Monthly Archives: June 2007

***** Bring Out Your Dead

DataBase Marketing, Measuring Engagement

Yes, a rare 5 star article, my “must read”.  Why?  For one thing, it is based on analysis and real-life data modeling by Professor Peter Fader and friends at the Wharton School – it’s not a trade mag article by some Consultainer.  Fader has a major track record in customer analysis and modeling.  The article is Beware the Walking Dead.

What we’re talking about here is the effectiveness of cross-sell and retention efforts based on the Customer LifeCycle, and how if you execute too late in the Cycle, you could end up “waking the dead” and driving defection rather than encouraging retention.  The specific example given is cable television, though this article provides support for a lot of ground covered on this blog and others, including my piece on engagement, and Ron’s numerous pieces on customer experience.  I love it when academia synchs up with real world experience - academics are so much more rigorous, you know…

The article is a summary of the results from the academic paper, and includes a link to the actual paper for those of you who are into the math and modeling.  If you’re unfamiliar with academic papers, they typically provide the actual formulas for the proof of the assertion.  Reading the actual paper is not for the faint of heart, but I know some of you folks dig the high level modeling math.  Not into the math?  Read the article itself, an excellent summary.

Bottom line: another reason to downplay the LifeTime Value approach in favor of Customer LifeCycles.

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 audienceÂmeasurement?  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 spac 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.