Author Archives: ghotchkiss

Climbing the Slippery Slope of Advertising

First published June 6, 2013 in Mediapost’s Search Insider

Google’s Matt Cutts is warning advertisers not to try passing off “native ads” – or advertorials – as legit content. Apparently, the line between advertising and content continues to get blurrier. The reason is that advertisers are still trying to find an ad that works. And they have been for over 300 years.

The first newspaper ads, which seem to mark the dawn of advertising, appeared very early in the 18th century. Because they looked just like the articles surrounding them, they had to be labeled as an “Advertisement.” Sound familiar?

Now, wouldn’t you think that if you’ve been doing something for over 300 years, you would have figured it out? So why does most advertising still suck? Why are we still trying to find some magic formula that works.

We could attribute it to changing technologies, saying that advertising continues to evolve because the marketplace it operates in is in constant flux, along with the delivery channels it uses and the creative possibilities it offers. That would be what an “advertiser” would tell you.

The answer, I think, it a bit simpler than that.  It comes down to a three-century disconnect between the market and the marketers: marketers want advertising, the market doesn’t. At least, we don’t want advertising in the form that it usually takes. Advertisers have been tinkering for all that time to find something the public doesn’t reject outright.

Perhaps, as we often do in the Thursday Search Insider, we can find some clues in the etymology of the word. “Advertisement” comes from the French verb “avertir” – which means to give notice or, more ominously, warning. Ironically, the very word we use to label our industry came from roots that carry a negative connotation. To move it to a more positive light, we could say that the purpose of advertising is to make us aware of something we weren’t previously aware of. That seems rather benign. Helpful, even. And it would be accurate to say that the earliest ads aspired to this purpose.

But somewhere along the line, ads stepped over the line and became something we learned to hate. How did this happen?

Like many of the social issues that plague us today, the roots can be traced back to the Industrial Revolution. Technology enabled scale. Mass production became reality. And, to keep pace, advertising showed us its less benign side.

Prior to mass production, the output of a product was limited to the resources of a producer. Increasing quantity usually had an inverse impact on quality, which relied on the skills of a single craftsperson. One person could only produce so much. The first brands were introduced by these craftspeople to identify their products, differentiating them from inferior competitors.

But with mechanization and the introduction of the assembly line, suddenly scale became virtually unlimited. Uniform products could be produced by the trainload. Profits became tied to scale, and greed became tied to profit. From that point forward, the three moved in lock step.

It was at that point that advertising moved from being a helpful notice to an annoying plea to buy crap we don’t need. And that’s when advertisers had to learn to start pushing the public’s buttons, whether we wanted them pushed or not. Everything started to go off the rails early in the 20th century, and the wreckage really piled up with the introduction of mass communication. Suddenly, unlimited greed had an unlimited capacity to annoy us. Advertising couldn’t stop at informing. It had to start selling.

The twist in all this came right at the end of the “Century of Annoyance.”  In 1998, Goto.com introduced paid search (no, it wasn’t Google). It was an ad with one purpose, to make someone aware of something they weren’t previously aware of. And it was delivered in the perfect context. The market, in the form of a searcher, was looking to become more aware about something by seeking out new information. It gets even better. The searcher could decide whether or not to take the advertiser up on their offer by choosing to click or not.

Of course, with time, we advertisers will figure out a way to screw that up too. The good news, if you’re Matt Cutts, is that it means you’ll have a job for the foreseeable future.

Meet My Underwood No. 5

First published May 30 in Mediapost’s Search Insider

I collect typewriters. I don’t know why — I just do.

As I write this on a Bluetooth keyboard connected to an Apple Macbook, where the words I type appear on a screen through some magic of integrated circuitry and electrochemistry, I can’t help but cast envious glances at the 1923 Underwood No 5. Typewriter that sits on my credenza.

Now that is a piece of technology. It’s jam-packed with mechanical linkages and doodads that hint at wondrous functionality. It’s a machine built to do serious stuff. If I threw my Macbook through a window, there’s a 50/50 chance that no one would notice. It might not even break the glass. There’s a greater chance that no one would care. But if I throw that Underwood through a window, I’d be making a statement.

If you clicked on the link above, you’ll see that the Underwood didn’t want to hide its underbelly. Side windows and plenty of cutaways allow users to fully appreciate the almost 30 pounds of metallic integration that drove this particular typewriter. Nothing was hidden under the hood; it was all out there for everyone to see.  When you hit the carriage return, you unleashed a string of mechanical causes and effects that reminded you of a Rube Goldberg machine — like playing Mousetrap when you were a kid. There was no nuance about the Underwood. It was full-on industrial cleverness.

There was also no obsolescence built into this machine.  The heart of the mechanical workings came from a design introduced in 1896 that defined what typewriters would look like and how they would work for the next six decades, until the introduction of the IBM Selectric in the ‘60s.

Can you imagine introducing a new product today that would enjoy a 60-year run? Most of us would be happy with a 60-month run.  By the way, my typewriter, which has just turned 90, still works like a charm, thank you.  As far as I know, my typewriter and Betty White are the only two things that are still working at that age.

As I write this column on my more modern keyboard, the only outward sign that I’m working on anything is the muted “Apple-tick” of the keyboard, a discreet repetitive sound that falls somewhere between a quiet thud and a click.  It’s certainly nothing that would annoy the person in the next cubicle. Even with an office full of them, it sounds more like a gentle pattering of rain on a rooftop.

But fire up a steno pool full of Underwoods and you have a cacophony that literally screams productivity.  Typing a century ago was not for the faint of heart. It was a full-on sensory experience that you had to warm up for.  I, for one, remember typing class where the proper technique had to be drilled into you, preparing you for the sheer physicality required to effectively operate one of these machines. It was more basic training than user experience.

Why do I love typewriters? It’s certainly no practical reason. It’s pretty hard to file an online column written on an Underwood. I think, rather, that I love them because they remind me of a different time — a time when we were more muscular in our approach to technology. We were brasher, cockier and strived for permanence. We wanted to leaver a footprint that would last for decades, rather than cash out our startup in five years. We were not afraid to sweat a little bit to get ahead.

Or maybe it’s because it’s the only thing in my office older than I am.

The Momentum of Marketing

First published May 23, 2013 in Mediapost’s Search Insider

After becoming a parent, I discovered that there are no shortcuts to being a Dad. Contrary to popular belief, there’s no such thing as “quality time” with kids… there’s just time. You have to be there, as much as you can be, because you never know when those moments will occur that will cement your relationship with your children. You keep trying, you keep putting in the time, you keep doing the things you have to do to be a parent. Think of it as relationship “momentum.”

The same is true, I believe, in all worthwhile endeavors. Activity breeds success. And that includes marketing. If you take your foot off the gas, you lose momentum.

I’ve found that myself in the last few years. The marketing strategy of our company was all about activity. We conducted research, we published whitepapers, we blogged, we spoke at conferences, we held webinars — we never missed an opportunity to generate awareness. It was a lot of activity, aimed at maintaining our marketing momentum. And it worked. We had a profile in the industry that was probably out of proportion to our actual share of business. When it came to maintaining a profile, I think we punched above our weight.

I was the producer of much of this activity, so as our company profile rose, so did my own personal one. I was constantly fielding requests to speak, comment, participate or write.

But for various reasons, I’ve taken my foot off the gas recently. I’m not nearly as active in the industry as I was previously. My assumption was that the momentum would carry me for some period of time. I was wrong. The minute the activity decreased, so did the opportunities.

Now, this was partly by design. I knew that my previous industry profile would start to slip and so I didn’t panic. But still, I was surprised at how quickly it happened. And because of that, I suspect there’s a cautionary tale here for marketers. If you produce content or generate thought leadership, a hiatus can be costly. That lost momentum can take several months to build again. In fact, you might never get it back.

For myself, I’m now entering a new phase of my career, so my activity will change over the coming months. I still intend to be active — perhaps more so than ever — but it will be aimed in a new direction. I do have the advantage of past experience. I know it can work, because it has worked in the past.

So I leave you with these words of advice — be active in your marketing efforts. Always be producing new content, generating awareness, and raising your profile. I believe busy parents are generally good parents — and the same is true, I suspect, for marketers.

The Stress of Hyper-Success

Last week, I talked about the inflation of expectations. In that case, it was the vendors we deal with that were the victims of that inflation. But we don’t only have inflated expectations about others. Increasingly, we measure ourselves against our own expectations. And that is leading us down a dangerous path.

The problem is that success is a relative thing. We can only judge it by looking at others. This creates a problem, because increasingly, we’re looking at extreme outliers as our baseline for expectations.

Take social media, for instance. Women feel more stressed than satisfied after spending time on Pinterest, according to a recent survey. “Pinterest stress” is the official label for feelings of inadequacy in trying to measure up against the unrealistic examples of domestic perfection shared on the female-dominated social network.

But it’s not just women and Pinterest. One-third of Facebook users feel worse after visiting the site. Why? Because we feel envious after going through the pictures of someone else’s dream vacation. Social media invites comparison. We try to measure ourselves up to the achievements of others in our social circle. There are two problems with that: we are naturally jealous of our neighbors, and our neighbors tend to lie (or at least embellish) when they post of their own accomplishments.

Added to this is the unnatural effect of the Power Law curve. Not all online posts about accomplishments are equally popular. We tend to focus on those that are outstanding — those that are set apart from the average. These online examples, representing the extreme upper limits of success and achievement, take their place at the head of the Power Law curve, drawing a dramatically bigger audience. We ignore the commonplace, which lives somewhere in the Long Tail. Our own quest for the remarkable (humans never gossip about average, everyday topics) leads us to focus on the unrealistic.

So the more access we have to the achievements of others, the more skewed our idea of success becomes. What we don’t realize, however, is that we’re measuring ourselves against the very highest percentile of the human population.

Take salaries, for example. What would be a yearly amount that would make you happy? Economists Angus Deaton and Daniel Kahnemann asked that very question — and it turns out that $75,000 a year is the magic number. Below that number, the day-to-day stress of just getting by leads to chronic unhappiness. But above that number, people seem to feel more fulfilled and are generally in a more positive frame of mind. But after you get past that general threshold for happiness, more money doesn’t seem to always equate to increased happiness. Millionaires and billionaires are not that much happier than the rest of us.

Yet if I asked you how much you wanted to make, I suspect the number would be higher than $75,000. And I doubt that it would have much to do with happiness. It would be because we know of people making more than us — much more. We have no idea if those high wage earners are happy or not, but we do know they pull down a much bigger paycheck than we do. So we believe we should aspire to that standard, whether it’s realistic or not, in the mistaken belief that it will make us happier. It won’t, by the way. We humans are notoriously bad at forecasting our own happiness.

This is one of those strange Darwinian detours that evolution has saddled us with. In our original adaptive environment, doing better than our neighbors was a pretty sure bet for superior gene propagation. We’re hardwired to not just be envious but to strive to compete. That made sense when our target was the person we were competing against for food, shelter or sexual access.  It doesn’t make sense when our competition is a far removed, sometimes fictitious ideal propagated by the media and the viral force of social sharing.

Somewhere, a resetting of expectations is required before we self-destruct because of hyper competitiveness in trying to reach an unreachable goal. To end on a gratuitous pop culture quote, courtesy of Sheryl Crow: “It’s not having what you want, It’s wanting what you got.”

The Straw that Broke the Market’s Back

First published May 9, 2013 in Mediapost’s Search Insider

Customers are fickle — and I suspect they’re getting more fickle.  Perhaps they’re even feeling a little entitled.A recent survey shows that customers tend to bail on a company not because of a big time screw-up, but because of the accumulation of a lot of little annoyances. Soon, their frustration reaches a tipping point and they look elsewhere.

It would be easy to point the finger at the companies and demand that they get their collective acts together. But I suspect there’s more at play here. It would be my guess that customers are getting harder to please.  And I would further guess that the Web is largely to blame. I think it comes down to a constant rise in our collective expectations, while the reality of our experiences fall behind.

The balance between our expectations and the actual experience determines our loyalty to any course of action. If we have low expectations and a poor experience, we aren’t really surprised, which dampens our subsequent disappointment and leaves us more willing to forgive and forget.  If we have low expectations but a good experience, we’re pleasantly surprised, making us more apt to return. If we have high expectations and a good experience, we get a double hit of happiness. First, we enjoy the anticipation, then we appreciate that the experience actually lives up to our expectations. For a vendor, the scariest scenario is the last of the four: high expectations but a poor experience. In this case, we walk away disappointed and frustrated.

Now, balancing expectations and experience wouldn’t be that difficult for any moderately competent company if those expectations were realistic. But I suspect that more and more of us are entering into our respective experiences with unrealistic expectations. We’re setting our vendors up to fail.

Expectations are set partly based on our past experiences, but they’re also set by the experiences of others. We create our expectation set points based, in part, on what we hear from others.

The Web has created an open, accessible market of experiences and hearsay. We hear about the bad, a feedback loop that increasingly is calling out poor customer service. But we also hear about the good.  Correction – we hear about the exceptional. The “good” is not remarkable. It generally falls within our expectations and so goes without comment. But either the very good or the very bad is exceptional, and we are more apt to comment on it online. Not only do we comment, we also embellish, accentuating the plusses and minuses to make it a better story. Therefore, what we hear from others sets either a very low or very high bar. We steer clear of the low bars, but the high bars stick with us, contributing to the setting of future expectations.

The other thing the Web has done is create expectations that overlap domains.  Previously, when our expectations were set based on our own experiences, they tended to stay domain-specific. We had an expectation of what it would be like to buy a car, stay at a hotel, eat at a restaurant or purchase a new pair of shoes. With the Web, cross-pollination between domains is increasingly common. A head marketer for a well-known industrial manufacturer once said to me, “When it comes to online experience, my competitors are not the traditional ones. I’m competing against Amazon and eBay. That type of experience is what people expect.”

This “nudging up” of expectations is done without much rational consideration. We don’t care much for the reality of operational logistics in any particular domain. We just want our expectations to be met, no matter where those expectations might come from. And when they’re not, we pull the plug on that particular vendor, assuming another vendor can do better in meeting our inflated expectations. The Web has also engendered a virulent “grass is always greener” view of the world. We know a competitor is just a click away (whether or not that vendor is any better than the incumbent).

I’ll be the first to call out a bad customer experience, but when it comes to the increasing fickleness of customers, we should remember that there are two sides to this particular story.

Live by the Data, Die by the Data

First published in Mediapost’s Search Insider – May 2, 2013

While the Search Insiders tear up the stage in Amelia Island, Fla., I’ve been lurking virtually, watching the posts that emanate from the Everglades. Apparently, “Shitty” marketing is done for, Pinterest is the new darling of search marketers, and those same marketers are apparently fudging the ROI numbers on their search campaigns, over attributing to paid at the expense of organic, just so those paid search budgets don’t shrink. I’m assuming all this has data to back it up.

Here are other things that data supports. Facebook ads that feature cute, fuzzy critters get “liked” more often. Retired execs love the PGA, but are increasingly watching it on mobile screens. And, if you really want to beat the stock market, just invest based on who wins the Super Bowl. If an original NFC team wins, the stock market will have a bull run over the next year. But if an original AFC team wins, the bears will rule and the market will tank (which is confusing, because the Chicago Bears are a NFC team, while the Buffalo Bills, which is the closest thing to a bull in the NFL, are an AFC team – but I digress). Since 1967, the correlation between the two is close to 80%, and for a 20-year streak from 1967 to 1987, the correlation was over 90%. That odds of that correlation are 1 in 4,500,000, give or take a few thousand.

It can’t be chance, can it? If we’re paying attention to the data, we should all fire our brokers and just invest according to the current holder of the Lombardi trophy.

And that’s the problem with an overreliance on data. You start seeing signals where there is just noise. We flip our perspective to convince ourselves that there is a story where there may be none. Let’s use the Super Bowl example again. We look at the 1 in 4,500,000 odds and assume it must be more than chance. But this is faulty logic. The probability of “one” ticket winning a Powerball lottery is astronomically low, but the probability of “a” ticket winning it in any given week is pretty good. Likewise, the probability of “a” given indicator correlating with stock market performance is low, but the probability of any indicator having a positive correlation is very good. By the way, other stock market indicators with a long winning streak are lipstick sales, the length of Vanna White’s hemline and butter production in Bangladesh.

The problem is one of “overfitting.” It’s what happens when the irrationality of humans runs headlong into a mountain of data. We try to make a model work based on a subset of data, and mistake random patterns for underlying relationships. What seems to work okay in a test environment falls apart in the real world. Models get too complex, trying to accommodate too many variables, and we fall into the trap of manipulating the “what” of the data, rather than trying to understanding the “why” that’s generating the data.

I see this happen all the time in marketing. It’s particularly prevalent in the world of multivariate testing. We test variables at random, looking for the best combination. In our ongoing tweaking, we fall into a testing spiral that focuses on detail, forgetting about what the overall objective is. For example, we maximize conversion rates on one particular call to action, not looking at the impact across the entire spectrum of user experience. We become myopically optimized at the same time we draw further and further away from understanding our customers and their intent.

Marketing is still about human connection. We can analyze mountains of data, trying to understand what’s driving our customer’s behaviors, seeing patterns where they may or may not exist.

Or, we could just ask a few of them.

Read more: http://www.mediapost.com/publications/article/199503/live-by-the-data-die-by-the-data.html#ixzz2Sdtedfcz

Anchoring and Search

First published in Mediapost’s Search Insider – April 25, 2013

A few columns back, I talked about psychological priming and how it could play out in a search environment. In today’s column, I’d like to talk about a related concept: value anchoring.

Given almost every product category, with the exception of those things we buy very frequently (in my case, chocolate bars, beer and books), we don’t really know what the current going price would be. Either we don’t buy them frequently enough, or the price is subject to market volatility. We may have a rough idea of prices, but we need to adjust this price estimate to the current market conditions.

We need a pricing framework because, as consumers, we need to establish in our own minds what a “fair” price would be. This concept of fairness taps into some pretty deep emotional triggers — ones that vendors should be aware of. I’ll explain in a minute how these concepts of fairness can play out in a typical purchase journey.

Remember, our determination of what price is fair is totally arbitrary. It’s not as if we know objectively what the “fair” price for a carton of eggs, a big-screen TV, or a hotel room in San Francisco is. We make these pricing decisions based on comparisons to available information. And it just so happens that the first piece of information that is available to us tends to play a significantly bigger role than any of the subsequent information that we may come upon. That first price we’re exposed to anchors our heuristic comparisons and tends to linger in our subconscious, triggering emotions that drive our perceptions of fairness.

If we have to adjust our pricing expectations upwards, because the first price baseline is too low, we feel frustrated and taken advantage of.  Our brain’s warning signals go off and we suddenly feel anxious and go on the defensive. Our mood takes a turn for the worst.

If, on the other hand, we are able to adjust our pricing expectations downward because we’re finding prices substantially lower than the first price encountered, we’re almost euphoric. The reward center of our brain is telling us we’re getting a great deal and the resulting dopamine hit gives us a buying high.

Once again, these feelings are based on nothing more than us grasping at the first number we see, and then judging all subsequent pricing information against it. But the fact that this is nothing more than a gut call is exactly the point; its lack of rationality does nothing to diminish its emotional punch.

Now, let’s look at how this might play out in search. Remember, there’s a pretty good likelihood that many consumer journeys may start with a search engine. It’s also likely that many search advertisers might advertise the lowest price possible in order to capture the click. Given this, it wouldn’t be surprising to see that the initial benchmark price could be a very low one. There’s nothing wrong with this, as long as the prices the buyer will eventually pay will land in the same ballpark.

But, as is often the case, if prices start rising quickly because of the inevitable “fine print” exclusions, conditions and lack of availability, the advertiser is going to trigger all the wrong emotional reactions in the prospect. Rather than “hooking” them by dangling an unobtainable low price as bait, they instead unleash a wave of negative emotions. Even if they end up still capturing the sale (due to the competition not being able to beat the inflated price) they will not be engendering any brand “love.”

This is yet another example of focusing on the end result without thinking about the journey. If we become myopically focused on conversion rates, for example, to the exclusion of all else, we might be ignorant of the long-term brand damage we might be causing by capturing those clicks through a digital version of the classic bait-and-switch con.

Read more: http://www.mediapost.com/publications/article/198937/anchoring-and-search.html#ixzz2SdvLkwGB

The No BS Rule

First published in Mediapost’s Search Insider – April 18, 2013

I have wasted a significant portion of my life dealing with BS. Mea culpa. I decided to become a marketer and it just comes with the territory. But here’s the thing. Maybe it’s cause I’m older, maybe it’s because I’m just getting grumpier, but I’m getting less and less tolerant of BS.

After one particular day when the scent of BS hung heavy in the air, I wondered, why? Why do we have to put up with BS anyway?  What would my job be like sans-BS? Trust me, it’s a liberating mental exercise. Try it.

How often, each and every day, do you have to exert extra effort, take on extra tasks, send extra emails, or have extra meetings, just because of BS? And here’s the thing: none of this extra work is productive. Zero. Zilch. It’s all just spinning our wheels, trying to move forward and get over the mound of BS in our way. In fact, in most cases, BS puts us in reverse. We lose ground because of it. I have no empirical evidence on this, but I suspect that a workplace would be at least 10 times more efficient and effective without BS.

In 2004 Bob Sutton had an epiphany when he wrote the original No Asshole Rule in the Harvest Business Review. He posed a bold question: What could a workplace be like without assholes? I pose a follow-up question: How much more productive could we be if we eliminated BS?

I’m not sure if it’s a hard and fast rule, but it seems that the degree of BS corresponds directly to the size of the company. Many small start-ups have little to no operational BS (depending on the personalities involved). In huge companies, BS is the operational norm. I think BS is naturally present in any random group of people, but at some point in a company’s growth curve, BS seems to move from being an irritation to be eradicated to being a foundational rule of engagement. BS begets BS.

All BS is not the same. Some varieties are more toxic than other. Here are some of the common types I’ve encountered.

Cover-My-Butt BS: “I screwed up and I don’t want to admit it” 

This is one of the most common varieties of BS. Tremendous amounts of corporate effort are expending covering collective butts.  Look, if you suck on a consistent basis, I should be able to say you suck. Even if you’re my boss.

Incompetence is poison for an organization. And, if I am competent but still screwed up, I should be in an environment where I’m not afraid of being crucified for my mistake. Everyone screws up.  Screwing up and incompetence is not necessarily the same thing. Risk-takers, visionaries and leaders have learned the importance of developing a disciplined approach to screwing up.

Stop using BS to cover incompetence. It sucks the energy out of any organization.

I’m Smarter/Bigger/More Powerful Than You BS

This type of BS is particularly nefarious, because it strikes at the upper levels of the organization. Executives generate huge clouds of intentional BS waging turf wars to establish corporate lines of power. Egos and BS are positively correlated in the workplace. The dangerous thing about this is that generally the executive making the call is so far removed from the situation that she has no perspective on it. But that doesn’t stop the BS. You might as well have two rams butting it out head to head in the boardroom. It’s just as productive and a lot more thrilling to watch.

This strain of BS can stop corporate strategy in its tracks. It usually comes disguised as mission statements, vision statements, core values or other BS-laden documents that have zero relevance to the real world. Don’t get me wrong — I’m a big believer in true corporate strategy, but 99% of what passes for this is pure BS.  It accomplishes nothing.

Throw it out and start over with something real.

I Hate Change/I Don’t Want To Do This BS

The final type of BS is more common on the front lines.  The cause is simple. We just don’t want to do something. So we create a BS screen to hide the real reason why we don’t want to do it. This is usually tied to one of the two previous types of BS. Either we’re lazy and/or incompetent and don’t want to do the thing (see Cover My Butt BS) or a boss is forcing us to do something stupid (I’m Smarter/Bigger/More Powerful than You BS). Either way, the natural reaction is to start BSing.

I believe we should all start actively seeking out BS and calling people on it. It shouldn’t be tolerated in the workplace. And I realize that it’s human nature. You can’t change human nature, right? Well, having sex is pretty natural too, and we don’t tolerate open orgies in the workplace.

It’s all a matter of choice and agreement. Let’s at least have the discussion. I believe it’s one worth having.

Don’t Use Technology as an Excuse for Bad Customer Service

First published April 11, 2013 in Mediapost’s Search Insider

We all have our horror stories about online customer service. Just in the past two weeks, I added two more to my collection.

After placing an online order with Costco, I’ve had to wait (at this point) a week after the promised delivery date to get the stuff I bought and paid for. Three separate attempts to contact the shipper have been unsuccessful – the first two were simply ignored and the last one resulted in the shifting of blame to the local agent, who was supposed to call me to resolve the issue. That was 48 hours ago, and still no call. I suppose I could invest more of my time to harass them until they actually respond, but frankly, at this point, I just want to wash my hands of the whole transaction.

With the other example, the damage was done before I ever made the purchase, thank heavens. I was planning a trip using Kayak and sorted my booking options according to price. There, in the same format as the search results, was an ad from a well-known travel brand. I assumed the ad would offer me a rate that was comparable to the other results above and below it. After all, I had sorted by rate, so position should equate to price.  In fact, the ad offered a lower rate than the search result immediately above it. The ad worked – kind of. I did click it, only to find the promised offer evaporated and my actual rate was four times the price of the competitor. I quickly clicked back to Kayak to book with one of the competitors, having learned to ignore any further ads from this particular company.

Here’s the troubling thing. Most of you will say, “So what?” These two stories are not that unusual. We’ve come to accept this level of service online as the norm. The online market place is SNAFU – in it ‘s most literal sense. My question is, why? Why do sellers feel they can get away with this, and, what’s more important, why do we, the customer, accept it as the new normal?

Here’s my hypothesis. We accept it because we can’t look the offending party in the eye. They do it because they don’t have to answer for it face to face. Anonymity and arm’s length transactions prevent crappy business-people and their practices from being held accountable.

We humans have a long list of subtle and not so subtle things we can do to ensure fairness in transactions – but they all evolved to work face to face. Over our history, we have evolved many social “governors” that play on our emotions. In general, they work pretty well, as long as we’re all in the same room, tent, hut, tribal circle or canoe. But these governors, 10 thousand generations in the making, are being rendered ineffective by technology in the space of just one generation. We’re hiding behind a computer screen because we can.

I’m sure the customer service agent at the courier company would think twice about promising me a shipment on a certain day – a promise she had no intention of keeping – if she was making that promise to my face and she knew I’d be back the day after the parcel failed to show up.

And I find it hard to imagine that a hotel, airline or car rental firm would offer me a rate that was totally fictitious if they knew the actual cost was going to be three or four times what they offered. At least, I find it hard to imagine they’d do that if I was standing across the counter from them at the time.

So why, I ask again, do we settle for less in our arm’s length transactions? I believe every online company should use the BIP rule of thumb – do business as if you’re doing Business In Person. Assume you’re looking at the person you’re dealing with in the eye. Treat them as if they’re your next-door neighbor. Before you screw them over, assume you’ll have to say “Good morning” every day as you hop in your car and go to work.

You have a conscience for a reason – use it for what it was intended for.

Seperating the Strategic Signal from the Tactical Noise in Marketing

First published April 4, 2013 in Mediapost’s Search Insider

It’s somewhat ironic that, as a die-hard Darwinist, I find myself in the position of defending strategy against the onslaught of Big Data. Since my initial column on this subject a few months ago, I’ve been diving deeper into this topic.

Here’s the irony.

Embracing Big Data is essentially embracing a Darwinist approach to marketing.  It resists taking a top-down approach (aka strategy) by using data feedback to enforce evolution of your marketing program. It makes marketing “antifragile,” in the words of Nassim Nicholas Taleb. In theory, it uses disorder, mistakes and unexpected events to continually improve marketing.

Embracing strategy — at least my suggested Bayesian approach to strategy — would be akin to embracing intelligent design. It defines what an expected outcome should be, then starts defining paths to get there. But it does this in the full realization that those paths will continually shift and change. In fact, it sets up the framework to enable this strategic fluidity. It still uses “Big Data,” but puts it in the context of “Big Testing” (courtesy Scott Brinker).

To remove the strategy from the equation, as some suggest, would be to leave your marketing subject to random chance. Undoubtedly, given perfect feedback and the ability to quickly adapt using that feedback, marketing could improve continually. After all, we evolved in just such an environment and we’re pretty complex organisms.  But it’s hard to argue that a designer would have designed such flaws as our pharynx, which is used both for eating and breathing, leading to a drastically higher risk of choking; our spinal column, which tends to become misaligned in a significant portion of the population; or the fact that our retinas are “inside out.”

Big Data also requires separating “signal” from “noise” in the data. But without a strategic framework, what is the signal and what is the noise? Which of the datum do you pay attention to, and which do you ignore?

Here’s an even bigger question. What constitutes success and failure in your marketing program? Who sets these criteria? In nature, it’s pretty simple. Success is defined by genetic propagation. But it’s not so clear-cut in marketing. Success needs to align to some commonly understood objectives, and these objectives should be enshrined in — you guessed it, your strategy.

I believe that if  “intelligent designers” are available, why not use them? And I would hope that most marketing executives should fit the bill. As long as strategy includes a rigorous testing methodology and honest feedback does not fall victim to egotistical opinions and “yes speak” (which is a huge caveat, and a topic too big to tackle here), a program infused with strategy should outperform one left to chance.

But what about Taleb’s “Black Swans”? He argues that by providing “top down” direction, leading to interventionism, you tend to make systems fragile. In trying to smooth out the ups and downs of the environment, you build in limitations and inflexibility. You lose the ability to deal with a Black Swan, that unexpected occurrence that falls outside of your predictive horizon.

It’s a valid point. I believe that Black Swans have to be expected, but should not dictate your strategy. By their very nature, they may never happen. And if they do, they will be infrequent. If your strategy meets a Black Swan head on, a Bayesian approach should come with the humility to realize that the rules have changed, necessitating a corresponding change in strategy. But it would be a mistake to abandon strategy completely based on a “what-if.”