick burcher's site.  It makes a beautiful point.

While focused on the purchase step of the process, I think it relates to all stages of search, discovery, and consideration.   Unfortunately we often act like moths to light bulbs and add new shiny objects, just because we can.  Or worse because we don't know what consumers want so we put it out there and hope something sticks.

We should resist.

Cool stuff is not a strategy.

"Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away."   Antoine de Saint-Exupery.

Friday, November 04, 2011

Grapes, Climate Change and Branding

Will barbera go with fish or pork?

Like formica, kleenex and duct tape another category of generic brands is under threat.  This time wine.

What is common about the following?
  • Cabernet Sauvingon
  • Merlot
  • Pinot Noir
  • Chardonay
  • Reisling
  • Sauvingon Blanc
They are a) the original six Noble Grapes - the basis of highest-quality French wine (although the politically correct term is now International Varieties which includes 3 others and isn't limited to France), b) brands - for over 100 years the New World has marketed by the combination of varietal and location, and c) like to grow in cool climates.

So what happens when climate change raises the temperature by say 2-degrees?  In California, that could reduce the growing area by 30-50% by the year 2040.   This creates a serious marketing challenge as noted in a piece on NPR.  

An enduring brand adapts to the changing times; it has to. But when the roots of your business are based literally in roots that have come from grafted/cloned grape vines there are substantial risks as the environment changes.   A wine designated a 'California Chardonnay' must come from chardonnay grapes grown in California - it is the law.  But what happens when demand goes up and supply goes down? What happens when the category itself shrinks?  

Maybe a lesson from [yellow tail] provides insight.  They became a successful brand in part by producing a wine that isn't very winey.   Wine is known for being tannic and acidic - two tastes that most people simply don't like.  So, they made wines that aren't tannic and acidic for the 85% of the US market that didn't drink wine.  They re-featured wine by not focusing on the nuances of terroir (where the grapes are grown) which is often the basis of wine debates but rather on the simplest of elements - the variety.  From a production point of view this brand strategy allows grapes from many locations to be used to create a consistent product; nobody is likely to do vertical tastings of this brand.   By simplifying the decision process and making a less stringent product they made it very easy for consumers to choose.  As a result they sell more wine in the US than all French producers combined. 

Thursday, November 03, 2011

Frank Sinatra on Buying Cars

How do people buy cars?

Just like Frank Sinatra sang:  "I did it my way".  

A couple of days ago I posted some thoughts on search behavior and content marketing, this takes it a bit further in one industry.   We recently attended a round-table in the automotive industry where Google presented the following facts on how search has changed consumer behavior: 
  • 75% of car buyers are in the market for over a month, with the average in the 4-6 month time frame 
  • 61% will watch a video before going to dealership
  • 54% say that the Internet lead them to the dealer
  • 49% search the internet to find best deals
  • 44% use mobile device for comparison on the lot
  • 35% of the time customer is searching when dealership is closed
  • 32% use their Smartphone to find a dealership
  • 25% percent change brands based on information on the internet they research
On average, they use 18+ different sources of information (ZMOT).   And over 40% of the referral traffic to an OEM site comes from search engines; 6% from FB and 8% from Edmunds. 

The lesson learned is there are only two rules any more: #1 “the consumer is absolutely in control” and #2, “see the first rule”. 

So, if I were the marketing director for an automobile manufacturer – or an entrepreneur starting a business in this sector, here is what I’d do to improve the customer experience.
  1. Find a point of differentiation (uniqueness) that allows emotional and communal content to augment the promotional, informational content that the dealer already provides.  Too often search is dry.
  2. Make it easy to remember what cars consumers look at after leaving the lot. I’d create a custom content that integrated emotional and informational content; this would be done by creating a custom brochure using either QR or NFC technology
  3. Link buyers/browsers together as they traverse the buying cycle to share and get a sense of community and or winning.  See Nissan's roadtrip for Versa. 
These are brand, ie national ideas, not something sold dealer to dealer because the consumer isn't loyal at the location level.    We should be facilitating choice by focusing on emotional and communal content, not only offering promotional and informational content to make a sale. 

All these innovative solutions require the blending of marketing and technology, no wonder firms are creating a ‘Chief Marketing Technologist’ and yes, there is a blog for that. Scott Brinker's presentation at the Adobe event is worth watching or reading.

Tuesday, November 01, 2011

Why Interesting Content is Important

What are consumers doing along the path to purchase?

The concept of 'surrounding the consumer with interesting content' originally grew out of the notion that there are infinite paths to purchase and thus marketers need to be everywhere a consumer could turn.  The idea of using Red Laser to check prices, while reading reviews on Yelp! and looking for a coupon in the email is commonplace. 

This note takes a look at two different views:  The impact of social networks – in the scientific use of the term – on defection and the search patterns of buyers.

Social Networks
There has been a fair amount of discussion (and an equal amount of hope) that word of mouth spreads product adoption.   But only recently has the effect of social networks on defection been evaluated.   In a Journal of Marketing article this month there is evidence that knowing someone who has stopped using a service increases the odds of you stopping.  And this effect might be as strong or possibly stronger than the impact of networks on adoption.   The factors driving defection are similarity and the density of the network – if you share common attributes with those in a tight network then the odds of defection increase.    Loyalty, as defined by heavy use and/or tenure, mitigates the effect of defecting neighbors on your own decision.   

Customer bases with a high degree of inter-connectiivity run a higher risk of defection due to social networks.   The question that impacts marketing seems to be:   Are your customers connected?   (as in they share the same phone service).    If they are, then communication when one defects is important; not only to increase the odds of them coming back, but also to decrease the odds of being contagious.     This suggests that companies who foster a community of customers should also have direct-to-consumer communications when the migrate away.  "Sorry to See You Go" programs should augment "Thank You" and other communications.  

From a search perspective a recent research report on retail shopping behavior reveals the ways search is used in the shopping experience.   The themes:
  • "Generic queries dominate a buyer's search behavior" – buyers are using, and are referred by, non-branded queries.   It seems that the idea that the brand cuts thru the clutter, ie it is a surrogate for information (Chris Anderson's view), and gets a product in the consideration set is somewhat a fantasy for most products. 
  • "Organic listings drive buyer behavior" - Not surprisingly these are organic rather than paid links:  85-15%.   This makes for some interesting notions about content and how to leverage it.  
So, how do we link general terms with branded content?   It is the rational and communal (price and reviews) information, rather than emotional content that consumers use when clicking thru search results to another page.   The fact that Google and Bing have pushed more content to the SERP suggests that 'buy online, pick up in-store' will become more prevalent.  Add to the mix mobile devices and the research stage has moved to anywhere including staring a product at the point of purchase.

Advertising stimuli are often used to seed the search process.   But the use of generic terms suggest that consumers go up to the category level rather than a specific brand.   For category leaders this is good since they should be in the business of growing the category anyway.   For the rest of us this is a big risk - unless we're disruptive and creating a new category.   A clever stimulus will put other brands into consideration set, not eliminate them.  This suggests that the search strategy should be around owning the broad information that helps a consumer choose – not just the specifics of the brand.   So when a product is launched the search aspect should be on how to get it into the natural process of looking at organic, generic terms.   Unless someone can figure how to increase the page-rank of a brand new microsite then this path might be less fruitful than one would desire.    It does suggest that understanding search behavior and modifying the ad budget should be coordinated.   For instance, direct-to-consumer programs should control some ad groups at the time of the in–market date.  It also suggests that the role of display ads could change as well – clicking thru to someplace else. 

Both of the above examples, while from widely different aspects of marketing, illustrate the continuing need to think differently about how marketing works.

Agnostic vs. Cognostic

What is a word?

In the late 1800's Thomas Huxley coined the term 'agnostic' to reflect his world view that certain things, e.g. deities,  are not known or even knowable.  The inability to demonstrate a conclusion or premise is the basis of the term which translates to 'without knowledge'.  

In marketing and technology the term agnostic has moved closer to 'independent' - like 'platform agnostic.'   Unfortunately this has transcended into 'media agnostic' -- which is an unfortunate turn of phrase.  It would suggest we either don't know how to prove media works or are indifferent to it.  Nothing could be further from the truth.   One of the major advantages we have with clients is we can offer expertise not in one or two channels but in a wide variety of channels.   This provides the opportunity to  think in pan-media (earned, owned and paid) terms - the heavy lifting of strategic thinking. 

Both Omniture (adobe) and Google provide platforms for multi-channel funnels.  The latter typically focuses on website conversions; the former has a better opportunity to figure out content consumption 'out there'.   Generally, any captured event is an interaction.  It is up to the business do define what matters and what doesn't.  This is a market where interest is flowing:  iJento is a start up and Alltop – Top Web Analytics News lists all kinds of news in the space.  Some enterprising youngster will take Flow Visualization and apply it across a wide set of properties rather than just one the traffic to one site. 

So, in the spirit of inventing words I had come up with the term 'cognostic' four years ago to reflect that media planning is done with knowledge.   Not only do we know how it works, but we have the ability to understand how consumers use various mediums in their decision journey.