Intelligent Marketing

The challenge of marketing comes from uncertainty. A businessman (possibly John Wanamaker) once said, "Half the money I spend on advertising is wasted; the trouble is I don't know which half."

Matthew Leitch credits David Ogilvy with pioneering an experimental approach to advertising.

"Something that distinguished his approach from most other advertising agencies was his focus on using solid research to help make marketing decisions. He loved direct mail (or 'junk' mail as most people call it) because with direct mail it is possible to measure the response to advertising accurately. He could send slightly different advertisements to different groups of people and see what difference it made. He applied the same idea using reply coupons on page advertisements in newspapers and magazines, and used other forms of testing too. ... He also codified his research discoveries into over 100 rules of thumb to be applied to future advertisements. "

Ogilvy's approach has now become a routine element of the marketing process. I found a page on the IBM website documenting a Marketing Experimentation process to be automated using Websphere Commerce, although maybe it lacks Ogilvy's flair.

Experimentation allows marketing activity to be differentiated for different categories of customer demand, and refined in order to satisfy marketing goals more cost-effectively. One of the critical success factors here is the speed of the feedback loop - the faster the better.

There are various opportunities here for software technology to facilitate this feedback, by deploying advanced marketing communication tools that allow near-real-time measurement and analysis of campaigns. For example, a company called Intelligent Marketing Solutions claims to give you

"the ability to track, trace and manage every click your customer makes be it on a PC, Mobile or Tablet, you will know exactly how a campaign is performing around the clock and have the ability to make changes along the way to react to trends in response."

Other marketing tools can be used to provide independent monitoring of the effects of a marketing campaign, such as Buzz. See my post From Buzz to Actionable Intelligence (May 2010). If today's Buzz can give us a reasonable estimate of future revenues, then the marketing team can use Buzz as a predictive surrogate metric for the actual commercial success of a campaign.

Faster feedback can support single-loop learning - getting better at achieving a given set of marketing goals. Michael Mainelli and Ian Harris use a simplified version of VSM to describe a marketing process with feedforward and double-loop learning. Their system includes monitoring, information sharing, sense-making, planning, and continuous improvement - in other words a form of organizational intelligence.

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Dion Hinchcliffe, Advocacy: The New Currency of Marketing (15 January 2013)

Ira Horowitz, A Note on Advertising and Uncertainty. Journal of Industrial Economics, Vol. 18, No. 2 (April 1970), pp. 151-160 http://www.jstor.org/stable/2097504

Michael Mainelli and Ian Harris, Is Your Organisation Viable? – Customer Relationship Management Systems, Conspectus, Prime Marketing Publications Ltd (October 1999) pages 26-27. via Matthew Leitch

David Ogilvy, Ogilvy on Advertising (Pan Books, 1983)

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Places are still available on my forthcoming workshops Business Awareness (Jan 28), Business Architecture (Jan 29-31), Organizational Intelligence (Feb 1).

Marketing

Many people talk about marketing as if it were a strictly one-way communication - from a business organization to its customers.

True marketing is a two-way communication - a conversation between a business organization and its customers. True marketing means not just telling customers what wonderful products and services you have, but listening to customers and finding out what they really want, finding opportunities to deliver greater value, aligning your products and services to customers' real needs.

From a systems perspective, we should always be suspicious of any communication that appears to go in one direction only. All communication generates a response: the response is an essential part of the communication. A good communicator generally picks up the response and deals with it intelligently, but many organizations are very poor communicators in this sense.

It is true that many administrative systems (whether computerized or just bureaucratic) provide for a token response called an acknowledgement or handshake. But this merely confirms that a message has been received; it is difficult to see much meaning in it. (There is no body language in a computer handshake - nothing to convey how pleased the recipient might be.)

So it's not enough to say that communication needs to be a closed loop. It is not enough to have a rich and interesting communication in one direction, and just a paper-thin bureaucratic response in the other direction. Surely a rich and interesting message deserves a rich and interesting response?

Effective marketing departments don't just transmit, they receive and analyse and learn. We can observe this by studying real organizations, we can explain it using systems thinking, and by enacting this explanation in our own organizations we can experience it directly for ourselves. Theoretical understanding of organizations always requires both observation and explanation; practical understanding requires experience as well. As for experience without understanding ... well if that's all you want from life, you shouldn't be reading this blog.

Market Timing 2

I have referred on this blog before (Market Timing 1) to the importance of time/timing in making decisions. In Lacan's theory of Logical Time, there is "a moment to conclude". Lacan is one of the few thinkers who appreciates the need to explain why decisions and actions take place at a particular point in time - helping us understand, among other things, how decision-makers are affected by haste and hesitation.

Now marketing guru Seth Godin has a post on his blog on the importance of timing in marketing. He points out that the effect of a message depends on the state of the recipient when the message arrives.

"All marketing analyses that ignore time are wrong. There's a big difference between a message that arrives when I'm full and when I'm unfull. And there is a big difference between a first impression and tenth one. Even if I can't remember the first nine."

What happens when people have to make a decision on a particular day - for example an election? Some people make up their mind at the last minute. Perhaps it is not rational to commit to a candidate too early, since any candidate may say something unwise, and damaging revelations may emerge at any time before polling day. (A Republican candidate dropped out five weeks ago when inappropriate emails came to light [source: BBC News]. And after yesterday's mid-term election in the USA, the balance of power in the Senate depends on the outcome of the vote in Virginia, where the Republican incumbent was well ahead until he was caught on video uttering a racial slur [source: BBC News].)

But this is not a good example of Lacan's logical time, because an election is held according to an external schedule. What is more interesting in elections is the timing of a campaign. Seth is absolutely right to point to the importance of groundwork, but no amount of groundwork can prevent your candidate from peaking too soon.

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