Marketing? Automated Serendipity.

Bob Garfield has been railing on about a post-advertising age for over three years now and marketers just may be catching up with that concept.

In his 5,000 word article, a manifesto of sorts, he describes a form of marketing that is far beyond the traditional definition of marketing:
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“”Now we have the ability to automate serendipity,” says Dave Morgan, founder of Tacoda, the behavioral-marketing firm sold to AOL in 2007 for a reported $275 million. “Consumers may know things they think they want, but they don’t know for sure what they might want. They’re not spending all their time hunting for those things.”

Take, for instance, flat-panel TVs. In 2006 Tacoda did a project for Panasonic in which it scrutinized the online behavior of millions of internet users — not a sample of 1,200 subjects to project a result against the whole population within a statistical margin of error; this was actual millions. Then it broke down that population’s surfing behavior according to 400-some criteria: media choices, last site visited, search terms, etc. It then ranked all of those behaviors according to correlation with flat-screen-TV purchase.

In that list, “shopping online for flat-panel TVs” ranked 22nd — 18 places below “consumed ‘Miami travel’ content.” Miami travel?

“Not Chicago travel,” Morgan says. “Not Europe travel. Not business travel. Don’t ask me why. But here’s the incredible thing: No. 1 — and significantly above the others — was people looking at military content. It made no sense. Then I talked to a friend of mine who had been an officer in the first Iraq war. I said, ‘What’s going on?’ He said, ‘That’s easy. The kids in the military are huge video-gamers. They get big, fat signing bonuses, and their housing is free. They don’t need cars. So they buy big TVs.’”

Morgan followed up because he was curious and felt the need for this counterintuitive association to have an explanation. But he needn’t have. Why ask why? The whole point is that data mining takes us to a realm beyond obviousness and common sense. The data speak for themselves.

This message was hammered home in research the same year for Budget Rent A Car’s weekend-rental promotion. “Shopping for a rental car” was the No. 4 correlation. No. 1 was “recently read an online obituary.” Try to connect the dots if you wish; meantime, go read some online obits and see what ads show up on the page.

“We no longer have to rely on old cultural prophecies as to who is the right consumer for the right message,” Morgan says. “It no longer has to be microsample-based [à la Nielsen or Simmons]. We now have [total-population] data, and that changes everything. With [those] data, you can know essentially everything. You can find out all the things that are nonintuitive or counterintuitive that are excellent predictors. …

There’s a lot of power in that.”

The Miracle of Repackaging.

Jason over at 37Signals has a great post on the fundamentals of repackaging content. It’s a proven business concept and it is good to see how it can work online.

Here’s the condensed version:

1st Money: Get your ideas vetted out on your blog, sell ads on your blog.

2nd Money: Make a PDF book or your learnings and sell it.

3rd Money: Make PDF into book and sell that.

4th Money: Hold a conference based on the subject of your book. Charge for that.

Full article is here.

What’s That?

Future Glass is one of those things that I desperately want to work but have trouble imagining how it would. So with suspension-of-disbelief in full effect (because I want it to work), I can think of a few practical applications…museums, retail stores…it might even get interesting with face recognition but that might get a bit Terminatorish for some people.

Telemegaphoning: Happy Experiments.

I first heard about Unsworn Industries from Very Short List, which is a treasure trove of discoveries and well worth subscribing to, if you don’t already.

Unsworn

According to their description, Telemegaphones are tall loudspeaker sculptures that automatically answers incoming phone calls and projects the sound of the caller’s voice into its immediate surroundings. So, if you happen to be in the idyllic Dalsfjord in Western Norway, you would be able to hear the the voice of anyone who happened to call projected out across the fjord, the valley and the village of Dale below.

An initiative like this would simply be incomplete without  blog and they do indeed have one which can be found here.

There is an oddly human (perhaps male) allure in the idea of mixing a vast expanse of hill and dale and throwing a megaphone into the mix. The effect, I am told is quite magical. It “fills the whole valley like a soft voice from above”. This is a feat that the even the New York City Transit Authority has never quite perfected.

An Unpredictable Outcome

As more and more shopping experiences are happening online it is easy to devalue in importance how people shop in the physical world. Ignore that at your peril. We still live in a physical world and the lessons to be learned are myriad.

Plasmatic

Retail banking, for example, has undergone a radical transformation over the past 10 years and we can expect much more change as technology and generational issues (read: aging) force some innovative retail thinking.

If you have been in retail for any amount of time you are probably familar with the name, Paco Underhill, and his company, Envirosell. For the past 15 years they have my single favorite source of insights into how and why people shop. I would imagine that they are rather chagrined (or flattered) to  see all these new, “Customer Experience Groups” springing up when Envirosell has been doing just that for so long.

In an article entitled, Generational Shopping, Envirosell has this to say about retail banking, “Some banks are experimenting with teller-less branches staffed by greeters whose job it is to train people to use the machines. This is cheaper than staffing branches with tellers, but it provides the human touch that older customers especially appreciate, as well as the assistance they need. In a similar way, the Minneapolis-based John Ryan Co., the largest retail-bank-marketing agency in the world, has developed interactive banking kiosks that link customers to financial specialists. This gives bank branches the ability to provide personalized service without having the personnel on-site.”

This is especially important because here in America, demographers tell us that 60 percent of discretionary income is in the hands of people 55 and over.

So why is the specific age group of the customer important?

Envirosell goes on tho tell us, “Personal service is a big draw for older consumers, so what happens to an industry that wants to reduce its face-to-face contact with customers? Banking and financial services are, to seniors, heading for a train wreck. Teller-based banking is expensive, and many banks are looking for ways to wean customers away. Envirosell’s global experience shows that only in New York City are the demographics of ATM users and teller customers the same. Everywhere else in the world, ATM users are younger than teller customers.”

Could this mean that the greeter in front of a wall of ATM screens is the new face of banking?

Project Management Tools for the Troublesome Right Brained People Amongst Us.

Project Management (or productivity) software has always been troublesome. It was like accounting, you needed to have a special person who thought like all those spreadsheets to actually use the program.

Action Method

Then the tools evolved and now, with online banking and financial tools like Mint, we are able to track and analyze baffling things like money.

But productivity software has been notoriously problematic for creative projects. Just utter the phrase, “Microsoft Project” in a room full of creatives and it will quickly turn quite frosty. If the tagline for MS Project wasn’t, “Designed By Engineers For Engineers” it really should have been. Even the much-lauded Basecamp from 37 Signals, while light years ahead of Project, is still a bit of work for creative folks who still need to retrofit their working style to fit the interface.

In a recent email discussion about this, a friend from Agile Partners suggested that I keep my eyes open for Action Method. While it isn’t released yet (and living up to pre-launch hype is always a challenge), the concept gave me great hope because the problem wasn’t necessarily with the productivity software, it was with the people that used these applications. And the problem was that they loathed using them. I don’t think loathe is too strong a word. That’s a problem.

What looks different about Action Method is that they’ve broken out the world into projects with three categories.

Three_things

They describe it like this: “The typical creative process for managing ideas and projects is haphazard. Many creatives lose energy amidst unclear tasks, half-finished thoughts, ideas with ambiguous next steps, cluttered references, and little follow-up in a team environment. This method brings order to the organic creative process we all use in our work.”

The secret of what will most likely make Action Method successful is this key point: creative processes do not lend themselves to a whole lot of documentation and categorizing. “The Action Method is project-centric, not context-centric. “We found that creative people tend to approach their personal and professional lives as a series of projects. Design helps us sort the components of these projects and stay engaged long enough to complete them.” With over twenty years of experience in creative groups, I can assure you the operative in that sentence is, “stay engaged long enough to complete them”. It’s the difference between a productivity system that you can actually use to run your business and one that just wastes everybody’s time.

There’s a great usability book called, “Don’t Make Me Think” which encourages developers to not make the people who are going to be using the interface have to think about what they should do next. Action Method sounds like they have taken that to heart and designed a productivity system that works the way creative people think. At least, I’m hoping that’s what it is.

Magazine Error Messages: “What to Do if Your Cover Is Not Flashing”

Paper, meet pixels. Pixels, meet paper. While I have never bought a copy of Esquire magazine, as soon as I heard that there was an e-ink cover on the 75th Anniversary issue I shot over to Esquire’s site to learn more about how they did it.

It is more fun when the cover is blinking.

(Not familiar with it? Here’s what e-ink is all about).

The link that caught my attention is the one that made one eyebrow shoot up when I realized that magazine covers now have error messages: What to Do if You Cover Is Not Flashing. This is something that Esquire readers have not had to concern themselves with for 75 years. Onward!

The real story is that it’s an amazing story of innovation. It starts to get interesting when you scroll down to the third paragraph which starts, “Yet the technology still needed a push. First E Ink and its manufacturing partner, the Nicobar Group in Shanghai , had to design circuitry thin and flexible enough to bend with the cover and small enough to draw a level of energy that would allow the battery to last for at least ninety days.” Keep reading, it’s a great story.

There is a video of the cover in action which seems rather silly since the cover just blinks but, still, it is innovative in a Times Square kind of way. For the more visual amongst us, the section about How the E-Ink Cover Was Made documents the seven year journey around the world to bring the cover to fruition.

In a fit of inspiration, this 75 year old publisher has opened up their first e-ink cover to hackers and invited them in. Hackers are actively courted in a section entitled, Can You Hack Esquire’s E-Ink Cover? In response to that question, Esquire says, “We don’t know. Well, that’s not entirely true. We know it’s possible, but we’re not exactly sure how. That’s where you come in.” This is surely good for some buzz…and maybe even something more innovative than a blinking cover.

Guttenburg smiles down on all this, I’m sure.

The Metric System: Who’s Steering?

Imagine speeding down the highway and everyone in the car is trying to grab the steering wheel and yelling “Turn left!”, “Make a right!”, “Speed up!”, “Slow down!”. If you can imagine this scene you have probably been in an online development meeting recently.

Forget about which technology or functionality to use, one of the biggest challenges of running an online business right now is simply agreeing how to steer.

Someone recently gave me a copy of “Web Design For ROI” and I read it on a flight to San Diego. Despite its rather dry title, it is happily packed with pragmatic and insightful tips that had me nodding in agreement (and scribbling notes) all the way across the country.

If you’re in this business you have probably experienced marketing people, sales people, usability people, and analytics people all sitting around the conference table trying to prove that they alone have the one true and right critical success factor. So which one is the sole arbiter of truth? Here’s the path to wisdom: They all do and none of them do.

The truth is that running an online business requires a holistic triangulation of business metrics, site metrics, and user metrics and that no one of them exists in a vacuum. The business metrics are the same ones that the business uses to measure success at a high level such as those pulled from a sales system used by the whole company. The site metrics are from web site reporting tools such as Omniture or Google Analytics. The user metrics are derived from user feedback such as surveys, focus groups, and usability testing.

It is imperative to track different types of metrics from multiple sources if you are running an online business. Yes, imperative. You’ll need visibility into quantitative and qualitative results and this is a great way to enforce some checks and balances on the metrics that are tracked.

By using this dashboard approach you will have the ability to make informed, balanced decisions for your business that are rooted in fact.

Having trouble keeping it in the middle of the road? A good dashboard with these three metrics allow you to keep your eyes on the road and your hand upon the wheel.

Where Should We Put the Money?

It’s a question that shopkeepers have asked long before there were things like websites. Or digital revenue models.

Where should I spend my money; spend it on marketing or on making the store nicer?

Obviously we need both but historically companies have focused on buying more traffic, buying more traffic, buying more traffic. And while we need to drive traffic to the store. we also need to convert shoppers once they are in our store.  Lead generation, fundraising, recruiting, sales; all of these can be measured in terms of conversion.  So when we talk about conversion, that’s what we’re talking about.

The secret here is to look at Return On Investment (ROI) as a percentage because it shows us that simply buying more traffic is not always the wisest business decision (all this coming from an old advertising guy, no less).

Here’s why: Let’s say, for illustrative purposes, that our traffic generation programs yield an ROI of 100%. Every month we spend one dollar to make two dollars. We know what we can expect month-over month.
It looks like this:

Traffic

But let’s say we have a sales conversion rate of 2%, so for every 100 people who come to our site, 2 of them buy from us.

Now let’s suppose we improve something on our site, say, the checkout process and we increase our conversion rate from 2% to 2.3%.
It doesn’t seem like a very big lift, does it?

Here’s the big a-ha moment: the traffic percentage is for a single month. The conversion percentage is 2.3% of an ever-increasing, month-over-month number. Unlike traffic percentages, our conversion percentage increases:

Conversion

Buying traffic is a one-time cost with a one-time benefit. Increasing our conversion percentage is a one-time cost with an ongoing benefit that increases month over month. It is entirely possible to see a yearly ROI of over 1000% from conversion optimization and that is why we continually look for ways to improve the customer experience. It’s not just a buzzword, it’s good business and it can tell us where to put our money when budgets are tight.