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.    

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.

Implications:

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.

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.

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.

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.  

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

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.

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?

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.

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.

Augmenting Reality and Content

Why do we like overlays?

Augmentation refers to the process of making something more than originally intended - larger, more numerous, more intense.   In marketing, it often refers to satisfying one of two personal needs;  augmentation adds...

1. information and context.
2. a layer of personalization.

In the post-PC era content must reflect time and place because devices are now portable and thus truly become extensions of ourselves rather than our desks.

For the first type of augmentation, Adam Broitman wrote a good, detailed piece today entitled "A marketer's guide to augmented reality."   The technological examples range from individual to group experiences, e.g. National Geographic's Museum, to healthcare, e.g. glucose monitoring contact lenses for diabetics.   Because consumers will expect a brand to be where they are supporting what they are doing AR will continue to evolve. 

Also in the news this week was research that showed Pinterest is one of the top referrers to women's magazines.  While single copy sales are down nearly 10% year-over-year the linkage between personal interests and editorial content continues to grow.  The idea of combining interests from numerous sources alters the concept of content curation from an editorial role to one of being in a collector's club.

Now, to simply reverse the process and use Pinterest in AR to create a personalized, digital issue as part of the shopping experience. 

Marketers as Matchmakers

What can we learn from Yente?

"Matchmaker, matchmaker find me a match" - the classic lyrics from Fiddler on the Roof - apply to marketing as well as the marriage scene.  With a myriad of choices out there in nearly every category, marketers should be helping consumers choose.    On what basis can we can align needs and solutions?

There seem to be several possible ways in which matches can be made.

• Product:  From product selectors based on usage to using data mining to pick appropriate products for flyers this is the oldest and most common form of matching.  The objective is to make a sale.
• Consumer:  in industries where consumers share a common goal or style facilitating introductions may be the best way to create brand loyalty.   Homipholy is a power attractant and companies should create communities where appropriate.
• Voice and Message: if consumers use a product or service for very different reasons then it is quite possible to change the positioning of the product.   If we can understand the outcome a consumer is looking for, then we can serve up appropriate content.    The objective is to simplify the process of creating an emotional connection. 
• Finances: for real estate and automobiles sometimes the financing is as important as the house or the car itself. It can take the form of "you prequalify for $x" or "you can trade up for less than you're paying now."  The objective is to limit the range of choices to those within an appropriate payment envelope.

All of the above require an analytics engine of some type - from propensity models to collaborative filters to semantic technologies to complex business rules.   Mastering this diversity of technology is probably not a core competency of most marketers or companies. The implication is that analytics are likely to remain an outsourced function dominated by a cluster of boutique firms who do one thing well.  

Need to update my Rolodex in a couple of areas.

ROI and Coupon Monsters

"What is the ROI of a phone system?"

This was in response to a discussion at the local Utah AMA event around the payoff of social, local and mobile (SoLoMo) marketing.  I believe the point was that at some point, certain technologies simply become part of the business fabric - you can't operate without them.  However, from a marketing perspective the panelists were clear: If you don't know the objective and what success/failure looks like then it is easy to chase the next shiny object.  And this led to the best quote of the evening: "I hate lazy, crappy marketing."

Some key points...

1. ROI should be used as a relative measure to compare alternatives, not the absolutes of a single event.   It answers the question, where should I spend my next dollar?
2. Discounting should be tested carefully before deploying since you can't undo the effects of rewarding that kind of behavior.
3. The trend is toward direct-to-consumer marketing where it is "easier" to measure the impact of the spend.   This is a not so subtle shift from brand marketing to sales; the long-term effects of which are unknown.

Insights Come from Clues

What can we learn from product purchases?

In one of the most interesting cases of using data to create insights, the NYT reported and Forbes followed up on how Target figured out whether someone was pregnant. Using changes in product purchases the analytics team estimated the likelihood that a guest was pregnant and specifically in which trimester.

The marketing reason for such an analysis: identifying someone who is about to have a baby can be the basis for forming a long-term relationship. The business reason for doing so: If you can do that before other companies, the odds are much more in your favor of creating the habit that drives loyalty.

Those articles were shared by the boatload with lots of discussion.  The response was usually somewhere between cool and creepy; particularly when you start thinking about "selling the pregnancy score."  (Pic from that article.)

I'll leave the debate as to whether this goes beyond the boundaries of leveraging personal information to the ethicists.  From an analytic perspective, this a good example of how it should work.

1. Identify a question that hasn't been adequately answered before.
2. Attempt to infer the existence of a market based on what little we know.
3. Create, execute and refine a plan based on the clues.    

No report could have produced this type of analysis. 

Marketing Platforms and Human Behavior

Can marketing ever be automated?

The marketing of marketing technology fills our minds with the idea that it can be streamlined and automated.   However, there is plenty of evidence to suggest that it can never be a hands-free process.   Consider the issues with email marketing where list decay, declining click thru rates, and better filters result in a constant battle to just stay even, never mind improving things. 

Like Sisyphus, we continue to believe we're making progress only to find up we are further behind.

To succeed at our jobs as marketers, which in my mind is about influencing choice, suggests we would be better off if we focused on consumer behavior.   We need to garner insights, understand content consumption habits, and anticipate the path to purchase.   Individually the verbs "garner, understand, and anticipate" don't strike me as things that can be automated very well.  And the combination of the three would be a daunting task indeed. 

The questions we should be constantly considering include:

• What would be of interest right now?
• How can we alter the probability of choosing us?
• What can we do to remove friction along the decision path?

Landscape of Marketing Technology

What works when and for whom?

With the myriad of platforms, vehicles, and tools available to marketers it seemed inevitable that someone would come up with a framework for understanding what works for whom and when. 

The Grocery Manufacturer's Association and Booz & Company released their fourth annual installment of 'Shopper Marketing' and while focused on the buying part of consumer behavior, it does offer a good framework for overlaying marketing objectives on top of technology. 

The key findings:

• Marketing spend  on helping consumers choose (buy) continues to rise faster than other categories.
• Deal seeking, particularly digital, continues to be integral to the decision-making process.
• Proliferation makes for a complex world complex that eschews testing for the tried and true.

The overlay of business objectives and path to purchase on top of the effectiveness of various vehicles is worth the read.  

The New Tenets of Marketing Plans

What are the foundations of marketing planning?

A recent request on what the technology trends are led to thinking about some core elements that now have to be a part of any discussion about marketing plans.

Mobile is the center of the experience.

• Point-Know-Buy:  Consumers will be able to find out about anything simply by pointing to it.  The trend is to understand any object, not just those with codes or embedded activation.   Great examples from trendwatching.    

• Showrooming:  in-store mobile commerce; the trend to leverage both a network (phone calls) and the Internet while standing in a store.    

• Wireless Wallet: cash and cards will be marginalized as the wallet itself pays for everything.   

 Consumption gives way to Sharing.

•  Continuation of a trend; sharable content will overtake content designed for consumption.  Time spent on Facebook is now >15% of Internet minutes.    

• Content Know Thyself: Intelligence will be built directly into content for tracking and linking;   based on personal conversations with Adobe folks. 

Marketing and CIO are Joined at the Hip.

• Digital advertising now exceeds 30% of spend; will push toward 50%.  Because we're dealing in bits – the advertising world is often a technology one first, a marketing one second.  Complexity of just display illustrated here by LUMA and simplified by PerfectMarket. 

• Contact platforms will first extend horizontally to cover channels and then move vertically up into the business.   Already seeing this with platforms moving from email to multi-channel management.

•  Marketing firms are creating 'chief marketing technology' roles that effectively join the CMO and CIO roles.

Modularity and Place Independence.

•  Stuff will simply be there.   While the cloud was originally thought of as a cost-saving alternative to the DIY Glasshouse; the unintended benefit is that content is accessible from anywhere.   From Dropbox, match from iCloud, to telematics in cars the notion of content storage as part of an app will evaporate.

•  Mashups will succumb to modules.   The open nature of APIs allowed individuals to create new things; but that doesn't always scale.  In its place will be higher-order modules that connect with a host platform. Facebook, Amazon, salesforce and Adobe all have visions of being the center of a Hub and Spoke architecture because they own a verb.  The best apps will disappear because they become part of the device.

Data Makes Decisions

•  Personalization, relevancy, and customization will be driven by the math – gone will be the sessions trying to prioritize offers.  If we can optimize a banner ad on a publisher's site for a particular set of eyes, we should be able to do it for coupons.  Real time bidding and other sophisticated analytics will be applied to flyers.     

•  Big Money from Big Data:  the ability to wrestle the sheer magnitude of data into submission, never mind gleaning insights, will be a premium.   McKinsey predicts a 50% gap in required skills by 2018.   

Guess I'll have to update those planning templates and dig out my old slide rule.

Markeing's Goal: Own a Verb

What's in a word?

Often in positioning a product or company we talk about owning a word: safety, easy, etc.  On NPR this morning with Mark Pincus of Zynga made an interesting point: Don't own just any word, own a human activity.

Quick, who owns:

Shop
Search
View
Share
Play

What's the combined value of those verbs?
What is the market cap of Amazon + Google + YouTube + Facebook + Zynga?
The 'next big thing' will own a verb.