Getting from A to B Online is Complex

What exists between Marketer and Consumer in the online world?

The short answer is the Publisher of content, for that is what people consume and that is where display ads appear.  So, how does a banner actually appear on a particular site?  

LUMA Partners publishes a view of the Display LUMAscape or how to get from A to B, replicated below.

Thoughts:

• It is clearly a complex world under the covers of deciding where to place an ad; in fact, humans don't decide.   
• There doesn't seem to be much white space to create a new market.  The result is a mad scramble as the market consolidates into vertical or horizontal roll-ups.  See adexchanger for a list of changes since 2008. 

How would the picture look if we started from the Consumer on the left?  Would we then find market opportunities?  Traditionally, things like search sat between Consumer and Publisher.   But, what else could we do to improve the connection?

Integrating Social Media Inside of Campaign Management

If I send a custom offer in an email, can I also customize the tweet?

The idea of running campaigns inside of social media is a natural.  After all, social technology allows for the leveraging of human interactions to improve engagement with contests and events. Companies like Strutta and Wildfire are offering social media marketing products and suites to execute promotions from within social networks.

But what about integrating social channels into traditional campaign management tools to simultaneously deliver a message to a like, a follower, or a member.   Since the objective is to increase the odds of conversion, how do we surround a consumer with relevant offers across those channels? 

When we send 10,000 customers custom coupons based on their transactional data in email or direct mail, can we leverage social channels in a similar way?

So, the fine folks around the corner from my office took a look at the API's of various social technologies from that perspective.   Here's a brief synopsis of what they found.

• Twitter: we can certainly send a tweet to individual followers and we can dynamically generate the text and offer.  However, because twitter limits the number of tweets a given account can send per day you can't effectively reach all our followers.   
• Facebook: it is possible to post status updates to the page the brand owns and it can see the likes. However, posting on the wall of the likes is another matter.  And since the evidence suggests that less than 10% of likes see the posts on the brand page, this is an area worthy of further exploration.  
• LinkedIn: again, we can create an account, enlist followers and post messages.  The limitations are two-fold: first, what constitutes a marketing message, and a coupon would most certainly qualify as that; second, how deep into the network can a communication go - direct connections vs. 3rd degree. 

Obviously these limitations are in place to reduce spam.  

So, the question remains: when a consumer voluntarily connects within social media with a brand can we send custom offers from outside?

Consume vs. Share: Our role in a media world

Are we just couch potatoes?

Earlier this month Clay Shirky gave a straightforward TED Talk on why SOPA and PIPA weren't such good ideas.  And rather than talk about piracy and foreign web sites he touched on a fundamental question:  Are people simply consumers of content produced and distributed by others, or do we really strive for something else, i.e. to be human?

The media industry is often portrayed as taking the former point of view; they create, then publish in hopes that we consume on their terms.   To preserve that model they first tired to exert legal control over copying, then technically at the device level to prevent copying, and now at the root infrastructure level to restrict access.  On the other hand, the Internet exposed the fact that once the costs of production and distribution could be negligible we found out that copying was easy.

But what many have forgotten is that we copy because we like to share.   To have something interesting to talk about drives our interactions with one another. 

It is this distinction, consume vs. share and business vs. human, that may be at the root of all the passionate debate about ownership and compensation.

Repeat after me: I am not a couch potato.

Oh, should I have shared this?

The Rules of 95

Why does marketing struggle?

In a recent DMA webcast on "marketing to your customer's brain" Roger Dooley gave an overview of neuromarketing.  In it, two previously unrelated facts collided.

First, 95% of most marketing doesn't work.   The argument was that since direct mail, email and other direct-to-consumer campaigns are often measured in single digits they can't be defined as 'successful'.

Second, 95% of decision making is due to subconscious thought rather than an explicit process.  That is, for all the research we're not actually quite sure how consumers come to a decision.

If true, I doubt the relationship between the two is mere coincidence.  So I began to wonder what the relationship between those two 95's might be and what questions we need to consider.  We should ask ourselves:

1. How do consumers actually make decisions?
2. How do marketing events and campaigns work?
3. How do different types of content affect decisions?
4. How do consumer need states impact choices?
5. How do messages effect the odds of choosing one option over another?

Ultimately, the question is how do we relate this to ROI?  

The Value of Enrichment

Why augment your own data with 3rd party sources?

While transaction data is good, often it isn't enough to solve marketing problems.   Say you were a publisher of a number of magazines (in fact, as part of TC Media we are) and wanted to stimulate discussions with advertisers - what would you talk about?   While circulation and subscription figures are good for setting rates, they don't necessarily tell a story about who the audience is.

Imagine being able to talk about trend setters - the Urban Young (a Canadian Prizm group) - that are likely to be an attractive audience.  What do they read (if anything)?  What advertising recommendations would you make?

The following visualization combines 3rd party data to enrich the base subscription data and the ideas behind search clouds to provide a basis for conversation.  To read:  Size is the relative reach of the magazines based on total subscriptions while the color illustrates the penetration among a particular audience - red is higher.

The Urban Young:

• Are interested in style as evidenced by niche titles that have high penetration (red)
• Aren't really involved in mainstream publications (purple or blue titles)

So, a potential media strategy would be to use a number of publications to reach the desired audience.

 

Simple subscription data wouldn't spark such a conversation quite so quickly.  

Marketing Agility vs. Efficiency

Can marketing be automated?

Not really; although the search results of 'marketing automation' suggest it is not only possible but a business objective.  This perception is in part fueled by the research firms - e.g. Gartner, Forrester, et al - that write about the enabling technology as a category.  That's too bad.

The implied benefit of 'automation' is often interpreted as efficiency and certainly marketers are asking us to do more with less.   However it is easy to take this too far by driving thinking out of the equation in order to improve ROI.  For a glimpse of what not to do, Hubspot wrote a piece on the 7 Deadly Sins of Marketing Automation with a set of good tactical recommendations ending with analysis and measurement.   Yet there is a caveat to even that idea; because we are dealing with emotions, needs, and choices we must recognize that all that the testing and learning we're supposed to be doing may not be valid over the long haul (or even tomorrow).  And if it is 'automated' why is there a scarcity of skills?

The reality is that we must also adapt to or shape consumer preferences in order to succeed in any competitive market.  To achieve financial objectives we must understand the drivers of not only our business but consumer decision making.   The methods of continuous improvement rely on a set of clear and stable objectives that are appropriate for a brand.  Tools can't do that.

The important marketing questions that satisfy both issues seem to be:

• What are we trying to achieve?
• Why do we think we will get there?
• How do we plan on getting there?
• Why did we hit or more likely miss the target?
• What will we do next time?

In the end we must find ways to be both agile and efficient.

4 Reasons Custom Coupon Programs Work

Why shouldn't we just go ahead and blast coupons, they're cheap?

My mailboxes, both online and off, are stuffed to the gills with generic and gratuitously personal offers.  The majority of which don't even get a read.   The low cost approach of throwing spaghetti on the wall and seeing what sticks might work for direct response products but it dilutes brands. 

Consumer insights tell us the following:

• We like to be recognized as special
• We respond to rewards better when they are delivered intermittently
• We take advantage of opportunities we perceive as unique

A recent Journal of Marketing article applied this thinking to retailing coupon strategies by comparing 'custom coupons' with other forms like FSIs.   In the research, 'custom coupons' are defined "as campaigns that, unlike sales promotions and FSI coupons, retailers provide only to their best customers and include offers that are customized to consumers’ preferences."

The questions are:  Is it worth it?   And why does it work?

Financially, custom coupon campaigns resulted in higher spend among customers yielding a 14% increase in contribution net of marketing.  In short, they work - not only for the promoted products but for the whole basket.

So what explains the lift? Why do people put more things in their basket?

1. Exposure - the mere presence of a custom coupon program generated results.  This suggests that coupons, and the surrounding space should be treated like any other brand advertising element.
2. Redemption - the coupon itself acts like an attractor or stimulant, so is necessary but not sufficient to product the gains (otherwise there would be no improvement over manufacturer FSIs)
3. Atypical Frequency - because coupons are chosen based on preferences and behavior (or lack there of) the result is an unpredictable timing pattern, and this creates a sense of surprise and delight; improving results
4. Rewarding - choosing products for the best customers, and telling them you did so, adds to the effect.

The simulations were based on two years of loyalty shopper data sampled from across a number of retail chains, so provides a basis for a number of recommendations:

• Build a custom coupon program as part of any loyalty or points program, targeting the top tier
• Highlight items within flyers and other generic distribution means that are unique to the recipient
• Make the communications personal - in tone, message and offers; turn the creative team loose

Maybe I'd pay better attention...

A DOSE of Reality

How should we approach planning?

I had an opportunity to explain a project/program plan recently and was asked 'why does it take so long to get to market?'   So, we had to explain ourselves in four steps.

• Discovery - who is the audience, what do they want, how do they decide?
• Objectives - what are we trying to achieve, how do we know we'll be successful?
• Strategy - why will we be successful?
• Execution - what do we need to succeed?

The result was a DOSE of reality because too often the planning process works in reverse - start with a tactic and then figure the rest out.

The Coming Deal Storm

What can we learn from a nursery rhyme?

One of my favorite stories to read to my son was about storms.

“The storm starts when the drops start dropping. When the drops stop dropping then the storm starts stopping.” ― Dr. Seuss

In this day and age where deals are chic, a variation comes to mind.

People shop when the price starts dropping. When the price stops dropping then people stop shopping.  

Unless we're careful, we will be fueling a behavior and reinforce deal hopping, a practice very familiar to the consumer goods world where retailers were notorious for buying on deal to sell at full margin (just compare warehouse data with POS data) or today's NYT article on margin erosion during the holiday sales.   Add to that recent research from MarketTools that suggests that nearly a third of customers don't return because of a bad experience.  If we don't solve the experience side then the demand side will be for naught and given away at a discount. 

In yesterday's post, Seth Godin talked about a variation of this in terms of the inherent dangers of a measurement first attitude thru the example of direct response marketing where it is about the numbers.   The media planning argument seems to be going like this: because we can measure, we will spend.

In this storm brands become products.

Dealing with Big Data: Take a Deep Breath First

What do we do about 'Big Data'?

First, understand what we mean and second, not panic.   From my perspective marketing's 'Big Data' is the result of a world where everything is interactive and people are the media. As such it supports the view that transactions, events and comments across channels, locations, and devices are all part of Big Data.

On the second point, I read an interesting post and discussion on how to think about the problem from Wim Rampen.   The central theme is around questions we should be asking ourselves.  In his words....

It’s no time to panic, and it’s not the time to go out and buy all the technological solutions you may be led to think you need. What does it mean to go into calculated, strategic mode?

5 Questions to enter strategic mode
A good way to start being calculated and strategic about this is asking yourself 5 important questions. Here the are:

1. Start with asking (business) questions you need or want answers to. This could be any question, related to your processes, your customer needs, habits, your points of sale.. etcetera etcetera. Because, if you do not ask the right questions, you will never find the right answers in any data, let alone Big Data.
   
2. Re-think what you need the answers to your questions for: what is the proposed value coming out of knowing the answer? Will knowing the answer eventually result in creating more value for the company and the Customer? Is it actionable? If not, skip the question and focus on the ones that do provide actionable insights. There’s little time and little money, so you need to be effective with both resources.
   
3. Ask yourself: how can I obtain the answers to the questions fastest and cheapest? Can I get closer to the answer(s) by first asking my Customers? Can I get closer by first using data I already own? More data does not always mean better data. Relevancy is not always easy to establish, but 9 out of 10 times, the not so so sexy, not so far away, not so expensive is good enough. You don’t need to be exact all the times. You need to be closer than before.
   
4. If you still think you need to tap into Big Data, or need surrounding solutions, make sure you start any project with experiments and prototyping. Evaluate and iterate in short cycles, until you get it right. And don’t waste too much of your time getting it right. People will loose interest, and even if you get it right, chances of success decrease exponentially if people hopped on the next train.
   
5. Last, but not least, ask you self the question if you need all this “in (near) real time” like ‘they say’. Or that running your analysis once works just as well, because the patterns do not change that much.

Social Nurturing: Helping People Choose

How do we fill the void between inquiry and a sale?

Often there is a pregnant pause between consumers raising their hand requesting information and actual sales.   In days gone by we looked toward lead treatment as a means of moving people thru the sales funnel.  There are, however, several things in this idea that are at odds with how people want to interact.

• "Lead" - we don't think of ourselves as in this way.  Even the post-secondary industry - known for its voracious appetite for contacts - is moving away from this condescending view and looks at the world of inquiries.  
• "Treatment" - unless we have a medical condition, then being manipulated by an organization isn't all that appealing.
• "Funnel" - again, another business construct that is impersonal and doesn't actually reflect human behavior and motivations.

So, how can we really help inquiries confirm their interest?   For high-consideration products as well as those with a strong dose of passion then maybe, just maybe, we should let this be a communal activity.  Questions to consider:

• Since trust is an issue, who can we introduce prospects to that can help them make a choice?
• With the proliferation of options, how do we eliminate hyper-choice by doing a better job of matching needs and solutions?
• What behaviors help us differentiate between 'just looking', 'keep in touch', 'engagement' and 'hand-raising'?
• How do we convert transactional buyers into loyal customers?

In the ever-increasing world of connection, sharing and helping then it seems time is right for 'social nurturing'.