Making Big Data Work

"Hmmm.  I see Mrs Mittleshmitz  just bought six more cans of Hint-O'-Bacon spray cheese. Wilhelm, email her a Buy-Eight-Get-One-Free coupon"

I did something last week I haven't done in a long time.  I actually read a whole issue of Marketing Magazine and its twice-daily emails.  On most occasions Marketing only offers stale news or filler "content" or both—its Fall TV preview is an egregious example.  But this time was different.  It featured articles on Big Data that, by an odd coincidence, coat-tailed its Data Driven Marketing event of August 20. 

The main issue with big data is how to make sense of billions of consumer data points in a timely manner and not get it all screwed up.  There's a lot riding on this because many marketers believe that if they torture the data enough with the right analytic it will confess a truth about how and why consumers act the way they do.  But, finding unicorns can be a bitch. 

Data models are only as good as the parameters and the assumptions used to construct them.  And the more data used to create the models, the greater the chance for error or misinterpretation.  Then, there is statistical noise, as well as false positives, that skew results, among other problems.  And just because certain things are detected doesn't mean they are connected.  Correlation is not causation.

Case in point: the lead article of the magazine, Lost in Data Translation, mentions Kevin Keane, who now runs a "neuromarketing" outfit called BrainSights but at one time was a data cruncher for a booze company.  One day, Kevin noticed a huge spike in sales that neither he nor the client could explain. Maybe it was a new ad campaign or perhaps a large shift in consumer preferences.  Unsure of the cause, he decided to sit on the results and dig deeper.  Turns out that was the right thing to do.  Kevin discovered that sales spiked because of something the data could never reveal: because of a threatened LCBO workers strike consumers were stocking up.  Kevin applied a valuable element to his data. 

That element is identified by Matthew Quint, director of global brand leadership at Columbia Business School.  I'm overlooking the fact that he teaches at Columbia for the moment because he uses a quote from Einstein (Princeton) to stress what big data lacks: “Not everything that can be counted counts, and not everything that counts can be counted.”  Quint says, “Sometimes data is only valuable with a human interpretation on top of it – what the data reveals and what insights come from a human analysis of it – but also sometimes we miss things, as humans, with our gut instincts, understanding and anecdotes.” Overlaying the data with some human insight has benefits, but it will provide much more if marketers apply it in a different location.

Right now marketers sift through terabytes of consumer information every day to create models of their ideal loyal customers—the golden grains of profitability.  What they winnow out, however, could be much more valuable.  The chaff—light customers—are separated out because they have no apparent historical worth or loyalty.  But that is dead wrong.  Loyal customers are nice and all, but they are usually too expensive to retain; besides chances are they'll buy your product anyway. 

The biggest opportunity for data marketers comes from finding light customers, those who rarely buy the brand or do so two or three times a year—the segment that provides about 60-70% of a brand's sales.  Applying that layer of human interpretation on top of the data to understand and reach the light buyer is the way to increase penetration (increasing the customer base) instead of increasing market share (getting regular customers to buy more).  This is where big data can pay off. 

Just Random Stuff to put off doing your job on Monday morning

If cats controlled the Internet (more than they do already):

http://www.buzzfeed.com/catinternet

Wired discovers the obvious:

http://www.fastcompany.com/3016221/leadership-now/marketers-these-eye-popping-stats-will-make-you-stop-chasing-youth-start-cour

Days of reckoning for agencies?

http://www.adweek.com/news/advertising-branding/look-how-agency-compensation-has-changed-151921?utm_source=Sailthru&utm_medium=email&utm_term=AWK_NewDaily&utm_campaign=Adweek Newsletter Template - July 12 - Daily Digest

… and, in a related way, this:

http://sellsellblog.blogspot.com.au/2013/08/are-there-too-many-jobs-in-advertising.html?spref=tw&m=1

Train Announcer of the day:

http://www.thepoke.co.uk/2013/08/21/train-announcer-of-the-day/

So... you're a photographer?

http://sobadsogood.com/2013/08/13/22-glamour-photographs-that-will-leave-you-speechless/

FYI of the WEEK:

http://www.todayifoundout.com/index.php/2013/08/peeling-back-the-foil-the-origin-of-the-tv-dinner/

Dressing up the numbers?

I opened my eMarketer email from this morning and below the fold was an article, "Digital Set to Surpass TV in Time Spent with US Media." The first table, complete with mice type (must read that), shows that digital usage is broken down into online (with that vital asterisk), mobile (nonvoice) that includes tablet and feature cell phones—the one's that are considered not smart—and other, which isn't explained. It also shows how its results differ from other research firms because it lumps a lot of other stuff in with its numbers and gets a bit fuzzy with handling multi-tasking time.

 What caught my eye, though, was there was no explanation of what constitutes digital usage. TV usage is pretty self explanatory—turn it on, watch a show, turn it off—but digital usage can be anything from texting to posting pictures of your cat wearing sunglasses. It's like comparing a hammer to a Swiss Army knife; the hammer only does one thing while the Swiss Army knife can do many… except, of course, what a hammer can do.

That people are using mobile and tablets instead of desktops and laptops is not surprising as sales trends show people shifting from one device to the other. In fact, they're obsessed with them. Sit in any meeting, have a conversation with your teenager, ride any public conveyance or walk down any street and you'll see people totally absorbed and, sometimes, dangerously unaware of their surroundings. Like here, here and here.

To be fair, eMarketer should provide a breakdown of mobile usage by task: checking and reading email, texting, posting cat pictures, information gathering (schedules, prices, locations, blog and news viewing, etc), purchases and TV viewing. Apples to apples, not hammers to knives.

Pubic-Com, where advertising's future is clear

It's difficult to predict what the fallout will be with the Publicis-Omnicom merger, Pubic-Com as George Parker calls it.  It creates the Uber-Holding Company that will shake off many of the executive level types to reduce duplication.  It will unchain the galley slaves (the ones who do the actual work), despite its claim to the contrary,  at the Leo Burnett, Publicis, Saatchi & Saatchi, Starcom, ZenithOptimedia, Rosetta, Rokkan, VivaKi and Razorfish from Publicis, and BBDO, TBWA and DDB, Rapp, Omnicom Media Group, Organic, Proximity, and Tribal from Omnicom.  But who really believes a bunch of lawyers and accountants? Believe me, these assholes will squeeze every dime they can out of the new company except when it comes to their own salaries and "performance" bonuses. 

Maurice Levy meets with the creative department

The one thing I haven't seen mentioned is what happens to the thing it is supposed to produce.  There is no word about the advertising, though both companies seems to have given up on that.  It's unclear how the new company will deal with client conflicts, such as Pepsi and Coke, GM and competing automakers (including Mercedes, Volkswagon and Nissan among others), McDonalds and Burger King. I'm sure the new company will swear to build a Chinese Wall around these businesses but I don't think the smart clients will buy into that.  But more nimble agencies, like W+K could benefit if clients who can see through the bullshit decide move elsewhere. 

The reason behind all this seems to be control of media buying, both conventional and digital.  The new company will certainly be the gorilla in the room as it battles Google, IBM, and Facebook for control of data.  What the brains behind the merger seem to have forgotten is that no amount of data insight will create better, more effective ads.  Technology is just a tool, a commodity, not a strategy. Without breakthrough creative ideas, the Big Holding Companies have diluted the quality of the end product to the point where it is more like bottled water: cheap to make and totally flavourless, only now it comes in Big Gulp size. 

Of Madeleines and Music

Memories are not like lost car keys. To find cars keys, we have to force ourselves, usually by retracing our steps to track them down. Memories, especially distant ones, are found usually by accident, a chance encounter.  A passing scent, a brief taste, or a few notes of music can unleash a torrent of long-forgotten faces and events.

Artists, poets, and writers have been fascinated with memories for eons.  Neuroscientists, aren't, at least not in the same way as artists. They can tell us exactly where we store memories in our brain—they just can't tell us how we stumble upon a box of memories stashed under the stairs or crammed onto the top closet shelf of our mind with only the slightest prompt. (I've never much cared for neuroscientists.  They take all the fun out of stuff. Like those smarty-pants types who feel compelled to tell you the ending to The Sixth Sense before you've seen it.)

Marcel Proust had a lot to say about memories and their triggers in his work, Remembrance of Things Past. What set him off on his six-volume examination of the subject happened one day when he was having a cup of tea with his mother with which she included a little something, something he had seen in shop windows countless times but never given it a thought. But, once it "touched my palate, a shudder ran through my whole body, and I stopped, intent upon the extraordinary changes that were taking place."  He had tasted a madeleine, a little scallop-shaped cake. 

"And once I had recognized the taste of the crumb of madeleine soaked in her decoction of lime-flowers which my aunt used to give me (although I did not yet know and must long postpone the discovery of why this memory made me so happy) immediately the old grey house upon the street, where her room was, rose up like the scenery of a theatre to attach itself to the little pavilion, opening on to the garden, which had been built out behind it for my parents (the isolated panel which until that moment had been all that I could see); and with the house the town, from morning to night and in all weathers, the Square where I was sent before luncheon, the streets along which I used to run errands, the country roads we took when it was fine."

With me, music triggers equally as strong memories. Almost are delightful and are of people long gone—Billie Holiday sings and I'm back sitting with my father on the porch on a warm summer's night; listen to Strunz and Farah and I'm with my wife lying on the bald rock in front of the cottage at Nipissing looking at the stars during one of those rare times when our two-year old was asleep.   A few, though, are just bizarre. 

Yesterday I listened to Trick of the Tail by Genesis, an album I hadn't heard front to back for decades.  And as it played, I recalled someone from nearly 40 years ago.  His name was Peter and he was the worst scoundrel I have ever met.

We met at Calgary airport in 1976, which at that time a cluster of ATCO trailers surrounding a dinky terminal.  I was tagging along with my crush Mary Liz (pre-wife) to Banff, having dropped out of the geology and Earth Sciences programme at Waterloo to live in the mountains for a few years. While Mary Liz and me were waiting for the Brewster Bus to Banff, we spotted Peter, a handsome young man (we were 20, he was about 26) in the parking, lot frantically emptying his bags, pockets, and wallet onto the hood of his Bavarian; mentally retracing his steps, he soon realized he had left his keys in Montreal and his spare was in Banff.  Not thrilled of the prospect of riding the bus, Peter asked if we would split the cost of a one-way rental car.  In return, he let us stay with him until we got established.  Fortunately, he lived above the Avis car rental place and occupied the whole top floor of the house.  A virtual mansion for Banff. 

Over the next few weeks we got to know Peter.  He was nice, funny, and always generous with his liquor. Quite often, though, he'd ask us in the morning to not come home until around 8 or 9 in the evening as he was "entertaining" a woman.  He must have been good at it because there was always a stream of them coming and going. 

One day, when passing by his bedroom I noticed the handle of a substantial knife poking out from under his pillow.  Worried for our safety I asked him why he felt the need to keep a large knife on his bed.  He said it was for protection.  When asked, "protection from what?" he said, "from husbands."  You see Peter had a penchant for boinking Banff's married women.  Only married women.  He also said, with no shame whatsoever, that he made sure to lie next to the wall so he'd be behind the woman he was bedding in case an enraged husband burst in with a gun—he believed her body would stop any bullets directed his way.  When I told Mary Liz this, she looked at me with that look and said, "We leaving. Now." 

We didn't see much of Peter after that.  He never did get shot or have to stab anyone, and about six months later he, and his knife, went to Whistler.  He had simply run out of unboinked married women and went off in search of a new crop.  Fortunately, he gave us his apartment, which, for our visitors, was the easiest to find in town—we told them simply ask a woman wearing a wedding ring. 

Is the future of advertising all in your head... or a bit lower?

According to Marketing Magazine—my go-to source for trivia and 26 pages of Fall TV previews—the boomers are the segment to go after not the young people.  The piece quotes Michael Smith from Nielson Neurofocus who says that big brainy brain neuroscience guys studying whole bunch of pictures and graphs with squiggly lines from electroencephalograms are learning the way consumers respond to things. And, (better sit down) they've discovered that "older brains respond to things differently than younger brains." Smith says that as people get older the brain changes, sometimes caused by disease or degeneration and "There are differences in the ease with which the brain can recall words and memories.  There are changes in the way the brain responds to emotionally loaded information."

Good Heavens, Captain Obvious, what are we supposed to do and how are you planning to cash in on this? Well…

“It is becoming more and more important to understand how best to target that demographic,” he says. That could mean surveys, market research and focus groups to try and figure them out. But if you really want to know what they think, don’t ask them. Read their mind. That’s just basic neuromarketing.

There are some obvious steps – think, repetition in ads – for advertisers to make their ads more resonant, says Smith. But marketers need to think about the implications for an older marketplace at a more basic level – like product names. Many new products or online-based services want to come up with names that are unique to stand out online. “But that often results in names that have odd spellings or that may be hard

Much advertising follows the time-tested format of presenting a problem and then offering a solution with the product. The flaw in that format, says Smith, is that the problem is often presented in a very emotional way and, simply put, older brains don’t react the same way to those messages. “They are less easily frightened or less easily prone to be worried about negative information,” he says. “As a result they pay less attention to that sort of thing and you are less likely to hook them…Where as they respond relatively well to positive information.”

In a nutshell: to succeed, say your message often as Boomers tend to forget (because they might have brain damage); don't get to clever with brand names as Boomers get confused with all this hipster talk (brain damage, again) and; don't try emotional messaging or negative stuff because Boomers have no real feelings (possibly caused by brain damage) and aren't affected by guilt, so keep it bright and sunny

Neuroscience is the latest in a long line of pseudosciences that consumes marketers every few years.  My favourite was subliminal advertising.  You remember, the one that said advertisers were putting subliminal pictures of tits and dicks in ice cubes to make consumers unconsciously buy Pavlov's Vodka so they can get laid more often. Unfortunately, this epic example of academic phrenology has the persistence of antibiotic-resistant clap because it flares up occasionally to infect those unprotected from rational thought.

For the sake of argument, say in 20 years time Michael Smith and his neuroscience experts find the combination of brain chemicals and wiring that explains how consumers react to advertising.  This may help us target people better or make us more relevant, but it will never explain why it does.  It will never explain why art and music affect us, or why certain words or images can fill our heart with sadness or make us laugh out loud.  It will never explain why true love can happen when two people lock eyes for the first time. 

The how isn't important. No, it is the why that makes us human. And knowing the why can only come from understanding the human heart.  Good luck with that.

Are big brands wasting money on SEM?

If you have ever Googled Ford, Amazon, or Rogers (try it) you'll see two listings at the top of the page—the top one is a paid ad the other is organic (free).  Now, try it with eBay. Spot the difference? There is just one listing at the top, the organic one.

Why the difference and what does EBay know that other big brands don't? 

In 2012, eBay wanted to know if there was any benefit to paid search ads that contain the word "eBay," i.e. branded keyword ads.  So, it stopped buying these ads on Bing and Yahoo, while keeping them on Google.  The result?  No difference in sales from Bing and Yahoo compared to Google.  Customers simply clicked on the organic link in the absence of the ad.

The company then wanted to see how effective non-branded keyword search ads would be.  In this case, it chose "used les paul guitar."  Conventional wisdom told it that without a targeted ad a guitar reseller, like Chuck's Used Guitar Barn, would appear ahead of eBay.  So, it shut off all Google search ads in one-third of the US while keeping them in the remainder to see what would happen.  The result?  In the cut off region, people who had used eBay before and were looking for a used guitar found their way there either through the free listing or eBay's site.  And, in places where the paid ads were still in running, this same category of customers clicked on the paid ad—eBay had to pay Google for existing customers who were already on their way to eBay to buy a used guitar.  The only bump it got was a slight increase in users with little or no history with eBay; they were potential customers looking for information. 

This is not to say all paid search ads are worthless.  They have a practical use for smaller companies with no brand recognition or without a high Google page ranking.  They are a way to inform new customers about their services.  They may also be more profitable for smaller companies breaking into a new, local market.  The challenge for the big brands is the need to determine, despite what the experts say, what, if any, benefit do paid search ads (branded and non-branded) provide?  Are they worth the expense? It was clear to eBay that people found their way to its site either way without a drop in sales and that its was wasting money attracting existing, converted, customers with its ads.  So it stopped buying and saved millions.

You can read about it here.