marginally subversive

on #analytics: data availability is no longer the problem

Data availability is no longer the problem.  Accessibility is no longer the issue.  The cost of acquiring data has gone down dramatically.

Neither is the technology behind data collation the problem.  There are a myriad of options that one can collect, store, discover, collate, systematize, analyze, and use data.

The real problem is people's apathy and/or antipathy to data and data analyses.

It's all about changing the mindsets of business managers - specifically of marketing managers who think that their jobs encompass merely looking after advertising and media technologies.

David Campbell, as interviewed by Alex Howard (at Oreilly Radar) has this advice to clients about using their data:

From the data side, we've lived in what we'd call a world of scarcity. We thought that data was expensive to store, so we had to get rid of it as soon as possible. You don't want it unless you have a good use for it. Now we think about data from a perspective of abundance.

Part of the challenge, 10 or 15 years years ago, was where do I go get the data? Where do I tap in? But in today's world, everything is so interconnected. It's just a matter of teeing into it. The phrase I've used instead of big data is "ambient data." It's just out there and available.

The recommendation would be to stop and think about the latent value in all that data that's there to be collected and that's fairly easy to store now. That's the challenge and the opportunity for all of us.

(Emphases mine; from http://radar.oreilly.com/2011/12/david-campbell.html)

Here's the video of the interview:

 

 

on #analytics: knowing the question

If you don't know the question, any answer will be good enough.

the cluetrain manifesto - a decade on...

[ These markets are conversations. Their members communicate in language that is natural, open, honest, direct, funny and often shocking. Whether explaining or complaining, joking or serious, the human voice is unmistakably genuine. It can't be faked. ]

The Cluetrain Manifesto was one of the first things that I read when I was trying to grasp the new realities that the internet and the web were ushering into the world of advertising and marketing communications.

Back then, we looked at the web as "merely another channel - like TV, presses, magazines, and direct mailers - only that it accelerates the purchase cycle being much closer to the purchase occasion".

But we now know of course (I hope that all of us now know that!) that the internet and the web turned out to be more than that.

From my viewpoint, the web has dramatically changed not just the marketing and information landscape: it has changed the way we look at the world, the way we participate in it, the way we feel towards concepts such as privacy, hierarchies, and 'social order'.

And the Cluetrain Manifesto captured the new realities in marketing and in conducting business way before we knew where we were headed. 

Cluetrain

View more presentations from Toscana Enterprises Corporation.

So where are we now?

Here is a video from YouTube on where we are at.

 

One of the most beautiful things that was written in the Cluetrain Manifesto is this last paragraph in the introduction:

[ Corporate firewalls have kept smart employees in and smart markets out. It's going to cause real pain to tear those walls down. But the result will be a new kind of conversation. And it will be the most exciting conversation business has ever engaged in. ]

From the Cluetrain Website

what is marketing analytics? - a first stab...

I have been asked so many times "what is marketing analytics?"  (My mom would typically ask me the same question albeit in a different form: "So what exactly do you do?  What do I tell my friends when they ask me what you do in Singapore?")

Here is my stab at trying to define what exactly (the keyword) I do.

If you have any thoughts, opinions, suggestions, objections - feel free to leave a comment. I will try my best to respond.

What is marketing analytics?

Marketing communications analytics - simply put - is all about knowing "which half of your advertising investments are working" and making this "working half" work even harder.

Marketing analytics is aimed at understanding how each aspect of the marketing mix - from communications (including advertising, digital, and media planning), pricing, distribution, branding and brand heritage, target audiences - works in order to deliver sales, revenues, and profits. 

Using advanced statistical techniques - such as econometric and statistical modeling; marketing investment risk analysis, simulation, and mitigation; behavior- and financial-value-based segmentation of audiences - marketing communications analytics aims to answer questions that marketing directors, CMOs, and even CFOs may have about the effectiveness of their investments in advertising, promotions, pricing tactics, distribution and retailer drives, and customer relations.

It is quickly emerging to be on the top of the Chief Marketing Officer's to-do list as marketing costs are being (rightly) categorized (and recognized) as "financial investments" that therefore require to generate returns.

The demand for analytics is also emerging primarily because marketing discussions are beginning to be linked with strategic corporate and finance objectives of creating short- and long-term wealth for shareholders. 

Simply put, CMOs are now being demanded to quantify their team's contributions to the company's bottom-line.

So what does marketing analytics encompass?  

A rather good question - because I think this is where a lot of divergence happens, specially amongst companies that are seeking to establish their analytics practice internally.  Here are my thoughts:

1. Investment effectiveness analysis -

How much of the current sales/profits of the brand can be attributed to the investments made by the brand in marketing, including advertising and non-advertising efforts?  How much sales/profits are generated per dollar-spent on marketing?  What is the best way to invest across different kinds of marketing activities - TV advertising, press, promotions/discounts, price-cuts?  How do competitive investments affect levels of investments?  How do other external variables - socio-demographic changes, consumer moods, seasonality, temperature and rainfall, financial liquidity - affect the effectiveness of investments?

2. Investment optimization -

Given the historical performance of the brand's investments, what are the best ways to deploy marketing moneys in future campaigns?  What are the optimum levels of investments in each of the different aspects of marketing - TV, press, price-discounting, PR-buzz generation, digital, distribution-drive, retailer-push - to deliver an objective?  How can competitive pressure be managed

3. Investment simulation and scenario planning -

If marketing budgets were cut by 10%, what would the impact be?  If marketing budgets were increased by 10%, what would the impact be - and how should that additional 10% be used to further the brand's goals?  If competitive pressure increases by a commensurate 10% increase, what would the impact be?  If consumers' preferences changed due to changing economic environments, how can a company prepare?

4. Consumer Segmentation and Engagement -

Prior to preparing the budgets, which socio-demographic groups are most likely to be the "valuable" targets of the brand?  What kinds of brand communications best work with these segments?  How do we manage segments that are valuable but vulnerable to poaching by other brands/switching?  How can we attract other brands' high-value/highly-vulnerable target segments to our own brand?

Is marketing analytics new? 

Marketing Communications Analytics is not new.  Some have called it "marketing mix modeling" - since it deals with the 4/5/6 P's or marketing.  Some have called it marketing sciences.  Some call it evidence-based marketing planning.

It is however re-emerging as a practice because the demand amongst CMOs to measure and get their department's contribution to shareholder wealth and value creation measured is real. 

Given the economic crunch, it is quickly becoming an area of urgency.  Because companies are pressured to account for their investments more effectively to their boards and their shareholders, the demand for analytics is even going to increase more in the months to come.

Ad and media agencies believe that this is something that will propel their services to a higher level.  Some companies have succeeded in doing so.  However, one thing is certain:  the traditional way of doing business - from hiring and training talent to actual operations - is not going to be sufficient and will not guarantee success.

Agility is critical - and "financial- and political-will" are necessary to effect changes in how agencies think.

What is the future of marketing analytics? 

Marketing Communications Analytics will pave the way for new remuneration models for communications specialists - from brand consultancies, media companies, creative agencies, and digital agencies to CRM. 

We have seen in the last several years the inclusion of procurement companies in the agency pitch processes.  This is only the first step.

The next step - where marketing analytics will play a significant role - will be when finance executives start getting involved in the marketing business.

Finance executives have a different language - they will talk about NPVs, discounted cash-flows, IRRs, ROIs, risk-management, and value-at-risk.  It will probably take them some time to deeply understand the value of brands and brand strategies - but they will get there.

This is where marketing analytics comes in - because marketing analysts will be able to speak these same language (or at least, approximate the language of finance executives) through their use of hybrid techniques - techniques from statistics, econometrics, and finance.

===============================

What do you think?  Any opinions or thoughts on these?

"are you digital enough?"

I have been asked this question by a number of executive-search consultants a number of times.  And my answer has always been "what do you mean?"

Does that mean "do you know the CPM and CPA benchmarks for each of the different combinations and permutations of target audiences across Asia Pacific countries versus those globally?"

[No, I honestly don't - and I don't think anybody knows given the millions of possible combinations.]

Does that mean "do you know how to tag, untag, serve ads and make sure that the ads are geo-targeted?"

[No.  I was sleeping when some ad-sales executive was explaining how to add a script to an ad.]

Does that mean "do you know how to deploy keywords on Google or Bing or Yahoo, create copy that in two lines that will make people want to click, and then count how many clicks there were?"

[Well, if you have a database of keywords, the demand for these keywords, their value in dollars, and their relationships with certain events - e.g., digital ads, buzz-metrics, seasons, news, campaigns, PR, and other potential non-digital stimuli - plus their success against your objectives of actually selling and not just "acquiring" or "clicking-through" - or any other things that I can use to model which ones could potentially lead to better clicks, using either time-series, statistical/pseudo-econometric, or stochastic modeling - then yes. 

If you don't, sorry - I can't help you because you also probably don't know what you're doing.

If you'd like me to create copy - well, again: give me a history of the copies that went well and didn't go well, and why these were different.  And perhaps, I can give you something worthwhile.  Although you'd probably be better off with someone wittier than me.

If you want me to count, then yes, I can count - but I don't think "counting" is a very exciting thing to do, you see.]

Does that mean "do you know how to create banner ads, rich banner ads, collect data from rich banner ads, deploy Silverlight or Flash using DoubleClick or Atlas?"

[Hmmm.  What?  You don't need a digital director or a digital manager.  You need a technologist - or a messaging executive who specializes in digital design and messaging.]

Does that mean "do you know how to create media plans based on impressions, expected click-through's and acquisitions?"

[Impressions?  Oh yeah.  But is it still 2009 or 1999?

Expected click-through's and acquisitions?  Again.  Historical data.  Do you have them?  Are they stochastic?  Are they explainable?  Are they trending?  Are they random?  Data, man, data... do you have them?  If you do, then OK, let's see them.

If you don't have them, no - I can't help.  And you probably can't help yourself either.]

Does that mean "do you know how to create a great digital strategy?"

[What is a "great digital strategy"? 

You see, I only speak in terms of marketing communications strategies that are fact- and evidence-based.  I translate numbers into questions and then into stories and then into potential action points - and if in the process there is a role for digital media (which for me includes everything from digital OOH to on-PC to mobile to everything-that-can-be-represented-in-0's-and-1's), then great, there will be a digital component to the strategic plan.

If you think of digital as a silo, a division, a panacea, a cure-all, a magic pill, the RED pill, a silver bullet that operates on its own, sorry.  We have fundamental disagreements.]

===================

What really gets me is when people say, "Oh - you're not digital enough..."

Ehh.

What is "digital enough"?

Just because I know the CPA or CPM benchmark per country per segment per month per demographic group per industry doesn't mean I am already "digital" or a "digital expert".

I can recite from memory the 12 cranial nerves - in the right order and with a short description of what they do.  I can also explain to you how the Kreb's Cycle - the process through which oxygen is converted into energy on a cellular level.  But would you call me a medical expert?  A cellular/molecular biologist?

I can find the first- and second-derivatives of logarithmic and exponential functions.  I can also show you how to derive the Pythagorean theorem using a cartesian plane.  I can also tell you about integration, partial differentiation, and ordinary differential equations.  Does that make me a mathematician?

I train at the gym from Wednesdays till Saturdays - and my personal trainer will assert that I am learning my moves and forms quite well.  Would you call me a fitness expert?

Knowing CPAs and CPMs and other benchmarks, knowing how to tag an ad, knowing how to select effective keywords, knowing how to read and "analyze" Google Analytics results, knowing how to fill in the "funnel" in Google Analytics... or simply knowing that Google Analytics exist - all these don't make one a "digital expert".

And no, there is no such thing as "digital enough".

There are only people who understand consumers - because they are curious enough to ask questions and seek answers - and who understand how digital media in all its varied, myriad forms figure in their lives alongside the "old", non-digital media.

They may not be "digital enough" - but they will give you a much effective plan that will deliver demand creation, demand realization, revenue generation, and sustainable profitability.

Measuring Outdoor Channels' Effectiveness

ADGist™ measures the effectiveness of print and billboards in a single glance. It’s a more realistic way to test ad effectiveness since most print and billboards get only a single glance when a person is flipping through a magazine or driving on the road. It is often thought that ll the money spent on the majority of ads that people don’t pay much attention to is wasted, but is this really the case? ADGist™ assesses that.

via marketresearchbulletin.com

... by measuring the initial impact (or "impression") of the ad. The original research is from PROMPT RESEARCH INSIGHTS (http://promptresearchinsights.com).

My take: Interesting - and potentially powerful in a very attention-deficit age. But what would interest me more would be how the indicators that AdGist comes up with are related to actual behavioral and/or attitudinal shifts.

Outdoor - which is one of the fastest growing media in the APAC region due to changes in audience lifestyles [more mobility, less in-home activities] and technological opportunities [caveat: I consider bluecasting, infrared casting, location-based SMS/MMS - whilst on the mobile phone - outdoor] - needs to be more measurable and 'tradeable'.

I firmly believe that

1. buying posters based on 'anecdotal, location-based justifications' should end;

2. approximating "GRPs" and "deweighting" them based on self-reported attention to the medium in order to justify our media plans should stop; and

3. transforming print ads - images, layout, text, and all - into outdoor posters must also be trashed.

I hope that ADGist(TM) could help with that.

on social networks and complexities

via iq.harvard.edu

And now something related about work...

Whilst on holidays, I have been trying to read up on two work-related themes (in between my Paulo Coelho, Dan Brown [not a fan], and a few other 'esoteric' readings): Network Analysis and Complexity Science.

Two learnings:

1. Network analysis/science is not easy. It requires deep thought - and very unconventional approaches and algorithms. Most of the articles I have read have emphasized that their work is only the beginning - and that there is more to learn.

... Which leads me to the current belief in advertising that "so long as you have 'word-of-mouth' in your communications campaign, you'd be fine..." and "oh by the way, let's create a page on (insert your favorite social-networking site) and an app for iPhone".

I think this is simplifying the beauty of social networks and their impact on communications, marketing and ad effectiveness, and consumer behavior and emotions significantly.

Approaching social networks as if they were another medium that can be controlled is - in my belief - simply the wrong way. Not just because we don't have control over the social medium as we do on other media - but because social media affect people differently because they work differently.

2. Complexity is the nature of things - and whilst we may want to simplify our communications through visuals and bullet points, our message will remain to be complex.

We can create PowerPoint slides filled only with pictures and single-words or lines - because it is simple - and simple is beautiful, and is effective.  We can create simple ads - filled with white space or capped with a catchy tagline or a jingly.

At least that's what we are taught - cognitive science says "schemas work - so leave them with schemas that they can bring along with them and process".

But it does become really complex because of the last two words: "... and process".

No matter how complex or simple our message is, it will cross over to complexity as soon as human processing starts.

A 10slide presentation - that is simple - could have as much complexity as a 100slide presentation. And the length, or style, or manner doesn't really matter: it's how the audience processes them that matters - and that adds that significant layer of complexity.

The same is true with social media and social networks: A seemingly simple 5-friend group (5node network) is very complex - and its complexities could well be similar with a 10-friend, 20-friend, or 100-friend network.

Because?

The human element is there.

We are born social - we are innately social.

And some are more social than others with a selective group - regardless of whether they already belong within the same group or not.

does ROI still matter?

I had an interesting conversation on Twitter earlier with a friend of mine, Jon (who I should say is one of the brainiest guys I have ever met... and quick to learn!).  His questions were centered on ROI and whether it should be the only thing that mattered when one designs a campaign.

Now, I really wouldn't venture into getting into a debate with him - since he's a PhD in Marketing.  But I thought his questions were interesting.

Photo from heytherespaceman on Flickr

If we didn't measure ROI, then what's the point of spending?

We've always believed that marketing - like any other corporate funds - are investments.  They are being 'spent' to create value for the shareholder.  If a certain line on the corporate expenditure accounts didn't serve any purpose, then it shouldn't be there, right?  We might as well save it for something else.

Returns of marketing investments should therefore be measured.

But should ROI, then dictate the plan and its executions?

That's a deeper question, really - which brings us back to my previous post on whether communications and media planning were an art or a science.  My answer is, yes... but.

And it's a big but.

We have to clarify exactly what we mean by returns.  Are we talking about returns on investments in the form of savings and additional value?  Are we talking about returns in the form of being talked about in digital communities and vox-pops and forums?  Are we talking about returns in awareness and genuine affinity and likeability towards the brand?  Are we talking about products being purchased off the shelves?  Are we talking about users of the competitive-brands moving to ours?  Or our competitors falling in love more deeply with our brand?

Because ROI is on the verge of becoming another 'buzz-word' - like "engagement".

Everybody wants ROI.  But everybody has got a different view of what ROI is and should be.  And therefore should be clarified. 

Brand managers have their own ROIs - salary increments and perhaps, that promotion to AGM position.  CMOs have their own KPIs - perhaps, that golden parachute and more stock options or discounted stocks, and eventual accession to become the CEO.  CEOs have their own ROIs - stock prices, analyst ratings, and well, a positive disposition from the board.

Because ROI is 'bandied' around - and is almost always mentioned in every and any meeting between client ang agencies - it is bound to lose its meaning.

(An aside: When I was working on a fast-moving consumer good which shall go unnamed, their KPI measurement for their planning agency was "savings generated" - the same KPI for their buying agency because "that is ROI for all media investments"!)

So ROI - or ROMI or ROAI or iROI or iROMI or iROAI or ROMA or iROMA - needs be clear.

And every one needs to be aligned on what it is.

Lest it becomes another buzzword - "important but meaningless".

But ROI is only a number; how many ideas and campaigns have been killed because its ROI cannot be ensured because pretest scores are bad?

It is indeed only a number - but it is a number that should inspire, encourage, and motivate - not restrain and constrain.

We have this habit of looking at numbers as if they were a manifestation of God (with all due respect to physicists and mathematicians - and well, gnostics).  But I see numbers as guideposts.

People don't like the ad during the pretest?  Rather than dwell on the score, ask why.  What is it about it that makes it so... wrong?  Why is it unlikeable to this particular person?  Why is it unlikeable to this particular group?

Most pretests are run on groups and/or on people.  And usually in the form on unfinished TVCs.  Surely, they cannot appreciate the beauty of the idea in a rough form.  And the fact that you have convened them into a room (however natural, comfortable, open that room is...) have put them in a different mode altogether.

The more important thing about pretest scores is "Why is this not working on this paticular person or this particular group?"  Any self-respecting pre-test moderator would want to explore that!

Turning the question around: How many ideas and campaigns have been killed because they have not been tested and their ROI potentials unmeasured?

Which - I believe - is also a valid question: Just how many ideas, campaigns, thoughts, executions have been killed because they have not been invested into properly because they were not measured, they were not subjected to some form of indicative pretest?

It is again back to "numbers versus gut" - "art versus science".

So what now? 

In statistics and econometrics, we have a concept called the "error".  Whilst statisticians and econometricians think of the "error term" differently, the term is there in models to remind us - constantly - that we cannot ensnare every single thing with numbers.

In econometrics, "error terms" are sometimes called "innovations".  (Let's not get into the technical details for now...)

And that could exactly be that: we can derive all the numbers and formulas that we want, create stringent benchmarks and tests and questionnaires and surveys... but we will never really capture reality - the audiences' reality.

It doesn't mean the stats and the formulas are wrong: it's just that, well, it's incomplete.  And it can never be complete.

Because that's the nature of numbers.

ROI?  Yes.  Testing?  Yes.  Measuring post-campaign effects?  Yes.

But they are your tools - you're not theirs.

the mighty also falls

"How the Mighty Fall" the BusinessWeek

Collins outlines five stages of decline: Hubris Born of Success, Undisciplined Pursuit of More, Denial of Risk and Peril, Grasping for Salvation, Capitulation to Irrelevance or Death. He makes the point that great companies can fall "even if engaged in energetic and ambitious activity"...  (Emphasis mine)

This is from Jim Collins who wrote Good to Great and Built to Last (together with Jerry Porras).

It is quite interesting how it captures - in very simple terms and 'stages' - the history of some companies.

If I look at the financial industry, this could very well be the same trends that occurred.  The same is true of "idols".

This could very well be the same of brands.

From BusinessWeek.Com

Measuring ROI with Google – A Simple View

An interesting video from Google on YouTube on calculating ROI, using profit margins.

What thing that’s missing though is “So how do I move into the future?”

Profit margins (and cost of goods sold and revenues) are not static measurements for businesses.  There is seasonality involved – and there is randomness involved.  While measuring ROI from past campaigns is good, measuring and predicting ROIs for future campaigns is far much better and far more useful.

Just because one product does generate more profits now doesn’t necessarily mean it will continue to generate profits in the future.

Similarly: ROI from the past are not necessarily good predictors of ROI in the future.