Biznology Blog: November 2007
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November 30, 2007
The Toughest Objection to Enterprise Search Ever
I spoke at the Gilbane conference yesterday (you can download my slides on semantic search). I fielded a number of interesting questions, but the one that made me stop and think for a minute was this one, "What's the hardest objection you ever overcame to sell a company on enterprise search?"
I was glad the other panelist answered first, because it took me a moment to think of something. It was several years ago, but I remember it like yesterday. (OK, OK, I'm old. I remember it a lot better than yesterday.)
A very well-run company had an unusually sane way of making technology decisions. They developed real business cases based on improved revenue or reduced cost, and they actually tracked whether the projects delivered on the promise one and two years later. (It was not great for your career if they didn't.) So, they wanted to subject their decision to license an intranet search engine to the same scrutiny.
They asked a simple question: "How can we prove that this search technology will increase revenue for our company?" It was a simple question, but the toughest one I'd ever gotten. There would be no productivity savings business cases here. No "If we assume that we save just six minutes each week for every knowledge worker..." No! This one needed a real business case. I promised the customer I'd put on my thinking cap and get back to him. (Since then, I've decided to wear my thinking cap all the time, despite all those snarky comments about my appearance.)
But how do you claim that anything you do to improve employees finding information will generate revenue? At first, I couldn't think of anything. I mean, if the HR people save some time, would a nickel roll in under the door from a customer? What about the executives? Or the accounting department? I couldn't come up with how I could stitch together revenue stories for every different usage of search across an entire enterprise full of employees on the intranet.
So I took a different approach. I started to ask myself which employees really did have an impact on revenue. Of course! It's the sales force. But how could I justify revenue based on making sales people more productive? I needed to go back to the customer for more information.
So, I asked my customer how they had justified that spiffy sales force automation package they used. And their spanking-new customer relationship management system. At first, he was puzzled about why I wanted to know, but he showed me the studies they'd done that showed how their sales people spent their time (18% was finding information) and the revenue impact of saving time for their sales people.
That was all I needed. I put together a business case that showed that the extra revenue stemming from the increased productivity of sales people more than paid for the search facility for the entire company. In fact, making information available to busy sales people on smart phones (where search is one of the few effective interfaces for a small screen) was enough to justify the search investment all by itself.
It was a tough question, but it had a good answer. You can't always justify technology investments based on revenue, and search is one of the toughest, but if you think about it a little bit, sometimes you can pull it off.
Posted by mikemoran at 9:27 AM | Comments (1) | TrackBack
November 29, 2007
Thanks for Choosing the Finest in Free Search Entertainment
I had to finish a magazine column last night while I was sitting alone in my hotel room and I decided to buy an in-room movie. I never go to movies so I hadn't seen any of these movie possibilities. After looking it over for a few minutes, I finally made my selection, and the announcer intoned, "Thank you for choosing the finest in in-room entertainment."
Whew! Out of all those movies, what were the odds I would choose the finest? I could scarcely believe it. OK, OK, I didn't believe it at all. It's just one more fatuous claim that marketers say that no one buys. (If I had just chosen a lousy movie, I suspect the announcer could have somehow avoided saying, "Thank you for choosing this piece of crap that we are about to remove from our rotation.")
But maybe I am wrong about all this clarity in marketing. Maybe everyone loves hype-laden claims.
So, I am proud to announce today that IBM is updating the best search engine on the planet, OmniFind Yahoo! Edition. It now allows multiple indexes, field-based searches, and improved metrics reports, which no home should be without. In fact, four out of five dentists that use search engines recommend IBM Yahoo! Edition. For more details, check out Sean Johnson's announcement of Release 8.4.2 of OmniFind Yahoo! Edition.
Best of all, it's a free download. You can't find a search engine priced lower.
25,000 people have already downloaded Yahoo! Edition. If you're one of them, thank you for choosing the finest in free search engine entertainment.
Posted by mikemoran at 9:16 AM | Comments (0) | TrackBack
November 28, 2007
Clarity: The New Marketing Secret?
My new book got a nice review in the Miami Herald the other day, and I am proud of that. But I am even happier about what it said: "I also liked how Moran, an engineer and former IBM product manager, simplifies things to the point where the least Web-savvy among us can readily comprehend most of his ideas, though more experienced readers will not feel slighted or condescended to, either." I had to work hard to be that clear. You should, too.
Clarity has not traditionally been a quality marketing copy is known for. Marketers are regarded in popular circles as flim-flam artists wearing better suits. Lawyers may have invented "fine print" but marketers have fallen in love with it. It's marketers that make an offer in a loud voice and then have the announcer talk at breakneck speed in a stacatto whisper for the last ten seconds of the radio commercial.
But your customers aren't paying attention to that kind of marketing anymore.
Marketers are best advised to come clean—to embrace clarity in their messages. Your customers are becoming just as savvy about marketing as you are—especially your Internet customers. They're well-educated and they want to buy from people whom they trust and whose values they share.
They might not understand what the breathless announcer is chanting at the end of your ad, and they don't necessarily know what the fine print means about what happens if they break the contract, but they know this: They don't trust you.
Why is Verizon suddenly coming out in favor of open phones? Because the pressure is growing, from consumers, from the government, and from Google. Verizon is being smart—they are aiming for more clarity while their competitors are sticking with the old doubletalk.
If Verizon can take steps toward clarity in the byzantine cellular phone business, you can do it in your business. More and more, your customers are expecting your offers to be clear and understandable. If you don't do it, you are just waiting for your competitors to do it. Think they are busy at Sprint and AT&T today?
Posted by mikemoran at 4:31 PM | Comments (1) | TrackBack
November 27, 2007
Discount Coupon for Search Marketing Standard
One of the nicest things about Internet marketing is that so many of the techniques and so much of the instructional information is free. Sometimes, however, it makes sense to pay for information. (No, this is not another pitch for you to buy my books.) When you do have to pay, it sure is nice to pay as little as possible. If you're not a subscriber to Search Marketing Standard magazine, this is your big chance to subscribe for one year for under $5.
If you've never read Search Marketing Standard magazine, you're missing a lot. I surf the Web for free search marketing information as much as anyone, but I still read Search Marketing Standard magazine, for a couple of reasons. First, I travel a lot, and it's very nice to have good old-fashioned paper information to bring with me. But that's not the major reason.
Search Marketing Standard magazine brings you top writing on current search marketing issues. Just look at a few of the articles from the Fall 2007 issue:
- An interview with Mr. Search, Danny Sullivan, on personalized search
- An article on link building by the father of the art, Eric Ward
- Country-by-country analyses of search marketing
- Coverage of social media marketing, mobile marketing, and much more
But here's the really great news. For a limited time only (try to read this out loud in an AM radio announcer voice) you can get a one-year subscription to Search Marketing Standard magazine for as little as $4.95. (Now, in a fast-paced whisper voice, say "$6.60 outside the U.S.") All you need to do is click the subscribe link and add the coupon code "HOLIDAY67" when you check out.
This promotion is for new subscribers only and is available until December 10th. (Cue AM radio voice again.) But that's not all! In addition to the discount, we'll also send a donation check to Toys for Tots—$1 for every subscriber that used the coupon code during registration.
But even that's not all! Well, actually, it is, but I was really starting to get into it...
Posted by mikemoran at 1:21 PM | Comments (0) | TrackBack
November 26, 2007
Toyota Finds It's Not Easy Being Green
Everyone wants to be seen as green these days, and if you haven't been paying attention lately, you might assume that Toyota is in an enviable position with those environmentally-focused consumers. Its Prius hybrid has been one of the feel-good stories of the past few years, winning over green consumers and selling well, also. But you'd be wrong. Green activists are now targeting Toyota, and it is a sobering story on how the new PR works.
What happened?
The Web happened, and Toyota has seemingly been blind-sided by its impact on public relations. Newsweek has an excellent treatment of the backstory, which it called Toyota's Green Problem. The short version is that Toyota doesn't realize that everything it does is in public view nowadays, and that the Web provides its critics with a free printing press to call Toyota on its values.
The green folks have several complaints with Toyota, but the biggest surrounds the company's opposition to new U.S. government gas mileage proposals. According to Newsweek, Toyota is lobbying the U.S. Congress to stay away from tougher regulations and has joined U.S. automakers in a lawsuit over tougher California regulations. Time was that this sort of back room political machination would struggle to get printed in the mainstream media. But the blogosphere has brought this issue to the fore, which now drives the mainstream media (such as Newsweek) to call even more attention to it. Activists even organized 100,000 protest e-mails to be sent to Toyota.
Now, several other carmakers are opposed to the new mileage proposals also, but it's not a good story to criticize GM for not being green. Toyota's success with the Prius, on the other hand, leaves the green folks feeling betrayed. They thought Toyota was different.
How should Toyota respond to this? You'd think that they'd realize that their brand image is tied up in this fight and that it might make sense to re-evaluate their stand on the mileage proposals. They may well be doing that behind closed doors, but publicly, they are defending their right to take that position.
And they are responding with a very old-world PR campaign. They have a series of "Why Not?" TV commercials asking "tough questions" about being environmentally responsible. Oh sure, they have the obligatory Web site, too.
So what is happening now? Activists are asking Toyota, "Why not drop the opposition to the new mileage standards? Why not?" They are even using Toyota's own commercials in their campaign, as this video shows.
Toyota's saga illustrates how difficult it can be to ride the wave. Toyota's success with Prius has been fed by online and offline media—the story sounds planet-friendly, so it spreads as interest in combating global warming rises. But to continue to ride this green wave, Toyota must carefully decide how it will follow through in every area to remain in concert with this new brand image. That's what the new marketing and PR approach demands, because everything your company does is in public and can be commented upon. And that is what really drives your brand image, not just what you say about yourself.
I don't know whether Toyota should abandon its opposition to the new mileage proposals, but it clearly must decide between a green image and this opposition—the Web demands that you be consistent and won't stop bugging you about it until the media piles on and gives you an old-fashioned PR crisis. Of course Toyota has every right to do what it is doing—there's no law demanding consistency—but the new online marketing and PR tend to make it an unsuccessful approach.
Posted by mikemoran at 8:36 AM | Comments (1) | TrackBack
November 21, 2007
Are Your Customers Looking For a Problem?
My dad sometimes asked, "Are you looking for a problem?" He wasn't a search marketer—just a dad from Brooklyn—and he didn't mean the same thing I do. When I ask, "Are your customers looking for a problem?" I'm asking if your customers are searching using words that describe their problem rather than words that describe your product. Thanks to Chris Sherman at Search Engine Land for publishing it.
Speaking of thanks, I'm taking off the rest of the week for the U.S. Thanksgiving holiday. Look for me on Monday after I stop to count my many blessings.
Posted by mikemoran at 10:16 AM | Comments (0) | TrackBack
November 20, 2007
Market Research Keeps Moving Online
A few months ago, I wrote about online panels, and I am finding more and more marketers moving their market research online. I spoke yesterday with Kathy Mahoney, Vice President of Market Research at Sirius Satellite Radio. She's sold on online market research for her company.
Kathy has experimented more and more with online market research over the past few years, and now says that it's definitely part of how Sirius does business. "There's a difference between people who take part in these online research programs and everyone else—they spend a lot more time online," she says. "But for Sirius, that works out really well," she adds, because Sirius customers do tend to spend a lot of time online. Kathy advised that "someone marketing Crest toothpaste" might want to look at the issue more.
Kathy talked in detail about a challenging project she did in March with Phi Power Communications, when she had little time to choose between several alternatives for a combined print and TV ad campaign. If she had used traditional in-person focus groups, she'd have needed several weeks, but her online test took "less than a week," she reported.
She had hoped that the test would reveal an overwhelming favorite among the ads, but it didn't. Instead, she was able to "eliminate some of the [poorly performing ads] and choose among the rest."
Online testing is not cheap—this test cost $40,000 when a focus group might have totalled just $10,000. But Kathy says it's worth it. Not only could she complete the tests more quickly and get the winning ads on the air, but she also was more sure of the results. A $10,000 focus group test might have tested just a few dozen respondents, while her online test polled 1600 people.
"There's still a place for in-person interviewing," Kathy says, "but I use it far less then in the past." She uses focus groups for early qualititative research, where she wants to understand the customer's vocabulary in an area "when you don't know anything."
Marketing opinion seems to be coalescing around how to use these various tools. Focus groups are ideal for qualitative questions—especially "why" questions. Online panels can handle qualitative, too, but you can scale them to be statistically significant. We need to be careful, however, not to rely on what people say they do as opposed to truly tracking customer actions on our Web sites—what they really do.
Kathy's planning to do more online market research next year. Online panels are getting easier to set up. Maybe you should be setting them up, too.
Posted by mikemoran at 9:01 AM | Comments (0) | TrackBack
November 19, 2007
"Mistakes Make Me Feel Like a Clown"
Nobody ever wants to make a mistake. From the time we are children, we get corrected. We are told how to do better. For many of us, the feelings that come along with the mistakes are the worst part—we'd do anything to avoid feeling them. But the only way to avoid those feelings completely, we tell ourselves, is to avoid mistakes. The way that plays out in real life is to avoid risks, chances, experiments, and everything we actually need to do to succeed at Internet marketing. What can you do when mistakes make you feel like a clown?
The first thing to do is to realize that this is not rational. It makes no sense for you to avoid all risk-taking to prevent mistakes. You know that you are preventing success when you do this. But that doesn't mean that it's easy to stop.
The fear of making a mistake, the abject terror that you might feel at the consequences ("I might lose my job" or "I will be a laughingstock"), and the depression that can follow can provoke even more anxiety the next time. Because we all make mistakes no matter what lengths we go to attempting to prevent them. And each one can sometimes feel worse than the last. The thought of making a mistake can fill some people with dread.
But even if your reactions are less extreme, you might still be engaging in avoidance behavior. You might be playing it safe.
If you are, you need to realize that the Internet is making "playing it safe" a very dangerous game. If you are playing it safe, while your competitors are beginning to experiment, then you are losing ground to them every day. Because you are standing still while they improve. And that is the biggest mistake of all.
So, when I say "do it wrong quickly," does a cold shudder run through your body? Do you tense up just thinking about being responsible for a mistake? If so, you need to change your self-talk—that little voice inside that speaks to you all day. That voice is telling you about all the scary and awful things that will happen when you are wrong.
Instead, you need a new song playing in your head. I say, if mistakes make you feel like a clown, then it's time to cue the calliope music. Stop making every decision life and death, and start looking at every marketing maneuver as part of a negotiation with your customer. You try something and the customer might respond favorably—or not. Then you try again.
By making lots of little "mistakes" you eventually find the winning formula. You just need to get past that voice in your head that triggers those nasty feelings we all want to avoid. Then you'll be in your way to doing it wrong quickly.
Posted by mikemoran at 6:20 AM | Comments (2) | TrackBack
November 16, 2007
The New PR Gatekeepers
I was given the opportunity by Bulldog Reporter to kick off their all-day event in New York City today, where they are helping veteran PR people adapt to the new opportunities on the Web. You can get my slides for The New PR Gatekeepers, but I enjoyed the questions and the interaction with other speakers.
Bill Barnes of Enquiro passed along a tip I had never heard before—to create a site map of your images on your Web site so that journalists can grab pictures of your company officers, products, and other things they might use in their stories.
SEO-PR's Greg Jarboe had a pithy quote: "The home page of your Press Room is Google." Greg says that research shows that the Press Room area of your Web site that you spend so much time on is actually the second place that journalists look—the first place is a search engine.
I also was very interested in Matt Anchin's perspective on empowering your company to speak in public. Regular readers know that I believe it is imperative for companies to do that, but Matt had a different take. Matt formerly worked at IBM and now handles these issues for American Express. "You need to see what is right for your company," he says. He doesn't believe that AmEx can train its employees to answer customer service questions.
He's probably right. Maybe your customer service people could post on message boards, but you may not want untrained folks tackling those questions. I believe that employees can learn what kinds of questions they should tackle and what kinds they should alert people about. I think AmEx can do this (and must do this) the same way any company must, but Matt is understandably concerned.
Matt may know more about this than me—maybe it's not right for AmEx. I think more and more of your brand image plays out on the Web and you need to ensure that your company is out there interacting. Matt also said, "I'm happy to see IBM figure out how to do this and then we can do that." Matt's right to be concerned about the dangers (especially in a regulated industry), but I think we have to experiment to find out what works for each of us.
Matt is doing that at AmEx and he'll decide different things to experiment with than IBM does. That's healthy and natural. Instead of trying to find the perfect advice for what everyone should do, you are better off doing as Matt says and experimenting to see what is right for your company.
Posted by mikemoran at 10:51 AM | Comments (0) | TrackBack
November 15, 2007
Online Marketing Show at wsradio.com
I really enjoyed spending a few minutes yesterday with RSS Ray on wsradio.com. He was kind enough to ask me a few questions about my new book. You can listen to the recordings of Part 1 and Part 2 of the broadcast. It's the third time I've appeared on the show over the years, and I always enjoy speaking with RSS Ray—he's always well-prepared and knowledgable.
Posted by mikemoran at 10:00 PM | Comments (0) | TrackBack
November 14, 2007
Can Marketers Learn From Buddhists?
Yesterday, as part of National Education Week, I audited several classes at my daughter's high school. One of them, Non-Western Philosophy (yeah, high school has changed in the last 30 years), was starting a two-week study of Buddhism, starting with the life of the Buddha himself. It was the last place I'd have expected to be reminded of Internet marketing, but I was (maybe because I have a one-track mind).
Now understand, I'm a Christian. What I know about Buddhism fits snugly in a thimble. I'm not proud of it—it's just true. So sitting in on a half-hour discussion of the Buddha's life yesterday probably multiplied my knowledge of Buddhism tenfold, which wasn't hard to do—until yesterday I didn't know I was supposed to put "the" in front of "Buddha."
But I was struck by the parallels in Buddhist thinking to what marketers must do to adapt to the Interent.
Buddhists, rather than manipulating the world to their ends, instead pursue an unrelenting path to enligtenment—whereby they understand the most important things. To succeed on the Internet, marketers must stop merely trying to get attention—they also must pay attention. Understanding who their customers are and what they need is achieved through listening to what customers say and watching what they do. Sure, marketers will always need to be persuasive (cynics would say manipulative), but the more they pursue enlightenment about their customers and their needs, the more in tune with them they will be.
The Buddha also encouraged his followers to put his teachings to the test, rather than trying to interpret what he said or what others say or write. This is also important to the modern marketer. Instead of tying ourselves in knots about best practices dreamed up by consultants and other soothsayers, we must test everything we do. Even if a smart consultant has seen a technique work ten times in a row does not mean it will work for your business. Only by constant experimentation and testing will you find what the best practices are for you.
In case you find all of this to be sacrilegious, understand that I am aware that the Buddha, were he alive today, is unlikley to have pursued a career in marketing. Much of the Buddha's message was one that bordered on ascetism, and marketers (even on our best days) are motivated by money changing hands. But I wonder (armed with my 30-minute graduate degree in Buddhism) whether the Buddhist attitude toward money is healthy for marketers, also.
The Buddha seemed to be focused more on avoiding attachment to worldly things, such as money, rather than steering clear of money itself. If true, that also holds lessons for Internet marketers. Instead of focusing on quick-win sales, we need to do the right thing by our customers and expect that things will work out. It's attachment to those outcomes that causes us to short-circuit the true path to marketing enlightenment.
And make no mistake about it. Adopting the approach of listening and watching customers instead of hawking products is as big a change as any religious conversion. Long-held beliefs are tested when we cut short the planning process and just get out there to interact with flesh-and-blood customers, measuring whether what we did was right or wrong.
It's not comfortable, but not even the Buddha promised that life would be comfortable.
Posted by mikemoran at 6:23 AM | Comments (0) | TrackBack
November 13, 2007
I'm a Twitter Twit
A few months ago, I posted about how I was really on the fence about Facebook, but a few weeks ago I finally signed up and started using it. I have a similar dilemma about Twitter—I signed up yesterday, but I have no idea what to do with it.
Someone sent me an e-mail asking me to give them my Twitter handle because they want to know what I am doing. I thought about explaining that I don't do Twitter but decided instead to sign up and see what it's all about. (I keep telling people to experiment, so I need to take my own medicine sometimes.)
I'm not sure what I can do with Twitter that I couldn't do by updating my Facebook status (which I haven't bothered doing yet), but I have a more fundamental confusion about this. I honestly can't imagine why anyone would want to know what I am doing. I mean, so far my status has told people that I am writing an article, that I was at my daughter's high school, and at IBM Research for some meetings. Geez, I bore myself with that kind of stuff—who could want to know that about me?
But I'm going to give it a try. I'll spend the next couple of weeks updating my wherabouts and maybe I will figure it out. (Or maybe one of you will have mercy and tell me.) If you want to follow me, my Twitter handle is MikeMoran. But I'd love to know why you'd want to follow me. I gotta admit, I don't think I will be following you.
Posted by mikemoran at 4:13 PM | Comments (1) | TrackBack
November 12, 2007
What Do You Want to Be When You Grow Up?
It's not a question I've spent much time thinking about lately, but it was a question brought to mind when I appeared on a panel discussion for 100 business students at New York University last week. Each one of them is confronting the new career choices brought about by the Internet. It's hard for me to relate to these kind of choices. I feel like the gorilla in this picture—some kind of more primitive form that made career decisions at the same age as these students. The world really has changed.
30 years ago, students like these wondered if they should go into sales or marketing or public relations. They wondered if they should work for a company or an agency. A few decided to go into direct marketing, but not many. They decided to focus on B2B or B2C businesses. They might have cared about which industry they worked in. It might have seemed complex at the time, but it was a far simpler set of choices than students face today.
Now, all of those choices are still in play, but it's harder to draw stark lines on the Internet. Where is the line between sales and marketing? Or between marketing and public relations? Where does search marketing fall? Is organic search considered PR and paid search thought of as marketing? Is a search for "family restaurant" marketing while one for "pizza hut delivery manhatten" sales?
The questions themselves are dizzying. But as I thought about things more, I started to realize that I am making the same kind of decision that these business students are—in fact we are all making the same decision every day. What's really changed in the last 30 years is that you don't choose a career and stick with it forever. In some ways, you choose your career every day.
And it dawned on me that maybe the old categories are not important anymore. Who cares what is considered to be sales or marketing or PR? Why do you need to know? Why is it important for you to constrain what you do based on those old labels?
So when those students quite naturally asked the panel how to choose, I gave the so-helpful answer, "Whatever blows your skirt up." I went on to explain that the winners will be the people that can draw upon whatever skill they need at the moment—sales, marketing, PR, and others, too—to solve the problem at hand. In the last 20 years, management gurus have celebrated the idea of cross-functional teams. I'd like to celebrate cross-functional people.
So each day, as you decide what you are going to read, what you are going to work on, and ultimately what you are going to learn, you are making a career decision. You are slowly choosing what you focus on. And you can change your mind and focus on something else every day. In the end, your career isn't a label, it's the sum total of what your knowledge, skills, and experience make it.
So what is your career going to be today?
Posted by mikemoran at 9:09 AM | Comments (2) | TrackBack
November 9, 2007
How Dangerous Is the Slow Lane?
I work for a large company, and although we try to move quickly and respond to the outside world, we know in our hearts that sometimes we move a bit too slowly for our own good—every big company does. But is the danger of big company (or small company) slowness much bigger than the bland "not keeping up"? Gord Hotchkiss thinks so. Is he right?
My favorite line from Gordon's rant is that the chowderheads are running the company off the cliff because of their caution. He's talking about search marketing, but it applies to many subjects—it's one of the big themes of Do It Wrong Quickly.
Why do people do this? They're not stupid (even though I like calling them chowderheads once in a while myself). No, they are just prisoners of their own success.
Like some kind of Darwinian business school, the last 100 years of success has mostly gone to the cautious. Oh sure, there have been a few Henry Fords thrown in here and there, but there have been a lot more General Motors types. Overwhelming resources used cautiously has been a winning formula. Success breeds imitation and before you know it, you've got a lot of careful, "just check it one more time" personalities in charge of the big companies (and plenty of the small ones, too).
But the Internet is turning that comfortable slow lane into a death trap.
We keep watching overwhelming resources (Microsoft, Barnes and Noble, or Blockbuster) get put on the defensive by the speedy innovators (Google, Amazon, or Netflix). What Gord knows (and many of you know too) is that going slow is suicide in a world where every minute you are not tweaking your approach you are losing out to someone who is willing to do that extra work. To paraphrase Damon Runyan, the race may not always be to the swift, but that's how I prefer to bet.
That's why I keep railing about how to do it wrong quickly. We have to dump the caution and be willing to try things that turn out to be wrong. We must be willing to act when we don't have all the information. We must be willing to take our lumps and go right back out there again.
It's a cliche to say that "not deciding is also a decision." But it's also true.
Get out of the "not deciding, not experimenting, playing it safe" slow lane. Your competition is passing you by.
Posted by mikemoran at 1:37 PM | Comments (0) | TrackBack
November 8, 2007
Why Don't Bid Management Programs Optimize For Profit?
Bid management programs are indispensible for paid search campaigns. Without them, you'd spend all your time recalculating what the right bid would be and have no time to do anything else. But you can't just let them run on auto-pilot. Bid management programs can optimize on many metrics, but gross profit is not one of them—and that's what most businesses optimize. So what can you do?
Google and Yahoo! are trying to make bid management easier. Google's Conversion Optimizer and Yahoo!'s Campaign Optimization are both attempts at this.
Both help you optimize your conversions based on how much you spend to get them (Cost Per Action and return on Advertising Spend both get after this same concept). But what you really want to optimize on is profit, or even Lifetime Value.
And today's tools don't do that, because they are transaction-oriented, and you probably can't calculate overall profit (although you can calculate profit margin) or Lifetime Value. Profit requires that you understand how to re-allocate your fixed costs every time you sell something, which accountants are only starting to think about. You can think of this as continuous accounting, where you know where you stand all the time, rather than only at the end of a period.
Until we get there, we are stuck measuring transactions in isolation and living with CPA, ROAS, or (better) profit margin. So how do you cope with that.
First, you must understand that these automated optimizations won't necessarily optimize your profit. You might have to test a big increase in bids to see what happens. You might need to kick-start your bids in a whole new neighborhood to see what sales result, and then let your automated systems kick in from there.
Automation is a good thing, but you must routinely examine how it is working. These systems don't yet substitute for human judgement.
Posted by mikemoran at 8:54 AM | Comments (8) | TrackBack
November 7, 2007
Tracking Offline Conversions
In my books and my appearances, I emphasize how important it is to identify your Web conversions—just what are you trying to persuade your customers to do? You also need to measure them. It sounds easy to measure when it's a shopping cart on an e-Commerce site, but when you sell offline its not so easy.
Different companies take different approaches. Auto manufacturers use elaborate mechanisms that allow you to "build your own car," selecting the colors, options, and equipment and seeing the manufacturer's suggested retail price. The consumer prints out the result and brings it to the dealer and asks, "How much for one of these?" The dealer notes that this customer came from the Web and the car company can attribute the sale to the Web if one results.
This technique works because people will do almost anything to spend less time with a car salesman. If your customers actually like your salespeople, then you might need to offer a discount for anyone who prints a coupon and redeems it at your store. Or you might provide a special phone number shown only on your Web site—you know anyone calling that number came from your Web site.
I've just finished reading Outside-in Software Development
So how are you measuring your offline conversions? If you're not tracking them at all, then you have no basis for identifying which marketing expenditures are working and which ones aren't. Without that kind of feedback, you can't continuously improve your marketing because you don't know how to keep score of the winners and losers.
Posted by mikemoran at 3:14 PM | Comments (3) | TrackBack
November 6, 2007
The Do It Wrong Quickly Challenge
It's a lot of work to write a book. So, when you're through with it, you really (really!) hope people will read it. And so you try to think of ways to get attention for it. To promote it. To market it. So you ask other authors what they would do in your situation. When I sat down with Bryan and Jeffrey Eisenberg a few months ago, they said, "Make a game out of it." So I did.
They suggested that I create a game that posed Internet marketing dilemmas and offered a few possible answers. So, with the help of my publisher, we built that game and launched it a few weeks ago, and Bryan and Jeffery wrote about it on their blog.
But I wasn't entirely happy with the game. I wanted to explain the answers, because I didn't think people would always immediately understand (or agree) with what I claimed was the right answer. But I couldn't get all the Web pages created in time for the launch of the game, so we went without them. (Yes, we did it wrong quickly—we launched the game before it was perfect because we needed to launch at the same time the book was coming out.)
By now, I've gotten many great responses to the game. People have told me that it is fun and challenging and that they've learned a lot just from playing, which I love to hear. I also have received feedback that some of my answers don't make sense or are just plain wrong and exactly what were you thinking?
So now you can find out what I was thinking. We've relaunched the game, this time with explanataions of each answer. You play the game the same way as before, answering questions rapid-fire while the clock runs, but now at the end you can click on any of the questions you are curious about and see my explanation for why that's the right answer.
And that's the way you should always do marketing. If we'd launched the game to a rousing yawn and everyone told me it was pointless and stupid, I probably wouldn't have bothered enhancing the game with explanations. But because people like it, it makes sense to improve it.
So, give it a spin. See if you're up to the Do It Wrong Quickly Challenge.
Posted by mikemoran at 8:44 AM | Comments (0) | TrackBack
November 5, 2007
Search by the Numbers
I enjoyed speaking in Chicago on Friday at the final American Marketing Association Hot Topics seminar on Search Marketing. I've spoken at two previous versions of this event, but had never been at the morning sessions—this time I was able to hear the talks from Stephan Spencer and Alan Rimm-Kaufman, which were very interesting.
I especially liked Alan's analogy that branded paid search keywords (such as "Land's End Men's Oxfords") are like white pages listings, while non-branded searches (such as "Men's Oxfords") are similar to yellow pages listings. Your search campaign needs to address both "white pages" and "yellow pages" opportunities, and they should separate them when analyzing success. You should naturally expect higher conversions from white pages queries—those customers are far more "sold" on your company.
Stephan (as usual) had a wealth of tools he demonstrated, but also added inside information that I didn't know (that I think people expect me to know as an expert). One tidbit is that Yahoo! Site Explorer requires that you be logged in to provide the most accurate information. Stephan explained that you get different (less accurate) results if you use the site anonymously. I've never used the site without being logged in, so I had never noticed that—it's a great insight for search marketers and I jotted it down.
If you're interested in getting my charts, you can download Search by the Numbers. Thanks to Stephan and the AMA for inviting me to contribute to the series. If you keep hanging around experts, you'll always find more to learn.
Posted by mikemoran at 1:04 PM | Comments (3) | TrackBack
November 2, 2007
Do It Wrong Quickly Is the Right Choice
Drew McLellan posted an interview with me in which he kindly says that "Do It Wrong Quickly Is the Right Choice And even though I literally wrote the book, I understand why that advice is still hard for people to accept. I have trouble doing it wrong quickly myself sometimes. The latest time revolves around my redesigning my own Web site.
If you've looked at my Web site, you may have wondered if it was designed in 1998 and never repainted. It's not quite that old, but it does have dated design, for sure.
I have to admit that it looks dowdy. And when I managed the top-notch Web designers at ibm.com, several of them told me, "Your Web design suc...uh..is dowdy, boss."
Clearly, I had a choice. When I started my Web site, I could have decided that the collective Web design skills of my wife and me were sub-par, so I am not ready for a Web site yet. But I decided to "do it wrong quickly" and go ahead and start my site anyway. I had something to say and I hoped people would overlook the dowdy design. (Thanks to all of you that have.)
So, after lots of suggestions (and help) from many friends (and a lot of patient waiting on their part), I am close to being able to upgrade my site to a new design. (A design from this decade.) You'll see something soon. It won't be awe-inspiring, but it will no longer be embarrassing (I hope).
So, I am going to change the design soon, but I still don't love it. I want to add buttons for social bookmarking. I am not sure the colors are right. I am not sure the navigation is the best.
But I am going to release the new design anyway. It takes enormous amounts of time to redo a Web site, and even more time to do all of these extra things I am listing. At some point, I have to say, "Hey it's better than what I have now, so I should do it wrong quickly."
It's hard to do, however. I'd really prefer to wait until it was "perfect"—until I was really happy with the new design. Because I know this design is "wrong."
If I do launch the new design, though, people can help me change the colors or spiffy up the navigation. And they can tell me about more problems that I might not have figured out on my own, no matter how long I waited, no matter how long I thought about it.
And that's the reason to "do it wrong quickly." You admit that what you are trying is probably wrong, but you know that the feedback you get will tell you what to do next. So, keep an eye out for my new design and please tell me what you think. I know it's wrong, but I think it's an improvement.
Posted by mikemoran at 12:29 PM | Comments (0) | TrackBack
November 1, 2007
Measuring Brand Awareness for Free
Often, I work with marketers who aren't ready to expand their horizons to Internet marketing. They remain mired in the old TV and print habits, religiously comissioning expensive surveys to measure the uptick in brand awareness stemming from their latest campaigns. 
But one time I baited my hook with something they desperately wanted—I promised to do their brand awareness survey for free.
Several years ago, my nascent search marketing team was having a heckuva time getting a certain group of marketers to pay any attention to us. we'd shown them the statistics and the business case and everything we could think of, but they clung to their traditional ad spending—this newfangled search stuff made no sense to them.
One day, however, we found our opportunity. They were introducing a new product feature, one that they intended to publicize widely. They were determined to blanket the airwaves, magazines, and anything else they could think of with this interesting marketing message. They were determined to get the message out on this new feature.
But they had a problem. As often happens in big companies, their promotional budget was much smaller than what they needed. They faced the Hobson's choice of reducing their spending on advertising or eliminating the brand awareness survey—the very survey that would prove to everyone how effective their campaign was.
So my team came to the rescue. "How would you like us to show you whether your campaign is working?" we asked sweetly. "We can prove that people are becoming aware of your message, and we can do it in a few days—not the weeks or months you must wait for a typical brand awareness survey." And that's not all we promised. "We can do all this for your favorite price—free."
For the first time, these marketers were interested in what the geeks had to say. They wanted to know more. So, we explained that we can use keyword tools that tell us what words searchers are looking for. We can run those tools before the campaign starts to show that no one is searching for any terms corresponding to the new feature. Then, after the campaign has started, we can regularly show how many more people are looking for those very same words. And it won't cost a cent—just a few minutes of time. Obviously, the only reason for an uptick in searchers looking for these words would be the success of the offline campaign in raising awareness. Tracking search volumes is a free way to measure brand awareness.
The marketers were ecstatic. They eagerly diverted the money allocated to the follow-up brand awarness survey and poured it into the ads themselves. They still had less money than they had hoped, but that's always true, isn't it? They also hoped that our statistics might convince the powers-that-be to add more money for the campaign once they saw it was working.
Finally the big moment arrived. Our keyword tools showed without a doubt that something no one had ever heard of was suddenly driving hundreds of searches on a regular basis. The excited marketers gave each other "high fives" to celebrate their success. And, just as they hoped, they got an increase in funding to do even more advertising. It couldn't have worked out better.
Then, one of them asked an innocent question, "Um, just what do all these searchers see when they type these words in, anyway?" And we showed them. The search results pages showed magazine reviews of the new product with this exciting feature, they showed newspaper stories and many other results—with one Web site conspicuous by its absence. Ours.
You see, because these marketers had never been interested in search marketing, they had provided no content on IBM's Web site for the search engines to find. They had a nifty Flash demo, but all these potential leads were forced to find some other way to get information from IBM. Google hadn't found any information on IBM's own Web site.
And then the light dawned. Finally they understood why search marketing was so important. And they were suddenly very interested in working with our team from then on. They got it because they now had a tangible, concrete experience that made it abundantly clear what they were missing.
Now, we could all sit back and laugh at how clueless these folks were, but that would be stupid on our part. In their defense, this happened in 2002, when so many of us knew a lot less about the importance of search than we do now. But all of us oh-so-clever Internet marketers too often write off the "Luddites" as a great way of excusing ourselves over our lack of persuausiveness. I mean, if we're marketers, why can't we convince these folks that this is something worth trying. What's wrong with us?
We have to face the fact that we don't apply the same skills to convincing our colleagues that we use to convince our customers. It's hard work to get someone to try something new, so we reserve that level of effort for our customers. We don't work quite so hard to turn around our fellow marketers' optinions. We'd rather snicker about them or lament about how dumb they are. "They just don't get it."
Instead, we need to help them. We need to find out what kinds of things are important to them, such as brand awareness, and help them solve the problems they do care about. Once we show them we know a thing or two, then they might get curious about what else we know—then they'll be far more likely to listen to us. It's not different from the way marketers must initially hook customers with something they really care about, and wait until later to have a chance to "upsell" them.
So what are you doing to hook the folks where you work? Are you racking your brain over ways to convince them to use new techniques and new tactics, or are you just satisfied with feeling superior? Take the challenge to get out there and use your marketing skills to bring your colleagues along, instead of writing them off.
Posted by mikemoran at 7:23 AM | Comments (4) | TrackBack
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