Tuesday, 30 October 2012

Advertising missed the point, it was never about analysis.

I reviewed the book Moneyball ages ago. It's great. Read it if you haven't already.

I'd like to revisit that book today, even though it's old news now and we've all moved on to talking about new shiny things from Apple and forgotten why a small baseball team from Oakland keeps beating bigger baseball teams. I'm going back to it, because it seems to me that advertising spectacularly missed the central point of the book. And the central point of Moneyball is potentially incredibly valuable to what we do.

When it read Moneyball, the advertising industry heard: "Analyse lots. If you do lots of analysis, you'll win more." After all, the Oakland A's baseball team hired a team of analysts and then they performed much better.

Which is wrong.

That's like saying if you want to go to Edinburgh, drive your car around a lot, because it's possible to drive to Edinburgh. It's not a massive amount of help until you work out which way you're going and just driving in circles will cost you a lot in petrol.

It's all about the question again. It's always all about the question.

The early analysis done by the Oakland A's was really nothing special - almost back of a fag packet stuff - but they'd asked the right question. That question was, "how do we compete, when we have less money than other teams?", which is itself too general to guide an analysis and quickly moved towards, "which players are undervalued, in terms of their ability to win us a baseball game?"

From there, your analysis lines up very quickly:

Which attributes of players help you to win baseball games?

Which players are good at those things?

So, which players have a cheap price tag, that doesn't reflect their ability to help win games?

Moneyball is all about looking for market inefficiencies. It's about discovering factors that are important in winning a baseball game, but which your competitors undervalue and then buying up cheap players who are good at those things.

We don't do that type of thinking very often in advertising.

We assume, over and over again, that the way to stay ahead of the competition is to innovate first and to be the first into an emerging media channel. Mobile, social, video pre-rolls... whatever is flavour of the month. The trouble is, with everybody doing that, demand for emerging channels will be higher and the price will be pushed up. It's basic supply and demand.

With lots of companies chasing after emerging media channels, their price is almost certainly inflated vs. their effectiveness. If you consider that new channels are risky because we don't know if they work yet, the problem gets even worse.

So where would the advertising market inefficiencies be, if you went looking for them? Which channels work better than their price suggests? I'm willing to bet those inefficiencies are in the same place as they were in baseball - they're in older, unfashionable channels just like they were in older, unfashionable players.

Players who can't do every job, but are still very, very good at one job. Other inflexible players can then be brought in to cover their deficiencies and overall, you'll have a very effective team. Or, alternatively you can go for a very focussed game-plan, based around the limited skills that your players do have.

I'd be willing to bet that it's the unglamorous media channels, which are undervalued in marketing. Leaflets... emails... daytime TV... You know, the channels that tend to get used by companies with small advertising budgets, who punch above their weight and who keep a very close eye on marketing efficiency. The companies with 'limited' but very focussed media plans.

This article from a few weeks ago also pointed out that in the US, the over 50s control 75% of financial assets and yet we pay a premium to target younger consumers with advertising. Yes, younger people are harder to reach, but they're so much less valuable in terms of spending power that I'd be amazed if there isn't an inefficiency here for somebody to exploit.

It's hugely cheaper to market a product to the over 50s and they're the ones with all the money. It's not glamorous advertising, but then the Oakland A's didn't have glamorous players.

They had effective ones.

Thursday, 25 October 2012

Measuring social: Even Q couldn't do it.

I'm sure you've seen this video from Coke Zero. It's brilliant.

Best example of a marketing viral I've seen in ages and I'm sure the Coke Zero social marketing team are giving themselves well deserved pats on the back.

This one's going to turn up in every "how to do social" slide deck that gets produced in the next 12 months. It's a rare example of a social campaign where nobody's going to argue with the value. Any marketer would be proud to have it on his CV.

But what if finance got awkward?

What if they insisted you'd never be allowed to pull a stunt like this again, unless you could prove it sold some bottles of Cola?

Well then you'd have a problem.

I've posted before that for a variety of reasons you've got virtually no chance of linking social media activity to sales. Actually, let's rephrase that. There are hundreds of ways to imply a link, but it's virtually impossible to prove a link, mostly because it's hard to get good audience data on who saw the viral and when they saw it, plus any positive effects it has on sales are likely to build up slowly, so looking for an immediate spike won't work.

We've all seen loads of 'how to measure the ROI of social' articles, which then spend five hundred words avoiding the question, but for once, I'd like to hit that question head on. First of all, for ROI in terms of additional sales, forget it. Even if you've got sophisticated econometric models in place you'll be lucky to pick up the effect. So here's what I'd do.

Your answer is going to need a £ figure in it, because you're talking to finance. Loads of Facebook shares and positive Twitter sentiment isn't going to cut it.

That YouTube video's got 3.8m views, so line up your social campaign vs. the alternatives. How much would it cost to run a TV advertising spot that achieved 3.8m impacts?

Actually, not that much. In the UK, take an average adult cost per thousand impacts on TV of £5 (ish) and you're looking at an equivalent value of... £19,000.

Damn, that's not very impressive. Probably not enough.

Say you can show that the audience for the YouTube vid is a bit better than a blanket "adults" target. That it's younger and would be harder to reach with TV. That wouldn't be difficult; if nothing else, you could show that YouTube users in general are younger and so your viral audience probably is too.

Now you might be able to justify a cost per thousand of around £50, rather than £5 because hitting younger viewers with TV spots is expensive. Your equivalent media value is £190,000. Better.

But hang on, that video is two minutes long, not the standard 30" TV spot. Four times the spot length, gets us to a value of £760,000.

That's more like it.

It's also more good evidence for why you'll struggle to measure a social media effect on sales. A global TV campaign for Coke with a budget of £760,000? Don't make me laugh. It's a drop in the ocean.

Once you've got a nice solid financial number, you can layer on some softer metrics, always referring back to  what it would have cost you to expose that audience in a different way. Did you gain Facebook followers? Great. They're valuable because you can talk to them again, rather than spending money somewhere else.

Shares on Twitter? Careful, those people are already in the YouTube plays number.

New followers on Twitter? Lovely, just like the Facebook ones, they have a value because now you can show them more advertising messages.

The last step you might want to try is that direct link to sales. You won't be able to prove it (I might have mentioned that) but you can imply it. If there's a general ROI to TV circulating in the business then you've just put social in the same space as that media, so you can potentially borrow it. How many sales would a TV campaign of that value have generated?

You might also be tempted to make the case that somehow Facebook advertising messages, or YouTube video views are 'better' than TV spots - that they're more engaging and with higher impact - but be very, very careful. You're doing this exercise for finance and they're almost certainly starting from the viewpoint that an ad is an ad, no matter where it's shown. Do you have rock solid evidence that it's better (ROI better) to talk to people on a social network than on TV? I don't. In fact I have the opposite, because you're more likely to be talking to existing customers.

Do what you can with the real financial metrics and accept that sometimes, your equivalent ROI number isn't going to look very impressive. After all, we've just proved that the best viral we've seen this year is probably worth less than running £1m worth of the same creative on TV.

Tuesday, 23 October 2012

Users don't want 'clever' dashboards

You're an analyst. Probably. That's why you're reading Wallpapering Fog.

If not an analyst, then at least inquisitive; if somebody shows you data then you want to dive a bit deeper and understand why the top-line numbers are doing what they're doing.

The more client dashboards we build, the more I'm discovering that while everybody always says they want to dive into the data, most people actually don't. If you give most marketing managers an interactive dashboard, they won't interact with it. They'll look at the screens in their default state, read what they can from them and then stop.

You can try to demonstrate how to interact with the data. When a marketer asks "why is my website bounce rate so high?", you can drill the number down, while they watch, and show which sources are sending the low quality traffic. They'll nod and thank you. Then next week, they'll ask exactly the same question again.

Unless you set up a screen which is specifically designed to answer the bouncing traffic question, without needing to be manipulated. A specific screen called "Sources of bouncing traffic". Then you'll have a happy client.

Who'll think of a different question, that you haven't already built a screen to answer.

I'm not being negative about interactive dashboards. I love interactive dashboards. Especially Tableau ones, but most of our clients aren't like me. If they were they'd be analysts, not clients.

If you're building dashboards for non-analysts, you may well find that they get a better reception if they're not interactive. Usually a marketer only has the same few questions on a Monday morning and if you can set up screens that answer them without being manipulated then you've got a happy marketer.

You could instead build an interactive screen, which with a few clicks will answer lots of questions, which would need multiple different static views to do the same job. Want a week-on-week and a year-on-year view? Just click the drill down button! What's the difference between branded and generic keyword searches? Click into the 'total searches' line and it will show you!

Except your marketer won't click the drill down button. They'll get frustrated that their dashboard isn't showing exactly what they want.

You can get annoyed about this. People don't want your clever interactive screens!

Or you can see the advantages.

We're doing quite a nice line in dashboards of Google Analytics data. The clients have a login to Google Analytics just like we do, but they don't use it because the GA website doesn't immediately show them exactly the stats, for exactly the date breakdown that they need, on one screen. With Tableau and Python to hit the Google Analytics API, it's very easy to set that up and automatically refresh it.

Now your client has a dashboard that they can't do without, that shows them exactly what they want at 9am on a Monday and you know what else? You don't even have to bill them for a server login because they want static views, so PDFs in their email are actually better than a login to an interactive system.

Not for everybody though, and those logins are still important. You can give analysts (or analytically minded people) on the client side some server logins, but I guarantee the Marketing Director doesn't want one. They might say they want one, but they won't use it, which is where we started. If they needed your dashboard login then they'd already be using Google Analytics.

A lot of dashboard software (and certainly Tableau) is really fantastic at two jobs. One, is making data interactive and easy to interrogate and analysts love that. The other is making refreshes of static screens really easy. Think hard when you're designing, because for a lot of people, those static screens are better.

Static screens may also be much harder to get right, even though building them feels a lot less clever. When you can't ask the user to click through to what they want, you have to know what they want before they arrive at your dashboard.

You have to really understand the client and their business. That's the really clever bit.

Monday, 15 October 2012

A clash of broadcasting worlds

Did you watch Felix Baumgartner's record breaking jump yesterday? It was amazing.

Watching live on the Red Bull branded wesite at www.redbullstratos.com, I thought we could be seeing a new era in live broadcasting. After all, if you own the content, then why get somebody else to broadcast it for you? Run your own station, for as long as you need it, on the web.

Why would Neil Armstrong's moon landing be broadcast on TV in an era of live streaming?

There is a very good reason.

Red Bull's stream (via YouTube) attracted an audience of eight million. That would be very impressive if it was a UK audience, but it isn't. It's a global audience.

Eight million globally is, frankly, a bit crap. It's a YouTube record, but that's not the point. ITV were showing an hour long Coronation Street special at the same time as Felix was hoping he'd packed his 'chute properly and that did 6.25m, just in the UK.

So why do you want a regular TV broadcaster for your content? Simple. Audience reach. It's the same reason advertisers want TV ads, even if they've truly bought into social media.

I'm assuming one of two things happened with Red Bull Stratos. Either Google bunged Red Bull some fairly serious cash for the exclusive rights to Live stream via YouTube, or regular broadcasters just weren't interested, because they couldn't be given a predictable prime-time slot when the jump would take place. "Sometime in the next week if the weather's ok" doesn't really work for an ITV scheduler.

In one (fabulous) event, we've got the best and worst of new and old media. Only old media could have got that footage in front of its true potential audience. But TV is too inflexible to make the scheduling work for an event as unpredictable as the Stratos project.

In the UK at least, it's a shame we didn't have a dedicated digital TV channel that could be activated on short notice and then trailed on a major network. Press the red button to watch a nutter jump from space. The technology is there and it worked really well during the olympics. For a moon landing type event (Mars landing?) in 2012, I'm betting that's what would happen.

Unfortunately, the broadcaster with that capability is the BBC. With Red Bull logos everywhere? Never going to happen.

We're not quite living in the future yet. If you missed the footage yesterday because you didn't have one eye on Twitter, then here's the Austrian with the big cahones in all his high altitude parachutey glory. Enjoy.

Friday, 5 October 2012

Nobody needs hourly reports. I now understand why they want them.

We build a lot of business dashboards at MediaCom, to track advertising performance, what your competitors are up to, your latest sales figures, that sort of thing.

I'm a strong believer in the fact that nobody needs to see those kinds of figures daily, or even more frequently than that. You can't learn very much when the frequency of your reports is that high. There's a good chance you'll focus on a misleading figure that's not part of a general trend and the little that you can learn, you can't react to. If one of your products is flying out the door, great! What are you going to do about that this afternoon?

Other than feel really good about it.

Which is what I discovered this week.

I set up my first ad campaign this week, for an online shop selling paragliding t-shirts, mugs and gifts (pump those SEO terms...) and I've instantly become obsessed with the traffic stats. Now that there's money at stake, it's even worse than monitoring Google Analytics for this blog.

So I get it. I want daily reporting too. If we can automate it, you can have it (because whatever the benefits, manual daily reporting is still a bloody silly idea.)

You still can't do anything useful with it. You're still going to need weekly and monthly summaries to understand what's actually going on. But very frequent reports are a huge motivator - they remind you that what you're doing is actually out there, in the world, and people are buying it. And that's important.

I didn't understand that, until in a very small way, I turned into an advertiser. It's been a great reminder that before you argue with what a client wants, you should walk in their shoes.