Category — Analytics

The future belongs to those who measure the total brand experience. By Al Wittemen. Each and every one of us has endured our share of pain over the last several years. In all my years in marketing, it’s safe to say I’ve never experienced anything quite like the last five. It now appears that the worst of the economic calamity is behind us, but it would be foolish to think that the pain is over.

In fact, in many ways, it is just beginning. A recent IBM survey of 1,700 chief marketing officers across 64 countries spelled out the sources of our discomfort. It identified some of the biggest challenges facing chief marketing officers, each of which is a pervasive and universal game changer … read >>

New complexities require new math for new media. By Mary Pocsik. The recession and still-sluggish economy may have decreased total ad dollars, but economic uncertainty doesn’t seem to slow the increasing number of new media-tactics or investments in them.

Which of these emerging media are most effective? In the past, that question could be answered with relative ease: Media choices were limited to print, radio and television. Today, the so-called traditional media triumvirate is quickly being displaced (or at least augmented) by a plethora of digitally-driven options … read >>

Retail promotions may have a stronger impact on brand sales and identity than advertising. By Will Minton. Shopper-marketing stakeholders talk a lot about the need to “quantify the path-to-purchase” — not just to measure the effectiveness of programs and tactics, but also to evaluate them against traditional advertising investments.

Sales response models might make a nice playing field on which to compare retail marketing to traditional advertising. While shopper-marketing advocates frequently measure program effectiveness through direct sales effects, the traditional advertising world has shunned these models … read >>

A new book by Charles Seife "reveals the truly corrosive effects on a society awash in numerical mendacity," writes Steven Strogatz in the New York Times (9/17/10). In Proofiness, Charles "examines the many ways that people fudge numbers, sometimes just to sell more moisturizer but also to ruin our economy, rig our elections, convict the innocent and undercount the needy." He defines "proofiness" as "the art of using bogus mathematical arguments to prove something that you know in your heart is true — even when it’s not."

In other words, "proofiness" is the mathematical equivalent of "truthiness." Our susceptibility is "that numbers impress us." For example, Joseph McCarthy‘s accusation about Communists in the State Department was more persuasive because he held up a list naming exactly 205 Commie infiltrators. A day later, in a letter to President Truman, the number changed to 57, and then it turned out McCarthy didn’t actually have a list. But it didn’t matter because "the numbers intimidated McCarthy’s critics."

Charles also criticizes Al Gore for "showing terrifying simulations of what would happen to Florida and Louisiana if sea levels were to rise by 20 feet," which Charles says is very unlikely. He says the Bush Administration meanwhile committed proofiness when it claimed "its tax cuts would save the average family $1,596" when it was actually less than $650. This was because the "average" included "whopping refunds received by very few, very wealthy families." Proofiness, concludes Steven Strogatz, "is more than a math book; it’s an eye-opening civics lesson."

Marketing needs to change before the cost structure of media-spend collapses. By Uri Baruchin. They say time flies when you’re having fun. Perhaps it flies even faster when you’re confused.

On one side we have the bright-eyed and bushy-tailed evangelical digital radicals, declaring digital to be the end of marketing as we know it, if not the end of marketing, period … read >>

The ROI on social media is at retail. By Catherine Boera. (more)

“In ‘The Numerati,’ (Stephen) Baker offers a highly readable and fascinating account of the numbers-driven world we now live in,” writes John Derbyshire, in the Wall Street Journal (9/15/08). That word is, as we know, inhabited by a motley mix of “marketers, politicians, employers, doctors, matchmakers or national-security analysts.” And baseball managers. Political types mine “databases that track consumer and ‘lifestyle’ preferences, and sort us into tribes by behavioral proxy.” Own a cat, do you? Hm, a likely liberal. Doctors can monitor their patients’ vitals by following “data streams from sensors on clothing or even from sensor-laden ‘magic carpets’ laid around the house.”

Marketers, when they’re not talking, can listen to their shoppers by following bloggers. “What makes the blog world especially valuable to marketers,” Stephen writes, is “its unfiltered immediacy.” When they’d rather do the talking themselves, there’s Google’s data-driven Adsense service, which “will automatically place context-related ads on a blog page. The Numerati is, however, still trying to figure out how to deal with splogs — which are fake blogs, filled with nothing but gibberish, but that nonetheless attract visitors and then entice them with ads. In the book, Stephen "gives a helpful sketch of the math involved, each blog reduced to a vector in a space of several dozen dimensions."

Using data patterns to break the backs of terrorists is, however, both more pressing and more daunting. Compounding this challenge is that “terrorists themselves are data-savvy and skillful exploiters of the internet … Jihadists may want to take us back to the seventh century, but they are willing to detour through the 21st to get there,” notes John Derbyshire, adding: “It doesn’t help that our National Security Agency … is restricted to hiring U.S. citizens and paying civil-service salaries while their competitors in recruitment — Yahoo, Google, IBM Research — can cast their net worldwide and engage in bidding wars for top talent.” Then there’s the matter of privacy, although Stephen Baker argues that while we are indeed the targets of the Numerati, we also benefit from their work. ~ Tim Manners, editor

Starwood is combining its “culture of creativity” with the discipline of Six Sigma, fostering innovations that last year “delivered more than $100 million in profits to its bottom line,” reports Spencer E. Ante in BusinessWeek (10/8/07). “We have been driving our margin growth faster than our competitors … When people ask why, I point to Six Sigma,” says Geoffrey A. Ballotti, president of Starwood N.A. Starwood initiated the approach back in 2001, and has involved training “150 employees as ‘black belts’ and more than 2,700 ‘green belts’ in the arts of Six Sigma.” The “black belts” supervise projects, and “green belts” sweat the details.

However, the ideas for the projects themselves “come from in-house staff.” For example, “after a study found that 34 percent of frequent travelers feel lonely away from home,” Starwood’s Westin Chicago River North hotel initiated a project called “Unwind.” Its purpose was “to think up a set of nightly activities that would draw guests out of their rooms and into the lobby where they could mingle, develop a greater loyalty to the hotel group, and maybe spend a little more money.” During a brainstorming session with Starwood’s black- and green-belts, the hotel’s fitness director came up with the idea of offering massages.

The Six Sigma team liked the idea and figured out how to make it work as efficiently as possible. Starwood knew the idea was working because it uses “a proprietary web-based system … to monitor a slew of performance metrics to gauge the success or failure of a new project.” The system “currently contains 3,000 to 4,000 items — the “Unwind” program itself has spawned 120 ideas — “one for each of Starwood’s hotels, including traditional fire dancing in Fiji and Chinese watercolor painting in Beijing.” Geoffrey Ballotti is very pleased with the team effort: “I probably will make 50 percent fewer mistakes than if I had rolled out a project myself, ” he says. ~ Tim Manners, editor

To make sense of the “mind-numbing flow of data on the purchases” of its 13 million loyalty-card holders “across 55,000 product lines,” Tesco’s Dunnhumby “cooked up an algorithm called the rolling ball,” reports The Economist (9/15/07). “It works by assigning attributes to each of the products on Tesco’s shelves,” ranging “from easy-to cook to value-for-money, from adventurous to fresh.” The algorithm “starts at the extremes: ostrich-burgers, say, would count as very adventurous.” The idea is to see which other products the “adventurous” ostrich-burger shopper buys and then draw associations between product attributes and shopping behavior.

The technique is called “the rolling ball” because “as the associations between products become progressively weaker on one dimension, they start to get stronger on another,” and the “ball” rolls “from one attribute to another.” Once every product is “categorized and graded across every attribute, Dunnhumby is able to segment and cluster Tesco’s customers based on what they buy.” The data are then used to make decisions such as which products to put in which stores, and “which products should sit next to each other on the shelves.” It is also used to help Tesco “respond to each customer in a personalized way … by using its analysis to tailor direct-marketing offers to each Clubcard member.”

In addition to “segmenting its customers on how they live, the data also enable the supermarket rapidly to spot shifts in their consumption patterns … Tesco’s response rates to such targeted marketing stands at 10-20 percent, against an industry average of only around one percent.” Despite the power of such numbers crunching, “human judgment still has a role,” of course. In addition to its algorithms, Dunnhumby “is trying to overlay attitudinal research on top of purchasing data to understand why people buy things as well as what they buy.” However, as one observer notes, given the crush of data, al gore rhythms “are bound to take over the world.” ~ Tim Manners, editor