Making the Case for Platforms (Warning: Explicit Math)

In some recent posts, I’ve discussed the values of platforms over campaigns.   For those of you just joining us, platforms, or brand-owned spaces that foster long-term engagement with customers, offer an economical alternative to acquiring and re-acquiring customers via Facebook and Google.

Today, I’d like to discuss the economics.  There will be math.  I am not above putting pictures of puppies in this post to keep you engaged.

I will stop at nothing to get you to pay attention to numbers.

The basic equation shouldn’t hurt; you need to compare costs to build and maintain the platform against expected customer value over a relevant time period.  I have no hard-and-fast figures for any of the above.  As always, the devil is in the details.

Costs to build and maintain

Costs fall into two categories: costs to create the platform and costs to drive consumers to it.  Creative costs vary as widely as the forms they take.  These costs depend mostly on what the marketer intends the platform to do, which in turn depends on what’s right for the audience.  Figuring out platform functionality–and hence creative costs–will probably take up the lion’s share of strategy development time due to the open-ended nature of building a platform.

Driving customers to the platform, aka acquisition, also represents a substantial cost.  Yes, despite all I’ve written about turning away from campaigns, I will now discuss why platforms require campaigns.

Puppy reminds you to think about a cost per action model!

A platform won’t grow customers all by itself.  Just as with any other marketing tactic, marketers need to make sure their audience knows about it for it to succeed.  That said, bear in mind that the platform will have lower acquisition costs than, say, a campaign designed to sell something.  A relevant platform offers something useful or entertaining to the consumer, something of immediate value.  A timely article or a fun mini-game will have broader interest than a straight sell.

Expected customer value

Acquisition costs nothwithstanding, platforms ultimately must drive some measurable value such as sales.  Direct brands and retailers have no problem here since they can usually connect a visitor to a sale easily.  Other brands in sectors such as consumer packaged goods, automotive or consumer durables have some more math to do, especially in terms of attribution.  The same goes for direct or B2B brands that don’t rely on digital channels to close the sale.

In short, how the hell do you correlate activity on a cleaning tips app to sales of a washing machine?

It’s not “attribute,” it’s “attri-cute!”

As Bob Dylan would have said had he gone into marketing, “the answer my friend, is proxies.”  Well, he might have said it, at any rate.  Marketers need to find good proxies for purchase behavior.  Let’s use the cleaning tips app and imagine our client is GE appliances (disclosure: they were a client of mine before GE sold them off).  GE appliances could push a coupon through the app or encourage new purchasers to register their new appliances via the app.  From this proxy, GE appliances could use the cost of the appliance or some derivation thereof as the yardstick for value.

Relevant time period

Marketers can’t measure a platform’s success in the same relatively short time period that they might use for a typical campaign.  Platforms engage consumers at different points of their journey, so results may not happen in the near-instant time frames associated with digital campaigns.

As a starting point, the time period for measuring platform success should correspond to the customer journey in some way.  On a recent platform project for an automotive brand, for instance, I used three years as a period of measurement because three years represents a typical (if short) ownership period for a car.  For the appliance example above, ownership periods represent too long a period to wait; people hang onto major appliances for more than a decade!  Instead, it might help to look at a length of time related to the purchase cycle.  A typical CPG, on the other hand, has the opposite problem.  People replenish their pantries and supply closets weekly.  As a result, the measurement period might represent a typical timeline for a customer to go from new customer to brand-loyal customer.

That wasn’t so bad, was it?  Now, let’s talk long-term lease depreciation.

I’ve sketched out the math for platforms in very broad terms.  Hopefully, you can use this math as a framework for evaluating ideas that will allow you to break your brand’s dependence on the digital duopoly.  If not, I hope you liked the puppy pictures.

OK, P&G. I’m Impressed

“Only Nixon could go to China.”

A Procter & Gamble ad promoting their Olympic sponsorship reminds me of this old political chestnut, made popular by “Star Trek VI.”  I speak in particular of the vignette of a bullied, gay male figure skater being consoled by his mother.

I’m impressed

As the right-thinking among us say “it’s about time,” let me ad some context.  Nearly a quarter-century ago, I conducted communication check interviews for Cognac Hennessy to determine whether an ad read “gay” or not.

For the blessedly uninitiated, brands often run communication check interviews to confirm that an ad gets the main idea over to its audience.  So Bud might conduct communication check research to ensure that beer drinkers who saw a TV spot heard “beechwood aged” enough times to get the point.

Hennessy’s ad, a pencil sketch concept at this point, featured a younger man hugging an older man with a headline about the experience of coming home.  As an aside, the sketch of the younger man bore a striking resemblance to our account director, David Freeman (RIP, Dieter), Apparently, two men hugging in 1994 was a big deal.  So happens, most respondents didn’t see the ad as depicting gay men, although a few suggested that maybe the younger man was gay and the hug signaled acceptance from his father.

Lots of things happened between then and now, including “Will & Grace” and Obergfell v. HodgesEllen DeGeneres kissed a woman on prime time TV and the world didn’t end.  The arc has truly bent towards justice on this issue, even as some remain opposed.  As Kahlil Gibran said, “the dogs bark, but the caravan moves on.”

Kudos to P&G for joining the caravan and leaving the dogs behind.

Why rent when you can buy? The argument for marketing platforms.

In my last post, I argued that Facebook’s decision to shift their news feed algorithm away from publishers’ posts and back towards friends’ and family members’ posts should encourage marketers to build platforms as a hedge against changes that might hurt them.  Solid advice.

Now what the hell is a marketing platform and why should marketers invest in one?

In terms of description, a marketing platform is a long-term marketing initiative, often but not always digital, that engages customers and prospects at one or more points along the customer journey in a brand-owned space.  Let me emphasize that last point about a brand-owned space.  In some ways, platforms work like branded content in reverse; rather than engage consumers in a trusted publisher’s space, platforms build brand trust by becoming media properties themselves.

Some of my favorite examples of marketing platforms include:

Society of Grownups, Mass Mutual’s content platform for adult financial education

These models are about as psyched as you are to learn about IRAs

Society of Grownups speaks to a segment of recent-ish college graduates who need to start making financial decisions with lifetime consequences.  Creating the Society of Grownups platform gives Mass Mutual’s content some credibility without relying on a publisher brand.  They update it frequently with new articles, graphics and calculators to encourage ongoing learning.

DIY Projects & Ideas, Home Depot’s tool and project tutorial series

Now I have a nail gun. Ho. Ho. Ho.

Home Depot has, of course, featured live tutorials in their stores for ages (and these, incidentally, serve as a great example of non-digital platforms).  Putting these tutorials online might represent an obvious next step for our connected and busy world.  However, they also encourage consumers and maybe even some pros to keep visiting the site and to build their trust with Home Depot.

Yeah?  So?  Why should I spend money on one?

Obviously, platforms such as these, which depend on fresh content and functionality, don’t come cheap, so why build them?

In terms of the investment discussion, it helps to think of platforms as a way to buy your audience’s attention rather than to rent it.  A successful platform reduces the need to acquire and re-acquire customers and prospects every time they reach the “shop” or “buy” phase of the customer journey.  They keep showing up because the platform has something of value for them.  Continued visits build brand trust that ultimately leads to purchase.

Speaking specifically of digital platforms, they can also play a valuable role as CRM tools.  At their simplest, any platform can have a “buy now” button or something similar.  The nail gun video above has links beneath it to drive users to a nail gun buying guide that leads to product pages.  More subtle approaches can gather data about visitors (assuming proper permissions, of course) and provision them with appropriate content and offers when they display buying behavior.

In a subsequent post, we’ll discuss how to build, maintain and most importantly measure the performance of marketing platforms.  For now, though, think of what you could do with your audiences if they belonged to you and not Facebook.

Facebook’s Revised News Feed is a Hint-and-a-Half for Your Ass

Pundits have not yet finished the volley of thought pieces in the wake of The Zuck’s decree that his kingdom’s news feed will focus more on posts by your friends and families and less on posts from publishers and, more to the point for our purposes, brands.  This move reminds me of the advice of noted marketing guru Eddie Murphy to people in horror films: “that’s a hint-and-a-half for your ass to get out.”

OK, maybe I exaggerate a little by suggesting that brands get out of Facebook (hey, clickbaiters gonna bait), but I think they should stop relying too much on Facebook for engagement and start building their own platforms.

It’s not an ark.  It’s a species diversity platform.

First, let’s acknowledge that no one, maybe not even Zuck himself, knows what the news feed change really means.  On the face of it, the change seems to limit opportunities for brands to buy their way into Facebook users’ consciousness.  However, Zuck didn’t become a gajillionaire by ignoring marketers’ and publishers’ wants.  Based on my studies of the Mafia and OPEC, I suspect that the Hoodied One wants to drive up margins by artificially limiting supply.  Take that as someone who grew up in the home state of Tony Soprano and Exxon.

Regardless of Facebook’s endgame, marketers should take this moment to acknowledge the media duopoly.  Facebook and Google account for 77% of all digital ad dollars spent.

As an alternative, look to create platforms rather than campaigns.  Specifically, I mean digital platforms such as The Wirecutter, an e-commerce platform owned by the New York Times or American Express OPEN’s Forum platform.  While campaigns and platforms both engage consumers around a brand, platforms seek long-term engagement rather than a limited time capture of consumers’ attention.  To put it another way, platforms help engage consumers when they’re interested in something, not merely when marketers have something to say.

Over time, successful platforms reduce the need to rely on Facebook or Google to snag consumers’ attention.  They become self-sustaining.  Facebook can restrict its news feed to French bulldogs for all your brand cares.  As my friend and mentor Tim Suther likes to say, “why rent your customers when you can buy them?”

Take the hint.  Build a platform.

Why Not Blockchain for News?

For the first time since color film, Kodak might be onto something.

Provider of mobile technology since ’88.  1888.

Pundits have already savaged The Great Yellow Father‘s entry into blockchain with KodakCoin.  After all, Bitcoin and cyrptocurrency hype continues to soar despite cautions from pretty good sources.

However, before consigning KodakCoin to the scrap heap, consider what Kodak and its partner WENN digital media created the product to do.  They intend to take advantage of blockchain’s distributed ledger to track the usage of photographs.  If you’ve never waded into the mire of photography digital rights, consider yourself lucky.  Fair, compensated use of photographs bedevils photographers and commercial entities who use photographs alike.

Also consider the larger opportunity: fake news.

Photo manipulation (e.g. Photoshop) has forced us to question the reality of a photograph since the days of Matthew Brady.  Now the ability to create a realistic photograph from nothing but algorithms has started to emerge.  A distributed ledger could verify that a picture of, say, Elvis shaking hands with President Nixon, really happened.

Why stop at photos?  Couldn’t we use a blockchain-driven technology to allow consumers to see who actually created a news article or video?  Sure, we can assume that a story appearing on the Wall Street Journal’s website really came from a WSJ reporter.  However, when we see a dubious news story in our Facebook feed, couldn’t something like KodakCoin let us know where it really came from?

I can’t wait to see how Kodak–wait for it–develops this idea.

What I Learned about Leadership from Brendan Byrne

Few outside the Garden State will probably note the passing of Governor Brendan Byrne, who served two terms from 1974 to 1982.  He never ran for President, nor did he have any notable scandals in his administration.  For most of his tenure, New Jersey played the butt of the jokes from other 49 states, with the emergence of Bruce Springsteen as the notable exception.  However, I learned a little bit about leadership from him, thanks to my grandfather, that I carry with me to this day and, I hope, I live up to.

If my meeting the Governor happened by chance, my grandfather helped the odds a bit.  Before his career in government, Byrne practiced law and had my grandfather as a client in the 1950s.  In 1980, my grandfather celebrated his 65th birthday by taking his children and grandchildren to Bermuda for the Memorial Day weekend.  We ran into the Governor in a hotel lobby.  My grandfather strode across the carpet and shook the Governor’s hand, exchanging greetings and asking after each other in a polite but genuine fashion.  As a 10-year-old, I stood awestruck that my grandfather spoke so easily with, by my reckoning, the second-most-powerful politician in America.

Years later, I spent a summer working at my grandfather’s demolition company doing everything from driving him around to jobsites to picking steel rebar from the rubble of recently-dismantled buildings.  Among other things, I saw my grandfather interact with the men who worked for him as foremen, truckers, equipment operators and laborers.  And that’s what he called them, “the men.”  Never “the guys,” “the fellas” or even the faux-honorific “the gentlemen.”  Always “the men.”

He spoke frankly and genuinely with them.  He had an easy familiarity with them that he did not put on.  It was how he talked.

Years later, I would note that he spoke as easily with his men as he did with the Governor.  And that’s when I realized a great truism of dealing with co-workers.  The opposite was even more true: he spoke with his men with as much respect as if they had been the Governor of New Jersey.

Data. And Research. And Fried Chicken.

When it comes down to it, marketing strategists have only three tools at their disposal: data, research and their own opinions.  Make that two things; opinions don’t count because everyone else has them, too.  Strangely, most strategists willingly ignore 50% of the tools remaining and focus on just research or just data.  I’ve learned that not only do research and data strengthen each other, they also cover each other’s blind spots.  If you consider yourself a strategist, you should use both.

The case for research informing data

Imagine a clothing brand that sells a sweater in both black and white in its online store.  Any data analyst can pull an astounding amount of information about the sales that will inform marketing strategy.  At its simplest, these data can show what percentage of people bought black vs. white out to as many decimal places as you please.  Without too much trouble, an analyst could also find interesting trends such as which color sold better at which time of the day or which one resulted in the larger average order size.  Add in data about the buyers and the analyst can tell you where black sold better than white or which sold better to longtime customers vs. first-time buyers.

Know what the data can’t tell you?  How many people wanted a blue sweater instead?

While data partisans prize data for their irrefutability, data tend to look backwards at what people did and not forwards at what they might do.  Looking forward means more than adding another sweater color.  In a larger sense, it means seeing opportunities that data simply can’t predict.

The case for data informing research

Research, on the other hand, has something to learn from data.  One need only look at polls where Americans report interest in healthier foods and compare that interest to actual sales of, say, Doritos to see the limits of research..  The discrepancy between what people say and what they do doesn’t invalidate research, of course.  Research gets strategists into the heads of consumers in a way that data simply can’t.  Like a CT scan, good research shows us not simply what consumers think, but how and why they think that way.

That said, data enhance research’s usefulness by giving scale and weight to findings or even by ensuring that the strategists answer the right questions in the first place.  In a famous example from the 1960s, one of the corn oil companies conducted research that proved, to them at any rate, that people preferred the taste of home-fried chicken over a new product, Shake ‘N Bake.  Correct answer, but to the wrong question.  Had the corn oil company recognized that people DID buy Shake ‘N Bake, perhaps they would have asked those purchasers WHY they bought the product and taken action to maintain sales of their product.

Come to think of it, I’d like to research a nice piece of fried chicken

Think “both/and” not “either/or”

A strategist who employs both data and research together can expect to provide stronger rationales for her recommendations.  Data give research a foot in the here-and-now while research gives data more understanding of why the numbers are what they are and how marketers can identify new opportunities.  Try using them to support one another and then maybe, just maybe, your opinions might count after all.

Humor: Generic Creative Agency Mission Statement

The work matters most.

The work tells you when you can go home, not the clock, not your boss and not your dog just barely holding it in.  The work comes first, slams the door in your face and laughs under its breath.  The work doesn’t wait more than three minutes at Starbucks.

The work pays the bills, puts a roof over your head and expects you to take out the trash, you bum.  The work calls its mother every day.

The work matters most.

The work matters more than E divided by C squared.  The work wrote all of Chuck Norris’s so-called facts.  The work has a bigger following on Instagram than Beyonce’s dog.  The work can make jokes in French.

The work is probably sleeping with that co-worker you haven’t worked up the courage to ask out yet.  The work can make Cross Fitters shut up for a second.  The work literally can even.

The work matters most.

The work matters. You do not.

Pro Bono Advice: Be Like the Watermelon

Marketers often turn to pro-bono or charity work to give back to the community, to use their skills for good or even just to get experience they can parlay into paying work.  I can’t tell you why you should volunteer.  However, if you do volunteer, I advise you to be like a watermelon: develop a thick but porous skin.

I am not even remotely above using pictures of babies to get you to read my blog

The watermelon analogy stems (sorry) from the realities of charities and not-for-profits.  Most often, people work or volunteer in this sector because they have strong feelings about the subject, whether it’s the environment, religion, an illness or civil rights.  Moreover, these people often have a difficult connection to that subject.  This connection both makes the work more meaningful and more difficult.

You need a thick skin to take on some of the more uncomfortable issues, yet you still need to let some of that discomfort in to remind you of why you take on the work.

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So You’ve Painted Yourself into a Corner

Some articles by marketing strategists expand your horizons and render your giddy over the endless possibilities of our craft with soaring language and sparkling analogies.

This is not one of those articles.

Instead, this article focuses on one of the more grind-it-out aspects of our trade: what to do when you’ve got to provide strategic input for a purely executional project.

Rise and grind, kids.  Rise and grind.

You know the type: you have to direct your creative team to complete a very prescribed set of display ads, emails or social posts to meet a specific set of objectives, which usually boil down to clickthroughs, even if objective focuses on branding.  More often than not, someone else, perhaps at a different agency, has finalized the brand strategy and creative idea, aka “the fun part.”  More to the point, this project may not actually make sense to you.  For instance, in the above example about objectives, clickthroughs do not serve as an effective proxy for branding.

Or the task may involve picking existing creative assets to fill a role they weren’t designed for.  You’ve got the proverbial hammer all right, but none of the problems looks like a nail.

I liken this situation to the proverbial “painting oneself into a corner.”  It doesn’t matter what color you’ve used; you’re stuck.

Here’s the secret: don’t think of it as a chore, think of it as…ah, who am I kidding?  It’s a chore all right.  However, that doesn’t mean you can’t stretch your strategy muscles and make something as good as can be.  Hell, maybe you can even make it fun, as long as you have a flexible definition of fun.

Let’s assume “do something else” isn’t an option.  I’ll admit that I’ve often taken “no” for an answer when I could have pushed back a bit.  Mea culpa, but mea cupla minima as I’ve learned the hard way that pushing back ends badly more often than not.

Instead, try this approach:

    1. Clarify objectives and metrics.  Go over both thoroughly with the client or client manager.  As the strategist, you have to be clear about them even if the powers-that-be aren’t.  Pay close attention to any disparity between objective and metric, such as the branding/clickthrough inconsistency.  You better believe that when it comes down between the two, the metric will matter more than the objective.
    2. Find the most likely key.  Here’s where you earn your kibble.  Use whatever you can to establish which factors drive the metric that matters most.  In the best case scenario, you have previous results that you can parse for clues.  Fire up Excel and look for anything that you might compare.  These comparisons might include the basics (segment, offer) and any and all creative factors (headline/subject line length, call to action copy, image content).
      Unless you have really huge audiences, you’ll probably end up with anecdotal evidence.  But that’s better than nothing.  By the way, if you do have nothing, raid whatever you can for insight, including the overall brand brief, customer research or even insights pulled from competitive or desk research.
    3. Build your brief around the factors that emerge.  Present those factors to the creative team as puzzle pieces.  Encourage them to think of themselves as beating the brief; finding the tricks that will make the whole thing work.  Then let ’em rip.

 

While we pride ourselves as strategists and planners by our ability to weave together the whole cloth of new brands and platforms from the frayed threads of consumer insight, business requirements and cultural trends, we still have to pay the bills.  In this case, paying the bills means writing the quotidian briefs and offering the quotidian feedback on the long tail of client relationships.  Rise and grind.