Results Marketing

Social Norms Trump Market Norms

2009-09-23T07:52:00.000-05:00

Do you know the difference between market norms and social norms? If you do, can you make the distinction in social marketing?

Something many of us grew up with was the "limited availability offer." In other word, the ad in the paper would promote, say a radio at the local electronics store, but would come with a disclaimer stating that there were only so many, and no rain checks would be given. Generally, we accepted that. If others got there first, they got the radio at the price, and that is just the way it was. This is a market norm; it is monetarily driven, fairly cold, logical to a fault, and basically understood.

A social norm is not driven by money. If I invite people over for a BBQ, and part way through realize I do not have enough burgers or hot dogs, I feel guilty and look for ways to remedy this. Even if some folks show up with relatives who just happened be in town, or folks show up who originally thought they were not going to make it, I have a sense of obligation to make sure everyone is fed, and fed well. So, I run out to the store and buy more of everything I needed. Money is not the issue; making my guests happy is.

As companies venture into social media, they must be very aware that the norms are different now, and getting them mixed up will result in long term harm. To get a sense of this in better words than I can write, (if you have not done so) read "Predictably Irrational" by David Ariely.

The first few chapters show this distinction well (read the whole book though).

A key take away is this:

Though it may not seem so at first, market norms are not nearly so punishing, nor their affect so enduring, as social norms.

If you have a product, and your competitor develops a better value equation, you may lose some customers. Improve your value equation, and you have a shot at getting them back. This is the nature of markets.

On the other hand, if you lose a customer because you made them angry, violating some social norm (even though you're a business), social norms trump market norms and they are gone... perhaps for good.

TGIF, while underestimating the power of social media, certainly appears to understand the blended environment social media presents for social and market norms. In their recent social campaign, promoted on tv, up to 500,000 fans of Woody get a free burger. Well, 500k was reached in short order, and they were still only 1/2 way through the month. TGIF and their agency worked quickly to approve an additional 500K free burgers to honor those who were trying to fan woody after the first mark was hit. There is social credit given for openly and quickly addressing this.

Though TGFI had been upfront about the conditions of the give away (market norms), they realized they were operating in social environment. Rather than saying "we did what we said we'd do, you're wrong to expect more," they pushed forward and honored the intent of the program. TGIF honored the social norm.

Get more for digital advertising at idatatools.c

2009-09-22T08:38:00.004-05:00

Peering into the brain to figure out what triggers specific reactions and how to motivate consumers to buy is part of the Neuromarketing practice that is being explored today.

Kevin Randal at Movéo Integrated Branding posted on FastCompany's blog about five brands using various techniques.

This is a pretty cool approach. I'd like to see something like this applied to education. What really motivates kid to learn?

Defining what it is not

2009-09-18T07:46:00.002-05:00

I like to read Seth Godin's blog... it makes me think.

If you are marketing on the web, and have a web redesign project, Seth's post suggest key questions to ask. Most have to do with the objective, and considerations for reaching it.

In his list, there are obvious, but frequently overlook questions. He ends with:

"And finally,
Does the organization understand that 'everything' is not an option?"

I have seen organizations, with web projects or others, agree on a project objectives. Only, when it is completed, and the objectives are reached, you hear, "Yes, but I thought we would also be able to..."

Sometimes it is as important to define what a project IS NOT, as it is to define what it IS.

A New Paradigm for Compensation and Structure

2009-09-12T10:29:00.010-05:00

Falsely Treating Every Jobs as a widget...
In many organizations the reward for performing well is to be promoted. With a promotion comes more money (usually) and a broader sphere of influence. The inference is that the lower position is less valuable to the organization; certainly, this is the impression created.

This inference goes along with organizational theory of scientific management (Frederick Taylor; The Principles of Scientific Management) for developing efficiency, which wittingly or not, is foundational to most organizations. By separating front line or lower rung tasks into routinized, binary decisions (the widget to which you add your piece is there or it is not) your labor does not need to be highly skilled, is relatively easy to replace, and cheap. Only as you go higher up in the organization do you find positions that can impact the profits. Managers who can structure the line to move parts more quickly or operate with fewer people; negotiate better supply costs or expand distribution and sales. By routinizing as much as possible you lower costs, reduce defects and focus your monetary rewards on a smaller and presumably more impact-ful group.

This manufacturing based paradigm has been transferred to the service sector. We take call centers that may be handling 5, 6 and 7 digit life time value customers and move them around the world where English is a second or even a third language, give the operators scripts that are very binary and save some money. And these are the valued customers that made it through the IVR.

Unfortunately, this lower rung compensating structure has been so ingrained that it is now applied to virtually every organization. For years I have argued that I would welcome employees who want to stay at the "lower rungs" but organizations are generally not structured to compensate them accordingly. I am not writing about routinized activities, but those in the new economy where "lower rung" employees can have a multi-million dollar impact. They handle million dollar accounts, are asked to identify opportunities to make and save money and have a direct, and often significant affect on the bottom line.

Today we hear more about ROI than ever. Ironically, I can more easily tie activities to results for these employees than most managers I've worked with, including myself. I could take credit for motivating my team or coming up with the big ideas (usually theirs), but that too is part of the old way. To get the kind of results I have seen, individuals must have an inherent motivation, a real desire to do the kinds of things we need them to do... the things they have to stop doing if they want to earn enough to support a family.

Many studies have been done to suggest that money is not a key motivator. But, lack of money, or opportunity to earn it, can be a great de-motivator. You will not make someone good at what they do simply by paying them more. But, if they really like what they do and are good at it, paying them too little can make them perform poorly; lack of desired income will cut their enthusiasm over time.

If we look at the value potential of certain non-managerial positions, and build the compensation structure accordingly, I believe organizations can achieve more with fewer people and have a better work environment because no one feels trapped. But, getting there requires both companies and individuals to do something of a paradigm shift.

The Shift - Companies
Companies must stop viewing those who wish to become experts in "organizationally lower" positions as blocks to organizational development. I believe some of the reasons we have more managers are:

1) People are not monetarily encouraged to view their positions for the long term. To earn more money, they must necessarily seek skills that have less to do with their current role than one, two or three levels above it. This creates a disconnect between company needs and employee career development. To keep employees properly focused, a disproportionate amount of a manager's is spent keeping them on task.

2) By the time anyone becomes really good at what they are doing, they are promoted (or seek opportunities with other companies), creating an experience gap that needs be managed. On top of constantly filling job openings, managers are simultaneously covering for vacant positions (and not necessarily experts at it), and facilitating very basic training.

In addition to the raw dollar cost of constantly recruiting, this situation has an even bigger impact on time. Because the core group of employees has relatively low average time on the job, more are require to get the job done compared to experienced teams. Additionally, given the recruiting overhead and additional direct oversight needs, there is a higher manager to employee ratio required.

Financial compensation structures encourage either False Delegation or Abdication.

Managers struggle with delegation today because they often feel their teams do not have the experience necessary to do the job. Managers who feel they are not staffed with experts either assume direct control (false delegation), or abdicate responsibility for the results. The former requires more mangers (doing the job of their direct reports) and the latter risks performance. Neither is acceptable, both are often evident.

By encouraging well developed expertise in non-managerial positions, whole organizations can become more effective. Those who concentrate in a single area become superbly adept at it. When this happens, you need fewer people in the non-managerial and managerial rolls. Rather than focusing on how to keep the 'thing' going, everyone can focus on improving their area of expertise. But this requires organizations to step up and recognize key players not just with promotions, but with financial models and recognition.

The flip side of this is, perhaps, more challenging. Managers, supported by the company, have to be able to hold their direct reports to very high standards, and be ready to make very difficult decisions. This is true all the way up the organizational chain. If a mid to senior manager is falsely delegating activity, or abdicating responsibility for outcomes, they must be held to task. If they are delegating appropriately, they must, in turn, be able to hold their team to task. In all areas, proper corrective actions ranging from additional training and resources to termination have to not only be available to managers, but expected by all concerned.

The way many organizations have structured their financial compensation models feeds very poor managerial habits. Expectations for current employees are often based on the lowest common denominator - the new employee; is it worth replacing this person with a new employee that we have to train anyway? Many have accepted the need to manage mediocrity, rather than push for excellence. The problem with excellence is that the people who reach it are going to be promoted, or seek advancement elsewhere... where the money is. What if highly valuable individuals, in highly impact-ful positions wanted to, and could afford to stay there for the long haul?

Two Paths
A new paradigm of professional development is needed to provide both the company and the people with what they need. High value, non-managerial positions need one track while there is another track for management. How this breaks out in individual companies will differ. But, if there are front line positions that have highly specialized expertise, direct impact on the profits and a compensation structure geared toward those under 30 (or 25) years old, there is a gap. In theses situations, keeping people focused on what they like to do, if they do it well, is beneficial to all.

By combining two paths into one, we have mixed and blurred our view of very distinct skill sets and fostered an environment which ultimately leads to the Peter Principle. The assumption that because someone is very good at doing something (whatever that is), they should manage others who do it, is a false assumption. The inverse is also true; an individual need not be the best 'doer' in order to be a great manager. This is a very hard reality for many to accept in our current paradigm.

If you are the best at what you do, then the expectation is that you should not have to report to someone who gets paid more and is not as good at it as you are. Further, since compensation structures encourage management paths, the best doers are pushed to become managers, despite the fact that these are two very different skill sets. In the current environment, where managers often falsely delegate (essentially remaining doers), it is very easy to accept this reality.

Companies need to clearly identify two paths for careers: managerial and non-managerial. Recognizing these distinctions allow individuals and companies to align people and company needs more effectively, create more stability and align compensation with value. It is a big shift. I have seen what real expertise can do. I have seen what really good managers can do. Fostering both for their distinct value would improve company performance and individual satisfaction.

social Playbook from 360i

2009-08-20T15:37:00.003-05:00

If your working a social plan, or overseeing an agency or team that is, this is a good read:

360i Social Marketing Playbook

View more documents from Lorenzo Mendoza.

Google Search CPA's Fatal Attraction

2009-06-23T08:37:00.014-05:00

On the surface, CPA programs sound great. Essentially, set it and forget it... except for the non-thinking administrative mess that accompanies these programs. Unfortunately, what starts out as a simplified way to manage a search program ultimately causes search atrophy.

As the market changes, and opportunities arise, or problems start to materialize, they are masked by the CPA number. So long as that is locked, you don't have to worry about the leading KPIs. The reason for a CPA program is so you do not have to get into these details... they are someone else's problem.

This works fine in scenarios where you don't control the inputs anyway. Affiliate marketing is a great example of a program that can really only work on a CPA basis. Display programs, depending on your objectives, can also work okay here, in a limited fashion. But search has so many factors that are in your control, and enable you to optimize, it is silly to forgo the opportunity. Either you, or your agency should be focused on leveraging what search can offer.

To that end, beyond the masked KPIs, you have the more harmful affect of minimizing optimization opportunities. No online program, search or otherwise, is static. Either you change, or the market place changes. If you are doing your job, you will continue to change ahead of the market. With CPA, testing the end-to-end implications of a program are virtually impossible. If you change site metrics, this changes media performance; media that is opaque in a CPA program.

You miss the opportunity to identify nuances that lead to incremental and even big improvements in performance. As you improve site buy flow and conversions increase, you get more sales, but you lose the efficiencies you earned by creating the change. Yet the media properties benefit with higher compensation against the same work effort.

Part of the cycle of improving performance includes wider margins on existing media vehicles which can then be applied to new media opportunities. Consider...

Before conversion increases:

10,000 sales at $50 CPA = $500,000 / month in media spend at say, 40% media margin = $200,000 contribution.

Increase conversion by 10%.

11,000 in sales at $50 CPA = $550,000 at 40% margin = $220,000 contribution. Since your cost basis always moves with volume, you never become more efficient.

Now, assume you are managing search directly, not on a CPA. You will go from 10,000 to 11,000 in sales and pocket the entire additional $50K instead of $20k.

You go from $200,000 in contribution to $250,000 in contribution, or 25% improvement vs 10%.

Your margin goes from 40% to 50%.

If someone gave you a 25% bump in your budget, what would you do with it?

A couple of years ago, I went into how this can help agencies and clients in this post. The bottom line for clients & their agencies, is that keeping control of this is good for both. The comp model in the post, ironically, is performance based. The difference between what I propose and what Google is proposing is that by controlling the media all the way through to the purchase, you can optimized the whole chain. With strong agency / client relationships, agencies have an opportunity to increase compensation IF they increase the client's profitable volume, and clients have visibility into the agency's profitability, ensuring that margins really are being used to seek more sales.

This kind of optimization cycle is only available if you have end-to-end control of the process. Continual testing of keywords, copy, site layout, buy flow, offers, etc, is the only way to maximize what the web, and search in particular, have to offer.

More on the Google CPA from MediaPost.com

Federal legislation... volume on tv commercials?

2009-06-12T17:20:00.001-05:00

Congress is about to entertain a bill that would regulate the broadcast volume for television commercials.

Rep. Eshoo introduced the H.R. 6209, the Commercial Advertisement Loudness Mitigation Act (CALM Act) to address loud commercials.

Economy down. Auto sector struggling. 9.4% unemployment. North Korea playing with nukes. Environment & economy dependent on one of the most unstable parts of the world. Families without health care. Kids not reading at grade level in many schools...

Does broadcast volume of tv commercials fit? Of all the things our "leaders" should be addressing, that we as individuals cannot affect, is this even worthy of a conversation?

Display Ad and Search Relationship Research

2009-05-31T12:03:00.001-05:00

ComScore and iProspect studies on search and display ad relationships.

Key take-aways:
- Though it depends on the industry, there is potentially an additional activity of 60% versus the direct clicks (31% click, 21% say they type in the URL - iProspect).
- Approximately 1/3 of users have clicked on a display ad in the last 30 days(ComScore) to 6 months (iProspect)
- Conversely, 2/3 of users do not click on any display ads
- About 16% of users make up 80% of the clicks from display ads (ComScore)
- CTRs are in general decline, at about 0.1% (ComScore)
- Display ad value is quantifiable beyond the CTR based on search and direct URL entry following ad exposure.

Display ad costs should be measured against the incremental value based on KPI lift factors. On average display exposure increases site visits from 4.5% (control group not exposed to display ads) up to 6.6% (test users exposed to display ads). In other words, the incremental lift is 2.1 percentage points. (ComScore). Views and repeat visit tracking are important parts of media metrics. There is no way to properly assign value with out them.

Both studies are worth reading.
ComScore: How Online Avertising Works: Wither the Click?
iProspect: Search Engine Marketing and Online Display Advertising Integration Study

Narrative:
iProspect released "Search Engine Marketing and Online Display Advertising Integration Study" this month. Though it is very thought provoking, it needs to be interpreted from the right perspective. Primarily, this is not a study about ads, it is a study about users. This distinction is important because if the presentation the numbers is not interpreted properly, it can lead to some erroneous conclusions.

To illustrate my point:

"The key message from this study is that online display advertising is far from dead -- its 31% direct response rate confirms that," said Robert Murray, CEO, iProspect.

When we look at response rates, we look at how many times our ads are clicked versus how many times they are shown, or the CTR. What Robert Murray is referring to is that 31% of the people surveyed said that the had clicked on a display ad at some point over the past 6 months.

As I looked at the iProspect study, I recalled the ComScore study released in December 2008. It reviewed integration from an ad perspective and the user perspective rather than just the user perspective alone. I think this is important for several reasons:

1) Cost basis: most display advertising is still sold on a CPM. The value of a "user" has to be relative to the cost of the communication.
2) Industry: behavior varies greatly by industry.
3) Exposure: are users cognizant of how many exposures they receive before they react. This goes to cost basis.

When we look at each part of these two studies, we see some commonalities:

1) Both studies found that roughly 1/3 of users clicked on an add (ComScore in the last month, iProspect in the last 6 months).
2) There are strong synergies between search and display advertising. ComScore showed a 38% lift in advertiser's branded search after display ad exposure, while the iProspect study simply showed that, of those who said they saw an ad, the response of 27% was to conduct a search on the brand, product or category.

The divergence
As a person with roots in media, on and off-line, every time someone suggests buying more ads, or bigger ads, I ask several questions. Key among them is: What is the incremental value of spending the money?

This is where the ComScore study is more helpful. It measures the lift in KPIs, such as site visits, competitive searches, TM / Brand searches and incremental sales. Contrast this with the iProspect study, which is survey based, and depends on users recollections over a six month period, with no control group against which to compare the test subjects. If you want to know the real value of additional advertising, it has to be measured not in absolute terms, but relative to the outcome of not increasing the advertising. In other words, what was the incremental affect received from spending more money.

One of the interesting findings on the ComScore study is that there is a 45.7% lift in site visits over a 4 week period as a result of exposure to display ads . Of those not exposed to the advertising, 4.5% eventually reach the test advertiser's site, while 6.6% of those who were exposed reached the site, either by clicking, using search or navigating to the site directly. Another way to read this is that 68% of the people who reached the display advertisers' sites would have done so with or with out the advertising. So while the total visit was 6.6% of the users who saw display ads, these ads contributed 2.1% of the users' visits.

What is important is that the results vary greatly by industry. From a low of 21% lift in the travel industry to a high of 114% in the auto (though with a very low base % of visits to start).

On the flip side, there is also an increase in competitors' sites visits following exposures to display ads. Over a 4 week period, the lift is 23.4% (13.5% vs 16.6% of users).

In essence, what display advertising does is spark shopping activity in general.

In addition to the number of people who eventually reach the advertisers' sites, the way they get there is important; it directly affects the core measurement of CTR. Every one I speak with about the impact of display advertising acknowledges that the click is only one way to measure the influence of display advertising, but they are usually lost when trying to measure non-click activity. The iProspect study shines a light on the other behaviors as reported by users. 21% said they typed in the advertiser's URL, while 27% did a search on the product, brand or company. Combining this insight with the lift that the ComScore study shows, and you can get some idea of a factorization you can apply to the CTR to estimate net visits resulting from display advertising. Though it depends on the industry, there is potentially an additional 60% versus the direct clicks (31% click, 21% say they type in the URL).

All this amounts to one fact: Direct measurements are ineffective. The only way to assess the real value of advertising is with robust tracking and analytics.

30-Second Collision: Short Tail Media Video Unit

2009-05-11T11:31:00.006-05:00

David Payne, CEO of Short Tail Media is pushing for 30 sec (& 15 sec) video commercials online through its new service Digital 30 (D30). He is working with publishers to test a :30 spot between sites, with Reuters being the first to sign on. Expect to see some this summer.

According to Payne, publishers need to "stop worshiping, and start interrupting the almighty user."

In my last post, I talked about the extreme of only looking at the user and sacrificing real revenue generating opportunities as we saw in YouTube. On the other hand, Hulu was balancing three constituents: Users, Advertiser, Content Providers. I prefer the Hulu approach; its sustainable over time.

Hulu is converging needs.

Payne is directly colliding the need for more revenue producing ads with the belief that users will not accept this. He his banking on the idea that the increase revenue from the new ad units will off-set any revenue losses stemming from user abandonment.

His perspective challenges the ethos of the internet (if there is one) as well as commonly held assumptions about potential user behavior.

Is he right? I don't know. But, I give him a lot of credit for pushing a very radical approach to an old problem... maximizing sustainable revenue.

Media week article

Video - actively converging

2009-05-04T08:27:00.008-05:00

Hulu and YouTube represent terrific and timely examples of the difference between converging and not converging.

YouTube started out purely focused on the user. This is great for them / us. We can put on funny, if not inane, material, share guitar riffs, and see some amazing car racing . We get to see videos from around the world that we would not be able to see otherwise. It gives us something to talk about off-line as well. However, it is not a sustainable model as it exist. Google is attempting to monetize the traffic to YouTube and, though not transparent, indications are that revenue may not be out-pacing cost.

Hulu, headed by Jason Kilar, recognized that successful ideas are multi-facetted. When launching Hulu, he and his team identified three constituents: Users, Content Providers and Advertisers. Focussing too much on one to the detriment of the others puts the entire operation at risk. This is a tough path to follow, but he is doing it.

The difference between the two is simple; not only in content, which is quite obvious, but more importantly, the attitude during the initial concept development. Like too many online start ups, YouTube began without looking at the whole landscape. When Chen, Hurley and Karim started YouTube in 2005, it was focused on allowing users to share their videos. In a world where VC was pouring in, long-term financial sustainability was not built in. This is not to say that it was not considered, but the experience itself was built around its absence. It was created with the notion that everyone wants their content up and advertisers were not welcome. In short, YouTube only considered a small segment of a very large group of constituents. Now, with a lot of traffic, monetization and quality content is an after thought. They are now attempting to force ads into the experience that had been ads-free.

Hulu recognized from beginning that long term sustainability depends on a realistic view of "life after launch." By building in respect for content, and the rights of the content owner, as well as consideration for advertisers, Jason set the stage for a viable model. True, given the parentage of the company, content providers could not possibly be forgotten. But, considering the way it is working out, this is actually a good thing.

Internet "purest" would argue that the end users should be the only consideration. This holdover from the early days of the web has proven untenable; it collides with economic realities. Colliding can be good, but not in this case. Hulu chose to Converge the interest of multiple constituencies based on a realistic assessment of the landscape before them. It works.

2009-04-15T00:42:00.001-05:00

A couple of weeks ago I wrote about the distinction between building a brand and leveraging it. In short, building is what you do up to the time the consumer is ready to buy, while leveraging it is what you do when you are pulling all the pieces together to close the sale. The point was / is, that building or leveraging the brand is not about the media, marketers, brand managers or agencies. It is about the consumer and where are they in the shopping process.

This discussion most often comes into play around search and the branded keywords. Too often, marketers focus in the medium, or in this case, the branded keyword. I believe this media-centric dialogue misses the point and mentioned that broadening the perspective goes beyond search:

"While this conversation regularly comes up in search, the same discussion needs to happen around display. Geo-targeting, behavioral targeting and other user profiling capabilities allow us to learn about consumer intent. As they visit sites, they may indicate that it is no longer time to tell them about Honda's great quality, but instead focus on the great gas mileage of the Civic, or even the service and quality of a specific dealer. We have to be more open to the intent in order to provide the consumer with the right information."

A piece in Media Post's Behavioral Insider by Steve Smith discusses how Teracent is helping HP target the message based on consumer's online, and off-site behavior. Chip Hall, Sr VP at Teracent, discusses the changes in messaging base on real-time data and the progression of message targeting from the very broad when data is scarce, to very targeted when there is more data upon which to base the targeting decisions. It is all consumer, not media, centric.

At no time does this suggest that we ignore brand. It is always part of the equation. But this is how it plays into the message evolution as we learn about the consumer. BT is still rather young. But, its premiss is focussed on what the consumer wants to hear and see given their place in the buying process and not on a binary decision of "this is a branding vehicle and this one is not". Two consumers can get two different messages from the same display space (or anywhere) from the same advertiser. The focus of the message, pure brand or focussed on attributes, will depend on what you know about the consumer at that moment.

2009-04-14T00:51:00.000-05:00

Mike Masnick presentation at mesh. Thought provoking perspective on the new business model. It is about creating scarcity and providing a reason to buy. This model is one that we need to take to heart, especially as the web has changed the way we interact with prospective customers.

In addition to the content, his presentation style is one of the best I have seen.

SEO Insight from Randfish

2009-04-09T08:37:00.001-05:00

As always, randfish has great SEO insights into the components and relative importance with regards to organic page rankings for Google.

You will read many responses to his post. My caution when I see these conversations start is, don't focus on one or two things only. As you will see from his historical graph, a component's importance changes over time. The best practice has always been to focus on good, holistic site / page development with a great deal of attention paid to the user. Don't chase the shinny object of today; keep it in mind along with all the others.

When you talk to folks at Google, or listen to them present, the common theme is a quality user experience. Combine this with good technical practices in site development, link partnerships (intent on good user experience) and you are most of the way there.

Social is growing up... a little

2009-04-07T22:28:00.000-05:00

Marketers have been approaching social with one of two lenses: 1) this is too risky, the content is too much on the edge, or 2) this is a group we cannot reach anywhere else, and it gives us a chance to speak to a new audience in a different way. Both set the Social media (primarily networks) among the fringe to either be avoided or chased.

Well, thats changing rapidly. Social networks are not just for the young people any more. Older folks, driven primarily by Facebook's growth, are a growing part of the social network community according to Hitwise.

The way we viewed social networks over the past few years needs to be broadened. A 40 year old mother of three is not going to respond the same as a 20 year old college student, and now they are both participating. When looking at content, creating content, engaging the people, we were focused on a segment that was rather well separated from other segments; they were actively on the social networks while the older segments were avoiding them. Now, with the fluidity of information and the adoption of social networks by a broader array of people, anything we do in one segment will quickly become visible to the others. The chances of alienating your base while trying to go after the new segments just increased.

This situation is reminiscent of an Oldsmobile move in the 90's; that was a conscious effort to cater to a new demographic. If you remember Oldsmobile, you may also remember there last major campaign "Not your father's Oldsmobile." A big, national campaign. It failed to gain traction with the younger buyers, and simultaneously alienated the then current (but aging) customer base. That was an overt decision to go after one market while knowingly pushing away another. It failed.

In social, this same thing is very possible, but may be the result of unintended consequences rather than a strategic shift.

So, what is the best way to approach social? Actually, the same as it always was. Be true to yourself, your brand and your core customer base. It is not about Social media. It is about your customer. Social is another, and much more involved, way to interact with them.

The right perspective

2009-04-07T11:00:00.000-05:00

"...just because we beat the competition yesterday doesn't mean that the competition isn't going to come back and crush us tomorrow."

Steve Baldwin MediaPost 4/6/2009

Social Media Embraced for years

2009-04-06T11:06:00.000-05:00

Social media has taken a seat at the CMO table.
BrandWeek's article, recounts that some companies have been stepping up social. I have heard their stories in the past. But recently, with all the hype, we seem to have lost site of the fact that social media has been actively engaged by companies like Wells Fargo for years. They were ahead of the curve in 2005. But the reasons for going into social are not alway clear, nor the same for different companies.

There is a lot new with Social. But, there is also a lot old. Unfortunately, with the net being all about tracking, the mainstream has (until recently) discounted social media as an important driver. They are now learning from the "old hands." In the case of Dell, it was about containing the bad. In others, like Coke, it is about brand engagement. In others, it is about connecting the activity to a sale. The key to a good social marketing effort is to decide, before you dive in, what it is you are shooting for - setting your objectives. This isn't new... it's good old fashion marketing. Old principles still apply to new media.

Large, stable companies (even in this economy), have shown that social engagement on the net works. These are traditional marketers (I'd even throw Dell in there, though many would disagree), that demonstrated the value of good planning while leveraging the opportunities of new media.

http://www.brandweek.com/bw/content_display/news-and-features/digital/e3ie2a94edbc5b0a7c1150d6cbf4741dede?pn=1

Are you building a brand, or leveraging it?

2009-03-29T20:07:00.001-05:00

As we look at the brand, particularly online, we have to acknowledge that there are places where we are building brands, and places where we are mostly leveraging them. What makes this difficult is that there is no clear and absolute delineation. In the 'old' world, television was seen as the place to build brands. Newspapers or yellow pages leveraged them (with some building going on)... directing people to where to find 'it' and make the purchase (over simplification, but you get the idea). Today, even television is not completely dedicated to brand building, but has elements of leveraging. How do we know which we should be doing?

Building a brand is all the stuff we do before the consumer is ready to buy. Leveraging the brand is what we do when the consumer is ready to make the purchase; it is when we pull together the 'feeling' and equity we have created, then relate this to the consumer and their immediate need. We leverage the Brand as we sell the product or service. Which one we are doing at any point in time is less about us, and all about the consumer; at least it should be.

What brings me to this point is the perspective that the "brand" keywords are upper funnel and need to be controlled by the parent company, presenting the brand's message. On the surface, this rationale may appear solid. However, this is the web. Old perceptions of how the brand is used by the consumer no longer apply. When someone types in "Honda", they are as likely looking for a place to buy a Honda CR-V as they are trying to figure out what the "Honda" brand stands for and what types of cars Honda has. Brand messaging control in search is about the company. Understanding the intent of the search is about the consumer.

While this conversation regularly comes up in search, the same discussion needs to happen around display. Geo-targeting, behavioral targeting and other user profiling capabilities allow us to learn about consumer intent. As they visit sites, they may indicate that it is no longer time to tell them about Honda's great quality, but instead focus on the great gas mileage of the Civic, or even the service and quality of a specific dealer. We have to be more open to the intent in order to provide the consumer with the right information.

In reality, everything we do either builds or diminishes the brand. We know that the web changes the way we interact with the consumers, but brands need to understand that it also means we have to be prepared for a much wider range of messaging than just the brand's highlights. It is very likely that, when someone uses a branded keyword term, the best service a brand can provide is to step back and let a local dealer lead the conversation. If this is the case, but the brand insists on leading with a very upper funnel message, instead of leveraging what they have built, they end up diminishing it and frustrating the consumer.

If you're asking, you missed the point of social

2009-03-27T14:39:00.000-05:00

"If I start engaging in social media, don't I lose control of my message?"

If this is your question, you need to start looking more at the web... you never had control.

Social media is not about control, it's about engaging, learning and, if your true to your customers, adding to the conversation.

Branded Keyword Bidding vs Fixed Placement

2009-03-27T14:28:00.000-05:00

Today, Matt Greitzer of Razorfish proposed search engines offer a branded keyword lock-in option for brand owners. Essentially, pay a fee, not a PPC, and then be guaranteed first position, with all other competing ads aligned on the rail (but they should still be part of the auction model). The suggestion on setting the fee is:

"The fee should reflect the incremental value of branded keyword clicks along with a reasonable premium for price stability and the brand value of a guaranteed top position."

This reflection came after being told that the CPC of a branded Keyword increased 300% over the prior month, with no changes at all on their end. I'll forgo overly commenting on the "set it and forget it" PPC management strategy this statement implies (unintentionally as razorFish is a good agency), and instead focus on the "value" proposition.

We have target metrics to align costs and value. If the branded keyword is costing 300% more than a month ago, then somewhere a competitor figured out their metrics placed the value of the keyword at a significantly higher cost than they were previously bidding. In effect, the market has provided you with the potential value of the keyword. If you are not seeing the ROI on a transactional basis (since this is your brand, the the competition is leveraging it for the transaction), then your competitor has either figured out something that you missed, or is messing with the bid landscape (which will subside as they go bust).

If you then take the transactional value, add to it the brand value and then layer on top of that a 'stabilization fee', you end up paying more and losing more upside, than if you simply deploy the resources necessary to properly manage the program.

A fixed fee is great for agencies. Tack on 15% and you can set the program, visit the results monthly, give your clients a report, and send them a bill. This is reminiscent of when I was selling online advertising back in 1995, the precursors to search and IYPs of today. At the end of the contract, the client's questions came: "what did I get for my spend?" and "what, exactly, did you do to earn the commission?"

One of the attractions of search engine marketing is that, if done properly, it propels us into an understanding of our clients' business from pre-click to sale, and being able to clearly demonstrate value. We run programs that close online as well as offline; our compensation only happens when our clients close the sale. We spend our own money, track results with our clients, and run the risk of losing money if we screw up. This model is one of the reasons our clients have come to us to run their corporate search programs.

Since this is our own money, you might think that I would be in favor of fixed placements, for all the reasons Matt points out. However, stability comes at a price... growth. If we see that our CPCs are increasing day over day, we have to ask ourselves, "did someone figure something out that we missed?" Rather than seeking the shelter provided by a fix placement model, the beauty of the market-based system of search is that it gives you day-to-day, hour-to-hour feedback on how well you are doing. Not just in how well you hold your keyword position, but how well you help your clients grow their sales.

So, rather than suggest the engines shelter us for the competition, I would propose that the onus is on us:

1) Focus on the entire buying process to align value
2) Continuous conversion / sales monitoring
3) Use transactional metrics to assess relative performance
4) If there is a CPC change, investigate the competition and ask yourself what they are doing better

I understand that these proposals do nothing to mitigate the CPC fluctuation, and are at the heart of most SEM, but when simply followed, they can do much to help improve the value you receive out of each click. Very often, I am telling people that good SEM is not rocket science, just good hard work (with some social and statistical science thrown in :) ).

Finally, I have to make the point that I am not thoroughly convinced that a first position strategy is necessarily warranted. Of course, if the c-level office wants it, you give it to them. But, as a corner stone of SEM, this strategy is has not always born fruit and made financial sense. We have to be very clear on the motive for any postion, if any, we target for our clients.

Yahoo!, the short sighted view of search.

2008-09-04T20:30:00.000-05:00

As Yahoo! evolves its search algorithm and pushes forward with its Google partnership, we need to be clear that Panama is not and never can be adwords in function, nor in spirit.

On Google, there is a long tail. If you are smart enough to recognize a search term that others are not bidding on (or doing so minimally), or have optimized an obscure term, you are rewarded. You have a relatively minimum bid landscape to reduce your cost and you can isolate the phrase to maximize ROI. You can even go further and isolate the match type, recognizing that someone who types in a phrase exactly might (and often does) behave very differently than someone who clicked on a broad match delivery. As the markets mature, others jump in, raising the price of the keyword (and thus Google's revenue), and you move on to another group of phrases. It works out well for the advertiser, as they get more sales, and it works for the searcher, as we have to be smarter about what we put in front of them and how we treat them post-click.

Yahoo! however does not care. After all, why let you get a click for $0.25 on a long tail term when they can map that term to a more popular one and drive a $1.00 cpc? It does not matter to Yahoo! that the post click behavior is different. Nor is Yahoo! willing to take the long-term view (like Google) that will not only deliver higher quality search results, but could actually increase their revenue by helping develop the number of phrases that have value to advertisers.

Think about the Google deal. Yahoo! has far fewer phrases on which advertisers are bidding, or terms on which they are bidding very low. This was imposed on advertisers because of the mapping of larger groups of keywords to a single keyword or phrase. There was no value in bidding on these keywords, and Yahoo! did not care; they forced an artificially higher cpc that could not be optimized. Google, however maintained a system where we can optimize to the long tail, making our ability to optimize based on post click behavior easier, and thereby increasing the value of these long tail terms. Now that Google has fostered the market for these terms, Yahoo! is going to de-map many of their terms (they have already started), so that they can benefit from the mature market that we were able to create with Google.

Unfortunately, the inventory on Yahoo! is going to dilute the value that was built up in the Google ecosystem... not that Yahoo! cares; they'll get their revenue. Yahoo! would not work with us (advertisers) to develop the value within their own search product. Instead, they waited until the value was created within Google, and then decided to de-map keywords for advertisers in order to serve up the Google ad. If the metrics on Google's adwords program are skewed, then we have to drop the bids or drop out of the keywords. For those who think Yahoo! won't be big enough to matter, remember, we are dealing with a large number of low volume, long tail terms. Small changes make a big difference in the back end metrics.

Beyond the search terms themselves, Yahoo! match types are not optimization friendly either. On Yahoo!, if you are bidding on a standard match basis (meaning you show up when the user types in your keyword / phrase), you can be trumped by different terms that are on advanced match bidding (meaning Yahoo! decides there is some relationship between the search and the keyword). Yahoo! has made it so this is likely, based on the bid amount. So, even if you have an exact / standard bid against a keyword, Yahoo! will see what other keywords in your account might actually qualify, and then de-dupe the keywords based on ranking... The bid amount is very influential. Look at the impression distribution, it varies widely from day to day. Yahoo! will tell you that is because users' search patterns change widely day-by-day. Our experience shows us otherwise... there are trackable patterns, not wide swings.

(We know that this is also technically possible on Google. But, you can see your impression share in Google reports that clearly indicate that your exact match keywords are not getting pushed aside. Yahoo! has no view into this.)

Unlike Google, Yahoo! does not encourage multiple match type bidding. It doesn't matter that their are two different post-click behaviors based on the match type. The system was designed to lump everything together, and then see where they (Yahoo!) can make the most money.

What Yahoo! has not figured out (that Google figured out a long time ago), is that the post click value is what advertiser care about. Yes, they give lip service to this concept. But, when they deliver a search product that actually backs up the rhetoric, we can start to believe that they get it. Give us: true match type bidding, keyword delivery unfettered by mapping, real reporting, truly targetable negative keyword implementation (match type, no limits). Until then, they will follow well behind Google with a me-too (Panama) product that appears designed to maximize short term per-click revenue while giving no care for the long-term devaluation of the Yahoo! product.

Google is no longer going to de-activate keywords, and will have on the fly Quality Score

2008-08-29T18:38:00.000-05:00

Google is removing the min bid rules.

Essentially Min bids and inactive keywords are out. Instead, you will see a First Page bid estimates and keywords will always be active (though not always showing because of relatively low QS). The other change will move from periodic quality review and score updates to dynamic, on-the-fly scoring. At this time, I am focused on the minimum bid changes.

What this means to you depends on where you are in the marketing chain. From the campaign managers to the product managers, these changes can have very little, or a very big impact. There are however, much broader implications for those who are managing the spectrum on online activity and relationships. In some cases, there is only one channel that a company will use. While I believe this is very limiting to the potential benefit, it is easier for someone to manage - fewer plates spinning. It is only justified if there are no venues for exploiting more online channels. For those who choose the harder, but more profitable road of managing multiple channel types, this gets interesting.

___________________

Affiliate / e-tail program managers will have to pay attention to the landscape with the new changes. There are several ways to manage the search landscape ranging from no bidding to a free for all. Though they are quite common, I have never been a fan of bid caps as a way to manage programs. The market is too dynamic for a fixed value to have relevancy over time. As a way to keep some people out, there is a strategy to set bid caps so low that you know it is below reasonable minimum bids ( a de facto "no bid" rule). So, it is possible that players who would not spend the min $1.00 or $5 or $10, can now appear for $0.50. Discouraged from the market place before, these people placed virtually no price pressure on keywords. Now, they have a chance to enter the market, get some results and start appearing. Do you have any mechanism to maximize profit by ensuring only your best partners are showing up?

Before you think, "no bidding on my brand" as a way to keep it easy, be leery of this relatively lazy strategy - it is the realm of the naive and ignorant. With it, your life may seem easier, but you give up a chance to let your best partners help you while simultaneously exposing your marketing underbelly to the competition.

Competing brands or products will now find it easier to enter your bid landscape. If you are Sony and none of your affiliates or e-tailors are allowed to bid on your brand, minimum bids often made it cost prohibitive for your competitors to do so as well (quality score issues created high minimum bids). So, you could possibly control your brand's bid landscape (for many categories, even the minimum bids have not discouraged bidding on competitive brand keywords). This is no longer true. Mitsubishi, Sharp and others will not be hit with minimum bids and can enter your playground much more easily. So rather than have e-tailors that target segments of your customers to whom you cannot cater, you have given up the landscape to your competitors.

While this has always been an issue for the "no-bid" group, the reality becomes even more severe once the Minimum Bid is removed as a competitive obstacle. I can tell you, we will leverage it; any good SEM will. Your best defense to to build up a small, but strong group of e- tailors that will promote your product and services. Take up the bid landscape for your brand with partners that can leverage segments of your market where they are stronger than you are. This is not an issue of duplicate listing. It is an issue of directing users to experiences which are truly geared for their stage in the buying cycle or buying motivation.

Some segments are upper funnel. Corporate sites provide a level of confidence and information sources that upper funnel users are looking for. Other sites, typically e-tail sites with time and resources to optimize against conversion, are far more adept and managing the lower end of the funnel. Well over a year ago, I vented against the branded keyword sales being a given.

I have seen first hand the differences in subtle changes, importance of MVT for the experience and managing SEM based on long term / annual trend performance.

Combine this with a compensation structure that encourages performance rather than one which simply encourages spending (cost plus) and the right partners, and you can develop a channel that is motivated to drive down market costs (their margins are directly affected) while maximizing your sales.

This change in Google's policy provides and opportunity for online marketers to evaluate their search programs and how they will manage the diverse consumer base. They can either take the easy way out and limit sales, or they can maximize their market potential.

When she is ready to listen, do you know what to say?

2008-07-23T15:29:00.000-05:00

Seth Godin:
Are they Ready to Listen? (http://sethgodin.typepad.com/seths_blog/2008/07/are-they-ready.html)

A simple and at the same time often missed thought, Seth Godin points out the issue of timing in marketing.

To prove his point, he did some field research (impromptu it appears):

"Every single one a demographically perfect match for my handbook. After 100,000 people had walked by and we'd sold only one book, I lowered the price from around $10 to $1 just to prove my point--that it wasn't the book and it wasn't the price, it was the ability of the audience to listen that mattered."

Here he had what was the perfect product, with the perfect audience and his sales were abysmal. Sometimes the market is just not ready to listen.

Oddly, even in search, where someone raised her hand and says "I'm listening", we can see drastic swings in sales or other end metric. Take a look at time of day conversions, time of week, month, year, geography, etc. Conversion rates can vary greatly.

So, this begs the question: When she is ready to listen, do you know what to say?

When a person searches, does she click on your ad because it has the right message, or because nothing is right and she is just hunting down the list? Even if you're the best in a group that is bad, your ad is still bad. Getting the right ad, in front of the right search at the right time is an iterative process. It is not a case of making your ad different for difference's sake, but for the consumer's sake.

The search term (not the keyword), is the key indicator of what the consumer wants to hear. It is the nuance of the search term that needs to inform the messaging. By vigilantly combing the query data, you can identify new ad groups with more focussed messaging and important negatives that will help you ensure that you direct the searcher to the appropriate campaign / ad group. This can be tedious and manual work. But, failure to do this on a continual basis can create mediocre results from an otherwise stellar product.

Further, if you are familiar enough with your consumer, you may know that the same search term has different meanings based on the time of day, week, or month; same keyword, different message. Early in the month may be the time she is collecting product information, while later, she is looking for a reason to buy from you. If you help her in the beginning, you have a better chance of getting her to listen later. Try too hard to sell her in the beginning and you lose an opportunity for the sale later.

Continual copy and experience testing are key to being sure you are ready when the consumer tells you she is listening. Search is about nuance; what the consumer is telling you and, in turn, what you are saying in response. The only way to know if you heard correctly is to test, continually.

In short, by paying attention to, and understanding where, when and how the consumer tells you she is listening, you have a better chance of telling her what she wants to hear... just like any relationship.

SEM best kept secret is actually an open violation of Google's rules

2008-06-26T17:49:00.000-05:00

Secondary Search: Search Marketing's Best Kept Secret By Larry Organ is one of those articles that just makes me wonder how far out of touch some, usually well informed and respected, people are about search. I am all for having an objective view of our search programs. But to suggest that running a second search team, bidding on the same keywords to obtain multiple positions for your site without acknowledging the fundamental problems could make one believe this is a quick and easy path.

"Having a second, walled off team allows organizations to do things that would be impossible under a single roof. For example, the major search engines make it very difficult to lock up multiple paid positions within a single search campaign. But a secondary search team makes this an easy-to-achieve goal. An organization's primary SEM team can concentrate on gaining top placement for primary keywords while a secondary team can focus on lower positions."

On the face of it, this is a direct violation of Google double ad serving policy. Google will link the two accounts that are trying to do this. If you think you can simply create a second site, Google will catch that too and link the URLs. If people spend the time trying to do the right thing, rather than finding ways to mess with the rules, they would get better, longer-term results.

"Testing is another advantage. Any time an organization can see its primary SEM efforts (the control) compared against an entirely separate campaign (the test), great insight can be gained."

My experience is that good testing structure needs good coordination. You can not tell your core SEM team to do nothing while the other team makes changes. You're playing two different positions (assuming you can keep Google in the dark), you are going to get different results. If you are isolating a variable, you do not need two teams to do this. The whole concept ignores some fundamentals of search. Consider that Google has a sliding (though secret) scale for using CTR in the quality score; it is based on ad position. The vary idea is that ads in different positions will get different results. This is not a reflection on the team that holds either spot on the listings. If you want to run a true test, focus on the copy utilized within a position, or the message connected to the landing page, or the point within the funnel to which you deliver the
prospect, or a host of any other variables. But to give one team positions 1-3 and another 3-6 or 6-9 and then compare the results is not a test.

If you want to compare the prowess of two agencies, fine. Give them separate assignment, normalize the results and see who comes out on top... then select ONE.

"And, of course, having multiple suppliers for any business process is the best way of keeping vendors honest."

I have never liked this motivation for a business practice. If you believe your vendors, or employees are going to screw you as soon as they get a chance, dump them, now. Don't create a situation that de-motivates honest partners and employees. Structured correctly, a good relationship rewards employees or agencies in proportion to their contribution to your success, thus minimizing the potential for getting complacent. I have always believed in looking for ways to motivate good partners rather than treat everyone like a potentially bad partner. You can not make someone honest. Either they are or they are not. Choose honest partners and accept the risk that sometimes we choose poorly, then move on.

Larry Organ has long and successful career as an entrepreneur and perhaps he has used, or does use this strategy currently. But, for most organizations, this path is not as straight forward as it would appear. Focus on good SEM / SEO. Gaming the system, which is what this strategy is, will only be short lived at best.

Promotions... build them and they will come?

2008-05-04T00:06:00.000-05:00

In the early 90's, one of the clients I had was an auto after-market repair chain that was a mix of corporate owned and franchise locations. The corporate client opened a new store not too far from a franchisee. The franchisee was up in arms. He shouted that the corporate location was stealing his customers, and as proof he showed a decreasing sales trend vs the prior year. The client asked us to run some numbers. Since we were 'third' party and both had business with us, the analysis would be accepted by both.

Well, to combat the corporate location, the franchisee began a series of promotions. x% off brake jobs, every x oil change free, free labor on exhaust installation, etc. The promotions worked really well... at lowering his average sale. It turns out, he was just running the promotions in store. There was no out-bound advertising to draw people in (or very little actually). So, while the corporate location did virtually nothing to decrease his customer base, his promotion-focused 'solution' did a lot to decrease the value of that base.

So, this is the lens through which I read the clickz article, "Promotions Could Overtake Display and Search Says Report" According to the study, search and display will peak, then decline while promotions will overtake them. The study was done by Borrell and Associates ( CEO Gordon Borrell) According to the study, display advertising is flat at about $12.6B and will decline by 1/2 over the next four years. "What's driving it is an overall dissatisfaction or nagging feeling on the part of advertisers that their advertising isn't working, or that they're overspending on it," said Borrell. "With the Internet, they can go straight to consumers. If they're having a sale, they can put it up on their Web site and consumers will come to them, and if their Web site is good enough, consumers will keep coming back."

"With the Internet, they can go straight to the consumers." I am not sure how. Decrease the display advertising, decrease the search
advertising, and anti spam laws are terrifying companies. How exactly do they go straight to the consumers with the promotions? The answer would appear to be, " put it up on their Web site and the consumers will come to them..". So, they are not attracting as many new customers (if any at all), and for any customer that would come to the site anyway, they will give them a discount - promotion.

Now, contrast Gordon Borrell's perspective with that of Jon Brancheau,(15 minute video) from GM. GM's director of media operations, Jon Brancheau, reveals the truth about the company's digital budget allocations in a frank chat from the 2008 iMedia Driving Interactive Summit. He is bullish on the digital space. Far from seeing digital as not working, this is a place to push the boundaries.

I cannot see a 50% decline in display advertising. As for it being flat the past 2 years, there has been an inventory influx with social media over that time. This has been high volume, low CPM inventory. Contrary to a retraction, as behavioral targeting improves and the niche value of the individual areas of inventory are identified, I believe this will increase. These low value segments will fine their place in the advertising ecosystem and help it grow.

I am not sure that Gordan Borrell believes in the 'build-it-and-they-will-come' myth that was debunked years ago. But the general sense of the article would lead one to believe that this is nearly so.
If we believe the advertising is not working, then we should fix it before we start leaving money on the table with unadvertised promotions. There really is no reason for any online advertiser to wonder if their efforts are working. We can track minutia. If we are unsure of performance, it is not a lacking of the media, but a lacking of our imaginations. There are many ways to tag metrics to our advertising. And it will probably cost less than running unadvertised promotions.

Check out idatatools for more advertising info

Google's form filling bot a benefit to some, scares others.

2008-04-23T00:08:00.000-05:00

Google's form filling bot a benefit to some, scares others. Kevin Heisler's article in SEW points out a dilemma that Google faces; in an attempt to homogenize the desires and intents of the masses, they will please some while angering, annoying or frightening others. I am not nearly as bothered by this as Kevin. As this question popped up in some communications in my company, my response was...

"Google has been inundated with questions as to why pages are not showing up in the index, only to explore the issue and find out that the only way to get to the pages in question is to submit a form of some type. The most obvious is  corporate home pages where the user has to select the country / region in a drop  down (Matt's example). Until this new release, Google couldn't crawl the pages from the home page. Other examples include product selection, category information where you  have to tell the site, via a form, what you want. Web masters and publishers  have be frustrated by their in ability to get a lot of content indexed because  managing it requires data driven applications and the use of forms. This is  Google's attempt to rectify the problem."

For those really worried about this, blocking the bot from sub pages can be done." 

Matt Cutts has a good post on this.

I think another aspect of blocking the bot is the robot.txt. As Matt says, "If you’d prefer that Google not crawl urls like this, you can use robots.txt to block the urls that would be discovered by crawling through a form."   These URLs should probably be part of the robot.txt file anyway. But if not, this should not be too arduous a task to add them. 
Any way, like so many other "things" Google, this seems bigger at first than it will in hind sight.