Archive for December, 2009
Measuring ROI 10 Years On…
Posted by Bob Kumagai in Business, Technology on December 28th, 2009
Robot Last Click
To say that there have been seismic changes over the past 10 years in the ways that we market online is to belabor the obvious. That said, let’s belabor anew as the “00’s” come to a merciful end and we head into 2010. Among the most significant have been the erosion of the walls that existed between the online or digital activities of marketers and those of the traditional or offline variety. In 2000 it wasn’t uncommon at all for a company or brand to have a distinctly separate dotcom marketing team (and even business unit) from the majority of its marketing activities. The notion of silo’d digital marketing has become one that businesses adhere to at their peril as the wisdom of integration and alignment of all marketing channels has grown to become the prevailing wind. In other words, your website had better be telling the same story as your retail locations, you catalogs, your customer service teams, sales teams, as well as PR and brand support. Customers have come to expect your brand’s narrative around value, service or pricing to be consistent across each and every touchpoint they encounter. This is no longer about being a visionary, this about basic blocking and tackling.
Another important change has been the increasing emphasis upon more accurately measuring the ROI of those marketing channels. If businesses have learned anything from their online initiatives, it is that a great many of them can be measured in a way that their offline activities cannot. Of course, the fact that an activity can be measured does not necessarily mean that it should be, at least in the way that we have done so to date. What flows out of this reality is that marketers must apply some manner of metric to everything that they do – online and offline. There is certainly nothing revolutionary about the idea of measuring and applying critical analysis of how resources are spent, but it begs the question of whether businesses are measuring the right things and if those metrics are valid. The beauty of the Google paid search machine is that you get a pretty clear picture of what happens when you put money in the slot, i.e., a click costs a dime, it takes 100 clicks to get an action so voila! the cost to acquire is ten bucks. This leads to ROI calculation that is clean, relatively accurate, and aligns neatly with the silo’d activities of ten years ago. Unless you are a pure-play (online or offline) and market in only one channel, this model can lead to inaccurate metrics at best, and poor decision making around resource allocation.
If only it was so simple to measure the investment in marketing collateral, tradeshow displays, online and offline display advertising, direct marketing efforts, customer retention and lifetime values, search marketing, broadcast, social media, and so on. Truly integrated and multi-disciplinary marketing requires more thoughtful measurement models. Relying upon “last click” attribution today makes no more sense than using a print publication’s circulation and pass-along rates did when the magazine and newspaper business was still healthy. The challenge remains to blend the various aspects of a comprehensive marketing mix and emerge with a more holistic view of what is spent and what that resulted in.
Steve Kerho of Organic reported some interesting findings in a recent post on developing an “analytics ecosystem” model for multi-modal campaigns across the web. Paid search, display (banner) ads and branded website activities showed some inter-relationships that confirm what many marketers have “known” but have had difficulty demonstrating. To wit, paid search performs better when a user sees display ads prior to clicking through a search ad; branded sites converted at much higher rates when display ads were viewed in prior sessions, but after too many display impressions performance fell off. Clearly, utilizing a last-click attribution model around your paid search campaigns risks undervaluing concurrent campaigns in different vehicles. The temptation to discard every activity but paid search requires the development of proxy metrics and blended or weighted analytics to more fully capture ROI. The long story short is that being able to model and manage the data will be a minimal requirement for marketing in the coming years. Marketers that can develop or partner with those that can aggregate and segment data will have the best chance of success going forward. Sound familiar?
Shorts at 3 Degrees?
Posted by Bob Kumagai in Colorado, Parenting, That's Life on December 4th, 2009
December - What Not To Wear
The recent arrival of bitter cold temperatures in Denver has many of us discarding concerns around global warming in favor of nudging the thermostat up and dramatically increasing our carbon footprint. Rising sea levels may be bad for California but freezing in your own home is far more of an immediate climate crisis. Most people tend to dress appropriately for these frigid conditions – indeed those heinous fur-lined Crocs take on an entirely different fashion value in these desperate times. It is not uncommon to see people dressed as though they are competing in the Iditarod, this in spite of the fact that they are sitting on the freeway in the Suburban with the heat cranked-up to 80. This alignment between cold temperatures and climate-appropriate clothing does not appear to apply to the average American teenage boy. Especially mine.
Tom Whittaker wrote yesterday in his witty blog of witnessing some heartless parent in a luxury car practically kicking his son out at the bus stop. The kid was wearing a t-shirt. Temperature in the single digits. This, understandably, struck Tom as an example of lousy parenting. It seemed to me to be par for the course. His post set off a string of comments (I’m guilty too) that reveals that there are two groups of people in the world – 1) those that value and cherish the safety, health and well-being of children and; 2) the parents of teenagers.
Those in group #2 most likely were members of group #1 until their children hit the brick wall that is adolescence. As a card-carrying member of group #2, I have grown weary of the daily battles surrounding what my kids wear (or don’t), what they eat (or won’t), as well as what they say (or should). I am no longer aghast at my son’s choice of shorts, t-shirt and pool slides for arctic conditions that would have made Sir Ernest Shackleton run for the closest REI store. This morning, a balmy 6 degrees, I received a fittingly icy stare in response to my suggestion that some type of coat might be helpful. Like most group #2 members, each loving and well-intentioned kernal of parental guidance (aka control) is met with the rolled-eyes that signal how fatiguing it is to have been cursed with parents that are so annoying. (Someone once said that his daughter’s eye rolls were so dramatic that he could hear them roll. I can attest to the truth in this).
This is the karma payback that I get for taking my then recalcitrant 4 year old to preschool wearing only his pajama bottoms. The parenting class said, “children must be allowed to make their own choices and learn that those choices have consequences”. So when, for the umpteenth time, he refused to get dressed for preschool, it seemed perfectly fitting to march him out to the car, through the snow, for the ride to school. As we drove the mile to preschool I could barely hear my son screaming at me – what with the A/C blowing full-blast and the windows rolled down! I assured him that I understood that he was cold but to not worry because I had chosen to wear a coat and shoes, so was really warm. He looked like a hypothermia survivor of an Everest expedition gone bad, albeit one that was equipped with cowboy pajamas instead of Gore-Tex. The result was not a well-deserved visit from Child Protective Services but a kid that no longer required any encouragement to dress appropriately for winter weather. “Lesson learned!” I gloated and it worked for another few years. But slowly, the defiance grew over time until today I am resigned to being one of “those parents” that group #1 looks at as if my kids should be placed into foster care until I learn some parenting skills.
As you pass the bus stop this winter, know that the middle school kids that are dressed more for the beach than for the arctic cold, actually do have parents that have helped them survive to this point. They’ve just given up on this particular battle.