June 15, 2010

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Targeting Ads to Individual Brains Advertising is about awareness and resonance leading to engagement, desire and purchase. Savvy ad guys are constantly trying to improve our ability to understand, target and get inside the heads of target customers to optimize the efficiency and effectiveness of the memes and means of communication. Traditionally the tools for calibrating images, messages concepts and media choices were multiple forms of qualitative and quantitative market research and media usage ratings filtered through creative gut instinct. Behavioral data and neuroscience are new tools for hedging our bets and for cueing creatives. But old habits are hard to break. New approaches and new research raise the prospect of identifying the ways we think, process, understand and choose content, which should inform how ads are made and where ads are placed. This is the Holy Grail that art directors, copywriters, strategic planners and user interface designers are perennially chasing. Underlying these approaches are an array of assumptions worth articulating: Different people think and process in different ways Thinking styles are hard-wired from birth Much of our thinking process is subconscious How we think determines our behavioral choices There are identifiable brain processing styles We are overwhelmed with inputs and stimuli A lot of our thinking is dedicated to sorting and filtering The Internet has changed the way we read and process; maybe how we think If you know how we think, you can figure out better ways to communicate If you can tag people by how they think, you can persuade them better or faster The obvious conclusion is to create a segmentation scheme that accurately reflects differences among target audiences then craft messages that appeal directly to each segment delivered according to stated or inferred customer preferences. Sounds like a piece of cake doesn’t it? There are countless personality survey instruments that type and segment people along some variation of the Myers-Briggs axes. They range from sophisticated tools to simple magazine-like quizzes. Each purports to help understand what kind of person you are and by understanding personality types and/or matching it with demographic data, marketers can infer likes, dislikes and media preferences. In the direct and database world marketers have become extremely sophisticated at using behavioral data and purchase history to model segments and predict likely behaviors. Yet having mastered serial regressions techniques these guys can tell you who is likely to buy with very good accuracy. But they don’t know why. How and why researchers slice and dice the audience seems to make all the difference. The battle to determine the best, the most accurate research methodology has been going on since the first ad was written. Among the classic arguments used to promote or to discredit various technical approaches are The people who make the ads; aren’t the same as those who receive them The sample isn’t statistically significant, representative or project able The data doesn’t control for environmental or cultural factors The data only shows what they do; not why they do it The segments are fancifully named; but you can’t actually find these customers The segments align with sellers’ desires; not buyers’ needs Into this on-going debate comes Xyte Technologies, a start-up behavioral research firm in Madison, WI, led by Linda McIsaac, a psychologist. Xyte starts with a personality profile and layers on different data in seven steps to create a funnel-like filtration process that supposedly can predict who will like and respond to specific creative stimuli. In working with clients like CBS TV Networks and Pepsi they conduct additional product/service-centric surveys that probe for buying habits, leisure activities and media usage. The filtration process begins with a 16 cell segmentation scheme, called “Xying Insights” which promises in 28 questions to “identify different ways people absorb, process and delineate information” as well as “understand how the mind functions.” The cells are pretty discrete. The biggest cell “Organize” is just 16% of the population and the smallest “Operate” is just 3%, five times smaller. These segments have been tested and validated by overlaying them on panels representative of the US population operated by Knowledge Networks and StartSampling These serious claims, tested in military, corrections, youth development and HR markets, seem to border on the efficacy of the Vulcan mind-meld. But don’t take my word for it. Take the personality test and make your own assessment. Ping [email protected] for a personal password to the survey. Layered on top of the 16 behavioral profiles are four sets of “dichotomies” that separate consumers by how their minds work, where they get their...
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4 Ways to Cope with Procurement For the last dozen years or more clients have inserted sourcing or procurement specialists into the management of agency relationships. Most agencies still haven’t gotten over it fearing that ignorant and malevolent bean counters will grind them down and steal their magic. It’s a classic mismatch. Personality types and business orientations clash repeatedly.For the most part agency types are C students on business and finance topics. They generally dislike or put off the process of counting, scoping, negotiating, pricing and reconciling. Similarly, agencies are notoriously behind the times in process automation and in using sophisticated software to manage their business. On the flip side sourcing professionals don’t know or care much about the intangibles of marketing. Sourcing pros create systems, which are inter-related and yield business results. Theirs is a world of ratios and regularly changing financial constructs. They look to use extensive process modeling and high powered software suites to standardize, template, count, sort, compare, benchmark and yank costs out of every system. The latest evidence comes from an ANA survey of 225 people – 76 client side procurement types, 59 client marketers and 90 agency executives published in Ad Age. Only 14% of agency executives think procurement knows anything about the tangibles of advertising and marketing and only about 1 in 3 feel that they communicate openly. The parties view the issues from opposite ends of the telescope. 84 percent of procurement people see advertising as an investment to be optimized. 74% of their agency counterparts believe they view marketing as a cost center to be minimized. The chasm doesn’t have to be as wide as it seems if both parties spend more time with each other and talk realistically together. Consider these four approaches to working more effectively to get fair value for the contribution agencies make toward client business results. Check your ego at the door. This isn’t personal. Procurement people are just as exasperated by the process as agency people. No one is trying to screw you. Both sides are trying to accomplish the same goal and meet profitability and productivity metrics. Its not necessarily a zero-sum game. It’s a constant negotiation where transparency and relationships directly affect the outcome. Understand the context. Business operations have changed dramatically over the last decade aided and abetted by the recession. Everyone wants more for less. Everyone is looking to cut every cost they can. Everyone wants to re-use, re-purpose and squeeze as much use and value out of every asset. This has been going on for 25 years in manufacturing, production, supply chain, research and development and human resources. This process is not an inquisition against marketers or agencies. Recognize the different points of departure. Procurement comes to the game with an industrial optimization mentality. They want to measure outcomes – what happens in the business. They don’t really care what it takes to achieve the result as long as the cost of getting the result has a reasonable ratio to the return. They are on a continuous hunt to define “good” in financial terms. They figure if they are going to buy something, it ought to have legs and they don’t want to buy the same thing over and over again. They ask a lot of detailed questions. They want to know why the same CD working on two different projects has two different costs. They want to know the ratio of Art Directors to designers on each job. They want to know why one e-mail project takes 4 weeks and a similar e-mail for another takes eight. They want to know the real costs and the mark-ups on outside vendors or tech suppliers. They want to understand why things can’t be templated, re-used or shot once in a universal format and placed in ten different media. Rarely are agencies models of process efficiency. There are few industry norms because agencies consider their processes; even the most convoluted ones, part of the secret sauce. Everyone does the same basic steps a different way or uses a different sequence. Every agency allocates staff differently. Every agency assumes a different number of rounds for review and revision and each agency offers a different mix of services priced in idiosyncratic ways. And while the 4As do annual financial surveys, everyone knows the data is not 100 percent accurate. This drives procurement people nuts. They live in a world of standards, norms and rules of thumb. And agencies do everything they can to avoid being pinned down. Why? Ad guys...

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

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