Leave it in 2012

We recently stumbled across the #leaveitin2012 hashtag conversation and got a good chuckle out of some of the suggestions for things better left behind as we move into a new year.

The acronym “YOLO,” swag, the band One Direction, girls making their eyebrows look like they were sponsored by Nike, and the Kardashians, for example, each got a good-sized number of mentions on this micro-meme.

We didn’t see too many business, or more specifically, marketing-related suggestions–the spirit of this particular Twitter discussion, as of this writing anyway, is clearly more cultural (i.e., catchphrases, reality TV and pop stars that many of us could do without) and personal (i.e., bad boyfriends, things that make you unhappy, saying “new year, new me”). Nevertheless, we’ve most definitely got our running list of business and marketing ideas, concepts, and practices that we’d just assume not see in 2013, beginning with our top pick:

The statement, “marketing is dead.”

We’ve read and heard more than our fair share of articles, blog posts, speeches, interviews, and discussion that have encapsulated the sentiment of this irritating sentence in one way or another over the years.

Whether announcing the death of traditional marketing, some aspect of marketing strategy such as positioning, or just marketing in general, those uttering the statement typically are expressing the disappointment many have with the current performance of existing marketing programs and the excitement about a new tactic, technology, or channel of communication that’s caught the attention of buyers in the category or industry and, therefore, the businesses trying to engage with them.

Bill Lee’s much-ballyhooed piece on the Harvard Business Review blog back in August, “Marketing is Dead,” stands as a case in point from 2012. Though, in spite of the title, the object of his ire is primarily traditional marketing communications, Lee’s piece is pretty representative of the mindset we’d just assume pass into the annals of history: if it’s not working as well or having the same effect it once did, it’s definitely because it’s no longer relevant and, rather than think about why, marketers just better pull the plug.

“Traditional marketing—including advertising, public relations, branding and corporate communications—is dead,” Lee proclaimed in his post. “Many people in traditional marketing roles and organizations may not realize they’re operating within a dead paradigm. But they are. The evidence is clear.”

He continued, “Several studies have confirmed that in the ‘buyer’s decision journey,’ traditional marketing communications just aren’t relevant.” His conclusion: “Buyers are no longer paying much attention [to traditional advertising].”

Let’s take a closer look at some of his points.

True, there’s plenty of evidence that many marketing programs and new products/services do not perform as well as they could or should. Still, it seems a little bit premature, to say the least, to conclude that advertising, pr, branding, corporate communication, and, heck, the whole practice of marketing in general are totally irrelevant to the business of selling goods and services today.

It’s a fair statement that the explosion of digital, social, and mobile communications has improved the accessibility to a vast array of information about brands, products, and services and has forever changed where, when, and how companies reach and communicate with customers. While it’s entirely possible that in some cases for some brands, the digital revolution may have had some negative impact on the effectiveness of traditional advertising campaigns, companies should not automatically presume that traditional forms of communications have been rendered entirely ineffectual.

Keep in mind there could be many potential contributing factors to disappointing performance. Perhaps, for instance, the strategy, plan, and tactics used were not appropriate given the firm’s marketing objectives. It could have been a flaw in the strategy on which the tactical plan or a campaign was based, perhaps inefficient spending, or some combination of both.

As our chairman Kevin Clancy is fond of saying, “a body brought in from the cold is not necessarily dead.” It could be that how traditional advertising is used by a company in the future will change, but until a marketer determines for sure that his or her customers aren’t paying attention to it; gets a little closer to the bottom of why not; and figures out how and when it could be better deployed within the context of the consumer journey, it should not be declared dead on arrival.

In fact, there’s a growing body of evidence that indicates some aspects of “traditional marketing,” may be worth a second look. Recent work done by Marketing Management Analytics (MMA), for example, demonstrated that for every dollar a consumer packaged goods (CPG) company spent on traditional TV, print, and radio advertising, the return was negative and had declined over the past five years. Very importantly, however, MMA found the opposite to be true for non-CPG firms where the ROI of traditional advertising had markedly improved over the same time period—which, as an aside, happened to be when digital and social was exploding—and was highly positive.

EMarketer also reported that, according to a 2012 study conducted by Milward Brown and Dynamic Logic, “TV ads were the No. 2 reason smartphone and tablet owners turned to their mobile devices for actions such as brand searches, app downloads or visiting brand websites or social networking pages.” Granted, as depicted in the table below, it ranked second to recommendations, but it would nonetheless seem that TV advertising played a pertinent role in generating awareness and interest in a brand, not to mention inspiring subsequent action.

Making statements like “marketing is dead” isn’t going to make it any easier to get people to buy a brand. It’s not going to encourage companies to do a thoughtful, more comprehensive evaluation of marketing objectives and activities to figure out what’s working, what isn’t, why, and what to do to improve effectiveness and profitability. It’ll be a better year for marketers all around if we just leave it in 2012.

Marketing Frayers

marketing discovery

The Meaning of the Holidays.... For Marketers, That Is

Black Friday….Cyber Monday….Showrooming….Discounts and deals….Free shipping….Cyber Thursday…Black Friday II…

Ahh, the holidays.

Many marketers, no doubt, are keeping a steady eye on foot traffic, site traffic, sales, and communications effectiveness in these early days of the annual holiday shopping season. Understandably, most are on the look out for signs of consumer trends, indications of potential market opportunities, and looming PR or inventory problems.

No sooner had stores opened their doors, pushed out email blasts, and posted deals last Thursday, than analysis began of early results. As if they weren’t already stuffed enough with all the big data from the rest of the year, marketers have even more to chew on.

Preliminary data, for instance, didn’t do as much to pump up social media as some marketers might have been expected.

Reporting on the results of studies conducted late last week and over the weekend by Adobe and IBM, respectively, Adweek’s Christopher Heine rather stunningly concluded that “social media’s influence on shoppers appears to be sputtering.” IBM found that social-media-driven sales fell 35% year-over-year for Black Friday. Meanwhile, Adobe discovered sites such as Facebook, Twitter, YouTube, and Pinterest accounted for just 2% of total site visits on Cyber Monday.

Early data also reflected the downsides to that beloved go-to ecommerce promotional tactic: “free shipping.”

Likely not a shock to anyone, online shopping rose 26% on Black Friday to surpass the $1 billion mark, according to comScore. Yet while online sales and the number of orders jumped higher from last year, the average order size per customer actually shrank by about 5% to $181.22 and the average number of items in an order also slipped 12% to 5.6 items.

The culprit? As IBM’s Jay Henderson, strategy director for IBM Smarter Commerce, explained, this holiday season etailers have required, “fewer items in a consumer’s basket to get them over that free-shipping threshold.”

The numbers didn’t exactly do much to buttress the continued relevance of Black Friday either.

“For years, the day after Thanksgiving was a great retail harbinger, a leading indicator of how the vital Christmas shopping season will turn out,” wrote The Daily Beast’s Daniel Gross. “Analysts sift through traffic and sales rung up by mall retailers the way Roman priests used to inspect chicken entrails for omens.”

Given the number of big box and other stores that decided to open Thursday, “a lot of retail business that was not conducted on Thanksgiving Day 2011 was conducted on Thanksgiving Day 2012. It’s likely the same will be the case next year.” The not-so-surprising result? ShopperTrak found that while foot traffic was up 3.5% at malls and retail stores on Black Friday, actual sales fell by about 2%.

Gross proclaimed, “this trend reduces the utility of Black Friday sales as an indicator.”

Neil Irwin’s post, “Black Friday Is a Bunch of Meaningless Hype, In One Chart” on the Washington Post’s WonkBlog put another nail in the retail ritual’s coffin. He recounted the analysis done by Paul Dales of Capital Economics on the relationship between retail sales during the week of Thanksgiving against the overall change in retail sales for November through January. Dales, as Irwin tells it, found a very weak, slightly negative connection.

“In other words,” wrote Irwin, “strong sales results around Black Friday actually predict slightly weaker holiday sales overall.”

Cyber Monday took some shots too. As Chris Copeland wrote in a piece for AdAge.com, “Cyber Monday, with its rise owing to online access in the workplace, is as equally irrelevant due to household connectivity and alternate device options.”

Aside from all the stats, the first official week of holiday shopping offered a window into the varying approaches of different types of shoppers when the predominant motivation for shopping—e.g., getting a gift for someone—is pretty similar across groups of people and categories.

Shelly Banjo, for instance, recounted the ways the six member of the Ultican family, ages 56, 54, 27, 26, 24, and 10, took to post-Turkey day shopping in her piece, “Shopping’s Great Age Divide,” in the Wall Street Journal.

It’s true that some of the differences in behaviors, preferences, and habits described in Bajo’s article may not be all that surprising:

  • The 50-something parents buy in stores and on line using a PC, and clip coupons from mailers.
  • The 20-something kids prefer online shopping and search the web for coupon codes using PC and, increasingly, their mobile device.
  • The 10-year old takes pics of things she might buy with her iPhone and uses Instagram to poll friends about what to buy and wear.

Still, for marketers looking to take some business-related meaning from the holiday shopping season, all the decision-making processes and shopping behaviors on display may be one of the most important sets of data to follow.

After all, a company needs to have a clear sense of how its target customers are moving along the path to purchase—where they make purchases, where they get information, what devices are they using, where they get coupons and promotions, etc.—if it wants to maximize its sales when consumers are most in the mindset to buy.

Marketing Frayers

marketing discovery

Marketing Lessons of the Presidential Campaign 2012

One of the most surprising outcomes of the 2012 presidential election was the volume of–not to mention the velocity with which–the business and marketing press produced pronouncements of the marketing lessons to which those of us in the industry should pay particular attention.

We don’t imagine we’ve been the only ones to notice that a lion’s share of focus has been on the way both campaigns used “big data” to make more data-driven marketing decisions than in any other previous election.

As Michael Scherer recounted in Time magazine, “From the beginning [Obama’s] campaign manager Jim Messina had promised a totally different, metric-driven kind of campaign in which politics was the goal but political instincts might not be the means.”

One of the few issues on which both parties could agree this year, Democrats and Republicans both admitted that their respective campaign organizations had far too many separate databases.

As an example, to quote Scherer’s Time piece again, “volunteers making phone calls through the Obama website were working off lists that differed from the lists used by callers in the campaign office. Get-out-the-vote lists were never reconciled with fundraising lists,” and so on. Not surprisingly, none of the databases could “talk to each other.”

The Obama campaign spent almost two years creating “a single massive system that could merge the information collected from pollsters, fundraisers, field workers and consumer databases as well as social-media and mobile contacts with the main Democratic voter files in the swing states.”

Not to be outdone, the Romney campaign also looked to better integrated databases in order to guide decision-making. “The Romney team, too, looked to harness unwieldly data sets and close the gap,” wrote Kate Kaye in AdAge.

Both campaign organizations did unprecedented amounts of precise targeting of messages and media buying. For instance, the Obama campaign developed a scoring methodology to rank order undecided voters in swing states based on their “persuadability.” Using internal databases, the campaign then determined the best ways to reach its audience with media and to influence behavior with messaging.

As a result, the campaign reported to Time it was able to “buy 14% more efficiently [than in 2008]…to make sure we were talking to our persuadable voters.”

According to Lois Beckett on ProPublica.org, the persuasion scores further allowed “the campaign to focus its outreach efforts on their volunteer phone calls—on voters who might actually change their minds as a result. It also guided them in what policy messages individual voters should hear.”

The Romney campaign did its fair share of message targeting to very specific audiences on- and off-line, as well. In Florida, for example, Antony Young, CEO of Mindshare, said, “the Romney campaign sought Cuban-American voters with hard-hitting TV commercials claiming Venezuelan President Hugo Chavez supported Mr. Obama’s policies.”

Both campaigns also seemed to be doing a large amount of message testing and performance tracking with all manner of fundraising and voter acquisition efforts off- and on-line, and used the data to inform marketing and message choices almost moment-to-moment. Young noted, “although all marketers listen to consumer responses, it was the speed and consistency with which both the Romney and Obama campaigns were able to respond that impressed me.”

He used as an example the multiple occasions Mr. Romney tested a message or storyline with a real audience at a campaign rally speech and “if it got a reaction from the audience, video spots would quickly follow online. If there was strong response online or pickup by cable news networks, the ads would appear on broadcast TV…all within a matter of days, often adjusting further as the campaign progressed.”

We’d agree that using “big data”–or at the very least data pulled from a variety of sources–to enable more precise, effective, and efficient media placement, messaging, and outreach, a.k.a., “activation” in marketing parlance, is great and might very well be cutting-edge as far as political marketing goes. We’re a little hard-pressed to see how it’s incredibly different from what many companies are already doing or trying to do, be it use data to make decisions in response to day-to-day shifts in marketplace demands, to micro-target messaging, to localize efforts, etc.

We’re not as sure as AdAge’s Kate Kaye who asserted that “corporate brands could learn a thing or two,” from the campaigns’ applications of “big data,” “whether it’s how data can incite speedier decisions, or ways offline info can benefit online messaging.”

It may be true that “in politics, the era of ‘big data’ has arrived,” as Time’s Michael Scherer concluded. At the same time, it’s also hard to say that either campaign was exactly breaking new ground in this area within the marketing world in general.

What we found particularly interesting in all the data discussion was how little all the “big data” seemed to shape the “big picture” marketing strategy of either campaign.

The general feeling we got is that each campaign targeted the core supporter and demographic groups on which Democrats and Republicans have usually concentrated. “Women, Latinos, young people, and blue-collar families in the auto industry,” were among the Obama campaign’s targets, for instance, as Elizabeth Wilner wrote in her AdAge summary piece.

“Big data” perhaps improved the effectiveness and efficiency of communication and get-out-the-vote efforts, but near as we can tell these were still pretty traditional targeting decisions driven as much by experience and past voter behavior than anything new coming out of “big data.”

To the extent that either candidate had a clear, consistent, definitive, over-arching positioning, it’s hard to say that the positioning decision came out of anything from the data either. Romney, for example, continued to employ his “the candidate with real business experience” positioning which he’d used in previous presidential, gubernatorial, and senatorial campaigns—with mixed end-results, we might add—as opposed to something that came out of new insight gleaned from the combination of all of its voter databases.

Certainly there’s no arguing that the more information a campaign has about individual voters’ on- and off-line media habits, voting behavior, location, attitudes, demographics, etc., the more precisely it can reach and motivate them.

Nor is there much doubt that the easier it is for a campaign to find and identify individual voters and/or people similar to them in different databases, the more integrated and adaptable the organization and the better the performance of marketing efforts will most likely be.

Yet, in and of itself, “big data” isn’t necessarily going to make or break a campaign—political or otherwise. As Mike Zaneis, general counsel of the Interactive Advertising Bureau, quipped, “big data isn’t going to help Todd Akin,” referring to the disgraced Congressman from Missouri who lost his Senate campaign after claiming women can ward off pregnancy resulting from “legitimate rape.”

In other words, many factors go into the success or failure of a candidate’s bid for office; an exceptional data-driven marketing campaign–as sophisticated and impressive as its data warehouse might be–is but one of them.

Marketing Frayers

marketing discovery, marketing strategy