Tuesday, March 27, 2007

Data + Digital + CRM = 1

The mathematically incorrect but meaningful equation of 1 + 1 = 3 symbolizes the synergistic added value by combining two elements; the adding of two elements produces something more than the value of the elements by itself. In the case that I want to discuss, I am pleading for a very different equation: 1 + 1 + 1 = 1. This equation of adding three different elements creates an uniquely simple and powerful “1”; the addition leads to a lesser that is more powerful. Why? Most marketers are trying to build three distinct practice areas: Data, Digital, and CRM whereas in reality we are witnessing a convergence of these three discipline into one less and less distinguishable form of marketing.

What’s happening? A couple of things:
  • The correct and actionable real time analysis of data leads into a digital expression towards a consumer. Best example is “Search”. Is Search a Digital or a Data practice? It’s both! The mathematical analysis of intention (= search term) leads to the most meaningful digital answer (= search results).
  • The best digital marketing programs create an ongoing consumer centric and relevant digital content expression that leads to a positive relationship between digital content provider and consumer. Best example is Amazon’s consumer reviews and recommendations, or Netflix’ movie ratings for subscribers.
  • Any successfully established and ongoing relationship between Consumer and Brand leads to more captured data and deeper insights into consumers.

The right convergence of data, digital, and CRM creates a self-feeding mechanism that gets smarter and smarter with every new cycle. That’s why I use the equation of 1 + 1 +1 = 1 as the right convergence model. We probably still need experts in one of the three practice areas but a too rigid distinction will rather hinder a fully integrated design of consumer experience. The conscious merging of these practices will enable marketing services firms to keep a significant part of big brand’s marketing budgets. As Bob Garfield’s writes in this week’s AdAge: “In order to exploit the internet’s phenomenal capacity for targeting and optimizing messages in ads and on websites, advertisers have to invest vast resources in information-technology infrastructure to crunch the vast amount of data that will be pouring in every second of every day.”

The functional gaps between information analysis, creative expression, and relationship building will disappear further. There will be a lot of financial rewards for marketers who are figuring out how to make it happen. Sometimes the addition of different elements to create a lesser “1” is more difficult, but also more powerful than most marketers assume.

Thursday, March 22, 2007


Is programming coming back as one of the critical qualifications for great story tellers? Adrian Holovaty, the creator of Django and Chicagocrime.org, claims exactly that. Tim O’Reilly calls the combination of journalism with programming the only future that publishing has. Why? Because the three key jobs of journalism – gathering news, exercising editorial judgment, and presenting the story – can be augmented by programming.

The same can be said for our analytical work, programming might be the one critical skill that we have neglected over the last years in advancing our discipline. Programming, used correctly can help all three steps, borrowed from the O’Reilly’s description of journalism. It helps gathering data (for journalists news) in a more automated and search oriented manner, it supports exercising an editorial function by establishing intelligent business rules to inform the selection of relevant data points (for journalists the editorial function), and it improves the presentation of the story by utilizing customized visualization techniques (for journalists story presentation).

We might have thought that programming is being more and more relegated to outsourced development centers. But quite often the closeness of a programmer to the hot spot of value creation in our analytical world helps improving the quality of every single value step that we are responsible for. Over the last 12 months I advocated strongly the hiring and utilization of data visualization experts our marketing intelligent practices, maybe it’s time to contemplate the same for smart programmers.

Tuesday, March 13, 2007

Between Kandinsky and Greenspan

Nowadays the practice of Data is oscillating between two application extremes that I call the “Kandinsky” and the “Greenspan” paradigm. The “Kandinksy” paradigm focuses on the visual beauty and artful representation of data insights to democratize them across a multitude of recipients. The “Greenspan” paradigm focuses on the ultimate questions of marketing ROI and effectiveness. Both paradigms need to be able to live productively in any successful data practice. Unfortunately they rarely do.

Let me first explain briefly both paradigms before attempting a recommended approach of how to integrate them productively. The “Kandinsky” paradigm focuses primarily on visualization aspects of our data work. The emphasis is on designing the right composition of different data insights to unveil the hidden value across a vast amount of available information - all with the focus on impactful visual representation, therefore called Kandinsky. The “Greenspan” paradigm focuses on understanding of how any dollar spend on marketing activities can show a truly incremental margin that is equal the invested dollar. Unfortunately most marketing activities still don’t have this level of transparent accountability, therefore we need to rely quite often on directional proxies that build the best possible correlation between spend and positive financial impact.

Both very dichotic behaving paradigms can be integrated within one marketing team by following some simple sounding learnings:
  • Both paradigm practitioners can only start working on something if they have clearly identified a business issue or challenge. Too many marketers work on issues for which there is no well defined problem
  • Every paradigm outcome needs to have the power of changing something in our marketing strategy or tactics. If the outcome of our work will not change anything, then we should not start doing the work. Unfortunately most of our work is targeted at outcomes that change nothing
  • Every practitioner in both paradigms needs to strive for expanding the power of the particular paradigm systems instead of engaging into political useless debates of the merits of the individual paradigm. It’s all about improving and inventing, not about arguing.
  • The leader of the marketing team with both paradigms has to realize that there is no right or wrong, better or worse between both paradigms but the right paradigm for a particular challenge in specific situation. It’s about relevance, not about a philosophical truth

There are only a few marketers who enjoy working within both paradigms. The challenge is to always consider both paradigms as a particular unique discourse with its own rules, belief systems, and methodologies. It’s not about a dogmatic decision for one but about the interplay of very different and very useful systems.

Monday, March 05, 2007

Integrated Marketing Communications

Over the last months I was a bit surprised to encounter several Fortune 500 marketing organizations as well as some leading marketers, who are focusing heavily on the concept of “Integrated Marketing Communication (IMC)”. I thought this concept had its prime time in the mid and late 90ies. But I was wrong, it seems that most marketing organizations have never executed against this rather simple but powerful marketing approach. The American Marketing Association suggests that IMC is a “Planning process designed to assure that all brand contacts received by a customer or prospect for a product, service, or organization are relevant to that person and consistent over time.” Who could argue against this very sound philosophy? I think no one.

Using Google to find the deeper meaning of IMC, one can only be surprised that 6 out of the top 10 search results are academic references to related research and papers (e.g. Northwestern). No real live company or firm shows up in the top 10 results. It indicates that IMC seems to remain more a theoretical concept that a well executed and proven practice. My personal experience tells me that one of the key reasons for the week proliferation of IMC is the insufficient usage of Data Intelligence.

How can the correct and relevant usage of data support a successful IMC practice? There are a couple of areas where the right Data Intelligence can function as the crucial foundation of any successful IMC:
  • Only the actionable data driven insights into consumers, their preferences, intentions, and behaviors enable the most profitable design of targeted marketing message on segment specific level at the right time in the right channel.
  • Only data intelligence can set up the right optimization framework to improve an IMC plan in a structured and holistic manner. The real hard work starts after agreeing and executing the first IMC plan
  • Only data intelligence can quantify the positive impact of a well designed and correctly executed IMC strategy. The IMC philosophy is certainly correct but to go beyond its "truthiness” (S.C.) we have to look at its concrete financial benefits.

My initial surprise of the resurgence of the IMC approach was unjustified, there is still so much more basic marketing work to be completed before most marketing organizations can move beyond it.