Agile Marketing Must Haves

agile_must_haves
It’s difficult to find a development team that hasn’t embraced the agile method—an iterative approach to software design focused on smaller projects, shorter cycle times and lots of testing and learning. The fundamental assumption of the agile method is that project requirements change on a daily basis so being nimble matters. The old waterfall method of gathering requirements, designing, writing code, testing and releasing looks cumbersome, slow, and outdated by comparison. Not to mention more expensive and less effective.

Yet time and again, when technology-driven companies go to market, they often fail to translate their highly effective agile mindset to their marketing practice. Oddly enough, when it comes to marketing, they tend to over-think. As if they have one chance and one chance only to get it right. Their marketing practice becomes slow and cumbersome, more expensive than they’d like, and the results disappoint.

It pays to know that running a cutting edge marketing practice has an enormous amount in common with running a cutting edge development shop. Marketing, too, works better on the agile method—small projects, short cycles and lots of iteration.

Especially if you are ready to start optimizing conversion (ie: you have traffic and customers) porting your stellar agile development culture over to your marketing operation is a must.

Just like your agile development practice, your new agile marketing practice needs but a few key elements to keep it humming on all cylinders:

1. An Agile Delivery System. Today’s marketers need to make changes on a dime. Without total control over marketing web pages through a content management system that they own, they will forever spend their time requirements gathering, designing and producing ideas rather than introducing ideas to the marketplace so they can listen and adapt. Just like your agile development team needs to make frequent, pointed updates to code, your marketers need to add blog posts, change links, add and edit web copy and even full pages with pointed frequency.

2. Integrated Input. No doubt, our marketing requirements have gotten ten fold more complex in the last ten years. With multiple modalities, an explosion of technologies, fragmented communication channels and more touch points to manage everyday, it’s more important than ever to ensure that our marketing efforts are integrated—not only in the eyes of the customer, but with the fundamental workings of the organization. Integration of the sales and marketing functions has been a no-brainer for decades. Now it’s time to integrate our marketing efforts with customer service, product development and public relations, informing and coordinating our efforts, building and taking advantage of interdependencies.

3. An Iterative, Hypothesis-driven Project Schedule. Like agile software developers, agile marketers need to iterate—toss an idea into the mix, see what happens, learn, change, nip, tuck, adapt. Like developers turn stories into tasks, marketers turn hypotheses into campaigns. Like developers write and release code, marketers write and release messaging and promotions. Smaller projects, shorter cycles, iterative learning. It works very well for both.

4. Measurement. Business has long demanded accountability for the value of their software investments and your marketing efforts should be no different. As long as online marketing technology keeps innovating, marketing ROI will always be a moving target. It depends on a large number of complex inputs that will only continue to grow. That said, the same measurement principles you use in your agile development process (another complex, constantly emerging task) are also good for measuring your marketing efforts:

• Measure outcome, not output.
• Follow trends, not numbers.
• Make data easy to collect.
• Pay attention to what reveals, not what conceals.
• Collect feedback on a frequent and regular basis.
• Encourage a “good-enough” mentality and move on.

Lastly, like a development house works best when one key metric drives the business, a marketing practice works best under a single shared goal. That metric will most certainly change as your business grows. While you start out needing to drive web traffic, you’ll certainly move into the need to drive conversion and hopefully (if you’re very, very lucky) wind up faced with the need to maximize customer life time value.

A Brief History of Optimization

cardsThe practice of marketing optimization is founded upon a number of disciplines – some old, some new, and some emerging. Like marketing optimization, many of its foundation disciplines are sciences that have historically been developed to reduce risk while maximizing the chances for success.

Whether ‘success’ is winning at cards, winning a war or maximizing conversion in a PPC campaign, ‘optimization’ put simply is the practice of finding optimal methods for driving objectives. Probability theory, management science, statistics, economic theory, experimental design and technology all converge in marketing optimization to provide marketers with the tools and processes for finding optimal methods for executing the marketing function such that risk is reduced and the chances of success are maximized.

Probability Theory
Some of the first excursions into probability theory sprung from the study of gambling and games of chance. Thought to be the first mathematician to study gambling more than 500 years ago, Girolamo Cardano (1501-1576) took the first steps toward developing predictive models for risk reduction. Like us, our optimization predecessors sought to understand the relationships between all the possible outcomes and the favorable outcomes.

Probability theory today includes the study of all sorts of phenomenon (including the way consumers make choices) in which some initial starting point is known, there are many possible paths for the process to take, but that some possibilities are more probable than others. In our to quest to find the most probable paths to increased conversion and long-term customer loyalty, we marketers rely on probability theory more and more each day.

Management Science

The practice of optimization of course owes a great deal to developments in management science, or the discipline of applying analytical models like mathematics to make better business decisions. From Frederick Taylor’s famous time and motion studies to the strides in operations research made by the British and US military during the war years, the search for process improvement plays a significant role in marketing optimization.

Experimental Design
The discipline of marketing optimization includes a strong emphasis on rigorous experimental design and owes a great dealt to Fischer’s groundbreaking work in the Design of Experiments. Fischer was the first statistician to adopt a formal mathematical methodology for experimental design in order to study the effect of a process (AKA: message) on an experimental unit (AKA: consumer). Today’s multivariate testing discipline does exactly that, studying the effects of various creative treatments on consumer purchase behavior.

Economic Theory
We hear a lot about various methodologies used to develop the algorithms for automated marketing optimization. A good methodology is rooted in economic theory, or models that analyze the way people purchase decisions in certain contexts (on the Internet, in a direct mail campaign) and study the relationships between the creative messages and treatments and life time customer value.

Technology

It’s nearly impossible to overstate the impact of technology on the modern marketing function. The arrival of the Internet especially has made an indelible mark on the way we hawk our wares and has forever changed the way consumers interact with business.

Rapid growth in deeper understanding of consumer choices as well as the rapid dissemination of new technologies has impacted the marketing function in two critical ways:

  • It’s given consumers more avenues – more channels – for interacting with business, and
  • It’s given marketers more tools and technologies to inform their marketing decisions.

Technology enables and automates the application of the sciences described above such that today’s marketing problems are solved much faster and more reliably. Technology now automates the process of structuring experiments (experimental design), optimization algorithms automate the process of finding the most probable paths to success (probability and economic theory), and analytical tools provide a dearth of information to help us make better business decisions (management science).

The art of marketing began as the simple practice of getting more folks to open their wallets more often – perhaps nothing more complicated than placing a charismatic speaker on a soapbox in the town square. Today’s marketing discipline has evolved into the practice of properly combining the increasing number of levers at your disposal to find optimal methods for driving complex objectives. Optimization in today’s context requires us as marketers to understand and leverage the foundation disciplines described above and to apply those disciplines to more effectively manage profitable customer relationships.

The Utility of Social Media

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Facebook’s arrival as a lifestyle brand was cemented the moment Zuckerberg appeared on Oprah. Having been on Facebook for several years as an Internet marketing professional, one can’t help but notice the sudden barrage of old high school friends (stay at home moms) having suddenly found me on Facebook. A noticeable shift in the FB demographic has taken place in the last six months.

Which makes the brand now part of popular culture, properly cited by Steve Rubel as the key motivation for recent advertiser interest in Facebook. Advertisers from Palm to Sprint are plugging Facebook in TV spots, aligning themselves with the social media icon that touches 200 million everyday.

But even brands who cozy up to Facebook in TV spots don’t promote their own page in the spot. They give no compelling reason to visit them on Facebook, no call to action, in fact no instructions on how or what to do it even if the viewer wanted to connect with them on Facebook. Which infers that that the advertiser isn’t so interested in having folks visit them on Facebook. Which infers that they have yet to realize, quantify or otherwise evaluate the benefit of Facebook interactions.

Again, the social media ROI dilemma.

Social media is difficult to quantify and always will be because it’s a brand play. A positioning play. A PR play. Twitter, Facebook and media-sharing sites are places to listen (market research) make impressions, join and steer conversations, publish information, and drive brand image. Every day, social media looks more and more like broadcast media, facilitating one-to-many interactions.

Because “online marketing” including SEM, SEO, email and affiliate marketing, has grown up as a direct marketing discipline, it doesn’t know what to make of Facebook and Twitter. Neither are demonstrated lead gen or new traffic generating vehicles. Yet as emerging web-based, interactive channels, social media responsibility often falls to the “online marketer”, who ROI-driven by nature, is skeptical (ahem).

Online marketers who are responsible for the total online presence from AdWords to social media often leave the company Twitter profile to an afterthought. A wise friend said to me back in 2005 when the whole of the Internet was surging toward investments in direct, data-driven marketing, that in the total mix, “there will always be a place for brand, there will always be a place for direct and it’s a mistake to divest entirely in brand marketing online.”

Data: The New Black

the_new_blackThe NYT makes data-driven marketing look like the hottest new trend. The article title, Put Ad on Web. Count Clicks. Revise. puts to mind one of the first pieces of marketing copy I worked on for an optimization SaaS provider several years ago: Test. Adapt. Repeat. or somesuch was our pithy copy describing what we helped marketers to do.

Love the piece’s Wall Street meets Madison Avenue description of the future of data-driven marketing. Perhaps we geeks who get giddy over data will soon have our time in the limelight!

Customer Experience Optimization: Technology + Metrics + Culture

delightful_resultsWhile the Industrial Revolution ushered in the era of the celebration of product, the Digital Revolution now celebrates the consumer.

Because today’s consumers initiate and control the conversation, the sooner marketers shift from a product to a customer experience focus, the sooner they will reap the benefits of adapting properly to the changing marketplace.

More than ever, today’s marketers are increasingly interested in building optimal customer experiences that drive long-term profitable relationships than they are in driving revenue from widget sales. As they should be. In the age of the empowered consumer, marketing optimization is quickly becoming a function of managing the customer experience.

Shifting from product to customer experience marketing indeed seems a daunting task for enterprises with multiple lines of business operating across multiple channels. Exactly how is it done? Where do we begin?

Optimization is an ongoing, iterative discipline that is part technology and part process. It’s important to consider investments in each when making the move to customer experience optimization. Although technologies for optimization are easy to spot, processes are less so. The difference between formalized business processes that remain focused on product marketing and those trained on optimizing the customer experience is evident in two key areas: metrics and culture.

So where should you begin? By making investments in all three—technology, metrics and culture—in order to make the switch from product-centric marketing to customer experience optimization.

Technology
There are many forms of marketing optimization technology, including those that focus on multivariate testing, or controlled experimental design and rules management. The term “optimization software”, however, spans a number of applications from web analytics to behavioral targeting to paid search bidding tools.

The market for marketing optimization technology is emerging, fraught with change, overlap, widely differing approaches and sometimes contradiction. Keeping your eye on the fundamental objective of optimization—to ‘make as effective, perfect, or useful as possible’—is a good way to ensure that your optimization technology investments are sound.

Just keep in mind that s focus on controlled testing should provide the backbone for any marketing optimization approach no matter what the technology investments—or constraints.

Metrics
What you choose to measure is as important as measurement itself. Marketers often take great pains to vet investments in measurement technologies and processes, scrutinizing features and methodologies to ensure that their new metrics capability is top notch. Often, however, the plan for exactly what they will measure is less thoroughly drawn.

How well your business generates and maintains long-term profitable customer relationships depends both on how well you manage each customer interaction as well as the entire experience across media and channels. Both the granular detail and the bird’s eye view matter. Your recent ad campaign might have generated huge lift in site traffic and conversion, but upon further inspection seems to have delivered rather undesirable customers. Order values are down and a high return rate has put a strain on customer service. Your successful ad campaign has in fact reduced profitability, but if you only measure ad clicks, you don’t even see it.

Customer experience optimization means implementing a metrics framework that measures your campaigns and programs by their ability to drive broader business outcomes than just clicks. It requires cooperation from many different functional groups, like IT, operations, and marketing and should include a plan for building communication and understanding between these groups. Because they typically start out with different needs and goals, disparate measurement priorities and data requirements, varying measurement infrastructure and methodologies, a proactive, considered plan for how to consolidate your metrics framework so that it still delivers value to each key stakeholder is critical.

Culture
“Optimization is part process, part technology.” “Customer-centricity is a journey not a destination.” “There is no optimization silver bullet.” Common—and quite true—refrains in the marketing optimization marketplace. Each of these statements infers that there is something else going on in the practice of optimization that can’t be addressed with black box solutions.

One of the biggest obstacles marketers face as they endeavor to optimize the full customer experience is organizational culture. Although marketers talk an awful lot about delivering great customer experiences, 75% report they have no single person named responsible for the entire customer experience from end-to-end. Silos exist.

Especially now that customer experiences are woven across multiple media and channels, multiple functional teams are usually involved in making them happen. Without a strong conductor on the bandstand, these teams don’t necessarily operate in concert. The ability shift from a product to a customer focus in your marketing efforts can be much more of a management problem than a technology problem.

Remember that you don’t use paid search advertising to sell widgets, you use it to attract the right types of customers who happen to be online at the moment. Shifting your focus away from the product and even away from the channel itself are key first steps in championing the move toward customer experience optimization in your organization.

Web 3.0: Show Me the Money

piDespite a sincere enthusiasm for all things Internet, Site can’t help but to have noticed a lot of over-valuation going on.

Site applauds recent news from Silicon Valley that increasingly scrutinizing eyes are being put to Internet-based investments. Most notably, VCs now seem more interested in investing in companies projecting non-ad-based revenue models, citing that Accel’s early investment in Facebook might not be repeated today given the social platform’s challenges with monetization.

Making money online is attractive because it’s extremely efficient and cost-effective if done right—not because it magically happens with when traffic or even market share get large. Potty-mouth notwithstanding, Jeremy Schoemaker makes a nice case for caution when counting your Internet chickens before they are hatched in his 7 Deadly Sins of People Trying to Make Money Online.

Making money online is smart. Making smart money online is even smarter. Cheers to the portfolio managers who see past simple site popularity and look for clean, predictable and short paths to profitability when deciding how to spend investment dollars.

‘Twas the Night Before Twitter Got Montetized

moneySo what do we think, Tweeters – would we like to get a fraction of a penny for each Tweet? According to Ad Age, it can be done in three easy steps.

Site is skeptical. Volume is the name of the game in online advertising – advertisers have to kiss a lot of toads (put forth many, many images) to find a prince (get a click), even when the audience is well targeted.

Although some Tweeters have impressive follower volume, we’ve yet to see numbers that would mean anything to an advertiser, most of whom need to present an ad to several hundred thousand unique visitors a month before they see any real ROI from an advertising investment. Keyword: uniques.

Sure, our Twitter followers are highly targeted, presuming they self organize into networks of shared interests, but their networks are also relatively static. We’ve yet to see any single member of a social network – not My Space, not Facebook – see hundreds of thousands of brand new unique visitors to their page every month.

The result thus far has been that all that fantastic technology that can scan content and determine what product and service categories will interest the followers of one specific Tweeter or the visitors to a single Facebook page, usually identify one or two. This explains why when we log into Facebook and visit our friend’s pages, we see the same stale ads again and again.

Site thinks the content + ad model for monetizing web properties works quite well for many, but not for all and especially not for social networks. Facebook has yet to monetize profitably, let alone find a path to sustainable revenue growth. Famous for giving away the store to Facebook app developers who do see hundreds of thousands of unique visits per month, Site predicts Facebook will soon discover this is the only real revenue stream on the property. Watch for Facebook to start taking a bigger slice of the pie from application ad revenue.

Especially in today’s economy the path to revenue for online ventures needs to be much, much shorter. Investors don’t have five or six years to wait around for Amazon to get profitable anymore. Site is keeping it’s eyes and ears open for social networks that skip the ad model and aim for immediate revenue sources – direct commercial relationships with their users in the form of subscription fees.