4 steps to becoming an experience brand

If you are truly interested in meeting consumer expectations, you’ll not only be measuring and tracking those experiences but also consistently making updates to improve them.

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Once a primary differentiator, reliable customer service has now become a mandatory commodity. With rising consumer expectations and automated technologies, experience has replaced this long-heralded advantage.

Brands positioned with a customer-first, always-on experience optimization approach and those who build for personalization are poised to be market leaders. Becoming an experience-focus brand has been painted as more difficult than it is. The answers and truth are right in front of us. Your consumers have those answers, you just need to ask – and pay attention.

In working with more than 30 brands on their experience strategies, I’ve found four critical steps to helping brands successfully migrate to become customer experience leaders in their market. The simple formula is to identify, measure, build and test.

Identify audiences and journeys

Identify your audience

Let’s start with an exercise. Suppose money is no object, and you get to pick out a new vehicle. Take a moment to picture what you’d like to buy. Now that you have that vehicle in mind, let’s assume that this is the vehicle everyone else wants. It seems ridiculous that the vehicle you want is assumed to be the vehicle everyone else would want. But, how often do you create experiences using that same assumption? As you design an experience, you need to have an audience in mind, but oftentimes, experiences are developed in a vacuum without consumer feedback. In our current environment audience strategy and experiences should never be developed without some type of consumer insight.

Here are a few questions to help you get started in assessing your audience(s).

  • Who is my current audience? 
  • What data sources do I have available to me (research, analytics, databases, etc.)? 
  • What do they prefer? What are their motivations? 
  • Who is/not responding?  
  • Do my loyal customers look different than everyone else? What type of data and insights am I missing? 

Identify audience journeys

I often think of the journey as the foundation. The good news about building out an audience journey is that there are a lot of good approaches. I do not believe there is one single source of truth to creating an audience journey. The important thing is that you create one. If your budget, resources, and time only allow for a whiteboard brainstorm session, then do it. If you have behavioral data at your fingertips and can look at connected event stream data by specific channels and by individual, then do it. If you have the ability to conduct primary research, please do it.

After building a journey, the first mistake I see is that too many brands try to tackle fixing all of the possible interactions they’ve discovered. Prioritization becomes key; if you are able to gather consumer-driven insights to measure and help you prioritize experiences, then that should be your next step.

How do they behave? How do they buy? What are the most common paths to purchase? What are all of the possible interactions?

Measure experiences

Beginning to think from the consumer’s perspective is the right first step, but it is far more effective to actually measure experiences from their direct interactions. Always-on customer-listening engines have been around for decades. Today’s new wave of measurement is more effective but needs to be further elevated. The Customer Effort Score (CES) has come to the forefront of this movement but is lacking in three critical components: measuring multiple interactions, measuring importance, and measuring revenue. This four-dimensional approach has the power to begin moving the needle.

The measurement of ease to work with a brand across interactions, prioritized within the journey, allows brands to identify the most critical points within the consumer experience. This enables brands to find quick wins to remove as much friction as possible. In the example provided in the image above, one would initially think that “compare plans” and “cancel subscription” should be the areas of focus, but a closer look at importance guides you to prioritize “compare plans” to have the greatest impact.

What are their significant phases of interaction in their journey? Which interactions are the most important? What interactions are in desperate need of help? What is the revenue associated with each interaction?

Build

With a foundational and an architectural assessment, you’ll be poised to build best-in class experiences based on consumer insights. Along the way, an audit of data and technology will become critical to supporting the automation of personalized, people-based experiences. The alignment of key stakeholders across the organization will be another critical component to driving change, which is why a data-driven approach to prioritization from the consumer’s perspective is needed for the potential political battles you’ll be up against.

Another supporting point for your internal journey will be the results from prioritized quick wins. A four-dimensional prioritization of experiences allows the brand to hit the ground running, making immediate improvements to prove out the work, while also laying out critical interactions that may take more significant efforts to improve for long-term planning.

Who are the key stakeholders (detractors/supporters)? What quick wins are we going to tackle? What is our long-term experience roadmap? What technologies/data do I need? 

Test experiences

Another shift in the market over the years has continued in the same vein of always-on, quick-win optimization. Take, for example, website redesigns, as depicted in the image above. Traditional methods would call for significant redesigns every couple of years, requiring weighty amounts of time and money, with gaps and subpar experiences in between. There is a better way. If you are truly interested in meeting consumer expectations you’ll not only be measuring and tracking those experiences on an ongoing basis, but you’ll be consistently making updates to improve them.

What approach are we using today? What tools do I need to conduct testing? What should we test first? Who (internal and/or consumers) should I gather feedback from?

I believe Dentsu Aegis Network Americas CEO Nick Brien sums it up best when he says, “There’s been a fundamental shift in the balance of power. When I started in marketing, I lived in a brand-led world – you changed consumer behavior. But now we live in a consumer-led world. It’s about changing your brand behavior, it is about personalization, it is about relevance, it is about engagement.”

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IBM’s Watson Marketing spinoff launches with agile strategy

The company will focus on delivering marketing solutions that could compete with larger marketing cloud vendors.

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Back in April, IBM’s Watson Marketing announced plans to spin off to form a standalone marketing company under the new ownership of New York-based private equity firm Centerbridge Partners.

The new company, which is still yet to be named, launched on Monday.  The company aims to deliver marketing automation, marketing analytics and content management solutions. 

In separating from IBM’s larger umbrella, Watson Marketing should be able to focus more keenly on its marketing customers’ needs.

“Marketers and advertisers are burdened with mediocre technology and disappointed that most of the promises MarTech and AdTech companies make aren’t kept,” CEO Marc Simpson wrote in a blog post. “They’re being asked to change the way they work to retro-fit to the tools they use, rather than the other way around. The difficulty of making sense of their data is made even tougher by consumers questioning if it should be available to marketers in the first place. We’ve leaned heavily into technology, but seem to be losing the inherent humanity needed to actually move people.” 

While positioning itself separately from its former parent, the new company also aims to adopt an agile approach to help drive its competition with other marketing cloud vendors – notably Adobe, Oracle and Salesforce.

“With over 1,000 people on day one, we’re far from a small company. And yet, we’re also able to be one of the nimblest and most responsive to industry changes of any other marketing cloud,” Simpson added. “We aren’t weighed down by unrelated businesses and large company structures like our competitors, but we have the experience and capabilities to match them and are able to focus 100% on the marketer.” 

Why we should care

In separating from IBM, the new Watson organization is able to move away from some of the antiquated processes of the legacy organizations, allowing it to adopt an agile growth strategy. As Simpson noted, it is not a small company, but launching with an agile-first mindset could play a key role in how the company evolves and maintains its competitive edge against other martech goliaths. 

More on the news

  • The name of the newly-launched entity is slated to be announced later this month.
  • The company plans to “double down” on AI by investing in an experienced team of data scientists
  • IBM marketing and commerce solutions include Campaign Automation, Marketing Assistant, Media Optimizer, Customer Experience Analytics, Content Hub, Real-Time Personalization, Personalized Search, Universal Behavior Exchange, Intelligent Bidder, Price & Promotion Optimization and Payments Gateway.
  • Centerbridge plans to establish a board of directors with deep marketing solution experience.

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How marketers can take the lead with revenue optimization teams

Many marketers are best positioned to drive change, improve alignment and create new opportunities for business results.

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Most marketers are equipped with copious amounts of data that help us understand our customers, create meaningful messaging that resonates with our audience and drives the business outcomes we need to achieve our goals. Marketers also have the ability to translate different trends across customers and prospects such as strong lead generation sources, common themes, objection trends and overall responses to different campaigns. But, many organizations operate in siloes, making it difficult to share these data points with the necessary people.

A solution? Establish a revenue optimization team to bring together the key internal players in your organization to improve alignment and ultimately, drive more revenue. 

Marketers and sales need to track the same goals

Thanks to the amount of valuable information accessible through our martech stacks, marketers can — and should — play a critical role in establishing a customer-centric revenue optimization team.

“Revenue optimization starts with the idea of putting the customer in the center of every interaction an enabling everyone to align around the customer to generate value in every interaction,” said Patrick Morrissey, chief marketing officer of customer revenue optimization platform, Altify. And according to Morrissey, marketers should play a critical role as part of the revenue team, and are best positioned to lead the charge. For many marketers, this requires a shift in thinking about our revenue contributions.

“From a marketing perspective, thinking about the fundamental outcomes, marketers have to start thinking of themselves as part of the revenue team,” said Morrissey. “This intersection presents an opportunity for marketers who are generally better communicators to become the translation mechanism for an entire team. Instead of tracking pipeline, marketers need to track revenue in closed/won business along with the sales team.”

The shift in mindset expands past the marketing team, however. According to Jenn DiMaria, senior manager of client services at marketing automation solution provider Digital Pi, the shift in mindset needs to be organizational. “Marketing is often viewed as a cost center, but in reality, other teams are lusting after the tools and data we have access to,” said DiMaria. “Aligning a revenue team creates opportunities for marketers to improve accessibility  to the data and help bridge gaps with other parts of the organization.” 

Marketers, get closer to the customer

Marketers tend to be far removed from any interactions with customers, but it is extremely valuable to engage face-to-face with customers. After all, marketers understand that relationship-building is key to retaining customers.  According to Morrissey, marketers need to put themselves in the shoes of the customer in order to understand their challenges.

“Marketers should focus on how we can get out of our own way and put ourselves in the shoes of the customers,” said Morrissey. “Going on the road to meet with salespeople and sit with customers will help marketers better understand the market, the broader changes in technology and fundamentally how to help customers succeed, personally and professionally.”

“Marketers need to have some real-world customer experience, explained Mary Ngai, founder of Connector42 and head of analytics and technology at RI. “Even if marketers are listening on sales calls, it can be incredibly insightful in grasping a better understanding of their needs.” Ngai also recommends that marketers attend customer site visits during ongoing projects or sales deals to increase visibility into accounts.

In addition to more face time with customers, Morrissey recommends that marketers lead internal account reviews and deal reviews with the sales and customer success teams. Regularly reviewing the accounts with members of different parts of the organization will expose different issues and areas that can be addressed by the necessary members of the revenue optimization team. Working with customer success can also bring to light what some of the daily challenges and successes the customer experiences — valuable insight for marketers as they developing retention campaigns to drive renewals. 

Leading the path to revenue optimization

Revenue optimization teams present an opportunity for marketers to leverage their communication, analytical and creative skills to improve holistic marketing efforts in coordination with other internal departments. 

“Marketers have proven that we can lead revenue optimization teams as we typically bear the brunt of the responsibility when it comes to acquiring new leads and we have to track our efforts,” said DiMaria. “Also, tools that have entered the market in the past ten years have made this possible.”

The concept of implementing a fundamental shift in thinking may seem overwhelming, but the long-term benefit is streamlined efforts across your organization and consistent communication around prospect and customer activities.

“If you think about the customer journey, we’re all trying to get a numeric view of the customer — BDRs are measured by the total number of call they make and are concerned with propensity-to-buy data,” said Morrissey. “Marketers are providing that data, creating segments and determining what funnel to put a prospect in. Then we talk about deal size or ACV, then finally we’re just an NPS score. Marketers are the ones who can best translate this into plain English, for everyone to understand.”

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Conversion optimization is an operating system (not a tactic)

CRO and growth teams should be cheerleaders for evidence-based decision making, experimentation and the judicious use of data in campaigns.

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I know it sounds banal, but I’d like to revisit the question: “What is conversion rate optimization.”

If you search Google, the answer seems obvious enough. The first result, from Moz, defines it as, “the systematic process of increasing the percentage of website visitors who take a desired action — be that filling out a form, becoming customers, or otherwise.”

That seems right to me.

Then why do so many articles, courses, lectures and talks focus on conversion rate optimization tactics?

These articles – some of which include hundreds of tips and tactics – include advice like “use high-quality images” and “offer free shipping.”

These are assuredly good pieces of advice.

One would assume highquality images would perform better than low-quality images (subjectiveness aside), and I’m sure customers delight in not having to pay for free shipping (though operationally, this adds some complexity).

Any single tactic or tip on this list is not in itself conversion optimization (or growth or growth hacking or experimentation or whatever word you’re using for the practice of evidence-based decision making).

For the sake of this article, I’m going to say conversion optimization and growth, by and large, are pretty much the same thing.

Growth usually encompasses product and marketing, whereas conversion optimization usually just looks at the website experience, though that seems to be a pretty minor distinguishment in the grand scheme of things. Both of these things encourage experimentation, data-driven decision making, and fast learning and iteration.

And people have a ton of “growth hacking tips” and tactics:

However, without context none of this is helpful. Would the aspiring growth hacker or conversion optimizer just run down each list and implement each thing? Test each thing individually?

CRO tactics vs. strategy (and operating systems)

The first learning from these searches is that people misunderstand tactics and strategies and use the words interchangeably.

Strategy is the “overarching plan or set of goals.” Tactics “are the specific actions or steps you undertake to accomplish your strategy.”

For instance, if it were my strategy to appear as a growth thought leader (whatever that means), one tactic in my toolbelt may be writing articles like this. Another may be doing webinars hosted on my personal website. Another might be doing local meetups.

For my role at HubSpot, I could carve out a strategy to appear at every possible organic location for bottom funnel search results. Tactically, this could mean writing listicles like our “best help desk software” article. It could also mean getting more customer reviews to lift our prominence on review sites that already appear near the top of Google for these terms.

Now, I think that CRO or growth should neither be looked at as a strategy nor as a tactic. It should be viewed as an operating system.

An operating system, removed slightly from its technical origins, defines the rules, functions, heuristics and mannerisms that control a system. In short, it’s a code (both implicit and explicit) that defines how decisions are made.

What this means practically is that a conversion optimizer or growth hacker should look much less like a vigilante ninja, complete with both a broad and simultaneously specialized skill set, who can come in and optimize a landing page or fix a referral loop.

Instead, the practice should look much more like building and maintaining infrastructure.

This is an idea inspired in part by Ed Fry (from this blog post and from several conversations). In his article, he distinguishes marketing (those who write the copy, launch the campaigns, define the brand) from growth (the scientific method, which has come a long way in marketing due to technological enablement like front-end testing tools).

He writes:

“Our observation is growth enables marketing, product, sales and other teams across the organization. It sits at an operational role, supporting multiple teams across the company, and rolls up to Operations or the CEO. This is not about managing marketing activities that have to happen every day. Growth is far more concerned about moving levers behind the sales & marketing activity instead of the functional practices of campaigns, brand, and so on.”

This is where I think CRO (or growth) thrives, particularly as a company expands in size and sophistication.

No matter how you cut it, the process usually looks something like this:

We collect data and information, put it through our proprietary growth or CRO process (made up of a unique blend of technology, processes and humans), and our output is better decisions and experiences for our users.

But why should that live within the purview of one person or even one team? What if we could enable everyone in the company to make better decisions, systematically?

Where does CRO fit into the company structure?

CRO teams tend to be either centralized or decentralized (or in growth parlance, independent or function-led).

Image Source

In a centralized model, everything flows through that team, resulting in a more structured and predictable system, but can perhaps become bottlenecked if other teams want to join in. Here’s an article about the relative pros and cons of each model.

Image source

There’s a third model as well that I see more often now, particularly in large organizations with sophisticated experimentation programs: the center of excellence model.

Ronny Kohavi talked about this in an HBR article and explains it like this:

“A center of excellence focuses mostly on the design, execution, and analysis of controlled experiments. It significantly lowers the time and resources those tasks require by building a companywide experimentation platform and related tools. It can also spread best testing practices throughout the organization by hosting classes, labs, and conferences.”

In other words, if we move to a center of excellence model, CRO or growth teams can focus on building up three components of company infrastructure:

  • Technical ability (tools)
  • Education and best practices
  • Attitudes/beliefs (culture)

CRO should support technical enablement and tooling

First and foremost, to build a company where everyone can run experiments and make better decisions, it’s important to give people the tools and technology needed to do that. I think that falls under three areas:

  • Data
  • Experimentation capabilities
  • Knowledge sharing

To make better decisions, we need better data. A growth or CRO team can help implement, orchestrate and access the data each team needs to make better decisions.

Of course, there are a million tools on the market, ranging from the free and ubiquitous (Google Analytics) to the enterprise (Adobe Analytics) to the custom setups loved in technical organizations.

There’s no right choice for every organization, but it’s an important decision to discuss.

The second point is to decide on an experimentation framework or platform. Again, there are tons of tools available, ranging from free (Google Optimize) to enterprise to custom built.

How you set this up should have a lot to do with your organization’s technical capabilities, culture and functional needs. Echoing the above, there’s no easy answer here – but here’s a really interesting paper on how Microsoft has built their experimentation platform.

Finally, knowledge sharing is probably the most underrated. Assuming you have several teams running trustworthy experiments, delivering better experiences and getting results – the next logical piece in the puzzle is to allow archiving and communicating these results.

Education, training and best practices

The second component of infrastructure is education. If you’re going to democratize experiments, then you’ll want to make sure everyone knows how to run them.

Personally, I love the Airbnb model – they send employees through Data University to train everyone in the fundamentals.

Image Source

I realize this is a heavy up-front and top-down effort, so it doesn’t need to be as robust right off the bat. Your team could simply act as an internal consultancy, holding office hours and supporting interested teams when they run experiments. Normally it takes a small ramp up period before the team or the analyst/marketer is off and running by themselves.

At the very least, documenting how to set up and analyze experiments is something that should be done. Having a resource center, or at the very least a checklist or list of guidelines like I’ve tried to put together in this article, helps people feel more comfortable running their own tests properly.

Empowering a culture of experimentation

Finally, the last component of infrastructure is the subtle and the emotional. CRO and growth teams should be cheerleaders for evidence-based decision making, experimentation and the judicious use of data in campaigns.

I’ve written a lot about building a culture of experimentation in the past and can’t say there’s any one tip or tactic or magic bullet to do it.

Often, the best way is to have a powerful and influential evangelist at the top leading the way.

Sometimes it’s built up through the bottom through consistently showing results and disseminating them through the company via Wiki posts, newsletters, and weekly experiment readouts.

This may be the most important job of the CRO or growth team, as it builds a sort of “flywheel” effect. The more excited others are about growth and experimentation, the more they’re willing to learn and improve their own skill sets, and the more evangelists you’ll have for the program – a perpetual motion device of data-driven decision making that will surely help you edge out past the competition in the long run.

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Are revenue optimization teams the answer to alignment issues between sales and marketing?

It is more critical than ever that sales and marketing collaborate in the full sales process.

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Challenges between sales and marketing, stemming from broader organizational issues, are not uncommon. From miscommunication to mismatched data, there are plenty of frustrating problems that hinder alignment across siloed teams. A recent report (registration required) from Aragon Research found that customer revenue optimization helps organizations increase sales volume, improve win rates and deal sizes while delivering increased customer value. The research also showed that marketers tend to grade their relationship with sales higher than their counterparts on the sales team — indicative of just how disconnected these teams can be.

Co-founder and executive vice president of enterprise software firm Altify, Áine Denn, recognized these challenges when she co-founded the firm in 2005. “Sales and marketing aren’t speaking the same language,” said Denn. “Buyers have elevated expectations, but many brands’ sales and marketing teams are disconnected.”

Revenue optimization teams can reframe conversations

As businesses increasingly shift toward subscription-based models, brands apply an account-based marketing strategy to support the sales process. According to Altify’s chief marketing officer Patrick Morrisey, it’s time for a fundamental shift in our sales and marketing efforts, and even our larger organizational structures. “We need to shift the conversation from ‘what are we trying to sell’ to ‘what problems are we trying to solve?'”, said Morrisey. “That’s where the revenue optimization team comes in.”  He also noted that by creating a revenue optimization team, brands can increase transparency into sales campaigns and provide better insights into their digital marketing efforts.

“As marketers, our roles are changing as the buying cycle continues to shift,” said Allie Hughes, founder of Hughes & Co., a digital marketing agency with a strategic focus on profitability and revenue generation. “We need a better picture of the sales process to get better at what we do.”

One step towards solving the challenges of accessibility, insights and transparency across teams is to establish deal review meetings with the internal stakeholders involved in an account’s sales process. “It’s not the ‘old-world’, tech-driven center of excellence,” says Morrisey. “It’s establishing cross-functional resources grounded in account plans and driven by processes and metrics bringing internal stakeholders to the table.”

Cross-functional teams can lead to more effective campaigns

By establishing a cross-functional revenue optimization team and involving stakeholders from across sales and marketing in the process from beginning to end, digital marketers can set the tone for the entire sales process. Building rapport with your counterparts in sales — from business development to customer success managers — will provide valuable insights your team can act on to drive conversions. Partnering with the product marketing team and involving them in the process is also critical for ensuring that sales is well-equipped to manage customers’ expectations and solve challenges.

“Buyers can be extremely well-informed. Sales need to be equipped with accurate information from business development, product marketing team to deliver the right message — and solutions — to the customer during the sales process,” said Morrisey. “The tangible value that marketers are delivering to customers is actually equipping the sales team to understand the customer and products that will best solve the customer’s problems.”

Alignment can lead to competitive advantage

The view into accounts that marketing receives from sales generally doesn’t extend much further than the information put in the organizations’ CRM. This makes it challenging for marketers to understand the customer’s expectations and needs. “Sales very inadequately supports marketing with the information and insights that they need to understand how to shift marketing campaigns,” said Denn.

“Marketing is a sales-enabling activity, with more access to information about the entire sales process our efforts are more informed, our data-based decision making has a stronger foundation and ultimately our marketing efforts and products will scale up in quality as these teams are implemented in companies,” said Hughes. “We see clients shifting in this direction and our capacity to help generate strong ROI is improving.”

The importance of alignment cannot be understated; our sales and marketing teams should be as well-informed as the customers we are trying to reach.

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Key takeaways for brands after Google Marketing Live 2019

Digital giant bets big on shoppable ads, cross-app campaigns and real-time intelligence.

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There were a couple of telling stats from this week’s Google Marketing Live event, which included many digital ad product announcements and was attended by around 5,000 industry players in San Francisco. In a Google-led study, the tech giant sussed out one particular shopper who wanted to buy a single pair of jeans—the person spent 73 days looking and interacted with more than 250 digital touchpoints (searches, video views and page views) before making a purchase. The modern customer journey can be long and complicated, indeed.

This reality underscores the need for a wide range of customer intelligence—from social media listening and email insights to call data—so brands can act with as much relevance and real-time empathy as possible. Google, as much as any martech or adtech player, understands this need all too well and wants to make it easier for marketers to meet customers where they are at in the shopping cycle.

Now that Google Marketing Live is coming to a close, let’s take a look at the new ad products, stats and takeaways that marketing practitioners need to know.

Ads get more visual across apps

Google Discover, which has been the search engine’s news feed since September, now offers brands ad placements that are swipeable, carousel-style images that Instagram initially popularized a few years ago. Marketers can place the ads on not only Google Discover but also the YouTube home feed and the Gmail promotions tab.

Google also promises that these ads will get smarter and smarter due to machine learning. All told, these developments should be attractive if you’re a brand marketer who wants to run cross-app initiatives that strategically use the Alphabet-owned platforms’ wealth of data.

Advertisers should also pay attention to Gallery ads. Also similar to Instagram’s carousel ads, they are designed to be visually stimulating promos and will render at the top of mobile search results. They entail a scrollable gallery that will include four to eight images and up to 70 characters available for every photo. (Search Engine Land first reported on the emergence of these ads in February.)

Advertisers gain control over KPIs

Notably, Google has made moves on the data front to help ad buyers feel more in control over their campaigns. You can now choose what kinds of conversions (sales, lead-gen, email signups, webinar registrations, etc.) you want as your key performance indicator (KPI) at the campaign level.

Additionally, you can adjust conversion values based on the audiences you want to target. This ability will let you better tweak your ad bidding, which should improve ROI.

Ad tools improve efficiency for marketers on the go

The entire digital advertising ecosystem has gradually moved toward the smartphone mindset, letting you manage your campaigns from almost anywhere. In a growing number of instances, all you need to build and buy ads is a wireless signal. These mobile features help busy, often-traveling campaign managers get their work done in an efficient way.

With all of that in mind, Google now lets you build responsive search ads directly from its Google Ads mobile app. En route to a client meeting across town in a taxi cab but need to launch a last-minute holiday campaign? Google’s Android and iOS app now lets you write the search copy, optimize the headline, place bids and set budget constraints from your smartphone.

Timely data and alerts boost performance

Once again, Google recognizes that marketers aren’t always going to be in front of their laptop or at work. The Google Ads mobile app will now send notifications that alert you of a campaign’s performance as well as when better ad opportunities may be afoot.

Google clearly wants ad buyers to make use of their real-time intelligence. For instance, when certain keywords are performing poorly, you will be able to pause part or all of a campaign. And the app will offer you recommendations that can help drive sales. As one possible example, if you are a sneakers retailer and inventory for the white-hot shoe “Nike Air Presto” is unusually abundant—and therefore lower in cost on the bidding platform—the app will ping you to let you know of the opportunity. Google ad buyers of all sizes should appreciate such information, and the feature underscores how data is transforming all of marketing.

Local ads prove successful

While more and more sales happen online, 88% of all retail still happens offline. Therefore, retailers want their digital ads to not just drive ecommerce but also foot traffic to stores.

In recent years, Google, Facebook, Snapchat and other digital platforms have been working to prove that their ads help drive bricks-and-mortar sales. So, it was intriguing to see Google trot out brand-based statistics ahead of Google Marketing Live and during the show. The most impressive data point offered: Quick-serve giant Dunkin’ increased monthly store visits in some locations by 400% with Google’s location-based advertising.

 

Such revelations signal that hyperlocal marketing has gone multichannel, and advertisers of all sizes are now using digital to not only drive store visits but also sales in other offline channels like inbound phone calls.

Retail ads expanded

It’s clear Google wants a bigger chunk of retail advertising budgets as it competes with Amazon’s growing ad business.

Google revealed that its Showcase Shopping Ads, first debuted in 2017, have gone from being available for regular search results to the image search results, the discover search results and YouTube.

Showcase Shopping ads are similar to Galley Ads in that they offer the ability to include multiple product images that are scrollable from left to right. The ads also offer an easy way for consumers to click through to a product page and then commence to check out.

Marketers: stay ahead of the digital game

Google Marketing Live 2019 shows the brand marketing community continuing to march toward shoppable ads, tools for the mobile-minded practitioner, and improved targeting that leverages location data and granular performance metrics. For Google’s part, the ad products shown off represent the search engine giant’s desire to become a bigger player in retail.

It’s clear that Google is trying to advance how competitive it will be with Facebook, Amazon, and others for brand marketers’ ad dollars in the coming months—especially the holiday season. For all nearly all marketers, it’s imperative to keep pace as the available tools and best practices change at lightning speed.

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Google is focused on Ether and Ozone rather than on Amazon

Google journeys into uncharted territory with offline TV efforts and disruptive purchasing habits – countering competition from Amazon.

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We were marveled at Google Marketing Live. Fascinating demos and ground-breaking announcements like the Discovery Ads and the Bumper machine. The keynote also emphasized that Google is taking privacy seriously, which I was particularly pleased to hear. And in the ad innovations keynote, there was an overwhelming feeling that Google takes competition from Amazon more than seriously without ever mentioning it.

“Did they just say that?” was one of my common reactions during the keynote. I like the format of their presentations and the fact that you can go back and review presentations via the online portal almost immediately after they are finished. “Yes, they did!”, they said they were going to allow advertisers to book campaigns on national broadcast networks and local TV stations programmatically later this year. Google is reaching into the Ether. They also said they wanted to enable purchasing from a whole host of places within the Google properties; via voice commands, in images, in videos, in cars, in search results.

Wait, in search results? Did they just say that?

Buying functionalities will be available everywhere you use Google, a bit like the ozone gas which is distributed in the air around us in the atmosphere. Ozone is present in different doses but everywhere to be found. And it is, of course, the ozone layer that protects us from strong radiation from the sun. Fun fact, ozone which is composed of oxygen, is also lethal to humans if the concentration is too high.

Not only is Google working on Shopping Actions, which you can read more about here [https://searchengineland.com/new-personalized-shopping-actions-enabled-google-shopping-debuts-in-france-314458/], a functionality whereby you can compare products and buy from shops either within Google, by going to an online store or by going to a physical store. Initially, I found this surprising – and even a bit of a fuzzy positioning: buy either here or there or offline in a shop – buy wherever you see fit. It makes a little more sense when you consider that they are also activating the shopping experiences within all their properties and in future projects like in cars which were mentioned several times during the day. Will they be changing their mantra from Mobile First to Shopping First, I wonder? This impressive host of shopping-related initiatives is clearly aimed to defend Google from the rise of Amazon. Put up an ozone layer to protect them from Amazon radiation.

Why is Amazon such a danger to Google?

We currently observe a user behaviour by which an increasing number of people end their user journey on Amazon, whether they start it on Google, Facebook or somewhere else. 

If this user behavior expands further, then Google risks being excluded from the strong monetization related to e-commerce and limited to generating advertising revenues which can’t be connected directly to sales. Due to the way the digital marketing ecosystem works, this is increasingly important.

What originally made Google advertising so compelling was exactly the fact, that an advertising campaign could be directly connected to a conversion. This was what made Google Ads become such a dominating part of the marketing mix, and in turn, this, is what made Google rich.

Today, the user journey is not as linear as it was back then, and it has many more touch-points as the Ads innovation presentation on Google Marketing Live further illustrated: a purchase decision can take a user through 50 to 250 touchpoints and run over long periods of time. In parallel, organisations are increasingly measuring and monitoring the performance of their campaigns based on the impact they have on sales.

Facebook is generating powerful influence on buying decisions but it is a challenge to connect that influence to sales. The same goes for display and video advertising which is the reason why improved integration and measurement between channels is so important. If a sale takes place in a different Walled garden (Google, Amazon, Microsoft, Apple, …) than the one which generated the decision to buy, connecting influence to action is difficult. As we saw in the presentations yesterday, Google aim to make it easier to track and monitor behaviour among their own properties and more difficult to track from other properties – in the name of privacy.

We found in our research at Innovell, that search & shopping strategies involving both Google and Amazon are already a winning approach for leading paid search teams around the world. Approximately 80% of these teams include shopping services in their offering, and 32% of them have already started working with Amazon Ads despite limited availability around the world.

With growth in searches slowing down and market share projected to recede in 2019, Google has chosen to take up the challenge. Growth is to be found in shopping and Google is going all in.

Google today master the entire user journey except for the final sales transaction. They are reaching into the ether to connect with one of the last offline media outlets, TV broadcast. And at the other end of the user journey, rather than trying to do what Amazon does, they have chosen to do like the ozone gas, dilute their shopping capabilities everywhere around us when we are in touch with products or services via a Google service. Everywhere to be found, and aiming at disrupting the user journey to their advantage.

2019 is Ether and Ozone.

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Salesforce announces Pardot Business Units for enterprise marketers

Salesforce is launching Pardot Business Units, a new feature for digital marketers looking to segment audiences across different areas of an enterprise. The solution, announced Monday, aims to provide agile functionality and analytics to global marketing teams for account-based marketing efforts. The tool leverages Pardot Einstein, Salesforce’s AI, seeking to help sales and marketing teams […]

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Salesforce is launching Pardot Business Units, a new feature for digital marketers looking to segment audiences across different areas of an enterprise. The solution, announced Monday, aims to provide agile functionality and analytics to global marketing teams for account-based marketing efforts. The tool leverages Pardot Einstein, Salesforce’s AI, seeking to help sales and marketing teams interpret digital engagement metrics and understand what type of content effectively resonates with the individuals who compose enterprise buying teams. The AI analyzes engagement metrics from across an entire enterprise, rather than the business units, giving digital marketers access to enterprise-level data and connect with their global marketing partners to share insights.

Why we should care

Enterprise digital marketers are familiar with the challenges of operating in an environment with limited access to different parts of the business. For companies composed of sub-brands, business units and across multiple geographies, most team have their own siloed data, best practices and processes. The lack of visibility and processes can hinder teams from sharing data and aligning messaging across the organization. Pardot Business Units seeks to allow users to break down those silos.

It also addresses privacy and compliance regulations by allowing teams in different geographies to see when a customers has provided explicit permission. “Compliance is such an important part of this capability,” says Nate Skinner, Pardot vice president. “We’re focused taking care of compliance to help marketers manage it.”

More on the news

Digital marketers using Pardot can now:

  • Segment audiences by line of business, sub-brand or geography for targeting.
  • Understand what customers and leads have provided consent for marketing.
  • Create visual reports for engagement metrics across multiple domains.

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Why you want ‘clumpy’ binge-buying customers

By understanding binge purchasing, you can uncover a new metric to measure and predict CLV – and choose which customers to focus on and when.

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We’ve all heard of the term the “hot hand” in the context of sports. Basketball players go from missing every shot, to scoring in streaks. Sometimes players are in such a “zone” that he or she seemingly can’t miss a shot. Baseball players also tend to hit home runs in bunches.

Throughout my career and through my research at Wharton, I’ve studied the phenomenon of the “hot hand” as it relates to the way consumers tend to buy products and services or consume content. Simply put, customers who consume or buy content in bunches, then go away and come back and buy in bunches, are more valuable to companies than customers who buy at a steady pace.

Don’t believe me? Let’s take a deeper look at how measuring binge consumption by customers, or what I call “clumpiness,” can be applied to maximize Customer Lifetime Value, yielding stronger sales and marketing ROI over time.

Maximizing Customer Lifetime Value with clumpiness

CLV is universally accepted as a central tenet of marketing today. In both academia and practice, it is looked upon as a goal of firm value maximization. That is, more profitable firms recognize that CLV maximization yields greater cash flows and higher long-run profits.

Relatedly, mathematical models that allow these firms to predict CLV are commonly based on a framework commonly called RFM.

  •       Recency – How recently did a given customer make a purchase?
  •       Frequency – How often they made a purchase?
  •       Monetary Value – How much did they spend?

These are the cornerstones of CLV calculations and segmentation used by countless marketers and I’m here to tell you: They’re wrong!

Well, sort of. They are incomplete.

Through research, I have demonstrated and introduced that not only are RFM crucial components to calculating CLV; there is one additional dimension that MUST be factored in: clumpiness (C) or as some refer to it, binge consumption.

The hot hand

Let’s go back to the hot hand example and the player who is scoring points in bunches. Now, juxtapose over the world of marketing and consumers and you have clumpiness, AKA consumers who buy in bunches.

My research shows those who consume or buy content in bunches, then go away and come back and buy in bunches, are more valuable than other customers.

Let me put that another way. If a given brand knew both – how clumpy a consumer’s behavior is AND how frequently they buy – the better predictor when it comes to their future CLV is their clumpiness. I realize that may seem shocking, but it’s true. My research clearly illustrates that brands/marketers should be tracking someone’s clumpiness over time because that’s extraordinarily predictive of their CLV.

Across the board, marketers see far stronger results when they use RFMC data versus only using RFM. By focusing on clumpy consumers as their most valuable customers, brands can realize far stronger CLV and profitability.

With that overview in mind, let’s take a deeper look at what various brands have done to improve CLV and better target their marketing to encourage binge purchases by consumers.

Digital consumers behave more clumpily

We’re all familiar with binge-watching a series on Netflix, or other binge consumption of content from YouTube to gaming. But consumers have expanded this behavior beyond digital content and we’re now seeing it everywhere — from shared services such as AirBnB, Lyft and Uber to retail and online purchases.

A variety of different factors can drive clumpy behavior. In the case of content, the key driver is availability. For example, Netflix releases a new season of a given show, and suddenly everyone wants to watch it ASAP. They literally plan their lives around it.

Consumers can go weeks in between major purchases and then get the “hot hand” making multiple purchases or consuming an unusual amount of goods or services in a short period, or spending more money in a concentrated time.

The two sides of being clumpy and the demographic view

There are two types of clumpiness when it comes to consumers – visit clumpy and purchase clumpy. Consumers who are visit-clumpy are akin to the classic “window shoppers” of yesteryear. They visit both online and offline channels without necessarily making a purchase. In contrast, purchase-clumpy shoppers are far more valuable over time.

As a part of our research, we examined multiple retailers in specific product categories. Among the key findings were that millennials are more clumpy than other generations and that women are clumpier than men.

With marketers struggling to figure out how to market to millennials, this information can be helpful. By understanding clumpiness as a key facet of CLV, brands are turning the corner and seeing better results.

By understanding clumpy behavior, knowing to look for it and analyzing the level of clumpiness, marketers and other key decision makers gain a new metric for measuring and predicting CLV and choosing which customers to focus on and when. They can also gain a better understanding of customer satisfaction and react to it faster.

Defying the odds

When I first set out to conduct the research, I would have bet that the, findings would indicate that regular buyers were more loyal than those who buy in clumps. Well it turns out that my research, as well as others, suggests that regular buyers are in fact not more loyal.

Many times these are subscription customers and in fact, just buy without even thinking about their repurchase decision. A lot of research shows right now this is how you lose money. You take someone that buys in a regular pattern and try to upsell them because they don’t even think that they’re buying in a regular pattern.

We call it “poking the sleeping bear.” You poke somebody who’s just using your service regularly but isn’t even consciously … let’s say monthly making the decision to do so. And by your saying “Hey, why don’t you also buy …product?” “Holy cow! You mean I’m spending $300 a month on your product? Forget it! I cancel!” But your goal was to upsell them and instead you made them churn. So I’m not a strong believer in just observed loyalty. What appears to be observed loyalty over time, that’s not actually loyalty.

Final thoughts

I’m sure many of you reading this will have doubts. Many of you will want to stick to the tried-and-true RFM method and you are of course more than welcome to continue to do so. But I can tell you, without reservation, that if you do not begin to also factor in C (clumpiness), you will never get a true read on your customers.

Although recency/frequency/monetary value (RFM) segmentation framework, and its related probability models, remain a CLV mainstay, companies need to extend the framework to include clumpiness to predict future customer behavior successfully.

After studying thousands of data sets from companies across categories, we’ve found that C adds to the predictive power, above and beyond RFM and firm marketing action, of both the churn, incidence, and monetary value parts of CLV. Hence, we recommend a significant implementation change: from RFM to RFMC.

Measuring clumpiness has huge practical value. Clumpy consumers are worth more money and firms need to find them, and use marketing to drive customers to binge consume.

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