Archive for the 'Measurement' Category

Retail as a Media Channel: Rachel Shechtman’s STORY

April 23, 2014

STORY_Color-STORYRachel Shechtman is redefining the way we measure success in brick and mortar retail. Her 2000 square foot store in New York City–STORY–has the point of view of a magazine, changes decor like an art gallery, and sells products like a store. Against the odds, Shechtman’s innovative concept and business model drove STORY to be profitable by the end of its first year–physical retailers usually break even by year three.

STORY is intended to create unique experiences meant for the physical world and offers the type of in-person interactions that stimulate emotional brand associations which lead to word-of-mouth publicity. Shechtman explained during the BRITE ’14 conference that while digital retail has considerably progressed in the past twenty years, stores have remained in many ways static and, “judged only by their sales per square foot.”

Shechtman is redefining how to build a successful retail store in two main ways: by using brands as sponsors that contribute to the store’s concept, content, and revenue, and by monitoring the impact of the store experience, as much as its sales per square foot.

Like a magazine, STORY has an editorial perspective, releasing a new “issue” every few weeks. It engages shoppers by partnering with brands to rotate its design and merchandise around carefully curated content and experiences. Like an art gallery, the team behind STORY creates immersive experiences that encourage participation from store visitors, transforming every aspect of the environment: from wall color and textures to merchandise and fixtures.

STORY’s model of innovation through brand sponsorship helps bring a different source of revenue and provides unique encounters that cannot be experienced anywhere else. The Making Things STORY edition –sponsored by GE– used 75% of the space for “pure experiences,” with laser cutters and injection molding machines available for customers to make plastic robots, jewelry, sunglasses, and customized MetroCard holders.

In 2012, STORY partnered with Benjamin Moore to create the Color STORY, where Benjamin Moore got to showcase its newest collection, Color Stories, and present a session, “The Power of Color & its De-Stressing Benefits,” led by a Benjamin Moore senior designer and a color marketing expert. They taught attendees how to use color in small living spaces with the purpose of detoxing and de-stressing. Shechtman pointed out that not only does this provide a second revenue stream for STORY, but it enables the brand to be their own storyteller. As she explains, “Benjamin Moore knows a lot more about color than Rachel Shechtman or the STORY team.”

The current issue, Good STORY, features a combination of brands including TOMS, Uncharted Play, ROMA boots, and Bombas socks, focusing on the stories behind the products, their missions and their vision for social change. As explained on STORY’s website, “each product tells a story that matters because it’s a story of people joining together to do something good.”

BY GABRIELA TORRES PATIÑO

Why Big Data Is So Hard for Companies

August 16, 2013

big-data-eyeballs-mediumI landed in Paris just as the NSA story was breaking, and Europeans were waking up to the extent of their American surveillance. Made for a lot of interest in my speech on big data and innovation to CEOs of the travel industry the following day.

If any industry will be shaped dramatically by the revolution in data and business practice, it should be travel. Travel transactions have already shifted almost entirely online, numerous touchpoints and complex customer experiences allow for wide-ranging innovation, and airlines were an early pioneer in applying dynamic pricing algorithms to optimize “yield” from each flight’s allotment of seats.

And yet, over the course of two days of meetings and conference events, I discovered the travel industry is grappling with the same issues as every other industry in trying to make “big data” work to the benefit of their customers, their business models, and their bottom lines.

Five lessons for CEOs, CMOs, and CIOs struggling with big data initiatives:

1. Customer level data is paramount.
Data is no longer about knowing that “69% of customers prefer X.” As data has shifted from the survey paradigm to real-time analysis and unstructured data, the value is in knowing that “customers who buy X, and do Y, are 140% more likely to want Z.”  This value requires linking together different behaviors and data signals at the level of the individual customer, to unlock insight and deliver much more customized value. As of recently, the airline industry has not even retained historical purchase records, literally “throwing out” the unique ID of each customer transaction after the trip, to recycle the record locator number for another customer.

2. Customers need to see value, to allay privacy fears.
With an ever-increasing spotlight on issues of data privacy, from both governments and corporations, gathering and using customer data surreptitiously is no longer an option. And to earn the trust of customers to use their data transparently, companies need to demonstrate the value they are delivering to them. When customers see actual benefits, from personalization, offers, and unique services, they are much more willing to accept the anonymized use of their data by your business.

3. Loyalty programs will be the leading edge of opt-in data.
The most transparent and familiar paradigm for customers to recognize a value exchange around data is loyalty programs. Huge numbers of customers already participate in at least one such program, and understand that they are opting in to allow the company to deliver rewards based on behaviors it is tracking and responding to. For companies with limited customer-level datasets (e.g. those who traditionally sell only through intermediary channels), loyalty programs are the first step down the path of developing their own strategic data asset.

4. Data is political, not just technical. Most conversations about big data take for granted that the biggest hurdles to assembling and linking diverse and enormous sets of unstructured data are technical challenges. But in the real world of businesses, the toughest challenges are political.  Sharing and linking of data, in order to assemble a complete picture of customer behavior, is very frequently obstructed by reluctance to share between divisions of a single company, or between partner companies.  Whosoever “owns” the data wields a great deal of power. The travel industry is struggling to shift to NDC, a new data standard for airline reservations. Why? Because while airlines claim it will allow for much better servicing of customers, online travel agencies (OTAs) fear being cut out of the value chain – disintermediated by their partners.

5. Data “ownership” is the wrong model. As turf wars heat up over customer data, some businesses are trying to lay down rules to establish their “ownership” of their customers’ data, before they share it with any business partners.  But ownership is fundamentally the wrong legal paradigm. While one business may try to set terms of use before sharing data with another, it does not “own” the data of its customers’ public online behavior. (This is equivalent to a radio station claiming ownership of a songwriter’s lyrics once a song is transmitted over its airwaves.) In a post-Snowden world, companies who try to argue too loudly for legal ownership of their customers’ digital footprints, will not be looked on kindly in the eyes of customers or policymakers.

The conference I spoke at was hosted by Amadeus, a leading global technology provider for the travel industry. If you are interested in the state of play of data in the travel industry, Amadeus has sponsored an excellent independent report on the topic. (Disclosure: Amadeus is a client. However, I was not involved in this study.)

BY DAVID ROGERS

This piece was originally posted by David on the DavidRogers.biz blog at: http://www.davidrogers.biz

What’s the ROI for Brand Advertisers and Online Video?

July 22, 2013

With Emmy nominations going to Netflix’s House of Cards and Arrested Development, the world of online video can say, “Well we finally made it.” But despite a growing viewership, and TV awards on the horizon, the question remains whether these signs of online video success will actually drive a significant return on investment (ROI) for brand advertisers and the video platforms. We were pleased to bring together a panel of experts at our BRITE ’13 conference to prognosticate on this issue.

Jonathan Knee, Faculty Director of the Media Program at Columbia Business School, began the debate by asking if this disconnect was a product problem or a marketing problem. “I think there are definitely measurement complications,” stated Kerry Trainor, CEO of Vimeo.com, “the internet is so fragmented it’s like trying to measure a sprinkler system. For all of the evils of the 30-second spot, it is standardized. You can build a marketplace around it…. so we have an ad product problem.” This was a sentiment agreed to by all on the panel.

Nielsen Cross-Platform Report Q1 2013

Nielsen Cross-Platform Report Q1 2013

However, John Montgomery, COO of GroupM Interactive, stated that he doesn’t see an inequity between the level of viewership and the ad spend going to online video. Using Nielsen’s 2012 figures, he notes that Americans are spending about 3% as much time watching online video as compared to TV while GroupM spends about 5% of its “TV ad budgets” on online video ads. This was a prescient use of dollars for GroupM, as Nielsen’s recent reporting for Q1 2013 now shows online video as indeed reaching 5% of the time spent on TV.

Thinking even bigger when it comes to measurement, Michael Keriakos, Co-Founder and President of Everyday Health, talks in detail about how his company has developed what amounts to a big data strategy that merges its own data with a range of 3rd party data. Through such efforts Everyday Health calculates, with good confidence, the pharmaceutical sales lift that is driven by peoples’ exposure to, and interaction with, a particular online video ad or marketing effort.

In the end, Larry Aidem, CEO and Founder of IconicTV, brings the discussion back full circle to the marketing problem that online video still faces. “Selling television the way CBS does, for a shrinking audience, continuing to see prices go up is a breathtaking accomplishment.” Larry believes that online video companies need to better sell their ad offerings and package them as if they were a TV spend. Although he does note there are still targeting problems with the ad serving technologies, like his own experience with a Romney ad running on JAY Z’s online venture Life+Times and an erectile dysfunction ad that ran on myISH.com which has a primary audience of teenage girls.

The complex ecosystem of online video will certainly lead to more growing pains, but marketers and advertisers are certainly paying much more attention to it. The latest IAB Internet Advertising Revenue Report (April 2013) found a 28% increase in ad revenues for online video from 2011 to 2012. And as viewing and spend increases, Americans will indeed watch more online video ads. Just last month, comScore reported that a record 20 billion ads were watched by US consumers, reaching nearly 54% percent of the total U.S. population, who saw an average of 121 ads in June.

BY MATTHEW QUINT

The Evolution of Online Education and its Future Real-Life Applications

June 5, 2013

Once considered a threat to traditional higher educational institutions, online course offerings now seem to be a defining element in creating and maintaining a world-class reputation in the space. Speaking at the BRITE ’13 Conference, Sree Sreenivasan, Columbia University’s first chief digital officer, discussed how the growing demand for massive open online courses (MOOCs) is disrupting conventional thought around the school’s many programs.

PJA

There are several platforms in place already, including Harvard and MIT’s co-created platform edX, and for-profit providers Coursera and Udacity, with the landscape changing daily as colleges and universities around the globe explore digital learning models and test them in larger markets. This past April, Stanford University, a long-time advocate for open learning, struck an agreement to share its proprietary Class2Go platform with edX, GigaOm reported.

Despite the growing number of courses offered online and the increasing appetite for them, the sentiment around online degrees seems to be a different story. As discussed in a US News & World Report piece in late 2012, it is still unclear how far down the road major blue-chip organizations are from universally embracing job candidates with online degrees, although smaller organizations have begun to look more seriously at them. Similarly, many schools themselves have reservations – Columbia being one of them. Administration is reluctant to provide online MBA courses for full credit, stating that a large part of the experience happens on campus and in the traditional classroom setting. Given how quickly online ed has taken hold in the past year alone, Sreenivasan predicted more and more accredited institutions will likely begin to offer full-fledged programs.  He explained that the advancement of and increasing accessibility to technology would be a key driver in this space. Columbia, he pointed out, has been involved with online ed since the turn of the century, citing its Fathom project, a learning portal which ran from 2000-2003. He said that its failure to catch on was due to the fact that it was “ahead of its time” and needed people to catch up to, and be able to access, the innovation before it could succeed.

Whatever the challenges, Sreenivasan was adamant that any successful initiative would be rooted in Columbia’s commitment to its brand, claiming that ongoing exploration and testing of online courses would not detract from “the magic that happens in the classroom.” Instead, he expects to optimize how both the digital and physical classrooms operate. How? The same way other big businesses improve their product and services: data. Through the ability to offer classes to tens of thousands of students, educators are able to collect enormous amounts of information on how students interact with courses and online tools. From Sreenivasan’s perspective, it is only a matter of time before digital learning becomes mainstream.

Watch Sree Sreenivasan’s BRITE ’13 talk to learn more about his and other organization’s views on the future of online education.

BY NANDITA RAY

Small Experiments That Lead to Big Results: The Value of A/B Testing

May 29, 2013

The use of randomized experiments to determine the most effective marketing or communications approach – known as A/B testing – is an extremely valuable tool for companies aiming to make the biggest impact on key stakeholders. However, according to Pete Koomen, president of website optimization software company Optimizely, the method is not implemented nearly enough. At the BRITE ’13 conference, Koomen shared personal experiences to demonstrate the very real value that A/B testing can contribute to developing results-driven communications programs. The most compelling of his examples included the 2008 Obama presidential campaign and the countless tests its analytics team ran on www.barackobama.com website content and email subject lines. Koomen noted that even the slightest word phrasing could drive visitors to action (e.g., donating funds, signing up to volunteer). “It was an extremely powerful technique for [influencing] decisions,” he said. However, given the deep investment in time and resources needed for A/B testing, Koomen observed over time that companies tended to avoid using the technique – a fact that he and his business partner Dan Siroker quickly recognized as a major business opportunity.

Koomen

The success of the 2008 campaign spoke for itself. Koomen estimated that methodical experimentation accounted for roughly $75 million more in donations to President Obama’s campaign and 4 million new website registrants. These results motivated Koomen and Siroker, both former Google product managers, to found Optimizely in 2009. They created a simple program that even small and medium-size businesses could utilize without having to depend on specialized in-house talent to run experiments. Organizations with limited resources could take advantage of marketing tactics that Amazon and other major blue-chip companies have been using for years to increase traffic and user conversion.

At BRITE ‘13, Koomen shared some best practices and lessons learned from running over 100,000 tests for clients and identifying the most effective approaches for achieving business objectives. For the Obama campaign, this entailed what Bloomberg BusinessWeek called “strange, incessant, and weirdly over familiar e-mails” due to the unusual, extremely casual tone Obama’s team usedjourney to office in 2008. The fundraising team found that the most successful subject heading “Hey” alone brought in millions of dollars in funding.

A few things that Koomen recommends businesses keep in mind as they take stock of their websites’ performance are:

  • Define quantifiable success metrics. One of the most important parts of testing. As exemplified by the Obama campaign, Koomen states that the campaign staffers did a good job of attracting people to the official website, but turning the site’s visitors into subscribers had proved more challenging and converting email signups to paying donators even more so.  By tweaking the website to optimize those two KPIs – subscribers and payers – the new website outperformed the old version by about 40%.
  • Explore before you refine. Koomen cautions against refining and optimizing in favor of exploring first to ensure you are aware of all potential solutions before selecting one to improve.  Otherwise, there is a chance the best solution will be missed.
  • Less is more. Reducing optionality can have a major impact on a website’s effectiveness. Koomen cites a client which removed a series of links related to its product portfolio and company background from its shopping cart page and saw a 16% improvement in the dollars per visitor.

PJA

Watch Pete Koomen’s BRITE ’13 talk to learn more about how A/B Testing can drive greater communications effectiveness.

BY NANDITA RAY

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