Manhattan Marketing Maven

Brain Science Validates Advertising Assumptions

 It’s always heart-warming when science validates the assumptions that underlie our thinking about messaging and media.

 

For years advertising agencies have been advising clients that disruptive or unexpected imagery seen, scanned or read with some frequency builds brand impressions. And that these impressions turn into awareness, preference, and purchases over time. Freud inferred that the unconscious mind picked up and processed as many signals as the conscious mind and on this basis the advertising industry developed rules of thumb about how, when and how often to intercept consumers and present brand messages.

 

Now brain researchers at

Tel

Aviv

University

have conducted experiments to prove this point. Professors Moti Salti, Dominique Lamy and Yair Ben-Haim documented that unconscious perception exists. A far cry from Freud’s postulates about repressed trauma and childhood angst, the data suggests that our brains take in signals and process messages on several simultaneous levels of consciousness. Perhaps this explains why even those who skip the commercials and flip past the ads can recall brand logos and key copy points. According to Professor Salti, “You walk around and are exposed to many stimuli from all directions but are aware of very few.”

 

The tests exposed participants to a square on their computer screen. By hooking these subjects to an electroencephalograph, they charted brain activity to document how and when they were conscious of seeing the square. In 50 percent of the cases they could pinpoint the exact location of the square, even if when questioned about seeing a square, they could recall nothing. The complete scientific results are being published in the Journal of Cognitive Neuroscience.

 

The implications for marketers seem to be …

 

1. Don’t focus as much on engagement as on exposure. Carpet bombing might work better than we thought especially if the brain is your ally in reaching individuals who aren’t formally paying attention.
2. Frequency works. The more unconscious exposures, the more likely that the target customer will “absorb” your message regardless of his or her intention or viewing and reading habits.
3. Create scan-able messages. Don’t assume ads will be read or watched. Approach traditional advertising creative like online creative; assume things will get a quick glance at best. Then purposefully create a stimulus that is distinct and different from what is expected and what is popular and you gain a nanosecond or two of extra attention, enough to score that unconscious comprehension.
4. Messages Don’t Need to be Linear. It’s possible that those ads you see and scratch your head about, thinking “what were they thinking” may be scoring more points that we thought.
5. Subliminal advertising might exist and work.

Can Online Display Ads Work Harder?

Online display ads are the red-headed freckled kid of interactive advertising; present but not quite understood even though last year 4.5 trillion ads were served and each of us was exposed to nearly a hundred ads per person each business day. 

Marketers spent an estimated $5.9 billion in 2008 to spray and pray banners, skyscrapers, advergames, “ghost” ads and moving or animated images (the top five ad formats) across the Internet. Some hoped to provoke clicks and convert those clicks into sales. Yet many just hoped to expose passing web surfers to a brand image or brand impression in the hope of raising or extending awareness or priming the pump for later consideration or sales. 

And while the metrics of direct response advertising is generally known there is still no real consensus around and the value and utility of display advertising other than the logical belief that what worked for a century in traditional media ought to work in digital media. And while we buy the logic, many of us still have the “banners suck” mantra at the forefront of our consciousness.

But rationally it makes sense. Images, sound, moving pictures and uber creativity ought to capture the attention and motivate consumers at least as well as short text ads served up by search engines. But the difference for leading display ad sellers like Yahoo, Facebook, Fox Interactive, Microsoft, AOL and Google is in the perception of value and the ability of marketers to target and measure campaigns. And while 9.5 percent of campaigns were “behaviorally” targeted using a variety of methods and measurements, most marketers don’t have faith that they can effectively and efficiently reach target audiences using online display advertising even in this environment where there is a glut of inventory at significantly discounted prices and a gaggle of ad networks peddling remnant inventory for as low as 40 cents per thousand. 

The Online Publishers Association and ComScore, both seriously interested parties, did a study of 80 campaigns for 50 top brands which was tracked across the top 200 highly trafficked sites and concluded: 

1. The 80-20 rule applies to clicks. Eighty percent of the clicks come from 20 percent of the people exposed to the ads. At very best only 1 in 5 ads draws a click whether that was the intention of the ad or not. 

2. Displays Ads Prompt Search. Queries for terms exposed in display ads were searched 50% more often a week after exposure and 38% more often even 4 weeks after exposure. If you see something that intersects your interests or your personal wish list, you are more likely to search for it directly when you’re ready to buy. Direct and brand advertising interact synergistically online and offline. 

3. Display Ads Drive Site Engagement. Those exposed to ads spent 34 minutes per unique visitor on the sites exposed. This is hard to believe in terms of the time spent on site and the amount of “lift”. Maybe it just measures the vagaries of site architecture and navigation. 

4. Brand Exposure Bumps Up eCommerce. Those exposed to brand ads spent 7% more on average when they bought. This feels like advertising orthodoxy; exposure drives awareness, consideration and purchase and maybe added exposure convinces customers to trade up a little.

But whether you buy this data or not, the issue of buying, targeting and measuring still looms large for anyone seriously contemplating an online display campaign. Into this fray comes Shaukat Shamin, a Yahoo veteran with $6 million in venture money from Rembrandt Ventures, Onset Ventures, Reid Hoffman and SoftTech VC, and a brand spanking new display ad platform solution called Permuto. 

Permuto purports to create tools for display advertisers similar to the Google Adwords toolbox which will enable targeting, price negotiating, clearance verification, reporting and more effective sales conversion from display ads. Shaukat has organized a network of about 100 eCommerce, comparison-shopping sites and bargain hunter sites that cookie prospective buyers based on the category, product and SKUs they look at online. 

They observe, infer and assign an “ActiveShopper Score” to these individuals and then offer marketers the opportunity to follow and serve them display ads for the products they spent time with on a cost-per-click (CPC) basis. He claims this is different and better than existing "remarketing" solutions but I can't see how. You buy this service on a per-SKU basis and, so far, there are no packaged deals to be had for multiple product sets or categories and there is no product or category exclusivity available. 

At this point v1 doesn’t offer sophisticated targeting options against an estimated reach of 70 million prospective customers, but “more is planned for the future.” Overtime the marketers adopting this tool will develop best practices and/or common understandings about how to leverage the built-in functionality to optimize behavioral targeting and cost efficient conversions. 

Permuto doesn’t help if the goal of a display campaign is brand exposure or awareness in which case we’re still stuck trying to figure out how to buy, place, negotiate and prove that display ads work.

Two New Important eCommerce Factors Revealed

On the cusp of the Shop.org meeting, with ten weeks to go until the annual “Black Friday-Cyber Monday” holiday sales kick-off, new research-driven insights into cross-channel shopping and shopping cart abandonment could impact recession-affected eCommerce sales.  

Lauren Freedman’s 5^th Annual Cross-Channel Shopping Study reveals a drop-off in in-store pick-up, which could potentially depress sales and disrespect a primo audience—multi-channel shoppers. By looking carefully at 40 websites and mystery-shopping 77 retail stores, Lauren and the E-Tailing Group discovered “many merchants are not taking advantage of opportunities to sell and service the cross-channel customer.” 

Multi-channel shoppers, according to IDC’s Global Retail Insight survey spend 15-30 percent more than single-channel shoppers and they do it more frequently. Those who shop multiple channels simultaneously spend 15-30 percent more than less hyper multi-channel shoppers. So if you ignore, disenfranchise or piss off these guys you are disconnecting a mighty purchase stream. 

Over the last year same day and in-store pick-up of merchandise purchased online has fallen off.  Availability of in-store pick-up fell from 54% of surveyed merchants in 2008 to just 39% this year. And the training, signage and dedicated effort to facilitate easy offline pick-ups have degraded as well. Only about ¼ of merchants have web access to shoppers should something be wrong or an instant validation be required. 

The ability to whiz through the store and collect your eCommerce goods has also fallen off significantly. In 2008 26% of merchants required no additional check out but this year only 4% offered this express “grab-and-go” option. As you might imagine customers madly buying from catalogs, using iPhones, shopping  at websites, clicking on e-mails or dialing 1-800 numbers want their stuff quickly. The key to multi-channel satisfaction is near-immediate gratification. 

Maybe this fall off in customer focus and service reflects the reaction of notoriously cheap retailers to the pressures of the recession. Or maybe they’ve just taken their eye off the ball. Either way, ignoring a critical sales driving segment doesn’t bode well for the immediate future. 

If under serving key customers doesn’t get your attention, maybe new purchasing patterns will. According to a new study by McAfee, 65 percent of all online shoppers sleep on their purchases. The Digital Window Shopping study, which tracked 163 million online purchases, found that 2 out of 3 online shoppers wait an average of 33 hours and 54 minutes before completing a purchase.

Evidently what we’ve been scoring as cart abandonment seems to be a recession-driven “mulling over period” that, according to McAfee, can be influenced by displaying trust marks or security policy. This is a ready-made case for deploying a robust persistent shopping cart and/or using triggered e-mail messages to nurture and close more sales. 

After ten years of robust holiday eCommerce we are still learning new tricks and understanding the nuances of online merchandising. These new data points remind us that retail is dynamic and that by measuring the use of technology we can consistently improve our customer support and sales performance.

 

 

 

 

 

 

 

3 Ways for Agencies to Cope with Recessionary Pressures

Ad agencies have always been at the mercy of client anxieties. Now that it's 2010 planning season, agencies are getting hammered on process, productivity and price. Agencies have always been the whipping boys for all manner of brand or product performance issues. Everyone understands that agencies exist so they can be fired. Everyone also realizes that the core agency value proposition is either “we know or can do something you cannot” or “we have arms and legs to get things done faster, better and/or cheaper than you can do it yourself.” 

But during this recession agencies have had even more tenuous relationships with their clients. The list of clients that broom agencies quickly seems to be growing. The research indicates that clients change agencies, on average, every 2.5 years, twice as frequently as before. There are all kinds of reasons but the bottom line is that few clients believe that agencies are long-term partners.

You can’t be a partner if they don’t know you well. Rarely are agency chieftains, part of a client’s inner circle. It is unusual for agency heads to be considered the CEO’s or even the VP Marketing’s consigliore or to even have a voice in crafting client strategy. Instead agencies and their leaders have become receivers of strategic output and implementers of tactical plans. 

Very few clients believe that their agencies actually know the fundamentals of their business, their category or the critical processes within their enterprise. Agency expertise is understood as generic, plain vanilla project management and content creation. Agency outputs are commodities that can be priced and negotiated by purchasing agents.

And even that role, too, has a built-in trap. Aggressive cost controls and benchmarking have given savvy clients unusual leverage. Many specify upfront the time, cost and staff to produce a postcard, a website, an e-mail campaign or a #10 mail package. Few are willing to pay for anything but minimal staffing. Even fewer are willing to pay for senior people who allegedly bring added value, insight or experience to their accounts.

Yet agencies, from the 2-person shops to the global conglomerates, seem to be impotent to affect the size, timing or sequence of client spending. Agencies are output. It is a sobering thought, which fundamentally changes the game. Yet changing these circumstances requires changing the way agencies do business.

Consider three areas to creative an opening for agencies to have a greater impact on their own fate.

Leadership. Clients hire agencies that have a point of view. If you don’t have a POV you are just another vendor cranking out pretty pictures or punchy copy. Unfortunately too many agencies either haven’t developed or articulated a distinguishing POV or are unwilling to expose their POVs for fear of rejection. In a corporate and financial environment that risk averse, having a POV is a point of distinction, which must be leveraged to an agency’s benefit 

Agencies often have practical knowledge not only about a client’s strategy but generally understand the distribution channels, the media, contact centers, customer service, fulfillment, retail traffic patterns and nuts and bolts operational reality. Agencies are often in a position to traffic information, data and ideas among and between different business units and to infuse grand schemes with a healthy dose of reality. 

Leadership requires agencies to get out ahead of their clients by thinking through and anticipating events, sketching out likely competitive scenarios and contingency plans, understanding the personalities and power dynamics within client organizations and presenting “crazy” ideas or trial balloons for client consideration.

Doing this requires proactive thinking and investment spending. It also requires that use senior, seasoned people to get top-level access and to put this stuff across persuasively. Account people who take reasonable risks, get beyond the day-to-day and become trusted, memorable or effective on the basis of their personalities play a critical role in offering clients the leadership they crave. 

Efficiency & Transparency.    Developing tools to train, manage, deploy and effectively use agency resources is critical to maintain margins and grow profitable businesses. Clients routinely ask skeptical questions about rates, billing and productivity. Though most agencies have adopted the professional services fee model, they haven’t used professional services norms to maximize the value, productivity and utilization of their people.

This is not a software problem. It is a matter of understanding who is working and what they can do and mapping these resources transparently against client needs in real time. Improved real-time resource planning in-tandem with clients is a necessity. 

Agencies have not parsed work among or between teams to capitalize on expertise or economies of scale. Nor have they used time zone differences, cost differentials or global resources to move projects ahead faster or to squeeze out better margins. Force utilization tactics and productivity measures, beyond counting billable time, are virtually unknown in the ad business, even though other industries have used these techniques to great effect in reducing costs and cycle times while motivating their best people. 

Alliances.  Every agency has loads of alliances. They are usually touted in press releases. Yet few can actually capitalize on these relationships to the benefit of clients. And while they sound good in credentials presentations, far too many agencies can’t,  don’t or won’t leverage these alliances because they cannot control the ally’s end product or they fear disintermediation.

These twin demons --- paranoia and the need for control – have undercut most agencies claims and seriously burned credibility in offering clients the ever elusive “integrated solution”. The ability to leverage resources within networks is still the exception rather than the rule and has led all but a few clients to reject the idea that they can get full service from any one company. 

Clients believe that each agency has one or two core strengths. Nobody really believes that any given agency is tops in everything. Having, using and delivering credible, expert allies is critical to consolidating, maintaining or expanding  any standing with the leading marketers and brands, especially at a time when they are working with skeletal staffs.

Being able to field a coordinated team of agencies who will uniformly understand client objectives and culture, work in a coordinated manner, deliver against integrated timetables and husband precious marketing dollars is the Holy Grail. Orchestrating alliances is the best chance for finding and delivering the Grail to our clients.

Leadership, efficiency and alliances are three areas directly controlled by agencies. They have traditionally influenced relationships with clients. Whining about the economy isn’t the answer. Leveraging agency assets is the only hope.

The Marketing Job Market Sucks -- But Don't Panic

Advertising and marketing have been devastated and decimated in the continuing recession. Nielsen reports ad spending is down 15.4% the first half of 2009 compared to last year. Everyone has a bunch of friends out,looking and anxious.  Every agency and marketing organization has shed jobs and many will continue to pare down staff and freelance slots.

Jerry Bernhart, ace DM recruiter, surveyed 418 unemployed executives during the first week of September and found that searches are taking longer than before and that marketers' were out of work almost twice as long as the national average 28 weeks versus 15.5 weeks. 

More than half of unemployed ad folks reported looking for a new gig for 7 to more than 10 months. And as you might imagine, the higher the rank and the salary sought; the longer the search. A third of those seeking $200K plus salaries reported being "on the beach" for 10 months or more. There is plenty of reason to worry.

But, says my friend Kimberly Bishop, one of Businessweek's top 100 recruiters,don't panic and don't do crazy, desperate things that can sabotage your search. She cautions candidates to “differentiate yourself and stand out from the crowd but not by being obnoxious or by being a jerk.” 

Kim’s Top 5 search killers are: 

1. Don’t force yourself on someone’s calendar. Don’t invite yourself using Outlook. Don’t pressure an assistant. Don’t show up unannounced. Don’t make threats or demands. Don’t send gifts, novelties or packages. Don’t beg. 

2. Don’t pretend you have a relationship with a recruiter. Don’t drop executive names. Don’t say you are a distant cousin. Don’t masquerade as someone else to get through the phone screener. Don’t pretend someone the recruiter knows referred you. Don’t pretend to be a survey-taker or a customer service representative. 

3. Don’t spin or spill a sob story. Don’t discuss your conditions, your medications, your mortgage, the state of your relationships, your immigration status or your creditors. Don’t suggest that there will be dire consequences if you don’t get an interview. Don’t whine. 

4. Don’t go over the top. Don’t send over-the-top letters, videos or creative presentations comparing your career to famous actors, professional athletes, national political figures or Nobel Prize winners. Don’t exaggerate or claim credit for others’ work. Don’t brag.  Don’t use profanity. Don’t sing, recite, rap or whistle. Don’t make up heroic or mythical stories. Don’t denigrate co-workers or former employers. Don’t share information or materials that are proprietary to former employers. 

5. Don’t ignore the basics. Craft a perfect resume. Prepare for the interview.  Anticipate the questions.  Have your elevator pitch ready.  Cite examples of how your experience matches the job description.

There are lots of good reasons to freak out. But it's a waste of time and energy. It's not productive. Marketing continues. Firms need entry-level, mid-career and senior experts to help them. The smart players know they can gain share by advertising and marketing when competitors hesitate. 

There is an enormous pool of good will, advice and potential contacts in your network. Don't be bashful. Use what's available to you and never let them see you sweat. Good luck. 

 

 

 

It's Time to Celebrate Jerry's Kids

Along with the French, I love Jerry Lewis.

The schmaltz, the cheesiness, the has-been performers singing long-forgotten big-band songs, the B rolls of guys in white coats holding test tubes, the drum rolls and the tote boards that will conjure up the ghost of Ed McMahon, the lame local anchors and the tear-wrenching appeals all signal Labor Day to me.

I imagine a great national catharsis focuses on Jerry and his kids as I participate in the morbid health-watch to see which diseases and which side effects of treatments Jerry himself will display each year. Jerry and MDA have staked out a position and for 30+ years they have delivered on it and raised zillions to fight muscular diseases. There's nothing better and nothing more reliable and nothing more comforting than watching Jerry and his shtick on the Love Network including the parade of firefighters, convenience store owners, oil companies and other random sponsors presenting those over-sized checks at random moments during the Labor Day weekend.

So this year don't just sit there -- dial the number or type in the URL on your screen and help Jerry!

Happy Labor Day.   

Players & Pervs Come Out After Dark on the Internet

An provocative study of Internet traffic by Arbor Networks, an online security firm, suggests that Americans jump online after dinner to play games and watch porn. 

The study based on traffic data from dozens of ISPs, tens of millions of subscribers and petabytes of daily Internet traffic indicates that "US Internet traffic reaches its peak at 11p ET and stays relatively high till 3 am." This suggests that 8p-Midnight is prime time on the west coast and Pacific Time. The traffic consists largely of consumer traffic which climbs later in the day and accounts for the bulk of after-business-hours activity.

By looking at the sources of traffic and analyzing traffic by host sites, Arbor discerned that video usage increases later in the day peaking at midnight. Similarly servers hosting adult material draw a traffic spike daily between 10p and 1 am. 

Its reasonable to assume that gamers, prohibited by policy, sensibility or bandwidth at school or work flock to the web at night to unwind and to lose themselves in the games, the avatars and their alter-egos. With similar limitations, those seeking more prurient stimulation do likewise.

The implications for marketers are:

1. Primetime TV has serious competition. Either people are bailing out on network fare in favor of more interactive, involving or targeted programming or they are multi-tasking and only partly paying attention to the new Fall season. A roadblock strategy should integrate online and offline media to truly cover the waterfront. Its a fair bet that covering both bases is the only sure way to penetrate the male 18-34 demographic. 

2. Commercial or product placement and/or integration into games and porn have the potential to reach and persuade more people than previously thought. Maybe the early adapters of product placement tactics in games were no so crazy. Naturally this is a sensitive issue in terms of content compatibility, but I have a hunch that daring marketers can achieve breakthrough awareness and brand affinity by strategically embedding brand messages in related online properties.

3. Consider online "appointment" events to reach selected audience segments. Midnight madness sales, special hour-by-hour promotions or pricing, night owl content or copy might have added value and pulling power for those up late and active online.

Are Advertisers Out of Touch?

Know your customer is advertising's prime directive. Yet in the evolving digital age knowing your customer is harder and harder to do even tough we have many more ways to monitor, watch, listen, react, interact and measure customer behavior.

The newest evidence of the gap between customer and advertiser perceptions comes from a survey of 1015 advertisers and 4546 customers conduced in June by Harris Interactive using the LinkedIn Research Network to qualify and access both panels. The study found that while advertisers are increasing their use of digital advertising at the expense of print and broadcast media, they are not necessarily increasing their insight into or understanding of customers by using interactive channels.

Consider these top line survey results.

Only one in twelve customers (8 percent) find advertising "very interesting."

45 percent of advertisers think Twitter is evolving and has legs as a potential media channel even though 69 percent of customers don't know enough about it or have no opinion. While ad guys are waxing poetic abut Twitter and urging clients to embrace its charms, 9 out of 10 customers don't think it will go mainstream, think its already over or don't know enough about it to have an opinion.

Advertisers peg the effectiveness of nearly all the major characteristics of ads much higher than consumers do. For example there are 20 points of difference in perceptions of ads that make you stop and think, ads that give new information or ads integrated into the feel of the program. The closest perceptions, still separated by a point or two, is the common appreciate for ads that are funny or don't take themselves too seriously.

Consumers hate intrusive ads and universally scorn pop-ups, pages that expand, ads you cannot close or escape, animations with unmutable sound and ads triggered by mouse-overs. And yet 1 in 3 say advertising influenced their last large purchase decision.

Advertisers have missed the impact of the recession on consumers. Advertisers are pushing empathy messages and framing messages that say "we'll all get through this together." While consumers want deals and want ways to have their luxuries for less.

So what does it all mean?

1. We need more ethnographic research. Advertisers are guessing. We are not really in the heads or hearts of customers and we know way too little about online behaviors and sensibilities. At the risk of shilling for Harris Interactive, we all need to invest more in understand mindsets, click streams and evolving online behavior. After 10-12 years of an active commercial Internet, we are not really keeping pace with the inventive and not-so-intuitive ways our customers are using the Internet. 

2. Actions Matter More than Words. We have underestimated the impact of the recession. Our customers don't want rhetoric they want help. I suspect fundamental behaviors will be changed as a result of hard times. Advertisers need to focus on this and position themselves as a source of help. Spend your marketing budget strategically on meeting this need not on more lofty messaging.

3. Funny and Expected Trumps Newsy and Intrusive. Customers expect ads. They like the funny and offbeat ads. They know that there is hardly anything that's truly new and exciting. They want them where and how they are used to them. Nobody wants to be captured, buffaloed or cornered by an ad. The more intrusive it is, the more backlash you provoke.

4. We are Not Using the Data We Have. The interactive ad universe gives us the ability to collect and analyze mountains of data., This survey suggests that we are not connecting the dots and using observed and documented behavior to inform strategy or messaging. This might be a result of siloed organizational structures or siloed thinking. But we know and collect much more than we use in crafting approaches and campaigns. And to the extent that we don't mind the data, we miss the boat. We have a way to go before we can make any serious claims about customer intimacy. And before we realize this goal, we have to more effectively use what we already know to achieve great impact and customer engagement.