David Raab Article Archive

Did you ever wonder why people watch the Weather Channel? Neither have I.

But it does seem that the continuing interest many people have in tomorrow’s weather is something like their endless fascination with technology forecasts. Both have some minor practical value, but not enough to justify all the attention they receive. Their appeal lies deeper within human nature: to curiosity about the future and a desire to understand, and perhaps even control, the forces that are shaping it.

So long as the demand exists for such forecasts, a still more basic human instinct–greed–ensures someone will supply them. But a good trend is hard to find, so much of what’s reported is recycled conventional wisdom. This isn’t all bad: like a weather report, conventional wisdom may not be infallible but is a reasonable way to bet. Still, it’s more fun to learn something new.

One place to look for a fresh perspective is submissions to industry awards. These describe projects that, at least in the entrants’ view, break enough new ground to be worthy of note. So they offer the double benefit of showing what real-world marketers are doing, and showing what those same real-world marketers think is special.

The following table summarizes twenty entrants to two marketing technology contests held within the past year. Details are confidential, but simply placing the projects into general categories yields some intriguing results. The numbers total greater than twenty because some projects fall into more than one category.

Observations:

– Statistical modeling and scoring is by far the most popular application (9 of 20 projects). This is a bit of a surprise–we all know scoring was important, but who suspected it would be so dominant? With the benefit of 20/20 hindsight, modeling relatively easy to implement and exploit, supports many different applications, and gives a quick, definite performance improvement over conventional segmentation or treating everyone the same. In today’s difficult business environment, it makes sense that something cheap, easy and quickly profitable is widely attractive.

– Next most popular are event-driven campaigns, which typically run daily. These analyze a set of data (usually transactions), identify marketing opportunities, and then generate a related message. Like modeling, they also generate a quick return on investment. But the more interesting observation is that these are batch, not real time interactions. While many analysts see real time marketing as an important trend, it is apparently the subject of more talk than action. The preference for batch processing again reflects the business environment, which discourages the large investments needed for real time systems. But it may also suggest that practical marketers have concluded that, in many situations, near-real-time response is good enough. Conventional wisdom notwithstanding, real time may often be overkill.

– The third-ranked item, integration of central marketing with lead management, branch and field operations, is closely related to the first two. Often what’s pushed to the field is an opportunity generated by an event-driven campaign, identified or prioritized by statistical modeling. Again, real time plays little role here: personal channels such as field sales, branch offices, agents, dealers and outbound call centers cannot respond to opportunities within a split second. The rank of this item could even be interpreted to mean that marketers have found integrating with personal contact channels to be more productive than adding sophisticated real-time marketing to email and Web sites. While this is an apples-to-oranges comparison, it is exactly the sort of choice businesses must make when deciding where to invest scarce resources.

On reflection, it makes perfect sense that marketers would give precedence to personal channels: they have a high cost per contact but also potentially high effectiveness rates, so better targeted leads and offers may double or triple productivity at almost no incremental cost. A more sophisticated email or Web marketing system will likely produce much smaller relative improvements and require significant added expense to do it. And at most firms, personal channels account for a much higher proportion of business than electronic channels, so the payback is greater in absolute terms as well.

– The least common items are cross- or multi-channel campaigns, general marketing analytics, and automatically recurring campaigns. The first two are frequently cited as important trends, which makes them notable for their rarity. Conventional wisdom may still prove correct: after all, the wave of the future takes time to reach shore. But at least for now, it seems marketers find these applications less compelling than other alternatives.

What does this all mean? Perhaps nothing–after all, small differences in a small sample have no statistical significance. But just maybe, tomorrow will be a little different from the conventional forecast: with more modeling, field integration and event-tracking, and less real-time interaction, cross-channel campaigns and analysis. Stay tuned.

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David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.