MediaPost | Performance Insider

Moneyball And Media

Thu, 13 Oct 2011 13:29:01 -0400

Whether or not you’ve seen the "Moneyball” movie or read Michael Lewis’ terrific book, you surely know the basic premise: a small-budget team beats the big boys by analyzing the data that really matters, rather than relying on the established stats the others continue to use. Billy Beane, Paul DePodesta and others used new measures like Wins Above Replacement and OPS to find price/value players and win more games than the pundits expected from low-spending teams. Beane and his upstart protégés effectively applied Apple’s “Think Different” maxim and shook up a sedentary world.

A growing number of smart marketers are applying the same Moneyball principles to their customer acquisition media spending. Moneyball’s gurus boiled baseball down to Runs Created -- that is, if you score more runs than the other team, you win. And when you win more games, you gain “market share,” rising in the standings. It’s just as simple in marketing -- essentially substituting Sales Created for Runs Created. Use the right tools to analyze your spending and you’ll find the combination that will result in more business and more market share for less.

This is where performance marketing comes in. Instead of acronyms like OPS, we have eCPM, eCPA and eCPL. We even have MVP. Ignore these measures and you might virtually sign an overweight, over-the-hill pitcher to a long, expensive contract.

Channel your inner stats geek for a moment and let’s examine these measures.

What is eCPM? It’s a bottom-up measure that shows what your media spending is really worth. The calculation starts with performance programs, where you pay for results only, generally on a Cost per Lead (CPL) basis. Effective CPM is figured by dividing the amount you’re willing to pay for a qualified lead by the ad impressions. As an example, let’s say you run a dedicated email to 100,000 and yield 125 qualified leads, paying $20 per lead. The total spending is $2,500. And that’s an eCPM of $25. Why is that measure important? It sets a standard for what you should be willing to pay that list owner on a straight CPM basis.

This kind of bottom up thinking leads to fair pricing for direct-focused media – it can be considered a base price in negotiations. And there’s always an argument that branding value adds to that base CPM, it’s certainly valid to add a set dollar amount to the eCPM.

How about eCPA? Same basic concept, but now we look at the real bottom-line results: how many of the leads turned into actual sales? And how much revenue did the average sale generate? How many “runs” did the media create? This can be harder to calculate because the data may not be as easy to get. But it is getting better: There are end-to-end systems now that make it simpler to link the source of sales to the original media action. The flip side is eCPL, where you can examine how paid (CPM) media converts into prospects. This is simply fixed media cost over number of leads or actions generated.

Let’s not forget MVP. In the performance world, an MVP is a Most Valuable Prospect -- that one-in-a-thousand prospect who should make you jump through hoops when she raises her hand.

When dealing in the realm of eCPM, keep the MVP in mind -- simply because not all leads are equal. If you set a value for a qualified prospect, certain prospects should be worth more, because they can be heavy users or high margin players. Qualified prospects at the top of your screening criteria are the “free agents” who should give you the best return on your nurturing cost -- even if you spend more than average to acquire them. A Moneyball approach overweights the factors you care about, and may ignore factors your industry generally seeks.

What about media relationships? Using these metrics helps identify media that might not be considered otherwise, just like Beane’s Oakland As traded for players nobody else seemed to want. The metrics also help rationalize pricing and potentially build longer-term relations with the media you currently use. In either case, the medium gets an opportunity to prove itself. And you both get to agree on a formula for a fair price.

Want to win the game unfairly? Take a swing at some of these new ways to pitch data.

Getting New Customers In This Endless Recession

Fri, 19 Aug 2011 13:05:21 -0400

We all know the script now, don't we? The latest financial crisis comes, the markets overreact, the politicians throw up their hands, and the consumers hide under the bed and stop spending. Then the marketers try to figure out how to grow while their staffs and budgets are being cut for the second time in three years. Not a recipe for a happy ending -- or for holding on to your CMO position.

The Delicate Dance Of Lead-Gen On Emerging Platforms

Fri, 12 Aug 2011 10:46:01 -0400

Given the popularity and frequency at which social/mobile applications emerge, we've reached a point where it's assumed that when a new platform is introduced, opportunities for marketers to leverage the platform should be in place at launch. In theory, this makes sense: after all, the only thing you need to do to generate a potential lead on Facebook is to click that "like" button. What's not quite as clear is the role that emerging platforms play in attracting customers.

Tips For Mobile Lead Generation

Thu, 30 Jun 2011 12:00:20 -0400

It's no secret -- smartphone adoption won't be slowing down anytime soon. And as advances in mobile technology bring these devices closer to the experience provided by the standard computer, there will be an opportunity for marketers to bring consumers richer advertising experiences. Through the power of mobile applications or clever use of the mobile web, marketers will have several channels to try and generate solid leads. But before you launch that next campaign, perhaps take the tips below into account.

Social Media Delivers -- But Multichannel Integration Delivers More

Fri, 24 Jun 2011 14:45:29 -0400

Without question, social media is proving itself increasingly valuable as a way to reach out to and connect with consumers. Plus, it's easy to measure and provides nearly instant gratification -- for both our online audience and for us as marketers, too. Does that mean you should be focusing solely on social media for lead generation?

Putting It All Into Context

Thu, 31 Mar 2011 13:15:23 -0400

What state of mind are you in when you read your favorite news source, check sports scores, or gossip sites? What about when you are in the market for something (could be a car, could be a new recipe for dinner, information on health matters, whatever) or when you just need to connect, to feel like the people, places and opinions that matter most to you are close and accessible? Despite all the digital analytics, it's surmising your state of mind that is the ultimate goal: are you searching car sites because you are in market or because you just love to see new cars, or maybe you need to know what is coming down the pike in automotive offerings because your job requires it?

Why Verifying Identities Is Mission-Critical To Lead Generation

Fri, 11 Mar 2011 17:15:11 -0500

Whether you're running an inbound call center or generating leads online, the most important first step is knowing the identity of whom you're communicating with. There is no point in overlaying a host of attributes -- purchasing scores, home ownership, credit worthiness, vehicle ownership, purchasing patterns and lifestyle characteristics - unless you know who is on the other end of the line. The keystone is still "identifiers," because attributes are useless without association to a true and current identity.

Picture This!

Fri, 28 Jan 2011 17:30:13 -0500

What we see has a profound effect on what we do, how we feel, and who we are. Through experience and experimentation, we continually increase our understanding of the visual world and how we are influenced by it. Psychologist Albert Mehrabian demonstrated that 93% of communication is nonverbal. Past research at 3M Corporation concluded that we process visuals 60,000 times faster than text. Further studies found that the human brain deciphers image elements simultaneously, while language is decoded in a linear, sequential manner taking more time to process. Therefore the ability of visual stimuli to communicate and influence is undeniable and inescapable.

The Ultimate Lead-Generation Technique

Fri, 21 Jan 2011 16:00:25 -0500

Time and time again, we in this industry are asked the same question, "what is the most effective way of generating leads??? The answer to this question lies in one truth, and that is the attention span of the user. When a user signs up for a product they are at the peak of their personal interest level, but that level quickly diminishes. With each different type of advertising technique, the user is one-on-one with a product, and they longer they spend with it, the better the lead will ultimately be. The goal is to keep the user as interested as possible, for as long as possible, before making them do anything on their end (click a button, fill out a form, etc.).

What Does Groupon/Google Tell Performance Marketers?

Fri, 03 Dec 2010 14:30:56 -0500

veryone in online marketing can't stop talking about Google's likely acquisition of Groupon. Are they paying too much? Or is it a discount deal? What makes Groupon so special? Is it the poster child for social media? Do they really hire out-of-work comedians to write their copy? And of course -- why didn't I think of that?

Influencing Consumers When Their Purchase Intent Is At Its Peak

Fri, 12 Nov 2010 16:15:14 -0500

A world divided into brand and bulk advertising? After the hype and novelty of Internet advertising died down (at least according to some), big name, blue-chip brands sought to advertise on highly visible branded sites, while smaller companies tried to figure out the performance formula for successfully targeting niche and vertical audiences. Superficially, today's online media landscape seems to be the result. A finite number of cash-rich brand advertisers dominate ad space on household brand media sites such as the New York Times, while all other advertising on the Web is network-run or text advertising: bought in bulk and cheap.

Eight Tips For Better Blogging

Thu, 14 Oct 2010 14:30:22 -0400

Blogs are becoming an increasingly important part of the marketing mix for industrial companies. According to the recent GlobalSpec 2010 Marketing Trends Survey, 26% of marketers use company blogs and 35% plan to implement a blog this year. Blogs can help establish a thought leadership position, increase brand recognition, improve search engine rankings, foster good relationships with customers and prospects, and create opportunities for leads and sales. But many attempts at blogging start out healthy and end up withering. Whether your company is already blogging or planning to start, follow these tips to help ensure success.

Creating An Effective Online Member Acquisition Strategy

Thu, 07 Oct 2010 14:31:08 -0400

Marketers historically have paid close attention to site traffic, time on site and page view metrics. Success on today's Internet, the social Web, is not guaranteed by any of these numbers. The game has shifted, and most savvy marketers are waking up to the fact that new key performance indicators are more relevant:

Forget Remailing -- Think Remarketing

Thu, 23 Sep 2010 15:45:19 -0400

There is increasing pressure on marketers to deliver increased marketing ROI through improvements in marketing performance metrics and resultant reductions in acquisition costs. Too often, marketers take the easy path towards attaining that objective by increasing direct mail circulation to former customers and non-converters without making the effort to customize targeting, refine offers/incentives, or tailor messaging to them.

Lead Generation: Getting Back To Basics (Only Better)

Thu, 02 Sep 2010 16:15:02 -0400

As many have said, people were social long before there was social media. So when it comes to using social media for lead generation, let's not reinvent the wheel. Successful strategies remain effective. But, even the most successful strategies suffer from the inherent problem that lead generation is impersonal -- we just don't know who our prospective customers are, since we haven't met them yet. What's new is that social media platforms now allow us to become far more personal, sooner, in our customer recruitment efforts.

Five Steps To Implementing A Content Strategy

Thu, 29 Jul 2010 14:30:46 -0400

Your potential BTB customers want access to content that helps educate them, improves their decision-making capabilities, and increases their confidence level in their final purchase decision. According to a recent survey GlobalSpec conducted on the "industrial buy cycle," 83% of buyers review up to three pieces of content before making decisions on purchases under $1,000, while 70% review four or more pieces of information on purchases greater than $10,000.

Four Ways to Increase Qualified Leads

Thu, 01 Jul 2010 16:15:57 -0400

Are there ever enough leads coming into your company? Probably not, since most companies have an insatiable appetite for revenue growth. Yet the most important aspect of lead generation is not the quantity of leads coming in, but the quality of those leads. Here are four ways to increase the number of qualified leads you generate for your sales team.

Social Media For Business: It's All About The Leads

Thu, 24 Jun 2010 13:30:21 -0400

As business marketers, we feel obligated to participate in social media. But beyond the basics of setting up a Facebook page and Twitter profile, marketers are still finding ways to measure results. While some believe the intangible benefits of having a voice for your brand engaged in various social media channels is reward enough, other marketing departments need to provide the CMO and CEO with a more quantifiable answer. The best way to accomplish this is by demonstrating the value social media brings to lead generation. Not just lead quantity (volume), but lead quality (scoring) and conversion rates. But tracking business leads from social media is neither straightforward nor easy. It requires a serious investment in time and/or technology to get it right.

Safeguarding Brands From Scams

Thu, 10 Jun 2010 16:30:14 -0400

2009 will be remembered as the year that delivered an onslaught of challenges to CMOs. Financial uncertainty and changes in consumer buying habits combined with reduced marketing budgets led to demands for greater accountability and efficiency for every marketing dollar. These trends are driving an important new responsibility for CMOs in 2010: safeguarding their brands from online scams.

Using Advanced Analytics To Track Web Site Hits Generated by TV Ads

Thu, 03 Jun 2010 17:15:08 -0400

The Internet ushered in a new era of performance marketing not only for online advertising, but also for traditional offline ad campaigns that are crafted to drive Web site commerce. In the latter instance, the big challenge is in being able to pinpoint exactly which offline ads are responsible for Web site hits, so that media choices and spending can be fully optimized.

What's Your PRM Score?

Fri, 21 May 2010 13:46:58 -0400

So you think your lead generation programs are cruising along? You're confident that you're building your database. You're getting new customers, or at least new leads. You might even be saving money on your prospecting investment. But are you spending your time and money on the right leads? On your highest-margin, highest value prospects? Are your leads making the mission-critical transformation to customers? As you think about your answers to these questions, it might be a great time to "score yourself" on your lead generation and conversion efforts.

Understanding Today's Changing Display Ad Market

Thu, 13 May 2010 15:30:19 -0400

Why are people lining up to use search and overlooking display When I ask this question, the response I usually get is, "display doesn't work," quickly followed by "it doesn't work as well as search." Throughout my career, I've had the privilege of working with some of the smartest and most experienced digital marketers in the world. And, not coincidentally, most of these people work in companies that are the top spenders in display. So when I hear people proclaim that "display doesn't work," I have to wonder -- if that is true, then why are many of the largest and most sophisticated digital marketers in the world not just buying display, but often spending more on display advertising than search advertising?

Adjusting to the New 'Desktop' Buy Cycle

Thu, 29 Apr 2010 16:45:11 -0400

In B2B, it is critical that you understand the importance of the industrial buy cycle: the steps buyers engage in when purchasing products and services. While the stages of the process haven't changed over the years, the way buyers navigate through the buy cycle and where they go to get information has changed dramatically.

Beyond Lead Arbitrage

Fri, 23 Apr 2010 12:30:36 -0400

The online lead generation market is in the early stages of shifting away from the easy money of arbitrage profits to a more value-added model driven by content. Because consumers are getting savvier and the Justice Department is becoming more protective of consumers' privacy, lead generation companies need to embrace the concept of "opt-in" transparency.

How To Reap The Benefits Of Continuous Optimization

Thu, 01 Apr 2010 16:00:39 -0400

As the ongoing and irrevocable shift to digital marketing continues, a new mindset is required to reap the greatest rewards. In the past, marketers often would take a linear path to develop a campaign: nail down the audience, the positioning, the offers, then build the Web site, landing pages and media. While every bit of this process is valid, even the best of us can't always hit the bulls-eye the first time. But here's how to improve your odds....

What You Can Do Now To Drive ROI

Thu, 25 Mar 2010 15:45:38 -0400

The last two years have been a significant learning and development period for digital marketers and online publishers. There are now different perceptions about how to engage with customers and a newfound focus on demonstrable ROI. Here's how both sides of the digital marketing partnership can succeed.

The True Price of A Lead

Thu, 11 Mar 2010 15:30:42 -0500

So many still struggle with the idea of a higher-priced lead being that much better than a lower-priced lead. Unlike a computer or car, where you can often cut costs and receive an equivalent product, that is a dangerous belief to carry into performance-based online advertising. Cheaper sounds better, but is it better? Or, could something cheaper even if it seems to have the same attributes turn out to cost significantly more?

Adapt To New Nuances of Building B2B Relationships

Thu, 25 Feb 2010 17:00:07 -0500

Have you ever heard a B2B marketing person make the following case: "If you just get a single sale out of this campaign, then it will have paid for itself." To be frank, I am guilty of having thought along those lines at times. That perspective, while plausible, doesn't actually pay the bills.

Social Media As A Sales Tool

Fri, 19 Feb 2010 09:13:54 -0500

Getting involved in social media can offer value to sales professionals, without requiring hours of time. In fact, there are a number of benefits to be gained by spending only minutes a week on popular social media sites such as LinkedIn and Twitter. Take advantage of these six guidelines for engaging in social media as a sales tool.

Truth In Advertising

Thu, 11 Feb 2010 15:00:07 -0500

As a sector, online lead generation activities accounted for an estimated $2 billion last year. It's big business, and a difficult one to get right, given that a large number of those buying media to drive these form fills do so by taking principal risk.