Marketers Could---but Should They?

Marketers are faced with an overabundance of options for all types of strategic decisions. This is especially true of channels choices. By that, I’m mostly referring to communications channels, but the same principles may be true of e-commerce channels.

The current atmosphere reminds me of the mid-1990s when companies were waking up to the Internet and asking, “Should we have a website?” It quickly became, “We must have a website because everyone else does.” It was bad reasoning then; it’s bad reasoning now. Only now it’s, “We must have a Facebook page because everyone else does.”

Now every business or non-profit organization has a website. Many of them aren’t very good. They don’t fulfill the business mission and they don’t provide good customer experience. So sadly, before marketers have fully comprehended the issues of ‘traditional’ online marketing, they are faced with the explosion of social networks. And they are FREE! Clearly, we’ve got to do that!!!

I’ve been pointing out for quite some time that social media marketing is not free. It takes skilled people who are committing time to it. So nix the free argument.

We’re back to square one. There are a lot of channels to choose from. Marketers COULD use any or all of them. The real question is which ones they SHOULD use. And notice the consistent use of plural. You do not reach any target audience today with meaningful impact in a single channel. Multiple channels must be assumed.

That makes the real question how to choose the correct combination of channels to accomplish marketing and business objective. I’ll make my recommendations; your additions are solicited.

First, there is your target audience. We know the general outlines. Younger people are more likely to use social networks; older segments are slower to go online, but according to Pew, once they are there they eagerly search for information and engage in gaming, for example. It is important to remember that these are generalizations and the specifics of both demographics and use behavior can change from one product category to another.

Second, there is your position in the value chain. Are you a manufacturer? If so, is your Internet objective to support your retailers and distributors or it is to open another channel to reach customers directly? Are you a dealer or distributor who needs to communicate with and develop loyalty among B2B customers? Are you a small retailer who wants to participate in the frenzy of local marketing? In these cases, channels have been defined and the different channels imply vastly different marketing strategies.

Third, there are your specific marketing objectives. Do you want to sell things? Do you want to generate sales leads? Do you want to grow your social media followers—which is nice, but not enough. What is your PURPOSE (potential marketing uses) for having social media followers? This is about marketing effectiveness, not about bragging rights. Please don’t tell me you want to generate awareness. I’ve written about that before and plan to update my campaign against awareness objectives for Internet marketing soon. The Internet is about generating desired behaviors among targeted audiences. Leaving it at awareness is simply leaving cards on the table.See the video on the McKinsey Quarterly (free registration required)>

The pressing strategic issue is, “Which of the 4Ps comes first?” Ok, I’ll accept that you usually have to have an offering first. But then what? Does your choice of channels (multiple but integrated) determine the outlines of your promotion, including creative as well as the service and tech infrastructure you have to put into place? Take a look at the section of this Eric Schmidt video in which he talks about ‘designing for mobile first.’ He’s talking about disruptive business models, but it also has a strategic lesson for marketers.

As I write this, I realize that we marketers have a semantics problem that we must be clear about in order to make wise strategic channels choices. There are channels of distribution from the traditional Manufacturer > Wholesaler > Retailer to Manufacturer Direct via E-Commerce. Those are choices that, once made, are difficult to change for reasons of both infrastructure and relationships.

Then there are communications channels choices. There are a myriad of those from television ads to a Facebook page. Some of those can be specific to a particular marketing campaign—television advertising, for example. Others, like a Facebook page, need to be maintained once they are established, with involvement in marketing campaigns as required. The point is that the communications channels choices are more temporal than the distribution channels choices, although they have their own elements of stickiness.

My point is that the choice of communications channels sets the direction for a lot of the marketing work that must follow. What do you think?

Personalization--Part 2 - The Back End

Read Part 1 here
Personalization of customer communications is can be a powerful marketing technique. It is best exemplified by carefully-chosen content that is relevant to the customer’s activities and interests, not simply by addressing customers by name. On the front end it can be used to attract attention and encourage action. On the back end it places great demands on data and systems. Relevant behavioral data must be captured and maintained in a form that makes it accessible to personalized marketing communications programs. Systems must be in place to ensure data quality and security, maintain it in actionable form, and deliver it when required. Marketing and IT are the two major players in these activities, but they require the informed cooperation of personnel throughout the organization. That requires the backing of top management. Put together, as they are in this graphic from Marketing Charts it’s a very tall order.
The CMO personalization survey confirms observation and anecdote that indicates few firms are handling the data and systems issues well. Their findings include:

•Nearly 50 percent of marketers report having fair to poor or little knowledge of customers, and almost 47 percent rate their company’s data integration capabilities as being deficient or needing improvement.
•[Only about] 10 percent of respondents rate the accuracy and reliability of their customer data as extremely good.
•Many marketers currently spend less than 10 percent of their budgets on personalized
communications; looking ahead, 55 percent say they will spend more than 10 percent.
•Purchasing history/activity – as well as size, profitability and location of customer – are key data points for designing personalized communications campaigns.
•Multi-channel integration is still lagging in personalized communications as almost 50 percent of marketers report a low degree of integration.
•Marketers appear fearful and intimidated by the investments required for personalized communications as there has been limited testing across all areas.

The effectiveness of personalized communications has been long established, as I suggested yesterday. Likewise the challenges of shared organizational ownership of data that leads to poor data capture and management are not new to those who have practiced database marketing since the 70s. These problems do not seem to be getting better. In fact the sheer volume of data available on the Internet seems to have exacerbated them. The CMO report includes expert commentary on the results. Bernard Gracy,VP, Strategy and Business Development forPitney Bowes Document Messaging Technologies hit the nail squarely on the head. He lists the top three challenges as being:

• Inadequate systems, data, resources and budgets. Personalization requires an effective investment to improve our available solutions – something many marketers are hesitant to make.
• The disconnect and lack of communication between chief marketing executives, who serve as the primary directors of personalized marketing initiatives and sales and customer relationship management groups, which most frequently maintain control of data used in these campaigns.
• An ineffective tracking system for a customer’s purchase history and activity, as well as size,profitability and location of customer. These are, by far, the most important key data points for designing personalized communications.

He adds that, “Tapping into “The Power of Personalization” requires marketing, IT, and operations divisions to work in concert – to link disparate databases across the enterprise to create a single view of the customer,create insight from that view, and have that insight.”

At best, that’s a hard job. Without top management understanding (this is not all going to happen overnight) and support (it’s going to take some front-end investment; ROI will come later), the job will not get done. The CMO study provides useful guidelines. It also suggests that CMOs will have to champion the personalization initiative within the organization. That takes marketing strategy skills, some rudimentary knowledge of what the technology can and cannot do, and the ability to bring disparate groups within the organization together around a common theme.

Let’s hope we have lots of CMOs with the combination of marketing and organizational skills necessary to pull it together on the back end. With the back end in place, the front end will be able to field compelling personalized communications.

Without it, companies will languish in the back waters of untargeted mass communications. That cancels out major capabilities of channels like email and websites themselves. That’s unfortunate, and in the end, it’s a waste of resources. Better to invest in the data that will enable meaningful use of the technology.
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Is the Engagement Metric Evolving?

Microsoft’s announcement of its new Engagement Mapping metric at the IAB conference this week created additional buzz around what was already one of the hottest online marketing topics of the moment. And not just this particular moment—it has been ongoing for awhile. Last summer ARF Chief Research Officer Joe Plummer defined it this way, "Engagement is turning on a prospect to a brand idea enhanced by the surrounding context." That’s an interesting concept, but it doesn’t give me any guidance as to how I could measure it.

Several marketers have proposed approaches to measuring brand engagement, especially online. Forrester has a concept that includes four factors--involvement, interaction, intimacy, and influence. That appears to combine attitudinal and behavioral measures, and that would be a strong approach. The public information makes it clear that it requires both online and offline data. That doesn’t make it cheap, but it makes it comprehensive, which is essential.

Brand Keys offers measures of engagement that are category-specific. Their measure relies heavily on customer expectations of brands in the category. They publish a list of highest-scoring brands in various categories each year.

Nielsen//NetRatings has changed its key measure of web traffic from page views to time spent on the site. They tout it as a better measure of engagement, and it certainly beats page views, which have well-known problems. However, that goes back to an old academic argument on the definition of brand loyalty (is engagement a precursor to loyalty--I think so). The argument is that loyalty is more than repeat purchase behavior—that can be just habit. True loyalty—and I suspect true engagement—requires understanding of attitudes as well as behavior.

Earlier this year Kevin Mannion wrote a three-part article (1, 2, 3) for MediaPost’s Metrics Insider Newsletter that gives an excellent summary of efforts to date. He references the work of Eric T. Peterson and Avinash Kaushik, both prolific writer/speakers on metrics issues. Mannion’s analysis of this body of work produces an engagement metric with six components. They are:
Loyalty: how often visitors return to a site over a long period of time.
Recency: how frequently visitors come to a site within a narrow time period.
Duration: how long visitors remain on the site.
Click Depth: the degree to which visitors view site content.
Interactivity: the kinds of actions visitors take with content (downloading content, viewing videos, attending webinars, posting content, etc.).
Subscription: the extent to which visitors register for services or content.
In the third installment he gives an example of how this metric would work. Note that it is all behavioral; to be specific it is all based on online metrics. That means it is based on data that online marketers currently can access.

That brings us full-circle to the Microsoft Engagement Mapping platform. According to Brian McAndrews of Microsoft, “Our Engagement Mapping approach conveys how each ad exposure — whether display, rich media or search, seen multiple times on multiple sites and across many channels — influenced an eventual purchase. We believe it represents a quantum leap for advertisers and publishers who are seeking to maximize their online spends.” I can visualize what such a map would look like and how useful it would be, especially to the multichannel e-retailer.

It doesn’t solve the metrics issue, however. Engagement Mapping is all behavioral—more a measure of impact than engagement in my mind. If engagement is indeed an attitudinal state that is manifested in brand behavior of various types—both on and offline—we still don’t have a metric that truly captures the concept.
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TJX, Television Viewing and Trust

I ran across a CNET post earlier in the week that recalled a recent experience. While I was paying (in cash) for a small purchase at the local TJ Maxx the checker asked me if I wanted to save money with a rewards card. I had seen a promotion for it as I entered the store and thought, “Are they nuts? Willingly give them any data? Not in this lifetime!”

And that’s pretty much the response I gave to the clerk’s question. The look on her face suggested that she was hearing that a lot, but she just replied politely that she had to ask. I apologized for snapping at her. The failings of TJX management are not her fault.

The CNET post highlighted a 60 Minutes segment from Sunday, November 25 that included the recently-completed Canadian study of the data theft. Sorry I missed it, because one of the subjects for the week’s Internet marketing class at Emerson College was data security. The TJX hack was in the class notes even though we had already talked about it several times, but I was pretty sure that Leslie Stahl had more/more recent information than I did.

So I asked the class of young professionals how many had watched 60 Minutes Sunday night and then waited for a hand to go up. And waited. Of the 15 young professionals and 1 much older one, not one of us had seen the promotion for the segment or watched the broadcast. It’s no secret that broadcast TV has its own viewership issues, but that surprised even me.

I assumed the segment might be posted somewhere, so during the break I searched. It took me less than 60 seconds to find it on the CBS News site, where it still resides as of this posting. That, too, is a commentary on the changing media scene. We all watched it together and had similar responses. The subject matter is downright scary even though we all though we knew quite a bit about the situation. For an Internet marketing class it also made the important point that identity theft is currently more common offline. Will that change as ecommerce continues to grow?

No matter whose fault they are—the retailers or the financial services providers—thefts like the TJX one do irreparable damage to customer trust. Especially when the institution at fault doesn’t notify the public in a timely fashion and seems less than forthcoming when they do notify. TJX does still have a prominent link to customer information about the data breach on their home page and on the main pages of each of their units. That mostly serves to remind many of us where we will only shop with cash, if at all.

No rewards card for me, for sure. And a sobering reminder of how hard marketers need to work to build trust in their brands and how easily it can be damaged. If you are a Jet Blue, and you have a great reservoir of good will among your customers, you can survive one bad experience, especially if the CEO is public and forthcoming and promises to fix the problem. How many of us have built that level of satisfaction and trust among our stakeholders? And what do we need to be doing to continue building trust?
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ShopNBC Scores With V-Commerce

If it’s Cyber Monday, I must write about online shopping, right? And that from a smug person who has most of her Christmas shopping done—a large portion of it online.

My enthusiasm for video as part of the communications mix is well known. It’s not just a shopper perspective, although I use and value online video. It’s data driven. A recent study by SellPoint and Coremetrics and reported by Marketing Charts showed video product tour increasing online conversion by 35%. Among the findings of the study were:

•Shoppers who viewed videos spent an average of 2.5 minutes viewing detailed product information. That’s considerably more than the average time spent on most of the top sites according to the October 2007 Nielsen//NetRatings release.
•Last year shoppers spent more time on Thanksgiving Day viewing video product tours (208,509 minutes) than they did on Cyber Monday itself (181,726 minutes).
•They estimate that time spent will go up this year to 380,000 minutes on Thanksgiving and 182,000 minutes on Cyber Monday.
There are a lot of people pushing back from their Thanksgiving dinner table and rushing straight for the computer to start shopping! All online marketers should take note.
One firm that’s doing a lot of things well is ShopNBC, one of the big 3 television shopping channels. They use various communication channels well, including email and direct mail. Their website is a best practices leader. They call it a v-commerce channel.

After their most recent site update shoppers can:

•Watch previously-aired tv shows indexed by product category, brand or host. (All three channels have offered live streaming of their current programming for several years.)
•Search videos by product, brand or host.


•Customize the upcoming week’s program schedule by product, brand or host (full disclosure: that feature isn’t working this morning)
•Watch webcasts, which appear to be selected previously-aired programming.
•Share video by email, although that doesn’t seem to be available for all of the 4,000 or so video clips on the site.

After two month’s experience with the upgrade ShopNBC describes the results:(Press releases documenting the upgrades can be seen at ShopNBC.com > Investor Relations > Press Releases.)
•Average viewing time for the enhanced live web video stream at ShopNBC.com is five times higher than its previous version.
•Conversion for products is significantly higher when web video is a part of the customer experience.
•Strong web video usage has been seen in the most important online product categories.
•Top customers use web video more than anyone else.
They have already announced several upgrades since the v-commerce site was launched in May. Given the strong results, it seems likely there will be more. It’s a site worth watching.
But right now, I have to go shopping!
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Marketing and the New Media - The Analytics Challenge

One of the main attractions of the Internet for marketers is the ability to track and evaluate the effectiveness of our marketing efforts. There’s a lot of help available, but complete tracking and evaluation is still more difficult than it sounds.

In June 2005 WebTrends published the results of a study that found only 5% of marketers “very confident” in their abilities to measure web marketing efforts while 43% said they were “fairly confident.” A scary 26% admitted to “flying blind.” Has the situation improved since then? Probably; there are a lot of good web analytics programs out there and marketers of all types are increasingly cognizant of their importance.

But that begs the real question because web analytics are the easy part. Measuring the offline activities that are still an important part of the marketing mix is still harder. A recent chart caught my eye, because it highlights important issues.

Click here to view article.

Marketers still see data quality as a problem, but by far their largest problem is marketing and tracking the results in multiple (sales) channels. That is closely followed by what marketers express as “closing the loop on campaigns by merging response and transactional data.” In other words, we also have multiple communications channels. So we have multiple communications channels inciting action in multiple transactional channels. The marketer is faced with a spaghetti-like network of activity and action, and it’s hard to follow the strands from beginning to end.

The web analytics providers are doing a heroic job of integrating non-website channels like email and search into their solutions. However, it’s easy to surmise that the new media channels like blogs and social networks are going to grow (and sometimes shrink) faster than the integrated analytics solutions can incorporate their metrics.

For now, we’ll be working with individual solutions in various channels. For example:
•Blog platforms provide basic metrics for each user blog
•Analytics widgets for social networks like MySpace and Facebook have become a booming industry. Some of them are purely for the gratification of the page owner but some are useful for a commercial page
•Social networks have been a focus of research for many years and the research has produced appropriate metrics
•Analytics packages like Google Analytics can be included in various social media applications.

More generally, the Web Metrics Association is encouraging the development of metrics for social media with a combination of virtual and real-world collaborative activities. The metrics are evolving but putting them together into a complete picture is a moving target.
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