***** The Medium is the Metric for Online Ads

Article with the title above, published here, is apparently creating quite a stir in the advertising media community, particularly among the “brand” folks.  One of the core points is that all media will become measurable and thus “accountable” in terms of the effect ads placed in the media have.  While I’m not sure that’s going to happen in my lifetime, the initial thrust is that online media better get their crap together in the measurement area and define some standards, because the new “Agency of Record” is going to be an analytics shop that measures, in a centralized way, the effectiveness of all advertising a client is running.  The unspoken implication here is this agency would essentially have the power to fill or kill any campaign based on performance.  Neat idea.  Two comments:

1.  I was selling cable television ads in the mid 80’s when Nielsen, despite intense pressure from the broadcast networks, started metering cable homes “in the box” (wired into the set top controller).  When the first hard numbers came out, they absolutely blew away all the estimates of the cable viewing audience.  Turns out a lot of cable viewing was not captured in the paper diaries, and the meters picked it up.  Go figure.  You mean what people report to you in a survey doesn’t reflect their actual behavior?  C’mon, that can’t be true (being sarcastic for those who don’t know me).  Anyway, network cable advertising absolutely exploded after this, and all this money fueled better programming.  That’s when “Big 3” share really started to tank.

In other words, we have seen this movie before.  Money follows accuracy.  Instead of resisting this idea, these brand folks ought to embrace it and hang on – it’s going to be a wild ride.

2.  The idea of a central agency being the “Master Record Keeper” is an absolute must, since if each agency runs it’s own success metrics, each agency will claim success that really belongs to another agency.  You need to have a source of the “one truth”.  I have argued this same point many times with companies that have analysts spread out into each of the silos.  While it is possible this could work, you would need an iron fist to enforce consistency and remove the tendency of an analyst to paint a better picture of the silo his boss runs. 

Just trying to make sure every silo is being honest would take a huge amount of work – why not just centralize it in the first place, and do the work once?  If all the analysts report to a CAO who basically is a 3rd party with no axe to grind, then the CEO is going to get the straight picture – including all the cross-silo effects, which is usually where all the ROI is hiding.  For example, you are not going to get an analysis that includes the “true cost” of a marketing campaign that causes all kinds of problems in customer service from an analyst in the marketing department, it’s just not going to happen.  You need a 3rd party view to get to the Root Cause and start fixing broken processes that affect the customer experience and waste a ton of money.  There are very positive benefits to having a group of analysts who each are experts on a single piece of the company under one roof, interacting and discussing business issues.  That’s how you get breakthrough thinking, how you fix the broken cross-silo processes that drive customers crazy.

It’s great that we are all becoming more accountable, but let’s get down to the meat of the matter and kick analytics up to the C level and out of the silos.  How long will it take before the CEO finds out the silo analysts are “torturing the numbers”?  Do you want to be there when it happens?  It’s not pretty, let me tell ya.  I’ve seen it.

In case this doesn’t make any sense to you, here is an example.  How many customers does your company have?  Ask 5 people, you will get at least 3 different answers (if you get any answers at all) and they are all probably wrong.  The proper answer is “that depends on how you define a customer”.  Now, picture each silo with their own set of KPI’s, many based on the “number of customers” in some way and you start to understand what I am talking about.

Like I said, not pretty.  A full-on, CEO’s beating forehead vein kind of thing, a “We’ve been telling Wall Street we’re running this company based on analytics and now you tell me that we can’t even agree on how many customers we have?” kind of meltdown.

Maybe you should start thinking about centralizing your analysts now?  Or at least talking about it?

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7 thoughts on “***** The Medium is the Metric for Online Ads

  1. And this is why time series analysis/marketing mix modeling is so important a capability: a good model can estimate the contribution of each medium to the outcome (sales, click, calls, etc.). It can even account for non-traditional media such as sponsorships, endorsements, naming rights, etc. and can do all that at an aggregate level, that is, without resorting to client level data.

  2. Nice thoughts here. While lying with statistics is nothing new, the notion that being brutally honest might be more lucrative in the long run is definitely a whack upside the head for most marketing and sales departments. We’ll see.

  3. Jim, great post. While a firm like the one I work at would probably love to be the “master record keeper”, in all good faith I would recommend to any CMO that it absolutely must be an IN-sourced function. Otherwise, its like putting the fox in charge of the hen house.

    But, alas, I don’t see it happening in too many firms too quickly. The analytics groups don’t have the clout and the strategic vision to take the macro view.

    The “brand folks” (as you call them) will play whack-a-mole with these analytical initiatives and proposals popping up down and then in an attempt to keep them down.

    But over time, I think what you laid out will happen…. it’s a matter of when, not if.

  4. I think few can argue on any logical level and say that your advice here isn’t good… but it can be very dangerous to go about pointing out that the emperor has no clothes! Not saying it shouldn’t be done, but some caution and political adroitness is necessary in most cases, I would think.

  5. All, thanks for the comments. It absolutely will be a challenge, and it may not happen until the CEO has the kind of meltdown I described – there is simply too much at stake for the various “emperors” out there.

    I really think web analytics will drive some of this – the success folks are having with a cross-silo attitude and “unified analytics” approach are highly visible, and at some point, someone is going to ask, “Why don’t we use this approach elsewhere in the company?”. That will be the beginning.

    To be clear, I don’t have a problem with “brands”, but I include the entire customer experience in the definition of one. I do have a problem with “branding”, meaning the use of impression tonnage to try and convince people your company or product is “this”. Your company or product is only “this” if “this” is the experience people have with it.  There is way too much transparency now to get away with the “if they have an ad on TV everybody must be using it and love it” consumer mentality of the 50’s.

    After all, many great brands have been created without doing ANY “branding” style advertising at all. The challenge is for marketing folks to understand how this is done and do it for their company, and a lot of this work involves understanding the role service and excellent process execution plays in a brand.

  6. Jim, have been a subscriber of your newsletter for a while, and finally responding to one post. I agree with Ron Shelvin above, this function should be IN-sourced. We actually had a client recently say “We know you are our agency of record, but we really want to control the analysis of data internally” and I suspect many more to come. On the note of multi-channel analytics, I thought I’d mention that we have recommended two partners to our clients who really seem to “get it” and really have figured out how to take duplication of results (and a whole lot more) coming from offline and online. Check them out Blackfoot Interactive (http://blackfootinc.com) and Database Marketing Services (database-marketing.com).

  7. Thanks for the comment William, I guess I’m guilty of not being clear on my position. I’m with Ya on the In-source thing, if your company has the talent. If not, Outsource.

    Either way, my point was I have seen analytical efforts provide the highest benefit when they are centralized so that you get both consistency of platform / metrics and 3rd party analysis that is not subject to the data torture often prevalent in the silos. How we get there is still up for debate, and I submit the CEO melt-down scenario is probably the most likely route at this point. This is, of course, a reactive model and it sure would be great to have a proactive substitute for analytical panic – knowing it is going to happen, what can we do now to prevent it?

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