Tag: White Papers

Lighting the Way

Persistent climate change concerns, volatile energy prices and a growing awareness of technological advancement in energy are leading consumers across the globe to reconsider their role in the electric power value chain. Likewise, substantial increases in utility infrastructure investment are likely due to global demands for climate change mitigation; the need to support aging networks and generation plants; and proliferation of government stimulus plans for weakened economies.

For energy and utility companies, this presents an historic opportunity to encourage new, mutually beneficial behaviors and create business models to meet new consumer demands.

Our last report, "Plugging in the Consumer: Innovating Utility Business Models for the Future," explored the radically changing relationship between energy providers and consumers who took part in a survey conducted in late 2007. Even during the global economic downturn, progress has continued along the two dimensions shaping these changes: technology advancement and consumers’ desire for more control. Ultimately, this will result in movement of the basis of the industry to a participatory network – an interconnected environment characterized by a wide variety of grid and network technologies that enable shared responsibility and benefits. It will drive the creation of entirely new markets and products.

To continue our research about consumer expectations, we launched a followup survey in the fall of 2008. We surveyed over 5,000 customers from an expanded group of countries. This included the "core group" from our prior survey – the U.S., the U.K., Germany, the Netherlands, Australia and Japan – plus Canada, Denmark, Belgium, France, Ireland and New Zealand. Our survey findings strongly suggest the historical view of customers as "like-minded" is already outdated in most places.

Encouraging New Behaviors

In our surveys over the past two years, many consumers demonstrated at least one goal associated with asserting more control over their energy usage. The features of a participatory network appeal tremendously to them, because it would offer abundant service options and information to manage energy usage according to specific goals, such as cost reduction or environmental impact.

There is not much evidence that consumers think lower rates are coming. Over half see the cost increasing at roughly the same pace as usage. Forty percent see their bills increasing more rapidly than their usage (or not decreasing as much as any reduction in usage). Six percent think their bills will increase more slowly (or decrease more rapidly) than their usage. Overall, this year’s respondents have a slightly more pessimistic view of the next five years than those last year.

Cost remains the powerful motivator behind a desire for control over energy usage and a willingness to change behavior. Four in five consumers are willing to change the time-of-day in which they perform energy-consuming housework in exchange for cost savings of 50 percent or more. With the prevalent feeling that prices will move inexorably upward and awareness of smart meters growing, over 90 percent of respondents indicated that they would like a smart meter or other tools to manage their usage, with 55 percent to 60 percent of these respondents willing to pay a one-time or monthly fee for that capability.

Consumers’ emphasis on climate change and the availability of renewable energy programs in response to this demand for more carbon-neutral products remained about the same year to year. Across the core group countries, the percentage reporting that they did not have renewable power programs available dropped to 16 percent from 21 percent in the new survey (see Figure 1). Rather than changing their answers to the affirmative, however, most of the movement was to "don’t know" (up to 50 percent from 46 percent).

According to industry experts in some of the countries surveyed, the high level of "don’t know" responses, in part, reflects doubts in some countries about the veracity of green power claims. Still, if to a larger extent many customers truly cannot answer that question, this could indicate a valuable opportunity lost to ineffective communication with customers in countries with significant renewable resources and high participation levels.

In addition to environmental concerns, the global economic downturn of 2008 is clearly having severe impact on consumers. Across the core group countries, the number of consumers paying a premium for green products and services is down 20 percent to 30 percent (see Figure 2).

This change in spending patterns also seems to influence perceptions of green power options among consumers from core group countries that do not have (or are unsure if they have) green power options. The percentage of people who say they want green power options is down slightly, falling to 78 percent in 2008 from 85 percent in 2007. But, during that one-year period, the percentage of those willing to pay an additional 20 percent or more monthly dropped by nearly two-thirds, to just 6 percent from 16 percent.

The percentage of those who have green power options and actually buy them remained about the same, however. This is not surprising given contractual commitments, significantly higher prices for nonrenewable fuels in the past year (which eliminated some of the cost differential between standard and green power), and the overall commitment to the environment expected of "green" consumers.

Analyzing Consumers

In "Plugging in the Consumer," we described an emerging segmentation comprised of four consumer types: passive ratepayers (PR), frugal goal-seekers (FGs), energy epicures (EE) and energy stalwarts (ES) (see Figure 3). Our latest survey results reinforce these segments as likely outcomes of current trends. Two main attributes are associated with variances in consumers’ behavior profiles:

  • Personal Initiative. A consumer’s willingness to make decisions and take action based on specific goals such as cost control, reliability, convenience and climate change impact.
  • Disposable Income. A consumer’s financial wherewithal to support energy-related goals. In early adoption phases, only those with sufficient resources will be able to implement new technologies and buy more expensive products.

We also found that other demographic characteristics – such as age and country of residence – affect the speed of technology adoption, ability to leverage control "behind the meter," goals embedded in accepting more responsibility for energy choices, among others.

Consumer Profiles

PRs that embody a passive preference for the status quo remain the most prevalent of any of the four consumer archetypes. However, we see a remarkable transition in progress. In the past, these typically uninvolved, acquiescent customers comprised virtually 100 percent of the customer base. They represent just 31 percent of our 2008 survey respondents.

The number of more engaged and goal-oriented customers all along the income spectrum is approaching one-half of the total customer base. Frugal goal-seekers (FGs), about 22 percent of the survey population, have limited resources but strong will to change the way they use energy and manage its consumption. This group desires low-cost control of energy choices. Energy stalwarts (ES) have enough strength in both will and wallet to proactively take measures from making simple efficiency improvements to generating their own electricity. They have a clear willingness to invest in energy choices and represent about one in five consumers surveyed. Both of these groups will strongly influence the other half of consumers as they succeed in meeting their goals.

The remaining respondents (26 percent) are the EEs, who are curious but not committed. While they actually demonstrate more knowledge about their provider and options than any other group, they do not share the cost concerns or clear desire for information and control. This appears to be a matter of choice and not ignorance. While passive in some ways, this group is open to experimentation, particularly when the cost and lifestyle impact of a behavioral change are low.

Generational Change

In the short term, changes in customer needs will occur based on personal initiative and income. In the long run, even more radical changes may emerge as the millennial generation continues to move into adulthood and the energy customer base. By varying definitions, the first wave of these information-hungry, technology-savvy consumers is somewhere in our 25- to 34-year-old demographic grouping and fully encompasses the 18- to 24-year-old age group.

Precisely at this juncture, we see major changes in the survey results related to the ways consumers learn about companies and products, what they value and what they will pay for, as well as how they communicate with each other and the companies with which they do business. This, ultimately, may give way to new customer segments that will influence the shape of the industry in ways unimagined just a decade or two ago. To effectively determine the best strategy for a customer-focused transition to the participatory network of the future, every provider of energy or related services will need to construct an inventory of existing customer interactions with a wide variety of current and future service and product models.

In the following sections, we outline how specific consumer segments view the technology and business advances associated with key interactions.

Learning about Providers

Important messages from providers do not always reach consumers, as evidenced by consumers’ lack of awareness of available green power options (see Figure 1).

Additionally, only one in six consumers foresees a decrease in usage over the next five years, and only about a third say their provider can help them save energy despite strong efforts by the industry and governments to promote efficiency. In particular, provider messages are not reaching the youngest consumers. For example, those aged 18 to 34 are 40 percent more likely to not know if they have a choice in providers versus those 35 and older. The under-34 group also is twice as likely to not even know their provider’s name.

While all age groups will continue to rely heavily on their providers for information about energy (85 percent to 90 percent of respondents indicated this was a likely source), reliance on other sources differed starkly. Those over 55 are more than 10 times more likely to look to government for energy information than to social networks and other Web 2.0 content. Current trends also imply that those under 25 are becoming almost as likely to use the latter, rather than the former. To reach all generations, companies need to understand how different consumers tend to educate themselves about providers and their offerings with the wide variety of media available.

Controlling Costs

Not surprisingly, those aged 18 to 34 were most eager for the types of "self-service" and automated energy management that smart metering and smart grids will bring. What may be surprising, however, is that this age group – and particularly those under 25 – is the most willing to pay a stated premium for these services of approximately $100 U.S. as a one-time fee, or a monthly fee of $5 U.S. (see Figure 4).

Having a message sent to a mobile device when power is out at the consumer’s home also garnered significantly higher interest from the under-25 age group. About 30 percent were more likely than the other age groups to pay $1 per month for such a service. This finding may be related to the generally higher willingness we observed of younger age groups to subscribe to these programs, to their higher rate of ownership of mobile data devices and plans, or a combination of the two.

Investing in the Consumer

Substantial new increases in investment in utility infrastructure will come with a great deal of public, regulatory and shareholder scrutiny. All of these stakeholders will want to know how the public as a whole can benefit.

Energy and utility companies will need a strategy for aligning customer wants and needs with technology deployment roadmaps, beginning with rigorous customer segmentation and building an inventory of customer interactions. This must be followed by a program to analyze the interactions that are anticipated with each consumer segment and to assess whether existing capabilities are sufficient to leverage the new infrastructure in ways that support the new customer experience:

  • Identifying customer wants and needs specific to the interactions that will be most important to each particular segment;
  • Identifying the interactions that can be most effectively enhanced through participatory network deployment strategies;
  • Defining new or augmented business capabilities and regulatory models that must be developed to translate technological capabilities into customer benefits;
  • Determining which capabilities, if any, will be ceded to other providers for further development;
  • Integrating the development of specific new business capabilities into the participatory network deployment roadmap; and
  • Communicating these new capabilities clearly and effectively to all stakeholders.

The outcome of this process will lead to critical decisions about the customer-facing business capabilities on which the enterprise will focus.

Existing organizational strengths and new capabilities to be developed – one by one or in combinations – will form the basis for a broad menu of new products and services that the energy provider can offer. Each energy or service provider must be prepared to analyze its customer base to determine specific wants and needs before assessing how customers want to see new products and services emerge. After preferences are evaluated, they need to be applied to the customer interaction inventory in a way that identifies what should to be enhanced through technological improvements, regulatory change or improvements to communication channels.

This needs to be an ongoing process; customer assessment will not cease to be important once the participatory network is in place. The good news is that the data required to perform this continual assessment will be ubiquitous and arrive in real time from multiple sources of value-generating insights. But with this capability comes a challenge: finding new and powerful ways to collect, assimilate and evaluate this torrent of data in a way that will lead to inspiration for new programs and products that appeals to an expanding number of involved consumers.

Old School, New School… And How They Relate to Marketing

We all want to be new school and know the latest hit song (via iTunes). I wouldn’t know what that was without looking it up because what I pay attention to the most are things I already love. While I’d like to be cutting edge, the songs that run through my head are more like “The Way We Were,” if I’m feeling melancholy; “Sweet Home Alabama,” if I feel good; or Madonna’s “Like a Virgin,” if I feel, you know, sassy.

What does this have to do with marketing, you ask? We all get in our own grooves. We know what we’ve experienced and what we like, and that makes it easier and more natural to do those “traditional” things and do them well. Each of us seasoned marketers also recognizes that there are a few things we don’t know, so we experiment with new ideas our agencies bring us to try; we test them a bit and learn.

But even agencies are lacking an overall view. They, too, are experimenting with online tools to understand what is possible. Over the last half of 2007, Rubicon Consulting has been doing a lot of research to figure out what has changed in the field of go-to-market. During that time, we’ve studied online Web marketing as one big source of innovation. Our purpose was to open our eyes and see the true relevance of cool Web techniques and methodologies. We also wanted to think about what it can mean as a source of market power and business strategy.

What I see is that there is something we can do online – something not broadly known by anyone (yet) – and I want to share that here. I’m convinced that when we know what is possible, we’ll grow in our ability to address our customers better and create a deeper connection – and thus grow our revenues and own the market. After all, it is all about winning!

Two Important Questions: Whether and Why

While we know that interactive marketing (viral videos, user-generated content, etc.) is “way cool,” what we don’t know is whether it’s worth doing and why. There’s absolutely no data to go on. Just look at Second Life, the much-touted online “world” – it attracted major companies like Sun, IBM and Dell for a time, but these same big names later retreated from the site or let their presence grow stale after failing to generate results.

Making investment decisions is an art. It’s knowing what works, for what purpose. A great marketer needs to know what to do to drive awareness, consideration, preference and purchase as part of the knowledge mix about what is relevant to the audience, what works, what is cost-effective and, ultimately, what delivers results. But what if we don’t know what results we’re looking for? If we don’t know what the new online tools can achieve, then it’s definitely hard to measure, right?

While almost every company is at least experimenting with Internet marketing, many are frustrated because they don’t have a strategic framework for understanding what can be accomplished, when to use which online marketing tools and what rules drive success. In the absence of such a framework, many online programs are driven by coolness or enthusiasm rather than rational market planning. And perhaps that’s why so many folks are doing some “experimentation” with interactive marketing but aren’t in a rush to jump in with both feet (and bring their marketing budget with them). There are several statistics about marketers leaving their dollars in print and traditional advertising vehicles, even while their target audience increasingly lives online.

AMA Survey

A 2007 American Marketing Association survey of senior-level marketers revealed that:

  • About half intend to keep spending in magazines and newspapers at current levels;
  • 26 percent plan to shift dollars away from magazines to other media;
  • 21 percent are doing the same with their newspaper budgets;
  • 54 percent said they’re only “somewhat satisfied” with current (traditional) measurement;
  • 45 percent say it’s very important to improve the accuracy of their reporting;
  • 51 percent want more detailed information about user engagement and interaction; and
  • 74 percent are redirecting print budgets to the Internet.

So we know 74 percent are moving their print budgets, but the fundamental truth behind the AMA statistics is that most don’t know how to measure their new success. People don’t know what they’re aiming for now. Once we understand what new things we can achieve, we can find the metrics to measure them. Measurement follows strategy.

We’re Learning What’s Changing Against Our Old Models

There’s a lot of guidance available in conferences and seminars, but most of it is either too high level or too tactical. We’ve all heard keynote speakers declare things like, “Marketing is dead,” or “Traditional mass media is over,” but that doesn’t really tell a marketing executive what to do (other than to prep her résumé). At the same time, most of what’s discussed in online marketing workshops is extremely tactical – things like guidelines for CEO blogging, search engine optimization and, our current favorite, viral video campaigns.

There’s a gap between high-level vision and in-the-dirt implementation. You need a bridge that gets you from one to the other. One good approach is to compare this new marketing environment against the ways that we have traditionally developed awareness, consideration, preference and purchase (see Figure 1).

What does and doesn’t change when you market online? What I’ve suggested in Figure 1 is that the traditional awareness/ consideration/preference/purchase mix can be driven more effectively. The new world of Internet marketing is both an extension and a redefinition of traditional marketing. The move from one-way mass marketing to two-way individualized marketing challenges us all to rethink not just how we market, but what we’re trying to accomplish when we market. When used correctly, the new Internet marketing tools help companies build dramatically deeper bonds with customers, define markets much more precisely and develop new ways of generating value. Clearly, it’s worth figuring out.

But There’s More

The mistake I see most companies making is that they use new online marketing tools to pursue traditional marketing goals, such as driving awareness, consideration, etc.

It’s a mistake because the rules of traditional marketing were shaped by what could be accomplished using one-way mass media. Frankly, it was the only tool we had available – even just a few years ago. Now that Internet media enables two-way communication, the whole idea of moving customers through a structured consideration process needs to be revised.

The central goal of online marketing isn’t awareness – it’s engagement. And the five key tools to produce engagement are affinity, personality, community, co-creation and advocacy. Engagement is getting the customer involved with your company, with your products and often, with your people. When customers like what they see and experience, the relationship deepens, and it leads to affinity.

Affinity means leveraging the depth and interactivity of the Web to create a memorable relationship with the customer. Some of the best techniques for building affinity include being useful when a customer’s not buying, sharing obsessions, extending the product online and creating cool experiences.

Personality is how your company interacts with the world, both emotionally and rationally. The company’s personality must be both distinctive and genuine. Unlike a brand image, it can’t be faked. Your company’s culture defines the personality you can build online. For example, a company that tells its employees, customers, partners and the public that it’s green but doesn’t recycle its tech waste is contradicting its desired image. This behavior is inconsistent – and it can also harm your firm’s ability to develop a community.

Community as a marketing tool challenges almost every expectation of traditional marketing. Instead of controlling the marketing process, the company hosts a social interaction in which customers develop most of the content. But good communities don’t generally grow on their own; the most effective ones are carefully cultivated and subtly supervised. A company that takes the wrong steps can easily kill a community before it even gets started. The best communities foster sharing, involve influencers and fans, and breed involved customers who may even want to be co-creators with your company.

Co-creators enjoy your product or services so much that they want to build on top of something you’ve already done – or create something new. An example would be a fan who decides he wants to make laces embroidered with his school name to match the basketball shoes you’ve manufactured. It’s the process of engaging customers online to help design the product. When done right, this can be very powerful and provide real revenue benefits. It can also be very intimidating to a company that’s used to doing all the thinking for its customers. It requires a change in mind-set. This goes back to interaction, which I mentioned when we spoke about personality.

Advocacy is a new way to describe customers who used to be considered hobbyists. But these folks take it to a new level of obsession. They are users who like tinkering with a product or service far beyond what the normal user might do – whatever camera, software or appliance the customer advocate or influencer is working on, on the cutting edge. They may take apart then reconstruct your product. They may develop companion services. They may mashup your product with something they developed independently. Working with “influencers” is a very hot topic in online marketing, but it assumes that there’s a small group of people in the population that drives purchases of all products. The reality is much more complicated. A company’s goal should be identifying, caring for and training advocates – customers who are willing to help market your products to others. That’s very different from sending press releases to a few influential bloggers.

Change Can Be Good

Marketing done right is about more than just communicating to customers – it’s about shaping your company’s offerings to match the needs of the marketplace. The Internet enables new business models, including one-to-many communication that we could have only dreamed about previously. It provides us with tools we can use to guard against competitors and lets us explore new possibilities.

Internet marketing is a competitive weapon that can be used to underscore our leadership. There’s tremendous opportunity here for CEOs and marketing folk. Let’s think about what we can achieve with these new approaches and whether that matters to our company goals, and then we’ll know what we want to harness to lead.

Is Your Marketing Organization Ready To Change Its MO?

It can sometimes be difficult to determine whether your company is ready to implement “Marketing Operations.” As described in “7 Deadly Sins” (also in this chapter), Marketing Operations (MO) is an emerging discipline with the potential to significantly increase performance and accountability in complex marketing organizations. It leverages a strong front-end infrastructure to reinforce marketing strategy and back-end programs and tactics.

This paper identifies the characteristics that signal your organization’s readiness for MO and answers these questions: What does that organization look like? What are its primary pain points? What is its vision for the future? What pressures are driving it to consider undergoing substantial change?

MO Readiness: A Checklist for Your Company

To see if your company is a good candidate for MO, check any of the following characteristics that apply:

  • My company is mid-size or larger
  • My company’s marketplace is dynamic and highly competitive
  • My company’s marketing has evolved into a complex and multidimensional function
  • My company has a significant marketing budget
  • My company has a diverse mix of programs and resources are funded to reach a breadth of audiences (segments, sales channels, internal and external stakeholders, etc.)
  • My company faces government and regulatory compliance pressures
  • My company’s marketing processes have evolved to the point that they are no longer well-coordinated or even well-understood
  • My company values best practices but lacks process, technology and metrics to achieve them
  • My company is pressuring marketing to assume a more strategic role
  • Within my company, many believe that marketing must deliver greater value for the company’s investment

If you checked at least half of those statements, your company is a great candidate to benefit from the power of Marketing Operations.

MO Readiness: Where Do You Feel the Pain?

If your company is feeling some pain, you’re probably acutely aware of it. Arriving at an accurate diagnosis, however, requires a careful examination. Before digging into the specifics, first consider the general health of your marketing effort. Does marketing currently receive wide recognition for its strategic leadership and bottom-line contribution? Is marketing in complete alignment with your company’s strategic goals and other key functions? Can marketing clearly measure its success and demonstrate ROI to your executive team?

Marketing Operations is specifically designed to address these corporate pain points:

  • Marketing is focused on firefighting and tactics rather than on strategy
  • Marketing experiencing difficulty measuring ROI and demonstrating value, causing it often to be on the defensive, needing to justify its role and contribution to C-level executives and investors
  • Marketing success tied to other groups that have different or even conflicting goals
  • A corporate environment that fails to support collaboration and, consequently, loses opportunities for synergy
  • Employee defections that jeopardize continuity, place institutional knowledge and expertise at risk and contribute to high customer churn
  • Marketing processes that too often constrain internal efficiencies and effectiveness instead of enabling them
  • Poor coordination of shared processes across functions
  • Difficulty assimilating and integrating programs, systems and resources obtained from corporate mergers or acquisitions, leading to duplicated effort, loss of momentum, lack of focus and resistance to change

If you can relate to two or more of those statements, your organization may be in enough pain to embrace Marketing Operations.

MO Readiness: What’s Your Vision of Marketing’s Contribution ?

In a perfect world, marketing operates as a very creative, fast-paced, results-driven function that stays close to the customer and its other stakeholders. It is not only aligned with the enterprise’s strategic agenda but also helps define it. It leads the customer experience and innovation processes. It is well-integrated with other corporate functions and takes full advantage of the power and discipline of a strategically designed Marketing Operations infrastructure.

The MO infrastructure builds into the marketing function the processes, technology, guidance and metrics required by an efficient operation that delivers outstanding value on a consistent basis. Such an MO infrastructure enables informed decision making, accountability, sustainability, visibility, teamwork, strategic thinking and repeatable best practices execution.

A marketing organization is ready to think seriously about embracing MO when it feels internal and external pressures to make systemic changes because it has not been delivering on its vision and has consistently failed to achieve its operational goals.

Marketing Operations: The Bottom Line

Bringing the benefits of Marketing Operations into your marketing function should be considered an evolutionary process. MO is both a serious commitment and a great opportunity. Like all change initiatives, it requires careful and comprehensive thought and exacting implementation. Key players in marketing and other cross-functional organizations, such as sales and product development, need to be invited into the process early on and need to stay involved to achieve stakeholder ownership and buy-in.

The effort, however, yields impressive rewards. As Figure 1 shows, Marketing Operations has the power to reposition and re-energize a company’s marketing function, moving it past stubborn barriers to unprecedented levels of performance and success. Leveraging the discipline and rewards of an MO approach places marketing in the perfect position to influence strategic decisions and help increase corporate revenue, decrease costs and sustain high levels of customer and employee satisfaction. In short, Marketing Operations, when thoughtfully implemented, has the potential to transform a “marketing function” into a “marketing powerhouse.”

MO Readiness: Making the Assessment

By this point, you probably have a good idea whether it would be worthwhile for your company to learn more about Marketing Operations. But it’s also true that it can be tough for marketing insiders to have a clear and objective view of their own operation. That’s where professionals can help assess your organization’s readiness to move forward with a new MO.

Solving Marketing’s Seven Deadly Sins

Busy corporate marketing groups can be so focused on tactics and firefighting, they jeopardize their marketing investment. Overreacting to events, tackling symptoms rather than underlying fundamental problems and jumping to please the boss can prove fatal. Crippled marketing efforts can leave promising companies in the dust or, at least, handicapped at the starting gate.

Admired technology companies are leveraging Marketing Operations to improve performance and measure ROI as they refine their marketing organizations. Marketing Operations is an emerging discipline that increases efficiency and drives consistent results in complex marketing organizations. It builds a foundation for excellence by reinforcing marketing strategy with processes, technology, guidance (including rules of engagement, knowledge management, marketing intelligence and best practices) and metrics.

While Marketing Operations is uniquely suited to tackle marketing’s most challenging problems in Fortune 500 companies, you don’t have to be a Cisco or an Adobe to benefit. The following describes the seven deadliest marketing sins that plague companies of all sizes and how Marketing Operations addresses them:

SIN #1: Ill-Defined Metrics

Today’s corporate marketing departments must justify their existence. The need to measure results is inevitable. However, the instincts and skills that make a corporate marketing professional great – a bias toward action, verbal and written acuity, and a talent for relationship building – often don’t translate into an ability or willingness to scientifically and objectively evaluate success.

Broken systems and the unwillingness of the organization to pay for marketing measurement also conspire against the effort to define meaningful success metrics.

SOLUTION: Marketing Operations ensures that correct processes are in place to establish meaningful metrics at the front end of the marketing process, enabling success measurement processes at key intervals and as each program concludes.

SIN #2: Slammed Resources

The prevailing attitude of “doing more with less” can leave key people discouraged, overwhelmed and near burnout – eventually, leading them to circulate their resumes. For organizations, the consequences are costly mistakes, high turnover and collapsed programs when key people leave and missed opportunities to leverage important but ownerless programs.

SOLUTION: Marketing Operations addresses resource limitations by ensuring that workload is effectively allocated, roles are clearly defined, interdependencies are understood, team members feel satisfied with their jobs and valued-added programs and associated resources can be justified to executive management.

SIN #3: Sketchy Institutional Memory

Successful marketing programs depend on accurate information, a historical view into past successes and failures, and the ability to recognize patterns that link seemingly unrelated data points.

Unfortunately, in many marketing organizations, this crucial knowledge is scattered all over the company. It’s in the heads of individual workers, on shelves, on hard drives and in long-forgotten filing systems. Often, when people leave, a big piece of organizational knowledge goes with them. Information loss is a huge productivity killer for marketing teams, and trying to regain this lost insight wastes previous marketing investments.

SOLUTION: Marketing Operations facilitates knowledge sharing, creates an enduring repository of information and encourages decision making based on fact, rather than on hunches or gut feelings.

Sin #4: Constipated Creativity

The best creative solutions come from the collaboration of many brains. The age of the “individual-contributor/director” has led to constrained creativity. When the entire creative burden falls mostly on one corporate marketer, thinking out of the box can be severely impacted. Creative synergy results from many minds thinking as one.

SOLUTION: Marketing Operations enables the creative process to benefit from the synergy of team.

SIN #5: Dysfunctional Team and Supplier Relationships

Team collaboration is a real challenge in stagnant, mature – and even dynamic – organizations typically modeled on competition, power and control structures. Over-reliance on legacy systems and tools also perpetuates this problem. At a Marketing Operations symposium I attended, one MO leader at a large financial institution proudly shared how his department was using Excel spreadsheets to capture knowledge that required more than 100 columns in width. Many companies are stretching the capabilities of everyday resources like Excel well beyond their intended capabilities. This misuse of technology only perpetuates the siloed nature of organizations and the rampant over-dependency on individuals who closely protect their specialized knowledge as a source of power, potentially leaving the company in the lurch when they are unavailable or decide to leave the organization. Real collaboration and traceable decision-making processes are fantasies in such companies.

Problematic supplier relationships are also an indicator of trouble. Most successful companies can point to numerous strong, long-term marketing supplier relationships they consider to be integral to their success. Likewise, a pattern of failed supplier relationships is often an indicator of marketing department failure, rather than poor vendor performance. Unfortunately, companies that have had consistently bad relationships with outside vendors and suppliers often react by bringing everything in-house. While this strategy may provide the illusion of control, it allows marketing managers to deflect the blame for failures, rather than teaching them how to manage their outsourcing program by taking responsibility for the results. In addition, this “Band-Aid” strategy won’t scale with the organization as it grows.

SOLUTION: Marketing Operations helps set realistic expectations and mutual accountability between suppliers and the organization, thereby increasing the effectiveness of outsourced partners by empowering them to act as an extension of the internal team.

SIN #6: Poor Fiscal and Tactical Decision Making

Budgets are never set in stone. Often, it’s a “use it or lose it” situation. For some managers, it’s “misuse it and lose it anyway.” Unfortunately, many corporate marketing departments end up leaving program budget on the table or allocating it to the wrong initiatives. This “catch-22 marketing budget dilemma” occurs because:

  • It’s very time-consuming to manage the budget effectively, especially in companies with broken financial systems;
  • Each marketing-spend decision creates more work for the one-person or small-team marketing department in terms of project management, measurement, supplier management, etc.;
  • Doubt persists about the ability to successfully justify the expenditure to management;
  • Focus is instinctively on high-visibility marketing activities and C-level executive requests over good fiscal management;
  • Most marketing types are inclined toward creativity rather than finance . Poor budgeting processes and kludged financial/marketing systems also contribute to perpetuating this sin.

SOLUTION: Marketing Operations facilitates implementation of the system-support infrastructure and financial management discipline needed to protect valuable marketing budgets.

SIN #7: Inadequate Marketing Portfolio

Many companies align their fate with the success of too few marketing programs, whether it’s lead generation, public relations, trade shows or advertising. Overreliance on any one particular program can derail a company, especially if a key program unexpectedly loses momentum. In the meantime, programs that could have had strong leverage never get a chance to prove their mettle and are forever relegated to the “B” list. Classic examples include customer references, lead nurturing and leveraging investments in analyst research and consulting subscriptions.

In addition, poor intelligence about program ROI creates a challenge in sustaining the right marketing mix.

SOLUTION: Marketing Operations puts the means in place to launch potentially high-value marketing programs that would otherwise never get out of the starting gate, and understand the contribution of each marketing program in the context of the overall marketing portfolio.

WINNING COLLABORATION

Implementing a Marketing Operations program takes buy-in from key executives and the commitment of the entire marketing team. However, considering the positive results and high return on investment experienced by Fortune 500 companies and those that wish to emulate them, it is well worth the eff ort.

Web Analytics 2.0: A New Measurement Strategy For Marketing 2.0

In 2004, when I wrote my first book, Web Analytics Demystified: a Marketer’s Guide to Understanding How Your Web Site Affects Your Business, I started it with the following definition:

Web analytics is the assessment of a variety of data, including Web traffic, Web-based transactions, Web server performance, usability studies, user submitted information and related sources to help create a generalized understanding of the visitor experience online.

This definition has withstood the test of time; now, more than ever, creating a robust view of visitor behavior online requires multiple sources of data, both quantitative and qualitative, allowing marketers to answer fundamental questions of who, what, where, when, why and how. When I originally developed that definition, the implication was that each of these data sources would be considered independently but used in concert to create a rich understanding of the relationships between intent and satisfaction, functionality and usability, performance and conversion.

The bar has clearly been raised. It is not enough for marketers to simply have the data at their disposal; they need a plan to integrate quantitative and qualitative data in a common environment, supporting deeper analysis of visitor activity and the creation of robust segments, based both on click-stream data and expressed visitor preferences.

In retrospect, my definition was very much limited to Web Analytics 1.0, appropriate for measuring visitors, visits and views. But new technology and increased investment in the online channel have created demand for a new measurement strategy, one able to accommodate more diverse visitor types, browser applications, activities and measurement points. Today’s marketers need a measurement strategy designed to handle the inherent challenges brought on by Web 2.0.

In response to this need, I propose the following definition:

Web Analytics 2.0 is the assessment of visitor interactions in the online channel, informed by the integration of a variety of data including event-based interactions, Web server performance and qualitative feedback, collected from multiple user and client types and able to measure diverse activities and events.

While this definition is slightly more verbose, I submit that it is also entirely more appropriate for measuring marketing 2.0 and the plethora of new technologies designed to create stickier, more engaging websites.

Historically speaking, Web Analytics 1.0 was powered largely by tools designed to parse log files and aggregate the output from script-based “tags” inserted into Web pages. These applications excel at processing quantitative data to produce any number of attractive reports designed to summarize visitor behavior, answering what, when and where questions.

But Web Analytics 2.0 requires additional inputs, largely qualitative in nature, designed to answer questions of who, why and how. Web Analytics 2.0 also creates a need for powerful technology designed to make data relevant to the business so marketers can actually use it. I refer to the collection of technologies powering Web Analytics 2.0 as the Website Optimization Ecosystem.

The Website Optimization Ecosystem

Many software vendors would have you believe that the Website Optimization Ecosystem and Web analytics applications are one and the same. These same vendors would have you believe that all that can be known about Web visitors can be gleaned through their data collection strategy and reporting interface. While Web analytics tools are certainly very powerful, understanding visitor behavior is as much a function of qualitatively determining interests and intent as it is quantifying clicks from page to page.

Fortunately, there are two other classes of applications designed to provide a more qualitative view of online visitor behavior: those that report on the overall visitor/ customer experience (Customer Experience Management) and those that report direct feedback given by visitors and customers (Voice of the Customer).

Yet Customer Experience Management and Voice of Customer applications on their own are no more likely to provide a complete view of visitor behavior than Web analytics applications. Each application plays a valuable role in the Website Optimization Ecosystem, and smart business owners have already learned how to take advantage of each in an ongoing effort to optimize the online channel and maximize profits while simultaneously minimizing costs. The real challenge facing online business is not recognizing that each of these systems exists; the challenge is understanding the true capabilities each system provides and where the three systems converge to create a more accurate view of visitor and customer behavior.

Web Analytics, Customer Experience Management and Voice of Customer systems together form a foundation that supports the online business’s ability to positively influence desired outcomes. These similar-yet-distinct systems each contribute to the site operator’s ability to recognize, react and respond to the ongoing challenges faced by every website owner. Fundamental to the optimization process is measurement – the data and information-gathering tools that can be transformed into recommendations for action. When properly used, these systems allow for convergent validation – combining different sets of data collected for the same audience to provide a richer and deeper understanding of audience behavior.

Questions Web Analytics 2.0 Is Designed to Answer

Web Analytics 1.0, while appropriate for the early days of the Internet, was primarily designed to help marketers answer relatively simple questions. Web Analytics 2.0 is more robust. The integration of qualitative and performance data allows marketers and site operators to answer a much wider array of questions. For example:

  • Click-stream data, satisfaction surveys and experience replay (the ability to review visitor sessions, much like watching a videotape) allow marketers to learn which site performance issues lead to low customer satisfaction;
  • Widget data, RSS feeds and click-stream data allow publishers to determine which content is most popular across their entire network, regardless of distribution point;
  • Event data, qualitative feedback and experience replay allow designers and programmers to learn where visitors struggle using rich Internet applications; and
  • Voice of Customer, subscription data and click-stream data allow marketers to learn where their most engaged visitors and customers are coming from.

By combining relevant data from these multiple systems into a single view of visitor behavior, marketers and analysts are able to create visitor segments that are far more informative than those based solely on click-stream behavior. Suddenly, questions about customer satisfaction, content distribution and visitor engagement can be answered in the context of the entire online business, not in individual silos powered by overlapping-but-distinct technology sets.

The Importance of Business Process to Web Analytics 2.0

One important idea that is often glossed over when talking about website measurement is that Web analytics is hard. A study conducted by my firm in March 2007 found that 57 percent of industry professionals described Web analytics as “difficult.”

More interestingly, depth of experience had no impact on this assessment. Survey respondents with more than five years of experience with these technologies were just as likely to rate Web analytics as “somewhat” to “extremely” difficult as were respondents new to the area.

Unfortunately, there is no easy solution to this problem. One reason why Web analytics is hard is that too few organizations have clearly established processes for taking advantage of the data they collect. In companies large and small, a lack of clear ownership over these systems often leads to great internal confusion over how the technology will be used. And more often than not, this confusion leads to a breakdown in the actual use of these systems – some companies get stuck in an endless implementation loop; others stop at the report-generation stage; and still others eventually forget they’ve made the investment in the first place.

Especially when working to create convergent validity using the multiple systems described in this article, the need for solid process becomes critical. Given the complexity associated with integrating Web analytics, Customer Experience Management and Voice of Customer data, leveraging the combined data effectively often requires careful analysis supported by robust processes for data gathering and validation. And given the depth of analysis required to fully benefit from ecosystem technologies used in tandem, it is critical that organizations have clear processes to take advantage of analysis output.

How to Get Started With Web Analytics 2.0

Assuming you’re with me so far on the need for process and a diverse set of inputs to inform your organization about online visitor behavior, the question you should be asking yourself now is, “How do we get started with Web Analytics 2.0?” There is no easy answer: You cannot get Web Analytics 2.0 from any single vendor, consulting group or services organization. This stuff is cutting edge and requires some careful planning to execute well.

The best advice I can give any company wanting to make the transition from Web Analytics 1.0 to Web Analytics 2.0 is this:

  1. Determine whether your Web analytics application allows you to effectively measure emerging Web 2.0 technologies. In October 2007, Google released true event-tracking for Google Analytics, specifically designed to track interaction with rich Internet applications built with AJAX, Adobe Flash, Adobe Flex and Microsoft Silverlight. At that time other vendors still required their customers to “hack” normal data collection and reporting mechanisms to track many of these new technologies. Ask your vendor about its commitment to helping you measure these emerging technologies.
  2. Determine whether you have Voice of Customer and Customer Experience Management applications already deployed. If not, start looking for ways to fill these gaps. Voice of Customer vendors like ForeSee Results and Opinion- Lab, and Customer Experience Management vendors like Coradiant and Tealeaf all have experience integrating with the top-tier Web analytics vendors. Talk to them and ask specifically how they contribute to the Website Optimization Ecosystem.
  3. Develop a strategic measurement road map to guide your Web Analytics 2.0 efforts. In my experience, too few companies have a truly strategic view of how Web analytics will help their organization compete in a marketing 2.0 world. A strategic measurement road map will help you clarify what your measurement needs truly are; what technologies and inputs are necessary to make those measurements; and how the results will help change and optimize your business. Start with a matrix detailing your current and planned technology deployments, overlaid with your measurement capabilities, and use this matrix to guide investment and process development.

As you clarify your data collection needs and fill gaps, you should be left with both the appropriate technologies and business processes required to successfully execute on Web Analytics 2.0 measurement projects. Properly done, your new capabilities will give you the potential to dramatically improve your understanding of visitor interaction; their response to your marketing 2.0 efforts; and ultimately, your ability to optimize the entire customer experience on your site.

Marketers Know They Aren’t Calculating Digital Advertising ROI Correctly

Marketers don’t need to change the way they think. They just need new digital marketing technology and measures that conform to the way they think. Thankfully, while the old model for measuring the return on investment (ROI) from digital advertising falls short, a new model is gaining momentum.

Digital marketing continues to incur an enormous amount of growth. The proliferation of new digital channels, compelling websites and countless new opportunities makes it difficult for marketers to keep pace – and even more challenging for marketers to reach and engage their audience.

Large brands and direct response marketers are therefore constantly seeking the right mix of channels, sites and interesting creative to engage their audience as effectively as possible. Yet when a digital advertising campaign is successful, they can only credit one of the many touch points their audience experienced. Typically, between 93 percent and 95 percent of audience engagements with online advertising receive no credit at all when advertisers review the ROI on their campaigns. Although the universe has been getting bigger, marketers have been forced to view it through a very limited kens. And this limited view has constrained their vision, creativity and success.

The reason for this misalignment is that the industry has been using a method of ROI measurement that only attributes credit for advertising effectiveness to the last ad clicked or viewed prior to a customer conversion (Figure 1). The “last ad” standard forces marketers to pay attention to a small set of data and ignore key information required to properly calculate the ROI for each site and channel. In addition, it goes against conventional marketing wisdom, and therefore stands in the way of adoption, creativity and the innovative evolution of digital advertising by marketers who are seeking better results.

THE ‘LAST AD’ MODEL VS. CONVENTIONAL WISDOM

To date, the industry’s online ROI measurement models, including click-through rates and the “last ad” standard, have been significantly out of alignment with basic marketing fundamentals. For example, a critical marketing concept, the sales funnel, is completely disregarded by the “last ad” model. The idea is simple: different marketing messages play different roles for consumers. Some marketing messages drive awareness; others close the deal. In the off-line world, broadcast media have typically been at the top of the funnel, while other channels, such as direct mail, have been used to induce a purchase. In the last 10 years, online media have moved from being strictly a direct response medium to becoming a multifaceted channel with the potential to reach consumers across every point in their journeys. The “last ad” model is exceptional at measuring ROI if your only goal is to measure the bottommost touch point in the sales funnel. In this regard, our current conversion attribution standard is sadly out of
touch with the reality of online marketing today.

Based on only a single engagement, the “last ad” model forces marketers to place greater importance on the aspects of their advertising that support the model than on those that truly support advertising success. Given all of these factors, it’s fair to wonder why the industry persists in using the “last ad” model. The reason is that until now, digital marketing technologies enabled only a limited set of capabilities and measures of digital media.

Marketers, however, need to be able to calculate the ROI on all of the exposures and interactions the audience experiences on each media owner’s site – not just the last one (Figure 2). The result of this more comprehensive calculation is a measurement known as engagement ROI. Advanced digital advertising technologies are now making it possible to calculate engagement ROI (see “Factors That Impact Engagement ROI,” on the following page).

ENGAGEMENT MAPPING: YOU CAN GET THERE FROM HERE

The new model enabling the calculation of engagement ROI is called Engagement Mapping. It’s based on the following three simple premises:

  • Marketers need to attribute credit to multiple sites and engagements, not just the last one.
  • Marketers need to have true transparency and the flexibility to weigh the importance of influential factors such as ad size, frequency and rich media interactions in their ROI calculations.
  • Marketers need to be able to easily adopt and transition to the new model from the old.

Engagement mapping is made possible by back-end technology that analyzes many factors behind the scenes. In the new model, key influential factors can roll up into a straightforward site-by-site analysis to succinctly summarize engagement ROI. Factors that can be taken into account include frequency, ad size, recency, media type, interaction and order of engagement.

By considering these experiential factors, advertisers will be able to learn from previous campaigns and fine-tune their media strategies while their campaigns are still in progress. Marketers can then manage their digital media investments by channel, placement, site and media type (among other factors).

WEIGHTING FACTORS

The Engagement Mapping model allows you to easily customize your application of the model to the factors you deem important for measuring your specific campaign (Figure 3). The various factors can be weighted differently in your engagement ROI calculation. For example, passive events (like viewing a text link or a display ad) can be weighted one way, while active events (like clicks and rich media interactions that convey a higher level of interest) can be assigned different values. If you aren’t sure how much weight you should assign to a factor, you can simply choose a setting that closely reflects your marketing objectives from a collection of default settings.

PRACTICAL APPLICATION OF ENGAGEMENT MAPPING: SINGLE SITE EXAMPLE

Engagement Mapping isn’t just conceptual. It’s a model that you can begin to apply practically today. When the model is applied, each exposure and interaction can be attributed a portion of the credit for a conversion.

Here’s a hypothetical example of how Engagement Mapping attributes credit differently (see Figure 4). Let’s say you have a site right now that gets 1,000 conversions under the “last ad” model. When frequency is figured into the model, it actually boosts the attribution number up to more than twice as many conversions. So your number of conversions credited to the specific site has jumped up to 2,000.

But it turns out a lot of these frequent impressions are not very large. When you factor in ad size, it turns out that a high number of exposures were actually small text links. By factoring in ad size, the number of conversions attributed to the specific site is revised downward to 1,400.

Continuing down this path, the Engagement Mapping model also accounts for creative type, recency and order. The model ends up attributing 1,600 of your conversions to this one site. Thus, when you evaluate the sites that produced the greatest return on your media investment, this one site looks very different than it did when you used the “last ad” model.

By being able to weigh the importance of various factors, you can put a greater focus on those that matter more. Thus, if you’re a direct-response marketer, you might want to place more emphasis on factors like clicks and recency, but if you’re a brand marketer, you might want to give more credit to more passive engagements – such as video views and ad size – even if there’s no interaction. Or your objective might lie somewhere in between. Flexibility and transparency in the way you measure each factor are important components of the new model.

As you get more familiar with the new model and how each factor affects your results, you can begin to test your well-exercised intuition. For example, most marketers that employ rich media do so because intuitively they know that it’s a strong way for the audience to experience their product or brand. The new model gives advertisers the ability to make specific adjustments, and set the dials to reflect the impact of the factors they believe have the greatest impact on their engagement ROI.

STAY ON COURSE; GO A LOT FARTHER

Great marketing comes from a healthy combination of right- and left-brain thinking. Once marketers move beyond the “last ad” measurement model, they’ll benefit from greater flexibility and transparency. And they’ll be free to combine attention-getting creative with smarter buying practices that achieve awareness goals and take full advantage of the infinite opportunities presented by digital media. Your campaigns will likely garner more attention once you can measure and justify the use of a greater variety of formats, sites and channels.

Lead Generation for The Next Generation

When you think of lead generation, do you think of:

  1. A co-registration checkbox that appears on the sign-in page of a website?
  2. Receiving a weekly file with the name and basic contact information for potential customers?
  3. Uploading those names into an e-newsletter database and then moving to the next item on your to-do list?
  4. All of the above?

If you answered a., b., c. or d., you’ve missed five years of evolution in the lead generation area. And if you’re just using lead generation for cheap and easy newsletter sign-ups, you’re missing out.

More sophisticated strategies, backed by more powerful technologies are enabling marketers to hone in on their target audiences in ways that were unheard of five years ago. As never before, there are immense opportunities for marketers to use lead generation strategically and in a way that deepens understanding of consumers, increases acquisitions, strengthens brand loyalty and enhances customer retention.

Robust Profiles

The integration of behavioral data and traditional lead generation data can help marketers generate robust consumer profiles that go far beyond name and email address and allow marketers to expertly reach their ideal consumer. Let’s say a consumer’s Web use reveals interest in both alternative medicine and online degree programs. In this case, an online university might decide to place a lead on a website that sells herbal remedies. Not an obvious strategy, perhaps, but one that is being used increasingly as it becomes easier to leverage so-called “segment” data.

There are scores of off-line data companies that comb through public records, surveys and warranty cards to amass databases with a treasure trove of consumer information: household income, marital status, ages of children, home ownership, educational level, travel histories and so on. This creates the ability to gather highly predictive consumer data on behaviors, interests and lifestyles. Furthermore, the information can be sliced and diced into dozens of micro-demographic groupings. Lead generation firms can leverage this type of consumer profile to enhance the data they send back to their clients or to target advertiser offers in their network more accurately. Marketers can leverage this information across multiple customer touch points, including websites, call centers and email campaigns.

It’s also worth noting that this type of consumer information is continually updated, so the data remains fresh and actionable. This gives lead generation firms and co-registration companies tools for increasing offer acceptance rates.

Well Scrubbed

More sophisticated technology has dramatically increased the ability to generate lead data that is accurate, valid and free of duplicates – in real time. This means that marketers pay only for leads whose mailing addresses have been verified through the U.S. Postal Service and whose email addresses have been verified through a third-party database. Again, scrubbed and validated leads can be provided instantaneously, so consumers can be contacted while they are still interested and receptive.

Lead generation can be a powerful tool if it’s part of your overall marketing strategy. This means that good communication is critically important between lead generation providers and marketers, including discussion of your conversion targets, how you plan to follow up on leads and whether this follow-up can be customized. The more information you can share with your lead generation partner, the more opportunity there is to develop a sophisticated, cost-effective solution.

Here’s an example. A travel site wants to generate leads for its offer, “Get a Free Family Travel Planning Guide.” The target audience is mothers, 25 to 45 years old, with specific behavioral and psychographic attributes. The travel site places its ad, and positive responders are asked to provide answers to questions about desired destination, budget, number of family members and their ages, and timing of the trip. Answers to these questions can generate a very rich lead profile with several crucial data points.

Now suppose the travel site has a call center that can accept real-time leads and can tailor its script to customer responses. The center can instantly follow up with a phone call based on unique user information – families with very young children, families that want to travel to Europe or any number of other attributes. Being able to reach consumers in such a personalized way vastly increases the potential for converting to sales.

Privacy Please

There is a flip side to all of these new capabilities, and that is the issue of privacy. Our ability to dig deeper into people’s behavior also raises concerns about protecting consumer data. Advertisers and publishers are taking the cue from the Interactive Advertising Bureau (IAB) best practices guidelines for data transfer, which spell out how advertisers should be collecting consumer data so that it is protected. Furthermore, the IAB is working on additional best practices and guidelines that will ultimately form the game rules for how the interactive lead generation industry functions and services its clients.

Our future success is contingent on earning and maintaining consumers’ trust. So it’s important for lead generation providers to ensure a consumer-friendly environment where users are explicitly asked for permission to be contacted by advertisers. And advertisers must require their publishing partners to send data to them encrypted, according to IAB guidelines.

Today’s lead generation players use vastly more sophisticated processes than even just a few years ago. This offers great opportunities for us to work together to use data collected online more effectively, creatively, strategically and responsibly. When you plan your programs, know what’s available, what’s new and what’s coming down the pike – both in terms of technical capabilities and best practices. Overall, staying ahead of the competition means staying ahead of the curve, and the next generation of lead generation is no exception.

Web 2.0 and the Corporate Website: Technology That Can Boost or Cripple Your Online Presence

Web 2.0 is a phenomenon whose predominate features are composed of a high level of user or community participation combined with leading-edge technical features, such as AJAX (asynchronous JavaScript and XML). Research indicates that more and more corporate sites are blindly rushing to jump on the bandwagon by implementing Web 2.0 technology, often leading to plummeting traffic and loss of visitors.

How to detect and avoid these traps? This paper will cover the challenges and propose solutions that could save or restore your online presence.

Web Content – Giving Up Control ?

One key factor enabling successful search engine optimization is fine-tuning website content according to your search terms. If the content is written by editorial staff or internal copywriters, this usually doesn’t pose a problem. But what if the site content is created by the actual visitors and users of the Web platform or community?

Within the framework of Web 2.0, this falls under the term user-generated content. The slogan “content is king” is sufficient for traditional site SEO, but “usergenerated content is king” doesn’t necessarily hold the same weight.

Even if a Web 2.0 component of a corporate website contains large amounts of content, it isn’t necessarily optimized for search terms. Thus, a technical support forum could consist of hundreds of thousands of technical posts, sorted by the poster’s name, geographical location, etc., but if nobody is searching for the specific name of a poster or location, these data don’t serve much purpose in helping visitors locate your site. Here, it would be much more effective to organize content according to a problem-solution model.

Detailed Content

It is especially important to motivate the online community to create content that is both meaningful and detailed. For example, say a golf equipment manufacturer’s site features a forum that allows motivated customers to create groups with similarly minded members, e.g., “golf enthusiasts San Jose.” If you simply encourage the creator and owner of this group to give it a reasonable description, it will probably end up fairly short and meaningless.

A more effective strategy is to offer a template of partial questions to frame the description more effectively. The answers to those questions will form the group description (see Figure 1).

From these partial answers, it is then easy to create a compelling group description. So instead of simply describing the group as “the local golf forum,” which isn’t targeting any strategic keywords, craft it according to the three buckets in the template above. For example, “The San Jose Golf Enthusiasts group is for absolutely everybody who enjoys…” is not only more informational but also covers the keywords “golf enthusiast” and “San Jose” much more effectively. You should, however, generate a preview for the author to review and approve before deeming it final.

All in all, it makes sense to be fairly specific about what you want your content to focus on – not only for the search engines, but to present your site visitors with comprehensive and cohesive information.

Optimizing the Content

Often it’s not possible to exert much influence during the content-creation stage. In that case, these pages must be optimized as a whole as much as possible. Elements over which you have direct control, such as page titles, headers and elements of navigation, will need to be tightened.

By the same token, it is extremely beneficial to filter out less relevant text and focus on content that addresses the search terms most effectively. Consider the example of a hotel site with a database that consists of more than 50 guest reviews of a certain hotel in Palo Alto, Calif. If the page featuring these reviews is to be optimized for “Palo Alto hotel,” it is critical that you post reviews containing the keywords first and then list the others. Your data needs to be organized according to your own value-ranking system to entice the search engine algorithms to take notice. And, of course, your visitors will also appreciate this organization.

Web 2.0 Technologies – Friend or Foe ?

Many of the technological hurdles that exist for standard websites also exist for Web 2.0 sites. Some examples are dynamic URLs or the use of frames or iFrames. In addition, some of the most touted Web 2.0 features can cause serious challenges from a search perspective. The following are important technological features that could turn into serious long-term bottlenecks.

AJAX

AJAX allows the dynamic reloading of certain areas of a Web page. This technology helps redraw pages more efficiently and ultimately leads to a better user experience. In general, the reloading of content via AJAX isn’t an issue, if the content in question isn’t relevant for SEO purposes. If AJAX is used to sort a list of results or to redraw a stock chart, for example, it has no potential impact on search engine results. But if it is used to display relevant content that hasn’t already appeared somewhere else on the website, the search engines generally won’t be able to spider and index it.

The simple advice here is to limit your implementation of AJAX to nonrelevant areas of the website. In the end, you will be forced to determine whether the improved user-friendliness of AJAX is more important than the risk of having search engines stumble when indexing the content of your site.

Forms

Forms aren’t necessarily a Web 2.0-specific issue, but as they’re often implemented as a data management feature, they can cause severe problems. One example is a large real estate agent platform organized via a central search box where you would input your local ZIP code or city name to get an appropriate data listing (see Figure 2). Search engines aren’t able to input data into search fields when traversing a site. They lack the ability to initiate intelligent searches to generate reasonable results.

Thus, all content of a site must be available as part of the actual site structure for search engines to spider it. If the real estate site platform in our example provides data for 100 different cities behind a form, there must be a directory in which these cities are listed and linked to their appropriate subpages. Otherwise, in the eyes of a search engine, that data doesn’t exist.

Links

Not every link can be detected by a search engine. In some cases, links are represented via JavaScript or, even worse, the HTML code that contains the links is generated via JavaScript. Similar to the AJAX challenge discussed previously, links must be clearly visible in the HTML code.

Structural Issues – Is There a Berlin Wall Around Your Content ?

Many Web 2.0 sites aren’t optimized well structurally when it comes to sharing relevant search terms with the search engines, which also impacts usability.

Search Engine Optimization

For standard corporate sites as well as those incorporating Web 2.0, it is fundamental that the relevant search terms actually exist within the site content. It is most effective to target each search term with a page or section embedded within a site structure that is built upon the top-down approach, meaning that more general content is at the top and gets progressively more specific as you move farther down.

This is often neglected for Web 2.0 areas. So it is vital for corporations implementing Web 2.0 to research relevant search terms and establish an effective site structure that targets those keywords.

Public vs. Private Content

Web 2.0 sites have a fundamental dichotomy to resolve. They want to attract as many new-member accounts to a forum or blog as possible, which can be encouraged by locking “sacred” or private content behind a login prompt. But the fact that you need to register to access the “golden nuggets” of a site without any means to preview them can be a turnoff to visitors.

But that’s not the only dilemma. When you’re dealing with search engines, it is even more important to make as much content as possible open or public. If a search engine can’t access your content, it won’t be indexed. As with online forms, search engines can’t submit a questionnaire in order to access your member database.

The best response to this problem is a hybrid solution that has been applied successfully by social networks – letting users define an opt-in public profile with certain data that is freely shared. This model ensures that enough content can be accessed by the search engines while still encouraging visitors to register as members to gain full access.

Corporate Blogs – Trends and Best Practices

Many assume that corporate blogs need to be part of the marketing mix since they are vital to search engine rankings. But is this claim exaggerated? More and more B-to-B and B-to-C buying decisions are based on online research, especially blogs, according to a September 2006 study by Hotwire/ Ipsos. The data also clearly indicates that private blogs are much more effective in influencing buying decisions than corporate blogs. So the more believable and genuine a blog is, the more effective it will be in motivating clients to take a serious look at solutions covered in the posts. But how can a corporate blog be made less corporate?

The Current Corporate Blog Landscape

To understand the current state of corporate blogs, Bloofusion published a study in November 2006 of 61 representative U.S. and European corporate blogs. The objectives were to determine the categories included in the hierarchy of a typical corporate blog and identify the areas of content focus. The results were rather unexpected (see Figure 3).

Product news dominated the blog space by far. The global percentage here was 33.9 percent, and U.S. blogs were at 48.9 percent. The next-biggest category of content was day-to-day posts (18.8 percent) and corporate news coverage (14.3 percent). Trailing at the lower end of importance was industry news at 8.1 percent. This is the area where you can establish your blog as a genuine thought leader in its field and offer added value to your visitors.

Building a Profitable Corporate Blog

Blog content needs to target important search terms, so keyword research is vital. This is not your primary corporate website, so don’t limit yourself to covering internal corporate matters. Look outside the box and demonstrate your grasp of the industry, incenting visitors to return.

Inbound links to your blog are one of the most important and time-consuming elements to establish. This process forces your marketing staff to build an online community by connecting with other bloggers who are writing on similar topics. An online peer review infrastructure will not go unnoticed by Google. Tools such as trackbacks, which are used primarily to facilitate communication between blogs, will notify you when someone links to your content.

Should a blog be completely separate, or integrated directly into the main corporate site? This question is fundamental to the overall success of your blog strategy. While it might at first make sense to host the blog on a completely separate domain, it is more beneficial to feature everything under one roof. There may be temptation to keep the corporate look and feel intact, including the logo, navigation bar, header, etc. This strategy is straightforward, but it will backfire. A blog – even a corporate blog – needs to look and behave like one. The inviting and sometimes quirky tone of voice shouldn’t be stifled by the corporate fist. And herein lies the challenge as well as the power of establishing a corporate blog that remains a blog.

The Future of SEO Is Now

Overview

Since June 2005, when Google unveiled its plans to make personalization the default setting for Google Accounts, and continuing through April 2007, when Google integrated its vertical search properties (e.g., video, maps, image, news, blogs) into Universal Search, the search blogs have been abuzz with doomsday prophecies about the impending death of search engine optimization (SEO).

Today personalization puts more of an emphasis on relevance than on simple page rank – by eliminating the standardized search engine results page (SERP) and showing search results based on an individual’s prior search and Web history. By focusing your website on relevance and user experience, users will be more apt to return. Through these criteria, a brand can reach qualified individuals who are actively seeking their specific product or service. And that positive interaction will, in turn, determine rankings and allow potential contact with other individuals who have a similar profile.

Universal search, which introduces additional types of digital content (e.g., press releases, images, videos and blog posts) into search results for virtually all query types, effectively eliminates the text-based SERP and changes the optimization game by giving alternate forms of content their own listings alongside links to Web pages. In this environment, a brand’s website may compete with an image or video for the searcher’s attention.

Although the deployment of universal and personalized search has practitioners of primitive SEO running scared, it’s hardly the end of SEO. It does, however, change the way marketers need to think about SEO in order to compete. One viable strategy for SEO success is achieved through distribution and syndication of all digital content to expand your brand’s findability.

Impact

Universal Search
Simply put, universal search (also called “blended”) refers to the act of using Google’s Web search engine to search its vertical search engines and their results simultaneously. While universal search is a Google-specific term, the other major search engines all incorporate some sort of blended content into their search results as well (see Figure 1). For example, if a searcher is looking for video content, it is no longer necessary to go to a video search engine to find it, as those results will appear alongside traditional Web page results. Therefore, the search performed is not just a Web search, video search or news search. Instead, it’s all of these at once – a “universal” search.

Marketers have seen this before to a lesser extent and with a different name, when the Google OneBox was introduced prior to universal search. Google OneBox is a list of relevant links for shopping, movies, music, etc., listed at the top of the Web search results. For years, properly optimizing product feeds for Google Product Search (or Froogle, as it was once called) could win retailers the first three spots on the SERP, not just for the Google product page, but for Google Web results as well.

Google’s universal search takes this one step further, incorporating all types of digital content Google’s algorithm turns up into the Web search results and providing even more opportunity for marketers to get their digital assets in front of consumers. The impact of universal search should be overwhelmingly positive if marketers build their online presence authentically within multiple formats – video, images, mobile, etc. The more content and formats you provide, the better your chances are of being found. That said, the same principles of SEO still apply to all content, and you’ll still need to assign keyword-rich tags and descriptions, execute a link-building campaign and so on.

Personalized Search Results
Another major innovation is related to personalized Web search results. Like universal search, personalized search is Google’s attempt to improve the user experience by making results more relevant. The difference lies in the fact that personalized search uses a searcher’s Web history to customize search results. Prior to personalized search, there was less variance in Web rankings. For instance, a company appearing as the first result for a Google search would have that same top ranking in response to any search, regardless of the user’s location or other searches he or she conducted previously.

With personalized search, however, a new layer has been added to the ranking algorithm, giving precedence to Web pages that have been visited before, or adjusting results according to past queries. As a result, the order of listings within search engine results can vary greatly in any given area, depending upon which sites the user has visited in the past and related queries the user has previously submitted. For example, with personalized search results, a fan of Charlie Brown entering the query “peanuts” might see more content related to the comic strip by Charles M. Schulz, while a mom entering the same search term to find a homemade alternative to Jiffy peanut butter might see results related to the popular legume.

The impact here should be minimal – if your optimization efforts have always focused on relevance before ranking, that is. “White hat” marketers, as they’ve come to be known, are those whose SEO methods are generally looked upon favorably by the search engines. They focus on the user experience to continue providing relevant content for positive search results. “Black hat” marketers, on the other hand, who attempt to redirect search results to particular target pages using maligned tactics such as “keyword stuffing,” risk reduced visibility in the current era of personalized search, as do marketers who don’t optimize all types of digital content.

Recommendations

As a marketer, you should push for optimization of all digital assets, including news, video, images and more, to take full advantage of universal search. Furthermore, continue to focus on improving your website with social media, blog and feed optimization, and other tools for providing more relevant search results and enhancing the user experience. These tactics will drive quality traffic from natural search results and are best practices that will position you to tackle whatever the next big algorithm tweak happens to be.

Marketers Need a Seat At the Revenue Table

Who’s in charge of revenue at your company? In most B-to-B companies, the sales department is the primary and exclusive owner of the revenue pipeline. Sales and revenue just seem to go together, so much that some people use the words synonymously – for example, “Last quarter’s sales grew 10 percent.” Marketing may play a supporting role by supplying leads (which all too often get dropped or ignored), but in these B-to-B companies, it is the sales department that controls the revenue process and is accountable for top-line growth.

The marketing department, in contrast, too often gets left out of the revenue process. There are companies, in fact, where the sales department holds weekly revenue calls, yet nobody from marketing is included. The executive leaders of these companies think of marketing only as a cost center, not a strategic asset that drives growth. As one marketer recently lamented, “My group is perceived by upper management as the people who do color brochures.”

AN ANACHRONISTIC MODEL

This model of the roles of sales and marketing is becoming increasingly anachronistic in the age of the Internet and social media. In the past, access to information about new products and solutions was limited to a few sources, and the only way a buyer could learn more was by meeting with a sales representative from the company. That’s why buyers were willing to engage with sales so early in the buying cycle.

Today, in contrast, there’s open access to information, and customers are much better at seeking out information themselves. As a result, buyers want to educate themselves before they speak with anyone from sales: more than 93 percent of prospects start their research online, and 80 percent of decision makers who made recent purchases believe they found the vendor (as opposed to the vendor targeting them).

This means that companies are meeting prospective customers earlier than ever in the buying cycle. At the same time, these customers want to engage with sales later. The old model in which marketing generates a lead and sends it over to tele-sales or direct sales simply doesn’t work anymore.

AN INTEGRATED REVENUE PIPELINE

CEOs and other executives who care about revenue generation must let go of the outdated notion that only sales drives revenue. They must find a way to connect sales and marketing into an integrated revenue pipeline that begins when a prospect first hears about the company, nurtures that relationship over time, understands the prospect’s interests and intent and at the right time seamlessly hands the prospect to sales to close the business.

An integrated revenue funnel provides sales and marketing with a common language and metrics, and ensures that goals, initiatives and promotions are aligned across the departments. Companies that succeed at implementing an integrated revenue pipeline enjoy better sales and marketing alignment, greater sales productivity and an improved ability to meet or exceed growth targets.

It makes sense that marketing should be as responsible for revenue as sales. After all, marketing drives the first impression, which creates a disproportionate impact on the prospect’s view of the business. In addition, marketing talks to many more prospects than sales ever will. And marketing creates the tools that educate prospects and influence buying criteria.

However, before companies can put the single integrated revenue pipeline in place, marketers needs to take more responsibility for revenue. In other words, they must earn their seat at the revenue table.

BECOMING PART OF THE REVENUE MACHINE

What can marketers do to make themselves seen as part of a machine that drives revenue and profits rather than just the people who throw parties and buy swag? The key is to act more like sales – and to do that, they must:

  1. Speak the financial “language of business”;
  2. Forecast results, not just costs;
  3. Make hard business cases for spending;
  4. Align incentives;
  5. Use standardized best practice methodologies; and
  6. Do “more with less” using automation technology.

1. Speak the Financial “Language of Business”

Soft metrics – such as brand awareness, impressions, organic search rankings, satisfaction and quality – are all important, but only to the extent that they eventually connect in a quantifiable way to hard metrics such as pipeline, revenue and profit. Look at how every other influential executive in the organization talks: they use terms like return on investment (ROI), margin and stockholder equity. If these are not the terms marketers use, marketing becomes disconnected from the power center.

The marketing dashboard must continue to measure the impact of all marketing activities; however, it should keep all but the most critical metrics internal to marketing. By speaking the same financial language as the CEO, CFO and VP of sales, marketers will better communicate marketing’s value and impact.

2. Forecast Results, Not Just Costs

Most marketers know how much they will spend next month and next quarter, and many can forecast their cost per lead with great accuracy. However, by framing the discussion of marketing forecasts in terms of costs, they only perpetuate the perception that marketing is a cost center.

In contrast, the VP of sales manages a detailed forecast of how sales activities will impact revenue. By framing its activities in terms of hard metrics, sales maintains its reputation as a revenue center.

Marketers must do the same, forecasting leads and revenue with confidence. Sales and marketing must sit together at the revenue table to contribute to next quarter’s and next year’s forecasts.

Marketing’s role is to predict how many new qualified prospects will enter the funnel, how those leads will develop and how many of them will become “sales-ready” in any given quarter. Only by demonstrating how their efforts directly influence revenue can marketers position themselves not as a cost center but rather as an asset that drives revenue.

3. Sell the Marketing Budget to Your CFO

Marketing also must make a hard business case for the resources it needs to deliver on those forecasts. In most organizations, any significant investment needs a bottoms-up business case demonstrating that it will deliver a minimum rate of return. If the business case is made, the CFO generally approves the investment. Marketing spending should not be any different.

Building this kind of business case requires knowing what it takes – in money, time and effort – to acquire qualified leads and nurture those leads until they’re ready to talk with sales. This means thinking about and justifying the marketing budget as an investment that incurs costs today but delivers benefits for many years.

Marketers who use this type of rigorous methodology to determine marketing spending are also able to justify and defend their budgets. If the CEO wants to cut marketing spending by 10 percent, the chief marketing officer can specify exactly what impact that will have on next quarter’s revenue.

4. Align Incentives

One challenge presented by the integrated revenue pipeline is that marketing’s incentives tend to be very different from those of sales. Marketing is a very measurable process; however, the results are hard to measure. And while it’s easy to measure sales outcomes, it’s difficult to measure sales activity. As a result, compensation and rewards tend to be very different, hindering marketing’s ability to sit at the revenue table.

It all comes down to incentives. If marketing is measured by cost per lead and/or lead volume, marketing will generate lots of cheap, low-quality leads. Instead, measure marketing’s impact on revenue, and hold marketing accountable for revenue. Take a cue from the sales playbook and give marketing a quota. Everyone knows that salespeople have higher on-target earnings than marketers. Thus, as marketers take on more incentive compensation, they should expect to earn more as well.

5. Use Standardized Best Practice Methodologies

Marketers need to develop repeatable and systematic processes. One reason that the sales department is effective is that it can follow agreed-upon best practice methodologies. Similarly, finance is effective because it can follow generally accepted accounting principles that everyone understands and agrees about. In fact, all functions in the enterprise need repeatable and systematic processes if they’re to be seen as professional disciplines.

Marketing is no different: what’s needed is a rigorous, quantifiable and universally understood methodology for creating interest and turning that interest into revenue and cash flow. Only with this in place will marketing be seen as a professional discipline, not a second-class department lacking rigor and precision.

There are additional benefits to using a documented, best practice methodology. First, it provides a common language for consistent communication inside and outside the department. Consistency is critical to ensure reliable roll-ups and forecasts, as well as for accurate comparisons of value among different leads and opportunities. Second, a best practice methodology improves performance by helping every marketer perform more like the top performers in the field – regardless of each one’s experience with any given tactic or channel. For too long, marketing has been seen as an art and not a science. Implementing a consistent best practice marketing methodology will go a long way toward changing that perception.

6. Do “More With Less” Using Technology

There’s no doubt that marketers need better forecasting, accountability and methodologies. However, accountability is a double-edged sword that shines a bright light on poor performance as well as good performance. This means that predictability and accountability are necessary but not sufficient conditions for CMOs to earn their seat at the revenue table. In the absence of better performance, better accountability will actually hurt marketing’s role in the organization. That’s where automation technology can help.

On the sales side, sales force automation (SFA) technology has become a no-brainer. The SFA solution is a key enabler of the activities that tie sales to revenue; without SFA, sales executives could not roll up forecasts and implement best practice methodologies. Unfortunately, most marketers have found it impossible to implement marketing automation technology to support their activities and funnel. The problem is that traditional marketing solutions are expensive, require up-front capital investment and need lots of technology resources to implement and maintain.

Fortunately, with the rise of on-demand software, there are now fast and easy solutions that work within the framework of today’s marketing budgets and technology support. These solutions provide the automation and support that the marketing department needs to drive revenue, predict results, plan spending, measure impact and improve performance.

MODERN B-TO-B MARKETING

Marketing can and must earn a seat at the revenue table. But earning that seat requires acting like the departments already at the table. It requires making forecasts, planning spending and measuring results using hard business metrics such as pipeline, revenue and cash flow. It also requires implementing a best practice methodology – supported by marketing automation software – that delivers consistent communication and improves performance. And – since better accountability necessitates better performance – it requires that the marketing department make good on its promises by delivering more and better leads to sales. Only then will marketing be seen as an equal partner with sales in the effort to deliver revenue for the organization.