5 reasons marketers hate web analytics

The continuing theme in the above reasons why some marketers seem to hate web analytics is inertia. Many companies suffer from complacency — folks not wanting to make a fuss, not wanting to get at the real root of things. (I have heard web analytics called “the smoking gun” that you can bring to either creative, editorial, or IT depending on the measurement.) This reveals the real strength — and weakness — of web analytics in general. Here is the link.

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Emperor’s new cloths torn apart

I am completely and utterly amazed that people can get away with such BS and even get paid for it! Watch for yourself and then read how the bogus is dismantled by following this link to Anna O’Brien’s blog “Random acts of data”.

To be or not to be digital

Advertising Age has an article on their site stating (based on Forrester Research) that marketing budgets are moving from non-digital to digital. As a fact this may be correct, but the point is that these choices aren’t being made for the sake of technology but because channels are measurable in terms of ROI. Here is the link to my comment.

Never the twine of thinking, saying, doing shall…

Last week I read this interesting post by Luis García de la Fuente at his blog titled “Why Social Media May Never Work as a marketing channel.”

He cites the following passage from a post at Opposableplanets.com :

In the age of social networks we find ourselves coming under a vast grid of surveillance – of permanent visibility. The routine self-reporting of what we are doing, reading, thinking via status updates makes our every action and location visible to the crowd. This visibility has a normative effect on behavior (in other words we conform our behavior and/or our speech about that behavior when we know we are being observed).

and follows up with this questioning:

That´s exactly what I think. And that´s because many marketing studies and surveys doesn´t work properly: people know they are being observed, so they say what they think they are expected to say.

What part of social media conversations or blogs are really spontaneous (that means original, and therefore valuable) and what part are just ‘mirrors’ in front of mirrors…???

Initially I agree that using Social Media has a normative effect on our behavior and that it is always very hard to really know the customer through market research and questionnaires. In general customers don’t say what they do and they don’t do what they say.

This is something marketing always had to deal with since the fifties. Through trial and error one could create a proxy of what was working in the market, albeit with hindsight. But then along with lower prices on computers came databases in the eighties loaded with facts on customer behavior. One could now clearly see customers ‘walk their talk’ and ‘putting their money where their mouth is’. Variables (i.e. offerings, channels used, price)  in a marketing program could now be tested and measured very accurately.

The $64.000 question that still remained unanswered was to know what the customer will do tomorrow. To the rescue came the technology of datamining. By using complex algorithms it became possible to predict the future behavior of customers. The biggest benefit of this technology is that one does not have to think up the marketing variables that will have the most influence on the future (profitable!) behavior that marketers are looking for. Given the ROI variables of a marketing campaign the marketer gets a list of customers ranked by probability of response and a cut-off point on the list where profits peak. Each next address being used means profits diminish. Traditional marketers find this very hard to grasp. They are so hard-wired on sales, volume and share of market that they can not make the mind shift to thinking in profits and that there is an optimum where one should stop.

Now getting back to Luis’ post. From a business perspective it isn’t necessary (economically viable) anymore to understand your customers the way that was required in the ‘older’ days. On the other hand, from an intellectual standpoint (or for the fact that we are sociable animals that love to watch each other),  it remains interesting to get a grasp on society by pondering the questions of how and why. To be or not to be is still the question. Although being fake in these digital times seems to be an acceptable alternative as well.

Do Social Media friends influence buying?

The basic outcome; yes people influence each other through their networks. On the other hand; what’s new? Humans are social animals that live in groups. In this research there are leaders (12%), followers (40%) and laggards (48%). Leaders keep moving on (revenue -14%), the followers imitate (revenue +5%) and the laggards (revenue change 0%), well, just lag unaffected. “Keeping up with the Joneses” is as always the game being played by customers and this can play tricks on your ROI from marketing.

As the researchers point out there is still a lot of groundwork to be done. The last paragraph of their conclusion:

Our findings are relevant for social networking sites and large advertisers. The members in high status group have an influence on those in the middle status group for the diffusion of a new product. However, a successful diffusion in the middle status segment may make high status members lose interest in the new product. This interplay of product diffusion and customer segmentation leaves much room for future research.

To my knowledge this is the first scientific research done on the effects of social media in terms of revenue effects. The  research and report “Do friends influence purchases in a social network?” is crafted out by Raghuram Iyengar, Sangman Han and Sunil Gupta. It is a free download from Harvard Business School.