Articles by: "Tim Bourgeois — Digital Media Auditor and Consultant"

It’s difficult for any piece of news to rise above the cacophony of our current political discourse. So give yourself a pass if you missed this recent advertising industry coverage that involved the FBI and subpoenas. According to the Wall Street Journal, the FBI has issued subpoenas Havas for issues related to rebates and transparency.

Industry publications rushed to provide their take on the news:

“Feds Probe Agencies Over Media Transparency” (MediaPost)
“Federal prosecutors investigating shady media-buying practices in the ad industry have reportedly begun issuing subpoenas” (Business Insider)
“Feds media-buying probe is ‘cloud that will hang over the industry’” (AdAge)
“Advertising stocks move further down on probe news” (Seeking Alpha)

Even for a relatively high profile industry category like advertising — which is second only to Hollywood for its number of awards shows and overall narcissism — this kind of news serves as high drama. And the stakes are high, particularly given whispers of sex worker allegations and the Cambridge Analytica mess.

Contrary To The Adage, All PR Is Not Good PR

The current attacks on U.S. intelligence agencies notwithstanding, FBI investigations are generally regarded as credible. (Why else would they allocate scarce resources to them?). And when asked by Congress to report in on its activities, the FBI unsurprisingly points to successful investigations as proof of their worth, using words like “takedown,” “scheme,” and “rampant.”

Needless to say, these kind of investigations create buzz that’s bad for business. This kind of FBI attention from is catnip for industry watchers and general business press alike. This only increases the likelihood of the significant collateral damage, regardless of the investigation’s outcome.

Agencies Scramble To Find New Ways To Make Money

The rebate and transparency issue was outed years ago, and there’s been sort of a slow burn since to address these problems. Along the way, agency executives have slogged through difficult conversations with their peers (and clients) at brands to address questions and explain remedies.

The larger issue is that, even buried in the financials, rebates serve(d) as a profit stream for agencies — an industry that generates income at approximately an average rate of 13%. For comparative purposes, Omnicom generated $2 billion in net income up against $15 billion in sales (13%), while Bristol-Myers Squibb reported $5B in profits on $20B in sales (25%), and Goldman Sachs yielded $11B in earnings on $32B in revenues (34%). By this measure, the agency business is not a particularly attractive category.

That’s not to suggest that potential fraud in advertising is unworthy of examination. Far from it. The U.S. advertising industry topped $200B last year, so just a small percentage of that equates to huge dollars. However, it is nowhere near as profitable as sectors such as financial services or software, where profit margins are 3X compared to advertising.

Systematic and Lingering Implications

The challenges associated with rebates and transparency are grouped, fairly or not, with viewability and fraud (almost exclusively related to digital). These topics have received a good bit of attention in the advertising industry as a whole in recent years, though they’ve not dominated conversations. Of course, there are plenty of other things driving change in the business, from social media and video to influencer marketing and virtual reality, which have been far more interesting for everyone involved.

That’s all about to change, unless the FBI investigation reveals no wrongdoing and the effort is quietly shut down. Not many industry veterans think this is likely, however. In fact, many are preparing for the worst case scenario. An official FBI report, which would most certainly include indictments for most or all of the big agencies, could put the entire industry on its heels for years. And that makes this topic worthy of close attention by industry executives in advertising, publishing, and adtech.

About The Author

Tim Bourgeois (@ECoastCatalyst) is a principal at East Coast Catalyst, a Boston-based digital marketing audit company.

Perspectives

How much should advertisers worry about the future of consumer data?

September 12, 2018 Tim Bourgeois — Digital Media Auditor and Consultant

For more than a decade now, users of social media platforms and internet services have been providing personal data to companies like Facebook, Google, and Yahoo! in exchange for free services like online communities, email, and storage space. The value proposition is straightforward: We give the companies some personal information – name, birthdate, and where we live – and permission to track our activity when using said services, and they let us use their software. In turn, this data drives advertising models. It’s a bit more complicated than that, but not much.

However, several high profile events over the past couple of years – some directly related to web services, others on the periphery – have presented potential threats to this seemingly too-good-to-be true business model. Take your pick of which event might have raised your ire, as there’s something for everybody: Cambridge Analytica’s hacking of 50+ million Facebook accounts to support its efforts during the 2016 U.S. presidential elections (followed by the hacking of its entire user population); Yahoo’s admission in late 2017 of a massive breach of its 3 billion user base; or the Equifax compromise that affected 300+ million accounts, which the company is still trying to sort out, a year after its announcement. These followed other newsworthy problems in the mid-2010s involving household brands like eBay and Target, which themselves followed the TJX credit card breach, which involved about 45 million records.

Though, of course, 0we can’t predict the next meaningful breach, the past decade or so tells us that we’ll experience a least a couple each year for the foreseeable future. Hackers are an ingenuitive bunch, apparently. The motivation behind the efforts range from the acquisition of political power to greed and just plain hooliganism. For advertisers, though, the big question is: Do consumers care enough about these threats to change their behavior?

Is There a Shift In Consumer Behavior Underway?

According to new research from Pew Research Center, we could be seeing signs of shifting consumer behavior. According to its survey from June, more than half of respondents said they’d adjusted their Facebook privacy settings over the previous year, while 4-in-10 said they’d taken a break of “several weeks or more” from the app, and a not insignificant 25% said they’d deleted the app from their cellphones.

As a snapshot, these results are noteworthy, but not shocking. (And it’s too early to tell if they signal a larger trend.) Facebook seems to be approaching market saturation in the U.S., while the coveted teen demographic is using Instagram and Snapchat more frequently. It stands to reason that more experienced users are likely to tinker with privacy settings, as well as occasional bouts of abstinence.

(Weep not for Facebook or proclaim its impending demise. In the last reported quarter, it added an average of 22 million new users every day.)

It Probably Doesn’t Matter Much For Advertisers, At Least Not In The Short Term

While we may be seeing signs of Facebook user behavior evolution, most constraints on consumer data availability in the short term will be driven primarily by government regulations or self-policing actions by Facebook/Google/Yahoo/Verizon. The EU’s General Data Protection Regulation (GDPR) law enacted over the summer is the most obvious example of government involvement, which caused genuine angst among American companies, and instigated modifications and new ideas. It doesn’t seem like U.S. lawmakers will follow suit in the foreseeable future. This is due in equal parts to a lack of understanding of the issues, an administration that espouses deregulation, and attention to a litany of more pressing issues.

More practically, most companies outside of the largest 100 U.S. advertisers or so aren’t pressing for more consumer data. Indeed, they aren’t able to convert much of the existing available data to actionable marketing strategies. Weaponizing big data requires major investments in systems and resources that are beyond the reach of small and mid-sized companies. (And the scope of data currently being captured is genuinely mind-boggling.)

The Bottom Line

Given that brands have more consumer data available to them than most can practically deploy for advertising purposes, changes in consumer behavior in response to data breaches like the Facebook-Cambridge Analytica kerfuffle are unlikely to meaningfully impact marketing strategies for the foreseeable future. However, while consumers have historically demonstrated an extraordinary threshold for what they are willing to provide in exchange for free goods and services – and this premise is effectively the lifeblood of companies like Google and Facebook – the combination of high profile breaches, Congressional hearings, and product fatigue could prove to be problematic for the category over the longer term, and it’s certainly something we’ll be watching closely.

About The Author

Tim Bourgeois (@ECoastCatalyst) is a principal at East Coast Catalyst, a Boston-based digital marketing audit company.

Perspectives

The other side of advertising: Why publishers need to think more about self-promotion

May 8, 2018 Tim Bourgeois — Digital Media Auditor and Consultant

Publishers spend most of their time thinking about how to sell advertising, not buy it. However, they should rethink advertising as a promotional tactic. As their sales teams likely say time and again, it can be used to increase brand awareness, viewership, and even paying customers. What follows are a few ideas for thinking about how to work old-fashioned advertising into a publisher’s promotional and audience acquisition strategy. (For more “traditional,” digital-centric tactics for increasing a publication’s audience, see my March 2018 piece, “How to Maximize the Value of Your Digital Publishing Properties”.)

Google Display Network

When campaigns are executed properly, the Google Display Network (GDN) can be a powerful tool for publishers to reach big audience groups, quickly and cost-effectively. The trick is to make sure that campaign settings are precise and strict.

According to some estimates, the GDN reaches as much as 90% of internet users. While Google makes most of its money on high-priced, keyword-based, pay-per-click activity, it also has a robust display advertising network that is global and reaches into the outermost nooks and crannies of the internet. For just pennies a click, savvy publishers can get their content in front of relevant audiences.

Twitter

Though, by comparison, considerably more expensive than Google (on a per-click basis), Twitter can nevertheless be a valuable tool in a publisher’s promotional bag-of-tricks. It is especially useful when a marquee or evergreen piece of content is at the center of a campaign. Marketers can easily serve up ads to audience categories that are known to be attracted to a particular topic.

(If you’re not on Twitter already, it’s high time you open an account. Then keep an eye out for ads – aka promoted tweets – from the New York Times, which has been particularly aggressive on the social network in recent weeks – along with the usual suspects Fidelity Investments, Starz, and Uber.)

Press Releases

Not typically considered as “advertising”, as apress releases can serve in a variety of roles:

To strengthen a particular content asset’s performance in the search engines (when aligned with a particular keyword(s) strategy)
Expand a content asset’s reach among secondary and tertiary target audience groups – such as other media outlets, which takes their cues from others, and pursue “me-too” stories
To legitimize a topic or subject, vis-a-vis the vetting methodology and reputation of highly regarded wire services

Keys to Success

Regardless of the techniques used to get eyeballs to a content asset or publishing property, a variety of baseline tactics need to be employed in order to maximize ROI on the money you spent to the get them there. These include:

Front-and-center conversions. Make it easy for site visitors to follow your social media properties, sign up for newsletters, and give you permission to engage with them over the long term. The ultimate goal is to gain a new subscriber, of course, but there are lots of interim, nurturing steps that need to be formidable to help convince suspects and prospects of your value.
Accommodate Google’s Best Practices. That means make sure your website downloads fast and secure, and is in line with the Google Accelerated Mobile Pages (AMP) project. These accommodations lead to better search engine result placement, and more traffic. (When in doubt, look at properties like NYTimes.com and BusinessInsider.com for best practice guidance. And remember, we don’t need to respect the content, just the promotional tactics.)
Give Them An Offer They Can’t Refuse. Digitally-enable offers that you’ve been using for years via direct mail or at industry conferences: three months for one dollar, two years for the price of one, etc. Digital advertising, when done correctly, practically guarantees that your ads are being seen by like-minded individuals. Use what’s worked offline to convert passive online audiences into paying subscribers.

When employed strategically, online advertising can play a meaningful role in a publisher’s audience expansion plans. When combined with compelling content and baseline digital marketing best practices, internet advertising can help publishers find new paying audience groups and expand their footprints in a meaningful way.

Tim Bourgeois (@ChiefDigOfficer) is a principal at East Coast Catalyst, a Boston-based digital consulting company specializing in advertising audit services.

Advertising | Perspectives

The time is now: Make aggressive moves to win market share

April 10, 2018 Tim Bourgeois — Digital Media Auditor and Consultant

It’s been a common theme of mine and this publication for months, but it bears repeating: The Facebook and Google duopoly have never been more vulnerable. So, the time is right for publishers to double down on proven tactics and test new ones in pursuit of gaining market share.

If you still need convincing of market conditions, consider the news of just this week from three of the most influential publications on the planet:

A coalition of 20 consumer groups are about to file a federal complaint against YouTube/Google for violating a children’s privacy law (NY Times)
Facebook’s CEO admitted to a “huge mistake”, and the platform may have leaked info from 87 million users (Wall Street Journal)
A lawmaker said the scandals plaguing the social media giant might be “too big” for it to fix alone, and that he might “be in favor of regulating Facebook” (Washington Post)

This coverage is, of course, in addition to the real whopper involving Russian meddling in the most recent U.S. presidential election. These venerable newspapers – which collectively influence millions directly, and tens of millions indirectly – are singing from the same hymnbook. When it comes to the duopoly, they are on the attack. It’s not so much that Google and Facebook have been consistently bad actors, necessarily. But let’s face it, Congressional hearings and privacy problems make great copy. Or, maybe it’s personal. No matter – this is happening either way.

A Perfect Storm

Several overlapping and intersecting factors, occurring over many years, have lead to today’s market conditions: shifting consumer needs and market demand; thinly-veiled, monopolistic corporate behavior characterized by overreach and insufficient self-governance; and unintended consequences of streamlining the advertising supply chain. To be sure, the past decade has been tumultuous. But the current state of affairs in digital advertising will not come as a surprise to DCN community members.

To wit: Last week, Mark Glaser warned publishers to be careful about gloating in the wake of Facebook’s troubles – sage advice. Last month, DCN CEO Jason Kint addressed Google’s “battle with transparency” when reporting its massive digital advertising revenues. And at the beginning of the year, I offered techniques for publishers to employ to sell more advertising to media buyers via easily digestible sales tools,an emphasis on branding, and formidable client service. Even with all this attention, however, I don’t know that the community expected the situation to get *this hot* for the duopoly.

Having experienced extraordinarily challenging conditions since the late 2000s – and being in the unenviable position of shrinking in the face of a growing, ancillary market –– publishers now have a compelling talking point, a reason to reach out to customers, prospects, partners, and the press. Certainly, behaviors change slowly. Customers are risk-averse, and no one has “gotten fired for buying ads from Google and Facebook” in quite awhile. Now, if only for reasons of diligence, media buyers now have to pick their heads up from Google and Facebook dashboards and assess alternatives.

If Not Now, When?

Last year, and for the first time, companies spent more on digital advertising than TV spots. We all saw this coming, but it actually happened last year, and it signaled an official changing-of-the-guard in the industry. Most professional prognosticators believe digital ad spending will continue to grow for the foreseeable future, to eventually capture 40% or more of the overall marketplace.

Publishers certainly continue to face meaningful growth challenges. However, it’s difficult to imagine conditions being more fertile than today for building market share. The time is right for making aggressive moves.

Tim Bourgeois (@ChiefDigOfficer) is a management consultant at East Coast Catalyst, a Boston-based digital strategy agency.

Perspectives

How to maximize the value of your digital publishing properties

March 13, 2018 Tim Bourgeois — Digital Media Auditor and Consultant

A veritable bonanza of market developments – ranging from pedestrian pricing pressure to international political drama – have conspired to cause the “‘pendulum’ of power in global media to [finally] swing away from Google and Facebook” and “signal that their domination of global media is not guaranteed”. Though by no means a fait accompli, the digital media landscape could very well be undergoing a significant change during this first half of 2018. And the net result could mean that the “duopoly” – Google and Facebook – could be vulnerable to eroding market share for the first time in nearly a decade. Here’s a list of issues that competitors need to attend to in order to take advantage of the opportunity.

Speed

The Google algorithm rewards websites that download quickly – on both desktop and mobile devices – with favorable results placements. This is a constant challenge for publishers that try to cram as many advertisements as possible into a finite amount of real estate. Finding the correct balance is more art than science, and requires constant monitoring and tweaking to maintain the proper balance.

Action Items: Ensure your website is housed in a formidable hosting environment, and configured to run as fast and smoothly as possible.

Keywords

While driving reporters and editors crazy, savvy keyword strategies are the linchpin to healthy inbound traffic volume and exposure to new audiences. Publishers are well-served by building teams that combine data-intensive digital marketing analysts with writers who understand audience needs. This is straightforward in concept, but exceedingly difficult in practice.

Action Items: Formalize a keyword strategy – which could include hundreds of keywords if you’re a midsize or large publication – and make its governance and evolution part of someone’s job description.

Amplification

By now, we all know the value of “viral” content – i.e., the rare but impactful piece of prose (or image, meme, or video clip) that strikes a chord and makes its way around the internet at warp speed, registering hundreds of thousands or even millions of “shares”. Less celebrated, however, is the regular amplification of content by means of a coordinated effort that transforms a typical content asset into one that has meaningful engagement and marketplace impact.

Action Items: Make sure your publication’s content is easy to share, effectively promoted and re-purposed; and make use of your employees’ digital footprints to promote and disseminate content.

Old School Tactics

Considering the mind-blowing pace at which digital tactics take hold, proliferate, and sometimes fizzle –- remember MySpace, AOL, Ask Jeeves, Tumblr, etc.? – it’s easy to forget about the staying power and effectiveness of some of the *old school* tactics. Using the principle of relativity, remember that tactics involving email newsletters, LinkedIn (especially with B2B), and Bing (a Microsoft property that continues to grow steadily, if not remarkably), are the closest things that resemble sure bets in the digital ecosystem.

Action Items: Audit your properties’ promotional tactics, and make sure they incorporate proven (but admittedly, less sexy) initiatives that target audiences use regularly. Note: this may even include things like direct postal mail; given the massive drop-off in DM efforts, it’s easier to stand out as unique through the channel now as a result.

Relentlessly Cross-Promote

One of the most impactful metrics in digital success is “domain authority”, which is generally understood to be the relative value of what the internet (i.e., Google and Bing) assigns to a specific domain URL. For example, one measurement company rates IBM.com and NYTimes.com as scoring in the 95+ range (on a scale of 1-100), which makes sense, considering the value of the brands, and the level of effort they both put into maintaining successful websites.

Action Items: Multi-property publishing outfits can help their titles maximize domain authority through strategic cross-promotion, since a significant criteria in the algorithm is “inbound links”.

Since the category’s inception two decades ago, the digital advertising marketplace has mostly confounded traditional publishers. Only a handful of organizations have been able to incorporate online channels into their operations without residual upheaval and near-debilitating transformation. Far more organizations failed at managing the evolution, and shuttered. For those that survived, there are signs that new opportunities may soon become apparent, and preparing for a market turn would be prudent.

Tim Bourgeois (@ChiefDigOfficer) is a management consultant at East Coast Catalyst, a Boston-based advisory firm specializing in digital strategy consulting and media audits.

Advertising | Perspectives

How to make it easy for brands to buy your advertising (like Google & Facebook)

January 9, 2018 Tim Bourgeois — Digital Media Auditor and Consultant

We all know the story only too well by now: depending on whose estimates are cited, Google and Facebook — the oft-referred to “duopoly” — together account for 60%-80% or more of all digital advertising revenues. eMarketer succinctly captures the repercussions by stating “With the duopoly taking in about two-thirds of US digital ad revenues, that leaves around a third of the market for every other firm to compete for.”

These “other firms” include deep-pocketed companies like Microsoft, Amazon, and Verizon — all of which pose a threat to both eat into the duopoly’s market share as well as capture the lion’s share of the remaining $30 billion or so in US digital ad revenues. But this is by no means a foregone conclusion.

Microsoft has been stumbling around this category for years without finding its groove; Amazon doesn’t understand the ad business; and Verizon doesn’t know how to compete in unregulated categories (yet). Among the duopoly itself, Facebook will have the Department of Justice on its back for at least a couple of years due to its complicity in the election mess, and Google is just waiting for the other shoe in the saga to be dropped on its doorstep. Meanwhile, the braintrust at Googleplex in Mountain View is focused on figuring out how to diversity revenues into non-advertising channels, with mixed results so far.

For companies seeking to successfully capture or grow their share of the roughly $100 billion US digital advertising marketplace, the following tactics will help ingratiate you among digital marketers and media buyers.

Make It Easy To Buy From You

The path of least resistance here is joining the exchanges and allowing media buyers to access your inventory via programmatic platforms like AppNexus, MediaMath and OpenX. And this should certainly be part of a multifaceted strategy.

But there’s also old-fashioned tactics like providing media buyers with case studies that resonate, transparent pricing, low minimum buys, creative support, accepting credit cards, and trafficking campaigns quickly.

Without question, most advertising is done by the largest 100 or so brands, so from one vantage point, it makes the most sense to allocate inordinate resources to this area of the marketplace. But this is also a crowded and fiercely competitive part of the market. The upside of the emergence of Google and Facebook is that small and medium sized businesses now understand the power of targeted advertising as never before, and are more receptive to advertising pitches as a result.

Emphasize Your Strengths

Brands still matter — arguably now more than ever. And seminal publishing brands have brand power in spades. Longevity, relationship with readers, and unique value propositions can help, over time, combat against the duopoly dominance.

By contrast, problems associated with digital advertising have entered the public consciousness via Russia election meddling, with Facebook serving as the poster child. While challenges associated with ad fraud aren’t easily avoided by any organization with robust digital properties, they are certainly more manageable relative to Facebook trying to monitor billions of users or Google’s ad network, which supposedly reaches 90% of the internet. Buyers need to understand these risks, and the pros and cons of going in one direction versus another.

To be sure, it’s easy to buy ads from Facebook and Google today. But these avenues can be expensive, and are rife with potential problems — fraud and transparency among them, but dozens of others as well related to campaign configuration and tuning. The media buying community writ large still requires a good deal of education on these issues, and traditional publishers have an opportunity to carefully deliver these messages. (In my experience, there is a subtle and mostly silent shift underway in the marketplace, as experienced media buyers aren’t happy about being overly reliant on two outlets for more than half of their media buys.)

Help Marketers Help Themselves

Perhaps Google’s greatest genius —not including search marketing (which was a happy accident, like Pfizer’s *discovery* of Viagra) — has been in helping marketers reorient their fundamental value proposition in the organization. By emphasizing business-based metrics such as “conversions” and “dollar value per conversion” in their ad buying (AdWords) and measurement (Google Analytics) tools, which can be easily linked to revenues and profits, they’ve helped marketers do their jobs more easily and effectively. At the same time, Google’s tools provide marketers with myriad ways to shape performance data in order demonstrate a campaign’s effectiveness.

Publishers can steal a page from this playbook by providing prospects with similar support (recognizing that some manual labor will be required in this effort) to monitor performance and ROI after the campaign has been completed (or even mid-flight). Like the Google and Facebook systems do, it’s not so much the absolute data that matters most, but their organization, meaning, and presentation. And most marketers need help separating the wheat from chaff. This kind of pre- and post-sale support will go a long way towards generating industry goodwill (unless you’re a top 100 buyer, Google and Facebook support is awful) and, of course, repeat buyers and loyal customers.

While both the advertising and publishing sectors have experienced seismic changes over the past decade, we could be on the precipice of another shift, albeit a far more subtle one. The volatile political environment has created an uptick in demand for quality journalism, and venerable properties such as The New York Times are growing subscriber bases and figuring out how to make the transition to digital work. Fallout from politics has also ensured that one of the biggest players in digital advertising will have a neon bullseye on its back for the foreseeable future, at least limiting any unusually aggressive behavior. For storied media organizations looking to make a move and carve out their territory in the digital advertising ecosystem, conditions may not get better than this.

Tim Bourgeois (@ChiefDigOfficer) is a management consultant at East Coast Catalyst, a Boston-based advisory firm specializing in digital strategy assessments and media audit projects.

Perspectives

Metrics that matter: email marketing

December 5, 2017 Tim Bourgeois — Digital Media Auditor and Consultant

Email marketing, which was likely the first digital marketing tactic to go mainstream, has experienced a public relations drubbing over the past decade. Maybe it all started in the wake of the CAN-SPAM act of 2003, and the category has yet to recover its shiny gloss. But savvy professionals know otherwise: When employed smartly, email can be one of the core components of a successful marketing operation.

Source: Smart Insights, GetResponse Survey

When thinking about your organization’s email marketing strategy and planning for improved performance, here are the metrics you need to keep top-of-mind.

1. Everyone’s Doing It

This statement applies to both individuals and corporations. According to Pew Research, 88% of smartphone users actively check email on their phones. Also, after being around for more than two decades, most organizations have some kind of either active or passive email marketing strategy in place – because it works. In a recent survey by Smart Insights and Get Response, more than 50% of marketers said email marketing performed good or excellent, outperforming all other tactics. And, eMarketer forecasts the U.S. email advertising market to increase from $343M this year to $500M+ in 2021 – not the skyrocketing growth we see in other digital categories, but not bad considering it’s been around awhile.

If you don’t have a formal email marketing strategy in place, prioritize its design and launch as soon as possible. It’s likely there’s an in-house list that exists somewhere and can be dusted off and put to use. If are currently engaged in email marketing, have a senior member of the marketing team assess its status and budget. Depending on the type of organization, the email marketing budget should account for 2.5% – 25% of overall marketing spending. A large, B2B company will skew smaller while a small B2C company will skew larger.

2. Be Wary of ‘Rate’ Metrics

Yes, this is an article on metrics, but too many organizations measure email marketing team performance on their rates: open rates, click-through rates, deliverability rates, etc. While meaningful in some ways, they aren’t very useful in the context of strategic marketing goals like branding, engagement, and conversions. Deep-pocketed technology companies with sophisticated marketing and sales operations like Constant Contact, Hubspot, Marketo, and Salesforce have force-fed the industry a set of metrics which, outside of small and specialized email teams, aren’t very meaningful. Senior marketing managers and non-marketing executives don’t need to understand the minutia of the operations, and sharing ground-level performance data with them only weakens the impact.

Email marketing performance is best viewed vis a vis other marketing tactics (direct mail, events, telemarketing, etc.) and its ability to contribute to customer acquisition and retention. While the true, absolute contributions of a tactic like email can often require sophisticated modeling and measurement operations – rolling up to attribution – the baseline metrics that are easy to track and serve as a reasonable proxy for attribution are engagement and sharing. Both are genuine measurements of the impact of an email’s content and strategies.

3. Take the Long View

Successful email marketing operations follow a 3-to-1 give-versus-ask ratio. That is to say, they only ask for something – a purchase, a piece of information – one time for every three times they give. While people have an overall preference to email-based communications from brands, their biggest point of feedback, according to an Adobe survey, is to make the correspondence “less about promotion and more about providing me information”. This is a big challenge for brands of all stripes, as hammering email lists to meet quarterly or year-end goals is a common tactic, but a short-sighted one.

While challenging, employing the 3:1 ratio isn’t as difficult as it might seem. A “give” to a user base could be a coupon, an entertaining but brand-promoting video, or a white paper or webinar pass. It takes some creativity, but most organizations have enough assets in place to make this happen without extraordinary effort. The important thing is to approach an email marketing strategy from a user-based perspective, and get the audience to look forward to opening your emails. It’ll pay major dividends over the long run.

To be sure, email marketing is capable of delivering on nearly every major marketing goal in our crosshairs: branding, awareness, thought leadership, engagement, acquisition, and retention. So, from a marketing strategy perspective, it’s not a question of “if”, but rather “how much”? That email marketing is the oldest and least shiny object among the current digital marketing toolset – which includes search, display, social, native, video, etc. – means that it might require an extra dose of support during budgeting season. But for most organizations, it’s well-worth the effort.

Tim Bourgeois (@ChiefDigOfficer) is a partner at East Coast Catalyst, a Boston-based digital consulting company specializing in strategic roadmaps, marketing audits, and online marketing optimization programs.

Perspectives

Measuring marketing performance and delivering on metrics that matter

October 31, 2017 Tim Bourgeois — Digital Media Auditor and Consultant

As we approach year-end, general managers and department executives across the world are in the throes of 2017 performance evaluation and 2018 strategic planning. Among their functional peers in sales, finance, operations, and human resources, senior marketing managers have unique challenges when it comes to measuring performance and justifying budget increases.

To wit: senior executive – CEOs, CFOs and line of business GMs – expectations of marketing operations have never been greater. Indeed, one study revealed that “80% of CEOs don’t trust or are unimpressed with their CMOs”. So it comes as little surprise that more than half of CMOs have been in their jobs for three years or fewer.

Indeed, it’s a constant struggle for marketing leaders to find solid footing amidst the shifting sands of digital enablement, big data, and artificial intelligence. After more than a decade of absorbing aggressive overtures from the internet giants, martech companies, and digital media concerns, the most senior executives have continued to approve bigger marketing budgets. Today, the marketing line item now accounts for more than 10% of revenues at some of the world’s largest companies, and CMOs are experiencing unprecedented pressure to justify continued investments and budget increases.

In a digital-first and data-intensive world, here are the measurement metrics that matter most:

1. Brand Awareness.

At the end of the day, it’s the marketing team’s job to deliver on two primary tasks, and defining and promoting the corporate brand is one of them (demand generation is the other). For companies like Coca-Cola, McDonald’s, and GEICO, brand management is the driving force of the business, and referenced in every strategic planning discussion. For the rest of us marketers, brand awareness is regarded as a ‘soft’ metric by the senior executives we report to. So it’s up to us to create a measurement strategy and educate the company on its importance.

How to Get There:

A digital-first approach – website analytics, social media listening, and competitive benchmarking – is the fastest way to measuring a brand’s relative share of voice and level of engagement with target audiences. The world’s largest brands invest heavily in monitoring their brand’s effectiveness through surveys, focus groups, and consumer recall. However, most companies can get a firm handle on a brand’s impact using solely internet-based techniques, and a digital marketing audit is a great way to initiate the effort.

2. Demand Generation & Capture.

From toothbrushes to jet engines, marketplace demand needs to be both generated and corralled, and it’s the marketing group’s responsibility deliver on this task. Some products, such as car insurance or residential real estate, are ‘bought.’ Thus, marketers in these segments are mainly focused on being in front of the prospective buyer with effective messaging throughout the sales cycle. In categories where items are ‘sold’ – think automobiles, pharmaceuticals, and enterprise software – marketers need to first educate prospective buyers about the need (perceived or otherwise) for their products, and then convince the prospect of their superior offering.

How To Get There:

Most of the large management consulting firms (like McKinsey) have invested significantly in some variation of a “customer lifecycle journey” methodology, and these are useful for helping to define the different points of engagement and identifying relevant metrics (for both new and returning customers). The first step for marketing teams is to define their unique customer lifecycle checkpoints – from awareness to engagement and consideration – and install metrics to monitor their relative performance over time (monthly, quarterly, annually, etc.). Subsequently, most organizations require an education process, aimed at non-marketing executives, to generate consensus and buy-in on the measurement strategies.

3. Cost Per Conversion.

Cost per conversion, or “CPC”, is very much a digital marketing term, but the concept is straightforward and useful in both online and offline activities. The approach requires marketers to determine how much an engagement activity – such as an inbound phone call or watching a video advertisement on a website – cost to generate, and then work towards some performance metric. For example, most companies understand their prospect-to-customer conversion ratios reasonably well, if not specifically then intuitively. A car dealership, for example, might understand that that it needs to generate 10 visitors to the lot to generate one new customer, or 100 visits to its website to generate one email inquiry, and 25 email inquiries are required to get a new customer; and the average new customer generates $30,000 in sales and $6,000 in gross profit margin. With these metrics in mind, the dealership can comfortably spend $250 to generate a lot visitor or $1 to generate a website visit and accommodate its profit variables.

How To Get There:

Job one is to create the unique model specific to the business, and get a firm handle on the relevant metrics. A B2C company’s measurement strategy will be virtually unrecognizable to a B2B concern, but the general approach – cost modeling measurable actions – will be the same. Even just a handful of relevant ‘conversions’ can help guide a marketing group’s budget allocation in a meaningful way. Most importantly, these metrics allow marketing contributions to be measured vis-a-vis revenues and profitability, which are the most valued metrics by CEOs, CFOs and boards of directors.

For better or worse, long gone are the days of marketing operations that were considered in terms of vanity (or not considered at all). With marketing budgets continuing to swell, and rapid digital adoption making quantifiable performance measurement more accessible to companies of all shapes and sizes, senior executives are holding marketing accountable for revenue-generating contributions and ROI. In the long run, marketers will benefit from this evolution, as the quality of their contributions to profits and corporate performance increase, but the short term will continue to be bumpy as expectations get sorted out and responsibilities more clearly defined. Senior marketers can help accelerate this process by embracing core performance metrics and working to continually improve their performance in those specific areas.

Tim Bourgeois (@ChiefDigOfficer) is a partner at East Coast Catalyst, a Boston-based digital consulting company specializing in strategic roadmaps, digital media audits, and online marketing optimization programs.

Advertising | Industry-Research | Perspectives

Buyer beware: Programmatic advertising report emphasizes the importance of brand safety

October 3, 2017 Tim Bourgeois — Digital Media Auditor and Consultant

For the past several years, marketers shifted digital ad budgets “gleefully to programmatic engines that promise efficiency and hands-off effectiveness.” These days, as much as 80% of all online display activity is transacted through technology-based exchanges that offer promises to “hyper-define, hyper-target and hyper-engage with minimal human monitoring.”

In retrospect, it all seemed to just a little bit too easy: superior targeting, engagement and tracking—and all for lower costs. However, in response to significant concerns around fraud and brand safety, the advertising industry is taking a collective pause on programmatic.

That’s not to say programmatic won’t continue to play a meaningful role in the advertising ecosystem, but its flaws have been exposed. There is a dark underbelly associated with with programmatic advertising (see: the 2016 US president election and Facebook-fake news aftermath. So, today many big brands, experienced marketers, and agencies are in the process of carefully reevaluating their adtech-enabled digital media buying strategies.

During the summer of 2017, the CMO Council interviewed hundreds of brand leaders to gauge their thoughts about these issues and recently published Brand Protection From Digital Content Infection report.

Here are the key findings that media executives and marketers need to be thinking about:

Digital can be a dangerous place

“Buyer Beware” might be the best sign to hang outside of the digital advertising gates. Of the marketers engaged in programmatic advertising buying, more than half (52%) are focused on risk and reputation management across ads placed on social media sites. Marketers are also aware that issues like ad fraud plague brand safety.

Guilt by association

The overwhelming majority of marketers believe that inadvertent association or negative adjacency has had a direct (and negative) impact on their brand. Some 78% of respondents say that unintended associations with objectionable content, images, topics, audience or conversations have hurt their brand’s reputation.

Reputation management problems lead to lost dollars

Brand safety and integrity in advertising are not simply reputation issues anymore; they can directly impact the bottom line. When consumers were asked about their reaction to seeing the brands they love being associated with inappropriate or questionable content, the answer was clear: Customers will walk away with their wallets—even if it means walking away from their most beloved brands.

Marketers not waiting for industry solutions

Marketers are taking specific steps to ensure the integrity of digital ad placements and, by extension, the integrity of the customer’s experience. First and foremost, marketers are developing stronger digital advertising guidelines for agencies and buying networks to adhere to. And many are choosing to move to programmatic direct buys and private exchanges rather than having their programmatic dollars spread across open exchange networks.

Core recommendations focused on proactive governance & adjusted KPIs

The programmatic advertising train has left the station and there’s no risk of stopping it or even slowing it down in a meaningful way anytime soon. The actual and perceived benefits are simply too powerful. As well, with deep-pocketed and influential behemoths Google and Facebook so thoroughly dependent on the category’s health to grow and be successful, its likelihood of continuing as a force for years to come is practically guaranteed.

But it’s emerging from the shadows, and marketers are getting more sophisticated about how they assess its performance, and how they plan its role in broader strategies moving forward. While this trend should cause companies like Google and Facebook to at least pause, it’s hard to imagine how it doesn’t translate positively to both tightly controlled ad buying networks and premium publishing brands. At the end of the day, it is about targeting and engagement, where premium properties continue to hold sway.

Industry-Research | Perspectives

Brands are stepping up their media governance

August 23, 2017 Tim Bourgeois — Digital Media Auditor and Consultant

It was just a matter of time – we all knew it had to happen eventually – but the other shoe is dropping on digital advertising’s most glaring weaknesses: accountability and fraud. Brands are taking steps to exert more control over growing online advertising budgets, and rely less on external agencies to do the job.

This is according to a new survey from the World Federation of Advertisers (WFA) of 35 global companies with more than $30 billion in ad spend. To wit: nearly 9-of-10 say they are pulling back spending in ad networks that don’t allow third party verification, and three quarters of them say transparency is an “escalating” issue.

Though short of revolutionary, these survey findings indicate a meaningful attitudinal shift among brands: now more comfortable with the digital channel, and under pressure from CFOs and CEOs to get waste under control, they’re putting pressure on the source – the media buying function.

Former Mediacom CEO Joe Mandel set this process in motion back in March of 2015 at an Association of National Advertisers meeting when he declared: “I personally believe we’re living through the least transparent time for the media industry in our careers”. Fast forward to May of this year, when WFA’s survey was conducted, and we’re beginning to see empirical evidence of the backlash.

What this means for different constituents in the digital marketing ecosystem:

Whenever there’s talk of “digital media” in general, it’s important to remember that Google and Facebook comprise 70%+ of the activity. So evolving media buying practices are largely targeted at getting Google- and Facebook-enabled advertising under control.
These media buying shifts are significant, especially in light of the TV, radio, and print channels over the second half of 20th century, which were remarkably stable; it tooks brands awhile to respond to fraud and viewability issues because they hadn’t really had to deal with media buying challenges since the introduction of TV advertising in the 1950s.
As brands get more comfortable with theirs hands on the online media buying controls, new opportunities will emerge for channels beyond Google and Facebook. Nearly half of respondents in the survey indicate they are shifting away from using CPM as the key pricing metric, and this favors niche players and premium brands.
Agencies have been bracing for this market shift for years, and have been aggressively investing in their technology infrastructures and talent pools as a way to prepare. (See WPP’s list of investments on Crunchbase.) As is the case with brands, agencies are maneuvering to become less reliant on Google and Facebook, and those that haven’t are vulnerable and risk obsolescence.
Peripheral players in the ecosystem – lawyers, auditors, verification companies and watchdog groups – are boosted by these findings. Almost 90% of survey respondents said they already have or are planning to include “specific media/financial audit right clauses” in contracts, suggesting that brands are putting agencies on notice, and plan to keep a closer eye on activity moving forward.

Given that digital will soon account for nearly half of all advertising spending – and was barely its own unique line item as recently as 2000 – brands are smart to be re-thinking their approaches to online media buying. Indeed, many industry experts will credibly claim that these changes are long overdue. Regardless, the trends signal an interesting new chapter in digital marketing, where opportunities will emerge for organizations – brands, agencies, and publishers alike – that evolve to accommodate changing marketplace demands.

Tim Bourgeois (@ChiefDigOfficer) is a partner at East Coast Catalyst, a Boston-based digital consulting company specializing in strategic roadmaps, digital marketing audits, and online marketing optimization programs.

Advertising | Industry-Research | Perspectives

Google’s dominance in digital ad spending continues, though challengers have emerged

July 25, 2017 Tim Bourgeois — Digital Media Auditor and Consultant

Spending on search engine advertising is trending up — increasing to 22% growth in Q2 on Google, an increase from 9% last year — according to Merkle’s Digital Marketing Report Q2 2017. Search ads delivers the best bang-for-buck when it comes to “low-in-the-funnel” prospective customers, across both the B2C and B2C categories, and the ease of use makes it accessible to companies of all shapes and sizes.

Experienced digital marketers know that search engine marketing, primarily Google, has served as the bread-and-butter of online lead generation since the early 2010s. And this category’s continued expansion can be seen as good news for everyone in the digital marketing ecosystem. Though Google remains the bellwether player, brands are looking to expand their digital advertising footprint, and are looking for options beyond Google.

This is partially represented in this analysis, which includes Bing Ads and Yahoo Gemini. Given the sustained efficacy of Google search ads — and breathtaking profits realized by Google — over the past decade or more, it’s notable that it’s taken several years to attract formidable competitors to the category. But it’s great to have Bing (Microsoft) and Yahoo (Verizon) show up for the party. Even though genuinely competitive offerings may be years away, their scale and ability to offer relatively discount price products will help the category as a whole. Digital marketers are also cautiously optimistic that others will be attracted to the category as well, as Google has held sway over the market for too long,

Back to the data. The following are the most pertinent data points from Merkle’s recent research report, and what digital marketing professionals need to understand.

Key takeaways:

Q2 2017 saw continued strength for the two major digital marketing platforms as Google search spending growth accelerated to 23% year-over-year (Y/Y) and Facebook budgets continued to grow much more rapidly than the online ad industry as a whole.
While mobile continues to be the main engine of spending growth across digital ad platforms, desktop has been pulling more weight for Google in recent quarters; this resurgence began soon after Google began allowing search advertisers to bid separately for tablet traffic and the better performing desktop segment in Q3 2016.
Bing Ads and Yahoo Gemini combined search ad spending fell 3% Y/Y in Q2 2017, an improvement from a 14% decline in Q1. Though in absolute terms this news does not optically serve Bing of Yahoo well, this is a relative improvement in a growing marketplace, and excited digital marketing professionals, who have grown weary in recent years of their reliance on Google.
Facebook ad spend increased 56% Y/Y in Q2 2017, in line with Q1 growth. Facebook CPC fell 3% Y/Y, while CPMs jumped 57%. A relative new entrant on the scene, Facebook is a force to be reckoned with, especially in the B2C category. Based on CPC rates, Facebook is more than willing to “buy market share” and for good reason. It’s only a matter of time before Facebook figures out how to makes its mark in the B2B sector, where it’s already a significant force outside of the United States.

The Bottom Line

Through their spending, brands continue to reinforce their estimation of the value and efficacy of text-based search engine marketing advertising. Consumers, both in the B2C and B2C categories, look to search engines to seek out vendors for their needs, ranging from new shoes to cars to enterprise software applications that cost hundreds of thousands of dollars. And companies continue to push more advertising dollars to the medium because of the success they experience in the channel.

Tim Bourgeois (@ChiefDigOfficer) is a partner at East Coast Catalyst, a Boston-based digital consulting companyspecializing in strategic roadmaps, digital marketing audits, and online marketing optimization programs.

Advertising | Industry-Research

What marketers need to know about the impact of negative digital advertising experiences on their brands

June 21, 2017 Tim Bourgeois — Digital Media Auditor and Consultant

Programmatic advertising will account for 80% of all digital display advertising in 2017. However, this technology-driven ad buying process has seemingly created as many problems at it’s solved, in the forms of both wasted ad spend and brand risk exposure. In response, CMOs are taking steps to protect and safeguard their brands by reducing spend in certain digital channels until better controls and compliance measures are in place.

With all of the talk over the past couple of years about ad fraud and compromised viewability rates, we as an industry have sort of overlooked the implications of online advertisements that are seen, but in sub-optimal settings. That is to say: How are consumer behaviors impacted when they interact with ads in an unseemly or unexpected context? (Example: a banner ad layered over a hate group recruiting video on YouTube.) Marketers need to understand the impact of these negative advertising experiences.

This issue, to be sure, has been a persistent problem for advertisers since the early days of the business. One needs to look no further than Harry Crane (Rich Sommer) of Mad Men’s Sterling Cooper agency. They launched the firm’s new television department and charged it with monitoring a client’s ad buy just as the medium took off. Fans of the show quickly learned what media buyers the world over already know: Advertisers do not appreciate their promotions running anywhere but in the slots they’ve approved.

Managing this challenge across the digital channel has been a problem since the first banner ad was sold in the early 2000s. And it has only worsened in the wake of programmatic. To date, this issue has evaded intense scrutiny because the digital channel is some much more cost effective than its offline counterparts. But, as advertising economics continue to evolve and companies become smarter about managing a multi-channel environment, brand safety in the digital channel is gaining steam.

Leading this movement’s charge are private companies such as Integral Ad Science and industry organizations like the Association of National Advertisers (ANA) and and CMO Council. Indeed, digital marketing auditing is emerging as a cottage industry unto itself as advertisers are becoming more aware of inefficiencies in the channel.

To that end, this month, the CMO Council released a report titled “How Brands Annoy Fans: The Impact of Negative Advertising Experiences,” which explains the steep consequences associated with ads running in undesirable places.

Here’s what you need to know about the findings:

Almost half of survey respondents say they would consider defecting from brands who fail to control where their ads appear. This suggests that marketers should be “deeply concerned” over the integrity of content environments.
66% of those surveyed say their respect for brands decreases when they encounter ads near hateful, inappropriate, or distressing content.
Where an ad runs is just as important as its message. And consumers seem less likely to give their preferred brands “a pass” for appearing in inappropriate environments or next to jarring content.
85% of those surveyed expressed some level of concern about how easily they are directed or redirected to offensive or objectionable sites.
According to publishers, consumers are actively contacting them to ask if their properties endorse certain content, given their stated values.
With increasing fervor, consumers are demanding that brands respect their time and their messages appear in environments they trust.

The bottom line: Context matters. All parties in the digital advertising ecosystem must ensure that great advertising experiences are delivered in equally excellent environments.