Friday, March 30, 2012

Digital vs. Analog Marketing

What changed when we went digital?

There have been at least two fundamental shifts in how we approach marketing in the digital era.

First, we've gone from addressable to guessable.   The concept of a persistent identifier that we could hang our programs on has evaporated in the digital age.   Gone is the physical address and phone number that formed the foundation of our knowing a consumer .  Now IP addresses and cookies form the 'bedrock' of digital knowledge where we often have to do a lot of inferring about an individual.  This means we need to think in terms of probabilities rather than absolutes.   It also may mean we should focus on the behavior itself and worry less about who is doing something. 

Second, we've gone from our media calendar to consumers' internal clocks.  The concept of a prescribed sequence of campaign steps within a defined calendar no longer applies when everything is interactive.  The notion of batches or drops needs to be augmented with support for pull and accessible content.  This means we need to think in terms of continuous exposure.  The implication of this is that we need to abandon the silos of channel and think about surrounding the consumer with interesting content to help her choose.

Tuesday, March 27, 2012

Marketing and the Digital Self - Part 2

How does marketing need to change?

So, let’s assume for the moment it is ok to use the digital self for marketing purposes. What’s different?

While technology clearly leaves a footprint that can be leveraged in the marketing process an immediate implication is the creation of infinite paths to purchase. Because every surface or touch-point can act as a jumping off point the traditional view of what tools are appropriate for awareness – consideration – purchase needs to be completely rethought.

For years marketing wanted to deliver the right message to the right person at the right time and we’ve come close.  However, the adoption of social technology has meant more likely that some message is delivered to someone at some time.  And even if we succeed in delivering our message you can guarantee it will be vetted.  The questions that really need answers – is this a good price, what do you think, will it look good on me? – are a simple click, tap or swipe away. 

The combination of mercurial paths and hazy messaging results in the abdication of control and a significant change in influence wielded.   As a result, marketing has to deal with a fluid fog because the brutal truth is we can’t know exactly what is going on at any moment in time.

So, what should we be doing?  There are new areas for marketers to consider as they create their plans. 
  1. Understand how choices are made. What are the sources of influence?  Given the immediate access to numerous points of view those companies that think about improving the probability of choice will win out.
  2. Understand how content works.  What types of content affect choice? What should we be producing? Creating a blend of emotional, promotional, informational and communal content will be required to satisfy the left and right brain aspects of deciding.
  3. Rethink the use of 'brand advertising' and 'direct-to-consumer' in the marketing mix.  A strong brand acts as an emotional short cut to a decision.   And in the recommendation economy this is consumer-to-consumer rather than air cover.  The focus should be on surrounding the consumer with interesting content to help her choose.  
These steps all rely on understanding the role of a brand in the era of digital self-expression. 

Marketing and the Digital Self - Part 1

How do digital bread crumbs relate to marketing?

The benefit of a digital world where nearly everything we see or touch is interactive is that we can actuate our human desire to share.  The rise of social technology reinforces the notion that “self-expression is the new entertainment”  (Arianna Huffington).  The unintended consequence of all of this for media is disruption as both new players and new channels of distribution emerge.  And with all things digital, as we share content we’re creating a trail of breadcrumbs, or a ‘digital self.’

And, this leaves us with a fresh question:
Do the signals left by digital self-expression represent a foundation for selling stuff?
On the one hand, this is viewed as a dream come true: We know what a person does, what her interests are, and with whom she communicates.   One can’t imagine a better way to create a target rich environment for personalized communication and or laser-focused advertising.  

However, identifying individuals based on their behavior raises a thorny question:  Do we need permission to use the digital self as a platform for targeting?   Many of the industry approaches to this dilemma take a loosely aggregated or anonymous approach to avoid identification of specific individuals through the creation of segments, predictive models or even an IP Zone.  While this is often framed as a question of privacy, there are some basic marketing questions as well. 
  1. Are the crumbs we see reflective of the need we satisfy?
  2. When does self-expression relate to a commercial interest?
  3. How do we distinguish transient self-expression from core intent?

An approach would be to try to glean insights from the combination of purchase history and the digital self.   Since these represent two very different personae this route might help reduce the amount of inference, and frankly guesswork, required to understand a consumer’s intentions.   Yet to do this requires some serious integration work starting with the acceptance that we live in a brave new world.    

Friday, March 23, 2012

A View from the Summit

What does marketing look like from the top?

Given Adobe's client base, there is no doubt what happens at the Adobe Digital Marketing Summit doesn't stay here is Salt Lake City.  This year's message about the Digital Self is likely to be repeated in the conference rooms of the biggest companies with the question: What do we do now?

But this is a tale of two conferences: It was a marketing conference; it was a technology conference.  Those who had been to previous Omniture Summits missed the deep diving 'how do I' sessions.  The new marketers in attendance wanted less code or product marketing and more solutions and proof.   Reflecting this duality many a company sent both their geeks and their business minds as hallway conversations involved small groups. 

This being Adobe's Summit, their site-centric view of the world yielded a common refrain: convert traffic into sales.  Even the session on media monetization focused on segmenting site content based on traffic patterns.  Their position on driving traffic still remains one for their partners as evidenced by the sponsors - multichannel campaign management and search companies dominated the exhibit hall.  So, it falls short of being a full-blown digital marketing conference.

They continue to extend the Genesis idea of data integration in a couple of new ways - separate environments for handling of multi-channel and real time data (e.g. Insights), integration of analytics into reporting (Navigator - from the lab), and numerous social plays - usually from an ad or campaign point of view.   The idea of personal, direct-to-consumer communication remains elusive. 

Personal highlights:
  • "Self-expression is the new entertainment" - Arianna Huffington's view of the time spent on line.  Whether permission is granted to use that to sell stuff remains to be seen.
  • A chance encounter to have lunch with Adobe founder John Warnock where we discussed 'where was this all going?'   His view:  simple, end-to-end understanding of how to market.  The opportunity to have a point of view on what content to create is still open and 'is the right question'.
  • "Fail fast to succeed faster" - the conclusion of a session on conversion testing delivered by my son.  I'll admit to being proud and prefer this to Biz Stone's recommendation to hire people who have failed in the past.

  1. At some point the adjective 'digital' will be dropped and this will be just the Adobe Marketing conference as those in attendance assume leadership positions.
  2. Off-site strategy remains a big opportunity while on-site optimization is becoming a professional service. 
  3. The blending of CMO and CIO will continue as both disciplines will be required going forward. Saying you don't understand technology or marketing will be career-limiting.
  4. Consumer identification remains the holy grail.   All working sessions talked about the year-long integration challenges to get to a place where the vision could be realized. 
  5. Data and analytics will be the fabric of marketing planning; they will have a seat at the table from the beginning.

Wednesday, March 21, 2012

Measuring Human Values

What fuels growth?

Earlier I had suggested that marketing should own a human activity like search, shop or view.  Last night Jim Stengel, former CMO of P&G, argued that companies should take the high road and focus on a core human value.   His list of five from the book Grow included:
  • Eliciting Joy
  • Enabling Connection
  • Inspiring Exploration
  • Evoking Pride
  • Impacting Society
Focusing on this level results in some truly remarkable companies - Coca Cola, Starbucks, Discovery, Mercedes-Benz, and IBM - from the list of 50 that had superior performance over the past decade. 

These are clearly ethereal ideals that make measurement just a bit tricky.  Jim relayed a story that focused on measuring engagement with the ideal with just two questions.  Are employees living it? Are customers experiencing it?    If we are making progress along those two dimensions, then financial results follow.  As an example, for Visa the measurement is around both rational and emotional brand attributes:  Trust, Secure, Reliable and Empowerment, Freedom and Control.   All of this to create better living with better money.  

But just what is a human value?  Here is a potential definition.
  • Values are beliefs. But they are beliefs tied inextricably to emotion, not objective, cold ideas.
  • Values are a motivational construct. They refer to the desirable goals people strive to attain.
  • Values transcend specific actions and situations. They are abstract goals.
  • Values guide the selection or evaluation of actions, policies, people, and events. That is, values serve as standards or criteria.
  • Values are ordered by importance relative to one another. People’s values form an ordered system of value priorities that characterize them as individuals.
These criteria suggest there are several other potential values or ideals that could serve the basis for a business.

As a marketing agency I'm still stuck at the verb level with 'helping people choose' - need to elevate my thinking.

Tuesday, March 20, 2012

Understanding How Content Works

What should we be asking ourselves?

With the rise of sharing and interactive communications, there is an opportunity for someone to step in and make the claim: "We know how content works."

The questions that need answers include:
  • How should the impact of content be assessed?
  • Is there a categorization scheme that makes it easier to assess and report on content?
  • What content attributes affect choices and decisions?
  • How do content types map to engagement and transactions?
  • How do people consume content - by device, location and intent?
  • What types of content accelerate the path to purchase?
  • What are the relevant content consumption segments?
Plus a couple on who is doing it well today:
  • Is this a client side activity or vendor/agency/publisher opportunity?
  • What firms are actively pursuing the answers?

Take a Normative View

Quick: Is $28m in sales a good thing?

Well, the answer depends on a whole host of other factors the two most important being 1) what did we expect the number to be and 2) how does that stack up against similar plans.   Both expectations suggest that relative or normative assessments are as critical as an absolute figure.

If expectations were for $20m in sales, then the $28m is likely a good thing.
If the marketing plan used to generate the estimate typically generates $40m in sales then there is a potential issue to resolve.

One of the distinct advantages a supplier/vendor can bring to the table is a pan-industry view to help provide context and set expectations for performance.  Once upon a time I worked for BASES and we combined marketing plans and survey results to predict first year sales.  Our clients could have replicated the math but chose not to for two reasons:  they could kill the messenger if the results weren't up to par and they really wanted to know how their ideas stacked up against industry norms.

So, ask your vendor to tell you how your programs, plans, products stack up.  They should be glad to help you understand.

Wednesday, March 14, 2012

Recognizing Patterns from Nasty Bugs

What can we learn from epidemiology?

Stopping the spread of serious health risks like SARS and H1V1 now relies on analysis and technology as much as it does treatment and containment.  A recent article discusses various ways the health community is banding together to share information in order to create better early warning systems.

While marketing challenges pale in comparison to the arresting the spread of disease, there are a few points we should take away:
  1. Integrate the data.  Silos helps no one in the long run.
  2. Make it as real time as possible.  Winning the race to rapport requires a sense and respond mentality that doesn't fit the budget cycle.
  3. Let the data decide.   Opportunities are often too complex for mere mortals to recognize in time.  
Social media has been suggested as an effective epidemiology tool, now may be the time to reverse the process and adopt those techniques for marketing.  

Saturday, March 10, 2012

The Evolution of Content Distribution

How do we get from print to pull?

While marketers should own a verb of human activity, their vendors should own one dealing with either planning or execution.   When it comes to content distribution there are four possibilities that also form a continuum for the industry's transformation.

Print - Publish - Push - Pull
  • Print:  the production and distribution of large quantities of content - usually defined by someone else. Companies are rewarded for operational excellence. 
  • Publish: adds the creation of the content itself to the production function.  Content producers, custom or mainstream, are rewarded for editorial excellence (and reach).    
  • Push: adds targeting to the mix and requires a deep understanding of the recipient's needs, behaviors and preferences.  Because this is typically direct-to-consumer suppliers are rewarded for return on investment.
  • Pull: flip the whole process on its head and let consumers find content they need or have in mind. Those who can solve a disaggregated technology problem will be rewarded. 
The concepts of push and pull require new thinking - who consumed what, where and how and then what did they do (buy)?  The keys to look for:
  • Trackable - each chunk of content has to be identifiable as a standalone entity.  The unique identifiers used in content or digital management should be viewed from a consumption not just a management perspective.
  • Identifiable - consumption has to be specifically defined as to individual, location, and context (possibly inferred from device).
  • Linkable - to determine the impact of content, consumption habits must be tied to purchase behavior. 
All this will eventually lead to answering the question: "What content should we produce?"  

And the first marketing services company to answer that question for its clients can make the claim: "We know how content works."

As Dave Mason sang in a World in Changes
World in changes going thru
I've got a lot to learn about you
World in changes going thru
You've got a lot to learn about me too

Friday, March 09, 2012

Two Rights Make a Wrong

Why is average the most dangerous word in marketing?

A recent post by George Michie over on Search Engine Land talked about reasons management might not like the numbers your reporting.   While written about paid search campaigns the lessons are applicable to all marketing endeavors.   Here's just one of the examples from that post:

Since management likes to see just the top-line numbers, this report would be a recipe for disaster - a tongue lashing at best and a pink slip at worst.

So, why did all three key metrics fall?   (And the question as to whether these are the right metrics in the first place is addressed in the original post.)

We mix our tactics for a number of reasons: create reach, ensure coverage, and stimulate different responses to name just a few.   Like all marketing tactics, some things are worth more to us than others in terms of their ability to generate contribution margin.   So, in this example because some keywords are worth more than others the manager made two right decisions between weeks 1 and 2.  First, she identified the allowable marketing cost for two segments of key words:  "Quality" - $500 vs. "Discount" - $150.  Second, she allocated spend according to the performance of each tactic to grow the business profitably.

The results: 75% more high quality visits and 67% fewer discount visits.  A much different story than the averages told above. 

In this case, two right decisions got transformed into one that was perceived as bonehead because averages were reported.  In fact, because of the fundamental change in approach we can't really compare the overall CPL $250 to $304 although I'm not sure I'd try to make that argument directly to my boss.

Notes to self:
  1. When changing the mix over time, don't report aggregates only.
  2. Don't report diagnostic measures, report what actually matters.
  3. When segmenting, there is no overall average.

Monday, March 05, 2012

3 Eras of People and Place

How are the times are a-changing?

There have been three distinct eras of communication.

First, direct-to-consumer communication focused on a physical location since that is all we knew.   Direct mail and phone calls were direct to a specific place in hopes of reaching the intended recipient.   While these methods could be targeted, they lacked deep personalization and really didn't change much over time based on needs.  My house still has the same geo-demographics as it did when I moved in 20 years ago. 

Second, as technology allowed for portability, we sent our communications to a specific person via email and cell phones.   We knew very little if anything about where and how the message was consumed.  This time period was characterized by the 'right message to the right person at the right time' - nothing said about right place or conforming the message to be place relevant.

Now, we are entering a third era where we are beginning to understand person@place.   Looking at the intersection of place and person allows us to be much more context aware and focus on behavioral intent. Some themes...
  • Augmented reality overlays information that would be relevant to a person at a given place.  And the rumor of Google's 'heads up display' glasses suggest this area will heat up.
  • Ambient social networking identifies those around us that we might want to interact with; it may be the scariest trend of the year.
  • SoLoMo and hyperlocal are common topics in search marketing via Foursquare among others.
Is this my new phone?

Saturday, March 03, 2012

Analytic and Artisanal Marketing

Where should we focus in order to grow?

In an excerpt from "Grow", former P&G marketing leader Jim Stengel talks about what makes a brand enduring over the long-term. They focus on an 'ideal' or more simply put: what a company does to improve the lives of its customers. 

To create those brands requires an artistic temperament that understands that success is not only measured in operational terms but also in terms of quality of life.  In an interview on co.create he states "Certainly we have to measure the volume and the sales and the margin and cash, etc. Those are table stakes."

Thus, it seems that marketing not only needs to be at least a co-owner of the vision and passion it also needs to report on the organization's progress of achieving it in the minds' of consumers.   

This will definitely a new set of metrics that are not found in transaction data.

Friday, March 02, 2012

Matching Analytic Skills to Marketing Plans

Why do we analyze?

There seem to be several key questions we should be asking and answering.
  1. Why are results different than we expected?
  2. What do we expect to happen in the short term?
  3. Are there opportunities that would put us on a better trajectory?
Each question requires a different mindset as well as skills to answer.  

The first typically focuses on exploration, discovery and detective work since we have an outcome and need to understand why it occurred.   These analysts have a strong desire to solve a riddle posed by deviations from existing marketing plans.

The second usually means estimating the future by understanding how business changes as a result of past activities.  These analysts want to create order out of chaos and link causes to effects to create a better marketing plan next time.

And the third is the most improvisational of all since it requires imagining a new future and then working backwards.  These analysts focus on the art of the possible and conjure up completely new marketing plans.

A good team will have a mix of these skills.