Digital Solid: Marketing Technology ROI

Does giving away your book, ala DRM-free music, make business sense?

When avant-garde rock band Radiohead posted their latest album online, they invited fans to pay whatever price they thought was appropriate — or even pay nothing at all. More recently, bluesy Brit Joss Stone went on record as saying she thought “piracy” of her music was just dandy. She implies that the freely shared music is growing box office sales of her live shows. These and other examples from the recording industry suggest a business model where your chief intellectual product can be given away — or shared at a huge discount — to the overall benefit of your bottom line. One could even go so far as suggest that digital rights management (DRM) protection does more economic harm than good.

Okay, but does this model hold water if you’re a niche business writer, speaker and consultant?

My blogging friend Kevin Hillstrom reports that it seems to, if viewed holistically. And especially since his book is called Multichannel Secrets, you’d better believe Kevin views things holistically!

Joss Stone more or less admitted in her interview that, taken as a single tactic (my word, not hers), giving away music helps create buzz. It doesn’t help pay the bills. But this buzz is supporting her live shows. She is, in essence, a multi-channel business, and one channel is benefiting from the loss-leader status of the other.

Similarly, Kevin — who is the president of MineThatData — mentions in his blog that his pre-release book giveaway was not a profitable move. He reports at one point that he gave away twice as many books as he sold. But he emphasizes that as a “‘micro-channel’ strategy to running my business,” the giveaway concept makes good economic sense.

If you’re a self-publisher, you’ve probably already considered the strategy of giving out free advance copies. But Kevin can still help you, with his well-framed case for emulating Radiohead. Rock on, Kevin!

2 comments June 27th, 2008

Quantifying community standards one Google search at a time

A Florida lawyer has found a novel use for search engine data in presenting a court case. Defending his client from obscenity charges, Lawrence Walters seeks to show that the “community standards” in Pensacola aren’t as lofty as some might expect. The New York Times lays out his defense tactic in “What’s Obscene? Google could have an answer“:

In the trial of a pornographic Web site operator, the defense plans to show that residents of Pensacola are more likely to use Google to search for terms like “orgy” than for “apple pie” or “watermelon.” The publicly accessible data is vague in that it does not specify how many people are searching for the terms, just their relative popularity over time. [Walters] is arguing that the evidence is sufficient to demonstrate that interest in the sexual subjects exceeds that of more mainstream topics — and that by extension, the sexual material distributed by his client is not outside the norm.

I’m reminded of an old Tom T. Hall song about another southern community. In “Harper Valley PTA,” a single mother is accused by her school group of being unfit to raise her middle school daughter. She “wears tight skirts,” and has a drink or two in public — with men, no less! The song has our protagonist defending herself:

Well, Mr. Harper couldn’t be here ’cause he stayed too long at Kelly’s Bar again
And if you smell Shirley Thompson’s breath, you’ll find she’s had a little nip of gin
Then you have the nerve to tell me you think that as a mother I’m not fit
Well, this is just a little Peyton Place and you’re all Harper Valley hypocrites

Of course the song ends with her accusers chastened and her “fitness” as a mother confirmed. Relatively speaking, of course, taking into account the prevailing Harper Valley community standards.

It will be interesting to see if a more high-tech version of this shaming defense wins the case. I have no affection for the industry that’s being defended, but if a jury of non-technologists can find the data presented reasonable and compelling, it will be a sign of just how quickly “John Q. Public” is coming around to viewing behavioral data as a yardstick of social attitudes.

Add comment June 26th, 2008

Why the debate about in-house SEM vs outsourced work clouds an important issue

This morning, MediaPost featured “The Great (And Completely Ridiculous) ‘In-house vs. Outsourced SEM’ Debate,” by Dave Pasternack (registration to MediaPost is required). The piece begins with Pasternack asserting that in his 10 years in the business, “I’ve never, not once, seen a search campaign created by an in-house team outperform one crafted by a competent SEM [search engine marketing] agency.”

I trust that what he says is his experience, although at least one other in the comments reports differing results. Also in the comments, David Berkowitz found some of Dave’s arguments to be as “spurious” as the premise itself (Hark! Do I hear you composing your own post on the subject, David?).

I’m letting that discussion continue without adding to the din.

But my opinion is that the debate itself — in-house versus outsourced SEM — clouds the true secret to optimum ROI: Working together, in-house and agency pros are more likely to get a campaign that really hits one out of the park.

No one understands the subject domain as well as those who live and breathe it. And successful SEM requires content that uses this knowledge. Customer-focused internal SEM pros can add a level of richness to an SEM campaign that no outside agency can match.

SEM Is More Similar Than Different Across Industries

So what’s the problem with most “pure-play” internal SEM work? It’s a question of experience. When someone is handling multiple campaigns for many different types of clients, the similarities and synergies become apparent. Knowledge has a way of “cross-pollinating” between campaigns and clients. That’s a huge advantage. Also, this level of activity forces a heightened level of process that is just too difficult to match in an internal campaign.

As with most black-and-white debates, this one distracts from the benefits of a middle ground.

In every industry, and in every business category, there are those brands that lead the way in SEM. For the majority of these market leaders, I would be shocked if there wasn’t a smart blend of internal and outsourced efforts and expertise at work.

Both sides of the desk have something superior to bring to an SEM campaign. I suggest we SEM agencies work harder to remember this, and to promote this important truth.

2 comments June 23rd, 2008

Multi-touch screen tables interact with casino patrons

Since Jeff Han first presented multi-touch screen technology, there has been a great deal of speculation on which industry would be first to make use of it. The industry first to reap profits from another breakthrough technology — personal video players — was not surprising “adult entertainment.” But manipulating images on a cool glass monitor is hardly conducive to this, er, prurient interest. Allow another vice, or maybe two, to step in and fill the void.

Of course! Drinking. And eventually, gambling.

Thank you Mike Luedke, of Dinefly fame, for tipping me off to this extraordinary application of Microsoft Surface technology. As this report explains:

The six rectangular tables with built-in 30-inch flat screens using Microsoft Surface technology were installed in a lounge at the Rio All-Suite Hotel & Casino in Las Vegas, with custom applications built for Harrah’s.

A spokeswoman for Microsoft said the units sold for a base price of $10,000.

A program called Mixologists lets patrons play bartender by creating and ordering concoctions of whatever cocktails and mixers they click on. The system is able to remember users’ drink orders and, one day, may be able to offer customers the same drink at other Harrah’s locations, such as when they play a slot machine.

Another program lets users watch YouTube videos, either by searching or choosing from a list of popular videos. Harrah’s officials said they reached a licensing deal with YouTube on Wednesday.

The table also includes a program called Flirt, which lets customers sitting at any such table in the lounge see and chat with each other, take and e-mail pictures and even trade cell phone numbers.

Okay, so maybe there is a tie-in to prurient interests. Or at least hooking up. Regardless, this is a brilliant application from Harrah’s, a group that has already shown its mastery in customer relationship marketing.

I’ll be curious, when my parents next travel to Vegas, to see if these tables will suck them in. They are long-standing members of Harrah’s Club. I hope they do. I would love to see how data from interactions with these bar tables are used to further improve their experiences at the casinos and beyond.

Speaking of my parents, Have a great Father’s Day weekend, dad!

Add comment June 12th, 2008

Infoweek and TechWeb launch strikingly familiar b-to-b portal

This week InformationWeek and its affiliated TechWeb introduced CreateYourNextCustomer.com, a b-to-b portal for their reportedly “13.3 million business technology buyers.”

I’ve signed up and looked over their downloads and other resources, and I have to say there appears to be some valuable material. The focus of the portal is to help marketing technology pros plan their campaigns and online media buys. This would happen, in part, by gaining access to their media partners’ planning tools.

Where have I seen that before?

Which brings up a little episode of deja vous. They tout a media planning widget, to “zoom in on the business technology marketing solutions you need.” This was of course designed independently of one of the projects that my team produced last year, but I have to say it’s uncanny the similarities!

Here’s a blurb in Yahoo Financial News on the site and its solution wizard (oh, wait — that’s what our creation is called!).

What are your thoughts on this portal? Will it serve a need? Or is it too blatant a sell-through device for their partners?

2 comments June 5th, 2008

The decline of legible handwriting

Although it might not be a harbinger of lost social capital, it is undeniably sad that typing away all day has made most of us strangers to our once-good handwriting. One of my favorite scholars on the subject of technology and society, danah boyd, blogged about this last year. And now her lament has been put into wonderful comic form, in the Tampa Tribune’s Blogjam:

Add comment June 3rd, 2008

Financial services marketers lean heavily on direct response and email tactics

A new report by the Direct Marketing Association reveals that marketers in the financial services sector are relying heavily on direct marketing and email, and showing an impressive ROI for these tactics. Here are two particularly impressive findings from this research of U.S. banks and credit institutions:

• They invested $13.4 billion in direct marketing advertising, which produced $178.8 billion in sales, or $13.34 returned for every dollar spent
• Growth in email marketing within financial services companies is expected to be the greatest of all media types used in the next four years, for a compound annual growth of 22.5%

The report also showed a very small reduction in print advertising over the next four years.

What can account for this? Aside from the arguably better overall effectiveness of these media, they are also tactics more suitable to centralized control. As financial institutions continue to consolidate, these tactics become even more appealing.

Add comment April 3rd, 2008

B-to-B Viral Marketing Case: Powerboat sales as a window to our current economic squall

Let’s say you’re a company that mines data in a quiet niche — one not known for analytic vigor. You’ve been doing it for years and do it wonderfully. For clients who appreciate your chops, you’re a godsend. But these clients are exceptional in the traditional retail business sector you serve.

How, how do you spread the word about your super-segmented lists and dead-on business intelligence services? Intuition says you find something to “go viral” around. But that requires some degree of topical relevance, if not outright sensationalism. How do you enliven something as dry as, say, boat purchase behavior (pun intended), to give it the life necessary to grab headlines?

The answer is what Info-Link does. They periodically publish one of the more pedestrian metrics they track: Quarterly sales in bellwether states. Below is their latest Bellwether Report, available on their site and distributed via a simple but effective opt-in email:

You can explore various sales statistics by quarter (use the pull-down). Yes, the news is depressing. But it’s undeniably informative. And share-able. What information can your business repackage in such a way that people will want to share it?

2 comments March 15th, 2008

Follow-through is crucial to higher search conversion rates

Yesterday I sent a results report to a client for a pay-per-click (PPC) search  lead generation campaign that my team managed. It showed a performance that was five times higher, in terms of cost-per-lead, than a traditional direct mail campaign. That’s pretty cool. But as I sent the report, I was reminded of this recent report from eMarketer:

It shows how a majority of marketers favor direct mail for lead generation versus search marketing. Scott Brinker was rightly puzzled by this, in a recent post. I agree with Scott that a chief reason for this strong preference for direct mail over search engine marketing (34% versus 8%), when it comes to customer acquisition, is the difficulty many marketers face in getting search prospects to convert.

Indeed, if the lead acquisition campaign my team was leading was instead a customer acquisition campaign, the results would likely have been closer to a dead heat with direct mail in terms of ROI.

But what does that mean? Just that we’re not trying hard enough. As marketers, I feel we cannot allow so many opportunities for conversion to click away from landing pages. There are many tested techniques for improving conversions (new offers, testimonials, guarantees, Web 2.0 landing page design). There are also spectacular new tools to do multivariate testing of these techniques.

Let’s take direct mail for what it should be. It is (usually) the customer acquisition benchmark. Now let’s shift more resources online, but apply them where it really counts: To create campaigns that actually surpass the mail in delivering a strong ROI.

3 comments March 5th, 2008

PRISM, a bricks and mortar store analytics effort, takes its cue from e-stores

It seems improbable that there was ever a time when skilled marketers didn’t use at least some traffic data to make improvements to their sites. The availability of this data, no matter how flawed, has been a chief impetus for the growth of web marketing as a discipline. The comparison was always with the dearth of similar data from bricks and mortar stores. Here are a few specifics:

Stage of Purchase	Web Metric	Store Metric
Initiation	Unique Visits	Foot Traffic Counts
Consideration	Page Views	None Available
Completion	Transactional Data	Transactional Data

This list is over-simplified, but it makes a point. In the Consideration Stage — between the time when the door store swings open and the time the purchase is rung up — there is little to help the bricks and mortar marketer understand the motivation of the customer.

By comparison, a web marketer has a full toolkit of metrics. There are page views to show visits to specific product pages and web site sections, exit pages to show when a consumer decides to leave without buying, and shopping cart abandonment metrics to show exactly when a consumer decided to stop his or her purchase.

This stark difference is changing fast.

PRISM (short for “Pioneering Research for an In-Store Metric”), is a Nielsen Media / In-store Marketing Institute co-production. Working with a consortium of retailers and consumer-goods manufacturers, the duo completed a test recently using sensors placed at key points in over 160 stores around the country. These sensors monitored the entrances and exits, as well as some store aisles, composing data sets and even heat maps of customer-traffic patterns.

In a way that is uncannily similar to web analytics, the PRISM system combined these traffic data with transactional information. The end game is to achieve greater insight into consumer behavior.

As you can imagine, the potential for improving the in-store experience is huge. Just as web marketers have walked away with significant improvements to their sites through web analytics, these marketers are nearly giddy with new-found knowledge. At least, that’s the impression I’ve received by press accounts of PRISM. This piece in In-Store Marketing Institute’s site is characteristic of that excitement, particularly in this accompanying Flash and Quicktime video. (Warning: The video is all talking heads. Sadly, demonstrations of the system at work are being held closely under wraps.)

Here is a typical insight, disclosed in the video by David Calhoun, CEO of the Nielsen Company:

“In some food stores, the heaviest traffic flow is not through the carbonated beverage and snack aisles — which might be the conventional wisdom based on sales rates — but through the yogurt and eggs section of the store.”

The chart above shows this (but not very well — it was captured from the video and only Calhoun’s narrative can identify the categories), with the two circled categories being the Yogurt and the Eggs sections.

Since the advent of web analytics, physical world marketers have looked at us web marketers with envy. It appears their time to play next to us, in the sandbox of database marketing, is just around the corner.

Add comment January 28th, 2008