Posts Tagged ‘performance marketing’

Once upon a time the objective of a digital advertising brief was much the same as an off-line brief: to communicate a sales message to people in order to get them to buy a product. The only real differences were the way in which that message was delivered and the way in which the consumer could purchase the product.

However, in recent years there has been a dramatic shift away from this model. The traditional set-up of websites, micro sites and banner ads is increasingly being replaced by a new breed of apps, networks, engagement platforms and digital tools. Interrupting people with overt sales messages is out of style. Most of the time these things have almost nothing to do with the actual product the company is selling.

But how then do we measure these new experiences? The old model of reach, click-through and conversion isn’t really any different to direct-mail and was easy, but our brave new world often has very little to do with that old model. In order to understand how to measure this we first need to look at what these tools actually are and why they came about in the first place.

[N.B - I have never directly worked on any of the case studies I use in this post and use them only as examples or for hypothetical ideas]

The need for branded utility and customer engagement

Branded utility, and indeed the whole ‘customer engagement’ movement is born out of the increasing commoditisation of products. In the old days the only sources of information available to customers were advertising (and sales) and the advice of a very small peer-group. This meant that marketers had full control over who knew about their products and, more importantly, what they thought about them. This one-way communication to a captive audience allowed the ad-men to conjure up a complex meta-narrative of value and meaning around essentially rather dull products. People weren’t loyal to a product because they loved it, it was because they were brainwashed into believing that their lives would be so much the worse without it.

Skipping forward to the present day: in a world where information is available before we even know we need it, and where brands live and die based on the the ebb and flow of social media sentiment, we no longer need adverts to tell us how to think and feel about products. If I want to know which mobile phone provider is right for me a focused 20 minutes on the Internet reading reviews and asking my friends will form an infinitely more genuine and useful opinion than an ambiguous TV advert of people rolling around in fields of corn.

So marketers no longer control the message, and therefore a product is merely a product. Other than the actual efficacy and quality of the product itself our ability to influence people’s purchase decisions is very quickly vanishing. This is the central business issue behind this new move towards customer engagement online: as someone who works for an agency I get to see this first hand in the challenges presented to us by our clients. At bottom they all say the same thing:

Help!! We need to be more than just a product!

How to be more than just a product

“Stop interrupting what people are interested in and be what people are interested in” – David Ogilvy

If brands want to mean more to their customers than just the products they sell, then it follows that they need to develop a relationship with the customer over and above the experience of that product. This means doing and being something else in such a way that the brand itself becomes a meaningful part of our customers’ everyday lives.

The most famous and most often cited example of how this can work is Nike Plus. Nike sell running shoes, which people probably buy once or twice a year and which they probably never really think about when they’re wearing them to run in. Nike Plus transcends the product by providing a unique service which enhances the entire experience of running. It’s completely relevant to shoes but it isn’t shoes, and it allows Nike as a brand to own running and not just running shoes. This therefore becomes a platform whereby Nike are continually engaged with the running community and through which they have an immensely valid stage on which to communicate to this community about products when it’s appropriate.

Another excellent example is Charmin’s Sit or Squat mobile phone app, which allows a user to locate nearby public toilets when ‘caught short’. It even allows you to upload photographs and rate/review different locations. Obviously this has nothing to do with selling the product directly in the traditional sense (features and benefits), but at the same time it is completely relevant to toilets and therefore toilet paper – it’s a genius piece of advertising which the ‘audience’ keeps with them and uses again and again.

Lastly, there is one more example of this which I am sure will be familiar to readers of this blog, and which may come as a surprise – Google Analytics. At first this might seem odd, but if you think about it GA is actually one of the cleverest engagement platforms in existence: it’s free and ultimately exists to benefit Adwords revenue, but what more effective way could there be to engage, captivate and learn about businesses regarding their use of the web?

How does branded utility differ?

If we want to develop a framework for this stuff which differs to the usual model, we first need to understand how it differs in concept. Here are the key pillars:

Product disassociation – traditional advertising almost always points directly to a product. Even if we can’t measure the sale directly as we can with on-line conversion, it is generally possible to show some correlation between the communication and it’s impact on sales. However with branded utility the picture isn’t always so easy. What actual impact on Charmin’s sales does the Sit or Squat app really have?

Quality not quantity – branded utility is all about relationships, engagement, loyalty and advocacy. Unlike traditional advertising, it doesn’t necessarily matter how many people see the app or service, it only really matters how many people find it useful; feel an affinity to the brand because of it; and talk about it to their friends. Whereas hateful and irritating TV ads can still create positive brand equity through recall, it simply doesn’t work like that here.

Marketing as a service – increasingly people expect something in return for receiving messages, and not only where branded utility is concerned. SAAS tools like Spotify, which allows a free version with ads and a paid version without, has created a popular belief that advertising is a choice – if I have to see it then I want something in return. This is another reason why branded utility is increasingly in demand for brands. Marketing must offer a genuine service in order for any message to be accepted by the consumer.

Advocacy is more than a passing comment – in the digital age it isn’t enough for people simply to tell their friends about your product in the pub. True digital advocates are somewhere slightly closer to a mobilized sales-force; they must be proactive in sharing their experiences and bringing others in to the fold. This can only happen if doing it is easy, meaningful and if they have the right tools to go about it.

Measuring and optimising branded utility

Ultimately, branded utility differs from traditional advertising because it is about creating and driving owned and earned media, which behave incredibly differently to bought media and all the models of traditional advertising. But how then do we measure these strategies?

Aligning corporate goals

Very simply, why the hell are you even doing this really? What exactly do you think it will achieve in terms of profit, retention, sales blah blah blah. If you can’t align the initiative to what it is ultimately supposed to do then your measurements won’t offer any true value in terms of how effective it is for the business. Start from the most obvious and top-line corporate goals and trace these down to your metrics for the initiative. This will become more apparent in the following sections.

Differentiate impact and effectiveness

The natural tendency with branded utility is to measure it like a website. Let’s take the Charmin app as an example. Depending on how it was tagged we could tell how many people download the app; how many times they use it and for how long; to what extent they share, upload and rate content; and also perhaps what they think of it with the aid of some qual research. We can also identify key behavioural goals which in some way mirror a ‘conversion point’, thus giving us a kind of funnel analysis.

However, all this tells us is what the impact of the app is. We can track lots of data on how well it works and how much people love it as a toilet app, but this doesn’t tell us whether it is effective a as a brand communication. It could be number one in the iTunes app store and raved about on national TV, but does this really mean that people will buy more toilet paper? This is the effectiveness of the entire initiative and relies much more heavily on controlled qualitative studies and business modeling.

Build a measurement framework

Create a framework for the metrics you will report on, and ensure it reflects the distinction between impact and effectiveness described above. I have written more extensively on how to build a measurement framework on another blog post, but I have also sketched out a brief hypothetical example based on the Charmin example here. This is, in part, based on Forrester’s general framework for measuring engagement, which fits very nicely with this type of digital activity

Beware correlation and causation

It is amazing how many mistakes are made regarding correlation and causation in web analytics, but it is especially easy with branded utility. For example, take the example of Mazda’s online community forum for MX5 owners, which is certainly a form of branded utlity. They would be interested in to what extent people who use the forum are likely to renew vs. people who don’t. This is easy to do: take a sample of user-drivers vs a sample of non-user drivers and compare the renewal rate. However, this is incorrect. People who use the forum are already more engaged with the brand than people who don’t; this is the very reason that they find it and sign up to it. So the fact that they are more likely to renew could have nothing to do with the forum at all. The real question is: what is the incremental value of the forum or, more clearly: how many people renew because of their experience on the forum. This is not as easy to answer.

Don’t be afraid of intangibles

The answer to the above question cannot necessarily be answered with straight data, and will seem like an intangible business question, but unfortunately it is exactly these kind of questions which we need to answer to address the effectiveness part of the measurement. Rather than go into detail here, I will point you in the direction of a fantastic book: How to Measure Anything by Douglas Hubbard – if you haven’t read this I strongly recommend it. It will enlighten you about just how much of the supposedly unmeasurable can indeed be measured.

In brief summary

The digital relationships we have with our customers are changing. The old advertising and sales modelsdon’t apply in this new world. Embrace the future!

Further reading:

Contagious Magazine Special Report – Branded Utility

Brand Utility – a neat presentation from brandutility.net

Branded Utility Day at Ogilvy – presentation on Youtube

Another branded utility slideshare presentation

Brand Utility, the blog

Is web analytics an art or a science? Is it primarily a creative or a methodical endeavour? Is it left-brain or right-brain?

Or, is it both? Does it rely on some kind of balance between the two?

I initially started pondering this after reading Steve Jackson’s Cult of Analytics. The book primarily describes an organisational structure and process that can be used to put web analytics at the heart of an organisation. However, it goes much further than this in that it attempts to create an intensely rigorous system of scorecards that can be used to police the delivery of this framework. I also noticed similar thinking in Akin Arikan’s recent call to create an expert system for web analytics, which argues that web analytics should operate much like the field of medicine or mechanics, with concrete processes followed to the letter.

I can certainly see where they are both coming from, but something about this whole thing just makes me feel really uncomfortable. It is undeniable that web analytics is a form of science and computing (it’s got the word ‘analytics’ in it for a start!), but something inside me constantly cries out “no, there’s more to it than that, web analytics is about creativity and intuition and sales and the passion for opportunity!”. You might need the science and the tech in order to understand what’s happening, but can this ever really tell you what to do next? Doesn’t this require a fundamental and intrinsic understanding of business strategy that can’t be reduced to statistics and data; or made into some kind of rules-based process?

But if this is true, and web analytics is a balance between science and art; analysis and intuition – then today the field seems woefully lacking in the art and intuition. But why is this?

Web analytics has a ‘tech’ heritage, but does this fit?

Web analytics originally ‘emerged’ from the field of IT, and was later integrated with the field of business intelligence. This produced a group of people with a huge amount of technical and analytical knowledge, but their role is to report things to other people. They don’t typically get involved with what that information is used for.

But web analytics IS the use of the information. You can’t divorce the information from what it needs to be used for. Anyone who has witnessed first hand an organisation where reporting is handled by IT and optimisation by marketing will know exactly how disastrous this can be. Separating the two creates an uncrossable chasm in the middle. You either need one person with both skill sets (unfortunately quite rare), or a well managed team with both camps working together.

Web analysis is not the same as traditional data analysis

The word ‘analysis’ in web analysis persuades most companies that they should fill their senior web analyst positions with hardcore data analysts. Some companies even go as far as employing people who have previously been analysing things like meteorological or geological data sets. However, whilst it is important to have at least some hardcore stats knowledge in a team, it isn’t necessary at the senior level.

Web analytics tools are easy to use, at least from a functionality perspective. The vast majority of the stats and number crunching has already been done by the software. Anyone who has crossed over from using something like SAS to something like Site Catalyst will understand this. It isn’t analysis in the same sense; it’s report viewing – so the ‘analysis’ is in fact the interpretation and translation of the reports into action, which starts to get much closer to marketing and general business performance than any kind of traditional analysis.

People only see the means, not the end

If someone came to your house to sell you double-glazing and spent an hour showing you the tools they planned to use, and talked about how the plastic was manufactured, you wouldn’t buy the windows! If, on the other hand, they talked to you about the reduction in noise, the increased warmth and the lower fuel bills that you would get, then you would be more interested, right?

For some reason, we have an endemic problem in this industry whereby people obsess over the analysis and data, and not the benefits of the analysis. This results in a perception of web analytics as boring and difficult to understand. If you are presenting recommendations of analysis to senior management, do you really even need to show the analysis? Web analytics is decision support, not a sleep-aid!

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The problem then it seems, is that you often have senior people who are too scientific in their approach and lack the spark of commercial intuition and business acumen that can drive truly actionable analytics. This was less of a problem in the old days of data analysis for direct marketing because there were clearly defined process frameworks through which marketing folk could receive standard reports and make decisions based on those reports – but, and here’s the crucial point, there isn’t really anything standard about digital marketing!

I have always said that, one day fairly soon, the word digital will cease to exist; it’s a term used to describe the fact that some things are analogue and other things are digital, but already there isn’t so much left that can reasonably be called analogue. Therefore, if digital marketing simply becomes marketing, and digital business simply becomes business, and these things are as data-driven as we all hope they will be, then ‘analytics’ is a huge central discipline to an entire business operation – to reduce it as a discipline to a fixed process is like trying to create a fixed process for all aspects of the management of a business. Is this possible and, even if it were, is it not suffocating to the organic growth and development of the business?

On a final note, I was curious to see that Avinash Kaushik’s new book, which I haven’t actually read yet, holds the strap-line “The Art of Online Accountability and Science of Customer Centricity” – I wonder what, if anything, he has in store for us on this question?

I have just been reading Jason Carmel’s post on Optimization and Analytics, which quite rightly argues that performance marketing may be a better and less ambiguous term to describe what we web analysts actually do on a day-to-day basis. I couldn’t agree more, but the issue obviously goes way beyond terminology; and the post actually reminded me of a recent discussion with a client on exactly the same topic, which might be worth sharing.

What is web analytics anyway though?

The real root of this issue is the fact that many companies fail to see what the real goal of web analytics is. They see it as something extra that might be useful, but only when they get around to it and when they don’t have anything more important to do. In the mean-time they carry on as normal; churning out emails, scheduling site updates, adding and removing things to the home page – all based on gut feel or, as Avinash Kaushik likes to put it, the HiPPO (Highest Paid Person’s Opinion). What they don’t understand is that all this stuff they do and web analytics are actually one and the same! Talking about performance marketing not only makes web analytics seem less geeky, it brings to light the fact that our ultimate output IS marketing.

Performance Marketing is a much better clarion call

The specific client I was talking to had exactly this problem; because they didn’t understand web analytics they just couldn’t connect it mentally to their own jobs. In this situation it’s no good talking to people about maturity models or measurement frameworks, or trying to train them on tools, because they still won’t get it. You need to educate them about why they should even listen to you and, more importantly, you need get them excited about why they need to be involved. This is how I went about it on this occasion:

Step 1 – Show them why they need it

The client was under immense pressure to deliver results with a reduced budget, and couldn’t see any way of doing it. They dismissed all notion of ‘web analytics’ because it sounded expensive, time-consuming and like something that wouldn’t deliver immediate results – i.e. they didn’t get it. The first step was to try and show them (without talking about analytics) that they needed to be cleverer about their marketing:

The Need for Data-Driven Marketing

This chart is specific to this client’s market and situation, but what it actually says isn’t so relevant. The key point is that mass marketing is no longer effective, even if you have got the cash for it. Customers are more individual than they use to be, and so you need to get closer to them and have more genuine conversations with them.

Step 2 – Make the connection

Nobody can really argue with what you’ve just said, and then the line of argument progresses in this fashion:

1. The ability to be pro-active and to successfully affect consumer decisions is reliant on the ability to listen, learn and to communicate genuine value through intelligent dialogue.
2. In an online environment listening and learning is achieved through web analysis, measurement and research; understanding how customers currently interact with us and how they want to interact with us.
3. Intelligent dialogue is achieved by optimising the customer experience in order to communicate our message in the most appropriate way, based on what we have learned by listening and understanding.
4. The process is only possible if the data, tools, capabilities and the methods for using them are available and tuned in to what we want to know, and so careful planning is required in order to ensure that insight can become actionable.

This describes holistically the whole process of marketing based on listening, which can also be called performance marketing. Then you can start talking about how to enable them with the ability to actually do it. At the heart of this is the ability to streamline and simplify the flow of data so that decisions can be made:

Enabling Performance Marketing

If data and tools are faster, easier, better and generally more efficient at providing meaningful insight, then your staff are able to spend more time generating action based on that insight and less time trying to work out what it means. This, in turn, means that more attention can be focused on optimisation and improvement initiatives that drive increased performance; and the final result of this is that dialogue and relationship with the customer becomes more tailored, more meaningful and more effective.

Now you can talk about analytics!

Only then can you start to have discussions about maturity models, vendors, internal or external consultants etc etc. It might still be a very long slog, but at least your client (or boss or whoever) can understand what the end game really is.