Author Archives: ghotchkiss

What’s Wrong with Market Research

sharingbrainWhen we first started doing research at Enquiro into how people used search, we found very quickly that what people say and what people do are very different things. It just happened that we were doing a survey and a focus group at roughly the same time. In the survey, where we got the results first, we asked if things like the position of a listing was important in whether people read it or not. We asked people to rank a number of factors on their relative importance, including position, relevancy and trust in brands and vendors shown. Almost without exception, in the survey, people indicated that relevancy was the key factor. They also indicated that they read listings pretty carefully and gave a fair amount of thought before selecting one. Finally, many said they would never click on a paid listing.

Then, we invited about 30 people into our labs and actually recorded their interactions with the search engines (before our eye tracking studies) and it quickly became obvious that how they said they used a search engine and how they actually did were two different things. The vast majority of clicks happened in the first few listings. Many who indicated they wouldn’t click on paid listings actually did, and perhaps, most interestingly, the average interaction was around 10 seconds or so. Subsequently, we’ve seen this type of behavior repeated in eye tracking after eye tracking study. Of course, the famous golden triangle study we did with Eyetools and Did It, and subsequent ones conducted by Enquiro, have shown over and over how quickly we interact with a search engine and how much of our scanning activity is “top loaded”. Also, we don’t really skip over sponsored listings, but in some circumstances (research based activity) we’re less likely to click on them. We’ve used this body of research to come up with a fairly consistent model of how people interact with search results. The results belie what people indicated in our very first survey. Well over 60% of the clicks happened in the first 4 or 5 listings, including the top sponsored ones. People generally spent just a few seconds on the page (around 10 to 12 seems to be the average) in which they scan (not read) 4 to 5 listings. There was almost no deliberation. People click quickly, and if they don’t like what they see, they click back. It would take the average person about 2 minutes to actually read all the results on the average search results page. Even if we just read the top 4 or 5, we’d be spending about 30 to 40 seconds on the page. It takes about 7 seconds to read one listing. But we don’t spend much longer than this covering 4 to 5 listings, about 2 seconds per listing. Obviously, we don’t give a lot of thought to the credibility of the search listings.

So, were all 1600 of our original survey respondents liars? Were they intentionally misleading us? No, they were just being human.

What we found was the systemic fault with almost all market research. And there’s a very good explanation for it. We’re generally not aware of 95% of what we do or why we do it. That’s because much or what we do is hidden in our subconscious. I’m currently reading How Customers Think by Gerald Zaltman and he pinpoints the problem with traditional market research. In almost every case, we ask people to tell us, either verbally or through writing, what they’re thinking. Just by doing this, we kick in the cortex, the rational seat of our intellect. But Zaltman tells us that at least 95% of every decision is made subconsciously. There, in the murky depths of our brains, predating the evolution of our cortex by many millions of years, thoughts are created through tremendously complex connections of memories, beliefs, instincts and intuition. In many cases, our decisions are made long before they bubble up to our conscious minds. The conscious mind exists to put a little polish on them and, in most cases, to rationalize a decision that was largely based on primal instincts. We may have done what we did because our flight or fight mechanism kicked in, or because our need to procreate surfaced. That’s why we chose the minivan, or the red convertible. It really had nothing to do with the Consumer Reports rating. But, being highly evolved humans, we convince ourselves that our choices are much more rational than those of a lizard (our basic brain core, which rules many of our decisions, is basically the same as a reptile’s brain).

In our case, our initial respondents indicated that they deliberated over which search result they chose. In actual fact, there was little risk in choosing a wrong link (it’s not like our lives, our family or our money is at stake), so we cut off the amount of deliberation we did and after a quick scan, picked the result that seemed to be most relevant to our intent. The lack of deliberation wasn’t lack of intelligence, it was a survival instinct bred into us by eons of evolutionary refinement. If there’s no immediate risk to us, why should we kick in our brains and spend unnecessary time and cortex processing power to come to the optimal decision. It’s not required. A simple scan and click will suffice. Our brains are simply doing what they’ve been programmed to do. And it’s not that the decisions are bad. As Malcolm Gladwell shows in Blink, often these decisions prove to be better than the ones that we endlessly deliberate over. Our brains, especially the 95% that remains under the surface, are amazingly adept at making good decisions.

But there’s a more fundamental issue here. If what we experienced in search is typical in all market research (which it is) how do we ever find out how people actually make purchase decisions?

This is a significant challenge, the extent of which might not be obvious at first glance. Let me use an analogy to further illustrate. Remember the tale of the shoemaker and the elves? Let me use that and adapt it slightly for my purposes. For those of you unfamiliar with the story, a poor shoemaker only has enough leather left for one pair of shoes. He cuts the leather and lays it out for stitching the next morning. He awakes, amazed to find the shoes made, and meticulously crafted at that. Elves apparently helped out during the night, soon to bring fame and fortune to the shoemaker.

But what if the elves didn’t exist. What if, instead, the shoemaker was actually making the shoes in his sleep? The idea is not so ridiculous. Rumor has it that Coleridge actually wrote Kubla Khan during a dream, and managed to scribble it down before it faded from his consciousness. As any psychiatrist will tell you, we’re closest to our subsconscious when we’re hovering between sleep and wakefulness. It’s about the only time we get a glimpse into those murky depths.

So let’s say our shoemaker actually makes the shoes in some bizarre bout of sleepwalking. He awakes every morning, to find the shoes nearly perfectly finished. All he needs to do is add the laces and a bit of polish. And the shoes are fair more carefully crafted then he could ever accomplish while awake.

The shoemaker really isn’t aware of where the shoes come from. In fact, as time goes on, and as he receives more and more recognition for the quality of his workmanship, he begins to believe that it’s solely due to the little bit of work he does while he’s awake, threading the laces and adding a little polish. He learns to ignore the 95% of the work that’s done while he’s asleep.

Now, imagine someone comes to ask him why his shoes are so exceptionally crafted. Would he admit the truth and say he doesn’t know? No, pride and genuine lack of knowledge would keep him from saying that. He has no idea what he does while he’s asleep. It’s almost as if someone else did the work for him. His conscious brain would kick in and come up with some perfectly rational but completely untrue explanation. Clotaire Rapaille, in his book The Culture Code, cites an example of this:

In a classic study, the nineteenth-century scientist Jean-Martin Charcot hypnotized a female patient, handed her an umbrella, and asked her to open it. After this, he slowly brought the woman out of her hypnotic state. When she came to, she was surprised by the object she held in her hand. Charcot then asked her why she was carrying an open umbrella indoors. The woman was utterly confused by the question. She of course had no idea of what she had been through and no memories of Charcot’s instructions. Baffled, she looked at the ceiling. Then she looked back at Charcot and said, “It was raining.”

This is what happens in almost every instance of market research. Our buying decisions are like the shoemaker’s shoes. They’re usually quite good, but we have little idea how they came into being.

For most of the history of marketing, we’ve been restrained by the limitations of market research. It’s only recently, through advancements in cognitive psychology and brain scanning technologies that we’re beginning to get a glimpse of what might actually be happening. My next post (tomorrow) why it’s important that we keep trying.

Edison Also Asked: “When Will People Get It?”

First published November 15, 2007 in Mediapost’s Search Insider

Over the past few weeks, my general theme has been “why don’t more people get it?” Why don’t agencies get search. Why don’t CEOs get search? Why don’t more search portals get that it’s the user that determines your success? Why don’t more people get that the world is changing, quickly? What’s with us, anyway?

Well, this week, I gained a little insight; thanks to a paper by Paul David called “The Dynamo and the Computer.” Maybe we just need some time. It’s not the first time this happened. Let me tell you the story of the light bulb.

Lighting Up the Industrial Age

Edison introduced the first practical incandescent light bulb in 1879. The first generating stations in New York and London started their dynamos spinning in 1881. Profound changes were to follow. Productivity was to grow by leaps and bounds.

Factories in the 1800’s were dark, noisy and not particularly pleasant places to spend a day.  At the center sat the steam engine: a huge, hungry and finicky behemoth, connected by an extended system of belts to the operating machinery of the factory. Even the early electrical engines were smaller, cleaner and much more efficient. Electric lighting made 24 hour shifts more practical. The benefits were obvious. Electricity was the ultimate “no-brainer.”

Still in the Dark

But by 1899, almost two decades after the introduction of the light bulb, only 3% of homes were “wired.” And the much-predicted impact on the North American industrial engine would have to wait until the 1920s to take hold. It took a half century for electricity to make much of a difference in America.

You see, technology tends to move fast, but people move slowly. It’s because transition tends to be dependent on many factors. It’s not like the flicking of (quite literally, in this case) a light switch. It’s more like waiting for a long series of dominos to fall into place, each drop contingent on the previous one.

In the case of electricity, significant money had been invested in steam power. You don’t just rip it all out and start over again, no matter how compelling the advantages might be. So factory owners waited for things to break down, and then retrofitted with new electric engines. But even this retrofitting had to wait for the supply of electrical engineers to catch up. In 1899, not many people knew how to design an electrical delivery system. The skill gap had to be eliminated. And this lack of expertise also showed up in less direct ways. America also had to wait for a new generation of factory architects to appear, who could design factories built to be powered by electricity. For every obvious benefit of electrification, there was a long series of factors that had to fall into place first. That’s why it took five decades to turn on the light.

History Repeating Itself

This technology adoption curve has been repeated over and over. The replacement of horsepower with steam power. And more recently, the information technology revolution. We can get as frustrated as we want with the snail’s pace reluctance of many to grasp the realities of the new world, but the fact is, we’re just being human.

Technology adoption usually follows a predictable path: introduction of technology, commercialization of technology, layering the technology onto what preceded it, and finally, throwing out the old completely and building from the ground up to embrace the technology. Each step depends on the step before it. And in every case, legacy investment slows the speed at which we move from one to the other.

If we look at the adoption of Internet technology and compare it to previous technology adoption curves, we’re just starting up the beginning of the long and steep part of the “S” curve. There’s no doubt we’ll get there, but it will take time.

Android and Pondering the Future from Portugal

AlgarveSagresThis afternoon, I saw what was, at one point, probably the most exciting and terrifying place in the world. Sagres is the southwest corner of Portugal. From this point, sailing west, you leave the Mediterranean and enter the vast expanse of the Atlantic. Beyond Sagres was no man’s land. Everything safe and familiar was behind you. New worlds of discovery and vast expanses of the unknown lay beyond. It was a powerful personal experience. Sitting on a rock overlooking the cliffs, looking at nothing but water, you discover something primal in yourself.

It was also metaphorical. We’re on the cusp of our own voyage. In our world, there’s a lot of unknown that lies ahead. For anyone that has pondered where we’re at, and what it might mean for us in the future, the possibilities are as exciting and frightening as they must have once appeared from the vantage point of Sagres.

It was somewhat fitting that the day I visited Sagres was the same day that Sergey Brin announced Google’s support of Android developers, to the tune of $10 million. No one doubts the potential of mobile. We all know that ubiquitous computing and access to the Internet will change everything. It will put the world in our hands.

And Google’s move into the space is interesting to think about as well. They’re betting on the power of community and open source to be the best way to reduce the friction so prevalent in the mobile space. Lack of standards, in fighting between telcos, convoluted politics between hardware manufacturers and service providers: Google is saying to hell with it, opening the door and letting things fall where they may. It’s a greenfield ripe for exploring, so the more the merrier! If our bets pay off (and in the grand scheme of things, $10 million is less than a pittance) there’s more than enough potential here for everyone. Forget control, let’s just get the ball rolling.

So, not to get all metaphorical on you, but if you compare it to the exploration of the new world, with many of those voyages rounding the point of Sagres, you’ll find a lot of similarity. Unlimited potential, a lot of unknowns, great odds that somebody’s going to get rich and, if you really think about it, scary as hell. But then, that could just be the Madeira talking.

Satisficing, Bounded Rationality and Search

150px-HerbertSimonHerbert Simon came up with some pretty interesting concepts, among them satisficing, bounded rationality and chunking.

Before Simon, we commonly believed that humans came to optimal decisions in a rational manner, based on the information provided. We took all the data that was accessible, weighed pros and cons and used our cortexes to come to the best possible outcome.

Simon, in effect, said that this placed to high a load on us cognitively. In many cases, there was simply too much information available, so we had to make choices based more on heuristics, cutting the available information down to a more manageable level. He called this “satisficing”, a blend of satisfy and suffice. And Simon started saying this a half century ago. Imagine how this translates to the present time.

We have never had more information available. At the click of a mouse, we can access huge amounts of information. There’s simply no way we can process it all and come to rational decisions. And this brings us to another concept, that of bounded rationality. We’re more rational about some decisions than others. It depends on a number of factors, including risk, emotional enjoyment and brand self identification. Think of it as a chart with three axes. One axis is risk. We put more rational thought into decisions that expose us to greater risk. In consumer decisions, risk usually equates with cost, but in B to B decisions, it could also include professional reputation (related to but not always directly tied to cost). We’re going to put a lot more thought into the purchase of a car or house than that of a candy bar. Another axis is emotional enjoyment. This is a risk/reward mechanism to most decisions, and if the reward is one that is particularly appealing to us, we tend to be swayed more by emotion than rational decision. If we’re planning a holiday, we may make some irrational decisions (or at least, they might appear that way to an outsider) based on a sense of rewarding ourselves. We’ll treat ourselves to a few nights in a 5 star resort, when the 3 star resort would offer greater overall value. The final factor, and one that is usually buried somewhere in our subconscious, is how we use brands or products to define who we are. Now, no one usually admits to being defined by a brand, but we all are, to some extent. This touches on the cult-like devotees that some brands develop. Harley Davidson, Rolex, BMW, Apple and Nike all come to mind. Is a Rolex a rational choice? No. But a Rolex defines, to some extent, the person wearing it. It says something about the person.

Bounded rationality says that there are boundaries to the amount of rational thought that we can and we want to put into decisions. The amount we decide is sufficient depends on the three facts discussed.

Now, the use of Search tends to plot somewhere along this 3 dimensional chart. If risk is high and brand identification is low (buying software for the company), there is a high likelihood that search will be used extensively. If risk is low and brand identification is high (i.e. buying a soft drink or a beer) there is almost no likelihood that search will be used. In this case, the two factors usually work inversely to each other. Emotional enjoyment isn’t as directly tied to search activity. We will do as much (or as little) searching for a purchase that will give us great enjoyment as for those that won’t.

It’s interesting to watch how these factors impact search intent and behavior. Satisficing leads to a classic sort of search behavior, what I call I category search, where we use fairly generic, non branded queries that broadly define the category we’re looking at. Let me give you an example. Tomorrow my wife and I are headed to Europe for a week. We’re going to spend a few days in Portugal, then fly up to London for SMX (where I’ll be talking more about these ideas in some of my sessions). We’re flying into Lisbon, then renting a car and driving down to the Algarve region. I have GPS navigation software for my PDA, but only for North America. I wanted to get European software, but because of the limited use of it, I didn’t want to spend too much. The developer of my North American software didn’t make a EU version, so I turned to search to find a suitable candidate. Here there was no brand identification, some degree of risk (if it didn’t work in Europe, I’d be lost, literally) and no emotional enjoyment factor. My first search was what I call a “landmark” search. I wanted to find some sites to plot the landscape. Sites that listed and compared my alternatives would be ideal matches to my intent.

I searched for “pocket pc gps software”, knowing that “gps software” would be too broad. I soon found the sites were pretty much all about North American versions. Few of them offered or reviewed European versions. I spent several minutes on the TomTom site trying to order a European version from Canada but to no avail. Apparently TomTom doesn’t believe people in North America would ever choose to drive in Europe.

In classic “satisficing” behavior, I wanted to cut my research workload by setting some basic eligibility criteria: it had to work on a Pocket PC, it had to be reasonably priced (under $100 preferably) and it had to offer coverage for all of Europe (we’re going back to France and Italy next year and I’d like to use it then as well). My next search was for “pocket pc gps software europe”. This gave me what I needed to begin to create my satisficed list. Ideally, we want 3 or 4 alternatives to compare. I did find the TomTom choice, but I was already frustrated with this, and the price was over my threshold. Destinator also offered an alternative that seemed to be a little better match. It matched all the criteria, appeared to have some decent reviews and was available on eBay for about $75, including shipping. Sold! Was it the optimal choice? Maybe not. If I had spent hours more doing research, I could have probably found a better package or a better value. But it was good enough.

Chunking has to do with cognitive channel capacity, and the amount of information we can store in our heads, accessible for use. Again, we tend to maximize the available slots by creating chunks of information, grouping similar types of information together.

When you look at Simon’s work, even though the majority of it far preceded search engines, it sheds a lot of light on how we use search in a number of cases. If you want to tap into user intent, I would recommend finding out more about bounded rationality and satisficing. Chunking is probably worth a look as well.

Caution Will Kill You in the Search Game

First published November 8, 2007 in Mediapost’s Search Insider

A strange thing started happening to me in the last two years or so. As I became more vocal about my opinion, people started seeking it out more often. The more I shared it, the more people nodded their heads. And the more obnoxious I got about it, the more people jumped on my own little opinion bandwagon. It you look at comments to this column as an indicator of striking chords, it seems like I touch cords either when I’m being a total dickhead (increasingly frequent) or introspective and emotionally deep (a much rarer occurrence). But other than a “right-on” post or comment, and the vigorous nodding of heads, I’m not sure it will go much further than that. Inside, we all like to be smarter than our bosses and a little bit revolutionary. But on the surface, where we live and work, we go with the flow. I call it the Cluetrain Conundrum.

The Cluetrain Manifesto was posted in 1999, when the Internet was still new and bold and gritty. Much of the initial grass-roots appeal that tweaked the interest of Messrs. Locke, Weinberger and Searles has since been paved over to make room for commercial storefronts. At the time of publishing, as an in-your-face, spit-in-your-boss’s-coffee and laugh-all-the-way-to-the-corporate-bathroom call to action against the cluelessness of the command and control establishment, it attracted its own rush of “right-ons.”. In fact, since it went online, thousands have signed the Manifesto. It seemed like the world could change. But now, eight years later, we’re still waiting.

You see, it’s one thing to say you’re ready to change. It’s another to convince the rest of the people in all the cubicles in all the offices in all the world that you’re right. You know it, and the person in the next cubicle knows it, but the chowderheads in the X-0 suites seem intent on running the company off the cliff. Why? In a word, caution.

No, Really, Tell Me what You Think…

In the last few months, I’ve been asked for my opinion on how to improve certain search properties. I think the people asking me are hoping for an answer like this: “You see all these ads you’re trying to get people to click on? Well, all you have to do is move them here and put this colored box behind them, and people will sprain a finger trying to buy from your advertisers. It’s that simple!”

Of course, it’s not. It’s understanding all the things that the Cluetrain authors were trying to get across. It’s understanding that markets are conversations, that we’re sick of advertising, that we long for authenticity and transparency, and that we can sniff insincerity and BS a mile away. It’s saying that you have to worry about users first, build up truckloads of trust, and then figure out how to make money. And that’s just not likely to happen when you already have an existing search property.

The problem is that you’re already somewhat successful. There’s existing revenue and advertisers. Generally speaking, although attrition is higher than you’d like, most of the advertisers keep coming back. And as long as they’re doing that, management won’t be very motivated to change. Because the changes required are not simple fixes. They’re stripping things down to the foundations and rebuilding for the user. And that means a lot of money, and almost certainly lost revenue in the short term, against the remote possibility of long-term gain. That’s a ton of risk, and it’s not surprising that someone in the C-level executive wing is unwilling to stake their corporate reputations on this particular roll of the dice. There’s a lot better chance you’ll go down in flames than be crowned a hero.

The Illusion that You Have a Choice

But the irony here is that while it appears you have a choice, you really don’t. Because if you don’t take this chance, someone with a lot less to lose will. And eventually, that someone else will win. They’ll win, and you’ll lose, because Web traffic is a zero-sum game. Just ask every search engine who’s not Google. So while it appears there’s way too much to lose by reinventing your business model, it’s much, much riskier not to. Because as much as you think you’re in control of your business, you’re not. The users are, and you have them now by the simple virtue of there not being a better place to go — yet. In the Internet world, there will always be a better place to go, eventually. Either you build it or someone else will.

Last month, in a hotel lobby, I was having this conversation with somebody who had asked me my opinion. I basically told him what I’m telling you today and asked him if his company had the courage to do this. He wasn’t sure, and asked how important it was. I said it depends on the competition. He was a little reassured, because their competition is even more cautious. The reassurance was short-lived when I replied, “Ah, but that’s the competition you know about. Chances are, this is going to come completely out of the blue and you won’t know what hit you.”

I suspect people are going to stop asking my opinion.

Interfaces are only Skin Deep

Steve Haar had a great comment on my post about Ask breaking through in the search market share battle:

I agree about the interface being much better with Ask. But, what about the search results? I took a look at them compared to the others and, between sites for adsense and dead links, the results were so poor I was embarrassed for them. I wonder how many of the searches were from repeat users vs once and gone?

I think Steve points out a fundamental concept that we might tend to forget from time to time. The best interface on a piece of garbage just gives you nice looking garbage. Now, I’m not saying that Ask is garbage. But I’ve seen some cases (and heard anecdotally many more) of some issues with spam and I do think they have some work to do. Ultimately, it’s the quality of the results that will determine marketshare. In fact, a nice interface on top of poor results will kill Ask quicker than ever, as it draws more trial users (as Steve alludes to) and generates more negative word of mouth. This is exactly what Ask doesn’t want to happen.

I’m the first to speak up about the importance of the user experience, but it’s important to remember that the interface is only one small part of that. Ultimately, there needs to be enough under the hood to meet and exceed the user’s expectations. Steve (and others) are indicating that Ask might be falling short in the relevancy horsepower department.

Canadian Car Buyers Calling BS on Higher Prices

The internet is a wonderful thing.

graph120In the last 5 years, and particularly in the last few months, the Canadian dollar has rocketed in value against the US greenback. It doesn’t seem that long ago that a Canadian dollar was worth about 60 cents American. Now, we’re pushing the $1.08 range, and there seems to be no end in site. In the last 120 days alone, our dollar has gained over 16 cents against it’s American counterpart.

Now, as you might imagine, this has a number of implications for Canadians. It’s good for cross border shopping, but terrible for exporters. One area that wasn’t so good was car buying. When the values of our respective dollars were flipped, we could understand why we had to pay 10 to 15 thousand more for the average vehicle. It was a simple exchange rate calculation. But why did the price gap remain when our dollar started to rise?

Just today, I went to Toyota’s Canadian website (toyota.ca) to see what a fully loaded Prius would cost, delivered and ready to drive. The price tag came to just over $41,000. The exact same vehicle, just across the border in Spokane, Washington? $28,000. And remember, that’s $41,000 Canadian. If we calculate at current exchange rates, that’s $44, 300. Everytime we buy a vehicle, Canadian’s are getting screwed, in this case, to the tune of over $16,000.

Now, thanks to the transparency of the web (it took me about 4 minutes to figure out the extent to which Toyota was screwing us) Canadians figured out pretty quickly that we were being had, which lead to a flurry of cross border shopping. Suddenly, vehicles were flying off the lot, headed north for the border. The manufacturer’s answer? Certainly not to consider a pricing change. No, they forbid US dealers to sell to Canadians. Of course, in today’s world, for every wall you put up, a dozen holes are quickly rammed through it. The auto brokership business is thriving, thank you.

Now, as a Canadian, that makes me furious. There’s no excuse for it. The media have started to pick up on this and there is some pressure on the manufacturers, all of which have remained stonily silent. I suspect that if the reverse were true, and American’s were being fleeced out of $16,000 everytime they buy a vehicle, they’d be a little more responsive. I did hear Buzz Hargrove, spokesman for the Canadian Auto Workers Union, say that this wasn’t about pricing, it was about keeping jobs in Canada by supporting the Canadian auto industry. What? Like the Canadian auto industry is supporting us by giving us clear, fair and transparent pricing? Buzz, you have your head up your ass. This is about not treating customers like a bunch of stupid sheep. It’s about doing the right thing and valuing us. And if you can’t do that, you don’t deserve your jobs. I want Canada to be able to compete in a fair and open market place, not by slipping a fast one past your neighbours.

By the way, this is not just about cars. We’re paying more for pretty much everything. If you’re in Canada, pick up a book and see the Canadian price, relative to the American price. We’re paying about 40% more. A friend of mine actually had some US cash with him and tried convincing the seller to give him the US price if he paid in US cash. It didn’t work.

Now, there’s are somethings that will always be more expensive in Canada. We’re a big country, a lot of areas are fairly remote and we have a different tax structure. I’m not expecting parity with the US. I’m expecting fair pricing. I’m expecting a frictionless marketplace that let’s the customer decide.

What the manufacturer’s, like Toyota, don’t seem to understand is that in today’s world, the customer isn’t ignorant. We know when we’re being screwed. And we don’t like it. Why would you expect us to react differently?

Why Do We Keep Buying from Bad Businesses?

There’s an Italian grocery store in the town I live in. In fact, there are two. Most of our family, including my wife, shops at the one. They very seldom go to the other. Yet, I constantly hear how bad the service is at the store they frequent. I’ve heard hair raising stories (I’m not sure how true they are because I don’t personally shop there) of repackaging outdated products so the best before date didn’t show, rancid cheeses, repackaging produce so the rotten ones were out of sight at the bottom of the package and the owner cruising other grocery stores, buying outdated products from them and then selling them in his own store. And if you happen to take something back and complain, you’re immediately questioned as someone who is trying to scam the store. At best, the store takes a “you should know better, buyer beware” attitude. Now, it’s a generational thing as well. The owner ascribes to the “whatever it takes to get ahead” school of business, where his children, who are gradually getting more involved, seem to be a little less clueless about the importance of happy customers and are trying to change things.

But my wife keeps buying there. Why?

The competition doesn’t seem to have the same problems, or at least, not to the same extent. My wife never shops there. Again, I ask, why?

Well, according to my wife and the few other family members I asked, it comes down to three things. Convenience, price and some twisted sense of obligation to the family that runs the offending store. I suspect the last one has a lot to do with Italian culture, so may not be applicable in all circumstances. (Incidentally, they used to know the family that ran the other store but stopped patronizing it when they sold to store to owners they didn’t know).  But the other two, price and convenience, are, I suspect, more universal motivations.

I’ve seen it myself. I hate shopping at Walmart. Most people I know hate shopping at Walmart. It’s too big, too messy, too loud and the service generally sucks. But I shop there. Why? Because of price and convenience. It saves me a stop somewhere else, because it has a little of everything. And the prices are generally lower than the competition’s.

Seth Godin himself, the king of the Purple Cow and remarkable products, regularly blogs about bad experiences he’s had with businesses he’d rather not frequent. Bad airlines, bad theme parks, bad hotels. And I use Seth as an example purposefully. There’s probably no one on the planet more active in exposing bad business, but even he’s still giving them his money, and then bitching about it after. Why? I suspect convenience and price are the culprits.

Now, sometimes, there’s literally no alternative. One of the worst airline experiences I ever had was on United. Try as I might, I just couldn’t find another flight from Chicago to Toronto that got me there anywhere close to the times I needed, so I had to suck it up and fly United. And sure enough, United delivered the experience I was expecting. In fact, they exceeded my expectations, but not in a good way.

We keep crowing about the new control consumers wield. But with that control comes responsibility. We complain about bad advertising and bad businesses, but we continue to patronize them. We absolve ourselves of any blame for the twisted, greedy, profit crazed culture we’ve spawned over the past century. But it wouldn’t be this way if we simply stopped buying from bad businesses. Ultimately, we’re to blame. We might have to pony up 10% more on occasion, or go a little out of our way so we don’t have to worry about getting two rotten tomatoes at the bottom of the package or a bag of rancid pasta. One of the beautiful things about our free market economy is that if people stop buying, companies go out of business. If you’re bitching about a business, remember, it’s you that’s keeping them in business.

Gord’s Weekly Rants: Agency Cluelessness, Measuring Engagement & Selective Perception

I’ve been a little grumpy this week. And you can tell from the two columns I wrote.

First, in MediaPost, I took on big agencies and the continued cluelessness I see around search:

Will Agencies Get Search: Don’t Hold Your Breath

It seems like anytime I have a conversation with anyone who knows search and its effectiveness, we always come back to the same question: “Why don’t more ad agencies and brand advertisers get search?”

Then I decided to take a swipe at the ARF’s ill fated attempt to create a one size all metric around engagement. In this column for Search Engine Land, I dove fairly deep into how we psychologically perceive and cognitize ads. If selective perception, schemas and priming are your bag, check it out.

Taking On ARF, Engagement, Interruptive Advertising… And Whatever Else You’ve Got!

In 2005, The Advertising Research Foundation (ARF), through their MI4 Initiative, decided to embark on the Quixotic quest of defining engagement. The impetus was finding a more appropriate and applicable metric that could stretch across the rapidly expanding number of channels that were exploding through digital delivery. So, the good folks at ARF assembled a bunch of agency people, various publishers and yes, even a few search marketers, to try to thrash out a definition for a standard metric that could apply equally to video, print, digital display, audio and text. I watched the proceedings from the sideline with skepticism.

It’s sounds trite to say there’s a revolution happening in marketing. Everybody, including CMO’s for the big brands and big agency flacks are saying the same thing. Almost everyone is talking the talk. But almost no one is walking the walk. I guess it’s a lot easier to say than to do. And I think that’s the sticking point. More and more, marketing is about delivering on every customer experience opportunity. And that’s not a marketing function. That’s the very DNA of a company. Agencies can’t do that for you. It requires a CEO that tends to get obsessive and dictatorial about the core purpose of the company (Disney and family entertainment, Jobs and design, Neeleman and a better flying experience, Brin, Page and User defined relevancy).

Through my research, I’m finding that an intellectual level, everybody gets that something fundamental is happening here. There are thousand of signatories of the Cluetrain Manifesto, published in 2000, 7 years ago. Every one of them says, “Right on, absolutely, you guys rock!” (I paraphrase). How come, then, I still see some many crappy customer experiences, advertising seems less authentic, more intrusive and louder than ever, and clueless corporations with questionable ethics and continuing control fantasies. Because, it’s one thing to be a silent revolutionary who’s read the subversive manifesto and smirkingly nods their head in agreement. But how do you do something about it? Unless you have X-O level support, you’re doomed to failure.

Example, one of the signatories: – “I’m on the train! Now, can you send this to my CEO?” Holly Harrington, Web Developer, Intel

What’s needed is a true revolution where some corporate monarchs are toppled and the rebels take control. We need more corporate juntas. But those just don’t happen, do they? Because when your Corporation X, with umpteen billions in annual revenue, who’s going to have the guts to say, “Hey, we’re doing it all wrong and we have to change everything” and to do that in full knowledge that it will decimate earnings for at least 5 years. No, we’re not going to see the change for the big corporations. American Airlines or United is never going to say, “God, flying on our planes suck”. It’s going to come from the JetBlues, the Googles and the next generation who get the fact that it’s all about giving people something to talk about.

Will Agencies Get Search? Don’t Hold Your Breath

First published November 1, 2007 in Mediapost’s Search Insider

It seems like anytime I have a conversation with anyone who knows search and its effectiveness, we always come back to the same question: “Why don’t more ad agencies and brand advertisers get search?”

Just this week, I was having this conversation. Twice, in fact. One of my pet peeves is an arbitrary allocation of budget to search, with no regard for the objectives of a cross-channel campaign. “We’ll take this pile and give it to television. We’ll take this slightly smaller pile and give it to print. Here’s a small pile for online, and, oh, make sure you take a little bit of that and set it aside for search, because everyone’s telling us we should be doing search.” I guess I shouldn’t be complaining. At least there’s now a little bit left over for search, which is a vast improvement from where we were just a few years ago.

But what this approach does is force your search campaign to be managed to budget, rather than to overall objectives. So we see more restrictive targeting, movement down the tail into longer and more specific key phrases, day parting and flighting, geo targeting and other ways to slice and dice the campaign to get the best quality clicks from the budget available.

Now, there’s nothing wrong with this. It’s called campaign optimization. But it’s often done to keep within an arbitrary budget cap that has no logical reason to exist. I’ve said it before and I’ll say it again. Search dollars should be the first ones in, not the last. Take as much search inventory as you can get. Judge your costs per acquisition not against your top performing keywords, but against your other channels, both online and offline. If even the marginal search traffic is generating a lower CPA, beg, borrow and steal as much budget as you can and top up search. Only then should you move from “pull” (prospects holding up their hands to purchase through search) to “push” (trying to persuade latent prospects to purchase). Only put restrictions on your search campaign if you’re absolutely certain that another channel can exceed its effectiveness.

The Classic Brand Building Gambit

Sure, you say, but what about ‘branding”? That’s TV’s domain. Well, I disagree. I think there’s no better branding opportunity than deep engagement with a Web site from a qualified prospect. Again, this is someone well down the funnel who is considering his or her purchase options. And search drives these opportunities. Sure, TV, print and other channels can build brands, but I challenge anyone to prove to me that they build brands as cost-effectively as search driving Web site engagement. I’ve yet to see a study that shows that. I’ve seen several that show search blowing away other channels, including the CPG study I wrote about last week. Brand-build with prospects that are ready to buy first, then build with the “maybe, someday” crowd with what’s left over.

So, why is it such a struggle to get search on the horizon of big agencies and advertisers? I’ve come to the conclusion that search is being held back by four things:

Search is small. Advertisers and agencies like to think big. They like big, bold ideas. Killer campaigns. Knock-your-socks-off creative. Search is none of those things. Search is thousands of micro-niche campaigns. Search is granular and gritty. Search is turning a whole bunch of dials and pulling a lot of levers, to squeeze out new customers a few at a time. You can’t “unveil” a new search campaign, like snatching a sheet off a sculpture. Launching a search campaign is more like putting a million grains of sand into a bucket, one spoonful at a time. That’s not a concept that “brilliant” advertising minds can get fired up about.

Search is measurable. You can measure the hell out of search. You can hold everyone accountable. You can demand to know who screwed up the campaign because your ROI dropped 10 points. That can cause a lot of red faces round the ol’ agency conference table.

Search is hard. Because search is granular, search is hard. It takes a lot of work to squeeze out an impressive bottom line. And the harder you work, the more impressive that bottom line will be. You’ll never hit a search home run with one inspired brainstorm. There is no golden concept. You just keep plugging away, tweaking keywords and pulling in prospects. Agencies and big advertisers are looking for that single perfect run down the mountain, with fresh powder and the sun shining. Search is more like cross-country skiing up the mountain.

Search is utilitarian. Search is constantly accused of not being sexy. That drives me nuts. The irony is that in pigeonholing search as being boring and utilitarian, all these brilliant advertising minds are missing the biggest idea of all: search works because it’s the customer driving the process, not the advertiser. All you have to do is a half decent job of meeting them halfway. Some say it’s that lack of control that scares the bejeebers out of agencies and brand marketers. To be fair, I don’t think that’s always true. I just think that search just doesn’t get the juices going in the average marketer. It may not be that they’re scared; it may just be that they’re bored.

And for all these reasons, I don’t think big agencies will ever truly get search. It’s too much of a cultural mismatch for them. They’ll bring search in-house, but they’ll silo it off, in a back room, far from the playground which is really where everyone wants to be, cranking out killer creative for the next TV campaign.

It’s just too bad that those TV ads won’t work very well. At least, not when you compare them to search.