Category Archives: Measuring Engagement

“Social Media” that Works

Measuring Engagement, Web Analytics

So what kind of social media really works for display advertising?  I have 2 examples.  They’re not poke-me, friend-me, follow-me kind of apps, so perhaps some will tell me they are not “social media”.  But they are successful in a Wiki way, and have some interesting lessons to teach us, I think.

Wisdom of Crowds

Angie’s List is an interesting example using multiple revenue models.  Over 600,000 members pay (yes, pay) about $50 a year (differs by city) to belong to a community of people looking to hire the best service companies in their area.  Members post their experiences with every local company from plumbers to auto repair shops into a database searchable by anyone who is a member.  Companies are graded and ranked by their performance, with testimonials (no, make that UGC) posted by each user (sorry, customer).  There’s a few more twist ands turns, but you get the idea.

On top of that, they send a very nice slim-jim monthly magazine to all members, which if you think about it is an super-targeted local ad vehicle for these service shops.  I talked to one guy I hired (re-modeler) who said 1 year of advertising in that Angie’s List mag generated more closed sales for him than 5 years in the Yellow Pages – and a year costs 1/20 of what an annual Yellow Page ad costs for the same size.  Yikes. 

That’s display advertising done right.  All you have to do is look up the company in the Angie’s magazine ad on Angie’s List.  The companies with Ratings of “A” and lots of glowing testimonials say their magazine ads work like gangbusters.  I imagine companies with “C” ratings and UGC horror stories say their magazine ads suck.

Go figure.

Then the companies who fall to a “C” get barred from advertising in the main part of the magazine any more due to poor ratings on the list.  New companies not on the list can attract Attention to themselves by advertising in the back “classifieds” section, in hopes of getting “A” ratings and the opportunity to advertise tin the main part of the mag.

Self-policing, continuous quality improvement.  The Attention improves in quality over time.  Sure, “ratings” are very e-Bay-like.  But the online / offline approach to maximizing Marketing Productivity for all sides is fully integrated and just very smart Marketing, they are working the model to full potential.

This community, though small by MySpace standards (that is, if all those MySpace members are active), has a very valuable, tangible reason to be working together on this shared database.  And because they put so much value on this relationship (they pay to participate), there is a lot of value in the relationship. 

You see this same pattern time and time again in display media; the more people are willing to pay for the content surrounding the media, the more valuable advertising in the media is.  It’s that fashion magazine thing again, the ads are part of the content. 

We know how much people are willing to pay for a membership to MySpace or FaceBook…

Offline Front End

Moms Tampa Bay is a very basic chat board idea – mothers in the Tampa Bay, FL area post questions and provide answers on family and child care issues.  It was built by a local TV station and soft launched in May of 2007, currently at 2700 members or so.  Just recently, they have started heavier promotion of the board on the TV station itself.

Now, it’s not hard to understand the display advertising opportunities on a site like this, this display model is a proven one because the members have well-defined interests and needs.  They’re paying Attention.  The fact they are all local people drives further targeting capability and some unique social opportunities.

For example, the TV station is going to launch an “issues show” based on the topics discussed in the community, with members from the community as the talent.  This kind of exposure is sure to cement the relationships and drive further participation.  YouTube local on real broadcast TV. 

“Mabel, I could be a staaahhhh…”

The station / members could do all kind of things to expand on this core idea – publish guidebooks, produce educational videos, hold events – all of it sure to attract advertising dollars. 

No brainer for many categories.

Now, TV is not known for being very good at one-to-one, and this board is far from perfect.  There are risks the station could screw this up by pushing the group too hard or far, and I’d bet they would benefit from an experienced online community manager / more resources.  But they seem to be doing pretty well at it so far, and to me, it’s quite ironic to see the old broadcast model going vertical using online, just as the onliners are trying to do broadcast…

Both sides can’t be right.  My bet is the media itself defines what you can so with it successfully, and you can’t simply decide to “break the rules” and get the result you want.  FaceBook and MySpace are devoted to people who want to create a free media platform for themselves.  Just like GeoCities and Tripod. 

With similar results on the display ad side.

I want to make it clear I’m not dumping on MySpace or FaceBook as being “useful” or even essential to certain groups of people for specific purposes.  What I am saying is while the utility to the user might be extremely high, the value of the space surrounding this content is quite low for display advertising purposes.

Other than display ads targeted to the specific needs of people in that group with those media platform goals, there is no reason to believe general display advertising will ever be successful in that environment. 

There’s No Attention to spare.

Hitting the Wall

DataBase Marketing, Measuring Engagement, Web Analytics

Looks like Red Envelope is Hitting the Wall. What they need now is a Relationship Marketing Strategy based on understanding dis-engagement. It’s the only way to dig out of this.

They need higher Marketing Productivity.

Check out this statement:

“We hoped that our renewed creative statement would drive an up-tick in performance in fall and holiday, but unfortunately this was not the case” -CEO John Pound

Got some old schoolers there. That’s a “pray and spray”, offline Customer Marketing approach, not an interactive customer strategy. They have to understand why the behavior is different.

You know, the difference between Brand and Branding.

They have the data. But they didn’t do the analysis, because the effects of dis-enagagement were masked by new customer acquisition. They thought everything was just fine and changing creative could “give them an uptick”.

Not. I’m just guessing, but it seems to me this business model is a case where the Catalog – as they are implementing it – is only driving incremental business in very small segments, and is a loss overall.

In other words, a prime candidate for a Controlled Test to resolve this matter of catalog incrementality quickly by avoiding the “matchback” problem so common when one takes an old school approach to an “always on” interactive medium.

I’m not saying the catalog is a bad idea. I’m saying it matters more than most folks understand who you send it to and when.

So, have you ever shopped with Red Envelope? How was the experience? Did you purchase again from them? What’s your Net Promoter Score with respect to them (giggle).

More details on what Hitting the Wall is all about are here.

MultiChannel / Omnichannel Mayhem – Example

Analytical Culture, DataBase Marketing, Measuring Engagement, Web Analytics

It’s been over 10 years since I left Home Shopping Network, so I’m pretty sure I can tell this Relationship Marketplace story without enraging the Gods.

The mail order channel had a jewelry-only catalog that did quite well, in terms of mail order ROMI. This book generated the majority of the profits in the mail order division. What we wanted to know was this: if you looked at the book from the company perspective – across all channels at the customer level – what was the contribution to profits this book made?

When we started using Control Groups on the book and looking more deeply into the Relationship Marketplace, here is what we found:

1. The book actually lost money versus control. It virtually had zero impact on sales at the customer level, meaning it was almost completely cannibalistic to TV. That means the entire cost of the book, plus the cost of discounts, was a net loss on every book mailed. The more they mailed, the worse the losses were.

I remind you this book generated the majority of the profits at the mail order divisional level. This revelation was not pretty.

2. Like the good Marketers they were, the mail order folks had tested all kind of segments across the entire customer database, and found brand-spanking new TV jewelry buyers to be the most productive target. In other words, they were mailing to the folks with the highest level of Engagement. This is why the book was very productive at the divisional but not at the company level. The “always on” nature of the TV channel demand was pulling in buyers all by itself, and the book was essentially just getting these sales that would have happened anyway to switch channels.

3. Further, and perhaps even scarier, the mail order division was involved with a list exchange that had a “hotline” (new buyer) component. That meant as soon as TV acquired these highly Engaged jewelry buyers, their contact info was rented by the mail order division to competing jewelry catalogs if they became mail order buyers. That’s OK for the mail order division, which gets to keep the list rental income.

I should also say list exchanges of this type are standard practice in the catalog business. So the catalog folks were not doing anything “wrong”, from the catalog division perspective.

But I think we could all agree that situation sucks for the TV channel, which deployed assets to acquire the customer in the first place. Not only is TV getting hosed on the (company perspective) non-incremental sales stolen by the catalog division through this book, TV is not getting a piece of the list rental income from selling the contact info of their best customers to the competition!

Further, as one might guess would happen with highly Engaged customers, when we held back a control group from the list rental process, those folks who were not rented out delivered higher profits to the company overall than those rented out.

Just makes sense, right? Relationship Marketplace, indeed.

What to do? We simply re-configured the targeting of this catalog to dis-Engaging TV jewelry buyers. As they stopped buying from TV, this very well-executed book was able to extract another purchase or two from the customer and actually maintain some of them longer term. Sales for the book dropped dramatically, but these sales were truly incremental versus control, and the book was still profitable. This also affected list rental, but since the buyers had already dis-Engaged from TV, this issue was not nearly as critical.

Got any multichannel misallocation stories of your own you can share?

Background on this post here; solution I’ve seen succeed, here.