Monthly Archives: June 2007

The 3% Solution

Brand Management, Web Analytics

A list of the posts in this series on Brand Management is here.

Without getting too deeply into the Math (and if you wish to, feel free to post) the web simply does not have the “weight” to move the needle like TV does. It ends up our ol’ offline advertising friend GRP’s (Gross Ratings Points = Reach x Frequency)  mean something.  But “you can’t measure the web that way” has always been the cry from online Display ad proponents.  Yea, no kidding.

This from ARF’s Online Reach & Frequency Committee:

“When a banner or other type of ad is served, it is rarely exposed to the full audience of the site or even the full audience of the page served. As a result, there is no relationship between the site’s audience and the audience for the advertising.”

Hmm.  Houston?  That’s what you call a problem in media, a problem that makes any criticism of the GRP / TRP way of life simply slide off the radar.  Christ, at least with GRP’s we have some kind of yardstick, some tangible notion of “weight”, however inaccurate.  At least GRP’s are consistent, which I can deal with.  We used to worry about frequency imbalances, you know, over / under delivery on Frequency to certain segments.  Or, sure, people get up and go to the bathroom during the ad or use a VCR and skip the ads.  That’s all nothing compared to this little online problem we have here with Display Advertising and audience measurement.  Perhaps we’re just going about this whole Display Ad thing in the wrong way, trying to force an old media business model into a new media environment?

In 1991 when I was at HSN, we actually tried to convince Nielsen to measure the HSN TV audience in Cume Quarter Hours. They went right over the edge. “That’s a radio measurement” they sneered, like I didn’t know.  “Why is radio measured differently than TV?” I asked, feigning innocence.  “Because radio listeners behave differently than TV viewers”, they said.  Oh, I see.  So audience behavior defines best practices for audience measurement? Cool beans, man.  I’m with ya.

Because, you see, my pointy-headed little Nielsen-ites, the way people primarily watch TV Shopping is by flipping into and out of the shopping program while they are watching something else on TV – something else you folks, by the way, are assuming they are watching straight through.  Lots of people, for example, flip to HSN during the ads on the other TV Networks.  The behavior is different, it’s a lot more like radio where people are constantly changing stations, which is why radio uses Cume Quarter Hours, right?

Silence from the Nielsen-ites.

Then, “We’ll get back to you on this”.  They never did.  Wouldn’t even take my calls.  I think they were hoping TV Shopping would just go away.  Meanwhile, a TV network that supposedly had “no viewers” sold a billion dollars worth of stuff that year.

No viewers, indeed.

I think you can probably see where I am headed with this.  But I’m not letting you off the hook yet.

I may be the only one reading this old enough to remember the launch of cable television. Yes, there was a time when there was no cable TV. Back then, our friends at Nielsen operated strictly with the diary system, and surprise, surprise, cable TV never got any ratings. No viewers. Years and years of lobbying later – with the broadcast networks doing everything they could to pressure Nielsen into sticking with the diaries -Nielsen installed the meter system. For the first time, you could actually tell what TV channel people were tuned to. And the ratings for cable TV absolutely exploded off the charts. The trade pubs were all “Who knew?” and all the major agencies were “Mea culpa!” as they dove in head first and spent billions on cable network advertising. Good thing to, because a lot of those early cable networks were on the verge of going belly-up. Not too many years later, total cable programming viewership exceeded total “broadcast” programming viewership for the first time.

No viewers, indeed.  Ends up people were doing a lot of “flipping” with that new-fangled remote control thing that came with the cable box.  Yes, flipping.  From channel to channel.  Can you imagine it? Viewers don’t sit still and watch the entire program through to the end?  And you mean to tell me viewers wouldn’t spend the time to write every flip down in a diary?  Or remember every flip in the end of the month rush to fill out the diary from memory?  C’mon, who knew?

So now we get to online display ads, and we’re back in Houston again (with apologies to those of you who live in Houston – a great city).  The onliners are simply not measuring this audience stuff correctly or not measuring it at all, depending on your point of view.  And the end result is Online Display ads simply don’t work as “mass media”, you can’t get any “weight”, so you can’t move the needle at the checkout aisle for a Brand Manager.

Based on past experience, I’d have to say this: the behavior of the audience probably has something to do with this measurement problem. Call me crazy. But the fact of the matter is advertisers want to understand the audience for a media, and once they do, they’re pretty likely to jump in with both feet, just like they did into cable TV when they got the measurement right. Unless, of course, the measurement indicates Online Display ads are basically equivalent to advertising on matchbook covers in terms of any mass-media “weight” you can get.

If you’re looking for an answer to this particular online display advertising measurement problem as it stands today from me, I’m not that smart.  There are plenty of people with deeply vested interests in this area to chase down the “right” answer if the Display industry chooses to stick to the old media model.

But may I suggest that this answer will not be found in an “old media” model.  I think it’s possible that because of the extreme fragmentation in this online media, you simply can’t get to any kind of measurement that makes sense from the old model mass media perspective.  The closest you can get to an old media idea is the “Yahoo HomePage Takeover” kind of trick, where you basically know what visits to the HomePage will be and you have a single “forced” point source for the ad.  Now you’re getting closer to a GRP-feeling kind of measurement, if you exclude robots and all the pingers and everything else that’s not human.

That still doesn’t take into account the behavior side, the fact that most folks on the web are there to get something done in one way or another, not to sit passively being entertained. So unless what your ad has to say is directly related to the task at hand, it simply isn’t going to make a difference, if it even registers as an impression.  Most of this display advertising has been so irrelevant to the visitor for so long that people don’t even see the ads any more.

At this point, I bet you think my opinion of banner real estate is that it’s useless.  That’s not the case.  I think the way this space is currently packaged, used, and measured is illogical and defies what we know about human behavior.  I also think there’s a pretty good chance you can never aggregate enough exposure to this space to create “weight” comparable to mass media, or that if you can do this aggregation, the expense of doing so drives the cost of the media beyond what it costs to do the same job – with a lot less pain – on TV.

I mean, that’s the underlying problem, the real root cause, right?  At some point, when you’re trying to create a “mass media weight” in a totally fragmented environment like the web, the expense of not just the media but the damn administration of it gets so high you might as well go out and buy yourself a basket full of TV and Radio.  Which is exactly what the Brand folks do.

Sure, you can do some highly targeted Display stuff that works out pretty well, filling in against “lost audiences” and so forth, and there are examples of this approach around. But let’s agree this kind of execution is not “mass media” by any stretch of the imagination, OK?

So Jim, what would you do with the banner space to make it worth purchasing by mass media folks?  Reject the offline mass-media model, and create a behaviorally appropriate model for online Display, one that directly and effectively supports offline mass media as opposed to trying to be the offline mass media.

I would stop trying to turn the banners themselves into “mass media”; stop worrying about awareness and intent and all that stuff based on the Banner alone.  Instead, use banners to bring people to a microsite / web site, where they can be delivered a tangible experience of some kind.  Then run these packages underneath the mass media: use the mass media to do what it is good at – generate broad awareness.  Let the banner / site package come in behind and take care of the intent and engagement.  The proper execution of this idea is as a TV –> Banner –> Microsite integrated campaign – I’m not talking about just slapping a URL on a TV ad here.

And then look at your awareness and intent – not based on the Banners alone, but on the interaction of visitors with the banners and the web site as a package.  This would be a new media approach to the new media, as opposed to trying to force the old display model into new media.

By taking this approach, you align yourself with the behavior of the consumer, and slash out a tremendous amount of noise on the measurement side.  The measurement population becomes “Of those who are interested enough to click the banner” versus “Of those who we continue to bludgeon to death with irrelevant advertising”.  To help people get their heads around this, the closest offline compare is probably Magazines, where the audience has pre-selected themselves as being interested in a topic and the ads are more like part of the content rather than an intrusion.  This is roughly the way the behavior would play out online for a Display / micro-site package.

This approach would require agencies to go “beyond the banner”, and we know it’s not cool for agencies to care about what happens “after the impression“, despite what is going on in their space.

So, 3% of the mass-media budget is OK with you agency folks, then?

Next time: Let’s talk a little bit about what a Brand and Brand Advertising really are, leading to why a banner / site package might make a lot of sense to the mass-media folks controlling the other 97% of the spend.  The next post is this series is here.

As always, comments on the above are welcome!

Why Can’t Johnny Brand?

Brand Management

A list of the posts in this series on Brand Management is here.

But can he do Brand-ing?  You bet!

Curious thing happening out there in online media world.  Comments about the non-effectiveness of Display Advertising on the web seem to be working their way out of the dark recesses of the Marketing community into the light of the media day.  Witness these recent comments from:

1. A Seller of Banner Ads.

2. A Buyer of Banner Ads

3. Consumer research on Banner Ads

1.  “The net is not a branding tool or a quick-reach vehicle, but when used in conjunction with other media, it helps to seal the deal with the consumer.” – Bill McOwen at MPG, the media buying unit of the mega-agency HAVAS, as reported in the Wall Street Journal (subscription might be required).

2.  “I don’t think banner ads are a total waste of money, but they’re not very effective”. – Trond Riiber Knudsen, Senior Vice President of Strategic Marketing at Nokia, as reported in the McKinsey Quarterly.

3.  (bold emphasis mine) “…banner ads may provide a valuable function in fostering familiarity even if those that view them never click through to the source of the ads. The downside for advertisers is that any evaluation of the positive impressions that this familiarity creates, even one based on false premises, is enough to make those positive feelings vanish.  This suggests that familiarity-based advertising may work best for impulse buys, where more detailed evaluations aren’t likely to occur.” – Journal of Consumer Research, as reported here.

A sample of 3 sources is pretty small, sure.  The quality of the sample is pretty good though, and these comments bring up a lot of important Marketing Productivity issues.  But I’ll address just one fundamental idea in this post, and get into the other issues later on.

A lot of the online agency moaning about the lack of “support” for Banner / Display initiatives focuses on the packaged good folks, who represent the majority of offline media spending. These agency people say that if 1/3 of media consumption time is spent online, then 1/3 of the mass media spend should be online, instead of the 3% they get.

That’s the issue we will focus on today. And please remember while reading this (if you don’t know already) that a Brand consists of much more than the Brand Advertising used to support it.

Why Johnny Can’t Brand

The people who support online Display Advertising as an advertising approach always point out how effective it is at “Branding“. I know what a Brand is, and am familiar with Brand Advertising strategy. But I’d never heard the word “Branding” until it was used to describe why it was important to shoot gerbils out of a cannon or have a sock puppet that looked like a dog in a TV ad. I ask myself, what does this effort have to do with Brand or Brand Advertising? I can see how these ads generate awareness, sure, but what do the ads have to do with the Brand? How do they segment audience, differentiate or position the product?

No matter. Despite the complete lack of any real marketing strategy behind this expensive advertising (it’s different this time, right?) “Branding” as a concept persisted in online Display advertising throughout the bubble after the TV experiment. Later, when called to task on effectiveness, the people pushing this type of advertising started to do studies.  They found consumers exposed to online Display Advertising had increased levels of “awareness” and “intent”, as in the oft-cited studies by Dynamic Logic and others.

Cool!  Please read #3 above.

I’m still not sure what Branding really means, but let’s take the industry on it’s word, and stipulate it means “increasing awareness and intent using online Display Advertising”.  Let’s even agree that Branding works, despite the very real measurement problems present with  metrics like “view through“, which means the awareness and intent they are measuring could be generated by other sources  Search, for example.  Let’s ignore all that, and believe “Branding” works as described.

Despite this acceptance, we now get to a real problem, in my mind.  I don’t think many heavy buyers of mass media (TV, Print, Radio, etc.) are judged on awareness and intent alone. They are primarily judged on Sales and Share.  Do you think the Brand Managers at Procter & Gamble get away with spending billions of dollars on mass media with nobody looking at Sales and Share?

Right.

A  Brand Manager knows whether the Brand Advertising is working or not, and for what segments.  This analytical effort is a damn science at the packaged goods companies, who are the largest buyers of mass media and of course, the ultimate “Brand” folks.

Sure, they measure awareness and intent as part of managing a mass media campaign, that’s market intelligence.  But the effort doesn’t stop there, they need to see product movement, and they know how to track this movement.  In other words, they understand how awareness and intent turn into actual product Sales and Share of market.  How mass media ad spend turns into Profits.

So, I ask you, where is this comparable measurement effort with the online “Branding” folks   How does the awareness and intent generated by online display advertising turn into Sales and Share for these mass media advertisers?

Based on the above 3 comments, I think I know the answer. Branding folks simply can’t measure the end impact of the awareness and intent generated by online Display Ads – and neither can their clients.  So even if you stipulate “Online Branding Works”, it’s still irrelevant in the mass media world. Online Branding can’t move the needle enough to be measured at the checkout counter or at the cell phone store.

In other words, Branding is Brand Advertising without the “end demand” part.  So the bottom line for the big mass media spenders is this: it “doesn’t hurt” to sprinkle a few dollars across “Branding” online, but it’s not going to be a big deal, really.  A rounding error, and the budget should reflect that.

What’s the root cause of this problem?  Try this on for size: Dragging an old media idea like Display Advertising online and expecting it to work like it does offline, and at the same time, making the case it should be measured differently than offline.

You can’t have One without the (pause) – Other.

Now, I know a lot of folks have vested interests in creating, buying and selling Display Ads, and that my thoughts above are not terribly welcome.  But just take a look at what is happening around you. If you want to be relevant to the packaged good folks and others like them, you are going to have to change the Display / Branding model. It’s simply not going to survive in the current form because it cannot move the demand needle.

Is it possible that there are much more effective ways to execute Brand Advertising on the web than simply buying Banners and other Display units?  Approaches that will lead to a higher percentage of mass media spend on the web, which after all, seems to be the end goal?  Of course there are, and there are people out there making it happen by thinking about what the packaged goods folks want / need and being creative. Using both brains – left and right.

For example, if you are in love with the idea of Banners / Display as a customer-facing media, why not tightly package them to activity on the web site, where you can drive interaction and measure something tangible?  Integrate the media so the messaging flows into the site, tell a complete story, cause some interaction that has value?

When I ask most online “Branding” agencies about the example above, here is the answer I get:

“What happens on the web site is not our problem”.

What happens after the impression is not your problem?  Why not?  Again, that’s an old media idea, isn’t it?  How convenient to fall back on the “old way” of thinking about advertising when it suits you, often at the same time scolding folks like those making the 3 comments at the top of this post for being “stuck in the past” or “not getting it”.

How’s that working for ya?

I’ll run through a model for thinking about and understanding this area in future posts, along with some examples.  Be warned though, we will be covering things like Psychology and Human Behavior- you know, that Marketing Strategy stuff that rarely seems to come up anymore.

Your thoughts on the ideas above are appreciated and welcome!

And if you don’t agree with what I have said in this post, please provide a counter-example (go ahead and hide the personal stuff) so we can all learn from your expertise.

The next post in this series is here.

Tracking UnTrackable Campaigns

Analytical Culture, DataBase Marketing, Driller Q & A, Newsletters

Jim answers questions from fellow Drillers
(More questions with answers here, Work Overview here, Index of concepts here)

(Any Tracking is Better than No Tracking at All)

Q: I have a background in direct marketing and the measurement of campaigns using defined sources.  Now I am working at a technical or 2 year college and I’m trying to use my previous knowledge and experience to measure our return on marketing efforts in recruiting new students and converting them from prospects to enrolled students at the school.

I’m looking to measure events and all of the advertising and promotion used to communicate those events as well as other campaigns. It’s difficult to measure since it may include newspaper ads, direct mail, posters, etc. – not just direct mail with a measurable list to refer to for tracking response.

Plus, trying to get the admissions folks to track leads can be difficult. They also want to track return on publications (brochures, flyers, etc.)….not sure how one would do that if they are not mailed to a given measurable list?

I’m looking to track ROI based on the whole equation….from the # of inquiries who came to an event or responded to whatever all the way to whether they matriculated and enrolled in courses.

A: I can feel your pain!

I don’t think there are any easy answers to this. You could simply measure what you can measure through the traditional direct methods you are familiar with, and let the rest “ride”. Or, you can try to selectively determine, as best you can, what the value of all these other activities is by engaging in some kind of testing. This will take some institutional willpower and is probably something you can’t do on your own. In other words, I encourage you to start evangelizing the next generation of marketing measurement at the school.

From your title, I perceive you don’t “report to” marketing, but some higher institutional level responsible for Quality and perhaps Productivity / Accountability for funds that are spent? It sounds to me like your unit might perhaps report into the Financial area of the school at a higher level, and if so, that’s good!

I think I would simply start the conversation with folks in the financial area about some of these issues, and see if you can create some simple tests to get some “direction” on the contribution of the various marketing outlets.

For example, every publication should contain some kind of tracking device. Sometimes you have to be creative with this idea and it won’t always be accurate, but it’s better than nothing at all. If response is generally by phone, then try to get a unique phone number for newspaper ads, brochures, etc. If response is driven to the web site, get unique URL’s put on each document. If response is filling out a sheet or card at an event, have them numbered or coded in some way. Then of course, you need to get the response information – number of phone calls to each number, number of visits to each unique web site URL, number of response cards mailed or turned in.

Implementing a program like this, then finding and getting access to the response info may not be easy, and that’s why it would help to have a “higher power”, particularly a financial one, backing this effort. It’s pretty amazing what people will do when, for example, the people who control the budget for an area say, “You will participate in this tracking program”.

Alternatively, you could go with a test / control kind of scenario where during a quarter, you leave out one particular marketing effort and see if there is an impact on overall Marketing Productivity. This is more of a “marketing mix” kind of approach and not without some problems, including proving the missing marketing effort was responsible or not for changes in Productivity. You have to think about how you might pin these issues down in advance – for example, do you have good baselines for “normal” activity?

Whether or not you decide to pursue all of this is somewhat of a personal choice. Some analysts simply don’t think it is their “job” to help create measurable structures – they only measure what can be measured. Others see the difficulty as a challenge, and want to help build out the structure. Clearly, if you are going to eventually be responsible for measurement, being a part of the team constructing the measurement paths is a real advantage to you. It will involve some politics, but analytics always involves politics at some level. I encourage you to seek out the support you need to make this work.

If there is “pressure” for measurement, someone wants it to happen. Start by finding these people and having a conversation about how it could happen, the strengths and weaknesses of the measurements, the internal challenges you will face.

When taking on something like this, it’s usually best not to try to change the world all at once, but one step at a time. So, for example, looking at the overall “unmeasurable budget”, what is the largest line item? If it’s “newspaper”, that’s a place you probably have the largest leverage. Implement there first, keeping in mind that this single implementation might help you down the road. For example, getting a unique phone number and results tracking for newspaper may teach you a lot about how to get this done for other marketing devices.

The finance people should be able to provide you with some idea of the net “margin” of a course and any other financial ideas that come into play. Then it’s a matter of asking if the spend on the media generated positive results. If the margin on a course is $500, a newspaper ad costing $1000 that only generates 1 student is not a great investment – but it might be the best one relative to other vehicles. This part is not really your call. Your job is to bring the data to life so that people can understand what they are spending and what they are getting.

There could be plenty of reasons why “losing $500” on a newspaper ad is OK – there is “brand exposure”, for example. In this case, the brand exposure only costs $500 versus a perception that it costs $1000, if the student generated is included in the formula. This may be a very positive result of the measurement for many folks in the institution. That judgment is really for someone else to make. Now at least they are making it on a full set of facts as opposed to perceptions they have about cost.

Q: However, how long do you keep measuring enrollments…they may not enroll based on one campaign…might take a few hits before they actually become students.

A: Sure. What seems reasonable? Given an annual budget cycle, let’s say reasonable is 12 months. One benefit from your tracking is you will be able to probably put some numbers against this eventually. If you get calls to a brochure number 2 years after it was issued, then the number is 2 years for a brochure. Newspaper calls stop coming in at 4 weeks, it’s 4 weeks for newspaper.

Q: The other issue: the marketing folks only want to measure up to inquiries–what they have control over.  What’s the best way to only measure the return on that…it’s before a “sale” or “enrollment” even occurs, so the “profit” is not booked.

A: Well, sometimes you simply have to decide what is “best available”. You certainly can start by measuring inquiries, especially since it’s pretty clear in this case marketing lacks some control over key conversion elements – financial aid, student abilities, and so forth. Down the road, it’s possible that certain types of media generate lower quality inquiries with lower conversion rates. You will get there over time.

For now, you could apply the “average conversion” to any lead to get down to the financial part of the game. If all leads on average convert at 25%, then just use that.  Then when tracking gets a wider reach, try to drill into it more deeply. To do this, you’d have to get access to enrollment data, of course. But you don’t have to get “all the data, all the time”. You could do a sample of a couple of months and go through it by hand to match back to inquiries, if you have to. You certainly would not be the first to do something like this to pin down an issue – it happens all the time.

Whether you want to do something like a “by hand count” or see it as part of your job is really more of a personal choice.  You can certainly – and analysts often do – blame a lack of knowledge on system problems, politics, whatever.  Just can’t get the data.  For some people “don’t know” is not acceptable – they have to find the answer, whatever way they have to do it – even if it is by hand!

Q: Does your book give an education example? We’re not “selling” a product and “sales” deals with # of credits taken by students & price per credit plus funding we receive from the state gov’t based on the number of FTEs generated. It seems like such a different animal so I’m struggling to figure how to do ROI for an educational services provider. I have created an Excel template based on how I calculated ROI for other industries but haven’t tried it yet.

A: Sounds like the “profit” side of it is a bit complex with the outside funding, but I’m sure you can get to a “value per FTE” somehow. Just start with something, and make it better as you move along. If you have to, simply take “all revenue” divided by number of FTE’s and you at least have a place to start.

The book doesn’t have extensive educational examples but here are some related topics from the newsletter:

Predicting Student Churn

Profiling Library Customers

I have a lot of interest in these educational measurement scenarios for a variety of reasons.  Keep me posted on how you are getting along and ask any questions you might have as you make your way through?  If I can be of help let me know!

Jim

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