.com deconstructed

Interesting Musings of a New Guy in the Digital World

Beyond Vanilla, it's Spaghetti Sauce (and Branding)

This blog post is actually about dynamic creative technologies in the online advertising space, so if you are patient and read the introduction, you may be rewarded, but I cannot offer any promises :)

First off, I need to attribute all of the ideas I'm about to write to my former boss and mentor, Pete Kim.  His last blog entry on The Curse of the Vanilla and having heard him talk about Malcolm Gladwell's spaghetti sauce story are really what this is all about.  I'm simply trying to add convenience by tying some of these thoughts together.

To briefly summarize, Gladwell talks about how the pursuit of science (and in many ways human happiness) has been the attempt to find universals in our world.  And, the world of media has followed along nicely.  Print, radio, television, and even the internet all follow that paradigm of broadcast: I have one message that I want as much of the world to read/hear/see as possible.  Then he talks about this man named Howard Moskowitz who changed the world of food science forever by figuring out that not all people like exactly the same spaghetti sauce, but different types.  And, he went on to develop this concept of horizontal segmentation, which is now taught in the most basic of MBA marketing classes.

So, what did Dr. Moskowitz really do for the world?  Probably a lot, but these are the two I care about the most.
  • Discovered the diversity of functional, emotional, and aspirational needs of consumers (at least in food)
  • Put forth was the notion that people don't really know what they want.
Remember these two points as they carry directly to the two main points I make later.

It's scary to imagine that at one point people thought this was foolishness, but yet, the old accepted way of doing a marketing study was by getting a bunch of people into a room and asking them what they wanted.  Now, we know to perform market segmentation studies and CPG companies, for example, send our free trials knowing that people won't know if they really want it until they try it.

So, how does all of this relate to the world of dynamic creative?  Simple:  People are different and in the online world, there's no reason why we have to show the same creative to every single person, so why do we?  It's the same problem that Dr. Moskowitz ran into: Because we had always done it that way in the past.  It's not a technology constraint.  We've just been programmed into this mindset of "one-size-fits-all" and thought that if it works on TV, it'll work online too.

I haven't extended any thoughts beyond what's already been written by Pete and others, but here are some slight twists to ideas that have been offered up:

1.  If you already have gone through the trouble of segmenting your market, dynamic creative is a way to make the most effective use of your online media buy.  Right now, marketers go through this sloppy process of trying to line up their market segments with the audiences being offered in various mediums.  There are overlaps representing wasted spend and gaps representing missed opportunity.  In the online world, it doesn't need to be that way.  You just need a way to buy your exact market segments (audiences) at scale.  The obvious missing component here is data.  For the dynamic creative to get to the right person, you need some idea of who that person is.  Whether your segments are composed of something simple like demographics or complex like psychographics, the better data about the user, the more efficient the media.  (Psst..digital media buying agencies..this is really important because if you can demonstrate your buys are more efficient than your old media buying counterparts, dollars will come your way.)

2.  Because people don't know what they want, even in advertising, you should always be testing and learning.  
Go and listen to Gladwell's TED talk, but we all know what we say we want is very different than what we really want.  Therefore, it also makes sense that we put new (and old) brand messages out there every so often to see.  A good dynamic creative algorithm will never stop showing a particular message, even if it's extremely unpopular.  People change.  A well-run dynamic campaign will also get messages added in over time.  People may like something else.  (Psst...creative agencies..this is really important because it gives you a way to quickly see if other message/creative ideas are worth exploring.)

There's more wrong with this OPA study

While I generally agree with Russ Fradin's post on Ad Age, I think it's simpler to say that the reason why this study done by OPA isn't right is bias:  If you look at the organizations supporting OPA, the "results" of this study are in their favor (of course).

Paying someone to perform a study for you that usually results in positive results for you though is commonplace.  I suppose I should give OPA a pass since the drug industry uses this method to get drug trials done.  They fund a third party to conduct the trial.  I shouldn't have to say this, but doing a study on drug safety is more important the OPA.

I started with an article saying how biased this OPA study is and ended scaring myself about drug safety.

(Another example of this is audits for publicly traded companies.  The SEC requires them, but the company that gets the audit is the one that funds and controls its budget.)

YAPRC: Yet Another Post Regarding Consolidation

Ad Age usually provides news and interesting points of view.  Not today.  Someone has gone and repeated that the online advertising value chain is extremely crowded and is ripe for consolidation.  Usually, comments to posts are usually folks arguing over arcane points, but in this scenario, the sole commenter (at least when I read the post) calls him to the carpet:

When everyone decides to take their bat and ball home with them, these middlemen are going to be left with aging IP that does not generate revenue. No one, at least in 2010, is ready to make a big bet on technology. It ages too fast.

Eh.  I'm all for being a contrarian, in fact, I should make it my middle name, but like all views that sit on the polar opposites, what's most likely to happen is somewhere in the middle.  In some parts of the value chain, it makes absolute sense for some companies to consider horizontally or vertically integration, either backward or forward.  The real issue with online advertising, unlike many other industries, is that you can become very good at say, being a DSP, but if you sit idly while you're #1, six months later, you are no longer.  We're not Dunder Mifflin making paper.  The learning curve is extraordinarily steep for every step of the value chain.  Therefore, I think it'd be foolish to think large pools of these companies post-consolidation would be able to move at the right speed.

Then you look at industries that decoupled their value chain, like the car industry.  For them, it was mainly a good idea (except Ford and GM never truly cut the umbilical cord with Visteon and Delphi, respectively).  In others, it ended with disastrous consequences like Boeing's attempt to outsource most of the Dreamliner's construction.

Someone point me to a thoughtful notion of what this market may really end up looking like with some solid reasoning.  I want to read something profound.

Interesting Twist from Yahoo! Labs on Social Media

I must be living in a cave.  People pay Kim Kardashian $10,000 per tweet?  What?  Again, the rise of falsely famous eludes me.  Once, we had to be talented to be famous.  Then, finding a way to be really rich made you famous.  Now, we're in the world of something else.  I'll end my rant and get to the point.

I read the Tipping Point and thought of it as insightful and possibly accurate.  What's interesting is the thought crossed my mind that Malcolm Gladwell, at the end of the day, is a great journalistic author who has noticed these "trends", but has purported to testing them in any meaningful way.  Yet, his book has shaped how marketers are monetizing social media.

This Ad Age article, though, excerpts research from Yahoo! Labs.  Here's an excerpt from the excerpt:

But in looking at influencers, Mr. Watts found that it's incredibly hard to predict who will be a major factor on Twitter, a conclusion that runs counter to the prevailing wisdom of social epidemics popularized by the book "The Tipping Point." While he acknowledges there are certain personalities such as Kim Kardashian who can potentially trigger a larger cascade of re-tweets given her large amount of "followers" ("Tipping Point" enthusiasts call her a connector), close studies of social platforms reveal that influence is spread more efficiently and more reliably when done through many-to-many connections, rather than through a few highly connected individuals.

This makes sense, but using Kim Kardashian isn't a great baseline for someone who is well-connected.  In Gladwell's book, he also talks about Mavens as those who are known and trusted to be experts in a certain area.  When you get a tweet from Kim, who are you assuming she's getting her information from?  If it's not a Maven, then you might not trust the information as reliable and see it more as pure entertainment.  (In a sense, I'm agreeing with Watts' research.)

What would be interesting would be seeing how her Twitter followers reacted to tweets of hers based on bona fide recommendations from Mavens in her network, rather than shameless bribes by advertisers paying her to leverage her "talent".

PPC Innovation: How will Google’s new lead capture extension affect your pay...

This should be quite interesting.


We have been quite busy at the labs here, but I wanted to cover a PPC development that blipped on our radar earlier this year. For many of us, PPC is a critical source of traffic, and can be quite the task to manage. Well to add to the list of things to consider, Google is beta-testing the collection of phone lead information directly from SERPs (Search Engine Results Pages).

Google generates roughly 97% of its revenue from online advertising, so it makes sense that they delve into new areas of online marketing – which now seems to include part of the sales process as well.

Given the huge potential (or threat) this represents to you, the Internet marketer, I think this is a vital development to cover on this blog (and even reached out to a search engine marketing firm to get their ideas for you as well.) While this will not affect all verticals, for some niches this might pour some gasoline (or more correctly napalm), on already very competitive areas.

So how does it work?

According to Amber from PPC Hero, “The gist of the beta is if you’re running a PPC ad in Google, and you’re in the top position, you can click on a plus sign next to a call to action (the name you give your contact form) and Google will drop down your contact form to be submitted right there in the Google search results.”

Here is an image from that article to show the lead collection:

Google-contact-form-beta

It’s important to note that, as with all things in beta, this has the potential for change, as I believe Google does do some testing from time to time.

And since this new feature is currently in beta, limited to businesses appearing in position #1 of PPC results, and on select keywords, it may not be available to you yet. If you’re interested, the best person to contact is your friendly Google rep.

More importantly…how can I make it work for me?

While I think this could have potentially large ripples in certain areas of online marketing, I wanted to have a chat with our friends at ROI Revolution, and get another viewpoint as well.

As a quick background, ROIRevelution is a company whose main area of focus is in pay-per-click management and they are quite good at it. We had the chance to speak with PPC Account Manager Mike O’Rourke. Here are just a couple of points Mike and I discussed:

Upsides

  • Simplifies the conversion process.
  • No friction (and lead loss) from weak landing pages.
  • Great tracking for businesses that use the phone a lot, a traditional weakness of current PPC tracking solutions.  Interesting, how could this be applied to other voice communication/VOIP solutions like Google Voice?
  • The feature will be good for certain verticals (e.g., plumbers) that provide local services tied to specific keywords (e.g., “broken pipes”).

Downsides

  • Can’t have a conversation in a PPC ad. Landing pages provide a good service for addressing anxiety and questions. So how effective will this lead capture be?
  • Opportunities to increase the value of a lead with a well-optimized funnel are lost (e.g. upsells). Without the ability to do that how valuable will the leads really will be?
  • Because conversion is expected on the search page, you do not have their undivided attention.  On a landing page, you can guide their thinking.
  • Maximum cost-per-click (CPC) rates are applied to leads submitted. This will likely cause your cost per acquisition to rise.
  • Since you must in position #1, the bids for the top position might heat up significantly.
  • Many people also now use many CRM solutions for keeping track of customers and sales. Will this information be easily integrated with common solutions or sent to advertisers in a standardized way?

Won’t you tell me your name? I love you. Hello.

Personally, I am interested in seeing are how users respond to putting their information directly into a form on a search engine results page. While I think some users are very trusting, others might be turned off by your attempt to get their number so soon.

It might seem like an out-of-sequence conversation. As Flint McGlaughlin, the director of MECLabs Group (our parent company) describes trying to ask for a lead to early in the process, “You don’t ask a girl for a kiss before you have a date with her.”

That might seem kind of corny. But think about how you handle your own phone number. Many of us treasure our phone numbers and can guard them quite fiercely. Will a relatively short ad space be enough to capture users and convince them to give up this information? Are you asking for too much, too soon?

Also, some of the things we talk about in great detail here are anxiety and value proposition. While you can address these with your ad copy in a limited fashion, the fact remains you only have so many characters to work within.

Your pay-per-click ad copy and the space search providers give you is simply to get the conversation going – address why they should click, how you are meeting their motivation, and then get them to a landing page to do the heavy lifting.

In skipping that step, you can end up with spending a lot of money (especially by paying max CPC) with leads that are not as qualified or do not convert.

Also, since this is a new technology, you might be getting a fair amount of people using it because they wanted to see how it works, rather than being genuinely interested in your message.

I have some more thoughts on this that we will post soon, but I want to get your opinion on what impact, if any, you think this new Google innovation will have?

Great tracking for businesses that use the phone a lot, a traditional weakness of current PPC tracking solutions.  How could this be applied to other voice communication/VOIP solutions like Google Voice?

The myth of privacy

This AdAge article makes you think that, somehow, these companies have finally figured out how to target people online by using all of the consumer information they collect given that they are also the credit reporting agencies.

Yet, we all dutifully punch all of our lives into the likes of Facebook and Twitter without giving it a second thought.  My, my.  We are a bunch of hypocrites.

These guys have been using this data for years to target us in our offline lives.  I go and have a baby and buy my first package of diapers.  A couple of weeks later, I get coupons for diapers and a whole host of other baby-related supplies.  How did they know?!?!

As an individual, our marketing data is fairly worthless.  However, these companies have a treasure trove of information about the consumer, of which, they make unreasonable profits.  Data, given the proper insight, can be turned into money, especially when aggregated across millions of consumers.

The capitalist in me says that these companies are providing value, not only to the businesses that they sell the data to, but to me by targeting relevant advertising to me, both online and offline.

The real capitalist in me says that I own my data and should be able to make money off of it.  Unfortunately, there's no monetization mechanism for marketing data of one.  Maybe Experian can buy Zynga so every time my marketing data gets used, I get virtual currency so I can virtual stuff.  Wouldn't that be pure irony?

(In full disclosure, I do now work at a bastion of online advertising, so perhaps my views are now somewhat tainted.)

A New Branding Paradigm Built Around Digital

I'm not entirely sure if I agree with this article, but it definitely carries some fascinating points and makes some convincing arguments.  I think her argument can simply be summed up by the point that digital media offers us the ability to build brand value in ways we've never imagined.

Think of the simple example of social media:

In yesterday's world, you built a brand with functional, emotional and aspirational messaging to hopefully push the right buttons to build head and heart loyalty.  You didn't exactly know who those folks were, and you couldn't exactly ask them, "Hey.  Are you heart loyal to my brand?"

In today's world, you can.  And, you know exactly who they are.  You know what their friends look like.  You can see pictures of their families, what they do on the weekends, whether or not they travel frequently...

Creepy yes, but think of the amount of brand engineering you could do.