July 2009

I used to be one of those people who would read articles in major news outlets and be shocked at certain statistics. “50% of people in Oklahoma City don’t have high school diplomas!” “Eating strawberries reduces your chance of developing eye cancer by 67%!” “80% of married men cheat!” I’d scurry off to my friends and repeat what I’d read, devising how I’d need to change my lifestyle to ensure I didn’t end up with a bad case of psoriasis from eating cole slaw.

Little did I know what a mistake I was making. It’s fascinating how easily statistics and research data can be manipulated to present a very biased picture of what’s actually going on. As marketers, we need to champion the use of good market research as the base upon which all marketing programs are built, and be certain we’re building our research methods as effectively as possible.

Here are some tips to help you avoid falling into these all-too-common research data traps:

1. Be a skeptic. 

People tend to use statistics carelessly, and the actual research study that was performed is rarely linked to the article. A writer might not disclose whether a corporate sponsor paid for the research and is skewing the results. Before you run off implementing some new social networking strategy after reading an article claiming 67% of American households use Facebook and/or Twitter, do YOUR research. Dig out the research study and read it. With the Internet, we have the power to find these things. I hate to say, “Don’t believe anything you read,” but it’s often true.

2. Understand what could constitute bad research. 

Experiments are set up differently for many reasons. For example, you can’t force someone to start smoking, or drive without a seatbelt. This means that inferences have to be drawn based on an observational study of smokers, and—yes, you got it—that pool of subjects is already biased. The results from that group would not yield results applicable to a non-biased population. A randomized study usually provides less biased data. Observational studies should always have a control group, and sometimes they don’t. Worse, some studies completely falsify their data. Be aware!

3. Pay attention to sample size.

This is a very common trap. Studies often exaggerate the feedback from a very small data set as being representative of an entire population. If 10 people are giving you positive feedback about your new HR policies, be sure to be thorough in finding out if the other 500 employees feel the same. You often find wild swings in variation in small sets of data. Leave your ego out of it—collect enough data to be sure you’re your sample represents the entire population within a reasonable margin of error.

4. Everything regresses toward the mean.

Disappointing, I know. If you changed nothing, those outstanding click-through rates you got two months in a row after months of steady results are probably just chance. In time, all swings even out.

As marketers, we know how easy it is to design campaigns to manipulate people’s minds and habits. However, we have a responsibility to the consumer and to ourselves to use data correctly. Back up your claims. Use credible research. Collect enough data to make sure your conclusions are correct. Data doesn’t lie, and neither should we.

Forrester just released their five year forecast for US Interactive Marketing and it is an interesting read.  Five year forecasts are always dicey in today’s new media world. How many people in 2004 predicted the most talked about politicians in 2009 would be Barack Obama and Sarah Palin?  Zero.  About the same amount of people in 2004 who predicted the country would come to a standstill to watch and follow Michael Jackson’s memorial on Face book and Twitter. 

However, the numbers confirm and quantify what most of us already know – the amount of dollars to be spent on interactive marketing are growing fast and taking share from traditional media.  Overall, search marketing will be the biggest component, and Mobile (27% CAGR) and Social Media (34% CAGR) will grow the fastest.  All of these media/technologies are game changers in terms of information/content consumption and marketing.  Anyone who has taken a spin around an iPhone can see just how radically our content consuming habits will change.  And, marketers must follow suit.

Here is a quote from Forrester’s Shar VanBoskrik’s blog:

But to me, the most interesting takeaway from the research is that overall advertising budgets will decline.  Yep.  With dollars moving out of traditional media toward less expensive and more efficient interactive tools, marketers will actually need less money to accomplish their current advertising goals.   But reasonable marketers won’t relinquish budget because their programs are running too efficiently. Instead, marketers will allocate unused advertising dollars into investments like innovation, research, customer service, customer experiences, and marketing-specific technology and IT staff, in order to further marketing’s strategic influence within their companies.

If I may add my two cents – this gives marketers and brands the opportunity to become the media.  By creating their own original content, brands can build trust and affinity with customers and prospects.  The budget and technology now exists for marketers to totally bypass traditional media and ad agencies and talk directly to customers.  Content is what will fuel search and social media, so the opportunity for companies to engage in content marketing has never been greater.  I may not be bold enough to predict what the marketing world will look like in 2014, but I do know one thing.  I would not invest in any traditional ad agencies any time soon.

Everybody is talking about social media but we hear less about measurement and analytics.  All good marketing must be measurable and provide tangible results for the sponsoring organization.  I recently contributed an article to the June/July issue of Chief Marketer where I explore the topic.  Below is the text of the article.  Let me know your thoughts and how you are measuring social media.

Measuring the Value of Online Fan Communities

The tangible — and intangible — results of participating in online communities

Sure, it makes sense for most businesses to follow their customers into the world of social media. But before doing so, they must have a firm grasp on how to measure the ROI of those ventures.

The first step is to create a strategy that dovetails with existing marketing plans and messaging. A company wants to be where its audience is living online, and that will often mean social networking sites such as Facebook and LinkedIn, and services like Twitter. Social media also means a corporate blog: If a firm does not have one, it is already behind the times.

For organizations, social media can serve as a private media channel that allows corporate control of the messaging. Social networks provide an excellent vehicle for pushing out content that supports marketers’ objectives, while social sites are great for spreading viral campaigns and word-of-mouth programs. Many companies are using social networks to recruit and invite prospects to Webcasts and live events, both of which are easily tracked by assigning unique URLs and codes.

There is little out-of-pocket cost associated with social media, aside from personnel costs. Even small firms can start a blog with shareware, and there is no cost to post a page or group on Facebook or LinkedIn.

But while the setup costs are low, a marketer needs to assign dedicated resources to manage the process and create and maintain the content. Someone in the organization needs to own the social media function for it to work successfully.

Work in progress

Initially, social media should be treated as both an experiment and a work in progress. Some trial and error is necessary to discover what works for each company and industry. One size does not fit all.

What constitutes the success of a social media campaign? Marketers are able to track relationships that were either created or enhanced by social sites or blogs. However, even before a prospect becomes a lead, there are ways to measure traffic and interaction with content.

To measure the ROI of new media, the media must in fact be measurable. Fortunately, the various social media are. The majority of social media platforms offer:
 

Quantitative data

Marketers can gauge success by the number of page views received, responses/comments, content downloaded/embedded, number of shares, RSS feed subscriptions, sign-ups and much more. These numbers offer indications of how well strategies are driving traffic and facilitating interaction with prospects.

Qualitative measurements

Hard data doesn’t do justice to measuring abstract returns such as an improved corporate reputation, reducing the ratio of negative/positive relationships in the online world, customer retention, strengthening of B-to-B or B-to-C relationships, increased direct dialogue with target audiences, and so forth. While it is hard to put a number on these measures, they are important outcomes of social media strategies.

Business value

In a down economy, dwindling budgets make low-cost social media campaigns a popular choice. According to an Online Marketing Summit presentation by Michael Weisfeld, senior Web strategist at BusinessOnLine, “Only 14% of people trust ads, whereas 32% trust bloggers’ opinions on products and services.” Social media offer a great way to get a direct connection with marketers’ audiences. Best of all, a single well-crafted effort can expand exponentially.

Can social media really lead to sales? Yes, according to research conducted among IT decision makers by IDG Connect. IDG found that social content is a significant decision-making factor within the IT investment process. According to their research, buying teams are using social content for educational purposes more than transactional content.

The big finding is that when a vendor is presented in a positive light in the social space, the likelihood of its offerings being purchased increase. Conversely, negative social exposure makes sales more difficult.

While that’s all true, one critical element of social media cannot be easily quantified: the quality of interaction between people. The blending of business and personal on social sites gives marketers an opportunity to get to know business partners in a different light and deepen personal bonds.

So while metrics are important, never discount the intangible, positive factor of human interaction. Social media allow us to get personally closer to our prospects and customers than ever before. 
 
 

© 2008 Penton Media, Inc. All rights reserved.