Category: Advertising

Over-engineered

Dan Goodman at Ogilvy — the interactive guru — made a statement today during a discussion about metrics and optimization that made me stop, think hard, and then ask him to back up.

“Don’t over-engineer things,” he said.

As the interactive marketing guy for the company that makes the best-engineered PCs, who is often the only non-engineer in most meetings; the guy who only passed algebra II because the teacher was his coach, who sat at a dinner last night in NYC and listened to the inimitable Uncle Fester from this blog’s comments tell my eldest son that his father “was a serious math retard …”

For me to hear an A-team interactive marketing guy tell me not to be over-weening in online advertising, behavioral targeting, multivariate testing, A|B analysis, demographic segmentation, continuous improvement`cycles, dashboards, NPV, E-to-R ….

Well, it made my day to hear someone throw a bucket of cold water and basically say, there’s so far you can take it.
The maddening thing about web marketing is it represents a collision of the logical precision of information technology with the creative chaos of media. Maddening because in theory one should be able to measure and improve with a high degree of precision. But in practice no one has enough, time, money or talent to get to the Valhalla vision that in theory, you know is possible.

As T.S. Eliot wrote in The Hollow Men:

Between the idea
And the reality
Between the motion
And the act
Falls the Shadow

That’s what keeps me grinding away in the online medium — the idea, the promise, the illusion that if you do it all just right, it will all start to swing along on its own. Integrating metrics with a content management system and an ad server, building a neat little closed system that sort of self-optimizes …..

The reality is fouled up insertion orders, weird metric tagging, site errors, and that big unknown … user behavior. Yet, I suspect every online operator — from the service providers, the agencies, the publishers, the bloggers, the vloggers, the podcasters — will, if caught in the right optimistic mood, express an idealistic hope that online media is the most perfectable medium ever known.

Online branding — possible or not?

I am coming to the conclusion that building a brand online — in any interactive medium — by buying awareness, is a fool’s errand. Sure, there are some online only campaigns that have established companies — Vonage is generally cited. The X10 Web Cam pop-under was inescapable … but I am eager to find a brand that primarily built online, or, at the very least, changed itself through an online brand campaign.

I think one can change demand through online buys, but brand is a function of:

  • Citizen marketing: users telling other users whether a product/company is worth doing business with.
  • Search: the game changed with Google when prospective customers can work the consideration process with total recall and accuracy
  • Buzz: whatever buzz is, it seems to be activated online via viral, YouTube is an enabler, but buzz seems to be ephemeral and something you find, not plan.

If I were to invest in brand building online I’d pour my money into the social media side, not impressions.

Ratios and Leading Indicators – what drives me

Every industry has a specific, almost canonical metric it pays attention to and benchmarks its participants against one another. I wanted to take a few seconds to think out loud about the basic ratios that guide me on a daily basis.
Some business cultures emphasize one financial and operational ratio over another. In Switzerland and Asia, inventory turnover is a big deal. In NASDAQ-listed tech stocks its price-earnings as a measure of value and expectations (P/E). In other industries it’s revenue per employee, while others focus on average revenue per user (ARPU), and then there are operational, specific ratios such cost-per-click.

I live in a world of expense-to-revenue, or “E2R“, expressed variously as “e:r,” “e/r,” and “e|r.” As a relatively green marketer, I assume this is the prevailing canon for measuring marketing effectiveness and efficiency: for every dollar spent in market, what revenue is received, and what budget should be fenced off based on the top line to support a marketing expense. In dummy terms, “How much did I spend to make $X?”

A 1:1 e-to-r means I spend a dollar to make a dollar; that comes out as a 100 percent E/R. We can call that a wash. A negative E:R is when I spend two dollars to make one dollar. This is a 200% E/R and means I’m looking for a new job. A good E:R is when I spend one dollar to make five, a 20% E/R, or as Warren Buffett would say, buying dollars for twenty cents.

This applies in interactive marketing on ad tactics and assumes perfect insights into the purchase of an impression (based on cost-per-thousand impressions, or CPM), yield click-throughs (measured by click-through-rates or CTR), and ultimately ARPU, or average revenue per user (or unique visitor). If I am able to track the user from the first purchased impression to the final checkout, then I can credit the tactic with the sale.

Still with me? This is predicated on that user accepting the tracking beacon, or cookie, from my metric system, a cookie that the user gets when clicking on the search term or the banner ad I’ve purchased for N. If the user permits cookies — in my case one deposited by a script on every page of our website that will permit our metrics tool, Omniture SiteCatalyst to follow that user across multiple visits — then, if our commerce guys have successfully done their job, the user will buy something and I will be able to credit the original marketing tactic with the sale.

Sounds hard and imprecise? It is, but compare it to a newspaper ad. If I buy a full page ad in the Daily Planet and it is seen by a theoretical 100,000 readers, and sales from the zip codes where those 100,000 readers live goes up by 10 percent can I declare the ad a success?

This is the old handgrenade-and-horseshoes school of marketing — the famous I-know-half-of-my-advertising-works-but-which-half” school of marketing.

So back to what I worry about, which is interactive advertising: the interesting thing in assigning expense-to-revenue ratios to a particular tactic is knowing what the intent of the original message was, and second, knowing what it yielded.

Those tactics are pretty simple. Search engine marketing, which is very precise in that I am purchasing clicks through an auction model, but which is usually promotion driven by non-brand tactics like “cheap notebook” or “fast PC.” Then there is display advertising — banners, buttons, IAB standard graphical units — and that is arguably either pure branding or can be pure promotion, but generally are a hybrid of the two. Success in assigning an E/R ratio depends on accuracy in following a customer through multiple visits to my store, because in my market, where I am selling products for $500 to $3000, the customer is researching, comparing, and considering before hitting the purchase button.

We can do this, the rest is pure optimization, arbitrage, and discipline. It’s actually kind of cool and very fun, and a nice feeling at the end of the week to say, “I bought a dollar for twenty cents.”

Attention Gone Amuck? Time for a Wakeup Call!

Attention Gone Amuck? Time for a Wakeup Call!

Pete Blackshaw at Buzzmetrics in ClickZ — on the aftermath of the Boston Lite Brite Incident and the continuing destruction of the old advertising model. Taken in the context of Jaffe’s Life After the 30-Second Spot, I’d say the public is mad as hell and isn’t going to take it anymore. On the other hand, the new Chevy “take off all your clothes” ad and the Dorito winner are two examples of winning “consumer” submitted ads that are actually worth watching. I don’t. I Tivo and skip. I am on the Do Not Call list and I toss all junk mail. I also can’t remember a banner ad worth clicking on.

So what to spend our money on?

“We need more parameters in advertising. We need clarity regarding what’s reasonable and what’s not. We need more disclosure. We need to keep the chatterbacking in check.

Most important, we need to trust our own guts as consumers. Admit it, you hate advertising intrusion. It drives you crazy. We rarely answer the phone at home, and we relish the thrill of zapping ads.

Once we acknowledge that reality, we’ll find the right ad model that works for consumers and business alike. In the meantime, we must explain ourselves to an increasingly critical court of public opinion.”

What I’m Reading — Life After the 30-Second Spot

Joseph Jaffe came onto my radar in December when he corrected me for terming his new venture crayon as a development firm in my now infamous screed asking why marketers should give a fig about SecondLife. crayon is not a dev firm, but a “new marketing company.”

Jaffe went back on my screen this morning as I was reading Lorne Hanley’s fascinating piece in this morning’s Sunday Times Magazine about Bud.tv. Jaffe was quoted there in the context of his authority earned by penning Life After the 30-Second Spot.

Jaffe, who co-founded crayon (emphasis on the lower-case “c”, ask me sometime about what happened when I tried to start a sentence in a Forbes story with the word “cisco”), is a former Madison Ave. exec (Ogilvy, TBWA/Chiat (what is the deal with the four-letter ad agency acronym fest?)) is the kind of change agent I’d love to drag into a interactive marketing meeting to knock some heads together.

The book came to me via a colleague, Gary Milner, who bought multiple copies to press into the hands of the marketing team. Last week I read it during the flights to and from RTP.

The first thing I did was look at the frontispiece to see what the publication date was. 2005. The problem with books about new media, or any trend pushed by technology is that books are inherently slow media and new media is inherently fast. Jaffe actually writes what I imagine in 2004 or early 2005 was a very strong and prescient polemic against business-as-usual marketing, mass media tactics, and a call to arms and revolution to Internet/Interactive marketing. A lot of what he predicts has come true, but I suspect for a more current state of the art perspective, you need to spend time on his blog, lifeafter30.com


 CMOs should read it, people like me who own the function should read it, but it’s not an operations manual by a long shot. It’s stuffed with great stats and quantitative data that should help some interactive marketing change-agent inside of a “Brown-Suit” company to make their point via some strong Powerpoint slides (I saw one of Jaffe’s points or frameworks appear in a presentation I saw just last week).

So, good book, not a cookbook like an O’Reilly Press manual with a lemur on the cover, but a good cribsheet for making the big plea to the CMO to get with the program and ditch all the old tactics that used to work, but don’t any more.

Bad buzz is better than no buzz? Discuss

Interference Inc. is a New York guerilla marketing firm. They are very good at what they do. They deliver buzz to their clients.

Given that they basically own the business sections and front pages of today’s newspapers (see the NYT) from the follow-ups to Wednesday’s “terrorist” shutdowns of Boston because a couple of guys put 30 little battery powered light boxes around the city, under bridges, on overpasses, to promote a Turner late night cartoon about fast food products …..

…One can declare that this is one of the most successful guerrilla campaigns in history.

The fact that one of the guys arrested for putting up the light boxes without permission looks like Rob Zombie, and held a mock press conference where he said the issue was “haircuts from the 1970s” makes this all the weirder. I can imagine Boston talk radio now, with the salt of the earth calling for capital punishment or at least hard labor for the pair of twenty-somethings who brought a city to its knees for one expensive afternoon.

Turner is in bunker mode, pointing the press at Interference. Interference’s website is hosed from the traffic. I would image viewership for Aqua Teen Hunger Force is also through the roof. Turner may be making restitution to the city, which actually blew up one of the offending light boxes to neutralize it, but Turner, the performance artists who did the deed for $300, Intereference are, in the end coming out ahead if one subscribes to the “any publicity is good publicity” school.

Google May Extend Advertising Into Video Games

DailyTech – Google May Extend Advertising Into Video Games

Tim Supples sends along this del.icio.us link about getting advertising into video games. Hey, the industry is a lot bigger than films, and product placement is a fact of life in Hollywood, why not the Palmolive Sword of Two-Handed Cleanliness in World of Warcraft? An Army recruiting poster in Halo III?

“Google, the current force in online advertising, could now be looking to expand its reach into the video game space. According to the Wall Street Journal, Google is in talks to acquire Adscape Media, a company whose technology allows for in-game advertising.”

MIT Advertising Lab: Burger King Sells 2 Million Game Copies in 4 Weeks

MIT Advertising Lab: future of advertising and advertising technology: Burger King Sells 2 Million Game Copies in 4 Weeks

I loved the Burger King Xbox promotion and apparently so did 2 million other people. $3.99 games of The King doing his thing struck a chord.

“Burger King “announced that its trio of games for the Xbox and Xbox 360 had broken the 2 million mark in just four weeks” (GameSpot). That’s a cumulative number for the three titles — Sneak King (pictured), Pocketbike Racer, and Big Bumpin’– that sold for $3.99 each in BK restaurants. That’s more than the 2 million copies of the blockbuster Gears of War sold in 6 weeks worldwide.

The news illustrates three things. First, people don’t hate brands in games, at least not unequivocally. Second, branded entertainment is more than disposable advertising; it’s worth paying for.”

The End Of The Page View

Fred Wilson: 2007: The End Of The Page View

Om weighs in this morning with the resignation that the page-view model is what we have for a benchmark of web audiences and therefore it is the benchmark we have to live with. Knowing that Om’s GigaOm network is dependent on advertising revenue, he has to conform the prevailing metric in the market, which is the 1990’s Web 1.0 measurement of audience as expressed by page views and unique visitors.

Fred sparked Om’s defense of the PV with this:

“…there are changes afoot in the Internet measurement business. Everyone is recognizing that pageviews matter less now. Ajax and other more modern web technologies allow for new ads to be diisplayed without a page reload. Ad views can grow even as page views decline. I know that there have been a number of discussions about this at the highest levels of the leading Internet measurement firms and the leading Internet businesses. And we’ll be seeing the outcomes of those discussions at some point in 2007.”But it doesn’t even stop there. Web pages themselves are changing, moving from pages controlled by publishers to pages controlled by users.”

I’ll reiterate my position from the point of view of a buyer of traffic, which is ultimately the onus on the site I buy from is not gross tonnage of views, nor even clicks, but the end-of-funnel conversion that occurs on my site after the publisher delivers the traffic into it. This of course is further complicated by the reality that the “deal is everything”, no publisher can control the creative run on the page — AJAX or static — but in the end, when I operate the campaign, optimize the creative, retraffick the placements and optimize the backend landing page for A/B and multivariate possibilities, I will look at those sites or networks which sent in the best traffic conditioned to respond to me.

I don’t buy large numbers. I don’t buy CPMs. I look at publishers as providing me blunt approximations of an audience, and then it is up to me and my agency to put the right offer in front of that audience at the right time. If I believe a publisher’s pitch on gross tonnage, then I’d be buying into the fact that they are pushing forced page refreshes to hit their campaign guarantees (which I did in former lives) are needlessly chunking long stories into multi-jumps to force up their pages per session, and otherwise playing the games with the logs that I played myself.

It takes one to know one and I know that ad impression numbers are wholly unreliable and again, reiterate, that the burden is on the buyer — aka, let the buyer beware — and take responsibility for the user experience once they wind up on the destination site.