It is quite amazing how marketeers are now so enamored by "the social".
But as early as the 1990s, I have seen studies that showed that "recommendations from friends, family, and other people" are as effective or more effective than any form of advertising. A former colleague was not convinced by it - to the point that she junked the research and called it "irrelevant and potentially, not valid".
I guess the problem was, when you say "recommendations are far better than any form of bought advertising", you're essentially saying that "you don't have so much control over your brand messages as you have earlier thought". that "your brand is essentially at the mercy of consumers".
the truth is, "it" - The Social - has always existed.
we're the ones waking up to its power.
the conversations are louder, the demand to be heard is more pressing, and the clamor to "own" (or "disown") the brands that we thought we had control over is not about to end.
I had an interesting conversation with a former client. We were talking about building businesses for his clients. And one thing he told me stuck with me: "You don't have to change behaviors in order to build business. Besides, advertising cannot change behaviors."
I went "What?"
But since he was not paying me for strategic advice but merely to create and design his much-loved slides and translate his English into something his clients would understand, I didn't argue.
However, above is my free advice to him.
And if advertising is not supposed to change behaviors, then why are we here for? Awards? Kudos? Pats on the back?
If RoI is not quantified - it's nothing but useless chest-thumping, "I-saved-the-company/world-all-by-myself" denial of what's real.
And oh - you can't set business objectives unless you know where you currently are - if your business sucks now, it doesn't help if you deny that it sucks or 'beautify' it with "yes, we suck but...". No "but's" about sucking, dude.
If you suck, you suck. Period. Admit it. Move on. Set new directions - real, realistic directions.
We've all heard about the Old Spice campaign - but I believe it's only the tip of the iceberg that is social video.
There is more that marketeers can do with social videos. And it's not just about 'seeding' videos in YouTube and other video platforms hoping that the audience - your audience - will share them.
Social video, was defined by ReelSEO as follows:
Social video advertising involves a push to intentionally draw attention to a video or video campaign (and its product, service, solution, event, etc.) in a public medium in order to promote one or more conversion goals (views, shares, leads, sales, attendance, or some other form of engagement).
I beg to slightly differ though - because I think that there is more to social video than just drawing attention.
I think social video involves drawing attention to a certain video, engaging and enchanting audiences to share them - and more importantly, to participate in a dialogue with the brand behind the video. The brand can then choose to respond to these in videos or other platforms of social media.
The success of the Old Spice campaign is not just because the first video was funny and was (probably, likely) seeded and promoted properly. The key to its success was how it used the social video platform to create a conversation with its target audiences.
I am sure it was difficult - you have got to have your ear on the ground, weed through the comments (and the likes and the dislikes), and respond quickly via a video. But hey, that's the price of success. ":D
In case you've never heard of it, here's the Old Spice Guy.
i am republishing these thoughts again, but with a stronger emphasis on what's really marketing analytics is all about: interpretation and transformative insights.
marketing analytics is far more than equations and cross-tabulations and significance-testing - although these techniques form part of that. it is the interpretation that really matters - the "so-what?" and "what-now?"
i realized this after almost a year of not dealing with equations and wonderful world of econometrics, matrices, error-testing, and all that. [well, *almost* not dealing with equations - i still had to fit curves against numbers and trends and all that beyond OLS and all that...)
equations, econometircs, statistical modelling, regression, arima, arma, time-series, curve-fitting, stat-tests, and cross-tabs are all means towards bigger end: creating an interpretation that makes a difference in the decisions that we will make in an uncertain world.
here are - once again - my thoughts on "marketing analytics principles" with some additional thoughts or comments in brackets
[i will keep the quotes until - well - I retire and/or leave the world of marketing analytics as i don't think i am qualified at this stage to set the principles as real principles.]
[comment: indeed, this was written on 30 September 2009; how time flies...]
1. Every investment in marketing has an effect on the company’s sales/revenues business.
The goal of econometrics in marketing communications is to quantify these effects and be able to compare-contrast the effects of investments in marketing channels in order to make decisions.
[we are not in the business of driving awareness. we are not in the business of "being present on-air". we are not in the business of being on-air where our buddies can see our products - thereby giving us the chance to gloat.
we are in the business of business: driving revenues, sales, profits.
i will even go further and say that we are not in the business of driving impressions, ratings, share of 'voice', 'share of consumer experiences'... if we are not aligned on that, there is no point in investing in advertising. and yes, investing - not spending.]
There is a point where additional investments in marketing will not have any significant effect on revenues or other marketing KPIs; beyond which, any additional investments are considered wasteful.
On the other hand, there is also a minimum threshold that needs to be met in marketing investments in order to ‘break through’, be competitive, and generate returns on marketing investments.
This is the economics behind marketing investments – economics is all about the optimal allocation of finite resources, and marketing econometrics is aimed at understanding the brand’s opportunities to optimally allocate finite resources that are not linearly related.
This is where the concept of S-curved and diminishing-return response rates comes in.
[i believe it is human for us to believe that if something is good, then more of that same thing should be better. case in point? money. that same belief seems to hold in decisions that we make for marketing: if 200Mln USD of investments in advertising worked in the past - then we need 600Mln USD will triple our profits or revenues. Not.
even in my non-regression/non-econometric work in the past have shown that more is not always better - and that when it comes to investing in marketing, bigger is not always better. i would go on to say that the higher your investments in marketing, the higher the risks - but not necessarily the profits and the returns.]
Marketing communications spent in time period “t” has a measurable impact within the same time period “t”. Marketing econometrics is aimed at understanding the immediate effects of investments so decision-makers can course-correct accordingly.
[we are not in the business of driving awareness. we are in the business of driving revenues, sales, profits. if we are not aligned on that, there is no point in investing in advertising. and yes, investing - not spending.]
Marketing communications spent in time period “t” has a measurable impact after time period “t” – though such an impact may well be diminished and not so strong as the initial impact.
Marketing econometrics is aimed at quantifying the persistent effect of a campaign on a brand’s revenue through the use of concepts such as decay rates and ad-stock.
While econometrics is a quantitative technique and a science aimed at quantifying relationships between two or more variables, it should take into account the messages that are being conveyed by the brand.
This may be achieved by incorporating dummy variables that code different campaigns of the brand, the use of granular (by-version) data, qualitatively reviewing and comparing-contrasting messages and executions, and other similar techniques.
[the above paragraph is a bit too focused on 'coding' dummy variables - the only way one can have a true understanding of the dynamics of a market is to have a synergistic approach to marketing analytics: one that encompases quantitative, pseudo-quantitative, and qualitative techniques. sometimes, equations cannot answer the question "why?" - and therein may lie the need for further analyses using non-quant or hybrid-quant analytic strategies.]
Econometrics should result to potential action and/or decision points for the clients. These may include (1) making decisions on how much to spend on specific brands, (2) optimizing revenues and other campaign-effects against constrained, finite budgets, (3) optimizing investment lay-down to optimize revenues and returns, (4) creating different scenarios with varying effects, and (5) deciding the optimal course of action given current knowledge.
[if it doesn't lead to action, then what was the whole project for?]
Econometrics is an application of statistics and probability to test hypothesis on the economics of marketing. As such, there are risks involved. The most basic of econometric models –
Yt = β0 + βiXi + εi
suggest that there are ‘errors’ that cannot fully be accounted for. These ‘errors’ – or innovations – are the source of risks that no matter how robust a certain model is, there will always be unaccounted for variation – and there will always be errors and risks.
Risks should therefore be considered in making decisions based on marketing econometrics – and any other technique.
[nobody has seen the future. even the most prolific of quant-traders from the field of finance failed to project the breadth and depth of the financial crisis. and with all the changing variables and scenarios that are all around us, it is foolish to say that "because the equation has a probability of error of less than 1%, therefore it is correct..." (which is in itself a contradiction).
risks abound - and therefore must be accounted for, and not necessarily measured or quantified - but prepared for.]
Risk management aims at quantifying and mitigating the impact of random, stochastic variation (and shocks) in the future. Marketing econometrics provides an opportunity for marketing executives to ‘look into possible futures’ – and a basis to mitigate the effects of negative events.
In the practice of marketing econometrics, this entails not just a review of the distribution of “errors”/“residuals” and their corresponding impact on the brands’ business. This also entails the understanding of each variable/factor’s contributions and effects on the company’s revenues, and the risks they pose on the company’s revenues.
[equations are usually back-tested (tested on previous data) to ensure their accuracy. but that is not enough. the past is not always a good predictor of the future - and errors, innovations, shifts happen. and even with the most robust of models cannot capture all these possibilities. risk management principles - "management" used very loosely - need to be put in place. risk cognizance, risk awareness, and preparedness need to be put in place.
and that will require far more than just models, statistical tests, inferential statistics, back-testing, and everything numeric.]
So I was downstairs taking a break from all the numbers that I have spread out on my table.
Then I overheard this conversation between two presons from an ad agency who are in the same building as we are.
I am guessing one of them - the guy - was from the creative department because he was complaining about how much time he has already spent on the ad and was clearly agitated. The girl - I am guessing again - was from the client-servicing department, because she was kinda patient - though I could see that she was on the verge of losing it.
After their smokes, the girl summarized it in a very interesting manner:
"Look. You're young. You're idealistic. You're good. You're beyond good. You've potentials. But one thing you need to learn in this industry is this:
I hope the young guy doesn't lose his idealism and his passion and his desire to deliver something that he is not proud of. I hope the young guy would continue to test the limits - his and of his clients.
And I certainly hope he will NOT listen to this advice.
i get it: there are merits to the elevator pitch. that we all are time-poor. that we don't have time to read reams and tons of documents. that "simple is beautiful".
but sometimes, simple is just simply not enough.
we live in a complex world. to deny that is to deny what is real.
the truth is - to get to a SIMPLE SOLUTION we will have to go through a myriad - perhaps infinite number - of potential solutions.
but no: we want quick-fix solutions to problems:
sales are going down - let's do a promotion.
awareness is nil - let's spend money.
people are not clicking through our ads - let's bombard them even more.
products aren't flying off the shelves - let's fire the ad people, the promo people, the graphic designer.
people are not talking about us online - let's pay bloggers.
people are bashing our brands - delete their comments.
people think our products are expensive - let's cut prices.
stock prices have been stagnant for 4 weeks - let's fire the ceo.
we're the market leader - let's kill the smaller players.
we want simple solutions to problems that are very complex.
life is not simple.
business is not simple.
marketing is not simple.
people are not simple.
how we think isn't simple.
how we choose isn't simple.
why then should we expect that the solutions ought to be simple?
I really liked this ad.
It's not your usual shampoo ad with a beautiful girl with flowy, thick, shiny hair - with experts extolling the value of their brand.
This simply tells a story.
And a beautiful story it is.
It's probably not realistic - but realism is overrated. Just surf on TV and look at all the TV serials, sitcoms, and even so-called "reality programs".
This simply connects, I believe.
Did it deliver the goods? I am not sure. But I am going to bet it rose through the clutter and simply created a difference amongst those who have watched it.
Media planners have always wanted to measure the “optimum level of reach and frequency of different combinations of media channels”.
The question is – to a certain extent – valid: What is the best way to manage finite financial resources across TV, radio, press, and other forms of communications to achieve the best impact?
It is not entirely a bad thing: Once we know the answers – or the principles related – to this question, we can then move towards optimization.
Given the fragmented media landscape and increasingly declining budgets, all the more that we should be answering this question and deciding based on those answers.
But should the internet and social media be included in these process?
TV, radio, presses and outdoor are still measured in terms of the ‘number of people who have seen (or who claim to have seen) the medium’. That’s what GRPs – even PeopleMeter measures – are based on.
But the web – in all its myriad forms from banner ads, rich ads, search, action-seeking ads (either recommend, forward, click, save or download) – is an entirely different thing.
Whilst PeopleMeter and diary ratings are operationally defined as “people who click on a button in front of the TV to identify themselves” or “people who record their media exposures on a predefined diary”, the web is entirely different.
Let’s not even talk about mobile phones – which encompass SMS, location-based and on-demand apps, bluecasting, mobile search, location-based push-SMS/messages…
The point is: Reach and frequency – and other OTS (opportunity-to-see/hear) metrics – on these “new” media. It is not actionable nor relevant to say that “TV generates 70% of unduplicated reach, whilst the internet delivers an additional 15% reach”.
Nor can we say: “Site A delivers 35% reach, and with the additional Site B buys, we will have an additional 12% reach – resulting to 47% unduplicated reach of the internet campaign".
I understand the need for a single currency – because how can we optimize if we don’t have a single currency that would define goals and constraints?
But the call for a single currency shouldn’t disrespect the medium and its innate characteristics, strength, and roles in the lives of consumers.
There must be another way of creating a single, standard currency that applies to all.
In my opinion, that’s consumer response to the ads carried in different media.