Thursday, March 29, 2007

Simple analysis - but powerful messages

The old adage is that simple ideas are often the best. This is as true for marketing as other functions.

Victor Cook has written an interesting article on Coke vs. Pepsi and using some really basic numbers, he's determined that Pepsi may be a better run organisation than Coke (see

Whilst this article may ignore overseas earnings and the like, it does go to show that there is a wealth of data out there which can be used to produce a report on every competitor in an industry. You don't just want data from Nielsen, BARB etc - get the financials as well. Here in the UK, you have to pay £1 for a copy of an organisations annual accounts. That's great value and the lessons in the data may be far greater than anything hidden in some randomly administered surveys.

Thursday, March 22, 2007

Threshers voucher time again - too much of a good thing?

Many of you will have looked into the effectiveness of discount coupons and vouchers and wondered if they really work. Measuring the effectiveness of these offers is actually fairly simple in terms of short term ROI - however the complications come further down the line when customers become attuned to vouchers and discounts - in theory having damaged the brand. This mistake was made by K-mart in the 1990's and this should serve as a warning to prospective discounters - train customers to expect vouchers and special discounts at your peril - it will make regular products look more expensive.

Anyway - the good people at Threshers had a massive PR coup during Christmas when they released a voucher (by accident they claimed?) which entitled those who received it to a 40% discount on any bottle of wine. This was a great offer from their point-of-view since the offer went viral and thousands of people got hold of the voucher which was only released to a few. the result was a PR coup where people believed they had received a "golden ticket" and ran round to Threshers to clear the shelves. Having allegedly made £15m from this deal they are at it again.

You can find the voucher here - - by the way this site has some fantastic images which you can use on your business cards if you're brave!

From the consumers point-of-view this is great - we can go and get some good wine at a perceived reduction of 40% on list price (although it's often pointed out that the real discount is 7% - if you were already going to get 3 bottles of wine, this retailer already gives you 33% off). From the point of view of Threshers, is this great for their brand or are they relying on very short-term lifts which may train consumers to go there only when vouchers are available - let's see if they do another one at Christmas.

Tuesday, March 20, 2007

Time to experiment a little

The beauty of digital marketing is in the data - not the popups.

To the right of this site, you will see some adverts "from our sponsors" - Amazon and Google. Without giving too much away, the data i've got from these services suggests the following:

  1. Nobody can see that i have an Amazon bookshop or nobody is interested. To test this, i'm going to make it more obvious for readers to find it. If nobody goes there again then time to get rid of it
  2. My other Amazon adverts for Ogilvy books are also not getting any hits - they are going
  3. The Google ads got some decent traffic early on but now that's dried up. I guess this was people "clicking for interest" but it would be better if it was more click through events occur ed - therefore i'm moving the Google ads up the page - again if nothing happens then time to review the presence of these ads

Let's see if there is any value in this online real estate....

Wednesday, March 14, 2007

Do S-curves really exist in marketing?

Over the years, I've engaged in lot's of debate with potential colleagues as to the existence of the S-curve. Before i launch into a debate on the pro's and con's, i should sumarise what I'm on about:

What is the S-Curve?
The s-curve represent a non-linear (bendy) relationship between an input (labour, advertising, time) and an output (productivity, sales, population). S-curves apparently occur quite often in nature - i believe that population projections are based on an S-curve relationships. They are also popular for those considering product life-cycle projections - the classic diffusion model popular in social science makes use of s-curve type relationships.

From the marketing point-of-view, we typically use an S-curve to represent a situation where we expect that a small amount of input will make little difference whilst the marginal benefit from a large to very large input will also have little effect. In between these points is what is known as the effective range where returns are at their greatest.

S-curves in Marketing
Marketeers often talk about s-curves when debating how marketing works. A popular opinion is that there is a minimum level of advertising below which investment will be ineffective. Others counter that there is no logical reason why the second exposure to a message (if identical) will be more effective than the first exposure. As such they prefer the alternative diminishing returns curve.

For marketing channels other than advertising, the debate also exists. In the study of sales forces, it is far harder to argue that an s-curve relationship exists between the number of salesmen and overall sales. The argument goes that the salesmen an organisation adds to an already large pile are likely to deliver only marginal incremental benefit to an organisation whilst the first salesman should offer the greatest ROI. Seth Godin has recently written about this on his blog and he offers an alternative view which supports the s-curve for sales forces.

Estimating S-Curves
S-curves represent a real challenge for market researchers. In terms of estimation, one requires far more data to estimate a relationship of this type and it's difficult to determine what functional form to use for estimation. I've experimented in the past with trying to estimate S-curves using the Gompertz relationship. The fact that there are an extra two parameters to estimate in a regression means that margins of error become very wide very quickly.

In summary
I've yet to see conclusive proof that S-curves exist in marketing. On occasions, I've seen evidence which points to their existence but it's far from case proven in my eyes. From the point-of-view of researchers, my opinion is that unless it's essential to find an S-relationship in your data, I suggest you steer clear of this type of estimation and stick to looking for the point of diminishing returns.

One other point to make today - the importance of trying to measure diminishing returns is often overlooked but the power of diminishing returns is massive. In this piece, Victor Cook has outlined some basic but powerful analysis which highlights why this concept matters so much to businesses looking for answers - not just reports.

Saturday, March 10, 2007

Assuming you're using a decent internet browser, you will no doubt have noticed a logo like this popping up all over the place. If you've not clicked it then try it and see what happens. You'll find that the whole browing experience becomes easier to manage day after day (at least i have) because what happens is that you get the power of RSS or Really Simple Syndication.

I don't really know what RSS technology does exactly (something about using a simple schema to ensure that data can be read in compatible systems or the like) but what it's done for me is to enable me to get info from multiple websites really quickly and efficiently. By using the built in RSS reader of Internet Explorer 7, i can monitor a whole range of websites for updated content then see that content in a common format. No distracting adverts (well just a few) and standardised text formatting etc. The other great benefit is being able to keep up to date with the latest news - items are tracked by publishing date so it's made really easy to see the latest comments and industry news.

One interesting feature that RSS offers marketing analysts is the ability to track which info online consumers have been exposed to and see which have the greatest impact on the purchase process. I'm not aware of anyone doing it but it is clearly possible to track when people are exposed to individual messages, identify the messages which had the greatest impact and which were ineffective. My guess is that conjoint style analysis will be combined with this data pretty soon to great effect.

For more info click here to see a presentation from on RSS for marketeers.

Friday, March 02, 2007

MRM - what does it mean to your organisation?

As part owner of a technology company in the marketing space, i'm obviously interested in understanding what is the next item on the agenda of organisations when it comes to marketing tech. Over the previous couple of years, more and more organisations have been dabbling in what are known as Marketing Resource Management systems (MRM) but the definition of what this means is a little unclear.

I've found a site which seeks to explain this -

There is lots of useful info on this site and i'd encourage anyone interested in the subject to pay a visit and find out more. Clearly the definition of what MRM is needs to be flexible - my organisation ( is building out our own marketing decision and analysis platform and some clients consider what we do a form of MRM. Clearly we're looking to go beyond the classic reporting function. We're also unlikely to adopt purchase approval process as tools from organisations such as Aprimo and Unica already manage these exceptionally well. The difference we will offer will come through superior analytical tools and more interactive simulation options - my greatest issue with many MRM systems is that they often end up as glorified reporting tools - SAP or Oracle for marcoms. I believe that clients really want help answering their questions rather than more pieces of info to print out - ie - no more "TPS reports".