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3 Ways to Get Smarter About Conversions

3 Ways to Get Smarter About Conversions Stephan Pretorius
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Since the very early days of online advertising our industry has been extremely vocal about its ability to track online conversions accurately. Since the late '90s when post-click tracking (also known as pixel tracking or web beacon tracking) really started taking off, we have been measuring the impact of online ad campaigns on sales, reservations, bookings and sign-ups, and have been using this data to justify the efficiency of the online channel. Traditional channels were criticized for not being accountable and online was positioned as a medium of perfect transparency and measurability.


Increasingly, however, I hear experienced senior marketing execs asking very tough questions of their agencies and online marketing teams, questioning the validity of online conversion numbers and wanting to know whether the claimed efficiency is really as good as it looks. No one likes to be criticized, but I think if we were all very honest with ourselves we would have to agree that we often approach conversion and reporting in too simplistic a fashion. This is not because we don't understand how to track or how to do P&L calculations, but it is often easier to simply pull a report from your ad serving system and rely on the canned conversion numbers as final evidence of campaign impact.


But this is no excuse: With online displacing increasing amounts of traditional marketing budgets it is vital that we (as an industry) become more sophisticated and qualified in how we speak about online conversions. Here are three areas to focus on:


Factor 1: The measurement methodology
Most ad servers, search bid management platforms and email marketing tools enable us to track in a variety of ways: immediate clickthrough, delayed clickthrough (with a default 30-day cookie window), viewthrough, et cetera. Since I have written about the pros and cons of these different methodologies before, I am not going to repeat that discussion here. Suffice it to say that it is our duty to be 100 percent transparent when supplying conversion reports to specify what methodology is being used. It is misleading (if not fraudulent) to simply list generic conversions and not disclose how you are counting.


This becomes pronounced when you are working in an enterprise environment in which there are usually several parallel tracking systems at work, e.g. site analytics or offline financial systems relying on promo codes. These systems rarely count in the same way (different report start/end dates, different cookie window lengths, et cetera) and if you cannot explain the discrepancy your numbers will be questioned. Promo code systems are usually the lowest common denominators, only counting the equivalent of immediate clickthrough conversions and not even tracking any cross-over sales. While it is fine to argue that we should attribute more than this to our online campaigns, and while it is fine to report on more than this, it is also important to be able to report on the lowest common denominator so that marketing execs can make apples-to-apples comparisons.   


Factor 2: Offer and distribution
In order to properly understand the value of online conversions it is vital that marketers know what offer was used to drive such conversion as well as where the offer was placed. A conversion off a keyword search for your brand and product needs to be evaluated very differently from a banner ad in an editorial environment, and very differently again from an incentivized offer on a "free stuff" website. In the first case, you are simply funneling existing demand for your product; in the second you are creating new demand in a contextually relevant environment; and in the third case you are incentivizing someone to buy your product that would most likely not do so otherwise. It would be unwise to compare the acquisition costs of these three conversions directly since the lifetime value of these customers will be very different.


An argument that one should control offer and distribution might sound trite, but in a world of affiliate marketing and blind networks it is a very important one. I am vigorously opposed to the idea of blind networks and I think the tide is turning against the phenomenon. However, as long as they are still around, it is important that you set a detailed bar of what is and what is not allowed, e.g. no incentivized offers, or incentivized offers only up to a $20 value, or no paid search placements, et cetera.


Factor 3: Using enterprise metrics
In most organizations an online conversion is not the end of the P&L road. There is a long list of additional (often, industry-specific) factors that affect the P&L on a campaign: no-shows, returns, up-sells at pick-up, charge-backs, repeat purchases, churn, and so on. Unfortunately, most of these activities either do not occur online or are not tracked by online campaign measurement tools. The best approach is to pick up some kind of enterprise identifier (like a reservation number or order ID) when the online conversion occurs and then to append the "post-conversion" data so that a true assessment of the online conversions can be made.


Such "post-conversion" reporting and data analysis is complex and not something I have seen many marketers or agencies do well, but it is the only way to achieve real credibility, and will in the long run separate the online cowboys from the respected marketers.


Conclusion: It's time to grow up
When marketing execs ask tough questions about online conversion reports, they are not trying to undermine the new kid on the block, nor are they engaging in some kind of schadenfreude about finding a hole in the online armor. They are simply trying to properly size and compare the impact of a medium that is playing an increasingly important part in their budgets and sales forecasts. We should help them in this pursuit and be responsible about how we report on campaign impact. This industry is past the scrappy, rough and ready period of the late '90s. It's time to grow up.

Sony


The sin: Hackers infiltrated the Sony PlayStation Network (which includes Sony Online Entertainment) and stole data pertaining to more than 77 million users. Just a few days later, the cyber criminals struck again, hacking an out-dated (2007) database that contained sensitive customer information including names, addresses, birth dates, passwords, and even credit card information.


The penance: After taking a 26-day hiatus to restore its systems, Sony offered its customers a welcome-back program that included upgrades and purchase credits. Sony also offered to enroll customers in identity theft protection programs -- such as cyber monitoring -- at no cost to customers.


In the welcome-back video, Sony executive Kazuo Hirai offered his "sincere apologies for the inconvenience the service outage has caused" and went on to thank Sony customers for their patience.


"We know you've invested in Sony and the PlayStation network and Qriocity services, and we will do everything we can to regain your trust and confidence. We also realize that actions speak louder than words, and we're taking aggressive action to address the concerns that were raised by this incident." Hirai explained that Sony had "greatly upgraded" its data security systems with "increased levels of encryption" in addition to improved firewalls and an updated detection system.




Sony was able to successfully launch its newly fortified systems in early May. However, despite the new security measures, Japan -- where Sony is based -- initially refused to allow the company to launch the PlayStation Network within the country until additional security measures were in place.


The aftermath: While it's too early to detect the long-term effects of the breech, it is certain that Sony still faces an uphill battle: A slew of lawsuits cropped up when consumers learned that their information had been leaked, and the company has yet to fully regain consumer trust. According to Business Insider, analysts are certain that the breach will cost Sony more than $1 billion.



Citigroup


The sin: In May 2011, the names, account numbers, and email addresses of 200,000 Citibank customers were compromised when the company was hacked by thieves.


The penance: Citigroup's response to the situation was mysterious: It took the company more than a month to contact its customers about the breach. When the situation was leaked to the public, Citigroup's spokesman, Sean Kevelighan, admitted to the hack but refused to divulge any information. "For the security of these customers, we are not disclosing further details," he said.


The aftermath: It's too soon to tell how severely this security breach will affect Citigroup. However, the Sony situation is a good indicator of how things might go for the company. Sony waited a week to go public with the information -- many customers viewed this as a gross violation of trust. One can only assume that in waiting a month to disclose this vital information, Citibank customers will be in an uproar over the company's negligence. Citibank is sure to face some serious legal and financial difficulties over this debacle.

The Yankees


The sin: In April 20111, a ticket rep for the Yankees accidentally sent out an email attachment that contained the names, addresses, email, phone numbers, and Yankee.com IDs of 21,466 of the team's season ticket holders. Ticket holders were infuriated, as this gaffe left them vulnerable to spammers and possible thieves who, upon guessing the right password, could gain access to the actual tickets.


The penance: The Yankees franchise wasn't as penitent as it could have been. According to Deadspin, the Yankees didn't even bother to let subscribes know of the breach until the incident was made public on the internet. Only then did the Yankees send out a message to subscribers itemizing the confidential data disclosed in the ticket rep's errant email. While the email did state that "the Yankees deeply regret this incident, and any inconvenience that it might cause," there was no solid apology or effort to rectify the situation. The only conciliatory act detailed in the email was that "remedial measures were undertaken so as to assure that a similar incident could not happen again."


To compound matters, in what can only be assumed was a secondary mistake, the subject line of the apology email was left blank.


The aftermath: To many, this email came off as a half-hearted attempt to save face. According to mediabistro.com, there was no official apology, no effort to "make things up" to those that had been affected, the rep kept his job, and the Yankees made no further comment.
 
While it's too early to tell what the fallout will be from this incident, one thing is certain: The Yankees franchise, unlike Sony, is confident that its brand is beyond the need to recompense fans whose accounts were compromised.



Domino's


The sin: In 2009, consumers were horrified by what became known as the Domino's "gross out" video. In case you live under a rock: These videos demonstrate unsupervised employees snorting, sneezing, and passing gas on Domino's edibles -- presumably before the food was delivered to unsuspecting customers.


In an act of absolute idiocy, the aforementioned employees then decided to post their videos online. In a matter of hours, the video went viral, and Domino's found itself at the center of a very sticky situation.


The penance: Dominos immediately fired the two employees, Kristy Hammonds (who also happens to be a registered sex offender) and Michael Setzer.


And, 48 hours later, the company issued a video apology.


In the video, Domino's President Patrick Doyle made it clear that while the offending workers claimed the video was a hoax, Domino's intended to take situation "very seriously." To illuminate just how serious, Doyle stated that "the two team members have been dismissed and there are felony warrants out for their arrest."


Domino's made good on its word; the employees were apprehended and arrested.


Kristy Hammonds, who was charged with felony adulterating food, received a 45-day suspended jail sentence and 18 months of probation after entering a deal in which she pleaded guilty to a lesser charge. Michael Setzer also pleaded guilty and was hit with a six-month suspended jail sentence followed by 24 months of supervised probation.


The aftermath: Unfortunately, this incident spelled out doom for the North Carolina franchise. Despite a thorough disinfecting of the location and a new set of employees, customers shied away from the store. Several months later, the franchise owner was forced to close down his business due to shoddy sales.


By the time Domino's removed the video from YouTube, it had garnered almost 1 million hits. Naysayers cited this, and the fact that Dominos took a full 48 hours to apologize, as the reason for the immediate nosedive in positive feedback for the company online.


The following chart, created via Infegy's Social Radar, measured the damage in the social media arena.



However, all is not lost. Today, Domino's sales are going strong. According to Yahoo Finance, the company recently opened its first store in Poland and expects its global retail sales to increase from 4 to 7 percent in the near future -- not too shabby for a food chain that had to apologize for unsanitary practices less than two years ago.

Amazon


The sin: In the summer of 2009, Amazon remotely deleted George Orwell's "1984" from the Kindle devices of users who had bought the book online. Consumers were not just angry -- they were horrified to discover that the book had suddenly vanished from their Kindles along with any highlighting, earmarking, and notes that they might have stored on the device. It was an absurdly ironic act (to say the least) considering that the book's central theme revolves around censorship and oppression.


Amazon cited legal issues as the reason for the recall. Apparently Mobile Reference, the company that added the books to the Amazon site, did not own the rights to sell the titles.


The penance: Jeff Bezos, founder and CEO of Amazon, posted an apology on the company forum, where he admitted that the act was "stupid, thoughtless, and painfully out of line with [Amazon's] principles."


Bezos then went on to prostrate himself and the company by saying, "We deserve the criticism we've received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission."


The aftermath: While many folks were outraged at the time, it appears as if the whole incident is water under the bridge. Kindle sales are at an all time high; according to Bloomberg Businessweek, Amazon exceeded its projected Kindle sales by 60 percent in 2010. That's more than 8 million devices -- which goes to show that consumers tend to have short-term memories.



H&M and Walmart


The sin: In 2010, The New York Times ran an article about companies that destroyed unused and unwanted clothing. The offending companies -- H&M and Walmart -- left piles of slashed clothing in trash bags outside their stores in the dead of winter, when many of the cities' poor were freezing and in need of warm garments.


According to the article, New York City resident Cynthia Magnus stumbled across multitudinous trash bags filled with damaged clothing from Walmart and H&M stores. She collected the clothing in an effort to patch up the items, which she then intended to donate to a local shelter.


Magnus repeatedly attempted to contact representatives for H&M -- she proposed to align the company with a charity to which it could donate the unwanted clothing. Much to her chagrin, she was repeatedly ignored. So, Magnus tipped off The New York Times in hopes of revealing the shoddy practice to the public.


The penance: According to New York Magazine, The New York Times attempted to contact a rep from H&M 10 times before spokesperson Nicole Christie finally offered a response. Christie asserted that it would "not happen again" and insisted that normally H&M donates its unworn clothing to charity. Walmart spokeswoman Melissa Hill claimed to have absolutely no knowledge of why that particular store destroyed the clothing, and contended that it was Walmart policy to donate or recycle unwanted materials.


Neither company issued a formal apology and instead opted to go on the defense -- claiming ignorance.


The aftermath: Despite the initial wave of negative media attention, the scandal died down fairly quickly. A year and a half after the event, it appears as if it's business as usual for the two mega-brands.

The sin: In the summer of 2010, Apple released the iPhone 4. Devoted customers -- some had waited in line for hours to purchase the device -- were sorely disappointed when it was discovered that the phone's antenna placement inhibits its functionality. Left-handed users found that the iPhone 4 constantly dropped calls because the position of their hand on the back of the device blocked the antenna signal.


The penance: When Endgaget inquired about the mistake, Apple responded with an email that encouraged users to "avoid gripping [the iPhone 4] in the lower left corner in a way that covers both sides of the black strip in the metal band, or simply use one of many available cases."


Yes, you read it correctly: Apple made a critical mistake in the design of the iPhone 4, and when confronted, the company responded by telling users they should change the position of their hand or purchase additional accessories to improve antenna utility. Not much of a penance, was it?


Customers became even angrier after Apple's response to the oversight, and eventually irate consumers and the critical press pressured Apple into offering a free phone "bumper" to users who were having problems with iPhone 4 reception.


The aftermath: Apple continues to grow exponentially; the introduction of new generations of devices has eclipsed the scandal and, for the most part, the whole calamity seems to have been forgotten by the general public.


Conclusion
These eight examples demonstrate how different brands respond to a diverse array of scandals. The anatomy of these "apologies" only proves that there is not necessarily a right way to say "I'm sorry" to your customers. Much depends on your brand's threshold for scandal and the expected damage (both in image and bottom-line sales) that a given incident might ultimately have.


The key is to keep tabs on what is being said about your company and to act according to popular demands -- consumers, at the very least, deserve some type of response.


Jennifer Marlo is an associate editor at iMedia Connection.


On Twitter? Follow iMedia at @iMediaTweet.

2. Be clear on what is your reason for being


There are literally thousands of agencies available to brands. Setting your agency apart in that sort of environment is critical. All agencies try to do this, but you might be surprised by how many deliver virtually the same stories under the misconception that they are saying something unique.


In one of his very popular TED talks, Simon Sinek posits that people buy why you do something even more than how you do it. Doubtless there are lots of great things about your agency -- people, experience, past work, channel expertise, etc. But that's true of lots of agencies out there. To make yourself memorable, you need something bigger than a bunch of unverifiable attributes.


Why did you create your agency? Why did you join? What are you on a mission to do or upend or change? The best "why" I ever heard was years ago, from The Richards Group. They said that they existed to fill a key gap in the industry -- that they were all about persuading consumers "who lived between the I-5 and I-95."


Now that's a why! It built on an idea that was already in prospects' heads: that agencies can be too focused on what will play with hipsters that work at ad agencies and awards show judges. It also celebrated what other shops might disdainfully call the "flyover" customers. What TRG said was, "We don't disdain them, we celebrate them."

3. Tell them what you're really good at



 
One friend currently in the middle of a review told me that when he asked prospective agencies what they are really great at, they all said "everything," or words to that effect. C'mon. Emphasizing that you can do everything is different than explaining where your true expertise lies.


No one expects you'll be great at everything, and when you say you are, you lose credibility. Explain your core strengths in the context of what is most important -- now and in the future. This is the high-level "what" that flows from your "why." It needn't be focused on a channel or device, though it could be.


Here are a few examples that impress me:


Anomaly's focus on creating "IP that changes the game"
Traction's focus on creating participatory marketing
OgilvyOne's focus on using data to give more than just lip service to understanding and shaping customer engagements.

4. Engage the customer in a discussion


You will never be as interesting to anyone as they are to themselves. So put some tight limits on the "about us" slides.  I once worked for an agency that had more than 40 slides devoted to itself and how great it was. You need clients to get to know you, not revere you. 


Over and over, clients have told me that the best pitches evolve into conversations about their business issues. And what's most interesting is that while some clients seem reluctant to reveal their issues, the most successful agencies figure out ways to get those conversations going.


Even when clients aren't forthcoming with business information, your teams should be able to make educated inferences about a brand's business issues. If you think high level, most brands have one of three business challenges -- awareness, trial, or repeat purchase.


And even if you are wrong, 99.9 percent of companies will appreciate your effort to make your pitch about them. This is one of the core ideas behind The Challenger Sale, Matthew Dixon and Brent Adamson's bestseller on successful selling strategies. Providing a thought-through opinion changes the nature of a sales pitch so that the client speaks to you like a partner, instead of one of four interchangeable vendors.

5. View every communication as an opportunity


Usually, clients know little about you when they RFP. Therefore, it's natural that they use every communication as a heuristic to understand what it's like to work with you. When you respond rapidly to every request, when you meet that no-later-than-5-p.m.-Eastern-on-the-12 deadline without begging for an extension, when you submit pitches that don't bounce back because of file size, when you show up early for phone calls and meetings, you tell the client a great deal about yourselves and what working with you will be like.


6. Build bridges, not walls


In many agency searches, there are a handful of people who collectively have the power to choose you. But lots of agencies forget that there are others in the company that can strongly influence the decision makers to say no (or yes).


One such situation is when there is an internal creative or media team, and you are being considered because the marketing team is dissatisfied with that team's work. They may even denigrate that team in your discussions with them.


What's your move? You may think it's to distance yourself from that team as much as you can, and to ice them out of conversations. Nope. The marketing team wants more creative firepower, but won't pick you if it increases the internal political mess they experience every day.


Whatever they say, what they really want is for you to find ways to collaborate with that internal team and make it better. Having the internal creative team feel good about the decision to hire you will go a long way toward ensuring you get the assignment. 


Similarly, in large orgs, one group or division might hire you to help them elbow another division. The key in situations like this is to figure out a way to give your clients what they want while creating greater harmony between groups. Many times, all that requires are ears that work and a will to do the right thing.

7. Don't forget the relatability


There are lots of intangibles in a pitch process, and one of the most important is the extent to which you can build immediate rapport with client decision-makers. Sounds sort of elementary, I suppose. But I cannot tell you how many pitches I witnessed in which one or several of the agency people were so busy massaging their own egos and proving their superiority that they forgot that people like to work with people they like.


Here's an example of what not to do: A friend of mine, part of an all-female brand team at a paper company, was part of the search committee for a new agency for a line of feminine protection products. A male creative director presented a campaign that -- the mind reels -- had a tagline that included a raunchy double entendre about "seeing red." When the brand team lead questioned whether dark humor was the way to sell tampons, the creative director explained to them that he had an instinctive understanding of what women wanted, and that working with him would be a "great learning exercise for them."


Beyond leaving the condescension at home, do a little homework. If you know who's going to be in the room when you pitch, research them. Look at their LinkedIn, follow their Twitter feed, and scan their Pinterest images. Look for points of common interest that break the ice and turn a stiff presentation into a rich conversation.


And never, under any circumstances, pitch a tampon brand with a raunchy double entendre. 'Nuff read.


Jim Nichols is vice president of marketing at Apsalar.


On Twitter? Follow iMedia at @iMediaTweet.


"Businessman arms" image via iStock.

Stephan Pretorius founded Acceleration in 1999 and is currently responsible for product development and client strategy. In the seven years since founding Acceleration, he has grown the company's product line from the initial online media buying...

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