Setting Realistic Expectations

The hardest thing for a brand or business to do is to filter through the BS and set realistic expectations for your marketing investment and efforts. Obviously when you have a limited budget you can't afford to do everything you could if say you were a massive brand with unlimited dollars.

I wrote previously to start with your goal and work backwards. Net you can look at your labor and capital resources and choose where you think will match your goals best. I then suggest you 'Sandbag' your expectations and work up some numbers below a homerun. Sandbagging is used by direct sales people when they have to give their forecasts to management, they under forecast so the blow away expectations vs underachieve. 

Why should you 'Sandbag'? Marketers hype. That is their nature. Whether it be your Agency or a Media Channel they are going to inflate things in their pitch. You will be told how many people they can reach for you, but often be unrealistic. Especially since most can not prove results due to the type of platforms. A TV station can't prove I was watching your commercial vs getting up to pee. A Magazine can not prove I read your ad on page 33. Facebook can't prove I saw the little ad to the side but they can tell you if I clicked. 

I like a 30% discount for anything that is unmeasurable and has to be estimated. So make your own adjustments. If the local cable station says for $500 you can reach 100,000 people with a 30 sec spot which is 0.5 cents per viewer cut that by 30% to 70,000 and use a higher cost. Do this for all your media spend. I would rather reach more people than I expect than reach less than I expect.

Use math as well. I have seen Facebook with 850mil accounts and Twitter with over 400million accounts. But when I crunch the activity numbers happening each day they tell a different story. That in the US only 15million people are actively tweeting and only 27mil to 35mil are active on Facebook. Many more log in and just read. So this means you can reach more with 'Paid' advertising like Facebook Ads, but lower your expectations for sharing of any content or reaching them with tweets and posts. That $500 for a Cable TV 30 sec spot might turn out less expensive than Facebook ads or the labor/time to reach them with posts on your Brand page or Tweets.

Only you can decide how much a new customer is worth paying for. Advertising and Marketing can get a new customer to try your product or service, but after that most of their work is done. You now are responsible for ensuring they come back by having a great product or service at the right price point with the right customer service and customer experience.

Why Measuring ROI is Important and some Tips

Interesting article on Media Post about how marketing departments lack data and also don't measure Return on Investment.

First read Fred Wilson's blogpost on ROI.

All areas of business need to measure this. The best run businesses make decisions to maximize the return of the money they invest. Do I spend more on TV advertising or what if I hired a direct sales person instead. Which brings in the most profit and revenue? You should choose the one that does and invest there.

Marketing is tough. Numbers are vague. Nielsen might say 2 million TVs watched a show but they can't prove anyone was in the room. We can just estimate. We can prove how many banner ads were viewed and see clicks but unless they buy something then and there, we have no idea the true impact.

How can you allocate your precious financial resources if you don't have the data to make these decisions. For marketers you first need the data. 

This includes where you spend your money, the estimated results, and any actual results you can measure. You might place an ad with a coupon in a print newspaper. You know the cost. You know the circulation they claim to have. You can count how many are redeemed.

Next is agreeing what the value of certain activities are. How much is free publicity in a Magazine worth? You can estimate based on readership and the cost of buying an ad what you feel the value is. The same for coupons. If it brings in a new customer vs an existing one coming more often. How much is that worth? Social Media is free? No you have your own time invested or employee time.

Then you can create some spreadsheets and track this data monthly. Then correlate to sales in some ways. What if that print ad ran once a month vs every week? You can test what happens. Do you have a sales increase or not. What if you don't and coupon redemption is the same? You know to place your ad just once a week and then use the extra money elsewhere.

This doesn't have to be an exact science like stock investing. Trust me estimates are better than not having anything. Try different media channels and marketing techniques. Track this and start comparing results year over year and month over month.

And if you lack data....find it. Don't say 'I don't have it'. Say 'I need it and how can I get this data'. Your business's health and success depend on it.

The Fallacy of Impressions

American Heritage Dictionary: im·pres·sion

Home > Library > Literature & Language > Dictionary

(ĭm-prĕsh'ən)
n.

1. An effect, feeling, or image retained as a consequence of experience.
2. A vague notion, remembrance, or belief: I have the impression that we have met once before.
3. A mark produced on a surface by pressure.
4. The act or process of impressing.
5. Printing.
   1. All the copies of a publication printed at one time from the same set of type.
   2. A single copy of such a printing.
6. A humorous imitation of the voice and mannerisms of a famous person done by an entertainer.
7. An initial or single coat of color or paint.
8. Dentistry. An imprint of the teeth and surrounding tissues, formed with a plastic material that hardens into a mold for use in making dentures, inlays, or plastic models

To say I hate this term is an understatement. I loathe it. The term has earned Ad Agencies a Gazillion Dollars. Brands love buying them. It's like buying air though. You can't see them. But since you breathe air, you know you need it to live, you accept that it is there. How many Brands are clueless that after all those TV, Radio, Digital, and Out of Home Impressions it turns out in the Supermarket their box design is what catches people's eye? Or you happened to have the best Price-Value proposition of your competitors? Will an Agency tell you that? Hell no.

TV Impressions - Number of people who watched a commercial. 

But did they really watch it? How do you know. Were you in the room tracking their eyes?

TV: Well we actually did that with some people.

Chief Alien: But you claimed 1 million views. All one million?

TV: Well we extrapolated and used an algorithm. Here is your invoice.

Chief Alien: How about I cut you a check for 80% just in case some left the room?

Out of Home Impressions - Number of people who viewed a Billboard

This is highly dependent on location. Some have much higher potential. In subway cars or certain street locations do better than say overlooking Freeways. LINK

OOH: We know 100,000 cars pass by this Billboard everyday. X 30 = 3million X 1.7 passengers = 5.1million Impressions.

Chief Alien: Do you know what speed they were all driving? Because if they were at highway speed they would be less likely to see and consume your ad. Or in heavy traffic too they could be watching out to ensure they don't get in an accident. What about the 0.7 passengers. Were they looking out the window? On the Phone? Reading? Playing with the Radio/IPod? Putting ketchup on their burger?

OOH: We did some surveys. We used some sophisticated measuring technology with some cameras. Plus people tell us they read Billboards when they are driving and they are bored.

Chief Alien: How about I cut you a check for 3mil Impressions not every vehicle with 1.7 people could have possibly paid attention to our Billboard.

My point of this is not to make fun of the TV or Out of Home Vendors. It is up to you to do your own math. Whether you are the head of Marketing or a Media Buyer you have to do your own analysis. When you ask for a price quote, get the Rate and their quoted Impression numbers and decide for yourself. Include everything in your pricing analysis.

Billboard costs $50,000 for one month. They claim 5million impressions or $0.01/impression or $10 CPM. $50,000 is your cost. But if you know the location and you know you will be lucky to get half those impressions your internal cost should be double. And that is what you should be basing your ROI calculations on.

I am not saying the Advertising efforts did not work. Or should not be undertaken. But a lot goes into a buying decision. I bet if I don't see another Geico commercial for the next 2 years I will still remember '15 minutes could save me 15% on Car Insurance'. In fact in my judgement Geico could spend 50% less on TV advertising and see zero decrease in phone calls or sales. I bet their Media Buyer would never admit that.

*credit to www.answers.com for the definition of impressions.

Happy New Year Wishes for a Great 2011 from the Chief Alien!

I hope everyone had a great holiday season and is healthy and happy! Now get back to work! 8)

I thought this would be a good time to talk about me for once. Versus ranting about Facebook or Mashable or trying to give some insight into how things work. I was born in a covered wagon as my family trekked to Long Island from Queens, NY....wait that is not what you want to know!

My Alien persona and why I chose it is key to everything. Not sure if anyone follows Helen Klein Ross (@adbroad) on Twitter or read her blog (see link to the left), but she is one of the founders of the Brand Fiction Factory. Prior to coming into Advertising/Marketing my background is a BS Finance, 2 years of selling Telecommunications services in Los Angeles, and 12 years of B2B Sales selling industrial parts in Southern California and the Western United States. Some from catalogs and some that didn't exist. From the 3 companies I worked at during those years I got to work in every industry except for Mining, and intimately. I have been inside Oil Refineries, Missile Factories, Movie Studios and even once Arnold Schwarzenegger's Trailer on the set for Junior.

And working for smaller companies I have been blessed to also have experience in every facet of a businesses except Accounting. I have been involved with Manufacturing, Marketing, Sales, Warehousing, Shipping, Quality Assurance, Engineering, Distribution, Customer Service, Business Development and Strategic Planning.

I am inquisitive. I want to know how things work. Your NASA Probe crashed because you installed my part wrong? I want to see it. You are testing my Cooling Valve on your Hydrogen Fuel Cell  bus, take me for a ride in the Bus. You need to find a valve to replace a broken one in your oil refinery? Take me to it. I have worn Nomex Flame Retardant Outfits and Clean Room Bunny Suits.

Advertising is a Mid-Life Career Change. Coming up on 3 years now. Sky Pulse Media is only 16 months old. I was not groomed in this 'World' and thus I am Alien to it. I have read voraciously Blogs, News, and anything I can get my hands on but not any Advertising Books. I don't read Business Books. I prefer real life observation and case studies. I don't need a Book for this. You should be reading the Harvard Business Journal, the Economist, Fortune, Business Week, Bloomberg, to learn how business works and how it is performing. Observe your customers. Ask questions. My Finance background has me crunching numbers like crazy and my B2B work has me skeptical if I can not measure ROI. There is a lot wrong with the Ad Industry. Marketers and Brands are suckers just like many of the people they get to buy their stuff.

When I read that 50% of Ad Spend is wasted I spent months observing why. Advertising is like Government. The goal is not to spend smarter it is to spend more. I want to change that. I want to show Pepsi they can spend 10% less and sell just as much Soda. Their Agency would hate me. The Media Companies would hate me. But their Shareholders would love me! I champion the Brand first, second and third. They are my customers. And every time I see a horrible media buy or crappy advertising I see waste. Big waste.

So when I lay out numbers or observations here I try to have my facts straight from real data, not some fluff Mashable throws at you, or Ad Week writes up where often they are PR pieces with an Agenda. I spent time in the Personal Care section of my local Market trying to find one person buying Old Spice did you? I run a Facebook Page and a Twitter account for a client. My observations are real life because that is where real things happen. Ask your Social Media Guru if they have done this for a client directly vs just advising them.

So I am an Alien. I will challenge things that do not make sense. Logic and Hard Cold Facts rules my world. Not the Warm and Fuzzy Marketers try to use on everyone. I want to help you bring results and to have realistic goals. I want to help you value the aspects of marketing properly so that you can decide where to allocate your resources or how much you should pay for something. If I don't have an answer I hope to get you thinking and possibly we can figure one out together.

But one thing is a fact. If you make a great product, give great service, give great value, you will be successful.

My Friday Agency Rant

 
Some things have been bugging me. Here are 10 Things I just have to say!

1] Stop discussing the Agency of the Future. The Future comes slowly if you can't adapt it's your fault.

2] Stop wasting Clients money. If you are upset with ROI talk don't take the work. Many of your Clients are public companies that judge every other part of their business for ROI and fire people who have negative ROI. Why should you be different? Being Smarter is the Answer! Seek out Media and Message Delivery Channels that can be measured properly. It will reduce finger pointing and help you defend your outrageous billing fees.

3] Digital Advertising is not the answer. Just because we have Computers and Use them a lot doesn't mean we want Ads on there. We have 15 years of utter failure and yet the discussion is always 'well what we just did it this way' without ever thinking maybe the People have a Choice and they already Chose. Get over it! And no Google Goggles or the IPad in not an Advertising game changer as much as they are Technology game changers.

4] Social Media will always be an AND. It is never going to replace Traditional Marketing! But it can enhance it and help you. Use it. But don't believe what anyone says about Social Media who has a vested interest in Social Media's success (ie Zuckerberg, Mashable, or any number of Social Rock Stars that write books and speak on tour) vs Your success! You can not reach 540million people on Facebook. You can reach only 1 person at a time. And it is just as hard as going to the Mall and trying to meet people 1 on 1 and get them to like you.

*Side note. 75% of the Top 100 Social Media Speakers are talking out of their ass just to make money! It is up to you to figure out which 25% are the real deal!

5] Viral does not exist for Marketers. It is 0.00001% of all Social Media chatter. You can reach more than 1 person by reaching 1 person in the right way. But you had better be damn happy if you reach 10 people this way. But if you or your Brand fucks up! Viral will take care of itself. Social Media is People to People technology not Brand to People Technology.

6] For every Product or Brand that sells itself (Best in Class), there are 3 Dogs or Pigs. Be honest with the Consumer and the Client. Don't over sell either. I know you want billings. But dishonesty sets you up for failure.

7] If your campaign is a big sink hole of money with no results, don't open your hand and ask for next years funding. Prove to your client how you will do better.

8] Great Products won't fail, even if the advertising you did sucks! But you can't save Bad Products from failing with great advertising! Remember Marketers and Brands are much more gullible that Consumers. Someone at the Brand believed it was a winner. The Agency told the Brand it was a winner so they could get the billings and the work. And then 9 of 10 new product launches fail. Who are the suckers?

9] More Advertising in More Places, More of the time is not the answer! Just because you can put an ad somewhere doesn't mean anyone cares for it to be there. Advertisers always come up with new places to put ads because they want to bilk their Clients of more money. Not because people want to see ads there. Getting seen by the right demographic is much more important than just getting seen.

10] Sorry but consumers do not care about your ads, the products or the brands as much as you think they do. They don't want to engage with brands, with your advertising, or talk via Social like you think they do. They are busy. Have little time. And want things on their terms not your terms. Get over it and stop lying to your clients about this. There is a reason Facebook Fan pages are failing. People want to talk to their friends much more than a Brand.

Thank you now carry on with your day!