15 February, 2012 · 5:36 pm

The Growing Reality of Always On Marketing

It’s said that the future lies clearly in the present, as long as you know where to look. If you look at the underpinnings of today’s rising brands, a pattern emerges. There is, of course, the by-now standard dictum of a shared brand experience.  The idea of talking with people instead of at them is no less true for now being common wisdom. What’s less common are brands who have taken it to the next step.  It is one thing to have a Twitter manager lobbing out pseudo-conversational tidbits such as “what’s your favorite Super Bowl snack?” It is another thing entirely to know to whom you’re talking to and being able to share something with them of real interest based on the context of that particular moment. This is at the heart of Always On marketing.  Like most marketing innovations, Always On marketing started with small niche brands finding new ways to build buzz outside traditional approaches. Now you see established brands like AMEX, JetBlue and Gatorade adopting Always On principles.

What is Always On?

At its heart, it’s a simple premise. Always On marketing is the ability to respond in real-time to an individual customer with the most relevant brand content.  If I’m in the market for a new smartphone, and I don’t know whether I want an iPhone or Android model, a carrier who serves up reviews of the two types of phone would have an advantage winning me over as a customer. If I’m away from home at my kid’s basketball tournament, and a quick-service restaurant sends me a coupon and directions to their place around the corner, they’re likely to get a sale.  While a simple idea in theory, in practice it requires a new set of capabilities.

What’s Driving It?

The drive for Always On marketing side is a combination of developments on both the producer and consumer side of the equation. In total, there are three overall developments driving the moves to Always On marketing.

1. The Death of the Funnel

The traditional sales funnel looked something like this:

If this funnel were ever really true, it is not true now. Studies from Y&R, McKinsey Consulting and others show that the brand selection process does not involve a broad embrace of brands at the start, followed by a rational and linear winnowing down to a preferred brand. The McKinsey model suggests a path that looks more like this:

There are several significant differences between this model and the traditional funnel. Most notable are:

  • When something triggers our desire to make a purchase, we start with a narrow preconceived set of brands, not a wide view of the category
  • That initial set of brands may actually grow instead of narrow as we evaluate our choices.
  • The move from the initial trigger to the final purchase may skip a step at any point.

This revised view has important implications. For one, it emphasizes how critical it is to understand your brand’s place with a potential customer at each stage of the process. Contrary to traditional funnel thinking, a new challenger brand may have a better chance getting attention in the Active Evaluation stage than the Initial Consideration stage. For another, it encourages forging multiple paths to purchase. Each person goes through their own purchase journey, skipping over one stage to the next.  If that person is forced to confined to a predetermined path, you risk losing their interest and their business. Taken together, it requires a system that can spot when a personal trigger event happens  (e.g., visit to a car dealer, browsing an online catalog, moving to a new town) and act on it immediately. Consider that the average time from a trigger event to a purchase decision is 10-12  days for someone going on a vacation.  The time from trigger to purchase for a mobile phone is about 7 days. Always On marketers who can spot the trigger and market accordingly in that short span of time gain a huge advantage.

2. Great Expectations

Consumer expectations have changed significantly. If you can think back as long as five years ago, the idea that you would shout out a company’s name on the street and expect a personal reply would be grounds for psychiatric evaluation. But Twitter has created an expectation fairly close to that. People register complaints with no more than a company hashtag and are miffed if there is not a response.

This represents a ratcheting up in consumer expectations. People increasingly expect real-time interactions from the brands they care about.

3. Big Data

The burgeoning availability of actionable real-time data provides new opportunities to truly deliver on one-to-one marketing. The “one-to-one marketing “ label has been around for decades, but it was a way of thinking rather than an actual way of working. Traditional database marketing relies on segmentation schema that group people by common characteristics.  Segmentation is a way to break a mass group up into smaller groups, but is not truly individualized.  It creates proxies for real knowledge of the person.  For example, a battery manufacturer would create a “gadget lovers” segment based on demographic and survey data, and design marketing programs targeted in various degrees of specificity to that group. That approach is several times more effective that simple mass marketing. Yet their effectiveness would be even several factors higher than that if they knew nothing about a person’s demographic and survey responses, but did know how many times an individual had purchased batteries in the past six months, what devices they owned, the last time they bought a batteries, and where they were shopping for electronics right now.  In that way, Big Data renders group segmentation obsolete. Always On marketing operates on a segment-of one-philosophy.

What Does Always it Require?

An Always On marketing platform require four major components.

1. A Powerful Marketing Engine

The most critical component of Always On marketing is the ability to gather, process, and act on large amounts of data. Big Data generates a continuous fire hose of data that cannot be meaningfully processed by traditional analytic methods. A Marketing Engine is a collection of tools, partners, and processes that enable a brand to:

  • Combine multiple data sources to construct an actionable profile of each individual they encounter.
  • Apply business rules that allow real-time matches between individuals and brand content
  • Track responses of individuals to brand contacts and pursue different paths with that individual based on the nature of that response
  • Monitor performance across channels in a way that allows for constant optimization

2. Deep Reservoir of Brand Content

Even with the most powerful Marketing Engine in place, it is not effective if the interactions with people aren’t compelling and relevant. That’s why brands need to build and update sources of content that can be at the ready. That content can be constructed dynamically (e.g. customized offers),  pre-produced (e.g. how-to videos), or human (e.g. a customer service representative).  As brands embrace an Always On approach, the content needs will become apparent as their interactions grow and patterns emerge.

3. A Clear Brand Story

One thing that hasn’t changed about effective marketing is the importance of having a compelling brand story.  This is what establishes the fundamental human attraction to brands. In fact, it is even more critical in an Always On environment. That’s because the brand story has to be told in so many more ways that it used to be. As a result, more people are involved in telling the brand story than ever before. Community managers, customer service agents, other employees and brand fans join brand managers as promoters of the brand. They need a clear story that can guide their efforts in concert without centralized control.  While it may seem put of place in a discussion about Marketing Engines and Big Data, the core truth is that storytelling is more essential than ever. Now,  it not only has to inspire the people who hear it, but also inspire the people who tell it.

4. A Different Mindset

All of the above components are critical to deliver Always On marketing. Yet, they won’t work without an accompanying shift in mindset. Many marketing organizations are built to deliver tightly structured campaigns that require extensive time for deliberation, review and testing behind the scenes before each launch. Always On requires a “constant beta” approach where the testing and enhancements are being made in market.  While it is no less rigorous strategically, it embraces a quicker and less predictable cadence. More effort has to be into crafting playbooks and operating principles, and less into approvals of individual executions. In this way, marketing organizations may come to look more like the best customer service organizations, both highly disciplined and highly flexible.

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25 November, 2011 · 12:45 pm

Facebook: Rebel Becomes the Empire

Facebook recently hosted a very well run Studio Live event in town. The goal was to provide marketers with new ways of using Facebook to benefit brands and their fans.  It achieved that goal, but inadvertently revealed the choppy waters that churn when the currents of innovation and self-interest conflict.

Here’s what happened. As part of the day, Facebook sponsored a “Hack Session.” The idea was to think innovatively and provocatively around a real case study. Prior to the case, we heard inspired talks about the hack culture that drives the Facebook development team. We were encouraged to adopt the pirate mentality, think outside the box, break the rules, and act boldly.  Different stories were shared reinforcing the moral that too many marketers were still stuck in the old way of doing things. We all urgently needed to embrace the hack culture to succeed in the modern marketplace.

We then broke out into small groups for the Hack Session. Our mission was to take the lessons they’d shared to build awareness and support for Feeding America. To take advantage of the competitive nature of the attendees, it was set up as a contest between the groups. The winning team would have their ideas implemented and other tokens of glory bestowed upon them. Inspired by the competition and such a worthy cause, our group eagerly jumped in. The overriding challenge was to get support for a cause amidst the clamor of many other worthy causes. We quickly came up with several ideas, but one big idea revved us up the most. It started by building a Hunger page with local stories about people we could all relate to who are facing the challenge of where their families’ next meal is coming from.  But why would anyone notice or care? Because we were going to tap into one of the hottest memes around Facebook. We were going to give their page the first Dislike button. People would be able to come in and “dislike” hunger, and by doing so, generate a contribution to Feeding America.

We were fired up and on fire, spinning out PR, social, and promotional ideas in a happy frenzy. The Facebook people assigned to our group joined in enthusiastically – for a while. Then we got word from their organizers. Our idea would not be seriously considered for the competition.

Us: Why?

Them:  Because the Dislike button isn’t “feasible.”

Us: You mean it isn’t technically feasible?

Them: No, it just isn’t feasible that Facebook would allow it.

It wasn’t feasible even temporarily, even for a single page, even for a great cause.  It was clear that even the self-declared disciples of the hack culture have their limits. It is a persistent lesson in human nature, even amidst the ceaseless revolution that has defined the digital era.  It’s always easier to break the rules when they’re someone else’s.

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1 September, 2011 · 6:07 pm

What Comes After Facebook?

The ancient Roman Cicero said that “to be ignorant of the past is to forever be a child.” This seems an apt reminder for times when even recent history is ignored. As the Facebook retreat on Places and Daily Deals shows, it’s not the unstoppable juggernaut many believe it is. It is true that Facebook reaches more people than almost any other vehicle in the world. As such, marketers would be foolish to ignore it. At the same time, those with a long-term view would be foolish to assume it will continue to dominate the digital landscape.

The certainty of that statement doesn’t come from any brilliant strategic analysis, but only from history. In the past 15 years, there has been a steady historical record of supposedly dominant players overcome by the unceasing pace of change. Starting with Netscape, and continuing through Yahoo, AOL, and MySpace, the pattern repeats itself.  A new player establishes itself as the hot thing, rises to take over the dominant position in its category, and investors and pundits alike point to its widespread adoption as an insurmountable barrier to competition. Until it isn’t.

So what will replace Facebook and when? No one can know. But given the trends, you can make a good guess about where it might come from. The rise of the web has been an exercise in disintermediation, or in non B-school terms, the elimination of the middle man. Google has done that with content. It used to be that content and distribution were linked. If you wanted to find content (TV show, magazine article, etc), you had to go the content provider (CBS, Esquire, etc). Google let you find the content without going through the provider. They effectively decoupled content and distribution. YouTube, Hulu, and others have extended that separation. I can consume content without ever visiting the its source.

Right now Facebook links three things: distribution network, content creation and content consumption.  In other words, I have to use Facebook if I want to manage my list of friends, if I want to share something with them, or if I want them to share something with me. This combination makes it the hub of social activity. It makes it the second most visited site in the world.  That traffic provides its cultural currency and its commercial reason for being. Yet you can already see the potential for disintermediation. Social network consoles show a future where content creation and consumption are separated from the distribution network. Yonoo, Digsby and others let users bring content from several source into a single dashboard. It points to a future where I never have to be on Facebook in order to use Facebook’s distribution infrastructure. The same way that content sites get demoted to just something Google can scrape, social networking sites could become just feeds for the consoles. And if it does not already exist, it is not hard to imagine an app that manages your LinkedIn connections, Facebook friends, and Twitter followers in a single database that doesn’t require you to directly use their respective tools. If I can manage my content and manage my network without ever visiting Facebook, it becomes a conduit instead of a destination.

That may not be the way it plays out. But history says the digital barbarians are due to bring down the Facebook empire.

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24 August, 2011 · 6:06 pm

Paid-Owned-Earned is Not-Quite-Right

Like straw fedora hats, there are some trends you like that you know won’t last. Paid Owned and Earned is the fedora hat of marketing and media circles right now. It is stylish and current, and probably destined to last only a few seasons. It’s served a useful purpose in getting people beyond the old media labels that defined channels by their mode of delivery — television, print, online, OOH, etc. But it falls short of its own intent, which is to define media by how it connects with people rather than by what it looks like.

Paid Owned and Earned uses a financial nomenclature to separate media. As such, it represents the view of the producer not the consumer. Paid Owned and Earned may mean something to the company paying the bill. But does a person really care how a message was funded? Do people react differently to a message knowing that it is “owned” rather than “paid?” Of course not. These terms also lead to odd categorizations. Is a Facebook page owned or paid? A company doesn’t have to pay for a Facebook page, and they control the content, but they don’t own it either.

When I hear the savviest media people I know talk about Paid Owned and Earned, they are really using those words to mean something else. They are trying to describe the nature of how the marketing meets the consumer.

Here’s a more useful way to think about Paid Owned and Earned. First of all, we should start with idea that all marketing is some form of content. The content can be an app, a webpage, a 30-second TV spot, or a shelf talker.  If you think about all marketing as content, then you can think of media as the way that the content connects to the right person. In this model, there are three types of media:

1) Brand-t0-Person

The brand seeks out a person (or type of person) and puts the content in front of them. Ideally, it is content that the person welcomes, but they weren’t intending to find it. They went to ESPN, Huffington Post, or drove down the highway and the content came to them.

2) Person-to-Brand

The person seeks out the brand for the content they provide. They intentionally went to find it. They visited a website, downloaded an app, or searched for it. They found the  content instead of the content finding them.

3) Person-to-Person

 A person shares the content with another person. The brand is not directly involved in the exchange of content.

These categories are a more consumer-centered way of connecting with media. They are also more useful in understanding the role your media is playing in the marketplace.  It helps you think more clearly about how to allocate your media, construct a media plan, and measure its effectiveness. The only problem is that the labels aren’t as pithy as Paid Owned and Earned. How about some suggestions?

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21 June, 2011 · 3:44 pm

Digital Marketing is Dead – Long Live Digital Marketing

The marketing services community is undergoing yet another spin as the world’s cultural and functional landscape grows ever more digital.  On one side, so-called traditional agencies continue striving to prove that they get digital with all the subtlety of an American Idol audition. On the other side, digital agencies are equally eager to show they can take center stage after years of playing support roles. Both sides fear irrelevance as the “digital” label becomes as redundant to marketing as the word “hard” is to “rock.” When almost every communication medium is technically being created or transmitted digitally, what does it mean to be digital?

You can see the challenge of this realization in how larger agencies are repositioning themselves and their digital arms. Large legacy agencies that excitedly established separate digital arms 8-10 years ago, like Tribal DDB or G2, are now figuring out how to reel them back in. What was seen as innovative then is now seen as damning evidence that your mother company doesn’t understand the digital space. Digital agencies are dealing with different ramifications of the same issue. If all marketing is becoming digital, and some agencies like Weiden and Goodby show themselves to be as creative in the digital arena as they were in  broadcast, are digital agencies starting to look too specialized to drive big brand ideas?

For marketers trying to sort this all out, it’s best to avoid the labels of traditional and digital. They may have been helpful for understanding what these places did in the past, but they are not helpful for what they can do for a brand now. The world may be going digital, but that does not mean that digital agencies are the best choice for marketers going forward. Too many digital agencies got that title because of their expertise with a particular toolset – websites, mobile apps or social community management. The current rise of digital goes beyond the toolset. It is the influence on our culture and expectations where digital is now having the most impact. People who’ve never redeemed a GroupOn or tweeted a word are thinking and behaving differently because of the impact the digital world is having on everything we do. In that sense, being digital is no longer about a toolset, it is about a mindset.

Marketers looking for a partner who can help then succeed in the modern marketplace want an agency with a digital mindset regardless of their historical toolset. In a marketing sense, a digital mindset means:

Invitations vs. Performances

When you think of your potential customers in terms of an audience, you think in terms of performing for them. It’s your show, and they are there to enjoy it.  You’re looking for feedback, but only of a limited kind — applause, cheers, laughter, boos.  If you think of  your customers as participants in your brand, you think in terms of inviting them to join with what you’re doing. Sometimes you’ll both be in the audience together, sharing common interests. Sometimes you’ll both be on stage, sharing new product ideas. In these and every situation in between, an invitation-mentality reflects the digital sensibility of marketing with people instead of to them.

2.1 vs. Ta Da

A traditional mindset sees success as an event, whereas a digital mindset sees it more as a process. The traditional campaign mentality treats each new effort as one-time attempt to get it right. You work on pulling work together for six months or so, then unveil it to the world like a movie or a book launch. The digital mentality sees a world that is more iterative. In the digital experience, you don’t expect to get everything right in your first version. You build it as best you can, and you expect to have to issue new versions to address issues or opportunities you did not foresee, or that may not have been there when you started.  No success is expected to continue without continual refinement and improvement. A traditional mindset tends to see the world in discrete episodes. A digital mindset sees the world more as real-time stream.

Speed Skating vs Figure Skating

Figure skating and speed skating both involve competitions on ice, but success takes different paths. In figure skating, you are the best in the world to the extent that you can convince an influential panel of judges that you are the best. In many ways, it is equivalent to how agencies used to get ranked. If you won a lot of awards from judges who thought you were good, that meant you were good. In speed skating, you are the best if you go faster than anybody else. Digital agencies love measuring. They’re hungry to prove what’s working. They don’t only use data at the end to build the case study, they use it in the beginning to shape the work. Marketing will always constitute some measure of both art and science, but digital agencies look for inspiration from them both.

Architects vs. Authors

If  I ask  who wrote “The Great Gatsby,” many could tell me it was F. Scott Fitzgerald. If I ask  who built the Empire State Building, the answer is both less well-known and less clear. An author takes satisfaction in literally crafting every word of their work. Owning the idea in the literary world means owning both the overarching concept and each detail of its execution. You rarely see books credited to more than one author. The traditional mindset has a similar instinct around enshrining the auteur. Architects, on the other hand,  know that their craft requires collaboration across many fields. They put forward the vision, but recognize the critical need for fellow engineers, builders, interior designers, and a host of others to make the idea come to life. The architect parallels the digital mindset that naturally looks to partnership as the operative model.

Digital marketing is entering a new phase where is less about mastering the technology and more about mastering the cultural dynamic. The tools will constantly be changing, so the toolset becomes less relevant. The digital mindset is what will drive marketing into the next phase.

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23 February, 2011 · 4:44 pm

The Blessing of an Elusive Attention Span

Virginia Heffernan wrote a terrific piece in the NYT Sunday Magazine in late November 2010. Entitled “The Attention Span Myth,” she questioned the idea that the human attention span is in danger of eroding against the onslaught of technology and media. She spent a good part of the article arguing against enshrining  a long attention span as a morally and intellectually superior quality. But I found this particular paragraph the most powerful:

Whether the Web is making us smarter or dumber, isn’t there something just unconvincing about the idea that an occult “span” in the brain makes certain cultural objects more compelling than others? So a kid loves the drums but can hardly get through a chapter of the “The Sun Also Rises”; and another aces algebra but can’t even understand how Call of Duty is played. The actions of these children may dismay or please adults, but anyone who has ever been bored by one practice and absorbed by another can explain the kids’ choices more persuasively than does the dominant model, which ignores the content of activities in favor of a wonky span thought vaguely to be in the brain.

This insightful point puts the constant barrage of statistics on texting, video, and cross-media consumption into a very different light.  The point is that the cause and effect are essentially backwards. The always-on twitter-sized mediaverse is not creating our restless attention spans. Rather, our restless attention spans are creating the mediaverse. The reason that kids are texting their friends in history class isn’t because they are so different from the kids of 50 years ago, it is because they can. Quite simply, there were fewer options to being bored a generation ago. Back then, you could doodle, pass notes, or daydream. But if The Beaver and Cindy Brady could have gossiped with their friends instead of listening to a lecture on the Magna Carta, you can bet they would’ve done it. If good ol’ Dad in the worn leather chair could have checked out the sports scores when Ed Sullivan rolled out the trained dog act, you can bet he would’ve done it too.

In marketing circles, there are many who decry the media clutter as the enemy of effective communications. They protest that those fragile attention spans are making their jobs harder. With a bewildering number of choices at people’s disposal involving not only what types of media they consume, but when and how they consume it, it’s harder than ever to put across a marketing message. It was so much easier when people just stayed glued to their television sets. For this very reason, good marketers ought to be rejoicing. You used to be able to get away with being boring and expected as long as you had a big media budget. Now, the game is changing from who can command the airwaves to who can command attention. The winners will be those who can be the most interesting, entertaining, and engaging. That is a great thing for marketers. The harder it is for a company to connect with its current and potential customers, the more valuable those who can do it well become. Advertising people who used to complain about having to crank out formulaic commercials can revel in the challenge of making something that people will actually enjoy. I can’t speak for all my colleagues, but if smarts and creativity are increasingly the best ways to win, I can’t wait to play.

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28 December, 2010 · 3:13 pm

The Missing Measure of Business Strength

There are three areas that determine the strength of a business. Yet widely accepted measures have only been developed for two of them.

The overall health of a business depends on three factors:

  1. The quality of its products and services
  2. The cost/price structure
  3. The strength of customer relationships

The third area is often overlooked, but shouldn’t be. Peter Drucker distilled the issue into a fundamental truth when he said that “the purpose of business is to create and keep a customer.” It’s the strength of the customer relationship that makes people automatically ascribe higher levels of design and performance to Apple products.  It’s the lack of a customer relationship that feeds the high churn rates in wireless carriers. This is what CEO’s mean when they use the word “brand,” as opposed to what CMO’s often mean when they use the word brand. The CEO describes it in terms of a competitive advantage, and the CMO too often in terms of imagery and recall.

As vital as this relationship is to both the short and long-term health of the business, the measurements around it are not well-developed. There are rigorous measures and standards around quality, as evidenced by approaches like Six Sigma and third-party evaluators like J.D. Power. There are even more rigorous measures in place over the financial health of the firm, enough to employ an army of accountants at any large firm.  But measures of the customer relationship are underdeveloped. The net promoter score attempts to measure the customer relationship by likelihood to recommend to  friend. It is the closest thing we have to a standard measure of customer relationships.  As such, it has been a useful tool for many companies looking to develop a stronger customer-centered culture. Still, its critics are as numerous as its supporters because it lacks the objectivity that is standard in measurements of quality and financial performance. For example, people may be less likely to recommend something they perceive as a vice, even if they are very satisfied (e.g. high fat ice cream). Many companies have their own loyalty measures that are more sophisticated than the net promoter score. But the fact that they are proprietary means that it’s difficult to compare their measures to other competitive companies.

The day will come when savvy investors will analyze customer relationships as closely as they analyze EBITDA. That will be a good day for enlightened marketers because it will establish the best of them as mission-critical drivers of business growth.

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4 November, 2010 · 6:02 pm

Planning is Everything. Plans are Nothing.

The title above is from a quote usually ascribed to Dwight Eisenhower.  Though he was referring to battle plans, it is an apt lesson for business plans as well. His point was that the battle never goes as planned. Weather conditions, enemy reactions and human mistakes conspire to ensure that every military action usually goes off plan before the first shot is fired.  But if the planning process is done with the proper rigor, leaders can react more effectively to unexpected developments. They can assess how changes impact their overall strategy, and better judge the consequences of their subsequent decisions.

I recalled this quote after seeing an interesting discussion on LinkedIn debating the value of business plans for new companies.  Some potential entrepreneurs were dismissing the value of business plans for start-ups because they rarely had any relevance to the business once they hit the  realities of actually going to market. General Eisenhower reminds us how this argument misses the point. The value of a business or marketing plan is not in the plan itself, but in forcing you to think in a rigorous way about how best to deploy your resources. Who is your target? What’s your value to them? Who’s your competition? What kind of human and financial resources will you need to make a go of it? Of course, unless you are the first true psychic, most of what you come up with will be wrong.  The details of the plan may be mere historical artifacts within months of launch. But if you planned well, you are better able to identify and react to what you were wrong about.

The same lesson was delivered in another context by an accomplished climber I once heard speak. He described the meticulous planning process that his team followed before a major climb. They literally mapped out every step. He went on to say that they almost never followed the predetermined path once the actual climbing began, but it was the planning that allowed them to make intelligent choices under stress about what they could afford to change.

Whether you are crafting a business plan for a new company or a marketing plan for an established brand, there are three important lessons in this.  One is that a plan is worth what you put into it.  If you just go through the motions in order to be able to point to an official-looking plan, it will be of no value. Second, you shouldn’t dismiss the planning process just because the plans themselves are rarely executed.  A well-constructed plan will make you a smarter leader and manager for the unexpected turns that inevitably come your way. The final related lesson is that you should not treat the plan as anything but your best current guess. If the plan isn’t working, don’t be afraid to change it. Too many marketing managers disregard new information and new opportunities because it’s “not in the plan.” A plan is not a substitute for thinking. Plans should be treated more like boyfriends than husbands. You should always be open to a better one.

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14 September, 2010 · 9:59 pm

All Media is Now Earned Media

Reach is increasingly hard to buy.

As marketers try to sort the trends between traditional and non-traditional, online and offline, global and hyperlocal, at least one trend is clear. All media is morphing into earned media.

Earned media was typically used to distinguish from paid media.  Tools like PR and grassroots marketing that depended on some viral element to reach a large audience were put in the Earned category, and things like TV, radio, and print were put in the Paid category.  They were like apples and oranges. The common wisdom held that there was a clear trade-off between these categories. Earned media was cheaper to execute, but provided little or no control over what kind or how many people you would reach. Paid media was expensive, but provided guaranteed reach and frequency numbers that ensured the message was delivered.  The categories and the trade-off are both evaporating.

Technology and the explosion of choices have undermined guaranteed delivery.  New channels like YouTube are obvious examples of a choice medium where the viewership is entirely dependent on the nature of the content. You may get 10 views or 1 million views, but it’s impossible to predict. For every Annoying Orange, there are hundreds of thousands of unwatched puppet skits. But the even the so-called mass media are becoming increasingly choice-driven.  For example,  Morpace research estimates that almost 50% of TV viewing is via DVR, online, or other on-demand alternatives.  So even if marketers try to attach themselves to a hit show, their viewers increasingly time-shift and fast-forward past the advertising that is neither relevant nor interesting to them. The previous control over who and when your message would be seen is rapidly ebbing away.  The reach of a marketing message is increasingly dependent on the inherent value of its content regardless of the channel. That’s what we mean when we say all media is now Earned media.

Less obvious but equally true is that the low-cost perception of Earned media is also fading away.  A good press release or a publicity stunt just doesn’t go as far as it used to. The rise of social media has created more avenues for memes to rise and take hold, but also a flood of information that hastens their decline.  The competition for time and attention is more intense than ever.  So the chances of rising above the noise are less. And even if your idea does breakthrough,  it’s lifespan is much shorter because of the constant flood new work competing for the same attention spans. So even if the distribution costs of some new Earned media channels are lower (e.g. Facebook page vs. TV buy), the development costs in terms of the quality of the ideas, the frequency of the ideas, and the work required to populate those ideas with key constituencies is rising.

There are at least two implication for marketers. One is that they have to think of their messaging in terms of content. It must follow the basic principles by which we earn peoples’  interest in its own right or it will be ignored or skipped over.  This is true regardless of its form or distribution channel. The second is that they have to refresh their marketing efforts more frequently if they expect to maintain any consistent share of mind with their target.

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8 September, 2010 · 10:41 am

I Hate Focus Groups and You Should Too

Focus groups are the most  abused form of research in marketing.

I would go so far as to say that more harm than good has been done with focus groups. Because they are relatively easy to set-up and conduct, people overlook their inherent limitations in order to get comfort from having done some form of research before making a risky decision. It allows people to check the box next to research. But in many cases, it would have been better to do no research at all than to have only done focus groups. Here are several of the factors that make focus groups a less than ideal research tool:

Selection Bias: Most research is built on the assumption that you are tapping into a random sample of your desired target market.  Focus groups tend to have a persistent selection bias that negates that assumption.  In our time-starved society, few people are willing to go out of their way and give 2-3 hours of their time to discuss something they don’t care that much about for $50. Those that do tend to either have time on their hands, are eager to share an opinion, or really want the money. In some cases, that may be fine. In most cases, it introduces a type of person whose motivations are different from the target audience you want to understand.

Sample Size: The biggest abuse of focus groups is treating them like a quantitative study. Too often, someone will  conduct a series of focus groups, and form a conclusion about an idea based on the percentage of people who liked it. From a statistical perspective, this is unfounded. Five rounds of focus groups will involve about 20-25 people. Even if you assume a random sample of people, at this number the relative reliability of the results could be in the area of +/- 30%. So if 2/3rds of the people you talk to in focus groups give it a positive rating, it is equally likely that 2/3rds of your overall target actually dislikes the idea.

Rational Bias: Another well-known bias with focus groups is our desire to look smart.  Said another way, we tend to make up rational reasons for why we like or don’t like things, even when we don’t have any.  So when you sit people down in a room, walk them through an idea, and then ask them to comment, you are likely to get an artificial response. People don’t like to admit that they like or dislike things based on what may seem frivolous reasons to others. They won’t admit to wanting to look cool or be popular, even though we know that drives a lot of human behavior. So the answers you tend to get in focus groups downplay the emotional human elements that are central to our motivations.

Environmental Factors: There are a host of environmental factors around focus groups that color what you get out of them.  For one, you are often exposing them to an idea outside of its context or in a less tangible form.  For example, asking people if they think they’d notice a new package design after you’ve forced them to look at a picture of a package is not likely to get you a reaction anything close to glancing past a three-dimensional package in the middle of a supermarket aisle.

Group Dynamics:   Most of us like to get along with others, so there is a hesitancy to disagree openly with another person in the group. Some people tend to be more comfortable talking than others. When you combine those factors together, you tend to get people who unintentionally dominate a group. More extroverted people comment first, and that sets a bench line for other people’s response. Good moderators can help draw out people, but they are fighting a basic human characteristic. So group reactions tend to move toward consensus rather than diversity.

Lack of a Hypothesis: Good research should have some ingoing hypothesis that you are trying to prove or disprove.  For example, the hypothesis may be as simple as “current users prefer this new package design to the old one.” The format and questions in the research are then built around getting a solid read on that hypothesis.  All too often in focus groups, this discipline falls by the wayside. People will just want to do some focus groups to get a general reaction to an idea. Without a hypothesis, people just look at the collection of comments and try to discern possible patterns in them after that fact. The problem with this is that focus groups always generate a number of positive and negative comments. So you can construct any number of theories to explain what may be a random pattern of responses.

So when is it a good idea to use focus groups? For the reasons cited above, they are not good at projecting how meaningful or universal a particular reaction might be.  There are two situations when they are useful.  One is as a starting point. If you are early in your learning process,  and don’t even know what issues may be relevant, focus groups can help you get an initial lay of the land.  The other situation is when you want to better understand the reasons behind a specific reaction.  Suppose your team is working on a new interface design for a website. It’s a radical new design that you’re concerned might confuse novice users. A focus group would not necessarily give you an accurate sense of how many people found your interface confusing. But it could help you better understand what was causing the confusion for those users who were confused by it. In other words, if focus groups are not a reliable tool for finding the answer, they can be useful for understanding the reasons behind it.

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