Data’s $20B Role in Marketing

Right on cue. My last blog post happened to discuss Europe’s forthcoming “Data Freeze.” Enter a new U.S. study that articulates just how large the use of data for smarter marketing really is stateside — to the tune of $20 billion plus.

Third Party Data Study - Selected Chart
Credit: Data & Marketing Association by Winterberry Group

Right on cue. My last blog post happened to discuss Europe’s forthcoming “Data Freeze.”

Enter a new U.S. study that articulates just how large the use of data for smarter marketing really is stateside — to the tune of $20 billion plus.

The Data & Marketing Association and Interactive Advertising Bureau’s Data Center of Excellence commissioned the “State of Data 2017” study [available as a download], conducted by Winterberry Group. According to the foreword:

“…marketers and publishers looking to become ‘data centric’ have had little choice but to embark on that titanic change effort without the benefit of clear and complete intelligence; the inherent complexity of data and its myriad applications has previously made accurate reporting — on how users are investing in data, putting it to work and evolving their marketing approaches in turn — too challenging to accurately compile.

“This report represents the first industry-wide effort to address that gap. By providing credible, practitioner-informed insight, we hope to demystify how U.S. companies are investing in audience data (and its associated support functions), helping practitioners benchmark their own spending against industry norms and establish a firmer basis for future investments.”

If 2018 will be the year of third-party data quality, this study perhaps underscores why: Third-party audience data spending will top nearly $10.1 billion this year, in omnichannel ($3.5 billion), transactional ($3.0 billion), digital ($2.8 billion), specialty ($0.9 billion) and identity categories ($0.6 billion). Another $10.1 billion will be spent on various data “activation” solutions, from integration, processing and hygiene ($4.3 billion); to hosting and management ($4.2 billion); to analytics, modeling and segmentation ($1.6 billion).

In short, marketers are investing heavily on knowing prospects and customers better — and communicating intelligently with them to meet demands and expectations. For more and more brands and organizations in both consumer and business-to-business markets, third-party data is essential in this process — online, offline and omnichannel. But it’s indeed complex.

The scope of the study includes commercially licensable data and/or audience segments, as well as third-party data solutions that seek to activate or apply any combination of first-, second- or third-party data. It does not include data for “insourced” product development, aggregated data for market research, data for custom audiences that bundled inside “walled gardens” of social media platforms and other publishers, and enterprise data usage not related to advertising, marketing and media.

The study is helpful in providing benchmarks for companies as they evaluate their own third-party data dynamics in advertising, marketing and media planning — but I can’t help appreciate this snapshot on a wider economic basis. Responsible data collection for more relevant engagement with customers is a $20 billion business – a substantial and likely growing slice of all ad and marketing spend. [Early next month, Winterberry Group’s Bruce Biegel will present firsthand a “2018 Media Outlook” for direct, digital and data — and how they compare to overall media spending.]

If CMOs increasingly are judged on business effectiveness, on how advertising and marketing performs in this context, then gaining prowess with data — including third-party data — is fast becoming table stakes. Building out data-driven marketing capabilities will serve them well.

Third-party data and activation is indeed fuel for consumer engagement and business growth. This reality — documented in this study — needs to be understood, recognized and respected far beyond the C-suite. But let’s start with the C-suite.

Still No Magic Bullet for SEO

SEMrush’s “Ranking Factors Study 2.0” confirms yet again that there is no single “open sesame” tactic that will magically net your site’s URLs the top placements in the Google search results. I am sure that this is terribly disappointing for site owners and practitioners who have long-sought to replace solid valued and valuable content, technical excellence and a commitment to the user with a magic bullet tactic.

SEO
“SEO,” Creative Commons license. | Credit: Flickr by Global Panorama

SEMrush’s “Ranking Factors Study 2.0” confirms yet again that there is no single “open sesame” tactic that will magically net your site’s URLs the top placements in the Google search results. I am sure that this is terribly disappointing for site owners and practitioners who have long-sought to replace solid valued and valuable content, technical excellence and a commitment to the user with a magic bullet tactic.

This study and other similar studies that look for keys to unlocking the Google algorithm increasingly confirm the need for a holistic, user-centric approach to search.

The SEMrush study used a 600,000-keyword worldwide data set and examined the first 100 SERP positions for each keyword. To crunch this big data and reveal the importance of the ranking factors, it applied a machine-learning algorithm called Random Forest. This methodology is one of the most effective machine-learning regression models used for predictive analysis. As the name implies, random forest is decision-tree methodology that teases out the most significant factors. Those with a statistical interest will find SEMrush’s choice of this methodology interesting.

What Were the Results?

The study identified 17 factors that influence how a page ranks in the Google SERPs. The study found that direct website traffic is the most influential ranking factor. A high volume of users directly navigating to the site is a key indicator to Google that the domain has authority and value.

What drives an individual to directly navigate to a site? The answer is easy: content and presentation that users value. The study shows that user behavior signals, such as time on site, pages per session and bounce rate influence rankings. They are indicators of site quality and its relevance for users. It should be noted that the study authors point out that the factors are intertwined, so focusing on a single factor does not strongly influence the overall result. They all fit neatly together.

What About Links?

The study shows that backlinks and link profiles are still key factors in rankings. The volume of referring domains, volume of backlinks and referring IP addresses are key metrics. The authors caution that “all the metrics of the backlink portfolio are interconnected, and a blind manipulation of only one of them will not increase your rankings, unless you also work on the other metrics.”

A well-orchestrated digital marketing effort can yield a surprising number of quality links. It has been my practice to focus on quality, and let the quantity flow from the overall value of the site’s offering as enhanced and exposed through the total marketing effort.

Does Content Matter?

The research clearly shows that content is crucial to ranking. There is no magic bullet length. If the content is irrelevant to the user’s query, it doesn’t matter how long it is — it will still be irrelevant.

The message is clear that by creating relevant content, you can improve your ranking. The research indicates that pages that rank higher have longer content, on average. This is particularly important for high search volume competitive keywords. For long-tail keywords, don’t scrimp on the content. Narrow your focus and cover the topic in depth, and you will be rewarded.

The Key Takeaway

The study also looked at on-page optimization factors and the impact of Google’s push to make the Web more secure by rewarding secure sites and shaming insecure sites. The results make interesting reading and, in my opinion, this entire study is a must-read for search marketers.

The key takeaway for me is that given the importance of direct traffic and user experience, that building brand awareness and enhancing user experience is as important as a strong SEO program. A holistic approach to addressing the dynamics of generating search traffic is essential.

Millennial Irony: Now They Eat Out Too Much

Two weeks ago, I blogged and did a video about the report that Millennials are “killing” casual dining restaurants. The whole idea sounded like something made up by a fired Fridays manager. Well, today, we got some new information that’s a real head-scratcher: Now Millennials are spending too much money eating out!

Two weeks ago, I blogged and did a video about the report that Millennials are “killing” casual dining restaurants. The whole idea sounded like something made up by a fired Fridays manager.

Well, today, we got some new information that’s a real head-scratcher: Now Millennials are spending too much money eating out!

The new information comes from a survey by BankRate. And they at least had the sense to let a Millennial break the news to her fellow Millennials. Apparently Millennials money woes shouldn’t be blamed on avocado toast at all, it’s all the happy hours. (The Yahoo Finance article the video comes from had additional commentary on it as well.)

(Aside: Is she talking to me? Born 1977, am I Gen X, Millennial or a damn Xennial? I can’t freakin’ tell! Can we please make up our minds at least about this? Studying generations is like discovering a very uncomfortable version of time travel at 40. Like trying to Instagram while spinning in one of those old, banned metal merry-go-rounds. … I do not cook at home a lot.)

Let me tell you folks, I am SHOCKED!

Me, every time conflicting information comes out about Millennials.
Me, every time conflicting information comes out about Millennials.

Every time one set of data comes out saying this is what Millennials are and the impact they’re having, just wait a couple weeks and a new set of data will say the opposite.

So, are they killing restaurants or keeping them in business? And if they’re out eating and drinking multiple times a week, but classic bar and grills can’t bring them in, is the younger adults’ faults?

One thing’s for sure: They are spending money. In fact, judging from that video, Millennials are spending money more freely than just about any generation in history. So if you’re not getting a piece of that, that’s on you.

One other thing I’m sure of: Even though almost all the Millennials are out in the workforce now, a lot of corporate America and the researchers feeding them data still don’t know Jack about who this generation really is or how to reach them. (“Us”? I still can’t tell.)

6 Keys to Search Success in 2014

What if someone gave you scientific data on what hundreds of sites are doing to get thousands of top keyword rankings on Google? Would you, or could you, make changes to your site to match the criteria for achieving these rankings? The data is now available. Searchmetrics has just released a new study, part of a multiyear longitudinal study on ranking factors, entitled “SEO Ranking Factors and Rank Correlations 2014—Google U.S.” In this lengthy whitepaper, there are some big takeaways and lots of guidance, which savvy search marketers will turn into action plans—or roadmaps for success, as I prefer to think of them. Here are some of the nuggets gleaned from the research:

What if someone gave you scientific data on what hundreds of sites are doing to get thousands of top keyword rankings on Google? Would you, or could you, make changes to your site to match the criteria for achieving these rankings? The data is now available. Searchmetrics has just released a new study, part of a multiyear longitudinal study on ranking factors, entitled “SEO Ranking Factors and Rank Correlations 2014—Google U.S.” In this lengthy whitepaper, there are some big takeaways and lots of guidance, which savvy search marketers will turn into action plans—or roadmaps for success, as I prefer to think of them. Here are some of the nuggets gleaned from the research:

  • SEO Success Requires Vigilance—the study reinforces that good SEO is, in fact, the culmination of hundreds of tactical efforts, all executed precisely and flawlessly. SEO is changing and evolving so that tactics that garnered top rankings just a few years ago may not be as significant today; therefore, it is important to continuously tune your program based on precise new information.
  • Basic SEO Is Not Enough—These are the stakes needed to even play at the table: robust site architecture with good internal links, short loading times and the presence of all relevant Meta tags, such as Title and Description. You cannot expect your basic optimization efforts to do all the work. They are just the foundation for search success.
  • Bring on the Content—Content must be richer and longer. Most top-ranking pages include about 900 words, 17 sentences or so of real content. This content must engage the user, contain the keywords you are targeting and be highly readable by your audience. With Google moving to a holistic approach to page relevancy, so, too, must content creators. They need to include not just the keyword target, but other semantically relevant keywords. The days are long gone where keyword stuffing and pages of weak content with the same keyword repeated over and over were successful.
  • Quality Links, Not Just Quantity—Success in Google has always required attention to the site’s linkage profile. Today, link-building should really be transformed into link-curation. The Searchmetrics report clearly emphasizes the importance of focusing on high-quality links and paying closer attention to internal linking structures. Most SEO efforts focus on external link-building and forget about removing broken, irrelevant and unnecessary links. These should be part of the basic “housekeeping” activities for the site.
  • Social Media Just Give Signals—Social media provide valuable signals for Google as to the worth of your content. The Searchmetrics study has shown that these signals are less valuable to Google in 2014 compared to 2013. The jury is still out as to exactly how they contribute, but more shares and likes impact rankings positively. Make no mistake—social media likes, pins and mentions are not magic bullets for improving rankings. Social media provide Google signals as to how valuable users find the content on your site. Your efforts should be focused on the user.
  • It Is All About the User—If you want to rank well, users must find your content interesting. The study found that URLs with top rankings had clickthrough rates (CTRs) of 32 percent and the 10th highest ranking URL had a 3 percent CTR. Users clicking through typically stay on the top-ranking pages 101 seconds and exhibit only a 37 percent bounce rate. Users stay longer on top-ranked pages—30 seconds longer than on a page in the 4th position. If your data shows that your pages have low clickthrough rates, short stays and high bounce rates, you cannot really expect top rankings. To put it bluntly, your pages are not worthy. The challenge is to use the information in the Searchmetrics study to improve your site’s performance. This means taking a long, hard look at what you are doing right and have a willingness to address issues that might be impairing your performance in search. Just remember, SEO success is hundreds of rapidly changing tactics, flawlessly executed.

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.

A New Approach to Integrated Marketing

I had a great chat the other day with Elana Anderson, the former Forrester Research superstar analyst who has gone out on her own with her (relatively new) company, NxtERA Marketing. The company offers advisory and consulting services to marketing organizations and providers of marketing services and technology.

We were discussing a new study that her company worked on with marketing solutions provider Responsys.

I had a great chat the other day with Elana Anderson, the former Forrester Research superstar analyst who has gone out on her own with her (relatively new) company, NxtERA Marketing. The company offers advisory and consulting services to marketing organizations and providers of marketing services and technology.

We were discussing a new study that her company worked on with marketing solutions provider Responsys.

The main gist of the study–called Marketing Beyond the Status Quo–is that as customer response to broadcast messaging steadily declines and as the percentage of prospects and customers giving permission to market to them decreases, marketers must increase the relevance of their multichannel communications or risk falling short of revenue expectations from the C-suite.

“The data shows – and marketers generally agree – that brands have reached a point where they must invest more time and money in improving the relevance of their communications,” said Anderson.

The report also unveiled the MSQ Model to help marketers determine their relevance maturity and develop a realistic action plan to become a more customer-focused marketer.

The four-point MSQ Model assesses the four fundamental competencies required for marketing relevance: strategic (how customer-focused are your marketing efforts?), analytical (how strategic and actionable is your customer insight?), technical (how well-suited is your infrastructure to support customer-focused marketing?) and process (how collaborative, efficient and error-free is your marketing organization?).

Each competency is weighted and combined to yield an overall Relevance Maturity Score which defines a MSQ Level ranging from 1 (broadcast) to 5 (integrated). Marketers can use the model in conjunction with the MSQ Self-Test to pinpoint their MSQ Level as well as identify the steps they must take in order to successfully move to the next level.

Other key findings and strategies from the study include:
1. Response to one-size-fits-all messaging is declining steadily. The report found that one retailer increased revenues by 500 percent by dividing its e-mail list into four segments and customizing the message to each group. In addition, a comparison of aggregate response data from companies leveraging broadcast tactics versus those using a highly targeted approach showed that the latter delivered significant improvement in open rates, clickthrough rates and clicks per open.

2.Marketers who want to increase marketing relevance must think outside in – from the perspective of the customer. The first step to relevancy requires marketers to clearly define relevancy to include timely response to customer actions, cross channel integration and a programmatic approach, the study found. Marketers must then develop a realistic action plan based on their current relevancy competency as assessed by the MSQ Model and measure and test every step of their program improvements.

3. Without the right technologies, relevant marketing is impossible. Technologies that increase marketing relevance should be made for marketers, and include functionality for automation, collaboration and integration – with little or no IT expertise needed. The report identifies emerging software-as-service options are a boon for marketers looking for lower up-front investment costs, to reduce IT involvement and to decrease time to market.

To receive a full copy of the Marketing Beyond the Status Quo report, visit www.responsys.com/beyond.

Check it out!