About

I'm a partner in the advanced analytics group at Bain & Company, the global management consulting firm. My primary focus is on marketing analytics (bio). I've been writing here (views my own) about marketing, technology, e-business, and analytics since 2003 (blog name explained).

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40 posts categorized "Events"

March 11, 2012

#SXSW Trip Report Part 1: The Journey

Arrive Houston late.  Some lady steers my Hertz car out of space 125, toots cheerfully, and is off. (Wonder how she'll persuade the guard: "Yes, I am Cesar Brea...")  I arrange a replacement, and promptly get lost somewhere near Hobby.  

Later:  looking up from the hotel lobby floor is like looking down a shaft on the Death Star.  Thirty stories of beige-brown cantilevered soul-crushing sameness.  Can't sleep.  Accept insomnia, opt for double-header dystopia: the HBO Julianne Moore / Ed Harris / Woody Harrelson docu-drama Game Change about Sarah Palin, then Repo Men.

Morning.  I-290 West, toward Austin; it's  monsooning.  Vaguely Quixotic: a "Dry-Force Water Removal" van blasts past me doing seventy.  Cattle line up near the road, backsides to the storm, in the bovine manner. 

Who says frontier towns are dead?  They're just spread out more, reflecting today's faster horses.  No horseshoes, but plenty of brake shoes. First Church of Such-and-Such -- still here.   Saloons? Gringo's Tex Mex, with "Latino Fusion".  Doc's specialized, or maybe just re-branded to game insurance billing -- "Drive-in Gynecology Clinic" (really).  Depending on local laws -- or lack of them -- gentlemen's clubs = brothels by another name.  Fireworks - pawn - gold - boots - tack - guns - ammo.  Plus, still plenty of 'tude:

 

We don't dial 911


I cross the Brazos.  (Always wanted to say that.)

"We got all your outdoor needs." Even if those extend to giant welded roosters:

 

Giant welded chicken

 

Obligatory BBQ stop. Chopped BBQ sandwich, slaw, jalapeno at the Lost Pines BBQ in Giddings. Highly recommended for friendly service and great food:

 

 

Lost pines bbq giddings texas

 

 

McDade: two chihuahuas play by the road.

They jump into the traffic.

Doing sixty, I swerve and miss.

The tractor-trailer behind me doesn't.

 

Crosses, mostly singly, sometimes in bunches: "Have you found Jesus?"

Austin, 30 miles: "Do you know Linux?"

 

 

Do you know linux


Part 2: Being There 

October 05, 2011

#MediaPost Future of Media Conference Trip Report

Today I attended Media  Magazine's / MediaPost.com's "Future Of Media" conference in NYC.  NYU hosted the event at its Kimmel Center overlooking Washington Square; after lots of recent events in midtown it was nice to be in the Village for a change, especially on a sunny early-fall day.  To the fortunate folks living in the condo one block south:  admiring your rooftop garden and the sweet library below made for a great conversation starter at breakfast!

Ken Fadner, Joe Mandese, and the MediaPost team assembled a great panel.  Josh Quittner framed his kickoff question with what seems to be the Ur-point of departure for all recent conferences:  Apple's latest announcements.  "Is the future simply "three screens" -- small / smartphone, mid-sized / tablet & PC, large / TV?"  Very quickly, the responses tumbled out. "Yes!  And more: wearables!  Thermostats! Location-based marketing (plus ça change...)! Voice!  Device-based payments! (Biometric access to our devices, for greater security!)  More fragmentation..."

Someone -- I think it was David Verklin -- replied that the answer is to "follow the consumer".  At first it seemed like a bland answer.   But of course it's really the only way you can get a grip on where things are going:  think users and use cases.  Which users, and which of their macro life events and the micro use cases that go along with those, represent the biggest pots of potential value to act as muses for media innovators?  Someone else -- Bob Carrigan? -- suggested that in shaping experiences to address those users and use cases, "convenience trumps quality."  Echoing William Gibson's iconic "The future's already here, it's just not evenly distributed," Maria Luisa Francoli noted that, for example, we're already seeing mobile devices used as a vehicle for payments in Africa.  Riffing on that theme, Beth Comstock predicted that we'd see lots more investment in user experience over raw features in the coming two years.  

Now, the role of the media in shaping what's possible seems even more significant today than 47 years ago.  So Josh naturally segued to ask about what firms would dominate the landscape in the coming years:  "Certainly Apple, Amazon, Google, and Facebook -- but who else?"  On the one hand, the panel had no specific, answers: no candidate from the MSM world, no mention of Microsoft (stunning, since we still spend so much time with their software), no golden child(ren) from the Web's Third Wave (though Groupon and Zynga did get shout-outs at different points later in the conversation).   On the other, their comments together pointed out that Josh's Big Four all aspired to be platforms that allow others -- ten million, by Bob Pittman's counting I think -- to transform features into experiences that solve for the users and use cases mentioned earlier.  One question left unaddressed is how much of the "profit pool" in this vision of media futures goes to the API builders versus the API users.  From my perspective, it looks like "the stack" metaphor for software strategy now generalizes well to media too.

In the spirit of "You manage what you measure," one of the audience questions had to do with the metrics that will guide our progress toward media's future.  There's consensus, as voiced by Brian Monahan, that The Age of Sampling is passing, and The Age of Big Data is upon us.  David Verklin told a good story (even if it sounded slightly apocryphal, and his math seemed slightly off): "CNBC ratings recently went down 15%.  Why?  Two guys turned 55.  What could that possibly mean??  Well, the CNBC ratings panel tracks men 25-54 with certain other characteristics.  The panel had 32 people.  Two of those guys turned 55..."  Swimming briefly against the tide, Bob Pittman counselled "Some of this metrics stuff goes the wrong direction, you gotta help clients think like marketers.  When I ran Six Flags, I told my park managers, 'You have unlimited marketing budgets -- just give me a return.'"   Maria Luisa Francoli disagreed, pointing to attribution analysis as the way forward.  Pittman replied, "True, but that tends to drive you to direct marketing, "  She naturally countered, pointing out attribution analysis' whole premise is to put brand and direct investments on a common currency.   (For me, it's not whether you pursue greater accountability, but how...)

Josh: "Is social networking a fad?" Consensus answer: the genie's out of the bottle, the challenge is that social media is "broad but not very deep" in terms of how relationships are conducted and maintained there. David to Josh: "How many 'friends' do you really have?"  For me, behind this question, crucial to media firms and advertisers trying to capitalize on viral dynamics, is the question of how each of us "filter" the digital world, and of better filters as a worthy avenue toward media futures (the subject of the post I contributed to the conference blog).

What did I miss?  What's your synthesis?  Again, thanks for a great session.

 

#MediaPost "Future of Media" Conference in NYC Today

I'm at Media Magazine's / MediaPost's "Future of Media" conference at NYU's Kimmel Center today. (I contributed this post to the conference blog last week.)  Please say hi!  Trip report to follow.

July 19, 2011

Please sponsor me! Nashoba Learning Group 50 Mile Bike-a-thon / Saturday, July 23

Hello friends,

This Saturday, July 23rd, I mount my trusty steed once again to ride in Nashoba Learning Group's 50-mile bikeathon to help raise money for the school.  Many of you have been extremely generous in years past.   Nan and I are grateful to you for that and proud to have seen your gifts help to build such a wonderful organization.  Since 2003, when Will started as one of the first three students, the school's up to 90 kids with a much larger waiting list, and it's widely recognized to be at the very front of the list of models for how children with autistic spectrum disorders can make the most progress toward their potential.

Saturday is forecasted to be very hot, just like 2007's ride.  I am a little older and fatter (so close to "fitter", yet so far).  So, I hope once again we can count on your support, in any amount!  Donation information:  please visit the Nashoba Learning Group website donation page http://www.nashobalearninggroup.org/donations.htm .  Look for "2011 Bikeathon / Walkathon" in the drop down list if you wish to use a credit card.  Otherwise, you can send a check to:

Nashoba Learning Group
10 Oak Park Drive
Bedford, MA  01730
Attention:  Kathy Romeo

Thanks so much!

Cesar

 

February 16, 2011

#Watson Wins #Jeopardy! The Singularity Is Near(er): Are You Ready for Computational Engine Optimization ("CEO")?

Saw the news (though missed the show) that IBM's Watson won on Jeopardy.  Interesting to see this and other articles call out Watson's "stumble" -- as though they expected perfection, which is a milestone in itself.  Here's a great explanation of "what went wrong"

There are two notable things to me about this development / achievement.

The first is to ask whether this puts us ahead or behind Ray Kurzweil's schedule for 2019 (as predicted in 1999).  (Really worth reading his predictions, since we're within shouting distance!  What would you "keep / change / drop / add"?)  

The second is a little closer in.   Given the pace of this development, what does it mean for us as humans / users / consumers / citizens on the one hand, and as marketers / investors, etc. on the other -- from "now" to, say, "two years out"?

Imagine for example that in two years, IBM provides access to a more generalized form of Watson as a cloud-based API.   What might you, as a person or as a business or other organization, do with a service that can understand speech, parse meanings, and optimize spending and investment recommendations based on how sure it is of the answer?

Cesar: "Watson, our lease is up soon, can you suggest some available space options nearby that would make sense for a business like Force Five Partners?"

Watson: "Cesar, here are five choices, with suggestions for what you should be paying for each, based on what I can find out right now..."

A stretch?  Apple's integrated Wolfram Alpha - based support into the Siri app for the iPhone now.  Try asking Siri, out loud: "What is the market capitalization of Goldman Sachs, divided by the US population?"   Answer back to me, in three seconds (iPhone 3GS / AT&T):

Photo

(Cross-check: Wolfram Alpha direct. Or,  GS on Google Finance / US Population on Google Search.)

 (FWIW, this hits 3 of 4 criteria in a prediction framework I suggested nearly six years ago.)

Wow.  We had barely figured out SEO, when we got slammed with SNO -- Social Network Optimization (as well as the frozen kind)!  Now we have to figure out Computational Engine Optimization?  (Confusingly, natch, "CEO" -- you read it here first!)  How do I optimize for "What inexpensive steakhouses are nearby?"   How do we even think about that?  

(Possible direction: Semantic Web Optimization -- "SWO", of course.  Make sure you are well tagged-for, and indexed-by, the data stores and services where the terms "inexpensive", "steakhouse", and "nearby" would be judged.  Or, in plain English: if Wolfram Alpha looks to Yelp to help answer this question, make sure your restaurant's entry there is labeled as a steakhouse, has an accurate address, and is accurately price-rated as "$".  Whatever gaming ensues,  just don't blame IBM / Apple / Wolfram /(Google too) for going for the mega-cheddar.)

It's trite to say that change is accelerating as technology develops.  ("We're only in the second inning!")  Some dismiss this (as Arthur C. Clarke said, we always overestimate the impact of technology in the short term, but underestimate it in the long term).  But, if you doubt, this chart is worth a look.  And then think about the degree to which "social" and "mobile" are now reinforcing, amplifying, and accelerating each other...

(Insert shameless commercial:) What are you doing to help your organization keep up? 

 

July 12, 2010

Please Sponsor Me: Nashoba Learning Group Bike-A-Thon (July 17)

This Saturday, July 17, I'll be riding in the 50-mile Nashoba Learning Group bike-a-thon.  The school does extraordinary work with developmentally-disabled children (here's a good Boston Globe article that ran a while back), and it's become a model for other schools around the country in the process.  If you are able, please sponsor me and help support the school by visiting http://www.nashobalearninggroup.org/donations.htm (select "2010 bike-a-thon / walk-a-thon").  Thank you!

April 13, 2010

MITX Panel: "Integrating Cross-Channel Customer Experiences" (April 29, 2010)

On the morning of April 29 I'll be moderating a MITX panel discussion titled "Integrating Cross-Channel Customer Experiences", in Cambridge, MA (Kendall Square).  More here, more posts to follow.  Hope to see you there!

January 29, 2010

Ecommerce On The Edge In 2010 #MITX

Yesterday morning I attended MITX's "What's Next For E-Commerce" Panel at Microsoft in Cambridge.  Flybridge Capital's Jeff Bussgang moderated a panel that included Shoebuy.com CEO Scott Savitz, CSN CEO Niraj Shah, Mall Networks CEO Tom Beecher,and Avenue 100 Media Solutions CEO Brian Eberman.

The session was well-attended and the panelists didn't disappoint. Across the board they provided a consistent cross-section of the sophistication and energy that characterizes life 2 SDs the right on the ecommerce success curve.

My notes and observations follow. But first, courtesy of Jeff, a quiz (answers at the end of the post):

1. Name the person, company, and city that originated the web-based shopping cart and secure payment process?

2. Name the person, company, and city that originated affiliate marketing on the web?

3. Name the largest email marketing firm in the world, and the city where it's headquartered?

Jeff opened by asking each of the panelists to talk about how they drive traffic, and how they try to distinguish themselves in doing so.

Brian described (my version) what his firm does as "performance marketing in the long tail", historically for education-sector customers (for- and non-profit) but now beyond that category. What that means is that they manage bidding and creative for 2 million less-popular keywords across all the major search engines for their customers. Their business is entirely automated and uses sophisticated models to predict when a customer should be willing to pay price X and use creative Y for keyword Z to reel in a likely-profitable order. The idea is that the boom in SEM demand has driven prices way up for popular keywords, but that there are still efficient marketing deals to be mined in the "long tail" of keyword popularity (e.g.,structured collaboration").

Niraj noted that there's an increasing returns dynamic in the SEM channel that raises entry barriers for upstarts and helps firms like CSN preserve and expand their position.  Namely, as firms like his get more sophisticated about conversion through scale and experience, they can afford to pay higher prices for a given keyword than smaller competitors can, and can reinvest in extending their SEM capabilities.  CSN now has a 10-person search marketing team within its total staff of 500. Since SEM is, to some degree, a jump-starter for firms that don't yet have a web presence sufficient to drive traffic organically, this edge is a powerful competitive weapon.  CSN is up to $200 million in annual revenues, and now manages the online furniture stores for folks like Walmart.

Scott sounded a different note, with similar results.  Shoebuy has focused more on cultivating its relationship with its existing customers and on Lifetime Value -- including referrals.  This focus has had a salutary effect on SEO, allowing them to rely less on SEM as it gets pricier.  Last year Shoebuy experienced double-digit top line growth and hit 8M uniques for December's shopping season, while realizing its lowest marketing expense as a percentage of sales since 2002.  They've continued to plow the savings into a better overall customer experience.  One way Shoebuy guides this reinvestment is through extensive use of Net Promoter-based surveys.  They keep the surveys brutally simple:  1)"Were you satisfied?" 2)"Whould you shop with us again?" 3)"Would you recommend us?".  Then they calculate the resulting NP scores to different things they try in their marketing mix, to give them a more nuanced insight than the binary outcome of an order can provide.

Tom described how while Mall Networks' traffic is "free" -- it all comes from their loyalty program partners' sites (e.g. Delta Skymiles website awards redemption page) -- they still have to jockey for Mall Networks' placement on those pages. (Though Tom was too polite to say so, the processes for deciding who goes where on popular pages is often a blood sport and ripe in most organizations for a more structured, rational approach.)

Former Molecular founder and CEO Ralph Folz asked about display -- is that making a comeback?  Brian indicated the lack of performance and the lack of placement control through ad networks made that a highly negative experience.  He did note that they are now experimenting with participation in real-time-bidding through ad exchanges for inventory that ad networks make available, sometimes for time windows only a hundred milliseconds long.  Jeff reinforced the emergence of "RTB" and mentioned MIT Prof. Ed Crawley's Cambridge-based DataXu (which Flybridge has invested in) as a leader in the field.

Affiliate marketing came up next.  Tom explained the basics (in response to a question): each of the 600 stores in Mall Networks stable pays Mall Networks, say for example, a 10% commission on orders that come through Mall Networks.  Mall Networks gives a chunk to the members of various loyalty programs that shop through it -- say 3-5% of the value of the order; some goes to the loyalty programs themselves, as partial inducements for sending traffic to Mall Networks, and the rest goes to Mall Networks to cover costs and yield profits.

All the other panelists include affiliates in their marketing mix, and all appeared satisfied to have them play a healthy role.  Niraj specifically mentioned the ShareASale and Google Affiliate networks.  Jeff asked about everyone's frenemy Amazon; the answers were uniformly respectful: "they're a tough competitor, but they build general confidence and familiarity with the ecommerce channel, and that's good for everyone."  Niraj noted the 800 lb. gorilla nature of their category dominance: "They're at $20m and NewEgg is the next biggest pure play at $2B.  They're a fact of life. We just have to be better at what we focus on."

Someone in the audience raised email.  All of the panelists use it, with lists ranging from millions to hundreds of millions of recipients in size.  They noted that this traditional pillar of online marketing has now gotten very sophisticated.  In their world, they look well beyond top line metrics like open- and clickthrough rates to root-cause analysis of segment-based performance.  Re-targeting came up, and Niraj noted that for them, email and re-targeting weren't substitutes (as some have seen them) but in fact played complementary roles in their mix.  (Jeff explained re-targeting for the audience: using an ad network to cookie visitors to your site, and then serving them "please come back!" ads on other sites in the network they go to after they've abandoned a shopping cart or otherwise left your site.  A twist: serving ads inviting them to *your* site after they've abandoned one of your competitors' sites.  Hey, all's fair in love, war, and ecommerce...).  A common theme:  unlike most of the rest of the world, email teams at these leading firms are tightly integrated with other channels' operators to better integrate the overall experience, even to the point of shared metrics.

What about social?  Scott: "Building community is key for us.  We run contests -- "What are you hoping will be under your tree this Christmas?" -- to stimulate input from our customers.  And, while we have social media coordinators, many people here participate in channels like Twitter in support of our efforts."  Niraj: "Our PR team came up with a 'Living Room Rescue' contest which we did in partnership with [a popular] HGTV host [whose name escaped me -- C.B.].  We got six thousand entries; we used a panel of professional decorators to narrow the list to a hundred, and then used social voting to choose a winner.  We publicized the contest, and it took on a life of its own, as local papers tried to drum up support for their local [slobs -- my word, not Niraj's].  While we couldn't / didn't measure conversion directly from this campaign, our indirect assessment was that it had a great ROI."  Jeff observed that social's potential seems greater when the object of the buzz is newsworthy.

It was a short leap from this to a question about attribution analysis, the simultaneous-dream-and-nightmare-du-jour for web analytics geeks out there.  Brian was surprisingly dismissive.  In his experience (if I understood correctly), he's seeing only up to 20%, and usually only 5-10% of order-placing customers touch two or more properties they source clicks from, across the broad landscape they cover, across a time frame ranging from a day to a month long.  "In the end, only a couple of dollars would shift from one channel to another if we did attribution analysis, so in general it's not worth it."  We chatted briefly after the panel about this; there are large ticket, high-margin exceptions to this rule (cars).  I need to learn about this one some more, it surprised me.

Mobile!  Is it finally here?  Scott reports that 6-9 months ago *customers* finally began asking for it (as opposed to having it pushed by vendors), so now they have a Shoebuy.com iPhone app.  Jeff noted that customers are rolling their own mobile strategies -- some folks are now going into (say) Best Buy, having a look at products in the flesh, then checking Amazon for the items and buying them through their iPhone if the price is right.  So, your store is now Amazon's showroom.  If you can't find something, or didn't even know you wanted it, but happen to stray near a store carrying it, location-based services will push offers at you -- and the offers may come from competitors.  (Gratuitous told-you-so here.)  Niraj:  "Say you're in Home Depot.  You want a mailbox.  Their selection is 'limited' [his description was more colorful]. We have 300 to choose from.  Wouldn't you want to know that?" Jeff:  Soon we'll also see the death of the checkout line: you'll take a picture of the barcode on the object of your desire, your smartphone will tell the store's POS system about it, and the POS system will send back a digital receipt you can show someone (or in the future, something) on your way out of the store. 

With all these channels in use, I asked how often they make decisions to reallocate investments across (as opposed to within) them -- say from search to email, as opposed to from keyword to keyword.  Brian: "Every day, each morning.  Some things -- like affiliate relationships -- may take 3-4 days to unwind.  But the optimization is basically non-stop."  Later we talked about the parallels with Wall Street trading floors.  For him, the analogy is apt.  Effectively he's a market-maker, only the securities are clicks, not stocks.  It's now reflected in their recruiting: many recent hires are former Wall Street quants.

A final note: The cultures in these shops are intensely customer-focused, flat, and data-driven.  Scott reads *every one* of the hundreds of thousands (yes you read right) of customer survey responses Shoebuy gets each year.  He also described the enthusiasm with which their customer service team embraced having all company communications to customers end with an invitation to email senior management with any concerns.  Niraj described CSN's floor plan:  500 people, no offices.  Everyone in the company takes a regular turn in customer service.  Everyone has access to the firm's data warehouse.  Brian told us about a digital display they have up in their offices showing hour-by-hour, source-by-source performance.  They also recently ran a "Query Day" in which everyone in the company -- including sales, finance, HR -- got training in how to use their databases to answer business questions.  Tom described that they “watch the cash register every minute, hour, day during the Christmas shopping season.”

This was a terrific session, and I've only captured half of it here.  Further comments / corrections / observations very welcome.

Quiz Answers:

1. MIT Prof. David K. Gifford, Open Market, Cambridge

2. Tom Gerace, BeFree, Cambridge

3. Constant Contact, Waltham

January 22, 2010

Marketing Zeitgeist: Winter 2010 #amab

Call me Ishmael.  Wednesday night I was on the tip of Boston's Fish Pier, attending the AMA Boston chapter's first panel of the year at the Exchange Conference Center. The title of the event was "Marketing 2010: What CMOs Are Saying".   Panelists included Harpoon Brewery's EVP of Marketing Charles Storey, Dancing Deer Bakery's VP of Direct-to-Consumer Marketing Scott Miller, and Philips Healthcare VP of Global Communications Frank McGillin.  Collectively they represented a useful cross-section of the B2C-B2B spectrum.

Myles Bristowe, the chapter president and an old acquaintance from ArsDigita days, moderated.  Myles' first question was "How has the economy affected your marketing plans for the coming year?"  The consensus answer I heard, channeling Stephen Stills, was to "Love The One You're With."  Charlie talked about increasing purchasing frequency among folks who know Harpoon and are brew-istas.  Scott described plans to de-seasonalize their business by positioning DD products as gifts for occasions beyond end-of-year holidays, and to invest in database technology to do a better job of personalization ("It's worse to do personalization poorly than not at all.")  And Frank talked about how Philip's event-focused strategy would focus less on tallying leads and evaluating events as lead sources per se, and more on the quality of engagement of interactions (online and off), trusting that this will prove a better indication of the efficiency and effectiveness of their investment in pricey events.

In answer to where they are increasing and decreasing their spend, the panelists presented an interesting duality, combining a "going to the mattresses" reliance on channels they know and love (Harpoon and Philips both rely heavily on events) and a forward-looking focus on integrating the cross-channel experience.  Charlie talked about Harpoon's intent to "cut in new channels and go back to the core [events]", describing their marketing strategy as "experiential" (focused on music festivals, road races, bike races, and the like) with support for "enthusiast activities with a social component" where they could use social media to reinforce the investment in the event itself.  Further, Charlie talked about the importance of documenting these experiences -- storytelling -- to reinforce and extend the impact of the events themselves on brand affinity.  Frank talked about how Philips is working to ensure that they are trying to "get better synergy across channels, by understanding customer segments and their purchasing experiences."  Scott described how DD's D2C average order value and conversion rates are much higher in areas where thay have a presence in grocery stores, and how they are re-focusing on "harvesting cross-channel affinity" by targeting their outbound D2C investments into geographies where they have a wholesale presence / store distribution. 

More generally, Scott talked about how the ebbs and flows of supply and demand are also affecting where they put their marginal dollars.  He described how a couple of years ago, surging postage and printing costs had pushed them away from physical catalogs and toward email but also SEM in particular.  However, more recently, popular keywords have been bid up to the point where that channel has become less attractive on the margin.  Meanwhile, affiliates have matured to the point where they can be relied on more, and, related, Scott's seeing major ROI in their SEO investments -- every dollar invested there has
produced $95 in revenue.  Throughout, direct marketing generally and email specifically "still work".  As for social media, his experience so far has been that it's useful for supporting the brand, but it's not yet accountable enough to be looked to as a monetization mainstay.

Speaking of social media, Charlie and Frank echoed Scott's sentiment.  Charlie noted that Harpoon still relies primarily on a high-five figure house list for its email newsletter as the get-the-word-out cake, and its so-far-more-organic social media efforts as frosting.  Frank talked about how for Philips, their main investment so far in social media has been more focused on listening in established communities such as Sermo and Facebook's "Innovations In Health" group, rather than "trying to build the world's biggest online community of MRI enthusiasts."  In particular, he noted there's a genuineness of the feedback you get in these settings that the artificiality of focus groups and surveys tends to suppress.  And Scott talked about how DD is trying to "recycle" the listening it does through its call center's conversations with customers, where "everyone's got a cookie story -- 'I just want you to know that Grandma had one of your brownies just before she passed!'" to do online justice to this organic brand advocacy they're hearing everyday.

Another question concerned how measurable they find / are trying to make their marketing, and what that's meant to their business.  Scott described DD as very analytically driven, telling a story about how insights have transformed their business.  he described how they had observed that 92% of their orders were "ship-to-someone-other-than-buyer".  This helped them conclude that they weren't really a bakery, as the founders perceived, but a gift retailer.  So, they stopped taking pictures of the cakes, and started taking pictures of the packages for their catalogs! (Very memorable "data is the new creative" example, IMHO.)

The panelists were asked about the degree to which they are pursuing finer-grained measurement, and how much they are using testing.  Interestingly, they suggested that there were both cost and utility limits to what they could do.  Charlie noted that being two layers away from the customer made measurement beyond profit per case-equivalent a very expensive proposition for them. As for testing, Scott noted that with most of their sales concentrated in a very tight seasonal window, testing carried high risks that didn't rule it out, but made them more conservative about what to try.  Nonetheless, he noted that given the ease of fielding some tests they are now able to adjust what they do within this tight holiday window if they start very early -- right after Thanksgiving this year, for example.

I asked what campaigns by others they found memorable and gave them ideas for their own marketing.  All three panelists mentioned good ones. I liked Frank's best: he described how, before and during a major snowstorm, Volvo Boston had sent email weather advisories and reminders about topping up on windshield fluid.  Great example of indirect brand building through a useful service.

Afterward I chatted briefly with Paul Regensburg, President of Rain Castle Communications, which recently helped Unica re-launch its brand.  Paul noted a slightly less breathless tenor about "new channels" among the panelists than you'd expect if all you read were the trades.  We agreed that it's always different to hear directly from practitioners, especially when you ask them about everything they're grappling with rather than any particular channel effort or campaign.  The calibration was really useful.

(Finally, congratulations to Myles and his volunteer colleagues for the great work they've done building the Boston chapter to be the fourth largest of 78 in the country.  Last night's event drew well over 100 people, not bad for a frosty January weeknight.  Myles noted that 30% of ticket sales for the event
had come from their viral "Tweets For Seats" Program.)

October 05, 2009

Personalization Is A Process #MITXMT

Last week I went to a MITX panel in Cambridge titled, "Get Relevant:  The Next Generation of Website Personalization".  I asked a question: "In between broadcast-to-the-masses and one-to-one, where in your practical experience is the crossover point (in number of customer segments you define and design for) where returns from finer-grained personalization are exceeded by the complexity of supporting an expanding number of them?" 

I got three good answers:

  • Brett Zucker (CTO at Bridgeline Software) and Joe Henriques (Regional Director, Sitecore) manned up ;-) and each gave me a number for where they see many organizations today -- Brett said 6-10, and Joe put it at 10-20.  Gross average, but crudely useful nonetheless!
  • Andrew Hally (VP Product Marketing and Strategy at Unica) offered that it really depends on the industry, and on the mass-customizability of the product and other elements of the marketing mix. In the credit card biz, for example, you see firms executing against thousands of segments continuously redefined through real-time testing, because it's really easy to change terms and assess response.
  • Scott Brinker (Co-founder/CTO at ion Interactive) noted that there are several answers to the question, because the process changes with each order of magnitude of the number of segments you set up to support. Scott described how in his experience, the hardest jump to make is from a handful of segments, supported by a highly manual process for creating offers, to the next order of magnitude, which at minimum requires modularization of marketing mix elements so they can be re-combined easily.  Scott further noted that traditional, primary-research-based segmentation approaches are being replaced by emergent (my word, blame me) segmentations based on testing. 

(Gents, apologies if I misquoted you -- please let me know.)

There's another question embedded in all this, which is Personalization (segmentation) with respect to what?  In other words, you can usefully define different segments for different elements of the marketing mix.  Upscale leisure traveler and a business traveler may get the same luxury hotel room.  But, they may behave differently when it comes to price.  Price-sensitive travelers may have different preferences for using marketing channels to find the best price.  So, in theory, you could have a single segment for product (luxury buyer, for example), two for pricing ("service-focused vs. price-focused"), and yet another two for channel preferences (e.g., "online-dominant" vs. "offline-dominant").  This can make segmentation much more operationally relevant, but it then also puts a premium on coordinating the outputs of these segmentation efforts (for example, if someone's really price-sensitive, you may want to steer them toward lower-cost digital channels for conversion).

Finally, another take-away from all this is to match the technology to the degree and kind (e.g., implicit vs. explicit) of personalization you intend to design a process for.  There's no point in buying a "Hemi-size" personalization engine if you've got a "Yugo-size" gas tank for marketing mix execution.  On the other hand, when the technology for testing an order-of-magnitude jump in segments becomes affordable, maybe it's time to optimize for that capability and flex / redesign the execution capability?