Thursday, December 31, 2009

Grading 2009 Marketing Forecasts

It's that time of the year...when the wonders of the world wide web and its infinite storage give us the chance to review what we it was typed. Mostly for fun.

Back in January, I posted themes for marketing in 2009 [here]. Let's take a quick look, shall we?  Grading is, well, subjective. Your scores and comments--using whatever rubric you prefer--are welcome.

Theme 1: Wearing other people's shoes

The era of the simulacra in marketing--whereby we substitute a representation of what is real for what is real--will further resolve itself in 2009. Defining a customer's values by using a marketer's representation of those values will be discredited by...the customer. Unauthentic marketer monologues that rely on self-referencing notions or that characterize people as collectivist definitions based on gender, race, age, income, or as...consumers...will be cast aside. In their place, favor will rest with real conversations among real people that enable the real people in marketing to catch a glimpse of the real world as it exists where someone else stands.

Grade: B+
Certainly all manner of social media has enabled people to talk with or at one another. I'm not sure if Coke Zero's conversation with 2000 followers on Twitter [here] is a good example of authentic dialogue, but many marketers now seem to be seeking the real thing on social sites like Twitter + Facebook and on open forums like blogs. Even conservative industries like agriculture are taking the plunge to actually, you know, engage customers, critics and competitors...see Monsanto here and here. The conversation isn't always pretty. Unfortunately for some industries (notably ad and news), the point of recognition seems to have not yet arrived en masse.

Theme 2: Increasing the discomfort index

The tools and techniques that have gotten marketers where they are will be unable to sustain them going forward. In a year when many long held beliefs--from capitalism to consumption--are being questioned, people in marketing will need to question whatever makes them feel comfortable. If it's easy, if it's table stakes, it probably needs to be questioned.

Grade: B
With continued weakness in advertising spending, online even feeling the pinch, discomfort is high. In addition, the challenging economics of The Great Recession make Price and Promotion the predominant P's for many marketer's [here]. Clients are asking for more causation in marketing ROI discussions and this continues to challenge investment in the tools that are broad based and hard to measure in realtime. Volume and value in advertising would seem to have a new inverse relationship [here].

Theme 3: Testing the real world

Along the lines of themes 1 and 2, the idea of market-testing ideas will continue to evolve toward a ready, fire, reload approach. With one-size-fits-all focus group and field studies too slow, too expensive and too generalized, creative and product testing will take place in realtime using clickstream data to inform evolution and variation in low cost, perpetual prototypes...much as direct mailers have practiced in paper space for some time.

Grade: C
Examples of crowdsourcing like Netflix' prize demonstrate the concept of the collaboratory in high profile. But on a more granular level, the deployment rates of social media is a broader indication that marketers are testing their ideas in the real world [here] [here]. Whether they are finding that their ideas reasonate is a different question, but the trend would seem clear: everyone continues to know that they must pursue innovative ways of competing against ignorance, apathy and genuinely good competitors. Unfortunately, too many marketers still rely on the 'please let us know what you think by taking our survey' solicitation on receipts, web pages or followup phone calls.

Theme 4: Detailed online impressions

After years of ignoring the online space, many people in marketing have rushed in to fully embrace it...using the traditional models of impressions-based media, intrusion, and branding that they comfortably carried with them from meatspace. In 2009, impressions-based pricing online will continue its deflationary trend and be replaced by pricing models that pay only for performance. Intrusion-based ad units such as rich media and popovers will be ignored routinely. People in marketing roles will focus on the nuances of online brand experiences as defined by a long-tailed view of customer preferences and interactions with a brand. Usable, useful, and desirable will be the criteria against which meaningful brand experiences will be designed and delivered online--and off.

Grade: A
Annoyance with intrusive ad units online remains high. And though some predict huge gains in new video-based advertising online, the only continuous uptrend in online spending even during down times, is with search [here]. Performance measurement is still a way off for traditional TV models, but even Google is getting into the game using DVR data [here]. Customers are in control and if there isn't a clear reason to engage, people won' matter how intrusive you try to be. If impressions are paid for without follow through to engagement, then the price can only continue to deflate as value continues to align with what is directly measurable.

Theme 5: Time as a risk to manage

Time is the one commodity everyone has in equal portions each day. People in marketing will increasingly confront the reality that wasting a customer's time is a brand risk that must be actively managed. Engagement will be defined more precisely in terms of positive and negative engagements where efficient use of and respect for a person's time becomes the expectation. Whether it's call center catacombs, unusable information, spam like solicitations, or irrelevant pitches, marketers will find that a risk premium comes standard with every touchpoint.

Grade: A-
While time is a risk to manage for marketers, it would seem they are losing the battle in capturing it. With Facebook now occupying more time than any other online activity, and games like Farmville, Mafia Wars and Sorority Life becoming major time sinks online, one wonders where marketers will find room to compete. That's why salaries are earned I guess. 

Regardless, marketers are confronted with the idea that even their products are, in fact, services [here]. And where there is service, there is a time risk to manage. The good news is that customer service options are now being deployed in online, call center, and in person channels that are more integrated and efficient for all involved. Usability and human factors are more broadly recognized as critical components of service design.

The bad news is that many marketers still seem to think that their customer's time isn't their concern. Whether it's once a day email promotions blasted to thousands of inboxes or 12-step phone menus just to talk to someone, their remains a great deal of customer time to stop wasting.

Thursday, December 17, 2009

Volume vs. Value: The zettabyte generation

Say, 'Zettabyte'. Let it sink in for a second, then say it again. 'Zetta-byte'.

Like 'one trillion dollars', a zettabyte is  a really big number...and yet, it is the amount of data each of us average Americans consumes annually...3x!

Using the faded power of worn out analogies, if a zettabyte were printed on paper, it would bury the continental US AND Alaska in a layer of paper 7 feet deep...a number 9 zeroes more, even, than all the dollars in the national debt!

National debt: $7,938,000,000,000
One Zettabyte: 1,000,000,000,000,000,000,000

At least, that's the total information consumed according to three researchers at UC San Diego in their report 'How Much Information: 2009 Report on Consumers'

The report's headlines include a deluge of data on media consumption, broken out by bytes, hours, and format.

TV, for instance, occupies 41% of our daily hours, 44% of the daily words we encounter, but only 34% of the bytes we, um, consume. Perhaps hot selling HD video screens will boost our appetite for bytes?

Here's a just a bit (or rather 450,000 bytes) of some fun numbers from the report (click to enlarge):

But beyond the numbers showing:

  • a +5% annual growth rate in the amount of data we consume, 
  • the decades-long relative increase in the amount of reading by Americans (albeit not using the ungreen paper format,) and 
  • the huge amount of data consumed playing video games vs. radio, phone, and print media, 

the report provides an important, mostly obvious, caveat: measures of quantity, whether in hours or bytes, are not measures of value.

Overfed and underread?

The report uses the example of Lincoln's Gettysburg address to show that volume (as in exposures, bytes or costs) does not equate to impact in the general human sense of more-is-more.

For instance, Lincoln's 2.5 minute speech, scrawled on paper, heard by few, but repeated repeatedly to schoolchildren throughout the years, turns out to have more impact--both quantitatively and subjectively--than the much more expensive, high-volume, TV series, 'Heroes'. And yet, looking at Heroes through the lenses of hours of content and bandwidth, one might (mistakenly) conclude the opposite.

Which brings us to a point in all this data masquerading as information...

So what?

For marketers, the message supported by the report would seem clear: as the volume of data consumed by modern Americans--measured by time, volume or format--continues to measurably increase, there is one clear means of breaking through the data noise in a way that leads to measurable informational value: interaction.

And while the move from passive to active engagement in marketing has been underway--at least rhetorically--for some time, it is surprising that so much of our media consumption is paid for based on volume-based models rather than action.

Increasingly, spending on pay-per-action models that support the business and marketing objectives would seem to be the demand of engagement marketers. Engaging one's attention in what marketers have to say comes with the demand that there be value to you. That's hard when you don't know someone by more than their zip code, demographic or gender.

The value of engagement is something that's been evident since before anyone knew what a kilobyte was. Somewhere along the way, we've started to re-discover that our tools alone are poor measures of the ends to which we apply them.

YouTube video showing one type of engagement with our tools (ads included)...for better or worse:

Wednesday, December 09, 2009

Tapped out consumers: what's a marketer to do?

'Advertising is the art of convincing people to spend money they don't have on something they don't need'
-Will Rogers

With credit continuing to contract, unemployment high, and The Great Recession wobbling between green shoots and brown leaves, the macro-level challenges to the consumer's spending habits seem apparent for the near term: Less is more...more or less.

In fact, when one looks at the income quintiles of US Households, the extent of the Great Debt Deleveraging taking place should be obvious:

Household debt as a percentage of GDP has reached 100% only twice in US history...1929 and 2007. Much of what US consumers bought over the last two decades was bought on credit. Much of it, perhaps, because advertising was so successful at convincing people in the way Will Rogers said.

But if thrift and living within one's means is the new required reality, what can advertisers and marketers hope to do going forward?

I took a look at this question by asking myself the following question: if everyone were to live within their income means, what is the value of a consumer's time in terms of their prospect for consumption? In other words, what is the absolute customer value built in to each minute of engagement and attention?

Rather than focus on the cost to reach someone, I thought I'd focus on the potential spending value of that person's time (and thus, the potential revenue value).

The answer? 5 to 22 cents per minute (depending on which income quintile the consumer inhabits) everything...including water, taxes and energy.

See table and assumptions (click to enlarge):

An adjustment to the per minute income value is made by multiplying the unadjusted value by 1.33 This adjustment is meant to account for the one-third of a person's time that is presumed to be unavailable for engagement (e.g., sleep, hygiene). Income conservatively based on lower bound for each quintile. All data from US Census 2004

So What?

Of course people will still make use of some credit. And most customer value calculations would use a multiyear or lifetime value. But whatever you think of the math and the assumptions, the new reality of living within one's means means that advertising, PR and the larger world of marketing have a hopeful using media in a social, engaging way.

I don't mean to imply that every brand has to swap it's marketing dollars from print to a Facebook Fan page. I do mean to imply that there are new, lower absolute values to the return one might expect from an investment in communications that seek only attention or delivering impressions.

Many in media have been slow to embrace planning approaches that went beyond broad-based awareness building, focussing primarily on the spend necessary to get a debt-fueled consumer's attention. In that world, sales lift was generally a sufficient measure of advertising impressions success.

But that approach may be done. In an era of thrift, engagement becomes a primary objective for brand communications. Social approaches to brand awareness through engagement, done well, have among their qualities:

  1. Low cost per minute of engagement relative to the value of the person's time (due in large part to the ownership of the engaged in building awareness and interest among their social network) 
  2. High relevancy (due to personalization and ownership of the message taken by those engaged)
  3. Tight audience focus (self-selection by the engaged reduces the inefficiency of audience descriptions based on gender, age, and race stereotypes)
  4. Trust (resulting primarily from the interaction of people with one another rather than one-size-fits-all, one-way brand abstractions).
  5. Learning (derived from observation of and interaction with the people who incorporate brand engagement into their lives in different ways).
  6. Measurement against predefined value objectives (available from the firehose of data available in near realtime). 
For more on social media measurement see here, here and here. For more on assigning a value to a social media visitor, see here.

    Taken together, engagement-based approaches to communications may provide corporate marketers the best chance of realizing realistic revenue impacts in an era of less consumption.

    No group or organizational unit owns engagement around a brand. In every company, though, there are leaders and those who would be led. Communications, customer service, sales and marketing professionals are all potential leaders along a path of customer engagement.

    The leaders who emerge will be recognized by their obsession with asking questions and listening to the answers.

    Wednesday, November 25, 2009

    Truth vs. facts: The sequel

    Back in April, we commented on TiVos impending challenge to the Nielsen TV rating hegemony in influencing advertising rates: Truths + Facts: Belief systems being challenged [here].

    Now, the worst fears of those who extract value through an opaque relationship between TV ad impressions and ad performance may be realized: Google is entering an agreement with TiVo to use its data on ad-skipping in a pay-for-performance manner [here].

    So What?

    The implications of better data on which TV ads are being seen (as opposed to skipped) exist on a plus or minus scale of positive to negative impacts...if you sell ads based on extrapolated audience deliveries (e.g., based on Nielsen Household Survey data) it may weigh negative. If you want to pay for performance, you'd certainly think it was a positive to have data supporting the invoice.

    Of course these are the self-evident truths we hold when stereotyping TV as an old school sales game and Google's pay for performance model as the all knowing oracle of answers to questions we haven't even thought to, er, Google.

    Here's three reasons I think TV networks will find a deal like TiVo-Google a good one:

    1. TV networks can objectively support their advertising value in the pay-for-performance era and define themselves as a viable part of that mix.
    2. Knowing under what circumstances ads work (i.e., which ads don't get skipped) can help networks create more flexible ad packages around second-by-second behavioral data...a single advertiser with a consecutive series of 2, 7, and 50 second spots in a pod might make as much sense as multiple advertisers in a single pod. 
    3. Flexible pricing models that enable auction-style bidding (similar to pay per click search marketing) may bring new advertisers to the networks by removing cost barriers.

    Certainly there are many other positive implications to be realized. And while it's easy for some to incessantly describe the imminent doom of Big Media, the reality is that knowledge, accountability and transparency are good for everyone in the long run. The alternative---ignorance, irresponsibility and trading in secrets--has no productive place in a social construct--like advertising--that relies on trust.

    Friday, November 20, 2009

    More than meets the eyeballs: seeing differences through social media

    Much is made of growth. Growth is about energy and possibility. It's heady, exciting, and fun. In life, growth defers hard questions about the future to...the future. Which, for some, has the distinct advantage of always being tomorrow.

    In business, likewise, growth sings a siren song of temptation...putting off hard questions about profitability, efficiency, and change in the name of doing it, scaling up, gaining critical mass! People jump on the bandwagon, join the fad, and ask each other "hey, have you seen and heard?". Marketing is genius when growth is the mode.  And this all works...until it doesn't. What then?

    Take social media. Here's Compete's comparison chart of 12 month's traffic for Twitter, Facebook and MySpace.

    What's notable isn't that Facebook continues to grow. Rather, what seems notable is that MySpace is in essentially the same place it was back in February 09. It ceased to grow sometime ago...and now it seems to have stopped shrinking. Of note, it has double the unique visitors of the now-flatlining Twitter.

    The stats are here to make one point only: Growth is good, but it seldom lasts forever: and when it stops, that's when marketing gets harder.

    What about that isn't obvious?

    Danah Boyd has an article in the November issue of Interactions titled "Implications of User Choice: The cultural logic of MySpace or Facebook?" The article speaks to what isn't always obvious in marketing's social media embrace: there is more to marketing online than meets the eyeballs.

    Though not specifically addressing marketing, Boyd's interviews and research illustrate the many ways online audiences define themselves and how these definitions affect where they engage with social media: often in different terms than marketers use.

    For instance, how many Nielsen or MRI reports identify social media audiences as Wangsta's, Emo's, or Honors kids for instance? And yet, it's precisely this type of engagement around cultural differences that is driving many choices about social media selections among teenagers. Is it such a stretch to think that an adult accountant by day might be a hipster online?

    So What?

    The promise of teh interwebz has been described, among other ways, as a great force for democratization of communication.  Online, noone knows your a dog. Or a dork. Well, ok, you can probably figure that out pretty easily.

    The good marketers take steps to avoid letting their own biases drive decisions about who and where their customers are online. They recognize that their brands have to be wherever their prospects are...and in a context that reflects who they are's not so much the other way around.

    It's easy to see a world of hip, middle income, early adopters using iPhones to update their Facebook Walls, clicking on ads when that's you. It's important to remember that customers online engage with others around powerful long-tail self definitions of their own making. Definitions that may look nothing like what we see in the mirror.

    And that's when marketing through social media gets harder than it already is. Because growth isn't a's an outcome. And eventually, when growth flattens, every one of those self-defining prospects + customers becomes precious.

    Question is, were you there for them...and did they see themselves in you?

    Friday, November 13, 2009

    Thinking different: products as services

    Back in the day, as part of the world's largest management consultancy firm, one of our partners used to routinely invoke the following pointmaker: People don't buy drills, they buy holes.

    The thinking was like this: everything about a drill is configured around the idea of a product...if you are the manufacturer, the distributor or the retailer. You may have entirely separate business units for design, marketing and service of the drill. You most certainly have product beauty shots in your advertising.

    But if you are the customer, the drill is a provider of a is part of a larger life experience...building a kitchen, assembling a swingset, hanging a mirror...drilling a hole. Experiences too numerous and rich to be captured in a single company department or in an advertising image with a mere 10,000 words in its vocabulary.

    The partner's point was that reconciling these two views is important. Because if a product plays it's part in the customer's experience poorly--through ambiguous or incompatible relationships to the other parts of the system--then all the marketing and advertising in the world can't prevent a single product from suddenly carrying the entire burden of a poor customer experience...fair or not. Just ask Microsoft.

    Now before you accuse me of going down the rabbit hole to pop-marketing-wonderland, please let me explain: I'm not suggesting that marketers abandon product thinking, or that every manufacturer of nails needs  to contemplate architecture in its marketing...I'm only suggesting that incorporating broader thinking about the customer system into which a product fits is an imperative for marketing.

    Many of you already do this, and I'd be grateful for any thoughts and experiences you can share that would do a better job of explaining this matter than I can. For the rest, here's my shot:

    Why should I care?

    It's how people experience most of our products...Chemicals, couches...product choice is not what customers typically lack. Customers have a multitude of choices among a sea of oftentimes indistinguishable features and benefits. 8 megapixels, 12 megapixels...all that is lost if you can't figure out how to get the image from the camera to grandma. That's the system the product exists within...the service it is expected to perform.

    Our colleagues are already doing it. An iPhone isn't a phone, it's a service for every occassion from finding red light cameras to evaluating the risk of your midnight sushi.  You don't have to be Apple though. Mattress Firm takes mattresses into the broader world of sleep. Business-to-business companies often design and deliver products as part of a service package that may include access to experts, supply or distribution services, financing or end user support.

    No product exists in a vacuum (with the possible exception of vacuum bags).  At the most basic level, all products are tools...whether they help build self esteem or tear down a wall, tools exist in service to the task against which they are applied. As the nature of our tasks grows more complex and interrelated, products that provide service to the larger system will find new ways to stay relevant:  they may even end up being used in ways originally when a search engine suddenly creates the opportunity to become an advertising company or a computer enables a company to become a TV station...or movie theater.


    The tricky part is tricky because it's easy to understand but difficult to implement. Systems thinking means changing the way the product organization works. Here's three of the biggest challenges I've observed for marketers:

    1. Everyone owns the customer experience: Marketing has long professed to represent the customer. But product design + engineering, sales, and especially customer service are all responsible for understanding and delivering on the brand promise in the customer service system to which a product belongs. Cross functional teams may be better at owning the total experience than more traditional, specialized business unit silos. In all cases, specific and accountable individuals should be aligned and empowered with the experience. If you can't deliver beyond the product, don't let your advertising and collateral say you can.

    2. Think of everything, act on some things: No organization, with the possible exception of the GoogleBorg, can successfully manage the entirety of a customer's experience. The first step, as they say, is admitting that. The second step is figuring out what can be managed. This happens when as much of the total system as possible is identified. What does the customer want to do? How do they do it? What other products are used (beyond the one we're selling)? Who do they interact with? Formally and thoroughly identifying and mapping the total experience system enables an organization to identify opportunities and priorities on which to focus. Marketers already have access to many of the tools, such as ethnographic and other market research, for helping to map the system.

    3. Be yourself: Behind every marketer, product manager or engineering title there is a real person. And every real person in any capacity at a company has a story about a product's failure in their personal experience. From the home entertainment system with five remote controls to packaging that requires a jackhammer to open. Asking how one's own products can remove unanticipated angst from the customer's lives isn't being cynical or negative...when it's accompanied by ideas for improvement, that's innovation. And like the customer experience, we all own innovation.

    Marketers have a critical role to play in helping their organizations move beyond product thinking alone. Fulfilling that role might require marketers to think like someone other than marketers on occassion.

    How do you think different?

    Thursday, November 05, 2009

    Calculating combinatorial explosion: a tool for word of mouth marketing

    I am not a big fan of the term 'viral marketing':  the swine flu pandemic (or H1N1 for those who think pigs are being unfairly singled out) has certainly reminded us that 'viral' things haven't historically been perceived positively...especially by those who are infected.  And yet, some in marketing and PR circles continue to let the term fly when discussing why social media should matter.

    Word of mouth, on the other hand, seems to focus more explicitly on all that is wunderbar with social media. Influencers tell influencers who tell influencers...and so on and so on...and when it's digital, it's free!

    Of course, when everyone is an influencer at some level, marketers might wonder just how many influencers it takes to get a critical mass of pass-alongers. One tool to help in the planning stages uses simple factorial math to calculate the reach that a viral word of mouth approach might achieve.

    I've posted a simple spreadsheet version of the tool you can download on the Dialogue Marketing website, here. (MS Excel file)

    The idea is relatively straightforward: capture a few assumptions and see how many people you might actually reach.

    The assumptions in the tool include:

    1. Number of initial influencers (or seeds) the campaign will contact
    2. Expected pass along (i.e., retweet, email, linkback) percentage
    3. Number of  people these influencers will reach
    4. The number of pass along cycles (the 'and so on' part)

    By structuring the capture of assumptions, enabling easy development of goal scenarios, and keeping the math in the background, the tool provides campaign planners with an easy to use expectation setter.

    Try it out and let me know what you think.

    Thursday, October 29, 2009

    Newsprinter circulation: a vehicle driven to tears

    Freedom of the press is limited to those with the ability to run one
    - A. J. Liebling

    What's black and white and read in the red all over? The newsprinter business apparently. Well, not actually. In fact many newspapers are more profitable than the evil health insurance companies (here + here).

    The Audit Bureau of Circulation released newspaper circulation numbers a couple of days ago...the Washington Post and other walking-dead media continue to bemoan the accelerating decline in paid circulation for America's newspapers (here and here for example). For a complete roundup, check Newspaper Death Watch (here)

    And while the Newspaper Association of America tries to convince itself of the successful migration of newsprint to digital (here), it would seem that everyone also understands why the economics of the move online are not working in a quid pro quo manner:

    "Ads on newspaper Internet sites sell for pennies on the dollar compared with ads in their ink-on-paper cousins."

    That's generally what happens when you apply technology to gets cheaper.

    So What?

    What the decline in the nation's largest newsprint organs means is anyone's guess, but here's mine:

    1. Journalism isn't dead: If the NY Times (and other big media) disappears in a sea of red ink, the republic will survive. The issue of newsprint's decline is one of inefficient media...not content. Investigative reporting doesn't really have anything to do with distributing a crossword puzzle, Paul Krugman, or the Yankees. Those are legacies of big media's bygone mass attention monopoly. The economics of the NYT investigative reporting is still built on the presumption that the book reviews matter...and that the newsprint that carries them matters too.

    2. Print isn't dead: At least, it isn't if you are relevant.  Like politics, the most relevant news is local. The same ABC statistics show that small dailies seem to be doing ok. Newsprint subscribers seem to find the cost of a printed newspaper reasonable when it covers news that is local. Thinking smaller, though, isn't generally in the nature of an organization that thinks it's already printing all the news that's fit to be printed. And even local news organizations get that print has to be integrated with low cost online outlets.

    3. News is a commodity: Newsprinters trade in information and information is a commodity. Analysis and opinion, on the other hand, are the stuff of differentiation. They also tend to engender polarization. The newsprinters who reconcile their ability to draw an audience around their opinion may survive, albeit as smaller enterprises. But smaller is where their headed one way or the other.

    4. Economics matter: Advertising is subjected to the same forces of cost efficiency, measurability and effectiveness as every other industry. As long as newsprinters rely on advertising, their cost structures will have to reflect the declining value of advertising. This may mean that those who want print have to assume more of the cost of print. And of course, the major newsprinters aren't losing money just because they aren't selling ads. They sucked from the same debt trough as so many of their readers...buying baseball teams, buildings and trucks with low cost Greenspan dollars for example. The bills have been coming due for quite some time. What the profitable papers are figuring out is that, like everyone else they have to reduce costs or raise prices...or both. How that works out in an era of deflation is anyone's guess.

    And let's not even start on the environmental considerations of the meantime, I'll wipe away my crocodile tears and continue looking forward in the new age of news.

    Friday, October 23, 2009

    Free vs. Paid content: Hulu becomes the next small thing

    Not one to usually value unsubstantiated rumors, I will occassionally pass along rumors that seem substantiated. In this case, it's the rumor that the video sharing site Hulu intends to start charging for access to it's content sometime in 2010.

    I say substantiated rumor because Hulu owner Newscorp's very own Chase Carey says it thusly:

    “It’s time to start getting paid for broadcast content online,”

    Full quote via TVWeek here

    Of course Hulu isn't the only new-legacy media outlet online attempting to find a way to get paid for what's previously been free. Newspapers, like the NYTimes, have gone free online, tried a paywall, then torn it down, only to reconsider it again.

    The long, slow decline of ad revenue at Big Media has driven the best and brightest they have to offer the usual and customary response: raise prices.

    So what?

    The obvious challenges in charging for broadcast content (or news, or opinion, or entertainment) online include:

    1. How does customer behavior that has been groomed around free access online suddenly change to a paid model?
    2. What value must be provided beyond what is currently available via the free model?

    3. How do you define broadcast content competition online that includes the myriad other channel options people have for spending their time and interacting?

    4. Broadcast content offline is subsidized by advertising...does charging customers for access online presumes that advertising is not required?

    Beyond these questions, the reality behind the online subscription model rumblings is this: traditional broadcast models are based on a cost structure that is under duress...because the models are based on big. Big audiences, big production, big ad revenues.

    Paper pays for infrastructure (printing presses, distribution, etc.) that is not able to be cost recovered. Broadcast content producers and their network distributors pay more than their audiences are willing to pay to watch (and, increasingly, more than the advertisers are willing to subsidize).

    Applying technology to most human endeavours does two things: it decreases the costs associated with doing the same thing the old way and it enables things to be done in a new or different way.

    Until broadcast models do something new and different, their only option will be to reduce costs and prices to reflect the long-tail reality of their customer's interests...the challenge is that cost cutting ends at zero. Ultimately, I think this means Big Media will have to think smaller...smaller audiences, smaller segmentation, smaller aggregate, they may become something bigger...but they have to start by thinking smaller.

    Ultimately, Hulu will probably deploy a mix of paid and free access...all-you-can-eat and on-demand packages. As with any endeavour that has near commodity status, the challenge will be in setting a price that marks to a market of one--not to what Hulu wishes a market of millions would bear.

    With any luck, small thinking might--finally--become the next big thing for Big Media.

    Wednesday, October 14, 2009

    Doing more for less: Unmasking display ad effectiveness research

    A couple of weeks ago, comScore and Starcom released a study showing that display advertising online continues to find fewer and fewer people willing to take the click (here). To boil it down to the essence, a mere 8% of internet users account for 85% of all display ad clicks. So much for the legendary 80-20 rule.

    This means that display ad click-thru rates for the other 92% of internet users are actually much lower than the oft-quoted figure of 0.05%. So low, in fact, as to be essentially the same as, well, zero.

    Some, perhaps with a vested interest in impression-based online media, react to the comScore report as one might expect. With vague assertions about online branding + awareness. Others quote 'research' about the additive effect of display advertising on the effectiveness of performance-based formats like search (example).

    But when one actually reads the research (when it can be found, like this one from Microsoft's Atlas Institute) one gets the distinct impression (so to speak) that these studies are often just marketing POV's dressed up in a mad-scientist Halloween costume: nice white lab coat, institute clipboard...but no research methods. No explanation of controls. And no causal explanation of why 27% of the results were in opposition to the fundamental conclusion of the study: that display ads provide a lift when used with search.

    So What?

    I'm not trying to trash display ads...or even self-referencing research (though the decline of display ad effectiveness is something predicted in the Themes for 2009 post). Heck, I'm not sure there's really a fundamental difference between an ad vehicle displayed based on the site a user visits and an ad vehicle that is displayed based on words a user types into a search engine.

    I'm only suggesting that, as a group, advertising professionals quit fighting losing battles about 'changing client perceptions on the value of an impression online'. Clients understand paying for an action. Shoot, we all should understand that we get paid for doing something, not for the impression of doing something.

    We're not serving clients, their brands, or the profession if we quote laughably biased and nonrigorous 'research' findings in support of impression-based buying online. Instead, let's propose online media plans that incorporate at least of few of the following components:

    1. Driven by practical and directly measurable audience action on each impression
    2. Demand a creative unit that has a call to action for each impression
    3. Priced on performance against the action.
    4. Prioritized in a media mix based on the action's value to the client (or their customer).

    Plans for action online don't require a belief system built around ambiguously demonstrated offline ad concepts or research that helps us see what we already believe. Plans for action online do require a commitment to transparent measurement and to a definition of value that serves all stakeholders' needs...especially the client's.

    Tuesday, October 06, 2009

    Child, please! Agency compensation and the suspension of disbelief

    Any explanation is better than none. - Nietzsche

    The 4A's (Amer Assoc of Ad Agencies) have a salary survey out ($350 for members) that, according to Advertising Age, shows top creative 'talent' billing out at $978 per hour [here] with lesser talent averaging $400 and up. I put the word 'talent' in parentheses because it takes quite a bit of talent to convince someone to pay you $978 per hour...for anything.

    If you were working 2000 hours per year, that would value your labor at $1.95 million. Of course, it would also mean that 4A's members only have to work for 21 minutes at that rate to pay for a copy of the 4A's confirming survey.

    But what is it that makes America's top creative talent worth that much? In the spirit of Nietsche, here's an explanation:

    These talented men and women are creating campaigns that, as a directly measurable result of their efforts, sell at least $1.95 million worth of something.

    How else to explain these rates? Some people might use terms like 'great' or 'impactful' to describe the work product that warrants this type of agency compensation. Others might throw in 'award-winning' to modify the noun 'work'. But those are not business terms.

    One other explanation does come to mind, but that would require something less noble. Maybe these rates aren't justifiable? Maybe they don't actually exist at all except in a world where reality is suspended in favor of imagination? Maybe they are reported, like capitalized billings once were, as a way of creating the impression of importance...of shoring up an industry pricing structure under duress.

    Whatever the explanation for the incredi-rates being reported in the 4A's study, the buyers of creative talent can always ask for a measurable explanation of the return on the investment.

    There are quite a few highly competent creative talents and agencies who are compensated at a fraction of the 4A's-reported's a few ways to recognize them:

    1. they embrace discussions about campaign measurement + can show you how they've worked with their clients to create measurement at every level of campaign (not just using awareness studies!).
    2. they are able to work with value-based or milestone-driven, fixed fee billing approaches that minimize the financial risk inherent to the client in spending on any campaign.
    3. they can define 'the work' with specificity around deliverables, costs + support for business objectives.
    4. they use the word 'strategy' in the proper context of accomplishing objectives rather than as a separate creative exercise and thus expect client involvement in the creative process.
    HT to Chad Ochocinco for inspiring the headline...and for delivering measurable results in the Dog Pound!

    Thursday, September 24, 2009

    Gambling on Twitter: Dollars to cents?

    Q: How do you make $1 million in Technology?
    A: Start with $100 million

    Some have called Twitter narcissistic. Others, blogging for the attention deficit disordered. Many techies have called Twitter nothing more than a feature. Google's Eric Schmidt called it, the greatest social media tool since, well, email [not really, he called it "a poor man's email"...which I guess means all of us who aren't billionaires like Eric, Serge and Larry! Or was he talking about a deficit of substance? hmm]

    But I digress. How about Twitter as a gamble? As a firm believer in the wisdom of the marketplace, I'll refer to what some gamblers venture capitalists have decided to call Twitter: a $158 million investment. [here]

    What's Twitter really worth? Better yet, what's a follower for your brand's Twitter feed worth?

    Following up on last week's calculation of web visitor worth [here] I apply the same misguided logic to the Twitter investment to conclude that a Twitter follower is worth...wait for it...$0.21 per month! (see math below)

    At least, that's the revenue Twitter will have to generate off each unique visitor to pay back the VC investment over 3 years.

    So What?

    To get a 10x return on their investment over three years, the gamblers venturesome will need Twitter's unicorn-like powers to magically tweet $2.31 of additional cash money per user per month. Where do you think that $2.31 per month per visitor is going to come from? Subscription fees? Micropayments per tweet? The Federal Reserve?

    Or is there another source? Say, hmm, I don't know, maybe, ADVERTISING!

    Of course advertising is always the easy answer. It's probably the one VC's are counting on.

    For a user, what kind of advertising am I paying attention to while busily crafting each and every one of the 140-character Twitter treats I'm tweeting to my tweet-toofed followers?

    For a marketer, why would I pay to advertise on someone else's feed when I can engage potential customers directly on my own? Maybe that's what Twitter will do...charge companies a fee based on followers. If that's the case, then a marketer might want to look at $2.31 as an upper limit cost for a follower on Twitter.

    And in figuring the metric, if I spend $5000 on my Twitter media presence, then I might consider 2164 followers a goal number...that's where the gamblin' smart money seems to have it valued anyway.

    Of course, if you can get a follower to do more than follow (say visit an eCommerce site or Retweet for you) then you can figure your return on Twitter in a more nuanced manner. Which is to say, a manner driven by objectives, informed by measurement and, thus, a manner that has less of the appearance of a gamble.

    Doing the math (please feel free to challenge this...I was not a math major):

    Total VC investment: $158,000,000 [here]
    Unique Monthly Visitors (Aug 09, comscore): 28,100,000
    One month breakeven return per visitor: $7.68
    Monthly breakeven return required per visitor, 1Year: $0.63
    Expected breakeven term: 3 years
    Expected Return on Investment: 10X
    Necessary Revenue Enhancement per visitor per month to meet investment objectives: $2.31 (gotta pay back the original $0.21!)

    Wednesday, September 16, 2009

    Breaking the Law...of averages

    Hear the one about the statistician who drowned trying to walk across the river because he determined the water was, on average, only 3 feet deep?

    It's a humorous little example of how trusting averages can be dangerous to your health. Here are some other averages...ask yourself if this is you. You are 5'6" tall, you weigh 176 pounds, and you make $42,028 per year

    So what?

    Ok, so there is no way you are all three, exactly, right? For one thing, we know that there are easy filters around gender that change these averages. And as marketers, we also know that there are numerous other filters we can finesse--like zip or fips codes, age, like...well, like a personality type?

    However a marketer might filter it, we're still just toying with what's average so we can speak in an average way. An average 20-something votes for Obama, uses an iPhone, and hooks up with friends using Facebook. But what about the exceptions? Do we right them off as outliers? What if the outliers become the rule?

    By dealing primarily in averages, do we run the risk of missing what's extraordinary about each and everyone of us?

    As marketers, we've always been keen to find the insights that lead to delight. But perhaps we've been a little too delighted with our own views of what, it turns out, is merely average. Average spots appealing to average instincts on average channels used average amounts of time.

    But how are we to go all Lake Wobegon and make every marketer above average? The good news is simple: treat people like a person and the averages disappear.

    Treating someone like a person is requires only three basic things:

    1. Treat people as individuals...people are only a member of a group when they decide they are a member of a group. People don't usually define themselves primarily by your brand. And if they do for the moment, it's because they decided so.

    2. Listen to what individuals have to say...Listening is a listen, you can't be doing all the talking. Of course, listening sometimes starts by asking a question, but it ends when you decide you don't want to hear what's being said. Deciding not to listen, though, doesn't mean the conversation ends, it only means you won't be part of it.

    3. Trust people...yes, we're all flawed, but if you can't trust in people then you can hardly expect people to trust you. From the call center operator to the salesperson to the executive earned is trust that must be repayed. Trust expected is an opportunity for trust to be earned.

    The technical tools at our disposal enable each of us to engage people as individuals on an unprecedented scale. From email to Facebook to instant messaging to 800 numbers, it's not the tools we wield that do the marketing but the marketers that use them in an unaveraged way.

    For a decidedly unaverage version of leather-clad metal odes to breaking the law, check it:

    Friday, September 11, 2009

    What's a visitor worth? A house of cards market and an end in mind

    Having been bombarded recently by cable and telephone direct marketing offers for TriplePlay and Three-fer bundles, I figured, why can't I make a triangular offer? So here's part three of the September online ad posting bundle. In it, we attempt to answer the generic question: What's an online visitor worth?

    image source: HHMI

    For those new visitors, which is most of you according to my Google Analytics reports, Part 1 and Part 2 dealt with the numbers surrounding online advertising on social networks and Nielsen's impending inclusion of online TV viewing numbers in their ratings reports, respectively.

    So what is an online visitor worth? $41.06*

    *based on the current value of the US dollar. So don't delay...lock in your pre-devalued-currency pricing today!

    How's that?

    In a recent issue of Forbes magazine (09/07/09), they examined online advertising data from eMarketer and EquityThink. Looking at the top 4 online properties (Google, Yahoo, MSN and AOL), which collectively represent 27% of online ad revenues globally, I looked at their ad revenues against their monthly unique visitors (adjusted for US visitors derived from comscore data). The table looks like this (all revenue and visitor totals are for Top 4 properties):

    So advertisers are, collectively, valuing a unique visitor to the top 4 portals at $41 worth of online advertising.

    Of course, the math is neither precise nor accurate given that many sites represented in the 73% that are not Google, Yahoo, MSN or AOL don't have advertising revenues reported very accurately. And of course the total unique visitors in the remaining 73% surely are mostly the same as those in the top 4.

    In other words, ad revenue and unique visitor numbers are estimates built on top of estimates with assumptions integrated. Think of them as the metrics equivalent of Collateralized Debt long as we all agree to buy into the same assumptions and estimation methodologies, we may find a consistent market value to mark to.

    So What?

    The point of this exercise, beyond occupying a few minutes this morning attempting to bring a Golden Triangle-like completion to a week's worth of postings, is to highlight a means of benchmarking answers to questions about investing in online advertising.

    If you are thinking of running multiple campaigns for search or display, how much are you willing to pay? What's the value of getting someone to click? The answers depend critically upon what your objectives are, what a transaction value is, what loyalty or revenue goals are. But for online branding campaigns, social media experiments and acquisition campaigns, it may be helpful to at least have an idea of what the market says a visitor is worth.

    You can divide unique visitors anyway you like. You can factor in deflating ad costs, assign factors based on each visitor's time spent, or you can adjust for the special value of the unqiue visitors you think your campaign will attract.

    The bottom line is that to answer what a visitor is worth in terms of ad spend, you have to start with a reasoned sense of what the marketplace says a visitor is worth. But you must end with what you think the visitor's value is.

    Wednesday, September 09, 2009

    Leaving an impression, eye contact + making time matter

    The self appointed senior deputy official accounters of anytime, anywhere media measurement, Nielsen, announced that they will soon provide data for online TV viewing. This, it is said, will complement their 'people meter'-derived homes data, which currently calls the hits and the misses for traditional tv viewing (i.e., the kind that actually requires a television set). Nielsen release here.

    On the surface, Nielsen's claim that it is important to account for online TV viewing seems reasonable. Multiple data sources, including Quantcast, Google, comScore and Nielsen are in violent agreement that more and more of us are watching TV shows on our computer screens. Unfortunately, Nielsen's move to more accurately, er, comprehensively account for tv viewing just isn't that big of a deal.

    Say What?

    The Nielsen approach attempts to take that which no longer is distinct (the TV) and treat it as if it were. Not to 'dis Nielsen, the same challenge presents itself in the way many traditional media interests have viewed the move online: they've taken the analog vehicle (e.g., TV set, newspaper, album) and tried to move that model online as if it were still distinct. Newspapers, music publishers, books...moving them online integrates video, text, images and audio behind a single, digitally-enabled screen to rule them all...with speakers...and a keyboard.

    So the idea that Nielsen's online TV viewing measurement matters much would require that traditional television programming must matter. Of course it does, just not as much as the salad days when we had less to do, with fewer tools to do it. Because now, our friend's silly video of their kid's soccer game matters more than primetime TV. So do our Twitter grunts and Facebook statuses. And we don't like it much when MadMen try to get between us and our context with interruptive, irrelevant advertising online.

    So What?

    Of course, like healthcare, we all want everything free: free media that is free of advertising and subscription costs. But unlike healthcare, we're willing to pay for ad-free viewing when we upgrade to OnDemand or TiVo-like equipment.

    So, let me propose a measure that matters: time spent. It's the common currency that we all share equally...just 24 hours in everyone's bank.

    Rather than treat us all as eyeballs and charge for impressions, let's get the best and brightest at Nielsen to track time spent...and where...did we watch 2 videos and read a status on Facebook? Did we watch 10 minutes of The Office on Hulu then 5 minutes of EpicFail?

    Each online property can price it's minutes of engagement commensurate with individual's willingness to engage there. Rather than pretending that only 250,000 of us matter when it comes to measuring online media, let's pretend we all do. And rather than pretending that there is 'an audience' let's get content whereever there is one or more audiences.

    Spend alot of time commenting on your friend's wall? Sending hundreds of Tweets a day to your sheeps on Twitter? Let your preferred screen sell you based on your time spent...not the number of screens you refresh. You can even let your preferred screen know what you are worth by bidding your time back. Willing to sell your time short? Tell your preferred screen what you are willing to tolerate. I'll tolerate one 60-second ad for every 15 minutes of ad-free experience.

    Better yet, give me a bank of earned 'ad-free' time that I accumulate by watching ads...then when I really want to watch a show, visit a site or watch my Friend Feed refresh, without added interruption, I cash out my ad balance by changing my expereince profile to 'ad-free'.

    In such a manner, Nielsen doesn't care what show gets billions of eyeballs (because none of them do), they care which sites get millions of minutes...or hundreds of minutes...of attention. And like a utility, sites can price their user's attention individually, variably, and in realtime. The user has a say in how durable a site's demand is by their willingness to accept or cash out ad-free credits.

    In the end, the networks matter as either content networks or distribution networks. If the former, you want to be wherever, whenever their is a willing audience on the latter. If the latter, you have to price on what the customer will pay (i.e., your users).

    In the end end, Keynes says we're all dead. So as advertisers and consumers let's make the most of the time we spend together rather than being satisfied with mere eye contact.

    Tuesday, September 01, 2009

    But, I thought it was supposed to be social?

    ComScore came out with a report that shows how important social media has traditional advertisers.

    The report shows that 20% of all online display ads (you know, the flashing, spinning, click me's that are priced on delivery rather than impact) are served via such social stalwarts as Facebook, MySpace and DeviantArt (well, ok, not all of them are stalwarts).

    chart via Comscore (here)

    So what?

    For one, it means that the wireless companies think social media is where there prospective customers know, the kids, mom, dad...even the dog. Because wireless companies AT+T, Sprint and Verizon represent 3 of the top 10 display advertisers in the social media space. And they'd be right...their customers are online. Everyone is. At least if they are under the age of 65 (here). Wouldn't you think though that the wireless carriers would try to advertise in the mobile stream they already own? Or do they know that their customer would rise up against the
    intrusion machine in their mobile space?

    Second, the data may mean that alot of media buying agencies don't really get social media. Because if you are buying display ads in social media, then you either: (A) have surplus ad dollars to spend; or (B) beleive that social media users are there to passively react to what they see. And while that may be true for some, anyone who uses social media regularly knows that you are more likely to be sending friends virtual puppies, taking quizzes to determine what kind of candy bar you'd be, or tagging yourself in your friends photo addition to networking and commenting on posts about all manner of social media topics of course.

    What people on social networks were supposed to do, as opposed to what they did on Web 1.0 sites, was be social...make the network ours. Engage others. Lean in. Interact...have fun. Display advertising is, by its very nature, a solitary act of cognition. You may see it (see banner blindness). It may be relevant. It might be in context. But what makes it social?

    In the end, the fact that we're talking about impressions served...and not mice clicked or pass-alongs...or tweet memes...probably says everything we need to know about display ads on social networks: They're just another attempt to force fit square marketing tactics into round media holes.

    Prior post on social network advertising from 2009 South By Southwest interactive session (here).

    Thursday, August 27, 2009

    No yodelling: Yahoo plans to show or tell?

    First, Yahoo CEO Carol Barth tells analysts that she needs to spend to protect the brand. Then new Chief Marketing Officer Elisa Steele says a new slogan might be something like "Yahoo, your home on the web' (here). Now, rumors are that what Yahoo learned in the Microsoft deal is to spend like a drunken sailor on advertising (here).

    Starting in September, we can expect a media blitz on why you should make Yahoo your home on the web, which is interesting for a few reasons:

    1. According to this article (on Yahoo, nonetheless), Yahoo's prospective new slogan and reference to 'the Web' seem, I don't know, dated? If they were hip squares, maybe they'd go with 'Yahoo: your pillow in da' cloudz'.

    2. But seriously, speaking of vaporous ideas, the notion that Yahoo wants to be the home base for our online lives is sweet. Unfortunately for Yahoo, we're not currently homeless online. We have many homes...all LinkedIn, Twittified, and FriendFeeded...inhabited by our online relationships. Yahoo can be a part of that...a mail account or a forum in one of Yahoo's channels...but Yahoo is a tool. And a hammer does not a home make.

    3. Which leads me to tools (no, not the kind on VH1's Tool Academy). If Yahoo wants to elevate the brand, or reposition it, I'd suggest investing in creating something useful, usable, and Google continuously does (tried Google Reader?), or even, ahem, Microsoft (Office 2010 anyone?).

    For a company like Yahoo, advertising should generate awareness of great new functions...the functions will take care of the positioning through the user other words, design the right functions, and you've designed the Brand Experience.

    I have to confess, I still have MyYahoo set as my browser home page. Yahoo has a wonderful history of creating things, like My Yahoo, that work. They've lost their way in middle age, though, trying to be so many things but special at nothing. They haven't stayed with the pack.

    So here's to hoping that any advertising investment is actually based on articulating wonderful new tools that redefine the My Yahoo brand experience. Tools that actually help people in a manner that reflects the user's centrality in the brand experience. Rather than telling me your mine, make yourself mine.

    The alternative would be trying to re-position via advertising alone...that's not merely a 'cost that is in the system', it's a pretty traditional approach. And that looks alot like the whimsical road they've been down before: fun ad, unmet functional expectation.

    Monday, August 24, 2009

    Monkey business: Seeing the brand within

    In the August 14 issue ofthe journal Science, a report (summary here. Full text requires subscription) on the effect of mimicry between monkeys + humans leads to an interesting conclusion: monkeys prefer exchanging tokens for food with humans who mimic the monkey's behavior.

    After exposure to humans acting like monkeys, and to those who acted like, well, humans, the monkeys spent more time looking at their human imitators, spent more time in proximity to them, and interacted more frequently with them than with humans who did not mimic the monkeys.

    So What?

    While it certainly would be a stretch to read too much into the behavior of humans monkeys, the experiment and protocol tested social interaction based on a phenomenon known as the 'chameleon effect'. The effect is a widely studied phenomenon of unconscious mimicry among--wait for it--people: it can be simple as when a baby returns the smile of a parent or as complicated as when one leaves a bigger tip than they otherwise would because of the example of another person. Sort of like chameleons changing color to mimic their background, but let's limit our posting to two species, shall we?

    But what does monkey business have to do with people business?

    A general lesson for a company or brand based on the chameleon effect might be as follows: to create a heightened sense of affiliation with a brand, to increase the time spent with a brand, or even, to develop a preference, have the brand mimic the prospect...through insight into their beliefs, aspirations, behaviors or, dare I say it, their personalities?

    But don't we already do that as marketers? I'd suggest that we don't often. Generally, we ask the prospect to see themselves in the brand...through a singular personality and positioning. We seek to find a singular insight to drive personality and positioning for a singular, homogenous, idealized group of monkeys humans, aged 25-54, with a gender, a race and an income.

    I'm simply suggesting that marketers flip that around. Have multiple insights drive multiple positionings and personalities that conform to the unique microsegments that define our differences. It's how we monkey people behave in the real world...the people with whom we choose to affiliate, spend time and conduct all manner of non-branded interactions. How does a brand personality fly above these human realities?

    Some big brands seem to be experimenting with multiple personalities in their traditional marketing: Geico being but one example with its gecko, caveman and wad-o-cash personalities. And though traditional advertising may be an expesnive place to exhibit multiple personalities, customer service, line extensions and loyalty programs seem ripe with possibility for asking questions and listening...and thus enabling the kind of personal, relevant, dialogue-based marketing that sees itself in the customer's eyes.

    Wednesday, August 19, 2009

    Emotion detector: What blogs tell us about mood

    In the Journal of Happiness Studies: An Interdisciplinary Forum on Subjective Wellbeing (yes, for real, here) a paper by two University of Vermont statisticians claims that the nation's mood can be determined, in part, by the tone of it's blog postings.

    Here's a chart from the paper (available here) showing an increasingly happy nation over the last four years (hearts are Valentine's Day and green trees are Christmas):

    Of note is the overall upward trend (didn't political acrimony seem high back in 06?), the periodic declines in July/August (summer doldrums/stock angst anyone?), and the incredible sadness apparently felt among the blogogentsia over Michael Jackson's passing.

    You can validate the statistical and research methods and conclusions for yourself (here). Essentially, they boil down to an automated index of blogs using a standard list of rank ordered words shown to convey particular emotions. Then, a magic algorithm is applied that enables age and geographic filters, among other things, to be applied to results and, voila`, the Emotion of The Crowds.

    So What?

    In some regards, the idea of a collective happiness index is similar to what pollsters have been attempting for decades...except that the sample size in the blog survey is much larger and is near realtime (it's automated afterall). It's also less representative of the diversity of the population.

    And as fascinating as the idea of a global barometer of happiness might be, the idea highlights the challenge inherent in defining something as uniquely personal as happiness for such a large group. The paper's authors certainly concede that opportunities for improving the approach exist. They even go so far as to suggest that the approach could be more useful as a means of evaluating 'social contagion' and 'predictive theories' of social interaction...which sounds a bit like what stock markets seem to have become.

    For marketers, however, it is a useful reminder that high-level trends can be valuable in scenario planning, ideation and in direction setting. It's also useful in reminding us that what may appear to be true and meaningful at the level of the group can break down completely when applied to the individual...that's as true of messaging, positioning, and creative as it is of our own happiness.

    For those of you made happy as RUSH completists, here's the Emotion Detector demo tape:

    Monday, August 17, 2009

    Social Media Metrics: Culture, Commerce + Conversation

    One of the questions that frequently arises in client conversations around social media concerns metrics: How should we measure social media's impact?

    One answer is: The same way you measure marketing impact.

    And while that may seem self-evident, if not obvious, it does reflect the oft-obscured truth about social media: it is but a different means to accomplish the same ends. Those ends, of course, are the marketing objectives.

    When social media metrics are clearly tied to marketing objectives, therefore, you will have answered the question at the start of this post with more than a steaming generality.

    Yes, but how?

    One tendency among the measuring class is to find a number and fixate on it: click-thrus as a singular view on success or failure, for instance.

    Meaningful metrics, however, tend to be directional...they identify trends or, um, direction over time. These metrics may embody the principles of a Balanced Scorecard, where a larger set of financial and nonfinancial measures, in aggregate, indicate the directional health of the activity or the enterprise. Here are some prior posting's on metrics (here, here, and here)

    So getting back to Social Media metrics, what type of marketing objectives might make a social media deployment sensible?

    Of course it would be silly to make proclamations that may not reflect the practical realities of a specific organization's situation...BUT...there are three general types of objectives that I've found applicable to social media.

    For any enterprise that operates as part of a highly networked, always-on, marketplace of ideas, marketing objectives must reflect the real-world way in which enduring human relationships are built: at the intersection of Culture, Conversation, and Commerce.

    If your organization is prepared to operate in these three areas in a balanced way, then it may be ready for a social media deployment as part of it's marketing efforts. Here are some sample marketing objective categories for use with social media:
    1. Culture: Demonstrate the shared attitudes + behaviors that reflect a commitment to the organization's or communities mission and values.
    2. Conversation: Ask for and respond to dialogue among and between an organization or community's members, employees, customers, and prospects.
    3. Commerce: Support promotion + sales
    What follows, then, are a few sample measurements for each of these objective categories...these are not comprehensive lists. They do provide examples of the type of measurements one might use to assess the direction of culture, conversation, or commerce objectives supported by social media:

    • Percent of interviewees who mention the organization or community's social media channels during the interview process
    • Percent of organization's associates who Friend/Follow/Participate in the organization's social media ecosystem
    • Number of customers who reference social media presence
    • Sentiment Index: Ratio of positive comments to negative comments on social channels
    • Engagement Ratio: Total Unique Visitors/Total Visitors; Tweets/Retweets; Post/repost; Visit duration
    • Dialogue Ratio: Number of comments per posting
    • Conversation Bandwidth: Number of inbound links; Page rank
    • Return on Investment: Cost per visitor, Cost per minute of engagement, Cost per feed subscriber
    • Raw referrals from social site to eCommerce site
    • Transaction dollar value/completion ratio
    • Transaction dollar value/referral ratio
    Many others exist of course. Hopefully, these examples provide a place to start.