Creating a path of least resistance

July 22, 2010

eMarketer just posted an article titled Where to Reach Women Online. What caught my attention was the bar chart (on the right) showing what women are most likely to notice on the Internet. There isn’t anything surprising about the responses here, but digital strategists should take note. The chart is actually an engagement funnel.

Using this funnel, marketers who are trying to engage women online would start by offering a discount, not by eliciting questions/opinions about the product. The idea is simple: invite consumers to participate in each subsequent brand activity in the order of their interest.

  1. Provide a discount, then invite participation in…
  2. An opportunity to win a prize, then invite participation in…
  3. A survey or quiz, then invite participation in…
  4. A social/chat feature to share opinions, then invite participation in…
  5. Viewing a video about the product or company…

Whenever possible, give consumers a path of least resistance.


The agency billing model is broke

July 7, 2010

Agencies typically bill their clients by the hours they spend, not by the results they deliver. What’s wrong with this model?

We’re ultimately in the business of selling stuff. Billing hours for making things doesn’t necessarily mean we’re selling more stuff. So why are clients content to pay their agencies by the number of hours they work? And why are agencies content to bill by the hour if they’re confident they can sell more stuff more efficiently then their competitors?

Our industry is notoriously bad at connecting the dots between a marketing communications activity and a sale. John Wannamaker was famously quoted as saying “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” After 100 years we’re only slightly more equipped to answer that question.

Agencies and brand marketers work on the premise that marketing communications can create awareness, brand favorability, and purchase intent. Each of these can be measured to some degree through consumer surveys, but drawing a direct line to a sale is difficult.

Most marketers also have many marketing activities running simultaneously, so quantifying exactly what parts of their marcom is working can be a challenge. Marketers are also faced with deciphering what factors are driving the effectiveness of any given activity: The creative? The media? The tactics?

Over the past few decades we’ve made some progress in cracking the code of marcom ROI, but many of these techniques are extremely expensive or based on anecdotal evidence. Marketing ROI has yet to become a quantifiable science.

Should agencies throw up their hands and continue to bill by the hour? Not necessarily.

In the digital marketing world we can readily measure engagement. Here are few examples of rudimentary engagement metrics:

Comments, posts, reviews, retweets, likes/follows, email opt-ins, downloads, uploads, subscribing (email, RSS, podcasts, video series, etc.), links to, embeds/installs, user-initiated plays/replays, favorites/ratings, social bookmarks, page views, clicks, game plays, time spent, poll participation, entries (contests, sweepstakes, etc.), coupon prints, and product demos.

Marketing researchers are getting a better handle how different types of engagement impact purchase behavior. And although we’re still years away from quantifying the exact value of a particular engagement activity, we have enough evidence to begin associating a value to an engagement.

I propose agencies involved in digital marketing efforts begin developing engagement models and attempt to associate a dollar value to each activity. If nothing else, brand marketers will have a better benchmark for measuring success, and who knows, agencies might end up with a better model for billing clients.


What we can learn from BP and Bear Stearns

July 4, 2010

Marketers aren’t immune to making monumental screw ups, although they might not be as notorious or colossal as those made recently by BP and a band of financial institutions. When people overlook or downplay risk, things often blow up.

In the late 2000s major financial institutions nearly cratered the entire U.S. economy as a result of their activity in the sub-prime loan market. A herd mentality created this crisis as an overwhelming number of bankers mistakenly believed housing prices would rise in perpetuity, and at exceptional rates.  A decline in home prices was simply unthinkable.

The exact cause of the BP oil spill might not be known for years, but most believe it was the result of an equipment failure that went unaddressed, reckless engineering decisions, and poor disaster planning. In the context of BP’s global operations, these probably seemed like small tactical issues to BP executives. Certainly nothing that could cost BP billions.

When a marketing communications strategy goes wrong, the fallout is rarely as obvious as an oil spill or financial collapse. Our methods of measuring success and failure often aren’t sophisticated enough to tell us exactly how poorly an ad campaign or marketing activity performed.

Our industry demands we take on risk. However, there are a couple lessons we can learn about risk from both BP and Bear Stearns .

  1. Be wary of group-think. Marketing people are huge suckers for Bright Shiny Objects: the latest fad, a new technology, a buzzword – hype that can distort our expectation as to how something will work in the real world. Experimentation is one thing, but making a big roll of the dice based on a mistaken belief can end badly.
  2. Execution matters more than you think. Agency leadership and brand marketers like to think big picture and often can’t be bothered with the icky, tactical stuff. Execution is almost always the first thing to get short-changed, from budgets to timelines. When implementation fails, the best idea in the world is worthless.

Attention and Intention

July 2, 2010

Bob Hoffman, the provocative blogger at AdContrarian.com asks “After 15 years, can anyone name even ten serious non-native consumer-facing brands that have been created by web advertising? Is there a brand of coffee, butter, beer, bread, chicken, gasoline, soda, peanut butter, dog food, milk, tires, potato chips, life insurance, lawn mowers…don’t make me go on, you get the point…that has been built primarily by web advertising?”

Although “non-native consumer-facing brands” is quite a caveat, and Bob forgets to mention the Internet as a mainstream advertising media is barely over a decade old, AND less than 10% of all ad dollars are spent online, he still has a point.

But the takeaway isn’t ‘web advertising is a failure.’ Far from it. To understand the role of digital marketing you need to understand the mindset of Internet users.

Marketing via traditional media is mostly about attention. Media planners are interested in demographics and relevance. They ask ‘does this programming sync with consumers who are most likely to buy the product being advertised?’ Media planners have few clues whether or not a viewer has any real intent to buy the product/service being advertised. I’ve watched hundreds, maybe thousands of TV ads by Geico and Progressive, and I have zero intent to purchase any of their fine services.

Internet users have an intention mindset. That explains why over 60% of online ad dollars are spent on search. When people are in the hunt for a particular product or service category, then tend to seek out product information, authorities, and reputations via digital media. They don’t sit in front of their TV sets to see which advertisement is most persuasive before making a purchase decision.

I realize I’m making some broad generalizations here. Most people don’t go online to research a candy bar or dish soap, and many brands move the awareness needle via web advertising. The point I want to make is marketing goals, user mindsets and media attributes should be a driving force behind any marketing strategy.


Exposure is just a means to an end

March 11, 2010
The basic idea behind marketing communications hasn’t really changed much over the years, but it’s amazing how this industry continues to miss what’s important. We also seem to miss there’s an actual progression to achieving a marketing goal.

The goal of marketing communications is to change the way a group of people think or feel about a brand. Ulimately, we’re trying to change what people do. Usually, buy the brand.

There’s a natural progression to changing thoughts, feelings, and behavior, and that’s where most marketers seem to stumble. Marcom always involves three basic steps: exposure, attention, and engagement. Without attention or engagement, you can’t ever hope to change a behavior.

Traditionally agencies and media firms have been rewarded based on exposure metrics like impressions and GRPs. Oddly, exposure to a marketing communication activity doesn’t mean the consumer had any awareness of the brand message. In fact, advertising agencies rarely know how many people exposed to an activity actually exhibited any awareness of or engagement with the activity.

There are many levels of awareness and engagement, and awareness tends to bleed into engagement. Engagement is a bit easier to measure because it requires an action from the user, but measuring awareness can be difficult.

We know higher levels of awareness and engagement translate into greater opportunities to change thinking, feelings, and behavior of a consumer. We also know awareness and engagement translates into sales.

Marketers should be placing much more emphasis gauging the effectiveness of their marcom by measuring awareness and engagement, not by relying on what’s easiest to measure: exposure.

TV Ad Exposure Exposed

February 28, 2010

Over the past decade or so there has been a lot of talk about the diminishing efficacy of TV advertising, but I’m not sure how much of this criticism gets to the heart of the matter. According Nielsen the average American still consumes over four hours of TV programming everyday and ad skipping via DVRs still seems to be negligible.

In 2009 Sequent Partners, Ball State University’s Center for Media Design, the Council for Research Excellence, and Nielsen reported findings of a ground breaking research project. If you want to get a better understanding of how Americans use media, I highly recommend reading the full report.

The study reported “TV users were exposed to, on average, roughly an hour a day (61.1 minutes) of live TV ads and promos.” This figure may be a bit inflated, but still stunning if you consider the average participant’s total exposure to computer and mobile screens was only 2 hours and 43 minutes a day. As a comparison, the average daily exposure to television clocked in at 6 hours and 3 minutes. For some reason participants in this study consumed two more hours of television everyday than the Nielsen panel – as reported in the Nielsen Three Screens Report.

What really troubles me about studies like this is the phrase ‘exposure to TV ads’. I submitted a request to the CRE for their definition but haven’t heard back yet. From what I can deduce, ‘exposure to ads’ means being in close enough proximity to a TV to see and/or hear the advertisements. Exposure doesn’t necessarily mean looking at the TV or actively listening to the audio. And there lies the problem.

“Exposure” is not a useful measure of consumer attention or engagement, and without at least a minimal level of attention, one would assume a TV advertisement would have little if any effect on the user.

So what do we know about TV ad exposure and a viewer’s level of attention? Not much, and I’m not so sure our industry is eager to find out.

Page 46 of the VCM final report includes a chart illustrating ‘concurrent media exposure’ during regular TV content and advertisements. The diagram is cryptic, but its obvious concurrent media exposure is significantly elevated when TV commercials are running. I assume environmental factors such as conversations, etc. are accounted for in the data represented by the blue triangle.

Concurrent media exposure sounds benign. Most people assume they can “multi-task” and successfully consume multiple media streams simultaneously. As I noted last November, researchers at Stanford University study found media multi-taskers cannot process more than one information string at a time. A 2007 MRI study reported similar findings.

Based on the VCM study and other studies, I diagrammed my hypothesis of how much attention viewers pay to TV advertising. During TV advertisements, the percentage of viewers who are highly engaged is quite small. How small? We don’t know for sure. To my knowledge, nobody has done a comprehensive study to find out how attentive viewers are to TV commercials. And that seems quite odd given billions of dollars are spent on television advertising every year.

So what does this all mean? Every marketing communications activity should be evaluated by attention and engagement measures, not exposure. CPM (cost-per-thousand) can be extremely misleading when comparing one marcom activity to the next.


Tweet me in St. Louis

February 17, 2010

My agency just launched STL Tweets, a community website that identifies, collects, and organizes Tweets into a variety of passion verticals. We think this is the ultimate resource for St. Louisians who want to know what the rest of the community is talking about – right now. The site also allows people from the community who are deeply connected to a specific passion area to act as curators. Check it out.