Mapping Your Data on the Cheap

One of the challenges the analytics community needs to work on is finding better ways to present our findings so that they are easy for business managers to digest. We tend to show up with tables of figures and complex spreadsheets, but that’s not always the best way to get the point across. One of our clients is in a business that is heavily geographically. So not only do they want to know how effective their campaigns have been from an ROI standpoint, they want to know this by state, or even county.

You can imagine what a spreadsheet listing all of the counties in the country and their associated metrics would look like. What a beast. Much better to show this overlaid on a map, don’t you think? Well, I searched for months to find a good, easy and cheap solution for rendering data on a map, and surprisingly came up with few options. There are sophisticated applications/services out there that can do this and more, but these were generally built for companies in logistics related industries and don’t offer the functionally needed by a marketer. What’s more, they are not cheap.

One option I have been using for 10 years now is Microsoft’s MapPoint. Now don’t misunderstand me, this is far from an ideal solution. It is clunky, limited in its options and definitely a canned product Microsoft just threw out there with little support. That said, it costs less than $300 and is very simple to use. I generally describe it as a map that allows you to import a spreadsheet. And as long as your spreadsheet has at least one column with a standard geographic metric in it, you can plot it. It is great for plotting store locations, DMAs where advertising was purchased, zip codes that convert most…or all three on the same map. Now that’s a visual!

Map of retail locations and surrounding, segmented zip codes within 20 miles

There is one quirk that I researched for weeks. It drove me crazy. There is no intuitive way to render the value of what you are plotting as the label. In other words, if a particular county produced 500 sales in a given month, you want the county name and the number “500” overlaid on the map. Let me save you hours of aggravation and tell you the workaround. Territories. When importing your spreadsheet, use the Importing Territories Wizard and assign the heading Territory to the column you want to serve as your label – “Sales” in this example.

Otherwise, the tool is a great bang for your buck. I use it all the time, and the maps it creates never cease to impress.

Running the A/C with Your Windows Open

Often it takes a striking or controversial statement to get people to address an overlooked need.  For a minute, I want to talk about step 2 of an acquisition campaign.  We often focus on the clicks or calls driven by a campaign, but ultimately we are interested in a conversions. Let’s take a second to remind ourselves that there is a step in between interest and conversion.  Advertising can get someone to the doorstep, but they have to walk through it themselves.  So the first thing they see or hear is critical.  Offline on TV or in Print, for example, it is the call script or IVR message.  In the web world, this means landing pages.  Why spend all the money and energy driving someone to click but then show them a sub-optimal LP?  Doing PPC without LP optimization is like running the A/C with your windows open.

For specific help getting started, see my post on Google Optimizer.

Tips When Testing Your Next Idea

How familiar is this scene to you:  There are 10 people in a conference room.  Line-of-business owners, representatives from the creative team, a senior exec or two, and maybe even an analytics person.  The goal of the meeting – decide what to test in the upcoming campaigns.  On the table are new circulation lists or media properties, different creative executions, alternative calls-to-action, and perhaps more.  So what to do and how to agree on the next step?

In this situation, I always focus on two key points:  1) if testing discipline is not practiced, the test could be wasted, and 2) prioritize what you want to learn.  On the first point, I am speaking of ensuring you achieve a valid test result.  If you cut up the test into too many different cells, you may end up with Parameter A yielding 31 conversions, Parameter B showing 28 and Parameter C netting 35.  So after weeks (or months) of planning, execution and budget outlay, we can’t say whether the differences in performance are true or simply due to normal statistical variability.

Easy for me to say, you may be thinking.  Actually, it’s easy for you to do.  All that is necessary is doing some simple math to estimate what your results will be.  Look at previous campaigns to get a ballpark for response rates, click-through-rates, conversion rates and the like.  Then, do your simple math:

Circulation (or Impressions)  X  Response Rate  =  Total Responses

 

Next,

Total Responses  X  Conversion Rate  =  Conversions

 

Look at this figure for your different test cells.  Be sure that you can get to a count of at least 150.  The best way is to actually back into a statistically significant result, but in lieu of that at least ensure that you have this many conversions.  That will often lead you to a readable sample size and result.

Ok, so we have whittled down the number of test cells through the exercise above.  Now, how do we choose which parameters to test?  That is the tough part.  Still, as you might expect, it’s about prioritization.  I suggest you start with the boldest thing you are testing.  A good example of this is a new set of media or a new list.  Once you have validated the first priority, then move to the next.  Yes, this will take some time and in today’s world, everyone wants answers now.  But the risk is trying to do too much in each test and not learning anything.  I’ve seen this play out more times that I can count.

The Powerful Relationship Between TV and Search

Search (or Pay-Per-Click) advertising tends to be one of the most efficient advertising channels for companies.  If you have a good product, people are finding you online.  And when they do so by Googling your brand name, they often convert well.  This is because they are already a few steps down the path.

TV advertising is usually thought as the antithesis of this.  People are often unaware of your product or brand when they see the commercial, and its cost is substantially higher than that of a Search ad.  So companies often find it hard to justify spending on TV.  But if you have felt this, let me point out one important – and often overlooked – effect of TV…

TV advertising raises awareness of your product and brand. Just to be clear, I do not mean this in a fluffy brand awareness sense, but in a direct response sense.  Let me explain.  Say you are maxing out on your “branded” search campaign.  This is likely your best performing ad group.  As in all advertising mediums, you can’t buy any more inventory than is available.  However, in Search, it is possible to create inventory! How?  You guessed it – TV.  When a spot airs, you drive people to the web to learn more about your product, and they will do it using your brand name.  So although TV can be expensive, one of it’s benefits is that it creates media in what is likely your cheapest and most efficient channel – Search.

(Google) Instant Challenges for Small Business

Google Instant has been out now for a couple weeks, and it is still sinking in.  Most are reporting insignificant change to performance of their search campaigns, but this could simply be due to people not yet fully embracing the new technology.  If it takes hold, this new technology could significantly impact performance and require businesses to adjust to a new norm.  Some will benefit from this, but I worry that small businesses and new products will suffer.

The main functionality of Google Instant is to offer refreshed search results as the searcher types each successive character.  In other words, you will get results before you are finished typing your query in.  In some instances, Google will locate what the searcher is looking for faster, but in others, the searcher will get diverted from their search with something else tangential or perhaps even unrelated.  Regardless, my sense is fewer long tail queries will be executed.

This is bad news for small businesses.  Anyone who has logged into AdWords and executed a campaign, is aware of how expensive clicks are these days.  Established companies and brands, having history and resources, tend to dominate category head terms.  Thus, newcomers can often only effectively compete in the realm of long tail terms.  That has been a fine strategy, as the searchers locating those sites found a product or service that was much more aligned with their specific needs than what a category head term would deliver.  And with the significantly lower cost, small businesses can afford them.  Sure, impression volume is dramatically lower, but a smaller operation wouldn’t need the same volume to stay afloat.  Unfortunately, if Google Instant does to search what some predict, it will further hamper small businesses from getting noticed and send more volume to the established companies and products.

Large companies will not remain unaffected by Google Instant either.  New search strategies around concepts like the order of search terms in a phrase or partial keyword bidding could require them to optimize their campaigns all over again for this new landscape.  As well, some key metrics will now be skewed.  Impression volume will rise as in-process searches register views, and this will by definition affect KPIs like click-through-rate (CTR).

So Google Instant has kicked off an adjustment period where businesses must re-evaluate their search strategies and experiment with approaches.  If it is adopted widely, there could be significant work ahead for all of us.  Now, it’s not necessarily a bad thing to occasionally have a shakeup that requires the players to prove their worth, but I do worry that this will disproportionately hurt small businesses.

Stepping Into Broadcast Advertising

Your business is growing steadily. Things are going well. You started out on Google bidding 50 cents here and $1.30 there and built a stable channel in PPC. You then branched out to the affiliate world and navigated that questionable lot to find some good partners and grow your business even more. Then you took a leap and placed your first print ad, and held your breath for 2 months until you learned that it worked. And today, although you have a solid base of advertising in these vehicles, you still want to grow. But you pause before you take the next step because that is a whole different beast – broadcast advertising.

Broadcast advertising doesn’t have to be scary, but there are some important considerations before jumping into it. I am going to weigh the pros and cons of Direct Response Television (DRTV) and Direct Response Radio (DRR) here, but these principles apply even in the brand advertising world.

So your first question may be, how do I ease into this? This is the first pro for radio. Production for a radio spot is minimal, as it simply involves people speaking and a few sound effects. Even with numerous takes, it requires minimal time in the studio. Just make sure you get someone good to write your creative, because it will definitely impact performance. Next, you need to place some media and test the channel. This is again a positive for radio versus TV. For the price of one to two full pages in a monthly you can test radio and get a decent read.

Based on this, you may be thinking that radio is the obvious way to go. However, that may not be true. Yes, it will cost you significantly to produce and test a TV spot. But TV has the potential to change your business – as it has for Rosetta Stone and many others. Radio has done that for a handful of companies, but more times than not, it is an average performer in a company’s advertising portfolio. There are several reasons why, but the two biggest are 1) lack of focus and 2) difficulty scaling. What is a lack of focus? Think about when you listen to the radio versus watch TV. Usually you are doing something else while listening to the radio (driving, cleaning, working). This makes for a less attentive audience, and one that may not be able to write down a phone number or web address while driving. But the second reason is even more significant. On TV, there are maybe a few hundred networks. If you whittle those down to the big networks that have significant media available, we are talking dozens. But with radio, there are literally thousands of stations. Centralizing, managing and aggregating data for all those stations is a bear. There are a few agencies out there who do this, but not many good ones.

TV, in spite of its high hurdle of initial investment, can be a game changer. Now, it’s only for companies that have the cash, are patient enough to see it through (no spot hits it out of the park on the first go), and are able to handle real growth. As well, TV really only works for certain types of products. But if all these things come together, it can be an amazing medium. Just make sure you pick the right agency, because another downside of TV is, there are dozens of players that will all tell you whatever they think you want to hear. They get compensated based on the media you buy, so their interests may not be fully aligned with yours. You should be very critical when interviewing agencies.

Unraveling Multi-Channel Marketing

If your company advertises, chances are you are a “Multi-Channel Marketer”.  Buzzwords aside, all that really means is that you try and reach customers in several different ways (for example, Google AdWords, magazines, direct mail and email).  So why all the fuss about Multi-Channel Marketing?  The fuss is not about the concept, but how to measure and optimize it.  That means answering questions your management team has likely asked, such as:

With us advertising in so many different ways, isn’t there wasteful spending going on?

or

If we hit the same customer several different ways in the span of a month, will they convert better?

This is the billion dollar question in advertising today.  The truth is, optimizing your mix is very challenging and there is no one single way to do it.  I have heard numerous agency presentations on how to do this, and have rolled up my sleeves and tackled it myself.  The approaches are varied, but there are two that are the most common.

The first is to conduct an in-market test, identifying like populations and isolating different media into a series of test cells.  I conducted my first of these analyses at Dell in the early days of marketing analytics in 2002.  It was an enlightening exercise, and yielded some powerful recommendations.  Of course, not every company has the resources (or patience) to execute a test like this.

That brings me to the other common approach, which is a mathematical exercise.  Data from all your efforts are entered into a database and correlations, etc. are run to determine what happens as your different media fluctuates over time.  This approach may yield interesting results, but it is certainly not a silver bullet.

After nearly a decade of trying to answer this question, where I net out is that there are several approaches to improving multi-channel effectiveness, but each situation is unique and thus each approach must be as well.  I don’t believe an outsider can come in, plug your data into a computer and produce the answer.  Instead, the approach that has worked for me is to take the time to understand what really makes the business tick.  Each business has its quirks, and I have learned that this path will lead you to a better solution.

That Clever Whole Foods Pricing Strategy

When you are a data person, it permeates your life.  But another thing I am passionate about is health, so I regularly shop at Whole Foods.  Well, my curious nature drove me to do a very crude analysis of their pricing.  I shopped for my regular basket of items in Whole Foods, Safeway, Trader Joe’s and Giant.  What I think I uncovered is a very clever pricing strategy at Whole Foods.

We all probably perceive Whole Foods as an expensive place.  And they are.  I definitely found that for my total basket of items, they were the highest priced.  That didn’t take rocket science to figure out.  But drilling a little deeper, I found something very clever in Whole Foods strategy.  Let’s say you want to cook a pasta dinner.  The actual pasta is very cheap (at least the 365 brand is, which is very good).  But if you want to get tomato sauce to put on it or some basil to spread over it, you are going to pay for it.  Similarly, lunchmeat is very cheap at Whole Foods.  But the bread and cheese will cost you a pretty penny.

My assumption is that their strategy is to have enough cheap staples on the shelves to make people feel that it is worth stopping in, but when they realize that they don’t have time to go to three different stores to get the best price on each of the items for a particular meal, they will just do the convenient thing and purchase all the ingredients there.  It’s really quite smart.  I know if they were more expensive than their competitors on all items, I would not be shopping there often.  But as it is, I find myself there on a weekly basis.  I guess you could say they appeal to both my health-conscious lifestyle and my intellect.