5 Reasons Advertising is Becoming More Humanistic … 6 Actions to Take

Field Guide Fridays - metrics and business models
Field Guide Fridays

You’ve probably felt it. Advertising and measurement has changed. And you’re uneasy.  You sense that the old school ideas centered on the impact of media exposure—the one that led us to ask: “what is our advertising doing to people?”—doesn’t really describe how advertising works today.

But many of us—and probably you, too—realize that we need an up to date model to understand how advertising works in today’s digital, social, mobile world. A world where people act, transact, speak, and feel. One where the data we collect captures their humanity and life in the world. And one that asks a different question now: “What are people doing with our advertising, and with what effect?”

5 Different Ways to Think About Advertising

I asked experts contributing to The Digital Metrics Field Guide to share their thoughts about how we should be thinking about advertising today. They boil down to five:

#1. Digital Currencies May Not Be Needed After All

Merkle CRO Yaakov KImelfeld presented a challenge: Do we need a currency for digital media? His provocative answer—“it’s not clear that we do.” Well-designed online campaigns “thrive in the absence of a currency.” Kimelfeld questions the need for comparable cross-media metrics. While their familiarity comforts us and are simple to understand, they chain us and restrain us from exploiting “online’s unique capabilities for brand building and customer experience.” Focusing on reach and frequency forces us to serve ads based on demographics, not on relevant audience characteristics such as interactions with the ad, sharing, influence, and other uniquely online behaviors. Kimelfeld urges us “to start facing forward.”

#2. We Need to Shift from Models Of Audience Delivery to Models of Advertising Effectiveness

Graeme Hutton of media agency UM advises the need to develop an advertising model for our 21st century, not the 19th—when straight line Awareness-Interest-Desire-Action (AIDA) and purchase funnel models appeared on the scene. Hutton argues that we should shift from models of audience delivery—which we still need to measure—to models of advertising effectiveness grounded in contemporary science and empirically supported. Hutton sees progress coming from research areas like neuroscience and analyzing online social behavior. Armed with a contemporary model of advertising rooted in effectiveness, advertisers and agencies should be better able to explain why their advertising will work and how it will work, leading to improved planning and purchasing that reduces uncertainty and improves business results.

#3. Include The Consumer’s Context to Understand Effectiveness

Advertising’s effectiveness model should include context. Kevin Moeller, formerly of Media Behavior Institute but now at UM, contends that effective targeting in today’s complex media system depends on deep insight into the roles consumers are playing, the situations they are in, and the emotions they are experiencing at the moment that messages reach them. Reaching audiences when they are most receptive to the message often improves the response to advertising, resulting in enhanced advertising ROI and increased value to advertisers.

#4. Evaluate Advertising Performance on Consumer Actions

Niels Schillewaert and Annelies Verhaeghe of InSites Consulting believe that the “key performance metrics we need to add to our arsenal for measuring communication effectiveness should really be centered on consumers’ online and offline brand-related actions (COBRAs).” Marketers need to know what people do for their brands after exposure to marketing initiatives for products, services, or experiences. Conversation, sharing, reviewing, and buying are some of the brand-related actions people take. Niels and Annelies found that TV ad effectiveness was related to an ad’s ability to stimulate conversation among viewers.

That finding just received substantial support. Keller-Fay’s Brad Fay recapped a very rigorous WOMMA study analyzed by Analytic Partners. It concluded that “The single most important factor in the success of an advertisement is this: Does it stimulate consumer conversation and sharing? Nothing else matters as much.” Consumer conversations, the study found, “actually increase the sales impact of advertising by 15% and account for an average 13% of consumer sales overall.”

#5. Develop Predictive Indicators for the Outcomes of Actions

MotiveQuest’s David Rabjohns takes consumer actions further. He studied many types of consumer actions, one of which was advocacy: the number of unique people strongly recommending and promoting a brand because they want to. With Northwestern University, his firm modeled the relationship of advocacy to sales—one of the “gold standard” measures of return on investment. Rabjohns and his team discovered correlations that make advocacy a leading indicator for next-month sales. Correlation is not causation of course, but the level of advocacy tells us that something is going on in the real world, as well as in online conversations, that is boosting sales or forcing them to plummet.

These 5 Ways Lead to The Emergence of Humanistic Advertising

A cynic might look at these ideas and say we’ve heard them before. They could be dismissed as nothing more than overused trade terms: engagement, advocacy, and effectiveness. But that sorely misses the point. Too many digitally-oriented campaigns narrowly focus on getting “more” with the belief that if brands can get more consumers to engage, advocate, and act, then marketing success will follow. So they do things that get those numbers up.

But when you consider these ideas, you soon realize a humanistic impulse underlies all of them. They aim to understand people as people living their lives. They see brand marketing and advertising as one means to help  people live their lives more as each person would like, and less as the brand wants them to. Now we can relax a bit. We have a newer way to think about advertising.

This more humanistic model will grow in importance over time as we become more comfortable with “humetrics,” or understanding people through measurement, and as more brands shift from a “do to” to a “do with” mindset. The media exposure model will be around for media buying and selling reasons—it’s the way that business is done, but we can expect that its grip on strategy will weaken.

6 Actions You Can Take Towards Humanistic Advertising

There are a number of things we can do for our brands—and ourselves—to help them succeed in this humanistic era:

  • Challenge accepted strategy. How can a “do-to” strategy transform into a “do-with” strategy?
  • Identify and study brands that have adopted a humanistic approach and talk them over with your colleagues. These ideas need to be socialized for them take hold . Apple is one of the poster children for this. Find others.
  • Experiment. Test out old model vs. new model thinking when you can. See which works better, when, and why.
  • Understand people better. Acquire penetrating insights into who they are, what they value, and what they would like to achieve or attain. Discover the ideas that make a difference to a person and to the business.
  • Learn about social processes. Most brands still treat social, mobile, and digital as they do mass media.These media are not simply delivery channels, they are webs of connected people and enablers of social interaction and interpersonal communication. Large knowledgebases exist in the social sciences about why people share, engage, or advocate and what results from that at the individual, group, and community levels. Leverage that.
  • Think of your customers as people living lives in which your brand is a part that contributes to their happiness. Figure out what your brand should do-with them.

 Link of the Week

The Google Trends Data Goldmine by Ben Spiegel explains Google Trends and its many uses. I’ve been a fan of Google Trends for years and include it into the hands-on sections in my workshops on social listening. This post is a Link of the Week because the data provides a window into the humetrics of people’s interests and intentions,.

Consumer Mindsets Tuesdays: Mind Genomics and Revenue Growth

Consumer mindset Tuesdays. News of mind genomics and cognitive economics.
Consumer MIndset Tuesdays

Since we’re early into our Consumer Mindsets Tuesdays series, I will use the first several posts to introduce core ideas of Mind Genomics, the “science of everyday experiences,” on which our research is based. Today’s post explains four of them, including the direct contribution that mindset segments make to creating revenue-building marketing campaigns.

Core Idea #1: Mind Genomics Studies our Experiences in all their Richness

We live in a world of rich experience where many aspects hit us all at once: it is a world of mixtures that we often evaluate as a whole. Just think about buying wine. In real life choosing a bottle results from weighing a host of factors such as : price, grape varietal, sensory attributes, origin, winery, winemaker, recommendations, marketing, food pairings, and occasion.

Mind Genomics takes these variables, mixes them in systematic ways, and discovers through experimentation and statistical analysis which aspects drive interest, or not; how people differ in the way they respond to these aspects of wine, and how these differences cluster to form segments, which we call mindsets.

Core Idea #2: Mind Genome

People do not have a single mindset, we all have thousands upon thousands of them. Towards every individual “thing” in our lives, e.g. a person, pet, brand, product, service, or experience, we have a mindset. Mind Genomics enables the discovery of the different mindsets that exist towards each “thing” (usually between 2 and 5) and assign a person to one of those mindsets.

The Genomics part of Mind Genomics borrows from the concept of the human genome, as our image above suggests. As each genome sequence is unique to an individual, so is the sequence of mindsets that describe a person’s mind.  Mind Genomics enables us to understand the structure of the mind genomes for individual persons in specific terms and market or advertise to them specifically.

Let’s take a look at the mind genomes of two guys named Dylan and Jack. For simplicity we’ll take just three categories. Say for coffee Dylan is mindset 1, for Caribbean vacations he is mindset 3, and for bar soap he is mindset 2. Dylan’s sequence is: 1-3-2. Now look at Jack. He is mindset 2 for coffee, mindset 1 for Caribbean vacations, and mindset two for bar soap. Jack’s sequence is 2-1-2. (Note: I will explain the segment assignment process in a future post).

Core Idea #3:  Mind Genomes Differentiate People

Conventional segmentation is based on the notion that people who share characteristics are alike and can be sold to the same way. Consider the advertiser who wants to reach tech-savvy men. That target group might be described as: male, 18-34, have a college degree, boast household incomes in the range of $50-$65k, own an iPhone, and eat out a few times a week. Let’s assume that Dylan and Jack fit this description.

Consider a new coffee chain wants to reach this target. Advertising messages would be directed to the group but, as we saw with Dylan and Jack, they look alike on the outside but are not the same on the inside. Because their “mindset gene” for coffee differs, Jack and Dylan are likely to respond differently to the same advertising message.

We see this routinely in our research. Let’s take the example of red wine. In a recent study we discovered three mindsets towards red wine: the person only interested in the wine itself; the person interested in an affordable bottle that goes with a range of food; and the person who is keen on wine contributing to a good time. One of the messages included in the mixtures was “Imported from France.” In the first mindset, when the message “imported from France” appeared it raised interest by 23%; in the second mindset it had no impact; and in the third mindset it decreased interest in red wine by -8%.

Understanding the differential responses to messages by mindset enables marketers to select and direct the right message to the right person for maximum impact

Core Idea #4: Mindset Segments and Tailored Messaging Lead to Revenue Growth

Continuing with Dylan and Jack, the coffee chain would treat each mindset as a segment then market and advertise to each with great precision. Doing so increases the chances that Dylan and Jack will respond more favorably to the directed messages.

Take the American Heart Association. They aimed to increase donations from their email list. Mind Genomics discovered four mindset segments. These were then used to create customized communications for each group. The results: a 42.5% increase in donations. All the details are in this Marketing Sherpa case study: ‘Mind Type’ Segmenting Lifts Email Donations 42.5%: 6 Steps to Find Subscribers’ Underlying Motivations

Final Words

The key idea is simply that mindset segmentation provides us with the ability to market and advertise to people with messages that are more likely to get a positive response. Mind Genomics reveals which messages raise or lower interest within a mindset … and by what amount. This gives advertisers and marketers a tool for scientifically selecting messages that “pop” within the mind of the consumer.

Future posts will discuss how to assign thousands or millions of people to mindset segments easily and with little cost, introduce cognitive economics, and competing through narrative.

A Cognitive Economics Primer – Q&A with Mitch Joel

Mitch Joel, President of Mirum, digital expert and host of the Six Pixels of Separation podcast series, interviewed me and Howard Moskowitz about our work in cognitive economics. We talk about mind genomics, cognitive economics, research we’ve done, such as the classic study of red wine, and our book Millennials, Mindsets, and Money, which is in development.

You can listen to the podcast here: Cognitive Economics With Howard Moskowitz And Stephen Rappaport from the Six Pixels site, or from iTunes.

Here’s how Mitch introduced us:

Cherry Vanilla Dr. Pepper, Vlasic’s zesty pickles, and Prego’s extra chunky tomato sauce. None of these products would exist without Dr. Howard Moskowitz. His work has been immortalized in Malcolm Gladwell‘s TED Talk, Choice, Happiness And Spaghetti Sauce. The speech familiarized the world with his research on consumer segmentation. This work in horizontal-segmentation helps brands understand that their products should not be hierarchical in a world where different kinds of products suit different kinds of consumers.

Now, Moskowitz is pushing his work further with Stephen Rappaport (a former executive for the Advertising Research Foundation and business book author). Their work is looking to help brands rethink their consumer behavior through the science of mind genomics in a specialized area they call cognitive economics. Using robust listening studies mapped against consumer segmentation techniques, they’re unearthing fascinating and new consumer intelligence on how consumer behave. Enjoy this very fascinating conversation…

 

Field Guide Fridays: 5 Steps to Avoid the “Endometrics Problem” and Improve Your Measurement

Field Guide Fridays - metrics and business models
Field Guide Fridays

To write The Digital Metrics Field Guide I had to choose which metrics to include from an ever-expanding supply. Sometimes I wondered if there was a metrics nursery somewhere, like the star nursery in 30 Doradus.

So Many Metrics. Why?

When working on the Facebook metrics, I struggled with this question: Why were there so many measures concerned with engagement, interaction and sharing? Clicks. Social Clicks. Consumptions. Likes. Friends. Fans. Etc. Were they all needed? Why?

This stumped me for close to a month until the curtain drew back: The metrics Facebook reported appeared to reflect their assumptions about how social worked on their network, the features and functions they built into their platform, and their business model for selling advertising. I’m using Facebook as an example: the same was true for other social networks, sites, and engines.

Metrics Measure a Platform’s Business Model: The Endometrics Problem

I checked this notion out with Gilles Santini, a mathematician who, among his degrees, has a Masters in the philosophy of statistics and who created many of the industry-standard media measurement models. “Stephen,” he said, “these are ‘endometrics,’ Measures that come from within the system being measured. They measure the performance of a system in its own terms.” Bob Woodard, a former head of global insights for Campbell’s and erstwhile ARF colleague put it more bluntly: “Vendors measure what they want to sell you.” Aha!

A social network, site or engine that talks up its philosophy of “how advertising works on their platform” and is then joined by a chorus of agencies, consultants, or gurus, leads brands to work hard to optimize one or more of the metrics available from that platform to improve their chances for communications success on that platform. It made “perfect sense” to design Facebook campaigns to get as many clicks, likes, or fans as possible.

Business Models Change as Business Changes

Back in 2012 Facebook ran tests with Datalogix matching a Facebooker’s ad exposure on Facebook with their purchase data for 50 advertised brands. They found that 99% of the documented sales were from people who saw ads but did not interact with them. Brand advertising, Facebook VP Brad Smallwood announced, worked just like mass media advertising. Clicks, Smallwood noted, seemed applicable in some cases, such as in direct response campaigns, but it was challenging to understand their offline sales impacts .

Facebook built upon this finding over time and shifted its philosophy, business model, and marketing towards targeting, impressions, reach maximization,  and frequency optimization, and away from the old engagement model. Just last month Facebook rolled out LIFT, a tool for measuring online or offline conversions that reinforces their current model.

Metrics That Matter Change When Business Models Change

The point is that philosophies and business models furnished by social networks, sites and engines change over time. This is not a bad thing and is to be expected: after all they are growing and evolving, constantly learning about their platforms and users, figuring out what works, adjusting their endometrics, and revising their sales pitches accordingly.

5 Steps to Overcome the Endometrics Problem and Improve Your Digital Measurement

Platforms adopting new business models make the case for change. What may be best for a platform interests, however, may or may not be best for a brand’s interests. Why? Each is pursuing its own business strategy. Here are 5 steps that help align your communications goals and measurement with the platforms used.

  • Develop a crystal clear view of the philosophy and business model for any network, site or engine you are considering. Ask yourself these questions: How do they make their money? How do their metrics help them sell? Which of those metrics might be helpful to my brand given our objectives?
  • Come to your own understanding of the ways a platform or combination of platforms should work for your brands. Most media plans combine networks, sites, and engines.
  • Develop and agree upon a measurement framework for your communications goals, strategy, and tactics.
  • Select and fit relevant vendor metrics to your framework.
  • Periodically monitor and evaluate campaign performance. Delete, add, swap, and optimize metrics as results indicate.

These steps will help you select metrics that measure impact of your communications, tell your story to business partners, and provide the guidance you need to reach your goals. Don’t forget to revisit and reevaluate the platform’s business model to keep abreast of changes and modify your strategy and metrics as necessary.

Link of the Week: Facebook’s EdgeRank – List of Factors and Changes

Facebook’s EdgeRank algorithm undergoes periodic revisions to decide which items to place in users’ newsfeeds, and thus affects a brand’s potential reach. Buffer’s Kevan Lee maintains a very helpful list of algorithm factors and changes.

Consumer Mindsets Tuesdays: Three YouTuber Mindsets

This post is about the mindsets of YouTubers.
A gallery of popular YouTubers

The “Ideas from Outside” conference Moskowitz and I spoke at opened with a panel discussion moderated by Sari Katz, Partner Manager of YouTube Canada. She assembled a panel of four very popular Canadian YouTubers. I needn’t mention them by name. One had a cooking show, two were long-time friends who created comedy programs, and the fourth was a director and producer who has his own show and creates videos for others, brands included.

They appeared similar on the outside: mid-to-late 20s, backgrounds in communications arts, especially film and video. They aim to build media brands and work with advertisers, and they are aggressively metrics-driven in their decision-making. You might think that they would be alike because we typically assume that people who share characteristics are alike. That’s the logic underlying almost all segmentation. But when we listened closely to them talk about their viewers, subscribers, ad clients, and how they went about building their businesses and brands … they were remarkably different … on the inside: There were three unique mindsets up there, We called them the Marketer, the Storytellers, and the Rugged Individualist.

Continue reading “Consumer Mindsets Tuesdays: Three YouTuber Mindsets”