The Adaptive Marketer

Don’t Panic: In The Future Everyone Fails Spectacularly For 15 Minutes

Posted on 08. May, 2010 by Robert Rose in Content Marketing, Online Marketing, Web Analytics

With apologies to Andy Warhol (and Douglas Adams), in case you missed it (and for those on the West Coast if you went to lunch you might have) the stock market plunged 1,000 points on Thursday.  Panic ensued.

Headlines screamed, and the pundits were literally just talking all over each other.  Just watch this video of the plunge happening live. You have a split screen: Athens riots, the stock market plunging and the ticker talking about “35% of S&P are down 5% or more”.  As Dr. Peter Venkman, head Ghostbuster might say: “Human sacrifice, dogs and cats, living together – mass hysteria!!”

But then – um 15 minutes later…. The market came back.   Down, certainly but back to some kind of sanity.

I’ve seen this exact scenario happen in marketing departments as well.   A particular measurement goes completely haywire for a day, or for a week – and suddenly the conference room sounds like that video.  Sales blames marketing, the CFO wants a complete marketing spend audit, the marketing team blames the agency (off with their heads) – and basically everybody goes into panic mode.

Is it any wonder that marketers are afraid to try new experiments.   This week the stock market provided us a fascinating window into the way we measure our marketing success.

What does failure look like?  What does success look like?

Let’s pretend for a moment that a new CEO just started on Monday.  And, on Thursday, we have a day like the market had.  Oh my god, a horrible day right?  The new CEO is going to fire us.   So, we’re on the phone with our agency, just as she pokes her head into our office and says – “heard we had a bit of bad luck.  Can I get a run-down of what’s going on in lead generation?”  (I picture Kathy Bates from The Office as the CEO in this scenario).

Okay… Now What?

Let’s also pretend for a moment, that the real S&P 500 index for the last year is the number of leads we’re generating from our marketing.  Just to put things into real perspective.

Let’s look at different measurements of our historical success and our forecast for the future.  We’ll look at the end point of each time period as a way to measure our success or failure.  I’m including images of the graphs so you can see visually as well.   Just as a point of reference, on Friday, May 7^th – the S&P 500 was at approximately 1,110.

One Week Of Data

Must have been a catastrophic week right?  Well, yeah, certainly not a great week for sure.  If we look at the entire week as a whole, by day, we were down 7%.   If we look at just Thursday morning to the low point of Thursday (at around 2:45 PM) we were down a little more than 8% (we recovered a bit from that on Thursday afternoon).

But now, let’s go back and look at the last month…. Yeah, okay that’s not great either.  We were down 6%.   So, okay, April and May – and especially the last two weeks haven’t been great.  We should probably look at why.

6 Months Of Data

But before we do that, let’s look at the last quarter.  Okay, so now it’s a little confusing – because from last quarter, we’re actually up a half a percent.  So, we’ve had a bad couple of months – but overall, quarter over quarter, we’re still up slightly.

And, then, let’s confuse things all to hell.   If we look at our performance over the last six months – we’re actually flat.  Almost exactly.  And, over a year (here’s where we earn our job back) we’re actually 30% higher.  Whoa. Wait a minute.  What?  We’re 30% higher from last year?

One Year Of Data

Which number should we report to the CEO about the health of our marketing?

Hopefully, you answered ALL of them – with the addition of context behind the numbers.  So, clearly from the results over the last two months something isn’t working.  But what?   Was it a failed experiment?  Did we change the messaging?  Media?  Did we run out of budget?   Did we have some negative press?  Did our Web site go down?

Now, of course, there are additional considerations as well.   How many customers did we acquire out of these leads?  Right?  What would completely throw this exercise for a loop is if we all of a sudden discovered that our cost per lead was down, and that our number of customers were up.  We could walk in to Kathy Bates’ office and say “So, year over year, lead generation is up 30%.  Our Cost Per Lead is down 10% and even though we’ve seen a decrease of about 10% in the number of leads over the last quarter – we’re actually closing more customers than ever before.  Our plan is to continue to maintain costs – while we continue to get more leads.  And, actually, I’ll be coming to you for more budget next quarter once we have a better handle on that.”   How do you think that meeting went?

The most important lesson from last week – is that we have to look at measurement holistically, and based on objectives – not in isolation.  Numbers in isolation – are just that – numbers.  They mean nothing.  A panic over a one day or a one week drop is not productive.

This is why only a certain few should ever have access to the raw numbers – and why you should always work to draw the true insight out of your measurement – and base them on objectives and goals rather than trying to prove that something worked or didn’t.

There’s a wonderful quote by Stephen Covey (the 7 Habits Of Highly Effective People guy) that says:

“Priority Is A Function Of Context”

A successful marketing and media strategy creates a narrative.  A story – well told.   And, the only way to do that – is to be able to see the the larger story that plays out not minute by minute – but month by month and year by year.

And you?  How do you tell your story?

Photo Credit: artemuestra