With a background that includes direct marketing and customer relationship management (CRM), Jeff Larche brings an unusual approach to his work. What these other two disciplines have in common is database marketing, and they continue to strongly influence his work as marketing technology leader.
The joke is grim but makes its point. Two hunters are relaxing around the campfire before heading to their tents for the night. An angry grizzly bear charges out of the woods at them. One of hunters leaps up and immediately begins running away, still in his bare feet. The other takes a moment to step into his boots. The first one yells over his shoulder: “You’re wasting time! Don’t you know that even with those boots you can’t outrun a grizzly?” The other replies, as he begins making up lost ground: “I don’t have to outrun the grizzly. All I have to do is outrun you!”
In this same “whatever it takes” spirit, many small- and mid-sized businesses are strapping on a new pair of shoes. Their new shoes are social media, most notably Twitter. It’s a logical calculation for businesses that are newer and more agile. Or so it seems, from reading the results of this recent research by BIA/Kelsey. Here are a few highlights of the survey:
Social media by SMBs is more prevalent among younger businesses. The percentage of SMBs by age of business currently using Twitter for promotion is as follows:
16 percent of SMBs in business three years or less
11 percent of SMBs in business four to six years
6 percent of SMBs in business seven to 10 years
2 percent of SMBs in business 11-plus years
There is considerable thought and effort needed to use a channel like this properly, but for those that adopt this two-way communications channel effectively, it could help them outmaneuver more entrenched competitors.
It’s definitely making the competitive foot races more interesting.
Everyone involved in technology and marketing has had this conversation: They’re in a social setting, and the subject comes up about how technology is crafting messages to match consumer behavior. Someone pipes in, “Oh, like in Minority Report? That’s so wrong!” Although Gmail’s ads are customized based on the content of email messages, I’ve noticed that few object to that practice. Instead, they’ll complain about the ads appearing in Facebook — ads that clearly are using information users have given the network about themselves.
It’s a Catch 22 for online marketers. In order to boost response rates, we need to know more about the people viewing our ads. This work of behavioral targeting sounds like a win/win: “We’ll only provide you with the ads that you will likely care about.” But in practice, consumers get spooked.I’m reminded of direct response research done years ago. It was a survey to find out how people like to be hit up for contributions to non-profit causes.
Here’s how consumers responded:
Least favorite: Personal asks
2nd Least: Telemarketing calls
3rd Least: Direct mail
What researchers at the time found telling was the direct correlation that existed between disliking a method of asking for donations and its effectiveness in getting them. In other words, personal asks — your sister-in-law selling Girl Scout cookies for her daughter — are most effective in terms of closing rates. The closing rates of telemarketing (back when this was a more viable medium for fund raising) were nearly as good. And a distant third in terms of effectiveness was direct mail.
So what’s really going on here? The accepted theory is this: We all have limited money to contribute to causes, and we would prefer to put off making decisions about where that money should go. Therefore, the most effective ways of forcing a decision are the least preferred.
Similarly, we love DVRs, because they allow us to zoom past commercials. They give us a way to avoid participating in commerce. They can’t touch us because we’re averting our eyes.
Behavioral targeting, if done properly, presents ads that also touch us. Thus, we look for reasons to hate the practice. Privacy is as good a reason as any and better than most!
So what’s the solution?
I do think that attitudes are slowly changing, and this change will eliminate privacy concerns as a reason to hate behavioral targeting.
Here’s an example. Consumers using social media are getting more comfortable with the various personas that they present on networks. They’ll show their “all-business” persona on LinkedIn, and their more casual facade on Facebook. Both are true depictions of the user, but they’re single facets of a full personality. Context determines how consumers behave on these sites. They are becoming accustomed to being watched by friends and business associates.
Reading Online Body Language
These same consumers are seeing how they can watch their friends right back. They are learning to “read” a friend’s feelings and preferences, based on online behavior. Consumers are getting accustomed to the online equivalent of body language. Or maybe that’s too strong a word. We’re all quite conscious of what we’re conveying, and body language implies unconscious action. Maybe what we’re doing on social media is more akin to a Kabuki dance.
Reading these dances is what marketers behind behavioral targeting are learning at a mass level, and turning into surprisingly accurate algorithms. But when it’s done by machines, in the service of a sale, many consumers still insist it’s “so wrong.”
But what if the people behind the cameras sprung up from their chairs and raced into the aisles, to say things like, “I saw you were looking at those lawn rakes. Can we interest you in some yard waste trash bags as well?” There would probably be lost sales, at the very least!
In the online world there are intercepts like this, but they are automated. This automated “intercept” is something people will become more accustomed to over time, as a generation weaned on social media, and used to their online movements being watched, comes into the majority. They will be able to understand that their behavior is being measured by machines as well as their online friends. They’ll realize there is no man behind the online ad “curtain” … just a predictive model.
Blurring The Lens To Reduce The Creep Factor
Another trend that will help the acceptance of behavioral targeting is a move toward more explicit boundaries. For instance, I expect an eventual backlash to camera surveillance such as PRISM. But before this reaction can take hold, the boundaries of store monitoring will likely improve. This improvement in technology will, for once, be toward discreetly blurring the “analytical lens” — instead of making it sharper.
The benefits of this technology over cameras, at least to marketers, is cost — both in equipment and the labor of monitoring. Because people become moving “blobs” of color, it’s easier for computers to analyze traffic patterns and behaviors. Less can sometimes be more. Combine this information with RFID signals and you have a way to track a shopping basket all the way to check-out.
Imagine how this could be used:
Before he leaves that store, a consumer might someday pass an “intelligent end cap.” This smart store display knows — based on radio tomographic imagery, enhanced by RFID data sent to it — when to light up. The end cap would know the consumer has a yard rake, and offers him the trash bags he forgot to add to his list.
This hypothetical consumer will probably be grateful, since he really did need the bags for his yard project. And after all, he was just a blob of color moving through the store.
Ironically, this is the level of detail being used for most online behavioral targeting. This is the “privacy invasion” that is causing such a fuss on Facebook and elsewhere.
Over time, consumers will become more comfortable with behavioral targeting’s perceived betrayal of privacy.
That will leave only one valid objection the technique: They just don’t want to buy more stuff.
“Reveal” ads are almost always ineffective: This is seen across all industries as a key component that differentiates best and worst campaign performers. A few exceptions to this rule are video ads, which are much more likely to succeed in this format but are still risky, as well as ads with high entertainment or comedic value.
The use of human imagery is important: Human imagery appears to be a key factor in the success of most online campaigns but in particular, among financial services ads which have traditionally been more text heavy and therefore less effective at building awareness and persuasion.
Anyone who has followed this blog long enough knows that I am fascinated by how entrepreneurs have attempted to make money with podcasts. For a moment, forget about news publishers, or those focused on b-to-b lead generation or working on a non-profit model like NPR. I’m talking about pay for product — and your product is a podcast. I’d even eliminate Audible.com — the spoken word bookseller — from my list, because they sell their content by subscription instead of purchase by the podcast.
The company has since morphed and grown. I now see that Rifftrax is testing live events “rebroadcast” in movie theaters. Below is an ad for a screening that’s taking place all over the country, tonight, of what I’m sure is a very funny version of the world’s worst film: Ed Wood’s Plan 9 From Outer Space.
I will be intrigued to see how this national screening takes hold. When I went into the site of NCM Fathom, their apparent partner in this event, I saw that a good dozen theaters within the Metro Milwaukee area are showing the film. If any of my readers attend the event, contact me or leave a comment. I’ll be intrigued to learn how it went, and if this may be the first instance where a podcast business has spawned a theatrical film series.
Full disclosure: When I wrote my first blog about Rifftrax, they sent me a $10 eCoupon to encourage me to select a podcast or two for a Rifftrax party I was throwing. I paid for the download instead and gave away the gift as a prize in a subsequent reader contest.
There is mounting evidence that authenticity is more important to consumers than some perceived level of perfection. Here is another case — this one coming from a report by CNN Money, about AlpacaDirect:
AlpacaDirect.com always offered a page full of cherry-picked customer comments raving about the site’s alpaca sweaters, socks and yarn. But recently Hobart, 47, decided to take the idea a step further: He hired PowerReviews, whose software lets shoppers write their own product reviews directly on the retailer’s Web site.
It was a risky move for the four-year-old company, based in Brentwood, Calif. Hobart was effectively paying to host bad press — such as posts by customers who described AlpacaDirect’s golf cardigan as “kinda sweaty” and a “poor fit.” Both awarded the cardigan three out of a possible five stars.
But a month after installing the PowerReviews service, Hobart saw sales climb 23% on items that had customer reviews (even that cardigan, which garnered an average of four stars).
This leap in sales is not atypical. It’s hard to believe that one bold change can really improve sales by this much. But it’s true.
A week ago I was a co-speaker at a C2 Five Dollar Friday event. One of the last items I touched upon was how to measure traffic that comes from Twitter and other social media posts. I promised the group that I’d document the process.
It wasn’t too long ago that there were no definitive examples of strong positive ROI from Twitter. Since then several high-profile companies have publicized their successes. You might have read a recent account of how, according to Forbes and other sources, a division of Dell Computing has earned over $3 million from sales generated from its Twitter posts.
Here’s how your business can accurately measure direct sales — or track sales leads — generated by this powerful communication channel. All you need is a free Google Analytics (GA) account and the following new GA profiles (a special thanks to eConsultancy for their terrific post on this topic in May):
1.) Track all clicks from Twitter and major Twitter agents
a.) Add a new profile in Google Analytics
Name this new profile something like Twitter Traffic. If you’re creating this profile significantly later than the rest your Google Analytics set-up, you can add a date to the profile name. That will help you know how far back in time your results reach. In this case I haven’t:
I’ll be speaking Friday at C2, as part of their Five Dollar Friday afternoon sessions. Here’s what C2 says about the event:
September 18, 2 – 5 pm: SEM, SEO, PPC, HTML, CSS and other important web acronyms demystified!
We work in a quickly evolving industry. New versions of software, browsers and social media launch so often, keeping up can be a challenge. Today clients expect that creative professionals, regardless of title, know it ALL! C2 understands your pain.
To the rescue, C2 presents two sets of expertise: Andrew Wintheiser and the team from Lightburn Designs, and Jeff Larche, owner of Digital Solid. Andrew will clarify and simplify some of the more complex elements of search engine optimization (SEO), pay per click (PPC) and search engine marketing (SEM). Andrew will fill the first part of the afternoon with best practices, resources and case studies to help demystify these crucial web acronyms.
Jeff Larche will follow, to demystify one last but arguably most important acronym: return on investment (ROI).
He’ll walk you through some simple steps and web analytics to help you report, in real dollars, the effectiveness of your online work. Jeff explains, “It’s ironic that something so measurable – online marketing – should also be so difficult to quantify. But there have been recent gains in web analytics. They’ve produced techniques you can take your clients through.” He’ll also show how you can use current measurements as a benchmark, to gauge progress in growing ROI over time.
Starting next week, likemind will features speakers in an intimate, conversational format. Those who have attended one of these internationally acclaimed “un-networking” meetings can attest to their unique appeal. Like BarCamp conferences, they’re stripped-down ways for professionals of all stripes to meet and converse.
Changes to Milwaukee’s likemind format were inspired by this realization: Most of us can benefit from a meeting where diverse ideas are traded and new acquaintances are made — as long as there is one thing we can be sure to take back to the office. I was quick to agree with Jamey Shiels, my new co-host for the meetings, that an interesting speaker could be just such a “draw.”
Another change is the earlier meeting time. We’re started at 7:00 AM instead of 8:00. That means more people who must be in the office by the start of the business day can attend. Our speaker will be starting his brief presentation at roughly 7:20. And our first speaker is …
Learn About The Streetza Pizza Success Story
Scott Baitinger will be the speaker at likemind next week, Friday, September 18. He and Steve Mai are generating national attention for their street vending business. They sell gourmet pizza by the slice to a crowd generated in part by their posts on Twitter. Here’s what a Milwaukee Journal Sentinel piece on the duo had to say:
Twittering food trucks are a rarity in Milwaukee — Streetza might actually be the first — but they’ve been embraced elsewhere. In Los Angeles, the Kogi Korean BBQ taco truck broadcasts its moves via tweets and draws from 300 to 800 diners a night.
Scott will talk about the growing success of his business, which has generated dozens of franchise requests. If you missed his presentation at the recent Social Media University, you definitely do not want to miss this!
Garage bands … are taking the technologies that are familiar to their target market and using them in ways that are new and effective. In an odd way, it is these seat-of-the pants performers who can serve as some of the best inspiration for businesses large and small.
NOTES: The title of this piece on the portal was truncated to Garage Band Startups. The editorial elves have spoken, and I’ve learned my lesson that I shouldn’t refer to the headline in the lead of a post. Unless I want some confused readers! Also, a link to a prior blog post on busking was taken out. Here’s the post I referred to in that SoHoBiztube piece:
Digital marketing has always been a paradox. It is two things simultaneously: Extremely expensive and nearly free. It is pricey because the skills needed to stage digital campaigns and “collateral” are still rare compared to those needed to stage traditional media efforts. And it’s free because once you’ve published the material, every incremental interaction costs a fraction of a cent. So how in the world do you estimate a digital return on investment (ROI)?
Here are two trade secrets. In honor of the fast-approaching close of the summer vacation season, I’m going to use a road trip as a metaphor.
1.) Focus attention on the speed of your progress and not on whatever city is currently outside your window.
Web metrics are notoriously untrustworthy. They may be off by 11.5%, or -18%, but of one thing you can be sure: They are never exactly correct. Living with this imperfection requires both a diligent focus on precision and a resignation to the medium’s inevitable “slop.”
The solution is to chart metrics over time, using the last period as a benchmark for this one. A saving grace of web metrics is that as imperfect as they are, they’re always imperfect in perfectly identical ways, month after month (assuming nothing technically has changed).
2.) Remember the cost of the car as you calculate what you’ve spent.
Break the costs of your trip into two: Fixed and variable. With the car trip metaphor, you need to remember that part of your costs are sunk into an asset. Whereas the gas, oil and accelerated depreciation come from the variability of the trip, the expense of the car itself is fixed — something you would have to pay even if you left the car at home.
In the same way, every communication is a contribution to the maintenance of a crucial intellectual property: Your brand. Whether you did nothing this month to burnish that brand, it is still an asset — a source of wealth. (Consider this: You can’t sell a vacation you’ve just had, but you can sell the car you took it in!).
You spent dearly in the past to get your brand where it is today, and you should acknowledge that every investment in communication that mentions the brand is like the replacement of a radiator hose or car battery. It helps retain the brand’s value.
Don E. Schultz and Jeffrey S. Walters, in their book Measuring Brand Communication ROI, used a different metaphor. They compared a brand to a physical property (instead of the intellectual property that it actually is). Should you stop spending every year on its upkeep, it will begin to crumble, and will eventually fall to the ground. In digital marketing efforts, this spending is a portion of every PPC campaign, every email blast, every social media initiative.
What fraction of your digital spending should be put toward the “car” and not the “gas and oil?” That’s the subject of another day. But simply shifting to this paradigm is progress.
Take these two tips to heart and you’ll be well on your way to reporting reliable ROI.
Are you in the Milwaukee area? Then you can learn more when I speak at C2’s September Five Dollar Friday. On the afternoon of Friday, September 18, I will be a co-presenter there, as part of an exciting exploration of “crucial web acronyms: SEO, PPC, SEM,” and — ultimately — ROI!
Robert Scoble just posted this YouTube video of a demonstration of Microsoft’s Surface multi-touch tabletop monitor. Shot at last week’s Gnomedex, this video serves as a sneak preview of what this technology can do in a social setting.
Last month I posted about the new Bokode barcode. One application I described to friends was its use on trade show floors. The barcodes would be worn on presenter name tags, and reveal much about the wearers to any conference attendee wielding a smart-phone camera (the link to the Bokode post is below).
The MS Surface offers a different solution to the same challenge. It’s one of making the most of a networking opportunity. The tabletop displays the conference’s social graph, which can be manipulated and organized by anyone who steps forward and plops down their name tag.
Making the most of conferences
National conferences demand efficiency from its attendees. The cost in time and money is considerable, so many of us look at them as a competition to beat our personal best: How many relevant contacts can we make? How many friendships and business ties can we deepen? It’s all an effort to be efficient, and not fly home feeling we’ve overspent on a rare chance to make valuable face-to-face contacts.
This strong networking benefit is what’s convinced me that Microsoft is on to something. I suspect the main challenge with their tables will be the over-crowding that takes place around them. Conferences providing this technology will be hard-pressed to have enough tables to go around.