Archive for the ‘Interactivity’ Category

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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.

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Changing the Marcom Mindset (part VII) – Marcom as an Experience

February 2, 2010

I’ve touched on these ideas in previous posts:

  • Brands are experiences
  • Winning brands are the best experiences
  • Extraordinary experiences are interactive and provide pleasure or meaning
  • Brand experiences can happen on many levels beyond product use

So what do experiences have to do with marketing communications?

Marketing communications (Advertising, PR, etc.) is rarely an experience, or sometimes even a bad experience. Marketing usually interrupts what people are doing. It’s loud, condescending, or irrelevant – a barrier between us and another experience – an experience we chose.

Most marcom isn’t pleasurable or meaningful either. It provides no benefit or value to our lives, and as a result it isn’t something we choose to engage with.

Most marcom isn’t interactive. Marketers still see consumers as a passive audience, calling them readers, viewers, or listeners, and continue to see their job as creating and broadcasting commercial messages TO them.

What can marcom people learn from products and services?

Marcom folk can learn alot from the products/services they’ve advertised and promoted for decades.

Marcom needs to be more like brands: An experience. Something people choose to engage in over other experiences. This is a mindset shift of monumental proportions, especially for those who’ve spent years creating 30 second spots and print ads.

Marcom an experience? Something people do? Something people will choose to do instead of avoid?

These ideas might sound a bit strange, but the old Marcom mindset of creating and pushing commercial messages to the masses isn’t going to cut it in the future.

Next time: Mindsets are Hard to Break

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Changing the Marcom Mindset (part VI) – Experiences are Broad

January 28, 2010

Brand experiences happen on many levels. Let’s use beer as an example. There is an immediate sensory aspect of the beer experience: the chill of the bottle, the color and texture of the pour, the aroma, the taste…but the brand experience doesn’t end there.

The brand experience goes beyond product/service experience

Price is also an important factor in the beer experience, but the social and environmental situations in which a beer is consumed is equally or more important. If a brand can build a strong association with pleasurable or meaningful social situations, those experiences can become part of the brand experience.

Beer marketers recognize they’re limited in how they can improve the brand experience by what they put in the bottle, so for decades they’ve used advertising and promotion to suggest an association with other experiences.

But advertising is almost always passive. A suggestion of an experience isn’t an experience, even if consumers associate a particular beer brand with certain experiences in their mind. In the future brands will need to work harder by augmenting the experiences they want to be associated with.

Next Time: Marcom as an Experience

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Changing the Marcom Mindset (part IV) – Pleasure and Meaning

January 19, 2010

The second requirement of an extraordinary experience is the intensity of pleasure and meaning it provides. Pleasure is a state that is more about a sensation or feeling – something that is usually short-lived. Meaning is more about intellect and understanding – something that’s long lasting.

The lists below contain examples of both. The ‘meaning list’ is mostly borrowed from a presentation by Shedroff.

Intensity matters

Extraordinary experiences provide a high intensity of pleasure, meaning, or both. Brands need to think about what kind of pleasure or meaning they’re trying to evoke and find ways to dial up their intensity.

Next time: The Nuances of Experiences

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Changing the Marcom Mindset (part III) – Experiences and Interactivity

January 13, 2010

So if brands are experiences, shouldn’t we understand the basic things that determine whether an experience is good or not?

What experiences are made of

Extraordinary experiences usually have two qualities: 1) they’re interactive and 2) they provide pleasure or meaning.

Almost every brand I can think of offers some element of interactivity. Consumers USE most products and services, so it stands to reason brands are interactive. The quality of the interactive experience is also important.

Most products and services also have a sensorial element. You can see them, taste them, smell them, touch them, or hear them. Interactivity that involves more than one of our senses can be very powerful.

Nathan ShedroffWhat is interactivity?

In the mid ‘90s Nathan Shedroff diagrammed an interactivity continuum. It does a great job of illustrating the factors that make something interactive. This continuum can be used to analyze different types of media, but also evaluate almost any human activity. High levels of interactivity plotted on the right and low levels on the left.

You can even use this scale to analyze how one brand stacks up against another. In almost every case, brands that provide higher levels of interactivity are more successful than their counterparts.

Some brands can even create interactivity that results in a flow experience, such as video games, adventure vacations, and toys.

Next time: Meaning, Pleasure, and Intensity