Author Archives: ghotchkiss

The Ill Defined Problem of Attribution

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

For the past few years, I’ve sat on the board of a company that audits audience for various publications. One of the challenges the entire audience measurement industry has faced is the explosion of channels traditional publishers have been forced to use. It’s one thing to tally up the audience of a single newspaper, magazine or radio station. It’s quite another to try to get an aggregate view of an audience of publishers that, in addition to their magazines, have a website, several blogs, various email newsletters, a full slate of webinars, a YouTube channel, multiple Twitter accounts, Facebook pages, other social destinations, digital versions of magazines and an ever-growing collection of tablet and smartphone apps. Consider, for instance, how you would estimate the size of MediaPost’s total audience.

The problem, one quickly realizes, is how you find a common denominator across all these various points of audience engagement. It’s the classic “apples and oranges” challenge, multiplied several times over.

This is the opposite side of the attribution problem. How do you attribute value, whether it’s in terms of persuading a single prospect, or the degree of engagement across an entire audience, when there are so many variables at play?

Usually, when you talk about attribution, someone in the room volunteers that the answer to the problem can be found by coming up with the right algorithm, with the usual caveat something like this: “I don’t know how to do it, but I’m sure someone far smarter than I could figure it out.” The assumption is that if the data is there, there should be a solution hiding in there somewhere.

No disrespect to these hypothetical “smart” data-crunchers out there, but I believe there is a fundamental flaw in that assumption. The problem behind that assumption is that we’re accepting the problem as a “well defined” one – when in fact it’s an “ill-defined” problem.

We would like to believe that this is a solvable problem that could be reduced to a simplified and predictable model. This is especially true for media buyers (who use the audience measurement services) and marketers (who would like to find a usable attribution model). The right model, driven by the right algorithm, would make everyone’s job much easier. So, let’s quit complaining and just hire one of those really smart people to figure it out!

However, if we’re talking about an ill-defined problem, as I believe we are, then we have a significantly bigger challenge. Ill-defined problems defy clear solutions because of their complexity and unpredictability. They usually involve human elements impossible to account for. They are nuanced and “grey” as opposed to clear-cut “blacks and white.” If you try to capture an ill-defined problem in a model, you are forced to make heuristic assumptions that may be based on extraneous noise rather than true signals. This can lead to “overfitting.”

Let me give you an example. Let’s take that essential human goal: finding a life partner. Our task is to build an attribution model for successful courtship. Let us assume that we met our own livelong love in a bar. We would assume, then, that bars should have a relatively generous attribution of value in the partnership “conversion” funnel. But we’re ignoring all the “ill-defined” variables that went into that single conversion event: our current availability, the availability of the prospect, our moods, our level of intoxication, the friends we were with, the song that happened to be playing, the time of night, the necessity to get up early the next morning to go to work, etc.

In any human activity, the list of variables that must be considered to truly “define” the problem quickly becomes impossible. If we assume that bars are good places to find a partner, we must simplify to the point of “over-fitting.”  It may turn out that a grocery store, ATM or dentist’s waiting room would have served the purpose equally well.

Of course, you could take a purely statistical view, based on backwards-looking data. For example, we could say that of all couples, 23.7% of them met in bars. That may give us some very high level indications of “what” is happening, but it does little to help us understand the “why” of those numbers. Why do bars act as a good meeting ground?

In the end, audience measurement and attribution, being ill-defined problems, may end up as rough approximations at best. And that’s OK. It’s better than nothing. But I feel it’s only fair to warn those who believe there’s a “smarter” whiz out there who can figure all this out: Human nature is notoriously tough to predict.

Comparing and Contrasting the Classes of ’79 and ’13

First published July 2, 2013 in Mediapost’s Search Insider

My youngest daughter just graduated from high school. I graduated from my high school a third of a century ago. The things you read about every day here at MediaPost have made the world a much different place for her than it was for me.

Or have they?

I was actually struck these past few months with how her grad experience didn’t seem all that much different than mine. The biggest difference, it seemed, was in how she connected with her friends. But the “why” – the topics of those connections – seems very familiar.

She is graduating from a small school, with a grad class of just over 50. I graduated from a small-town high school in Alberta in a class of 70. Like me, she has gone to school with most of her class from kindergarten right through to grade 12 – so the social dynamics in both cases were fairly tightly woven.

Both classes, the class of ‘13 and the class of ’79, were under the temporary euphoria of youthful confidence. All things seem possible when you’re 18. The world is not a grinding gristmill of monthly mortgage payments, day-to-day job-related drudgery, vague yet persistent aches and pains and innumerable other nagging details that suck the life out of you. It’s a lion waiting to be tamed, a journey begging to be taken or an adventure still to be had. Is there any more optimistic time in your life than graduation? I wish that it could last forever, but I know better.

Both classes had their inevitable run-ins with authority that seemed unreasonable and inflexible. In both cases, said “run-ins” arose from social “traditions” that ran afoul of scheduled class time. Both times, the phrases “can’t condone” and “set a precedent” was used a lot by the school administration. Of course, such nuances don’t mean much to you when you’re 18. “Party” is a word with much more meaning.

Speaking of parties, both classes had their share. The biggest difference between ’79 and ’13 was in how word of these parties propagated through the grad social network. In 1979, “viral” meant hanging out at the main intersection of town (I told you I grew up in a small town) waiting for familiar trucks (I told you I grew up in Alberta) to go by, so you could ask where the party was. Today’s approach seems much more efficient.

Style also played a major role in both events. In many cases, it’s our first experience with formal wear, which means a lot of time is devoted to dress and/or suit shopping. My daughter has been wearing high heels in the house for the past week, hoping to master the trick of locomotion without severe injury. Of course, in my case it was a very stylish dark brown velvet tuxedo with matching bowtie. Hey, it was ’79, and my fashion influences were “The Love Boat” and Jack Tripper from “Three’s Company.” Cut me some slack! There were people who went in blue jeans (remember – rural Alberta).

Another major theme was, and is, “Who’s going with who (sic)” to graduation. For those of us who were less precocious in our experience with the opposite sex, a lot of pressure came with graduation. We had to get a date, or be labeled as “the guy who went stag.” This meant you had a lot of socially inept teenagers going through the trauma of a first date at the same time, in the same place. All the technology in the world can’t improve person-to-person communication in this scenario.

It seems to me that though the way the class of ’13 negotiated through their grad experience may have changed since 1979, the actual things that make up that experience seem remarkably familiar. It’s still about transition: whether it be in relationships, opportunities, routines or responsibility.  It’s that awesome experience of sitting on the cusp, when all things seem possible. It’s believing that you own the world – and that  the world is an essentially good place. Whether you express that on Facebook, Instagram or while leaning on the side of a Chevy pick-up at the “Four Corners” in Sundre, Alberta — the “how” may have changed, but the “why” has remained the same.

The Story of the Underwood Typewriter Company

Underwood_Typewriter_Company_exhibit_in_the_Palace_of_Liberal_Arts_at_the_1904_World's_Fair

Underwood Typewriter Company exhibit in the Palace of Liberal Arts at the 1904 World’s Fair – Wikimedia Commons

First published June 20 in Mediapost’s Search Insider

A few weeks ago, I introduced you to my Underwood No. 5. Today, I’d like to tell you a little bit about the company that created the iconic No. 5. The story may be over a hundred years old, but that doesn’t mean that the businesses of today can’t learn from it.

The first designs for the typewriter started showing up in the 1870s. After some rather imaginative designs, including one that looked like a pincushion, the Sholes and Glidden Type Writer (1873) was the first writer to introduce the QWERTY keyboard (which I’m still using today). The QWERTY design was (supposedly) introduced to overcome the physical limitations of the machine, which tended to become jammed if frequently used keys were located next to each other. The reason we still use it? Well, suffice to say, habits are a tough thing to break.

The S&G design, and all the other variations that followed for the next two decades, tried various approaches, but all had one thing in common: They were all “understroke” or “blind” writers. The keys hit the paper on the bottom of the platen so users couldn’t see what they were typing.

In the mid-1890s, John T. Underwood was trying to figure what to do with his company, a fairly significant provider of ribbons and carbon paper to then-industry-dominant typewriter manufacturer Remington.  That company had spun off its typewriter division from the sewing machine division, which in turn had evolved from its main business, making guns. But Underwood had heard that Remington had plans to start making its own consumables. He countered by declaring, “All right, then, we’ll just build our own typewriter.” Fate upped the ante by bringing together Underwood and German-American inventor Franz X. Wagner.

Wagner had designed a better typewriter. Or, at least, he had reached an acceptable compromise by combining many of the best innovations of the competitors, together with a few twists of his own, and putting them together into a new package (Does this sound a little like a precursor to the iPhone?). The result was a design that would define what almost every typewriter would look like for the next six decades, until the electrified IBM Selectric.

Underwood quickly locked down Wagner’s design by purchasing his company – and then made Underwood the biggest manufacturer of typewriters in the world. To say Underwood dominated was an understatement. The No. 5 outsold all other competitors combined for the first two decades of the 20th century.

In 1927, Underwood merged with Elliot-Fischer to consolidate market share, with the goal of ensuring dominance. But the decline had begun. One of the problems was that Underwoods seemed to last forever, so replacement sometimes took decades. The other challenge came in the form of a minor distraction known as World War II. During the war, Underwood cranked out carbines for the troops.

By the ‘40s, at the end of the war, Underwood struggled to regain relevance and dominance. But it was saddled by technology that was almost half a century old – all the company knew how to build and sell. There was no “next big thing” to open up new markets. Underwood was also held back by inertia. It was hard for company strategists  to understand why the thing that made them so successful was no longer potent enough to enable survival (Microsoft?).

Eventually, Underwood was gobbled up by Olivetti (1959) and the Underwood name last appeared on a portable Olivetti built in Spain in the 1980s.

There are a few relevant lessons here.  The more dominant your technology, the more likely it is that your company will be limited by it. Dominant technologies, no matter how innovative they are when they first appear, tend to build inertia in organizations as they ride a long winning streak. Struggle is good for the corporate soul, and the simple fact is, competitors are forced to struggle, which makes them sharper, more nimble and more aggressive.

Secondly, along with inertia, successful companies also become complacent. They generally don’t start looking for the next big thing until the existing product line (or lines) begins to falter — and by then, it’s too late. The competition, which is hungrier and moves more quickly, has too much of a lead on them.

And thirdly, it seems that the more reliant companies are on a single product or business line, the more susceptible they are to the inertia and complacency that comes with dominance. They are restricted by a single product cycle, rather than spreading their chances for survival over multiple bets, each at different stages of market maturity.

Underwood is no more. But for four decades, it had a good run. It’s difficult to say whether this is a sad thing, or it’s just the inevitable life cycle of a company.

The Open and Shut Mind

First published June 13, 2013 in Mediapost’s Search Insider

A few years ago I was invited to a conference on advertising at a major university. The attendees were a fairly illustrious group of advertising professionals, including several senior executives from major agencies. There was also a healthy sprinkling of academics with impeccable credentials. I was in privileged company.

The organizer of the conference asked me to come up with a “dinner topic.” She explained that she wanted to generate a lively discussion at the various tables as we dug in and broke bread. It was okay if it was a “little” controversial. I must have ignored the qualifier, because my suggestion was, “Is advertising evil?” I have never been one for half measures.

As the ad illuminati settled at their tables, I set the stage by providing two opposing points of view:

First, the positive side of advertising. It can be a way to touch the very core of what makes us human, sometimes moving us to greatness. It can unify communities, create bonds and motivate us en masse. Not only can it be a social “lubricant” but, at its best, advertising can be a powerful change agent as well.

Now, the “evil” side: Does advertising take all this power and fritter it away to drive pure avarice?  Does it short-circuit our Darwinian behavioral wiring, chaining us to a hedonistic treadmill where we constantly want something we don’t have? Regular readers will detect a theme here.

It wasn’t difficult to read the mood of the room as I was wrapping up. My dad has a saying that, despite its off-color nature, sums up the atmosphere of this particular gathering better than anything else I can think of: “It went over like a fart in the house of worship.” I cautiously headed back to my table to take part in the planned “lively discussion.”

My tablemates didn’t know where to start. It seemed that it had never crossed their mind that advertising could be anything but the highest of callings. To have a debate, you need to at least have an abstract understanding of the opposing viewpoint, even if you don’t agree with it. At my table the most common question was, “What do you mean, ‘Is advertising evil?’” I had apparently introduced an entirely foreign concept.

I swallowed and forged ahead, sketching out the basis of my hypothesis. I tried to stay in the abstract, hoping to generate a philosophical debate and avoid getting caught in an emotional catfight. It seemed, though, that I had not only hit a hot button, but had taken a sledgehammer and smashed it to smithereens. Advertisers, at least based on this particular sample, seemed unwilling to discuss the philosophical pros and cons (or at least the cons) of their profession. I just wanted the whole evening to end as soon as possible.

My purpose here is not to reopen the debate. I use this story to illustrate an unfortunate human tendency. We live in a world of grays, but we like to think in black and white. I doubt that advertising is totally evil, but I also doubt that advertising is totally good. The truth lies between the two extremes; advertising is most likely a rather dirty gray.  If we’re willing to consider alternatives to our beliefs, perhaps it will move us a little closer to reality. I think advertising would do nothing but benefit from a deeper evaluation of its moral standing.

But we often forego a search for the truth, content to stick with our beliefs, which often bear little resemblance to reality. If those beliefs are attacked, we defend them vociferously, turning a deaf ear to counter-arguments. We don’t listen, because open minds require the burning of a lot of energy.

In a simpler evolutionary environment, beliefs were a heuristic shortcut for survival.  But today, they often polarize us at either end of a moral spectrum, with no middle ground left for discussion. Case in point, the current American political landscape.

I have spent most of my adult life trying to fight this natural tendency. I have tried to keep an open mind and not let my beliefs blind me to an opposing viewpoint — at least, not when it comes to those things I believe to be truly important. Morality, religion and politics are just three arenas where open minds are much harder to find than staunchly held beliefs.

And, apparently, you can add advertising to that list as well.

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