Tuesday, August 19, 2008

OnlineSpin: Is Google Making Marketers Stupid?

Last week Joe wrote "Perspective, Patience And Pacing: Keys To A Lot More Than Marketing."

Richard Monihan wrote in response," Excellent article.

Of course, most people my age have figured this out and tried to impart the concept of patience on to the younger generation who tend to sadly lack it.

I watch my own sons, entering high school now, and worry as I see their friends completely wrapped up in instant gratification.

I interview young graduates who worry that they can't afford to get their OWN apartment in Manhattan on the salary offered.

And we all see the slow decline of the economy into recession and complain about 'how bad things are' without remembering that things were exceedingly good for so long, and that a recession is simply a reset button for the economy and those good times will come again.

Patience will reduce worry. Reduced worry will dissolve fear. Lack of fear will lead to good decisions."

Tuesday, August 19, 2008
Is Google Making Marketers Stupid?
By Joe Marchese

Understanding why people take action and how to influence those actions is marketing.

For generations, marketers have taken up the challenge of creating culturally relevant and iconic brands, with quite a bit of success. From product, to packaging, to messaging and communications, marketing has never been a silver-bullet discipline.

Even to people who have not spent a day of their lives as "professional" marketers, it's common sense that purchases don't just happen -- and the purchase process has been refined to a near-science amongst marketers. Depending on what book you read, the purchase process funnel runs from awareness, to perception, to preference, to consideration, to purchase. Yet a disproportionate share of online marketing budget is dedicated  only toward bottom-of-the-funnel activities, specifically measuring the click-through to purchase. Why?

The simple example: If I click on a paid link or banner for Nike shoes and make a purchase profiting Nike by $10, to say that the click on that link is worth up to $10 is stupid. Before I ever clicked on that link I have had so many brand interactions and product perceptions, from peer suggestions to celebrity endorsements, I couldn't count them all even if I wanted to. It could even have been those interactions that caused the click.

I had a good conversation with Tom Sebok, CEO of Y&R North America, discussing this very issue. Tom made this great analogy regarding over-valuing the click: "It's as if we automatically attributed every sale of Dr. Pepper to the neon sign in the convenience store window." Even if the neon sign told someone to come in, there was a whole sequence of brand interactions that had to occur for that person to be aware of what Dr. Pepper was, form a perception of what buying it will mean, and justify paying 30 to 50 cents more than some store brand.

Even Google and Microsoft recognize the value to every brand interaction a person may have had, online or off, leading up to that final click. This is the basis of building click attribution systems, and is discussed at length in "Microsoft Regarding Google: If You Can't Beat 'Em..."

But even click attribution isn't enough. By its very nature, click attribution restricts marketers to seeing a positive effect from only activities that can be captured online. I have never bought a soda or ordered fast food online, and I am not someone who buys clothes online (I am in the majority here, I promise). Pick your favorite brand and compare online versus offline sales, then argue with me that click attribution will be an effective measurement of online marketing ROI, or even that it should be online marketing's main focus. Yet I, and many of my peers, and many, many more of today's teens and tweens, are spending massive amounts of time and dedicating significant amounts of attention to the Internet.

So why haven't marketers taken the gloves off with regard to online? Why aren't agencies fighting for the ability to attack the areas that will help brands improve their awareness, perception, preference and intent to purchase? Why not focus online efforts to help affect client sales offline?

Mostly it's the product of a broken system and an addiction to Google's amazingly efficient direct response model. But too many dollars fighting for clicks at the bottom of the funnel is causing artificially inflated pricing for those clicks. Thus, there is a real opportunity to move up the funnel online and achieve spectacular results for marketers (especially in social media).

It's harder, and it requires thinking outside of the online media Excel spread sheet, but if marketers define and empower their agencies on what marketing goals they want to tackle in a media-agnostic fashion, and agencies treat the online opportunity as more than a DR tool, everyone will be taking monumental steps in the right direction.

I just had dinner with Rishad Tobaccowala, and he gave me a quote that sums it up nicely: "Not everything that counts can be counted; and not everything that can be counted, counts" -- Albert Einstein

What are your thoughts?

P.S. I have to give credit to the brilliant article by Nicholas Carr in The Atlantic, "Is Google Making Us Stupid?"  -- from which I borrowed/stole and altered the title for this piece. I highly recommend reading it.

Joe Marchese is President of socialvibe.

Online Spin for Tuesday, August 19, 2008:

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