A Benchmark in Time

First published September 13, 2012 in Mediapost’s Search Insider

That’s the news from Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average. — Garrison Keillor

How good are you? How intelligent, how talented, how kind, how patient? You can give me your opinion, but just like the citizens of Lake Wobegon, you’ll be making those judgments in a vacuum unless you compare yourself to others. Hence the importance of benchmarking.

The term benchmarking started with shoemakers, who asked their customers to put their feet on a bench where they were marked to serve as a pattern for cutting leather. But of course, feet are absolute things. They are a certain size and that’s all there is to it. Benchmarking has since been adapted to a more qualitative context.

For example, let’s take digital marketing maturity. How does one measure how good a company is at connecting with customers online? We all have our opinions, and I suspect, just like those little Wobegonians, most of us think we’re above average. But, of course, we all can’t be above average, so somebody is fudging the truth somewhere.

I have found that when we work with a client, benchmarking is an area of great political sensitivity, depending on your audience. Managers appreciate competitive insight and are a lot less upset when you tell them they have an ugly baby (or, at least, a baby of below-average attractiveness) than the practitioners who are on the front lines. I personally love benchmarking, as it serves to get a team on the same page. False complacency vaporizes in the face of real evidence that a competitor is repeatedly kicking your tushie all over the block.  It grounds a team in a more objective view of the marketplace and takes decision-making out of the vacuum.

But before going on a benchmarking bonanza, here are some things to consider:

Weighting is Important

It’s pretty easy to assign a score to something. But it’s more difficult to understand that some things are more important than others. For example, I can measure the social maturity of a marketer based on Facebook likes, the frequency of Twitter activity, the number of stars they have on Yelp or the completeness of their Linked In Profile, but these things are not equal in importance. Not only are they not equal, but the relative importance of each social activity will change from industry to industry and market to market. If I’m marketing a hotel, TripAdvisor reviews can make or break me, but I don’t care as much about my number of LinkedIn connections. If I’m marketing a movie or a new TV show, Facebook “Likes” might actually be a measure that has some value. Before you start assigning scores, you need a pretty accurate way to weight them for importance.

Be Careful Whom You’re Benchmarking Against

If you ask any marketer who their primary competitors are, they’ll be able to give you three or four names off the top of their head. That’s the obvious competition. But if we’re benchmarking digital effectiveness, it’s the non-obvious competition you have to worry about. That’s why we generally include at least one “aspirational” candidate in our benchmarking studies. These candidates set the bar higher and are often outside the traditional competitive set. While it may be gratifying to know you’re ahead of your primary competitors, that will be small comfort if a disruptive competitor (think Amazon in the industrial supply category) suddenly changes the game and blows up your entire market model by resetting your customer’s expectations. Good benchmarking practices should spot those potential hazards before they become critical.

Keep Objective

If qualitative assessments are part of your benchmarking (and there’s nothing wrong with that), make sure your assessments aren’t colored by internal biases. Having your own people do benchmarking can sometimes give you a skewed view of your market.  It might be worthwhile to find an external partner to help with benchmarking, who can ensure objectivity when it comes to evaluation and scoring.

And finally, remember that everybody is above average in something…

Marketing Physics 101

First published February 9, 2012 in Mediapost’s Search Insider

Physics has never been my strong suit, but I think I have a good basic grasp of the concepts of velocity and direction. In my experience, the two concepts have special significance in the world of direct marketing. All too often I see marketers that are too focused on one or the other. These imbalances lead to the following scenarios:

All Direction, No Velocity

As a Canadian, I am painfully familiar with this particular tendency. Up here, we call it a Royal Commission. For those of you unfamiliar with the vagaries of the Canadian political landscape, here’s how a Royal Commission works. It doesn’t. That’s the whole point. Royal Commissions are formed when you have an issue that you wished would simply go away, but the public won’t let it. So a Royal Commission deliberates over it for several months, issues a zillion-page report that nobody ever reads, and by the time the report comes out, everybody has forgotten why they were so riled up in the first place.

This is similar to a company’s strategists noodling for months, or even years, about their digital strategy without really doing anything about it. They have brainstorming sessions, run models, define objectives and finally, decide on a direction. Wonderful! But in the process, they’ve lost any velocity they may have had in the first place. Everyone has become so exhausted talking about digital marketing that they have no energy left to actually do anything about it. Worse, they think that because it lives on a shelf somewhere, the digital strategy actually exists.

All Velocity, No Direction

With some companies, the opposite is true. They try going in a hundred directions at once, constantly chasing the latest bright shiny object. Execution isn’t the problem. Stuff gets done. It’s just that no one seems to know which direction the ship is heading. Another problem is that even though velocity exists, progress is impossible to measure because no one has thought to decide what the right yardstick is. You can only measure how close you are to “there” when you know where “there” is.

Failing any unifying metrics grounded in the real world, people tend to make up their own metrics to justify the furious pace of execution. Some of my favorites: Twitter Retweets, Number One SEO rankings and Facebook Likes.  As in “our latest campaign generated 70,000 Facebook likes” — a metric heard in more and more boardrooms across America. Huh? So? How does this relate in any way to the real world where people dig out their wallets and actually buy stuff? Exactly what dollar value do you put on a Like? Believe me, people are trying to answer that question, but I’ve yet to see an answer that doesn’t contain the faint whiff of smoke being blown up my butt. I suspect those pondering the question are themselves victims of the “all velocity, no direction” syndrome.

Balanced Physics

The goal is to fall somewhere in between the two extremes. You need to know the general direction you’re heading and what the destination may look like. You will almost certainly have to make course adjustments on the way, but you should always know which way North is.

And if you have velocity, it’s much easier to make those course adjustments. Try turning a ship that’s standing still.

Look at the Big Picture in 2012

First published December 29, 2011 in Mediapost’s Search Insider

Another year’s pretty much in the can. And because I’m working on idle this week, trying to catch my breath with my family before plunging headlong into 2012, search marketing falls somewhere behind the recent releases on Netflix and trying out the new Wii game on the list of things preoccupying my mind. So, don’t expect any salient and timely search news from me!

When I look back on what has preoccupied me over the last 12 months, I will say that much of it has been spent “stepping back” and trying to look at the bigger picture. As online interactions have taken a bigger and bigger chunk of our lives (you’ll notice that both of the recreational options I mentioned have online components woven into them), trying to understand how our actions play out against a broader online backdrop has been the thing I think about most often.

We digital marketers tend to take that “bigger picture” and break it into pieces, trying to make sense of it by focusing on one small piece. Digital marketing lends itself to this minute focal depth because of the richness of each piece. Even the smallest chunk of an online interaction has a lot to explore, with a corresponding mound of data to analyze. We could spend hours drilling into how people use Linked In, or Twitter, or Google+ or Facebook.  We could dig into the depths of the Panda update or how local results show up on Bing and never come up for air.

But think back to what, at one time, was another holiday season pastime. Some of us remember when we used to get a jigsaw puzzle for Christmas. You’d dump out all 5,000 of those little photographic morsels and then begin to piece it together into a coherent image of something (usually a landscape involving a barn or a covered bridge). Success came not only from examining each piece, but also in using the image on the boxtop to help understand how each piece fit into the bigger picture. Without understanding what that bigger picture was supposed to look like, you could examine each piece until the cows came home (again, often a topic for jigsaw art).

So, much of my 2011 was spent trying to understand what the picture on the top of the puzzle box was supposed to look like. What would ultimately tie all the pieces together?  In physics terms, I guess you could say I’m been looking for the Unified Field Theory of online marketing. And you know what I realized? You won’t find it by focusing on technology, no matter how cool it is. Foursquare marketing or search retargeting or hyperlocal optimization are all just pieces of a much bigger puzzle. The real picture emerges when you look at how people navigate the events of their lives and the decisions they must make. It’s there where the big picture emerges.

A few weeks ago I was speaking to a group of marketers about the emerging role of mobile.  This was no group of digital slouches. They knew their mobile stuff. They had tested various campaign approaches and honed their tactics. But the results were uneven. Some were hits, but more were misses. They knew a lot about the pieces, but didn’t have the boxtop picture to guide them.

My message (for those who know me) was not a surprising one: understand how to leverage mobile by first understanding how people use mobile to do they things they intend to do.  Don’t jump on a QR code campaign simply because you read somewhere that QR codes are a red-hot marketing tool. First see if QR codes fit into the big picture in any possible way. If you do that, you might find that QR codes are a puzzle piece that actually belongs in another box.

After delivering my sermon about the importance of understanding their respective big pictures, I asked my favorite question: “How many of you have done any substantial qualitative research with your customers in the past year?” Not one hand went up. This was a group of puzzle assemblers working without any boxtop picture to guide them.

If you want to sum up my past year and fit it into one final paragraph for 2011, it’s this: Understand your customers! Spend a good part of 2012 digging deep into their decision process and their online paths. Make it personal. Stalk if necessary. Ask questions that start with “why.” Observe. Make notes. Broaden your online reading list to include blogs like Science Daily, Futurity, Neuroscience Marketing and Homo Consumericus. At some point, the bigger picture will begin to emerge. And I bet it will be much more interesting than a landscape with a barn and some cows in it.

We’re Looking in the Wrong Place for our Attribution Models

First published June 16, 2011 in Mediapost’s Search Insider

The online landscape is getting more complex. Speaking from a marketer’s perspective, there are more points of influence that can alter a buyer’s path. At the last Search Insider Summit, John Yi from Facebook introduced us to something he called Pinball Marketing. It’s an apt analogy for the new online reality.

Hoping for a Strike

In the past, marketing was like bowling. You would build a campaign with sufficient critical mass and aim it toward your target, hoping at the end of the campaign (or lane) your aim was good enough, and the ball/campaign had enough kinetic energy (measured in REACH X FREQUENCY X AD ENGAGEMENT) to knock down all the potential customers.  If you think about marketing in this perspective, it explains the massive amount of pain traditional marketers are feeling as they pull their bowling-shoe-clad feet from the old world and gingerly dip their toes in the new. The bowler was in control (theoretically) and the success or failure of the campaign lay in her hands alone. The paradigm was simple, clean and linear, just the way we marketers like it.

The new game of marketing is much more like pinball. The intersections between a buyer’s decision path and a product’s marketing presence are many, and each can send the buyer off in a different direction. Some of those intersection points are within the marketer’s control — and some aren’t. Marketers now have to try to understand engagement and buyer impact at each of these intersections and, in the process, try to piece together a map of the buyer’s journey, assigning value in the appropriate places.

Repealing Newton’s Law

But even though the frenetic path of a pinball gets us a little closer to today’s marketing reality, it still doesn’t get us all the way, because there’s one fundamental difference: pinballs don’t have brains. Nor do they have emotions, feelings, or needs. Pinballs are just little metal spheres that obey the laws of physics.

And therein lies the difference.  How much more challenging would pinball be if, rather than relying on Newtonian physics to set the path of a ball coming off a flipper, it could decide whether it wanted to go right, left or simply stop dead in its tracks, refusing to go one inch further until you showed it a little more respect.  As physicist Murray Gell-Mann once quipped, “Imagine how hard physics would be if particles could think.”

As we try to understand what influences our buyers, we tend to apply something like the laws of physics to unraveling attribution. We apply formulas to various touchpoints, mathematically weighting their respective values. We can weight it to the first click, the last click, or divvy up the value based on some arbitrary calculation. But, in the end, as we try to figure out the new rules of marketing, we tend to forget that these balls have brains.

Go to the Source

If we want to understand what makes buyers buy, we should ask them. We should base attribution models on decision paths, not arbitrary formulas. We should walk through the buying landscape with our prospects, seeing how they respond at each intersection point. And when we build our attribution models, we should base them on psychology, not physics.

Is this approach harder than the holy grail of a universal attribution formula (or even multiple variations of said formula)? Absolutely. It’s fuzzy and sometimes messy. It tends to squirm around a lot. And unlike Newtonian physics, it depends on context. What I’m proposing is riddled with “ifs” and “maybes.” In short, it’s human in its ambiguity, and that’s really the whole point. I would much rather have ambiguity that’s somewhat right than clarity that’s completely wrong.

What’s a Marketer’s Biggest Problem? So Much Technology – so Little Time!

pprogtechmstitleIn the past year or so, I’ve been at a number of technology platform user summits and at some point on the agenda, there is always the product feature enhancement announcements. With much fanfare I listen as they roll out enhancement after enhancement, and I can’t  help thinking: do people really use all these features?

Functional Dysfunction

I suspect every platform, whether it be sales automation, marketing automation, paid search management, website analytics or testing and optimization platforms all suffer from the same under utilization. When it comes to technology, there always seems to be an arms race between the product development people and the users…and at first glance, the user always loses. They always have far more functionality thrown at them than they can possibly use. Function turns into performance dysfunction. But ultimately, the users will have the last word. Stuff that doesn’t get used eventually doesn’t get renewed. It becomes fat that gets trimmed from the operational budget.

At Enquiro, we’re going through this right now. Several months ago, we decided we needed some new project management infrastructure software, so we compiled our list of wants and started shopping. We made our choice, based largely on the fact that the winner seemed to be able to do everything we wanted and some stuff we hadn’t even thought of. But all this functionality came at a price. We have been struggling to implement and even with our limited implementation, our team members are finding the overly complex interface a pain-in-the-ass to use. The technical assessment gave our final choice flying colors. The real world assessment is much less rosy.

Tools that Don’t Get Used Aren’t Tools, They’re Ballast

It’s like I’ve said before: technology is simply a tool. And a tool only has value if it’s used. It has to feel comfortable, familiar and useful. It has to match the way we work. And often, too many features jam up the interface, getting in the way of the user. Elegance is sacrificed for a grocery list of customer wishes.

Part of the blame lies with the developers, but honestly, most of it lies with the users. We ask for the stuff, so they give it to us. With our project management platform, they simply gave us everything we were asking for. Granted, they could have made it easier to use and integrated functionality a little more holistically, but developers have every right to defend themselves by saying, “hey, we’re just responding to our customer’s requests”.

So, where does the blame ultimately lie? Well, I think we marketers are focused on exactly the wrong thing. We keep looking at technology and asking for features without really understanding how we’ll use those features. There is no integrated strategic flow for us to follow, so there is no way for developers to build elegance into their interface. They have to give us access to every lever and button, bloating the user experience hopelessly, because we want everything but we’re not exactly sure what we want to do with it.

We fall into this trap because we’re focused on technology, not on end goals. We got mired in the minutiae without knowing our ultimate destination.

Objectives First, Strategy Second…then Technology

Let me give you an example. Let’s say a business objective of yours is to convince sales managers of mid sized companies selling to other businesses that your solution will allow each of their sales reps to sell 20 to 30% more. That’s a pretty simple objective. If you start by understanding what it would take to reach that objective, you begin to understand all the steps along the way. You begin to identify the desired inputs and outputs on the persuasion path and how they relate to each other. You map the journey your prospects have to take. And then, finally, you can see how tools can help you maximize your potential at each step of that journey. Suddenly, you’ve put your objective first, your strategy second and only then do you worry about the technology. Prospect behavior drives technical requirements and dictates the features you’ll used. In the optimal situation, you would come out of it with a buyer-centric strategy that pieces of technology can plug into seamlessly, with no wasted functionality.

Well, you say, that’s exactly what we do! Hooey, I say. I’ve yet to see a company pull that off successfully or consistently. First of all, ownership of that prospect path is brutally sliced up and scattered across your corporate org chart. No one owns it from start to finish. So, you look at your slice, along with your accompanying success metrics (which are at least 2 or 3 steps removed from the ultimate business objective) and you start looking for the tool to optimize that slice. There’s no one to connect all the technical pieces.

Meet the MT

Enter the Marketing Technologist. This is a brilliant concept from my friend Scott Brinker (who is the Chief Marketing Technologist) at ion Interactive. This is someone who can bridge the gap between marketing objectives, at a very high level, and the technology needed to execute against those objectives in a more integrated way. They own the entire process, beginning to end, and understand the end goals. They stitch together the distributed pieces of the campaign with the right features and the right tools, determined not by isolated wish lists but rather real marketing objectives and a deep understanding of prospect behavior.

Everybody Wins

If we keep people at the front of the process, where they belong, and technology at the end, everyone benefits. We can give clearer direction to tool developers about what we really need. If they understand ultimate requirements, rather than proximate ones, they can start to streamline the interface by building intelligence into it, doing some steps in the background and simplifying the interface by only including controls we really need to change. The customers benefit because our wooing of them becomes more integrated, smoother and much less irritating. And the marketers can focus on what they need to focus on, persuading people rather than trying to wade through complex technology.

Search Insider Sneak Peek: The Three-for-One Keynote

First published November 19, 2009 in Mediapost’s Search Insider

Avinash Kaushik, Google’s Analytics Evangelist, will be kicking off the Search Insider Summit in just two weeks. I had the opportunity to chat with Avinash last week about what might be in store. As anyone who has heard him before would agree, it won’t be-sugar coated, it will be colorful and it will probably wrench your perspective on things you took for granted at least 180 degrees. Here are the three basic themes he’ll be covering:

The Gold in the Long Tail

Avinash believers there is unmined search gold lying in the long tail of many campaigns. The secret is how to find it in an effective manner.  I’ve talked before about how longtail strategies must factor in the cost of administering the campaign, which can be a challenge as you expand into large numbers of low-traffic phrases. Chris Anderson’s Long Tail theory assumes frictionless markets where there is no or very low “inventory management” costs, such as digital music (iTunes) or print on demand bookstores (Amazon). In theory, this should apply to search but, in practice, effective management of search campaigns requires significant investments of time. You have to create copy, manage bid caps and, optimally, tweak landing pages, all of which quickly erode the ROI of long-tail phrases, so I’ll be very interested to see how Avinash recommends getting around this challenge. I’m sure if anyone can find the efficiencies of long tail management, Avinash Kaushik can.

Attribution Redefined

For the past three Search Insider Summits, attribution has been high on the list of discussion topics. Avinash thinks much of the thinking around attribution is askew (his term was not nearly as polite). All search marketers are struggling with attribution models for clients with longer sales cycles; often these models are little more than a marginally educated guess.  I believe simply crunching numbers cannot solve the convoluted challenge of attribution. The solution lies in a combination of qualitative and quantitative approaches. This, by the way, is the topic for another panel later in the day, “Balancing Hard Data & Real People.”  Avinash, despite his reputation as the analytics expert, always drops the numbers into a context that keeps human behavior firmly in focus.

Search Data Insights

The third topic that Avinash will be covering is how to take the massive set of consumer intent signals that lie within the search data and leverage it to not only improve your search strategies, but every aspect of your business. We chatted briefly on the phone about how unfortunate it is that search teams are often separated from much of the day-to-day running of a company. Typically, search marketers and their vast resources of campaign and competitive intelligence are not even connected to the other marketing teams. Avinash will show how the “database of intentions” can be effectively mined to provide unprecedented insight into the hearts, minds and needs of your market.

Any one of these topics is worthy of a keynote slot, but at the Search Insider Summit, you’ll be getting all three! See you there in just two weeks!

The Pressure’s On and the Cracks are Beginning to Show

First published September 10, 2009 in Mediapost’s Search Insider

Some time ago, I wrote a column saying the fallout of the economic crisis would be a rapid evolution in marketing practices, speeding the transition from the old way of doing things to a much more dominant role for digital. In that transition, search would play a bigger role than ever. In the past few months, I’m seeing exactly that come to pass. People are serious about search, from the bottom right up to the top corner office. This isn’t playtime in the sandbox anymore; we’re suddenly moving front and center.

“I’m Ready for My Close Up, Mr. CMO”

The reason people are so interested in search is that it comes with the reputation of being highly measurable and accountable. This isn’t anything new, but lately, it’s coming with some additional baggage. Now that the C-Level is involved, performance isn’t being judged simply on a trial campaign with a limited budget. Suddenly, search is being tested to see if it’s worthy of taking a starring role in the marketing mix. And that is adding a lot of pressure to those of us toiling down here in the search trenches.

Search, by its nature, isn’t all that scalable. It comes with a built-in inventory limitation. You can only reach people who have raised their hand, indicating interest in something. Once you tap out that inventory, search loses its bright shiny luster. Search is effective because it’s a signal for consumer intent. You can’t use search to create intent where none exists.

“You Bid on What?”

Management of search isn’t very scalable, either. It’s a lot of heavy lifting and obsessing over thousands of tiny little nitty-gritty details, which, if you overlook them, can suddenly blow your ROI right out of the water. Just ask the PPC manager who forgot to set the appropriate budget cap and comes in on a Monday morning to find they’ve just spent several thousand dollars of a client’s money on a broad match for the word “lube.”

Also, the new breed of client is expecting more than just a limited tactical approach to search. Suddenly they’re using words like “integrate” and “holistic” because, well, because those are just the kind of words you use when you get to the top of the corporate food chain. You get paid the big bucks because you can toss “synergistic” around in a board meeting and actually be serious at the time.

Back to the Drawing Board

Right now, people across this great land are pulling out their white boards and sketching out the rudiments of “Marketing Plan 2.0.” They know something important has shifted in the marketing landscape; the economic belly flop has made it all too apparent that there must be a better way of doing things.  I haven’t seen any huge waves of budget pouring into search yet, but I know there’s a lot of talk out there, and much of it is about search.

Generally, I think this is great news. I’m the first to complain about the tactical bias of search marketing.  I think search has a much greater role to play — but I feel it’s only fair to warn search marketers that this isn’t going to be a painless skip down the path to a lucrative retirement. Anytime there’s a big shift, it comes with an accompanying pendulum effect. After being restrained too far on one side of equilibrium, the pendulum has to correct by swinging too far in the other direction. As budgets start to come into digital channels, including search, we’ll learn that, in many cases, it comes with a set of expectations that are seriously out of whack.

Survival of the Fittest

There are some search marketers that are ready, willing and able to take search to the next level, the one it rightly deserves. There are many others who will use impressive words in the sales pitch (words like holistic, integrated and synergistic) but fall seriously short on delivery. The path ahead is going to have a lot of casualties, both on the vendor and client side. But then, evolution has never been a particularly gentle process.

Just ask any ichthyosaurus.

Measuring Success After The Click

First published April 23, 2009 in Mediapost’s Search Insider

Avinash Kaushik speculates that Bounce Rate might be the sexiest Web metric ever. Scott Brinker has a whole blog dedicated to post-click marketing.  I believe it was Craig MacDonald at Covario who said bad landing pages are where good leads go to die. And I’ve been quoted as saying (categorically, no less) that the single most important thing we can do for the client happens after the search click.

Start Swimming Downstream

It always amazes me that search marketers spend huge amounts of time tweaking everything to do with the search page and very little time worrying about what happens downstream from it. It’s symptomatic of the siloed nature of search, a marketing practice that sits apart from other channels and the online user experience itself. Yet, what’s the point of a good search campaign if we end up dumping all those leads onto a poor Web site?

Perhaps the reason we don’t spend more time worrying about user experience is that it forces us to learn something about the user. You have to take responsibility for connecting the dots between intent and content, reading the user’s mind and trying to deliver what it is he or she is looking for. When it’s all said and done, maybe it’s easier just to worry about maximum costs per click or generating more link love.

But everything that matters starts with the search click rather than ends with it. That’s the first introduction to the prospect, the first opportunity to make a good impression. And from that moment on, the success of that blossoming relationship depends on the success of the user experience.

Post-Click Live at Captiva

 At the Captiva Island Search Insider Summit in a few weeks, we’ll actually be talking about the world of opportunity downstream from the click in a panel I’m very excited about. “After the Search Click” will be a live, clinical look at the success of the onsite experience. Enquiro is even bringing our eye tracking lab down so we can do some on-site testing and share the results with the group. The aforementioned Scott Brinker from Ion Interactive and Lance Loveday from Closed Loop Marketing join me. I’ve had the pleasure of sharing a stage with both of these gentlemen multiple times in the past.

Students of Human Nature

 To me, the immense gray area of the onsite experience has always been infinitely more interesting than the more black and white tactics of search marketing. For me, the latter is simply the means to an end, and the end requires you to be a student of human nature. For example, I’m fascinated by the subtle but distinct differences between how males scan a page and how females scan it.  Or the difference in behavior between those who grew up in the online world versus those who have adopted it and adapted to it as adults.  And if I showed you the heat map of a visitor who went to a Web site with one specific task in mind, as opposed to those who are just there to browse, the difference would astound you. But how often do we stop to think of these things as we put our search campaigns together? All too often, those leads are dumped on a generic home page or an anemic landing page with nary a scrap of relevance to be seen anywhere. Of course, even a good landing page is no guarantee of success. It’s just one more step to the end goal, a journey that could be cut short by poor site search tools, bad navigation or an overly inquisitive form.

I could make a blanket statement saying I see far more bad sites than good sites out there. But really, that’s not for me to say. The success of a site depends on the people using it and what their goals are. It should be a clean, well-lighted, well-labeled path.  I can say, as a frequent online user, it’s very rare that I’m impressed by a web experience. So in that regard, there’s much to be said still about improving the post-click experience. Join us for the discussion in a few weeks in Florida.

Don’t Think Click Fraud, Think Negative ROI

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

The search engines have a dilemma on their hands when it comes to click fraud. We’re all clamoring for more information on the issue. We all want solid numbers to help us define the scope of click fraud. The very fact that we refer to it as click fraud is confusing. A lot of things get thrown in the click fraud “basket” that are in no way fraudulent. Thanks to sensationalist reporting by publications like BusinessWeek, click fraud is portrayed as the biggest scourge to threaten the Nirvana that is search marketing. A tremendous number of resources have been dedicated towards click fraud by the engines themselves, in response to the advertisers’ demand that the problem be stamped out.

But when you do an honest appraisal of the issue, the search engines would rather we get over our preoccupation with click fraud and start thinking of it as part of a much bigger whole, the return we get on our search marketing investment. This in no way negates the importance of click fraud as an issue. I don’t think there’s anyone more aware of click fraud than Shuman Ghosemajumder (Google), John Slade (Yahoo), and Brendan Kitts (Microsoft). They’re the first to say that click fraud does exist and that they’re each, in their own ways, actively policing it.

It’s more a question of proportional response, an appropriate amount of attention given the actual scope of the issue. And today, for the first time, Google is giving us concrete numbers on what that scope might be, at least for its network. Google is announcing a multiphase approach and product road map to handle the click fraud question. Accompanying the announcement are hard numbers, for the first time, about how much of Google’s traffic could actually be considered fraudulent. I’ll talk more about the numbers in a moment, but first, let’s explore the dilemma that presents itself to the engines.

Caught Between an Over-Hyped Threat and an Ignored Danger

The engines know that, as a factor that negatively impacts return on search marketing investment, click fraud represents a tiny percentage. There are far bigger drains on the performance of campaign that advertisers should be paying significantly more attention to, but thanks to doom and gloom “exposés,” there’s a disproportionate amount of attention focused on click fraud. So, although the engines would rather advertisers focus more on the big picture and consider all the factors, including fraudulent traffic, that are negatively impacting their return on that investment, they’re playing the game they have to and are keeping the focus on click fraud. Google’s announcement today may allay some of the “sky is falling” concerns that are being whipped up by journalists, but in the long run it may do the advertisers a disservice by diverting attention from more pressing campaign optimization issues.

I’ve talked about some of this before, but here are some of the issues I have with the current click fraud situation:

Just Because We Call It Fraud Doesn’t Make It Fraud

Click fraud seems to be the label that has stuck with this particular issue. There have been calls to try to put numbers around the occurrence of click fraud in search marketing. In reality, it’s not that cut-and-dried. First of all, fraud implies that someone loses money through the deliberate actions of someone else. For a click to be fraudulent, at least in the way that BusinessWeek tried to define it, advertisers have to lose money. They have to be paying for traffic that has no value.

Less than 10% are Invalid Clicks

The fact is, there are a number of factors that may result in traffic that the advertiser would probably prefer not to pay for. Fraudulent traffic is just one of them. Google puts all this traffic into a basket they call invalid clicks. This includes double clicks on ads, questionable activity from a single IP address, automated clicks, and yes, clicks from the nefarious click fraud perpetrator. In today’s release, Google said invalid clicks accounted for less than 10% of its total network traffic. The company didn’t want to get more specific than this, because the actual percentage can rise and fall with a fair amount of volatility, based on spikes in clickbot attacks and other factors. Google works to filter this traffic out proactively, so it’s as if the clicks never happened. The advertiser is never charged for this traffic. In most cases, the publisher of the site from which the traffic is generated is never paid for the traffic. No money changes hands, so no fraud has been committed. If anyone is out of pocket, it’s Google, not the advertiser.

The Bottom Line for Advertisers? .02%!

The traffic that the advertiser should be concerned about is the fraudulent traffic that slips through the cracks. This is truly click fraud. It’s not caught by the Google filters and it’s up to the advertiser to come back and report it and request a refund. In this case, money has changed hands and fraud has been perpetrated. Today, Google announced that this represents .02% of its total traffic. Some time ago I did a column after a talk with Shuman at Google, and after making some assumptions and extrapolating the number, I came out with a “worst case” estimate of .2%. It appears that my worst case was much higher than reality, by a factor of 10X.

I don’t know about you, but frankly, if something is only making a .02% impact on my advertising campaign, I’ve probably got better places to be spending my time. One place you might want to look? The conversion rates of your landing page. If you can bump your conversion rates by .5%, you’ve just made 25 times more impact on your overall campaign performance than by continuing to fret about click fraud on Google.

Google’s announcement today was more than just releasing numbers on the occurrence of click fraud. It is also announcing the creation of a Click Fraud Resource Center, a streamlined reporting process, the ability for advertisers to filter out questionable IPs, more details in its nvalid click reporting and some other initiatives. I believe all these things are good and are needed by advertisers, if only to put to bed the perceptions of click fraud as a major issue. But do me a favor, will you? Take some of the time you may be spending worrying about click fraud, and start looking at all the other places where your return on investment may be slipping through the cracks. My guess is there a lot bigger cracks you should be looking at than the click fraud one.

Metrics that Matter

There have been a few stories coming out lately about numbers and metrics. In our business, we tend to drown in the numbers. Just yesterday, I had a meeting with our team here to talk about the issue. The thing to realize is that not all of us are numbers people. For many of us, myself included, I’m more comfortable with stories than columns and columns of numbers. I love data, but not for the data itself, but rather for the story that’s hidden inside that data. I recently received a presentation from a very well known research company that was presented to a client. Inside the slide deck, there were tons of graphs and charts, all chock full of numbers. But after looking at almost 60 slides, I still couldn’t figure out the story. When we work with numbers day in and day out and get caught up in the micro stories within those numbers, we tend to forget to take a step back and get a look at the big picture. As Bill Wise from Did-It said in a recent column, often in search, it’s the bigger numbers that are more important.

Also, we have to realize that the same numbers can tell different stories to different people. As search marketers reporting to our clients, we have to first know what story each stakeholder wants to hear, and then interpret the numbers to see if that story is true or not. All too often we present reams and reams of numbers, without trying to find the story within them.

That’s my issue with most analytics programs. There’s no shortage of numbers, but there is a distinct lack of meaning. Most analytics programs needs someone skilled to analyze the numbers, distill out the meaning and help us understand it. I’ve talked to John Marshall at Clicktracks about this previously, who takes a refreshingly “big picture” view of analytics. In a recent e-mail summit, John suggested that perhaps marketers are a little too fixated on ROI, and should step back a little to gain a better perspective.

Like all industries, search marketer has a number of metrics that are unique to us. At the practitioner level, each number is important, but only as an indicator of a bigger whole. When you report on the number of links built, or keyword density on a page, or even average bid amounts for a keyword bucket and cost per acquisition, you tend to start focusing on those numbers as the ones being important. But it’s useful to step back and remember that ultimately, you’re going to be reporting on this campaign to someone who doesn’t care about links, or occurrences of keywords on a page, or the fluctuation in bid prices for your number one term. All they’re going to care about is how the campaign added (or detracted) from their bottom line. Ultimately, that’s the story you’re going to have to tell.

At Enquiro, we’re really working hard to keep focused on the story, and not lose sight of it in a maze of numbers. We call it “metrics that matter” Our analytics specialist, Manoj Jasra, has done some writing on the subject. Check out his blog.