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A sound and universal way to measure engagement<BR>
Hutchinson: In a noisy attention economy, the metrics of reach, frequency, impressions and click through seem to be crumbling beneath a growing need for more relevant metrics, like say, (drum roll please) "engagement."
Of course, the trouble with engagement is that it's tough to measure. But at a recent ad:tech conference, you presented to a full house what seemed like a perfectly sound and universal way to measure engagement. Has EMM Group split the atom here?
Hastings: I like the analogy (especially since it was a scientist from my Alma Mater, Cambridge University, who identified the nucleic model of the atom).
The analogy we used at ad:tech was another scientific one: the transition from one S-Curve to another. In technology, the S-curve portrays the life of a technology that starts with a disruptive innovation, advances through competitive exploration of possibilities to achieve the breakthrough to industry standards, and then reaps its economic rewards in maturity.
As it does so, the next S-curve starts to form as a new disruptive cycle begins, and will eventually replace the old one.
Marketing is at the end of its old S-curve, where no matter how much effort we put into it, we will not improve returns.
One of the phenomena of the old S Curve is the model of marketing communications as a funnel. We put communications in at the top, and it gurgles through the funnel to turn -- by increasingly smaller percentages -- communications into awareness, and then awareness into consideration, trial, repeat purchase and loyalty.
It's frighteningly inefficient, and the inefficiency is designed in!
The new S-curve is based on the new concept of customer engagement. Engagement is a dialog conducted via a multiplicity of contact points, selected by the customer. Engagement is built around two key changes in the operating environment:
1) First, the addressable consumer or customer. Increasingly, we are able to reach our customer individually as an electronic address as that consumer moves between a desktop computer attached to the internet, a laptop on the go, a web-enabled mobile hand held communications device or an iPod. They might be using email, instant messenger, blogging, knowledge management tools, collaborative business software or shopping. We can reach them at most times and follow them around the web to analyze behavior that reveals their needs.
2) Second, customer control over the content they choose to receive. Advertising -- or indeed anything that we might typically have thought of as "marketing communications" that simply interrupts them before they have put their hands up to say "please tell me something" -- is anathema.
Engagement is customer controlled. To engage with a customer, we must understand their needs and preferences pretty much as individuals, or at least in very, very finely segmented groups, and communicate with them when they choose, rather than when the brand owner chooses. Engagement requires personal, individual meaning, and therefore it requires personal, individual understanding.
In order to become a standard for marketing, the first requirement of customer engagement as a marketing tool is that we have measures of engagement. At ad:tech, we introduced the concepts of :
- Customer Engagement Points
- Share of Customer Engagement
- Engagement Conversion Rate
These are the cornerstones of the new engagement measurement system. They generate derivative measures like cost per engagement point and cost per share point of engagement.
It's a complete new paradigm, and it unleashes the new marketing S-Curve. Its key points are:
- It embraces all contacts with the consumer from the web to word of mouth to conventional communications. The customer tells us what qualifies as a contact.
- Every contact has a value, weighted by combining cognitive value (information generating a rational shift in favor of the brand), affective value (generating a positive feeling about the brand) and persuasive value (generating a shift in behavior towards the brand).
- All the values roll up to a total brand engagement score. This is a global currency. A brand engagement point in Berlin can be compared to a brand engagement point in Beijing, or Buffalo or Buenos Aries.