Brands must take an integrated approach that starts with a deep understanding of their audiences and objectives, and incorporates each medium that may be effectively utilized to reach and engage customers. In the digital realm we’re talking about display advertising, demand generation, paid search, natural search, email marketing,  social media and mobile marketing.  As there is no silver bullet in marketing, you have to take an integrated approach. Allocating budget and assigning responsibility is a good start, but without integrated planning, management and reporting, you might as well be living on a farm.

Earlier this year I moderated a panel discussion at the Online Marketing Summit on “Integrating Your Marketing Mix”. While it may not be the sexiest topic (the Twitter session next door had many more attendees), it is a very important topic and is a common challenge faced by marketing executives today.  I’ll address it by tackling the two big questions: what to integrate and how to do it.

What To Integrate?
I think you have to look at integration at two different levels.  Before you try to integrate your broadcast, print, direct mail, digital and other channels, you should integrate those activities that take place within each discipline.  Many consider “digital” or “interactive” as a stand-alone marketing discipline, when in fact is a collection of sub-specialties are that are quite different, yet inter-related.  Because they each require unique skills and experience, there are often internal and external chasms between web design, development, paid search, natural search, display media, email, social media and mobile, not to mention analytics and measurement.  Because each discipline requires specialized knowledge, it’s common that a brand will have one agency for paid search, another for natural search, another for display media, and others for email marketing, social media and mobile marketing.  Before you start trying to get traditional and digital to work together, you need to make sure your interactive specialists are all on the same page.  Once you have integrated digital planning, execution and measurement, you have a much better chance of winning the battle to integrate traditional and digital marketing efforts.

How to Integrate?
While there is no silver bullet for integrating business activities and operations, I can share a few thoughts that may be of help.  First, I am not an advocate of selecting one group or agency that can handle every one of your needs.  There are simply too many disciplines and all of them require deep knowledge and experience to make them work effectively.  No one agency can be great at everything. If you want the best in the disciplines that matter, you are often forced to cobble together a network of partners to achieve it.  In these situations, you can realize significant benefits by doing the following:

1. Integrate reporting and measurement – even if you use different resources (people, agencies, etc.) you can still standardize how results are tracked, reported and analyzed across channels.  Rather than receiving one report from your paid search firm, another from your display media agency, and yet more from your SEO, Social and Email partners, take some time up front to define the key performance indicators for each channel. Then require each partner to provide the information you need in a common format.  As it relates to digital marketing, you should standardize on one reporting platform that will be used to measure impact of your search, display, email and social media.  When it comes to reporting, less is more!

2. Integrate planning – once your strategic objectives are defined, ask each of your partners to create a plan that will help you achieve those objectives.  Give them a common framework (planning template) so each partner’s deliverables are consistent.  Then host a planning meeting in which all partners are invited to present their plan to the group.  Once the plans are presented, discuss them as a group with the goal of identifying where coordination, collaboration and knowledge sharing between and among your partners are required.

• Case study: one of our clients hosted such an event and we found it to be very worthwhile.  Not only did we learn what the other groups were working on, but we also identified common challenges and solutions that could be leveraged across disciplines.  Most importantly, we realized there were many inter-dependencies between our groups, and that we all stood to benefit if we worked together and coordinated our efforts.  It was very eye-opening for us but no one benefited more than the client.

3. Integrate Execution – while integrated planning is a great start, the true value is realized through integrated execution. If you are a brand marketer, you need to do more than suggest that your team and/or agencies work together; you need to facilitate it to ensure follow through.  If you need an example of how to do this, look no further than the funny guy with the big head: Jack.

• Case study: At the OMS panel mentioned above, Maria Brusaschetti, Media Manager for Jack In The Box, discussed how JITB not only encourages its agencies to work together – they require it.  They host all-hands planning meetings to make sure everyone is on the same page.  To ensure collaboration and cooperation, they tie agency compensation to feedback from peer surveys (yes, they survey their partners to find out how well their peers are cooperating).  If the agencies want to earn their bonus, they have to play nice with others.  I think this is a brilliant approach that can be also be implemented inside your organization.  If you want your departments to work together, offer the department heads monetary (and non-monetary) incentives to ensure interdepartmental cooperation.  Then make sure you follow through with execution.

In closing, integration is not a one-time fix.  As our organizations evolve, the ways in which we work together will evolve as well.  While mastering integration is far from easy, it can yield invaluable insights, efficiencies and synergy.  Or you can put on your overalls and fire up your John Deere.  The choice is yours!

Steve Latham
@stevelatham

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My presentation (embedded below) addresses these issues in today’s context, where results matter.  The contents include:

• How “above the line” and “below the line” are merging – digital goes through the line
• Challenges faced by marketers today
• How to translate online metrics into business results
• Roadmap for Measurement Success
• Online Surveys
• Attribution Analysis
• ROI Methodology
• Case Studies to demonstrate each concept
Closing the Gap on ROI Measurement – Steve Latham – OMS 2010
View more presentations from Spur Interactive.

As always, comments are welcome.  And feel free to share!

Steve Latham
@stevelatham

For more on Spur Interactive:

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Steps to Calculating Value

1. Determine the Value metric (Revenue, Margin, NPV) of a customer.
Some companies look at value of a transaction, annual revenue per customer or lifetime value (profit) of a customer.  Some assign higher values for new customers vs. a new sale to an existing customer. You need to determine what is best for your organization (hint: choose the metric that is most used by your executives).  For this example, let’s assume your average sale is $1,000 and that the lifetime value of a customer is $5,000.

2.  Assign conversion rates to approximate close rates.
Let’s assume 3% of site visitors request more information (inquiries) and that 30% of inquiries complete a purchase.  If you’ve done online campaigns before, you should have a basis for inquiry rates.  Hopefully your VP-Sales know how many leads convert to a transaction. If 3% of visitors become leads, and 30% of leads are closed, 0.9% of visitors will become customers.

3. Determine what your cost or investment will be.
Let’s assume you will spend $10,000 in online advertising (display, search, email, etc.) this month.

4. Do the math to calculate ROS and ROI:
Assuming your efforts drive 2,000 incremental visitors to your site (cost: $5 each) you should see 60 new leads (3% conversion rate) and 18 new customers (30% close rate) worth $18,000 in revenue or $1.80 direct ROS ($1.80 in revenue for every $1 spent).

The Net Present Value of the 18 customers is $90,000 ($5,000 each) yielding a Return On Investment of 900%.

If you present these types of results to your CFO, you’ll quickly find a lot of interest (and dollars) in online marketing.

Another Metric: Value per Engagement
Another way to measure results is calculating value per engagement (visit, inquiry, etc.).  In the example above, each visit is worth $9 in revenue ($18,000 divided by 2,000 visits), whereas each inquiry is worth $300 ($18k divided by 60), compared to a cost per visit of $5 and a cost per inquiry of $166.67.

Remember Your Margins
While revenue is an easy metric to measure, margins are much more important.  Assuming your gross margin is 60%, you are making profit as long as your cost per visit is less than $5.40 or cost per inquiry is less than $180.

Caveat Emptor!
Please use good judgment when applying these methodologies to your own business. Again, these are not a panacea for every situation.  But hopefully, they will give you some building blocks for quantifying the impact of your interactive marketing program.  If you have specific questions, please leave them here.  I can’t promise I’ll know the answer, but I’ll do my best to help you figure it out.  Happy number crunching!

Please feel free to COMMENT, SHARE with others and SUBSCRIBE to our blog. We look forward to your feedback!

Steve Latham (follow me on Twitter)

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I agree the concept of attribution is not new but unfortunately there are still many issues that need to be addressed, such as…

1. Ad servers reliance on their tag to be served on the last visit preceding an action. Unless I’m mistaken, ad servers above can only attribute credit for prior engagements if the last click preceding the conversion is goes through their server. Unfortunately most conversions are preceded by visits from direct navigation and/or natural search.  So unless the ad server integrates with site analytics data, they can’t attribute credit for a majority of online conversions.

2. Lack of an agreed upon methodology for recasting the cost per action across the touch-points that played a supporting role. How far back do you go? How many impressions are worth one click? How do you split the credit across different types of media?  We have our views and am sure others have theirs.  And most are probably based on sound logic.

3. Acknowledgment that our ability to measure impact is severely limited by increasing use of multiple devices (work, home, mobile) and cookie deletion. We’ve seen for years that users often browse at work and buy at home.  Now they are relying more and more on their mobile devices for browsing, making it pretty tough to figure out how and where they are becoming engaged and interested in our offer.  For every action we can measure via cookies, there must be 3-4 that we can’t measure.

To sum it up, engagement mapping and attributing credit across touch-points is an important and useful approach.  But it alone will not tell the whole story.  Market testing and surveys should also be included in your toolkit for determining what works in online media.

Related articles and presentations:
Online Demand Generation: Strategy and Metrics
Making Sense of Online Campaign Results: Part 1
Making Sense of Online Campaign Results: Part 2

I hope you find this helpful or at least thought-provoking.  Feel free to share with your colleagues, clients and propellerheads who are into web analytics and media modeling!

Steve Latham

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Overall, most feel the info you get from Compete and Quantcast is pretty solid, but not entirely accurate. While it may not be 99% accurate as to the amount of traffic your competitors’ sites are receiving, it is consistent in its methods of measuring activity, so you can have a high level of confidence as to the relative difference in traffic and page views between your site and those of your competitors.

On the other hand, most felt the data from Alexa was very suspect and easily gamed.  Because Alexa relies on browser plug-ins on individual computers to capture information, the results are reported to be somewhat easy to influence.  One marketer noted that the only thing Alexa is good for is to manufacture metrics you can use to show a client how successful you were in marketing their site.  Others were less critical but most felt the data was skewed and unreliable.  See the screen shot below for actual comments.

Back to the reason I started down this path… I recently came across a situation where an agency used the Alexa ranking of a brand new site (vs. that of its peers) as the single metric for success.  Not surprisingly, they achieved their goal of achieving a superior Alexa ranking in less than a month.  Yet the same site doesn’t even register on Compete.com or Quantcast, and it has a Google Page Rank of 1.  You can draw your own conclusions…

I decided to do my own test for my agency’s site and asked some of my team members to download the Alexa plug-in and visit our site each day for a few weeks.  When we started the test on July 15 our site was ranked 990,000 out of 30 million.  Just 2 weeks later, we are now at 730,000.  At this rate we’ll be in the 600,000 range by August 15.  If this plays out, it’s a pretty clear indicator that Alexa rankings are pretty easy to manipulate.

Here is a screenshot of some of the responses (sorry if it’s hard to read). Muy interesante!

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Online Media Funnel

Last week I spoke at the Online Marketing Summit’s tour stop in Houston on Demand Generation.  I was scheduled to speak in Dallas and Austin as well, but an unexpected foot injury / surgery sidelined me from travel.

At OMS I unveiled a new presentation that addresses the #1 objective of most marketers: generating leads, sales and other measurable results from online media.  The presentation “Online Demand Generation: Strategy and Metrics” is embedded below for your viewing pleasure; you can also find it on slideshare.  I started by defining “demand generation” (broader and more upscale than “lead gen”), the components of a demand generation program and various roles of online media. I also introduced engagement paths and the importance of defining the right metrics for success.

Also included is a practical methodology for measuring ROI and indexing performance against the market.  As a bonus, I also included my view of the 10 worst and best practices for managing campaigns (would really like your feedback on these!)

I hope you’ll take this information and use the insights to take your business or agency to the next level. And as always, comments are welcome!

Steve Latham

http://twitter.com/stevelatham

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I recently spoke to a group of business executives about how companies are using (or planning to use) social media, and how to build a business case for it. In my presentation I also included some new data on how the Inc. 500 is using social media, 5 reasons to pursue it, and a methodology for measuring ROI.

You can view the presentation below or find it at slideshare (note: sorry for some of the formatting issues caused by slideshare conversion).

I hope it’s helpful and that you’ll provide some feedback for improving it. And if you have any good data points to support the case, please send them my way!

For more info you can use, view our blog. And for updates follow me on Twitter!

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Now back to my rant… with the meltdown in the economy and paralysis that has gripped consumers, display ads are taking a beating due to their perceived lack of effectiveness. According to AdWeek, “Forrester Research expects display ads to come under the scrutiny of tight-fisted marketers uncertain of their effectiveness.”  IMHO, the experts are taking a myopic view of the value of display.

I am not proposing that you invest heavily in display as your first buy.  Your first online ad dollars should go to paid search; that’s where you’ll get the biggest bang for you buck.  But if you are in a limited category or geographic area, Search alone may not help you make your revenue goals.  There are only so many searches every day.  And these days there are fewer than there used to be.

This is where Display ads can work very well.  As we’ve seen firsthand, adding display to your mix, after optimizing paid search, is an effective way to increase awareness and create demand that eventually results in more site traffic, leads and sales.  But unlike Search, you probably won’t see the direct link via click-thrus and conversions.  Just as billboards (though we may hate them) create awareness, so do banner ads (when properly targeted.  While Display ads may create awareness, they usually produce poor click-thru rates and even lousier conversion rates.  Most often, the impact of a good display campaign will show up in the form of a lift in branded searches, SEM click-thru rates and direct visits.  So you have to take a holistic view. Here is a chart (from a 1/09 client report) that demonstrates this concept:

For this campaign we quickly learned that search impressions were very limited. So to supplement search we started running display ads (4 weeks ago).  While some ads had decent CTRs, most of the increase in traffic came from Direct navigation, branded search and paid search.  As shown, the increase in impressions had a direct impact on site traffic. As long as conversion rates hold up, we’ll continue to invest in display. And given that Display Ad prices are falling faster than Wal-Mart closeout prices, this should become an even more attractive opportunity over time.

Caveat Emptor!  While Display does have a place in the mix, you have to make smart buys.  You need to target (demo, geo, behavioral, contextual, etc.), cap frequency and daily impressions, specify where they will (and will NOT) be served and have a good ad serving / web analytics system for reporting.  If not planned and executed well, it can be a waste of time and money.  But if done correctly, you can expand your category, increase awareness and preference, and extend ROI from your scarce marketing budget.

If you’d like to discuss or debate, comment below, contact me or look me up on Facebook or Twitter.

Peace!

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The Wingman Effect
Another impediment to measurement is that most analytics platforms (including Google Analytics) were designed to attribute credit for an action to the last medium clicked. As noted above, user engagement typically entails multiple touch-points, both online and offline. Especially true with considered purchases, customers often make multiple visits, by way of multiple paths (e.g. display ad, search, direct nav), before taking action. Even if all of the visits are done on the same computer (and you COULD track using cookies), assigning credit for the lead or sale to the last click provides only part of the picture, and it generally rewards Search at the expense of Display, Email, Social and other media.

Using a crude analogy, consider the proverbial Wingman.  Picture two guys out at dinner and they see an attractive woman. You know the routine – one guy is the leader; the other is his Wingman.  The job of the Wingman is to support his pal.  He is often the one who initiates conversation and breaks the ice so his friend can move in for the kill. If the lead guy gets a phone number or email address, he knows he has the Wingman to thank for the assist.

In online marketing, Display is often the Wingman, the one who starts the conversation, while Search is the guy who gets most of the dates. But unlike the example above, Search gets all the credit and the Wingman’s contribution goes unnoticed. Moreover, because his contribution is not noticed, he may not be invited the next time they go out. Media planners often cut ad buys because they can’t see the supporting role they play in the engagement cycle. If they don’t drive directly actions, based on last-click analysis, conventional wisdom dictates you stop buying them. This ultimately works against you and will result in fewer conversations that lead to your desired results.

The takeaway for marketers is that you need to track interaction through the engagement cycle. Recently coined “Engagement Mapping” by Atlas (now part of Microsoft), savvy marketers are now tracking the first, middle and last clicks to determine how each media unit impacts results.

As we’ve seen firsthand on numerous campaigns, for every lead or sale you can directly attribute to an ad unit, there are 0.5 to 2.0 actions that are not traceable due to the reasons cited above.

While these are formidable challenges, do not despair – there are affordable, proven methods for overcoming both of them. Since this is how we make a living, I can’t share all the secrets with you. But I can provide some general recommendations.

First, you need to take a strategic approach to engagement mapping that will shed light on the various contributions (lead, supporting, etc.) your various online media units play in the engagement cycle. Once you understand which units create awareness, and which ones close the deal, you can produce smarter media plans.

Second, you should treat every campaign as a learning experience and make systematic media testing an ongoing program. By varying flight dates of various media, you can will gain better insights into the performance and contribution of your online media mix.

Lastly, you have to look at the overall lift in site traffic and activity, not just the visits that are directly attributable to specific ads. Don’t underestimate the tendency for people to take action on their 2^nd, 3^rd or 4^th visits. Take a holistic view and you’ll see a much clearer picture.

As always, your comments are welcome, so make your voice heard.  And if you think this is great – please share with your colleagues!

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If you are in this category, don’t despair – you are in good company. My personal research indicates that 94.59% of marketers are struggling with the same issues. I believe the challenge of measuring results that make sense is two-fold: 1) shortcomings of cookie-based tracking, and 2) the fallacy of last-click analysis, which I refer to as the “Wingman effect”.

Crumbling Cookies

As consumers become smarter, savvier online users, they are becoming more deliberate and less impulsive in their decision process. With so many more options at their fingertips they can easily do research and comparison shopping before buying that new camera or requesting information on your services. For big purchases, they often confer with others, e.g. sending a link to that new road bike to their friend or spouse to get their input). Another issue is the growing trend of “surf at work, buy at home”, where they do research on one computer and take action on another. Since we rely on cookies to track actions for each individual, these issues impact our ability to measure results. Here’s an example:

The example above illustrates how multiple visits and machines reduce the effectiveness of cookie-based tracking. The increasing use of cookie-cleaning tools adds to the dilemma. If, as widely reported, 40% of 3^rd party cookies are either not accepted or deleted within 30 days, we’re blind to what impacts a significant portion of our results. Consequently, it’s difficult to take an accurate measure of which media buys are performing, and which are not.

So with that we conclude the first part of this subject. In my next post I will introduce the Wingman and give new hope to display media salespeople. But for the mean time, please tell me what you think! If you found this to be of value, please comment below.

Later!

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