Are you measuring the right things?

I’d like to share a story about a time when I thought I was measuring the right thing (but wasn’t). I had decided that paid search was the right answer for my business.  Many of my competitors were buying keywords and there was plenty of traffic in the space.  The popular terms were bid up to the $2-3 dollar price range and based on my conversion assumptions, I thought I could get the customer acquisition cost tuned to the point where we would have a strongly positive ROI. After about six weeks of adjusting bids, killing off bad ad creative, inserting new ads, and reorganizing ad groups, BINGO, the cost per customer landed within about 5% of my target.  Needless to say, I felt pretty good and was thinking it was time to “pour some gasoline on the fire” by making a big budget request.   It seemed like a sensible thing to do given the acquisition cost and conversions rate. Before making the “big ask” for budget I decided to take one more look at the numbers.  I wanted to make sure these new sign ups would become productive long term customers.  My back-of-the-envelope estimates prior to the campaign had assumptions for the average revenue per customer.  The real data, however, showed that these customers yielded 75% less revenue than our “typical” customers, pushing this campaign into the red.  I was relieved to discover this before dropping  a large sum of money into this medium. The moral of the story: make sure you are measuring the right things and they are connected to real results. In most businesses, activity-based measures like leads or traffic are directional indicators.  In the end, revenue and sales are what really matter. So, what are you doing to connect your marketing activity to bottom line...

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The anatomy of a great april fools promotion

Did you know that the word gullible is not in the dictionary? Bah, dum, bum, crash.  Thank you very much.  I’ll be here all week.  Don’t forget to tip the waitresses. I knew it was going to be one of those days when my 7 year old started the day with her own April fools joke.  I hope that she sticks with her strength which is sales rather than marketing.  Her delivery was good but her creative strategy was flawed. After about the 10th fairly obvious gag campaign of the day, I started to think about what makes a truly great April Fools promotion (I’m not calling them jokes as they are often well planned online marketing campaigns)?  Here is my list: Consistency with brand – The best ones are “on brand” making them truly believable. Good enough – Some of the promotions are just too “over the top”.  Think about the Google CADIE application listed on their homepage.  Not only did it stick out like a sore thumb but it was just too clever even for Google. Easy to share – It is simple for the person getting “conned” (I believe the technical term here is sucker) to forward it quickly before he/she has time to realize it is bogus. Has a great payoff when forwarded – The person who forwards it will suffer great humiliation from friends and coworkers when the obvious hoax is discover.  This also gives the embarrassed a strong incentive to try to “get” someone else (think viral spread). Mainstream media picks it up – You get bonus points if the media first report it as real news but in the end, this is a PR/viral marketing exercise so any mainstream coverage is a big win. Just think of it as a viral campaign with a twist.  More than just getting a simple laugh, you need to make sure the forwarder also feels the pain. Did I miss any other obvious...

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Are you an accountable marketer?

I think marketing people get a bad rap and often think that accountability is the root cause.  Too often we use words like “brand building” to mask the fact that we can’t connect some of our activities with tangible results. Here are some questions to assess how accountable you are as a marketer. Do you do everything you can to track the results of a program (ie coded URLs, special offers, etc)? Do you freely admit when a program was a complete bust even if all the data is not in? Do you create a back of the envelope estimate for the campaign before you start with the creative? Have you sensitivity tested your campaign assumptions based on past program results? Do you ruthlessly remove the worst performing programs from your budget each year? Are you always looking for something that can outperform your tried and true programs? Is your CFO an ally? Does your CEO offer you more budget if you can find positive ROI programs? Do you favor effective over creative? Do you have a bias toward measurable programs? Did I miss any others? Let me...

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My week in social media and beyond

Busy week so I didn’t have time for any opinion pieces.  Here are some highlights from the week and what is on my mind. WebInno21 – Amazingly this was my first time at the event.  I’ve signed up before but each time it just never happened.  If you in are in Boston, it is a must.  Almost 500 entrepreneurs and service providers filled the room.  Unlike other “networking events”, this one was packed with people actually trying to build stuff and change the world. Adroit Interactive –  They received the most votes from the crowd at WebInno.  I really like the idea of dynamically driven ads, but I am also wary of any business working on a CPM basis when the aftermarket prices for online ads are under $1 these days. BravoCart – I am sucker for boring (sorry guys but shopping carts are not sexy) technologies that make a big difference.  I know, I know, shopping carts are so 1998 but I would bet these guys have the most success of the the main dishes at Webinno.  In the end, their core customers will “get it” and the ROI will be easier to demonstrate. Dropcard – I handed one guy my business card and he immediately typed it into his iPhone.  It wasn’t until I returned to my office the next day that I discovered he had sent me an electronic business card.  Pretty cool. Dapper – Adriot’s competitor in the dynamic ad market gets bonus points.  I was among the compulsive tweeters at WebInno and Dapper smartly responded to one of my tweets.  They are now on my radar.  I guess social media really does work. I am off to SXSW (that is South by Southwest for the rest of us) next week.  I should have lots of tasty morsels to blog about. Stay...

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Social Media Advertising: Does it work?

As I shared earlier this week, I’ve been experimenting with social media advertising on Facebook.  The results to date have been, how do i say this politely, appalling.  I knew from my prior research that the clickthroughs would be lower than paid search on Google but given the lower expected cost per click and and larger number of impressions, I figured we might “make it up in volume”. Here some interesting articles I’ve compiled while I try to assess the effectiveness of this campaign and my future with social media advertising. Ad Gurus Find The ‘Real Value’ Of Online Advertising Remains Elusive What’s the future for social network ads? Reach versus Engagement, part II (full post) Quick Case Study on Facebook Advertising The Facebook Ad Experiment — 5 Recommendations for a Successful Campaign Facebook Ads: Ineffective or Fraud? Social Network Advertising Must Change for Brands Results From My Facebook Ad Campaign As you can see, the jury is still out for social media ads and only more testing will help us discover the truth. Have you read any good...

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Making a bad decision on purpose: option value and social search

Am I going soft? I’ve been dabbling with paid search on one of the major social networks.  The interesting thing is that we decided to press forward despite the fact that our “back of the envelope” calculations using an optimistic lifetime value estimate projected that this campaign will end up underwater. I frequently rant about the value of running the numbers first but in this case we decided to “do it for strategic reasons”.  More specifically, this campaign had high option value.   In a situation like this, a simple ROI calculation may not be enough.  Conventional projects with predictable outcomes can use straightforward estimates.  When venturing into the unknown where the risks are greater and the future is uncertain, people often use real options as a way to capture the potential value of an opportunity. So in this case, paid social search is a good fit for thinking about option value.  Despite a lousy initial estimate, there is great potential in the medium.  If this works, it could open up a big, new promotional channel.  It could also be a bust.  We’ll never know unless we try it. So can you think of any high risk projects that have a small chance of a exponential...

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