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What is Marketing Optimization? Testing, Targeting, and Behavior

It is the Year of Optimization.  The recent acquisition of TouchClarity by Omniture is yet another confirmation of an intense surge in interest in technologies that make computers sell better to people. 

But what in the world *is* optimization?

As a matter of disclosure I am not a PhD.  My ADD is a strong inoculation against advanced scholarly pursuits.

However, I have the unique viewpoint of experience.  I co-ran a company, Fort Point Partners, that was responsible for deploying a dazzling range of technology for companies like Nike, Best Buy, and about 50 other firms.  We launched rules-based systems (ATG Scenario Server, e.Piphany), search systems (EasyAsk and Endeca) and more advanced segmentation and modeling software (LikeMinds, Personify, netPerceptions to name a few).  We also ran a lot of tests.

Our goal was simple - make the computer capable as a salesperson. For us, optimization is a fancy word for making a selling process more relevant and engaging for your customer so that they make you more money. And the best optimization tool was one where a marketer could adapt and learn, but the machine did the work.

I see four major approaches to optimization that each have critical value for the marketer (I will use this space over the next week or so to go into more detail on each approach):

1. Experimentation - testing approaches including A/B, multivariate, Taguchi, optimal design and others. Showing different experiences to different control groups to determine a "winner" or "best recipe" based on conversion rate, revenue, or other outcome. Read more here.
2. Targeting - also referred to as "rules-based optimization".  Defining explicit segments and rules for delivering content experience. These can be simple definitions like "show the iPod when our customer searches for "iPod" on Yahoo or very sophisticated behavioral segments.
3. Behavioral - applying AI or linear regression to prior data to determine predictive factors from data to drive the display of content.
4. Social - offloading the work of relevance to the community through ratings, reviews, tagging, or other forms of participation.

Take Google, for example.  They are algorithm guys, right? They use a predictive model that is finely tuned to determine the elusive grail of "relevance" and their results are unbelievable. Yet they also use targeting and testing. True, they outsource the work of specifying the rules to us through keyword selection, bidding, and match type, but this is targeting at its finest.  And they test regularly - evaluating different treatments of the SERPs.

So what is the best optimization approach? Optimization is just marketing with math. If your user base ratings improve the relevance of your search results, then do it!  If testing helps to eliminate your CEO's bias towards acres of copy, do it! The marketing "mix" for optimization is going to take time to get right, but will yield tasty morsels of revenue improvement every step of the way.

We started Offermatica not because we discovered the magic algorithm that turned a computer into a selling machine, but because we found out that the keys to selling online were speed and control. Speed - because marketers had no time, so the machine was going to have to do the work.  And Control, because the marketer still needed to be "in the loop", either driving new ideas or removing crazy outcomes.

And remember this: Marketing is done by marketers. Machines just help us listen and aim better.

Yahoo Pipes - 2 Rules for Software

Yahoo launched Pipes this week.

There is a simple rule that applies to software that can give you a good bead on whether a new offering will succeed:
1. Can an English Major do something useful (or entertaining!) within a week?
2. Can an Engineer do something interesting?

Most of Web2.0 succeeds with 1 and fails with 2. Some serious software, like app servers and data visualization software hits 2 and fails with 1.

Yahoo pipes is the rare package that could either hit both, or fail both.  It is very unlikely to get a single.

Landing Pages - The Consumer Just Won't Behave

Would you like to know the single biggest reason why online campaigns are not strong?  The consumer just won't behave. 

No, this is not another screed about user-generated media.  I love the mentos and diet coke guys as much as anyone.  The problem isn't that users are making more interesting ads.  Instead, it is that they are not consuming our media correctly.  We are working hard to make beautiful display ads.  We are making ever more luscious site experiences, and we are becoming sensitive impresarios of email.  But they are not following the rules.

No, they have the gall to want to click from an ad to a page that is relevant, and even to continue engaging in relevant content click after click until its satisfying conclusion.  How dare they.

In the old days, it was different.  You hired a small army of people, you made a 30 or 60-second spot, and the consumer consumed it.  They didn't ask us to make our stores match our ads.  They were disciplined back then.  They knew how to consume media in the exact chunks that we produced it.  And it was good.

It was simple. Start watching from the beginning of a show, and end at the end.  Start at the first minute, end at :30. But now that is over.  The new online generation will never have the stolid discipline of old. 

As marketers, we do ourselves a disservice when we still think about media as discrete units of production (an ad, a layout, a site).  The consumer isn't buying it.  Just because we have a different agency and subspecialty for site, display ad, PPC ad, email, etc., does not change the fact that every single action of every person on the web is defined as part of a group of actions. Very rarely does a person go online, type a URL into a browser, visit that single site, accomplish a task, and leave the web completely.

More often, we search, we dither, we explore, we lose track, we gain focus, we complete an action, we get bored, we get called for dinner, we log off.

In other words, a unit of consumption online is a Family Circus-like wandering from  point of engagement through completion, or -- often -- from point of engagement through boredom.

Only when we begin to consider the whole process, from first point of engagement and including every other step along the way, will we truly engage with our prospects.

Let me illustrate.

I was recently searching for a chiminea -- one of those outdoor fireplaces in which you can burn wood, toast marshmallows with the kids, and pretend you're camping (must be some primitive quest-for-fire drive).

So I typed in the word "chiminea" (I know, it's a stupid word) on Google, and came up with a long list of possibilities.

The first paid search listing was for FirePitShop.com. I clicked. Too many choices. While the landing page was designed well, showing a featured chiminea and some other, "popular" chimineas, it was still too generic.

Chimineas

FirePitShop did a good job landing me on a chiminea page, but for such a generic search term, the site might have fared better with me by providing some basic information.

The third paid search listing, BlueRooster.com, did better. (Why didn't I click on the second paid search listing? I have no idea -- it just didn't appeal. I think I didn't like the name of the URL - Yardiac.com. See the whims of your customers you have to contend with?)

While TheBlueRooster.com landing page didn't look as spiffy as FirePitShop.com, it offered me a list of tips on how to buy a chiminea. First off, I learned some definitions. Good news: the product I was looking for is actually called a fire pit (a bowl or 360 degree open fireplace without a chimney) rather than a chiminea (a fireplace that has a chimney to efficiently fuel fire with fresh air), which means that, thankfully, I can stop typing that silly word.

The tips were nice, but the layout was lousy (lots of strangely centered text marching down the page) and I navigated away. Still, I think it was a good choice on the part of the retailer to land me on a tips page rather than a product or category page.

Blue_rooster

Now lets explore an alternative - This time, one done by our marketing folks:

Search on "Landing Page Optimization" and click on our ad (which is relevant).  Here is what you will see:

Offermaticalpo_1

The goal is to connect the search to the experience.  What matters?  For one, be relevant to the search.  Secondly, offer some value - landing page articles that offer tips and suggestions.  Finally, give them something to do.

What is it not?  It is not a "Home Page" or "Product Page" that was built by the site group and linked to by the search marketer.  It is not a stranded landing page that is built by the PPC folks and divorced from the site.

It is a site page that fits in the site but is part and parcel with the PPC ad and relevant to the keyword. It carries the user into the the site in a way that is not jarring.

The user can't be trained to act in a way that is convenient for us. So lets meet them half way.

Update: Check out this post from Jon Mendez at Optimize and Prophesize on Tips for Better Landing pages.  Jon is one of the top landing page guys out there today.

A Better Man

"Do it"

These are the words that greeted me on my voicemail from Jerry Tuttle this past weekend.

"Do it"

I have to say I have listened to the message 30-40 times. I can't stop. It is a connection to an irretrievable past. It is a link to someone worthwhile and great and straightforward and honest. And gone.

This past weekend, Jerry, a friend of ours, passed away.  No, passed away is too weak. He was taken. Secreted away by a force I cannot negotiate with, cannot understand, cannot fight. He is gone.

But he left me: "Do it."

Now, to say Jerry was loved trivializes the impact he had on others, including good friends of mine.  To say he was respected fails to encompass his achievements.  I had the opportunity to spend time with his friends and associates from JMP on Monday, and what I heard was not the words of a staff missing a boss, but of a movement mourning a leader.  "He was a rocket".  "He saved my life".  "He changed me".  I heard spoken ten times over about Jerry what any of us mortals would love to hear spoken once about ourselves.

And I hear, "Do it." And I listen.

The funny part about the voicemail is that Jerry starts by giving a lot of rationales for why I am making a bad decision.  And they make a lot of sense.  But then he just stops.  And he just says "Do it."  It is straightforward and overwhelmingly persuasive because he is straightforward and without pretense.

Jerry was a mensch.  He was the real deal.

In the business world, great success is rare enough to be noteworthy.  Helping to create JMP is a feat in itself, and it is clear that Jerry was a force to be reckoned with.  But grace is a thing far more rare among the business elite than drive.  And Jerry had grace.

Jerry had the grace to take care of people.  People that I love.  He clearly loved his job, and he clearly loved his people.  In my experience, there are very few leaders who have Jerry's charisma, and there are virtually none who have his grace.

Jerry was also, frankly, fun. 

Almost a year ago, Jerry and I celebrated our birthdays.  He was born one day after me, and our wives, Kara and Stephanie, arranged a phenomenal birthday party in Napa.  It was one of those times when you just get to step back from life for a day and enjoy your family and friends and relish the simple fact that your friends and family are excellent.

Several of our guests brought gifts (frankly, Kara was far more deserving of recognition than I!).  Jerry got two bottles of excellent wine, some top-shelf tequila, and a single malt scotch.  I got four books. 

What I love about it was that we were both mildly irritated about what our friends were telling us...

To Stephanie, you know we think the world of Jerry and of your whole family and that he will live in our hearts.

To Jerry's Mom and Dad, know that in his fewer than 39 years, Jerry gave the world more than most of us could do in 100.  He was a leader, he cared, and he enjoyed life and the people in it.

His loss is profound, maddening, infuriating. But his message was clear.

"Do it."

Snapshot_20070201_002751

If you have a thought you want to add, please click "comment" below and tell your story.

Another friend talks about Jerry here.