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Architecting

Experience
A Marketing Science and
Digital Analytics Handbook

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Advances and Opportunities with Big Data and Analytics (AOBDA)

Series Editor:  Russell Walker (Northwestern University, USA)

Published:

Vol. 1: Architecting Experience:


A Marketing Science and Digital Analytics Handbook
by Scot R. Wheeler

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Advances and Opportunities with Big Data and Analytics

Architecting
Experience
A Marketing Science and
Digital Analytics Handbook

Scot R Wheeler
Medill-Northwestern University, USA

World Scientific
NEW JERSEY • LONDON • SINGAPORE • BEIJING • SHANGHAI • HONG KONG • TAIPEI • CHENNAI • TOKYO

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Published by
World Scientific Publishing Co. Pte. Ltd.
5 Toh Tuck Link, Singapore 596224
USA office: 27 Warren Street, Suite 401-402, Hackensack, NJ 07601
UK office: 57 Shelton Street, Covent Garden, London WC2H 9HE

Library of Congress Cataloging-in-Publication Data


Names: Wheeler, Scot R.
Title: Architecting experience : a marketing science and digital analytics handbook /
Scot R Wheeler, Medill-Northwestern University, USA.
Description: | Series: Advances and opportunities with big data and analytics; 1 |
Includes bibliographical references and index.
Identifiers: LCCN 2015028389| ISBN 9789814678414 (hardcover : alk. paper) |
ISBN 9814678414 (hardcover : alk. paper) | ISBN 9789814725651 (softcover : alk. paper) |
ISBN 9814725651 (softcover : alk. paper)
Subjects: LCSH: Communication in marketing. | Digital media.
Classification: LCC HF5415.123 .W48 2016 | DDC 658.8/02--dc23
LC record available at http://lccn.loc.gov/2015028389

British Library Cataloguing-in-Publication Data


A catalogue record for this book is available from the British Library.

Copyright © 2016 by World Scientific Publishing Co. Pte. Ltd.


All rights reserved. This book, or parts thereof, may not be reproduced in any form or by any means,
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Printed in Singapore

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Contents

About the Author viii


Introductionix

Chapter The Foundations of Personalization 1


ONE
1.1 The New Business Value: Analytics
Increase Relevance 4
1.2  Introducing the “Demand Chain” 7
1.3  The Customer Journey 8
1.4  Research and Analytics 16

Chapter Strategy, Technology, Science & Art 21


TWO
2.1  Paid, Earned, or Owned Breakdown 26
2.2  The Changing Nature of Marketing Data 32
2.3 The Fundamental Analytics Architecture:
The Analytics Pyramid 37

Chapter The Applied Digital Analytics Playbook


THREE (ADAP) Part One 49

3.1  ADAP Section One: Problem Definition 50


3.2  ADAP Section Two: Solution Definition 55

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viContents

Chapter The Changing World of Owned Media 71


FOUR
4.1 Web Architecture & Web Data Collection 73
4.2  Client-side Tagging 79
4.3  Tagging Design & Deployment 87
4.4  Mobile Marketing 95
4.5  Email Marketing 96
4.6  Introducing Cookies 102
4.7  Applying Owned Channel Metrics 105

Chapter Earned Media: Organic Social & SEO 115


FIVE
5.1 History 115
5.2  Organic vs. Paid Social Media 119
5.3  Organic Social Media Strategy 121
5.4 Inbound Organic Social
Data Sources for Key Objectives 123
5.5  Applying Social Metrics 127
5.6  Search Engine Optimization 146

Chapter Paid Media Analytics 151


SIX
6.1  Digital Paid Media Touch-points 152
6.2  The Paid Media Ecosystem 153
6.3  Targeting & Retargeting 159
6.4 DSPs and Programmatic Real-time
Bidding (RTB) 168

Chapter Testing & Optimization. Marketing


SEVEN Automation. Attribution 173

7.1 Prescriptive Analytics:
Testing & Optimization 173
7.2  Marketing Automation 187
7.3  Cross-channel Attribution 196

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Contents vii

Chapter Data Management, Models, and Algorithms 199


EIGHT
8.1 The Applied Digital Analytics Playbook
(ADAP) Part Two 199
8.2  Data Mining & Data Visualization 205
8.3  Predictive Analytics & Machine Learning 208

Chapter The Cultural and Organizational


NINE Impact of Data 221

9.1 Visualization 221
9.2 The Information Society: Media
Cycles & Feedback Loops 229
9.3 Organizational Change for Effective
Digital Analytics 250

Conclusion 263
Index267

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About the Author

Scot Wheeler is a leader in digi-


tal analytics delivery, overseeing
a team which develops consumer
intelligence, prospect conver-
sion propensity scoring, cross-
channel performance evaluation,
environmental trend analysis,
testing, targeting and optimiza-
tion, and predictive modeling
for budget allocation and response forecasts.

He is also an adjunct lecturer in Northwestern


University’s Master’s Degree program in Integrated
Marketing Communications, where he teaches Digital
Analytics and Statistics.

Scot received his MBA in Strategy, Finance and


Marketing from Northwestern University’s Kellogg
School of Management. Prior to his current roles,
Wheeler was Group Director of Marketing Science for
the digital agency Critical Mass. Before that, he ran
product development, marketing and sales for the
social media analytics platform Evolve24. Wheeler’s
professional background spans a variety of technology,
consulting and agency roles. From his start in software
development, Scot’s 20 years of experience at the inter-
section of technology and marketing includes work
with Yahoo!, GE, Electronic Arts, AT&T, MasterCard,
State Farm, USAA and HP.

viii

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Introduction

In the Integrated Marketing Communications


approach taught at Northwestern University, the con-
sumer is placed at the center of all marketing prac-
tice. Unfortunately, this customer-centricity is not
always as common in practice as it should be in the
real-world of digital marketing. In actual practice,
brands often place concern for awareness of their
message at the center of their marketing practice,
and much “digital strategy” is simply an effort to
ensure consistent branding and “messaging” across
digital channels. However, any digital marketing
practice that is focused on brand message and struc-
tured primarily by channel and function (the paid
media team, the social media team, the web team)
will typically fail to create a truly integrated and rel-
evant experience as a consumer moves across digital
channels. The capability to capture and use data
from any consumer’s digital engagement, and the
growing expectation for content personalization that
consumers have as a result (beginning with each
user’s Amazon and Netflix experience), means that
the disconnection of data across channels will be felt
by the user and will adversely impact their experi-
ence with the brand. Conversely, the effective collec-
tion and connection of data across channels will play
a significant role in creating and maintaining brand
relationships with the digitally embedded consumer.

ix

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x Architecting Experience

Thus, the question this book sets out to answer is the


biggest question facing digital marketers today: how
do I deliver content and experience around my
brand that is relevant enough to drive engagement in
the user’s current context? The quick answer to this
is of course through the application of data and ana-
lytics to drive highly relevant, contextual targeted
content and adaptive experience, but since this
answer is not as easy to achieve as it is to say (and it
is a mouthful), this book has been designed to help
you develop the understanding and skills required
to make this happen.

The path to delivering relevant, contextual and even


adaptive digital experiences is not one for the mar-
keter to walk alone, and this book will explore the
relationships that must emerge between marketing,
technology, research and operations to bring about
truly effective 21st digital experience delivery. At the
end of the day however, the envisioned reader of this
book has the strongest interest in the marketing per-
spective on these conversations, with a 21st century
marketing mindset that understands marketing as
innovation and technology driven customer-centric
relationship building for long-term customer value
versus message dissemination for the masses myopi-
cally focused on driving business transactions above
all else.

Digital communications long-ago turned mass-media


on its head, a fall from which mass-media as the top
effective communications form will never recover. In
a world with a seemingly infinite amount of content
and scores of methods for consuming that content,
communication today is about appealing to individu-
als, person by person, and appeal requires relevance

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Introduction xi

in context. In any conversation, delivering relevance


in context requires understanding the person you’re
speaking with. This is true for digital marketing as
well.

This book will focus on the impact of data and tech-


nology on marketing both within businesses and for
consumers as well. It will allow you to guide your
organization in a necessary process of continuous
evolution to effectively collect and use the right data,
analytics, technology platforms and algorithms to
achieve valuable outcomes.

This evolution is built around a six-stage process


which is facilitated through an Applied Digital
Ana­
­ lytics Plan (ADAP), which is introduced in
Chapter 3:

1. Define the problems that data can solve.


2. Identify sources of data (existing and potential).
3. Collect, manage and analyze data.
4. Overcome organizational and cultural inertia.
5. Apply data and analysis to solve the problems.
6. Evaluate the outcomes.

This book will explain how evolution within the pro-


cess detailed above is achieved through the follow-
ing activities:

1. Data-driven problem identification and data-ori-


ented strategic communications design (design
research).
2. Strategic alignment of customer and business
objectives.
3. KPI development and documentation from
objectives.

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xii Architecting Experience

4. Marketing channel digital data collection strategy


and implementation.
5. Multi-channel data integration.
6. Testing and optimization across all channels.
7. Integrated planning models and performance
reporting.
8. Predictive analytics and adaptive digital experi-
ence enablement.

These activities build upon and interact across each


other and are discussed in detail through the
remaining chapters, with the first several chapters
focusing on the specifics of data and collection and
analysis for owned media, earned media and
paid media channels, and with the later chapters
focused on integrating data across channels and
applying it to continual optimization of results in
omni-channel engagement with customers through
applied analysis and technology. Before proceeding
into these activities however, it is worth our while to
begin with a deeper examination of the question of
relevance in digital marketing. What is relevant to
our customers at any given point in time? How do we
know? And how do we take that knowledge and use
it to deliver better experiences that in turn yield bet-
ter results?

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Chapter
ONE
The Foundations of
Personalization

As the digitization of life proceeds with seemingly


exponential progress, we continually find ourselves in
an ever changing cultural landscape, where each day
the amount of new information recorded is greater
than all of the world’s recorded information prior to
the digital age, where the average citizen of nearly all
nations has unprecedented access to knowledge,
entertainment and opinion, and of course where
those same citizens are exposed to hundreds of adver-
tisements a day on screens both stationary and mobile.

We find ourselves in a world where social life increas-


ingly means digital life, and where success in busi-
ness and marketing require advanced capabilities to
access and interpret data. In short, we’ve crossed the
horizon into a world where it can be argued that
culture (i.e. work, arts and entertainment, customs,
habits and pastimes) has largely become a product
of information technology, and that correspond-
ingly, information has become the core of culture in
the developed world.

Living in a technologically and digitally driven world


means living with constant change. In the 20th century,
the economic and cultural base of the developed
world transformed from being agriculturally (and

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2 Architecting Experience

land) based to manufacturing and technology based


over half a century, with the Second World War finally
cementing the rise of the technocrat over the gentry
as culture’s new elite. The transformations that have
occurred as developed culture has then shifted from
capital intensive analog technology to skill and infor-
mation intensive digital technology have come more
and more rapidly, and many businesses are still trying
to catch up with the changes in technology and society
that have come at them over the last two decades.

The continual development of information technol-


ogy and applications arises from a human drive to
continually expand both our knowledge and conveni-
ence, a drive that has been at the core of advancement
in science and technology for centuries. In the middle
of the 20th century, the study of such advancement in
communication technology was taken up by a profes-
sor of communications at the University of Toronto
in a way that forever changed our understanding of
the relationship between media and society.

Given the breadth and depth of any individual’s


exposure to media today, it seems inconceivable that
the phrase “Media” and the concepts associated with
it would at one time have required an introduction
and development within popular thinking, but in
fact there was such a time not that long ago, and the
man who made the introduction was Professor
Marshall McLuhan.

McLuhan’s 1965 book Understanding Media: The


Extensions of Man introduced the concept of Media
where previously there had simply been notions of
independent communication technologies such as
‘the press’, ‘television’ and ‘advertising’ which were

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The Foundations of Personalization 3

recognized to synthesize into a single unit in practice,


but were nonetheless typically evaluated individually
with regards to their impact on culture.

McLuhan observed that these and many other infor-


mation and communication technologies and prac-
tices not only work together and proceed from one
another, but that in doing so they actually extend the
perceptual power of individuals and mediate com-
munication and thinking in ways that significantly
influence culture and human affairs; thus his appli-
cation of the term Media to these mediating ‘exten-
sions of man’.

Perhaps the most lasting convention introduced by


McLuhan (and the most useful for the subject of this
book) is the notion of “hot” and “cool” mediums, or
elements of culture. Very few people wonder who
should be credited for coining the use of ‘cool’ in
social context, e.g. a ‘cool’ new band or the ‘cool’
kids at school, since the expression seems to have
always been a part of the vernacular. Equally, the idea
of a ‘hot’ new sound or a person with a ‘hot’ body are
commonly used in American parlance without con-
sideration of origin. Today, these notions of “cool”
and “hot” seem natural in the ways they are applied,
but it was just as recently as the beginning of the Cold
War that Marshall McLuhan observed that different
media exerted different influences on people’s per-
ceptions and engagement with those media, and clas-
sified those media into “hot” and “cold” categories.

McLuhan’s theory has held up incredibly well into


the early 21st century media environment, and still
provides an excellent framework for understanding
the influence of mediated information on culture,

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4 Architecting Experience

and the countervailing response of culture in the


subsequent development of new information tech-
nology. Everyone wants their content to be “hot”,
“sticky” and “viral”, and these metaphors for informa-
tion owe much to McLuhan’s understanding of how
people engage with messages in media. McLuhan’s
thinking is worth consideration by anyone interested
in the science of marketing communications, and
will be explored in detail in Chapter 9. But to begin
with, we’ll first boil down the application of McLuhan’s
ideas to marketing to a fundamental principle — the
message is either relevant in the receiver’s current
context, or it is not.

1.1 The New Business Value: Analytics Increase


Relevance

In 20th century marketing, messages from the brand


were thought to be uni-directional, and consumer
interaction with these messages was thought of as
passive receipt and absorption of the message. Digital
communications turned that idea on its head. Digital
communications are multi-directional, as consumers
have the capability to respond and interact directly to
and/or about the brand through both shared and
owned media channels. This interaction between
brand and consumer or by consumers about/around
a brand in all digital channels is commonly referred
to as “engagement”, and effective engagement is the
objective of all digital marketing. Engagement result-
ing from digital marketing may be as simple as click-
ing on a link or liking/sharing content (and thus
passing it along through a network), or it may be
more involved, such as returning to a brand’s digital
experience, going deeper into content and tools,

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The Foundations of Personalization 5

adding their own new content, attending an event,


completing a form, making a purchase or sharing a
referral.

When it comes to engagement, one rule stands out


over all others: relevance drives results. We are no
more likely to engage with activities and conversa-
tions that have no appeal or value to us in digital
than we are in the real world. In fact, digital gives us
much better ways than we have in real-life to filter
out irrelevant and uninteresting content. Digital also
gives us much more content to filter than we face in
real-life, which for most users creates a high thresh-
old between what is potentially viewable for them
and what actually elicits engagement.

This returns us to the largest problem that the digital


marketer faces today: how do I deliver content around
my brand that is relevant enough to drive engagement
in the user’s current context? The answer to this is of
course through the application of data and analytics
to drive highly relevant, contextual targeted content
and adaptive experience.

The figure below tells a story about the rise of rele-


vance in digital communications channels over the
past two decades.

As we see in Figure 1.1 in the earliest days of main-


stream digital communication, marketing was con-
ducted through email, display advertising and websites.
Of course, the dawn of email marketing brought the
immediate dawn of spam, since in the early days, sim-
ply having an email address qualified you for targeting
by anyone who could get that email. In early digital
marketing, display advertising was made more relevant
than email by virtue of some occasional effort to align

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6 Architecting Experience

Figure 1.1   advertising with the content of the page on which it was
The Rise of advertised, at least by marketers who didn’t want to throw
Relevance
their digital budget down a black hole. And marketing on
websites was the most relevant content on the web for
those exposed to it since they were qualified to see it based
on having sought it out.

Search marketing arrived on the scene in earnest in 1999


to take the top position for delivering relevant marketing
content through algorithms that matched expressed inter-
est or intent with digital content results. Being based on
explicit interest cues and algorithmic matching of content
to those cues, search has remained toward the top of the
relevance ladder ever since, being surpassed recently only
by content that has interest cues, algorithmic content tar-
geting and memory of user history in a more specific con-
text than the blank page of a new search. However,
Google’s interest in having more user context data from
across all platforms will likely see the return of “predictive”
search (exhibited currently in the Google Now application)

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The Foundations of Personalization 7

as the most relevant form of content delivery around


any users immediate content needs in context.

What Figure 1.1 shows us — beginning with search


then extending to social content, social ads and
eventually lifting all boats — that increasing data
about context and algorithms for matching content
with context are helpful in delivering relevance. But
where is this data, and how do we use it to discover
what is relevant, and apply that understanding to
driving results?

1.2  Introducing the “Demand Chain”

A company’s supply chain and the practice of supply


chain management is critical to that company’s ability
to produce and deliver its goods to its customers. An
organization’s supply chain is the linkage of material,
processes and people that proceeds from the initial
procurement of the raw materials needed to product
a product, all the way through production to the final
delivery of that product to the end customer. Without
careful management of the supply chain, among
other problems, materials required for production
might not be available when needed, warehouses
could be overflowing with un-needed raw material or
finished product, or more product than needed
could be produced to sit on shelves in stores without
buyers. Supply chain management begins with pro-
jections around the demand for products, then puts
into motion all of the gears required to produce and
then distribute the right amount of product in the
right places at the right time based on that demand.

While a complex array of production inputs, outputs


and logistics provide the material for supply-chain
management, it is the projection or forecast of

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8 Architecting Experience

demand from the market that provides the impetus.


If the forecasted demand for product is incorrect,
then the best a highly effective supply-chain manage-
ment process can do is try to adjust to the estimating
error once it becomes apparent.

Creating perfectly precise demand forecasts is nearly


impossible, so producers of goods and services have
options. If the good is something packaged and sold
in a store, then a target for sales is set, and produc-
tion (in actual units or in production cost-to-profit
ratio for something like software) is run to that target.
Once produced, the product is put up for sale in
stores and/or online. Once the product is up for sale
in some location, the supply chain has done its job
until more product is needed — which can be quickly
for made-to-order goods or services. However, once
the product is up for sale, the product has entered
the “demand chain” — a less recognized and less
understood area of the marketing equation.

If the supply chain is the process that pushes a prod-


uct out to where it can be bought, the demand chain
is the counterpart process through which the cus-
tomer ultimately pulls the product into their basket.
Similarly, if the supply chain is the process that pro-
duces product supply, then the demand chain is the
process that produces demand.

1.3 The Customer Journey

While marketing strategy and marketing communica-


tions tries to understand and tap into the demand
chain, it is a common and disadvantageous mistake to
think that marketing drives the demand chain, and is

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The Foundations of Personalization 9

the source of product demand. Demand for products


starts with a need or desire in a consumer. It is very
true that advertising applies psychology to evoke
needs and desires, but it is also true that most goods
also fulfill an actual need or demand. Advertising can
be used to cultivate the perception of a certain brand
of clothing as more sexy or sophisticated than another,
but the demand for clothes was already there. Demand
also requires a stimulus to buy — I may be exposed to
advertising that guides me to fully perceive a brand as
tied to some characteristic or quality, but perception
is not purchase. To become a customer, there must be
some kind of trigger prompting me to buy some-
thing in that product category. Only then will my
pre-established perceptions of the characteristics of
various options begin to matter.

So, the demand chain begins with a “trigger” to con-


sider a purchase. This can be as simple as running
out of toilet paper, or as complex as recognizing the
need to determine a care plan for an aging parent.
The most traditional concept of the consumer path
to purchase (along the demand chain) envisioned
marketing as a funnel that brought the consumer
from awareness, to interest, to desire and then finally
to action, or purchase.

This way of thinking of customer engagement has


guided generations of marketing planners and mar-
keting campaigns, with no expense spared on aware-
ness and branding campaigns based on the idea that
more volume at the top of the funnel has to translate to
more volume out the bottom of the funnel. Of course,
the funnel was never a funnel as there was never 100%
retention of what went into the top. Instead, it was
more of a sieve, with much of what went into the top

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10 Architecting Experience

spilling out before it ever reached the bottom. Thus,


the idea that increasing volume at the top of the funnel
would increase sales at the bottom has never been
guaranteed. In fact, depending on how many and
how large the holes in the process of moving consum-
ers from awareness to purchase, there has always been
strong potential to waste huge amounts of time and
effort moving people into the top of a process from
which they would immediately fall out.

This recognition of prospect attrition throughout the


traditional “funnel” to purchase and the question
about how to decrease such attrition necessitated a
new way of thinking about the path to purchase. In
2009, McKinsey Consulting introduced the idea of
the Customer Decision Journey, which has subse-
quently become the new standard in thinking about
the path consumers take from awareness through
purchase and importantly, even after purchase. Since
its introduction, it has gone through several stages of
evolution and refinement, such as the version of the
journey we will reference throughout the pages of
this book.

Figure 1.2 takes the original notions of the McKinsey


Customer Decision Journey and adds two additional
dimensions: the role of external “life events” as trig-
gers to the customer decision journey, and the inter-
action points between customers on the journey and
data about those customers.

The process begins on the far left with a “life event”,


which is some piece of context that provides the
impetus to take action in our product category. Life
events are diverse, and relevant life events for any
business will vary based on the nature of that busi-
ness. Life events range from major events such as

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The Foundations of Personalization 11

Figure 1.2  
The Customer
Decision
Journey

marriage, a new job, a new house or the birth of a


child to everyday events such as hosting a party or
even just having time for lunch, reaching the week-
end, getting off from work in the afternoon, or need-
ing toilet paper. Life events do not need to be major
in order to be significant triggers for the customer
decision process. The size and scope of the life event
is not what matters in itself. What matters most is that
we, as marketers, are cognizant of the fact that there
is always an external context to a customer’s entry into
a decision journey — that the customer has a life out-
side the decision process, and that something about
that life brought them in to the decision process.
Understanding this, the marketer should treat every
life event as something important enough to their
customer to trigger the expenditure of thought and
energy through the decision process, and should of
course recognize that the more significant the life
event, the more significant the customer problems,
objectives and needs.

From the triggering event, we proceed clockwise


through the diagram. Customers in the first round of

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12 Architecting Experience

the journey will travel around the outside path


labeled “active evaluation”. While on this path of
active evaluation, they are developing an “initial con-
sideration set” with regard to the options available to
them to address the problems, objectives and needs
established with the triggering event. Awareness of
their options is of course very important at this stage,
so it is good that awareness building is already a sig-
nificant piece of most marketing programs. But ini-
tial consideration extends well beyond just awareness
and is in fact a process of comparison and evaluation
leading to a decision.

To survive the active evaluation stage, brands must


not only stay within consideration throughout the
process, but must also stand-out from other options
by the time the process reaches a decision point.
While understanding the importance of awareness
has led to a focus on that stage, with data being used
in increasingly sophisticated ways to optimize spend-
ing on targeted impressions for awareness develop-
ment, the entire active consideration process is still
under-addressed by most marketing programs. This
is changing with the evolution of marketing auto-
mation software, and those firms that are address-
ing this change with the most focus are poised to
reap the rewards. To repeat one of the most com-
mon themes of this book, relevance delivers results,
and if there is a critical time to establish relevance,
it is during the period of time when your company
is being considered against competitors for a fit
with your customers’ needs. The means to establish-
ing relevance is of course by generating meaningful
points of engagement from insights about each
customer’s context as drawn from your data. The
method for this will emerge through the rest of the

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The Foundations of Personalization 13

book, so suffice it to say here that knowing when and


why to apply data to engagement is at least as critical
as knowing how to do so.

Moving clockwise along the diagram, the customer


moves through active evaluation and ultimately
reaches a decision. If the trigger was not strong
enough to overcome dissatisfaction with all of the
options considered, then the customer may decide
not to make a purchase at all. If the trigger was strong
but no option was truly satisfactory, then the cus-
tomer will begrudgingly select the least dissatis­
factory option. With the long-tail of options ranging
from standard to niche presented today in most mar-
kets, this is increasingly less of a concern to most
consumers, who are happy for example to switch
from hotels to Airbnb to meet a set of requirements
that the hotels could not match, but which they had
to accept before Airbnb was an option. And if during
active consideration one option differentiated itself
according to the customer’s needs, at this point the
decision will be made to purchase from that brand.

Continuing clockwise around the consumer decision


journey, the next stage focuses on the post-purchase,
or post-decision, experience that the customer has
with a brand. Typically, this is thought of as “cus-
tomer service” for customers who have bought some-
thing from us, and that is a large segment of the
population that a company will engage at this stage
in the journey. But those customers who decision led
to an option other than ours still can, and should,
also be engaged here.

For those potential customers who chose another


option, our post purchase engagement will be

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14 Architecting Experience

focused largely around paid media. Perhaps


most importantly — and currently unfortunately
uncommon — we need to recognize when these
prospects have made a decision and are no longer in
active evaluation, and we need to suppress serving
them ads around our product. Most readers of this
book, as users of the web, will know how annoying it
is to be served ads about something we have already
purchased. So, even if we have lost a sale, it is impor-
tant that we do not further dissuade the prospect
from engaging with us by continuing to try and get
them to buy something they are no longer shopping
for. Having provided that level of relevance in their
experience, we then use data (primarily from paid
media and Data Management Platforms [DMPs]) to
anticipate their future needs and to be ready to
deliver greater relevance when they reach their next
trigger.

For active customers, engagement in the post-


decision stage of the journey is the key to guiding
them into the “loyalty loop”. This loyalty loop comes
from establishing a strong preference for our brand
with the customer so that at the next trigger, the
customer’s active evaluation will default to our com-
pany’s options and will bypass the active evaluation
of our competitors. Suppression of no longer rele-
vant paid media and conversion-oriented email is
equally important here to avoid alienation from our
brand post-purchase. Nothing seems sillier (or is
more wasteful to the marketing budget) than seeing
targeted advertising from a brand for a product
recently purchased from that same brand. Having
shown that we can achieve minimal context recogni-
tion by knowing that this customer has purchased
from us, we then use 3rd party DMP data as well as
first-party data from the customer’s purchase

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The Foundations of Personalization 15

experience and post-purchase engagement with our


earned and owned media channels (e.g. app,
web, email, social, customer service) to ensure satis-
faction with their decision, and to anticipate and
prepare relevant responses to their potential upcom-
ing needs. If we’ve done this effectively (through
methods this book will provide in subsequent chap-
ters), we are then much better poised to respond
faster and with more relevance to the customers next
round of needs than any other options, elevating our
brand in their next round of consideration.

The Customer Decision Journey (CDJ) provides a


very helpful sense of flow from trigger to purchase
and post-purchase behavior that allows more refined
marketing strategy within the demand chain. It is
worth noting that even the most helpful models
tend to oversimplify the reality they seek to repre-
sent, and as two of my Northwestern University
Integrated Marketing Communications (IMC) pro-
gram colleagues have observed, the customer deci-
sion journey is no different. At any level of perspective
on a process, there is a usually a more complex layer
beneath. Professors Ed Malthouse and Tom
Collinger in the IMC program conduct research
into drivers of the decision process through the
Spiegel Research Institute, and have developed a
conceptualization of customer demand that consid-
ers the process as less of a flow and more of a con-
tinuous interaction of multiple drivers to the
purchase decision.

The visualization (see Figure 1.3) represents the inter-


dependence of several factors in the purchase deci-
sion, as movement in any of the gears in the d ­ iagram
will turn all the other gears. This conception of the
deeper mechanics behind the decision to purchase

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16 Architecting Experience

Figure 1.3  
Spiegel
Customer
Engagement
Eco System

from a brand fits perfectly with the customer decision


journey with the understanding that the gears are the
mechanism by which the consumer is driven through
the CDJ flow.

1.4  Research and Analytics

The Spiegel Institute is one of many academic organiza-


tions dedicated to research that helps organizations
­better understand the consumer and the type of brand
engagement that produces business outcomes. And
certainly every company that survives or thrives in its
market has some person or organization dedicated to
that same understanding. As digital marketing channels
and the collection and application of data in those chan-
nels continues to evolve, market research, customer
insights and analytics are playing an integrated role in
digital marketing design and execution. In a market
moved by the facilitation of relevant experiences, the
organization with the best understanding of their

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The Foundations of Personalization 17

Figure 1.4  
Research and
Analytics

customers, the demand for their products, and the driv-


ers through the path to purchase have a clear advantage
over competitors with less understanding of any of
these drivers of sales and loyalty.

I am often asked to clarify how digital analytics differs


from the legacy market research function extant in most
organizations. Figure 1.4 shows the way in which research
and analytics wrap around and through the marketing
process from pre-trigger to post-purchase.

As discussed, the consumer decision journey starts with


a trigger — which we see at the bottom center of Figure
1.4. The trigger itself occurs within an indivi­dual, some-
one with needs, wants, interests, attitudes, beliefs family
and friends. The individual is also of a certain age, gen-
der, ethnicity, income range, geography, education level
and acting within a set of current circumstances. In the
center of the diagram above we see a flow from trigger
to the decision to purchase or not. The flow is driven
through the customer decision journey process by the
mechanics defined by the Spiegel institutes gears.

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To the left and right of the path to purchase lie the


outside influences on that path. From the left come
the macro-level external influences over the path to
purchase, including economic factors, competitors’
actions in the marketplace, and changes in technol-
ogy that alter production, supply or demand factors
within our market. From the right come influences
related specifically to our brand, including the quality
and value of our product and accompanying customer
service, the public response to our product, and of
course, our marketing efforts. Both of these sets of
influences serve as inputs and catalysts to the decision
that takes place through the path to purchase.

The various flavors of research and analytics reside


around and within this process and its influences.
From a supply-chain standpoint, the most fundamen-
tal (though not simple) method of market research
occurs on the arrow marked “Research (1)”, which
considers segments of consumers, their purchases,
and the influence of external factors on those pur-
chases and then develops a model to predict expected
future sales such that production numbers and mar-
keting budgets can be built from those predictions.
This approach to research is improved via “Research
(2)” which adds consideration of the brand experi-
ence influences on the outcomes in the purchase
path, improving the understanding of the variables
that influence “purchase or not” and thus improving
the accuracy of forecasts and the marketing mix
models built against those forecasts.

The branches of research shown in the arrows


marked “Research (3)” give us improved understand-
ing of our customer segments in demographic,
psychographic, attitudinal and behavioral terms, and

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The Foundations of Personalization 19

provide customer insights on which our marketing


communications and service delivery should be built.
To be most effective, this research combines qualita-
tive and quantitative methods, and delivers results
that drive the accuracy and applicability of the more
quantitative research approaches discussed above.

Finally we come to your reason for picking up this


book: analytics. As seen in Figure 1.4, analytics is
rooted in the understanding of each individual, their
influences and their circumstances, and runs parallel
to the path to purchase through the status of the pur-
chase decision and then around into the formation
of insights and tactics (e.g. spend) that influence the
next set of brand experience inputs to the path to
purchase/CDJ. Importantly, whereas research is typi-
cally conducted in a batch process against large sam-
ples, this analytics process is conducted in a streaming,
real-time timeframe on a case-by-case basis for each
individual within the path to purchase/CDJ. This
characteristic is what allows the output of analytics to
drive real-time marketing decisions such as real-time
bidding on media, real-time content customization,
and cross-channel marketing automation coordina-
tion. In the digital environment, each time a touch-
point is engaged by a potential customer, the analytics
function should have algorithms in place that adjust
the propensity for, or the probability of, a purchase
by that individual, and that determines what to do
next in marketing to this individual given this new
probability for purchase.

This summary of the function and objective of digital


analytics provides us with the launching point for the
remainder of this book. As mentioned, the subsequent
chapters will help you to understand the fundamental

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20 Architecting Experience

components and steps required to build effective


data-driven experience delivery, beginning with the
common current state within marketing analytics,
and finishing with the expected near-term future
state in programmatic experience delivery, and the
influence this may have on businesses and cultures.

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Chapter
TWO
Strategy, Technology,
Science & Art

The organizational discipline that defines the collec­


tion and integration of data, effectively translates that
data into useful information, and applies that infor­
mation to optimizing marketing delivery in a variety
of forms is most clearly thought of as “Marketing
Science”. As is apparent from this prior definition,
data and technology reside at the core of marketing
science. While this data can be derived from measure­
ment in digital channels, it can also be accumulated
through more traditional market research methods.
In fact, to remain relevant in the 21st century, corpo­
rate market research functions are finding it neces­
sary to build on their traditional market research data
sources and capabilities to better understand digital
consumers using digitally collected data. On the con­
tinuum of this evolution, what distinguishes mar­
keting science for digital marketing from traditional
research functions is that marketing science not only
understands digital data and technology, but is able to
strategically and tactically guide the organization in the
application of insights from this data through both
content and media technologies as the core driver in
delivering relevance in the digital user experience.

21

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22 Architecting Experience

Marketing Science: The collection, aggregation and


application of business data and consumer insights
to optimize customer experience and business results
through marketing technology.

Thus, the Marketing Science position in the delivery


of digital marketing is a hybrid of several traditional
specialized roles. First and foremost, there is no
sense in developing digital marketing strategy with­
out insights from data, and there is no sense trying to
develop insights from data without an understanding
of the business and marketing strategy these insights
will serve. Accordingly, the Marketing Science Analyst
is truly the next generation of what has traditionally
been considered the Digital Strategist role.

As McLuhan showed us in Chapter 1, the medium is


the message. Thus, effective delivery of a message in
digital marketing requires not just an understanding
of the vast proliferation of digital media technologies
(or digital touch-points), but also an understanding
of how information can be applied to optimize the
effectiveness of message delivery through these tech­
nologies. Put more succinctly, digital marketing tech-
nology is information technology. Thus, in guiding
the application of data to digital experience, the
Marketing Science Analyst must be an applied infor­
mation technologist and data scientist:

1. Understanding marketing technologies and digi­


tal media touch-points’ code enough to ensure
that the right data is being collected from each
digital touch-point;
2. Understanding data structures and sales/
marketing IT systems enough to ensure that all of
this data is being integrated together for cross-
channel analysis;

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Strategy, Technology, Science & Art 23

3. Being capable of defining and/or developing


explanatory/predictive models from data that can
be applied programmatically (e.g. algorithmi­
cally) to the delivery of digital experiences; and
4. Defining how to apply analytics from streaming
data to optimize the delivery and performance of
these digital experiences for each visitor across
channels.

Thus, the Marketing Science Analyst must be able to


move between and translate across marketing strat­
egy, information technology and data science. But
their work is not done yet. While, strategy, informa­
tion technology and data science are critical to facili­
tating the delivery of messages to the right people in
the right touch-points at the right time, there is one
more fundamental factor to every communication
through every touch-point: the right message. Here
is where the art of marketing science comes to play.
The data, analytics and algorithmic delivery of con­
tent will never be optimized if the content itself is not
effective. Thus, the data, insights and strategy devel­
oped by the Marketing Science Analyst must also be
brought to bear in better understanding the people
who are engaging with our brand through digital
(and other) touch-points, and in artfully designing
content and user experience (UX) in accordance
with that deep and detailed understanding.

A simple process for the delivery of digital experi­


ences from the perspective of the Marketing Science
Analyst is laid out in Figure 2.1. Beginning in the
lower left section, the collection of data is the core of
our marketing science/digital analytics capabilities.
As has been true in computer science since the first
card was punched: what you put in determines what

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24 Architecting Experience

Figure 2.1  
Experience
Delivery Cycle

you get out. In digital marketing, the collection of data


happens through software code. Every analyst should
desire to verify the quality of the source data they will
use to develop insights. In digital marketing, this
means looking into code, and being able to explain
your requirements for data collection from a touch-
point experience to the software developers who are
building that experience.

With data flowing into the experience delivery process,


the Marketing Science Analyst can begin to apply their
strategy, science and art. The bottom right section
represents the “design and development” stage of a
digital experience. Here, the analyst is exercising their
data science, strategic and creative capabilities to:

1. Discover and explain what makes an engagement


effective;
2. Define strategies around those explanations and
determine how the effectiveness of delivery against
these strategies will be measured;
3. Build models and algorithms that will allow the
optimal delivery of those strategies; and

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Strategy, Technology, Science & Art 25

4. Work with the content and experience design


creative teams to ensure that the experience is
built around these effectiveness insights.

With the experience built and put into production,


the attention of the Marketing Science Analyst then
shifts to the top section. Here, the analyst measures
the effectiveness of the delivery and guides the tech­
nical and creative optimization of that delivery. This
can be done through testing and experimentation
and through quantitative programmatic optimiza­
tion. With performance results being returned and
optimization efforts underway, the Marketing Science
Analyst returns to the first step in the next round of
design, asking what data from the existing delivery
can be used to optimize the next round, and defining
how to collect needed information that is not cur­
rently available.

Since we start and end this process with the collec­


tion of data, let’s first consider the sources for this
data from across the organization. While brands
have become careful to ensure consistent branding
across their traditional and digital channels, their
digital marketing practices are still structured pri­
marily by channel and function (with a paid media
team, a social media team and a web team for exam­
ple). Such a structure typically fails to create a truly
integrated and relevant experience as a consumer
moves across digital channels. The capability to cap­
ture and use data from any consumer’s digital
engagement, and the growing expectation for con­
tent personalization that consumers have as a result
(beginning with their Amazon and Netflix experi­
ences), means that the disconnection of data across
channels will be felt by the user and will impact their

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26 Architecting Experience

Figure 2.2   relationship with the brand. Thus, to secure brands’


The Marketing relationships with digitally embedded consumers,
Science Stack
Marketing Science must first collect and connect the
systems (and their corresponding data) that are
shown in Figure 2.2.

The gaps between each of the boxes in Figure 2.2


reflect the siloed or segmented nature of digital mar­
keting practice — and accordingly the data generated
from that practice — which Marketing Science must
help brands overcome.

2.1  Paid, Earned, or Owned Breakdown

In the center of this Digital Data Stack are the


communications channels through which digital
­
engagement occurs. At the top are the “owned
media” channels, which have been the primary focus
of Marketing Science for decades. Digital analytics
in marketing began with web tagging, and in many
cases this is still the primary analytics competency
within marketing or the agencies producing a
brand’s owned channel m ­ arketing. Chapter 3 will
focus on the owned media channel — and data
collection, connection and application in that
­

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c­hannel — beginning with the website but also


extending to web services, email and mobile apps.

Next come the “Earned Media” channels, which are


the focus of Chapter Four. A brand’s engagement with
consumers through earned media occurs through
search and social media, and Marketing Science for
earned media includes SEO analytics, social media
content tagging, social engagement analytics and
social media listening.

Last are the “Paid Media” channels, which typically


command the majority of a digital marketer’s spend
across. The major paid media outlets include search
marketing and paid display advertising, but social
media advertising is increasingly adding options (and
complexity) for media planners. Paid media has seen
the earliest and most widespread application of ana­
lytics to content delivery through “retargeting” which
analyzes a user’s past online behaviors to identify the
best advertising opportunity, through social content
network analysis, which allows social networks to use
insights about the interests of a user and their social
network connections to increase the relevance of
advertisements, and through “programmatic buying”
which uses business rules and real-time behavioral
feedback to make a split-second decision on whether
or not to buy an impression based on that particular
user’s history and characteristics.

Our owned, earned and paid marketing communica­


tions channels are surrounded by additional data
sources. On the left side of the document we have first
party sources of data that should be integrated with
the data drawn from our Marketing Communications
channels to increase the contextual relevance of digital

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28 Architecting Experience

engagement at any point in time. Customer service


records, sales data and survey responses should all
support more traditional consumer insights research
and usability analysis to increase the relevance of the
experience being delivered to the digital user.

On the right side we have third party data that should


also be used to support predictive models that best
match content with consumers and thus deliver the
highest level of relevance within digital engagement.
Data Management Platforms (DMPs) and Demand
Side Platforms (DSPs) play a central role in retargeting
and real-time buying by tying together users’ demo­
graphic characteristics with their exposure to and
engagement with advertising across the web as well
as anonymized information about online and offline
spending.

So, with the necessary background now established


and with a model of the various pieces of media that
need to be connected together as our foundation for
moving forward, we are now ready to explore how to
collect and connect data to drive relevant digital
engagement for your brand.

The Challenge to “Collect & Connect”

The Latin root of the word “data” means “a given or a


thing”, and that is really what data is, a collection of
“givens”. Data is the source from which information
can be created, but it is not quite information in itself.
The transition of a set of givens from data to informa­
tion requires analysis. Thinking in terms of a coin flip,
data is the possession of a coin with one side up, and
information is the recognition of which side that is.

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So, in thinking of data, we are thinking of what givens


we can collect with which to generate information,
insights and action. As analysts, every insight we gen­
erate and action we recommend is grounded in our
data, so every analyst must accept accountability for
their data as the most fundamental aspect of their
job. In the current state of digital analytics, this is a
big job.

As discussed in the preceding section, the sources of


marketing data are widely dispersed, and the first
challenge of marketing science is to collect and con­
nect these sources. As foreshadowed previously,
there are three fundamental challenges in the col­
lection and connection of digital marketing data:

1. The data is scattered across platforms and com­


munication channels;
2. With access constrained by organizational silos; and
3. It is of questionable quality as its generation has
largely been an afterthought.

Consider how a banking customer could engage


with their bank through multiple channels in a sin­
gle day. They may check a balance on their cell­
phone, then make a quick transfer from their laptop.
They may later receive an email for a credit card
product which they click through to view before
calling from their cell phone for more information.
When they ask to then check something about their
bank account, they need to be transferred.

In this example, the information about this one user


(with an existing customer in the CRM database) has
been collected (1) as a mobile visit with one unique
visitor ID, (2) as a laptop visitor with a different unique

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visitor ID, (3) as a “click through” in the email data­


base, which may or may not share the CRM system ID,
(4) as a second mobile visit referred from email, and
(5) as a call to the call center, which may or may not
wind up being associated with the email that was sent,
and (6) a transfer to a different call center.

If the data above is not correctly integrated, this one


person could appear to the organization as five dif­
ferent people, based on the disconnection of the
touch-points within a single experience. The result
of such a situation is that the experience of engaging
with this bank will often feel duplicative, redundant
and/or disjointed versus contextually relevant, quick
and easy with continual anticipation of the visitor’s
needs. The latter is the ideal state of digital engage­
ment, but it is not possible when data is scattered
across the channels in which it is collected.

This issue proliferates when product lines across the


bank (e.g. banking, insurance, credit, wealth man­
agement) each maintain their own marketing lists
and use their own marketing platforms (e.g. landing
pages, display ad purchases, email lists) against their
own internal objectives (sell, sell, sell). In this case,
customers will not only feel the frustration of the
lack of contextual relevance and disconnection
when trying to engage across multiple platforms, but
they will actually begin to have the sense that they
are not really a unique and valued customer whom
the bank is there to help. Instead they may begin to
see themselves as just a target source of revenue
whose purpose is to help the bank make more
money. When a party in a relationship feels used,
that usually does not bode well for the relationship,
and this holds true in marketing. When multiple

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Strategy, Technology, Science & Art 31

business lines within the same organization are all


competing for the same customers without coordi­
nation — which is dangerously easy to do with digital
marketing technologies — they run the risk of alien­
ating those customers through a lack of relevance
and consideration of their needs in the context of
each customer’s interest in engaging with the bank,
and their desired form of interaction with the bank.

So, in this scenario — which is common across most


organizations and not just this hypothetical bank —
the Marketing Science Analyst has to identify and
somehow integrate the sources of behavioral data
about each customer; their interactions over time
around a common goal and across multiple chan­
nels. Creating common recognition of a single per­
son across multiple channels will require the help of
the IT team and business lines, as data will need to
be passed from system to system, and many of those
systems, and the data within them, will be main­
tained under separate budgets by various lines of
business. Should the analyst be able to align the
technological and organizational stars to make this
happen, they will have the foundation on which to
assess digital experiences and develop optimization
strategies based on a clearer understanding of the
user’s experience across the whole digital ecosystem.
But the third foundational challenge suggests that
they may not yet have the data to do so.

The unfortunate state of marketing analytics today is


that most digital data has been generated as an after­
thought in the development of a site or campaign, or
even as ‘exhaust’ without any thought at all. If the
data collection aspect of the deployment of a digi­
tal experience was not as carefully designed and

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32 Architecting Experience

considered as the creative and technology aspects, it


is likely that data collection was instead tacked on at
the last minute and in a very haphazard way designed
to get the basic “count and amount” variable and not
much else. For an analyst hoping to explain the per­
formance of digital marketing and find a basis for
recommending optimization opportunities and pre­
dict the outcomes of such optimization, there is typi­
cally not enough data to work with given the lack of
thought that had previously been put into the gen­
eration and collection of behavioral data. Sometimes,
the rush to tag a digital experience before it goes live
leads to mistakes, yielding data that is wrong. In
these cases, the production of reports from this data
is worse for the business than simply not having any
analysis.

Starting with typically one or more of these issues


around data at play, and with responsibility for the
data that drives analysis in their hands, the Marketing
Science Analyst clearly has their work cut out for
them in building effective analytics to guide optimal
experience delivery.

2.2 The Changing Nature of Marketing Data

The process of overcoming data collection chal­


lenges and building an accurate and comprehensive
data repository for digital marketing analytics begins
with an understanding of the types of data and the
ways in which data can be generated and applied.

A well-known description of Big Data is built around


the factors of “Volume, Velocity and Variety”, with

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Big Data being big because it possesses one or more


of these qualities; it comes in large volumes, it comes
quickly and/or it comes from many sources.

Historically, the most common data used for market­


ing is market research, channel performance data,
sales data, and prospect and customer records. From
a volume standpoint, the data from market research
is typically small data drawn from a sample. Channel
performance data, sales data and customer data
can be larger data sets, but do not come near the size
of the behavioral data sets collected from digital
engagement.

So marketing has some adjustment to make to pro­


cessing the volume of data that can be applied to
drive and optimize digital engagement delivery, and
with the perpetual increase in data arising from con­
stant connectivity and wearable sensors, the volume
of data available to marketing and these required
adjustments will increase. But ultimately, the ques­
tion of volume is really just a technical problem of
storage and retrieval. The bigger challenges in the
new data paradigm for digital marketing come from
the velocity and variety of data that can be applied to
optimize digital marketing.

Velocity

As long as data and some sort of analysis has been


used in marketing (approximately for the past
50 years), it has been collected and delivered peri­
odically, in batches. Traditional market research
involves the fielding of surveys or focus groups or
ethnographic observation. These methods involve a

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period of collection, then the collection ends and a


batch of data is delivered for analysis.

With digital analytics, the collection of data is con­


tinuous. Rather than being delivered in periodic
batches, the data instead flows to the analyst in an
endless stream. This ‘streaming’ data challenges the
insight generating mechanisms of traditional market
research that were built for processing batches of
data delivered periodically. Most of the traditional
models are still valid — cluster analysis for segmenta­
tion correlation and multivariate regression for pre­
diction — but the speed in which the data requires
them to be applied has made the problem of analysis
much more complex.

This complexity is solved with the application of


computation to process the constant stream of data.
Computation not only offers quicker application of
traditional models, but also introduces new and per­
haps better models for analysis depending on the
question. Several of these evolving approaches to
marketing analysis through machine learning will be
introduced in Chapter 8. Needless to say, adjustment
to the rapid acceleration in the velocity of data and
the shift in analytic methods required to process that
continuous stream (and volume) of data requires
more than just minor adjustments in the practice of
marketing. These changes are actually precipitating
a paradigm shift in the notion of how market
research and consumer insights should be applied to
drive the delivery of marketing messages under the
traditional paradigm, or put more appropriately for
the new paradigm; to guide engagement with the
brand’s relevant stakeholders to optimally serve the
objectives of all involved parties. This paradigm shift

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in what analytics-driven experience design can and


should be able to accomplish is already evolving and
transforming the discipline of marketing from its
20th century origins as an outbound-directed mes­
sage broadcasting mechanism into a more organic
feedback system with capability to continually learn
from its inputs and adapt appropriately to increas­
ingly broad arrays of context.

Variety

These broad arrays of context constitute the third


“V” — variety — in our Big Data feature set. The data
accessible to the marketing scientist has become
more increasingly variable in two forms: the method
of collection and the composition of the data (which
is often determined by the first variable).

As mentioned above, the traditional batch collection


of data is conducted either directly or by intermedi­
aries as surveys or focus groups. These methods col­
lect data from samples of a population at a fixed
point in time. The insights from this sample at this
fixed point in time are then extrapolated onto the
population and considered applicable to the present
moment. While this method can generate very good
“directional” insights, as a sample taken at a point in
time from a fixed position, it is much like recording
a concert performance on a smartphone camera,
you wind up with only a partial representation of
what actually happened over the course of the con­
cert experience. Furthermore, where you point your
camera determines what ultimately ‘represents’ the
event; so you have to hope you’re focusing your data
collection on what’s actually important.

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The collection methods offered through digital ana­


lytics introduce the opportunity to take much larger
samples (or even observe entire populations) more
frequently (or even continually). But the nature of
variety in digital data collection comes not only from
the increased possibilities for sampling, but from the
type of data collection through that sample.

Survey and focus-group research deliver data which


is primarily self-reported, meaning that participants’
reporting of certain perceptions and behaviors reflect
what they believe (at that time) they think and/or do
around the question at hand, which due to well-known
cognitive biases, filters and ulterior motives may or
may not actually represent their actually exhibited
perceptions, motivations and behaviors.

One significant benefit of digital analytics to the


building of predictive models is that a large part of
the data collected is not self-reported (and thus
potentially misleading), but is rather a direct record­
ing of behavior, which gives the Marketing Science
Analyst a much better factor for the prediction of
subsequent behaviors of the observed individual and
or of others who share similar characteristics within
a statistical cluster.

Since the emergence of computerized business data


in the 1990s, many market research teams have also
made use of other sources of behavioral data that fall
somewhere between batch and streaming in their
nature. Transactional or Point of Sale (PoS) data is
recorded and stored digitally, and is accessible for
analysis. Historically, and particularly around physi­
cal retail, this data has been available to marketing
only in batches, delayed by the process of importing
from retail locations to a central repository, and

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analyzed only periodically by a marketing research


cadence designed around batch data provision.
Improved integration between retail nodes and the
central data hub have reduced or eliminated lag in
the velocity of this behavioral PoS data, which has
become streaming for many retailers. The rise of
Customer Relationship Management (CRM) in the
early 2000’s introduced another potential stream of
behavioral data into the marketing scientist’s toolkit,
a stream which is becoming more adopted as a source
of insight development and experience design, but
has not yet been commonly integrated into the cus­
tomer insights development function, though any
firm wishing to compete on analytics must have the
integration of data around digital behaviors (website,
app, email, video, social and advertising), Point of
Sale and CRM into their customer insights modeling
dataset already underway.

2.3 The Fundamental Analytics Architecture:


The Analytics Pyramid

There are technological challenges to collecting


data that is increasing in volume, velocity and variety,
but the challenge for the digital marketer is more
fundamental; the determination of the data that
should be collected in the first place and the ways in
which it should be applied to experience delivery.
These decisions will in turn determine the data man­
agement and experience deliver technologies
required to achieve those results.

The first job of the marketing scientist is to deter­


mine their data requirements and communicate
these through the organization. Without correctly
defined data requirements, the marketing scientist

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will be working entirely or in part with incomplete and/


or inaccurate data, limiting the capabilities of their
analysis. Typically, any marketing scientist seeking to
advance their efforts will find that they require more and
better data to build more accurate models. In these
cases, the marketing scientist’s ability to communicate
and ultimately sell the need to spend time and energy
on data collection become critical. This ability to mobi­
lize the organization around the collection and integra­
tion of more and better data begins with the establishment
of a common organization understanding of the applica­
tions of data to business objectives.

The Digital Analytics Pyramid has been useful in my con­


sulting and teaching as an artifact around which this
common understanding can be established. It has also
proven to be a useful foundation on which to develop a
more intentional and organized marketing science
practice.
Figure 2.3  
The Digital The Analytics Pyramid (Figure 2.3) segments the
Analytics ­possible application of the insights derived from data
Pyramid

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and analysis into four layers: (1) Descriptive,


(2) Prescriptive, (3) Predictive and (4) Adaptive.

Descriptive Analytics

The foundational layer represents Descriptive ana­


lytics, and divides these into three sub-categories.

1. Performance Analytics: This is the type of analysis


most commonly envisioned when ‘analytics’ is dis­
cussed, since performance insights are what most
reporting and dashboard tools have been designed
to deliver. In performance analytics we find the
“counts and amounts” related to Key Performance
Indicators (KPIs) within digital channels; things
like page visits, bounce rate, open rate, click-
through rate, likes, follows, views and downloads.

Performance analytics tell us how we are doing in


terms of outputs, but they do not tell us much about
who is doing these things or the context in which the
thing occurs, and so are less immediately applica­
ble to an understanding of actual business outcomes.
This is exacerbated by the fact that performance
metrics only measure the positive occurrences of a
certain output, so in and of themselves they tell us
absolutely nothing about an equally important set
of data, all the cases in which the behavior did not
occur — which is the understanding we’ll need to
improve performance. For that information we
turn from the “what” and “how much” of perfor­
mance analytics to the “who, where, when and
why” of context analytics.

2. Context Analytics: Good reports and dashboards


present their performance analytics in context,

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because without context we have no basis to act


on the insights around performance. If perfor­
mance analytics tell us some KPI is underper­
forming our expectations, we have no basis for
designing a fix to this issue until we understand
whether this is true for everyone or just certain
types of people, whether it happens all the time or
just at specific times, whether there is a pattern of
behavior that appears before and/or after the
occurrence (or equally important the non-occur­
rence) that might indicate a possible point of inter­
vention to increase the desired behavior. Thus,
contextual analytics like segmentation and path
analysis give us more clarity around performance.

Unfortunately, not all reports and dashboards are


good reports and dashboards. In fact, the vast
majority of descriptive analysis provided for mar­
keting in organizations is provided as perfor­
mance data without much context.

To a large degree this is due to the lack of descrip­


tive data available around most KPIs. Digital ana­
lytics for marketing is still a very young discipline,
and the collection of data from most channels
has been implemented haphazardly, often as an
afterthought, and often on a tiny budget. In part,
this is due to the old paradigm of outbound mass
marketing in which marketing leads did not
understand how data could be used to guide
their practice. Data was seen as simply a means
for proving the success of what they designed
through traditional market research, design and
management approaches. Some data was better
than no data, but all the data really needed to do
was prove that marketing was working.

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Now, measuring whether marketing is working is


not enough, especially when it does not appear to
be working. Now, the reason that something works
or doesn’t has become of great interest. Now, mar­
keting leads are suddenly asking about the data
they have accessible to explain the performance
they are getting from across all of their marketing
channels. And they’re finding that data doesn’t
exist, so they’re turning to the readers of this book
to bring it into being. Establishing contextual
insights to explain performance is the first place
to start.

3. Research: The third sub-segment in descriptive


analytics is the extension of marketing research
into the field of digital data and analytics.
Performance analytics rightly hold the promi­
nent first position in digital analytics; if we are
doing nothing else we should at least be meas­
uring performance. The performance we observe
is contextualized and better understood through
the introduction of context like segmentation
and pathing, but performance does not become
explained (particularly in a statistically valid
sense) until research methods are introduced.

The most basic type of research that should be


conducted around digitally collected data is the
development and maintenance of descriptive
­statistics around key performance indicators, par­
ticularly measures of centrality (mean, median
and mode) and measures of dispersion (variance
and standard deviation). These basic statistical
measures allow us to define statistical norms
around our performance variables, and are best
when defined for multiple contexts, particularly

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segments. Segmentation itself around digitally


collected variables falls into this research category,
as does basic correlation to test the significance of
various steps throughout the path analysis.

In short, the research category of descriptive analyt­


ics is the most advanced of the three in that it pro­
vides statistical rigor around our performance and
context analysis. It is also the gateway to the next
level of the analytics pyramid.

Prescriptive Analytics

The second layer of the analytics pyramid repre­


sents Prescriptive analytics. In this level we advance
from observing and describing outcomes to taking a
more experimental approach to data collection and
application.

As we advance through the three categories of


descriptive analytics we gain increasing insight into
what works and what doesn’t work. In the research
category we establish statistical rigor around those
insights. However, even as we establish the parame­
ters of performance against various contexts, we will
likely find that our new insights yield as many ques­
tions as they do answers. At a minimum, we will want
to know whether good performance can be made
better through our understanding of the context
around that performance, and whether those con­
textual drivers of good performance in one area can
be applied to improve performance in another area
with shared context.

Our descriptive research will also allow us to identify


blind-spots. This will be particularly apparent when

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we find ourselves developing an engagement strat­


egy that involves trying something for which there is
no prior example, and thus no prior measurement.
For example, a new segment may develop, or a new
channel for communication may emerge, or a new
context for engagement may evolve. These new con­
ditions will require the development of new strate­
gies. In some cases, research should be conducted to
understand more about the new situation, and this
research may reveal similarities that allow us to use
past performance data to guide the new strategy.
However, given that we will be trying something that
has not been tried before, our descriptive analytics
are directional at best.

In today’s data rich environment, management often


expects marketing scientists to provide an expected
Return on Investment (ROI) prediction for a project
as an input to the decision making process. To deliver
this ROI forecast, marketing scientists must have two
data-points; investment and return. Developing an
investment forecast in advance of delivery is simply
the definition of the budget, a relatively straightfor­
ward exercise in any organization. The more difficult
variable for this prediction is the “return” forecast.
Management will ask the marketing scientist to look
at the data for the answer, but of course, when the
return is being generated by activity that has never
been tried or measured, there will actually be no
directly relevant data on which to base an estimate.

In such cases, the marketing scientist may make pre­


dictions based on data that seems similar to the case
at hand and hope the basis for those predictions was
sound. But as the name of this stage suggests, the
better scenario for the truly data-driven marketing
organization is to develop a set of prescriptions built

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on informed expert opinion — an array of options


each with a range of possible outcomes. These prob­
abilistic prescriptions for drivers of performance
should be defined as hypotheses which may then be
tested to develop evidence about the initial theories
around drivers of performance for our emergent
and previously unmeasured circumstances.

The data-driven organization is not willing to make


a final decision from guesses or the gut-instinct of
top decision makers. Unfortunately, many organiza­
tions do still operate this way, particularly when it
comes to marketing decisions, though readers of this
book can help to change that. Also unfortunately,
organizations will often try to make the data they
do have fit the solution they’ve already decided (by
instinct) they want to pursue, regardless of the
validity of that fit.

The benefit of testing and optimization and the pre­


scriptive level of digital analytics is that it relieves man­
agement of the requirement to guess about the right
approach, and thus run the risk of guessing wrong.
The short average tenure of CMOs is the direct result
of the consequence of being the chief decision maker
in a discipline ruled by instinct, guesses and more
recently, an effort to decrease guesswork by applying
data about apples to problems about oranges.

CMOs and their senior managers need to admit


when the data they have is not applicable to the
problem they are trying to solve, then they need to
generate that data through testing. The hypotheses
they test may be developed from the data they have
through descriptive analytics, but the data on which
they ultimately base their decision will emerge from

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a carefully conducted approach to developing pre­


scriptive analytics. The methods for this level of the
analytics pyramid through testing and optimization
will be discussed in Chapter 6.

Predictive Analytics

The insights we develop through our descriptive and


prescriptive analytics will result in the emergence
of “rules” around certain outcomes. For example,
through observation and experimentation it may
emerge that people in Segment A tend to move with
higher success from the consideration to the purchase
stage of their decision process after viewing a type of
video, and that a reminder email to those who did not
convert during the visit in which they watched the
video can prompt a large number of those to return
and convert. We may find that for those who have not
given an email, a Facebook post showing the product
they viewed is the right method for pro­ mpting a
higher than average return for conversion. We may
have tested various periods of time to wait before
sending the email or Facebook post and established
sub-segmentation for (1) those for whom a reminder
in 1–2 days is most effective, (2) those for whom a
second reminder is effective, and (3) those who were
apparently not as interested in converting as their
view of the video suggested under our initial model.

The understanding of these rules in all of their spe­


cific contexts provides the basis for the development
of predictive models. These rules may be applied as
the training data set for planning and forecasting,
offering relevant data to ROI forecasts and other
predictive performance models. They may also be

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codified into the “programmatic” delivery of the


marketing experience through emerging tools such
as Demand Side Platforms (DSPs), Real-time Buying
(RTB) of media, and Marketing Automation soft­
ware. In each of these platforms, the general rule for
the best approach to drive any user through to a
conversion is established from the data and coded to
be followed whenever a user matching the right cri­
teria appears in the right circumstances.

Following our example above, if the system recog­


nizes that a visitor to the landing page belongs to
Segment A, it will programmatically fill a prominent
spot on the page with the right kind of video. Our
data collection should record if the video was
watched, and whether the call-to-action (CTA) to
convert was then followed. If the visitor did not con­
vert in that session, the Marketing Automation sys­
tem will begin the countdown to the follow-up
contact, will identify whether the follow-up will be
through email or Facebook, will send then appropri­
ate follow-up at the appropriate time, will record
whether the desired outcome occurred, and will pro­
ceed to the appropriate next step.

Everything that occurred above was based on a series


of predictions about the best next step to drive to an
outcome, and the basis for those predictions is the
data collected through our descriptive and prescrip­
tive processes. Through the technologies described,
marketing scientist may now predefine a stagger­
ingly large set of step-by-step rules to be followed
under an equally large set of circumstances for any
number of types of digital users.

The limitation on the application of predictive ana­


lytics to drive optimal marketing delivery is not one

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of models or technology — these exist. The limita­


tions are with data. If marketers do not have suffi­
cient contextual insight, research into segments and
paths, and tested hypotheses about previously
untried approaches, the predictions about what is
best to do next in any given case will be developed
from an incomplete understanding of the problem
and all possible solutions, and as such, may predict a
“best” path that misses better alternatives. Good pre­
dictive modeling requires contextualization of per­
formance around the target objective, and good
research into segmentation and the paths of those
segments from point to point through their engage­
ment with the brand.

Feeding historical data into a tool that will act auton­


omously against predictions it makes from that data
can be a benefit to the business when the data is good
and the predictions are accurate, or it can be an auto­
pilot system that drives marketing results straight into
the side of a mountain through a series of bad deci­
sions built on the rules it established from the data it
was given. In other words, marketing scientists should
seek to build predictive, programmatic marketing
around as many decisions as the data warrants, but
the limits of the data should be well understood, and
efforts to extend the limits of the data should be rec­
ognized as an ongoing pursuit. This pursuit involves
a constant cycling of the results from predictive deliv­
ery back into the front-end of the descriptive process,
to proceed through contextualization, research and
testing to a new set of improved predictions. Much of
this cycle will be conducted by the marketing science
team. But increasingly, some of this cycle can be con­
ducted without human intervention, through machine
learning techniques that define our final level in the
analytics pyramid: adaptive analytics.

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Adaptive Analytics

Adaptive analytics do exactly what the name implies —


they transform descriptive and predictive data to
information and allow the experience being deliv­
ered through digital channels to adapt to the best fit
for any specific digital visitor in context based on that
information.

Adaptive analytics are an extension of predictive ana­


lytics, with the chief distinction being the application
of machine learning algorithms to drive the adaptive
delivery of digital experiences. Machine learning
algorithms start with the predictive models devel­
oped in the Predictive analytics stage, and with each
new data point they automatically and continuously
refine and diversify those models to deliver better
predictions around ever increasingly specific con­
texts. With machine learning, the “rules” that guide
predictions are not fixed into place until a new
model is developed by an analyst. Instead, a com­
puter is given the initial model as a starting point and
is then set free to adjust that model to optimize some
key objective it has been assigned to maximize.

When this more fluid and adaptive form of modeling


is coupled with integrated data, common customer
segmentation, strong content management capabili­
ties, programmatic delivery capabilities in marketing
touch-points and sound marketing strategy, the stage
is set for highly effective “real-time”, “personalized”
and “1-to-1” marketing. However, the climb up the
analytics pyramid is not an easy journey; it must be
approached deliberately and systematically.

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Chapter
THREE
The Applied Digital Analytics
Playbook (ADAP) Part One

The Applied Digital Analytics Playbook (ADAP) is a


template that guides a deliberate and systematic jour-
ney up the analytics pyramid, and can serve as the core
piece of documentation at the heart of every market-
ing science initiative. The ADAP allows the marketing
science analyst to clearly identify the problems that
data can solve, to identify the existing and needed
sources of data to solve those problems, and to delib-
erately design the collection, organization and appli-
cation of the required data to experience delivery and
to the evaluation of the results of that delivery.

The ADAP is built around four sections: (1) Problem


Definition, (2) Solution Definition, (3) Data Design
and (4) Analytics Plan. These four sections together
are designed to support communication and collabo-
ration across multiple constituencies as both a strate-
gic business communication and a marketing science
engineering plan. This chapter will take a detailed
look at the first two sections of the ADAP. Details
around how to populate the last two sections (Part Two)
will emerge as the subject of the remainder of the
book, and will be addressed explicitly in Chapter 8. An
ADAP template is available at this book’s counterpart
website (www.architectingexperience.com).

49

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3.1  ADAP Section One: Problem Definition


Business Problem/Business Case

The first section of the ADAP is focused on the defi-


nition of the business problem, on making the case
for spending the business’ time and money to solve
the problem, and on documenting the measurable
business objectives and key performance indicators
associated with successfully fulfilling that business
case.

The fundamental problem for any business is the ques-


tion of how to increase profits. This problem typically
spawns children such as ‘how to increase sales’ and
grandchildren such as ‘how to increase repeat sales’,
‘how to decrease switching’, ‘how to win back past cus-
tomers’ and ‘how to acquire new customers’. The busi-
ness problem statement in the ADAP should articulate
a problem that can be solved by the application of data
to digital marketing experience delivery, and the busi-
ness value that will come from solving this problem.

Sample Business Problem


Competitive Travel Site has the largest market share as of the end of
2013, owning 42% of the Online Travel Agency (OTA) market. Our
Company is the second largest player in the market with a 21% share.
Competitor is growing at a much faster rate than Our Company, grow-
ing by 18% in 2013 as compared to 2012, versus our 9% growth in the
same period. Also, Competitor has a 3 year CAGR of 13% whereas Our
Company has a 3 year CAGR of only 4%. To maintain or grow reve-
nues, our Company needs to focus on providing a better offering than
our competitor through understanding of our customers; improving
sales to new users, getting them enrolled in our loyalty program, and
increasing frequency and size of purchase.

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Business Objectives & Key Performance Indicators

Once we have established clear documentation of the


business problem and the benefit that will come from
solving the problem, we can then turn our focus to
the definition of solutions. Accordingly, the next
­section of the ADAP is devoted to the documentation
of Objectives and Key Performance Indicators (KPIs)
for the business in general and marketing in specific.

Objectives & Key Performance Indicators (KPIs)

Each of the problems defined in each of our problem


areas should be given a matching objective. These
objectives simply describe what we intend to accom-
plish to resolve the associated problem. Objectives
should be stated in terms that will allow them to be
measured for performance. The measurement of
performance against these objectives is conducted
through Key Performance Indicators, or KPIs.

Considering the hypothetical problems defined in


the previous section, our associated objectives and
KPIs might look like the following:

Business Objective 1: Increase new customer


acquisition.

KPIs: Total number of new visitors. New app down-


loads. New visitor purchases and basket size (see
Objective 2). Conversion rate of new customers to
repeat (see Objective 3).

Business Objective 2: Increase basket size and value


per sale.

KPIs: Number of items added to basket. Value of


items added to basket.

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Business Objective 3: Increase repeat sales.

KPIs: Total number of returning visits. Returning


visitor purchase recency, frequency and volume.
Number of items purchased by loyalty members
online. Number of items purchased with loyalty
points, online and offline.

Marketing Objectives & Key Performance Indicators

Having defined the business problem, we can now


define the marketing problem, which describes the
engagement points that can be optimized in the inter-
mediation between the business and the customer.
The marketing problem reflects the challenges that
arise in trying to solve the business problem by
addressing customer problems.

In my experience developing marketing objectives


with many different students and professionals,
I have observed that marketing objectives are often
framed around what the business wants to make peo-
ple think or do. The way in which these problems
are framed greatly influences the probability for the
success in solving these problems.

Marketers should not believe they have the capabil-


ity to ‘make’ anyone think or behave in certain ways,
at least not for long. In human exchanges, ‘making’
a person behave or think in a desired way is typically
achieved through one of two means: (1) intimidation
or (2) manipulation. While few marketers that I’ve
ever met would utilize intimidation as a tactic, more
than a few have no issue considering manipulation
to be a legitimate marketing tactic. However, these
marketers may give themselves and their intellect a bit

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too much credit, and give their customers too little


credit. The development of effective and relevant
experiences in an environment of ever expanding
choice cannot be sustained through either of these
methods. While manipulation of feelings and self-
perceptions has been a part of the marketing play-
book through the 20th century and up to the
present, the availability of multiple options and clear
alternatives for most goods for most consumers in
most developed markets along with an increasingly
sophisticated understanding of media by consumers
means there is less willingness amongst consumers
to allow themselves to be easily manipulated by a
brand’s message, particularly if their needs are not
met in the delivery or consumption of the good.
Messages, even manipulative messages, may still

Sample Marketing Objectives


Marketing Objective 1: Increase awareness of and enrollment in our
Loyalty program.
KPIs: Loyalty program sign-ups conversion rate. Below or at target on
cost per acquisition.

Marketing Objective 2: Guide new and existing enrollments toward


increased sales, satisfaction and referrals.
KPIs: Pre-booking behaviors. Booking rates by new & existing loyalty
members. Value of bookings. Loyalty customer CSAT survey. Loyalty
customer call center/online support issue/complaint rate. Referred
loyalty program sign-ups.

Marketing Objective 3: Work with IT to define and implement data


needed to achieve marketing objectives one and two.
KPIs: increased sign-up, engagement and sales conversion perfor-
mance and decreased complains from users receiving targeted and
personalized content.

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work, but only if the experience of consumption of


the product fulfills customer problems better than
any alternative. Thus, delivering a relevant experi-
ence and meeting customer needs remains the core
objective of the marketer, and the marketing prob-
lem should be tied to this objective.

You may have noticed that our objectives are not


defined around specific digital media touch-points
(e.g. web or mobile app), but are instead defined
around the problems facing the business and the cus-
tomer. Each KPI will typically be related to a specific
touch-point, but the measurement of performance
against an objective will almost always involve evalua-
tion of multiple touch-points through multiple KPIs.
Marketers often think of performance measurement
by channel, with web reporting, email reporting, paid
media reporting and social media reporting all broken
out separately. This division by channel often aligns
with the internal organizational structure developed
around digital marketing, but it is completely unnatu-
ral when considered in terms of how customers engage
with our company through digital. Customers experi-
ence our brand through a combination of overlapping
touch-points, and they engage with those touch-points
in an effort to resolve a customer problem or need.
Thus, as shown in the sample, our KPIs should be built
around needs, and our reporting should be developed
from a multi-channel measurement around the points
of engagement designed to address that need.

By explicitly documenting the problems we are try-


ing to address from multiple perspectives, and by
defining what success would look like and how it
would be measured, we have now completed the first
and perhaps most important step in preparing our

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organization to deliver good digital analytics. The


next section of the ADAP begins to define how we
plan to successfully meet those objectives, and how
data and analytics is involved in that success.

3.2  ADAP Section Two: Solution Definition

The second section of the ADAP turns our focus


from describing the problems we are going to solve
(“what”) and the reasons we are going to solve them
(“why”) to now define more specifically for “whom”
we will be solving these problems, and “when” and
“where” they will be solved. This is the section of the
ADAP that is most closely aligned with the digital
marketing strategy, user experience and design disci-
plines. The alignment to these disciplines illustrates
an important point with regard to the marketing sci-
ence analyst’s role in the digital marketing design
and development process.

The Integrated Marketing Communications (IMC)


way of thinking places understanding the customers
in the center of the marketing process, and that
understanding of the customer is ultimately data
about each customer. So it is really data that resides
at the center of IMC thinking, and as shown in
Figure 3.1, that data is coming from all directions,
and has the capability to be applied throughout the
entire marketing lifecycle.

At the top of the cycle depicted in Figure 3.1, the


collection of data from behavior and context is
driven into our central data repository. In the next
step clockwise, this data is used to help determine the
priorities for research and forecasting, and results
from that research is added to the data repository.

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Figure 3.1  
The Data-
centered Cycle

In the user experience delivery lifecycle, proceeding


clockwise, strategy and planning draw from research
and data to define the approach to be taken, from
media mix planning to user experience strategy
across those channels. The defined strategy is pre-
sented to the next step of creative and user experi-
ence design, where data about specific characteristics
of customers is critically important to build relevant
experiences that provide highly effective results. In
the next step, data is applied to target and personalize
the delivery of content and experience, and finally,
the performance of that experience is measured, with
that performance data defining the next stage areas
for optimization, which will in turn determine new
data collection and research needs to begin the cycle
again.

The second section of the ADAP is where we explicitly


design the solution to our defined problems by

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describing the digital experience we plan to deliver.


As shown previously, the definition of user experi-
ence must be guided by data. Therefore, the second
section of the ADAP is designed to guide and docu-
ment our thinking about the integration between
data and user experience design and delivery.

While data and its application through segmenta-


tion, prediction, targeting and personalization have
become a part of more developed strategic planning
and even made their way into the creative processes
of user experience design by more advanced practi-
tioners, for the most part, data in the form of statisti-
cally sound segmentation and targeting models from
digital behavioral data is still finding its way into the
creative portion of experience design. Though the
pace of the integration of digital behavioral data into
the creative design process will continue to quicken
as more and more capabilities for data in the design
process continue to emerge, this second section of
the ADAP recognizes that for the creative side of the
marketing communications endeavor, the primary
understanding of the end user/customer in our digi-
tal experiences has been and will remain the cus-
tomer persona — so section two of the ADAP begins
with the development of a centralized and common
articulation of those personas.

Personas Aligned to Customer Objectives

The ADAP’s section on personas is intended to


clearly define the customers we are seeking to engage
through our digital experience as we understand
them through primary research and secondary data
sources. Eventually, as data comes into the picture,
these personas will be evaluated and refined in the

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context of various segmentation schemas. Whatever


insight we have driving the definition of our perso-
nas, their purpose remains to provide identities for
customers through storytelling, using a narrative
characterization and backstory for different seg-
ments of customers. Personas have long been a cen-
tral component of creative planning and more
recently user experience strategy, because they allow
experience design teams to feel like they ‘know’ the
people for whom they are building an experience.

Personas are initially built from customer insights


research, so they will only be as good, and helpful, as
the research that has been conducted to understand
customers. If the customer insights research and
eventual digital data collection is designed primarily
around demographics and transactions, then our
personas will carry less power to create relevance
around customer interests and objectives. Personas
built on such limited data tend to paint pictures in
broad strokes, such as the now classic “soccer mom”
(e.g. A middle-class female aged 30–45 focused on her
children. Makes online purchases from our category weekly.)
Such broad-stroke description does not give user
experience design teams much to work with when it
comes to knowing and understanding the customer
to ensure their experience is as relevant as possible
in their specific context of engagement.

On the other hand, if our customer insight research


and digital data collection is designed to provide
insight into our customers interests, attitudes, behav-
iors and responses, and we can place all of that in the
context of different demographics and transactional
groupings, then we have the right ingredients for
comprehensive and fully-fleshed personas that will

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actually let us ‘know’ the people for whom we are


building experiences through our marketing touch-
points. Personas built from this more complete and
complex understanding of customers will allow user
experience teams to better understand the personal-
ity and motivations of the people for whom they are
designing experiences, which in turn will make for
better experiences, and better outcomes.

In addition to the inclusion of meaningful attitudi-


nal, motivational and behavioral insights built
around meaningfully distinguished demographics
and transactional segmentation, another important
aspect of a strong personas is the integration of cus-
tomer problems and objectives into the story.

Stacy, a wife of six years, mother of one young child and


graphic design professional, lives in a trendy urban neigh-
borhood in a condo she and her husband bought four years
ago just in advance of her son’s birth. On work mornings,
they all try to have breakfast together before she commutes
with her son, dropping him off at school before going to work.
She enjoys balancing her role at work with her role at home.
Stacy’s job requires her to travel once or twice a month. When
she has to travel, she is always looking for ways to minimize
the time away from her family while still accomplishing her
business needs.

Stacy is a frequent user of many loyalty programs, although


she does not travel enough to achieve status on any given
airline. The thing that really makes her travel okay is the
opportunity to apply any reward miles she can use from
flights or stays to trips with her family.

Though she occasionally uses our service to book, she also


uses competitor sites as well as she hunts for the best timing
on her travel. She is not yet enrolled in our loyalty program
because she is not aware of it. She would be very interested in

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a loyalty program that makes personalized recommendations


around her main interests in minimizing travel time and
maximizing points. She does love being able to share great
deals and interesting purchases through social media, where
she also posts frequently about family, entertainment, health
and wellness.

This persona will give the experience design team a


clear understanding of Stacy, her motivations and
interests, and her problems with the brand’s experi-
ence. As a next step, the experience design team will
now need to address the specific marketing prob-
lems and marketing objectives that will connect the
business objectives (create awareness and enroll-
ment, create loyalty for referral, increase share of
wallet, etc.) with Stacy’s interests, motivations and
objectives.

Customer Problem

When business problems are considered only from


the perspective of the business and its needs, the
solutions tend to be one-dimensional and lacking an
important perspective — an understanding of the
customer problems and objectives that correspond
with the business problem and objectives. If the
business has low sales, if they’re losing customers, if
they’re not gaining enough new customers; these are
all influenced not just by what the business does, but
equally importantly by how the customers respond to
the business and the experiences it creates. In short,
to solve its own business problems, a business must
first solve customer problems and focus on meeting
customer objectives. To accomplish this, it must
understand those customer problems and customer
objectives.

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Thus, in addition to documenting the business prob-


lem and objectives, the ADAP also documents the
customer problems and objectives related to the
business problem.

Although the understanding of customers and their


needs is central to the Integrated Marketing Commu­
nication approach, a business’ primary focus on
profits can make customer-centricity a difficult per-
spective to maintain. Quite often, when I first ask
clients or students to define customer problems,
they instead describe the problems the business has
in marketing to their customers versus the problems
that customers have that the business can solve. The
distinction between a business’ problem with its cus-
tomers and the customers’ problems for the business
is critical in that it separates strategies built around
what the business wants from its customers (‘give us
money’) versus strategies built around what the cus-
tomer wants the business to solve (‘give us solutions
that warrant us spending our money’). A typical initial
response to the request to define a customer prob-
lem would look something like this; ‘enrolled cus-
tomers are not opening the loyalty program emails
we are sending or responding to in-store loyalty pro-
gram offers.’ Although this mentions the customer,
that alone does not make it a customer problem; what
it states is not the concern of the customer, but rather
the concern of the business in engaging the cus-
tomer. As such, the prior statement is a reasonable
marketing (business) problem, but it is not a cus-
tomer problem. A true customer problem statement
would define the issues and concerns in the mind of
the consumer. The business may or may not be able
to solve these problems, but they will have no chance
of building effective experiences for customers if
they are not even aware of their issues and concerns.

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Sample Customer Problem


Customers who occasionally book with us haven’t identified sufficient
incentive to enroll in our loyalty program, while many customers
enrolled in the loyalty program do not have sufficient incentive to
actively use/manage their accounts, and many may be frustrated by
the limitations of the loyalty program’s digital experience. Specific
issues include:

· Website experience is subpar. Very busy site, crowded with many


irrelevant offers and not customized at all, even when logged in
with loyalty number,
· Mobile App offers better personalized experience during travel, but
it is not valued as expressed through low use vs. downloads.

Customer Objective 1: Be provided with a clear presentation of the


information and options that matter to me.
KPIs: Decreased site/app search activity. Increased repeat utilization
of site and app. Increased engagement with personalized/targeted
content. Response to random satisfaction survey.

Customer Objective 2: Easily earn access and use points.


KPIs: Use of mobile app during travel to earn points with affiliate
vendors. Use of website for account review/point redemption.

The Consumer Decision Journey Aligned to Touch-points

The problems and objectives for any given consumer


will evolve throughout the experience leading up to
purchase, so the mapping and documentation of
these problems and objectives should be conducted
against a process such as the Customer Decision
Journey. As shown in the CDJ diagram (first appeared
as Figure 1.2, here as Figure 3.2), we should collect
data about each decision point in the customer

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Figure 3.2  
The Consumer
Decision
Journey

decision journey for everyone who has passed through


it to help understand what is effective and what can
be improved for future visitors. I have not encoun-
tered a company that does not have records of its
sales, but I have encountered many who are missing
key information on even the most rudimentary demo-
graphic insights on who it is doing the buying. Even
less common is the understanding of who is dropping
out of the process before buying, and where and why
they are dropping out. Data collection will help us
understand all of these inputs to future strategic
planning.

As mentioned previously, perhaps more important


than detailed knowledge of the customer base around
our successful sales (after all, we now have their
money) is knowledge of the customer base around
our lost sales. At this customer decision point in the
journey, we need to understand that portion of the
market that is choosing an option other than ours, we
need to develop strong hypotheses about why that
might be, and we need to test those hypotheses with

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alternative forms of engagement targeted to those


types of consumers. While trying to understand how
to grow the share of market has long been a focus on
Market Research teams, and trying to reach them
the focus of marketing strategists, with digital data
we now have a trail of context around those poten-
tial customers who engaged with us but never pur-
chased. Readers of this book should ensure that
their organizations are integrating such data into
market research activities, and should ensure that
digital strategies include the development of hypoth-
eses and alternatives aimed at improving conversion
performance amongst those who had previously
chosen another option.

The alignment of the experience journey to touch-


points if often best conceptualized and expressed
through an experience map, which aligns the design
of the digital experience in terms of graphic presen-
tation, copy and user experience with the touch-
points assigned to each stage of the user experience
for each unique set of customer segments or personas
and their objectives in each stage of the journey.
As we documented the decision journey for each
segment as detailed above, we will have also defined
the touch-points (e.g. digital ad, sponsored post,
email, website, app, etc.) that will potentially be
engaged throughout each step of the journey. With
the experience map, we align each creative and user
experience asset that will be delivered through the
experience with a specific (or set of specific) cus-
tomer segment/persona + stage + channel combina-
tion. This methodological alignment of every
component of the experience with a specific segment
at a specific point in the journey helps marketing
management ensure three benefits.

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Benefit One: That the initial investment in the pro-


duction of creative assets is based
around clearly defined and measura-
ble objectives, with a clear hypothesis
about why and how each creative/
media mix approach will meet those
objectives better than any alternative.

Creative design for marketing has always been the


‘sexy’ side of marketing, and the first thing people
think about when it comes to advertising. In a new
business pitch by an agency, it is typically the creative
that wins the business, and throughout the industry,
it is creative execution that wins agencies and brands
awards and recognition. The Super Bowl has long
been the premier example of brands spending huge
amounts of money to try and one-up each other
around outrageously ‘creative’ and entertaining
advertisements with the primary objective of receiv-
ing publicity and recognition for having produced a
top Super Bowl ad, and without much regard for
whether the ad delivered a better ROI than other
marketing alternatives.

Somehow, the decision process around the approval


for creative delivery — which composes one of the
largest costs for marketing — remains one of the
most subjective and arbitrary aspects of marketing.
The CMO’s approval of a creative option versus
alternatives is seldom a data-driven decision. Instead,
this decision typically involves a dependence on the
expert subjective opinion of in-house and agency
strategists and creatives, along with the occasional
dollop of personal preference. Often, the expert
opinions upon which these decisions are made are
motivated more by an interest in recognition and

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award winning (and of course agency’s billings) than


they are on the relative potential for each option to
deliver the greatest results for the lowest associated
cost. In other words, the most sexy and ‘award wor-
thy’ marketing tactics may not be the most effective
for delivering relevance and optimal user experi-
ence throughout the Customer Decision Journey.
More importantly, most CMOs still have no way of
proving this assertion as either true or false. But
wouldn’t the CMO who had that type of data for
decision making have a distinct advantage over com-
petitors — not in the realm of vanity awards, but in
the arena that matters to the business — in deliver-
ing relevance to customers and reaping the results.

By requiring that each component of each creative


recommendation be mapped to customer and mar-
keting objectives for specific segments at specific
stages of the CDJ, marketing management can
ensure that their campaign and channel mix is
addressing the right markets across all of the stages
of the CDJ, and not just seeking broad public aware-
ness of the ad (regardless of delivering resulting
outcomes) or focusing generally on acquisition at
the ‘top of funnel’ that is so typically the primary
focus of marketing. Marketing management can also
have a clear explanation of the basis for creative
options with regards to their potential to deliver
measurable results against defined objectives. While
winning awards and publicity for creative may still be
a valid marketing objective for some marketing
efforts, marketing management can at least make
explicit the portion of the budget that should be
spent to achieve this goal, and can understand what
type of results they should expect from the creative
work and subsequent engagement by customers

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through the CDJ that will be generated from the


remainder of their budget.

Benefit Two:  That thanks to this explicit definition


of objectives, we can effectively assign
Key Performance Indicators (KPIs) to
measure the performance of each crea-
tive/content aspect of the digital experi-
ence in delivering results against those
creative design hypotheses and their
corresponding performance objectives.

By enforcing the methodological alignment of every


component of the digital marketing experience with
a specific segment at a specific point in the journey,
marketing management requires that the basis for
creative and UX design decisions be based on an
evaluation of outcomes and the formation of hypoth-
eses about what will best deliver those outcomes
(Benefit One). By enforcing the definition of meas-
urable Key Performance Indicators against each of
these objectives, marketing management is able to
articulate what kind of results the company should be
seeing from each channel, for each type of customer,
at each stage of the customer decision journey. As we
will discuss in details in subsequent chapters, this
provides the foundation for cross-channel customer-
centered performance measurement.

The generation of publicity and awareness through


high-profile advertising is a fine marketing objective
for any company that can afford it. The generation
of leads or completion of purchases are also fine
marketing objectives. With any marketing objective
(and business objective, and customer objective),
what we want most from our objectives is that they

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are explicitly defined and documented, and that


they have an associated set of key performance indi-
cators to guide their measurement. This book does
not argue that every marketing activity should be
measurable in terms of revenue and ROI, but it does
unquestionably argue that every marketing activity
should be measurable since ultimately, there can be
no truly effective management without measure-
ment. By requiring that creative decisions are based
in clearly articulated hypotheses about what makes
them effective in specific contexts, and by defining
the KPIs that determine effectiveness, marketing
managers are well on their way to being able to
deliver not just optimal channel mixes, but also opti-
mal content through those channels.

Benefit Three: Thanks to this measurement, we are


able to continue and optimize crea-
tive and UX designs that are work-
ing, and stop expending budget and
effort on those that aren’t working.

With all of the data available to marketers, there is


absolutely no reason that hunches, guesses or opin-
ions should ever be the primary basis for a market-
ing decision. Not only is there data available to
provide data-driven guidance or direction at the
start of any decision making process, there is even
more data available around the performance result-
ing from prior decisions, and around the options
available to either extend positive results or fix nega-
tive results. The benefits of objectives-oriented crea-
tive production ensure that the creative, content and
overall user experience has been designed to deliver
measurable results against clearly defined objectives.
Because we know what to measure, and have

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expectations around the results, through real-time


measurement we are able to identify issues with the
experience as they arise, and we are able to quickly
develop and apply new hypotheses about what will
improve performance through methods which will
be discussed in subsequent chapters.

ADAP Part One Summary

The first half of the Applied Digital Analytics Plan is


focused on carefully and comprehensively articulat-
ing the reason we are bothering to collect and ana-
lyze marketing data. Without this important first
step, we will not have a clear and common organiza-
tional understanding of what we should be measur-
ing and analyzing. Without this first step, we increase
the likelihood that our approach to data collection
will be haphazard, siloed and inconsistent across
channels. Without this first step, we lack the vision of
how data can be converted into insights and applied
to contextualization, anticipation, targeting and per-
sonalization of omni-channel experience for multi-
ple segments/personas. This first half of the ADAP is
where we are able to make a compelling business
case for improved data collection and analysis,
grounding that case in a discussion of the business
objectives we can meet through our improved
approach to marketing science and analytics.

Before discussing the second half of the ADAP,


which focuses on design of our data and its reposito-
ries and the specific ways in which we apply that data
to experience delivery, the following several chapters
will discuss the ideal application of marketing tech-
nology for data collection, analysis and experience

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delivery for businesses of all sizes. As we leave this


chapter, it is important to recognize that an organi-
zation’s capability to reach the ideal applications of
data and technology that you will read about will
very much depend on the extent to which they have
gone through the strategic thinking and collective
articulation of customers and their objectives, digital
experience vision and business and marketing goals
as outlined in the first half of the ADAP.

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Chapter
FOUR
The Changing World
of Owned Media

As discussed in Chapter 2, owned media are those


channels in which a brand has complete control over
access and content. Email was the first digital owned
media channel to gain interest for marketing uses,
and the corporate website — which quickly followed
email in adoption — is still typically the most promi-
nent owned media channel for brands. Web-based
landing pages, online tools, mobile-optimized web
sites and mobile apps are all owned media channels
that can play an important role in a brand’s digital
marketing strategy.

In fact, the increasing shift of digital media consump-


tion toward mobile access and the prominence of
social media is creating a challenge to the corporate
website’s traditional role as the centerpoint of digital
strategy. Designing for mobile access means rethink-
ing the structure and presentation of content. And
social media means a decentralization of the brand
message in the digital ecosystem as consumer gener-
ated content about the brand (e.g. ratings, reviews,
tweets, check-ins, and posts) becomes more promi-
nent and more importantly, more relevant (authentic)
in the eyes of digital consumers.

71

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This returns us to the central theme of digital analyt-


ics for digital marketing; that relevance drives results.
While owned media channels offer brands the
strongest opportunity for driving business results,
they also run the risk of being so oriented around
obtaining business results that they overlook user
objectives and user experience. Email is an excellent
example of this problem; brands believe they have
direct access to a customer through this channel,
and use it in an effort to guide customers into fulfill-
ing the businesses objectives. However, most digital
consumers have too much email to deal with flowing
through their inbox, and any message that doesn’t
clearly stand out as relevant to fulfilling an interest is
not only something to ignore, but is potentially an
annoyance that erodes rather than builds the rela-
tionship with the brand.

Corporate websites are not nearly as intrusive as


email, and so avoid the risk of working at odds with
their intended objectives. Websites are typically only
accessed through intentional effort on the part of
the user, which means the people who are there
actually want to be there. In this context, the issues
facing corporate websites are two-fold:

1. Not as many people are intentionally seeking out


brand websites as review sites and social media
content now also influences consideration.
2. Of those who do come to the website, it may not
provide what they were looking for.

There’s not much that brands can do about issue


one other than recognize this fact and adjust their
digital marketing strategy appropriately (using tech-
niques we will discuss in the beginnings of Chapter 6).

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This is simply a trend in digital media consumption


arising from the increasing preference for digital
content consumption through social channels and
on mobile devices. And recognizing and adjusting to
this fact is not a trivial effort; the implications of such
an adjustment extend to adjusting budgets and strat-
egies around the website, paid search, display adver-
tising, email, social and mobile.

The second issue around delivering relevance


through the website to those who have sought it out
is something fully within the brand’s control, and
web analytics will be the tool that delivers relevance.

4.1 Web Architecture & Web Data Collection


The history of web measurement over the last two
decades, which takes us from log file analysis on the
earliest websites to today’s sophisticated analytics
tools, shows that even though the development of
web analytics technology has come a long way, it is
still not yet a perfect science, and will likely undergo
more changes as the role of the website and the
nature of engagement with websites continues to
evolve.

Understanding web measurement requires an under-


standing of web architecture. Figure 4.1 is a general
representation.

When the browser on our computer, tablet or phone


gets directed to a website, the browser sends a
request to the web server hosting that website. The
web server receives and processes the request, and
returns the code and content that defines that web-
site as a result of processing the request.

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Figure 4.1 
Web
Architecture

Modern browsers like Google Chrome make it pos-


sible to observe the responses from a web server
being sent to a browser as a result of an HTTP
request.

Figure 4.2 shows a partial list of the content sent as a


result of navigating from the home page to a sub-
page of a website. The content types sent from the
server and received by the browser includes HTML
defining the structure and content of the page, CSS
(cascading style sheets) defining the look of the
page, images, and JavaScript, a programming lan-
guage which builds richer interactions into the page
by allowing certain aspects of information process-
ing to be conducted and stored in the browser
(client) as opposed to needing to be processed
­
through an HTTP request/response exchange.

The JavaScript content mentioned above deserves a


moment of special attention because of the role it
played in transforming web analytics. Prior to the
introduction of JavaScript for the web, web analytics
were built upon information collected on the back-
end of each web transaction, in files called “weblogs”.
Each time an HTTP response was sent, information

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Figure 4.2    Chrome Network Tab
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about the request received and corresponding


response provided were captured in these weblog
files, and anyone wanting to analyze what type of
transactions were happening on the site could pull
up these weblogs to categorize and analyze the his-
tory of HTTP requests and responses. In 1993, the
first true web analytics software was launched to
allow easier out of the box analysis and reporting on
weblog data. That company, Webtrends, continues
today as one of the web analytics software leaders,
although they have lost ground to the undisputed
champions of web analytics whose platforms are
based on client-side JavaScript; Adobe’s Omniture
and Google Analytics.

It was the richness in analytics that could be gained


from collecting data on the client side that drove the
shift from server-side data to JavaScript based client-
side applications. Before JavaScript, browsers were
relatively dumb clients; they could display what was
sent to them in terms of HTML and images, but they
didn’t do much else, so there was not much data to
collect, nor was there any way to collect it.

The latter problem of the capability for data collec-


tion was solved in 1995 when Netscape introduced
their newly developed JavaScript language into their
browser, and Microsoft adopted the language into
Internet Explorer in 1996. This adoption by the two
largest browsers suddenly made the client-side of the
HTTP transaction a potentially much more interest-
ing place for web developers, who could now make
things happen for users inside their browsers, as
opposed to on the web server. This was especially
liberating in the low-bandwidth context of the early
internet, where conducting programmatic exchanges

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with the server could potentially take minutes. By


loading the program into the browser, sites could do
things blazingly fast (in a relative sense), because the
processing was being done on the client side.

The first application of client-side analytics was the


soon ubiquitous hit-counter which proliferated
across websites in the late 1990s. The hit counter
used JavaScript to register a site visit and increment
the total number of visitors to that page in a display
on the website. While hit counters offered insight
into relative traffic across different sites, they did
nothing but provide a count, and so were not useful
analytics in and of themselves. What was useful was
the idea of capturing data about a visitor’s activity on
the website using JavaScript, and it was this idea that
in 1996 spawned a company named Omniture,
which today, as a part of Adobe, stands as one of the
leaders in the analytics space.

JavaScript was critical in establishing the JavaScript


“web tag” which, through tools like Omniture, became
the preferred approach for web analytics, but there
was one other critical piece of the client-side infra-
structure which made this possible; the now famous
(or infamous) “cookie” protocol, which was also
developed by Netscape, and actually preceded
JavaScript as an aspect of the browser, having been
integrated into the Netscape browser in 1994.

Cookies are simply small data packets which are sent


over in an HTTP response and get stored on a user’s
computer through storage associated with the
browser application. This data packet can be identi-
fied as being present or not on subsequent visits to
the website that placed it (indicating prior visits),

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and can be queried by the server for other informa-


tion it might contain. This other information that a
cookie might contain is where these two browser
features come together, because it is JavaScript that
allows information about what someone is doing in
their browser to be sent to a cookie on their
machine. In essence, cookies created a space for
data to be stored on a user’s machine for later
retrieval by the web server, and JavaScript allowed
programs to be run on the user’s machine that
could send data into that storage space, all without
the user ever knowing that part of their computer’s
memory was being allocated to collecting informa-
tion about them.

It was this stealth commandeering of web users’ com-


puters functionality that caused an initial alarm
about cookies to rise once people became aware of
them around 1996, and that keeps them controver-
sial to this day. For the purposes of this discussion, it
is enough to note that the controversy over cookies
has increased enough that alternative data collection
methods are becoming important for organizations
to consider.

It’s not just the cookie controversy however that


should be causing companies to rethink their web
analytics approach. There have always been data-
fidelity issues inherent in client-side tracking, the
most predominant being the inability for cookies
and tags to recognize that several different people
are sharing a browser. Web cookies are also only as
good as their implementation — putting a cookie in
the wrong place or structuring it in the wrong way
can cause under-collection or over-collection of
data.

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But perhaps the most significant limitation of client-


side web analysis is the inability to trace a unique
user across the multiple devices (work and home
computers, tablet and phone) they are likely using to
access the website and/or apps. Without help from a
unique user ID that unites visits from multiple
devices under a single visitor record, this one per-
son’s series of visits will appear in the web analytics as
several different visits from apparently different peo-
ple. As we will see, this means that the true ‘journey’
of these customers from their first interaction
through a desired conversion may not be captured
correctly, as different steps in the journey are attrib-
uted to different anonymous users.

4.2 Client-side Tagging


Of course, none of these issues mean client-side tag-
ging is not a valid solution; it is and will remain one
of the best methods available for collecting data
around web traffic and behaviors. The issues and
limitations mentioned above must be recognized
and addressed by the web analyst as part of their web
analytics methodology, but first, good data collection
through client-side tagging should be established.

Software Solutions Overview


The major players by popularity and name recogni-
tion in client-side web analytics are Adobe’s Site
Catalyst (formerly Omniture, now part of the Adobe
Marketing Cloud) and Google Analytics. Other strong
and commonly used solutions include IBM’s Digital
Analytics (formerly Coremetrics), and Webtrends.

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Adobe’s Marketing Cloud Web Analytics is also com-


monly referred to as Omniture and/or Site Catalyst
(which are respective the legacy company and appli-
cation that were integrated into Adobe). Adobe’s
web analytics offering continues to improve, and is a
very powerful and versatile application. However,
the primary take-away heard around Adobe’s offer-
ing is the steep learning curve. For example, the out
of the box implementation has been improved in
recent years, but software coding skills are still
required to make the most of an implementation.
Also, more advanced data management will require
the purchase of support hours from Adobe client
services to establish VISTA rules (Visitor
Identification, Segmentation and Transformation
Architecture). The learning curve applies to report-
ing as well. The out of the box dashboard gives
standard descriptive metrics, and more advanced
analysis of the data is available through the Ad Hoc
Analysis and Data Workbench modules. While these
tools also have a somewhat steep learning curve,
once learned, they offer some of the best capabilities
for cross-channel reporting and historical data analy-
sis available in any measurement suite. Adobe’s fully
integrated segment manager and testing platform,
and their increasingly integrated social platform,
round out this solution.

At the opposite end of the learning curve sits Google


Analytics (GA). GA offers a simple tagging syntax and
relatively intuitive dashboards and reporting that can
focus on acquisition, behavior and goal completion
(including ecommerce goals). With less technical
know-how and/or client services support than is
required by Adobe, GA also offers segmentation and
attribution analytics. (In the free version these are
based on statistically valid samples of the data.)

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Metrics from Google’s vast array of digital advertising


offerings are readily available, and Google’s inte-
grated “Experiments” module allows testing and tar-
geting from this solution as well. GA also offers an
Application Programmers Interface (API) allowing
data to be retrieved from Google’s servers for use in
external applications. While utilization of this API
requires a very capable software engineer, it allows for
historical data analysis and cross-channel analysis for
those GA users who have such needs.

IBM’s Digital Analytics (formerly Coremetrics) web ana-


lytics solution is receiving more attention in the web
analytics selection processes, thanks in no small part
to its direct integration with the popular IBM Unica,
TeaLeaf and Silverpop applications, all of which have
dropped those former names and become inte-
grated aspects of IBM’s digital marketing suite. The
analytics application is a solid solution in its own
right, with a straightforward tagging syntax, built-in
segmentation and very good pathing and heatmap
analysis in the dashboards. While IBM for web analyt-
ics is less well known than the two leaders mentioned
above, their array of complementary marketing tech-
nologies and established presence in most IT depart-
ments makes them perhaps the most fully integrated
solution with a suite of technologies that can drive
comprehensive owned-channel marketing automa-
tion. While this focus on owned-channel (web,
mobile, email, CRM) integration and automation
continues to evolve, IBM has traditionally given less
focus to integration capabilities with channels such
as social and paid media, although this may change
with additional acquisitions.

Webtrends, the first technology to come to market


with a dedicated web analytics platform, continues to

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perform as a leader in this space. Webtrends offers an


open data architecture to clients, making web analyt-
ics data accessible across the organization, and has
built-in social and mobile measurement capabilities
to align with web metrics. Webtrends’ technology spe-
cializes in instantaneous analysis of in-session data,
and correspondingly offers a strong array of conver-
sion optimization capabilities built around segmen-
tation, testing, and data-driven targeting. In addition,
Webtrends understands the digital marketing lifecy-
cle, and typically delivers its implementations in
conjunction with services that align owned-channel
data with email and paid-media retargeting. Webtrends’
services group also offers specialized approaches for
retail, travel and finance, all of which makes them a
favorite of ecommerce websites.

Implementing Page Analytics

For the purposes of understanding how client-side


tagging works “under the hood”, we will use GA as
our platform since it is the only platform that will
allow you to actually try everything explained here
for free.
Figure 4.3
Web Analytics All of the client-side solutions mentioned share a
JavaScript
similar architecture (Figure 4.3) for data collection:

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One or more snippets of JavaScript reside on each


web page. Another JavaScript file residing on a web
server channels information collected from the page
to data storage, which is typically hosted by the web
analytics application.

The standard JavaScript “tag” for GA is shown below.


This “tag” would be pasted in the <head> section on
every page on the site. Typically this is accomplished
by placing this once into a “header” module that is
served to each page as it is rendered through a
Content Management System (CMS).

1. <script>
2. (function(i,s,o,g,r,a,m){i[‘GoogleAnalyticsObject’]=r
;i[r]=i[r]||function(){
3. (i[r].q=i[r].q||[]).push(arguments)},i[r].l=1*new
Date();a=s.createElement(o),
4. m=s.getElementsByTagName(o)[0];a.async=1;a.src=g;m.
parentNode.insertBefore(a,m)
5. })(window,document,‘script’,’//www.google-analytics.
com/analytics.js’,‘ga’);
6.
7. ga(‘create’, ‘UA-10101010-0’, ‘imcanalytics.com’);
8. ga(‘send’, ‘pageview’);
9. </script>

Lines 1 and 9 above are the opening and closing


indicators to the webpage that JavaScript is begin-
ning and ending. Lines 2 through 5 send informa-
tion to the file on a google server listed at the end of
line 5. Line 7 contains the GA ID and URL for your
site, and line 8 tells GA to increment the “pageview”
metric each time it receives this data (so on each
view of a page containing this code).

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Implementing More Detailed Data Collection


This introduction to web analytics will now touch
briefly on two other types of “tags” that are com-
monly used in web analytics, the “campaign” tag and
the “event” tag.

The pageview tag discussed above will first be fired for


each visitor as they enter our site. All web analytics
platforms have the built-in capability to tell us some-
thing about where that visitor is coming from. Did
they click in from a search engine? Were they referred
by another site? Did they enter from social media?
From a digital ad? From email? Web analytics plat-
forms will answer all of these with general regard to
the “channel” from which the visitor is coming, and
where possible, will provide the URL of the referring
site. Standard metrics will also tell us the type of
browser and device, the geography and network of the
visitor, and other interesting distinguishing variables.

What we won’t know about many of the referring


channels is whether our marketing efforts had
­something to do with the referral; that is unless we
implement a campaign tracking tag. Knowing that
someone came from email or a paid display ad is a
start, but to have the data that will allow us to better
understand our performance and continually opti-
mize our strategy and delivery, we will need addi-
tional context around that click. Was there specific
content in the email that drove the click? Which
digital advertisement brought in the pageview from
paid media? These are the questions answered by a
campaign tag.

A GA campaign tag is simply a string of code that


is appended to the end of the URL that drives

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people from the external source to the targeted


web page.

http://www.yoururl.com/?utm_source=loyalty_letter_a&utm_
medium=email&utm_content=1_2015_update&utm_campaign=tech_
savvy

In the code you see the URL to our site, then follow-
ing the / a question mark preceding several utm
codes. Each of these utm codes corresponds to a
variable in GA reporting, which become populated
with the data following each = sign (and preceding
the next ampersand) when a visitor arrives at the site
through this link.

We will discuss this tag in more detail in Section 4.4.


For now, we can see that the tag above will tell me
that the user who has arrived through this link was
sourced from a loyalty program mailing via the email
medium with a January update for our tech savvy
customers. Every referring source that you’ve estab-
lished as part of your marketing efforts can carry a
unique code that allows you to 1) respond in real-
time to the source of your visit and the context that
provides, and 2) analyze your marketing efforts
within and across channels through campaign seg-
mented performance reporting.

While the code above told us about email, a different


campaign code attached to a paid display campaign
built around retargeting would send different varia-
bles. For example, the next one tells us this visitor was
sourced from an ad network. In the real world, we
would ensure that we have programmatically received
information on which ad network. We would see this
was delivered through the Cost-per-Click (CPC) ad

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medium and was delivered through our retargeting


campaign.

www.imcanalytics.com/?utm_source=ad%20network&
utm_medium=cpc&utm_campaign=retargeting

Campaign tags are thus an important piece of data


collection for giving us more granular data on how
visitors are arriving on our site. Each analytics plat-
form will have its own methods for formatting these
tags which will be outlined in their document.

While campaign tags tell us something about what


was happening before the visitor arrived, the next
thing we’d like to understand is what is happening
after the visitor arrives. For this we turn to event tags.

Event tags are JavaScript tags for data collection that


are placed around a page in any place where a visitor
might do something that we want to track. This
JavaScript can be placed multiple times in-line with
the event and fired on occurrence of the event,
which is what we will see, or it can be placed one
time in a “listening” mode which will dynamically
collect and transmit relevant information when cer-
tain pre-defined things happen on a page. This latter
approach will require more help from a developer,
but is the standard approach for complex pages and
through suites like Adobe Web Analytics.

A simple GA (Universal) event tag is shown below:

1. <a href=“../book”
2. onClick=“ga(send,‘event’,‘Engagement’,‘Link_
Click’,‘strategy’);”>
3. See The Book</a>

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In line one of the code above we are simply giving


the browser an HTML instruction (<a>) to create a
hyperlink to the ‘book’ page of our website.

The second line of code above is where our JavaScript


snippet kicks-in. It says that when a user clicks the
link we’ve just created, we want to access the master
GA Javascript from this page and tell it to track this
event. We will pass along some data; the type of event
was engagement (with content), the action taken was
a link click, and the action happened in the ‘strat-
egy’ content section of the page we were on.

The information passed into our web analytics from


an event tag will allow us to group and sort reporting
on our visits by each of the variables passed. We can
compare different types of actions taken on our site.
We can see which types of content drive certain
actions. We can follow a trail of actions to see if it
leads to our objectives for the site (such as placing an
order). Each of these dimensions of analysis can be
further evaluated through the data from our cam-
paign tracking to tell us how different sources of
acquisition to the site result in different events and
outcomes. Finally we will want to add even more con-
text through segmentation — the understanding of
who these people are who are taking each of these
actions.

4.3 Tagging Design & Deployment


As mentioned in Chapter 2, establishing good data
collection takes time, planning and effort. Without
these, data collection will be added as an after-
thought, if at all. In most cases, poorly designed data
collection is actually worse than having no data
because it drives decisions from a false or faulty

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sense of understanding. Ensuring that decisions are


being made from good data requires investment, but
it is an investment that will pay off immensely
through your ability to make informed planning
decisions, understand the value of outcomes, and
optimize engagement.

Tagging Approach: Annotations & Tag Matrix


Because what we tag and measure on the website (as
in any channel) should be based upon our objectives
and KPIs, and will be implemented against a designed
experience, the definition of a web tagging strategy
begins with the completion of the first half of the
ADAP.

The actual implementation of web analytics tagging


is done by software developers, so the documenta-
tion around our tagging will require clear communi-
cation of our requirements. The ADAP will have
defined the objectives and KPIs as well as the experi-
ence map around those objectives, and by the time
we are ready to document our tagging approach, the
design team will have converted these into wire-
frames of the user interface in the web or even com-
prehensive designs (“comps”) that include the
creative treatment that will compose the final design.

These wireframes or ‘comps’ of the planned


experience provide the platform for our tagging
­
documentation. Figure 4.4 shows an example of a
wireframe.

The first step in our tagging documentation is to


assign a unique ID, usually just a number, to each

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Figure 4.4 element of the page that will receive a tag for data
Wireframe collection, beginning with the page itself, which will
receive a primary “page view” tag. Once we have
assigned numbers to each element we will tag, we
will ensure the design process has maintained and
delivered documentation around the objective(s)
and KPI(s) associated with each element of the page,
and we will need to add these when they have not
been included in the experience designs, or are not
clear. This documentation of KPIs will be used when
we design our reporting around experience
objectives.

With the elements of the page that will be tagged


now identified, numbered and defined in terms of
Objective and Key Performance Indicator (KPI), we
begin assigning the actual tags to each element in a
document called a “tagging matrix”. The exact syn-
tax for tagging will depend on the web analytics
platform we are using. However, regardless of the
platform we are using, the information we convey to

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Figure 4.5 our technology team for tagging will remain the
Tag Matrix same. In this matrix, we need to convey the informa-
Excerpt
tion we want sent from this page to our reporting
system when the tag is triggered. In terms of the
ADAP, this type of information flowing back from
the experience to our database is called output, as it
is the output generated from engagement with the
experience.

A portion of a sample tagging matrix for GA


(Universal) might look like Figure 4.5.

In Figure 4.5, each of the ID’s corresponds to a por-


tion of the page on a wireframe or comp, so the
developer can confirm that they are placing this
tag, which is really just a snippet of code, in the
right area. The second column in the figure above
provides the tag itself. As mentioned, there are sev-
eral ways that tags can be implemented. These GA
event tags are configured for inclusion with a sim-
ple “onClick” or other event command in the
page’s HTML at the appropriate place. Check the
documentation for your specific measurement
platform in consultation with your tech team to
­

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determine the best way to implement tags for your


experience.

Looking carefully at the table above, you will notice


that portions of the tags are defined with sharp
brackets “<>” around them. This is a method for
notating portions of the tag that will be generated
dynamically when then tag is fired. So looking at line
2 in Figure 4.5, we see that when this tag is fired
through a user’s action on the webpage, the web
analytics database will receive a record of the cate-
gory in which we want to group this action (“deepen-
ing” as the objective met), the action taken in terms
of this deepening (a click on the “Things-to-Do” call
to action), and a dynamic piece of information tell-
ing us which particular suggested thing to do was
clicked.

Adding Other Tags


The tags we add to our webpage will likely not be
limited to just our web analytics tags. For example,
Paid Media solutions (media agencies, ad networks,
exchanges and Demand Side Platforms) often utilize
tags to help identify how specific paid media impres-
sions are performing against page objectives.
Marketing Automation solutions also utilize tags to
support the tracking of users across platforms for
personalized experience delivery.

The tagging matrix provides us with the right doc-


ument to capture these additional tags in addition
to our web analytics tags. We will document these
tags in the same way we document web tags; by

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associating them with an ID (either the entire page


or an element/action on the page), and docu-
menting the specific syntax that will be applied
to the page by the developer responsible for apply-
ing tags.

Tag Management
Tag management systems provide us with a way to
organize and manage all of the different tags we may
be applying to an experience from one single place.
Tag management involves the implementation of
the tag management system’s tag on each page of
the site. Once this tag is implemented, the tag man-
agement system allows multiple unique tags from
multiple systems to be loaded through this single
page management system tag.

At its simplest, tag management is simply a call on


each page to a separate JavaScript file containing
instructions for all of the tags. For example,
instead of placing the GA page tag on each page
(likely through a reusable header template),
we place it in a tag-management.js file which is
called through that same header template, and
thus dynamically populates each page with the GA
tag. As shown in Figure 4.6, this simple manifesta-
tion will reduce the clutter of individual tags on a
page. More importantly, it allows us to add and
modify tags on any page from a single location,
without having to change anything about the rest
of our site.

Examples of tag management systems include Google


Tag Manager, Signal (formerly Bright Tag), Ensighten

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Figure 4.6 and Tealium, among others. Adobe and IBM have
Tag tag management built into their solutions as well.
Con­solidation/
Criteria for determining the right tag management
Tag Manager
tool for your needs include the number and type of
tags you will be managing, the number of users who
will be managing those tags and the way you want to
manage permissions, the cross-channel capabilities
you are seeking, an IT assessment of the ease of inte-
gration with your existing systems and the level of
support you need from the technology vendor.

Implementation and Validation


As mentioned several times above, it is likely that
your tags will be implemented, either directly or via
a tag manager, by someone with the technical skill
to add them to the experience. Once the tags are
implemented, it should be the responsibility
of the analyst to validate that the tags are all ‘fir-
ing’ correctly and are providing the desired

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information about all of the experience actions


defined to be measured. This means that tags
should be evaluated in a quality assurance (QA)
environment prior to being released to produc-
tion. The need to have all tags evaluated through a
QA environment with time to validate and fix as
needed in turn requires that tags be implemented
as planned and managed part of the development
process. Unfortunately, tags are often instead added
as an afterthought once the development is com-
plete, and sometimes even after it has been moved
into a live environment. This diminishes the plan-
ning that goes into tags — delivering the bare mini-
mum of page views in most cases, and leaving
management pining for better analytics once the
need for data about the experience is recognized.
Rushing to get tags applied at the end of the deliv-
ery process may also result in incorrectly tagged
experience that fail to deliver data as planned, or
that deliver incorrect data that actually misleads
management in the decision making process. One
of the worst examples of this I’ve witnessed was a
page tag that fired each time a rotating banner on
the page changed. This error in tagging massively
influenced the number of pageviews being reported,
and falsely decreased the “bounce rates” or exits
from a single page view. The marketing manage-
ment team working with data from this site was thus
making decisions based on an entirely false view of
their web traffic resulting from poorly imple-
mented tagging. Following the ADAP process,
developing a tagging matrix and allowing time to
test tagging before the experience is deployed is
the way to avoid such costly and significant ­mistakes
in web tag implementation.

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4.4  Mobile Marketing


There are two types of mobile owned media proper-
ties — mobile websites and mobile applications, or
apps. The mobile website can a site that has been
designed specifically for the mobile experience, usu-
ally as a subdomain of the main site. Increasingly,
websites are being designed to be “responsive” to
whatever device is being used by the visitor, which
means that the same site that is served through a
laptop browser is also served through a mobile
phone, using pre-defined rules to configure itself
correctly for the given screen-size.

The mobile application is different from a website.


An app is a piece of software residing on the user’s
device that does not need a connection to the inter-
net to operate. So, while mobile website tagging can
typically follow the exact same approach as the
standard website tagging, app data collection
requires some variation to account for the periods
when the app might be in use, but is not connected
and so is not able to send data about that use to an
analytics system.

The major web analytics options listed previously all


have specialized approaches for mobile app manage-
ment, so the free GA solution is an option here too,
as is the extension of any other web measurement
solution. There are also mobile app specific options
such as Mixpanel, Flurry and Localitics. All app
measurement tools offer the ability to cache meas-
urement data when users are active but offline. The
app-specific measurement options mentioned above
do not offer anything that is not available in the web
analytics platforms, and are differentiated largely by

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their dashboards, so they are typically the option for


enterprises managing just an app. For enterprises
managing mobile apps as an aspect of a larger inte-
grated owned media mix, it makes sense to try and
extend tagging through a single system across as
much of that mix as possible. And because the only
reporting we will be concerned with from an inte-
grated standpoint is ­ user-centric cross channel
reporting, our interest in any system should be how
easily we can avoid its channel-specific dashboards
and access its data for inclusion in our centralized
cross-channel reporting and analytics.

4.5  Email Marketing


Email is the last major touch-point for our consid-
eration within the owned digital media category.
Email marketing was the earliest digital form of
marketing on the web, since the capability to email
existed before browsers, and early targeting tended
to involve selection based simply on the fact that
the recipient had an email account. As email
accounts became common, email marketing prolif-
erated so quickly and so broadly that email inboxes
had to be fit with “spam” filters and junk mailboxes
to deal with the influx of marketing efforts through
email.

Email Strategy
Of course, unsolicited junk mail through an inbox
does not meet the relevance criteria discussed in this
book, and is usually as appreciated as an unsolicited
sales call in the middle of dinner. But the practice of

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email marketing is cheap and easy, lists that promise


to be well-targeted are available for purchase, and
due to inherent cognitive bias, few marketers think
that their email will be considered junk. So despite
the fact that an unwanted email is more likely to
alienate the receiver than it is to persuade the
receiver to take the desired action (if it is acknowl-
edged at all), mass emailing is still a foundation of
many marketing efforts.

So, email marketing can quickly become a waste of


time and budget if the strategy behind it is not built
around delivering relevance in context. But with the
right strategy, it can also be a very effective part of an
integrated marketing program. Since 2012, many
platforms that had been dedicated to email market-
ing have become integrated into larger Marketing
Automation suites (e.g. Exact Target, Silverpop) with
the recognition that an email with the right content
sent at the right time in coordination with engage-
ment through other channels can be an effective
method to encourage desired conversion behaviors.

The textbook example of effective email marketing


comes from the 2012 Obama presidential campaign.
What made this email marketing program so effec-
tive was the combination of recipient segmentation
targeting and content testing, both of which were
guided by ongoing data collection and analysis.
These same three practices (segmentation, targeting
and testing) are the key to optimization in all digital
channels, but are perhaps most easily accomplished
in email, meaning there is really no excuse to con-
duct email marketing without applying these
practices.

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Effective email marketing such as the type con-


ducted by the Obama campaign focuses first on
maintaining a good list of targets, meaning we are
only going to email people for whom (1) email is an
effective channel for engagement, and (2) an email
from us will have relevance to them (if presented
correctly). Because the Obama campaign’s email
operation was focused around a single goal through
a single email team, it was able to avoid the issue of
multiple mailing across product-lines and/or over-
saturation common to some large brands and to
overly eager companies of all sizes.

These initial targets were then segmented by interest


and behavior. Some recipients responded strongly to
requests for volunteering, but were not campaign
contributors, while others gave moment but did not
volunteer. Many potential recipients had also at
some point shared feedback on their interest in
issues relevant to the campaign. This information on
prior behavior and interest was used to determine
groups who would receive certain emails, as well as
the content of the emails themselves.

With clearly defined groups based on behavior and


interest selected to receive differentiated messages,
the team then placed significant effort into the
design of that content. The Obama campaign team
had a large team brainstorming X subject line and
Call-to-Action (CTA) combinations each day. They
would select the best options to test, and begin test-
ing with small samples, eventually optimizing their
email content based on the results of those tests.

Most businesses, even large businesses, do not have


the resources to spend on this type of creative pro-
cess around email. Most businesses also do not have

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as much to gain from effective email campaigns as a


political campaign does. Organizations should
define the effort they put into any channel by the
potential returns they can gain through that chan-
nel. Many organizations are still setting their sights
too high around the expectations for email market-
ing on its own. Email strategies should set realistic
expectations around the results they can expect
from email — recognizing that email is usually only
welcome in specific contexts. With this in mind, they
should try to define how those results are improved
in concert with marketing engagement through
other channels, and should include email marketing
as a part of their orchestrated, multi-channel mar-
keting plans designed for customer decision jour-
neys, potentially applying marketing automation
software to facilitate this orchestration.

Email Data Collection


The effectiveness of email can be measured by sev-
eral KPIs. Effectiveness begins with the recipient
opening the email. If an email is not opened, there
is no way it can drive positive results. All email sys-
tems measure email open rates as a core KPI. Some
may also measure delivery (versus route to spam)
and delete without open rates. These are all useful
for pruning lists or evaluating response by different
types of recipients to different subject lines.

Email management systems also measure clicks on


links or other calls-to-action inside the email as a
core KPI, and will provide dashboards and reports
with counts of delivery, open and interaction
instances. These metrics are useful for evaluating the
email channel specific performance, but a more

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complete understanding of how email channel per-


formance contributes to customer and business
objectives is only available when metrics are col-
lected across channels, allowing them to be linked
within and across steps in the customer decision
journey.

Marketing Automation tools like Rocket Fuel should


be implemented with tags that link traffic coming
from a click in an email to activity on the website.
Such tracking can also be done for free using cam-
paign tags in GA.

Remember the campaign tag; the additional infor-


mation that is appended to the end of a URL, which
are read when the URL is used to open a page? A GA
campaign tags is structured as follows:

http://www.yoururl.com/?utm_source=loyalty_
letter_a&utm_medium=email&utm_content=1_2015_
update&utm_campaign=tech_savvy

The syntax of this string is the standard HTML GET


request syntax, with the beginning of the request
demarcated with a ? after the website URL, and with
each subsequent query string (name/value pair)
beginning with a &.

The tag above is typical of a link that might be


embedded in an email. This one would be embed-
ded in a loyalty program email, as we see from read-
ing the portion of the URL above immediately
following the URL and ? symbol defining the utm_
source to be equal to loyalty_letter_a. The

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utm_medium variable tells us this click came from


email. The utm_content variable tells us that the
content of this email was the 1_2015_update, and
we see that this was sent to our tech-savvy email
segment, possibly as part of an A/B test on con-
tent, since we see an a appended to the end of the
source tag.

With all of this information included in the URL we


embed into links and buttons in our email, we will
now have a great deal of context about the different
visits we get from our email campaign, including
which versions of different email variations are driving
more of specific segments into our site. This informa-
tion allows us to understand the effectiveness of our
efforts around channels and segments. In this way, it is
very much like the ‘event’ feedback we will have from
our web analytics. We can identify what type of content
is getting engagement, and we can associate certain
segments of users with our measured behaviors.

The next question then should be, ‘how can we use


this information about what has driven engagement
amongst a type of person to deliver more relevant
content at each next interaction?’ With email, we
have identified each person’s segment in order to
send them the right content, so when they carry that
segment value in to the site through their click URL,
we will be able to associate all of the subsequent
activity in that session with a visitor of that segment
type. But how do we maintain that understanding if
they visit again through another referring source
which is not tagged and does not give us the same
information, for example, by entering the URL
directly. Alternatively, how do we avoid seeing this

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visitor as two different people if they revisit our site


through the same link, but this time from their tab-
let instead of their laptop, since the web analytics
software will consider the different browser to be a
different person? The information we can send
through our link is limited, partly based on syntax
and also significantly because for the most funda-
mental privacy reasons, we don’t want to pass our
customer’s personal information through URLs. We
need a method to enhance information about the
person coming to our site through a link. A very
common and useful way in which this is achieved is
through the use of ‘cookies’.

4.6  Introducing Cookies


Web cookies are perhaps the best known, least
understood and most irrationally feared elements of
digital analytics. They are also one of the most useful
tools in the project of establishing relevance in digi-
tal engagement, and — as anyone old enough to
remember the flashing neon banners for stuff you’d
never buy that were omnipresent in Web 1.0 can
attest — for most people, the experience of using
the Internet would be drastically less interesting and
significantly more obnoxious without them.

In technical terms, a cookie is a little package of


information that is placed into each visitor’s browser
using instructions provided by the page. Cookies
come in two common flavors: “first party” and “third
party”.

First party cookies are pieces of data collected and


accessed directly by the website you are visiting. The
data collected through this cookie is specifically

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designed to improve the experience on that site, and


only that site, and is typically related to that site. First
party cookies will store information like your Member
ID and other details that allow the site to ‘remember’
you and apply that information about you and your
past activity when you return. Without first party cook-
ies, the experience of using your favorite sites would be
a little more tedious (log on every time), a little more
repetitious (provide the same inputs every time, and
across every device), and not nearly as personalized.

Third party cookies are the most common and most


contentious type of cookie. These cookies are pieces
of data collected and accessed by digital advertising
networks and exchanges like DoubleClick and
Yahoo!, and Data Management Platforms (DMPs)
and data resellers like BlueKai and Datalogix. Third
party cookies are used to track the type of sites you
have visited, which is typically the source of privacy
concerns related to third party cookies. These cook-
ies essentially ‘watch’ your browsing behavior, and
use what they learn for both general and specific
targeting. This tracking is ‘anonymous’ in that no
one with access to the data is able to see personally
identifying information (PII) about you, such as
your full name, social security number, credit card
number, nor are they typically even 100% certain
about your gender or age. Third party data compa-
nies use what they observe in terms of browser activ-
ity to essentially guess your age, gender, income and
interests. They use these guesses, along with your
location and the record of your activity, to help
advertisers and other content providers either target
you with new content they think will be relevant to
your context, or re-target you with a ‘next-step’ piece
of content related to a prior content exposure or

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engagement. This cookie-based targeting and


re-­targeting will be discussed in detail in Chapter 6.

When data is collected through first party or third


party cookies, the information is stored in the visitor’s
browser. To retrieve this information from storage on
the visitor’s computer, you have to know (1) the spe-
cific name of the cookie, and (2) you have to have
some way to interpret the content of the cookie. Your
browser will allow you to see the cookies related to
any site — in Chrome for example, navigate to www.
amazon.com then use your right-click (PC) menu to
select “View page info”. At the top of the resulting
menu you will see cookies belonging to amazon.com
(first-party cookies) and cookies belonging to ‘others’
(third-party cookies). This site will likely have over 20
cookies of each type. Select “Show cookies and site
data” and you will see a list of cookies by owner. Look
inside any of the folders to see the names of the cook-
ies. The select any of the cookies to see the content.
You will see that most content appears to be just a
string of random characters. These are not random,
but are encrypted so that not just anyone can make
sense of the data contained in the cookie. The string
may contain a unique ID representing you and/or
other details about behaviors and characteristics, but
without the decryption key, this will not make sense
or be useable by anyone except the owner of the
cookie. Additionally, the data in the cookie may sim-
ply be just a unique ID meant to link your session at
the time of a visit to data residing on a secure back
end system. Without access to that back-end data, the
unique ID provides no information.

Before we close the lid on the cookie jar for now, you
might be asking yourself where the “second party”
cookies have all gone. Consider what is meant by all

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of these parties in the transaction or exchange that is


occurring each time a user visits a website. The first-
party in the transaction is the site being visited. The
third-parties are all entities that are not controlled by
the site, but are ‘contracted’ by the site to indepen-
dently collect and/or provide information. In a tradi-
tional commercial definition, the second-party in a
transaction would be the buyer, or the visitor. Of
course, media likes to create its own definitions. In
media, second-party data has come to mean a type of
first-party data that is generated through a source
beyond the site publisher, but nevertheless controlled
or guided in some way by the publisher. While it is not
the publisher’s domain on the cookie, the informa-
tion collected has been shaped/customized by the
publisher, versus third-party data which is defined by
the third-party entity then provided to buyers as-is.
Second party cookies and other second-party data
only began to emerge after 2010 with the introduc-
tion and evolution of intermediating technology like
Marketing Automation tools and Demand-side
Platforms (DSPs) residing between web publishers
(first-parties) and web advertising networks and DMPs
(third-parties).

4.7 Applying Owned Channel Metrics


With our tags and cookies in place, the question eve-
ryone wants answered is ‘how can we use the owned
channel data we’ve begun to collect to improve our
business results?’ Thinking back to the analytics pyra-
mid, you’ll recall several layers of analytics. In the first
layer, the “Descriptive” layer, we conduct analysis for
performance measurement, contextualization of per-
formance and research support. These metrics may

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be evaluated in channel-specific terms, as they will


be in each of the following chapters, and in ‘cross-
channel’ or ‘omni-channel’ terms, as will be dis-
cussed in the beginnings of Chapter 6.

The next levels of analytics were prescriptive and


predictive. These layers of analytics should always be
built across all relevant channels around the cus-
tomer segments we can define from data. Our think-
ing around how to conduct these levels of analytics
and apply the results to digital strategy and tactics
will also be deferred through the following chapters
until we reach the topic of cross-channel Marketing
Automation in Chapter 6.

Descriptive Owned Analytics


All of the web, mobile and email analytics platforms
mentioned earlier in this chapter tend to provide
comprehensive analytics reporting and dashboards
for an understanding of channel performance, and
most also offer the capability to develop good con-
text around that performance and draw insights
for research from the data, including the integration
of testing capabilities that will be discussed in
Chapter 6.

Email metrics tend to be very functionally focused


around the key metrics of delete rate, open rate,
­un-subscription rate, and click-through rate. Beyond
these, email is measured as a referral to other chan-
nels within those channel’s dashboards vs. within an
email report. So while we can see the open rate and
click-through rate in our email metrics, our insight
into what happened after that click-through will
come from metrics in the channel that received the

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referral — which is typically a web landing page — as


long as we tagged the click to pass along the right
information into the receiving channel. Thus, the
descriptive analytics in an email platform are typi-
cally used to evaluate the response of different seg-
ments of recipients to all of the content that has
been sent to them, including to evaluate the results
of content tests within a segment (e.g. testing the
response to two different subject lines, or calls to
action). In conjunction with the marketing automa-
tion platforms that will be discussed in Chapter 6,
email marketing platforms are beginning to use this
descriptive response feedback to build prescriptive
recommendations and predictive targeting algo-
rithms into their platforms.

Most web and mobile dashboards provide some


­pre-defined views organized around types of visitors,
sources of traffic, and the classic stages of the
­consumer funnel through which they pass in their
consumer journey. GA has organized these as clearly
as any of the standard platforms.

Conversion metrics are the backbone of our descrip-


tive analytics, telling us whether or not our earned
channels are converting our visitors to our key busi-
ness and marketing objectives. Typically, the KPIs
associated with our business objectives will be
defined here as goals, and when possible, goals
should be assigned financial value. Aside from the
rate of user/visitor conversion to our KPIs within
any given ­ channel, conversion measurement may
also include measurement of the contribution that
other channels make in driving that conversion
through attribution measurement that recognizes
that our main or ‘macro’ conversions may be assisted

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by other channels for key ‘micro’ conversions


through awareness and consideration stages leading
up to the macro conversion.

Acquisition metrics deepen our understanding of the


sources of traffic to our website or app. These metrics
may feed performance measurement against acquisi-
tion objectives set for traffic-driving channels like
organic and paid search, email, social and display
advertising, but it should be remembered that acqui-
sition (e.g. click-through) is not an end in itself, it is
simply an initial means to the end we desire for each
visitor, conversion into our defined macro conver-
sion. As measures of performance, acquisitions met-
rics are the basis for setting and measuring channel
performance optimization against conversion goals.
Acquisition metrics also provide useful context to aid
this optimization such as comparative campaign and
keyword performance.

Audience metrics exist to provide context around


the types of visitors, augmenting performance met-
rics and supporting research in descriptive analytics,
and are critical to the segmentation and targeting
efforts that are central to prescriptive and predictive
analytics. Audience metrics typically begin with
straightforward demographic metrics of age, gen-
der and geography, and technographic variables
around browsers and devices used to access the site.
All of Google Analytics’ audience metrics are built
from what they know about site visitors based on the
Google advertising cookies each of those visitors
carries in their browser, and many other platforms
also incorporate or can at least integrate with data
from advertising cookies from multiple sources.
When this link exists, audience data also includes

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summaries of the interests and market segments of


site visitors, which can be used to develop segmenta-
tion, guide content creation, and target the delivery
of that content.

Behavior metrics will typically provide measures of


marketing KPIs, and provide critical context around
user’s interactions with the site, revealing patterns
over time around behaviors leading up to conver-
sion or non-conversion. These metrics largely fall
into the “context” and “research” sections of the
analytics pyramid, and are critical in allowing us to
develop insights into what works, what doesn’t and
form hypotheses around what might work better.

Behaviors that we measure on the site include pages


viewed as the most basic measure, and the visitor’s
interaction with pages as measured through the
events we might have established, site search and the
paths users take through the site.

Entry and exit pages are the most basic metrics of


interest around pathing. Entry pages are typically
driven by our acquisition efforts, while exit pages
are based on alignment of the experience to the
user’s needs. “Bounce Rate” is a commonly evalu-
ated metric related to exit pages, measuring the
cases where the exit page is the same as the entry
page, and thus measuring the effectiveness of land-
ing page content in encouraging deeper interaction
with the site amongst the audience coming to that
page.

The importance of considering context around


­metrics has been mentioned several times, and it
is worth noting an example when evaluating bounce

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rate. When bounce rate is high, the immediate


impulse with this metric is to conclude that the page
has a problem, and that content on the page needs
to be optimized for the audience. However, it should
also be considered that if some or all of the audience
being delivered to the page is not ‘qualified’ as
potential converters, a high bounce rate may not be
a reflection on content effectiveness, but could
instead be a reflection on ineffective targeting and
acquisition. As always, when evaluating underper-
forming metrics, all realistically possible patterns of
cause and effect to examine should be identified
and then evaluated.

Continuing this example of establishing context


around the reason for a high bounce rate, our first
area for analysis might be to look for meaningful
correlation between bounce rate and both traffic
­
source and audience type (via segments). In most
web analytics systems, from the free to the top tier
paid solution, conducting such correlation will
involve accessing the source data for some defined
period and analyzing it in a tool separate from the
web dashboard. In GA for example, this would
require using the API to pull data on segments,
sources and bounce rates into a CSV for analysis in
the statistical tool of your choice. In the Adobe
Marketing Suite for example, this can be done in the
system as long as a user has access to higher tiers of
the product capabilities.

For the purpose of understanding what we might


analyze via correlation analysis (then test for ­causality
with A/B testing before rolling out a solution),
we might start with the “Behavior Flow” view in GA

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Figure 4.7 for a visual representation of the patterns we wish to


Google analyze. The “Behavior Flow” view shown in Figure
Analytics Path
4.7, is filtered on a very basic segment of “Returning
Analysis
Users” and grouped by “Traffic Type” as seen in the
first column.

A similar view of paths through the site segmented


and grouped by any combination of dimensions can
be developed in all major web analytics tools, and
the segments and groupings you are able to apply to
the data are typically limited only by the limits of
your measurement set-up and data collection
approach.

This initial view gives us a good sense of which chan-


nels are bringing this segment to our site, where this
segment is landing through those channels, and
what happens once they land (e.g. do they bounce

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or not), but it only works for a segment-by-segment


analysis. From this we can have a sense of which
pages are causing a particular segment to bounce,
where those who do not bounce are going for subse-
quent views, and where they are ultimately exiting
after passing through the site. We might actually
even use factor analysis to look for differences in
characteristics between the portion of this segment
that bounces and the portion that passes through to
subsequent pages and perhaps eventual conversion,
and use that sub-segmentation in subsequent causal
testing.

So from this one view we have the capability to


develop significant context around bounce rate (in
comparison to non-bounce by channel per seg-
ment), but to compare how different segments
respond to the same page, we would have to turn to
a table that takes away the time-series view of behav-
ior and focuses on outcomes. Such a table would also
give us the data we would need to develop correla-
tions around segment, entry channel and bounce
rate. If we identified differences between segments,
we could then conduct causal experimentation
around both the traffic from the source channel
related to higher bounce, and the related landing
pages to help focus on specific issues in either or
both of these potential causes of bounce.

In summary, the website, the mobile app and email


constitute the core of any organization’s owned
media mix, and while the proportions of use for
each of these may be changing as trends in digital
engagement also change, some version of these
three communications methods will continue to
evolve. As people’s expectations for relevance in

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digital engagement continues to evolve along with


these channels, so too do the requirements for data
be applied effectively in establishing that relevance.
As we learned in the previous chapter, establishing
relevance that also delivers results begins with care-
ful planning, and the ADAP can be an effective
guide in that planning. In this chapter, we used the
guidelines and requirements provided by the ADAP
to begin the collection of data from our earned
media channels, adding tagging documentation to
the ADAP as we did. In the next chapter, we con-
tinue our data collection efforts with a focus on the
earned media engagement coming from SEO and
Organic Social Media.

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FIVE
Earned Media:
Organic Social & SEO

We turn now to the ‘earned’ media channels in digital:


organic social media and Search Engine Optimization
(SEO). Earned media is exactly what it sounds like:
the presentation of our brand in media through
channels not owned by us, and without buying those
exposures. Both social media and search engine
exposures also have paid options in paid social
media channel advertising and paid search engine
marketing, so it is not correct to generally view the
social media or search channels as specifically either
organic or paid. This chapter looks at the organic,
earned manifestations of marketing through social
media and search engines, and the next chapter
turns to the paid approach to both channels.

5.1 History

The lesson behind the evolution of social media


“research and analytics” since the dawn of Twitter is
summarized nicely in a quote Nate Silver made about
analytics for economics; ‘Improved technology did
not cover for the lack of theoretical understanding
about the economy; it only gave economists faster and
more elaborate ways to mistake noise for a signal.’

115

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The first real corporate attention to social media


emerged around some high-profile brand crises. As
these were crisis communications problems, PR/
commu­nications was the natural organization to step
in and address the crisis management strategy
through social media channels.

This initial touch-point with social media prompted PR


teams to propose movement into proactive attention
to communications, particularly with a focus on “influ-
encers” and communities, a logical extension of PR’s
expertise in placing content with outlets that could
generate impressions within relevant audiences.

The initial reactive crisis management objectives


fueled a social media monitoring technology indus-
try, which then quickly adopted the influencer idea
to sell services supporting proactive social communi-
cations. Today many existing social teams have
grown from PR practices, and are striving to deliver
value through proactive social engagement of vari-
ous levels of influencers.

Around the same time, another natural extension of


the organization into social media measurement
emerged around customer support. In many organi-
zations, the business value of investment in social
communications were not immediately apparent
(after all, how can you ever prove that a crisis was
avoided?), so managers strove to find another driver
of value, and the potential to address customer issues
uncovered through social media was the most appar-
ent candidate.

This emergence of this approach saw the overlap of


call-centers and PR within these efforts, since a rea-
sonable argument could be made that a visible public

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complaint was indeed a PR issue. This overlap,


though often political and raucous for those involved,
has helped to establish the need for the removal of
organizational silos and a more holistic notion of cus-
tomer experience, which seeks to generate engaged
advocates for the brand through proactive experi-
ence and brand building and responsive customer
and relations.

As this first round of social media for business


evolved, several established practices that would
seem to have a natural fit with social media measure-
ment — namely Customer Intelligence and Market
Research, Direct Marketing, and Web Analytics — were
nowhere to be found in this first round of aligning
social media with business.

The hesitancy of these organizations to adopt the


first round of social media measurement practices
was likely rooted in a lack of fundamental under-
standing of social media, the perception that it might
be a ‘fad’, and ultimately the nature of the social
media data available to them. While PR has long
been accustomed to working from measures that at
best extrapolate and estimate the potential impact of
their work across broadly defined public constituen-
cies based on volumes of impressions, the general
audience served by an outlet, and sentiment of cover-
age, these other disciplines are built around clearly
modeled and structured data collection (a fired tag,
a closed-ended survey response) and well-defined
and validated segmentation of existing and potential
consumers using demographic and behavioral data.

Thus, while the first generation of social media meas-


urement allowed PR to gain more granular insight
(and entry) into public conversations about the brand,

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it did so with what was typically a non-random


­sample of a company’s overall market, without verifi-
able means of segmentation of the sample popula-
tion, and with meta-data derived from qualitative
tools like sentiment engines that were highly inac-
curate — making Customer Insights skeptical about
the value of the data.

Web analytics’ slow move to social media measure-


ment was also rooted in the nature of the data avail-
able — in essence, web analytics viewed social media
as just one potential referrer amongst many, and for
many large firms, certainly one of the least perform-
ing channels compared to email marketing, organic
and paid search, and online advertising.

In terms of understanding customer opinion and


behavior, web analytics has been able to use cookies
and site tagging to collect detailed information on
site visitors’ behaviors on the site across the web.
Through DMPs, the tracked behavioral data can be
coupled with demographic and psychographic data
to give insights around very specific segments of
users who are known to be using our site. For the
purposes of managing experiences on a website,
available forms of social media measurement have
had little applicability compared to this sort of data.

Increasingly though, web analytics functions are


becoming the Marketing Science team’s focus at the
center of the shift to ‘omni-channel’ analytics. From a
content measurement standpoint, Marketing Science
should approach social media monitoring and meas-
urement with the same mindset it brings to advanced
web analytics functions such as testing and optimiza-
tion. As social media may be an important step on the
path to conversion, web analysts must understand

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how to properly attribute social media to conversions,


and must help guide the optimization of social media
in that context.

The context measurement approach to social media


measurement fits even more strongly with the
strengths of web analytics. By drawing social graph
data directly from primary and secondary social net-
work APIs, analytics functions can use structured
quantitative data to derive the types of objectives-
oriented ratios and KPIs delivered through current
digital analytics reporting and dashboards.

Web analytics has an established competency in


building a data-driven management culture and pro-
viding business insights from digital data. Thus, mar-
keting science is a natural candidate to advance
organizations from the raw (and dumb) volume or
“count” metrics such as “Followers”, “Likes”, “Views”
etc. to give managers integrated performance
insights from ratios such as “comments/post”, “com-
ments/page likes”, “links followed/re-tweet” and
“conversions/social click-through”, which will be
even more valuable when used in conjunction with
the content analysis mentioned above.

Finally, as new solutions begin to align social media


profile, content and relationship data with existing
CRM databases, Marketing Science has a clear role
in developing digital strategy and performance
insights from these combined data-sets.

5.2  Organic vs. Paid Social Media

The development of data-driven omni-channel strate-


gies requires an understanding of realistic objectives

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for each of those channels. As teams who have his-


torically overseen the website have come to own the
deployment and measurement of social media as the
organization’s newly minted omni-channel digital
team, the expectations for social media have been
somewhat distorted. Because conversion to sales or
some other macro-KPI is the central objective of the
web team, the value of all other digital channels
revolves around how well they assist conversion. This
worked pretty well for a channel like email for exam-
ple, which was basically an auxiliary owned media
channel with the sole purpose of driving web visits,
or for paid display which once again had the sole
objective of driving web traffic. However, this same
view does not apply as well to social media.

Fundamentally, what makes social media effective is


the value of the content in the context of a social
exchange. People will not engage with brands in
social media if the only activity the brand takes in
social media is a continued attempt to steer them to
another channel where they are selling something.
Unlike email and display media, where people are
accustomed to clicking through to a webpage, any
activity that starts in social media should be expected
to stay in social media.

In organic social, the currency of value is certainly


not impressions or click-throughs. The currency of
value in social media is engagement, and more spe-
cifically, engagement with people who are actually
likely to purchase our product. Each time a qualified
prospective or existing customer engages with us or
talks about us in social media we are meeting the
core objective of social media: being social. We are
generating the most valuable type of awareness

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through peer referral, and we are creating affinity


and deepening loyalty through our interactions.

If we’ve approached the design of our social media


strategy with a Marketing Science mindset, then
we’re also generating another type of value through
each engagement — increasing our understanding
of our customers and prospects. An understanding
of who we’re communicating with is the most critical
foundation for actually communicating effectively.
Social media engagement strategies that don’t con-
tinually incorporate insights about the interests and
behaviors of the social audience will ultimately cease
to drive engagement, so continually developing
insights is as critical to an organic social media strat-
egy as the basis for the creative copy and imagery
that ultimately is sent through social channels.

Thus, just like our owned media categories, organic


social media analytics require all three types of data
from the first level of the digital analytics pyramid:
performance data, context data, and research data.

5.3  Organic Social Media Strategy

If the core objective of social media is being social,


the question for marketers then is; ‘what kind of
business objectives and customer objectives can be
achieved by being social?’ The answer to this depends
very much on (1) the composition of the users in that
medium, and (2) the nature of the particular social
medium (hot or cold).

The first question asks which channels have users


who look like the people we want to reach. Facebook

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and You Tube for example have a very broad demo-


graphic of users that is becoming analogous to the
types of audience that could previously be reached
through television or a mainstream magazine. Twitter
and LinkedIn also have diverse demographics in
users, but these users expect to use these channels in
ways that won’t work for every brand.

Outside of the big four as of this writing (Facebook,


Twitter, YouTube and LinkedIn), the audiences of
different networks (and there will be new ones
emerging after this is written) tend to become skewed
toward specific demographics and interests. For
example, Google+ has an increasingly large and
diverse base of users, but many of these are not truly
active on the platform but are instead accounts that
were established in order to use some other Google
product. Thus, at the time of writing, the active users
of Google+ are commonly older males, though know-
ing Google, this may have evolved by the time you are
reading this book. The image sharing network
Pinterest currently skews female, while the blogging
site Tumblr skews younger, as does the image sharing
site Instagram and the image sharing app Snapchat.

These are just surface demographics around the


range of age and gender found in each of these net-
works. The decision process around what networks
should be part of a brand’s social media strategy
must consider a much more involved analysis of the
demographic and psychographic composition of
each network’s audience to determine which net-
works engage people with whom that the brand
would like to be social. Research and analytics into
both our company’s market and the social networks’
audiences are of course key to collecting the data

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needed for this understanding. Analytics will also be


needed to commence planning around the type and
style of content that would be most influential to our
target audiences, and of course to evaluate and opti-
mize the performance of our engagement through
these channels.

5.4 Inbound Organic Social Data Sources


for Key Objectives

The data we will need for this multi-layered analysis of


organic social media data comes from a wide array of
sources. The most common source of social media data
comes from the ‘native’ analytics interfaces or dash-
boards for each social media channel (e.g. Facebook
Insights). Other sources of data include the social media
platforms’ Application Programming Interfaces (APIs),
“Listening” tools, and publishing tools. These sources are
represented in Figure 5.1 in the order of their applica-
tion to strategy and execution.

Figure 5.1  
Social Media
Data Sources

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Sidebar: Structured vs. Unstructured Data, &


Machine Learning

Before looking at this second data source for defin-


ing and understanding target audiences, it is impor-
tant to understand the distinction between structured
and unstructured data, since so much of social media
deals with unstructured data, while most of our other
analysis tends to work with structured data.

Structured data is historically the most common


form of data. As the name implies, structured data is
data that has been collected and organized around a
pre-defined structure, or plan, and which is typically
stored in relational databases in tables of columns
and rows. When we collect structured data, we know
what type of data (text, numeric, etc) and the meaning
of that data (name, customer ID, etc) will reside in
each variable of this clearly defined set of variables,
and we understand and have mapped the way in which
variables create connections in the data across the
data set. For example, we know that the “customer
ID” variable in the “customer details” table can be
matched to the “customer ID” variable in the “customer
activity” table in order to connect that customer’s
details with that customer’s purchases.

As mentioned, when working with social media data,


we are more likely to be dealing with unstructured
data than with structured data. When monitoring
social media, we never know what we’ll get in each
subsequent post we collect. Will it contain an image?
If so, what is the image? Will it contain numbers?
Will they be numeric characters or spelled-out? Will
it contain a person’s name? Will it contain a prod-
uct’s name? Will it reference the use of our product,

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or a response to our advertising, or an interaction


with our support team?

With structured data, the answer to these questions


would be inherent in the source of the data, and the
organization and storage of the data would be very
straightforward, with customer service interactions
logged in the customer service database, product
feedback in the market research database, and media
response feedback in the marketing attribution data-
base. However, because the data from social media
monitoring and from the social media APIs is largely
unstructured, before we can know what to do with
the content of any given post, we must first determine
what it contains.

So, before we can begin utilizing performance or


predictive analytics methods against unstructured
data, we must first provide that data with some struc-
ture that our analytics methods can understand. This
transformation itself typically involves an order of
analytics known as “machine learning”. Because so
much digital data is unstructured and needs to be
classified and organized before it can be used,
machine learning is a rapidly advancing field of com-
puter science and artificial intelligence. Machine
learning involves teaching the computer some initial
rules about content, then allowing it to ‘learn’ and
improve its ability to recognize aspects of the content
with each new piece of content it receives.

There are two common forms of machine learning


for the type of content we will encounter in social
media and digital marketing more broadly. Natural
Language Processing (NLP), which deals with teaching
the computer to ‘read’, and Audio/Visual Pattern

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Recognition, which teaches the computer to hear


and/or see, and is useful for image processing, voice
to text processing and video analysis.

Most readers of this book will not be expected to run


machine learning algorithms, but will instead encoun-
ter machine learning when processing their unstruc-
tured data somewhat remotely through the tools used
in their organization for the analysis of social media
data. What is important to understand for the analytics
purposes addressed by this book is that the unstruc-
tured data being collected from social media is not
usable for performance analysis or predictive mode-
ling without prior machine analysis to organize that
data, and that the results from subsequent use of that
data will only be as good as the machine learning
algorithms that organized it.

Digital analysts should be sensitive to the nature of


unstructured data, and should expect and prepare to
account for much more ‘noise’ in data sets derived
from unstructured data. Analysts can account for the
noise that is inherent in unstructured data and build
more effective data sets by understanding the data
collection methods and the content classification
approaches related to each unstructured data source
being brought into analysis in the organization.
Indeed, as will be repeated throughout this book, the
core role of the analyst before any results are pro-
duced is to take ownership of the data from which
that analysis will be developed. No matter how skilled
at the tools and methods for analysis, if the analyst
is working from bad data, their analysis will ulti-
mately be bad in terms of the guidance it provides
the business.

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5.5  Applying Social Metrics


Context & Research: Defining & Understanding
Target Audiences

As mentioned previously, the first step in an organic


social media strategy is to match the characteristics
of the target audiences we would like to engage with
similar actual audiences in social media channels.
This will often begin primarily as an evaluation of
secondary research into social channel demograph-
ics, psychographics and technographics (which
measure characteristics of technology use). As ana-
lysts, our primary source of data for this understand-
ing will come from listening to the conversations in
those channels to understand what topics and tone
related to our interests prevail amongst our target
audience, and accessing data representing user char-
acteristics from our social network’s analytics inter-
faces and APIs.

Social Media Aggregation and Listening Platforms

Social media listening applies text analytics algorithms


to the content coming from social media channels,
sorting and organizing that content by topic, author
and sentiment. One primary utility of social media
listening and analytics is in exploratory psychographic
research, through the discovery and understanding of
what matters to our target audiences in social media
channels. Beyond the research application, many
brands view maintaining a high volume and/or posi-
tive sentiment around brand discussions to be a per-
formance goal, and use social media listening tools

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to measure these goals. The measurement of volume


and tone of conversation as a performance metric is
frequently, and often legitimately, criticized as lacking
clear association to actual business objectives, partic-
ularly if the strategy behind social communications is
not clear on the buying and product use habits of the
audiences in those social channels.

One way in which listening as both a research and


scoring system has come to have clear operational
value to many brands is through customer relation-
ship management and customer satisfaction measure-
ment. This approach was pioneered by brands like
AT&T and Comcast who had technically savvy users
who were early adopters to Twitter and actively took
to that channel to voice their complaints about ser-
vices with these brands. These companies, and others
like them, sought to move from reactively responding
to complaints about their product as a risk mitigation
exercise, to proactively opening Twitter as a customer
service channel. This meant establishing customer
service agents who would monitor and respond to
customer service based mentions of the brand. This
also created a need for integration of social media
profiles (like a user’s ‘@’ Twitter handle) and their
Customer Relationship Management (CRM) system
profile. This use will be discussed further below in the
sections on evaluating performance and optimizing
social engagement delivery.

For listening purposes, Radian6 emerged as the leading


social media listening platform by sales sometime
around 2008, was acquired by Salesforce.com in 2011,
and remains a leading selection for listening by com-
panies of all sizes as of this publication. There are
many choices for social listening platforms, some are

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integrated with other functionality, like the Salesforce


solution’s integration with CRM or Adobe’s inclusion
of an ‘Adobe Social’ module in the Adobe Marketing
Suite, or a tool like Sprinklr, which offers both social
publishing and social listening. Others, like Visible
Technologies and Crimson Hexigon, are stand-alone with
a specialized focus on social media listening.

The primary function of all social media listening


tools is to take unstructured data from social media
sources and build an organizing structure to reveal
insights about the people, topics and attitudes related
to that data. Some good free examples of the ways in
which the data can be organized through all of these
tools to guide insights can be found at Social Mention
(http://www.socialmention.com/) which provides
keyword, sentiment, user and hashtag extraction
from searches on social media sources, and Bottlenose
Sonar (http://sonar.bottlenose.com/) which offers a
dynamic topic mapping chart around searches.

The key understanding for an analyst using social


media is that, just like with any other method of
analysis, the quality of the data you put into the
analysis will determine the quality of what comes out
of the analysis. The free tools above collect data from
a basic text search, and the results will typically include
content that is irrelevant to the intent of the search.
Paid enterprise social media listening tools allow
much more control over what goes into a search,
which can be a blessing and a curse. If the social
media tool is intended to be used for exploratory
research to discover emerging topics and trends,
then the search terms must be written to exclude very
little content, since the next trend could be anything
coming from anywhere. The extreme end of this is

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an effort to monitor the internet, which is a very big


data exercise, and which makes the effort to identify
that relevant and meaningful piece of information
the proverbial search for a needle in a haystack.

The more common approach to search is to narrow


and focus the terms. This limits the ability for discov-
ery, but also limits the probability of irrelevant con-
tent and improves the quality of analysis around what
data is being collected. The potential issue in con-
ducting analysis when limiting and focusing search
terms is that the sample for the analysis is prone to
confirmation bias. In other words, while we will now
have topic and tone analysis that is more accurate for
the content we have collected, our focused search
may mean we are looking for what we’ve already
determined we need to know, and we are missing
content that would more accurately reflect what we
don’t yet know, but should know, about our market,
our consumers, and the perceptions of influencers
around our brand and our market.

Thus, when done with an effectively balanced search


strategy, the data being collected can give us a good
sense of what is being said in social media by our
target customers, about our brand, and about our
audience’s interests more generally. While the vol-
ume of positive or negative content around key top-
ics is sometimes used as a performance measurement,
such measures can be drastically skewed by the
search terms around which the measure is taken,
and so performance measurement through social
listening should be considered with caution. The
real value of social media listening comes from its
ability to deliver insights around the opportunities to
create and optimize influence with target audiences

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through social channels. Listening gives us a very


good sense of what is being said, and the feelings
and attitudes present in those conversations. Under­
stan­ding the ‘who’ of this audience is assisted by
analysis of our audience’s characteristics and behav-
iors as drawn directly from the social network analyt-
ics dashboards and APIs.

Network Dashboards

Most social media platforms provide analytics around


audience and performance through a dashboard
view, and offer additional access to data through an
API. The analytics provided by social media networks
through their dashboards tend to focus on what the
network considers performance metrics. Not surpris-
ingly, the metrics are oriented around what the net-
work is most focused on delivering, so these metrics
typically center around views (impressions) and
some type of engagement (like, comment, share,
retweet, repin, repost, etc.). These metrics and the
channel-specific dashboards in which they are deliv-
ered are useful for measuring tactical success against
marketing objectives in specific channels. The
Facebook ‘insights’ dashboard (Figure 5.2) provides
one of the more comprehensive examples of social
media metrics.

This Facebook dashboard view gives a sense of the


data a social media strategist or moderator will have
to work with in evaluating their success over some
period of time. While these terms are specific to
Facebook, the type of content conveyed is what is
common in most dashboards: (1) how many people
‘followed’ our account, (2) how many people saw

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Figure 5.2   our content, and of those, (3) how many people did some-
Facebook thing with our content. Not every popular network has
Insights
embedded analytics (i.e. Instagram does not as of this pub-
lication), but for those that do, whether looking at
Facebook, Twitter, YouTube, Pinterest, Tumblr or another
of your choice, the fundamental measurement of “counts
and amounts” will remain the same.

When the outputs being measured are related to audi-


ence size or content impressions, it is difficult to place
the value for any sort of business outcome on that
­measurement. The size of the crowd or the number of
people who see our content are only the means to a more
meaningful outcome. Putting too much weight on these
measures creates the risk of building a strategy meant to
drive “vanity metrics” and not much else. However, these
metrics can be useful in providing context about our
audience.

Though some contextual metrics are available within the


‘insights’ dashboards of most tools, they are also typically

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very limited. For example, the “People” section in


Facebook insights gives only gender and age informa-
tion (Figure 5.3).

The “Posts” section (Figure 5.4) gives high-level feed-


back on what type of post is generating engagement.

After all of the preceding chapters, at this point in


the book, you are hopefully thinking about how nice
it would be if these various metrics could be evalu-
ated together — for example, by looking at clicks
through each type of content by gender and age. In
fact, a problem of most social network’s insights
pages is that they partition the analysis into pre-
defined views that don’t allow for deeper dives and
more refined analysis. For this, the analyst needs to
move outside of the native dashboards, and into the
data available from the Application Programming
Interface, which may be accessed directly, or more
probably by way of an enterprise social media man-
agement application.
Figure 5.3  
Facebook
Insights — As the dashboards provided by social media platforms
People are built primarily to provide an understanding of the

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Figure 5.4   ‘counts and amounts’ for network-intrinsic outputs, they


Facebook are a textbook example of pure descriptive performance
Post
measures. As noted, the interfaces limit the possibilities
Metrics
for contextual analysis, but even if they offered more pos-
sibilities for analysis, they would still lack the most impor-
tant context for our business: the business outcomes that
were driven by those measured (and contextualized)
outputs from each tool. The measurement of outcomes
will be discussed in the section immediately below, but
first we will consider the other descriptive context data
that can be built around social network performance
metrics through the use of social network application
­
programming interfaces, or APIs.

Social Network Application Programming Interfaces

Application Programming Interfaces (APIs) are exactly


what their name implies — an interface enabling some
application’s data to be used in the programming of
another application. APIs can provide read-access, which
allows data to be drawn from the course application, and
write-access, which allows data to be sent back into the
source application.

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These APIs are the lifeblood for social media work-


flow, publishing and engagement tools like Buddy
Media (Salesforce), Sprinklr, HearSay, Spreadfast,
Social­ware and others, which provide process work-
flow and multi-channel publishing and analytics. If
Facebook or Twitter were to cut-off API access to any
of these tools, their entire reason for existence as an
interface to these network would be lost. But APIs
exist to produce mutual benefit — the social media
support tools wouldn’t work without the social
­network APIs, but the social networks wouldn’t be as
useful to advertisers without the social media
­support tools.

What APIs allow for these social ‘middleware’ tools,


they also allow for anyone who learns to access the
API through a programming language; the ability to
gain deeper access to more granular data within
each channel, and the ability to combine data and
insights across multiple channels.

The middleware tools typically use their read


access to APIs to create integrated views of the
more standard metrics already provided in the
channel analytics, and make use of write access for
publishing. As analysts, the more interesting data
in developing context around our engagement in
social media will be what we can access directly
from the APIs.

Each API has its own intricacies for access, and


requires some programming ability in JavaScript, so
we will not address access here. The book’s supple-
mental website (www.architectingexperience.com)
has some pointers on getting started with the stand-
ard channels. As an analyst, your primary ability

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should be to set the requirements for the data, then


seek the help of a programmer if needed to access
that data. So for now, we will set aside the question
of how to get the data, and focus our thinking on
how to apply the data to descriptive analytic uses
beyond simple performance reporting.

Facebook Social Graph API

One of the richest sets of social API data comes from


Facebook’s Graph API, so this will be our focus as we
learn how to think, access and use data beyond the
dashboard. This method for working through the
Facebook API can be applied to any other social net-
work API, even if there is less to work with in those
datasets.

Facebook is a marketing company that offers value


through its ability to use data for very accurate tar-
geting, and the Facebook Graph API reflects the
centrality of contextual data in Facebook’s business
model. All of Facebook’s data is information about
users and the context of their use; their friends, their
interests, their level of engagement. Your ability to
access this data about a person depends on “permis-
sions” that are granted to you by each individual.
Without key permissions, the information available
to you in the API is relatively limited. With full per-
missions, you will basically be able to recreate and
fully analyze all the context around that individual’s
Facebook experience.

Permissions are granted by users through requests


made by Facebook apps, so the collection of the
permissions needed for the desired analysis of
­

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Figure 5.5  
Facebook
Permissions
Dialogue

contextual Facebook data must be explicitly built via apps.


Any analyst seeking contextual data from Facebook
needs to think through the design of every related expe-
rience with the design team to identify how permissions
might be obtained through that experience, and to
consider how the request for permissions might also
impact the experience. Users will typically be willing to
give permissions that make sense in the context of the
app’s intended use, but may decline to use the app if the
requested permissions fall outside their comfort zone.
Figure 5.5 is an example of a Request for Permission
dialogue that is seeking more permissions than a user
may be willing to give.

Analysts must therefore be aware that the data they are


seeking through apps may not be made available to

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them if the user does not clearly understand the


purpose of such access. However, for the sake of our
interest in fully exploring the API, we will proceed
with this example as if we have been granted a com-
plete set of permissions.

The permissions list above provides a good initial


sense of what we might have to work with when
granted full permissions. The list of details behind
each of these permissions is too large to provide here,
but is available on Facebook’s developer site (https://
developers.facebook.com/docs/graph-api).

Social API Analytics Context & Research Objectives

The most important context available to us from


social APIs is insight into customer segments. As reit-
erated throughout this book, a clear understanding
of the customer, their behavior and their motivation
is central to our marketing strategy. As introduced in
Chapter 3, statistical segmentation of customers and
the development of personas for design around those
segments is the way in which we develop this under-
standing. In Facebook’s Graph API, the “graph”
refers to the social graph, or the connections between
people in a social network. This view into the social
graph constructed around shared interests and activi-
ties can very effectively deepen our capability to
define and document accurate behavior and interest
based personas.

The way in which data is referenced and accessed in


the Facebook Graph API will be similar to methods
you will encounter in working with other social net-
work APIs. Access to data first requires authentication
as shown above. With proper authentication, calls

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for data are then made programmatically, typically


using PHP, JavaScript or through a mobile platform
Software Development Kit (SDK). APIs typically con-
tain access to hundreds of fields, which may be
organized through a top-level categorization, as they
are in the Facebook API, where these categorizations
are referred to as “nodes”. Currently, the node
related to an individual ‘user’ in Facebook contains
over 50 fields of data, many of those with sub-nodes
or deeper clusters of data about them accessible
through the Facebook API. This is too much data to
review in detail on these pages, so I again encourage
you to become familiar with the Facebook API (and
others) through exploration of their documentation
and associated tools. One such tool in Facebook is
the Graph Explorer, which is accessible once you
establish a Facebook Developer account.

The Graph Explorer provides a graphic interface in


which API queries can be easily run. The results of
API queries appear here as they are returned through
any method of API call, in JSON format (JavaScript
Object Notation), a snippet of which is shown below.

{
“id”: “100000000000001”,
“bio”: “Happy husband and dad & hobby guitarist. Writer,
strategist and entrepreneurial manager working where culture,
communication and tech meet. Kellogg MBA.”,
“education”: [
{
“school”: {
“id”: “200000000000001”,
“name”: “Kellogg School of Management”
},
“type”: “Graduate School”
]}

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The JSON data format and the mechanics of working


with JSON require some learning around both the
JSON format and your API accessing programming
language of choice. Teaching programming to this
degree is beyond the scope of this book, but luckily
there are many excellent free resources such as
W3schools.com that will help with this. However,
even without a trained understanding of JSON, the
method by which JSON organizes data should be
apparent from the snippet above. As you see above,
within the ‘user’ node, this user has a unique ‘id’
distinguishing them from all other Facebook users,
which is followed by a ‘bio’ field, then by additional
fields (organized in this case within the ‘education’
sub-node) presenting details into this user’s educa-
tion. This snippet represents a small slice of the
information returned from a call to the ‘user’ node
with reference to a user ID, and this structure would
repeat, with unique variable names, for as long as
there is data.

For those with interest in the data collection aspect


of digital analytics, it will be worthwhile to learn
more about JSON and programmatic methods for
accessing API data. However, for our consideration
of API usage in this section, our focus is on the
potential for insight into customers available to us
through this source that is not available through the
Insights view of the Facebook user interface. The
extent of this understanding for Facebook, and for
other social networks can only be realized through
review of the API field documentation for each net-
work. In terms of developing insights from this data,
there is an initial challenge in that most of the data
is “unstructured” and much of it is text based. Some
fields such as ID, dates, age, gender, etc, can be

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compared and analyzed across records as presented,


but the more text-based and descriptive fields will
need to be parsed with text analytics algorithms to
be converted to data that can be compared and ana-
lyzed across records. For example, the snippet below
is taken from a query on ‘user/likes’:

{
“category”: “Movie”,
“name”: “Akira”,
“id”: “307262422778684”,
“created_time”: “2014-09-15T15:11:20+0000”
},
{
“category”: “Musician/band”,
“name”: “Howlin’ Wolf - Chess Records”,
“id”: “735854339772319”,
“created_time”: “2014-02-19T20:38:23+0000”
},
{
“category”: “Book”,
“name”: “On the Road”,
“id”: “613324775416871”,
“created_time”: “2014-05-01T23:56:03+0000”
},
{
“category”: “Author”,
“name”: “Jack Kerouac”,
“id”: “1438690426374001”,
“created_time”: “2014-04-15T20:58:19+0000”
}

This is a small portion of the data returned on this


user. For the purpose of research to support content
strategy, I may want to classify the content interests of
my Facebook audience using this data. I might begin

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by grouping users around engagement with my con-


tent (engagement with certain posts, conversion on
site, etc). Within these groups I might be interested
in a routine that would code and count the different
‘categories’ to identify relative levels of “likes” across
movies, reading and listening to music. I might
exclude “Author” records for the purpose of quanti-
fying interest in categories of content across reading,
watching and listening, but I might want to evaluate
categories of authors against an external database to
classify segments by shared interest in writing styles.

With the amount of data available from just this API


as a start, and with the possibilities for analysis lim-
ited only by the data mining and pattern recognition
capabilities of the analyst and their supporting tech-
nology, the question should not be whether to draw
customer insights from social context data, but
rather where to invest in getting the most useful
insights to drive key objectives. As with all of our digi-
tal analytics endeavors, the basis for determining
objectives begins with documentation of the prob-
lems we wish to solve, and an understanding of our
current performance in solving those problems.

Optimizing Social Engagement Delivery

While most social media content is generated by


users, brands may of course also take an active role
in engaging users within social media. This social
activity by the brand may be proactive via the intro-
duction and moderation of content that will gener-
ate engagement by target audiences, or it may be
reactive, such as making responses to customer com-
plaints that were aired publicly through social media.

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Figure 5.6   Figure 5.6 shows the basic tactical paths for both
Social Media ­reactive and proactive social media activity by brands.
Tactical Paths
From the standpoint of the digital analyst, what is
important to note is the importance of social media
listening at the outset of both the reactive and proac-
tive paths.

Social media listening is conducted via specialized text


analytics applications built to collect and analyze
streams of social media content to identify topics, the
sentiment of content around those topics, and the
reach and influence of authors. The first platform to
dominate the social media listening analytics market
was Radian6, which since its acquisition by Salesforce.
com and addition of capabilities beyond listening is
still considered a very strong platform for social media
monitoring. Other pure-play listening platforms (as of
publication) include Synthesio and Visible
Technologies.

Beyond pure-play listening tools exists a class of social


media tools dubbed “Social Relationship Platforms”
which not only collect data from social media for

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analysis, but which also facilitate the publishing of


content to social media channels. Leaders in this
space (as of publication) include Sprinklr, Spreadfast,
Hearsay and Salesforce.com’s Buddy Media. These
platforms provide a more ‘full service’ approach to
social media engagement delivery with process work-
flow capabilities for creating, approving and publish-
ing content, with integration to social network APIs
for direct publishing, and with monitoring and per-
formance reporting. Many of these platforms also
have the capability to integrate to Customer Rela­tion­
ship Management (CRM) platforms, and with careful
planning around customer data collection, if a record
in the CRM database contain a social profile ID for
that user, any content generated in that channel by
that user can be linked to other data in the CRM sys-
tem. Such integration from social to CRM can be
immensely valuable in identifying the potential cost
from the loss of a dissatisfied customer complaining
through social media, and in providing context from
social media conversations when engaging with
­customers in other channels also linked to the CRM
database.

In terms of the value and applicability of social media


analytics, all listening capabilities, whether pure-play
or integrated into a ‘relationship platform’, share the
same potential weakness; the analysis will only be as
strong as the sources of content and the searches
established against these sources. Because there is so
much content in social media, Social Media Listening
typically relies on data collection limited by keyword
searches. If searches are created carefully and kept
broad, then actual discovery of opportunities and
issues can happen through social media listening.
However, often social media listening keywords are

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established around preconceived ideas of what is


important to monitor, creating a closed feedback
loop between these preconceptions and the repre-
sentation of the brand in social media that is subse-
quently reflected through the tool. As is the case with
analysis from any source of data, the social media
analyst must be certain that the analysis they produce
takes into context the breadth and depth of social
media content searches providing the data for the
analysis.

Social Media Performance: Evaluating Social


Influence & ROI

When looking at the data accessible to us through


APIs, we consider the contextual and research based
analytics that could be derived from the data. With
that in mind, let us now turn back to the perfor-
mance aspect of social analytics, where the main
problem to solve is always in developing a legitimate
understanding of how to identify and value the busi-
ness impact of the outcomes driven by social media
efforts.

When measuring the performance of social media, it


is possible (and easy via dashboards) to measure the
counts and amounts of channel-specific interactions
such as likes, comments, shares, plays, downloads,
retweets, follows, etc. The question that typically
arises around such measures is what value any of
them have in contribution to business objectives
such as qualified lead generation or sales. The rela-
tion of social media to lead generation or sales is
best established through an attribution model that
ties channel and content engagement to an eventual

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conversion (perhaps several points of contact down


the road). The topic of multi-channel attribution and
a review of its methods will be addressed in Chapter 9.

5.6  Search Engine Optimization

While social media has become the biggest chal-


lenge for earned digital marketing in terms of devel-
oping and executing a measurably effective strategy,
Search Engine Optimization (SEO) remains the
original earned media channel, and maintains its
own set of ever evolving challenges which data and
analysis can be used to help identify and address.

SEO emerged as a specialization in the early days of


digital marketing as a practice that understood the
inner workings of search engine’s content crawling
and ranking algorithms, and that applied that under-
standing to drive their client site’s to the top of search
results. As the sophistication of search algorithm’s
increased, the ranking methods of the algorithms
shifted to a focus on the quality of certain types of
content related across sources versus the simple pres-
ence of certain content (e.g. the site description tag)
or the quantity of certain types of data (e.g. back-
links), and the opportunities for ‘gaming’ these algo-
rithms began to diminish, separating true SEO
specialists from simple rule exploiters.

With contemporary search engines, SEO is not a


simple matter of tweaking portions of pages and
building volumes of links, but is instead completely
inter-related with site design and content strategy.
Search engines look deep into websites not just to
assign relevant keywords with that site, but also to

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evaluate and rank the quality and relevance of the site’s


content against those keywords. With the increasing
utilization of dynamic page content, the impact of
site design on search presentation is an important
consideration from the beginning of the design pro-
cess. Additionally, the correct set-up and mainte-
nance of meta-data within the content management
systems which will populate sites becomes a critical
effort for search engine optimization. Thus, the SEO
manager of today is less a simple editor of links and
tags, and more a manager of quality assurance
around the myriad aspects of site design, develop-
ment and content that determine the site’s appear-
ance in search results.

Defining, deploying and measuring effective SEO


strategies requires data and analysis. These may be
acquired and applied through tools ranging from
free solutions like Google Analytics, AdWords, paid
solutions like Moz and Alexa, and enterprise SEO
systems like BrightEdge, RankAbove and Searchmetrics.
Through any of these approaches, there are several
pieces of core SEO data analysis required.

The first is information all about keywords. How will


search engine view your site in terms of the keywords
it finds within the content? Conversely, what are the
keywords driving traffic around your key topic
amongst your targeted audiences? Analysis of these
two areas will reveal the core challenge of the SEO
manager — matching up what can be found on the
site with what people are searching for.

Understanding competitive keywords can be easily


accomplished through any of the tools mentioned
above, but is free through Google AdWords as long as

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Figure 5.7   you have set up an account. The “Tools” section of Google
Google AdWords AdWords offers a “Keyword Planner” which allows for key-
Keyword
word identification for any page.
Planner

These results also provide listings of the competition per


keyword and suggested bids, which indicate the value in
terms of relevance to searchers for those terms. The ROI
of SEO can acutally be determined by evaluating how
much was saved on winning traffic on these terms organi-
cally versus via purchased search results.

As mentioned previously, appearing at the top of a com-


petitive search is no longer a game of simple presence
or quantity of target key words, but with text-analytics
software being used in indexing algorithms, the name
of the game now is quality and relevance in the content
of your site, and clarity in the way it is presented. One
way in which Google suggests SEO managers convey the
relevance of their content is through links from high-
quality related sources. Google is now smart enough to
know if links to your site are coming from link farms’
which exist solely for the purpose of creating links to
try and fool search engines. There is no quick way to
create high value links, as Google notes, ‘Google inter-
prets a link from page A to page B as a vote by page A
for page B. Votes cast by pages that are themselves

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“important” weigh more heavily and help to make


other pages “important”.’

To this last point, in its advice to “Webmasters”,


Google provides this advice:

Make your site easily accessible


Build your site with a logical link structure. Every page should be
reachable from at least one static text link.

Use a text browser, such as Lynx, to examine your site. Most spiders see
your site much as Lynx would. If features such as JavaScript, cookies,
session IDs, frames, DHTML, or Macromedia Flash keep you from
­seeing your entire site in a text browser, then spiders may have trouble
crawling it.

The Lynx browser referred above is a text only


browser that renders pages without images or styl-
ing, breaking the content down to a human-readable
form of what the web crawlers will see. If the content
you want to be found in search engines cannot be
found when viewing the site in this browser, then
changes need to be made to the site.

As further proof of the point made earlier that SEO


managers need to understand the design and
mechanics of the entire site, note the technical
aspects of the design relayed in Google’s statement
that need to be evaluated if the page is not conveying
content to search engines as desired. Before they can
begin to solve problems with search optimization,
SEO managers must be able to identify and frame
problems for the developers who will ultimately help

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them solve those problems. There are some analytics


associated with SEO, but less than come into play
when buying keywords for specific targeted audi-
ences in search engine marketing. More important
than data analysis for SEO is the ability to holistically
analyze the site and the environment in which it
operates, which is where the information technology
end of the digital analyst/marketing scientist role
comes to play.

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Chapter
SIX
Paid Media Analytics

Having toured the owned and earned channels for


marketing communications, we finally arrive at the
paid media channels. At its most basic, Digital Paid
Media is an extension of traditional advertising, and
as the channel name implies, paid media is where
advertisers have traditionally paid out large portions
of their budgets to have their message placed in
front of consumers. In traditional advertising, these
‘impressions’ through paid media may be achieved
through television, print, radio and out of home
(OOH) placements such as billboards and bus-stop
sidings. In digital advertising, impressions are still
a currency of measurement for many formats —
especially in digital display advertising — but as is to
be expected with the digital format, engagement
(e.g. click-through, field input, video play) has
become an increasingly prominent measure of value
and success, and in many cases, conversion against
an outcome from that engagement is evaluated as
the ultimate performance measure for paid advertis-
ing. Because so much money is spent on paid adver-
tising, measurement of efficiency and effectiveness
in paid media advertising has become a pressing
concern for digital marketing managers, who need
to understand and try to optimize the returns they
are receiving from their expenditures across an ever
expanding array of digital advertising channels.

151

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This interest in measurement has prompted the


emergence of hundreds of technology solutions for
managing and measuring paid digital marketing.
This chapter will begin with a summarization of the
paid media touch-points, the ecosystem in which
these are activated, the fundamental measures of
performance for paid media, and the ways in which
analytics are being applied to increase the efficiency
and effectiveness of paid media marketing through
targeting and programmatic buying.

6.1  Digital Paid Media Touch-points

Paid search results and display banners are the two


best recognized and most utilized methods of paid
media marketing.

Paid search, or Search Engine Marketing (SEM) is


the paid counterpart to SEO, dedicated to ensuring
the appearance of an appealing summary and link to
an ‘owned’ property of the brand for every search on
a targeted keyword. SEM placements against key-
words are purchased directly from the targeted
search engines, so in the United States primarily
from Google and Bing.

Digital display marketing, or digital banner advertis-


ing, extends the location for brand impressions to
appear from beyond the search engine and into any
digital publication that has elected to display advertis-
ing. The traditional display ad was typically formatted
into a rectangle in a banner location or a square in a
side ‘rail’ location, but mobile advertising, video adver-
tising, social media advertising and content-oriented
‘native’ advertising have created many new formats in
which a brand’s message may be displayed.

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6.2 The Paid Media Ecosystem

The process to get the brand’s messages in front of an


audience can vary from simple to extremely complex,
but always requires some form of intermediation
between the brand and their audience. The diagram
below represents the potential processes for this inter-
mediation. As shown in Figure 6.1, the advertiser’s
message is separated from the audience that they’d
like to reach by several layers of exchange (as the mes-
sage moves from left to right in the diagram below).

Frequently, and especially with larger advertisers, the


first layer a message passes through to reach its audi-
ence is an agency services layer in which a media
agency works with the advertisers to determine the
creative content, formats and channels that will most
efficiently and effectively support the advertiser’s
paid media objectives.
Figure 6.1  
Social Media With the media strategy established, it is time for the
Ecosystem
advertiser and/or their agency to begin purchasing

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exposures to the audience in accordance with the


plan. Figure 6.1 shows several different options for
purchasing exposures on publishers’ sites, but from
our standpoint as analysts, our first question should
be how data is being applied to optimize the
­purchases and their outcomes.

Figure 6.1 shows three sources of data for optimiza-


tion of media placements. At the top of the diagram
is a Data Management Platform (DMP) driving
information into both the advertiser’s planning pro-
cess (potentially via the agency) and also potentially
into a Demand Side Platform (marked DSP in the
figure). DMPs are essentially giant “cookie jars” —
generating their own data about user characteristics
and behaviors across the web, and aggregating data
from other sources as well, as shown by the feed
of data from publishers, DSPs and exchanges into
the DMP.

In recent years, leading DMPs have been acquired or


developed internally by the largest players in market-
ing technology, including Adobe’s Audience Manager
and Oracle’s acquisition of BlueKai. Other leading
DMPs for advertisers as of publication are Rocketfuel
(following their acquisition of X+1) and Aggregate
Knowledge.

DMPs integrate and standardize data from first and


third party data sources across paid earned and
owned media, allowing advertisers to develop audi-
ences that are consistent and applicable across
channels. DMPs will contain some tools to allow for
data mining and statistical analysis of this inte-
grated data, and can make this data accessible to
any other tool that the advertiser choses to use to

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conduct such modeling. They also allow for audi-


ences developed through such modeling to be com-
municated back out to the networks and supporting
tools (DSP) through which these audiences are
accessed.

Armed, via the DMP, with a very specific understand-


ing of the audience(s) they wish to reach, the adver-
tiser may now reach out to publishers in two ways:
either directly with publishers, or indirectly through
networks and exchanges, which is the more com-
mon approach, though there are many variations
that this approach can take, beginning with the
exchanges used.

As mentioned, Google and Bing are the top sellers


of paid search impressions. For display impressions,
the Google Display Network (GDN) is typically con-
sidered the top advertising network, but there are
scores of additional leading networks including
Rubicon, Tribal Fusion, AOL and OpenX. Large
advertisers (and their agencies) will often use sev-
eral networks to achieve their goals. For our objec-
tives in understanding what part Ad Networks play
in the paid media ecosystem, we will focus on the
Google Display Network. DoubleClick for Advertisers
(DFA) is the premium ad server for GDN, and
AdWords can also be used for display ad buying in
addition to its more common use for SEM
placement.

There are several different KPIs that are commonly


used to measure paid media performance, and each
measure reflects a variation in approach that is typi-
cally driven by strategy, objectives and the data used
to support those things.

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CPM

The way in which an advertiser engages with advertis-


ing networks and exchanges is typically directly related
to how they work with data in determining strategy
and measuring performance. An advertiser without
specific consumer insights allowing them to value and
target different segments of consumers will look to
their networks and exchanges to determine and target
the highest value segments through trial and error.
If the advertiser’s strategy does not include a measur-
able conversion as the basis for determining value,
then it is likely that the measurement of efficiency and
effectiveness will be around lowering the cost as much
as possible for the greatest corresponding number of
impressions, which is typically measured as a metric
called CPM, or Cost-per-Mille (cost per thousand
impressions). Being rooted in impressions, or views,
this measurement (and any strategy based around it)
is removed from any notion of what results from an
impression of an advertisement. This measure sees the
delivery of an impression as an end result, as opposed
to the means to an end. Of course, marketing outputs
are not the same as business outcomes, so marketing
strategies based on impressions and CPM, while they
may be focused on optimizing spending against
impressions, cannot claim to be focused on optimiz-
ing any sort of business outcome, as there is no basis
to evaluate whether the marketing output (a cost)
actually led to a business outcome (a return).

CTR/VTR/CPC

While advertisers can be excused for measuring


impressions achieved as a KPI when evaluating

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advertising performance in traditional print, televi-


sion and radio touch-points as there is no way to
effectively measure the response to those impres-
sions, the capability to measure engagement with
content in digital channels allows for much better
measures of performance for digital advertising.
Thus, advancing slightly from measurement of CPM
are the measures of Click-through Rate (CTR) and
Cost-per-Click (CPC).

The “click” referred to in these metrics is typically a


“click-through” to an advertiser’s landing page or
other target content. Click-through (CTR) is a nice
measure as it is a ratio, and a measure of engage-
ment, and while it still does not measure an actual
business outcome, it is at least capable of measuring
the response to content, and as such conveys data
that can drive further optimization of effectiveness
in creative content and channel placements.

View-through Rate (VTR) is a variation of CTR


which has become increasingly used as a metric for
measuring not just the immediate reaction to an
advertisement via a click, but also the potential for
delayed reaction to an exposure to an advertise-
ment. VTR measurement uses a cookie to recognize
when a visitor to a site arriving through any referring
source has been exposed to a paid advertisement,
and counts that visit against View-through rate,
meaning that even though the visitor did not click
immediately in the ad, the visitor has come through
to the site at some point after being served (and pre-
sumably viewing) the ad. VTR thus allocates credit
for the visit back to the exposure to the ad. While
this method likely addresses actual cases where the
cause for a visit is delayed reaction to an advertising

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exposure, it likely also gives credit for visits to ad


exposures that were not the cause for an eventual
visit, or were much less effective than a subsequent
brand exposure through another channel like social
media or email. Approaches for trying to properly
assign some ‘partial’ credit to every touch-point that
contributes to a visit is discussed in the next
chapter.

CPC is a measure of the efficiency of the CTR/VTR


achieved. If optimizing to CTR, then CPC will rise
and fall according to the cost of reaching the size
and composition of audience that maximizes CTR. If
optimizing the CPC, then CTR will be affected if the
ability to reach an audience that is more qualified to
click is limited by a ceiling on the cost of reaching
that audience. Thus there are serious budgetary and
strategic concerns at stake in balancing an interest in
cost with an interest in outcomes.

Cost-per-Acquisition (CPA)

The Cost-per-Acquisition (CPA) metric focuses


squarely on a measurement of business results in
terms of customer acquisition or conversion. This
metric looks past a click or view that begins the pro-
cess of consideration and evaluates whether or not
that click or view ultimately delivered a positive busi-
ness outcome. Because outcomes (acquisition or
conversion) often take place after multiple interac-
tions with the brand occur over time and across
channels, CPA cannot be measured in terms of paid
media cost alone. Rather, paid media costs are
added to all other marketing costs before that total

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cost is divided by the number of acquisitions that


occurred in the period influenced by that
marketing.

CPA is an input into Return on Investment calcula-


tion, as the total cost to acquire each customer is the
‘investment’ that underlies the return. Thus, decreas-
ing CPA will not positively benefit ROI if the decrease
in spending causes a corresponding decrease in
results/returns. As with the other measures dis-
cussed above, optimizing efficiency in spend is only
positively impactful on the business if it can be done
without equally sacrificing the effectiveness of that
same spend. In fact, an increase in CPA would not be
bad for the business if it resulted in an even higher
increase in returns. As such, CPA should be estab-
lished as a target informed by expected return per
acquisition and the desired ROI.

6.3  Targeting & Retargeting

The discussion of metrics above should make clear


the importance of optimizing for the correct balance
of efficiency and effectiveness. This balance is not
something that is achieved equally for all prospective
customers, because not all prospective customer
have the same potential value, respond to the same
content and calls to action, or can be found in the
same channels. These differences in the value con-
sumers place on the business, their interests and
their touch-points necessitate organizing customers
by segments based on their value, interests and inter-
action points, and then ‘targeting’ each different
type of customer with the offers, content and con-
tacts that will be most relevant to them.

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Targeting
The most basic form of targeting is conducted
through the selection of publications based on the
readership of those publications. This approach can
be implemented through direct placements with
publishers or through selection of publication ­topics/
audiences established by the networks and exchanges.

Advertisers may seek to advance their targeting beyond


everyone visiting a certain publication to include addi-
tional criteria. Advertising networks and exchanges can
support targeting on nearly any measurable character-
istic, so targeting is typically constrained only by limita-
tions on time and information. Because Google AdWords
offers the basics of display targeting, we will begin with
a specific look at targeting with this tool — specifically
with the AdWords Editor tool, which offers a client-side
campaign editing interface for Google AdWords.

The planning and management of paid media is


typically organized around campaigns. Let’s begin
with the types of ads that can be managed through
this tool for any given campaign (Figure 6.2).

Ad type names are relatively self-explanatory with the


exception of WAP, which is an abbreviation for
Wireless Application Protocol and really just means
‘mobile’ ads. As you can see in Figure 6.2, AdWords can
deliver formats ranging from the simplest site-links
and text ads to Dynamic Search, Promoted Video and
Display ads.

The simplest method for targeting any of these ads is


by keywords. Keyword identification can be done auto-
matically using Google’s site analytics (content scrap-
ing and text analytics) defined in the SEO section

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Figure 6.2  
Google AdWords
Ad Types

above to evaluate your content and competitive con-


tent. When placing media on publisher sites, Google’s
keyword targeting also evaluates the content by which
searches arrive at those sites and the content of the
site itself to place your ads against inbound searches
and destination sites that best align with your defined
keywords. Note the option above for “Dynamic Search
Ads”. These are ads that not only use Google algo-
rithms for placement, but which allow Google to
insert content into the ad dynamically in an effort to
provide the most relevant impression to any given
consumer.

While the definition of keywords can be left to the


recommendation algorithm, analysis of what is per-
forming should be conducted by an analyst. It is also
important to review the keywords that are associated
with traffic to your site, and to use the “Negative
Keywords” filter, which explicitly tells the network
what words to not associate with your ad, to ensure
that your content is not served against keywords that
are not relevant to your content.

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Expanding from keywords that should and shouldn’t


be associated with your advertisement, paid media
targeting can be refined around the basic demo-
graphic characteristics of location, age and gender.
These targeting criteria may be effectively used when
consumer interest in your products can accurately
be determined by characteristics that are this broad.
For example, there are certain categories of prod-
ucts (e.g. types of razor, types of clothes) that will be
clearly differentiated by gender, or by age (e.g. medi-
cal and retirement related products) or by location
(e.g. local and regional shops, events, etc). Targeting
on this criteria can be used to target relevant audi-
ence and exclude irrelevant audiences for broad
solutions (e.g. men’s vs. women’s clothing), or can
be refined further to target more specific solutions
(e.g. women’s clothing for warm winter regions vs.
cold winter regions).

Refining targeting further will begin to utilize the


advertising network’s data around visitor interests,
or topics. Ad networks place cookies on all web
browsers that help to establish their interests. The
DMP BlueKai offers web users the ability to see
what they know about them by visiting the BlueKai
registry. (Active as of publication). The registry
exposes the way BlueKai sees each web user as it
aggregates data from web tracking cookies.

Within each of the categories (seen in Figure 6.3)


will reside anywhere from one to hundreds of
pieces of information stored within the browser
which purport to define the user of that browser.
For example, expanding the “Hobbies” and
“Interests” tab on my browser revealed 80 (16 pages

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Figure 6.3  
BlueKai Data
Categories

Figure 6.4  
BlueKai
Category Details

times 5 lines per page) pieces of information about


my hobbies and interests. Not all were accurate, and
Figure 6.4’s view reflects the level of detail related
to each item.

I am an online shopper, interested in healthy living.


I have not read a print magazine in some time, but I
consume content from magazines online. I do vote,
and I am interested in the environment. Knowing
this about me, when I establish an audience around
interests and other characteristics, ad networks will
target ads who have selected these ‘interests’ toward
me if I fit the other criteria for the audience
(e.g. age, gender, location).

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Retargeting

While all of the targeting often begins with an


understanding of segments of customers, ultimately,
data should allow targeting on a 1-to-1 basis with
each consumer. This movement toward 1-to-1 mar-
keting begins with the practice of “retargeting”,
which uses information from prior interactions with
a consumer to continually re-establish the efficiency
parameters (expected return and acceptable cost)
and increase the effectiveness of content and chan-
nels by leveraging information shared (tacitly and
explicitly) through these prior interactions.

At the most basic, retargeting is simply targeting


people who have had some prior exposure to the
brand in a channel where such exposure can be
tracked. Using Google AdWords for example, target
audiences for ads can be created based on cookies
that recognize that a consumer has visited your site
before. Audiences can also be created using “look
alike” models to identify consumers who may not
have visited your site, but ‘look like’ those who
have visited your site based on relevant characteris-
tics, or who have visited sites in your market (e.g.
competitor sites). When the prior interaction with
your content involves some type of engagement
that sends a signal, the retargeting effort can be
made more effective and efficient through evalua-
tion of that engagement. For example, if the con-
sumer reviewed or added a product to their online
shopping cart in a prior visit to the website, then
the retargeted advertisement may include an image
of that item, and may include an offer designed to
appeal to the expected or expressed interests of
that consumer.

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Paid Social Media

When organic social media was discussed in the pre-


vious chapter, it was noted that social media impres-
sions and engagement can also be generated through
paid methods. While content shared through organic
social media will only reach the network that is
already engaged with your brand with additional
earned impressions passed along to members of
those consumer’s networks when content is engaged
with or shared in some way, paid social impressions
can be purchased from across the entire social net-
work audience. The purpose and approach to paid
social marketing is similar to that of all other paid
media marketing, with the key distinction being the
direct interaction with the social networks as ‘pub-
lishers’. We will use the Facebook Ads interface to
explore the similarities and differences in creating
and targeting audiences in social media, as it repre-
sents the most options available for targeting in
social networks.

Facebook Ad Manager

Facebook’s Ad Manager is the interface for develop-


ing audiences, setting objectives and measuring
results. Facebook encourages the establishment of
objectives for each campaign, and facilitates the
creation of tracking pixels to track these objectives.
For example, if your objective with a Facebook cam-
paign is to drive not just visits to your site, but com-
pletion of some activity like a download or purchase,
then you would create a tracking pixel and assign it
to the ‘complete desired activity’ objective, then

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place it on your site in a place that visitors only reach


after completion of that activity, such as a “Thank
You” page.

As with any paid media tracking pixel, not only does


tracking conversions offer performance and optimi-
zation metrics (CPA) tied to business results, but it
allows the network to optimize delivery of future ads
to this business outcome based on an algorithmic
seeking for consumers who look like prior convert-
ers according to any combination of relevant charac-
teristics and behaviors.

Figure 6.5 shows Facebook’s top-level chart for cam-


paign performance tracking. The shape of this cart
shows the common issue of ad “wear-out” that will be
encountered in any medium; at some point all rele-
vant exposures will have been made and the ad will
either be showing up to the same people again and
again, or will algorithmically be taken out of rotation
to avoid such ineffective repeat exposures. When
campaign are targeted to very specific audiences
(such as the one shown), wear-out happens more
quickly. The campaign above was optimized to a low
CPA, which accordingly delivered a low conversion
Figure 6.5   rate. The campaign above was stopped when conver-
Campaign sions flat-lined near zero while cost reached equilib-
Conversions
rium at their highest rate.

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Facebook’s audience creation allows targeting simi-


lar to other paid advertising. The most basic target-
ing is built around age, gender and location.
Targeting can be refined around interests and
behaviors. On social networks, understanding of
interests and behaviors are clearly measurable: from
explicit expressions of interest in “about me” sec-
tions, and from engagement with content within the
network. Because engagement with content within
social networks is social, targeting can also be estab-
lished and broadened around any individual con-
sumer’s social network relationships.

Facebook and other social networks also allow retar-


geting. For example, Facebook facilitates the crea-
tion of audiences from information you already have
about consumers that can be matched with
Facebook’s details about them; including email,
phone numbers, or Facebook user IDs. Advertisers
using Facebook apps to engage their audiences can
retarget to users based on actions taken within the
app. And Facebook offers tracking pixels that can
create retargeting audiences from prior visitors to
specific pages of a website.

Facebook Marketing API

As a counterpart to its Social Graph API, Facebook


also offers a Marketing API which allows the audi-
ence management, ad campaign management, con-
tent management and performance measurement
data and capabilities to be access from external
applications, including 1st party and 3rd party sys-
tems used for the aggregation and coordination of
paid media planning and delivery across multiple

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networks. The API also allows for 1st party customer


data, such as CRM, sales and consumer insights data
to be ingested and utilized by Facebook.

Smart advertising networks (including social net-


works) are adding value to their services by offering
such read/write APIs as advertisers and their agen-
cies are reliant on multiple networks and are becom-
ing more sophisticated in how they exchange data
with those networks to optimize their marketing
efforts. Networks that do not accept 1st party data
from advertisers for establishing audiences and tar-
geting and that do not deliver data back to advertis-
ers for performance evaluation and further planning
are creating walled gardens that advertisers will not
be able to incorporate into their paid media ecosys-
tem. For even smaller advertisers, working across
multiple interfaces with audiences defined in each
to manage advertising to what is actually a single
audience accessed across multiple channels is not
only inefficient with regard to the time and effort
required to manage multiple systems, but is ineffec-
tive as well since impressions to the same person
cannot be coordinated. As a new generation of mar-
keting technology to facilitate integration and coor-
dination across channels emerges, APIs such as
Facebook’s — and not the network specific dash-
boards and interfaces — will increasingly become
the method of interaction with networks and their
data.

6.4  DSPs and Programmatic Real-time Bidding

Re-orienting ourselves to the diagram that started


this chapter (Figure 6.1), we can see that through
the discussion previously we have addressed how to

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Figure 6.1  
Social Media
Ecosystem

deliver targeted content directly with a publisher or


through an ad network with insights about our tar-
gets informed by data from a DMP and from the
networks themselves.

The final approach to paid media buying outlined in


Figure 6.1 (reproduced here again) is an algorith-
mic approach called Real-time Bidding (RTB), which
optimizes the efficiency or cost/benefit ratio around
qualified impressions by considering how much
each impression could be worth, and determining
how much to therefore bid to have the chance to
present content to that impression.

The real-time bid involves a micro-second negotia-


tion between what the publishers or their represent-
ative network proposes an impression is worth to
interested bidders, and the value that all advertiser
bidders are willing to place on that impression. In
this exchange, each side is calculating a value of the
impression, and will have a limit (bottom for seller
and top for each buyer) they want to achieve in the
exchange. In this exchange, Ad Networks have far
more information than the ad buyers, and so are in

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a better position to maximize the value they can


achieve from selling an impression. While the net-
work knows what all bidders are willing to pay to
start, and can discover various maximums through
the bidding process, any given buyer does not know
what other buyers are willing to bid. Thus, the deter-
mination of what to pay for an impression must be
based on a clear understanding of the expected
value of that impression.

This understanding of what each impression might


be worth is a data-driven understanding. It requires
that advertisers understand how any given audience
member they might encounter translates into a
potential consumer of their product. Taking the
same characteristics that can be used for targeting
into account (demographics, interests, prior online
behaviors, prior interactions with the brand at any
track-able touch-point), each prospective impression
must be values for their likelihood to convert, and
the expected value of such a conversion. And this
data-driven decision is not a managerial decision, it
is a decision that must be made and acted upon in
micro-seconds.

The tool that allows advertisers to evaluate data


about the consumer behind any potential impres-
sion to determine their propensity and value is a
DSP, and in Figure 6.1, it is shown as the system that
intermediates between the advertiser/agency and
the exchange through the process of RTB. Demand
side platforms allow advertisers to integrate their
data and interactions with multiple exchanges, and
their audience data from their DMP so in addition to
being the interface with exchanges for managing
advertisers’ interests in RTB, Demand Side Platforms

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Paid Media Analytics 171

also allows integrated performance measurement


and media planning across multiple exchanges.

RTB is also commonly referred to as “programmatic


marketing”, as the decision about each ad placement
is ultimately being determined by a computer pro-
gram using decision algorithms. The core decision
algorithms for RTB sit within the respective DSP
technologies, but each advertiser will customize the
variables and values used as inputs to their respective
programmatic campaign. This process of customiza-
tion of programmatic marketing algorithms for cus-
tomer acquisition and remarketing is part of a larger
movement in digital marketing toward the practice
of “marketing automation”, which we explore in
Chapter 7.

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Chapter
SEVEN
Testing & Optimization.
Marketing Automation.
Attribution

Having completed our overview of the data and data-


driven strategy considerations related to the paid,
earned and owned media channels, we now turn to
several approaches that allow us to begin maximiz-
ing the effectiveness of our marketing delivery
within and across channels through the delivery of
this data.

7.1  Prescriptive Analytics: Testing & Optimization

The strategic and design processes behind digital


content and user experience delivery often reach a
point in their process where a decision about the
‘best’ approach is required. While this decision can
often be effectively made based on professional
experience, prior data and a knowledge of best prac-
tices, there are also times when none of these can be
applied to the question at hand, either because there
are multiple and differing opinions around what
experience, data and best practice suggest would be
the best course, or because none of these are appli-
cable to a new content or experience design chal-
lenge we are trying to solve. In these cases, rather

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than guessing, the smart marketer will turn to testing


or experimentation to develop a data-driven position
on how to proceed.

Testing and experimentation can be done within


paid, owned or earned media by two approaches:
A/B/n testing or multivariate (MVT) testing. A/B/n
testing is the more straightforward of the two
approaches. In this approach, a control version “A”
is tested against a change in one variable through
one or more test versions (designated “B” through
“n”). In MVT testing, there are multiple test versions,
each of which contain some unique combination of
several variables being tested. Multivariate testing is
beneficial when there is a hypothesis that proposes
that a change of several variables will result in a bet-
ter outcome than a change in any one variable, and
allows the marketer to run a single test to under-
stand the lift provided by each possible combination
of changed variables as opposed to needing to run a
sequence of A/B tests for the same understanding.
The challenge with MVT testing is in the rapid
growth of versions as variables are added, and the
size of sample therefore needed to reach statistical
significance in the results. In a simple A/B/C test,
traffic to the element being tested is split 33/33/33
between the three versions, which means that we can
quickly collect a large enough sample of visitors in
each case to make the results statistically valid. In a
MVT test of three variables however, there would
need to be 27 versions to test all possible combina-
tions of all three variables, meaning each version
gets less than 4% of total traffic. With such small
numbers coming to each version, the time it will take
to reach statistical significance for each version will
be quite long.

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Sidebar: Statistical Significance and Sample Size

It is worth taking a small sidebar here to ensure a


shared understanding of the concepts of statistical
significance and sample size since they are central to
running a valid test. When we present the results of a
test, we want to be able to say that we have some level
of confidence that the results we got from the test
represent the reality we could expect when the test
version was exposed to everyone engaging in the
experience. Ensuring a random distribution in
the sample is a requirement for being able to claim
that our test represents what we could expect to see
in reality. The next requirement is to ensure we
receive a large enough sample of responses from this
random distribution to give us a reasonable expecta-
tion of the range of outcomes we could see. In work-
ing with a random sample, we will not expect that we
can even predict the exact outcome we will see from
our total population of visitors with 100% certainty,
but we can strive for as little error as possible in our
estimate. A typical goal for testing is 95% signifi-
cance, which means that there is only a 5% chance
that our results are based on an error in the sample;
e.g. our sample was not perfectly random, and/or we
have not seen a truly representative sample of the
population. If we have a random sample, meaning
anyone engaging in the experience has an equal
chance of seeing the test vs. the control, then we
need only to ensure a sufficient sample size to achieve
statistical significance at our desired level.

To determine the sample size required, we need sev-


eral pieces of information to input into our formula.
The first is the level of significance, which should

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typically be no less than 95%. The second is the


amount of change we want to detect, which we call
the Minimum Detectable Effect (MDE). If our cur-
rent conversion is 6% and we want to be able to
detect an absolute increase or decrease of 0.5%
(meaning a result of 5.5% or 6.5% would be pre-
sented with 95% statistical significance), then our
MDE is 0.5%.

With these three variables — significance, current


conversion and MDE — we are ready to calculate
sample size once we have dealt with a second con-
cern over error in the estimate. With our selection of
95% significance, we’ve addressed the potential
error of declaring our results to reflect reality when
they actually do not. But there is an alternate poten-
tial that we may make the error of missing an effect
that actually does exist in reality. To address this
error, we can define a ‘power’ of the test, which is
the probability that the test will detect the defined
effect. Just as 95% is a commonly acceptable level of
significance, 80% is a commonly acceptable level of
power, meaning we have 80% confidence that we will
capture the effect if it exists.

Most testing tools will manage power internally, but


will allow significance to be adjusted as desired.
There are sample size tools included in testing tools
or available in many online calculators which allow
the input of current conversion rate, desired signifi-
cance, minimum detectable effect and even power,
and will output the same size required to fulfill all
of these criteria. For example, for the criteria
defined above, we would need 35,824 subjects per
version (A and B) of the test, so a total of 71,648
subjects.

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Designing a Test

Given the sample population required for the simple


A/B test defined above, the sampling challenges and
design complications inherent in MVT testing should
be clear. Accordingly, we will focus on the A/B
approach to testing for the remainder of this chap-
ter, though it should be relatively obvious how most
of these principles can apply to MVT testing as well.

The first step to testing is to define and document


the goal you are seeking from the test. Test goals are
most commonly related to improving performance
around a key performance indicator (KPI), such as
increased click through on display advertising, or
increased engagement with a web page’s primary
call to action. The goal may be defined in terms of a
specifically quantified increase, but typically goals
are simply targeted against a significant lift, the
higher the better.

With the target KPI defined, the next step is to iden-


tify one variable that we think could be changed to
create significant improvement to our target KPI,
and to explain, in the form of a hypothesis, why that
change will produce improvement. Often, organiza-
tions will reach this step and realize they cannot
actually explain why they think a change might pro-
duce results, and are simply seeking to see if an alter-
native would work better than the existing approach,
without any basis for thinking it would. In this case,
a test without a hypothesis being tested is not actu-
ally a test, it is instead an experiment. Running
experiments to better understand how marketing
works is not a bad idea, so there is no problem with
this approach as long as it is acknowledged explicitly,

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and is not an experiment masquerading as a test and


trying to hide the lack of a hypothesis.

Whether we are running a test with a hypothesis, or


conducting observation through an experiment, in
an A/B test, our objective is to see a lift in outcomes
by the alteration of a single variable. In a test, the jus-
tification for the variable we chose and the change we
make to that variable are defined in our hypothesis.
The variable we chose may be related to any number
of elements in the digital experience, it may be loca-
tion of an ad, image or text, it may be the content of
the ad or copy of the text, it may be the structure of a
form, the sequence in which content is presented, or
the way in which navigation is structured. In all
of these cases, our basis for improving performance
of the experience will typically be related to resolving
an experience barrier or improving an experience
driver. These are several of the most common driv-
ers/barriers:

· Clarity. A lack of clarity in the reason for or pur-


pose of a message or experience is a sure barrier to
performance, just as increased clarity can be a
driver of improvement in performance. You don’t
want content viewers or site visitors to be confused
by or lost in the experience you deliver, and if
there’s a chance that they are, then increasing clar-
ity at that point is a good testing focus.
· Consistency. A close cousin of clarity, a lack of
consistency throughout the experience a user has in
digital channels can create a sense of incongruity,
and drive people away from the experience before
they reach the point of conversion. A common area
of missed consistency is in display advertising that
drives users to a landing experience that does not

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align with what was communicated in the ad.


Content, copy and UX that does not maintain logi-
cal consistency throughout the site or across chan-
nels (e.g. being unable to find something on
mobile that was easy to find in a laptop browser)
can also generate a negative response. Failing to
remember details about a user within a site experi-
ence as moving from page to page or section to
section (e.g. what was provided in one form is
asked for again on a subsequent page) is a major
failure in consistency, especially as users expect sites
to remember them (with their permission) from
visit to visit.
· Value/Urgency. In display advertising, on the
website, in email, and even occasionally in social
media; at some point in the digital experience the
visitor should feel compelled to act. A digital expe-
rience that fails to convey a sense of value or
urgency somewhere within its most engaged ele-
ments is clearly not working hard enough to drive
users to a conversion. An effort to more effectively
convey value and/or urgency is perhaps the most
common basis for testing, and rightly so. If the
path to conversion is indeed being presented
clearly and consistently but users still aren’t con-
verting, the next clear area of focus is in ensuring
that there is effective communication around the
value or urgency that users should feel in following
that path.
· Friction. A well designed and/or well tested expe-
rience will present users with a clear and consistent
experience that guides them toward a compelling
presentation of value and/or urgency to act. The
next barrier to conversion is friction in the process
required to complete the conversion. This is most
commonly related to content input required by

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users, for example, forms with too many fields or


too many options in several look-up fields, or forms
that are not designed well for input on mobile plat-
forms. Technical issues, such as pages that are slow
to save or slow to load, can also cause friction.
Forms that can be started but not saved, requiring
re-entry on a subsequent visit, violate good experi-
ence in terms of both consistency and friction.
· Anxiety. A close cousin of friction, anxiety causing
elements include a lack of clarity in the reason for
the collection of information, or requests for cer-
tain forms of personally identifying information
(PII) such as social security number. While person-
alization and consistency are typically desired by
users, there are times when the insertion of per-
sonal information or a sense of over-familiarity
within digital communication (especially off-site
display re-targeting) can seem ‘creepy’ and create
anxiety.

While our focus in A/B testing should be on trans-


forming just one variable, the transformation may
address more than one of the drivers/barriers
defined above. In a test, improvement in at least one
of these areas should be the basis of the hypothesis.

Context, Context, Context

In creating and evaluating the results of a test, it is


not only the hypothesis of the test that matters, but
the way in which it is designed, conducted and
evaluated as well. The importance of sample size has
been discussed already. Another consideration
around the sample to ensure statistical significance
is the requirement that the sample is truly random

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in that it proportionately represents participation


by every type of person (segment) you might engage
in the experience being tested beyond the test
environment.

With a random sample and sufficient sample size to


reach statistical significance the test can be put into
production with a target to reaching 95% statistical
significance. While the test is running, the analyst
can begin to define expected outcomes by segment
where the characteristics or behaviors of certain seg-
ments may inform how they are expected to respond
to our efforts to reduce barriers or increase drivers
of the experience. Not everyone is made anxious in
the same ways, or has their anxiousness resolved in
the same way. Likewise, not everyone perceives value
in the same way.

Once the test has reached 95% significance, the ana-


lyst should explain the outcome as clearly as possible.
If the test version showed lift, the analyst will restate
the hypothesis in explaining the result. If the test ver-
sion did not produce a significant lift, there will be
no explanation for the failure to achieve this result in
the test data itself. In such cases, the reason for the
failure to produce an outcome is that the hypothesis
was incorrect, or more pointedly, the basis for the
hypothesis was incorrect. The results of a failed test
do not contain clues as to what to do differently in
the next test, they only contain clear guidance on
what would not work if tested again.

One valid ‘dig’ area in the evaluation of test results


is in outcomes against segments. As stated above, the
attitudes and characteristics of different groups may
cause them to respond differently from the average

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response. Isolating responses from specific segments


and evaluating results for these segments against the
entire sample may reveal that what did not work for
the entire population does in fact seem to work for
a small portion of the population. With the capabil-
ity for dynamic targeting inherent in digital market-
ing, such knowledge can be very beneficial; though
we may not push the tested approach to production
at large, we can use targeting to serve the tested
approach to members of the segment that respond
better to the tested version than to the control
version.

Common Test Tool Functionality

There are many strong testing tools available for


marketers, which range from the free Google
Experiments inside Google Analytics, to robust SaaS
solutions such as Optimizely and Monetate, to enter-
prise solutions such as SiteSpect and Adobe Test
and Target. The capability to build increasing com-
plexity into tests, such as MVT, sequencing and cross-
channel integration, the built-in ease of integration
with other tools, the number and size of tests that
can be conducted and the integrated analytics for
tests tends to drive cost, but all testing tools have
several areas of functionality in common.

· Test set-up. Google Experiments takes the most


basic approach, requiring two different page files
to be tagged as test and control options, while
tools like SiteSpect and Optimizely allow test
designers to dynamically change aspects of a page
with graphical HTML editor. All tools allow defi-
nition for whether the test population will be split

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evenly across versions, or whether some versions


get more traffic than others. All tools also require
that a “goal” be defined as the KPI against which
the test is being run, and that a target level of sta-
tistical significance be defined.
· Test administration. All tools, from free to large
enterprise editions, also provide common basic
administration capabilities. All tools have built in
sample selection methods to ensure randomization
of the sample, and to monitor for statistically valid
sample size and call the test once the desired level
of significance has been reached.

Blind Spots and Dark Patterns

We end this section on testing and optimization with


an area of caution when it comes to testing.
Organizations tend to become very supportive of
testing the more they understand how beneficial it
can be in driving business performance. However, it
is important that testing focused on marketing KPIs
(CTR or clicks on the CTA) can clearly define how
those KPIs also drive business results. When tests are
designed solely to drive marketing KPIs without
clear understanding of the impact of those results on
overall user experience and/or business results, the
tests are prone to ‘blind spots’ in terms of whether
they are actually helping the business, and if they
might actually be doing more harm than good when
considered as part of a bigger picture.

A few years ago, I worked with a client who sold a


high-consideration product offline through large
retail chains, and used digital marketing in search,
web, social media and email to guide comparison

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shoppers through product feature descriptions and


value propositions over a multi-touch decision jour-
ney in the online environment.

Because this client was not able to track users from


the site to the store to truly understand how digital
marketing efforts contributed to sales, their execu-
tive team had decided to evaluate the value of digital
(and the performance of the VP of Marketing in
delivering that value) in terms of a ‘proxy’ measure
for sales, which they determined should be a click on
the “Where-to-Buy” (WTB) call to action for each
product on the assumption that at least some of
these would actually convert to sales.

Under pressure to deliver what executives considered


to be “conversions”, the digital marketing team was
asked to find ways to increase WTB conversions. In
evaluating opportunities to drive up this KPI, one
digital strategist noted that the Canadian version of
the site had a higher WTB rate than the US site. On
investigation, it turned out that the Canadian site did
not show pricing on the product detail page as did the
US site, but instead showed pricing only on the page
served from the WTB click. Seeing this as the basis for
the higher rate of WTB clicks on the Canadian site,
the US team decided to test a change to their site that
would match the Canadian site, moving pricing off of
the detail page and behind the WTB click.

As a result, WTB clicks on the US site did increase.


Luckily, this client allowed our analytics team to
accompany this test with a satisfaction survey.
Although the KPI was improved, the survey showed
that satisfaction with the site was much lower in the
test version than in the control, and many comments

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suggested that the frustration caused by having to


look for pricing had soured them on the idea of
selecting this brand’s product. While the test had
achieved a result in increasing a marketing KPI, it
had actually done so by decreasing clarity and
increasing friction, and the result of this degraded
user experience was an overall decrease in the value
of the site to users and the business, despite the
increase in the marketing KPI. Needless to say, we
advised the VP of Marketing not to implement the
winning result, and began to help the organization
rethink how they measured the value and success of
their digital marketing.

This case illustrates the unintentional sacrificing of


good user experience in exchange for a business
outcome in an approach that I call a “blind spot”
because the organization has become blinded to the
bigger picture in focused pursuit of a marketing KPI.
However, there are many unfortunate cases when
the sacrifice of user experience from manipulation
of that experience in pursuit of a marketing goal is
not unintentional, but is in fact quite intentional.
The creation of such intentional manipulations of
experience in pursuit of a KPI have become known
as “dark patterns”.

Dark patterns are intentional experience design ‘pat-


terns’ driven by the desire to maximize short-term
outcomes without concern for the longer-term conse-
quences. Thankfully for web users everywhere, since
2010, a group of user experience professionals has
been focused on documenting these deceptive mar-
keting practices whenever they are found via their
website http://darkpatterns.org. This group of user
experience designers has identified 14 dark patterns

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that companies engage in to intentionally deceive


users in pursuit of higher performance in certain
KPIs. While pursuit of higher performance in mar-
keting is the objective of testing, if the proposed test
option appears to align with any of the dark patterns
below, the analyst should raise their concern over the
use of a strategy that uses deception to increase a KPI.

Following are definitions for a few of the more rele-


vant patterns of concern from the Darkpatterns.org
website:

Bait and Switch: The user sets out to do one thing, but a different,
undesirable thing happens instead. This is one of the oldest tricks in the
book, and it is very broad in nature — many dark patterns involve some
kind of bait and switch.
Disguised Ads: Adverts that are disguised as other kinds of content or
navigation, in order to get users to click on them.
Forced Continuity: The user signs up for a free trial on a website, and
in doing so they are required to enter their credit card details. When the
trial comes to an end, they automatically start getting billed for the paid
service. The user is not given an adequate reminder, nor are they given
an easy and rapid way of canceling the automatic renewal. Sometimes
this is combined with the Sneak into Basket dark pattern. This dark
­pattern was previously known as “Silent Credit Card Roll-over” but was
renamed since the term “forced continuity” is already popularly used in
Marketing.
Hidden Costs: A hidden cost occurs when a user gets to the last step of
the checkout process, only to discover some unexpected charges have
appeared, e.g. delivery charges, tax, etc.
Roach Motel: The “Roach Motel” is a broad category of Dark Pattern
that subsumes most types listed on this site. Put simply, a Roach Motel
makes it very easy for a user to get into a certain situation, but then
makes it hard for them to get out of it when they realize it is undesirable.
Email newsletter un-subscription is a well-known example — whereby

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it is typically easy to subscribe, but much more effort is needed to


unsubscribe. The revised CAN–SPAM 2008 rules state that this prac-
tice is forbidden for emails that have a primary purpose ‘to advertise or
promote a commercial product or service’. (Unfortunately, CAN–
SPAM does not cover ‘transactional or relationship’ messages.)
Sneak in Basket: The user attempts to purchase a specific item.
However, somewhere in the purchasing journey the site sneaks an addi-
tional item into their basket, often through the use of an opt-out radio
­button or checkbox on a prior page.
Trick Questions: The user is required to respond to a question (typi-
cally in the checkout process), which, when glanced upon quickly
appears to ask one thing, but if read carefully, asks another thing entirely.
This pattern works because it is normal for users to employ high-speed
scan-reading on the web — see Steve Krug: ‘We don’t read pages. We
scan them.’)

7.2 Marketing Automation

The previous chapter introduced you to the practices


of programmatic and algorithmic targeting and re-
targeting in paid media channels. In essence, market-
ing automation is the practice of programmatic and
algorithmic targeting taken beyond paid media and
applied additionally within any owned or earned
media channel that a user might encounter through
their decision journey. With effective marketing auto-
mation, brands can ensure consistency and continuity
in the user experience for each user by ‘remember-
ing’ and learning from all prior interactions with that
user, and by tailoring each ‘next’ experience a user
has with a brand based on information the user has
already provided (tacitly or implicitly) and models
that evaluate the probable barriers and motivators on
the path to conversion for each user.

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There are two distinct data and analytics challenges


posed by this effort to guide users through a set of
experiences designed to maximize their probability
for conversion. The first is the challenge of recogniz-
ing a given user as the same individual across the
array of paid, earned and owned media touch-points.
This is a problem we can refer to as establishing and
maintaining a unified or universal customer profile.
The second is the challenge of predicting what type
of engagement will increase the propensity of any
given individual to convert in this visit or in a subse-
quent visit. This is a problem we can refer to as
dynamic propensity modeling, which we will review
with other analytic methods in Chapter 8.

Data Integration

The challenge in building a universal customer pro-


file begins with the nature of device constrained data
collection. In web and mobile analytics, anonymous
data about a user is tied to a browser, so that a single
person visiting a site in the morning from a PC and
in the afternoon from their phone will appear to be
two different people with two different visitor IDs to
the analytics system. Without data integration, their
click on a display ad several days ago will not be tied
to their email ID in determining what promotion
they should be sent. Their unsubscribe from the
email list will not be tied with their identity for ­display
targeting, or with either their web or mobile visitor
ID, Their like of a sponsored post on Facebook will
not be connected to their other behavior in response
to display ads or web activity. And perhaps most dis-
turbingly for the brand, despite having taken some or
all of these actions over the past few days, none of

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these ‘signals’ about their experience and intentions


will be recognized or acknowledged when this person
finally contacts the call center for the purpose that
their prior actions might indicate where they able to
be analyzed (e.g. as a highly qualified prospect for a
specifically searched product, or as a dissatisfied
­customer awaiting a very late shipment, etc.).

In the example above, a unified customer data pro-


file would allow the brand to recognize that this is
one single person engaging in different ways across
multiple channels over time, allowing the brand to
anticipate this person’s interests and needs and to
make their best effort to address those interests and
needs (and the prior activity around them) at each
next point of engagement. The better the brand is at
addressing interests, the more satisfied the customer
or prospect, and the more likely they are to convert
(or repeat, renew, refer or upgrade).

Establishing the unified customer view requires care-


ful data design to establish a universal identifier that
works across all channels. This is most easily achieved
in owned touch-points that allow login against some-
thing like a customer ID, which will associate each
touch-point specific ID (e.g. laptop browser visitor ID
and mobile browser visitor ID) with each other via
the shared customer ID, usually coordinated within
our Data Management Platforms (DMPs). This
approach would also tie these touch-points to the
Customer Relationship Management (CRM) s­ystem
containing the customer ID, and to a call center call
that asks for a customer ID (or links to that ID via a
customer phone number). From the call center, a
purchase or a registration/login we may also c­ onnect
an email address with this customer ID.

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Figure 7.1  
Cross-channel
Customer Data

Integrating our owned channels in an experience


that requires some kind of authentication requires
planning to design each channel’s experience to col-
lect a common identifying variable in each of these
multiple channels (see Figure 7.1) and effort in the
integration of those multiple channel data sources
via that field, but with a commitment to that design
and integration effort, the path to integration is rela-
tively clear. The next challenge arises in the effort to
expand this integration to the inclusion of paid and
social media impressions and engagement.

With the connections we’ve made through our


owned media, we can understand the user by their
behavior across all of our owned channels, and by all
the information we have about them within our
CRM database, which can include demographic and
transactional data. We can augment this with addi-
tional demographics and data about each user’s
perceived interests and actual engagement with con-
text across the web through our DMP, which links
any user we’ve encounter and tagged (pairing their

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unique DMP ID with our universal ID) in owned or


paid (DSP) media to all of the information the DMP
compiles about them from other 3rd party data
sources (anonymized offline transaction data,
anonymized paid media impression/engagement
data, etc.).

As shown in Figure 7.2, information about a specific


person’s response to our advertising can be pro-
vided via a DSP which pairs our universal customer
ID with that individual’s unique DSP ID. With these
additions we can understand any individual cur-
rently present in any of our paid or owned channels
in terms of their prior engagement with us in any
other channel, as well as with regard to an
anonymized categorization of their interests and
behaviors across the web and offline via our DMP.
We may also attempt to pair a social profile (or pro-
files) with the universal customer ID by asking for a
social profile or social sign-up in various channels
(shown in CRM, in Figure 7.2, but could be web or
app also) that are already associated with the univer-
sal customer ID.

If users on our owned properties do not sign in, we


will accordingly not be able to link them across
devices or touch-points. However, we might still be
able to understand them categorically based on the
way they are categorized by the DMP, and we will be
able to target them in paid via our DSP with this
knowledge plus any information we connected about
their visitor ID while they were anonymously on our
site. While this is less than the ideal defined above, it
is still better to have some cross-channel context
than to have none.

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Figure 7.2  
Extended Cross-
channel
Customer Data

Marketing Automation Platforms

Marketing automation tools use (and often help to


establish) cross-channel customer identification and
statistically-based prediction of the best next action
for each customer to automatically deliver those
actions across channels and over time.

Figure 7.3 gives a crude representation of the type of


cross-channel experience that might be “sequenced”
or “orchestrated” with the help of a marketing auto-
mation platform. As mentioned at the start of this
section, marketing automation tool like Marketo,
Oracle’s Eloqua, Salesforce.com’s Exact Target and
IBM’s Silverpop can be used in an algorithmic
approach, meaning programmatic and algorithmic
targeting taken beyond paid media and applied addi-
tionally within any owned or earned media channel
that a user might encounter through their decision
journey. In this use-case, marketing automation
‘remembers’ and learns from all prior interactions

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Figure 7.3   with each user, and tailors each ‘next’ experience
Cross-channel with a user based on information the user has already
Cross Time
provided (tacitly or implicitly) and models that evalu-
ate the probable barriers and motivators on the path
to conversion for each user.

However, marketing automation can be a prescrip-


tive practice as well, and in fact, many implementa-
tions of marketing automation start with prescriptive
approaches wherein the marketing team pre-deter-
mines the steps and timing that should be taken with
users by setting up various “if/then” conditions such
as: ‘if visitor visits ads a product to their cart but does
not return for three days, send an email referencing
items in basket and select an appropriate offer to
prompt purchase’. This is the straight ‘automation’
side of marketing automation. If the understanding
of customers are associated strategies behind the
rules are good, then the result of the rules will also
be good. But if the rules programmed into the sys-
tem are based on partial or faulty understandings of
customers and their motivations, then setting them
as rules may cause more harm than good.

Marketing automation tools are typically applied first


to an advertiser’s owned channels; web, mobile and
email. These tools use their own cookies and tags to
track users and their engagement across these

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channels over time, and coordinate delivery in these


channels via this user-level data. When this data is
integrated with CRM systems and DMPs, and synchro-
nized with paid media tracking, the data available for
real-time decision making can become very robust. A
marketing automation system can be a simple auto-
mation tool; automatically executing the same
­pre-determined reasoning and tactics that might have
been executed without software, but can now be
delivered more quickly, and with more granularity in
the approach. However, when cross-channel behavio-
ral data integrated with contextual user insight is
available, rather than building their potential for
marketing performance on some combination of
aggregate insights, experience and management intu-
ition, the predictive analytics aspects of these market-
ing automation should be activated an applied.

In the marketing materials produced around these


tools, the specific predictive methods are left pur-
posely opaque, presumably to defend from revealing
proprietary competitive information. The specific
data ingestion capabilities and models applied to
that data are different across all offerings, and in
evaluating Marketing Automation options, potential
buyers of these systems should seek to understand
how easily they can incorporate predictive analytics
through the tool to apply dynamic machine intelli-
gence to their marketing automation approach.
Even as all of the specific approaches will have vary-
ing degrees of difference, the underlying approach
to machine learning for dynamic delivery remain
largely the same:

1. Based on a comparison of an individual’s charac-


teristics and other context to those of prior users,

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score the propensity or likely probability of con-


version for each individual encountered through
marketing channels.
2. Use dynamic content delivery capabilities to per-
sonalize engagement based on propensity,
dynamically delivering push-messages (email,
mobile/text and ads) as optimized against the
best probable response for each user, suppress-
ing or escalating certain forms of engagement
based on user score, and dynamically selecting
the best content for each interaction. (This will
be typically be done in integration with a DSP for
delivery to display media).
3. Continually evaluate the ‘lift’ in probability to
convert created by sequences of channel and con-
tent interaction for users of different types over
time, and update probabilities for propensity
scoring and delivery optimization scoring
accordingly.

This last step, evaluation of incremental lift by chan-


nel (and ideally the specific content within that
channel) across the entire path constituting the cus-
tomer decision journey, and the assignment or “attri-
bution” of credit for a conversion to each channel,
has been a well-established topic of analysis outside
of marketing automation for some time. While the
integration of such insight into dynamic automation
is the logical next step for this approach, a first gen-
eration of Attribution technology providers have
helped established the vision for the benefits of such
measurement executed well, and have dealt with the
challenges to this approach arising from discon-
nected channel data.

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7.3  Cross-channel Attribution

Cross-channel attribution is a method used in con-


junction with cross-channel data to understand how
all of our marketing channels are working together,
and which are doing the most work.

The basis for that decision in a single channel like


paid display, or across multiple channels, comes
from a (machine learning based) understanding of
how prior converters who either (1) shared a similar
path to this point, or (2) are significantly similar to
this person at this point ultimately proceeded from
this point to a conversion. Not only can the model
compare and evaluate large numbers of paths
through multiple channels with regard to the respec-
tive conversion value of each, but it can also predict
how much each channel contributed by evaluating
the probability that the same outcome could have
occurred with at least one of the channels removed.

Figure 7.4   An example of how the attribution algorithm ‘thinks’


Attribution — can be seen below. Figure 7.4 shows three different
Paths to
customers’ paths to a decision to buy or not. (In this
Conversion
case, let’s say a cart left abandoned for over 30 days
is considered a lost sale).

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We see that Customer 1 had four interactions with


the brand, in four different channels, and ulti-
mately made a purchase. Customers 2 and 3 each
had just three interactions with the brand, and
while Customer 3 purchased, Customer 2 did not.
We see that Customers 1 and 3 who both purchased
also both engaged in channel 4, while Customer 2,
who did not purchase, also did not engaged in
channel 4.

Now, our attribution modelling algorithm will not


determine that Channel 4 is an important driver of
purchase (thus earning a higher attribution credit)
because it was present in 100% of purchases and
absent from 100% of lost sales, or that channel 3
deserves less attribution credit because it was only
present in 50% of sales from a sample of just three
observations, but it will begin to make these determi-
nations as it collects thousands of observations, ulti-
mately resulting in a weighting of each channel’s
apparent influence over purchase in the context of
all other channels that were also engaged by users
and did or did not contribute to purchase in some
number of cases.

This fills in one piece of the puzzle regarding our


prediction as to the propensity that a customer we
encounter in a channel will have to purchase if we
engage them effectively in that channel, but it is only
a piece of the puzzle, because these predictions
come from a mean frequency of occurrence of com-
binations of channels against all of our observed
cases, and can be made more precise when we move
from the general case which ignores much of the
context around this path through the channels to
more specific cases that account for more context.

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Chapter
EIGHT
Data Management, Models,
and Algorithms

8.1 The Applied Digital Analytics Playbook (ADAP)


Part Two

Having defined the who, what, when, where and why


of our digital marketing strategy through the first
two sections, the third section of the ADAP now
begins to describes how all of this will happen
through data by defining how we will get and use
data to drive the digital marketing experience.

ADAP Section 3.1 Segmentation

The description of segments is perhaps the most


critical fundamental practice related to the strategies
and tactics defined in this book, as an understanding
of the customer, their behaviors and their motiva-
tions resides at the core of every other aspect of data-
driven strategy and methodology discussed herein.

Segmentation is simply the organization of custom-


ers into shared groups through top-down (predeter-
mined) or bottom-up (statistically) based clustering
around their observed characteristics. Demographic
characteristics are the most commonly used top-down

199

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variables, with segmentation by gender, age, ethnicity,


income and geography typically emerging from even
the most basic customer insights practice. The most
common form of bottom-up segmentation for market-
ing is developed through RFM (Recency, Frequency
and Monetary) modeling. RFM modeling uses data
from customer’s transactions, and groups customers
according to the recency, frequency and monetary
value of those transactions.

These two common forms of segmentation reflect a


business-centered mindset in planning versus a con-
sumer-centered mindset. Although this is informa-
tion about customers, it defines customers in terms
of their value to the business. However, customer-
centered marketing should also be able to under-
stand the value of the business to its customers, and
should understand the customers on their own
terms. For this, segmentation methods must turn —
typically with a statistically informed view — to a set
of characteristics known as “psychographics”.

Psychographic variables cover a wide spectrum of


data about customers’ attitudes, interests, opinions,
values and beliefs. Traditionally, such data has been
collected through marketing research, but the value
of the results of psychographic marketing research
can vary greatly since data is collected through sub-
jective self-reflection and self-reporting, which are
notoriously prone to unintentional bias. With digital
data collection, we are able to get more objective
insights into customers’ psychographic traits through
the observation of online behavior, including social
network activity and content engagement across
multiple media touch-points. In fact, the potential

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insights that can be generated from the observation


of online behavior are so valuable that the next gen-
eration of digital user experience design will increas-
ingly be required to consider how to design explicit
opportunities for insight collection into the user
experiences it builds. Thus, this third section of the
ADAP begins with the documentation of the data we
will need to construct segments or profiles and apply
targeting rules or algorithms against those segments
or profiles.

ADAP Sections 3.2 Data Collected & 3.3 Data Referenced

The next two sections of the ADAP, “Data Collected”


and “Data Accessed”, document specific details
regarding the sources of data that will be used for
our descriptive, prescriptive, predictive and adaptive
analytics.

The Data Collected section, Section 3.2, is where we


provide details in terms of the approach and integra-
tion around the data that we will be directly respon-
sible for collecting and managing through our
various 1st party channels via tagging or through 3rd
party sources via pixels. Here is where we will outline
how we will obtain data from our website, mobile
apps, social media, email, organic and paid search
and paid display media, and what that data will be.
In answering this second question, we will also need
to identify how data from each source will be joined
with each other source by aligning the channel spe-
cific unique ID for each user in each channel with
their common universal user ID that spans all

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channels. The question to answer here is what we


can use from each channel to identify that user as
someone who already exists with reference to
another channel, i.e. with email address, a customer
id, or a device identifier of some sort that would
appear in multiple channels.

In this section we should document the formats in


which data will be accessed or extracted from each
channel (e.g. file export or API), how we expect to
transform data into a common format, and how we
will then load data to our own systems and provision
that data for the analytics purposes that will be out-
lined in Section Four.

The Data Accessed section, Section 3.3, is where we


provide details in terms of the approach and integra-
tion of data that we will be accessing from a separate
system such as CRM, Call Center or Point of Sale
systems. In these systems, we are not responsible for
nor do we have control over the data fields that
populate the system. Once again, we will want to
identify a field in each of these systems which can be
used to link a given customer in these systems with
their records in all other systems by integration
through the universal customer ID. We will also want
to identify the same extract, transform and load
(ETL) considerations for these sources as our owned
sources, so the prime distinction between these two
sections is that in the first we have control over what
data we chose to collect, and need to articulate those
choices to create the data, while in the second the
data available has been pre-determined, and we are
simply articulating what we plan to access from that
existing set of data.

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ADAP Section 4: Analytics Plan

The fourth and final section of the ADAP continues


the definition of how we will use analytics to support
the optimal user experience with data by applying data
as analytics through each of the levels of the analytics
pyramid.

In describing our “Descriptive Analytics” approach,


we outline our performance reporting approach,
including the method and cadence of such report-
ing for various stakeholder across the organization,
as well as the KPIs relevant to each of those stake-
holders. We outline how we will provide context
analytics around performance for each of these
stakeholder groups. Do we expect to conduct ‘deep-
dives’ into performance on behalf of these stake-
holders, or will we be designing interactive
dashboards that can guide our stakeholders into
their own deep-dive exploration of context around
performance? If the later, what type of pre-defined
data categorization will we want to provide? Finally
in this section, we will document how we anticipate
delivering descriptive analytics data to the research
organization.

In describing our “Prescriptive Analytics” approach,


we simply outline the performance data and analyt-
ics we recommend for use in determining testing
needs and the context data and analytics we sug-
gest for formulating hypotheses. We will also out-
line the specifics of the testing tool we have elected
to use, including the integration of data from
other sources (for context or conversion) with that
system.

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Any existing repository of prior test results should be


referenced in this section. Similarly, if we are aware
of tests desired or planned by our organization at the
time this document is developed, we can reference
our test planning document, or document reposi-
tory, from this section.

In the last section of the ADAP we describe the way in


which data flows into “Predictive and Adaptive
Analytics” across the digital marketing environment.
This may be as simple as reference to the channels in
which 3rd party algorithms are being applied, such
as stating our strategies for programmatic buying
through a DSP, algorithmic cost optimization or con-
tent targeting in media or other channels, and/or
marketing automation learning algorithms. If we have
developed, or expect to develop, our own predictive
or adaptive marketing algorithms, such as a proprie-
tary propensity model, or if we intend to modify/
customize the ‘starter’ models provided by our DSP
or attribution tool, the need for and approach to
customization would be documented here as well.

Applying the Data: The Next Steps

Once we have designed our data collection and


transformation in a way that binds together each
view of a single consumer as comprehensively as pos-
sible, and have this integrated data from across paid,
earned and owned media accessible to our analytics
tools and marketing technologies, we are ready to
begin using that data to conduct digital analytics.

There is a fundamental rule of data for marketing, the


better it is integrated around a customer, the better
the ability to market to that customer.

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8.2  Data Mining & Data Visualization

The most common application of data to decision


making has been via data scientists and analysts and
their skill in extracting meaning from large sets of
data, and in communicating that value to the organi-
zation in ways that allow the organization to take
action. The use of visual and increasingly other sen-
sorial methods to communicate the meaning in data
is known as “visualization”. The practice of finding
and extracting meaning from data is often called
“data mining”.

Mining: Cluster & Factor Analysis

Perhaps the largest latent opportunity for competitive


advantage in marketing is in more precisely under-
standing the customer’s influences, and in identifying
the best opportunities and channels in which to
engage those interests. Improvements in the level and
precision of understanding around customer traits
and motivations can be used to subsequently improve
predictions around the response to various marketing
approaches, and to optimize the delivery of marketing
experiences as these scenarios are executed.

As we integrate together behavioral data for each


customer we engage across multiple platforms, we
gain the opportunity to expand our intelligence
about what types of behaviors drive desired out-
comes, and which lead to undesired outcomes. This
understanding of “what works” and “how much” via
attribution analysis aids our intelligence into the
value of various combinations of paths, but attribu-
tion alone leaves many questions about marketing
optimization still unaddressed.

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The first important question remaining after attribu-


tion has explained the relative contribution of media
channels on a path to conversion is the question
“with whom”. The second is the question “why”.
Although they may all be united in having at least
some interest in what we are selling, it is critical for
marketers to recognize that each customer is unique.
In evaluating the performance of our marketing
(and attributing value to multiple channels along
the way), we should also evaluate with whom the
marketing performed well, and with whom it per-
formed poorly. Within each of those performance-
based segments, we may then ask whether there are
some distinguishable groups for whom marketing
performed less well than others. In analyzing data
for this purpose and forming segments from the
bottom-up (versus pre-defined top down group-
ings), the best suited data-mining technique is
known as “cluster analysis”.

There are many statistical models and supporting


algorithms that can be used to perform cluster analy-
sis, the most standard of which may be k-means clus-
tering. Put simply, k-means cluster analysis is a
method of segmentation of data about customers
into groups based on the degree of similarity between
any individual observation and the mean value of
various clusters of observations. Creating such clus-
ters requires strong computational support as each
value in the data set is iterated through in considera-
tion of its relation to the various possible averages
from various clusters of all other data in the set. The
“k” in the “k-means” approach indicates that the
number of clusters is not predetermined. The right
number of clusters is determined by an evaluation of
the extent to which adding an additional cluster

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(k+1) to the calculation reduces variance within clus-


ters and increases variance between clusters.

Clustering is easiest to visualize with two dimensions


or variables X and Y, but it can be conducted with
any number of dimensions and variables, which is
where the value of data collection and an experi-
enced analyst comes into play. Since the clusters cre-
ated by the analysis will be dependent on the
variables provided for the analysis, determining what
might be fed into a cluster analysis might involve
some consideration of how knowledge about these
variables might be acted upon. The variables or
dimensions within clusters that cannot be influ-
enced by us as marketers will provide us with context
around context to which we must react, while the
variables that we can influence will allow us where we
may express this reaction along with the characteris-
tics or behaviors around which we can proactively
engage our consumers.

In mining and understanding our data, “Factor


Analysis” is an extremely useful tool for reaching an
understanding of the meaningful influences on con-
sumers hidden within a large set of data. Motivations,
perceptions and beliefs are all ‘latent’ variables —
meaning that we cannot measure them directly, but
we can observe their existence through their influ-
ence on the things we can measure, which in digital
analytics includes behaviors. With behavioral meas-
urement, we see exactly what people do, but as meas-
ured at the top of this section, we have less initial
insight into ‘why’ these behaviors might occur.
When we can link an individual’s behavior with
other characteristics and traits (e.g. via 1st party
CRM and 3rd party DMP data), and with external

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context including competitors’ actions, marketing


and larger economic conditions, and other context
variables, we create better opportunities to find
unique patterns of influence on consumers across
multiple variables that we can either react to or pro-
actively address.

However, before we begin to build models to help us


interpret these influences and predict the expected
outcomes when these influences are altered in some
way, it is typically worthwhile to conduct an explora-
tory factor analysis on our set of variables to find
common unobservable factors that underlie and
influence the factors we can observe. By this method,
not only do we shift from a focus on variables that are
the results of an influence to focus on the influence
itself, we also accordingly reduce the number of vari-
ables we must consider in subsequent models.

8.3 Predictive Analytics & Machine Learning

In this chapter we have mined for patterns in the


data via clustering and factor analysis, and created
value from the data through visualization. We now
take our refined understanding of our data and our
‘aha’ insights and apply these to the prediction of
future outcomes. Though the importance and value
of prediction to marketing efforts has been stated
repeatedly throughout these pages, perhaps three
key benefits bear repeating.

1. Predictions can be made during planning to opti-


mize inputs to the consumer journey in terms of
optimal initial allocations to channels, content
and user experience as determined by a forecast
of results.

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2. Predictions can be made during the delivery of


the consumer journey to identify and rank pros-
pects (new customer or existing cross/up sell,
renewal, etc.) and their propensity to convert.
3. Predictions can be made during the delivery of
the consumer journey to deliver the Best Next
Experience (BNE) across channels optimized to
revenue, cost per conversion or some other KPI.

Put in the simplest terms, prediction is an estimate


or forecast of future outcomes based on knowledge
of the past. The best way to establish these forecasts
about the future is to identify factors that have
occurred in the past that appear to have influenced
the outcome we are seeking to predict. Thus, our
factor analysis previously gives us the raw material
from which we may start making decisions.

The most common mathematical approach to making


predictions is via regression, which is the use of an
equation to explain, or model, the interactions
between independent variables in relation to the
dependent outcome. The most straightforward (pun
intended) approach to regression is the linear regres-
sion model, which fits the mean of a predicted linear
and continuous range of outcomes as closely as pos-
sible to the set of observed outcomes based on the
distance of the mean of each predicted outcome from
the means of the observed outcomes surrounding it.

When the dependent variable is not continuous but


discrete and bounded, the logistic regression may be
used to transform the variable to a continuous
range.

When the order in which the dependent future


events may occur matters to our analysis, regression

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will not be sufficient to find the temporal or sequen-


tial structure of the predicting independent variables.
In these cases, time-series approaches to prediction
include autoregressive models, moving average mod-
els, and the combination of these such as ARIMA
(autoregressive integrated moving average models).
The recognition of the need for time-series analysis
because of the importance of sequence in a predic-
tion may and should be recognized by the analyst.
For help in selecting the best model for dealing with
sequence, contact your local statistician.

Any of these approaches may be appropriate for the


first and second purposes described previously; to
determine the optimal inputs in terms of the best
forecast of outcomes (what has typically been called
marketing mix modeling), and to forecast or predict
the likelihood of a customer to convert given all
­relevant known variables.

Finally, Classification and Regression Trees (CART)


analysis produces predictions using a decision tree
approach to prediction. The random forest model is
a common example of this approach (illustrated in
Figure 8.1).

In this approach, a number of individual probabilis-


tic decision trees are constructed and the mean or
mode prediction of the individual trees is presented
as the prediction. This model accounts much better
for multiple potential next steps in a series of steps
than does regression, and as such is suited to the
third purpose mentioned earlier; predicting the
BNE across channels at each step a customer makes
optimized to a forecast of potential revenue, cost per
conversion or some other KPI.

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Figure 8.1  
CART
Visualization

Adaptive Analytics: Machine Learning

Machine learning takes prediction from the realm of


what can be conducted and interpreted by the
human analyst, to rapid, iterative multidimensional
processing through which a computer learns as it
passes through each iteration of analysis, and applies
that learning to the next iteration.

This shift in the use of machines from passively pro-


cessing predictive models to actively developing bet-
ter models moves us up the analytics pyramid from
predictive analytics to adaptive analytics.

“Neural networks” are the coolest sounding, and


also most recognized method of adaptive analytics/
machine learning. This method for machine learning
along with support vector machines both make use
of a computational approach called “Gradient
descent”.

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Figure 8.2  
Neural Network

Neural network models take a variety of input varia-


bles and pass them through an adaptive weighting
process to find the combination of adaptively
weighted inputs that best aligns outputs from the
model with outputs from the training data.

This approach is built on a structure of individual


‘perceptrons’, which act like neurons in a real brain,
taking some input, processing it, and firing the out-
put to the next neuron (Figure 8.2).

Let’s say we want to train our machine learning algo-


rithm to make an offer when it recognizes a person
who is an existing customer and does not currently
have an item in their basket or a person who has an
item in their basket but is not an existing customer.
We could try to evaluate this with simple rules such
as AND and OR, which will produce linearly separa-
ble results. The Figures 8.3 and 8.4 illustrate what is
meant by this.

Let’s place “basket” (B) and “no basket” (No B) on


the X axis, and “customer” (C) and “not customer”
(No C) on the Y axis. If we evaluate customers who
are a customer and have an item in their basket,
we get the following linearly separable result in
Figure 8.3, meaning that the division between the
condition that meets the criteria and the conditions
that don’t can be divided with a straight line. The
only true result is produced when both conditions
are met.

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Figure 8.3   E


AND Condition
 d &

EŽ & &


 EŽ

Figure 8.4   KZ
OR Condition
 d d

EŽ d &
 EŽ

We can equally evaluate whether any given person


is either a customer or has an item in their basket,
with the only false result being when a visitor has
neither an item in their basket, nor is a customer
(Figure 8.4).

Neither of these linearly separable results allow us to


recognize someone who is a customer but does not
have an item in their basket, or a person who is not
a customer but does have an item in their basket. Put
into logical expression, such a condition is known as
an “exclusive or”, or XOR (Figure 8.5).

A simple neural network will help us find this result.


Figure 8.2 shows a very simple neural network pro-
cessing our two inputs “X” and “Y”. In the middle
layer, known as the “hidden layer”, at the top we
have a perceptron processing the AND rule, and at
the bottom one processing the OR rule. In this sce-
nario, the “X” perceptron receives four stimuli;
“Basket, No Basket, Basket, No Basket”. The “Y”

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Figure 8.5   yKZ


XOR Condition
 & d

EŽ d &
 EŽ

Figure 8.6  
Neural Network
Decision

perceptron received four corresponding stimuli;


“Customer, Customer, Not a Customer, Not a
Customer”. In response to evaluating for “customer
AND basket” for each pair, the top AND perceptron
outputs “true, false, false, false”. And in response to
evaluating for “customer OR basket” for each pair,
the OR perceptron outputs “true, true, true, false”.
When these pairs are combined in the XOR percep-
tron, the combinations are able to find the “exclu-
sive or” condition: the two cases where the outputs
do not match.

This is a very simple approach to a neural network.


There can be, and typically are, more than two
inputs. In one marketing application we might pro-
vide it with a visitor’s gender, prior visit status, cus-
tomer status, days since last purchase and current
type of interaction. It is this ability to provide any
combination of factors as input for a decision that
makes neural networks so powerful.

One important element of the way neural networks


work, which was not mentioned previously is the

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Data Management, Models, and Algorithms 215

weighting they provide to each exchange from percep-


tron to perceptron. This weighting is how neural net-
works adjust their ‘understanding’ of a combination of
inputs to ‘learn’. Weighting was not shown in the
example because the simple nature of the problem
made the need for weights unnecessary. However, let
us now consider that each of our results is being used
to predict a binary outcome to purchase or not, noted
as 0 or 1. Let us say that True outputs from our hidden
layer are given a value of 1, and false outputs are given
a value of 0. Finally, say that each output from the hid-
den layer carries a weight of 0.5. Let’s look at our out-
puts in Figure 8.7, and add the actual outcome for
each case as well.

We see that with the model, our prediction was cor-


rect in one out of four cases, and halfway correct in
another. With this information, our model could
adjust weights. In this case, for our understanding,
we will adjust only the weights shown, but an actual
network would adjust weights from the inputs to the
hidden layer, and would contain an “error” or “bias”
perceptron, the weight of which could also be
adjusted. For our purposes, this network would likely
adjust the weighting for the AND output down, and
the weighing for OR up. If they were weighted (.75,
.25) then the output would be (1, .75, .75, 0). We
have now improved our prediction for the second
actual occurrence, but we have also increased our
error. To fix this error, the network would weight the

Figure 8.7  
Weighted
Neural Network
Decision

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216 Architecting Experience

input into the hidden layer, giving higher weight to


the “X” inputs than the “Y” inputs, and would con-
tinue reweighting at every layer of the network until
the predicted outputs were optimized in alignment
with the actual outcomes against which the network
was being ‘trained’.

One of the most popular methods by which neural


networks and other machine learning algorithms
‘learn’, e.g. adjust the weights of each connection, is
an optimization method called gradient descent,
through which local minima (for an optimized cost
function or utility function) are established.

Figure 8.8 represents a multidimensional “decision


space” — capable of taking on any number of
dimensions. In the diagram, the algorithm has set
three starting points then evaluated the steps needed
to take to move from each starting point (error,
shown by the height dimension) to the local opti-
mum (the point at which a single step in any direc-
tion will not lead to further decent).

Neural networks ‘learn’ or receive training via gradi-


ent decent algorithms, which adjust the weights in

Figure 8.8  
Decision Space

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the hidden layer via gradient descent until each


node in the hidden layer has found the weighting
which works in conjunction with weighting in every
other node in that layer to the optimal reduction of
error in the model.

Machine leaning algorithms are useful and used in


the dynamic delivery of content, whether within pro-
grammatic targeting and retargeting or personalized
user experience delivery.

Applied Machine Learning/Adaptive Analytics: Dynamic


Propensity & Targeting

Historically, “propensity modeling” is a form of “lead


scoring”, meaning an evaluation of the expected
value of a customer at some point in the sales pro-
cess. Such scores are used to evaluate leads from
sales lead generators, such as online affiliates or lead
aggregation sites, email lists, and directly received
leads through landing pages.

Dynamic propensity modeling provides the mar-


keter (or marketing system) with a prediction of
whether (and how much) engagement in any given
channel in which we find a person will increase the
probability that a person will convert against each
next micro-objective, and how each conversion will
increase the likelihood of that same person ulti-
mately converting against the macro-objective. It can
also determine what creative/UX option amongst
many would be most effective in that given channel,
should we chose to engage. This is essentially similar
to the decisions we are making in programmatic
(RTB) ad buying, where we consider how each given

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impression will potentially impact our sum outcome,


and weigh that against the impact on our sum cost.

A propensity model seeking a higher degree of accu-


racy will also augment simple frequency derived
probabilities with context related to the value and
nature of purchases, observations of time-based
influence from seasonality to time of day, geographic
and demographic data about the customer, and of
course all other context derived from the integrated
view of the customer we created in the previous sec-
tion. The prediction of such a propensity model will
be derived from not just the expectation of the value
of the channel itself in driving results, but the
expected value of that channel in driving results for
a person like the specific individual in that channel
at that moment. For example, we might see that calls
to the call center have typically converted much
higher for new customers who have previously used
a tool on the website versus those who have not,
while calls to the call center have tended to end with-
out purchase for current customers who were look-
ing to upgrade their service, and also used the tool,
but did not complete the transaction online.

With the vast number of variables that can uniquely


describe a customer, their interests and their prior
engagement with our brand, propensity models
must sort through a large set of possible relation-
ships between persona, history, channel/content/
UX, and possible outcomes to find the statistically
relevant relationships, but once those initial rela-
tionships have been found, the model can continue
to learn and dynamically adjust the propensity or
probability that any given customer will convert, and
the expected value of that conversion, with each new

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piece of information gained about that customer.


With that dynamically changing insight into whether
a customer is likely to convert also comes the under-
standing of what content in what channel would
make them more likely to convert. With that under-
standing, we can turn to marketing automation soft-
ware to help create the most relevant and effective
experience for each customer at each contact we
have with them.

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Chapter
NINE
The Cultural and
Organizational Impact
of Data

Analytics is more than just data. Great analysis


requires transformation of data to information, of
information to knowledge, and hopefully, over time,
of knowledge to wisdom. This final chapter is an
attempt to share perspectives on our society and the
culture of businesses as new sources of knowledge
which will hopefully be transformed into wisdom
around the practice of analytics.

9.1 Visualization

The purpose of analysis is to identify patterns and


provide explanations for those patterns in ways that
inform actions to optimize desired outcomes. Given
this purpose, it would seem that really good analysis
should provide readers with a quick understanding
of an important pattern, clear insight into key driv-
ers of the pattern, and immediate guidance in how
to respond to this information.

Visualization of data and analysis taps into the


human hardwiring to respond to visual stimulus and
therefore provide a potentially powerful approach to
establishing and interpreting patterns. Unfortunately,

221

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this powerful potential is not always realized through


visualization, as visualization efforts often have an
unfortunate tendency to become more about form
than about substance. Often this is due to an absence
of substance in the data itself. For example, social
media dashboards provide clear visualizations of age
and demographics around engagement with con-
tent, but ultimately, there is little action that can be
stimulated by this visualization. In other cases the
triumph of form over substance in visualization
arises from the temptation offered by tools like
Tableau to present data in an array of different for-
mats. While experimentation with certain visualiza-
tion methods may help to reveal data in a clearer
way, the options available may also tempt analysts to
try and force data into a visualization for the sake of
dressing up a dashboard or report. In his 1983 book
The Visual Display of Quantitative Information, Edward
Tufte referred to such dressing up of data as
“chartjunk”, noting that if the purpose of a visualiza-
tion is not to reveal new insight that could not be
reached through simpler representation, then the
simpler representation of data is probably better.

A formula for the value of visualization which can be


helpful in guiding decisions around data visualiza-
tion efforts to avoid the manufacture of chartjunk
has been presented by John Stasko, a Professor in
the School of Interactive Computing at the Georgia
Institute of Technology. Professor Stasko proposes
that the value of visualization (V) is as follows:

V  =  Time + Insights + Essence + Confidence

This model asks analysts to consider four key factors


in deciding whether a visualization approach is the

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right way to present your data. The first value in this


model is Time, or more precisely, the extent to which
a visualization can help reduce the time required to
answer a range of questions about the data. In a con-
ference presentation in which this model was pre-
sented to the public1, Stasko lists the types of tasks
whose effort can be reduced via visualization includ-
ing retrieving values, sorting and applying filters,
calculating values, determining range and distribu-
tion, exposing anomalies, and illuminating clusters
and correlations.

The second value in the model is Insight, the delivery


of which is of course the primary purpose of any type
of analysis. Professor Stasko observes that good
insights can be characterized by the extent to which
they are complex, qualitative, and perhaps most
importantly, unexpected, or challenging to prior
conceptions and understandings, providing an “aha”
moment around a problem that may have seemed
inexplicable or impenetrable prior to the insight.

Next in the value of visualization comes the extent to


which the visualization captures the Essence of the
data. It would appear that an ability to distill a num-
ber of variables or factors into an essential picture
1
 The slides can would result from a maximization of the time ele-
be found ment of this equation, and would be a key driver of
online. The
the insights that could be drawn from the visualiza-
conference was
the 2014 tion. The chief take-away here is that to capture the
Eurographics essence of the data, the visualization must provide
Conference on both an understanding of salient details along with a
Visualization. view of the big picture. There is a tendency for ana-
See Further lysts to begin ‘drilling down’ for insights, and to drill
Reading for
so far that context around the analysis becomes lost
the URL link.
(e.g. finding a pattern in the movement of a single

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224 Architecting Experience

stock without considering movement within its


industry, or the market at large). The capability to
deliver “aha” insights comes from providing the big
picture within the data and a detailed cross-section
at the same time.

The last factor in this equation is the Confidence that


the visualization inspires, as clearly the visualization
will have no value if its readers do not trust the data
or the analyst. Trust in an analyst is established over
time, and trust in data typically follows trust in the
analyst. With that said, any time a visualization or
analysis of any sort challenges pre-conceptions, it
stands subject to doubt. This creates a conundrum
for the analyst; our primary objective is to create
“aha” moments giving unexpected insights from
the data which challenge preconceptions, but we
must recognize that challenging preconceptions
can create doubt that must be overcome through a
method of presentation that establishes confi-
dence. The analyst who creates “aha” insights but
does not recognize the importance of confidence
in analysis and the effect of challenges to the status
quo on confidence may develop amazing insights
that no one uses, which is an unfortunate position
to be in. Balancing the insight produced with a rec-
ognition of the response it will receive and a plan
to address questions of confidence rising from that
response will be able to continue delivering unex-
pected insights that people will welcome and act
upon.

An example of the wrong way to present visualiza-


tion with devastating consequences comes from the
tragic Challenger Space Shuttle launch. Setting
aside the handwritten nature, the visualization below

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Figure 9.1   violates several of the variables in the V  =  T  +  I  + 
Challenger Pre- C  +  E approach to visualization.
launch Analysis
Figure 9.1 shows a visualization produced by a group
of engineers seeking to cancel the launch of the
Challenger space shuttle in the lead up to that tragic,
fatal launch. The engineer’s valid concern was that a
part called an “O-Ring” had been known to malfunc-
tion at lower temperatures, and the temperature at
launch was expected to be low enough to cause a
malfunction. The engineers conducted their analysis
and produced the results shown above. As we know,
this information was not enough to convince the
launch managers to delay the launch, and on
January 28th, 1986 the shuttle blew apart 73 seconds
into its flight, killing all seven of its crew.

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This is a case in which the value of visualization was


critical. Granted, in 1986 the engineers did not have
the benefit of the data visualization capabilities we
have today, but let’s evaluate where the value of their
visualization was diminished such that their warn-
ings were not conveyed as well as they might have
been.

This analysis does fulfill the Time  requirement for


value in visualization, saving the reader from the
requirement of pulling and sorting the history of
O-Ring damage for themselves. Where the visualiza-
tion fails is in its conveyance of Insights and Essence.
The key insight that might have stopped the launch
would have been an analysis of how extensive O-Ring
damage could lead to the entire craft exploding, and
a prediction of the likelihood of O-Ring damage
given the temperature. The insight delivered in the
analysis above could be argued to show that more
O-Ring damage has occurred at temperatures above
60°F than below 60°F. It also could be argued to
show that launches can be successful even with
O-Ring damage. Thus, the insight that was meant to
challenge the status quo was not effectively delivered
through this visualization. Additionally, this presen-
tation fails to convey the essence of the data. It does
convey the breadth of the data, including the super-
fluous data point “wind speed” in the analysis, but in
conveying all of the picture, it fails to put the salient
details in the context of the most relevant aspect of
the big picture; the extreme different in damage
caused at the temperature below 55°F compared to
damage caused above that temperature, and the lack
of experience with a launch at temperatures below
50°F. By even using just an ‘average’ degree of dam-
age at each decreasing 5°F range instead of showing

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all damage rankings, the increasing level of damage


as temperatures dropped would have been much
more apparent, and the lack of data at the range in
which the launch was taking place might have been
much more apparent.

The engineers who prepared this visualization tried


their best, and I credit them immensely for their effort.
Their ability to establish the Confidence value for their
visualization was beyond their control due to filters
and biases in their organization. Some very common
drivers of organizational “groupthink” — familiarity,
social proof and escalation of commitment — were
amplified in what was characterized as “Go Fever” sur-
rounding this (and every other) impending launch.
Cutting through this Go Fever would have required a
heroic effort at data presentation that unfortunately
these engineers did not have the time or tools to deliver.

Figure 9.2  
John Snow
London
Cholera Map

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228 Architecting Experience

Flipping now to the other side of the coin, we will go


even further back in history to look at what is widely
considered to be the grandfather of all visualizations
and an example of value in all four areas; a map of a
cholera outbreak in London produced by John
Snow in 1854 (Figure 9.2).

John Snow was a doctor in London when a Cholera


outbreak struck the city in 1854. At the time, the
cause of Cholera was still unknown, with many dif-
ferent (incorrect) theories existing around how
diseases spread. Snow went to the impacted area
and began to collect data, and his analysis of the
data helped him determine that the common fac-
tor amongst all of the cases he observed was that
they had all consumed water drawn from a single
well (on Broad Street). He quickly conveyed his
findings to authorities who removed the handle
from the well. After his analysis had been responded
to, Snow created the above illustration to visualize
his analysis. Clearly, this visualization provides value
around time saved in data collection and analysis.
The insight is conveyed through an effective cap-
turing of the essence of the data; showing the
details of cases in the context of the bigger picture
map of the surrounding area. And as evidenced by
the fact that Snow’s analysis was acted upon ever
before the visualization was produced, it seems that
consumers of Snow’s analysis had great confidence
in him.

The implications of the approach taken to visualiza-


tion are clear. Valuable visualization saves time in
processing data, conveys an unexpected insight, cap-
tures the essence of a large data set by showing detail
in the context of the big picture, and does so in a way

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that instills confidence, while less valuable visualiza-


tion misses on one or all of these points.

9.2  The Information Society: Media Cycles &


Feedback Loops

As discussed above, information is powerful when it


is visualized, and it may be even more powerful when
it is felt. In the first chapter of this book, you were
introduced to Marshall McLuhan’s concept of hot
and cold media, which implies the power of media to
change the environment around it in a sensorial way.
But beyond the senses, McLuhan’s theory is one of
the impact of temperature change on the environ-
ment, specifically in terms of expansion and contrac-
tion; some new communications media cause culture
to ‘heat up’ until either some aspect of culture ‘melts
down’ or a countervailing cool medium emerges to
cool things down. But what does it mean to ‘heat up’
and ‘cool down’?

A “hot” medium is one that engages multiple senses


as completely as possible, and requires very little
‘reading’, interpretation or completion by the
receiver. McLuhan observes that a completely hot
medium essentially evokes a type of hypnosis in the
receiver, and offers early big-band jazz with its intri-
cate composed and conducted scores and its associ-
ated Jitterbug dance as examples of “hot” media.
Conversely, a “cool” medium is one that carries very
little information on its own, and requires the
receiver to interpret and/or complete the message.
McLuhan proposes that a completely cool medium
would evoke pure fantasy/hallucination, as the
receiver must provide every aspect of information.

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As an example of less extreme “cool” media,


McLuhan suggests the evolution of jazz into its
“cool” stage (yep — you’re seeing the cycle emerge),
with its freeform flow and long, improvised solos,
and the emergence of unstructured dances like the
Twist, which did away with the intricate coding of the
Jitterbug and let dancers improvise as they liked,
bringing their own interpretation to the music.
Mirrored sunglasses have always been “cool” as a
communication medium because they require the
receiver to complete the face/expression of the
wearer, while the latest fashions (the tighter the bet-
ter) are always “hot” because they add information
about the wearer (e.g. that they have ‘currency’ in
physical, temporal and financial terms).

McLuhan’s book offers an incredible array of exam-


ples into the cultural impacts of 20th century hot
and cool media, so I encourage you to add it to your
reading list. What these examples illustrate very con-
vincingly is that ‘the medium is the message’.
Perhaps you’ve encountered this phrase before and
were possibly aware that it comes from McLuhan.
Taken without the context of the book, it still intrin-
sically makes a certain kind of sense, but it makes
much more sense when considered in the context of
media “hot” and “cool”. In this context one can
observe that if effective sustained communication
requires the constant interplay of “hot” and “cool”
media to keep a balanced temperature (to avoid
cultural melt-downs and freeze-ups), then ‘the mes-
sage’ embedded in any medium is its cultural ‘tem-
perature’; does it shout or whisper? Does it hypnotize
or cause hallucinations? Does its temperature
depend on complimentary or conjoined media?

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McLuhan observed that broadcast television was pri-


marily a hot medium, with its rapidly paced plots and
pacing, its laugh-tracks and scores, and its inter-
spersed intense bursts of advertising providing strong
emotional cues and leaving no time to consider
what’s just been seen or what’s coming next. This
notion of television as a ‘hypnotizing’ force seemed
to resonate, becoming a very strong cultural meme
that persists today. Unfortunately, McLuhan died
long before the internet took its current form and
social networks created a new form of cultural inter-
action, because his take on these new media would
have certainly helped us understand not only just
how technology is shaping society, but more impor-
tantly for the innovators among us, what is likely to
come next in terms of communication technology
based on the culture’s need to ‘heat’ or ‘cool’ what
has come before. While I certainly cannot claim
McLuhan’s insight, I can attempt to extend his
framework against the media that have emerged
since McLuhan’s last observation.

Figure 9.3 illustrates the feedback and cycles between


various digital media over the last 20 years.

Email (Cold) At the beginning of what has become


our contemporary digital media landscape, the early
internet was a very cool medium. Everything was text
based, and communication was not nearly as instan-
taneous as it is today, messages were posted on
‘boards’ or sent via email and typically waited for
response until the receiver accessed the board or
account and saw the message. While it was possible
to share files, nothing could be viewed immediately,
but required download (very slow over dial-up

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232 Architecting Experience

Figure 9.3   ƟŵĞ KK> ,Kd


21st Century hƐĞŶĞƚͬĞŵĂŝů
“Hot” and ,dD> DŽnjŝůůĂƌŽǁƐĞƌ
“Cold” Media DŽďŝůĞWŚŽŶĞ ƌŽĂĚďĂŶĚ
ddžƚDƐŐƐ &ůĂƐŚͬDW'
ůŽŐƐ
dŽƌƌĞŶƚƐ DLJ^ƉĂĐĞͬ&ĂĐĞŬ
zŽƵdƵďĞ
ŝWŚŽŶĞ
dǁŝƩĞƌ
dƵŵďůƌ ŝWĂĚ
^ƉŽƟĨLJͬ>ĂƐƚ͘Ĩŵ
WŝŶƚĞƌĞƐƚ <ŝŶĞĐƚ
^ŶĂƉĐŚĂƚ 'ůĂƐƐͬKĐĐƵůƵƐ

modems) and frequently also decompression. In


short, the reader had to bring a lot to the medium to
get to the meaning in any message.

HTML (Cold) offered a profoundly new method of


non-linear writing, but despite its radical departure
from linear writing, it was still primarily about writ-
ing, and the prodigious use of links on almost every
word in early HTML coding meant that readers still
had to do a great deal of work to uncover the full
meaning embedded in an HTML-based medium.

Browser (Hot) It was the Mozilla browser that helped


the web ‘heat-up’ in the mid-1990s. The Mozilla
browser allowed multi-media elements to merge with
the written aspect of HTML, and guided web devel-
opment away from the early practice of dispersion
through links and more toward emersion through
‘content’.

Broadband (Hot) The immersive nature (and ‘hot-


ting-up’) of the web was exponentially expanded
with the introduction of broadband/‘high-speed’

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access and the emergence of animation and stream-


ing audio. It is really no coincidence that this hot
new communication technology became so over-
heated as to create a “bubble” in internet develop-
ment, which then burst in 2000–2001 (the dot-com
bubble).

Mobile and Text (Cold) Meanwhile on a separate


technological track, mobile technology was develop-
ing in a “cool” state. The emergence of smaller and
smaller phones with added functionality like con-
tacts memory, voice dialing and most importantly
text messaging was a very cool development for
­everyone who lived through it. Communication via
voice and text were both cool in McLuhan’s terms as
well; conversations were frequently lost due to spotty
service and really lame battery life, and text messages
were written in entirely abbreviated forms, requiring
readers to complete every word with omitted vowels,
syllables, grammar and punctuation.

Blogs (Cold) As the dot-com bubble burst, a cooler


form of web communication, blogging, emerged to
fill in the void. In its initial form, blogging was a very
text-heavy medium built around a single page, quite
a cool-down from the multi-media, multi-page web-
site that had just melted down. In contrast to the
emergence of digital specialty firms during the dot-
com bubble, blogging brought a DIY ethic back to
the web, allowing anyone and everyone to communi-
cate anything at any time, a characteristic which lent
itself (legitimately) to comedic (and occasionally
tragic) criticism of the practice. While some blogs
(e.g. Drudge Report, Huffington Post) took an approach
that eventually led them to more legitimate media
status on par with the digitized print outlets (e.g.

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NYT.com), the “Blogosphere” itself was (and is) a


largely cool medium (as anyone who attempted to
mine meaningful data from it in the early days can
attest); a universe of poorly-written and partial com-
munications or completely abandoned efforts with
huge vacuum-filled gaps in-between.

P2P/Torrents (Cold) At this point in the early 2000’s


as a new DIY ethic emerged from the excess and col-
lapse of Web 1.0, peer-to-peer (P2P) file-sharing
emerged as the primary point of user activity at the
center of the emerging new web. Napster, a music
file-sharing service was the poster-child for this new
generation of software and social interaction, but
sharing was not constrained to Napster. BitTorrent
software turned home computers into networked
file-servers, and in conjunction with home broad-
band, these file-sharing applications transformed
the internet from a text-delivery system into a true
media platform which made previously platform-
constrained and copyright protected content sud-
denly ubiquitous. The nature of the technology is
itself the very description of a cool medium, frag-
mented pieces of content (bit packets) being assem-
bled by the receiver into a cohesive whole.

Social Networks (Hot) With blogs leaving much to


be desired from an interactivity standpoint, and with
content sharing becoming the centerpiece of the
new web, the cool vacuum of the post-dot-com web
needed some heating up, making the environment
perfect for the introduction of platforms like
Friendster (2002), MySpace (2003), and ultimately
Facebook. These platforms simplified posting, (low-
ering the expectations around posts since a sentence
could suffice where blogs had seemed to want

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paragraphs), allowed multi-media to be easily and


seamlessly integrated (reducing the complexity of
installing and running torrents, though also reduc-
ing access to copyright-infringed content) and most
importantly, offered ready-made audiences through
the capability to find and add ‘friends’ or connec-
tions who were willing to receive posts and contrib-
ute their own in return, both through the established
network members as well as the drastically improved
personal SEO which these networks provided (mean-
ing Google had something it could find and show
under a search on a person’s name).

YouTube (Hot) The ‘re-heating’ of the web reached


a fever pitch with the expanding popularity of what
was initially known as “vlogging” (for video blog-
ging), and the emergence of YouTube (2005) as the
center of the web’s video universe. Critics derided
the channel as just another vanity outlet that would
shrivel up and die as the novelty wore off and people
tired of dealing with video quality that was pretty bad
by any standard, and the long wait times or frequent
interruptions while video buffered due to the lower
bandwidth connections of the time. Instead, within a
short period of time, video quality improved rapidly,
access to better connections expanded to a broader
population, and most importantly, people went crazy
for a type of video content that wasn’t available any-
where else.

YouTube was the birthplace for two concepts that


digital natives take for granted today. The first is
“going viral”. Something about YouTube videos com-
pelled people to share them with friends and
acquaintances, and the most broadly (and quickly)
spread videos were considered to have gone “viral”,

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spreading from person to person until everyone has


caught the fever (see Numa Numa [2005] for pre-
and early YouTube viral video and Gangnam Style
[2012] for something more recent).

The second concept spawned by YouTube is the


widespread recognition of the “meme”. The meme is
a concept introduced by Richard Dawkins, who ear-
lier in his career had established the concept of the
“gene”. Where the gene is a part of the assembly
instructions for a living organism which carries
instructions for how to assemble the building blocks
of life, a meme is similarly a part of the blueprint for
a culture, providing the building blocks of culture
(individual minds) instructions for how to assemble
together a common way of seeing or interpreting
things. The “virality” of certain videos on YouTube
(and subsequently everything imaginable, from
‘LOL cats’ to my personal favorite so far, ‘Sad
Keanu’) exposed the reality of the meme — a theme
or concept that not only required some cultural
knowledge for interpretation, but which also shapes
or evolves a culture (or more correctly sub-culture)
through its existence.

Clearly, the ability to go viral and create a feverish


response to content that actually shapes culture
belies the “hotness” of this new medium, which
when coupled with the heat of social networks could
no longer be contained on laptop and desktop
computers.

iPhone (Hot) Enter the iPhone in 2007. The


iPhone channeled the heat from social networks
and video away from the bounds of the computer
monitor and into a handheld format allowing the

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hot and viral content of the Internet to be accessed


anywhere, at any time. The iPhone also marked the
jump of mobile technology from cool (voice and
text) to hot, and engendered the heating up of
texting itself in the form of Twitter, a development
that triggered a new cooling phase of digital
technology.

The New Digital Primitivism, or The Rebirth of Cool

McLuhan observes that the aural and visual storytell-


ing medium of pre-literate cultures was an inher-
ently cool medium, requiring the listener to add
their own interpretations to the images being painted
by speech or drawing. By 2007, the heat generated
by the first (primarily hot) 15 years of expansion in
digital media had jumped the bounds of even
­laptops and was now completely mobile and univer-
sally accessible. With a web of highly produced sites
and social networks with content that merged audio,
video, text and image to convey entertainment,
information and advertising, a simpler, more basic
and human form of digital engagement was bound
to emerge.

The first 15 years of digital expansion had also


engendered a significant cultural change; the com-
ing into being of digital natives, children of the
developed world who since their first encounter with
technology had known nothing but Facebook,
YouTube, Torrents and smartphones. More than any-
one else perhaps, the Digital Natives who had been
born and raised in the feverish environment of digi-
tal expansion were in desperate need of some kind
of cooling counterbalance in their culture. In fact,

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since the turn of the century, the most distinct


­sub-culture amongst millenials has been Hipsterism,
or the pastiche of ‘retro’ (or more ‘primitive’) cul-
tural modes of cool based primarily on beatnick
(1955–65), 80’s pop, and grunge (1990s) fashions in
clothing, music and entertainment.

Twitter (Cool) Into this environment comes Twitter.


The origin story of Twitter emerges from the center
of digital ‘cool’, the South by Southwest Interactive
(SxSW) festival in Austin Texas. Less than a year old in
March of 2007, Twitter’s founders saw an opportunity
to build a highly influential and technology-literate
software evangelists, and by promoting their ‘one-to-
many’ messaging concept around this conference,
saw their usage increase 200% over the course of a
week. The Twitter experience is now well-known, 140
character messages that could be sent either to indi-
viduals (like a traditional text message) or to groups
of ‘followers’. During the 2007 conference, Twitter
was rapidly adopted attendees to build their per-
sonal social network without having to enter details
into a contact managers or pocket a business card,
since following and being followed was made easy by
Twitter. And Twitter was a natural for sharing quick
updates on what was happening around Austin,
both in conference sessions, and more importantly,
around the parties that were happening outside of
the conference.

Like texting, Twitter is a cool medium in that messages


must be abbreviated and condensed. A raw Twitter
stream is as close to chaos as a communication
medium is likely to get — a rapidly refreshing stream
of random and unconnected missives from a pool of
contacts without any overarching categorization and

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sorting structure in place. As a means of creating some


order from the chaos, Twitter’s users developed their
own structure with the introduction of the hashtag
(#) to indicate the tweet’s topic or category, and
Twitter’s engineers responded by generating auto-
matic links on hashtags that search for all other
tweets also carrying that hashtag.

Twitter’s emergence in 2007 is inextricably linked


with the iPhone’s own rapid adoption and the subse-
quent interest in location-based communication.
With mobile technology and a simplified communi-
cation medium, people seemed naturally inclined to
share details about where they were and what they
were doing at any given moment. However, despite
its growth and popularity, Twitter usage still remained
a bit of a subculture, with tacit and explicit rules
about correct forms of engagement and interaction,
and with a strong aversion to intrusion by corpora-
tions looking to tap into a highly influential audi-
ence. As a cool medium, getting engaged and staying
engaged in Twitter required some effort. Many peo-
ple, especially younger digital natives found it much
more difficult to build their network in Twitter than
in the hot Facebook network (especially since most
of their friends didn’t see what Twitter could give
them that Facebook already didn’t). Once on Twitter,
separating the wheat from the chaff was difficult, and
being as cool a medium as it was, staying engaged
with followers seemed to demand a high-degree of
response. So for the digital natives, Twitter as the first
wave of the new ‘cooling’ phase was not as natural to
adopt as it was for the attendees of the SxSW confer-
ence in 2007 who likely skewed to Gen-X who had
been engaged with cool digital media before.

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Tumblr (Cool) Despite the weak attraction to Twitter


as the first of the new cool media, millennial digital
natives were still unknowingly ‘burnt out’ on hot
channels and in need of a cool escape. By April of
2007, in a sure sign of needing to escape from the
hot expansion of the media, vintage hunting and
retro-worship had become the core of ‘hipster’ iden-
tify. In that same month, digital media felt its first
cooling wave in the form of Tumblr. Like Twitter,
Tumblr is considered a “micro-blogging” platform in
that it is designed specifically to allow users to share
content and interests in small snippets. However,
unlike Twitter, but very much in keeping with the
emergence and appeal to the natives of a more
primitive digital communication approach, Tumblr
is used primarily to share visual content rather than
text. Adding to the cool component of Tumblr and
the primitive tendencies it generates, a good num-
ber of the most popular Tumblr sites are dedicated
to user generated “photo-shopped” pastiche images
which photo-realistically portray imaginary or fantasy
scenarios. The use of (as realistic as possible) visual
imagery to generate humorous or serious allegorical
or metaphorical reflections on reality has been a
common cultural thread from the most primitive to
the most cultured, and the visual medium still typi-
cally has a more effective and immediate impact on
the receiver than does the written word. A picture
still speaks a thousand words, and in conjunction
with their fluency in cultural memes, Tumblr has
allowed digital natives to express complex and pro-
found intellectual and emotional positions and views
through snippets of imagery and text.

This trend to the visual will not be confined to mil-


lenials in the developed world, but will expand

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across societies and cultures and into subsequent


generations. Dr. Don Schultz of Medill IMC who
travels broadly through the developing world shared
with me his belief that the refinement of methods
for the expression and reception of ideas through
images (along with ubiquitous mobile accessibility)
will more broadly open the digital world to societies
with large-scale illiteracy. In these cultures, image-
based digital literacy will emerge as the prevailing
common literacy, while traditional text-based literacy
will stagnate further. The extension of the digital
world, digital creation and digital commerce to these
developing nations can have a have profound impact
on current structures of economic and social stratifi-
cation both intra- and inter-nationally.

In the developed world, textual literacy will continue


to be a focus of general education as written com-
munication will never be fully replaced as a source
and conduit of power. Undoubtedly however the
nature and content of writing and the standard for
literacy will change with subsequent generations, so
that the definition of textual literacy to the graduat-
ing class of 2033 will be evolved from yet distinct
(through both additions and subtractions) from
what is considered literacy in 2013 (just as graduates
in 1993 in meeting their standard of literacy had
been through handwriting classes back in grade-
school and BASIC programming language courses
in middle-school that 2013 grads likely never
encountered).

Last.fm and Spotify (Cool) What will be common


across generations in 2033, as it has been through
human civilization, will be the appeal of music. Back
here in the first decades of the century, the new

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primitivism and cooling of digital culture was


extended in 2008 with the introduction of the
Pandora mobile application, which suddenly gave
smartphone users free and legal access to a library of
music ranging from classical to the newest rap music.
This service, which spawned follow-up mobile apps
from similar services like Last.fm and Spotify, deliv-
ers volumes of music on a mobile device that could
only have been dreamed of at the computer down-
load speeds, memory constraints and copyright
infringement concerns of just a few years earlier.

What was more unique about these new music shar-


ing services than their licensing agreements and
technical architecture however was their foundation
in social networking. More-so than Pandora, Last.fm
and Spotify made sharing music and comments
across a social network a key component of their
platform. Spotify’s sharing architecture, including
shared playlists and ability to share and comment on
songs or albums across friends is helping quickly
erode the lead of earlier platforms.

Pinterest (Cool) The next popular product of the


cool digital wave was Pinterest, an almost entirely
visual social network where image sharing by cate-
gory or interest is assumed, and text is optional. The
layout of Pinterest is quite elegant and translates
nicely to a tablet device (i.e. iPad or Kindle). From
first use, Pinterest’s user experience is highly intui-
tive and guidance for new users is visually driven with
subordinated text.

Snapchat (Cool) Snapchat is a logical spawn of two


cool media; the digital image and texting, and its
rapid adoption by digital natives in the 13–23 age

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range illustrates the extent to which cool digital


media are the preferred form of engagement for the
coming generation of consumers that marketers will
address. Snapchat is cool taken to its extreme in digi-
tal media, It is the anti-Facebook: an image of a sin-
gle point in time that exists for only a short time for
a limited set of viewers before self-destructing. No
timeline, no history, no record of any communica-
tion — just an instantaneous exchange that disap-
pears to make way for the next.

Pinterest and Snapchat will not be the last catalysts


for the cooling of digital culture. If Dr. Schultz is cor-
rect, then the ‘primitivization’ of culture through
digital media content still has a very long lifespan
ahead of it. At the same-time, hardware is already
igniting a re-heating of the digital space as we
develop ever more integrated, constant and ubiqui-
tous digital interfaces.

iPad (Hot) The iPad was the first spark in the reheat-
ing of digital media following the long cooling
period that followed Facebook and the iPhone. The
iPad shifted all media into the mobile space, and
shifted culture’s expectation of the type of digital
experience that could be access and consumed
while away from a computer. It also revolutionized
the human-computer interface by making touch
interactions so common that any person under five
years old living today probably first tries a swipe
motion to interact with any screen they encounter.
The integration of touch-screens into service envi-
ronments (bank, airport, dining, etc.) show another
fork in which public screens will be widely available
for short context and transaction based digital
interactions.

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Google Glass and Occulus Rift (Hot) Google Glass


extended the evolution of the screen and human-
computer interaction with a screen that was con-
stantly affixed to the personal view, providing
real-time contextual information to the wearer while
recording the wearer’s context. Though at the time
of publication, Google Glass is undergoing a meta-
morphosis, the 2014 purchase of Occulus VR by
Facebook shows how a classical hot media (Facebook)
envisions hot digital media expanding into the
realm of fully immersive virtual reality, which will
likely allow technology to fulfill McLuhan’s observa-
tion that the ultimate hot media will create total
emersion to the point of hypnosis.

Application to Digital Strategy

The brief insight into the history of digital technology


in the context of hot and cold media should make it
clear why effective 21st century digital marketing
requires an applied understanding of the “producer”
mindset of much of the digitally native target popula-
tion, and the “temperature” of the various digital
channels through which this population can be
engaged. Ineffective digital marketing wants to force
hot content like buy now messages through ‘cool’
channels like Twitter, Tumblr and Pinterest. Effective
digital marketing understands that ‘the medium is
the message’, that cool media require cool content,
and recognizes that its social network wants to be
involved in content generation within the medium.

As engagement with digital interfaces and content


experiences becomes ever more ingrained in cul-
ture, the trade-offs and balance in preferences for
hot and cool communications will always be

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maintained and expressed through the behaviors of


media consumers. An ability to anticipate these pref-
erences by understanding and anticipating the
expansion and contraction of hot and cold media
amongst various elements (or segments) of culture
will be essential to digital media planners, communi-
cations strategists, experience designers and the
technologists who develop and evolve the channels
that deliver these hot and cold digital experiences.

As mentioned earlier, mass media is dying, and subse-


quently all media is becoming personal media, allow-
ing each media consumer to create their optimal mix
of hot and cold media. Media mix modeling is now
done just as actively on the consumer side as it is by
brands (perhaps more actively), meaning brands are
facing thousands of variations of potential media
mixes through which to build their relationship with
their target consumers. The ability to effectively lever-
age the right combination of technologies and con-
tent to build and maintain brand relationships with
digital natives requires an understanding of who they
are, where they are, what media they engage with,
why they consume that media, and why they should
be interested in having your brand involved in their
personal marketing media mix. This understanding
of what is relevant to your target consumer requires
data and analytics, and the scientific approach in the
collection and application of data.

Digital Analytics as a Medium

Before moving on though, we must consider one


final medium in our analysis of 21st century media;
the medium of digital analytics itself. Like any of the

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media previously discussed, and perhaps even more-


so in this case, analytics are an extension of our
senses and a ‘mediating’ channel between our senses
and the outside world. Analytics allow us to compre-
hend the reality of situations at a level of detail that
would otherwise be impenetrable by our senses and
our thinking.

We have already said in this chapter that analytics


create relevance, and that relevance delivers results.
As with any medium, the results of analytics are con-
tingent on the nature and quality of what passes
through them, and how the results are made mani-
fest. Data is the source medium of analytics; the
better the data, the better the analytics, regardless
of the way in which they are presented. It is not
always safe to assume, but for the purposes of this
thought exercise, let’s assume we have good data,
our interest in discussing analytics as a medium is in
examining the ways this data can be presented as
analysis.

The most common method for the presentation of


analytics in marketing is through a spreadsheet, either
alone or in combination with a ‘report’ in PowerPoint
built from the spreadsheet data. This is an ice cold
manifestation of the analytics medium. First, spread-
sheet analytics tend to be conducted on a scheduled
cadence, which means that by the time the analysis is
produced, it is looking at data that tells a story about
a moment in the past, but is no longer completely
current. Second, there is nothing at all immersive
about these presentations. With PowerPoint, there is
no chance for the information consumer of analytics
to ‘dive deeper’ into the data — what you see is all you

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get. With spreadsheets, it is possible for the informa-


tion consumer to warm up the medium a bit by dig-
ging past the initial presentation of charts and graphs
into the data itself, but not without first becoming
an expert on the structure of the file and the location
of reference data. Spreadsheets do not pull most
people in — rather they tend to require some effort
in digging.

The next most common method in the presentation


of analytics in marketing is through dashboards,
which warm things up a bit compared to spread-
sheets and print reports. First, dashboards allow for
the presentation of much more current or even
real-time data. Second, dashboards allow the infor-
mation consumer to dig through the initial presen-
tation of data to deeper levels of analysis along a
multitude of trajectories limited only by the bound-
aries of the data. Thus, good dashboards can be a
warm or even hot medium for analytics, but this is
determined by the quality of their design and the
comprehensiveness of the data in the context of
their intended analytical purpose. When the analyt-
ics allow better informed decision making, and the
decisions made can confidently be put into effect
and optimized at the speed at which the analytic
insights are updated, we have a hot system. Typically
though — in a problem that will be discussed in
detail in coming ­chapters — the data being fed into
individual dashboards still does not provide all the
information needed to confidently make decisions.
Furthermore, even when decisions can be made
from dashboard analysis, organizations have yet to
evolve their management practices to work at the
speed of digital analytics, so the application of

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decisions is delayed until the basis for the initial


analysis becomes cold and the decision may no
longer be relevant — an issue which will be dis-
cussed further in section 9.3 on organizational
change for data-driven marketing.

The hottest form of marketing analytics is the “pro-


grammatic” medium. Here, there is no human
interpretation of the most current data, except
through pre-established code designed to let com-
puters analyze large amounts of data to instantane-
ously make and act upon decisions that would take
people hours, days or weeks to accomplish. The
heat of this medium is precisely in the immersive
nature of its outcomes — when computers are con-
tinually evaluating a consumer’s context to deter-
mine and deliver a relevant marketing experience,
the result is the presentation of a more highly per-
sonalized media experience, and the subsequent
immersion by the media consumer in that experi-
ence. Here, there are fewer generalizations that
don’t quite fit the media consumer and cause them
to step back. Instead, there are better predictions
about what will be compelling and motivating that
cause them to lean in further. And as they lean in
and engage, a learning feedback system is created,
with the analytics program ingesting the nature of
this engagement as more data, and correspondingly
adjusting the decisions it makes around subsequent
engagement with this person based on prior interac-
tions. (If you’re thinking this sounds like Artificial
Intelligence, you’re right.) This hot form of analyt-
ics is the type at play amongst today’s leaders in
analytics (and AI) — Facebook, Google and Amazon
chief amongst them, with Netflix, Spotify, and a
flood of rapid innovators behind them.

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The hot programmatic application of analytics and


artificial intelligence to experience creation is the
ultimate objective of most digital marketers, whether
they recognize it or not, and thus, it is the topic
towards which the subsequent chapters build. So, to
close out this chapter, we should apply our under-
standing of hot and cold media to a projection of
where the analytics medium is headed.

As more and more media producers (marketers and


their brands included) achieve the goal of program-
matic application of analytics to experience, the
media environment for consumers will become hot
to the point of being supercharged. A personaliza-
tion and programmatic bubble will emerge, with a
resulting rapid cooling ‘contraction’ to follow, which
will ultimately consolidate the data and technology
for personalization amongst a few central sources.
This prediction of the eventual contraction and con-
solidation of highly personalized consumer insights
and their application to experience delivery is not
meant to discourage marketers from making the
effort to establish marketing science and digital ana-
lytics capabilities now. To the contrary, the under-
standing of how to build programmatic experience
delivery and real-time analytics as a foundation for
business is critical to any company wishing to grow
through the 21st century. Right now is the time for
organizations to learn how “hot” programmatically
applied analytics can transform their organization,
and to begin the transformation to the type of data-
driven and carefully programmed experience deliv-
ery that will separate the firms that dominate the
economy of the late 21st century from those that fail
to adapt to the power and speed of digital informa-
tion and thus disappear over the coming decades.

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9.3 Organizational Change for Effective Digital


Analytics

The underlying purpose of this chapter up to this


point is a belief that a deep understanding of the
influence of digital on culture (and the consumers
in it) is a requirement for companies that wish to
thrive through the 21st century. However, even more
important than the possession of this understanding
itself, is the ability for companies to act on this
understanding. It is likely that most every company
doing marketing today feels a need to be ‘data-
driven’ in their activity; I hear this from my largest
clients to my smallest. In this pursuit, it is important
that companies understand that becoming data
driven is a process of change, and that change is
often difficult. Change is difficult because it takes
individuals and organizations into the unknown — it
requires new thinking and new behavior — and for
most people it is easier and more comfortable to
keep doing what they already know how to do than
to learn new ways of thinking and acting.

This fact of human psychology is based on evolution-


ary preference; human beings have limited cognitive
processing power, and must allocate thinking resources
accordingly. The reduction of uncertainty (via the
development of patterns) in the day-to-day environ-
ment frees up thinking ability that would otherwise
have been applied to sorting between the important
and the unimportant new stimuli in the environment.
By routinizing the ‘little things’ and limiting the intru-
sion of unimportant stimuli in our day-to-day activity,
we leave more processing power for those things we
deem important. Or at least that’s the idea.

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Our psychological tactics to sort through all the


stimuli in our lives and make sense of the most
important are known as bias or heuristics, and often
fall victim to their own efforts. In organizations, in
addition to the ‘familiarity heuristic’, two other com-
mon heuristics tend to create challenges for organi-
zational change. The first is a heuristic known as
“social proof ”, which is an observed tendency for
individuals to conform to the activity they observe
from others in a group, particularly when confronted
with ambiguity or uncertainty. This can also be
thought of as pack or herd behavior. The second is a
bias or heuristic called “escalation of commitment”.
This interesting bias results in people justifying an
increasing level of commitment to prior decisions
even when confronted with new evidence that indi-
cates that abandonment of the current course of
action and development of a new approach would be
more productive.

When the familiarity, social proof and escalation of


commitment heuristics operate together in organi-
zations, we find places where managers are reflex-
ively investing ongoing effort in strategies and
tactics that should be reexamined based on changes
in the business situation, within organizational
structures that should also be reexamined, and with
teams that find it difficult to challenge the way
things are done as long as everyone else also seems
to think this is the right approach. The example
earlier in this chapter of the “Go Fever” that gripped
NASA in advance of the Challenger launch is a
tragic example of the danger these biases can cause
for organizations.

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Systems Thinking

Tackling the biases and heuristics which limit the


capability for change within organizations requires
explicit organizational change strategy. Some of the
best recent thinking on organizational change has
come from MIT. This is not surprising because MIT
is a driver of technological innovation, and the suc-
cessful adoption of any innovation requires a change
from an old way of acting (without the technology)
to a new way of acting (with the technology). One of
the leading thinkers at MIT is Peter Senge, who first
became known in the area of organizational devel-
opment with the publication of a book titled The
Fifth Discipline in which he introduced the idea of a
learning organization; a company that puts learning
and change at its core to ensure ongoing transforma-
tion and growth.

At the center of the learning organization is the cul-


tivation of “systems thinking”. Systems thinking is
the ability for an individual to unravel the context of
their environment, or the ‘system’ in which they
operate, into a series of separate threads that collec-
tively form the system. One thread people may con-
sciously discover and account for is how their own
patterns of thought and activity translate from seem-
ingly insignificant day-to-day attitudes and actions
into a component part of the organization and how
it works, and as such how, from the inside out, they
actually create the forces which they may have previ-
ously perceived of as an impersonal organization
acting on them from the outside in.

Systems thinking can be summarized well with the


questions, Why are we doing this? and ‘what could

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we being doing differently? As Senge puts it, ‘The


fundamental rationale of systems thinking is to
understand how it is that the problems that we all
deal with which are the most vexing, difficult and
intransigent come about, and to give us some per-
spective on those problems [in order to] give us
some leverage and insight as to what we might do
differently’.

Senge outlines the benefit of systems thinking as pro-


viding organizations with ‘the ability to discern non-
obvious areas of high leverage’, or in other words, to
develop competitive advantage through the ability to
create and act upon change. As Senge puts it in a
2011 interview produced by IBM, ‘…when you ask,
what does it take, in a business context, for people to
start to discern non-obvious areas of leverage, the
answer is, a very deep and persistent commitment to
learning. There are a couple of features to this com-
mitment to learning. One is, I have to be prepared to
be wrong. Again, if it was pretty obvious what needed
to be done, we’d already be doing it. So, I’m part of
the problem…my own way of seeing things, my own
sense of where there’s leverage, is probably part of
the problem. This is the domain we’ve always called
“mental models”. If I’m not prepared to challenge
my own mental models, the likelihood of finding
non-obvious areas of high leverage is low.’

As described earlier in this chapter, the purpose of


analysis is to identify patterns and provide explana-
tions for those patterns in ways that inform actions to
optimize desired outcomes. As also mentioned ear-
lier, these patterns have more value when they pro-
vide unexpected insight, or in Senge’s terms, when
they provide ‘non-obvious areas of high leverage’.

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Of course, finding these unique insights will not


happen until we begin to understand how our pre-
existing mental models, biases or heuristics are limit-
ing our perspective, and until we recognize that we
ourselves need to change for the system to change.
Nowhere is this truer than for managers in a business
that is looking to become more data-driven. In such
an environment looking to undergo organizational
change, not only is the manager challenged in the
implied shift of their role from ‘answer definer’ to
‘question asker’, but they will also be tasked with
guiding the organization’s ability to find ‘non-obvi-
ous sources of high leverage’ in the data, and to
apply these to achieve results. Engendering systems
thinking is the place to start. For an understanding
of how to begin this process, we turn to a second
MIT professor — Otto Scharmer, a Senior Lecturer
at Sloan School of Business and co-founder of the
Presencing Institute, the origin of Theory U.

Theory U

The success of an intervention depends on the interior condition


of the intervener.

— Bill O’Brien, CEO, Hannover Insurance

The quote is provided within Otto Scharmer’s book


Theory U: Leading from the Future as it Emerges, and per-
fectly summarizes his underlying message. Scharmer
shares Senge’s view of environments in need of
change as systems that have been built and main-
tained by the very people who need to make the
changes, and the related importance of each indi-
vidual’s recognition of their role in (re)structuring
the systems of which they are a part. The underlying

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principle of Scharmer’s Theory U is that positive


change can only emerge when individuals stop
‘downloading’ from the existing system and instead
begin to use new information and creativity to start
bringing the best possible future into the present, a
process he calls “Presencing”. This concept of
Presencing is grounded partly in the requirement
captured in the quotation that starts this system; the
requirement that individuals who hope to intervene
for good in their systems must be consciously present
within those systems to take the first step away from
the default state of downloading, which can also be
thought of as acting reflexively from the familiarity,
social proof and escalation of commitment heuristics
described earlier in this chapter.

Recognizing and addressing the heuristics, filters


and biases that shape the perspective of each of us as
individuals in our environment is a key first step to
enacting the type of change that will transform our
organization to be more “data-driven” and able to
act on unexpected insights. Scharmer’s Theory U
also provides a nicely structured understanding of
the organization, and the organizational life of indi-
viduals that provides context around the manifesta-
tion of our collective internal conditions into the
external conditions we perceive as a system.

Scharmer outlines three layers of organizational life


that collectively compose what we think of as the
‘system’ in an organization:

1. Objective Structures: This is the dimension of


the organization as defined by the organization
chart, and structured through established tools
and processes.

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256 Architecting Experience

2. Enacted Structures: This is the dimension of the


organization as defined by informal social net-
works. While the objective organization dictates
‘who is in charge of what’, the enacted structure
tends to determine how things actually get done.
This structure is where ‘who you know’ matters
more than your position in an org chart, and
‘what you know’ matters more than your defined
job function.
3. Personal Sources of Enactment: This is the foun-
dation of the organization, and the source of all
activity in the enacted structures and systems
described above. This is the position from which
each individual in the organization takes action,
and is defined by the collective perspectives, atti-
tudes, biases and filters of each individual in the
organization. When filters and biases are high,
perspectives are narrow, and attitudes lack energy
and positivity, the organization will be inflexible
and resistant to the change it will sorely need.

Because so much activity inside organizations is


guided by heuristics and processed through filters,
any proposed change that might result in a need to
leave this comfort zone will be perceived as a threat
unless, (1) it is offered with context that links the
change required by each individual to a bigger picture
vision of an organizational outcome, and (2) solves
something that these individuals agree needs to be
solved.

The “U” in Scharmer’s Theory U is essentially a


‘U-turn’ for individuals and the way they work within
and perceive their organizations. The shape reflects
a process of ‘diving-down’ to a point of deep under-
standing of oneself and one’s role in generating the

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present of the organization, then building back up


on the other side of this process to ultimately act as
the embodiment of a new and better way of organi-
zational work. On the left, or downward sloping side
of the “U”, there are four stages in shifting from the
current state to a place of readiness for change.

The default state of organizational awareness is


“Downloading/Conforming”. Here the individual
speaks from what is expected/learned. This is clearly
the antithesis of an analytical and data-driven mind-
set and environment. True analysts will not do well in
this environment, and data or analysis that contra-
dicts the established conformity will be rejected with-
out reason.

The first level of awareness deepening is to “Debate/


Confronting”. Here the individual begins speaking
from what they think. While this type of awareness is
at least capable of diverging from other views, for
each individual acting from this position, it is very
unidirectional and defensive; their thinking and per-
spective flows out into the organization, but little is
let back in to shape or transform their beliefs.
Heuristics and biases still rule the day in this world,
they are simply less shared. An analyst who can only
present what they think and cannot hear other per-
spectives will be limited in the value of insight they
can deliver. A manager who thinks this way will use
data when it supports their position, and reject data
when it does not.

The next level of awareness is one of “Dialogue/


Relating”. Here the individual understands that they
are part of a system, and speaks from the standpoint
of seeing themselves as part of the whole. This is

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clearly a much more productive position for all


involved. Analysis produced from this perspective
will be cognizant of the needs of others and the sys-
tem as a whole, and as such will be more valuable to
all. Managers who work from this perspective tend to
be focused more on enabling the best options even
if they come from others versus constraining activity
to only those ideas which come from them. In this
environment, data and models that point out a bet-
ter direction will be accepted and utilized.

The deepest level of awareness is “Presencing/


Connecting”. Here the individual is not afraid to
speak from what can emerge, and to enable and join
a flow of ideas and creativity across the organization.
Analysts who can work from this position will regu-
larly produce insights that are welcomed as percep-
tive, creative and able to help drive innovation and
progress in the organization. Managers who work
from this perspective are allowing their organiza-
tions to create a sum that is greater than its parts.
Data and models are welcomed if they resolve the
need to spend energy and effort on something that
is just as easily or better managed algorithmically,
and accordingly free up the organization’s thinking
for more creative pursuits.

When a critical mass of influential individuals in an


organization have collectively reached the presencing
level of awareness, the organization is certainly ready
to become data-driven, and to make the most of that
readiness in terms of quickly developing creative
responses to the ‘non-obvious sources of high lever-
age’ that a readiness for continuous discovery ena-
bles. But not all organizations have achieved a level
of dialogue or presencing that makes them ready to

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go where the data tells them to go. So how can a


reader of this book begin to initiate change in their
own perspective, and then in their organization, to
become able to find and apply insights from data?

Leadership and Change

In his book, Leading at the Speed of Change, Darryl


Connor defines the roles that people in organizations
will take around any sort of organizational change.
As explored above, there will typically be a large con-
tingent who are initially resistant to change. When it
comes to change related to data and the transforma-
tion to more data-driven practice, the likely first line
of resistance will come from the “Targets” of change,
the managers who are responsible for the current
system of data utilization, and the teams that are
accustomed to doing their daily work within in that
system. This latter group is also the first group that is
likely to spawn advocates for change as the benefits of
the potential change are defined, and those individu-
als capable of dialogue and presencing begin to envi-
sion a better system as a result of the change.

As Connor has observed, there are typically three


other roles working to enact the change for the
Targets of change. “Sponsors” are the formal leaders
in the organization who provide political capital and
resources in support of the change effort. These are
the individuals who can use organizational authority
to mandate that the change should happen. However,
even with the contribution of mandate, time and
budget, as systems are organic products of the indi-
viduals within them, mandates do not become
enacted simply based on their presentation by the

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organizations formal leadership. As Scharmer


observed, there is an ‘enacted’ system in organiza-
tions underlying the formal structure with a set of
relationships and informal processes that determine
how things actually get done.

The role emerging from this enacted organizational


structure is the “Advocate” for change. Even with
strong sponsorship within the formal system of an
organization, a change effort without Advocates in
the enacted layer is sentenced to failure. While for-
mal authority provided by sponsors in leadership in
critical for enacting change, support for change pro-
vided by advocates who fall within the Target popula-
tion that will be most affected by the change is
perhaps the most powerful form of advocacy for
getting the idea for change off the ground and into
practice. People in organizations understand that
they have to follow the letter of the law as dictated by
the Objective structure, but without belief in the
spirit of the law, this typically translates into going
through the motions around a new ‘process’ that is
viewed as an imposition, and is eventually aban-
doned due to a lack of results. Advocates for change
are those who believe in the spirit of the vision for
change that underlies a managerial mandate, and
who are able, through dialogue and presencing, to
translate that vision into terms that can be appreci-
ated by their peers.

The role that draws most heavily from the practices


of ‘presencing’ to bring the future into the present
through organizational change is the “Change Agent”.
Many of you reading this far into this chapter will
be interested in taking on this role in an effort to
help your organization begin utilizing some of the
approaches to digital analytics outlined in this book,

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The Cultural and Organizational Impact of Data 261

and hopefully the discussion in this chapter has pro-


vided you with guidance into how this may be accom-
plished. As you seek to implement change, ensure
you have Sponsorship, recognize your Targets,
develop Advocates, and cultivate those Advocates
into other Change Agents. Use the ideas defined by
Senge to shed light on the system, defining the prob-
lems of the system that most need to be addressed,
and using data to find ‘non-obvious sources of high
leverage’ that can be used to address them. And use
the ideas defined by Scharmer to establish a position
of presencing in your ‘personal field of enactment’
to place the most creative power behind your effort
to drive change, and to draw others as Advocates and
supporting Change Agents into your cause.

Overcome Organizational Inertia

We will end this chapter with some guidance on spe-


cific strategic and tactical considerations to make in
efforts to build a more data-driven organization.
These questions return us to the “Data Applied” sec-
tion of the ADAP, and may be asked and answered as
a preface to that section. In auditing the organiza-
tion to prepare for change to a more data-driven
structure, ask the following questions:

• What data is used in the design and delivery of


digital experiences?
• What data is used in the evaluation and optimiza-
tion of digital performance?

 Where is communication design work being


done from guesses or by rote process?
 Is there data available that should be used but
isn’t?

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262 Architecting Experience

 Are there design or performance questions


that need data that is not available?
 Is performance viewed in business siloes versus
integrated across channel, like the customer
experience?

As a Change Agent fueled with the creative power of


a presencing mindset, seek to expand your new
mindset to others. Through the development of the
ADAP, you will have made a giant step toward change
by defining a data-analytics strategy that can become
a part of collective dialogue. To see the change
through, ensure that Sponsors, Advocates and
Targets — even initial resistors to change — have all
contributed to the dialogue (which in the case of
resistors will have been debate initially, but can
become dialogue as they are engaged in that way).

Finally, return to the principles for valuable analysis


and visualization defined above to ensure you are
building frontline capabilities that actually deliver
the results that have been envisioned through the
process of change. While sophisticated analytics solu-
tions will create opportunities to identify non-obvious
areas of high leverage, these solutions must manifest
in interfaces and visualizations that are so simple and
useful that managers and employees will want to use
them daily. As you implement analytics, do not allow
the effort and investment be so heavily weighted
towards models that frontline usage gets overlooked,
since models and analytics are only truly valuable to
the business when they can be used to drive positive
results for the business and the consumer alike.

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Conclusion

Thank you for taking the time to read and learn


more about digital analytics and marketing science.
If this book has done its job, then the preceding
pages have answered that key question facing you as
a marketer: how do I deliver content and experience
around my brand that is relevant enough to drive
engagement in the user’s current context?

The answer begins with the documentation of busi-


ness objectives, consumer objectives and the resulting
marketing objectives to begin your Applied Digital
Analytics Plan, and emerges from diligent considera-
tion of the other foci of the ADAP:

1. Defining the problems that data can solve;


2. Identifying sources of data (existing and
potential);
3. Collecting, managing and analyzing data;
4. Overcoming organizational and cultural inertia;
5. Applying data and analysis to solve the problem;
6. Evaluating the outcomes.

In evaluating outcomes, you will now be aware of the


first rule of digital engagement: relevance drives
results. If the outcomes you evaluate through perfor-
mance analytics are not performing as desired, you
will look for ways to increase relevance through fur-
ther application of data and analytics.

263

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264 Architecting Experience

In evaluating the opportunities to increase relevance


with data, you will look beyond simple performance
measurement to evaluate the context around that
performance, and to conduct research needed to
augment that context.

You will form hypotheses that prescribe potential


solutions and test how well those prescriptions deliver
the desired results. You will incorporate knowledge
gained from context analysis, research and prescrip-
tive analytics into predictive models, and ultimately
you will allow those models to guide automated and
adaptive experiences that use machine learning to
optimize the efficiency and effectiveness of market-
ing delivery for each person you connect with, at
each point of engagement.

You now have a very good base understanding of how


to conduct data collection for owned, earned and
paid channels, and you understand the value of plan-
ning and implementing experience designs and
information technologies that connect data from
each of these channels around a common ID that
aligns interactions across channels and over time
with each unique individual who engages in those
interactions. You also understand the challenges of
making this unified data infrastructure work, but are
prepared to work with partners in technology and
across the business to define a realistic path toward
achieving unified data and a cross-channel view of
the customer.

In working across the organization to achieve this


customer-centered data-driven approach, you are
prepared to face resistance and inertia, and you are
armed with an understanding of what creates such

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Conclusion 265

resistance and inertia, and ideas for how to face and


overcome negative heuristics and patterns of down-
loading with systems thinking and Theory U. And in
driving meaningful and relevant engagement with
consumers, you are able to consider not just the con-
tent you are driving, but also the impact of the
medium through which content is communicated.
You recognize that different channels have different
impacts based on how their “hot” or “cold” nature
aligns with the ‘temperature’ of the sub-culture(s) to
which your audience belongs.

So, although you have reached the end of this book,


you are just at the beginning of what will undoubt-
edly turn out to be a long and interesting journey as
a champion for consumer-centered data-driven mar-
keting. As you follow the path that proceeds from
these pages into your own next chapter, please stay
connected via this book’s counterpart website (www.
architectingexperience.com) for access to supporting
material (e.g. the ADAP template), expanded think-
ing around this book, and to share your experiences
and ideas with peers and colleagues.

Further Reading
Connor, Daryl R. (1993). Leading at the Speed of Change.
London: Random House.
McLuhan, Marshall (1965). Understanding Media: The
Extensions of Man. New York: McGraw-Hill.
Stasko, John (2013). The Value of Visualization…and Why
Interaction Matters. Presentation at the 2014 Euro­
graphics Conference on Visualization (EuroVis’14).
June 9–13, 2014. Swansea, Wales, UK. Available at:
http://www.cc.gatech.edu/gvu/ii/talks/eurovis14-
capstone-stasko.pdf.

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266 Architecting Experience

Sage, Peter (1990) [2006]. The Fifth Discipline: The Art and
Practice of the Learning Organization [2nd ed.]. London:
Random House.
Scharmer, Otto (2007). Theory U: Leading from the Future as it
Emerges. San Francisco, CA: Berrett-Koehler Publishers.
Tufte, Edward (1983) [2001]. The Visual Display of
Quantitative Information [2nd ed.]. Cheshire, CT:
Graphics Press.

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Index

A/B test, 174, 177, 178, dark patterns, 183, 185, 186
180 data, 49, 50, 55, 56, 57, 154
Application Programming Data Management
Interfaces (APIs), 123, Platforms (DMPs), 14,
125, 127, 131, 134–136, 28, 103, 105, 118, 154,
138, 139, 142 162, 170, 189, 190, 194,
Applied Digital Analytics 207
Playbook (ADAP), 49, demand chain, 7–9, 15
50, 55, 69 Demand Side Platform
(DSP), 28, 46, 105, 154,
Big Data, 32, 35, 130 155, 170, 171, 191, 195,
204
campaign tagging, 84, 86, Demographics, 199
100 Digital Data Stack, 26
Click-through Rate (CTR),
157, 158 Earned Media, 27
Connor, Darryl, 259 event tagging, 84, 86, 87,
cookies (web), 77, 78, 102 90
cool medium, 229, 237 extract, transform and
Cost-per-Acquisition (CPA), load (ETL), 202
158, 159, 166
Cost-per-Click (CPC), 157 hot medium, 229, 231, 247
CPM, 156, 157
Customer Decision Journey Integrated Marketing
(CDJ), 10, 15, 16 Communications (IMC),
Customer Journey, 8 15, 55
Customer Relationship
Management (CRM), JavaScript, 74, 76, 77, 78,
29, 30, 37 83, 86, 92

267

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JavaScript Object Notation Real-time Bidding (RTB)


(JSON), 139 see programmatic
marketing, 168, 169
Key Performance Recency, Frequency and
Indicators (KPIs), 39–41 Monetary (RFM), 200
Retargeting, 164
machine learning, 125, Return of Investment
126 (ROI)
marketing science, 21, 22, Return on Investment
26, 29, 38, 47 (ROI), 43, 45, 65,
McLuhan, Marshall, 68, 145, 148, 159
229–231
media, 2–4, 14, 19 Scharmer, Otto, 254
middleware, 135 Senge, Peter, 252
multivariate (MVT) segmentation, 199, 200,
testing, 174, 177, 182 206
Stasko, John, 222
neural networks, 211, structured data, 117, 124,
214–216 125
systems thinking, 252–254
organizational change,
248, 250–252, 254, 259, tag management, 92, 93
260 targeting, 152, 159
owned media, 26 Theory U, 254–256
Tufte, Edward, 222
page tagging, 92
page tagging (web), 94 unstructured data, 124,
Paid Media, 27 126
personas, 57, 58, 64, 69
programmatic marketing, View-through Rate (VTR),
see Real-time Bidding 157
(RTB) 47, 171, 217 visualization, 205, 208
psychographics, 200
purchase funnel, 10

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