Category Archives: Analytical Culture

Online, the Web Site is the Ad

Analytical Culture, Brand Management, Measuring Engagement

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

OK, so hopefully we know the difference between a Brand in the classic sense and today’s notion of Branding. I’m going to resist going into the history of Brand Management here because I think many people in this medium simply don’t think the past has any lessons to offer, you know, “it’s different this time“. My experience has been that the channels and the tools may change, but the basic psychology driving human behavior is remarkably resistant to change.

So, instead of a long (and probably boring to most) review, let’s go ahead and just stipulate a couple of things from history to get started:

1. When mass media came on the scene, it was possible for the first time to market a product nationwide instead of market by market against the local offerings. The biggest problem you face doing this is the chatter about the local offering – it is made in town, by a local person, and all the local people use it. There is history – “my mother used it, her other used it”, etc. In other words, Word of Mouth. The mainstream concept of “Brand” was created to address this problem – namely, to create the impression of a premium product superior to the local one you could sell for a higher price than the local offering based on creating aspirational images of the product in people’s minds. “Housewives who really care about their families buy only the purest and most hygienic bathroom tissue”, etc. These aspirational images created Intent (or Interest and Desire, if you prefer the AIDA-S model).

2.Brands worked, perhaps largely because though the advertising might imply that “everybody who is anybody uses Brand X”, there was really no check or balance on this notion. People simply couldn’t communicate frictionlessly enough to handle any kind of “fact checking”, nor did they really want to  Sure, you could ask the neighbor over the fence how he liked his new Ford, but that was about it. Bathroom tissue? Not. Word of mouth was weak and very localized – unlike the mass media Brands concept. In fact, you might not even like the product, but if there were enough really cool ads running on TV about the Ford, your neighbor would be impressed you owned one, and that was enough for you!

So then what happened? We started to get “mass media word of mouth” through the web catching up with the mass media of the Brands, and now you’ve got a problem. There can be too many people counteracting the Brand message if it is not honest. Purely aspirational messages can be deflected or called on the carpet. Consumers can ask peers if “everybody” is using Glade plug-ins or not, and they can directly ascertain what their “risk” is to not provide a “fragrance greeting in every room” based on the experience of others (I’m not picking on Glade here, just an example). Consumers can mentally and somewhat empirically challenge the idea of whether having Glade plug-ins make life “better” in some way. They can even find out if the product is a fire hazard.

All this communication about products on the web fundamentally changes the original Brand model, doesn’t it? When you can do your own fact-checking on any ad or Brand statement in just a few seconds?

You can’t simply trot out aspirational messages anymore or make claims about superior quality without running the risk of getting into Brand trouble. In other words, the Advertising itself has been stripped of the “blind aspirational” role – and with this removal, so goes the Intent portion of the Advertising equation. The Aspirational stuff, and with it the generation of Intent (Interest, Desire), has moved to the web.

If people want to find out if the Brand promises are true, they go to the web. Hopefully, the company has something online that convinces people the Brand promise is true, and that is where Aspiration and Intent then kick in. After the web site experience. Intent leads to trial, and then the aspirational stuff is fed back to the web by consumers who have had a positive experience with the product. Then you have Brand.

Brand is now the experience, the trial, the usage, the service. Brand now requires a peer-confirmed aspirational message.

Without the aspirational role now handled by the web, mass advertising is left with the Awareness job – a job it actually does quite well, thank you. In fact, these ads can drive negative Intent, as the Awareness drives discovery of the underlying negative chatter. If you own a Ford and think it sucks, and everybody on the web says it sucks too, then it sucks. Doesn’t matter what the Brand adssay.

Some folks are taking advantage of this new mixed media model. For example, you can go on the web and tell people yourself how cool your new Ford Fusion is. Have you heard of the Ford Fusion? Seen the mass media ads that encourage you to go on the web and check out “user reviews” (Marketing / IT folks, can we find a better word than “user” for this context, please? How about Owner? Member?) This is mass media doing what mass media is good at – awareness -and the web doing what online is good at – Interaction, Intent, Brand. Each media taking on the task it is best at within an integrated campaign. Mass media generates Awareness through real “weight”, the web site generating Intent through positive Brand interaction. Intent leading to trial. Trial leading to Brand.

Now, let me take a moment to specify that “Brand interaction” at the web site is not playing some goofy game on the Brand’s web site where “exposure to the Brand name” is the end goal. That’s the Awareness thing again. That’s the Brand-ing folks again.”Exposure” is not the function of the web site in this model. Intent (Interest, Desire) is the function of the web site, the aspirational confirmations, the peer reviews, the decision to take a test drive.

There is also a less traditional but no less important Brand role the web site plays under this model, particularly in services  Mass media generates the Awareness, prospects go to web site, the web site sucks. Can’t find any mention of the content from the mass media on the home page, there is no scent. Can’t use the navigation to find any reference to the mass media campaign, and the on-site search can’t find the campaign either. No store locator. Can’t figure out how to open the high interest checking account or request more information. Visit Done, Brand = Bad.

If Intent is generated on the web site, the web site must be up for the job in more ways than one.

So, where does that leave our friend the Banner?  As I said,

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. Set the Banners in underneath the mass media campaign as Bridge Media, a “reminder” media reflecting the mass campaign taking folks directly to where you want them to go on the web site or microsite.  And then look at your awareness and intent – not based on the Banners, 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.

In simple terms, for online, the web site is the ad, not the Display unit or even the Search unit. The Brand interaction and resulting “Brand Proof” happens at the web site. And that is where you should do your measurement, not on the transitional or Bridge Media leading to the web site.

OK, there’s your model. Let’s go back to our three media quotes that kicked this sequence off:

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 may be required).

My take: Drive authentic Brand interaction and confirm aspirational messages – “seal the deal” – on the web site.

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.

My take: Forget trying to use Banners to generate awareness, unless you are talking about micro-segmentation of some kind, which, let’s face it, will be “not very effective”. If you’re going micro, use Search.

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.

My take: Forget using Banners to generate Awareness or Intent- it doesn’t really happen anyway.

So, is executing against this modelvery hard? I mean, other than the politics of which agency gets to “run” the campaign and which silo approves what creative and so forth. That’s a mess, but not strictly a Marketing problem, it’s an Organizational / Vendor issue. I would ask any agency folks in the middle of this to again,simply look at what is happening around you.

Can we be very far away from a time when the interactive agency makes a legitimate pitch to be in charge of the TV for these campaigns? After all, the web site is where the Brand action is. TV – just Awareness, youknow. No “Branding” really going on there. How about some of the direct agencies getting into the Brand game? After all, they understand persuasion, the behavioral linkages required between the media, and are for the most part media agnostic, generally choosing the most efficient way to get the job done. Are you direct folks up for some Brand work?

Stir in a little Google / DoubleClick, a little MSN / aQuantive, plus some Yahoo / Real Media, and I think you just might have the match needed to light this new media Advertising model on fire. When they (especially Google) start testing the true economic value of Display versus Search, and as the Display media moves more towards an auction model, the Brand measurement focus will shift to the web site itself, and away from the Bridge Media generating the visit. As a bonus, this united approach really gets rid of the whole “view-through” measurement problem since the metrics that matter are measured at the site – the “true origin” of the visit becomes much less important.

Agencies, get rid of the old media Display model in the new media. You’ve had a decade plus to make it work.

The web site experience is the Impression, folks. Let’s measure the value of the media based on the behavior of the audience, OK?

The next post in this series is here.

More on Customer LifeCycle / LifeTime Value

Analytical Culture, DataBase Marketing

Adelino has chimed in with some great thoughts on LifeTime Value and ways to execute against it.  I’m all for a practical approach, which he has outlined.

A couple of further ideas:

1.  As counter-intuitive as it might seem, I think we’re better off talking about LTV as a concept and not a “number” in most industries – especially when folks are just beginning to look at this area. 

The idea that customers have “future value” is not a hard one to get across, the idea you can triangulate a specific “number” representing this value is difficult. Tactically (which is what most folks care about), I like to use the idea of “relative LTV” or Potential Value – you don’t need to know a specific number, you just need to know which customers have higher versus lower Potential Value and allocate attention and budget appropriately. This approach allows people to execute against Adelino’s final four points without the mind-numbing LTV math.

Another way to say this: if you manage Potential Value at discrete points in time – say as monthly “snapshots” – the “movie” of LifeTime Value will take care of itself.  For the more aggressive math folks, this begins do look like a “value curve” for each customer or segment where you can look at the slope of the curve to predict Potential Value.  Go all the way to derivatives if you want to!

2.  There is still a need to bolt all this directly into Finance and the Periodic accounting system.  If Marketers or IT folks can do that, now you have something really cooking.  The best way I have found to sit down and start talking about this is to break out Customer Productivity by Financial period, as explained here.

This approach gets Finance to start wrapping their heads around “Potential Value” as opposed to Current Value.  You could use Adelino’s “Profitable, Marginal, Unprofitable” model in much the same way – just configure the customer chart so that it explains why the past Financial Quarter was Profitable, Marginal, or Unprofitable.  “We had a great quarter because the % of Profitable customers rose while the % of Unprofitable customers fell”. 

They need to see it right in front of their Financial eyes.  You get a couple of Quarters in a row where your analysis lines up with the Quarter, and then you start predicting the Financial outcome of Quarters based on the Customer Value Model.  Once you lock the customer analysis to the accounting analysis like this, you’re in, because the next question from Finance is:

Can you do anything to affect this model?

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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