The Rogue Marketer

Interesting post by Gord Hotchkiss in his blog Out of My Gord on the recent announcement by Google that natural search results will be driven in part by individual search history.   He contends that personalization or the use of your search history to guide future results will have a profound impact on Google’s future offerings.  Hotchkiss points out that not only can Google see the sites you visit, but can discern the intent of the individual by looking at the click stream.

If Google sees visits to vintage car sites, they know I'm at a minimum a car enthusiast and potentially someone that is looking to buy a car.  Each of the key lifecycle type of searches from baby products to retirement homes can vastly improve the customers satisfaction with the quality of the search and advertisers ability to target.  Wow.

Hotchkiss points out that Sep Kamvar, the Googlite responsible for this initiative, is going to transform Google’s current and future offerings with this level of mass customization.

I think Hotchkiss, while correctly identifying the profound impact it will have on the internet, is not seeing the impact this move by Kamvar will have on products outside of the internet. 

Consumers tend to benchmark expectations against a few companies that set the tone.  An ancient example is American Express setting the standard for service.  Google, Amazon and Microsoft set the expectation for UI design.   If Google begins to fit more like a glove, then other products need to change to stay perceptually current.

The idea that products will conform to the user experience vs. the user conforming to a fixed set of product features will cause a dramatic shift in the way products and services are designed. Products will dynamically transform themselves to keep up with the higher bar set by consumers for intelligent personalization. New category leaders can emerge by building dynamic adaptation into their design.  

The key to the puzzle is user intent and Google will have the best data set to understand what that intent is.

As mentioned in a previous blog entry, imagine cable TV with all of my favorite channels grouped together, or a camera with only the features I use (I can never find that damn red eye reduction button).  My car radio will tune to my most listed to stations, my browser will ask me if I’d like to view the NYTimes.com every time my computer is turned on and my kids will do what I’d like. I thought it was worth a try.

Interesting Sidebar: If Google can read intent and identify future behavior, then they might be able to discern patterns of behavior that are positive and negative.  For example, if they understood the typical search behavior of a terrorist or criminal, could they anticipate future action?

I’ve never seen a green marketing campaign work as a primary reason for making a purchase.  People talk green, but don't act green.  In the past green was either inconvenient, expensive or ineffective.  Said another way, it was not in the average consumers best interest.  It’s always been a niche market populated by the few individuals that put the environment ahead of themselves.  Maybe this is changing.

Michael Bloomberg, the mayor of New York, has put together a “Green” plan that seems to have momentum.  David Siefmen in the New York Post does a great job describing the mayor's plan and the way it aligns with the expectations of the New York voter.

The Gorical and his promotion of the global warming threat has made most of us take notice.  General Electric executives are compensated based on reaching green related goals.

I think the pendulum has shifted.  Green still isn't a primary benefit of purchase, but as a tie breaker, I’d go with the green.  Given the choice, or for a small premium, green may finally translate into green.

It used to be that every brand wanted to turn themselves into Starbucks.  Literally.  Just look at the ING cafe in Manhattan.  Now that the cafe craze is over it's on to the next trend, sponsoring content that has some remote affiliation with the brand.  Recent entries include Budweiser’s Bud.tv and a televising on demand type offering called General Electric Imagination Theater.

Richard Siklos writes about the phenomena in the April 15^th New York Times.  His story, "A Soft Sell With Cold Hard Cash in Mind" describes how recent efforts have resulted in decent programming that has a vague connection back to the sponsoring brand.   To quote Richard, “Hey, some of isn’t half bad" and  “can material spawned in such a way be anywhere near as effective as traditional advertising, or as good as conventional programming born by creative inspiration rather than to help sell something.”  The question is can brand content or entertainment that has no association with the brand other than sponsorship generate some kind of purchase or action.

I've spent significant amounts of time exploring the development of content that has a brand purpose.  For the USArmy I went so far as to develop an entire TV channel as a way of  influencing a hard to reach 16 - 24 year old target that wouldn't think to give the Army the time of day.  I've built the  business case and worked with a team that created multiple programming concepts.  There is no question that the economics of television channel development and the possible affect it can have on brand purchase behavior make it a worthwhile pursuit for any advertiser that spends $100 million a year or more (a cable or Internet channel costs approximately $60,000,000 to operate all in assuming you have 6+ hours of compelling content a day).

I've found that branded entertainment can be effective if it gets someone that wouldn't even look at a brand to start paying attention. In the case of the Army, content that has target relevance and is on a path that would lead to consideration of the Army is worth creating as part of a measurable conversion process.  It works in the same way public relations focuses on a topic of interest and then positions the brand as a source for individuals that share the same interest.

Content that has no clear link to a brand such as Microsoft's sponsorship of the Stu Osborne show, available exclusively to TIVO owners, is so allusive that I'm not sure what it does for Microsoft.  The program mimics a fake talk show and is fun to watch.  I'm not sure this makes Microsoft fun by association. 

I was never that good at the obtuse.  I think a brand should be purposeful in what it pays to communicate and the content it creates.  Now when is the next installment of Microsoft's Stu Osborne going to be on.

Great post by Whitney Hutchinson, the eCRM strategist for Razorfish/Avenue A in the April 16, 2007 Email Insider MediaPost called The Stacking Effect - Email and the Overall Marketing Mix .  The post is about how the use of online media used in combination generates a higher response rate than the use of any one medium alone.  Every advertiser I've worked with has struggled with this issue, particularly when individual media do not generate a positive ROI alone.  Take public relations where its value is propensity to purchase, not necessarily purchase.  Propensity is essential to helping other direct response media work such as direct mail, yet few companies will credit Public Relations with its fair ROI credit.

Hutchinson describes two online studies where stacking was used (stacking is another name for the concurrent use of online media - integrated marketing for those not keeping score).  In the fist study - to quote the post...

"When looking at click data alone..for a large company, we saw that when users clicked on only one channel they had a conversion rate of 4.7%. When they clicked on two channels, their conversion rate almost doubled, to 8.5% -- and when they clicked on three channels, their conversion rate almost tripled, to 11.5%. (Channels included search, display, email, affiliates, portals, and two additional industry-specific channels.)"

"For a large multichannel retailer the study looked at users who only saw display media versus those who saw display media plus email. Stacking both email and display media brought significant lift compared to not stacking the channels."

Hutchinson recommends a few steps  for testing your way to a media "stacking" strategy.

1. Start out by testing a few variables in a simple test-and-control methodology. Isolate your variables and make sure that the only difference between your test and control cells is the single variable you're testing. An example would be:

                Banner Only
                Email Only
                Banner Plus Email

3. Define  evaluation metrics up front, but be open to looking broadly to really understand the impact. It's important to agree on what metric is important for your organization, but it's also important to look at secondary metrics that might show significant lift even when primary metrics don't (such as the intent to purchase in addition to actual purchase).
4. Understand that this is just a snapshot in time. Many things may affect your response, including the maturity of your brand, your competition, your offers/creative and list.

For those struggling with measuring integrated marketing programs or setting integrated marketing benchmarks for specific industries, the Direct Marketing Association (DMA) publishes an annual study on response rates that includes benchmark responses for most stacked media.  I'd highly recommend purchasing the study.

Thanks to Fred Wilson for pointing out a new "myware" tool from Del.icio.us that automatically tracks the URL's you connect to on the Internet and than intelligently shows the most visited sites on only your tool bar.  A great concept.

Your browser can now intelligently track your behavior.  Easy access to your favorite sites is displayed for easy access.

The next step for marketers.  Build this intelligence into every product you sell.  On your digital camera, hide the thousands of features we don't use, and just display the ones we do.  Better yet, adjust the feature set in the store, so I can eliminate red eye or delete pictures without a doctoral degree in user interface design.

As we add features to Mimeo.com, our site should learn from each user.  If you only choose twin loop binding, color impressions and clear covers, maybe that is what should appear on the top of each pull-down menu.

What if Verizon FiOS took all of my viewing information and grouped my favorite channels together so that my first, second and third choice channels always appeared together.  What if the TV did this by user.

You get the idea.  MyWare works.  It differentiates and adds value.

I like to collect ideas such as those listed by David Baker in his "Happy Birthday to Me" post.   David, the head of email marketing at Razorfish/Avenue A describes how to turn a simple email idea, targeting a trigger purchase event such as a birthday, into a complete campaign.  The one he describes for a beer campaign had the following steps:

1.      What do people do as their birthday nears?

2.      What is the day of your birthday all about?

3.      What is the first thing you do after a great birthday party?

This line of questioning spawned ideas for a three-part birthday email series, though unfortunately only part of it was implemented.

1.      Two weeks before: We wanted to be the first one to acknowledge your birthday, and tied it to a sweeps program. We also wanted to leverage social networking to help you plan your birthday and invite your buddies through this viral component.

2.      Day of: We wanted to reward you, as it is your big day, so you would get the lighted candles with a cute song and a music download.

3.      Day after: Remember all those people who did'nt’t make it to your party? Here’s your opportunity to tie a little viral humor into a “Hey, you missed my party, so now you owe me a beer” message. This was delivered in a printable coupon that could be sent to others as a joke.

Couple of great marketing points to be made.

1.  Purchase occasions often need a trigger.  Life-cycle events are great "natural" triggers.   A natural trigger is one where an event is predictable such as a birthday.   Un-natural events are those that are unpredictable such as the 9/11 bombing and the rush to purchase security systems and cellular phones.

2.  Messages need a context - Consumers do not know what to do with the millions of messages they get everyday.  They need a reason to assimilate them into their memory.  Relating a purchase to the celebration of their birthday is a natural context for a beer purchase.

3. Suggestion is Powerful - Recommend to your audience how they should spread the word.  If they like the idea, and it doesn't require any work on their part, they will do it.  This idea is confirmed by Malcolm Gladwell in his book Blink where he found that consumers are very receptive to overt messages.

You can read more of David Bakers email ideas at his blog called White Noise Inc.  I just subscribed.

Why are the same mistakes made by marketers over and over again.  The latest entry to join the 2007 marketing malpractice hall of fame is the Sansadisk MP3 player, a joint venture by Yahoo, Zing Systems and Sandisk.  Nick Wingfield in the Wall Street Journal describes the device as selling for $250 and as having the unique ability to wirelessly download music from Yahoo's Internet music service. 

The device has some interesting features such as the ability to hold 1000 songs (yawn), and for $11.99 you get unlimited access to music.  Just enter any WiFi hot-spot and change or load new songs.  Walk away form the hot-spot and take the songs with you.   The bet by Sandisk and Zingsystems is that by having a tighter integration between the player and the source of music, they will have a winner.

They couldn't be more wrong.  The reasons why the SansaDisk player will fail have nothing to do with the price point, design of the device or the partners involved.  Tim Bucher, a former Apple executive who is the software genius behind the device hopes to attract new users and IPOD converts.  Sorry Tim, not in this lifetime. 

Reasons why Yahoo and SanDisk are going to fail:

1. Last Entry in a Crowded Field - There are 100,000,000 IPODs in circulation.  "The consumer has voted and the leader is IPOD.  Why would they pay attention to a SansaDisk if they want an IPOD. 

2. Nothing New - Great, so there is tight integration between player and music source.  Isn't that what the IPOD, ITunes combination brings to the market or the Microsoft Zune, or SanDisks San e200r (nice name) and Rhpasody, or the Microsoft Zune player and who cares who.

3. Brand do not change market position - Very few products in history have changed position from 2 to 1, or 8 to 3.  Consumer can remember 1, maybe 2 MP3 players. 

4. Consumers want an IPOD - Apple is the king.  They were elevated to Emperor with their new phone entry.  Even if the SansaDisk has a feature that they would want, they'll wait for Apple. When SONY came out with the color TV, everyone didn't just want a color TV, they wanted a SONY.  Toshiba and others for years have tried to upset their dominance with better features and engineering.  Consumers opted to wait for SONY.

So, Mr. Bucher, nice idea.  Now I know you are thinking that SanDisk has a 9% share with other players and that all you need is a couple of share points to make money.  Good luck.   

SanDisk, my latest nominee for the 2007 marketing malpractice awards.  The physics of marketing are real.  The ability to change physics,....impossible.

Bob Garfield's Chaos Scenario 2.0   should be required reading for anyone considering a career in advertising and marketing.  For any fans out there of Chaos 1.0, Bob outlined dramatic changes taking place in the industry with the dawn of the DVR and a shift of budgets to on-line venues.

In Chaos 2.0, Bob tracks the changes predicted and paints a grim picture for the infrastructure of the advertising industry.  He makes the case that the advertising agency business model is based on the use of manpower against large scale agency engagements.  An interesting case in point is a recent assignment for Six Flags amusement parks where they needed to give away 45,000 tickets as part of a promotion.  The old agency approach would have been the development of a multi-media advertising campaign.  The new model had the agency placing a notice on Craig's List.  The tickets were gone within hours.

Mr Garfield quotes many people from the traditional media world that claim that business is good.  People like Timothy Balding, CEO of the World Council of Newspapers who claims that newspaper readership is up.  Les Moonves from CBS claims that the network is health with increases in CPMs.  Jeff Bewkes the Time Warner COO claims that the 3 second spot will replace the :30 because a :03 is just as good. 

A case is made that mass media thrives in scarcity.  The economics of the advertising business rests on selling scarce access to mass audiences to advertisers.  With television audiences declining, there will come a point where the ROI of targeting smaller audiences will make sense to a declining number of advertisers.  Adam Thierer from the Progress & Freedom Foundation reiterates that we are seeing the "death of a business model that thrived in scarcity."  Jim Stengel from Procter & Gamble jumped on the bandwagon at the Association of National Advertisers conference where he said advertisers need to move from "telling to selling" to relationships.

My take is that the television networks and advertisers need to rethink the way they use the medium.  First, I don't buy that the future is relationship marketing, micro marketing and everything on-line.  As much as consumers like directing themselves on-line, a counter trend will develop as quickly that has consumers glued to their televisions watching video.

The issue is that with DVR penetration at 20%+ the viewer will not stand for television programs that are continually interrupted. 

Which brings me to a proposed solution.  Advertisers and television program producers need to co-develop television programming.  The programs need to meet the need of the advertiser - consistency with thematics that are germane to the advertiser that underwrites the program - combined with the creative instincts of those that are in television and know how to generate an audience. As mentioned in earlier posts, brands are a currency of meaning.  That meaning is no different than the currency of meaning communicated by a television program, book or any other content.

For example, Procter & Gamble's Folger's coffee stands for the pain that comes from transitions.  The transition from sleeping to awake, from inside the house to venturing out, from trip to work, to being at work etc.  Fertile ground for a television program that deals with transitions.  Imagine if Jim Stengel and Ted Whoerle at Procter partnered with Les Moonves at CBS or Mel Karmazin at Sirius, to develop content on this theme.  Individuals that are attracted to this type of meaning would flock to the content and the brand.

The challenge would be that the goal of an advertiser who wants to influence behavior is very different that a broadcaster that would want ratings over a long period of time.  To this point, each would have to be satisfied with the goal of the group paying the bills, single or multiple exposures that influence behavior.  Low ratings, but high impact on sales would work for the advertiser and possibly be a difficult pill to swallow for the broadcaster.

For the agency business the good news is that developing "brand content" is labor intensive.  The bad news for most creative staff is that the skill set required to express something in :30 minutes is very different than expressing something in :30 seconds.  (There is a famous Hemingway quote who started his career in advertising - why would I express something on one page, when I prefer to do it in 250).  With the change in staff, advertising agencies would have the talent and the billable hours they need to maintain the expensive infrastructure they have in place.  There will be some pain.  Instead of billing $1,000,000 for a :30 commercial, the same million would have to pay for multiple episodes of brand content.  I would start looking for the next Hemingway now.