I never thought I would write a “Things We Learned” type article because of a dreadful fear that I only recently learned something the rest of the world has known for years.

Similarly, I never thought I would write a “resolutions” or “predictions” article because I am not very good at keeping them or accurately predicting things, thus making the article just a bit more useful than the Jurassic Park VHS box set you got from Santa this year. But, combine all those things into one super list, and we may be on to something. So, with extra year-end bitterness and a dose of optimism for 2013, here goes nothing!

Accomplishments

2012 was a great year for digital and our industry accomplished a ton. Here are four achievements I found particularly great:

1. Digital Keeps Growing. Whether you choose the $37 billion number eMarketer uses as the digital ad spend for 2012 or the 18% growth rate comScore offers, 2012 was a great time to be in digital advertising, plain and simple.

2. A Return To Testing. If nothing else, 2012 seemed to be the year clients got over all the fear caused by the financial collapse (and the imminent doom of the world) and began testing again. Sure, we are still a ways off from our heyday so many years ago, but anytime the overall climate leans toward more liberal testing, better, more innovative opportunities follow – which is great for everyone involved in digital advertising.

3. Nimble Advertising Outlets. Gone are the days of vendors showing you options, then only being able to customize them 1/10^thof a percent. Here are the days of sites like Refinery 29 that work with you to build customized content surrounding your advertising or IntoTheGloss.com that will actually go out, find a model, put your product on said model, do a photoshoot, and write honest content (not fake-sounding advertorial) for you. This isn’t new, but the rigid lines the big, old sites were trying to hold seem to be blurring rather quickly.

4. Innovation. This seems like a boring one; but, at this point, we can more or less target any person, place, behavior, browsing history, shoe size, hair color, favorite food, height, weight, or anything else you want. Ok, some of those may be a stretch, but you get the point. What we can do today compared to what we could do even just two years ago is astounding and something we should all be proud of.

Complaints

As with anything in life, 2012 wasn’t all rainbows and lollipops, either. There are more than a few things to complain about – especially from bitter, old me – but I will limit it to four:

1. Bing Is Still Bing. Remember when we all got so excited about Bing and how we might have a real competitor to Google on our hands? There were all sorts of fancy background images at Bing.com, fancy ad campaigns (remember Scroogled? Don’t worry, most people don’t), and lots of fanfare and excitement.

But here we are, years into this Bing thing, and we are still waiting for a true competitor to Google. Yes, there has been some improvement (and I am super thankful for it), but most of it is simply trying to catch up to what Google already has. I am not asking for a revolution of search marketing; I just want a legitimate contender to keep Google from resting on its laurels. Heck, I would even be happy if the Bing desktop tool worked on Macs at this point.

2. Google’s Algorithm & Shopping Changes. The algorithm change was supposed to clean up natural results – I get that, and I love it. But I now know far less about the people coming to my site through natural than I ever have before, due to the lack of tracking. Maybe that was Google’s goal the whole time, but as a marketer, I hate it.

Couple that with a Google Base/Froogle/Shopping change to a paid model, and it was like a double whammy. Now that I think of it, maybe Bing does have a few things going for it.

3. Paralysis By Analysis. This is sort of inherent to our line of work, but as we get more data, clients require more analysis. The problem is that in most cases, clients want 100% clear info that gives the exact direction they should go in – and in most cases, we can only get to 95%, so we end up losing time and money.

I won’t give the old “you hold no other channel to this type of scrutiny” argument, but… yeah… digital is the only channel scrutinized to this extent and it slows progress.

4. Search Agencies Pretending To Be Digital Agencies. I wrote a long tirade on this last month – which you can read here – so I will spare you the details, but in short: either be a search agency and specialize in it or be a digital agency and be strong in more than just search. End of story.

Predictions

This is the fun part of the article where I get to make predictions for the industry as a whole (sort of) that no one will hold me accountable for because they will all be long forgotten by the time they all end up being wrong.

1. RTB Media Will Take Over. Real Time Bidded media is growing at an extremely quick rate and seems to be a better option than using a network in many cases. I predict in 2013, RTB media will become the biggest chunk of display spending.

2. Direct Response & Brand Will Become One. So, maybe this is more of a dream/hope than a prediction, but if ever there was a year for it, it’s 2013. Combining brand and direct response is a true 1+1=3 scenario – now if only clients and agencies would see that, too.

3. Extinction Of PPT Decks That Are Glorified Reports. Does anyone really need another poorly-colored chart showing the trend of CPCs over the course of 18 months in poorly designed slide format? 2013 is the year Microsoft releases an update to Office, preventing agencies and clients alike from building these slides.

4. English Language Change. The phrases “dovetail, low-hanging fruit, ecosystem (when referencing advertising), shopportunity, haircut (when referencing pricing), and cast a wider net” will be stricken from the English language. If Congress can get just this one thing done, I will forgive all their other missteps.

And, if there is one resolution I could add on top, it would be to be more optimistic.

2012 was a great year for digital from almost all angles, and while dealing with some of the frustrating little nuances that come with working in the industry can make one a bit bitter, we are still in the fastest growing, most innovative, and arguably, most fun sector of advertising that exists. And that is something we should all be celebrating.

Stock image used by permission of Shutterstock. 

1.  I remember nearly our entire company going to the meeting (there were only four of us, and three attended the meeting).
2. I remember the client VP sitting at the table alongside their traditional agency.
3. I remember how proud I was of the new grey sport coat I was wearing and had bought just for this meeting.

But perhaps the thing I remember most is walking away from that meeting thinking “How could they not get it?”  How could the big, traditional agency not see things were changing and search was the wave of the future?

Search would change how we advertise online, change how we measure things, and, most importantly, change the structure of ad agencies everywhere. And if a fresh-out-of-college kid with no business or marketing experience whatsoever could see it, how could a super successful ad agency not see it?

Back then, I came up with a simple answer: traditional ad agencies are dinosaurs. They don’t adapt, they don’t learn, they stick to what they know and, if they had to, they would learn this new “search thing” enough to get by.  Idiots.

We – this new breed of digital agency — would never do that.

But here we are almost 15 years later and it seems we are becoming the same dinosaurs we fought so long to defeat.

I recently made the switch from search agency to client-side consultant and went through the process of finding new agencies for multiple clients. We reviewed 14 different agencies ranging from the tiny to the biggest and “best” around. What I saw from most agencies was something I distinctly remember from that first meeting, and it scared me. But it also taught my teams and me quite a bit about what we needed to do to be successful and how we needed to manage our new agency partners.

Digital Agency Vs. Search Agency  

With every agency we spoke to, we were clear we were looking for paid and natural search expertise, but we also had both direct response display and branded display needs with our campaigns. This seemed like no problem given that each agency responded and said they were a “full service digital agency” and so much of display is a natural extension of where search began.  More than 10 presentations later, I learned most search agencies are still great at search, but have only marginally learned display.

All agencies could do network buys, some were strong in the RTB display space, but only two understood what a strong brand buy was, knew how to measure a branding campaign, or offered any creative suggestions to incorporate digital branding into our campaign.

This reminded me specifically of the traditional agencies that were great at offline, but had only marginally learned online.

What we learned: Search agencies knew search, but severely lacked the ability to effectively execute outside that core and, in most cases, were as much “Digital Agencies” as the old traditional agencies were “Search Agencies.”

Given that specialization, we needed to staff and possibly structure our internal client teams differently. Our focus had to be on hiring people that could take all the different pieces of digital (ranging from search to affiliate to email and everything in between) and combine them into one cohesive strategy.

We needed to take a far more strategic approach to our marketing initiatives knowing our agency likely will take a specialized, single-channel  approach.

Data Guided Vs. Data Only Decisions

Back in my first client meeting and still today, one of the greatest aspects of search marketing is the data. We get so much data about what people are searching for, clicking on, not clicking on, buying, geo locations, all sorts of data to make our campaigns better – something the old stodgy agencies had none of.

But it seems for many search agencies, the pendulum has swung too far in the “data must lead every decision” direction.  We spoke to agencies that were all too quick to mention their “staff of PhDs that dissect search data,” and others who blatantly said “data determines every action we take.”

Don’t get me wrong, I am a massive believer in data and love Excel far more than the normal person, but I also believe data shouldn’t be the only thing that determines our marketing strategy (I also believe if you are a PhD working for a search agency, perhaps things went wrong somewhere, but I digress).

Data helps us make smarter decisions, helps us narrow down our direction/approach, even helps us hold ourselves accountable for the decisions we do make. But what it also tends to do is neutralize the effects of branding altogether. It takes image, look, feel, heritage, the way the customer feels when they are in your store/on your site – all the softer parts of marketing – and eliminates them.

For some brands, that may work, but for us, it doesn’t.

What we learned:  We could rely on our search/digital agency to execute campaigns, evaluate them, and come back to us with solid data about their campaigns.  But when it came to inserting branding into our campaigns or creating and launching true brand-building campaigns (the ones search agencies so badly crave because they have “softer” success metrics), the workload would fall on our client team almost completely.

Technology-Led Vs. People-Led

Traditional agencies always had such a great pitch: your entire account services team has worked in advertising for 20 years, they have relationships at all the magazines and TV stations, and if you became their client, all that experience and all those relationships would be yours.

Then came search, where agency relationships helped, but technology would allow us to scale campaigns quickly, more efficiently, and with far less left to chance than with campaigns that hinged on relationships.

This is the one area where there was a clear divide amongst all the agencies we met with. Each agency tended to be either technology-based or people-based, but rarely was it a mix of the two (note: of the 14, two offered a “mix” type of approach.  In addition, we required all presentations be given by the account team and not by the sales team, which allowed us to get a better feel for the actual people that would be working on our business).

As search/digital agencies, we can do better.  We have all this whiz-bang technology that makes data-driven campaigns perfect, but we also need to layer in great creative people that can help us on the brand side. If you have great creative people, then there are plenty of technologies out there that can help with the executional pieces of search and DR display.

But the idea of being one or the other seems dated and more the approach of a rigid traditional agency than a nimble, new digital agency.

What we learned: Search agencies still seem to be finding their way and, while they do, it will be just as important, if not more important, for us (as clients) to maintain and build relationships with media partners as it will be for our agency to have relationships. By doing this, we are set up to be able to push both our agency and our partners to develop campaigns that work for our business.

I don’t want this column to read like a simple rant on search agencies, but, after spending more than a decade on the search agency side, viewing things from the client side has been rather enlightening.

I still believe just as strongly in search as a channel and believe there is a place for search specialization. But more than ever, I believe search agencies need to either step up and become true digital agencies, or stick with specializing in search — because trying to split the difference and falling short, hurts clients and will eventually hurt agency business.

Plus, it makes us just as much a dinosaur as the traditional ad agency that sat at the table so long ago.

Image from Shutterstock, used under license.

As I write that sentence, a wave of embarrassment washes over me. Failing Math 101 is pretty hard to do (I mean it was an 8 a.m. class my freshman year in college, so perhaps that had something to do with it, but I digress).  Yes, it was disappointing to my parents, but was it surprising? No. I have never been good with numbers.

My brain simply does not work that way and never has. I am a right-brained, creative type that prefers coming up with the ideas rather than figuring out the economics behind them.

That is why I was a journalism major and why I got into marketing in the first place: a complete avoidance of numbers. Just come up with creative ways of saying things, throw in some great photography, and voila! Instant career (and campaign) success.

Yet here I sit at 9 p.m. straining my brain trying to figure out the effects on FY13 gross and net revenue, customer counts, and ultimately EBITDA if I double my search spend in South Korea next year.

Welcome to the hell I call Budget Season. While I may never be able to create an long-range plan that accounts for the expected exchange rate of dollars to Yen and the fluctuating cost of cotton, there are four key steps that have helped me build budgets in-line with the business, in line with performance trends of each channel, and that deliver on what they say they will.

Monthly Timeframes Are Terrible For Budgeting

This may sound a bit silly, but months are more or less arbitrary groupings for days, and thus, are absolutely terrible for budgeting.  For example, is November 1^st just like November 15^th? How about November 30^th?

While we will never be able to throw budgeting by month out the window, what we can do is make sure our campaigns aren’t run on a monthly schedule. For example, if we have $31 to spend in October and $60 to spend in November, once we hit November 1^st, we shouldn’t just double what we are spending per day.

Instead, in late October, slowly begin raising your spend by a few percentage points per day. Then, continue that trend day over day over day throughout the month, or until you hit a day/time that is abnormally different (e.g., Thanksgiving day is abnormally low, and Cyber Monday is abnormally high).

This gives you a more controlled, predictable spend plan that’s in-line with seasonality, and eliminates wild swings that can happen as we hit a month that has a sharp increase in budgeted spend.

Comps Lie, Trends Don’t

Far too often, people budget to achieve a comp and throw trending out the window.  But the truth is, comps lie and trends don’t. Year-over-year comps are simply a comparison to the same time period a year before – which is just as much a reflection of what you did last year as it is what you want to do this year.

For example, in order for a comp to be truly helpful, you would need to normalize all special offers, tactics, CPCs, and so on in order to make it a “true” comp (and if you are like me, I have a hard time remembering the special offers I ran last week, let alone a few months ago).

So, instead of budgeting with a comp in mind, budget based on the trend of each of your channels month-to-month for the past 12 to 18 months. This will give you a better indicator of how each channel is performing and how it will perform in the future. Once you have established the trend, you can then see if it meets your goals, and if not, you can then adjust your tactics to try to meet your goal.

Not Everything Is Predictable

The blessing and the curse of digital marketing is that it is so trackable – which leads to the fallacy that everything is predictable.  how me someone who thinks they predicted everything and I will show you someone that has a flawed media plan.

No one could have predicted when/how Google Shopping would have switched from a free to a pay method, the effects of the Panda update, changes in the economy, changes in tax laws on Internet purchases… you get the point.

Instead of trying to predict everything and inevitably missing a few things, predict what you can, then build flexibility into your plan so you can actively adjust your plans when things change.

The two easiest ways to build flexibility into a media plan are to reforecast at least each month (using actuals and trends to adjust future months) and have a small percentage of your budget unallocated (I aim for 5% – 10%).  By having this slush fund, you always have budget to test new opportunities that pop up and it gives you the ability to immediately add funds to channels that are overproducing – which helps ensure you aren’t leaving money on the table.

Don’t Underestimate Your Gut

Once you have a media plan that takes into account daily seasonality and trends by channel, and once you’ve accepted the fact that you can’t predict everything, don’t be afraid to gut-check your answers. If you are like me, your gut is not only made up of beer, wings, and other assorted junk food, but it is also made up of all your experience, all your mistakes, and all your successes.

So, while your gut feelings should never drive your predictions, they can be a good way to look at things from a high level and make sure everything makes sense.

At the end of the day, there is no way to get around using some sort of math to build your budgets. But, by simply changing your approach from a math-centric, finance-driven model to a model based on experience and trends (with some basic math thrown on top), you can make the process easier to complete and sometimes even a bit more accurate than what the economics-degree-laden, math whizzes in finance can come up with.

OK, fine, technically you can go to someone’s house, sit them down at knifepoint, and force them to search for your brand term, but that seems like something reserved for a super nerdy, boring version of a Liam Neeson movie.

So, for the rest of us that have maxed out our brand terms and have budget to spare, what are we supposed to do?  Should we just be happy with what we get and move on from there?  Is there is no reasonable way to increase our brand search volume?

I mean, sure we can all just pump more into non-brand and be OK that we get a negative ROI and the implied benefit that at some point those people will search on our brand names. We can always try content, but can you really build a brand using content match?

We can try PLAs, Google Product Search, Email extensions, click-to-call, and whatever new toy the engines have developed, but can any of those actually help us grow our brand at a noticeable rate?

I think they can, but not nearly as well as other non-search media can. So as search marketers we must find ways to become better all-around marketers or risk having our budgets be based solely on existing demand.

Breaking The Single Channel Barrier

I think I am still somewhat surprised when people say they only manage/run/service one channel.  Don’t get me wrong, I am a search nerd at heart and I love match types, bid management, and campaign structure as much as the next guy (I am even holding on to a love for Google Premium Listings and old school paid inclusion too if we are be honest here), but at this point, to only look at one channel is a little head-in-the-sand-ish.

I think we can all agree that:

1. no channel exists in a vacuum and
2. branded paid search is always the result of demand generated by some other sort of marketing (including the Liam Neeson method for generating demand).

So if we know all channels overlap and the primary revenue driver for search is likely the result of other marketing, how do we break out of our single-channel mindset? (note: I am setting aside non-brand a little bit right now as, while I think it can help generate demand, I also think most folks’ bread and butter is based on brand terms and nonbrand performance/participation seems to vary wildly from brand to brand).

Adopt New Techniques For New Goals

Start with these five things:

1. Execute paid search perfectly. Paid search might not be driving all that much new brand awareness, but it definitely is capturing any new demand created. So if you are spending time and money on brand building, but not running an efficient paid search program, then you are pouring water into a bucket with a hole in the ground.

Make sure you have your paid search programs down pat.  Test everything that needs to be tested, run everything that needs to be run, report on everything you need to be reporting on.  Not only will this allow you to capture demand generated from other marketing, but it will also help you further show why the powers that be can’t simply cut search to fund branding.

2. Establish the difference between direct response marketing and interest-generating marketing.  This is not intended to take away from DR in the slightest, but capturing demand and generating interest are two related, but different marketing executions and the campaigns need to be planned, executed, and optimized differently.

For example you might optimize your DR campaign based on ROI while you would optimize your interest campaign based on unaided brand recall lift, SOV in a core category on a site, or even clicks from first-time site visitors.

3. Know the important metrics.  Coming from a DR perspective, I know it is hard to look at anything other than ROI, but your sordid affair with ROI must come to an end…or at least change.  I am a huge fan of keeping ROI a piece of any online campaign, but for more interest-generating type campaign, we must supplement ROI with metrics like percent of visitors that are new visitors, bounce rates, pages per visit, email and catalog sign ups, store locators, and a host of other metrics that will allow us to quantify ROI in a slightly different light.

4. Know your options.  The world is your oyster.  You are no longer tied to spending money on Google and Bing.  You can literally spend money on any site, anywhere.

But with any freedom should come caution.  For example, you can run on any site you want, but now you must consider things like whether or not the site is brand-appropriate, who the competition on the site will be, what kind of user base the site has, is the CPM right, and so on and so forth – none of which you typically need to consider with paid search.

So while you can run on any site you want, your true options are limited to the sites that are brand, cost, competitive, etc. appropriate.

5. Know how to bring it all together. It is only worth breaking out of a single channel if you are able to tie all your marketing channels together. While a full-on attribution system would be ideal, it doesn’t work for everyone.

So start with a unified tracking system – something that allows you to track all your marketing programs, de-dupes your conversions, and will show you some basic marketing pathing information.

This will not only show you the effect interest-driving campaigns are having on your direct response channels, but it will also make that DR side of you that doesn’t like running “branding” campaigns sleep a little easier because you’ll be able to look at a more clear cause-result type of metric.

And if five things weren’t enough, I think there is definitely a sixth thing to consider.  I hear over and over again that people can’t run display media or another channel because it is such a “different set of skills” or a “totally different type of person” that runs those types of campaigns.

This frustrates me more than anything because I think, to some extent, it discredits search marketers’ abilities. While the approach, metrics, vendors, etc. may be a bit different than what we are used to, the same basic principles and skills apply.

If you are a great search marketer, chances are you probably have the skillset to be a great overall marketer too (and in many cases, you are better suited to run all of marketing because you understand metrics and optimization).

So take the idea that it takes two totally different types of people to run search and display or brand marketing and throw it out the window.  Or don’t…and be stuck with a budget that is always going to be limited to the result of what the other marketing channels are driving.

Summer has a way of making us all a bit lazy

This article is late.  Very late.  Like late enough to where my editor should probably fire me (now might be a good time to point out how amazing, smart, talented, and, did I mention amazing, she is).

But it’s not my fault.  It really isn’t.

You see, every year as summer starts to roll in, a relaxed complacency starts to set in both personally and marketing-wise.

Holiday 2011 is a distant memory, but Holiday 2012 is still too far off to talk about.  Spring/Summer 2012 is on sale, but Fall/Winter collections are still a few months off.

Both marketers and consumers everywhere go on vacation (both physically and mentally). It’s hot, the days are long, and NYC is beginning to get that ripe smell that you can only get from trash baking in the sun all day on the sidewalk.

All fine things, but nothing article-worthy, so what am I actually supposed to write about (convinced it’s not my fault yet)?  Marketing complacency, that’s what.  Just as this complacency has hit me (and is the sole reason for my article being late), it also hits our campaigns this time of year — causing us to lose money and miss out on opportunities to move our businesses forward.

Start With Search And Get Creative

So where do we start? Search.

While paid search has great potential, it seems much easier to simply check all the best practice boxes and let it go.  Sure you are updating your bids and keywords, but when was the last time you really got creative with your paid search campaigns (and that one Friday night you had a few glasses of wine and upped your bids 20% doesn’t count.)?

Sure paid search has its character limits, so our creativity is stifled a little bit, but one area where paid search is virtually limitless is in audience targeting. Through smart keyword selection and geotargeting, you can target almost any individual group of people you want.  A few examples:

• If you are Nike, get a list of all the upcoming half- and full marathons in the US and buy keywords surrounding those events. A few months out, have your creative centered on marathon training, then as the event nears, focus on a motivational, branding message.
• If you sell designer swimwear, look into beach destinations and travel-related terms. The audience is already prequalified both interest-wise and HHI-wise (if you choose the right destinations), plus you are beginning to associate your brand with the right consumer mindset (e.g. luxury vacations).
• If you are a Colorado resort, advertise your cool temperatures, relaxing pools, and beautiful green surroundings only to people in Texas cities with high temperatures above 100 degrees (trust me, everything turns brown in Texas in the summer, so anything green sounds refreshing).

None of these are over-the-top creative, yet very few people apply this type of thinking to their paid search campaigns.  And for those of you saying “yea, but the ROI on these terms…” you should stop yourself.

Don’t Let Fear Of Low ROI Hinder You From Trying New Things

Will ROI on these types of terms be the same as your current campaigns?  Probably not. But the good thing is you can control what you spend. So start small, and if it does work, scale up and if it doesn’t, turn it off.

The one thing I can guarantee you is if you don’t stop yourself from making that ROI comment, you will never test new areas – and if you never test new areas, you will continue to be complacent and limit your campaign’s growth.

Break Out Of Your Display Rut, Too

If search is the limited channel, display is the limitless channel.  There are all sorts of sites, blogs, and Tumblrs for just about everything you could ever think of (don’t believe me?  Try this: http://samepicofdavecoulier.tumblr.com/).

So your possibilities for targeting — and your potential to spend a lot of money — are endless. But the same type of thinking still applies: get creative with both your media buying and your targeting.

Starting with your media buying, if you always buy from networks, try buying from a DSP.  If you always buy direct from larger sites (e.g. New York Times, NYMag, etc.), try buying with smaller sites or bloggers.  It will take a bit more work, and there is a risk in buying from a new media outlet, but if you do the research, you will likely end up with a few new outlets for your campaigns.

As for getting creative, think the same way you did when you came up with your new search segments — and you can even use your search segments to somewhat qualify your display efforts.  Using the same examples as above:

• If you are Nike, instead of buying Men’s Health, buy local sites surrounding the cities of upcoming marathons or use geo-targeting in your national campaigns to target IP addresses in marathon cities and serve them more personalized banners.
• If you sell designer swimwear, consider aligning with AMEX to buy ad space targeted to card holders with a high spending threshold and who have bought luxury vacations in the past.
• If you are a Colorado resort, sponsor the weather pages on all the local TV affiliates for the major cities in Texas.

Again, all of these ideas are somewhat basic and aren’t nearly as creative as is possible, but hopefully they are a starting point that can help break you out of your network-only, view-through-conversion-debating rut that can set in over the summer months.

Others’ Summer Laziness Could Be Your Opportunity

So as we begin to enter the dog days of summer, history says all of us will begin to lose our motivation to do anything creative, out of the ordinary, or that could potentially make us sweat. But those are the exact things that should motivate us.

Everyone else is sitting around being complacent — leaving the door wide open for someone to step through and take a chance with a new idea that could end up growing your business.

And if that doesn’t motivate you, I can always send my lovely, amazing, smart, wonderful editor your way.  You would be amazed how motivated you become when she is coming after you with a rolling pin in her hand.

Heck, it’s not even because I am just being extra cranky today (although that might be the case — I have been known to be a bit ornery in my old age).  It’s because we all get it wrong, and there is no one to blame but ourselves.  Here’s how it works:

1. Agency/Marketer takes on a new campaign.
2. Agency/Marketer knows they have to show big numbers right off the bat to impress the Powers That Be (PTB).
   

   ROI is important, but we all seem to be approaching it in the wrong way.

3. Agency/Marketer runs the easy, heavily direct response channels like branded paid search and retargeting and earns really impressive ROIs — leading to all the adoration in the world from the PTB.
4. Agency/Marketer maximizes these channels and goes broader — running brand growth or acquisition-type campaigns that deliver significantly lower ROI. The PTB see an ROI much lower than what they are used to seeing, freak out, blame the agency/marketer and cut the brand growth and acquisition budgets to raise their ROI back up.
5. Agency/Marketer obliges, and the brand goes right back to being the same size, with little expansion (but a really fantastic looking, high ROI) opportunity.

And so the cycle begins. It is an unhealthy cycle that hurts marketers, kills creativity, and ultimately stifles brand growth. The good news is that it’s completely preventable — and when agencies and marketers approach ROI the right way, their brands flourish.

The Value Of A Customer

One of the biggest issues with ROI in its most common interpretation is that it puts value on marketing and eliminates the value of the customer driven from the marketing.

While it obviously makes sense to put a value on marketing, it doesn’t make sense to split that from the value of the customer driven. For example, let’s say your search marketing campaign drives two conversions.

One conversion is someone who buys once because one item is on sale then never buys again. The second conversion is someone who buys each season when new product is released. By putting all the value on marketing and not investigating the value of the customer driven by the marketing, both these conversions are of equal value.

So the first step is to figure out what a customer is actually worth. By looking at data around lifetime value, purchase frequency, AOV, etc., you should be able to come up with a pretty solid number showing the value of your average customer.

If you have the ability take it a step further, you can divide this data up even further, giving different values to people based on their purchase history (e.g. people that have bought less than 3 times in their first year have a value of X while those that purchase 5 times in the first year have a value of Y).

Once you have figured out the value of each customer, set up the systems that let you qualify each conversion that comes in from your marketing (this is the part most people don’t want to do because it can take some time, is data-heavy, and no one likes working with boring old customer databases because they are un-sexy and upper management rarely sees the value because it is harder for them to grasp).

By setting up a system that allows you to quantify each conversion that comes in (even if on a weekly or bi-weekly basis), you are now able to assign value to your conversions, which then allows you to give a more “correct” value to conversions driven from your marketing.

The Value Of Customer Actions

If we are working to put a value on each customer our marketing drives, it only makes sense to put a value on each action a customer takes after interacting with our marketing.

In most cases, people track one action, most often a purchase. But tracking conversions only is like driving a car without seatbelts, lights, a windshield, or a radio: you can do it, but probably not the best idea. Instead, make sure you track, and know the value of, every action a customer takes on your website.  For starters:

• Email sign ups. This one is an absolute must if you ask me. Email takes a ton of credit for conversions, but something drove people to the site to sign up for email, so make sure that credit/value is partitioned out appropriately.
•  Store locators. You can give a value to a store locator visit and you can take it a step further and give additional value to someone who prints store directions/address info (which is a much stronger indication of offline purchase intent).
• Catalog sign ups.
• Social interactions.
• Wishlist adds

The list could go on and on. But the idea is that is when you are only looking at conversions, you are eliminating a massive amount of value being driven from your marketing.  And when you show less value from your marketing, you tend to run your campaigns differently, and by default, more conservatively.

Combining Customer And Action Values

So if you know what your different customers are worth and you know what different actions your customers make are worth, the final step is combining the two.  When you do, you end up with something that looks like this:

Old marketing ROI model:

$1 in marketing drives 1 conversion.  Conversion is worth $10.  Marketing ROI is $10:$1

New marketing ROI model:

$1 in marketing drives 1 conversion, 1 new customer, 1 new email sign up.  Conversion is worth $10, new customer is worth $30 for the year, email sign up is worth $5.  Marketing ROI is $45:$1

While that is a bit of a simplistic way of looking at it, you can see the type of impact this sort of thinking can have on your campaigns. If you knew your marketing ROI was actually 4x higher than it actually was, would you run your campaigns differently?

Don’t get me wrong.  I am 100% a believer in holding ourselves, our agencies, and our campaigns accountable for driving true value to our business. But if we are too nearsighted to investigate the true impact our marketing is having on our business, then we will always be overly conservative with our campaigns and stifle our own brand’s growth potential.

But then again, who really cares about our brand growth when we have a really high, shiny ROI we can show off to our friends?

And with those few words, I felt dumb.  For more than a decade I had focused on “direct response” digital campaigns, and with that one exchange, a client of mine was tearing it all down.  My immediate response was to chalk it up to semantics — we were saying the same thing just in different terms.

But when that didn’t stick, I chalked it up to another client that doesn’t “get” digital —  but I know this client, and he gets it.  So his comments stuck with me for the rest of the day, then into the next, and even into the next.  Then it hit me: I had been so used to talking one way when I discussed revenue-driving channels and another way when I was talking branding, that I had become…part of the problem.

Had I Turned Into One Of Those People I Made Fun Of?

Was it possible?  Was I turning into one of those people I hated – one of those people I made fun of for not realizing DR and branding go hand-in hand, should have intermixed budgets, should have the same overall strategy, should be evaluated similarly, and really aren’t that different?

Absolutely not (I mean let’s not get crazy here – one lazy interaction doesn’t make me one of them). But it was a good reminder that there are plenty of marketers out there that still separate the two, not realizing that when digital branding and DR campaigns are intertwined, strong results usually follow.

While it may seem like a silly place to start, the best place to start is with your existing “direct response” campaigns.  The majority of people run these campaigns on a strict ROI metric.  I spend $1, I need $5 back.  If my ROI is less than $5, I pull back on budget.  If it is more than $5, I throw a party.

Look At Your DR Campaigns With Branding In Mind

Seems pretty basic, right?  Sure, but by using this type of measurement as your sole metric for success you are doing yourself and the channel a disservice.  Instead, try looking at your campaigns this way:

• Never look at ROI alone.  It is a faulty metric.  Instead always look at ROI in conjunction with at least one other metric (e.g. volume, percent of site total, etc.).

By doing this, it will help ensure the ROI you are aiming at/getting is the right target to shoot for. For example, it is easy to get a 50 to 1 ROI, but without the context of volume, you won’t realize that the campaign only drove one sale.

• Always look at additional success metrics. It still amazes me that the majority of advertisers don’t look at metrics like new customer acquisition, current customer retention, and customer buying cycles on a week-in and week-out basis.

Sure the data is harder to come by, but that doesn’t mean it is not valuable. Would you still want a 5 to 1 ROI if you knew that 90% of your customers were first time buyers? Probably not. So by adding in these additional success metrics, you find the true value of your campaigns.

• Don’t put revenue over the brand. This is a big one, and one so many people miss.  Why do people spend tons of time and money to develop beautiful websites with beautiful photography and an overly fancy user experience, but allow their search programs to have less-than-flattering creative, allow their network banners to end up on seedy sites, and not even bother to make sure their SEO meta data is in line with their brand.

These may be  “direct response” campaigns, but I guarantee you every part of these campaigns has a huge effect on your brand image.

“Branding” Shouldn’t Be An Excuse For Low ROI

Now that we have covered direct response, let’s talk branding.  If DR focuses too much on ROI, branding skates by without getting enough focus. It seems like the go-to for marketers is to call any campaign that doesn’t end up driving a high ROI a “branding” campaign.

I mean let’s be honest, it’s a great way for marketers to excuse a poorly performing campaign, but otherwise, it’s a pretty weak argument. Instead, I would argue branding campaigns should have more tracked success metrics than most DR campaigns — and those metrics are likely similar metrics to some of your DR campaigns.

For example, every branding campaign can track impressions and clicks, but it can also track email and catalog sign ups, new customer acquisition, new site visitor percentage, social sign ups, and a whole host of other metrics.

The problem is that most marketers go into branding campaigns looking for “targeted impressions.”  Sure there is value is highly targeted impressions, but if you don’t back up that targeting with additional success metrics to prove the impressions were valuable, you don’t end up with a whole lot other than a fuzzy feeling inside because you got to tell your friends the ad they saw on the homepage of ESPN was yours — and unfortunately, that doesn’t do a whole lot for the brand.

So you have expanded your DR campaign analysis past simple ROI metrics and you have expanded your branding campaigns to include real, tracked data, what next?  Attribution.

I know it sounds like a big scary thing (and it can be if you let it overwhelm you), but there is no better way to break down the barrier between DR and branding than by watching how the two interact.  In an ideal world, you are using attribution across all channels and giving different values to each touchpoint and each channel, but it doesn’t have to be that complicated.

First Steps To Unifying Branding And DR

Start with the basics: I ran a banner designed to broadcast the brand to a new audience — did people that saw that banner then go search for my brand on Google?  By starting with basic views of how your branding buys affected your DR buys, you will begin to see how the two campaigns work together.

Once you begin to see how the two campaigns work together, you will begin to see the two campaigns as much less divided.  And I don’t want to get too idealistic here, but as the campaigns begin to get closer and closer together, you will start seeing everything as one big campaign with one big budget and one big goal.

I know this is a topic that has been covered a hundred times. And I know the pieces listed above aren’t Earth-shattering words of wisdom, but for some reason marketers continue to struggle to break down the walls between DR and branding.

And the longer we struggle, the more we become programmed to think they should and will be separate.  And once we are programmed to think that way, we will never be able to break the habit — and that ultimately results in you going back to your client with your tail between your legs and admitting they were right and you weren’t.

Color took a bit of a break from our lives the past few years as the entire world seemed to teeter on inevitable collapse, but it’s back now, and I, for one, am happy about it. From the skinny jeans (for women and, unfortunately, men too) that come in colors matching every shade of Avery Hi-Liter, to the incredibly popular Cole Haan Oxford shoes that sport neon yellow soles, to the numerous handbags bright enough to make any dark alley light up like it’s noon, color, in its brightest form, is back.

Unfortunately, that same color (or at least that same uplifting feeling) hasn’t translated to most digital campaigns. Marketers are still running the same campaigns, the same way they always have.  Not that there was anything “wrong” with your existing campaigns, but by adding some color to your old, grey campaigns, you can better align your brand with the market, tap into what customers are feeling, and maybe even add a little green to your pockets.

Add Color To Your Search Efforts

Search is a great place to begin adding color.  It’s quick, easy, low cost, and low risk.  But it’s also incredibly un-sexy if you don’t use it creatively.  For example, right now I would be willing to bet most people’s trademark search creative looks something like this:

 On its own, the creative is fine, but my guess is other than adjusting for an occasional special offer, the core creative has stayed the same for just about forever.  To add a little color, try getting a bit more creative, a bit more seasonal, and a bit more personal.  For example, instead of the normal creative running on a national campaign, build a geo-targeted campaign just to New York City and test city-specific creative. Using Nike as an example, try something like this (note: I do not work with/for Nike):

 This creative absolutely has a different feel to it and isn’t your typical direct response type of messaging — but in tests with multiple direct response retailers, we have seen seen sales increase in almost every case.  The reason is simple: by geo-targeting your campaign, then customizing your creative specific to that city/city’s weather conditions/city’s interests, you are able to deliver customers a more relevant message — resulting in higher click-through rates and higher conversion rates.

Sprucing Up Display

While not as quick and easy as search, display is still a relatively easy channel to spruce up, and one in desperate need of help, if you ask me.  Right now, if you are a direct response advertiser, chances are you are running retargeting and/or behavioral targeting through one or more networks and sort of leaving it at that.

Sure some people are fancy-ing it up by segmenting cookies or running dynamic creative, which is all great, but you can do so much more with display.  For example, try sequential messaging with your retargeting buys – showing site browsers a series of banners in a certain order where each message builds on the previous one.

Men’s Underwear Ads On A Dating Site?  Oh, Yes.

Try finding non-endemic sites and building custom messages and banners to speak specifically to that crowd.  One client of mine, 2(X)IST designer men’s underwear, took a small portion of their behavioral budget and bought targeted ads on Match.com with the tagline of “in case the first date goes well”.  The conversions from the buy were almost 90% first time buyers.

Similar to the search example above, build creative that dynamically inserts weather conditions and adjusts the messaging accordingly.  While these specific examples might not be a spot-on fit for your brand, the type of thinking that drives these types of ideas likely is on-point with your brand — you just have to be willing to test it.

Add Personality To Your Social Media

If playing with your search and display campaigns sounds too risky for you, start with your social media programs.  The above type of thinking is easily applicable to your Twitter, Facebook, Instagram, and Tumblr campaigns and costs absolutely nothing.

Instead of posting another boring link on your Facebook page about your free shipping, give your campaigns, and your brand, some personality, life, and color.  Post things that are contextually relevant to your brand that will encourage people to engage with you, rather than simply looking at your marketing as a means for taking money from them.

Digital is a great medium for advertising.  Our campaigns are quicker, more trackable, easily optimized — there are a thousand benefits to digital.  Unfortunately, all the campaign data has also made many of us somewhat cold, sterile marketing machines (I kinda picture the Terminator 3 Robot, with the scary red eyeball) that spit out marketing campaigns based on a magic algorithm that tells us how much money we will make.

The problem is, those magical algorithms can’t adjust for true creativity or the effect it will have on consumers. So before you decide to run the same boring banner or the same boring search creative, stop, take a step back and add some color to your campaign.  You will be surprised how much your customers will appreciate it — and how much more you will enjoy it.

Me: I don’t have one yet.

Vendor/Self-Appointed Industry Expert:  Really?!? Are you crazy?  You are missing out!  All your customers are there!  Our agency/technology/approach will make you tons and you can really capitalize on this once-in-a-lifetime opportunity.”

Me: Sigh.  Please go away.

Be honest. Most of you are reading this story only because you saw the Pinterest logo and got excited aren’t you?  I spent the last week at eTail West and the above conversation happened no less than a zillion times — and, yes, that is an exact number.  The entire conference seemed abuzz about the darling of the tech world right now, and for good reason.

Pinterest has an ungodly amount of momentum behind it: it is the second fastest growing website in history behind Facebook I believe, has a fantastic concept, and has the potential to be the next great thing.  People are signing up for it faster than the site can keep up with and even little old me has more than 100 followers already!  WOW!  I’m pretty popular.

And therein lies the problem: I have more than 100 people following me and I have no boards and no pins as of yet.  While I am likely the exception to the rule when it comes to Pinterest use, unfortunately, when it comes to direct marketing, far too often the rule seems to be to find a shiny new object and immediately make it your #1 priority.

While this approach can help keep you “cutting edge” it often leads to you trading dollars (all the proven, successful tactics and channels, such as search) for cents (the shiny new toy).  The great news is you can do both: continue to strengthen the foundation that all your marketing sits upon, while intelligently layering on new opportunities — and when you’re successful, you make both dollars and cents.

Evaluating Which Shiny Objects To Pay Attention To

Just like there will always be tried-and-true marketing methods, such as search, there will always be fantastic new things to try — it is part of what makes the digital marketing industry so enjoyable.  But just because something is new, doesn’t mean you should chase it down with unbridled fury to make sure you checked off that box that says you did it (remember when iAds came out with a ton of buzz but also a $1m minimum spend?  Glad you didn’t chase that one down now, aren’t ya?).  Instead, slow down and do the work to properly evaluate the opportunity and see if it is good fit for your business.  Three great questions to start with are:

• Is the new site/technology/shiny object affecting your business without your participating?  For example, are you getting traffic, revenue, links, coverage, etc.?
• Is the new site/technology/shiny object affecting your customer base in a positive way?  For example, are your customers using the new site/technology/shiny object more often, and if they are, what do you think about it?
• Is your brand naturally a part of the new site/technology/shiny object? For example, if you go to Pinterest and search for your brand/related product, are you already included?

While none of these will give you a 100% answer on what you should do, they should help give you a enough information to begin building a case to either put the new opportunity on the backburner for a bit or start exploring it more and begin setting the expectations for results.

Implementing the Test

So you’ve done the initial research and you determine your site, your customers, and your brand are all being affected by this shiny new object and you need to test it.  Great!  Now you must figure out a way to implement an effective test.  While there is no one right way to do this, marketers most often hit three roadblocks:

1. Budget. Unfortunately, just because something new comes along for us to test doesn’t mean new budget comes along to pay for it, as well.  The most common mistake marketers make here is they pull some money from an existing program to fund the new one.  They reason it out by saying they are cutting the worst performing piece, or they are cutting so little it won’t matter.  The problem with that logic is that if you are willing to cut the budget from an existing program now, then why were you spending that money in the first place? In other words, if you can cut the budget because it was underperforming, then why hadn’t you already cut it?  You are willing to take something that is proven at making you X amount of dollars and instead spend it on something that has no proven value.  Instead, I would argue the best way to fund testing a new program would be to do the research and make a business case so strong that there is no choice but to fund it (which is the same standard you hold your existing marketing to).  If you have trouble making that case, then perhaps it isn’t the best test for you.
2. Setting expectations.  “How am I supposed to know how it will perform?  That’s why they call it a test.”  Find yourself making that statement?  While I understand the logic, it is also the type of thinking that leads to unsuccessful tests because you aren’t shooting for any particular result.  Instead, set the expectation of what you would like to see happen from the test.  Set goals for every metric you can think of: traffic, revenue, acquisition, ROI, interaction, impressions, everything. Then at the end of the test, compare your results to each goal to see where you fell short and where you succeeded.  You likely won’t win on all of them, but the ones you do win on will help you determine where the new object might fit within your overall marketing plan (e.g. if it doesn’t drive great ROI, but it does drive new customer acquisition, you might evaluate/manage it differently). And more importantly, it will tell you how many pennies it will make you.
3. Evaluating Results. Every test you run will give you a set of data to evaluate whether or not the test was a success.  Seems pretty basic, right? The problem is most people stop there.  The better approach is to look at the direct results of the test, but also look at the results of all your more established channels and see how they were affected by your test.  If you are using a more advanced attribution system, this is a bit easier to do, but even if you aren’t, you can still look at a few metrics to see the implied influence. For example, look at your branded term impressions on exact match.  Assuming they are fully funded, this can give you a sense of whether or not your test caused more brand demand.  Look at the contribution percentage of every marketing channel.  Did it change?  Did your SEO program deliver 5% less revenue?  If so, you could have just moved revenue from a free channel (SEO) to a paid channel (your test).  There are a thousand ways to look at this data, but the most important thing to remember is you can’t look at it with a motive in mind — meaning you can’t be looking for ways to prove the test worked or failed.  You have to have an open mind, otherwise you will find data that will support your case either way.

Don’t get me wrong, I am not knocking on Pinterest. I am not against testing new opportunities, and I am not saying all new things are failures.  But what I am against is running from one buzzword to the next to the next to the next, betting on it being the next big thing that will change your business by 50% overnight.  More often than not, when you find yourself doing that, you lose track of the marketing efforts that got you to where you are today and you end up trading the dollars those campaigns are making you for shiny bright objects that took a ton of time, energy, and money to make you a just a few pennies.

Top male model in the world? Check.

Gorgeous, fashionable wife. Check?

Advertising guru? Ok, it might be a stretch to call David Beckham an ad guru, but after H&M’s near perfect campaign execution during and after the Super Bowl, the title seems relatively fitting for the fashion brand.

I’m not suggesting they get the title simply because of the TV ad – honestly the ad was relatively middle of the road if you ask me – but rather how they integrated the ad into every one of their marketing channels.

In addition to the TV ad, H&M wrapped am New York (one of the larger, free daily NYC newspapers) with a near poster-sized image from the commercial, they bought every possible related paid search term and ran Beckham messaging, their homepage quickly launches the ad from the Super Bowl, and heck, DavidBeckham.com even seems to use the same image from the campaign.

While none of this is hard to do, far too many advertisers don’t execute their campaigns nearly this seamlessly (e.g. Go Daddy paid search has no reference to the Super Bowl and searches for Skechers Go Run brings up paid search from their UK campaign), and that leads to wasted ad dollars.

Don’t get me wrong, it is easy to make aligning all your channels difficult.

From working with multiple agencies, to budgeting correctly, to simply getting everyone in the marketing department on the same page, aligning all your marketing efforts can be hard to do. But it doesn’t have to be, and when you break it down to the basics, there are three things that make aligning all your channels relatively simple.

1.  Eliminate Channels

When you stop talking about marketing channels and you start talking about the actual marketing idea you are trying to execute, things get simple in a hurry.

For example, do you think H&M went to their search agency and asked them to build a Super Bowl campaign, then went to their print team and asked them to build a Super Bowl strategy, then went to their TV team…you get the point. My guess is no.

Instead they likely approached it by saying “This is what we want to make happen – how can it happen in all channels?”

Approaching campaigns with a goal-first type of approach rather than a channel-first approach will help eliminate a lot of the barriers that tend to pop up when trying to plan cross-channel and will force your partners (whether internal channel managers or external agencies) to provide you with solutions that will help you achieve your goal.

2.  Budget Backwards

Budgets are a fact of life, plain and simple. But budgets are also a creative roadblock. If you tell someone to plan a $10 campaign, many people’s minds begin listing all the things they can’t do because they don’t have the $20 budget they were expecting. Whenever you begin strategizing that way, you immediately eliminate things that may be of great value to your campaign.

Instead, try approaching your campaigns with the question “how much budget do we need to execute this idea effectively?”

When you approach your teams with this question, they are more likely to give you a laundry list of all the pieces they think are essential for an effective campaign and how much each one costs. This will leave you with what your budget should be to effectively execute the campaign.

Of course we rarely get all the budget we ask for, so when your CMO tells you things are too expensive, you now have a list of everything you need and can show him/her what you have to cut (and what you will be losing by reducing budget) in order to meet their budget restrictions.

This not only sets expectations with your CMO, but it also lays the groundwork for more support on future projects.

3.  Talk

This sounds so basic, but have everyone in marketing, every agency, every channel, and team members at all levels talk to each other. Far too often, marketing teams (both client side and agency side) get stuck in their individual channels and see other channels/agencies as competitors fighting for the same budget.  That is unhealthy and unnecessary.

The goal is to build a marketing culture – that includes all internal teams and all external agencies – that is centered on doing what is best for the brand, not the channel. The best part is there is a simple solution: talking.

Get everyone a room together, as often as possible, and talk about what you want to accomplish for the brand collectively. Get everyone used to sharing openly.  Get everyone used to talking about helping the brand succeed instead of their channel.

The communication will be rough at first, but the longer it goes, the more open and constructive it will become – which will lead to healthier campaigns, better ideas, and better executions.

This is about the point in the article where you start wondering what kind of idealistic, fantasy world I live in where the above ideas fix everything. Truth is, they won’t fix everything. But what they will do is begin training you, your team, and your agencies to stop thinking about channels and begin thinking about marketing ideas.

The sooner you can effectively change the thinking of your marketing department, the sooner you can begin running truly cross-channel campaigns like H&M instead of ending up being one of those brands that’s left wondering why the $3+ million they spent on a Super Bowl ad didn’t help their business near as much as it was supposed to.