What Magritte Has to Tell Us About Marketing Data

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In the winter of 1928-29 a Belgian painter living in Paris painted what looked like an advertisement for pipe tobacco. The painter, René Magritte, painted a caption below the large pipe stating “This is not a pipe” creating confusion for viewers and a bit of a stir in the Paris art scene at  the time.

The title of the painting is “The Treachery of Images” and Magritte intended it as a reminder that representational art is a reflection of the artist’s view of the object,  not the object itself. His interpretation was that  the painting of the pipe is not actually a pipe. You can’t smoke it, fill it with tobacco, or put it in your pocket; it is a representation of reality.

Magritte’s message is particularly apt in our view of marketing data. As marketers, we use our marketing data all the time in measuring and assessing user behavior related to digital advertising and engagement. But it is extremely important to remember that marketing data is an imperfect representation of user behavior and not a perfect simulation.

There are three main reasons that marketing data is imperfect. The first is in the nature of tracking. Tracking is technically limited in its scope and reach.  At best, tracking can measure engagement from the same device over time, or the same multi-device account over time. This only works if the tracking is implemented correctly in the first place and is not disabled by the end user. Because of the technical limitations of tracking there will always be engagement that is not tracked because of multi-device use, the amount of time for which the tracking is active (cookie window), or because of personal opt-out at the user level either by choice or by browser pre-set settings.

The second main source of imperfection in marketing data is in user behavior.  As humans we have a wide variety of choices and methods of interacting with advertising. Some of us choose to avoid interacting with advertising as much as possible while some of us behave in the opposite fashion. Some of us will choose not to click on ads at all, some of us don’t hesitate. Some of us need to heavily research purchases, some don’t. There is not one engagement path that is adhered to by all users yet often our data is interpreted through a “single funnel” lens that introduces inaccuracies in interpreting data.

The last main source of data imperfection is in data integrity. The cleaning and analyzing of data must align with the knowledge being sought. De-duping rules will differ by business model. Attribution will vary based on external factors such as affiliate payment rules (and will still never tell a 100% accurate story). Data dropout can cause interpretation issues.

So what is a marketer to do?

The best thing you can do is to fully utilize data to test your own model of reality.  The best data firms don’t blindly use data but instead use it to inform their perception of reality.  For example, if you know that a percentage of social users engage with your brand without clicking on ads and instead show up as brand search or No Referrer traffic, you should try to assess: how much, how can that magnitude be assessed and what impact does it have on my decisions as a marketer if I can hypothesize about non-measured (but real!) activity.

Magritte’s point  is well-made. Our data is not reality, but an imperfect reflection of reality biased by user behavior, technical limitations, and process. Our best response is to acknowledge and accept this and use it to our advantage.

5 Marketing Data Mistakes Most Companies Make

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Even the most data-savvy of marketing teams can make mistakes in thinking about the use of data in optimizing campaigns for financial success. Let’s face it, marketing data is rife with issues and is never perfect, and it is easy to put on blinders based on the data you have available, the systems you use, the marketing channels you work with, or even the directives of senior executives. Despite that, everyone wants to be able to connect the dots from ad impression to profit. Here are a few common data traps we see even smart companies easily fall into. How do you rank on this list?

1. Using Average Value CPA Targets

Cost-Per-Acqusition targets are fertile ground for data issues. For example, are your targets even based on customer value, or are they merely a “seems reasonable” guess? Smart data-centric companies will base target CPAs on actual customer value to ensure that their marketing programs don’t risk over-paying for customer acquisition. However, even smart companies can fall into using a single average CPA target for all their customers. In doing so, they underpay for audiences that provide higher-than-average value customers and overpay for low-value customers. Companies can avoid this by using targets tied to segmented customer values, not averages.

2. Using Last-Click Attribution

The attribution question has long been mired in a false discussion of “who gets credit?” when there is more than one user touch leading to a sale or lead. Some companies still use last-click attribution, often in a mistaken belief that this is somehow a “truer” view of acquisition, or that it just allows them to avoid thinking about attribution at all. Google hasn’t made things easier by offering multiple views of attribution with little guidance on when and where the different options should be used. Here is our take: Avoid last-click attribution at all costs unless you are evaluating retargeting assists. Last-click attribution will severely over-inflate your brand and direct numbers and cloud your ability to see high-value first-mover channels.

3. Not Considering Out-Of-Channel Effects

Everyone looks at their channel-specific numbers, but an astonishingly few companies continually examine their direct and brand channels, looking for influence from other areas. While everyone logically understands that users did not wake up with magical knowledge of a company’s brand, it often feels like that’s the assumption of marketing teams who put on “channel blinders” when evaluating their programs. Smart companies view their data holistically, looking for out-of-channel trends that increase or decrease direct and brand engagement. While only 5% of users in a typical search campaign are likely to bounce over to direct or brand, it is not unusual for a whopping 50%-90% of sales from social media or display campaigns to come through direct or brand traffic.

4. Over-Valuing Metrics Not Tied to Revenue

What is the value of a Like? Most data-driven marketers have moved on from directly equating social media engagement as revenue-related events, but many metrics that don’t correlate well to revenue are still held as sacred cows. Any metric used for campaign optimization should be well understood in how it relates to revenue before it becomes a key KPI. Data-driven marketers with their eyes on the profit prize quickly realize that Time-On-Site, Impression Share, Cost-Per-Click, or other common metrics are not as tightly aligned with profit as they might think when other factors such as volume, customer value, out-of-channel influence, or profit margin are taken into account. Easy rule of thumb: Use post-marketing profit as your marketing KPI.

5. Assuming Traffic Equals Sales

We’re two decades into the digital revolution, and it’s still incredibly common for people to assume that eyeballs equal profit. Back in the days of traditional media the best shot you could make in media buying was the most eyeballs for the lowest cost. That approach doesn’t work in digital because of the competitive auctions, and yet “Let’s get more traffic to this page/product/site” is not at all an uncommon marching order, particularly from executives who don’t understand the auction effects in digital media buying. Smart data-driven marketers know that their job is as much about when NOT to buy traffic as it is in finding the areas of success, and continually evaluating how to increase the quality of an audience by peeling away the “eyeballs” that are not their target audience. This allows them to compete more aggressively in the auctions while protecting the bottom line. Sometimes less really is more.

These are samples of marketing data traps that are very easy to find in almost any campaign. Most of these issues can be avoided through three core practices: 1) By adhering to a holistic financial lens in optimizing the entire marketing program against financial targets; 2) By working backwards through the path that led from advertising to revenue and; 3) By not ignoring revenue that falls outside of the “channel buckets”.

7 Easy Steps to Improve Your Retargeting

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Here are seven quick adjustments you can make to take your retargeting program from “Yuck!” to “Yay!” (Listen up all of you who just use default settings and one giant bucket of targeted visitors, and don’t skip the last point below.)

1) Frequency Caps

Overexposure to ads can quickly annoy visitors and result in decreased campaign performance. Limit the number of times a tagged visitor is exposed to your ad. Understand your sales cycle and take into account how frequently you want visitors to see your ad within that time frame.

2) Audience Segmentation

Visitors arrive with different goals and needs. Are they a customer? A prospect? What content have they viewed, and how does that help define their needs? Target messaging in ads to different stages of the funnel. Keep ads relevant to the audience segment.

3) Use One Provider (to start)

Many retargeting providers, such as Google AdWords, AdRoll, Steelhouse, and Perfect Audience have a high level of overlap in their publisher network.  Use one out of the gate to avoid dilution, then add unique publisher networks as your program grows and becomes more sophisticated.  Start with a network that provides a broad reach and good feature support, such as frequency capping.

4) A/B Testing

As with all aspects of digital marketing, retargeting offers a fantastic opportunity to improve your engagement numbers through ad testing.  Ideally, optimize to increased conversions.

 5) Use Targeting Options

Many retargeting networks offer sophisticated add on targeting for geography, context, demographics, or more. If these help you better focus your retargeting spend on the audience that will most likely bring you value, you should be using them.

6) Switch Up Messaging

Many marketers reiterate messaging in their retargeting ads.  But retargeted ads are also an opportunity to say something different.  Perhaps the reason the prospect didn’t convert in the first place was that the key piece of your value proposition for that person was missing in their experience on the site.  A/B testing different ads that have different value propositions is a powerful one-two punch, and a path to success.

7) Evaluate Correctly

Repeat after me: “Retargeting is not a Channel”.  Unlike other media, retargeting only works as an add-on cost that pays for itself by increasing conversion rate.  Without your other channels, retargeting cannot exist.  Yet companies still commonly report on retargeting performance with channel-based metrics, such as a unique cost-per-action.  The right metric is cost-per-assist, and this can only be evaluated in terms of overall cost of acquisition and conversion rate. Thinking clearly about how to evaluate retargeting is key to success, as the increased use of retargeting is quickly increasing the cost and competition in the display networks.

Retargeting is quickly moving through its awkward adolescence as marketers begin to understand user behavior and find tactics that work for them.  Keep trying new ideas and you too will find that retargeting becomes a key piece of your digital marketing program.

Why We’re Loving Pinterest Promoted Pins

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In January, Pinterest moved their paid advertising platform out of beta.  As early adopters, we were able to run tests with Promoted Pins to see if targeting, cost, and engagement could provide a meaningful channel for our clients.

It did.

In fact, Pinterest Promoted Pins has been one of the fastest growing digital channels in our history, providing high quality traffic with measurable engagement.  For at least one of our clients, Pinterest has grown to encompass over half their media buy simply because the numbers are so good.

Direct Response in Social Media?

Unlike many paid Social Media advertising programs, the visual focus and highly engaging nature of paid pins have led to performance not unlike direct response campaigns in Search and other highly-responsive media. This has meant rapid results and optimization of campaigns, which is not always the case in Social Media advertising. Where many Facebook and other Social Media campaigns may be challenging for direct response results, Pinterest can work quite well. We do note that it is early for Pinterest, and increased competition and Pinterest’s own efforts to increase bidding are likely to result in a more expensive channel in the future.

Out-Of -Channel Activity

While Pinterest provides high-quality traffic and direct engagement with Promoted Pins, it is worth noting that they also provide a high level of Out-Of-Channel activity.  Out-Of-Channel activity simply means that there is a tracking disconnect between the exposure of the paid advertising and the actual sale or other engagement of the end user.  With Pinterest, it is not at all unusual for users to see the domain name of the advertiser associated with the promoted pin, then come in through a Brand or No Referrer visit.  It is important when evaluating Pinterest campaigns that the Out-Of-Channel lift be taken into consideration, as significant value is produced through Out-Of-Channel behavior.  In tests done with online retailer Urbilis.com, we estimate Out-Of-Channel activity to be close to or more than the level of tracked sales.

Out-Of-Channel activity occurs with any online advertising, and is related to the level of interruption of the media.  Search, for example, has essentially no level of interruption and therefore low levels of Out-Of-Channel behavior.  Pinterest, due to the nature of Pins and Promoted Pins, has surprisingly low levels of interruption compared to display, video, or even other Social Media advertising. With Urbilis.com we say Out-Of-Channel behavior as approximately 50% of the total value created by Pinterest.  In display, video, or other more interruptive media this can be 90% or higher.

Reach

Pinterest Promoted Pins allowed us to reach an audience far greater than our clients’ organic Pinterest campaigns. It has not been unusual for us to find that the volume of re-pins and clicks from Pinterest can be 10x t0 100x the volume of the non-paid Pinterest campaigns. This access to a significantly larger quality audience makes Promoted Pins highly valuable for clients in many vertical markets.

Pinterest is a great example of the power in testing new media channels and programs. Digital marketing is a game of volume and math. Finding new and engagable audiences while controlling cost of customer acquisition is a key part of a robust digital program.

Soren Ryherd to Speak at SMX Milan 2015 Conference – Mad Scientists of Paid Search

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Working Plant Co-Founder, Soren Ryherd, will be speaking at SMX Milan in November!  Soren will discuss why Out-Of-Channel measurement is critical in to the success of CPA-based marketing given the high levels of out-of-channel user engagement outside of Search, as well as the increasingly common cross-device behavior seen in mobile search. 

SMX Milan will take place at the Meliá Milano hotel on Thursday and Friday November 12 & 13 2015. Please catch up with him after the session, if you plan to attend! 

What “The Next Level” Looks Like for Digital Marketing

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“We want to take our marketing to the next level.”

We hear that often. But with digital marketing becoming more complex by the minute, what does the “next level” even look like?

1. It’s Holistic

With cross-device and cross-channel behavior becoming more the norm than the exception, marketing programs that are siloed by channel are going to be increasingly inefficient. For example, Mobile ad exposure can drive desktop engagement. Video ads may well drive brand searches.  But when value created in one channel is realized in another, it creates disconnects for budgeting and performance measurement. Striving for neat and tidy single-channel performance numbers is likely detrimental for your business. Marketers who break through to the next level are looking holistically at engagement across channels, across engagement points, and over time.

2. It’s Even More Data-Driven

Data-driven reporting, or simply looking at Google Analytics reports won’t cut it any more. Data used just for creating reports is data that is being wasted. True data-driven marketing feeds core metrics from advertising, engagement tracking, and customer databases back into ongoing optimization on a daily basis. “Next-level” data will focus on supporting complex modeling with hard data from multiple sources. The days of “do, measure, done” are gone.

3. It’s Financially Rooted

If you’ve been optimizing for marketing metrics without an underlying financial model, it’s time to step it up (take notice “Time-On-Site”). Marketing at its core is a financial  investment in a financial outcome. “Next level” marketing is explicit about the financial model and how engagement and customer value support revenues and profits. To do this, Key Performance Indicators must be tightly aligned with profits.

4. It’s Predictive

The ad dollars you spent today may have no relationship to the sales you made today unless you have the world’s shortest sales cycle. Today’s sales were likely to be largely, or maybe even entirely, from past advertising.  Tomorrow’s marketing relies on predictive models that are savvy about time. An understanding of sales cycle, latency and engagement process is critical to the financial assessment and efficient optimization of your program.

5. It’s Complex

Yes, life would be easy if marketing were simple. But today’s big opportunities in Digital lie in mastering complexity. The better you are at understanding complex user behaviors and tightly optimizing those behaviors for a clearly-stated financial result, the better chance you have to beat your competition. This means understanding the limitations of your ad management tools, reporting, tracking systems, and customer data and moving beyond those limitations.

The “next level” is an exciting place. Welcome to it.

Display & Search: 5 Things that Make them Better Together

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Marketers engaged in Search often overlook the opportunities in Display advertising, but with total Display ad spend set to surpass Search in 2016, it’s time for advertisers to take a hard look at Display.

The ugly truth is that advertisers who are used to Search often fail at Display.  Let’s chat a bit about the strengths and differences between Search and Display:

1. Immediate Need vs. Education – Search has been the go-to media for direct response campaigns because you can respond to  a clearly expressed need.  When users tell you what they want, it’s easy to tailor the message and the engagement path.  But Search is limited to those that both know what they want and are taking active steps to find it.  Display, on the other hand, offers the opportunity to get beyond the late-stage buyer.  By educating and engaging a broader market, Display can help grow your overall market opportunity.

2. Linear Engagement vs. Cross-Channel – Search-savvy advertisers often fail at Display because they apply the same tools and metrics to Display that work for Search.  The user path is completely different with Display than Search, however.  With Search, it is not uncommon for over 90% of users to click on an ad and then engage.  This linear behavior has lead to the explosion of analytic-driven marketing programs. With Display, though, the numbers may be reversed, with 70-90% of the users that engage doing so without ever clicking on an ad.  Click-to-engagement metrics can lead to Display being undervalued by a huge factor.  Luckily, more advanced approaches to understanding cause and effect are bringing Display back, as advertisers learn to take advantage of how users actually behave.

3. Create Demand – Advertisers that still use last-click attribution love their Brand traffic, but often don’t think about the drivers behind it.  Display engagement often happens through a follow-on Brand search, meaning Display can be a very strong driver of both brand awareness and brand engagement. (Pro-tip: Utilize Display ad messaging in Brand Search ads for seamless engagement.)

4. Accelerated Home-Page Testing – Companies addicted to split testing tend to focus on purpose-specific landing pages, often because targeted Search campaigns can benefit from them. With Display, more focus is placed on the home page (because of the high levels of engagement without a click) creating a bigger audience for testing.  As a result, tests can run faster, creating a conversion win for all marketing programs that drive traffic to the home page.

5. The Display + Search One, Two Punch – With Display campaigns creating demand, and Search campaigns capturing demand, the combined Display + Search approach creates a powerful combination for growth.  As we emerge from the channel-centric world into one that embraces multi-channel, multi-device behavior, this alignment creates tremendous value when executed correctly.

Soren Ryherd – Mad Scientist of Paid Search SMX Advanced

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Professor of Search Marketing

Andrew Goodman, Soren Ryherd, Andy Taylor

Working Planet CEO Soren Ryherd recently took the stage at SMX Advanced as one of the “Mad Scientists of Paid Search”. For the last nine years, SMX Advanced has showcased leaders in innovation in paid search on the Mad Scientists panel, one of the main stage events at a conference focused on advanced trends and tactics in digital marketing.

Soren spoke about the increasing need for Out-Of-Channel measurement due to high levels of Out-Of-Channel user engagement outside of Search as well as the increasingly common cross-device behavior seen in mobile search. He particularly focused on the detrimental effects on CPA-based bidding systems when Out-Of-Channel effects are ignored.

Soren’s presentation on “The Interruption Curve and Digital Optimization” can be seen here.

Creating Success in a Complex World

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Marketing is about creating success. Why, then, are marketers so often reacting to the numbers, rather than using the numbers to create success? Here are some of the current challenges in numbers-based digital marketing, with an eye to solutions.

Low-Cost Eyeballs vs. High-Value Actions

Historically, media was sold by the eyeball. In a business model based on “reach”, there was little opportunity to optimize on the fly, so traditional media was negotiated only to achieve the lowest cost. This was smart. Giving limited opportunities to improve, you had the best chance of success in being profitable if your media cost was low.

Digital auctions changed all that. Today, going after low-cost media online simply means that you cede an audience to other advertisers who are willing to pay. In AdWords, the advertiser with the best ability to monetize will win. In order to compete, marketers have to highly value actions tightly related to sales and profits, and nothing else. Only then can marketers and advertisers can make intelligent decisions related to value creation, which is the point of marketing.

Action-Centric Advertising is Breaking

While smart marketers moved from eyeballs to actions, fundamental shifts in user behavior were simultaneously breaking the ability to measure actions with total certainty. Cookie-based tracking is falling short in a world of multiple devices per person. Better tracking of multi-touchpoint data and more sophisticated measurement of “influence” is revealing that strict action-based tracking is not wrong, but may be very limited.

The impact on advertisers is immense. Companies that thought they were smartly valuing only conversions are now finding themselves increasing uncompetitive and left to fight it out in the ever-smaller world of desktop-based search.

What Next, Then?

More sophisticated tools are opening the doors to opportunity, while creating new challenges in execution::

1) Holistic measurement. The days of isolated channel behavior, assessment, and budgeting are gone. Cross-channel and cross-device behavior mandates a different view of performance, but one still rooted in value creation. Get used to Venn Diagrams and flow charts. Yes, it is more complex, but it yields better results.

2) Proactive Optimization. Too many companies use their numbers for reporting up, rather than as action points for improvement. Smart companies will isolate key points of the customer story, and will focus on improving them. They will view things that don’t work as opportunities, while recognizing that moving the needle on the things that are working will be faster and take less time.

3) A Segmented View. Marketers need to recognize that behind every average value are the good and bad segments of that audience that can be addressed individually. Sweeping “black and white” decisions based on average performance should be challenged, so as not to throw out the part of that campaign that is working.

The Future

Marketing is evolving and becoming more complex. Media diversity, multi-channel measurement, multi-device behavior, and data overload all contribute to difficulty in crafting a strategy and executing it efficiently. But as difficult as tactical execution is, the core challenge is still in how advertising is viewed. Companies that view every day as a new test and every metric, page, and ad as improvable, and who root everything in the reality of sales and profit, will excel.