Almost the Ultimate in ‘Not Interested’ Segmentation

If data is the fuel that is powering today’s marketing engine, Google has discovered a real gusher. Google, or any other AI-aided advertising sales effort, can add these datasets to already copious databases and use them as the almost ultimate tool to segment advertising messages to people most likely to be interested in them and to avoid sending ads in specific categories to those people who have signaled they are “not interested.”

I couldn’t quite believe my eyes.

Peter J. Rosenwald illustration one
Credit: Peter J. Rosenwald

That “i” with a circle around it and the accompanying “X” may have been there before, but I must never have noticed. They certainly didn’t leap off the page at me (that’s why I added the arrow) and would have had a hard time competing for attention with those cool 3D T-shirts.

Credit: Peter J. Rosenwald

But there they were, hiding in the upper right hand corner of lots of ads, placed every five paragraphs or so by those lovable folks at Google, certainly intended to interrupt my reading of every salacious breaking news story about the White House and porn star Stormy Daniels (upright in real life, Ms. Stephanie Clifford).

Seduced away from learning the latest secrets of how to earn $130,000 for allegedly having a soft porn one-nighter with a presidential candidate who, between rallies imploring the U.S. electorate to make America great again, found time for a little R & R, I became intrigued by those mysterious letters and moved my cursor to discover what they were telling me.

Credit: Peter J. Rosenwald

OK as far as it went, but by now in a state of aroused curiosity about the encircled “i” and accompanying “X,” I wanted to know more. Click on the encircled “i” and it takes you to AdSense, a website providing everything you ever wanted to know but perhaps never thought to ask, about Google’s targeted advertising and data protection policies.

Click on the “X” and here is what you get.

Credit: Peter J. Rosenwald

Google has now neatly positioned me to click on “Stop seeing this ad” or “Ads by Google,” un-highlighted and again accompanied by the encircled “i.” Addicted as I am to Sherlock Holmes, I felt compelled to move ahead and to click the “Stop” button.

But before I did, I began wondering; what’s in this for Google other than having delivered a possibly unwanted ad, then creating a nice warm “feel good” atmosphere. It’s rather like the guest who tracks mud into your living room, and then apologizes and promises to try not to do it again.

Credit: Peter J. Rosenwald

Now I get it.

It’s a brilliantly laid back survey generating invaluable data about;

  • Those “Not interested in this ad,” those on whom promotion money for this category should not be wasted.

The first time I clicked on “Not interested,” I was taken to a section of the site which showed me a wide range of interest categories and asked me to eliminate those for which I had no interest. As I’d indicate one, it would go away and another one would pop up in what became an endless five-minute project. Wanting to show it here, I tried again to find it, but Google had obviously gotten what it wanted from me and it mysteriously disappeared.

  • Those who didn’t have anything against the specific category but had seen it “multiple” times (too many), that number informing Google to limit the ad frequency for this person;
  • Those who consider the ad “inappropriate,” a clear signal to Google to send only “Jello’” ads here; no “Tamale flavored hot, spicy yogurt.”
  • When I clicked on “Ad-covered content,” I received a message that the ad had been ‘closed’ by Google, nothing else that might have explained what “Ad-covered content” might have meant.

If data is the fuel that is powering today’s marketing engine, Google has discovered a real gusher. Google, or any other AI-aided advertising sales effort, can add these datasets to already copious databases and use them as the almost ultimate tool to segment advertising messages to people most likely to be interested in them and to avoid sending ads in specific categories to those people who have signaled they are “not interested.”

It’s a win, win. For Google, because it should be a very sexy addition to its advertising sales platform. For advertisers, who must applaud a new ability not to spend the marketing budget talking to people who do not wish to hear their message.

The Sustainability of Consumer Trust

I refuse to jump on the privacy “scandal” bandwagon. It is rough listening in this week to certain lawmakers fail to recognize the absolute benefits accrued by consumers through the responsible collection and use of data for commerce, advertising and innovation. Yes, data handling requires stewardship — but that doesn’t mean “data” in and of itself — constitutes anything close to being a harm that needs to be regulate.

I refuse to jump on the privacy “scandal” bandwagon.

It is rough listening in this week to certain lawmakers fail to recognize the absolute benefits accrued by consumers through the responsible collection and use of data for commerce, advertising and innovation. Yes, data handling requires stewardship — but that doesn’t mean “data” in and of itself — constitutes anything close to being a harm that needs to be regulated, as if there were no rules already in place.

Whether or not I, as a voter, saw Russian-administered content online, in an alleged bid to stir up controversy and division among the American electorate, is an understandable concern. It should be investigated — because we need to isolate and diminish any and all “malicious” actors in our digital economy and democracy. Fraud, too, is a harm that must be isolated, identified and eradicated. You’ll have no debate from me here.

But let’s not conflate malicious actors with bona fide relevant advertising and content being presented to, and engaged by, consumers — a wholly beneficial outcome that public policy must acknowledge. Data, commerce and advertising are not dirty words — they are engines for job growth, innovation and — yes, even government revenue through taxes. Ads finance content freely available and useful to consumers and other businesses — and pay for journalism, too, and a diversity of content on the Net.

But all of this responsible data collection and use are useless if there is no consumer trust.

I argue that the U.S. approach to data regulation — legal restriction where sensitive personal information is collected, transferred and applied through sector-specific laws concerning health data, certain government IDs, personal finance, children’s data and credit — and where Fair Information Principles are applied for other data categories that do not have such propensity for harm. Consumers are extremely well-served by this regimen. It is far more harmful to have a breach of credit data, for example, than to have business entities share consumers’ advertising profiles in non-sensitive categories — the latter data use being wholly beneficial. U.S. data protections thus are wisely targeted and measured.

Ads pay the freight — and the economy grows as a direct result. Better for an ad to be relevant to an audience. I believe this is superior (at least for Americans) than other highly prescriptive regimes (read, Europe) that make little distinctions between data categories and require “opt-in” permissions for any and all types of data sharing, including that related to advertising and marketing. If consumers are inundated with opt-in requests for less sensitive types of data use, even for categories of use where they directly benefit, then inertia and fatigue will prevail and useful data flows won’t happen. I’m hoping businesses handling European citizen data will find ways to prove me wrong!

Is the motivation of such draconian restrictions in Europe really privacy protection as a fundamental human right? Or is it somehow questioning commerce, competition, diversity, trade and innovation, and other important social aims financed by advertising — all sacrificed on the altar of permission? Yes, consumer control should be a default with ad data — but affirmative consent should be reserved for data categories where the propensity for harm is real. This point of view, in Europe at least, is rhetorical — because the law is the law. And as of May 25, the General Data Protection Regulation is enforceable on all global entities touching EU citizen data. God Save the Queen and her data subjects, and perhaps all of us.

At a recent privacy conference, one of the primary architects of the European Union’s ePrivacy Regulation (a follow-up to GDPR) said, “What we are aiming at is to abolish surveillance-driven advertising.”

Surveillance-driven” advertising and “surveillance capitalism” — are Europe- and privacy-academic speak that seeks to link or conflate interest-based advertising with government surveillance of citizens. I mean, really? Ad tech may include companies not known to the consumer, and because brands enlist outside ad tech companies to help them make advertising inventory more relevant (and useful) to site and app users, and disclose such data sharing through enhanced notice mechanisms and privacy policies, somehow this still constitutes “surveillance” with all of its negative connotations. Let’s not forget that the intended result of these investments in consumer engagement is a more relevant ad, not a dossier!

We can see where some (important) heads may be motivated.

Back to the U.S.

Even something as innocuous as an ad served to a device — we have plenty of guidance for privacy rules of the road: Fair Information Practice Principles that are global, Data & Marketing Association Data Standards 2.0, Digital Advertising Alliance Principles and the YourAdChoices program (a client), IAB technical standards … and an active Federal Trade Commission (and other agencies, in certain data categories) overseeing the ecosystem, and enforcing privacy expectations — is both self-regulatory and legal.

The idea that the United States is a laissez-faire data free-for-all is pointedly not a correct assessment. In the digital world, we have 20-plus years of self-regulation, based on nearly 60 years of self-regulation offline. All of this premised on building and bolstering consumer trust. We have federal and state law in important data sectors. Through all of these decades, we’ve had an FTC minding the advertising/marketing store, growing the market, and — enforcing privacy and security of data through meaningful enforcement actions and consent decrees that serve as teaching tools to other businesses.

Instead of grandstanding and undermining years of hard-earned consumer trust, more policymakers — and perhaps industry leaders, too — should recognize how responsible data flows serve the consumer. Thus, they should back existing industry regimes that promote stewardship and governance — and hold us to it. Serving consumers, earning their trust, after all, is a shared goal by all responsible stakeholders.

In Praise of a ‘Workhorse’ — by Identifying One

The real workhorse of data-driven marketing — and perhaps soon all of advertising (or branded storytelling, some industry folks now eschew the term “advertising”) — is neither digital display, television or direct mail at all … it is data itself, as in data-driven.

workhorse
Painting: Working Horse, Hauling, 1994 | Credit: Kate Javens

What’s a workhorse?

I found this reference in a 2016 article on tech startups and private finance:

“Workhorses are smart, tough, sturdy, dependable, docile and patient. They are strong, even in the presence of a storm. Workhorses are durable and adaptable. Oh, and workhorses aren’t mythical.

Think of the workhorse as an evolved unicorn. The unicorn is of mythical value. The horn was useless and the magic isn’t real. Workhorses are evolved in that they are producers of fundamental value. They do real work and solve real problems.”

In aviation, for example, the “workhorse” of global and transcontinental passenger travel just had its U.S. retirement:  the only Boeing 747 still at work with a U.S. carrier is Air Force One. As much as I love 777s and Dreamliners, I’m actually going to miss the iconic jet. Check out this experiential marketing event in December from Delta, that’s quite a sendoff.

Jump to advertising — and we’re quick to see last night’s televised Super Bowl and this month’s Olympics as workhorses for mass marketing … even as they have their more targeted digital and social brand extensions.

Then there’s data-driven marketing.

According to eMarketer, digital overtook television in total media spending for the first time in 2017 — with digital capturing $4 of every $10 spent on all media … and what’s the “new” workhorse within digital?

Well, if measured by total spend, the answer is display advertising — which overtook search spending as the largest digital format last year. Both display and search are data-driven, with behavioral and contextual data providing the targeting parameters, but video display has come on the scene fast and is three-fourths as large as banner display.  Mobile is also a significant driver — mobile spend is twice as high as desktop/laptop, says eMarketer. Programmatic drives the bulk of digital display purchasing.

Media spend on digital display also will overtake total direct mail spending this year, says Winterberry Group — with $42.3 billion to be spent on mail advertising, and $47.2 billion to be spent on digital display. Debates are welcome on which of these categories produce greater response, greater ROI and more efficient cost-per-action.These metrics matter — so test, test and test.

My take-away from all this media-this-and-that is that the real workhorse of data-driven marketing — and perhaps soon all of advertising (or branded storytelling, some industry folks now eschew the term “advertising”) — is neither digital display, television or direct mail at all … it is data itself, as in data-driven.

Po-tay-to, po-tah-to. Media preferences may come and go, ebb and flow, but a reverence for data keeps the whole industry flying high, getting brands and customers from Point A to Point B, together, and creating value and experiences in the process. Like a Boeing 747.

Yes, data is today’s — and tomorrow’s — workhorse. And workhorses demand recognition and respect. The entire advertising ecosystem must embrace this concept, protect and preserve how and why data serves the customer, build and protect consumer trust, and prevent artificial barriers that impugn on the brand-customer value exchange.

Let workhorses work.

Marketers: Steer Right Along Consumer Desire Paths

Desire paths are a concept born in the physical world. You see them in places where there is a nicely planned path of travel — like a paved walkway through a park — and not far away from it, there is an alternate path that has been cut by people choosing their own path. That’s a desire path.

John Long blog image
Credit: John Long

Desire paths are a concept born in the physical world. You see them in places where there is a nicely planned path of travel — like a paved walkway through a park — and not far away from it, there is an alternate path that has been cut by people choosing their own path. That’s a desire path.

There are many different reasons for desire paths. Perhaps people want to take a shortcut through the park. Or maybe the additional path was started because so many people were walking the paved path, people wanted to find an alternate route to avoid the crowd. Or, perhaps, there was unspoken “rule of the road” that paved paths were for walkers and bikers created a new path to make things safer for all travelers.

In any event, the point is this:

People simply don’t always go the way you want them to go. And a ton can be learned by watching the behavior of those people finding their own way.

In fact, some college campus planners are now starting to end sidewalks short of their destination on purpose, so they can observe where people naturally create the end of the path. After they see where people travel on their own, they come back and pave that path. In other words: Designers are giving people a start, and then co-designing the end based on desire paths.

Now to get this in the business realm, the paved path provided would be “marketing.” And the well-beaten path created by people going where they want to go would be “market research.”

As a brand, you most likely do market research to try to understand what products or offerings or marketing messages you should create based on what people are craving, or what they are missing in other brands’ offerings. Then you put those offerings into market and spend advertising and content dollars to make people aware of the value you provide. And, in a perfect world, the dollars come rolling in.

But many brands miss the idea of using their marketing as market research. Desire paths are a good metaphor for an iterative approach to marketing … to learning from how people use content and experiences — the paths we provide. We can also learn a lot from observing how they *don’t* use them … or alter them.

Let’s call that information we gather “digital desire paths.”

When Twitter was first getting started, the idea of hashtags weren’t a designed part of the system.

Instead, people using Twitter who wanted to be able to better identify different topics for others to search for, follow and contribute to started using hashtags to identify words as specific keywords for search. Sometimes, the words were common (like #skateboarding) to allow people to find specific conversations, but not all mentions of the word (skateboarding, sans #). But other times, the words were more branded (like #NikeSB or #SkateYourDunks or even #trashin) to allow brands or power users to “own” specific conversations.

After the idea took hold and people started using hashtags to full effect, the engineers at Twitter added functionality to the system to make hashtags work better. They formalized the convention — like paving the dusty path created by walkers through a park. But the starting point was a desire path of power tweeters. (But just try to imagine Twitter  — and now Instagram  — without hashtags! The experience would be much less pleasant or rewarding.)

Digital desire paths, like hashtags or fan blog posts and more, are the clues for where people are going already. It’s simple market research that’s worth far more than creating functionality in a product, or value in content, and then seeing if people actually want it. This is market research from the bottom up — real indicators of need from the most ardent fans to inform creation. If you’re brand is authentic to the conversation those desire paths intone, they can become your path into the conversation and to more targeted content ideas.

Let’s take a note from college planners in marketing. Let’s create some great starts and see where our audience takes them. Let’s learn from the desire paths, and then create content that’s in people’s natural path, rather than always trying to tell them where to go.

Europe’s Forthcoming Data ‘Freeze’ and Why We Need to Care

European policymakers are transfixed with setting personal information controls on the private sector, and — beginning May 2018 — will give its citizens “default” power to shut down all such data usage for advertising purposes unless consumers provide affirmative consent. It’s called the General Data Protection Regulation (GDPR) and its companion ePrivacy Regulation.

Paris
Eiffel Tower” | Credit: TOUREFFEL.PARIS THE OFFICIAL WEBSITE OF THE EIFFEL TOWER by Eiffel Tower

There was a modicum of good news recently when the U.S. Department of Commerce’s “Privacy Shield” program was given a passing grade by the European Union, enabling private-sector cross-border data flows on European citizens between the U.S. and Europe. Thousands of U.S. companies participate in Privacy Shield. They rely on the program to help collect, process and transfer responsibly information for more relevant advertising, human resources, and other commercial and operational purposes. (It applies to charities, too.)

European policymakers are transfixed with setting personal information controls on the private sector, and — beginning May 2018 — will give its citizens “default” power to shut down all such data usage for advertising purposes unless consumers provide affirmative consent. It’s called the General Data Protection Regulation (GDPR) and its companion ePrivacy Regulation.

In the U.S., much digital information about consumer devices and browsers — such as their browsing history and app usage — is painstakingly “anonymized” by companies according to industry-wide self-regulatory codes. [Disclosure: One of my clients is the Digital Advertising Alliance.] Sweat equity through independent accountability programs safeguard such data from being used without proper consumer notice (transparency) and opportunity to exercise control through an easy-to-find, easy-to-use “opt-out.” However, in Europe, any digital information that “could” be used to re-identify an individual — even if anonymized from a U.S. perspective, such as an IP address — is considered personal by definition. Affirmative consent — most likely an “opt-in” though “consent” details are yet to be articulated — will hold sway. Common U.S. notice-and-opt-out regimens won’t suffice.

Imagine all the responsible data flows — even those clearly beneficial to consumers and the global economy — that will simply stop May 25, 2018, in Europe because of a hugely stricter consent mandate. American companies can only watch and wait to see who may be called out by EU data protection authorities, eager to fine a company up to 4 percent of its global returns, as provided for in the law.

Good policy? Or good politics. In reality, EU lawmakers are asking its citizens to pay a huge price. And that’s not my opinion as an American — it’s a fact in a Europe-born study. Look at what’s at stake:

  • €535 billion of the European Union economy benefits directly and indirectly from digital advertising;
  • 66 percent of digital ad spend depends on data, and 90 percent of digital advertising growth depends on data;
  • Ad units tied to data are 300 percent more valuable than standard run-of-network ads (because they are more effective)

That’s part of the economic argument. But there are social and political ramifications, too.

  • Much like U.S. consumers, Europeans prefer data-supported ads to paying for content — eight in 10 report such a preference;
  • Fully 68 percent say they would never pay for online content or use services such as email if they had to pay for it;
  • And 92 percent would stop using their favorite site or app if they had to pay for it;
  • Even 42 percent are “happy”: to see data used to deliver personalized ads.

European businesses, agencies and publishers have gone so far as to press policymakers that their respective countries’ own democratic and economic health is at stake — inherent in the power of data used in advertising:

  • Up to 50 percent of advertising growth will simply disappear if data cannot be used to make more relevant ads;
  • 70 percent of European citizens would abandon the Internet for news if they had to pay to replace the news content financed by digital advertising;
  • Internet usage would crash by 88 percent if EU citizens were forced to pay for online content and services;
  • And what of competition, diversity of content and innovation? The impact on small, independent publishers would be five times more pronounced than the impact on large media companies.

Yes, American companies are in the cross-hairs once GDPR and ePrivacy take some combination of enforcement effect next May — perhaps bad policy for seemingly good politics. Yet Europeans themselves are challenging such an objective — overreaching data controls punish consumers, employers and even democracies.

That’s a mindful lesson for all of us.

The Future of Retail Is in a Data Stream Near You

For all of the digital disruption, store closures and bankruptcies, the retail industry still has not had its transformative “moment.” While some might see a slow death through a thousand cuts, there’s really no need for such doom and gloom.

Retail
Magnificent Mile, Chicago, Nov. 13 | Credit: Chet Dalzell

For all of the digital disruption, store closures and bankruptcies, the retail industry still has not had its transformative “moment.” While some might see a slow death through a thousand cuts, there’s really no need for such doom and gloom. Unless you’re a retailer that can’t handle change.

For every piece of negative news out there, there’s a slew of innovation happening now. Even at the macro level, retailing is thriving!

First off, consumers are still shopping. Despite $1.2 trillion in student debt and $800 billion in credit card debt, the American consumer has resilience and fortitude. The National Retail Federation forecasts 3 percent-plus growth in retail spending this year.

But don’t dare measure retail health any more in year-over-year “comps” (comparable sales by store).

The metrics of success are undergoing a (sea) change — much because the customer journey is changing … rapidly. Smartphones, tablets, kiosks, websites, search… and stores — it’s all in the mix. And it’s not just Millennials who are all over the customer journey map.

To capitalize on today’s highly personalized paths to purchase, data is the currency that’s making a difference. In its most recent U.S. Retail Industry StatPack 2017 (download access), eMarketer reported:

“If I can start to take browsing history, social media history and tie that to your transaction history, I can start to do very specific segmentation … If you can master the data, you can really target customers with what they want and optimize your marketing,” said Michael Relich, COO, Crate & Barrel.

“There has been device proliferation in natural consumer shopping behavior,” said David Doctorow, head of global growth, eBay. “To serve customers well, we have to identify them no matter the device they’re interacting with us on.”

So much for CPMs and sales per square foot.

Look at these profound shifts in retail ad spending. Retail dominates U.S. digital ad spend among vertical categories, primarily because of e-commerce competition. Retail accounts for 21.9 percent of total U.S. digital ad spend, and will grow 15.8 percent this year to more than $18 billion. (Automotive and Financial Services — second- and third-ranked industries, respectively — each net around 12 percent of total U.S. digital ad spend, for comparison). Kantar reports that TV retail ad spend sits at $7 billion — digital’s nearest above-the-line neighbor.

Within digital advertising categories, tried-and-true display ads have nearly closed the gap with search — the former helped by mobile display and digital video display ads targeted to Millennials, eMarketer reports. Video is now 14.2 percent of total digital ad spend among retailers, and more than half of this spend is purchased directly with premium video sites. Meanwhile, programmatic ad spend is driven by retailer spending on social media: Facebook, Instagram and elsewhere, though brands reportedly are cautiously guarding where their ads appear — turning to “private, one-to-one setups to buy high-quality inventory.”

Search ads, as one might guess, prevail in retail’s mobile ad spend, as consumers conduct price comparisons and look for product reviews and recommendations while in-store.

And what of Amazon, the so-called retail killer? On the contrary, Amazon (and other marketplace platforms, such as Walmart) “storefronts” may prove a survival mechanism for many stores — though don’t expect that highly sought path-to-purchase data to find its way back to the retail brand. Data usually is not shared outside the “walled garden.” According to retail consultant Ryan Craver, speaking recently at Marketing Idea eXchange, half of Amazon’s U.S. product sales are now sold through third-party vendors (storefronts).

Yes, there’s more to today’s and tomorrow’s retail story than data-driven targeting and marketing … yes, physical stores need to be destinations, malls need to be destinations, retail may need to entertain, etc. But mass marketing is scaling to 1:1 personalization, anonymized or other, through data. Recognize that customer well, she will reward you. Sounds a lot like the 19th Century shopkeeper, virtually yours.

How to Negotiate a Risk-Sharing Marketing Contract

The marketing service company’s smooth and promising presentation assures me that hiring it will certainly grow my business. “Trust us,” they say, “We have a winning strategy and we’ll all celebrate the fantastic results.”

marketing negotiations
“Salary Negotiations,” Creative Commons license. | Credit: Flickr by MIke Kline

The marketing service company’s smooth and promising presentation assures me that hiring it will certainly grow my business. “Trust us,” they say, “We have a winning strategy and we’ll all celebrate the fantastic results.”

I want to believe them, but they come at a high price and we are not rolling in cash during these difficult and fast-changing times. If I were the potential client and they offered to minimize my front-end cost and share the risk of under-performance, I‘d find their proposal very attractive and credible. I’d feel comfortable sharing success with someone who is willing to share failure.

Entrepreneurs know that a strong component of commercial success depends upon getting their businesses noticed and engaging customers to buy their products or service. They also know or should know that this marketing and advertising task can consume substantial resources. If they can get their marketing partners to share this investment, through some form of split of the generated revenue, it can be a definite win-win. That’s why revenue-sharing and other forms of remuneration are becoming the new normal.

The historic 15 percent “commission” system was the basis for agency remuneration in the days of “Mad Men,” but tougher times have diminished the number of martinis and brought with them far more competitive systems of compensation. Now they are being asked — compelled, in some cases — to put their money where their mouths are: to mutual benefit. Some of the world’s most successful direct response copywriters have done this for years, and the winners have earned enormous sums from grateful clients who tried and tried, but were unable to beat the controls they created years ago.

Some years past, on a conference panel, I asked an advertising sales director of Globo TV (Brazil’s largest media company) what value he put on a 30-second commercial slot that Globo had failed to sell. Looking at me as if I were an escapee from a gringo nut house, he said it was obviously worth nothing. What, I then asked, if a potential advertiser were willing to guarantee to pay? Say, 35 percent of the normal price for any unsold advertising spots, a standard procedure in the U.S.? He emphatically said he would never even consider it. If he still has a job, it is unlikely he would take that view today, when Google is gorging itself on 80 percent of the fall in broadcast and print advertising.

To make revenue share work, the agency, consultancy or service provider needs to carefully do its homework. This “communicator” will first need to be able to assess the real cost of the time of the professionals who will be involved in the project.

Peter Rosenwald's Chart 1

Using a matrix like this, which sets various ranges of monthly compensation, assumes 1,800 (or some more appropriate number) of working hours per year, it’s easy to see the “Actual Cost Per Hour” for each category of professional. But we all know that 100 percent of the hours will not be billable. (Sometimes, there really isn’t much to do but chat on Facebook.) So we make a guesstimate of the percentage (here, 60 percent) of billable hours and increase the “Cost Rate” accordingly.

And of course we want to make a profit. (That’s the name of the game, isn’t it?) So to establish a minimum “Bill Rate,” we gross up the “Cost Rate” accordingly. And finally, we can round it up if we wish.

The professional responsible for pricing this project only has to input the number of professionals in each category and the estimated number of hours each will have to spend on the project and ZAP, the professional costs (including the percentage for hours not billable and the profit-loaded (29.3 percent) quotation amount for the professionals) is ready and waiting.

Collecting the other costs for the project, data, media, etc., (with or without mark-ups depending on policy and competitive pressure) and then adding them to the professional costs provides the essential baseline for a revenue share negotiation. You know your real costs and you know these costs with profit and the amount you would quote as a fixed fee. The old wise adage says; Never gamble more than you can afford to lose. That wisdom should inform what “revenue share” you are prepared to accept.

Peter Rosenwald's Chart 2

But that’s only from the communicator’s side.

What does the “marketer” have to know? And more importantly, what does he need to share with the communicator?

The answer is simply how much he can afford to get an “open,” a clickthrough, a lead or a final sale. Which of these he wants from the communicator depends upon his briefing of the communicator and whether the marketer knows his historic metrics for the journey from advertising through to the final sale. Keeping it simple, let’s assume that the marketer knows his numbers and has an expectation of selling 500 units at $850 each. He can afford it, but is unlikely to want to pay 10 percent of $85 per unit sold.

Peter Rosenwald's Chart 3

Because the communicator knows that to make his profit objective, he needs $26,125 or an alternative revenue share and must have a minimum of $19,592 to break even, he is well prepared to enter into a revenue-share negotiation.

Let’s look at it this way.

The communicator’s leverage for negotiation is the spread between his cost $19,592 and his quotation amount $26,125. To make its quotation amount, the communicator needs just $52.25 per sale. To cover his cost, he only needs $39.18. If the communicator receives $52.25 per sale, he only needs 375 sales to recover his costs. If the actual sales number is above 500, say, 550, the communicator will receive his full quotation amount plus 50 times $52.25, or an additional $2,612.

The question for the communicator is how much to ask for? Sixty percent of the $85 allowable would give $51 per sale — just short of the $52.25 needed to make the quotation amount at 500 sales: 50 percent would be $42.50. Not bad. Looked at from the marketer’s side, with no up-front cost, sharing the $85 allowable on a more or less equal basis should seem fair.

Peter Rosenwald's Chart 4

I’d argue for $50 per sale as a good compromise, but each negotiation is different and each person will have to define his own limits. Hopefully, the use of these tools and this methodology will help.

Peter Rosenwald's Final

Why Brand-Tracking Needs an Overhaul

Have you noticed how disconnected brand-tracking has become with actual consumer behavior? You might run a great new ad or build a new positioning in the market, and the tracker may even show an uptick in brand consideration. Nevertheless, when it comes to hard behavioral metrics (such as purchase volume), they remain unaffected.

Branding
“Branding,” Creative Commons license. | Credit: Flickr by Limelight Leads

Have you noticed how disconnected brand-tracking has become with actual consumer behavior? You might run a great new ad or build a new positioning in the market, and the tracker may even show an uptick in brand consideration. Nevertheless, when it comes to hard behavioral metrics (such as purchase volume), they remain unaffected.

Underlying Trends

According to a new study by Trinity Mirror, almost 70 percent of consumers don’t trust advertising and 42 percent distrust brands and view them as self-serving. Several other studies are finding similar conclusions. Despite this trend, it may be premature to say that brand advertising no longer works. Rather, the larger consensus seems to be that brands must find new ways to convey authenticity and sincerity beyond the ad. In many cases, brands are responding by focusing on brand purpose and brand experience in addition to traditional brand communication.

When it comes to brand-tracking, the problem is that most trackers are still tied to the traditional linear relationship between stated brand consideration and sales. While always a bit tenuous, the relationship made much more sense in the era of push marketing. Now, however, the consumer’s purchase decision process has fundamentally changed. More and more, consumers develop brand preference through experiences and by observing brands living up to their stated brand purpose. Not only does this new dynamic take time to measure, more importantly, but it also requires a well thought out measurement strategy. Let’s assume one of your brand propositions is “valuing the consumer’s time.” In this case, more important than measuring consideration is tracking if the consumer actually views you as valuing of their time. Furthermore, where in your transaction chain are you living up to that promise and where do you fail? Can you confirm this through behavioral data, such as a decrease in abandoned website shopping carts or fewer billing inquiries?

How Brand-Tracking Needs to Evolve

First, brand monitoring needs to be part of a larger consumer intelligence database. Integrating brand with NPS data, customer experience data and behavioral data is critical to understanding how your brand is performing. One significant advantage of this approach is that you may find that all the underlying brand principles are tracking upward, but brand consideration remains unchanged. Knowing this early may save you millions in investments on a brand strategy that is potentially not providing the market advantage you hoped for. Without tracking the underlying brand principles, you would be left wondering if the strategy is bad or if the execution is not working.

Next, build a custom brand measurement strategy. Because great brands are now structured around a unique purpose and experience, measurement strategies cannot be off the shelf. I commonly encounter brand-trackers that create more questions than they answer. While this can be spun into a positive, in pragmatic reality it wastes time and delays decisions. The underlying reason this happens is that companies fail to measure the specific changes and perceptions they are uniquely trying to affect.

Revisiting the brand proposition of “valuing the consumer’s time,” do you know how you will actually measure success on this proposition? When is the right time to ask the consumer? Is it solely the consumer’s responsibility to tell you how you are doing? What other ways can you listen to consumers besides a survey? What can you know from their behavior?

Having a clear vision of the underlying experience, behaviors, and perceptions you are trying to create and knowing how you will measure them will go a long way toward understanding how your brand is resonating in the market.

When I Remember September 11: Every Day

It’s Monday, September 11. When I board my flight today bound for New York, I will be certainly aware it’s perhaps the safest day to fly. You see, September 11 is always a part of me.

It’s Monday, September 11.

When I board my flight today bound for New York, I will be certainly aware it’s perhaps the safest day to fly. You see, September 11 is always a part of me.

On a warm, sunny morning in September 16 years ago, I was prepping for my monthly cross-company privacy team call at Harte Hanks in our Greenwich Village office.

As we opened the call shortly after 8:45 a.m. — my colleague peeked his head in the door of the conference room, “I just saw a plane hit the World Trade Center.” I paused the call for a moment, went to my office, and saw smoke and what seemed to be a small hole atop the north face of the North Tower. It was crystal clear outside, there were no weather issues, how could a plane hit the tower? I returned to the conference room, and asked meeting participants to postpone the call until later.

As I re-entered my office, that’s when I saw the second passenger jet flying low heading south over the Hudson River. I knew something was not right … Please, please, please do not hit another building. It actually passed the World Trade Center, and I was shortly relieved, but then I could see it banking right to make the return at an angle to collide into the South Tower. We are under attack, here in New York.

I remember throwing my fist into a file cabinet in futility, not quite understanding the tragedy unfolding, but realizing this would change everything forever.

My office mates and I stood mesmerized and shocked as we watched the hell play out one mile south of us.

Then one by one, we did our best to take an office head count, get in touch with loved ones, take inventory of who was supposed to be where — and as the day wore on, our hugs and collective tears gave us strength, each began the long trek home. I asked my colleagues to leave their office doors open, so I could stay and answer incoming calls to let those calling know the person they sought was okay, at least physically. Then at day’s end, I walked home alongside New Yorkers.

It took me 15 years to to muster the strength and courage to visit the September 11 Memorial. I’m very glad the civilized world has this extraordinary site, to honor those persons from 60-plus countries who died that day. In my heart, I have never accepted this was an attack only on America — I’ve always believed this was an attempt to undermine global peoples striving to live harmoniously. I remember President Bush, in perhaps his greatest moment, being quick to call out this attack in such perspective.

To this day, I see the “other” as those who try to disrupt such vision of harmony. These “others” in my life are not only radical Islamic terrorists, but also those who parade down the street in Charlottesville, shoot black men without provocation, use power to build walls instead of bridges, and accept no moral responsibility for refugees or children born in this country. Domestic or foreign, these “others” are all measures of the same thing to me: fear and hate. Where fear and hate are used to deny people freedoms and rights, and to erode principles which build our nation, as well as those enshrined in the founding charter of the United Nations, it’s then that I see the “other.” We should learn to identify the “other,” even in ourselves. I, myself, am not always so loyal to this vision.

September 11, it was a tragic day — but it is also was a day that solidifies for me one beautiful, hard truth: only love can win in the global competition of ideas, and it takes persistence and patience and a whole lot of courage and communicating to get there. No terrorist, no fear, no hatred can change that truth.

Has the NFL Lost a Step for Marketers?

All my life, NFL football has been the most popular, most important sport in America — perhaps the most popular and important event of any kind! But that popularity dipped in 2016. And on the eve of the 2017 season, I don’t feel like the league’s recovered.

All my life, NFL football has been the most popular, most important sport in America — perhaps the most popular and important event of any kind! The league just seemed to get more important every year, and the marketing space around it only became bigger and more valuable over that time.

But that popularity dipped in 2016. And on the eve of the 2017 season, I don’t feel like the league’s recovered.

NFL 2016: A Titan Stumbles

Coming into the 2016 NFL season, ad prices hit record levels. According to Kurt Badenhausen at Forbes and Standard Media Index, NFL ad revenue in 2016 hit $3.5 billion, a 3 percent increase over the prior year.

At the same time, over the course of 2016, NFL regular season TV ratings were down roughly 9 percent.

This did not pass without notice. Salon and ESPN were just two of many media outlets who openly asked, “What’s wrong with the NFL?”

AHas the NFL lost a step for maketers?nswers ranged from ratings competition with a contentious election season to cord cutters to the political and disciplinary controversies that seemed to envelop the league. Tom Brady, one of the league’s biggest stars, was suspended for several games, and some thought that alone accounted for the ratings dip.

But then the playoffs arrived, Tom Brady was back on top, and the Super Bowl was one of the five highest rated games in history (although it still had the lowest ratings for a Super Bowl in three years).

Dip traversed! The NFL was back … wasn’t it?

NFL 2017: Is Football Still Cool?

As a fan of the NFL, I have to say, this offseason was one of the least engaging I’ve ever seen. Around the office in Philadelphia — possibly the most intense football city in America — the sports talk seems quieter. Fewer younger colleagues are football fans … the sport has started to feel like, just maybe, it’s uncool.

Even around old sports fan friends, when I do talk about the NFL, there’s a 50/50 chance the talk will turn to  political aspects. We wind up talking about Colin Kaepernick, player discipline, Tom Brady and “Deflategate,” or other controversies around the game instead of the game itself.

With casual fans, concussions and CTE immediately come up.

But OK, those are just my circles; football isn’t really cooling off, is it?

Well, according to the league upfronts, where they actually sell those fabulously expensive ad,  it’s not just me. AdAge reported in June that interest in NFL advertising for the 2017 season was the softest it’s been since 2008 — the heart of The Great Recession. Ad prices are still rising somewhat — one source in the article says 2 percent to 4 percent this year — but there’s not a lot of excitement in the traditional media space.

The NFL is no longer entirely reliant on old media and the upfronts, though. Several social media networks have acquired rites to stream games themselves in recent years.

This year, Amazon is reportedly pricing ad packages around games at $2.8 million. In fact, Amazon’s packages would include a 30-second spot during the game, digital ads before and after the game, and a promise of unprecedented transparency into the ads’ performance and sales impact.

But is that enough to offset tepid TV advertiser interest?

This year is going to tell us a lot about the state of the NFL as a cultural institution, and as a marketing vehicle. Was last year’s dip just due to circumstance? Or is this marketing superstar finally past its prime?