Social Norms Trump Market Norms

Do you know the difference between market norms and social norms? If you do, can you make the distinction in social marketing?

Something many of us grew up with was the "limited availability offer." In other word, the ad in the paper would promote, say a radio at the local electronics store, but would come with a disclaimer stating that there were only so many, and no rain checks would be given. Generally, we accepted that. If others got there first, they got the radio at the price, and that is just the way it was. This is a market norm; it is monetarily driven, fairly cold, logical to a fault, and basically understood.

A social norm is not driven by money. If I invite people over for a BBQ, and part way through realize I do not have enough burgers or hot dogs, I feel guilty and look for ways to remedy this. Even if some folks show up with relatives who just happened be in town, or folks show up who originally thought they were not going to make it, I have a sense of obligation to make sure everyone is fed, and fed well. So, I run out to the store and buy more of everything I needed. Money is not the issue; making my guests happy is.

As companies venture into social media, they must be very aware that the norms are different now, and getting them mixed up will result in long term harm. To get a sense of this in better words than I can write, (if you have not done so) read "Predictably Irrational" by David Ariely.

The first few chapters show this distinction well (read the whole book though).

A key take away is this:

Though it may not seem so at first, market norms are not nearly so punishing, nor their affect so enduring, as social norms.

If you have a product, and your competitor develops a better value equation, you may lose some customers. Improve your value equation, and you have a shot at getting them back. This is the nature of markets.

On the other hand, if you lose a customer because you made them angry, violating some social norm (even though you're a business), social norms trump market norms and they are gone... perhaps for good.

TGIF, while underestimating the power of social media, certainly appears to understand the blended environment social media presents for social and market norms. In their recent social campaign, promoted on tv, up to 500,000 fans of Woody get a free burger. Well, 500k was reached in short order, and they were still only 1/2 way through the month. TGIF and their agency worked quickly to approve an additional 500K free burgers to honor those who were trying to fan woody after the first mark was hit. There is social credit given for openly and quickly addressing this.

Though TGFI had been upfront about the conditions of the give away (market norms), they realized they were operating in social environment. Rather than saying "we did what we said we'd do, you're wrong to expect more," they pushed forward and honored the intent of the program. TGIF honored the social norm.

Get more for digital advertising at idatatools.c

Peering into the brain to figure out what triggers specific reactions and how to motivate consumers to buy is part of the Neuromarketing practice that is being explored today.

Kevin Randal at Movéo Integrated Branding posted on FastCompany's blog about five brands using various techniques.

This is a pretty cool approach. I'd like to see something like this applied to education. What really motivates kid to learn?

Defining what it is not

I like to read Seth Godin's blog... it makes me think.

If you are marketing on the web, and have a web redesign project, Seth's post suggest key questions to ask. Most have to do with the objective, and considerations for reaching it.

In his list, there are obvious, but frequently overlook questions. He ends with:

"And finally,

• Does the organization understand that 'everything' is not an option?"

I have seen organizations, with web projects or others, agree on a project objectives. Only, when it is completed, and the objectives are reached, you hear, "Yes, but I thought we would also be able to..."

Sometimes it is as important to define what a project IS NOT, as it is to define what it IS.

A New Paradigm for Compensation and Structure

Falsely Treating Every Jobs as a widget...
In many organizations the reward for performing well is to be promoted. With a promotion comes more money (usually) and a broader sphere of influence. The inference is that the lower position is less valuable to the organization; certainly, this is the impression created.

This inference goes along with organizational theory of scientific management (Frederick Taylor; The Principles of Scientific Management) for developing efficiency, which wittingly or not, is foundational to most organizations. By separating front line or lower rung tasks into routinized, binary decisions (the widget to which you add your piece is there or it is not) your labor does not need to be highly skilled, is relatively easy to replace, and cheap. Only as you go higher up in the organization do you find positions that can impact the profits. Managers who can structure the line to move parts more quickly or operate with fewer people; negotiate better supply costs or expand distribution and sales. By routinizing as much as possible you lower costs, reduce defects and focus your monetary rewards on a smaller and presumably more impact-ful group.

This manufacturing based paradigm has been transferred to the service sector. We take call centers that may be handling 5, 6 and 7 digit life time value customers and move them around the world where English is a second or even a third language, give the operators scripts that are very binary and save some money. And these are the valued customers that made it through the IVR.

Unfortunately, this lower rung compensating structure has been so ingrained that it is now applied to virtually every organization. For years I have argued that I would welcome employees who want to stay at the "lower rungs" but organizations are generally not structured to compensate them accordingly. I am not writing about routinized activities, but those in the new economy where "lower rung" employees can have a multi-million dollar impact. They handle million dollar accounts, are asked to identify opportunities to make and save money and have a direct, and often significant affect on the bottom line.

Today we hear more about ROI than ever. Ironically, I can more easily tie activities to results for these employees than most managers I've worked with, including myself. I could take credit for motivating my team or coming up with the big ideas (usually theirs), but that too is part of the old way. To get the kind of results I have seen, individuals must have an inherent motivation, a real desire to do the kinds of things we need them to do... the things they have to stop doing if they want to earn enough to support a family.

Many studies have been done to suggest that money is not a key motivator. But, lack of money, or opportunity to earn it, can be a great de-motivator. You will not make someone good at what they do simply by paying them more. But, if they really like what they do and are good at it, paying them too little can make them perform poorly; lack of desired income will cut their enthusiasm over time.

If we look at the value potential of certain non-managerial positions, and build the compensation structure accordingly, I believe organizations can achieve more with fewer people and have a better work environment because no one feels trapped. But, getting there requires both companies and individuals to do something of a paradigm shift.

The Shift - Companies
Companies must stop viewing those who wish to become experts in "organizationally lower" positions as blocks to organizational development. I believe some of the reasons we have more managers are:

1) People are not monetarily encouraged to view their positions for the long term. To earn more money, they must necessarily seek skills that have less to do with their current role than one, two or three levels above it. This creates a disconnect between company needs and employee career development. To keep employees properly focused, a disproportionate amount of a manager's is spent keeping them on task.

2) By the time anyone becomes really good at what they are doing, they are promoted (or seek opportunities with other companies), creating an experience gap that needs be managed. On top of constantly filling job openings, managers are simultaneously covering for vacant positions (and not necessarily experts at it), and facilitating very basic training.

In addition to the raw dollar cost of constantly recruiting, this situation has an even bigger impact on time. Because the core group of employees has relatively low average time on the job, more are require to get the job done compared to experienced teams. Additionally, given the recruiting overhead and additional direct oversight needs, there is a higher manager to employee ratio required.

Financial compensation structures encourage either False Delegation or Abdication.

Managers struggle with delegation today because they often feel their teams do not have the experience necessary to do the job. Managers who feel they are not staffed with experts either assume direct control (false delegation), or abdicate responsibility for the results. The former requires more mangers (doing the job of their direct reports) and the latter risks performance. Neither is acceptable, both are often evident.

By encouraging well developed expertise in non-managerial positions, whole organizations can become more effective. Those who concentrate in a single area become superbly adept at it. When this happens, you need fewer people in the non-managerial and managerial rolls. Rather than focusing on how to keep the 'thing' going, everyone can focus on improving their area of expertise. But this requires organizations to step up and recognize key players not just with promotions, but with financial models and recognition.

The flip side of this is, perhaps, more challenging. Managers, supported by the company, have to be able to hold their direct reports to very high standards, and be ready to make very difficult decisions. This is true all the way up the organizational chain. If a mid to senior manager is falsely delegating activity, or abdicating responsibility for outcomes, they must be held to task. If they are delegating appropriately, they must, in turn, be able to hold their team to task. In all areas, proper corrective actions ranging from additional training and resources to termination have to not only be available to managers, but expected by all concerned.

The way many organizations have structured their financial compensation models feeds very poor managerial habits. Expectations for current employees are often based on the lowest common denominator - the new employee; is it worth replacing this person with a new employee that we have to train anyway? Many have accepted the need to manage mediocrity, rather than push for excellence. The problem with excellence is that the people who reach it are going to be promoted, or seek advancement elsewhere... where the money is. What if highly valuable individuals, in highly impact-ful positions wanted to, and could afford to stay there for the long haul?


Two Paths
A new paradigm of professional development is needed to provide both the company and the people with what they need. High value, non-managerial positions need one track while there is another track for management. How this breaks out in individual companies will differ. But, if there are front line positions that have highly specialized expertise, direct impact on the profits and a compensation structure geared toward those under 30 (or 25) years old, there is a gap. In theses situations, keeping people focused on what they like to do, if they do it well, is beneficial to all.

By combining two paths into one, we have mixed and blurred our view of very distinct skill sets and fostered an environment which ultimately leads to the Peter Principle. The assumption that because someone is very good at doing something (whatever that is), they should manage others who do it, is a false assumption. The inverse is also true; an individual need not be the best 'doer' in order to be a great manager. This is a very hard reality for many to accept in our current paradigm.

If you are the best at what you do, then the expectation is that you should not have to report to someone who gets paid more and is not as good at it as you are. Further, since compensation structures encourage management paths, the best doers are pushed to become managers, despite the fact that these are two very different skill sets. In the current environment, where managers often falsely delegate (essentially remaining doers), it is very easy to accept this reality.

Companies need to clearly identify two paths for careers: managerial and non-managerial. Recognizing these distinctions allow individuals and companies to align people and company needs more effectively, create more stability and align compensation with value. It is a big shift. I have seen what real expertise can do. I have seen what really good managers can do. Fostering both for their distinct value would improve company performance and individual satisfaction.

social Playbook from 360i

If your working a social plan, or overseeing an agency or team that is, this is a good read:

360i Social Marketing Playbook

View more documents from Lorenzo Mendoza.

Google Search CPA's Fatal Attraction

On the surface, CPA programs sound great. Essentially, set it and forget it... except for the non-thinking administrative mess that accompanies these programs. Unfortunately, what starts out as a simplified way to manage a search program ultimately causes search atrophy.

As the market changes, and opportunities arise, or problems start to materialize, they are masked by the CPA number. So long as that is locked, you don't have to worry about the leading KPIs. The reason for a CPA program is so you do not have to get into these details... they are someone else's problem.

This works fine in scenarios where you don't control the inputs anyway. Affiliate marketing is a great example of a program that can really only work on a CPA basis. Display programs, depending on your objectives, can also work okay here, in a limited fashion. But search has so many factors that are in your control, and enable you to optimize, it is silly to forgo the opportunity. Either you, or your agency should be focused on leveraging what search can offer.

To that end, beyond the masked KPIs, you have the more harmful affect of minimizing optimization opportunities. No online program, search or otherwise, is static. Either you change, or the market place changes. If you are doing your job, you will continue to change ahead of the market. With CPA, testing the end-to-end implications of a program are virtually impossible. If you change site metrics, this changes media performance; media that is opaque in a CPA program.

You miss the opportunity to identify nuances that lead to incremental and even big improvements in performance. As you improve site buy flow and conversions increase, you get more sales, but you lose the efficiencies you earned by creating the change. Yet the media properties benefit with higher compensation against the same work effort.

Part of the cycle of improving performance includes wider margins on existing media vehicles which can then be applied to new media opportunities. Consider...

Before conversion increases:

10,000 sales at $50 CPA = $500,000 / month in media spend at say, 40% media margin = $200,000 contribution.

Increase conversion by 10%.

11,000 in sales at $50 CPA = $550,000 at 40% margin = $220,000 contribution. Since your cost basis always moves with volume, you never become more efficient.

Now, assume you are managing search directly, not on a CPA. You will go from 10,000 to 11,000 in sales and pocket the entire additional $50K instead of $20k.

You go from $200,000 in contribution to $250,000 in contribution, or 25% improvement vs 10%.

Your margin goes from 40% to 50%.

If someone gave you a 25% bump in your budget, what would you do with it?

A couple of years ago, I went into how this can help agencies and clients in this post. The bottom line for clients & their agencies, is that keeping control of this is good for both. The comp model in the post, ironically, is performance based. The difference between what I propose and what Google is proposing is that by controlling the media all the way through to the purchase, you can optimized the whole chain. With strong agency / client relationships, agencies have an opportunity to increase compensation IF they increase the client's profitable volume, and clients have visibility into the agency's profitability, ensuring that margins really are being used to seek more sales.

This kind of optimization cycle is only available if you have end-to-end control of the process. Continual testing of keywords, copy, site layout, buy flow, offers, etc, is the only way to maximize what the web, and search in particular, have to offer.

More on the Google CPA from MediaPost.com

Federal legislation... volume on tv commercials?

Congress is about to entertain a bill that would regulate the broadcast volume for television commercials.

Rep. Eshoo introduced the H.R. 6209, the Commercial Advertisement Loudness Mitigation Act (CALM Act) to address loud commercials.

Economy down. Auto sector struggling. 9.4% unemployment. North Korea playing with nukes. Environment & economy dependent on one of the most unstable parts of the world. Families without health care. Kids not reading at grade level in many schools...

Does broadcast volume of tv commercials fit? Of all the things our "leaders" should be addressing, that we as individuals cannot affect, is this even worthy of a conversation?

Display Ad and Search Relationship Research

ComScore and iProspect studies on search and display ad relationships.

Key take-aways:
- Though it depends on the industry, there is potentially an additional activity of 60% versus the direct clicks (31% click, 21% say they type in the URL - iProspect).
- Approximately 1/3 of users have clicked on a display ad in the last 30 days(ComScore) to 6 months (iProspect)
- Conversely, 2/3 of users do not click on any display ads
- About 16% of users make up 80% of the clicks from display ads (ComScore)
- CTRs are in general decline, at about 0.1% (ComScore)
- Display ad value is quantifiable beyond the CTR based on search and direct URL entry following ad exposure.

Display ad costs should be measured against the incremental value based on KPI lift factors. On average display exposure increases site visits from 4.5% (control group not exposed to display ads) up to 6.6% (test users exposed to display ads). In other words, the incremental lift is 2.1 percentage points. (ComScore). Views and repeat visit tracking are important parts of media metrics. There is no way to properly assign value with out them.

Both studies are worth reading.
ComScore: How Online Avertising Works: Wither the Click?
iProspect: Search Engine Marketing and Online Display Advertising Integration Study

Narrative:
iProspect released "Search Engine Marketing and Online Display Advertising Integration Study" this month. Though it is very thought provoking, it needs to be interpreted from the right perspective. Primarily, this is not a study about ads, it is a study about users. This distinction is important because if the presentation the numbers is not interpreted properly, it can lead to some erroneous conclusions.

To illustrate my point:

"The key message from this study is that online display advertising is far from dead -- its 31% direct response rate confirms that," said Robert Murray, CEO, iProspect.

When we look at response rates, we look at how many times our ads are clicked versus how many times they are shown, or the CTR. What Robert Murray is referring to is that 31% of the people surveyed said that the had clicked on a display ad at some point over the past 6 months.

As I looked at the iProspect study, I recalled the ComScore study released in December 2008. It reviewed integration from an ad perspective and the user perspective rather than just the user perspective alone. I think this is important for several reasons:

1) Cost basis: most display advertising is still sold on a CPM. The value of a "user" has to be relative to the cost of the communication.
2) Industry: behavior varies greatly by industry.
3) Exposure: are users cognizant of how many exposures they receive before they react. This goes to cost basis.

When we look at each part of these two studies, we see some commonalities:

1) Both studies found that roughly 1/3 of users clicked on an add (ComScore in the last month, iProspect in the last 6 months).
2) There are strong synergies between search and display advertising. ComScore showed a 38% lift in advertiser's branded search after display ad exposure, while the iProspect study simply showed that, of those who said they saw an ad, the response of 27% was to conduct a search on the brand, product or category.

The divergence
As a person with roots in media, on and off-line, every time someone suggests buying more ads, or bigger ads, I ask several questions. Key among them is: What is the incremental value of spending the money?

This is where the ComScore study is more helpful. It measures the lift in KPIs, such as site visits, competitive searches, TM / Brand searches and incremental sales. Contrast this with the iProspect study, which is survey based, and depends on users recollections over a six month period, with no control group against which to compare the test subjects. If you want to know the real value of additional advertising, it has to be measured not in absolute terms, but relative to the outcome of not increasing the advertising. In other words, what was the incremental affect received from spending more money.

One of the interesting findings on the ComScore study is that there is a 45.7% lift in site visits over a 4 week period as a result of exposure to display ads . Of those not exposed to the advertising, 4.5% eventually reach the test advertiser's site, while 6.6% of those who were exposed reached the site, either by clicking, using search or navigating to the site directly. Another way to read this is that 68% of the people who reached the display advertisers' sites would have done so with or with out the advertising. So while the total visit was 6.6% of the users who saw display ads, these ads contributed 2.1% of the users' visits.

What is important is that the results vary greatly by industry. From a low of 21% lift in the travel industry to a high of 114% in the auto (though with a very low base % of visits to start).

On the flip side, there is also an increase in competitors' sites visits following exposures to display ads. Over a 4 week period, the lift is 23.4% (13.5% vs 16.6% of users).

In essence, what display advertising does is spark shopping activity in general.

In addition to the number of people who eventually reach the advertisers' sites, the way they get there is important; it directly affects the core measurement of CTR. Every one I speak with about the impact of display advertising acknowledges that the click is only one way to measure the influence of display advertising, but they are usually lost when trying to measure non-click activity. The iProspect study shines a light on the other behaviors as reported by users. 21% said they typed in the advertiser's URL, while 27% did a search on the product, brand or company. Combining this insight with the lift that the ComScore study shows, and you can get some idea of a factorization you can apply to the CTR to estimate net visits resulting from display advertising. Though it depends on the industry, there is potentially an additional 60% versus the direct clicks (31% click, 21% say they type in the URL).

All this amounts to one fact: Direct measurements are ineffective. The only way to assess the real value of advertising is with robust tracking and analytics.

30-Second Collision: Short Tail Media Video Unit

David Payne, CEO of Short Tail Media is pushing for 30 sec (& 15 sec) video commercials online through its new service Digital 30 (D30). He is working with publishers to test a :30 spot between sites, with Reuters being the first to sign on. Expect to see some this summer.

According to Payne, publishers need to "stop worshiping, and start interrupting the almighty user."

In my last post, I talked about the extreme of only looking at the user and sacrificing real revenue generating opportunities as we saw in YouTube. On the other hand, Hulu was balancing three constituents: Users, Advertiser, Content Providers. I prefer the Hulu approach; its sustainable over time.

Hulu is converging needs.

Payne is directly colliding the need for more revenue producing ads with the belief that users will not accept this. He his banking on the idea that the increase revenue from the new ad units will off-set any revenue losses stemming from user abandonment.

His perspective challenges the ethos of the internet (if there is one) as well as commonly held assumptions about potential user behavior.

Is he right? I don't know. But, I give him a lot of credit for pushing a very radical approach to an old problem... maximizing sustainable revenue.

Media week article

Video - actively converging

Hulu and YouTube represent terrific and timely examples of the difference between converging and not converging.

YouTube started out purely focused on the user. This is great for them / us. We can put on funny, if not inane, material, share guitar riffs, and see some amazing car racing . We get to see videos from around the world that we would not be able to see otherwise. It gives us something to talk about off-line as well. However, it is not a sustainable model as it exist. Google is attempting to monetize the traffic to YouTube and, though not transparent, indications are that revenue may not be out-pacing cost.

Hulu, headed by Jason Kilar, recognized that successful ideas are multi-facetted. When launching Hulu, he and his team identified three constituents: Users, Content Providers and Advertisers. Focussing too much on one to the detriment of the others puts the entire operation at risk. This is a tough path to follow, but he is doing it.

The difference between the two is simple; not only in content, which is quite obvious, but more importantly, the attitude during the initial concept development. Like too many online start ups, YouTube began without looking at the whole landscape. When Chen, Hurley and Karim started YouTube in 2005, it was focused on allowing users to share their videos. In a world where VC was pouring in, long-term financial sustainability was not built in. This is not to say that it was not considered, but the experience itself was built around its absence. It was created with the notion that everyone wants their content up and advertisers were not welcome. In short, YouTube only considered a small segment of a very large group of constituents. Now, with a lot of traffic, monetization and quality content is an after thought. They are now attempting to force ads into the experience that had been ads-free.

Hulu recognized from beginning that long term sustainability depends on a realistic view of "life after launch." By building in respect for content, and the rights of the content owner, as well as consideration for advertisers, Jason set the stage for a viable model. True, given the parentage of the company, content providers could not possibly be forgotten. But, considering the way it is working out, this is actually a good thing.

Internet "purest" would argue that the end users should be the only consideration. This holdover from the early days of the web has proven untenable; it collides with economic realities. Colliding can be good, but not in this case. Hulu chose to Converge the interest of multiple constituencies based on a realistic assessment of the landscape before them. It works.

A couple of weeks ago I wrote about the distinction between building a brand and leveraging it. In short, building is what you do up to the time the consumer is ready to buy, while leveraging it is what you do when you are pulling all the pieces together to close the sale. The point was / is, that building or leveraging the brand is not about the media, marketers, brand managers or agencies. It is about the consumer and where are they in the shopping process.

This discussion most often comes into play around search and the branded keywords. Too often, marketers focus in the medium, or in this case, the branded keyword. I believe this media-centric dialogue misses the point and mentioned that broadening the perspective goes beyond search:

"While this conversation regularly comes up in search, the same discussion needs to happen around display. Geo-targeting, behavioral targeting and other user profiling capabilities allow us to learn about consumer intent. As they visit sites, they may indicate that it is no longer time to tell them about Honda's great quality, but instead focus on the great gas mileage of the Civic, or even the service and quality of a specific dealer. We have to be more open to the intent in order to provide the consumer with the right information."

A piece in Media Post's Behavioral Insider by Steve Smith discusses how Teracent is helping HP target the message based on consumer's online, and off-site behavior.  Chip Hall, Sr VP at Teracent, discusses the changes in messaging base on real-time data and the progression of message targeting from the very broad when data is scarce, to very targeted when there is more data upon which to base the targeting decisions. It is all consumer, not media, centric.

At no time does this suggest that we ignore brand. It is always part of the equation. But this is how it plays into the message evolution as we learn about the consumer. BT is still rather young. But, its premiss is focussed on what the consumer wants to hear and see given their place in the buying process and not on a binary decision of "this is a branding vehicle and this one is not". Two consumers can get two different messages from the same display space (or anywhere) from the same advertiser. The focus of the message, pure brand or focussed on attributes, will depend on what you know about the consumer at that moment.

Mike Masnick presentation at mesh. Thought provoking perspective on the new business model. It is about creating scarcity and providing a reason to buy. This model is one that we need to take to heart, especially as the web has changed the way we interact with prospective customers. 

In addition to the content, his presentation style is one of the best I have seen.

SEO Insight from Randfish

As always, randfish has great SEO insights into the components and relative importance with regards to organic page rankings for Google. 

You will read many responses to his post. My caution when I see these conversations start is, don't focus on one or two things only. As you will see from his historical graph, a component's importance changes over time. The best practice has always been to focus on good, holistic site / page development with a great deal of attention paid to the user. Don't chase the shinny object of today; keep it in mind along with all the others. 

When you talk to folks at Google, or listen to them present, the common theme is a quality user experience. Combine this with good technical practices in site development, link partnerships (intent on good user experience) and you are most of the way there. 

Social is growing up... a little

Marketers have been approaching social with one of two lenses: 1) this is too risky, the content is too much on the edge, or 2) this is a group we cannot reach anywhere else, and it gives us a chance to speak to a new audience in a different way. Both set the Social media (primarily networks) among the fringe to either be avoided or chased.

Well, thats changing rapidly. Social networks are not just for the young people any more. Older folks, driven primarily by Facebook's growth, are a growing part of the social network community according to Hitwise. 

The way we viewed social networks over the past few years needs to be broadened. A 40 year old mother of three is not going to respond the same as a 20 year old college student, and now they are both participating. When looking at content, creating content, engaging the people, we were focused on a segment that was rather well separated from other segments; they were actively on the social networks while the older segments were avoiding them. Now, with the fluidity of information and the adoption of social networks by a broader array of people, anything we do in one segment will quickly become visible to the others. The chances of alienating your base while trying to go after the new segments just increased.

This situation is reminiscent of an Oldsmobile move in the 90's; that was a conscious effort to cater to a new demographic. If you remember Oldsmobile, you may also remember there last major campaign "Not your father's Oldsmobile." A big, national campaign. It failed to gain traction with the younger buyers, and simultaneously alienated the then current (but aging) customer base. That was an overt decision to go after one market while knowingly pushing away another. It failed.

In social, this same thing is very possible, but may be the result of unintended consequences rather than a strategic shift.

So, what is the best way to approach social? Actually, the same as it always was. Be true to yourself, your brand and your core customer base. It is not about Social media. It is about your customer. Social is another, and much more involved, way to interact with them.

The right perspective

"...just because we beat the competition yesterday doesn't mean that the competition isn't going to come back and crush us tomorrow."


Steve Baldwin MediaPost 4/6/2009

Social Media Embraced for years

Social media has taken a seat at the CMO table.
BrandWeek's article, recounts that some companies have been stepping up social. I have heard their stories in the past. But recently, with all the hype, we seem to have lost site of the fact that social media has been actively engaged by companies like Wells Fargo for years. They were ahead of the curve in 2005. But the reasons for going into social are not alway clear, nor the same for different companies.

There is a lot new with Social. But, there is also a lot old. Unfortunately, with the net being all about tracking, the mainstream has (until recently) discounted social media as an important driver. They are now learning from the "old hands." In the case of Dell, it was about containing the bad. In others, like Coke, it is about brand engagement. In others, it is about connecting the activity to a sale. The key to a good social marketing effort is to decide, before you dive in, what it is you are shooting for - setting your objectives. This isn't new... it's good old fashion marketing. Old principles still apply to new media.

Large, stable companies (even in this economy), have shown that social engagement on the net works. These are traditional marketers (I'd even throw Dell in there, though many would disagree), that demonstrated the value of good planning while leveraging the opportunities of new media.





http://www.brandweek.com/bw/content_display/news-and-features/digital/e3ie2a94edbc5b0a7c1150d6cbf4741dede?pn=1

Are you building a brand, or leveraging it?

As we look at the brand, particularly online, we have to acknowledge that there are places where we are building brands, and places where we are mostly leveraging them. What makes this difficult is that there is no clear and absolute delineation. In the 'old' world, television was seen as the place to build brands. Newspapers or yellow pages leveraged them (with some building going on)... directing people to where to find 'it' and make the purchase (over simplification, but you get the idea). Today, even television is not completely dedicated to brand building, but has elements of leveraging. How do we know which we should be doing?

Building a brand is all the stuff we do before the consumer is ready to buy. Leveraging the brand is what we do when the consumer is ready to make the purchase; it is when we pull together the 'feeling' and equity we have created, then relate this to the consumer and their immediate need. We leverage the Brand as we sell the product or service. Which one we are doing at any point in time is less about us, and all about the consumer; at least it should be.

What brings me to this point is the perspective that the "brand" keywords are upper funnel and need to be controlled by the parent company, presenting the brand's message. On the surface, this rationale may appear solid. However, this is the web. Old perceptions of how the brand is used by the consumer no longer apply. When someone types in "Honda", they are as likely looking for a place to buy a Honda CR-V as they are trying to figure out what the "Honda" brand stands for and what types of cars Honda has. Brand messaging control in search is about the company. Understanding the intent of the search is about the consumer.

While this conversation regularly comes up in search, the same discussion needs to happen around display. Geo-targeting, behavioral targeting and other user profiling capabilities allow us to learn about consumer intent. As they visit sites, they may indicate that it is no longer time to tell them about Honda's great quality, but instead focus on the great gas mileage of the Civic, or even the service and quality of a specific dealer. We have to be more open to the intent in order to provide the consumer with the right information.

In reality, everything we do either builds or diminishes the brand. We know that the web changes the way we interact with the consumers, but brands need to understand that it also means we have to be prepared for a much wider range of messaging than just the brand's highlights. It is very likely that, when someone uses a branded keyword term, the best service a brand can provide is to step back and let a local dealer lead the conversation. If this is the case, but the brand insists on leading with a very upper funnel message, instead of leveraging what they have built, they end up diminishing it and frustrating the consumer.

If you're asking, you missed the point of social

"If I start engaging in social media, don't I lose control of my message?"

If this is your question, you need to start looking more at the web... you never had control.

Social media is not about control, it's about engaging, learning and, if your true to your customers, adding to the conversation.

Branded Keyword Bidding vs Fixed Placement

Today, Matt Greitzer of Razorfish proposed search engines offer a branded keyword lock-in option for brand owners. Essentially, pay a fee, not a PPC, and then be guaranteed first position, with all other competing ads aligned on the rail (but they should still be part of the auction model). The suggestion on setting the fee is:

"The fee should reflect the incremental value of branded keyword clicks along with a reasonable premium for price stability and the brand value of a guaranteed top position."

This reflection came after being told that the CPC of a branded Keyword increased 300% over the prior month, with no changes at all on their end. I'll forgo overly commenting on the "set it and forget it" PPC management strategy this statement implies (unintentionally as razorFish is a good agency), and instead focus on the "value" proposition.

We have target metrics to align costs and value. If the branded keyword is costing 300% more than a month ago, then somewhere a competitor figured out their metrics placed the value of the keyword at a significantly higher cost than they were previously bidding. In effect, the market has provided you with the potential value of the keyword. If you are not seeing the ROI on a transactional basis (since this is your brand, the the competition is leveraging it for the transaction), then your competitor has either figured out something that you missed, or is messing with the bid landscape (which will subside as they go bust).

If you then take the transactional value, add to it the brand value and then layer on top of that a 'stabilization fee', you end up paying more and losing more upside, than if you simply deploy the resources necessary to properly manage the program.

A fixed fee is great for agencies. Tack on 15% and you can set the program, visit the results monthly, give your clients a report, and send them a bill. This is reminiscent of when I was selling online advertising back in 1995, the precursors to search and IYPs of today. At the end of the contract, the client's questions came: "what did I get for my spend?" and "what, exactly, did you do to earn the commission?"

One of the attractions of search engine marketing is that, if done properly, it propels us into an understanding of our clients' business from pre-click to sale, and being able to clearly demonstrate value. We run programs that close online as well as offline; our compensation only happens when our clients close the sale. We spend our own money, track results with our clients, and run the risk of losing money if we screw up. This model is one of the reasons our clients have come to us to run their corporate search programs.

Since this is our own money, you might think that I would be in favor of fixed placements, for all the reasons Matt points out. However, stability comes at a price... growth. If we see that our CPCs are increasing day over day, we have to ask ourselves, "did someone figure something out that we missed?" Rather than seeking the shelter provided by a fix placement model, the beauty of the market-based system of search is that it gives you day-to-day, hour-to-hour feedback on how well you are doing. Not just in how well you hold your keyword position, but how well you help your clients grow their sales.

So, rather than suggest the engines shelter us for the competition, I would propose that the onus is on us:

1) Focus on the entire buying process to align value
2) Continuous conversion / sales monitoring
3) Use transactional metrics to assess relative performance
4) If there is a CPC change, investigate the competition and ask yourself what they are doing better

I understand that these proposals do nothing to mitigate the CPC fluctuation, and are at the heart of most SEM, but when simply followed, they can do much to help improve the value you receive out of each click. Very often, I am telling people that good SEM is not rocket science, just good hard work (with some social and statistical science thrown in :) ).

Finally, I have to make the point that I am not thoroughly convinced that a first position strategy is necessarily warranted. Of course, if the c-level office wants it, you give it to them. But, as a corner stone of SEM, this strategy is has not always born fruit and made financial sense. We have to be very clear on the motive for any postion, if any, we target for our clients.