The Pitfalls of Data Driven Marketing

An Example In Behavioral Health Marketing

I often hear techie marketers boast about how they are “data driven” so they don’t get caught up in the errors of human judgment – as if it is possible to make complex decisions based solely on what their computer model, formula or data shows them.

Dane Shakespear - Data Driven Marketing

The idea is seductive because with large data sets over a large period of time it is possible to predict patterns, narrow focus and eliminate waste by optimizing marketing efforts and budgets to the predictions of the data model.

But the catch is, it will always take a thinking person to figure out what the data means and how to apply it to real world actions.

Too many “data driven” marketers begin relying so much on what the data says, that they ignore glaringly obvious real world indicators that what the data tells them is incorrect, misinterpreted, or just wrong.

In general consumer markets with huge volumes of searches, transactions, and conversions along with a relatively few possible search phrases or keywords used to find the product – such as in the t-shirt market, it may be possible to see from the data that the majority of sales come from women between 18-35 during the months of March through June, using the keywords “cute tee shirts”, “cute sayings tee shirts”, and “cut t shirts women’s” – then confidently limit spend to women of that age, during those months, and for those keywords to reduce waste and increase ROI.

However, in high cost, low volume markets such as behavioral health services it doesn’t work that way.

This is because the overall volume of searches is low, the cost of clicks is extremely high, and spread over nearly 3,000 keyword variations used to search for a solution for a child’s issues.

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The 2 Most Important Functions of Business are Innovation & Marketing – All Others are Costs

More than 60 years ago, Peter Drucker dramatically influenced the foundations of the modern American corporation. His words are as true today as they were then – maybe even more in the digital age when we’re all more easily and directly involved with marketing our businesses.

Peter Drucker Quote - Dane Shakespear Marketing

One of his most significant and profound observations was that innovation and marketing are the two most important functions of business – all others are costs.

Business owners and entrepreneurs probably agree in principle, but few put this precept into practice. Surveys of businesses across the board reveal that the top priorities are usually finance, sales, production, management, legal and people.

Why is Drucker Right and Almost Everyone Else Wrong?

If a meeting is scheduled with the most important department heads in your business, who would have a seat at the table? Legal and sales would be there, the CFO certainly, perhaps the CIO and HR. Would the head of marketing or R&D get an invite? (more…)

People Don’t Want to Buy Your Product

They Want to Buy a Better Version of Themselves..

One of the most difficult things for business owners to get a handle on is the true perspective of the needs and desires their clients or customers.  Because we spend so much time working on, perfecting and promoting our products or services – over time we get caught up in how awesome our product is rather than how awesome the client will be once he’s used it.

Reputation Management

All marketing communications should focus on showing the prospect the better version of himself he secretly desires.

Instead of talking about the specs, features, details, delivery, etc. of the product, you should paint a picture of how those specs and features will give them the outcome they want – from using your product or service.

Most successful high-end products are marketed this way.  Those who market these products understand that if they can tap into how a person will feel after or while using the product, the price becomes a secondary consideration.

If they instead focus on specs and features alone, their product becomes a commodity and price becomes the main consideration.

Take a simple high-end product like Starbucks coffee – of course people like the way it tastes, but if that were the only reason, the price would be similar to McDonalds or Dunkin Doughnuts coffee.

Because Starbucks offers the buyer a way to feel better, look better, or fit in – they can charge a premium for what has been historically nearly a free product.

Refining Google AdWords

Test the Forest, then the Trees, then the Branches, then the Leaves..

One of the most important things of any Google AdWords campaign is to continually test and refine.  The best practices for Google AdWords is to continually test and refine keywords, text ads, display ads, placements, ad extensions, target locations, and on and on.

Dane Shakespear Testing Adwords

When testing so many things, it is easy to test things that don’t matter (yet) before testing things that really matter – or will have a big impact more immediately.

Perry Marshall would always tell me that in each of those things you could test is an 80/20 grouping.  There will be a few things that will have a big impact (the 20%), and the rest a minute impact on your results (the 80%.)  BUT, he would also say:

“Before you test the little stuff, test the big stuff and work your way down. Test the Forest, then the Trees, then the Branches, then the Leaves..”

People often get hung up on testing the punctuation of an ad when they haven’t tested multiple variations of drastically different ads first.

The punctuation will have an effect, and has proven to produce big results in many cases, but how much bigger would the results be if you first identified an ad that is %30 more effective than the current ad?

The idea is to make sure you are in the right forest, with the right trees, before you climb the branches and begin polishing the leaves.

Tweaking the leaves of the wrong kind of tree in the wrong forest just uses a lot of time and money for nothing.

More Isn’t Better, Better is Better

Lead Generation Isn't Only About Volume..

I find it interesting as I begin evaluating prospective clients how infatuated they are with a single metric in their lead generation – volume.  Search volume, click volume, impressions, number of calls – whatever it is they watch it like a hawk and sadly make a lot of decisions based on it alone.

lead generation

I think it comes from the common idea that marketing is a numbers game – so if you want more sales, you simply pump up the volume of impressions, clicks, calls, etc. and eventually a certain number of conversions will take place.

While that may be true to a certain extent, a few highly qualified, highly interested leads  are way more valuable than thousands of unqualified leads that you have to wade through over and over until you find the one that may be in them.

Volume is one of those things that can be seductive.  It makes you feel like there is something going on, that you are making progress, or that whoever is making your phone ring is doing a good job.  It also gives you hope because if there is a high volume someone has to convert soon.

But the problem is, while it is an important metric, it is the wrong metric to measure to determine the success of any campaign. (more…)

Dear Ugly, Outdated, and Self-Made Websites…

I'm Sorry, This is you.

This is a great visual of how ugly, outdated, or self-made websites appear when they don’t measure up to just the basic expectations of the visitor.

website marketing

Yes, the creeper van does offer the same technical services as the school buses, but its presentation not only drives people away – it also recruits otherwise indifferent bystanders to warn others to stay clear.

The only reason I took a picture of it was because of how out of place it was in context of the regular school buses.

Is this for real?  Are they still in business?  Is this a scam? – All questions visitors have when something just doesn’t feel right.  Then they bounce.

Oh, if this is your van – I’m sorry, nothing personal.

The Unlimited Traffic Technique – A Real Life Case Study in Google AdWords

Unlimited traffic?  It sounds like a pipe dream or only a theoretical concept, but in fact it is not only an actual possibility – it will always happen in any online market when someone does a few simple things just a little better than their competition.

google adwords

On the internet, things operate on 90/10 vs. 80/20

When it comes to traffic, 90% of advertisers a fighting over scraps – the traffic left over after the 10% takes their share.  This is why most Google AdWords management companies measure their success by reducing the average cost per click and cost per conversion for their clients month after month.

When you’re on the 90% side of things, you have to worry endlessly about reducing cost per click, cost per conversion, and every way possible to take as much money out of the process as possible.

When you’re on the 10% side of things, your goal is to be able to afford to spend more than your competitors and put as much back into the process as possible.

I know this sounds bass-ackwards, and even blasphemous to a lot of ad management companies – but keep with me, and I’ll explain how it works – and why. (more…)

The Human Brain is Hardwired for Pattern Recognition – Marketing to the Subconcious

The human brain takes in a tremendous amount of information in an instant and decides for us what is important enough to call to our attention, as well as what is so unimportant or ordinary that it is filtered from our awareness completely.

Pattern Recognition - Dane Shakespeare

This is why you can see familiar shapes in clouds, trees, rock formations, ink blotches, or even cracks in the ceiling – while at the same time you can drive down the road and not be aware of things you see every day.

In marketing we use this to our advantage.  We create images that trigger the pattern recognition to call attention to a subject, or use the same concept to hide something altogether to guide the focus of attention along a path to another subject.

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A Statistical Correlation Does Not Necessarily Mean a Cause-Effect Relationship

One of the greatest aspects of digital marketing in comparison to traditional marketing methods is the amount of reliable data we can collect in a short period of time.

Marketing Statistics

Like no other marketing medium, we can track just about every aspect of every component of the ad and the people who respond to it.

This is great, but if we’re not careful this flood of data can cause us to draw incorrect conclusions to patterns and correlations we find in the data itself.

Here’s an example.

In 1924 a study conducted at Western Electric on employee productivity concluded that employees were more productive when they changed the lighting conditions.  Years later it was realized that the employees were more productive not necessarily because of the new lighting conditions, but because they new they were being observed during the study.

Another example often cited in statistics classes show the trends on a graph of annual murder rates and ice cream sales.  Both have identical seasonal curves on the graph – they correlate, but does this constitute a cause-effect relationship?  Of course not. (more…)

Phone Books are Dead

The prediction that phone books would be gone forever has been around for a decade.  Are they dead yet?  I say yes.  That doesn’t mean that they aren’t around or being published, it just means that they don’t actually DO anything related to their intended purpose.

Business hope that their advertisement will drive new business to their doors, but I’ve found that is rarely the case.  Most small business owners have abandoned the phone books entirely – they have small budgets and have to be frugal.  The businesses who remain are those who have deeper pockets and not a clue as to whether or not their advertisement is profitable.

When was the last time you opened a phone book?  I’ll bet it has been years, unless you have an ad in one – then you would be one of the few cracking them open just to see what your ad looks like.

The funny thing is, there are still arguments that they still work.  How can they? (more…)