DMN3 Blog

Display Ad Click Metrics Can No Longer Be Defended

Tue, 15 May 2012 13:35:00 GMT

Impressions and clicks have long dominated the metrics of online advertising. Yet these two metrics may be the least important metrics in measuring the effectiveness of any particular banner or display ad.

Ad Impressions reported by ad networks simply reports the number of ads that were sent from the ad server to the user’s browser. The term is misleading because it doesn’t mean that the ad was ever seen by the user. The ad may have never rendered within the browser or may have loaded below the fold where the user could only have seen it if they had scrolled down the page.

Clicks on display or banner ads are still the standard way success is measured when reporting results from online ad campaigns. It’s a logical assumption that clicks on ads that lead to pages designed to convert visitors would be the most important measure in attributing the value of a lead or sale.

A study released in April by ComScore and Pretarget questions these two fundamental metrics. Over a 9 month period, Pretarget and ComScore undertook a large scale study of 263 million ad impressions across 18 different advertisers. They gathered not only typical ad reporting data such as impressions and clicks but also other data including viewability and hover data. Clicks and cookie-based conversion data were also collected for the ads served. Conversion was defined as either a purchase or a request for information.

A Pearson correlation analysis of ”gross impressions,” “views” (defined as 75 percent of the pixels of an ad being visible in a browser either above the fold or after scrolling), “time-in-view,” “hover/engagements” and “total hover/engagement time,” ”clicks” and ”conversions.”

The Pearson product-moment correlation coefficient is widely used in statistics to measure the strength of linear dependence between two variables. The correlation coefficient value ranges from minus one to plus one (-1 to +1). A value of plus 1 denotes a direct linear relationship between the two variables while a value of minus 1 shows a direct inverse relationship between two variables (as one goes up the other goes down). Ä coefficient value of 0 means no linear correlation between the two variables.

What they found should lead to a reevaluation of Key Performance Indicators (KPIs) for online display and banner advertising campaigns. The metric with the highest correlation with conversion was ad hover/interaction with a correlation coefficient value of 0.49. Viewable correlations had the second highest correlation (coefficient value = 0.35) followed by a significantly lower gross impressions correlation (coefficient value = 0.17).

What should be most interesting for online advertisers is that the correlation coefficient value between the variables of clicks and conversions was 0.01! Let me repeat this finding: this study found no statistical correlation between ad “clicks” and conversions!

This study, along with other studies with similar conclusions should make online advertisers change the metrics they are using. MediaMind’s “2009 Benchmark Report" released in 2010 revealed that increasing average Dwell (hover) time from 5 percent to 15 percent increased conversion rate by 45%. In another study, Casale Media’s 2011 “Ad Visibility Report” showed that ads that appear above the fold were 6.7 times more effective at producing conversions than ads appearing below the fold.

It’s time for advertisers to look at their attribution models and definitions of KPIs. If you measure the success of your online advertising by looking at the last click to determine a display ad’s effectiveness you are missing the boat entirely. If you are using ad impressions as a KPI, there are better metrics to use.

Advertisers and their agencies should be paying close attention to how they measure the effectiveness of their online advertising campaigns. Clicks would appear to be a poor indicator of resulting conversions. These studies bring a new dimension to the shift away from last click to multi-touch attribution modeling underway.

Keep tuned…

Do Celebrity Endorsements Equal Advertising Effectiveness?

Tue, 08 May 2012 13:51:00 GMT

Celebrity endorsements are commonly used in advertising. Brands like Nike spend hundreds of millions of dollars each year on endorsements. If you plan on using celebrity endorsements, marketing research can help you make the right decisions.

Brand managers believe that they can enhance their brand’s image by having the brand endorsed by celebrities. They know that often consumers not only buy a product or service but also the associated image of the brand. Besides providing a reason to buy and creating positive feelings, the added brand value created by such endorsements are believed to help companies differentiate themselves from competitors.

Each year companies pay billions of dollars to celebrities to endorse their product, brand or company. The U.S. is probably the leader in using celebrity endorsements as part of advertising campaigns. Approximately 25 percent of television commercials in the U.S. featured celebrities according to the last study done on this subject.

The close to 40 marketing research studies done on celebrity endorsements are not so clear about the effectiveness of celebrity endorsements in general. Specific factors that lead to brand enhancement when using celebrity endorsements have yet to be clarified in any definitive way. Often the research has led to conflicting results.

That hasn’t stopped brand managers from using them. Brand managers believe that a celebrity endorsement adds value to the brand, product or company. Brand value is achieved by the transfer of the public’s perceived “meaning” of a celebrity based on the types of roles they play and how they are portrayed in the media.

There is a lot of research that supports the concept of transfer of “meaning” from the endorser to the brand. However marketing research also shows us that there are many factors associated in making such endorsements effective.

In a review of 36 separate studies on celebrity endorsements, Carsten Erfgen of the University of Hamburg identified 10 success factors that underlie the impact of celebrity endorsements on brand image in his paper published in 2011:

Impact of Celebrity Endorsement on Brand Image: A Communication Process Perspective on 30 Years of Empirical Research

There are several factors that appear to be universally accepted as having an impact on brand value. They include:

Credibility
Attractiveness
Brand fit
Negative information

Credibility: The credibility of the celebrity making the endorsement is critical to the success of the advertisement. Credibility is composed of two factors, each of which has been studied separately in various research studies. The two components of “credibility” relative to celebrity endorsements are “knowledge” and “trustworthiness.”

Knowledge: Knowledge is established when the consumer believes that the endorser has the expertise, skills and experience to provide an objective opinion of the brand or product endorsed.

Trustworthiness: Trustworthiness is when the consumer perceives that the endorser is believable, honest and ethical.

Attractiveness: While as a society we would like to think otherwise, the physical attractiveness of the endorser is very important to the success of endorsements. Likeability is also a part of what consumers perceive as an “attractive” trait. A variety of marketing research studies have shown that a physically attractive, likeable celebrity endorser greatly enhances a product or brand.

Brand Fit: Research studies on the subject show that celebrity endorsements are most effective if there is a strong and positive relationship between the endorser, product or brand, and the target audience. You wouldn’t use Cindy Crawford to endorse athletic shoes in a commercial shown during a basketball game. Okay, maybe you would, but that would not be the most effective way to use her. Knowledge as described above becomes part of brand fit. It should be instinctive in the mind of the consumer viewing the commercial that the endorser could have experience with the product or brand.

Negative Information: When brands use celebrities for endorsements, the “meaning” of the celebrity transfers to the brand. That can be a double edged sword. When negative information about the celebrity is publicized in the media, the brand can suffer. The worse the perception of the information, the worse the brand suffers. A celebrity getting a divorce for example is not as negative a factor as a celebrity being arrested for assaulting his or her spouse.

Brands paying for celebrity endorsements have moral clauses in their contracts that allow them to terminate the arrangement. It is estimated that Tiger Woods lost 23 million dollars in endorsement money in 2010 after his lifestyle was exposed by the media. The five companies that terminated their endorsement arrangement with Tiger Woods are Gillette, Accenture, AT&T, General Motors and Gatorade. These companies did not want Tiger Wood’s damaged “meaning” to be transferred to their brands.

These four factors have been found by various marketing studies to be important in the success of using celebrity endorsements as part of any advertising campaign. If you do plan on using celebrities to help build your brand, make sure you have a termination clause for “negative actions” in the endorsement contract.

Is Interactive Marketing Important to You?

Tue, 24 Apr 2012 13:26:00 GMT

The digital marketing revolution marches on at the expense of many traditional offline advertising channels. While the growth in total advertising expenditures has slowed, the growth in digital advertising spend continues unabated. It’s sink or swim time for many marketers…

Kantar Media recently provided their report for advertising expenditures for the fourth quarter of 2011 and for 2011 as a whole. The fourth quarter numbers were interesting for the fact that they reflected a small decline. Since 2009, advertising expenditures had experienced two solid years of growth. Total advertising expenditures increased 0.8 percent in 2011 and finished the year at $144.0 billion.

Only three areas experienced any growth in the media channels measured by Kantar. Television led the way, with digital (paid search and display) and outdoor advertising also experiencing positive growth for the year. All other channels had declines in ad expenditures for 2011 compared to 2010.

According to Kantar, ad expenditures for measured digital media declined in the fourth quarter. Budgets for paid search and display advertising were down 6.4 percent and 5.9 percent respectively compared to a year ago. For the entire year, paid search declined 2.8 percent and display increased by 5.5 percent.

“The contrast of resilient TV spending and waning budget allocations to other traditional media was plainly evident at the end of 2011,” said Jon Swallen, SVP Research at Kantar Media Intelligence North America. “Some mature digital media formats were also touched by the year-end tide of reduced spending. Whether this is an isolated occurrence or an early sign of digital dollars moving more quickly towards emerging and unmeasured digital platforms bears watching as 2012 unfolds.”

I believe the latter is what is happening. We are seeing a shifting of advertising dollars to newer online marketing channels as marketers look for new ways to reach their target audiences. Kantar is not in a position to track these dollars because they only track paid search and display advertising.

One thing is for sure, with the exception of television, we’ve been watching the shifting of advertising dollars away from many traditional channels to interactive advertising media. According to, US Interactive Marketing Forecast, 2011-2016, Forrester projects that by 2016 marketers will spend as much on interactive marketing as television.

The reason is simple. While television ad expenditures are still growing, they are growing at a slower pace than digital marketing channels. The other fact is that the growth in interactive marketing expenditures is coming at the expense of many traditional marketing channels.

The post office and newspapers would be in much better shape today had this shift not occurred.

According to Forrester, online marketing is not only here to stay, but expanding in both expenditures and available marketing channels. While search, display and email marketing continue to be important interactive marketing tools, today’s marketers are looking for other digital channels to reach their audience. They are investing heavily in mobile, social and online video advertising to complement their advertising in the more mature interactive channels.

Forrester projects that the U.S. online marketing expenditures will grow to approximately $77 Billion by 2016 and comprise about 35 percent of the advertising budget for all advertising channels. During that same period mobile advertising expenditures are projected to grow an average of 38 percent a year and dollars spent on social media, display and video are expected to triple.

Implications for Marketers and Agencies: More resources and more sophistication in online marketing will be needed by marketers as this wave of online advertising overwhelms more mature channel expertise.

Marketers will need to be able to manage online campaigns across all of the traditional and emerging online media channels. Greater expertise will be needed to create more relevant ads for specific channels instead of simply repurposing the same online ad. A more sophisticated approach to manage online and integrated campaign performances will be required. It’s not enough to measure performance of each channel. Marketers must understand how the various channels are working together to achieve the overall result.

There are three important components that marketers need to be effective in the evolving interactive marketing space. They are:

Creative: A creative team of people who understand both mature and emerging online channels who can design relevant and effective marketing campaigns.
Analytics: A robust analytics platform is needed that can both provide the insights needed to adjust campaign parameters and allocate revenue attribution across the various campaign touch points.
Analysis: Any analytics platform needs analysts that can both scrutinize known data to profile and segment markets for more effectively targeting and can analyze specific campaign data to provide the insights needed to make adjustments to it.

These pieces are not easy to acquire. There is a shortage of high qualified people to fill these roles and robust analytics platforms are expensive. Those marketers who want to go where the market is will have to find a way to put them in place.

Good luck!

Third Quarter 2011 Online Ad Spending: Did It Grow or Not?

Online Advertising: What Are the Priorities for 2011?

Television Advertising: Will it Grow or Wane in Importance?

Social Media Marketing: Have You Seen This Survey?

Tue, 17 Apr 2012 13:41:00 GMT

While great inroads have been made in understanding how best to use social media, marketers are still searching for the answers to the big questions. Are you?

Social media continues to be a necessary evil in the marketer’s media mix. Everyone knows it’s important, but few people really understand how it correlates to the bottom line, i.e., ROI. It will remain an enigma until marketing professionals can close the loop with earned social media.

SocialMediaExaminer.com recently released their fourth annual study: 2012 Social Media Marketing Industry Report. 3,800 marketers were surveyed regarding how they were using social media. They were also asked about their future plans.

There are too many insights from the report for this blog post. Here are a few that were significant to me.

Social Media Measurement was the top question on the minds of respondents to the survey. It’s no surprise that this question has been the top question for the past three years running. Measuring the impact of social media on ROI has been the top stated need in every survey I’ve seen on the topic of social media over the last three years.

Social Media Targeting was the second most asked question from respondents to the socialmediaexaminer.com survey. Marketers want to know how to find potential customers on social media channels. They want to be able to segment and target specific audiences by their social media habits.

Effort Equals Results: One big take away for me from the report is that you get out of social media by what you put into it. The survey asked both for respondents experience with social media (under 6 months to over 3 years) and how many hours per week they spend using social media for marketing.

It should be no surprise that marketers with more years of experience spend more hours each week marketing via social media than those with less experience. This correlation with experience carries over into reported results for using social media, i.e., the more experience you have, the more time you spend and the better the results you believe you achieve.

The more experienced marketers are also more sophisticated in their use of social media in that they utilize more channels than less experienced marketers to achieve their marketing objectives.

B2B versus B2C: Another insight from the report is the differences in the way B2B and B2C use social media. For instance, B2B companies were “significantly more likely to use social media for intelligence gathering.” The survey also found that B2C companies are more focused on Facebook and B2B companies are more focused on LinkedIn, Twitter and blogging.

Future Efforts: Marketers are looking to use YouTube/Video more in the future. For the second year in a row, YouTube/Video was the top area where marketers plan on increasing their efforts. Marketers are following their potential customers as consumers gravitate to viewing more online videos.

Google+ is also on marketers’ radar as its numbers grow. It was ranked first by respondents in the survey as the social media network most want to learn more about.

Social Media Outsourcing: 30% of respondents reported that they were outsourcing some of their social media efforts. Design and development, analytics and content creation were the top three tasks outsourced to third parties.

There’s a lot more in the entire report. I recommend reading it. It can be found here: 2012 Social Media Marketing Industry Report. The responses of such a large group (3,800 respondents) provide good insights as to how marketers are using social media. While it may or may not represent a complete picture of how marketers are using social media. It does represent how these 3,800 marketers are using social media.

My biggest criticism of the report is the author making comparisons with previous versions of the survey. Because of the way it is conducted, there is no way to compare one survey to previous ones with any confidence. For example, the 2012 survey displayed that 83% of respondents said that social media was important to their business. The author noted that “this number was a drop from 2011 where 90% thought social media was important…”

There is no way to determine whether the 83% and 90% are statistically different unless the same respondents participated in the other surveys. It’s very likely that the numbers aren’t really different from one year to the other. Without the entire population of social media marketers or an adequate random sample of that population, we cannot draw inferences for how all marketers are using social media.

This criticism is not specific to this survey, but is true for most online surveys. As long as you understand the difference, there are good insights to be had from this survey and others like it.

Related Posts on This Subject:

Is Your Company Using Social Media Effectively?

Are You Having Trouble Understanding the Impact of Social Media on Your Bottom Line?

How Are You Responding to the “Socialization” of the Internet?

Which Social Media Sites are Best for Your Business

Social Media Marketing: Where Do You Begin?

Social Media Marketing: Do You Know How?

Are Microsites Still a Good Marketing Option?

Tue, 10 Apr 2012 13:32:00 GMT

Are microsites still a good marketing option for marketers? After all, Facebook pages provide a vehicle for organizations to offer campaigns, special offers, etc that were the purview of landing pages and microsites in days past. The answer to this question is; it depends…

For many organizations, Facebook pages (also known as “fan” pages) may well be a good alternative to creating a microsite. In fact many smaller organizations have even forsaken a traditional website for a Facebook page. Many online marketers declared microsites all but dead in this age of social media. Contrast this view with Landing Pages which are still universally acclaimed to be a smart approach to online marketing.

There is no doubt that Facebook provides an incredible marketing opportunity for businesses. Facebook provides a variety of tools to create business Facebook pages that are interesting and engaging. Of course the success of any website, microsite, landing page or Facebook page still depends on the quality and relevance of the content provided.

Given the large reach and flexibility of Facebook pages, is there a good case for the use of microsites? Let me first define what I’m calling a microsite. A microsite is a mini website in that it consists of multiple pages with navigation among them included as part of the user experience. Landing pages may also consist of more than one page in certain instances. If so, then the visitor is guided through the pages as they respond to “offer” Calls to Actions (CTAs). Visitors have no access to navigation in a multi-page landing page scenario.

When a business utilizes a Facebook page, Facebook is in total control. After all, your page is on their site. As such, Facebook dictates the technical requirements and decides what data will be shared. As a public company, Facebook will face increasing pressure to maintain and increase profits. The data that is accumulated about Facebook users is a huge asset. Over time that could negatively affect what is now a great relationship between Facebook and those organizations that have Fan pages. There are no guarantees if you don’t own the site.

The reasons why many organizations still turn to microsites as part of their online presence may be varied, but several reasons are paramount:

Control: Businesses recognize that controlling the user experience and user data are very important issues. The user data that may be generated can be added to existing information that exists in the business’ database or CRM system. The business can also format the site and user data to the analytics platform they are using as opposed to taking what you can get with third-party vendors such as Facebook.

Focus: They recognize that microsites provide a vehicle for creating focused sites that can be mapped to users. An organization’s main website may be too broadly focused to provide the focus needed for a particular topic, audience, campaign, etc. A microsite allows a targeted focus that can generate more leads and sales.

Flexibility: Microsites allow marketers to take advantage of changes to the market place and update content and offers quickly to respond to those changes.

Microsites are particularly useful for visitors requiring more flexibility to access content at different points in the purchasing funnel. When microsites are mapped to user behavior and what is known about them from previous information collected, they can be highly effective at providing an optimal user experience.

Conversion: Because of focused content, the sites are more effective for targeting keywords in campaigns. Their focus translates into higher conversion rates than more general web pages. Better traffic and conversion translates into a more effective lead generation and sales site.

Yes, microsites are still around and still prove to be a very successful online marketing strategy when used in the right way. It should be noted that microsites can also have a negative impact in rankings on search engines in that the content is distributed on an independent site(s) instead of combining all of the content into a single website. The more comprehensive website can gain more prominence in search engine results pages (SERPs) by building authority and inbound links because of the large amount of good content on the site.

That brings up another argument. Should microsites have an entirely new and easy to remember URL or should they be a subdirectory or sub-domain of the organization’s main website? What do you think? That’s a topic for another day.

Marketing Attribution: Are You Using the Right Model?

Tue, 03 Apr 2012 13:34:00 GMT

Attribution is giving credit where credit is due. When it comes to marketing, that is easier said than done. Often when it is done, it is done poorly…

Marketing professionals have often heard the truism; “Half of my advertising expenditures aren’t working. I just don’t know which half.” There is a lot of truth in this statement. Fortunately for marketers and advertisers, there are now better ways to track which touch points during the purchasing process had an impact on the final sale or conversion. This ability is termed attribution management.

The tracking capabilities of the digital world are much more extensive than offline marketing channels. For this reason, attribution management or modeling is much easier to implement in this environment. It’s also very important because online marketing represents one of the most important marketing channels in the marketing mix.

For the most part, attribution has been focused on the last touch point prior to purchase or conversion. This has been true for both online and offline advertising. In the online world, this is represented by the “last click “attribution. This end point focuses on the bottom of the purchase funnel and gives little credit to the advertising at the top of the purchase funnel.

This approach to attribution assigns the full credit for a conversion transaction to the last clicked or viewed advertisement. No credit is given to other paid, owned or earned media that “contributed” to the purchase or conversion.

The result is a false impression of the value of the “last click” when viewed over the entire purchasing process and all of the touch points that may have occurred. It undervalues what takes place at the upper stages of the purchasing funnel.

In the last several years, analytics vendors have realized the short-sightedness of this legacy “last click” approach and have devised attribution models based on tracking a consumer’s entire path through the purchasing funnel. Specific weights are assigned to each touch point in the process. Most attribution models more heavily weigh the first and last touch points relative to the other touch point in the process. The result is that a percentage of the sale or conversion is attributed to all of the clicks or impressions (touch points) instead of the last.

This attribution management approach provides a more balanced and much truer picture of the value of paid, owned or earned advertising in the purchasing process.

Of course even this approach is subject to providing false information to marketers. After all, how the weights are assigned to each touch point is critical to providing true attribution. A second factor is the reliability of the data used. Different vendors may use different approaches. Some assign the weights manually while others are starting to use mathematical algorithms to assign values and confidence levels to them. The latter is more complex and cutting edge stuff in the online marketing world of attribution modeling.

Most marketers these days realize that an attribution model that goes beyond the “last click” mentality is needed. The problem is that there is no “fool proof” attribution model that truly can attribute every touch point at 100% accuracy.

Just like different online analytics platforms provide different statistics for the same monitoring, so it is with different multi-touch attribution vendors. Each vendor may provide a different analysis for the same purchasing funnel.

The main obstacles to increased acceptance of multi-touch attribution is for their vendors to convince marketers that their solutions provide a valid and reliable approach to attribution and that they can provide them in ways that are cost effective to agencies and advertisers.

We all would like to know which vendor offers the best value in such an attribution model and management toolset.

Why Not Use Knowledge-based Marketing?

Content Marketing: Do You Map Your Content to Customer Needs

Tue, 27 Mar 2012 13:58:00 GMT

It sounds so logical. Give prospects what they want when they want it. So why are so many organizations ignoring the fundamental marketing concept of "Content Mapping?" Are you one of them?

Most of what has been written on this subject revolves around the topic of online lead nurturing. It certainly holds true for offline approaches to getting prospects to close the sale as well.

It’s a straight forward process. As people become aware that they have a problem or issue that needs addressing, they first concentrate on educating themselves about it. Once they feel they know enough about it, they turn to possible solutions to it. This evaluation process looks at different solutions and approaches to solving the problem. The next stage involves choosing the specific vendor once a solution has been decided upon. After the purchase another post purchase evaluation may also be done.

In the online world this process is often called the “Sales Funnel” with the top of the funnel referring to individuals early in the buying process (awareness and education phase) and the bottom of the funnel for those who have decided to purchase.

Marketing in general refers to this as the buying or purchasing process. The stages are pretty much the same for the offline and online world. The number of stages may differ by researcher or industry, but generally fall into three broad categories leading up to purchase:

Awareness
Evaluation
Buying

Each of these stages can be further divided in a more sophisticated approach as to where leads are within these different stages.

The point is that people, as opposed to organizations, want different information depending on where they are in this process. The content they may want is then specifically mapped to their stage within the buying process. Because it’s people who interact with the content you provide, another factor comes into play: personas.

Depending on your business, there may be large number of personas for which you will need to segment your content marketing efforts. You may want to review my post on segmentation here:

Why Not Use Knowledge-based Marketing?

In the B2B world, decisions are often a “committee” decision with various people making up the decision process from initiators to decision makers and everyone in between. Many of these participants in the buying decision process are different from the others. They have different personas and have different psychographic drivers. Each persona is likely to have a different perception of the issues and company requirements involved in the purchasing decision process.

As you can see, the development of relevant and timely content mapped to each persona and stage of the buying process can become extremely complex. That’s probably why less than half of marketers are using lead nurturing tools.

Remember Mao’s quote; “a journey of a thousand miles begins with a single step.” Start with three steps in the buying process and seek to answer the questions that prospects may have at each particular stage. Map content to each stage and include offers to gauge their interest and to move them from one stage to the next. Over time you can expand this approach to include the personas of individuals as well as expanding the number of stages of the buying process for your customers.

Don’t try to force feed your prospects by treating them like they are further into the buying process. You will only damage the relationship. Remember 50 percent of leads are qualified but aren’t ready to buy something from you. That’s why, over time, lead nurturing programs can result in significant increases in conversion of leads to sales.

Those who treat every prospect as being at the end of the buying process or sales funnel may get lucky now and then but will not be successful in the long run.

Those organizations that provide relevant and timely content matched to personas and where they are in the buying process will be successful in meeting their business objectives.

In which category do you find yourself?

Optimizing B2B Websites: Two Fundamental Issues

Marketing Analytics: Are You Still Searching for the Holy Grail?

Tue, 20 Mar 2012 13:36:00 GMT

You are not alone if you are having trouble finding the right analytics program to measure your marketing efforts. Why is it so hard to find and use the right marketing analytics software?

Even while many use them, marketers are still struggling to make sense of the unprecedented explosion of marketing channels. A good marketing analytics platform that integrates owned, earned and paid marketing channels could provide actionable intelligence that makes a real difference in ROI. For many companies it remains the elusive Holy Grail.

There are a number of reasons why this integrated analytics suite remains a pipe dream for many organizations. Unica’s Annual Survey of Marketers: The State of Marketing 2011 provides some insight into the problems marketers are having with this issue. Finds from this study include:

When asked what factors represented the biggest bottlenecks with their marketing organization, Measurement, analysis and learning was ranked at the top with 57 percent of responses, followed by Integrating cross-channel efforts (53%) and IT support of marketing technology needs (47%).
When asked to rank the three most important issues for their marketing organization to address, Turning data into actions was ranked first by 70 percent of North American marketers, followed by Attributing success to marketing (49% of North Americans) and Determining optimal channel and contact frequency (48%).
When asked what could increase their marketing organization’s productivity, Improved technology infrastructure or software was viewed as the best hope for improving marketing productivity.
Marketers are looking for a more comprehensive and Integrated Marketing Analytics Application Suite. When asked to provide their level of agreement with the statement: “Marketing software is too siloed and missing important tools. As a result, marketing needs a more comprehensive and integrated application suite of marketing software in order to improve its effectiveness;” the numbers that agree has grown significantly over previous surveys reaching 87 percent in the latest survey.
When asked what were the top three barriers to integrating online data with offline data, 60 percent of North American marketers listed Existing systems and data are too disparate as their top choice, followed by Organizational structure, corporate culture or internal processes are not conducive (50%) and Difficulty working with internal IT (39%).

It’s clear from the these findings that marketers are seeking a marketing analytics product that provides not only a measure of key performance indicators (PKIs), but also actionable intelligence to improve their productivity and effectiveness.

Why they’re not using a comprehensive tool that provides the desired metrics and insights needed across all disparate marketing channels is not hard to understand. The top three bottlenecks as determined by the Unica study are interrelated. You can’t have a comprehensive approach to measurement, analysis and learning without integrating cross-channel efforts and you can’t integrate cross channel efforts or deploy marketing analytics to it without the support of the IT department in most organizations.

Add to these the issue of choices and costs and it can seem overwhelming. My vote for obstacles to deployment include choices, costs and corporate culture, especially when it comes to IT.

Choices: There are a myriad of analytic offerings that are on the market. There are a plethora of vendors providing SEO, PPC, Display Ad, Social Media, Email, Call tracking, Web, blog, lead and other types of analytics. These are only in the online world.

Most marketers also utilize many types of offline advertising and marketing channels. Understanding the need to integrate this online and offline marketing data to the many sources of information about consumers from third party vendors and public sources and you will begin to see the magnitude of the problem.

Costs: A heavy duty marketing analytics software suite that provides this level of integration and actionable insights is a considerable investment. Even with such a marketing analytics product in place, you still need the various sources of data to aggregate and integrate within the software.

Another potential large expense is securing access to the data needed and getting it to stream into your analytics platform.

This is typically done via an Application Programming Interface (API) that allows the analytics platform to communicate with the data source. Unless the vendor already has it in place from the data source, you will need to have a programmer or the vendor create this data stream for you.

Another method would be to export the data from the source in a file format that can be recognized by the analytics platform. Once exported, the data file would be imported into the analytics software. Depending on the data source; the frequency and timeliness of your data needs; and the analytics software you are using; this might be an acceptable approach. This methodology provides the data at a certain point in time as opposed to real time data streams available with the use of an API. It also requires someone to access the data source, export the data and then import it into the marketing analytics software. There is a cost as well in the time used to perform these tasks.

Without enriching data, your analytics platform will not have much value. You will need to employ one or both of the approaches outlined above to get the data from a variety of sources into your analytics program. For data sources that are not used regularly and for which real time is not important, the importing approach makes good sense, providing the data is available in a compatible format. When real time data is important and for sources that you will use repeatedly, the API approach makes better sense.

Corporate Culture: It’s been my experience, especially in large corporations, that IT departments are more concerned with security and compliance than assisting in marketing efforts. Because of these priorities, IT departments prevent access to the corporate website and data from it by marketers or the agencies they engage for their marketing campaigns.

Without the ability to place the things marketers need on websites, email, etc, and gain access to critical metric digital data, etc, it’s difficult or impossible to effectively do online marketing and integrate it with offline efforts. In these environments, the responsiveness of IT departments are critical if the organization is to have the ability to determine attribution, behaviors, etc that are crucial to segmentation, profiling, modeling etc.

I’ve often seen this problem. Marketing departments often attempt to go around their IT departments by using landing pages, microsites, and other services provided by third parties. The major drawback with this approach is that it becomes another siloed approach to marketing. Integration is the key along with closing the loop so that campaigns can be measured against the income they generate.

Hopefully the Holy Grail becomes easier to acquire and implement in the coming years as these bottlenecks are addressed.

Last week's post on this subject: Why Not Use Knowledge-based Marketing?

Why Not Use Knowledge-Based Marketing?

Tue, 13 Mar 2012 13:08:00 GMT

Marketing is about bringing your marketing messages to those most likely to buy your products or services. The way to do that best is to use information you already know. That’s where customer segmentation and profiling come in to play.

Customer Segmenting: Most marketing resources emphasize the importance of segmentation in the approach to reaching your targeted market. Segmenting the market is typically done in one of two ways:

Statically: Using data that is relatively constant about the customer or prospect. This data is typically demographic and psychographic data describing various consumer segments. An example of this type of segmentation might be that the prospect is married, has children, lives in a middle class neighborhood and reads People magazine.
Dynamically: Using data that is behavioral in nature. An example of a behavior-based segment is that the prospect frequently visits and has made past purchases at sports websites, especially those dealing with tennis.

Segmentation is a lot better than mass marketing to a universe of possible customers in a targeted market, e.g., all married prospects with children in certain zip codes. But consumer segmenting, as often done by third parties, is still more of a shotgun blast at the market than a rifle shot aimed at the prospects who are most likely to buy what you are selling.

Customer Profiling: To make your marketing efforts more efficient, you need to take your segmentation to the next level. Not all members of a market segment are really alike. In a more advanced marketing strategy, static and dynamic segmentation are combined with your own data to enable customer profiling.

Profiling uses your own data about existing customers to increase the sophistication of your targeting. When combined with demographic, psychographic and other behavioral data, it provides a much better profile of your current customers.

Use your existing best customers to target new prospects. It stands to reason that prospects who match your current customers are the most likely consumers to become new customers.

A BIG difference in segmentation and profiling as described here is that, with profiling, you are combining your data with static and dynamic segments and analyzing them for purchase patterns. You use the information you already know to support the decisions you make to best target those who are likely to become good customers.

Of course if you don’t collect data on your existing customers you will never be able to become more sophisticated in your marketing efforts. However, most organizations record some basic information about their customers. Online retailers know who purchased what and when. They also know payment and shipping information about the customers. Brick and mortar stores use loyalty programs, payment card information, coupons, etc. Direct marketers use PURLs, promotion codes, coupons, etc to collect information that can be used to profile customers.

The information you collect can be combined with the wealth of information being collected by third party advertising networks, data warehouses, etc. With today’s technology it is much easier to mine the combined data for patterns or clues to help you be more successful in your marketing efforts.

To practice such knowledge-based marketing, you need:

Good data: Typically you will use both your own and data from third parties. When it comes to data, typically the more the better. Whatever data you use, it must be valid and reliable.
Good analytics: The better you are at analyzing the data, the better the insights you derive that can be used to improve your marketing effectiveness. Unless you can mine the data and understand the results, having the data is meaningless. Good analytics and visualization software (or a service that does it for you) is a must.

Today’s marketing is not about basing decisions on seat-of-the-pants hunches, whims, etc. It’s about basing decisions from information you already know.

QR 2D Barcodes: Growth, Expectations and Threats

Mon, 20 Feb 2012 17:38:00 GMT

Marketers are rapidly coming around to using 2D barcodes as a way to integrate online and offline marketing efforts. The question is whether they are using them the way consumers want…

Marketers’ Perspective: A recent study of marketers by Scanbury shows a keen interest by marketers in the use of 2D barcodes. According to the study, 50 percent of the marketers surveyed were already using them. That number rises to 86 percent when asked about their future use. The open source QR (Quick Response) Code was the dominant format used by marketers.

Magazines/newspapers followed by direct mail and product packaging were the top choices of marketers for placement of 2D barcodes. The top uses for the barcodes were directing users to additional product information, promotions and coupons according to Scanbury.

Consumers’ Perspective: While consumers don’t know what a QR code is (79%), they do recognize them (81%) according to a survey released last month by Chadwick Martin Bailey (CMB). Another study conducted a few months earlier by Russell Herder indicated that 72 percent of those who responded to the survey reported seeing a QR code, while roughly 30 percent did not know what it was. Half of all smartphone users have reported scanning a 2D barcode at least once.

Why is it Being Scanned: The reasons for scanning 2D barcodes varied among respondents to the CMB study. Curiosity was a main driver, followed by accessing more information and taking advantage of a discount, coupon or free gift.

According to the CMB study, just 41 percent of respondents who scanned the barcodes found the resulting information useful. 57 percent of respondents who scanned a QR barcode did nothing with the information while 18 percent made a purchase. Doing nothing may be the result of both scanning for curiosity coupled with the fact that the information they were directed to was not useful.

The CMB study also revealed a high interest by respondents to scanning QR and other 2D barcodes to gain access to discounts, coupons and free offers. That data is graphically shown:

What is Being Scanned: The CMB study found that magazines/newspapers (35%), product packaging (18%) and websites (13%) led the way as to the location of barcodes that were scanned. It should be of interest to marketers that direct mail fared no better than billboards/signs (11%) in this study. If this study is valid, then more research is needed to determine why bacodes used in direct mail aren't ranking higher.

Where it is Being Scanned: ComScore reports the physical location of consumers when scanning a QR code by percent of scanning audience.

Growth: The use of 2D barcodes is exploding according to a number of studies and vendors in the 2D barcode space. ComScore reported that twenty million consumers in the U.S. used their smartphones to scan a QR code in the three month average period ending October, 2011.

Another indicator of the rapid growth of barcodes is NeoMedia Technologies reporting that it experienced a 1,800 percent growth in year-on-year for its 2D barcode management platform.

The growth in use by magazines has been rapid. The Mobile Action Codes in Magazine Advertising 2011 study by Nellymoser involved tracking the use of mobile action codes (essentially 2D barcodes) in the top 100 national magazines by circulation. Some of the things Nellymoser’s study found:

Magazines use of 2D barcodes rose 439 percent from the previous year. A total of 4,468 codes were printed in the top 100 magazines.
As the year progressed, more and more barcodes were being used.
Ninety-six percent of the top 100 magazines contained at least one barcode during the July to December, 2011 period.
Ninety-seven percent of the codes printed were either QR codes (72%) or Microsoft Tags (25%). QR codes percentage of use is growing while Microsoft and other proprietary codes continue to lose ground.
Barcodes were used in 2011 to showcase a video (54%), followed by sweepstakes/opt-in (30%).

The Future: The future looks rosy for QR barcodes for the next several years. It appears to be coming into its own as the standard for 2D barcodes as proprietary formats continue to lose share. Standardizing on one format should help consumers as well.

There are some threats out there that could derail or contain the use of 2D barcodes in the coming years. They include:

Poor Quality Content: The biggest is the fact that too many barcodes lead to information that is not useful to consumers. Novelty has been driving a lot of the scanning by consumers. As the novelty wears off it becomes increasing urgent that barcode direct consumes to relevant and timely information. Simply sending them to a website is a big mistake. It should take them to a landing page that contains what they want. If you believe the studies mentioned above, it should lead them to discounts, coupons, free offers, sweepstakes and to other important information needed in the purchasing decision process.

Lack of Education: More education is needed to make consumers comfortable with using this technology. Barcodes need to be accompanied with instructions on how to download the barcode reader. This won’t be necessary over time as more and more people become familiar with the technology. However, all barcodes should have descriptions of what will happen after the scan.

New Technology: A recent report by the Yankee Group estimates that percentage of smartphone users scanning 2D codes will peak in the near future and actually begin to fall in later years. They conclude that near field communication (NFC) will slowly but surely displace QR codes for many applications once the technology becomes widely embedded in phones (2014 – 2015).

NFC is touted to be a simple technology for consumers to use and has no limit on the amount of information that can be transferred. Consumers will simply tap their smartphones to initiate the call to action with NFC.

Another technology beginning to be seen in this arena is the use of digital watermarks. Think of them as invisible barcodes that are embedded into text, photos, ads, etc. While you can’t see them, your smartphone can. It allows advertisers to eliminate that “unattractive” barcode in the design of their advertisements.

The biggest issue with the mobile action codes or technologies is their poor use. If marketers don’t link them with relevant and timely information, it makes no difference if the technology is 2D barcodes, near field communications (NFC) or digital watermarks. It’s all about the content, not the technology.

Can Direct Mail Lead to Online Success?

Mobile Marketing: Since When Are Bar Codes Cutting Edge?

Notes:

Authors are starting to use the term QR (Quick Response) code to mean all 2D codes, both open source and proprietary when reporting on this subject.
One should always maintain a bit of skepticism of surveys by parties that have a vested interest in the results.

How to Generate Leads Online Without a Budget

Mon, 20 Feb 2012 17:39:00 GMT

If you have time and not much money, here are four lead generation strategies that will get you qualified leads when used together. If you are patient and consistent in their use, you will get the leads you need to be successful.

The following four lead generation tactics require a lot of time but not much money. Instead of using marketing strategies that rely on advertising, trade shows, telemarketing, email blasts, etc. that can cost a lot of money, you will let your potential leads come to you instead.

How? The how is by using four fundamental lead generation strategies. Actually these strategies will work for other kinds of online business objectives as well because they are fundamental to good Internet marketing. The four strategies you will use for online lead generation are:

Conversion Optimization
Search Engine Optimization
Publishing interesting, valued and relevant content
Using social media to both amplify content and engage prospects

The people at HubSpot have coined a phrase for getting prospects to find you. They call it “Inbound Marketing” and the phrase is being increasingly used when it comes to lead generation. HubSpot’s definition for Inbound Marketing is marketing focused on getting found by customers. They describe Inbound Marketing as having three components: Content, Search Engine Optimization, and Social Media (strategies 2 - 4 above).

I absolutely agree that, over time, these three strategies will generate qualified traffic to your website or landing pages. My view is that without ways to get them to take the action you want once they get there (conversion), the traffic is in large part wasted. Remember your objective is not to generate traffic to your site, but to generate leads!

You might want to read my thoughts on this issue in the post below.

So What?...A Question that Needs to Be Part of Your Marketing Vocabulary

Conversion Optimization: Conversion optimization describes a set of best practices to maximize the possibility that visitors to your site will take the action you favor. For lead generation, the most favored action for first time visitors is getting them to provide their name and/or email address in return for access to your blog, white papers, EBooks, Webinars, etc.

Conversion Optimization is simply using the elements that make up your website or landing page in ways that others have shown to increase the likelihood that visitors will take the action you want. We measure “conversion” as a rate. It’s the percentage of visitors that take the action.

Mobile Optimization is also important. Given the shift by consumers to mobile devices, optimizing a website or landing page for mobile device users is also a strategy that should be part of your conversion optimization efforts.

Conversion optimization is an on-going process. The process involves testing the various elements on the site to measure the impact of change to the conversion rate. Changing things like the Offer, Headlines, Navigation Scheme, Usability Factors, Calls to Action (CTA), Graphics, Type Font, Color Scheme, Page Placement, Type Size, Incentives, etc. can dramatically affect the conversion rate. The only way to find out is through an on-going series of tests to create a site over time that maximizes the conversion rate. Below are some related posts on this subject.

Website Conversion Optimization: Are You Really Doing It?

You Need a Quality Website to Create Trust in Visitors’ Minds

Website Usability: Do You Understand the Concept?

Conversion Optimization: Is Your Website a Business Center?

Website Optimization: How Important Is It to You?

Marketing on the Web Begins with the Website

Search Engine Optimization (SEO): As the name implies, search engine optimization (SEO) is designing your site to maximize the likelihood that search engines will both find it and index the content on it. The goal is to rank high in Search Engine Results Pages (SERPs) for the keywords you desire. Search engines are constantly updating their algorithms to make the results more relevant for those searching. An example of this is Google’s recent announcement that is giving Google+ posts more prominence in search engine results.

Basic search engine optimization for a website involves creating a good navigation scheme that makes the content easily accessible to both visitors and search engine crawlers. There is a whole list of best practices to optimize your website or landing pages, including optimizing Page Titles, Meta tags, Internal Links, good content with keyword placement, rich media, site speed, etc.

The other major factor is what is termed “link building.” Search Engines measure “trust” by the number of quality inbound links to it. The more inbound links from reputable sites on the Web, the more search engines believe the site itself is reputable. These links are major influencers in determining rankings. Below are additional related posts dealing with search engine optimization.

SEO/SEM: Where You Rank Impacts Click Through Rates (CTRs)

Search Engine Optimization: Is It Part of Your Equation for Web site Success?

Publishing Good Content: A business blog is a great vehicle for publishing great content and, over time, generating a lot of traffic to a website. While blogs are used by businesses for brand building and thought leadership, they can also function as a lead generation machine. A blog with good content that is both interesting and relevant to its readers can do all of these functions very well. Compelling content that is useful to prospects will be found by them.

Depending on your frequency of publishing good content that is indexed by search engines, it will take some time to build an audience big enough to provide the number of leads you set as your goal.

Turning those reading your blog into leads is a matter of creating persuasive offers and really good calls to action (conversion optimization). Below are some related posts on publishing good online content.

How Usable is Your Website Content?

Web Headlines: Do Yours Match Research Findings?

Website Content Optimization Can be Frustrating

Website Duplicate Content Poorly Understood

Using Social Media: Social Media is a key component of lead generation. It magnifies the influence of your content. The goal of course is to get readers of your content to share it with other people in their social media networks. Better yet is to get these social media networks to comment on the content. Content that is shared and talked about is perceived as more authentic and is even more likely to attract qualified prospects to your website or landing page.

Another use of social media is increasing your brand’s importance over the web. Social media should be used to help develop a stronger brand presence through brand mentions, brand awareness, branded search queries, etc. Publishing high-quality and engaging web content plays a big role in building a strong brand presence for your site.

Your primary goal with using social media is simple. It is to stay connected with existing customers and generate new leads and customers. The way you do that is publishing super content, becoming members of relevant social media communities and participating in their discussions and becoming an active member of the blogosphere for the subject matter that will, over time, attract more leads to your site. Below are some related posts on social media.

Your Facebook Page: What Can You Do to Make It Better and Does It Really Matter?

Social Media Marketing: Do You Know How?

Social Media: Where Do You Begin?

Which Social Media Sites are Best for Your Business?

Is Your Company Using Social Media Effectively?

What Metrics Tell Us: In 2010, HubSpot did an analysis of lead generation best practices used by over 1,400 small and medium-sized businesses. The results demonstrated that four key factors have a significant positive impact on lead generation. The HubSpot report lists four factors as having a significant positive impact on leads:

Your number of indexed pages in Google: Those organizations with more than several hundred pages experienced a significant increase in the rate of lead generation.
The number of keywords for which you rank in Google’s’ top 100 results: Once you achieve top 100 rankings for a significant (in the teens) number of keywords, lead growth is positively impacted. The more keywords for which you rank in the Google’s top 100, the more leads you will generate.
Publishing and growing your blog: Sites with blogs generate 68 percent more leads than sites without one. Lead generation can be impacted once as few as 24-51 articles are published on a site. The more good articles you publish the more leads generated.
Using Twitter and growing your followers: B2C organizations using Twitter generated two times more leads than those without a Twitter user account. The more twitter followers you have up to about 500 followers, the more leads you will garner. It seems that once followers grow beyond 500, you are probably getting non-qualified followers so the positive correlation stops about 500 followers.

Be Patient and Consistent: The strategies outlined in this article take time and lots of it. Fortunately, it doesn’t take a lot of money. The faster you publish excellent and relevant content, the faster you will get results. Make sure you publish at regular intervals. The minimum should be one article or blog post per week. More frequent is much better and will allow you to attain your goals faster. However, do not sacrifice interesting and engaging content to publish more content. Quality trumps quantity in today’s world. Expect to publish close to 50 articles before you see any impact. After reaching that initial target your leads will grow as your archive of good articles grows into the hundreds.

AdWords: If you have a budget and want to jump start your lead generation campaign then you can add a Fifth Strategy to your efforts: AdWords. Search engine “keyword” advertising is a way to show up on the first page of search engine results pages long before you get there through organic search engine rankings. Just remember to customize ads and landing pages to the keyword search string used by search engine users. If they search for “Schwinn bicycle parts”, the ad and landing page should be consistent and quickly show that they are in the right place for “Schwinn bicycle parts” as opposed to bicycle sales or bicycle events, etc. Aligning search keywords with persuasive ads and landing pages is important to conversion.

Analytics (Metrics): If something is important, it needs to be measured. Tracking how you are doing over time will allow you to make adjustments to your tactics. Analytics are essential. I would urge you to select metrics that allow you to know if you are making progress on the strategies outlined above.

While the number of leads and how many of them become customers are the key metrics, it is important to know if you are making progress on the strategies that will create the leads in the first place. There are a lot of tools you can use to measure your progress. Select what works for you and use the data to make changes to your lead generation campaign to make it more effective.

Third Quarter 2011 Online Ad Spending: Did It Grow or Not?

Mon, 20 Feb 2012 17:40:00 GMT

While we wait for the fourth quarter of 2011 data on Internet ad spending, the first three quarters provide a robust growth picture. However, at least one organization finds the data not so rosy.

While the Internet Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC US) survey on third quarter online ad spending continues to show strong growth, WPP’s Kantar Media’s report on third quarter overall Internet ad spending in the U.S. was actually down 2.9 percent.

Who’s right? If I were a betting man, I would put my money on the IAB report. The IAB is considered the most accurate measure of interactive advertising revenues. Their numbers are compiled directly from data provided by companies selling advertising on the Internet. Their survey is very comprehensive including compiling information on advertising revenue from websites, commercial online services, free email providers and other organizations selling digital advertising.

Compare this approach to that of Kantar which limits its data collection to the top 20,000 sub-domains per month. Their numbers are an estimate based on information that can be scraped off of the Google API.

Kantar estimates that overall Internet advertising expenditures was actually down by 2.9 percent during the third quarter of 2011. Overall online ad spending rose only 2.8 percent for the first nine months of 2011 with progressively slower growth rates each subsequent quarter according to Kantar.

Kantar credits this downturn to reductions in paid search advertising especially by insurance companies, legal services and medical care providers. They estimate that paid search advertising was down 2.1 percent for the first three quarters of 2011.

Contrast these numbers with the more comprehensive report from the IAB. The IAB reports that U.S. Internet advertising revenues were $7.88 billion for the third quarter of 2011. The figures represent a 22 percent increase from the same quarter of 2010. It also marks a 2.7 percent increase from the second quarter of 2011 and is the eighth consecutive quarter of year-over-year growth.

The data indicates that the IAB and PwC’s earlier prediction that overall online spending in 2011 will reach $31.0 billion will be met. eMarketer, which benchmarks the IAB data to its own projections of future online advertising spending, currently projects that online ad spending will reach $50 billion by the year 2015.

Online advertising will more and more consume a larger proportion of advertising budgets. Advertising follows consumers and consumers are spending more time on the Internet. Another reason for the growth in digital advertising is that there are more and more channels for advertisers. For example, consider the growth in the last few years in social media and mobile. In addition, today’s advertisers also have more ad formats than they did a few years ago.

All these factors add up to continued rapid growth in Internet advertising. While the state of the economy will be a factor in the rate of growth of online advertising, there is no stopping this train. Online advertising has become as fundamental as television advertising to today’s marketers. The $50 billion projection by eMarketer is a realistic projection in the eyes of this author.

Where Do You Rank Customer Engagement As a Driver of Business Success?

Mon, 20 Feb 2012 17:40:00 GMT

Customer Engagement is the latest buzz term for marketers. The long term relationships created by engagement is believed to provide a key competitive advantage. Why all the hype?

As consumers become more sophisticated, they expect more from the organizations they deal with and how those organizations interact with them. Marketers and advertisers are responding by placing a much greater emphasis on “customer engagement.”

Marketing and advertising professionals are working to make brands and advertising more relevant and engaging. This shift to creating greater brand meaning and better brand-consumer relationships is about creating more personal long term relationships with the people who are critical to your business success. Organizations view these relationships as providing a critical competitive advantage.

Customer engagement goes beyond loyalty, customer satisfaction and retention programs. While important, these programs do not consistently demonstrate a strong correlation to key business outcomes.

Business Executives’ Perspective: The Economist Intelligence Unit, in cooperation with Adobe, conducted a broad survey of business executives about their engagement activities. The results:

90 percent of respondents indicated that customer relationships are very or extremely important to the success of their business.
Respondents believe that more customer engagement would result in
- More customer loyalty (80%)
- Increased revenue (76%)
- Increased profits (75%)
- Increased customer referrals (79%)
Many respondents find customer engagement programs difficult to both implement and measure their effectiveness.

Gallup’s cross industry research supports these beliefs. Their research findings show that fully engaged customers buy more, are more loyal, and are more profitable than the average customer. Fully engaged customers represent a 23 percent premium in terms of share of wallet, profitability, revenue and relationship growth over the average customer. Actively disengaged customers represent a 13 percent discount in those same measures.

Gallup has created an “engagement ratio” to track the proportion of fully engaged customers to actively disengaged customers. Their research shows that average organizations have less than one fully engaged customer for every actively disengaged customer. Those organizations at or above Gallup’s 90^th percentile have an engagement ratio ten times larger (8:1) than the average organization.

Engagement Metric Is Elusive:

Most marketers measure customer engagement through specific behaviors, e.g., frequency of certain actions (visits per day), extent of specific behaviors (time spent) and the specific actions taken (conversions). These specific behavioral measures of engagement are viewed by many researchers as over simplistic and are not valid measures of overall customer engagement.

That’s because engagement is something that happens in the minds of consumers. Measuring the mental state of consumers is difficult for businesses. That’s why a more pragmatic approach is to measure certain behaviors that are thought to be consistent with “engagement” as a psychological state.

Because of the importance of measuring “engagement” the Advertising Research Foundation (ARF) along with the Association of National Advertisers (ANA) and the American Association of Advertising Agencies (AAAA) are working together to lead engagement research initiatives to create a core body of knowledge for the industry.

Gallup Consulting is one organization that is attempting to measure the “engagement mindset” of consumers. They’ve incorporated behavioral economics theories to come up with customer engagement metric that they tout as both straightforward and with a strong connection to key business outcomes. Behavioral economists believe that only 30 percent of consumer decisions and behaviors are the result of rational thought. If so, then 70 percent of consumer decisions are based on emotional factors.

After an extensive analysis of consumer responses to a list of questions, Gallup developed a list of 11 questions that includes 3 rational loyalty questions and 8 emotional attachment questions that consistently demonstrated linkages to important business performance metrics. Gallup calls this their CE metric.

You can learn more about Gallup’s approach here.

Customer engagement is a social phenomenon. It’s created or lost with each brand’s online or offline touch points with consumers. These repeated interactions either strengthen or reduce the emotional, psychological and physical investment a consumer has in a brand. It’s up to each organization or brand to make each touch point a positive experience.Concentrating on one strategy, e.g., social media, does little good if your customer service sucks!

Brands now live in a world where they no longer control the conversations that take place about them. Social media has become the dominant online strategy to create customer engagement. Unless other touch (engagement) points are also very positive, don’t expect to succeed in getting many fully engaged customers.

Taglines or Slogans: Do You Know that the Right One Can Double Sales?

Mon, 20 Feb 2012 17:41:00 GMT

If you’re not using a tagline or slogan for your brand, you should be. Of course it needs to be the right one for your brand, product and customer. Here’s what you need to know…

Marketing Researchers have firmly established the importance of using taglines or slogans. A number of studies have illustrated that the slogan may be more important than the brand itself in getting consumers to spend money. For example, in one study, consumers exposed to slogans, e.g., “Save money. Live better” were inclined to spend twice as much as when they were exposed to the brand itself; in this case, Walmart.

Another study demonstrated that a “savings” slogan actually made consumers spend more money than if they had not been exposed to such savings-oriented slogans. Savings-oriented slogans outperformed luxury-oriented slogans in getting consumers to spend money.

A variety of research shows that one phrase slogans can have a profound effect on the way consumers view a product or brand. The bottom line is that the right slogan can actually double sales compared to no slogan or the wrong slogan.

What do I mean by the “right” slogan? It’s one that is consistent with your brand’s or products’ unique selling proposition (USP) AND your target audience. I’ve written previously about how all marketing begins with understanding your potential customers. If you haven’t read these posts you can find them here.

Slogans should take into consideration the psychographics of various segments or your target market. In other words you need to understand the subsets of your customers and what motivates them to take actions. Your slogan should match the mindset of those various segments.

For overall brand slogans or taglines, you can use the predominant customers’ motivation or try to craft a slogan that appeals to multiple segments and what motivates them. Two motivators in particular are important for those generating slogans for their brands. They are “avoidance” and “approach consumer motivation.”

“Avoidance motivation” is associated with the possible loss of what they have. “Approach motivation” is associated with opportunities to improve their life.

Prevention of loss is a strong motivator for certain products and/or consumers. The “approach” or “promotion motivation” is also appropriate for certain high risk, high reward products as well as more opportunistic customers.

Most products fall in the middle and can be described in either avoidance or approach language.

Take for example how a toothpaste slogan might be described in either an avoidance or approach marketing message.

“Whiter teeth and fresh breath” (approach) or “Kills bacteria that causes bad breath and cavities” (avoidance)

If you are selling cars, you might use:

“Better mileage (approach) or “lower fuel costs” (avoidance)

Unless you business has very specific products geared to a specific motivating factor, your customer base is likely to consist of people driven by both motivations.

Segmenting either customers, products or both would be the most effective way to employ slogans so as to maximize the influence of the motivation language. For large brand slogans or taglines, including both loss and gain elements would be important to appeal to the largest audience.

Walmart is a brand that has maximized it slogan. “Save More” (avoidance AND savings-oriented) “Live Better” (approach) make it a home run based on the research described in this post. Walmart believes so in that they’ve put their slogan into their logo.

Marketing research leaves little doubt that using slogans or taglines increase sales. Hopefully you have a little more insight as to what the right kind of slogan should be.

As they say…a word to the wise is sufficient.

Print Advertising: Can It Be More Effective than Online Advertising?

Mon, 20 Feb 2012 17:42:00 GMT

In this era of the growth of online advertising, print advertising is often seen as being less desirable than online advertising. That’s an ignorant view of print’s place in any advertising campaign. Here’s why…

Good print advertising definitely has a significant role in achieving advertising objectives. In fact, at least one study by the branding agency Millward Brown used brain scans to demonstrate that paper-based advertising and digital advertising are treated differently as they are processed by our brains. The study showed that the tangible print media left more significant imprints in brains and caused more emotional processing in subjects. These are thought to be important from a branding and ad recall standpoint.

Of note is that this study only compared “static” online ads with similar print ads and not rich media and interactive digital ads. Such ads would be expected to be processed differently than static digital display ads.

The MIllward Brown Study could help advertising agencies and advertisers improve their print ads by adding to the various factors that comprise a good print ad. These factors include:

Objective: Every ad campaign and print ad should have an objective behind it. Specifically what is expected to be achieved by it? Most commercial advertisers are looking for a positive impact on branding or sales with a particular ad or ad campaign. Without clear objectives, how will you know if the ad or campaign was successful?

Target Audience: Before you do anything, you need to understand as much as possible about your target market. Specifically, who are your potential customers that you expect to reach with the ad. The more you know about their demographics and psychographics, the more likely you are to design an effective advertising campaign and the ads which make it up. My previous posts on this subject can be found here.

Marketing: It all Begins with Understanding Your Customer

Customer Insight: Why a Little Research Pays You Big Dividends

Customer Insight: Marketing Research You Should Be Doing

Match Concept to Target Audience: After all, your intent for a print ad or advertising campaign is to engage with its audience, create a positive impression with the ad and brand, be memorable and easily recalled and motivate the viewer over a number of impressions to take action.

The specific advertising appeal you use will depend on both your target audience and the products or services advertised. I’ve previously written about when to use certain appeals and the impact of rational advertising appeals and various emotional advertising appeals. You can find those posts here.

The formats you use should also reflect your target market. Choose particular print ad formats that are most likely to reach them effectively. Often the budget available also enters into this equation.

Specific Print Ads: When it comes to the ads you should remember the following points:

Clarity, Simplicity and Consistency Rule: Remember it usually takes multiple impressions before consumers respond to ads. If the ads keep changing in terms of logo, color, typography, layout, spacing, etc. it will only serve to confuse viewers and will have a negative impact on the ad’s effectiveness.

You have at most several seconds to attract the attention of viewers to your print advertisement. Less is often more. A strong compelling visual will help draw attention to your print ad. Research studies show that 70 percent of readers will only look at the visual, whereas only 30 percent will read the headline. When it comes to ad visuals consider the following:

Use realistic photographs instead of illustrations. People tend to relate to realistic photographs over unrealistic ones or illustrations.
Use relevant photographs instead of using photographs for shock value to gain attention. The photograph should be part of your marketing message.
Use large photographs instead of small ones. Research shows that ads with large photos get higher readership than ads with smaller photos or no art. Your visual should be at least one half of your ad. Some researchers suggest that it should take up approximately two thirds of the ad.

Headline: The Headline is the next important element of your ad. I’ve previously written about headline composition for online writing. There are many similarities between online and print headlines. You can find this post here

Web Headlines: Do Yours Match Research Findings?

Unique Selling Proposition: Every ad should contain the Unique Selling Proposition (USP). Unless it is branding ad, using a call to action with urgency coupled with the chief benefits (USP) is also important to attain the ad’s objectives. My previous post on this topic can be found below.

Unique Selling Proposition (USP): Positioning Yourself Vis-a-Vis Your Competitors

The Ad signature should convey a positive brand image with the necessary time and contact information.

In view of the Millward Brown study mentioned at the beginning of this post suggests that as part of this process, advertisers might consider thinking about how readers will physically interact with the ad. For example, heavier paper stock and a textured finish could increase the tactile nature of the advertising piece and could increase the brain’s response to it.

The brain’s emotional engagement with tangible media might suggest that such ads consider using a marketing message that has an emotional impact. The potential for enhanced recall with tangible media also would suggest that advertisers consider using brand imagery in such ads.

In the end is it about simplicity, clarity and knowing your targeted audience.