Jim answers questions from fellow Drillers
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Topic Overview
Hi again folks, Jim Novo here.
Oh dear. A marketer caught between branding and direct. Each approach has it’s own data and metrics that either can be important or not to the folks working with the other approach. Can the measurment of success using these two approaches be reconcilled? It’s possible, but does that make sense if the “success outcomes” are radically different? Gonna be a deep Drillin’…
Q: We constantly try to quantify the value of web sites as a branding vehicle. The thing that keeps gnawing at me is we will often report the average time spent on site. This seems like it should have a value we could wrap into our ROI, but as it is, it stands largely on its own.
Are you aware of, or have any thoughts on, how we might put an actual value to this? Is it enough to show lift without respect to time, and to talk about return visits in terms of frequency models, or is there some way to drill down to a fundamental value of what a person-second on your site could be worth (obviously the content of the site will impact how much of that value you actually got)?
A: I’ve done a bunch of work like this and personally, I think you measure branding with branding metrics and direct with direct metrics. If the CPG people understand the value of advertising in terms of brand affinity, recall, intent to purchase, and so forth, then it seems to me that is what you measure. They have already made the “final connection” between these metrics and ROI, so it’s not really up to the marketer to make those connections. They believe increasing intent to purchase = advertising worked. And I’m not sure you really can make a connection, because the “units” you are measuring are different and the math ultimately fails.
Here’s why. Traditional advertising has never been judged by the “value of the customer,” it is judged by the “value of the media.” The customer is “reach” and has no individual value; individual customers are totally exchangeable as long as the reach is the same. Any single person is irrelevant; it does not matter what they do or don’t do. If there is no “customer,” I’m not sure how you would ever get to ROI. It is assumed from reach comes sales, and this is proven using branding metrics, not ROI.
Q: I’ve gone back and forth on this and approached it from a few different angles For example, determine cost of 1 second of TV advertising per person. You could use this information to calculate how much it would have cost to communicate the total person-seconds you had on your site in a particular month, but this is fraught with problems as you might guess, and am looking for another point of view.
A: You see, this is a media value, not a customer value. It’s all about how much it costs to communicate, not what the customer is worth. Pegging the value relative to communication costs is a non-starter, my opinion, because to get to ROI, you need the value of the customer.
If I was going to try and “straddle” direct and brand metrics, I think I would migrate towards evidence of “loyalty.” You can use Frequency of visit, but it makes more sense when combined with Recency – not only have they visited often, but they are still visiting. Since Recency predicts repeat action, you can imply this: someone who has visited in the past 7 days is more “loyal” than someone who last visited 60 days ago, because they are more likely to visit again. You can look at the average Recency of the visitors created by different campaigns and measure which campaigns generate visitors with the highest average “loyalty” (Recency).
This is in fact exactly how database marketing companies and people who know how to execute on CRM manage customer retention – falling Recency = defecting customer. Falling Recency for a brand marketer’s web site could = falling loyalty, and loyalty rising or falling is a metric branders have a good understanding of.
This makes some sense if you think of it in terms of demographics, something branders are intimately familiar with. If you look at the Recency of visit by search engine, you usually see dramatic differences. Visitors coming from one engine are more “loyal” than those coming from another engine, and this generally has to do with the distribution (and thus demos) of the engine. Each search engine is really like a cable TV Channel, with it’s own demos. You can further see differences within a search engine by topic, which is similar in concept to the different demos of shows on a single cable TV channel.
As for time spent on the site, it’s pretty difficult to comment on without understanding the objectives of the site. In every case I have seen, longer visits = higher sales, leads, downloads, etc., because “tasks” take time to complete. But unless you are “selling time,” as with traditional media, I’m not sure “time” has an economic value to the marketer.
It begins to sound like the PR valuation models, e.g. “it would have cost you $XX to get this coverage in an ad.” But guess what? You don’t control the content of PR like you do with an ad, so frequently it can be much less effective than an ad – so less valuable.
On the other hand, time sure has economic value to the consumer, in terms of opportunity costs – they could easily be doing something else rather than staring at your site. So “person-seconds” could certainly be viewed as the sum of attention people are willing to give you instead of doing something else that has value to them.
Seems to me you can choose your metrics poison, branding or direct (ROI). Every time I try to mix the two the math, or direct side, falls apart. And the reality is you use whatever the client or culture believes in, unless they don’t use metrics at all, and I’m not sure there is anybody still in business that sails the ship without navigational charts of some kind.
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