Why? Because I wanted a place to occasionally capture and share my thoughts on the world of marketing and marketing communications. I call it "Marketing, Directly" because apparently I have a tendency to speak and write rather directly. I can hardly help it, I just think it's more efficient than being oblique all the time, and I figured, why stop now? So, I have a few postings I've been mulling over that I'll post up in fairly quick succession, and after that, hopefully achieve some sort of posting regularity.
So, if you stop by, read what you care to, and feel free to start a dialogue. Conversation is a 2-way street.
Wednesday, December 30, 2009
Tuesday, December 29, 2009
Measurability and last-click attribution
Raise your hand if you've ever heard, or read, somebody say that offline advertising is not measurable, and that its practitioners only get by on wishful thinking, and that online and direct response are so perfectly measurable there's no reason to be wasting money on un-targeted media like traditional mass media.
I thought so. Those statements demonstrate an unfortunate but pervasive ignorance about the level of professionalism and accountability that most offline and non-direct-response practitioners, and those who enlist their services, achieve as a regular part of doing business.
So let me break it down for the wet-behind-the ears types:
Just because you don't know how to measure the ROI of a broader media mix doesn't mean it isn't there. Just because you keep assigning all the credit for the efforts of every other dollar spent in the mix to your last response, doesn't mean the rest of it isn't contributing to the end result. To keep insisting otherwise, as is so often and vocally done, is to undermine the validity of your own position to the extent that it spills outside the search, online and direct response echo-chambers. Outside the echo chambers of newsletters, blogs, and conventions, a lot of people know better, and the last thing you want to do when you're trying to sell your capability is insult the CMO's intelligence and experience by overplaying your hand about what you think is measurable and what isn't.
Marketers have been measuring the effect of their offline efforts for as long as there have been offline efforts. It's been a long road since "half my advertising is wasted, I just don't know which half", and the improvements in measurement efforts are fairly stunning, especially in the last few years.
At the very least, marketers will select the brand attributes they're trying to measure, then isolate a subset of the audience they're trying to impact, either by selecting a set of test markets to measure against a control, or A/B copy testing, A/B media mix testing, what have you. The ROI can be "did sales improve" or "did brand attributes X Y and Z improve", or whatever metrics were decided upon at the outset, and to what degree did they change, and if the test was robust enough, it can be measured into specific segments of the tested audience.
The ROI is often, but not always, a dollars-and-cents measure. Marketing communications have lingering and measurable effects that can impact the effectiveness of subsequent contacts. The good analysts will have set up the test to try to isolate external, uncontrolled factors such as operations, weather, traffic, consumer confidence and so on, in an attempt to narrow the read down to just the effects that the marketing communications had, and many use econometric modeling, where media, creative, and environmental/economic factors are studied and their contributions to sales (or the metrics their choice) are calculated.
As for hard dollars-and-cents: Recently I was involved in a campaign for a billion dollar brick and mortar operation, where the goal of all activity was to drive sales, and since the sales involved a subscription of sorts, ROI would be calculated based a pre-established lifetime value per subscriber.
The markets where offline media were used in conjunction with online generated a nearly 2:1 ROI over the markets using just online and search alone. e.g. for every $1 we spent in advertising, the multimedia markets got $2 more in subscriber lifetime value than where only online and search were used, and this was a controlled-market test, so it wasn't like the lowest hanging fruit was cherry-picked to be a multi-market test.
Some companies are able to measure the effects of offline on the results of online very well, but it requires a hefty research budget. Millward Brown, Dynamic Logic, Jupiter and others have all conducted studies showing the ability of offline media to drive search and even conversion, not to mention online sales. And, it works both ways; certain research and measurement tools also show the effects of online and search on offline sales.
BOTTOM LINE: as Andrew Martin of the Atlas Institute said, "Evaluating only a single point of advertising contact oversimplifies the delivery and performance of any media channel."
So be careful about trying to attribute all communications success to the last click or the direct response of your choice. I see it happen all the time, and some of us know better.
I thought so. Those statements demonstrate an unfortunate but pervasive ignorance about the level of professionalism and accountability that most offline and non-direct-response practitioners, and those who enlist their services, achieve as a regular part of doing business.
So let me break it down for the wet-behind-the ears types:
Just because you don't know how to measure the ROI of a broader media mix doesn't mean it isn't there. Just because you keep assigning all the credit for the efforts of every other dollar spent in the mix to your last response, doesn't mean the rest of it isn't contributing to the end result. To keep insisting otherwise, as is so often and vocally done, is to undermine the validity of your own position to the extent that it spills outside the search, online and direct response echo-chambers. Outside the echo chambers of newsletters, blogs, and conventions, a lot of people know better, and the last thing you want to do when you're trying to sell your capability is insult the CMO's intelligence and experience by overplaying your hand about what you think is measurable and what isn't.
Marketers have been measuring the effect of their offline efforts for as long as there have been offline efforts. It's been a long road since "half my advertising is wasted, I just don't know which half", and the improvements in measurement efforts are fairly stunning, especially in the last few years.
At the very least, marketers will select the brand attributes they're trying to measure, then isolate a subset of the audience they're trying to impact, either by selecting a set of test markets to measure against a control, or A/B copy testing, A/B media mix testing, what have you. The ROI can be "did sales improve" or "did brand attributes X Y and Z improve", or whatever metrics were decided upon at the outset, and to what degree did they change, and if the test was robust enough, it can be measured into specific segments of the tested audience.
The ROI is often, but not always, a dollars-and-cents measure. Marketing communications have lingering and measurable effects that can impact the effectiveness of subsequent contacts. The good analysts will have set up the test to try to isolate external, uncontrolled factors such as operations, weather, traffic, consumer confidence and so on, in an attempt to narrow the read down to just the effects that the marketing communications had, and many use econometric modeling, where media, creative, and environmental/economic factors are studied and their contributions to sales (or the metrics their choice) are calculated.
As for hard dollars-and-cents: Recently I was involved in a campaign for a billion dollar brick and mortar operation, where the goal of all activity was to drive sales, and since the sales involved a subscription of sorts, ROI would be calculated based a pre-established lifetime value per subscriber.
The markets where offline media were used in conjunction with online generated a nearly 2:1 ROI over the markets using just online and search alone. e.g. for every $1 we spent in advertising, the multimedia markets got $2 more in subscriber lifetime value than where only online and search were used, and this was a controlled-market test, so it wasn't like the lowest hanging fruit was cherry-picked to be a multi-market test.
Some companies are able to measure the effects of offline on the results of online very well, but it requires a hefty research budget. Millward Brown, Dynamic Logic, Jupiter and others have all conducted studies showing the ability of offline media to drive search and even conversion, not to mention online sales. And, it works both ways; certain research and measurement tools also show the effects of online and search on offline sales.
BOTTOM LINE: as Andrew Martin of the Atlas Institute said, "Evaluating only a single point of advertising contact oversimplifies the delivery and performance of any media channel."
So be careful about trying to attribute all communications success to the last click or the direct response of your choice. I see it happen all the time, and some of us know better.
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