Targeting Customers: Researchers Over Influencers

While some social media specialists pine away about online ranking systems, more experienced marketers don't care about online algorithms so much. Do you want to know why?

Everything they need to know about their customers is already online, offline, and proprietary. In fact, in places like Las Vegas, the ability to track customer movements offline has existed for better than a decade and even longer if you count some of the amazing things resorts did with coupon codes and player cards. (In some cases, Vegas invented data mining.) It's not just about one city. It's everywhere.

Real measurement doesn't track kitty vid clicks; it tracks how much cat food you buy and how many cats you own.

Anybody who read the recent Forbes article already knows half of it. Target's data analysis has become good enough that, based upon purchasing decisions alone, it has a remarkably high probability of predicting if someone in the household is pregnant (even if not everyone in the house knows it).

In some cases, I wouldn't be surprised if the data analysis is good enough to predict the probability of pregnancy before the future parent knows it. It wouldn't be hard to do. By culling a large pool of newly pregnant customers' shopping patterns and then analyzing their purchases just prior to becoming pregnant, any marketer can test for a statistical probability.

Match this probability against every customer based on site views, product purchases, etc. and there will be a pattern, assuming there is a pattern to be found. The same method could even apply to any number of life changes: employment, unemployment, engagement, political leanings, successes, failures, etc. When you study the psychology and sociology of purchases, patterns begin to emerge.

It's all relatively simple too. Any company with a guest ID program (whether online or offline via club cards), has a sophisticated data analysis program or the potential to make one. As soon as any customer makes a purchase, select information is dumped into a data bucket, usually purchases, names, credit cards, email addresses, phone numbers, and any other information people willfully give up.

Such data mining isn't foolproof, but it has gotten better. This is why online advertisements follow you around on the Web after you visit a site, why some marketers know when to send you a discount coupon, and how some sellers make reasonably good (but not great) predictions of whether you might like certain books, music, fashions, etc. And, even better, you don't have to be online to make it work.

Influencers are interesting, but researchers are powerful. 

Naturally, the success of any company's data analysis isn't determined by the program alone. It's determined by the researchers — people who can identify trends and turn those trends into action.

Taking a second look at the Target story, statistician Andrew Pole was one of those people. His team created a statistical benchmark based upon women in the company's baby registry. They were buying larger quantities of unscented lotion; buying more supplements like calcium, magnesium, and zinc; looking at extra big bags of cotton balls and wash cloths; etc. All in all, Pole and his team identified 25 products as indicators.

When this information was matched to women not on the baby registry, Target had a reasonably good idea which customers might be pregnant whether or not they signed up with the baby registry. This is powerful information for any company that wants to create direct-to-customer communication, right down to specific messages based on which trimester.

Contrast the power of data mining against influencers who are actively attempting to appear influential by covering popular trends, soliciting traffic, using clever headlines, buying advertisements, gaming attention, etc. and the shortcomings become a little more apparent. Do you want to reach a percentage of an influencer's followers or do you want to reach people that you know are pregnant?

That's not to say influencers can't be useful. They can be useful for short-term prospecting, message reinforcement, amplification, and conversion (adding them to a database where the heavy lifting occurs). However, since numbers alone aren't nearly enough, it might make more sense to find out who your customers already listen to as opposed to any online algorithm.

The down side of data mining is always short-term creepiness. 

Any time an article like the Forbes story breaks, it always feels a little bit creepy. But as creepy as data mining can be (and it is creepy), it's also a constant. Target might have been the company covered, but hundreds of companies have been tracking equally detailed data for some time.

They did it before social media and social networks too; virtually anyone with a credit or rewards card. And if you want a friendly reminder of just how much data is being captured, take an unexpected shopping spree and make some oddball purchases on your credit card.

If you trigger a fraud investigation, your credit card company will be able to tell you everything you did during the day, including travel routes. And if they wanted to, they could probably cull the data and tell you some pretty interesting things about you, your family, and where your next vacation might be.

Related Reading:

• Social Media Key Influencer In Multi-Exposure Purchase Path by eMaketer

• FBI Seeks Social Media Data Mining Tool by CBC News

• How A Smartphone App Can Detect How Fit (Or Fat) You Are by Forbes

Observing Washington: George Washington Day

Although many in the United States believe Presidents' Day is a meant to be a celebration of both President Washington and President Lincoln (and all presidents to some degree), the federal holiday is still only tied to celebrating the birthday of President George Washington. Any other designation is usually derived from state laws and not those of the nation.

In fact, the one time the federal government tried to pass such a law, the Uniform Monday Holiday Act in 1968, it failed in committee. It wasn't until the mid 1980s that the idea of Presidents' Day took hold, spurred on not by government but by advertisers. Shortly after that commercial movement, some states began to rename Washington's Birthday observances as "President's Day," "Presidents' Day," "Washington and Lincoln Day," or other designations.

In some ways, the combining of the observance (if not in spirit, in law), might have been a mistake. George Washington had a unique vision for the country and one fitting for people to consider today. Nowhere did he make his thoughts better known than his farewell address, which you can read here. Here are some highlights.

Highlights from George Washington's Farewell Address. 

• Unity. Washington reminded the American people that their independence, peace at home and abroad, safety, prosperity, and liberty are all dependent upon the unity between the states. Although he recognized different regions had different beliefs, values, and visions of commerce, he believed that the nation would only prosper through unity.

• Change. Although Washington specifically said that it was the right of the people to alter its government that these alternations and changes ought to only be done through constitutional amendments. Even then, he warned that political factions would ultimately take the power from the people and place it in the hands of unjust men.

• Parties. Even as the first president, Washington saw the rise of a political party system as a danger to the nation and the Constitution. He believed there was too much potential for one group or another to seek power over other groups and gradually incline the minds of men to seek security as opposed to the absolute power of the individual.

 • Values. Although many people like to suggest that the United States ought to preserve a hardline separation of church and state, Washington believed that religious principles promote the protection of property, reputation, and life that are the foundations of justice. He said the morality of a nation cannot be maintained without religion (despite being a Diest himself).

• Budget. Washington said that a balanced federal budget, including the maintenance of the nation's credit, is an important source of strength and security. He said the nation should avoid war, avoid unnecessary borrowing, and pay off any national debt accumulated in times of war as quickly as possible so future generations would not have to take care of those financial burdens.

• Alliances. Washington continually maintained that the nation ought to avoid permanent foreign alliances with other nations, especially because foreign nations will continually seek to influence the American people and government. He said real patriots will be those who ignore popular opinion and resist the influence of friendly nations to seek what is best for their own country.

Equally interesting, in looking at the entirety of the address, it seems remarkable that a man who began his life as someone considered among the "middle ranking" would one day gain the experience necessary to guide the formation of a country and eventually preside over a constitutional government that could evolve. And, the entire time, he remained humble enough to feel the position he was elected to was largely undeserved.

His humility, no doubt, was the result of his own heritage. Although his half-brother, who acted as Washington's father figure after their own father had died, did have some privileges and opportunities granted to him after developing a close relationship with the Fairfax family, Washington was not necessarily born into any elite status like some of the country's founding fathers. He earned most of it.

And perhaps it was because he earned it that Washington still imparts some of the best wisdom for this country, even if his farewell address is no longer read by the House of Representatives and had taken on a more ceremonial reading in the Senate than one for our senators and representatives to reflect on.

If they did, some might imagine a very different agenda. If they did, they might see a government that works to unite rather than divide, preserve a legacy rather than write their own, protect individuals rather than subjugate them, observe morals rather than vilify them, balance a budget rather than argue about how much more to borrow, and place more importance on the country rather than its position in the world.

Happy birthday, George Washington (Feb. 11 on the old calendar and Feb. 22 on the new one). You might not have thought yourself worthy of the position, but your considerable wisdom proves otherwise. On every point, you were right.

Sharing Nonsense: Warner Music Group

Unlike many, I don't have anything against Warner Music Group (WMG). They have produced scores of solid albums from talented artists on their label and several dozen independent labels for more than 200 years if you trace it back to Chappell & Co. It's the third largest music publishing business in the world.

However, it is kind of remarkable that it has been able to accomplish as much as it has, given that the company is also its own worst enemy. Last fiscal year, it reported a net loss of $205 million.

The company likes to say the loss is associated with its hard work to make the transition to the digital music industry. But the truth is that the company isn't trying to transition to digital. WMG is trying to make the digital music industry transition to it.

Some might even say it is the cornerstone of its current business vision. It has long been regarded as having views that make other SOPA and PIPA supporters look reasonable. In fact, it is the most aggressive label in removing content on YouTube. And now, it seems to be arbitrarily enacting a model that cost EMI a contract with OK Go last year.

Warner Music Group in action. Disabling video embeds. 

As some people know, we run a little side project called Liquid [Hip]. It's a site that reviews all sorts of things, with music accounting for about 50 percent of the content. Yesterday, we reviewed an alternative rock/metal band called Janus. They're signed by Realid (pronounced Reality with a D), which happens to be owned by WMG.

Whenever we can, we try to include video embeds of bands to give readers an idea of what we hear. For Janus, we chose the new lyrical video Stains, which is the advance single off their new album due out in March. We think if the album is indicative of the single, it will catapult the band to the next level.

Since embedding was enabled, we thought it best represented the sound while showcasing the single. After the first hour, however, embedding wasn't disabled but the playback was replaced with a message: This video contains content from WMG, who has blocked it from display on this website. Watch it on YouTube. The message is inaccurate. It really means any website.



That's fine with me. We picked up a replacement video. Unfortunately, it doesn't represent as strong, doesn't link back to the artist's channel, and caused some people to send emails asking us about it.

It makes sense that they would. For the first hour or so, the review was read by several hundred people and shared by a few dozen. All that went cold after the lockdown. And it never came back for the band.

To their credit, Janus tried to find a solution because they wanted the lyrical video up too. They even said so on our Facebook page.

They even included a link to the lyrical video; the same video. The image capture shows how that turned out. Janus couldn't share its own video, not even on Facebook.

Given the block was so extreme, we decided to cull through all of our old posts. Sure enough, every WMG video and every WMG indie label carried the same message. So we replaced all of them, even the one that we helped give life to: it had ten views when we shared it. It has 9,700 views today.

Personally, I don't care about the drop off of interest, other than how it affects the band. I don't care because when we first launched the review site for fun, we promised ourselves to never compromise on cool. Listen, don't listen. Read, don't read. Buy, don't buy. I couldn't give a shit about going viral.

We emphasize this fact with our tagline: we cover cool, not popular. Never once did we expect the site would hit 50,000 views in the course of a month. But that's still not how we measure success.

We measure success by giving exposure to what we think is cool (which is a higher bar than what we like). And when people who read the reviews thank us for introducing a new band or a label writes us a note to thank us for what we are doing or another review site follows our lead and asks us for links to a purchase site or a band likes a review not because it is easy but because it is hard, well, it feels worth it.

WMG, on the other hand, ought to give a shit about going viral. The more people exposed to the music, the more people are likely to buy the album. The more people exposed to the music, the more likely they are to become fans. And the more people exposed to the music, the more likely they will buy Stains, Nox Aeris, past albums, merchandise, and future albums even if we never review them again.

It's painfully clear the embed block is not about piracy. It's about shrinking the sales funnel for short-term control and, in some cases, attempting to elevate views on YouTube even if most people in the business know that the majority of video views are fueled by embed views.

A different digital strategy and policy could help people help WMG. 

All of this really isn't a big deal. I removed/replaced about ten WMG locked down videos (except the one above for purposes of illustration), even if it hurts WMG and related label artists because I refuse to carry their WMG content message on our site. I don't intend to put the videos back either.

What I would like to avoid is feeling forced to omit WMG and related indie label artists outright. So instead of boycotting WMG as some have done, I wrote a few ideas for the new owner, Len Balvatnik, to pass along to the fine folks at WMG who didn't respond to my inquiry about the video block.

• Always assume the first single is an investment in the album and let people share it.
• Be courteous to reviewers by disabling 'embedding' outright and not after the fact.
• Recognize that people who view embeds follow them to the band channel (you win).
• Add advertisements that run inside the embeds to increase potential revenue.
• Include an end title card with a direct link to the purchase site of your choice.
• Weigh the merit of publishing clips (in some cases) as opposed to full-length videos.

The question ought not to be about how to prevent people from sharing WMG content outside of its social media assets, but how WMG can maximize revenue because people want to share its content.

I appreciate the concern about piracy (although embedding a video in a review is a revenue generator and not a detractor). Piracy is something everyone ought to be concerned about. But companies such as yours need to remember that most people are happy to purchase music as opposed to pirating it.

Right now, most regulations WMG wants to implement as well as the overzealous WMG lockdown and blocking practices alienate people who are paying loyalists and does nothing to curb the appetite of real criminals. In fact, almost every practice currently employed by WMG alienates people, empowers pirates, and diminishes the fading respect people once had for the brand. Please try to do the right thing.

Engineering Entrepreneurs: Start With Education

A few days ago, Anthony Delmedico, founder of The Little Green Money Machine and author of Kids In Business Around The World, gave a speech that he calls an "E2" during a Future of Entrepreneurship Education (FEE) Summit, which was held at the White House. His topic centered on an interesting idea: add entrepreneurship education as a core curriculum in our K-12 schools.

"While the nation's unemployment rate wavers close to 10 percent, for young adults, 16 to 30, the unemployment is closer to 26 percent. And in some cities, close to 40 percent," said Delmedico. "For those fortunate enough to earn a high school or college degree, very few are prepared for today's job market. Currently there are 2.4 million college graduates who cannot find jobs in their fields of study ... that's 80 percent."

Delmedico went on to say that America will need to create a net 21 million new jobs by 2020 in order to return to full employment. These jobs are unlikely to come from large companies. He rightly pointed out 75 percent of all jobs come from entrepreneurs with small companies. So, in order to create 21 million new jobs, Americans have be serious about creating new entrepreneurs, businesspeople whom he believes are sitting in classrooms today.

Delmedico is largely right. Early entrepreneurship is needed. 

While Delmedico's own marketing efforts sometimes seem tired and his book might be classified as motivational as much as it is business-minded, his heart and head are in the right place. Most curriculum is geared toward rudimentary skills to pass tests, perhaps prepare for college, and then on to learn theories that are supposed to help college graduates enter the job market and compete for jobs that don't exist.

The net result: a majority of young adults are unprepared to do anything except work for someone else. And, of those who are unprepared, most of them have never considered that they might be able to start their own businesses. It is very likely fewer young adults have entrepreneurial spirit because they have less experience given the government's ongoing war against lemonade stands, cupcake vendors, and other kid businesses.  

There is indeed an irony in that kids are allowed to peddle candy bars and merchandise for public schools or sports teams, but not themselves. And, right now, the Department of Labor continues to expand labor laws to prevent children from doing any work until the age of 16. Even then, there is a mountain of information to consider. 

Public education could be the right place to develop and rekindle the entrepreneurial spirit instead of ratcheting up legislation that nurtures dependency (e.g., young adults under the age of 21 must have proof of income or an adult co-signer; health insurance is poised to be extended until young adults turn 26). It might even be a catalyst to make a startup venture easier across the board. A turnkey program at public schools, perhaps as an elective to start, could even open the doors to make starting a business easier for young adults. Consider the possibilities. 

How introducing entrepreneurship reinvigorates students. 

By introducing an elective program into public education with various tracks, schools could provide a one-stop exemption for students to automatically receive all licenses, permits, etc. needed to start their own businesses.

Tracks could include a variety of alternatives such as invention (science and technology), service provision (for sales, like lemonade), arts and crafts (with an online component), engineering and architecture (manufacturing), etc. along with core components for bookkeeping, basic marketing, etc. In some cases, students with businesses that intersect could work together or create larger ventures that might be managed by several kids with a vested interest. And for the first time, many of these students will begin to understand why some basic information is important and applicable in their world.

More importantly, such a program could nurture what everyone wants these kids to exhibit despite not always being given the opportunity to learn: critical thinking and leadership skills. They can do it. Any student can. 

There are many studies that support the case that anyone can become a leader. In fact, most studies have concluded that no common traits (intelligence, birth order, socioeconomic status) nor characteristics (capacity, responsibility, participation) can distinguish non-leaders from leaders. What can be critical, however, is giving students leadership opportunities as early as possible so they develop confidence in becoming leaders later, people who can develop a vision, share that vision, value human resources, and become self-motivated.

Even if students who engage in an entrepreneurial program decide they do not want to start or manage a business as a result, such early experiences could still be beneficial to their future employers. At the same time, they might also gain an appreciation for small business employers.

Right. Starting a business can be challenging and rewarding, but it's also no easy task. It might even erase some of the growing disconnect between employers and employees if more people understood how taxes and regulations aimed at large employers tend to hinder small businesses the most.

Recognizing Data: Passive Analysis Pays Off

There are dozens of ways for marketers to gain insight and better understand the general public. And most marketers actively engage in such research, which means they conduct one (or more) of four traditional marketing research techniques (observational, focus group, survey research, experimental), many of which can be and are being applied online.

Where marketers miss, however, is in not conducting periodic off-topic research or considering what other studies, surveys, and experiments might reveal (passive analysis). Sometimes the biggest insights are not found in an organization's own research (products, services, etc.) but in the research being conducted by others.

Why The Better Homes and Gardens survey is important. 

As part of our ongoing study of shifting attitudes toward a new economy, we've been following dozens of studies to create a generalized composite of consumer sentiment. And one of the latest surveys by Better Homes and Gardens bears out the concept that the public is undergoing a shift, from spontaneous consumption to long-term value. Here are some of the most interesting findings from the survey.

• Consumers are taking more time to plan for home improvements (from 33% to 39%). 

• Consumers are shopping around for more deals and bargains (from 40% to 42%). 

• Consumers want value for every dollar they invest in their homes (from 56% to 61%). 

• Consumers will get rid of excess stuff before paying for more storage (31%, no change). 

• Consumers are less interested in "bonus rooms" as opposed to "multipurpose rooms" (not specified).

• Consumers are interested in some feature upgrades (facets, fixtures, etc.) (from 51% to 55%). 

• Consumers are not more interested in remodeling projects, with all types of projects remaining flat.

There was one survey point that we dismissed. According to the survey, owning a home is still an important part of the American dream (80%). But we dismissed this finding because the survey was conducted on the Better Homes and Gardens site. Obviously, people who do not value home ownership are less likely to visit Better Homes and Gardens.

The real insight in this survey (when compared to other research) follows trends toward a new economy. People are becoming more value driven (not necessarily direct response or sales driven), less consumption driven, consider flexibility more important than status, and place a greater emphasis on long-term purchases that will help them avoid more repairs, replacements, and remodels in the future. 

What does this mean for non-housing related marketers? 

Throughout the 1990s, most consumers banked on a rapidly changing future that would allow them to upgrade everything in their lives at a quick pace. People changed jobs for more opportunity, flipped homes as they advanced, refinanced for status remodels, traded in leased vehicles at a quicker pace, etc. 

In a slow economy, people are more concerned that whatever purchases they make will fit within their budgets and last considerably longer. They know their lifestyles may change, which means flexibility becomes increasingly important. They want increased reliability and security over change because they recognize that not all change is for the better. They place more value on intangible qualities of life (more time to do something meaningful) as opposed to tangible qualities of life (consumption). 

If an organization recognizes how such trends affect their niche, they can make modifications not only to their communication (highlighting long term over short term), but also apply it to research and development, with an emphasis on creating products and services that promise long-term value over short-term trades. How about your organization? Is it still catering to the shrinking pool of consumers who value consumption? Or is it trading in a short-term sales message for something better?  

Balancing Acts: #Fail vs. #Win

Michael Schechter, author of A Better Mess blog and filling in for Geoff Livingston, guest penned a post that touches at the heart of a new social media meme. The Audaciousness of Corporate Social Media Failure is a thought piece on the fascination with pointing out more failures than successes.

He is not alone in his recent assessment. Jennifer Kane called her post The Rise of Social Schadenfreude. Jason Falls recently asked What Happened To Saying Something Nice? And several weeks ago, although not in a blog post, Shel Holtz asked pretty much the same question related to public relations.

Richie Escovedo captured the sentiment in his post New Year's Hat Tip For Triumphs. Along with Holtz's thoughts, you can see my quip about it: "Many public relations triumphs go unseen, which is why they are triumphs." To which Holtz asked if the abundance of blunder-focused posts skews the perception of public relations. Escovedo believes it does. I'm not sure.

Understanding the lopsided exchange of #Fail and #Win. 

Some of it goes back to old school marketing and customer service. Even before social media, consumers were more likely to share a negative experience at a rate of 8 to 1. With social media, that ratio can expand to 8 million to 1, depending on the complaint and who shares it.

Some of it goes back to old school journalism. Negative news tends to have more news worthiness than good news, much in the same way the old adage once conveyed: dog bites man is not news. A man biting a dog is news. But it goes even deeper than that.

Anytime Bruce Spotleson, group publisher for Greenspun Media Group, speaks to my public relations class, he tells the students a story about one of the newspapers he worked for years ago. They agreed with everyone else. There is too much bad news. So, every Tuesday, they decided to make it a "good news" paper. It only took a couple months to find out what happens. People stopped buying Tuesday.

In fact, the phenomenon is not limited to communication. Watch most parents with their children after school. When "As" and "Bs" become commonplace, it will take an "F" for parents to take an interest. You can tell how influenced your children are already by the daily news they share with you. If they always lead with bad news, there's a good chance you're subconsciously ignoring their praises.

Some of it is hardwired. In one perception experiment featured in the free app Color Uncovered, you're asked to stare at a circle gray circle with magenta dots. Eventually, the magenta dots disappear. Except, they don't really disappear. We just stop paying attention when stimulus is unchanging or expected.

How to stop hating and live with the #Fail. 

Try to remember that people are not predisposed to negative. They are predisposed to ignore the expected. And unfortunately, that gives negative a leg up on everything. If the school bus makes it to school, no one cares. If it gets in an accident, it might make national news.

It's also why we never mention an 'expected' meal at a restaurant (it has to be exceptional or slightly below expected to be mentioned), why people mostly stopped tweeting about having waffles for breakfast (and were even made fun of), why negative political advertising works (even though people claim to detest it), why the media still tend to follow the mantra "if it bleeds, it leads," and why some review sites are staked with an overabundance of "1s" and "5s."

I experience it all the time too. I praised Corning Incorporated for a well-executed video and nobody really cared (not even people who claim there is too much negativity in the space). But coverage of any given crisis will always attract eyeballs. More people remember those case studies too.

In fact, after hearing from Writing For Public Relations students (last year) that I might include more negative than positive case studies, I counted them. The positive case studies outweighed negative case studies 10 to 1. They just chose to remember the negatives.

There is nothing much you can do to change human nature, but there are a few things you can do.

• Find different ways to make things unexpected by avoiding patterns that are too perfect.
• Critique negative behaviors and actions rather than the individuals or organizations.
• Stop writing for traffic and stay focused on what might benefit people to know.
• Never take social media, or even people in general, too seriously. We're all less than perfect.

Personally, I think it all comes down to intent. If the attempt is to willfully look to the next victim, the #fail #fails. But if the intent is to share an abundance of relevant stories, good or bad, and turn them into teaching lessons so people avoid making the same mistakes, then it can be great. Just use your head.

And now I have to go and ask my daughter what happened today. She always leads with good news for me because I'm interested. How about you? Are you actively looking for good case studies? And can you tell the difference between positive criticism and negative criticism?