DEEP Relationship Marketing

Posted on February 2, 2012 by Jason Burnham, Partner, Burnham Marketing

When we first launched the Digital Sphinx, we introduced everyone to the Relationship Funnel.  Since then, we have been developing and refining our relationship marketing attribution model by leveraging these fundamental drivers of human interaction.  We are very excited to share with you a model that we feel is applicable to any marketing program and provides the strategic framework that informs the requirements for all other tactical disciplines.

I feel our industry is a complete mess when it comes to how companies approach marketing.   In many cases, companies can’t even differentiate between strategy and tactics or between data and insights.   Perhaps this is a result of the digital media industry’s excellent work at selling false value to a point of confusion, where marketers can’t even determine what’s what.  This way-of-working needs to stop!  In order for our industry to continue to thrive we must simplify our approach and systematically execute marketing campaigns that deliver “actionable” insights.

A lot of different tactics does not mean you are satisfying you’re strategic needs.  And, more data does not mean greater insights.  Just because digital media has become highly fragmented does not mean that the strategic planning process and best practices no longer apply.   Marketers still need to establish fiscal goals, determine objectives, build a strategy, compile execution plans, and develop a measurement program that provides actionable analysis.

At the heart of any marketing strategy is the consumer.  Let’s start by remembering that a “consumer” is actually  a “human being” and not some numerical equation on a spreadsheet.   It is important to cultivate relationships and nurture people through the consumer journey.  Each person and group of people have different cognitive needs that must be met in order to make any decision.  How well you satisfy those cognitive needs will determine the relationship you have with your audience.

It is important to remember that each person you communicate to may be at a different point in their relationship with your brand/product.  How your positioning and messaging resonates with your addressable audience vs. your in-market prospects vs. customers vs. advocates will vary dramatically.  A segmented communication strategy should be designed to cater to individuals at the various stages of the consideration process.

Because people are at different points of the decision making process throughout the process, tactics that best satisfy the needs of people within each phase should be prioritized.  For example, display advertising is great at messaging to the addressable audience, while search may be better suited for in-market prospects and your web site, email, and social marketing will really assist in converting customers and building advocacy.

Since you will be leveraging different tactics against individuals at various points within the process, different success metrics should be established to measure the effectiveness of your efforts at each phase of the consumer journey.  From here, all other diagnostic campaign metrics can ladder up into one cohesive framework.

MindTime of the Day

Media consumption habits are determined by a person’s thinking style.  Different messaging, images, and content will resonate with different thinking styles in a variety of ways.  Without identifying the neurographic archetype of your audience, there will be a significant waste of marketing dollars.

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Dear CEO, Your Procurement Sucks!

Posted on January 12, 2012 by Jason Burnham, Partner, Burnham Marketing

You would think that after all of these years at least a basic comprehension of digital marketing and advertising would have resonated with major companies’ executive management team so that they could determine the best ways of valuing agency and media services.   At the very least assign someone to procurement who has an intimate understanding of the agency business and digital media, considering they are the department responsible for negotiating compensation for these services on the company’s behalf.  Although, instead of getting more qualified people into procurement departments, it appears to be getting worse.  As a result, the adverse effect is occurring; companies are losing more money due to the inexperience and lack of knowledge from their procurement officers than if the division did not exist in the first place.  And 2012 appears to be another clusterf@#k of a year when it comes to the agency/procurement dynamic.  Ah, the idiotical behavior of major corporations never ceases to amaze me.  It’s no wonder this country is going to hell in a hand basket.

One might ask, “Wow, Jason!  You are awfully cynical for the start of the New Year.”  Yes.  Yes, I am.  Now, I realize that procurement is nothing new and they have helped companies for many years to tighten up their belts to avoid excessive spending to boost profit margins.  I get it and I’m all for it.  However, evaluating agency services and media offerings should not be the role of procurement.  The last time I checked, this should be the responsibility of the marketing department, no?  I watch marketing and procurement clash all of the time and procurement always wins.  Why?  Because when it comes to saving money and negotiating prices on the company’s behalf, that’s what procurement’s role is.  Take it or leave it.  Unfortunately, given the state of the economy and agencies’ desperately seeking new business to stay in business, has resulted in everyone losing money – especially, the one entity responsible for this debacle; the client.

We partner and consult with a variety of different agencies and we are often on the front lines of developing capabilities and credentials presentations for client pitches.  As a result, I read many client briefs and agency RFPs.  It is pretty disgusting the demands advertisers are placing on prospective agencies just to be considered to pitch.  Apparently, advertisers don’t pay for strategy any more.  You have to provide your strategy in the first round of consideration.  Only now, it’s not just strategy – it’s a strategy, “big ideas” (whatever that means), a recommended budget, a media plan, flight calendars, creative strategy, competitive research, sample reports and analysis, ad unit recommendations, rates by site and placement, and recommend key performance indicators and an optimization strategy for the year.

We talk about the commoditization of media all of the time.  Well, guess what?  The agency business has been completely commoditized before our eyes and the one that is going to lose will be the advertiser and here’s why.  You see, when it comes to digital media management, agencies are already at their floor pricing in order to sustain any kind of profitable margin.  Through our work with NextMark, we helped determine what it costs an agency to develop and execute a media plan.  On average, 8% of the overall media budget is required to fund the planning and execution of a digital media plan.  Note, there are plenty of variables that can skew this margin, but this is the average.  Therefore, an agency must retain at least 8% of the media budget for fees just to break even.  Regardless of whether you, the advertiser, decide to pay for this now or later, you will pay one way or another.  You have to if you want your agency to stay in business.

Let me start with media rates, since this is the most counter-productive request you can ask from an agency during the pitch process.  It is important to understand that this exercise has no value in assessing cost savings by agency.  There are too many variables that determine rates by site, placement, and creative.  Rates are driven by the balance of supply and demand within the market.  Unfortunately, this balance does not currently exist for digital media for a variety of reasons.  We have actually found that advertisers have lost more money from inefficient campaign management from their agencies than from any media rate differences.

Digital has a far greater supply of ad inventory than there is buyer demand.  As a result, many publishers are shifting their ad inventory into the ad exchanges to improve margins by minimizing operating costs and eliminating sales commissions.  This is causing media pricing to become much more dynamic than it has ever been before.  A shift towards real-time-bidding and exchange media buying is becoming the preferred method of buying and selling media as it provides fair market value at an impression level.  This practice is dramatically changing the way digital media is bought, sold, and negotiated.  Media pricing  for banners and video is moving towards a completely dynamic market driven by demand.  This means that average media rates can fluctuate daily based on what the market is willing to pay for it.

There are too many variables to determine the value of an impression in the general market (i.e. target audience, contextual relevance, behavioral profiling, ad size and format, ad positioning, etc.).  Media “value” is completely dependent on advertiser marketing performance benchmarks.  Digital’s ability to track and measure beyond the ad impression allows advertisers to set their target rate to achieve goals based on historical performance and lifts in KPIs.  Below are just some of the factors that dramatically influence digital media rates.

  • Percentage of inventory retained by sales organizations in relation to the amount of inventory that is submitted into the exchange marketplace
  • Inventory demand in the open bid market will dynamically shift supply and demand in real-time causing a constant fluctuation in media rates; even for inventory retained by the sales organization since overall availability is affected.
  • Media budget allocation by flight period
  • Targeting criteria (i.e. geographical, audience profile, behavioral, re-targeting, etc.)
  • Frequency capping by flight period
  • Year-over-year rate changes and seasonality affects
  • Ad unit file size and format combined with deal structures and packages
  • Shifts in audience traffic month-over-month

It is poor practice to negotiate rates until the agency has been awarded the assignment.  The only way to get competitive rates is to actually contact and negotiate directly with media providers.  Requesting and negotiating rates for a pitch would be inappropriate, as it creates an excessive amount of work that no one is being compensated for.  Some agencies maintain their ethical position and do not adhere to these inappropriate client demands, which provides them with the credibility to negotiate the best possible rates when the time is right and when it counts most.  Any agency providing negotiated rates for a pitch should be removed from consideration as they are not adhering to industry best practices and will not receive preferential treatment by the leading media and technology providers.

To demonstrate just how ineffective this exercise actually is, I will provide you with a real example.  We recently had a client that was having agencies go out and negotiate the best possible rates for a pitch.  The agency that came back with the best rates would win the client’s business.  After going through this process, which lasted a year – yes, a year – they awarded the business to an agency who actually reached out to partner with us to execute the campaign.  Upon reviewing the media plan and talking with the media providers on the plan, we learned that the client paid nearly 150% more than what we would have been able to negotiate on their behalf, for the simple fact that the media providers needed to cover labor and operational costs to do the spec work for the pitch and had to charge accordingly.  Yes, it is true, you can get people to do the work for a perception of “free”, but you will pay for it in the end.

When it comes to requesting strategy and plans from agencies for a pitch it is costing you even more money.  Sure the agencies that lose the pitch take a loss, but the one who wins your business is going to make up for the work they provided during the pitch one way or another.  They have to.  There are too many resources allocated towards these pitch assignments not to, if the agency is to stay operationally profitable.  Perhaps you, the advertiser, will pay for these services in the form of padded hours, a perceived increase in scope of work, or by assigning the most junior and inexperienced people possible to manage your account behind the scenes –which always costs you money in mistakes, more hours required due to inexperience, and of course no expertise to drive dynamic strategic thinking for ongoing campaign management and optimization.   Don’t worry, the agency will be sure to cover up the costly mistakes their junior staff makes…you’ll pay for it, but you’ll never know it.  Ignorance is bliss, right?

It’s fine if you need an agency to demonstrate their strategic thinking, but to ask for a custom strategy, creative development, and a media plan is just going to cost you more money in the end.  In fact, we have found that when you factor in the inflated agency fees, rate increases due to poor practices, increased scope of work, unqualified procurement assessors, the internal costs for procurement salaries, and operational costs, it is actually costing companies exponentially more money to find an agency than any efficiencies that can be created from competitive differences between agencies.  With each new demand procurement requires, the more money your company is pissing into the ignorant abyss.  You may as well just throw a bunch of agency logos up on the wall and throw a dart.  Save time, money, credibility, and perhaps actually get what you pay for.

MindTime of the Day

Future thinking excels at negotiating.  Past thinking will validate the needs assessment.  Present thinking will inform the process of integration.  If there is not a balance of all three when evaluating corporate partnerships, much inefficiency can be created.

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“Faith” vs. “Works”

Posted on December 22, 2011 by Michelle Burnham, Partner, Burnham Marketing

The focus of the iMedia Agency summit this month was “WCW”, which stands for What Clients Want.  The iMedia team did a great job gathering presenters and encouraging dialog around this very important conversation.  It was also important to have the media companies there to participate in the discussion and hear first-hand where the disconnect stems from.  After listening to 3 days of great insight and feedback I was left wondering if the “out of good faith” model still works today.  From my perspective agencies and media partners are being evaluated mostly by their “works”.  By this I mean, performance and their ability to hit obscure and sometimes unrealistic goals.

So where does this leave the spirit of “in good faith” as a way to build the client relationship and trust?  Should agencies give away more for free in hopes of building loyalty?  Are we on the agency side creating a “monster” and doing ourselves in by giving away more than what is included in our scope of work?  I don’t think there is a simple answer to any of these questions.  As with everything else in our business the answer is more than likely “it depends”.  However, what is very clear is that the scope of work for agencies has grown.  Unfortunately, the compensation models for the work involved has not evolved at the same pace.

I believe in decoupling services and assigning costs for each in to a statement of work.  This helps set expectations upfront and safe guards against unpaid incremental work.  I also believe in great client services and have been known to piss off my partner for doing more than I should “in good faith”.  Like many of us on the agency side, I have been burned by a few clients and am now practicing discernment when it comes to answering client requests.  At the end of the day I know that I am being evaluated on whether or not my “works” are contributing to the success of the project or campaign.  I also know that I am not God and I cannot control the powers that be to reach unrealistic goals.  The most important lesson I’ve learned is to align realistic expectations to a campaign’s objectives upfront and have clear measurement requirements in order track performance.

I don’t necessarily believe that relationships can be built solely based on “works”.  If that were the case we could all be replaced because what we do can be duplicated to some extent.  What we bring to the table above and beyond what is expected does have value.  One exception to this is spec work.  I’ve heard crazy requests for a full media plan or fully baked ideas with an execution plan to be submitted for a pitch.  Why would anyone give away the “farm” for free!  (May not apply to incumbents in a review).  The best relationships are built on trust and respect.  Asking for everything upfront without a commitment does not build trust (it actually seems shady) or contribute to mutual respect between the respective parties.

So here are a few humble suggestions.  Use discernment and train your team to filter out client requests that either seem excessive or off track.  Focus on building your team’s value to the client by doing “acts of good faith” that is mutually beneficial.  Align realistic goals against the campaign’s objectives and find or build the bridge to the overall business and marketing objectives.  Get clear on what “works” you are specifically being held accountable for and set up your own measurement plan to track progress.  Lastly, don’t be afraid to say no.  Respect yourself and your team before selling out to a pro-bono project -something that may or may not be worth it.

MindTime of the Day

Future thinking drives innovation.  Past thinking drives validation.  And, Present thinking drives integration.  The wheel of collaboration is designed to move from innovation to validation, then to integration.   An appropriate balance of all three are necessary for a team and company to function properly.

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The Normalcy Bias

Posted on December 1, 2011 by Jason Burnham, Partner, Burnham Marketing

The normalcy bias is a mental state people enter when facing a disaster.  It causes people to underestimate both the possibility of a disaster occurring and its possible effects.  This often results in situations where people fail to adequately prepare for a disaster.  The assumption that is made in the case of the normalcy bias is that since a disaster never has occurred then it never will occur.  It also results in the inability of people to cope with a disaster once it occurs.  People with a normalcy bias have difficulties reacting to something they have not experienced before.  People also tend to interpret warnings in the most optimistic way possible, seizing on any ambiguities to infer a less serious situation.

The normalcy bias may be caused in part by the way the brain processes new data.  Research suggests that even when the brain is calm, it takes 8–10 seconds to process new information.  Stress slows the process, and when the brain cannot find an acceptable response to a situation, it fixates on a single solution that may or may not be correct.  An evolutionary reason for this response could be that paralysis gives an animal a better chance of surviving an attack; predators are less likely to eat prey that isn’t struggling.  The normalcy bias often results in unnecessary deaths in disaster situations.  The lack of preparation for disasters often leads to inadequate shelter, supplies, and evacuation plans.   Even when all these things are in place, individuals with a normalcy bias often refuse to leave their homes.  Studies have shown that more than 70% of people check with others before deciding to evacuate.

The normalcy bias or the sheep effect also causes people to drastically underestimate the effects of the disaster.  Therefore, they think that everything will be all right, while information from outside sources gives them reason to believe there is a risk.  This creates a cognitive dissonance that they then must work to eliminate.  Some manage to eliminate it by refusing to believe new warnings coming in and refusing to evacuate (maintaining the normalcy bias), while others eliminate the dissonance by escaping the danger.  The possibility that some may refuse to evacuate causes significant problems in disaster planning.

I believe our society is operating in a normalcy bias state-of-mind.    Because we are a future thinking society, we are cognitively driven by hope, aspiration, and the possibilities the future provides.   This only feeds our normalcy bias.   As Americans, we don’t like to focus on the negative, as we feel it slows down progress and growth; both personally and professionally.  We believe that positive-thinking is the source of strong mental health and physical well-being.   And if we are not thinking positively, we are told to see a psychiatrist, listen to motivational speakers, do yoga, and eliminate negative people from our lives.   While I believe in the importance of positive-thinking, I equally believe in the power of negative-thinking.  There must be a balance to assure we are constantly questioning the decisions we are making and consciously be made aware of both internal and external influences at work.

Our industry is a perfect microcosm of the trouble we face as a society.   Venture capitalists care little about the dynamics of our ecosystem, and are only focused on diversifying their portfolio of investments to yield the largest financial return.   Just because a company exists, does not mean they offer any real value.  Entrepreneurs no longer drive innovation, but focus primarily on incremental improvements to a broken process and work flow, since true game-changing innovations would pose too many costly challenges to be widely accepted and integrated at an infrastructural level.  No longer do we have a loyalty to the company we work for or the belief in the products we are producing or the services we are providing.  Our media-centric culture has taught us one thing – money can buy happiness.  And money is the motivation that drives everyone.

Money is our generation’s new God and capitalism is our religion.  Our mission: To develop a consuming society.  Make cheap products to drive accessibility.   Sacrifice quality for margin.  Create false demand and sell with enthusiasm!   Yet, like a nation ignorant to the financial collapse we are at risk to as a result of the potential of the US dollar being downgraded as the world’s reserve currency (do your own research to see what this means for our country; our third-world country), we as an industry are blind to the fact that we keep building and selling products that actually have little to no value to the fundamental attributes of effective marketing and advertising.

Apparently, no one seems to care too much.  No matter how much industry leaders speak out or how many articles the trades publish to educate the ignorant, nothing changes.  Why?   I speculate that like our country, our industry is made up of the same people with the same motivations.  Companies only care about their quarterly earnings.  CMOs focus on their compensation package and making the company enough money within 18 months to use as leverage for a salary increase in their next job.  Agencies are just trying to impress marketers, by negotiating low rates and overloading the client with mountains of meaningless data to demonstrate their value.  Media and technology providers are distracting agency execs with their new bright shiny objects and selling them meaningless trinkets.

But what happens when disaster strikes?  …when consumers stop buying and sales plummet?  …when companies go bankrupt?  …when there are no jobs to jump to?  … when margins are so low you cannot keep up with the burn rate?  … when it becomes clear that no one wants your crap products?  I guess if this does happen, we’ll need to find new ways of increasing our click through rates, right?  This is our normalcy bias.

MindTime of the Day

The Future mind seeks to expand our world by using each new idea as a jumping-off point for the next.  It stretches our sense of reality by being consciously aware of the inherent opportunity in everything it sees.   Hope is the culture of Future mind.

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Damn Sales Reps! …A Love Story

Posted on November 10, 2011 by Jason Burnham, Partner, Burnham Marketing

Every day I receive a countless number of incoming sales calls and emails.   Some calls are from reps I know or have worked with in the past, who are just following up to get update on the planning cycles for our clients.  Although, the majority are cold calls and emails trying to sell me “the next best thing” in digital and social marketing.  Unfortunately, there just are not enough hours in the day to get back to everyone.  I could spend 100% of my time just responding to sales calls.  I know I’m not alone.  This is an industry-wide problem and one that will not be solved by seasoned sales professionals with a big rolodex and monthly quotas.

In the spirit of true entrepreneurship, combined with our haste to drive digital media innovation, we have fragmented the market to unmanageable proportions.   However, I would argue that most of these media companies are not very innovative and are not led by strong entrepreneurs, but rather driven by greed and simplified, copycat business models designed to take advantage of the ignorant digital marketer.   Leaders of these organizations go out a try to recruit the best-of-the-best sales directors who have established relationships with media planners and buyers to drive revenue to a point of inflated value so that the company can be sold within a very short window of less than five years.  VCs are flipping companies like low income real estate.  And that is essentially what being an owner of a media company has become; a slum lord.

No longer is it about quality or the value you provide to an advertiser, but rather who can sell the cheapest junk at the highest volume.  Media sales reps have become less concerned about whether the product they are selling satisfies marketers’ objectives and primarily focused on whether or not they can maintain high margins and their ability to create false demand.  Now, don’t get me wrong, there are some great media companies out there that offer tremendous value to advertisers.  There are also amazing sales professionals who understand our clients’ business and work extremely hard to put together campaigns that deliver on our clients’ needs.  Unfortunately, this elite group accounts for a small fraction of media providers, making it extremely difficult for them to break through the clutter of crap.

Agencies and marketers are done with this nonsense.  This level of frustration has caused an entire industry to move towards automated buying in an attempt to eliminate the need to deal with sales reps and low value media providers.  Mark my words, “content will be king again”; frankly, it always has been.  If you are in the business of being a non-exclusive inventory representative ad network and/or in the business of arbitraging media, your days are numbered.  And if you are a content provider that only sells display / video advertising, you will have very little need for sales reps.

The entire digital media ecosystem is designed to address lower-funnel demand, which can and will be managed via the media trading desks and demand side platforms.  If you are a content provider that is attempting to attract brand advertisers and create value through experiential marketing, you must rethink your approach.  How can you best leverage your content, audience, and data to create a better experience between the brand and the consumer?  How much more value will these solutions be in building brand equity and creating strong relationships between your audience and your advertisers?   Once you can answer these questions, you can determine how best to go to market and what type of sales initiatives are required to drive revenue.

This requires a consultative sales approach which must be driven by experienced and seasoned sales professionals and not be by “right out of school” smile-and-dial entry level sales reps with strict monthly quotas to fill.  The client and agency side does not operate this way and neither should your sales organization.  If you really want to have a seat at the big table, you need to start playing the part and demonstrate that you deserve to be participating in high level strategic conversations.  Otherwise, fall back, play your position and just be an order-taker.  Don’t call us, we’ll call you.  Or, maybe we won’t and we’ll just buy some banners through our trading desk.

And another thing, know your accounts and the people you are calling on.  Please!  Sales organizations who marry up accounts based on revenue potential with the experience level of each sales rep is bound to fail.  We are a small firm, but our experience and expertise is far greater than most of the media planners (and directors, for that matter) managing the media budgets of the largest advertisers.  This is true for many small, independent digital media agencies.  As such, you should require your sales people to do a little research on the people they are calling on.  If you see that a person is very senior, you should assign a senior sales executive to manage that account and relationship.  We are too busy to train your sales people…you can pay us for that.

MindTime of the Day

Entrepreneurs and strong sales people tend to have a high composition of Future thinking, since Future thinking drives our ability to imagine future possibilities and outcomes, which is essential for communicating the value of something that has yet to transpire.

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Prove Digital Marketing Works – Part 2

Posted on November 3, 2011 by Michelle Burnham, Partner, Burnham Marketing

Last week I emphasized the importance of educating clients and managing expectations.  I also described how diagnostic metrics, such as click rate and site traffic, can be used with primary metrics, such as sales and revenue.  As consultants and educators of digital marketing we are called to deliver the truth, as ugly as it may be.    I ended my last article with a reference to a comedy released in 2009 called “He’s Just Not That Into You”.   In short, the somewhat entertaining film highlights the challenges of reading or misreading human behavior.  How many times have we done this with digital marketing?  When does behavioral targeting become cyberstaking?

Digital media allows for more measurement possibilities than any other media.  This can be overwhelming for marketers and many are struggling to find the right equations to measure marketing performance.  “Consumer engagement” is a customized metric that lacks certain measurement protocols and means something different for every marketer.  My point is there is no secret formula; we all have to create measurement models that tie back to the overarching business objectives that relate to the bottom line.

As Vipin Mayar points out in Digital Impact, creating a framework for marketing performance data includes breaking down exposure, strategic and financial metrics.  Exposure metrics include reach and frequency and other short term aspects of the campaign; strategic metrics cover brand preference and longer term marketing objectives; and financial metrics calculate the change in sales and ROI from the marketing activity.  An important part of the framework is including past performance data and realistic projections.  In order to move forward we need to take a look “under the hood” of our client’s business.

Part of proving digital marketing works involves taking a look at what has been done in the past and reviewing the results.  Data interpretation can be tricky and sometimes marketers are quick to say the campaign didn’t work because (fill in the blank).  As I mentioned in my last article, an increase in site traffic does not always translate into immediate conversions. Media can deliver targeted messages to your audience and even retarget the consumers who visited you recently, however the media cannot force a desired action of the consumer who is not ready to make a move. Therefore research must be done in order to discover what the barriers to the desired end action are.

Important areas to consider when accessing benchmarks and projections are the nature of the product or service, the sales cycle, site navigation and conversion activity from organic traffic.  What makes the internet unique is that it can impact every stage along the consumer buying cycle – creating awareness, interest, consideration, a transaction and brand loyalty.  It takes time for consumers to move down the sales cycle, therefore organic, non-incentivized, activity should not be used as a benchmark for marketing campaigns without modifications.

The same is true for different types of marketing tactics.  For example:  Search marketing reaches consumers who are actively researching information on your product/ service and are most likely ready to buy.  Conversion rates will be much higher for the search program than they are for display banners or social media out reach.   We also have research to prove typical consumer surfing behavior includes researching a product/ service via a search query after exposure to an ad.  Website analytics tools and many ad serving technologies use a “last click” attribution model which makes it very easy to misread consumer behavior.

The digital marketing industry as a whole is still struggling to define “engagement”.   As already mentioned consumer engagement with a brand is customized for each marketer and in many cases for each campaign.  The goal of the engagement metric is to compare the ability of different media and marketing tactics to influence consumer interaction; identify messaging within each tactic consumers respond to; and segment consumers based on the engagement behavior to then remarket to them with different messaging to drive deeper engagement.

The overall engagement metric will be a series of diagnostic metrics bundled into one to produce an engagement score.  The engagement score methodology should be based on assigning value scores to the types of measured activities performed by the consumer.  We will discuss the different ways to calculate an engagement score in another article.  In the meantime feel free to post questions on the information above.  I look forward to the feedback.

 

MindTime of the Day

Different words and images will resonate with different thinking styles in a variety of ways.   Therefore, in order to improve consumer engagement, you must build a segmented communication strategy based on the thinking style orientation of your target audience.

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Prove Digital Marketing Works – Part 1

Posted on October 27, 2011 by Michelle Burnham, Partner, Burnham Marketing

I love the movie “Jerry Maguire” for so many reasons because I feel it parallels my life in the digital industry.   In brief the movie is based on a sports agent, Jerry played by Tom Cruise, who decides to change the game of client service and walk away from corporate America.  (Technically he got fired.)  Jerry put his personal client attention philosophy to the test as an independent with the only athlete, Rod Tidwell played by Cuba Gooding Jr., who stays with him.  Jerry’s relationship with his high demanding, volatile client Rod and the journey they take together to learn what it takes to “show me the money” is what made an impression on me.

Over the past 15+ years of my career I have heard “show me the money” in many different ways.  My job is to show clients proof that digital marketing works and to give them a reason to believe in the power of digital media.  As most of you can relate to, the “proof” has to be displayed multiple times over the course of a campaign in order to convince a client.  Many times we have to convince them all over again when planning the next campaign.  The process requires endless education, especially in our industry where media and technology advances change the game every few months.  I have observed not only an increase in requests for “proof” but also a harder sell through.

As well all know, marketers are challenged to be more accountable and fiscally responsible than ever before.  Procurement departments of large corporations demand that their marketing teams provide clear ROI for the millions spent on advertising and small businesses have to account for every dollar spent.  In the book Digital Impact – The Secrets to Online Marketing Success, Geoff Ramsey and Vipin Mayar lay out the seven performance metrics every digital marketer should know.  The book does a great job explaining the metrics as well as how and why they are used.  What the authors have done is set up a framework for performance metrics based on the rationale that all digital campaigns are designed to reach, engage and motivate the right audience to take a desired action at a cost efficient spend.  So if it only takes seven metrics to prove digital marketing works then why the continued “show me the money”?

One major obstacle that marketers now recognize is their own tendency to measure only what can be measured, resulting in an overemphasis on direct response.  Let’s take the infamous and often dreaded click rate, “CTR”, for example.  We have research to prove two-thirds of internet users never click on display ads over the course of a month and only 16% of users account for 80% of all clicks.  Even with this research the CTR metric is the most misused and over used metric by marketers.  Almost every client asks for a CTR benchmark to measure up against to gauge performance.  How many of us use 0.04% as the CTR benchmark or stick to our position that CTR benchmarks don’t exist because they are irrelevant.  This conversation is not going anywhere so rather than fight against it lets reposition the CTR metric.

When positioned properly CTR represents consumer “potential interest” in learning more about the advertisement they were just presented with.  This is an impulse reaction to a visual stimulant, offer or promotion.  “Potential interest” does not always translate into an immediate sale, qualified lead or preference for a brand.  We also know that there are plenty of ways CTRs can be manipulated.  There are click-fraud farms, spiders/ bots and even flashy or trick ads that trigger an initial click.  In short, CTR is a diagnostic metric because it provides an obvious view of the short-term, immediate aspects of the campaign.  CTR should not be used as an end objective because it does not represent inherent interest in the product or service.  All we know is something got the consumer to walk through the “door” so now let’s focus on closing the deal.

Diagnostic metrics, such as CTR and web site traffic, help explain the primary metric that is used to gauge the overall success of the campaign.  Primary metrics, such as sales and revenue, are aligned to the overarching goal of the marketing spend and the business objectives.  Some marketers use web traffic and CTR as their primary metric when the goal of the campaign was to build brand preference.  This kind of disconnect can be prevented if diagnostic metrics are set up to explain the success or failure of the campaign prior to launch.  I know this is easier said than done; however this is a crucial part of managing a client’s expectations and education.  Media can be optimized to drive traffic to the client’s site and increase the overall CTR but what do you do when sales stay flat or worse decrease?  How do you tell your client “He’s not that into you”?  More on this next week!

MindTime of the Day

Future thinkers require higher levels of frequency before responding to an ad.  Past thinkers will respond quicker if the necessary information to make an informed decision is presented to them.  Present thinkers tend to respond based on their specific needs.  The stronger the brand; the greater the response rates.

 

 

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Mission to Future Sustainability

Posted on October 20, 2011 by Jason Burnham, Partner, Burnham Marketing

Last week Volans and JWT released The Future Quotient (FQ) which is a pitch towards a new concept to measure the ability to think and act along intergenerational timescales.  In the same way they currently measure the IQ or EQ of individuals, Volans and JWT believe that we need to investigate FQ as a measure of the future-readiness of individuals, teams, agencies, businesses, brands and beyond.

We encourage everyone to download a copy of The Future Quotient as this new perspective will help drive us towards greater sustainability, not just within our own industry, but at intersections of all business, government, cultural, and social crossroads.  We are proud to announce that MindTime Technologies is now a contributing partner in these global sustainability initiatives; a long term mission that is at the heart of MindTime.

The Future Quotient will be distributed to corporate, government, and organizational leaders around the globe.  The MindTime model and framework is playing a key role in measuring the future-readiness of individuals and organizations to identify our individual and collective thinking at work to understand paradigm shifts to create sustainability around the world.

It is time for everyone to play their part in order to secure a sustainable future for generations to come.  Best practices must be implemented and greater focus on long term growth and stability must be prioritized.  No longer can we concentrate on immediate short term demands at the risk of ignoring or sacrificing future-readiness.  Your task today is to read and absorb The Future Quotient, learn how you can leverage MindTime throughout your organization, and establish best practices that will support the global sustainability initiative; not just for our future, but for our children and grandchildren.  We created this mess – now it’s time to fix it!

MindTime of the Day

When working with people of different thinking styles you must first recognize the value of each individual’s thinking.  Only then can you begin to understand how your thinking works in collaboration with theirs rather than in competition.

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The Value of Brand Relationships

Posted on October 12, 2011 by Jason Burnham, Partner, Burnham Marketing

Brand favorability and loyalty does not start from the time someone sees an ad.  It occurs when you pay no attention to other products in a particular category because the brand you know and love completely fulfills your needs.  The earlier a brand is introduced into a person’s life, the stronger a bond can be formed.  How many of you buy Dove soap or Crest toothpaste because it was what your mother used to buy?  What about Tide detergent?  Or, perhaps Kraft macaroni and cheese?  How many of you signed up for Facebook once you started to get all of those invites from your friends?  Societal conditioning plays a major role in brand health and longevity.  Product endorsements from trusted sources, such as friends and family, are primary drivers of influence, trial, preference, and consumption.

These types of brand relationships are not going to be measured by whether someone clicks on your ad or “liking” your Facebook page.  Deep brand relationships are cultivated over time and integrate into people’s lifestyle.  As I mentioned in my first Digital Sphinx post, all human interaction is dependent on their relationship with the subject.  The stronger the relationship is, the greater the interaction and affinity.   Our industry needs to get out of the minutia of things that just don’t matter to the big picture and need to concentrate on how we create an infrastructure that not only supports, but also facilitates the cultivation of brand relationships.

To date, video is the most captivating media format to people.  The format itself can replicate the physical world, communicate emotionally, and relay cultural and social sensibility simultaneously.  It is the greatest story-telling format available to marketers.  It is through these stories that brands build relationships with consumers – relationships that are endorsed and passed down from generation to generation.  Our lives are comprised of sight, sound, and motion and the best way for brands to relate to and communicate to people is by utilizing as many of the human senses as possible.  As soon as we can smell, taste, and touch a commercial, we have the holy grail of an ad format.  For now, product sampling will suffice.

Television content has been front and center of pop culture and in many ways defines who we are as a society.  Although, keep a much closer eye on Facebook than ever before.  The combination of social networking, video content, interactivity, time spent, sharing capabilities, interest targeting, and brand endorsements from friends and family positions Facebook as being the next greatest vehicle for building brand relationships since the invention of the television.  Social connects everything and will be the conduit to establishing long term brand relationships.

Brand adjacency with content that is molding who we are as a people is precisely the kind of environment required for societal conditioning and building long term brand relationships.   We need to stop the bickering about television getting the bulk of ad spend and the differentiating value that the web offers.  Digital convergence is here and soon content and functionality will be device agnostic.  There will be no difference between your experience on a television vs. a computer vs. a mobile device.  Everything will be digital and the only major difference will be screen size.  So get over it, quit the land-grabbing, and get prepared.

Embrace the valuable attributes each device, channel, and medium has to offer to help drive future innovation and integration.  As you think about how your organization must adapt to the converging digital market, focus your attention on human behavior and how we are evolving as a society.   All of the greatest digital innovations (i.e. Apple, Google, Facebook, etc.) had one thing in common; they all exponentially improved an existing human behavior.  As a result, each created such a deep bond with their users that without them, we would feel a real emotional loss.  Transcending these types of digital brand relationships into the physical world will be the future of brand relationship marketing.  Then we can focus our attention on physical and virtual convergence.

MindTime of the Day

SmartSlices segments your audience based on how they think, how they see themselves, the world, and others, and how they really prefer to be addressed, providing insight into how best to build and maintain your ongoing relationship with them.  www.smartslices.com

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Social Media “Experts”…Really?!?

Posted on October 6, 2011 by Jason Burnham, Partner, Burnham Marketing

Social media is all the rage these days.  In fact, if you type the phrase “social media” into Google, over 326 million results will appear.  That’s more than double the results of just “media”.  Marketers are feeling the pressure to become more “social” from senior management and scrambling to put together social media campaigns so that they can check that box off of their marketing deliverables.  Many marketers think by launching a Facebook page or getting a lot of Twitter followers that they have satisfied their social media needs.  Once marketers realize that it takes much more to drive social activity that will result in ROI and the resources required for managing these social initiatives, they are quickly on the hunt for social media experts to assist them; and there are many who claim to be social media experts ready to serve your every need.  Sphinx!

Marketers have started to tackle their social media needs, similar to how they have historically approached every other marketing tactic – by isolating and siloing their strategic parameters, success metrics, and analytics.  We’ve seen this time and time again.  This is how marketers dealt with banner advertising in the ‘90s, SEM and email in the early ‘00s, and mobile and in-game advertising in the late ‘00s.  Over a decade later and the same mistakes are being made.  Next it will be real-time-bidding and then most likely video; especially as digital convergence really takes form and everything (i.e. TV, radio, print, etc.) is technically “digital”.  Agencies and media providers are always ready to reposition themselves based on the flavor of the month.  Social is the new black.  Or is it the new pink?  Most trends are just that – “trendy”.

Don’t get me wrong, social marketing is extremely important.  In fact, it is too important to think you can just silo it out and hire a specialized social media agency to manage it on your company’s behalf.  The most successful marketers are not experts in analog media, digital media, social media, search marketing, or real-time-bidding; they are experts in communication and understanding how to serve people’s needs.  Once you understand what your audience/customers’ needs are and their communication requirements, you can determine the most effective channels and tactics to satisfy those needs – just like establishing any human relationship.

I realize most marketing disciplines these days require specialists to deploy and manage specific tactics.   However, we must not confuse strategy with execution.  You must have an integrated communication strategy that puts your customers and target prospects at the core.  Through the communication planning process you should determine how much social marketing support is required and how it should be managed.  Additionally, we should stop referring to social as a tactic and think of it more as the fabric that weaves throughout your entire marketing program.  There’s no such thing as a social media campaign.  You don’t make friends with someone and then decide to abruptly end that friendship because he/she had plans on the same night you wanted to go out.

A strong relationship is cultivated over time and this means you need to be willing to allocate the necessary resources to building those high value relationships and plan on managing them indefinitely.  The only way to assure this can be done is by centralizing your customer relationship management internally.  Yes, social is a component of CRM.   Only now, it is a multi-dimensional dialogue and your refer-a-friend programs have exponential potential.  Those that are positioning themselves as “social media experts” are less concerned about the long term value of the relationships between you and your customers, and really trying to capitalize on the ignorance that exists in the marketplace to, once again, provide false value – kind of like that “friend” who is always there to console you during a really bad time.  They appear to be genuine, but we all know there is an ulterior motive which is driven by taking advantage of your vulnerability.

Be less concerned about the new, bright, shiny objects and focus on better understanding your audience/customers.  The more you learn about what people want, the better you can serve their needs.  Marketing channels and tactics are just the delivery mechanisms to serving those needs.  With all that being said, I do recommend partnering with those that are proficient at managing the execution of each tactic.  Many tactics are extremely labor-intensive and require a deep understanding of the market and the various technology platforms used to effectively manage these programs.  However, when it comes to building your strategy, focus on the communication needs of your audience, then determine the channels and tactics that will help facilitate how you address those needs.

Remember this, there is no such thing as a category called “social media”.  All media is social.  It always has been and always will be.  Only now, you can actually see what people are saying behind your back.   You just need to determine what value you can contribute to the conversation – more importantly, make sure it is a reciprocal dialogue.  Leave your “push, push” mentality back in the 20th century.  And if you plan on playing in the social sandbox, make sure you are welcoming, respectful, appreciative, and provide value.  Treat those the way you would like to be treated.

Sometimes I think marketers forget what it means to be human.  In the words of Robert Fulghum, “all you really need to know, you learned in kindergarten”.   Play fair.  Share everything.  Don’t take things that aren’t yours.  Don’t hit people.  Say you’re sorry when you hurt somebody.  Clean up your own mess.  Now, stop your whining and go make some friends!

MindTime of the Day

The phenomenological approach to psychology examines people through the perceptual framework of time—temporality—the phenomena that gives rise to human thinking.  Thinking precedes all actions, drives all actions, and shapes our personalities & our realities.

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