Data is a distraction

The paradox of modern marketing can be summed up in two quotations by Dr. W. Edwards Deming.

"In god we trust. All others bring data."

"The most important things cannot be measured."

We are awash in marketing data today. Between behavioral tracking on the web, GPS enabled devices that are capable of telling us where a consumer is when he accesses our mobile ad, set top box information from cable and satellite providers, check-out scanners, bio-feedback research and a whole host of other new technologies; we have more data than ever about when, where and how consumers interact with marketing communications.

Unfortunately, none of it matters because we have no idea whether what we're measuring actually drives sales.

Did a customer buy because he clicked on a banner ad, saw a TV spot, liked us on Facebook or got a digital discount as a reward for checking in on Four Square? And just because someone did it today, does it mean he or others will do the same tomorrow?

Who knows?

The answer, of course, is nobody.

Despite all the pontification, prognostication, posturing and polemics, the marketing measurement industry has yet to offer anything of substance when it comes to connecting our off- and on-line activities with actual consumer behavior.

Does that mean we should not be measuring the effectiveness of our marketing efforts? Absolutely not.

But if I were managing a brand, I wouldn't accept any measurement as gospel if those presenting it aren't able show a direct causation between their research results and sales.

There's no fighting the future

In the '80s the mantra was "I want my MTV." Now it's just "I want my TV."

We can't get enough.

The average American watch five and a half hours of live television per day. Toss in DVRs, web videos, streaming on smartphones and tablets and that number climbs near double digits.

So it's not surprising that ABC is enabling viewers in New York and Philadelphia who subscribe to a cable service to view network programming on their mobile devices with their new Watch ABC app.

As live viewership in the home continues to dip thanks to DVRs and services like Netflix, networks have become less valuable to advertisers. Adding more viewers who can't skip commercials whether their in their living rooms, offices, or anywhere else helps support their ad revenue. Plus offering the service only to cable subscribers helps build subscription revenue.

It's not the answer to the networks' ongoing issues, but it's a move in the right direction.

Bad ads are bad for business

After a recent run of particularly distasteful ads, clients, account supervisors and creative directors may want to revisit this study from Harris Interactive and Adweek of a few years ago.

What it boils down to is obvious. Offensive advertising drives customers away.

So why does it keep happening?

Because everyone wants their ad to "cut through the clutter," to be memorable, to drive social buzz, to appeal to the holy grail of marketing targets – 18 to 34 year olds (which in and of itself is insane, but that's another post).

Advertising is harder than it looks. Creating interest in toothpaste, underwear, web domains, appliances and other items that most people really don't spend a lot of time thinking about requires you to take risks to get noticed. But it also requires you to be smart.

There's nothing wrong with being exclusive and creating work that appeals to your target, but it rarely pays to be offensive.

I'm not sure if more people are making dumb decisions about their advertising now than a generation ago or if we just see more of it thanks to Facebook, Twitter, and YouTube. Whatever the case, the price you pay for lack of judgement is much higher now than ever.

So in the immortal words of Sargeant Esterhaus, "Let's be careful out there."

Not a banner day for advertising

As a public service to anyone planning their next online ad campaign I offer up the following facts about internet banner advertising.


1. Over 5.3 trillion display ads were served to U.S. users last year. (ComScore)
2. That’s one trillion more than 2009. (ComScore)
3. The typical Internet user is served 1,707 banner ads per month. (Comscore)
4. Click-through rates are .1 percent. (DoubleClick)
5. The 468 x 60 banner has a .04 percent click rate. (DoubleClick)
6. An estimated 31 percent of ad impressions can’t be viewed by users. (Comscore)
7. Eight percent of Internet users account for 85 percent of clicks. (ComScore)
8. Up to 50 percent of clicks on mobile banner ads are accidental. (GoldSpot Media)
9. 15 percent of people trust banner ads completely or somewhat, compared to 29 percent for TV ads. (eMarketer)
10. 34 percent don’t trust banner ads at all or much, compared to 26 percent for magazine ads. (eMarketer)

Do you remember when banner ads were supposed to finally bring accountability to the ad business by offering an platform where actual consumer behavior could be measured? The phrase, be careful what you wish for, comes to mind here. It appears that if you're looking for a more cluttered, ineffective and easy to ignore ad tactic, it would be hard to underperform banner ads.

This is why the New York Times and others are trying different revenue models for their online content. It has to be easier to convince consumers to pay for quality content than businesses to pay for ads that work this poorly.

It isn't the real thing

If you're counting on online buzz to drive sales, you might as well bet on the Cubs to win the World Series this year.

Yesterday at an Advertising Research Federation conference in New York, Coca Cola – a company that measures just about everything it does – had this to say about the connection between online "buzz" and business results...

We didn't see any significant relationship between our buzz and our short-term sales.

Count me as one of the least surprised people in the world.

Coca Cola has 99.9999999% awareness. I know where to find it. I know how much it costs. I know how refreshing it is. But somehow the expectation by the advocates of buzz is that I might see a post about Coke on a friend's Facebook page and Twitter feed and suddenly decide to go buy one?

I think not.

After this news and yesterday's post, I hope this signals a return to sanity in marketing where we'll focus more on using the tools for selling rather than just making noise.

Geico gets it

I spend a fair amount of time – maybe too much – pointing out the inane, misguided attraction some marketers have to shiny new things and the ridiculous language they use to justify their infatuation.

Not today.

Because today I want to share an interview with you from a marketer who has thrived in the brave new worlds of interactive and social media without adding to the froth and blather.

Ted Ward is the CMO of Geico Insurance and a very smart marketer.

How do I know he's smart? Well, first of all, he agrees with me.

Actually, this interview in Advertising Age is one of the best examples I've read from someone who understands that the tools of new media are just that, new tools, and do not change the fundamental principles of marketing. This quotation really stood out to me.

There is a reason it is called social media and not business media. There is much less control over the inputs and outputs, and the metrics of success are not as closely tied to direct business results.

It's not that Geico doesn't use social media. It's not that they aren't heavily invested in online marketing. It's just that Mr. Ward and his team know that online and social media all part of a mix and without data proving the efficacy of their activities, all the buzz in the world doesn't matter; an attitude sorely missing in many marketing departments these days.

Question before you measure

It has been said that we manage what we measure.

That was pretty simple when marketing measurements were limited to ratings, readership, reach and frequency.

The world is a little more complex now.

We can measure just about everything: Likes, Fans, Tweets, Mentions, Opens, Check-ins, Visits, Brainwaves, and more. The list is almost endless.

The question isn't "Should we measure?" but rather "What should we measure?"

The answer, of course, is "That depends."

Most businesses don't have the resources to measure everything, therefore need the discipline to measure what's most important. So before you add new measurements to your metrics, ask yourself a few questions:

• Who is our target? 
• How does this help us learn more about them?
• What are our objectives?
• How will we use the information to improve our marketing?

It's easy to get excited about the latest measurement tool. But if it doesn't measure something that's important, you're better off without it.

Ford gets its logo back

Ford celebrates regaining ownership of its trademark

What's a brand worth?

In the case of Ford and a few of its trademarks – the 'Blue Oval', Mustang and F-150 – somewhere just south of 24 billion dollars.

In 2006, Ford used those trademarks, along with a few other assets like their world headquarters building, as collateral for a $23.5 billion loan that they used to restructure the company.

Fortunately for Ford, they brought the right people on board, made some very smart product decisions and continued to build their brand even though it was technically owned by the bank.

The result? Six years later, Ford is incredibly profitable, has significantly paid down its debt, and thanks to an upgrade in its credit rating, regained ownership of the blue oval and all its other trademarks.

None of it would have been possible had the Ford brand not been so valuable in the first place. The bankers knew that even if Ford defaulted on its loans, they could sell the trademarks and other assets to another company and get most if not all its money back.

Yes, it's important to build remarkable products. But Ford proves that having a remarkable brand can mean just as much when times get tough.

Is Arby's future Burger King's present?

Yesterday it as reported that Wendy's passed Burger King as the second largest hamburger chain in the U.S. in annual sales – $8.5 billion versus $8.4 billion – even though Burger King has 1,500 more stores.

What does this have to do with the future of Arby's?

Recently Arby's hired Burger King's former marketing director, Russ Klein. He promptly fired BBDO, the advertising agency who's work contributed to five consecutive quarters of growth for Arby's.

With whom did he replace BBDO? CP+B, his former agency Burger King. They were fired after his departure and six consecutive quarters of declining sales.

If the definition of insanity is doing the same thing over and over again expecting different results, then Arby's executive team needs to spend some time on the couch.

Klein in talking about his decision to Adweek Magazine says. "CP+B is the most decorated agency of the last 10 years."

That's great. Awards are nice, but the true value of an agency/client partnership must be measured at the cash register. Subservient Chicken got a lot of views and praise from the ad industry, but how many chicken sandwiches did it sell? The Whopper Lust campaign got press, but giving away your signature product for free is not a recipe for profitability.



I realize that marketing isn't the only contributing factor in Burger King's decline, but unless Klein and CP+B are more disciplined strategically and focus on the things that truly drive business instead of clever but irrelevant marketing tactics, why should we believe the result of their partnership will be any different.

The upper limits

Yesterday after a very nice three year run, Apple's stock price hit $500 a share.

If you own it, you might want to think about selling.

Not that Apple doesn't make great products. Not that Apple won't continue to make great products. Not that Apple won't continue to be successful. But Apple's upside does have it's limits.

As the premium provider in all the categories it competes, Apple can only expand so far and maintain the price premiums they charge for their MacBooks, iPhones, iPads and iPods.

Apple is like BMW, Bang and Olufson, and Ritz Carleton. There's a limit to the market share premium brands can command. All these brands must innovate to maintain margin rather than grow share.

The share leaders always exist in the low to mid range of the market – Toyota, Chevrolet, Sony, Holiday Inn, HP, HTC, etc. – brands that compete on price and struggle with margin. Apple can't and shouldn't play that game.

Right now Apple owns about 10% of the PC market, 27% of the smartphone market and 58% of the tablet market. In all except the PC category, their share is declining due to the growth of lower priced competitors. I fully expect that when the latter two categories reach maturity, Apple will own a profitable 10% of each.

That means their only real opportunity for growth is to create new categories like they did with iPod/iTunes and iPad/App Store. My fear is, without Steve Jobs at the helm, their chances of doing that are greatly diminished.

So had I been smart enough to buy Apple stock instead of all those MacBooks, iPods and an iPad, I'd be hedging my bet right about now.