What is the difference between metrics and analytics?

The HBR blog Network recently posed some interesting questions regarding the “technology and analytical IQ” of marketing professionals, among them was defining the difference between metrics and analytics.

It is more than simple semantics these days. Webster gives the following definitions:

Visual of Metrics

Metric: A standard of measure.

Analytics: The method of logical analysis – a careful study of something to learn about its parts, what they do, and how they relate to each other. An explanation of the nature and meaning of something.

Here are some thoughts on the matter:

Metrics are based on historic data points, tangible in nature and can come these days from business transactions and the vast output of geographic location / behavioral data from mobile devices and social media.

Analytic Data at Work: SGI  Heat Map of Angriest Tweeters.

Analytics are intangible; future- focused in an attempt to predict possible outcomes and  designed to provide insight that can support better business decisions and feed business scorecards.

Metrics gather information in reports – often from an accounting perspective.  Analytics use that information to ask relevant questions and feed finance-related decisions.

Metrics are transactional and of low value. Analytics can and should be used to inform strategic directions that have the ability differentiate an organization, driving profitable growth thus having a much higher value.

So the heat map of angriest tweeters (based on negative sentiments expressed) doesn't support any business decisions, but may tell me to steer clear of east Texas, Ohio and New England.

In the end the astute 21^st Century marketer should be thinking along the lines of:

Metrics ->  Analytics ->  Insights ->  Better Informed Decisions ->   Optimized Outcomes.

Making the Argument for Marketing as a Science.

So much data, so little time to make sense of it all.

Been reviewing the debate about marketing being more of an art than a science, sparked to a great degree by a recent Harvard Business Review blog post on "How to find, asses and hire the modern marketer."

I agree with their premise that marketing as a discipline has undergone a significant amount of change, mainly driven by emerging technologies and the analytic data it has created. They argue that modern marketers need to be adept at understanding data and analytic information beyond simple metrics.

The Scientific Method

The long and short of it is that modern marketers need to take a "test-learn-apply" approach to nearly everything they do. It doesn't really matter how much ad agencies, marketing executives and senior management like marketing programs / ad campaigns, but rather how well they engage their target audience and get them to do something aligned with the firm's marketing and business objectives.

And it is more about engaging in a mutually beneficial conversation through marketing rather than shouting at or simply entertaining people with advertising. The HBR blog post has some great "test" criteria for evaluating the skills of a "modern marketer" around knowledge and use of data and analytics to aid business decision making and gain learning from failed efforts. They provide some smart guidelines to help assess a marketing candidate's technology and analytical "IQ" in addition to their marketing savvy.

Ad Age just reported that more and more Chief Marketing Officers now have engineering backgrounds. The story cites the likes of Salesforce CMO Lynn Vojvodich and Jet Blue's SVP Marketing and Commercial Strategy Marty St. George, the latter holding an engineering degree from MIT. 

St. George commented "Today, in the world of big data and trying to find a way to turn this incredible volume of noise into insights and actions, I definitely find myself falling back on my engineering tricks." he went on to say "When an issue comes up, my first thought is: How much data can I gather to try to triangulate around what's happening? I think that's definitely consistent with an engineering mentality."

This trend calls for a significant re-education of "seasoned marketers" and I've found many of the local Meet-Ups in NYC a great place to gain best-practice knowledge around data / analytic thinking, including "Data Driven NYC" / "Hardwired NYC" / "NY Tech Meet Up" and fun groups like "NYC Data Wranglers."  Note than many of these events "sell out" fast - so be sure to plan ahead to get a seat.

The modern marketer - akin to winged Pegasus in power?

These Meet Ups draw an eclectic combination of data geeks, business people and entrepreneurs more than willing to talk about what they're working on and how they are defining this new data-driven world. It's great to then connect with them on Linked In and follow them on Twitter.

The best part of the HBR post is the description of the modern marketer - having a blend of creativity and reasoning talents, inquisitive, inventive and enthused by a culture that is advanced and agile. I am going to work hard on further developing all these skills / professional attributes in 2014.

Marketing: Still Part Art and Part Science.

So what's the big deal about creating ads that go viral?

A while back I learned the advertising axiom “If it doesn’t sell, it isn’t creative” attributed to David Ogilvy. I also learned at DDB that “Word of mouth is the best medium of all” – from our beloved founder Bill Bernbach.  In today’s digital age content sharing has taken that notion to a new level.

But what are 20 million views of a funny ad worth on You Tube if they don’t help sell? 

Christopher Walken and Amy Poehler from SNL.

K-Mart’s “Ship My Pants” uses the time-tested approach of saying something over and over that sounds like an off-color word. K Mart agency draftFCB Chicago was wise to follow Saturday Night Live’s classic “Colonel Angus” skit gag along with their “CorkSoakers” skit. This kind of humor works.

K Mart followed with “Big Gas Savings” and “Show Your Joe”(16 million views) that went viral as well. So K Mart should be thrilled? Well not so fast. Their important same-store sales metric is off 2.1% in 3 Q 13, which isn’t helping the cause with parent Sears Holdings. Sears lost $ 534 million compared with a year-earlier loss for the same period of $ 498 million. 

K-Mart’s bright spot was a 17% jump in online and multichannel sales, so maybe people are shipping their pants (and other stuff) after all.

Mashable had a great write up on this whole issue “So Your Ad Went Viral – big deal” citing the “Advertising Bench Index” that supports the idea that ads should pitch a product above all else.

Legendary Ad Man Bill Bernbach.

This whole argument boils down to the simple fact that advertising is part art and part science. I’ve worked that places that placed great credence on the “art” or creativity side like DDB foster by founder Bill Bernbach, and other agencies where it was all science (or spend optimization) all the time like Grey Direct / G2 / Geometry Global.

Some firms like video agency Unruly push the value of the social sharing agenda by publishing a list of the most shared ads in 2013, as a metric. "Shares are the currency of social success and for leading brand marketers discovering how to create and distribute highly shareable content repeatedly and at scale is now at the top of their wish list," Unruly U.S. President Richard Kosinski said in a statement.

"And Your Reason for the 17.7% share loss was..?"

I'd bet these social sharing advocates never worked a client-side marketing job - and had to explain a falling market share and missed revenue target to senior management by countering “Gee – lots of people really seem to like our ads these days.” That argument never made senior management warm and fuzzy, usually followed by a disappointing incentive comp payout.

I still like watching “The most shared ads of 2013” – but taking the marketing process downstream to a profitable end with boring marketing effectiveness metrics  still has its place in an increasingly accountable world.

After all when marketing helps drive long-term profitable growth – doesn’t that give senior management something to talk about at the quarterly earnings call? And often it is growth that drives upward movement in equity valuations, or the real value creation for a business. I’m glad I learned that lesson in business school.

Data Exhaust and other thought provoking trends.

 Matt Turck with Gilad Lotan from Betaworks.

I had the chance to attend the 
Data Driven NYC # 20 last night at the Bloomberg LP building. This meet-up was founded by Matt Turck from First Mark Capital and offers some of the best data analytic thought leadership around, for free.

The event featured an all-star lineup of data talent, from Hilary Mason - Data Scientist in Residence at Accel (with almost 30,000 followers on Linked In) to Giland Lotan - Chief Data Scientist from Betaworks, a firm that utilizes data driven approaches to draw insights and understanding from social streams. What this guy did with visual analysis of a social flow audience study was amazing.

Betaworks social flow audience study graphic.

The event featured smart content, well presented with engaged speakers. They fielded a broad range of questions from the audience, and were around afterwards for lively one-on-one conversations. As a non-tech person I did not feel as if these people were taking over my head at any point. Better yet check out their personal blogs for really interesting content and thinking.

One of the most thought provoking presentations was from Blake Shaw, Data Scientist from Foursquare - the location based social networking website / app for smart phones. I thought they just offered an annoying service that allowed people to tell the world where they are.

I was dead wrong. Blake explained how Foursquare is using contextual data feeds - of "data exhaust" from mobile device users to build a contextual data feed. In plain English - news you can use based on where you are going and what you plan to do.

They've evolving the service into push content that will help people get smart about just about anything they plan to do, ahead of time based on near real-time information. This really advanced the idea of people being able to use their mobile devices to interact with their environment.

I recommend signing up for the December Data Driven NYC event well in advance.

Ready. Set. Now where are we going?

Being a typical American guy I am not too big on asking for directions, even when I am lost. It was much worse before smart phones with GPS direction finding functions, a fact not lost on me when I am driving anywhere in New Jersey.

It seems like many ad agencies and clients are living the pre-smart phone era from a strategic marketing standpoint. For the life of me I do not understand many of the ads that I see. 

Take for example this ad for Volvo Trucks featuring 53 year old Jean-Claude Van Damme and his trademark "spits" move. What are they trying to sell? Who is the target? Why does this ad seem 100% “benefit-free?”

One of my business school professors said “Sears sells lots of 3/8” variable speed cordless drills every year. But people do not buy the drill, they buy the hole in the wall – the end benefit.” Or maybe the power of a drill - as shown in this ad from DeWalt tools.

I was taught as a junior AE at DDB to write smart and tight strategies or I’d get thrown out of the creative director’s office on my ear. We needed to clearly state the purpose of the ad, the target (demographic and attitudinal description) and a benefit or promise statement, with three support points, or reasons to believe the promise. What would the product / service do for the user? How would it help the target audience feel as a result?

One agency that still gets it right is Wieden + Kennedy, and it shows in this Grand Effie award winning ad for Chrysler "Imported from Detroit" directed by Serial Picture's Sam Bayer.

 

The challenge was for Chrysler to launch the Chrysler 200 in the absence of any consumer loyalty or eager customers. "Unfortunately, America had turned its back on American cars" Chrysler stated in its entry. "Success requires us to keep the public's eye on Chrysler's future" - a simple and straightforward strategic objective.

As one Effie judge commented "They gave that brand its soul back" and the successful turn-around of Chrysler allowed them to pay off their government bail out loan six years early, and return to profitability.

This disciplined process in a highly creative shop helps develop lots of award winning ads, not only from a creative standpoint, but also from a brand and business building perspective. Chrysler is considering an IPO later this year, following the take-over by FIAT in 2008.

Looks like basic strategic training is gone from most agencies these days, a casualty of cost cutting and plain neglect of practicing a profession that is both art and science. So the old saying “if you don’t know where you are going, any road will get you there” is the order of the day. A sad state of affairs indeed.

Ad Agencies: Strategic Partners or Commodity Suppliers?

A commodity item is often defined as a good or service that is perceived to be of value, widely available, and bought / sold primarily based on price, with little to no difference made based on where it comes from.

I am wondering if advertising agency business has fallen squarely into this definition? Is "good creative" a commodity that can be bought on price along?

Used to be that ad agencies were viewed as important strategic partners and brand champions.They offered invaluable objective perspectives, were sources of business building ideas and advocates of their clients' business from front to back including customer service, distribution, pricing and new product development. They actually used the clients' products and understood them.

Working in both large and small agencies over the years I can recall making board level presentations on important branding and strategic direction issues, stepping in to act as a brand manager for new product launches and spending time in the field with sales people to better understand how our clients products went to market through various distribution channels. 

We spend countless hours analyzing data of all sorts and championed consumer-focused research to better understand our target audiences. Agencies also were experts in the competitive landscape and were excellent at spotting trends of all sorts that might impact our clients' businesses.

Seems these days lots of agencies just want to produce traditional and digital advertising. They have taken on a project management mentality, focused more on delivering the marketing communications programs on time and on budget and avoiding "scope creep."

Not long ago at a leading digital agency - I asked our account team to get on a plane with me to go visit our clients' office. The response I got was "Why should we do that?" They went on "We can just use Skype or set up an online meeting." During the interview process I was asked "Can you turn our client facing staff into real account people?" This turned out to be a significant challenge.

1990 United Spot: Still Relevant

 

 

 

Brings to mind a classic 1990 United Airlines Commercial "Speech" from Leo Burnett that showed a manager talking to his staff about a long-time client that had just fired them. He gives his team members airline tickets to go out and visit every one of their remaining clients.

I am all for new technology, but some of the old ways of doing business - face to face with vested concern in a positive strategic outcome still seem to make sense today.

Ad Agency Business: Is anyone putting client interest first?

I was thinking about the $ 35 billion merger deal between Omnicom and Publicis earlier this year as well as the roll up of a bunch of agencies by WPP including G2, Ogivly and JWT’s former “activation” operations into Geometry Global .

Maurice Levy and John Wren.

I fully understand why the big holding companies are doing this – to drive down back office costs by eliminating operations and management redundancies. In theory this should improve profitability and enhance shareholder value.

But which larger agencies / holding companies are committed to putting their clients’ interests first? Is anyone really thinking about the needs of the nice people who pay?

I went looking for a new financial adviser a while back and ended up selecting a person with the Chartered Financial Analyst credential or CFA. This is an elite group of global investment professionals whose code of ethics is grounded in their commitment to putting their clients’ interest first. I like the fact that my hard-earned money is being well managed by competent investment professionals, who will not do things like “churn” my account by making unnecessary trades.

However it does not appear that the same commitment to client interests is being followed in the ad agency business. I recall when I was a senior manager in several of the largest holding companies I spent lots of time arguing about money. In the morning I would discuss blended hourly rates and compensation reduction with client procurement departments. In the afternoon I would field calls from my agency CFO and President about growing my top-line revenue and improving my unit’s operating margins.

I got funny looks from both sets of people when I made the statement “So as the agency of record are we leading the charge for growing our clients’ business with our marketing and advertising programs?”

One holding company executive pulled me aside and said “Look – we all know we’ll lose this business within two years when the client CMO leaves and the new CMO holds an agency review, so why bother worrying about their business?”

Bill Duggan EVP of the Association of National Advertisers advised: Clients of Publicis and Omnicom should directly ask their agencies "What's in this for me?" and "How will this impact my business?

I've always viewed the most mutually beneficial agency-client relationships as being focused on building the client’s business. This usually produced long- term profitable growth for the client, a few Effie awards, and seldom resulted in arguments about compensation. The Agency simply delivered tangible value and it was rewarded accordingly.