Wednesday, 29 May 2013

Fixing the advertising industry (warning: this post is unlikely to fix the advertising industry)

I got involved in a bit of a heated debate yesterday over on The Ad Contrarian's comments section as a result of a post called "Time For Sorrell To Go". The post is a lament that working in advertising isn't fun any more because huge media groups, focussed on the bottom line, have driven the craft out of the business and commoditised everything.

"They have made it leaner and meaner. They have made it more efficient. They have made it more productive. They have squeezed all the fat out of it. They have also squeezed all the life out of it.

They have replaced ideas with data. They have replaced value with efficiency."

I wasn't around for the good old days, but anybody can see how huge companies work and not just in advertising. They're relentlessly focussed on the bottom line.

This is obviously less fun than not being relentlessly focussed on the bottom line.

Oh and before we go any further, I work for Martin Sorrell. Indirectly anyway. Half the people who work in advertising work for Martin Sorrell. Best be careful with this post, eh?

Most of the complaints about WPP, Publicis, Sorrell et al. could equally be applied to the music industry, or book publishing, or newspapers, or Hollywood movies, or...  Essentially, this is railing against capitalism, as a system that encourages a singular focus on short term financial profit.

Many of our clients demand a minimum acceptable standard for their advertising and they want to achieve this standard at the lowest possible cost. That's unlikely to be exactly how they'd describe it, but that's what they do.

"You know we're sitting on four million pounds of fuel, one nuclear weapon and a thing that has 270,000 moving parts built by the lowest bidder. Makes you feel good, doesn't it?"
Rockhound (Armageddon, 1998)

This is advertising built by the lowest bidder. It comes from a belief that in reality the minimum standard isn't so far short of the best, that excellence is worth taking risks to achieve. Let's be honest, in many cases that's true.

Any complaint about a WPP inspired race to the bottom that doesn't start by recognising what our clients want is just howling at the moon. Some of the comments on that original blog post (which is partly what dragged me in) bemoan the fact that it's "all about the money".

Well, yes. That's capitalism unfortunately. Advertising agencies are selling a way for companies to make more money. It's what we do.

In my opinion, this is why creative agencies have (largely) lost the 'lead agency' battle; they keep trying to argue that there are good things about adverts, beyond how much product they sell relative to how much they cost, and even if the client Marketing Director falls for it, the Financial Director won't.

Let's get one thing straight right now. A famous ad man once put this better.

The only legitimate purpose of private sector advertising is to sell more of a product.

It has no other benefits to the companies which pay for it.

If you can't handle that, you're in the wrong business.

Everything else is strategy. Sales now or later? Sales through acquisition or retention? Sales by appearing to be cool, or safe? Sales through happier employees? Sales by annoying people or by making them like you?

I don't particularly like that either, but that's the way it is. I think we should all work flexi-time four day weeks, spend the extra free time in the countryside and the world would be a happier place for it, but it's not going to happen. You can't expect a client to pay extra to run their adverts, just to make you a happier employee.

We're advertising in the big media groups' world. It's probably less fun than the times when clients paid more, there was more slack in the system, everybody had more time to be creative and if you didn't come back from the pub after a heavy Friday lunch, well, that was ok.

We can rant about it, or we can do something constructive.

"Screw the system." 

"No, not screw the system. 
Massage the system, 
play the system, work the system... 
but don't screw the system because 
the system's gonna screw you more."
The Chase (a fairly watchable Charlie Sheen B-Movie) 

Big advertising agencies aren't invincible, but they're winning because they offer what clients want.

If you want to do things differently, you have to make a strong case that your way is better.

"Better" means creating more sales with your adverts.

Don't roll your eyes. Read that last point again.

If you can't make the case that your way is better, what are you doing here?

You're an ad man.

Sell it to me.

Tuesday, 21 May 2013

Football model: Beating the bookies!

Well that was a lot of fun. Starting out with a subscription to EPL Index statistics, I decided in January this year to have a go at building a predictive model for Premier League football games. Wallpapering Fog's been a record of the development and predictions (all posts here) and has done a great job of keeping me motivated. It would be easy to skip a week's predictions, when you've got a hangover on Saturday morning and real-life stuff to do, but publicly committing to posting has worked. It's also turned up a fascinating community of analysts, who I'd probably never have read otherwise. Isn't Twitter brilliant?

From a personal point of view, it's been a massively satisfying project. If only because I've wanted to build a proper agent-based model for ages, but couldn't figure out something really interesting - with good data available - to throw the technique at.

The good news is, this all means the model will definitely be back next season!

I didn't originally build the model to bet with and had only ever placed a couple of fun bets in my life until this year (you know, Exeter City to score against Man U, that sort of thing. Geddon Ciddy.) But then I lined up some simulations of past games from the model against the bookies, as a test to see how it compared. It won. So naturally, I started betting...

The first post with actual results picks in it, as opposed to just percentage chances, was the 2nd March and then we had every game until the end of the season. Richard Whittall has written an interesting post today about the psychology of forcing yourself to bet and that's exactly what I've been doing. No attempt to identify systematic errors in the bookmakers odds, or to find the best prices in the market, just pick a winner in every game and bet on it.

Here's what happened, with a £10 bet on each game*

*Technically, I wish it had. I actually ran for a few weeks at a quid a game, because I'm a coward.

Overall the model called 55% of results correctly, which is a fraction higher than back-testing suggested and would probably settle to something closer to 52% over more games.

That number at the end's nice though, right? With a £100 bank to start and betting £10 a game, three months later you've still got your original £100, plus £166.50. And plus £100 bonus for opening a new account too, if you've got any sense.

Loads of development to come over the summer. But for now, the drinks are on Wallpapering Fog.

Sunday, 19 May 2013

Football model: Last predictions for 2012/13

Chelsea v Everton - Home win
Liverpool v QPR - Home win
Man City v Norwich - Home win
Newcastle v Arsenal - Away win
Southampton v Stoke - Draw
Swansea v Fulham - Home win
Spurs v Sunderland - Home win
West Brom v Man U - Away win
West Ham v Reading - Home win
Wigan v Villa - Ridiculously close! Home win

Tuesday, 14 May 2013

What's an analyst selling?

When we offer analysis in any field, what are we selling? I mean what do we really offer, right down at the core of it?

There isn't always an easy answer. A great story that makes this point is the one about the advertising consultant who was speaking to Parker pens and asked them what business they were in. What do Parker pens sell?

Pens, they said.

The consultant disagreed. He said Parker were in the gift business and that the gifts happened to be pens, and he was right. Nobody buys an expensive pen for themselves.

If you understand what you're selling, then you can sell it better. You can also future-proof yourself and not go the way of Kodak, who thought they were in the film business and not the 'taking photographs' business, so ignored digital cameras for a long time, despite having invented the first one in 1975. You go bankrupt by not understanding what you really sell.

So back to the original question. What do analysts offer?

Answers... Numbers... In advertising, I could tell you that spending a million pounds on TV will make you two million pounds in extra profit. In football, an analyst could tell you that signing the latest bright young thing from Italy should increase your points total for next season by ten.

That's the visible output from our work, but why does a decision maker want that information? In one word, what is the analyst selling?


In an uncertain world, we sell certainty. Confidence. The ability to know.

Since I've started analysing football, two themes keep bubbling up in conversations among football analysts on Twitter. One is a huge frustration that clubs appear not to be listening to the analytical community and what it thinks it can add to the game. The other is the large role that luck plays in winning football matches.

I think these two are related.

As analysts, we're hugely interested in chance because it sets the limits of what we can know for certain. In a football match, we obviously can't predict the bit of the result that is down to luck. If two teams are incredibly closely matched, who will win? It could come down to inches either way, on just one shot in the 90th minute, that strikes a post.

In a sales model, we often have measures which we're not statistically confident about. The model says that a marketing campaign is probably working and generating extra sales, but it isn't sure.

This is a problem, when what you're selling is certainty. Undermining the certainty that you sell is a Bad Thing.

What do we do? Do we make claims that aren't substantiated? Offer 100% certainty, even though we know it doesn't exist? Some people do. They quickly get found out as charlatans. Let's not do that.

What we can do is focus on what we know and move slowly onwards from there, because if you've done a big piece of work and you still don't know anything with more certainty than the person who commissioned it, then you've wasted your time. Start with the building blocks that you're confident in.

In marketing, analysis has a foothold because we can do this. We can walk into a business, run an analysis, offer some certainty about the world and critically offer a set of decisions that will improve the current situation. "Will improve" in analyst language means "will probably improve" but we tread a fine line.

In offering this certainty in an uncertain world, partly what we do is transfer risk from decision makers, onto ourselves. If you hedge your bets and prevaricate about what is the right decision, all of the uncertainty and all of the risk is still with the decision maker. They're paying you to make some of that risk go away.

I've yet to see very many of these types of conclusions in football analysis; concrete, positive strategies, based on statistics, that will help to win more games. Proving what doesn't work is easy.

We think that around 35% of match results may be down to luck.

We think that sacking your manager doesn't make any difference.

We believe that winning a cup trophy doesn't make you a better manager than the guy you beat in the final.

These are fascinating things and essential to understand, but it's positive conclusions that will make the difference in getting analysis adopted in any field. If you're a football manager, what's the knowledge above worth? A consolation prize as you sit at home, sacked, that you were just unlucky?

We sell certainty. And if we don't have any certainty to sell, we've got nothing.

Football model: Predictions for mid-week 14th May

Quick update with percentages for tonight. No alarms and no surprises, with wins for Arsenal and Man City, although we've got Man City as more likely to win than the bookies think (sacking effect?) and Arsenal as a little less likely.

Saturday, 11 May 2013

Football Sim: Predictions for 11/12 May

Nearly time for a summer of model development, but here are the predictions for this weekend...

Erm, Chelsea? Really?

Yes, really. This one's interesting.

Fantasy football scout has Chelsea starting with the this line-up:

Petr Cech
C├ęsar Azpilicueta
David Luiz Moreira Marinho
John Terry
Ashley Cole
Oscar dos Santos Emboada Junior
Frank Lampard
Ramires Santos do Nascimento
Victor Moses
John Obi Mikel
Demba Ba

With last week's starting eleven for Chelsea, we'd have Villa: 34% Chelsea: 41% Draw: 24%. Either way I've got it closer than the bookies, but this is one of the good things about the flexibility of an agent based model. Mine still needs a hell of a lot of work, but it's why if I was a manager, I'd want a resource like this available to simulate games ahead of the event. How much squad rotation can you get away with and still be confident of winning?

For betting:

Villa v Chelsea - We'll see when the starting lineups are announced. Might tweet it. Might be out windsurfing (it's not like this is a proper job...)

Stoke v Spurs - Home win
Everton v West Ham - Home win
Fulham v Liverpool - Away win
Norwich v West Brom - Home win
QPR v Newcastle - Draw
Sunderland v Southampton - Draw
Man United v Swansea - Home win

Yes, I know Stoke's a bit, erm... controversial too. We got Swansea in mid-week at 4.75 though. It does happen.

Tuesday, 7 May 2013

Football Model: Midweek Predictions 7th May

The model's been very up and down the past couple of weeks and I'm not sure why and it also made some slightly strange calls for last weekend (although both QPR's draw and Swansea's win both nearly came off!)

I can't find a mistake, but that doesn't mean there isn't one... so I've rebuilt the database to be on the safe side.

Here are tonight's and tomorrow's efforts:

Straighforward betting... Man City, Swansea and Chelsea to win.

Proper round up of performance so far coming soon, when I get some time. We're close to break-even on betting now I think. I haven't backed it since the start of calling results on here so my bank balance doesn't quite give the full picture!

Saturday, 4 May 2013

Football model: Predictions for 4th May (Better late than never!)

Time for this weekend's predictions. Lots of new things going on with development of the next version of the model but I'll save that for later, here we go...

Swansea's percentages are a bit (only a bit?!) controversial, but it does do things like this now and again. Sometimes it's right! The cause seems to be that the model's pretty determined Swansea have got goals in them.

And for betting...

Fulham v Reading - Home win
Norwich City v Aston Villa - Away win
Swansea City v Manchester City - Home win
Tottenham Hotspur v Southampton - Home win
West Bromwich Albion v Wigan Athletic - Home win
West Ham United v Newcastle United - Home win
Queens Park Rangers v Arsenal - Draw
Liverpool v Everton - Home win
Manchester United v Chelsea - Home win
Sunderland v Stoke City - Draw

QPR to grab a draw? Hmmm... well we've come this far. There's a very small margin on this decision but no backing out now.