How the Impact of COVID-19 Is Changing Marketing

Well, it’s not as if we can start 2020 all over again — we’re already halfway through this year thus far. Yet, we can say one thing, COVID-19 and its recessionary impacts may be hanging around awhile. How may this have changed marketing mid-year, and possibly changed it permanently?

Well, it’s not as if we can start 2020 all over again — we’re already halfway through this year thus far. Yet, we can say one thing: COVID-19 and its recessionary impacts may be hanging around awhile. How may this have changed marketing mid-year, and possibly changed it permanently?

Such prognostications have kept The Winterberry Group, a marketing research consultancy, plenty busy since March: reading the tea leaves of government data, industry interviews, marketing dashboards, econometric algorithms, and the like. Principal Bruce Biegel told a Direct Marketing Club of New York audience this past week that indeed June has been better than May, which was better than April — when the U.S. (and much of the global) economy was in free fall.

So what’s underway and what’s in store for us midyear? Have we turned a corner?

Our Comeback Will Not Be a U-Turn — ‘Swoosh!’

When unemployment shoots up to 17.1%, and 40 million American jobs either furlough or disappear, there’s going to be a lag effect. The “wallet” recession is upon us, as consumers hang onto their savings, or eat through them, so there’s not going to be the same level of demand that drives upward of two-thirds of the U.S. economy.

New York City is a COVID-19 epicenter — and the commercial real estate market may take five to 10 years to recover, reports The Economist (subscription required). Knowledge workers will return, eventually. But densely populated urban centers, where innovations accelerate the economy, may look and feel different for some time, and that in and of itself could hamper national and global growth. Can other innovation clusters stave off the virus to protect collaboration?

And then there’s our world of advertising. Biegel sees digital being a “winner,” as traditional media continues to take a drubbing. Linear TV spending dropped by a quarter this quarter, and direct mail by half. Experiential and sponsorship spending has been slashed by 75%, as concerts, live sports, conferences, and festivals all took a public health-ordered hiatus. Yet, even in digital categories, Q2 has yelled “ouch.”

Email is the only channel to have held its own, though pricing pressure has cut margins. Social, search, and digital display all have posted drops from 25% to 40% during the quarter — and though all our eyes were home watching Disney+, Netflix, and the like, even OTT/addressable TV ad spending was down by 5%. With the Newfronts coming this week, it will be interesting to see what types of digital media may post gains.

So if June’s “recovery” in media spend is any indication, Q3 (sans Olympics) and Q4 (yes, we’re still having an Election, last time I checked) should be solid though not buoyant. Biegel says it may be a “swoosh” recovery — think Nike’s logo — down fast, but up again slowly, steadily and resiliently. Which begs the questions: Can ad businesses, business models, and brands cope with a new reality?

The “new normal” is about coming out of the COVID-19 crisis — and half of executives surveyed by The Winterberry Group aren’t expecting miracles:

Medium-Term Budget Cuts

IAB-Winterberry Group State of Data (2020)

 Q3 Will Start a Recovery … of Sorts

Source: Advertiser Perceptions, Pivotal Research Group (2020), as reported by Winterberry Group

And, Biegel reported, that it may indeed take to 2024 — with COVID-19 firmly in a rear view mirror — for a recovery to be complete, according to IPG Mediabrands Magna. It is predicting a 4.4% ad spend contraction this year, a 4% recovery next year, and “subdued” results thereafter until mid-decade.

So How Have We Changed — and Will These New Behaviors Stick?

Some effects, though, may indeed have permanence in how Americans consume media — perhaps hastening trends already underway, or creating a whole rethink of how we act as consumers. Consider these impacts:

  • Streaming to TVs more than doubled during COVID-19 crisis. Have we rewired our video consumption habits away from scheduled programming for good?
  • Mobile data traffic surged 380% in March alone. Consumers have taken to their smartphones everywhere — so how has mobile viewing altered consumer’s screen habits across devices, and will it stick?
  • DTC brands and catalogs know all about remote selling — and so do millions of consumers who have now come to love shopping this way.
  • Video game use is up 60% — opening the door to more in-game advertising opportunities. This may change the mix of brands seeking to engage consumers there.
  • In January there were 280,000 posted job openings in data analytics. There are 21,000 today. More than half of marketers expect predictive modeling and segmentation to occupy their marketing strategy concerns for the balance of 2020.
  • Tangible value matters. Consumers will be demanding more pricing benefits from brand loyalty, and less VIP experiences. We may be getting tired of lockdowns but we are steadfast in a recession, savings conscious mindset.
  • Business travel – yes, your clients may be returning to the office, but do they really want to see YOU? What can B2B marketers and sellers achieve virtually?

It’s ironic, Biegel said, that privacy laws and the crumbling cookie are making customer recognition harder in the addressable media ecosystem, just as consumers expect and demand to be recognized. Identity resolution platforms will evolve to cope with these new marketplace realities — both of which are independent of COVID-19 – but the solutions will bring forth a blend of technologies, processes, and people yet to be fully formulated. These are still open and important marketplace issues.

So assuming we’re healthful health-wise, we have some challenges ahead in ad land. I’m glad to have some guideposts in this unprecedented time.

Brands Need to Keep Engaging – Don’t Just Stop Because of Crisis

We are in extraordinary times – and it’s only prudent to recognize this. While the Fed may be doing everything possible to keep our economy afloat, we likely will remain in limbo until a public health victory is apparent. It’s time to take stock of what we do on behalf of our brands and clients, to immediate effect.

Among thousands of businesses these past two-plus weeks, many of us have effectively handed our marketing decisions over to finance and accounting. Which means, if you’re not producing an immediate revenue gain, you’re probably being cost-reduced to the bone, if not entirely out of work. Such is the illiquidous, flash-frozen effect of COVID-19 on our economy. We’ve lost more U.S. jobs in three weeks than we did during the expanse of the Great Recession.

Cash is in crunch, and though The Fed may be doing everything possible to keep our economy afloat (will it work?) we likely will remain in limbo until a public health victory is apparent. That could be months. It may yet take longer to resume growth – and who knows how business and consumer behavior may have changed by then? We are in extraordinary times – and it’s only prudent to recognize this.

It’s time to take stock of what we do on behalf of our brands and clients, to immediate effect. There is much work to do.

Marketing Must Continue … With Prudence

  • Every pharmacy, drug store, food store, and big-box retailer – and the agencies that support them – should proactively communicate store safety measures, and elevate “conveniences” such as shop-online-and-pick-up-in-store to the preferred method of distribution. This is an opportunity to build consumer and brand trust.
  • For financial marketers, the need to connect with consumers right now regarding savings, budgeting tools, and capital preservation should be a high priority. Make it happen.
  • On television, I’ve seen the messages of optimism from the likes of Walmart, Toyota, and Ford. (Post your inspired ad in the comments section below to share, please.) We need these messages right now. Beyond our own mortality, we will emerge on the other side of this. Brands need to be megaphones for hope and empathy. And certainly not insensitivity.
  • Perhaps TV spending is too steep for many brands’ budgets. In my email inbox, my favorite restaurants offer meals-to-go, my coffee house enables virtual tips for unemployed baristas and healthcare workers, and nonprofit organizations are postponing their live fundraising events with an online ask for the here and now. Needs don’t stop, in fact, the chronic has become acute. For those of us who can afford to help, there’s a collective mood to give. There are reasons to keep relevant communication appropriately flowing to audiences.
  • My previous post addressed data quality. Let me repeat: all those mobile and data visitors to your sites right now must not go unrecognized. Ensure you have a data and tech plan to identify (perhaps in the form of free registration, analyze, and engage accordingly.
  • Respond to the Census. Yes, do it for democracy. But we in the marketing business also know how invaluable Census data is to the economy, and the strategies we map for our brands.

So, yes, we’re all facing a flash freeze. And marketing-as-normal needs to be re-calibrated. So let’s re-calibrate … show our CFOs the likely payback, and let’s get going.

 

 

How Do We Leverage Data to Drive a Faster Economic Recovery?

As growth leaders, we will be waking to a world with fewer resources and businesses desperate to grow again once we get past the coronavirus pandemic. However, in our struggle to regain our financial footing we will have a very valuable resource that previous generations did not: data and data science.

As growth leaders, we will be waking to a world with fewer resources and businesses desperate to grow again once we get past the coronavirus pandemic. And despite the global hardships that will be felt by many, in our struggle to regain our financial footing we will have a very valuable resource that previous generations did not: data and data science.

When used well, data science will help direct scarce resources to the right opportunities and efficiently drive growth. I am convinced this will be a big differentiator versus previous recoveries of this magnitude.

Over my career, I have consistently encountered inefficient and counter-productive practices in data-driven decision management and have written about them often. They are paralleled in the crisis today. Below are three issues I would like us all to think about when we leverage data science to rebuild the national and world economy.

1. Customer Data Hoarding

Companies collect so much data that many are “drowning in data.” If you have no idea of the value of what you are collecting, then it is digital garbage.

We were led to believe that AI and data mining would help make sense of the data. It does to some extent, but more often it leads to head-scratching conclusions. We can’t leverage what we can’t understand.

As a data-driven consultant, I am amazed at how much time is spent sifting through data just trying to make sense of it all before any valuable insights can be generated. Going forward we cannot afford this luxury. If there are 10 gallons of fuel in the tank, we can’t spend five gallons trying to figure out if the engine works. However, when it comes to mining company data, we often do.

2. It’s About Qualitative, Not Just Quantitative

We can’t be slaves to the data we have. Collecting the right data is often cheap and easily done, if time is taken to plan. This means that measurement strategy can’t be a retrospective exercise. Too often, I have engaged clients in the post-mortem analysis of very important projects. In many cases, my team is often limited to the data that is available and not the data that was needed. Critical answers are sometimes left unanswered. This is a waste of time, resources and most importantly, valuable information.

3. Data Is Not the Solution, It’s the Tool

We must regularly remind ourselves that data does not solve problems or create opportunities. Rather, brave decision making solves problems and creates opportunities. Data is a valuable tool that can only inform the decisions we need to make. It can help lower the risk and provide valuable insights. Sometimes, collecting more data before acting can be wise. Other times it can also be the delay in action that leads to disaster.

What is happening today has no parallel in recent memory. While the 1918 flu pandemic had similar infection rates, the world was a different place then. Today, we have advanced tools and technology to aid our recovery.

Data science will be one of those important tools, especially if we collectively decide to use it to its true potential. As a result, I am hopeful that we can come out of this faster than we realize.

The Grand Reopening of the U.S. Economy Will Happen, Plan for It

We are in uncharted territory, much as we were in previous economic downturns and recessions. Yet, do know, another expansion will follow … eventually. There will be a grand reopening of our economy, and as marketers, we need to plan for it.

I love defaulting to optimism – even in the darkest of times. It’s been part of my survival mechanism through all sorts of crises. That being said, we are in uncharted territory in this new normal, much as we were in previous economic downturns and recessions. “The Great Recession” of 2008-2009 was largely Wall Street born and Main Street slammed. But remember, the Great Expansion followed. A possible recession stemming from COVID-19, however, would be largely reversed, with millions of livelihoods suddenly denied, and both Main Street and Wall Street being slammed in tandem. Yet, do know, another expansion will follow … eventually. There will be a grand reopening of our economy, and as marketers, we need to plan for it.

Listening to the U.S. President talk about getting parts of our country back to some semblance of normal by Easter may seem wild-eyed and some might say irresponsible. In reality, China is reportedly already back on line – after six-to-eight weeks of paralysis. Does this mean a possible “V-shaped” recession (very short), a “U-shaped” one (mild), or an “L-shaped” one (long term)? We don’t know.

It’s always dangerous to make prognostications, but we can learn from patterns elsewhere in the virology. With the United States now the most afflicted nation in sickness, we yet have a massive fight ahead to control viral spread. And doubt and fear have taken hold as two debacles have come about, one public health and one economic.

Unfortunately, there is no “on/off” switch for the viral crisis. Even when its spread is curtailed, which will happen, we’ve been shaken and edginess is going to remain. That’s only human.

Patterns of consumption will not resume as if nothing happened. Unemployment shocks will not reverse as easily as they came. So there will be a “new” normal.

However, a reopening is coming. You might say that’s my optimism, but folks – we are going to be okay in a time. It may not be of our choosing, as Dr. Fauci faithfully reports, but one that will be here nonetheless. As marketers, let’s get ready for it.

Look to Your Data to Prepare for What’s Next

Recessions are actually good times to look to the enterprise and get customer data “cleaned up.” The early 90s recession gave us CRM, and database marketing flourished. The end of the Internet 1.0 boom in 2000 brought data discipline to digital data. And the Great Recession brought data to the C-suite.

So let’s use this time to do a data checkup. Here are four opportunities:

  1. Data audits are often cumbersome tasks to do – but data governance is a “must” if we want to get to gain a full customer view, and derive intelligent strategies for further brand engagement. Quality needs to be the pursuit. Replacing cookie identification also is a priority. Understand all data sources to “upgrade” for confidence, accuracy, privacy, and permissions.
  2. March 15 might be a good date to do an A/B split with your customer data inputs – pre-virus and during-virus. What new patterns emerged in media, app usage, mobile use and website visits? Are you able to identify your customers among this traffic? If not, that’s a data and tech gap that needs to be closed.
  3. Customer-centricity or data silos? It’s always a good time to tear down that silo and integrate the data, yet sometimes healthy economic growth can mask this problem. Use the recessions to free up some time to actually get the work done.
  4. Test new data and identity solution vendors to increase match rates across your omnichannel spectrum – to better create a unified view of audiences, both prospects and customers. I’ve already seen one of my clients come up with a novel offer to analyze a subset of unidentified data to drive a substantive lift in matches.

As we work remotely, it’s important to understand that this current state of crisis is not a permanent state. Only once the virus is conquered, on its weaknesses not ours, can we really have any timetable to resume the economy. That being the health science, it just makes great business sense now to “stage” your data for that eventual Grand Reopening.

Imagine: America First in 2018

How did 2017 work out for you? Well, let’s look forward to 2018 — and imagine what could be. The optimist in me is gung-ho on what’s transpiring in the world economy — and nearer at home.

How did 2017 work out for you? Well, let’s look forward to 2018 — and imagine what could be.

The optimist in me is gung-ho on what’s transpiring in the world economy — and nearer at home:

Sustainability is alive and well, no matter what country is in or out of the Paris Climate Accord. The private sector is already on it — and the world’s first trillionaire just may invent a better battery.

America First:  It would be nice if such ingenuity originated with an American enterprise, but that’s not required. Equity markets reward the future, not the past.

City economies — rather than national economies — move global business. New York City is alive and well, with 10 million anticipated residents by 2030. Queens and Brooklyn waterfronts are looking more like Manhattan — towers gleaming. With another 1.5 million residents (and immigrants) on their way, we’re going to need plenty more, perhaps in a more affordable price range.

America First: Americans re-learn how to move to where the jobs are, if host cities — and Amazon — can accommodate.

We vow not to lose this #MeToo moment and opportunity. Gender, race, sexuality, age, origin — we shed white male privilege — gladly — and replace it with a true meritocracy, based on individual achievement that is borderless (kinda like love). When knowledge is shared, power is redistributed.

America First: Now, that’s an American value and ideal we can live, work and pursue happiness with.

Advertising is more data-driven, more relevant and, thus, more trustworthy. Europe may use data to spark a trade war — but who really can hold back from consumer demands for ad-financed content, services and Internet? The ad supply chain does indeed exit the “fake anything” business.

America First: The world’s digital ecosystem was fostered by research and development — much of it U.S. funded, much of it by monetizing data, read Silicon Valley. We stop ill-driven interlopers in their crypto-tracks.

An informed consumer grows the market. An informed electorate leads to good governance. A more perfect information society solves problems and fosters opportunities — and ends the terror of despots and psychopaths whose narcissism feeds each other.

America First: We reject the real enemies — far, near and at home — who undermine journalism, science, democracy and intelligence, where America traditionally has led. We understand that to be a city on a hill, a beacon for the world, we must rein in all haters and charlatans.

As for the realist in me … well, I’m going to put that mindset on the back burner for a bit. Here’s to a happy, prosperous and enlightened New Year for everyone!

Blockchain Is Eating Commerce

Blockchain is a technology that has the potential to become a disruptive force in the ever-more digital economy. Its potential value — coupled with friends, clients and business partners asking about it — led me to publish this outline and answers to many of the questions I’ve been fielding. It’s something every Data Athlete will want to understand.

BlockchainYou may not be familiar with blockchain. Many “in-the-know” digital folks aren’t terribly familiar with blockchain; what it is, or how it works. I was surprised by how few were.

Blockchain is a technology that has the potential to become a disruptive force in the ever-more digital economy. Its potential value — coupled with friends, clients and business partners asking about it — led me to publish this outline and answers to many of the questions I’ve been fielding. It’s something every Data Athlete will want to understand.

Blockchain Starts With Bitcoin

Blockchain is essentially a distributed database, which means it’s like the database you know that lives on your server or in the cloud — except that it’s spread copies of itself around the Internet or network. A distributed database has the benefits of fault tolerance and transparency — more than one “node” on the network has a copy of the data. Blockchain also utilizes strong cryptography that prevents changes to the transactions content — they are permanent.

These characteristics were developed to support the exchange of Bitcoin, the now famous crypto-currency that is being used worldwide to facilitate a myriad of transactions.

Bitcoin is said to concern banking institutions and governments alike — as its decentralized nature means no one nation owns or controls it. Bitcoin and its underlying Blockchain are like the “MP3 of currency” in the early ’90s. Bitcoin.org summarizes the power of its decentralization:

“Sending Bitcoins across borders is as easy as sending them across the street. There are no banks to make you wait three business days, no extra fees for making an international transfer, and no special limitatons on the minimum or maximum amount you can send.”

So in order for Bitcoin to be a “free” and universal currency, it could not be centrally managed or controlled; hence, blockchain was created first — Bitcoin actually started the following year.

Furthermore, each and every Bitcoin has a copy of every transaction/exchange it was ever involved in. All of the data on that chain is distributed to every blockchain-distributed journal (or database) across the Web.

What Is Blockchain Used for Today?

Blockchain’s most prevalent usage is in Bitcoin. But remember, it’s an encrypted, distributed database. And so, blockchain technology also securely moves and stores host money, titles, deeds, music, art, scientific discoveries, intellectual property and even votes.

As a (distributed) database that is as open, borderless and secure, blockchain continues to find new uses, and has been adopted by every major technology company. IBM, for example, made an early investment in blockchain technology and IBM Blockchain.

“Blockchain technology also securely moves and stores host money, titles, deeds, music, art, scientific discoveries, intellectual property and even votes.”

Blockchain 2.0 — Triggered, Programmatic Transactions

Blockchain 2.0 is the rapid evolution of blockchain, and where blockchain offers the potential for transformation of the way we engage in commerce and business at an Internet scale.

Remember, blockchain is a distributed, cryptographically secured database. It makes sense that an evolution would allow programming code, or chain code, to manipulate the transactions in a blockchain — and that’s exactly what has happened.

In one example, SAP is using blockchain software to let patients share electronic medical records with doctors or drug makers for a specific time period, such as during medical care or a study.

In another example, they designed a system for farmers’ weather insurance. It pulls rainfall data from sensors in the field, then automatically informs insurers if there’s a drought that would trigger a payout.

Hiding Tax Increases: USPS Taps Mailers’ Budgets, Again

When the cost of oil and gas plummets, that’s when states—looking for revenue—make a move to raise taxes on gasoline, in hope voters will hardly notice. Of course, when the price of gasoline inevitably increases months or years later, that tax on gasoline becomes painfully obvious and more pronounced: Small cars get driven, while the big guzzlers stay in the garage or showroom. Conservation rules the day.

When the cost of oil and gas plummets, that’s when states—looking for revenue—make a move to raise taxes on gasoline, in hope voters will hardly notice. Of course, when the price of gasoline inevitably increases months or years later, that tax on gasoline becomes painfully obvious and more pronounced: Small cars get driven, while the big guzzlers stay in the garage or showroom. Conservation rules the day.

Like a tax-hungry legislature, the United States Postal Service is looking to raise postage again—a surprise rate hike request, given the exigency first taken from mailers’ pockets last year that is still in effect today. The U.S. economy may be back—but marketers aren’t stupid on postage, they well know the pain. Nothing takes business elsewhere and more rapidly than unplanned, surprise cost increases.

My mindset on the entire exigency has always been suspicious. Purportedly to recover lost funds from the impact of the Great Recession (2008-09), the USPS exigent increase, on top of the inflation-indexed release of 2014, has represented a collective 6 percent tax of a different kind. What business gets to pass along its Recession “losses” to its customers? Direct mailers, unlike drivers at the pump, have very much noticed.

Perhaps the economy is doing well—heck, even direct mail volume is holding up. However, better economic times—which can cover some fiscal sins—can’t hide what needs real fixing inside the Postal Service. We all know that USPS deficits and defaults, which postal management appeared to try hard to avoid, with cost-cutting, network rationalization and other initiatives, are really attributable to Congressional mandates, and not the Recession or digital migration.

Well the U.S. economy is moving in the right direction, and has been for six years, and may grow another 3 percent or more this year (2014 fourth quarter aside). Business outlooks are generally good, and Apple among others just set a quarterly earnings record in profit. Jobs have come back, though the labor participation rate lags, and pay packets have barely budged. The stock market, volatile yes, is booming again. Few may feel very secure, but the underlying data shows the recession of 2008-2009 is far behind us.

Even the USPS knows that the U.S. economy is growing. Direct mail volume held its own in 2014—the digital death knell has been greatly exaggerated. Perhaps cooking up the exigency, and another, surprise inflation-indexed increase this year, is the Postal Service’s way of taking another revenue injection when the going is good. Certainly that’s more reliable income than waiting for Congress to act on what is most meaningful: backing off ridiculously punitive, pre-funding requirements for retiree health benefits, letting the USPS offer employees its own healthcare plans, and halting silly moratoriums on USPS infrastructure needing to resize to fit the times.

I always thought Congress, with the USPS in fiscal crisis and default, and a difficult severe recession, would have prompted members to act. The White House, too. Nothing in the way of new reforms ever emerged. Maybe Congress, too, is waiting for “good times” again to stage its next postal act. Let’s hope this next one doesn’t cost mailers even more. The present situation is unsavory enough.

San Diego Dreamin’ – Charging Through ‘The DMA’

The last time the Direct Marketing Association held its annual conference in San Diego, it was 2009, we were all amid The Great Recession, and having been recently thrown out of a job, money was just too tight to attend on my own. Since then, marketing has changed—a lot—and the U.S. economy overall is in better shape than it was. Folks, looking back, we avoided a Depression

The last time the Direct Marketing Association held its annual conference in San Diego, it was 2009, we were all amid The Great Recession, and having been recently thrown out of a job, money was just too tight to attend on my own. Since then, marketing has changed—a lot—and the U.S. economy overall is in better shape than it was. Folks, looking back, we avoided a Depression.

I endured, and so did DMA. It’s 2014: The conference offering is as good as ever, and there’s simply no better place in the world for data-driven marketers to gather, learn and exchange. While I might argue, all of marketing, and all of advertising, has become data-driven, let’s not forget that measurability and accountability had its historic home in direct marketing … going back to at least 1917. ROI lives here.

It’s always good to get to The DMA early, to support Marketing EDGE (note, a client) and its Annual Awards Dinner, this year honoring Michael Becker and Google. If you didn’t make it Saturday night, you can still contribute via Marketing EDGE’s first foray into social fundraising. Literally hundreds of thousands will be raised this quarter to help build a bridge from students to market-ready marketing professionals.

Come Monday (today), it’s full-on with the conference: and I won’t be missing Magic Johnson giving “Part 3” of the opening keynote, right after DMA Chairman JoAnne Dunn, CEO of Alliant, gives the association address (can’t recall when a DMA Chairman has taken on this role at the conference), with KBM Group, joining Shell and Air Canada, on “The Evolution of Engagement: The Modern Reality of One-to-One.”

I also can’t miss “Data-Driven Marketing Genius: Google, Xerox and a Foreign Film Festival”—the first-time actual International ECHO Award Winners (they don’t know what they’ve won yet) get a main stage to tell the story behind the marketing campaigns that “Wowed” this year’s ECHO judges (including me). Happy Halloween: I’m still shaking over that Horror Festival campaign.

And since I can’t wait ’til January for my “Downton Abbey” fix, I plan to listen in on “Big Data Helps Keep Downton Abbey Alive for its Fans,” which I’m hopeful gives insight on how a popular TV program gives public television more fundraising lift through brand engagement. I’m curious about the Big Data angle.

“What’s the role of the Agency?” seems to have captured a La Jolla wave. Sessions such as “The New Engagement Agency: A Real-Time Revolution,” and “Agency A-List: The Changing Face & Role of the Agency in 2015” speak to some of the digital disruption that is going on, while Brian Fetherstonhaugh of OgilvyOne Worldwide addresses “E-Commerce: The Crucible of Customer Engagement” (all the more interesting, given Ogilvy’s creation of a new analytics agency, OgilvyAmp.)

By the time Wednesday comes, I will be exhausted, inspired and ready to put some newly learned know-how to the test—and I hope to come home with new business contacts, too—but only after I catch a wave and a libation at the Coronado.

Hey, Lawmaker: Marketing Moves Today’s Commerce, and Data Moves Today’s Marketing

Members of Congress, and even the White House, seem to forget or ignore that their very own campaigns depended on the flow of information about citizens and individuals and population segments to inform their campaigns. Their respective elections prove that data and marketing in concert are very effective, especially for incumbents. Yet listen to a few among our leaders, and you’d think data-driven marketing is a consumer privacy problem begging for a government solution

I’ll start this blog off with a disclosure: I’m a member of the Direct Marketing Association, serve and have served on various DMA committees, and I count the Digital Advertising Alliance and other data-driven marketing firms among my clients. In short, my livelihood depends on data-driven marketing.

Members of Congress, and even the White House, in good measure, seem to forget or ignore that their very own elections to office depended on the flow of information about citizens and individuals and population segments to inform their campaigns. Their respective elections prove that data and marketing in concert are very effective, especially for incumbents.

Yet listen to a few among our leaders, and you’d think data-driven marketing is a consumer privacy problem begging for a government solution. How they (some of them) ignore 40+ years of self-regulation success in data-driven marketing; U.S. leadership in information technology and its data-driven marketing application (they are not coincidental); and the economic powerhouse of jobs, sales and tax revenue that is created by data exchange for marketing purposes.

Research Proves Our Case … Again
In November, DMA and its Data-Driven Marketing Institute announced “The Value of Data” Study (opens as a pdf), which documented the economic impact: The data-driven marketing economy added $156 billion in revenue to the U.S. economy that fueled more than 675,000 jobs in 2012 alone. (Importantly, the study also provides state-by-state economic impact.) The full study is available here.

This past week, DAA announced results of its own commissioned research which focused on the value of digital advertising derived from data exchange—and its comparison to general ads online. The study reported that availability of cookies to facilitate information transfer increases the average impression price paid by advertisers by 60 percent to 200 percent. Additionally, ads for which cookie-related information was available sold for three-to-seven times higher than ads without cookies. Thus, the invisible hand of the market, once again, proves data’s value. The full study is available at http://www.aboutads.info/resource/fullvalueinfostudy.pdf.

We’ve Got Work to Do … with our Lawmakers
Yet President Barack Obama and Sens. Jay Rockefeller (D-WV) and Ed Markey (D-MA) might have Americans believe that National Security Agency surveillance of U.S. citizens, data breaches at retailers and other organizations, and data exchange to drive marketing is one big roll-up of the same issue.

We know they are not. Spying by government on its own citizens is an important civil liberty issue, and while I’m not a fan of Snowden hiding out, NSA revelations deserve a full debate on its own merits and threats. Data security extends far beyond marketing—and marketers and many lawmakers agree that we need one national data protection and breach notification standard (and not 50+1). Data-driven marketing is not a problem at all, but instead a huge boon to U.S. marketing success that depends on continued innovation and fair use of information principles, which deserves government support (or at least government staying out of the way).

Importing restrictive laws and regimes on data flows for marketing has the potential to ruin American commerce by killing relevance. At a time when consumers are becoming more skeptical of brands, the intelligent use of information to converse with consumers with resonance is a requirement of marketing smart today. Dumb marketing wastes resources, annoys consumers and frankly places us at a disadvantage globally. While culture around regions of the world is unique, I believe our sector-specific approach to privacy regulation based on consumer harm potential (credit, health, financial) is superior to omnibus privacy law (all personal data is the same) and has served our economy well. How terrible to find we have our own lawmakers who seem to fail to grasp the evidence. You can believe DMA, DAA and other advertising organizations are working hard to show policymakers the great value we create in the marketing profession.

Politicians sense moods … and read polling. In my next blog post, I’ll look at some of the perception challenges we face with consumers. Clearly, as much as consumers “consume,” marketing is not all that popular with some of them either. We have work to do with consumers, too.

Addressing the Skills Gap: 5 Reasons Why Year-End Giving Should Include a DMEF Donation

The uncertain domestic and global economy masks a glaring concern—one that goes to the root of sustainability in our discipline. In the direct, digital and database marketing fields, there is a tremendous shortage now of qualified professionals, and likely in the near and long term.

The demand [for talent] has far outstripped the supply.” – Joe Zawadzki, Chief Executive, MediaMath, The New York Times (Front Page, Oct. 31, 2011)

The uncertain domestic and global economy masks a glaring concern—one that goes to the root of sustainability in our discipline. In the direct, digital and database marketing fields, there is a tremendous shortage now of qualified professionals, and likely in the near and long term.

  1. In its seminal research report, From Stretched to Strengthened: Insights from the Global Chief Marketing Officer Study (October 2011), IBM states that an explosion of data, social platforms, channel and device choices, and shifting demographics all point to tremendous hurdles for CMOs [chief marketing officers] to overcome. IBM calls it “a gap in readiness.” The ability of higher institutions to provide global (and local) brands with people with skills necessary to capitalize on customer-centric interactions is vital.

  2. Another current report from McKinsey’s Global Institute, Big Data: The next frontier for innovation, competition and productivity (May 2011), states that the world needs as many as 190,000 specialists with deep analytical skills whose sole focus is Web marketing (never mind, analyzing data in multi-channel environments). These new professionals will need to be steeped in mathematics and statistics, as well as in marketing and the vertical markets where brands reside.

  3. During the 2010-2012 period, according to the Direct Marketing Association (The Power of Direct Marketing, October 2011), the U.S. economy is forecast to create more than 280,000 jobs from mobile, search, Internet and email marketing alone. It’s vital we are able to deliver and develop professionals in our field who have requisite knowledge and education.

  4. In a recent employment study for Direct Marketing Association (Quarterly Digital and Direct Marketing Employment Report, September 2011), undertaken by Jerry Bernhart Associates, employers noted that analytics-related posts are the most highly sought in our field, followed by marketing, sales, creative and information technology. Most recently, 61 percent of employer respondents said they were experiencing difficulty attracting the right talent for open positions, with 50 percent attributing this to a shortage of qualified candidates, and 18 percent to a lack of specific job or technical skills.

  5. The Direct Marketing Educational Foundation (DMEF) serves to address the skills gap by enabling its Scholarship program, Student Career Forums, intensive training in interactive marketing (I-MIX), its Professor’s Institute, among other activities, to make direct and interactive marketing one of the most highly attractive fields for young adults. During the past year, DMEF engaged 2,580 students, more than 270 professors, and 650 schools in its various programs. We stand ready to exceed our success this coming year—but we need your support to do it.

For these five reasons, I just sent my donation to DMEF for its year-end DirectWorks Challenge (an initiative where I serve as a consultant). I encourage every professional in our field to make a tax-deductible donation today—preferably before Dec. 31, with my thanks: www.directworks.org/contribute

It’s the one donation that keeps giving back to us as marketing professionals.