Exploring Marketing Technology

Category: Data Marketing

Using the power of computing to draw a straighter line between a business and its customers, to the benefit of each

  • Progress in measuring TV viewership comes too late to help network ad sales

    As Tom Peters famously put it, you can’t manage what you don’t measure. For too many years, network television executives have relied on incomplete and inaccurate measurements of viewership of their programming. This inaccuracy — plus the emergence of other, online ways to reach the same market — has finally come back to bite them, in the form of alarmingly soft TV ad sales.

    This week the bulk of ad sales for the TV networks’ fall season has come to a close, and the reports aren’t pretty. I’m reading estimates that the major players will see a drop of 3 percent or more in sales compared to last year at this time.

    Many think this is primarily due to the fact that DVRs now filter programming in 16% of American televisions. That means millions of viewers who would otherwise be exposed to advertisers’ messages have the opportunity of fast-forwarding through commercials.

    What’s more, television viewership in general is down, regardless of whether a DVR is intervening.

    Just as with other industries such as recording labels and movies, technology is changing the rules and causing the ad-driven networks to retrench, if only belatedly and with baby steps.

    How? More technology. Nielsen Media Research, whose largest customers are these television networks, recently announced a comprehensive plan to measure electronically all TV viewers, regardless of video platform. With this initiative, called Anytime, Anywhere Media Measurement (A2/M2), Nielsen is developing technology that will measure viewership on the Internet, cell phones, iPods, and other personal devices — all with the intent of eventually merging this data into its Nielsen National People Meter sample.

    Other reports from last year described an even more aggressive “People Meter.” This one, the Portable People Meter, would literally be carried by participants in the sample like a PDA. It would pick up ultrasonic identifiers broadcast on television and radio, to meet the pesky challenge of measuring media consumption in taverns, gyms, airports and other public places.

    I am fascinated to watch how these huge industries are confronting their eroding markets. A final measure of the level of erosion, and desperate nature of these attempts to win back ad customers, is that avowed competitors are joining forces in the fight. In the Portable People Meter initiative, radio listenership would be measured as well as television viewership. Arbitron, a fierce competitor of Nielsen and a leader in radio audience measurement, is a partner in the technology’s development.

    Will these attempts be able to turn things around for broadcast media? It’s hard to say. Tom Peters would point out that they may be taking steps toward better measurement, but that’s only the beginning. Then these measurements must be put to use, to manage better the products being broadcast.

    They’ll have a clearer view of their customers — one that’s closer to what database markers are accustomed to seeing right now. And that means they’ll be able to see all of the dissatisfaction and the defections, as they happen. Then what will they do about it? Now that will be interesting to watch.

  • The fat end of the long tail

    In my observation about NetFlix as a purveyer of long tail media, I hinted at all of the other ways that online marketers are prospering with this new business opportunity, made possible by word-of-mouth, suggestive selling and virtual — instead of real — merchandise inventories.

    I’ve since realized that so much of marketing technology can be heaped under this category that I need to add it as a tag, along with my intentionally general tags of direct response, database marketing, etc.

    True, the term long tail has more than a whiff of a meme ready for replacement, much as how push technology in the early 1990’s crystallized into RSS, and how the overworked online communities, the other buzz of the 90’s, turned into what we’re now calling online social networks.

    Regardless of what the phrase long tail becomes, it certainly has legs (why am I thinking of a lizard?). This Google Trends graph shows that in terms of searches and news coverage, it also has a fat end.

  • More evidence for the power of the long tail

    A few days ago my wife and I were in a restaurant, commiserating with a friend about her difficulties as a film fan on a mission. She told us she has been taking in as many of the films of Woody Allen as she can rent. It hasn’t been easy. She has been forced to rely on the shrinking inventory of the neighborhood video store, Video Adventures. Not surprisingly, the store just announced it will be going out of business next month.

    Alas, our friend has a lot of Woody Allen yet to cover. My wife and I almost simultaneously blurted out the obvious solution: Netflix.

    Netflix has an extensive film selection, excellent search capabilities and the brilliant ability to build and share your film wish lists. It’s the perfect tool for a film completist such as our friend.

    Allowing customers to rent videos from home, without the threat of late fees, is an obvious point in the favor of Netflix over the brick-and-mortar video store business model. But the other major reason Netflix has become such a marketing force, and a threat to the video store, is its ability to exploit the long tail phenomenon.

    If the term long tail is new to you, I recommend you read Wired editor Chris Anderson’s article, if only to learn the origin of the name (here’s a hint: think of the slim, wedge-shaped outer region of a graphic showing gross sales numbers along the vertical axis and the amount of variety of titles along the horizontal).

    The significance for marketers of the long tail is described well by Anderson below:

    [The emergence of] unlimited selection is revealing truths about what consumers want and how they want to get it in service after service … People are going deep into the catalog, down the long, long list of available titles, far past what’s available at Blockbuster Video, Tower Records, and Barnes & Noble. And the more they find, the more they like. As they wander further from the beaten path, they discover their taste is not as mainstream as they thought (or as they had been led to believe by marketing, a lack of alternatives, and a hit-driven culture).

    When I first read that article I was skeptical. After all, Hollywood has done a great job of dictating to the masses what they should be viewing. And true “video adventurers” like our friend are rare.

    Are we truly willing to take a chance? When given the opportunity to scratch an itch for more movies like those that we’ve enjoyed, even if they are obscure and heretofore unknown, is the typical consumer really going to risk disappointment?

    Now I have my answer.

    In his latest column, New York Times technology writer David Leonhardt explains that Netflix stocks approximately “60,000 movies, television shows and how-to videos that are available on DVD (and that aren’t pornography).” He continues below:

    Just as important … Netflix lets users rate movies on a one- to five-star scale and make online recommendations to their friends.

    The company’s servers also sift through the one billion ratings in its system to tell you which movies that you might like, based on which ones you have already liked. [Something described in a blog entry last month.]

    The result is a vast movie meritocracy that gives a film a second or third life simply because — get this — it’s good. [Here’s a]  brainteaser I have been giving my friends since I visited Netflix in Silicon Valley last month. Out of the 60,000 titles in Netflix’s inventory, I ask, how many do you think are rented at least once on a typical day?

    The most common answers have been around 1,000, which sounds reasonable enough. Americans tend to flock to the same small group of movies, just as they flock to the same candy bars and cars, right?

    Well, the actual answer is 35,000 to 40,000. That’s right: every day, almost two of every three movies ever put onto DVD are rented by a Netflix customer.

    I’ve personally experienced the long tail in music. My musical diet is more varied today than it has ever been, all thanks to access to a nearly unlimited variety of musical genres and artists in digital format. It’s exciting to read that the same exploration is taking place by consumers in the film industry, with the same predictable disruptive effects.

    Although I hate to see neighborhood businesses fold, with the resulting ripple effect on local economies, in this case that is outweighed by the fact that I’m a fan of many of those films found in the outer reaches of the long tail (and not found in any video store).

    So I find this latest news comforting. Less so, the news that our friend actually enjoyed Woody Allen’s Celebrity.

  • When is an email click-through not a click-through? Think “unsubscribe”

    When is an e-mail click-through not a click-through? When they’re telling you to kiss off!

    It’s hard to believe it’s been nearly a year since I had lunch with my friend and long-time career doppleganger, Melinda Krueger, and she told me about her latest email metrics discovery. It was a way to take into account the click-throughs that people register from your emails when they are in fact clicking through to unsubscribe.

    She described it, and it made perfect sense. Melinda’s formula in many cases would take meaningless data and actually tell us something. Specifically, it measures the power of a specific offer or message to cause a segment of your email audience to decide that enough is enough.

    She was thinking of calling it the DI, the Disaffection Index. Personally, I thought something a little more dramatic was in order for a metric that could enter the email lexicon. I suggested, because it measured their very last click-through with you, the LCI — the Last Click Index.

    She thought otherwise, and DI it remained. Do read this article, and the other articles and advice that Melinda provides as MediaPost’s “Email Diva.”

  • Crunching the numbers can expose myths

    A recent article in the New York Times Magazine’s Freakonomics column, and one of my favorite books of the year, both remind me that a careful examination of data can dispel long-held myths. Neither is directly related to a particular marketing challenge. But they both inspire me to continue to goad my clients into thinking beyond the obvious. We can seize a strong competitive advantage by assuming nothing and testing our premises whenever possible.

    The Freakonomics article is ostensibly about soccer and an odd correlation between player excellence and the month that player was born. In analyzing data about the birth months of some of Europe’s best soccer players, it was found that they were born far more than you would expect in the first three months of the year. When researchers looked deeper, they realized that a logical explanation is that children born in these months were exposed to more months of coaching in their schools — more repetition, more chances to excel.

    It suggests that the power of the Two P’s of practice and passion — as opposed to simply having “raw talent” — is far more important in excellence than is commonly believed. Thus the title of the Freakonomics article: “A Star Is Made.”

    If you know me, you know I care little about sports. But after reading Moneyball by Michael Lewis, I was so inspired I bought three copies*. One to keep, one to pass around to co-workers, and a third to give to my father as a gift. The message of the Freakonomics article was that stars are made, not born. Similarly, the message of this book, about the unlikely, data-driven success strategy of the Oakland Athletics baseball team, is: “A winning baseball team is made, not bought.”

    Read the book, and marvel at how Billy Beane, the general manager, refused to believe the group think of baseball scouts and the status quo. He wouldn’t listen to them when they told him how to identify promising players for his under-financed, under-performing team.

    It’s a great read, and another reminder that looking at the data instead of listening to the way things have always been done can pay huge dividends.

    *Thank you Bret Stasiak, my boss from my BVK/respond360 days, for letting me know about this wonderful book!