Integrated Branding Blog | Movéo

Joining the Conversation on Performance Marketing

For the past few years, I have been fortunate to attend several of the IAB's Leadership Forums.  The event's organizer, the Interactive Advertising Bureau (www.iab.net), is one of the most respected providers of information-based events for the interactive advertising industry. 

The IAB is based in New York and, as a result, the majority of its conferences take place in the Big Apple.  In fact, New York will be host to a Leadership Forum on Digital Video in May, one on User Generated Content & Social Media in June, Mobile Marketing in July and Audience Measurement in November.  Each of these conferences will cover issues that are crucial for today's marketers, and the future of online advertising as a whole.   

But, in Chicago, for the past four years we've played host to the most important (in my opinion) Leadership Forum of them all...the one on Performance Marketing.  This is an event where the industry takes a close look at how Interactive is changing the face of DIRECT marketing.

This year's event, titled "A New Era of Accountability" covered everything from next gen lead gen, to emerging media platforms, to predictive scoring, to the birth (and growth) of the ad exchange model.  But the recurring theme throughout every presentation was accountability.   

In his welcome message, Randall Rothenberg, President and CEO of the IAB, stated that "The paradigm of performance marketing has continued to shift...The traditional notion that specific advertising vehicles or channels should be reserved solely for branding and others for direct response no longer applies."

Hallelujah!!! For too many years, our clients have been asking, "Why can't my direct response campaign also build awareness?" or "Why can't my branding campaign also stimulate demand and generate sales leads?"  So, what about Brand-Response Advertising (a term we've been throwing around the agency for a couple of years)?  Increasingly, marketers are acknowledging that the consumer is in control...today's advertising objectives are written by replacing the words, "to build awareness" with the words, "to build engagement." 

As a concept, "engagement" is understood by brand advertisers AND direct response advertisers--equally.  The most successful brands in the world are those that have a loyal base of customers who are "engaged" in the brand.  And, the most successful lead gen campaigns are those that work to immediately "engage" the target audience. 

The Interactive advertising industry continues to push the envelope...developing increasingly complex advertising platforms and techniques.  But every one of them has been developed from the desire to more effectively ENGAGE with prospects and customers.

As Mr. Rothenberg said, "As the mediascape evolves and formerly distinct lines blur, [marketers] must expand their thinking and their tool kits."

Measuring Delayed Response to Online Advertising

Third-party ad serving has tremendous benefits for brand owners...by providing better visibility into the effects of their online advertising campaigns.

Ad servers allow marketers to identify end users—and the actions they have taken—by storing server-side profiles on each user that lands on their site after clicking on an ad (known as a click-through), or even those who did not click on the ad, but visited the site within a specified amount of time after being shown the ad (known as a view-through).

Through the use of pixel tags, marketers can track back-end actions like purchases from an ecommerce site, and tie that activity back to the advertising message (or series of messages) that initially drove the interest. Thus allowing you to optimize your campaign against conversion rates rather than click-through rates.

An even greater (but often ignored) benefit of 3rd-party ad serving is being able to understand the time it takes (on average) for a user to convert into a customer—after they've clicked on your banner ad.  When a user clicks on your ad but does not purchase something in that same session, this does not mean that your advertising message was wasted on that individual.  This person may return to your site later that day, or later that week, to complete his purchase. An ad server allows you to attribute the ultimate purchase to the advertising campaign, even though the purchase conversion itself was delayed.  [So, if you are not implementing pixel tags for tracking these repeat visits, you will lose this valuable information and ultimately underestimate the performance of your campaigns.]

But, a word of caution...when using pixel tags to track delayed response to your advertising, it is easy to distort the view of your campaign optimization efforts.  As you can see in the chart below, if you measure total # of conversions from week-to-week, it looks like the performance of the campaign is steadily improving...

But remember, some of the conversions SHOULD ACTUALLY be attributed to advertising that occurred prior to the week you're measuring (due to delayed response).  As you can see in this example, 100 conversions (25 click-thru and 75 view-thru) of the 250 measured for week 2, are actually delayed response to advertising that occurred in week 1.  This example actually represents NO improvement in the campaign's performance from week-to-week.    

As you become more sophisticated in tracking advertising effects, it becomes increasingly important that you attribute the right effect to the right effort.    

Location. Location. Location.

Almost any business owner you speak with will tell you the key to success is location. However, in the age of the information superhighway what exactly does this mean? Are they referring to their physical location, how it meets the demands of customers, suppliers, transportation, utility access, traffic count, ease of entry… the list of the Economic Geographic factors can be extensive, or are they referring to where prospects become customers?  Is location still a driving force for business? Not only is location crucial to the success of any business, so is location and location.

Location 1: Physical location

Where your business is located physically and how to optimize your location is analyzed using the economic and geographic metrics I listed above. Many factors go into the decision of which location best serves your business, whether your focus is shipping logistics or consumer access. It may be necessary for a retail outlet to be on a busy easy to access corner, just as it is important for a manufacturer to be near suppliers and transportation infrastructure.

Location 2: Virtual location

Where your business is located virtually is quickly gaining importance in the battle to draw in new customers, and keep current ones. Every business’ virtual location begins with an address on the world wide web. However, just as with physical locations, virtual locations are not just your website. Other factors included in virtual location are linkbacks, trackbacks, listing sites, Google maps, social networks (eg. Linkedin & Meetup), forums, e-zines, and anything else that is logged by the search engines (eg. Twitter, a mass IM social application).

Location 3: Brand location

Where your business is located in the mind of your customer is what brings everything together, turning prospects into clients. Brand strategy needs to integrated and implemented across the first two locations and everything your business is involved in to maximize effectiveness and allow your business to communicate what customer it best serves, and what hill you have planted your flag on.

Location is as important as ever for business. Whether brand, virtual or physical, your location choices will drive your business. Every step must be based in tested research to make sure you are in the best position to maximize your business’ opportunities.

Seven Reasons Google Profit Margins have Decreased in Q1 ‘08

Wall Street was surprised as Google released earnings for the first quarter of 2008 that showed, not a slowing of the massive growth rate experienced in the third and fourth quarters of 2007, a 42% increase from the same period last year. The line Google has been towing has been that they have been refining their system to increase the quality of the service to both advertisers and searchers. Google's lower click numbers had worried many stake holders and expectations just before the release of the information were much lower for the search giant. Here are the seven biggest changes Google has made in the Q1 2008:

1. Demographic bidding & exclusion
2. Demographic reporting
3. Site exclusion limit removal
4. Integrating audio ads with analytics
5. Landing page load time integration into quality score
6. Updated URL policy
7. Google Business YouTube channel

With Microsoft and Yahoo battling over a buyout at the number two and three spots in search Google has not lost a step. Google continues to take their ad serving system in directions to meet the more traditional standards B2B marketers insist upon, greater control over who does and does not see their ads and the ability to track ROI and optimize easily.

Yahoo! Search Marketing Bowing to Google? or Ducking MSN?

The online edition of The Wall Street Journal reported today that Yahoo is testing outsourcing it’s search advertising to Google.  Several News sources have already picked it up, and everybody seems to think the move by Yahoo to test outsourcing search advertisements to Google is all about snubbing Microsoft. Driving off the aggressive MSFT bid.

As someone who spends most of my day in one of the two outlets, this is the greatest news I have heard in a long time, and it will only be superceded if all Yahoo ads are served through the Google Adwords network. Why you ask? Let's be honest, for click-through-rates, conversions, and costs per click Yahoo usually is slightly better than Google. However, Google Adwords is not only easier to use than Yahoo! Search Marketing, it also allows advertisers much more control over who sees their ads.

Simply put, Google has better targeting options; from geographically to time of the day Google has countless additional features that Yahoo does not provide. Yahoo is really taking a chance by going public with the test though. Yahoo Search Marketing is already a shaky platform, and this is lets the public know that Yahoo’s solution involves finding another company to handle their search advertisements.

In the event that Yahoo outsources all of it’s search advertising to Google the emerging media of search advertising it will be like having the star who is the most popular in their sport join the team that has the best coaches and management structure. Google makes search advertising easiest in both setup and upkeep, Yahoo draws a large portion of the surfers new to the internet through their partnerships with internet service providers. Together the benefits will be for both advertisers and searchers alike, a smoother experience, and more targeted results. But there is the matter of whenever #1 and #2 get together, how much control can be held by one company before we see an explosion of smaller ad serving services enter the market.

Microsoft saw the move as confrontational and began talking with MySpace about some sort of combined takeover. Aol and Yahoo announced they will be partnering up as well. I seems as the economy tightens and businesses look for more effective ways to reach their prospects online the search and placement advertising servers will be battling it out to see who can rise to the top and be the dominant force.

Are you tracking the right Web metrics?

There is no denying the importance of measuring your Web site's visitor actions, how else would you know if your site is working for you? But,  are you tracking the right metrics?

I can't tell you the amount of times I have been in meetings and conversations with clients and colleagues where the subject of Web metrics comes up and the conversation immediately shifts to measuring visitor traffic.  While measuring traffic is important, that really does not tell you anything more then how many people are visiting your site. The real questions are, what are they doing and are they doing what you want them to?  I recall a recent conversation I had where a client was concerned about a decrease in visitor traffic to their site. Understanding this is a concern, we looked at the metrics more closely and found that the total number of conversions (visitors completing a goal) had actually increased.  Looking further we saw that the bounce rate (visitors who land on the site then immediately leave without visiting another page) decreased as well.  So despite the lower traffic figures we were actually getting better, more qualified, visitors to the site. This insight of course made the client very happy because things were not so bad after all, in fact they were quite good.

As Movéo's Director of Interactive Services I work with clients to help them define their internet strategies and how their Web site will support those strategies. One of the key components of our process is defining site metrics, specifically conversions (AKA goals). Often, web and marketing managers, particularly in the B2B space,  equate conversions with ecommerce and therefore overlook them because their site is not an ecommerce site. This of course is not the case. A conversion is a goal and a goal can be anything from a file download, to a page visit, to a completed contact form. The important thing is to understand and define what action(s) you want your Web site visitors to take and then measure whether or not they are taking them. Armed with this information you can optimize you site's user experience and marketing efforts to ultimately increase your ROI.

For some insight into defining your Web strategy, check out my article on Moveo.com titled "A Little Strategy Goes a Long Way."

Mobile Ads Made Easy by Google and Apple

For many B2B companies, that are larger than 5 employees, Google Adwords, and other pay-per-click outlets, are still an emerging media advertising platform. So, mobile pay-per-click advertising lies well within the boundaries of new media. This unfortunately, is counter intuitive, as those who B2B companies are looking to target are the people most likely to be on that new media frontier, plugged in to the latest gadgets and networks.

The C-level executive you are targeting is plugged into his iPhone right now at the airport, searching Google for possible suppliers of your product or service. Does your ad show up? Are you sure? I know you haven’t placed any mobile ads, or any of the other new ad types like newspaper, radio, or TV. The task of just learning how to leverage pay-per –click advertising can be daunting, as you see new ways of tracking your data, and new ways of structuring your advertising efforts.

Guess what? Google has made it easy for you. Google has been serving ads on searches on iPhones. It appears they serve up to three ads, all in that sweet spot in the bottom of the upper third. So don’t worry, if your bid, budget, and placement strategy are all sound, Google will make sure the CEO at the airport sees your ad.

Apple, presumably this is the browser and not Google, will convert phone numbers in ads to click-to-call buttons, making it as easy as possible for prospects to become clients and give your sales force a call.

Does Patient Satisfaction Matter?

Healthcare Providers Lag on Customer Loyalty Metrics

A lot has been written about how the healthcare industry is woefully behind
most others in their strategic marketing competence, technology adoption,
customer focus, etc. This is not news.

Actually hospitals have been conducting patent and stakeholder satisfaction
surveys for a long time. But how have they been applying the results? Toward
building patient brand loyalty? Improving the care offering or service? The
reality is that very few provider marketers or hospital employees know if or
how the survey information is applied.

Much of the impetus for patient satisfaction surveying is driven by the
federal government’s quality mandate and establishment (HCAPS). Moreover,
enterprising satisfaction survey research companies have taken full
advantage of the need for hospital compliance to successfully sell ongoing
survey products (not consulting) to providers, in effect creating client
loyalty to the patient satisfaction survey process. But few really know how
the complex survey reports, tables and data symbols are used (if at all) or
who within the hospital owns the program. Does the hospital CEO regularly
keep tabs on ratings? Are strategic marketing and customer service plans
created based on the feedback? Doubtful.

So if hospitals are behind in their understanding and use of customer
satisfaction data, where are they with the latest in loyalty metrics, the
Net Promoter Score (NPS) survey. You guessed it…not very far. And
satisfaction survey companies are naturally challenging the NPS methodology
since it is ridiculously simple and actionable…and threatens their
livelihood.

Leaders at Cancer Treatment Centers of America and Ascension Health however
do read their NPS results regularly and act on them…but these are among the
enlightened few NPS practitioners in the healthcare provider field.

So a hospital that can figure out how to develop and implement NPS will have
a strong chance of standing out in the market, driving needed organizational
change and building powerful consumer, physician and staff loyalty... and
hence brand value.

How Long is Search Data Useful for, and Why is Europe Deciding?

European regulations on privacy, collecting and retaining data are already much more stringent than those here in the US. A recent report published by the European Commission’s Article 29 Data Protection Working Party is recommending six months.

Google  has been quoted as saying that they were the first company to make search logs anonymous and shortening the life span of cookies placed on users computers. “Protecting users’ privacy is at the heart of all our products,” said Google’s global privacy council Peter Fleisher.

The real power of information collected through search logs, however, is not limited to the first six months. The step that this regulation is taking seems to be pulling the eyes over consumers, as if their search data is not accessible to anyone after that six-month period. Most search industry researchers use historic databases of keywords that have been compiled from multiple search engines, with records that often reach back several years. The best data for search marketing research comes from a balance of current trends in the past month to three months and historical data from the last several years at the same time of the year as the search marketing efforts are going to be deployed.

These recommendations, and other European regulations such as the Data Protection Directive, serve the purpose of limiting the scope of data collected by search engines such as Google, Yahoo, and Microsoft. Every third party search log collection service should be jumping for joy, assuming they can work quickly in collecting the data from the engines.

Maximizing Profits versus Maximizing ROI

It is a common question in advertising...how much spend is the right amount of spend?  As any marketer can attest, answering this question is not easy — especially when it's asked by your CFO.  A straightforward (but overly simplified) response to the question is, "you should spend as much money as it takes to maximize your profits."  But, how can you project profits accurately? 

The first thing to remember is that, when calculated as a percentage, maximizing return on investment (ROI) is NOT the same thing as maximizing profits. 

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ROI as a %...

Revenue Generated [minus] Investment [divided by] Investment [multiplied by] 100

So, if you spend $1,000.00 on a campaign, and you attribute $2,000.00 in revenue to the business generated from that campaign, your ROI is 100%.  Or, the campaign returned a profit equal to the amount of the initial investment.
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Now, back to the original question...how can you predict the profits you're likely to achieve from a given marketing investment?  It becomes a little easier if you can focus on a single marketing activity, and if you have the ability to attribute revenue to that activity in isolation.  So, for the sake of simplicity, let's consider an e-commerce company that generates customers only through its online banner (display) advertising.

Assuming the company had enough historical data (from testing), it could begin to predict customer conversion rates at different banner impression levels.  Simply put...serving X number of banner impressions will likely result in a customer conversion rate of Y.  But remember, similar to the Law of Diminishing Returns found in economics, there will be a point at which each additional advertising impression will become less effective than the one that preceded it.  Consider the three different points along the curve on the graph below.

Maximizing ROI (the first point) is based on finding the highest point in the distribution curve.  Maximizing profits (the second point) is based on finding the point JUST BEFORE you begin overspending (the third point).  [note: assumes the cost of each impression is the same, and the value of each new customer is the same at each point, at an $8.00 CPM and a customer value of $465.00]

In this (admittedly simple) example, if you were managing against an ROI metric (%), you'd choose to serve 70 million impressions.  But, if you were managing against a profit metric, you'd choose to serve 140 million impressions. 

Managing against profits represents a higher risk, because it increases your likelihood of overspending.  But as you can see, if you're focusing too much on ROI, you could be limiting the profits your campaigns generate for the company.