Saturday, June 21, 2008

The game has changed

I just read this post by Alan (Toad) of the Toad Stool. He has really hit the nail in the head regarding the changing world of advertising and how some companies really are stuck in the past.

In today's world, product performance is too transparent for advertising to have any significant persuasive effect. People don't look to ads to inform them about quality and performance, they look to Google.

End of story.

I met Alan for the first time at a social media panel discussion we did the other day (more on that in a later blog post). Alan is one of those ad guys who is refreshingly creatively pragmatic.

I am pretty sure that is a compliment.

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Wednesday, June 18, 2008

BabbleSoft Blogger moving on

I've been a fan of the entrepreMusings blog for a while. Aruni (who writes it and is the founder of BabbleSoft) is fun to listen to. And she always had/has great advice for new companies and entrepreneurs.

It turns out she is moving on (sort of) from her BabbleSoft position to a new J-O-B. It's tough times out there at the moment for new companies. And she has had a hard time convincing investors to take the plunge with her on BabbleSoft - which is kind of a web/mobile based parenting support tool.

As she points out, it's really a new market, and convincing investors to invest in creating demand in a tough economic climate is an up-hill task.

I wish her all the luck in her new endeavor and I hope BabbleSoft continues (she will be working on it part time).

I really think only crazy, ignorant and insane people start companies. And only people who start companies see any of those traits as assets. Aruni always struck me as a little bit crazy.

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Wednesday, June 11, 2008

Forrester Blog ROI

Early last year Charlene Li of Forrester fame wrote a report on blogging ROI. I saw this pop up in a recent presentation and wondered if you couldn't improve on some of these metrics.

Here is the list (you can click on the image to enlarge it):

Not a bad framework for understanding how to value a corporate blogging effort. But I would change the following:

1. Blog Traffic - unique visitors to a blog is a pretty useless measure from both an effectiveness standpoint and as a stand-in for advertising cost. This is because blogs tend to have a very high bounce-rate - the number of people who come to the blog and immediately leave because it wasn't what they were looking for. This is just an artifact of 'search', not a blight on the blog itself. Advertising, in contrast, tends to get served up in places where it at least has some relevance to the page/site/task at hand. Not really an apples-to-apples comparison.

I would suggest equating non-bounced blog traffic with the value of click-through advertising traffic (not impressions). So how much you would have paid to get the equivalent number of people to click on your ad in said content channel?

2. Press Mentions - Having your blog talked about by the press is an obvious direct substitute for PR cost. If the talk is positive, all the better. Ironically, I think equating this to advertising cost in the publication probably undervalues it. People are far more likely to remember a mention in an article than an ad. Although I would value this on a case-by-case basis. Not all publicity is good publicity. Believe me, it's not.

3. Technorati and comments - Not every blog has a Technorati ranking so this may or may not be a useful measure depending on the industry you are in. Comments as equivalent to a 'buzz agent'? I've never hired a 'buzz agent' but I would imagine they might be a bit put-out by comparing their efforts to blog comment numbers. Buzz agents can move a lot of interested traffic to your site and that traffic might turn into comments, but it's probably qualitatively different from just general comment leavers - who are more likely to confine their WoM to your blog and your blog only.

Track-backs and Technoarti mentions are probably best valued by the cost of a 'buzz agent'.

4. Comments as customer insight - A complete farce. In the article Forrester equates $180,000 worth of qualitative research to 100 comments on a blog a month. That's effectively turning qualitative research into a sophisticated suggestion box. Which it isn't. Good qualitative research is commissioned to solve difficult issues - brand positioning; deep (very deep) consumer understanding (think about the difference between a blog comment and an ethnographic study); communication testing/evaluation; etc. If you are using qualitative research to get a few ideas every now and then from consumers, you are wasting a lot of money.

5. UGC and NPS (User Generated Content and Net Promoter Score) - I can see where they are going on this one, but it depends on establishing a robust relationship between sales and NPS. I had a look at the NPS's historic relationship to sales in this post - not a pretty picture for that industry at least. I haven't used NPS extensively, but can't help feel a little dubious about its link to sales (this is not going to be the case in all industries, there are bound to be some success stories. As part of the value equation for a blog though, it needs to be looked at on as case-by-case basis).

6. Leads - This one makes a lot of sense. Blogs can generate sales leads. Pretty easy to measure as well - "where did you hear about us?". Probably one of the most tangible value results.

So over all, while some of these metrics need to be tweaked and others (the consumer insights one in particular) ignored, it's not a bad framework.

It's the sort of thing I can see presented to the CEO or CFO as an honest attempt at valuing a social media effort. It might not be exact, but it's probably not going to be significantly distorted.

Of course, blogging and social media have flow-on effects that are harder to measure (honesty, trust, openness, closer connections to customers) but equally as important.

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Monday, June 9, 2008

Do Facebook ads rock? #2

A couple of weeks ago (that's 2 for anyone working at Panera's and handing out scones), I made a post about Facebook ads in response to Bob's post over at The Challenge Dividend.

Bob was kind enough to come over here and comment on the post. It pretty much backed up his original assertion that Facebook ads don't work. At least not nearly as effectively as you would think given the hype around social networking sites.

My post was one of two experiments. The experiments dealt with placing a text-ad on Facebook that pointed to an online Guitar Hero type game. It was just a small add that talked about a new version of a cool game. The kind of pass-the-time thing you would expect a majority of Facebook users to like.

In the first experiment, I ran the ad for a week and got 154,565 impressions among people who had expressed an interest in Guitar Hero in their Facebook profile. Of everyone it was served up to, 70 people clicked on it. A click-through-rate (CTR) of 0.05%. Summarized here:

In the second experiment, I dropped the requirement to have an interest in Guitar Hero to test how well a non-targeted ad performed. Results:

The CTR more than halved. This is exactly what you would expect. But it is different to Bob's original post where targeting didn't seem to have any effect on the CTR.

Bob's ad may have been a one-off. Maybe he got lucky on the CTR for the non-targeted audience? I'm not too sure. But targeting on Facebook does work. Which was my original bone of contention with Bob's conclusions.

However, the CTRs are still BAD, very bad. Targeting doubled the performance of the ad (0.02% to 0.05% CTR) - but that is like going from very crap to crap. Even average banner campaigns get to 0.1%.

Based on the cost per click, if I was selling anything on my website (assuming a below 5% conversion ratio) I would need to absorb around $20 per item sold on customer acquisition costs. Fine for some things, horrendously expensive for others.

The low CTR's on Facebook are a problem. They confirm that advertising really is the last thing you want to pay attention to when you're on the site. Maybe even less so than usual.

Like so many other things Web 2.0, it's an idea in search of a business model (Twitter anyone?).

Media was always bought on 'attention'. The new currency is 'intention'. Facebook needs to find 'intentions', or derive them in some way. Its current targeting is not cutting it.

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Tuesday, June 3, 2008

Annoying surveys, again...

I wrote about annoying customer service surveys here.

I recently started using Skype and after every call, EVERY CALL, they ask you about the call's quality. Bad mistake.

In trying to find a solution to this problem, I came across some great examples of why over-surveying is a bad thing. From some forum posts:

"If i would have know that every 3rd call, it's going to open up my web browser with no ability to toggle it off, i would have not purchased it. In addition, i (ALWAYS) click on the lowest rating when it brings up that quality feedback web page, despite how really wonderfull the quality of the call was, just due to not being given a choice about the popup."
"Why not let users have the choice of giving feedback or not ?
Since eBay took over I've seen a variety of these type of things that control your user experience. angry.png
Like the previous poster, if we all put in negative feedback in the voice quality page perhaps Skype will realize that the loss of real feedback is a serious enough problem to allow free choice for the user."

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