Found an interesting post on Mine That Data titled Multichannel Customers Are Not The Most Profitable Customers.  I've read Kevin Hillstrom's blog for a while and even considered picking up a copy (happy to review it, BTW) of Hillstrom's Multichannel Forensics.

Anyway, I wrote a post about his post of Multichannel Customers Are Not The Most Profitable Customers which it titled Revelation - MultiChannel Customers might cost more than they’re worth over at The Analytics Guru, which I hope you read and subscribe to. 

Actually, it's not true, Multichannel customers are still profitable, but the effort it takes to market to them across channels might make them less profitable than those who are used to buying from a retailer only one channel - even if those single channel customers tend to spend less.

If the solution, proposed, seems to be - figure out a way to spend less money on multichannel customers to get the same or better results - and if everyone did just that - we might end up getting to a point (in a perfect world) where no one spent any money marketing at all - since everything would be so "efficient". 

Think about it - don't we revere stories of people who use Social Media to drive traffic, get businesses of the ground, all through WOM (Word of Mouth) - but if everyone could do that effectively, you'd hardly need marketers - in other words, if you got down to perfect efficiency - you'd end up spending next to 0 dollars and make maximum profit.  But is that realistic?  Sure, it's good to try to get there - but can you ever really expect to get there?  NO.

I'm also thinking of Political Spending by the Hillary and Obama camps, Hillary Clinton is now being ridiculed for wasting money that Barack Obama used much more effectively than her (see Somber Clinton Soldiers On as the Horizon Darkens and Donors Worried by Clinton Campaign Spending)

Now people are giving Barack Obama a lot more money than Hillary Clinton.  

But at the end of the day, the advertisers are making money on Hillary, so they don't mind if she's spending more money - after all, it's paying for some staffers, it's going into advertising, it's stimulating the economy - even if the advertising isn't working anymore that well.   Who's fault is that - the candidate?

I suppose that's the goal of all of this - spend less money so you can make more - who could argue with that?

But, on the other hand, if everyone could literally do that (spend no money and make the maximum) - if we had a society where every dollar spent yield maximum value - wouldn't the entire economy collapse? Hardly anyone in a service economy who make a living on services would make any money since no money needed to spend on them.

Inefficiency might actually account for much of economic spending we produce. 

Even Paul Krugman has said that spending money on the Iraq war is not bringing down the economy - it's the tax cuts to the Rich that are doing it - see An Iraq recession?

For example, suppose I only needed to spend 70 bucks a week on food - that's all that I'd need to keep me alive (I might spend more than 200 per week on food though) - but I eat out a lot - and sometimes, I spend money of meals that aren't that good - I wasted my money, but payed someone else's paycheck. 

Suppose my life was so perfect that I never spent any money I absolutely didn't need to spend.  The entire economic system as we know it, would collapse.

What would happen?  That goes way beyond HillStrom, who does really good work with Multichannel Metrics, BTW - but this going past that and asking if we need a certain amount of inefficiency to fund and expanding economy.

Just a thought on this Sunday.  And if you get around to it, read my detailed thoughts about it at Revelation - MultiChannel Customers might cost more than they’re worth.

Looked at Vertical Response adds multi channel tool written about in Duct Tape Marketing and feel this is a good idea – a platform that sends out email and creates postcards against the same email campaign in order to enhance response – the fact that it’s track able makes it even better.

It’ pretty well known that you can get better results, in many things, if you approach the same target in more than one direction at a time.

I really had not seen anything on Multichannel Compromise before; I suppose Multi Channel Cannibalization series in SemAngel was the closest thing to it - but it's not the same thing.

When do you deliberately cripple one marketing channel to benefit another? And is the outcome worth it?  I think Multichannel Compromise presents me with the feeling that it might not be.

In other words, you lose as much as you think your gaining, and in the case given below by Kevin, I don't think the gain was worth the losses.  Here's what I mean:

"..

Multichannel Catalog Results
	Phone	Web	Retail	Totals
Pre-Optimization	$3,000,000	$1,500,000	$500,000	$5,000,000
Post-Optimization	$2,250,000	$1,000,000	$2,250,000	$5,500,000
Increment	($750,000)	($500,000)	$1,750,000	$500,000

Telephone sales tank — they decrease by twenty five percent. Incremental online sales decrease by a third.

But retail sales sizzle, making store managers happy.

In total, the aspirational creative execution yields an increase in sales. The CMO agrees that this is the best direction for the brand, permanently changing course.

This decision drives a chain reaction of events. At the call center, a third of the associates are downsized, as catalog sales are less of a priority.

At the distribution center, job cuts also occur, though they aren't as deep due to all the online volume generated by online marketing activities.

In the creative department, employees feel demoralized, as they are now required to implement the creative treatment advocated by the ad agency.

Management is happy, because store expenses are being leveraged with the increased sales generated by the new catalog program. Management is also happy, because sales increased with the new strategy. Management considers this a "multichannel success story".

Have you experienced "Multichannel Compromise"? Was it beneficial for your business? Was it beneficial for your career?"

To me, the results don't really translate to a gain because they also generated a lot of ill will.  Somehow, if your going to have Multi Channel Compromise, it's should be a Win-Win for everyone.  In fact, I question if this strategy should even be called Multichannel Compromise …. I'd go with Multi Channel Sacrifice.  

My biggest gripe with this approach is more people are suffering than benefiting - and only the people at the very top see the money….everyone else seems to be suffering in Multichannel Compromise scenario.

Let's go with helping channels pay off each other and compete to be better than each other - I'm fine with that … and marketing channels do compete for funding, after all.  But..let's not cripple one channel in order to make another better - I just don't think that's a good way to go at all and even if the bottom line is more money - the price you pay in other directions, as Multichannel Compromise shows, is not worth it.

That's my two cents - and there's no compromise here.

I suppose you can build metrics and decision trees around anything - including when to have party.  TechCrunch just reviewed a site called MyPunchbowl.com

"…MyPunchbowl has made setting a date that much easier through the help of an algorithm that recommends the best date for your party."

Also, depending on who is coming and what level of importance they are (you specify that) the algorithm recalculates the best date for the party and notifies everyone else.

Hmm….sounds interesting.  Here's a YouTube movie that explains the whole thing:

Looks like Smartmobbing the US Presidency has taken another turn with Barack Obama's new site which is it's own social network - a full blown network is not that hard to build now. 

I like Deep Jive's account so I'll use his post to highlight this development (which I hope has a web metrics back-end!!!!!!)  (I can't imagine they'd give you Barack video to embed and not be counting the number of embedded videos - assume they are).  On BarrackObama.com you can do the following things:

1. Create your own profile
2. Get your own personalized Obama Barack Dashboard
3. Make Friends who are also supporters
4. Find out where events are happening near you
5. Send and receive messages within the network 
6. Set up your own networking functions from within the site (that support Obama's)
7. Can do fundraising and setup fundraising functions (I'm assuming the site takes care of all of this).
8. Start your own blog from within barackobama.com - smart move - will up link relevance and search rankings.
9. View Barack TV and embed Barack Videos within sites, just like you can do with YouTube.

That's pretty cool.  As Deep Jive notes:

"…The real power is whether or not he can mobilize his own supporters to use the site — for everything it *can* be used for. That means he’s got signage at every event. That means he has people promoting the site at every event. And it means the man himself, during interviews and on stage, using the site’s URL every time he wants to announce a new meeting, *use* the site every time he wants to create grass roots events, not be afraid, for example, of promoting people’s blogs off-line."

Remember - this stuff only works if the Candidate really believes in it and shows it.

If I were Barack, I'd use the site for all my communications (after making sure it's "secure") and regularly publish metrics on RSS Subscribers, traffic, Video and Podcast downloads, etc - why keep it a secret in this case - in fact - if the site is really popular - you'd want to make that popularity public knowledge.

Hell, he might even go a step further and have "affiliates".  Why not?  Pay people who believe in his cause, his product, his candidacy - pay them to send traffic that results in downloads or, if he can measure it on the site, using the back-end analytics, people who sign up to show up to an event via an "affiliate link".

Why not go all the way …you want traffic, you want aswareness, use some of that campaign contribution money and start your own affiliate network.

And while your at it, reward affiliates for every sale of a t Shirt, Magazine, book, video, etc.  Harness the market forces towards your advantage.  You got the social network…now use it.

Just got quoted by Robert Scoble on my post about John Edwards announcing his candidacy on YouTube. 

I had a couple more thoughts - many ideas "come to me" as I write, sorta like inspiration - and now that see his staffers logging onto my blog to take a look (saw 40-50 coming on in the last hour or so) it's a good time to mention thoughts I've had about political metrics.  

First, using Scoble's mention it was easy to identify  traffic pattern of Edwards' staffers as they all came to my homepage (they did not find it on search engines - the referral was Scoble's mention of me). 

Thanks Robert - we've met once or twice - very briefly at Webmasterworld Pubcon Boston last year and the another blogging conference in NYC in 2005. 

Here's what Scoble had to say:

"…..By the way, I sat next to reporters from Washington Post and Los Angeles Times. They told me they pay every part of the trip and won’t accept free travel or other things.

The problem is how do average citizens do trips like this and get access if they have to pay their own way? That’s going to be a problem. Maybe bloggers should start an association to pay for their own representatives to go on trips like this. That way we’ll make sure we keep our independence and credibility, while getting access to things like this.

Heheh, the staff is looking at Webmetrics right now to see what kind of increase in mentions they are seeing on the Web."

Sounds like a great opportunity - don't think I could afford to pay my own way (or have the time to do it right now - but I'm glad John Edwards is embracing bloggers - and it sound like a great place to be).   I can contribute with metrics, thoughts about it, at this point.  It also would be nice to be able to blog about this from time to time.  It's nice to see bloggers being embraced - because it's been shown that bloggers are influentials.

I think Howard Dean started this (using the Internet effectively to mobilize - but I think more is possible - and not everything needs to be created from scratch)

FeedBurner is improving it's RSS Feed Metrics - and it looks like you'll be able to geolocate RSS subscribers.   I believe the candidate that can best organize their subscribers will probably win (even against "voting irregularities" - which seem to be something you can almost "expect" - might as well plan around them).

There's a lot of problems with trying to Geo Locate Subscribers as not everyone can be geolocated easily (when I'm at work it looks like I'm in Durham, NC when I'm really in NYC) but there are also workarounds and new solutions (which I occasionally hear about).

Perhaps the best solution for a candidate, at this point, is to create custom RSS Feeds for each subscriber - and collect the address of that subscriber when they sign-up (and be able to match up the data you collect on each subscriber with the web data - even programs like Salesforce.com can do some of this - it's hooking up the data with web metrics that's the hardest thing to do); you can then track the activity of each subscriber, perhaps on several levels.  Here's when it gets interesting.  I think the technology can support this right now; but it does take planning.

In theory(I haven't done it - but I can "see it") - you can segment by location - see how your doing (forget about the pollsters - look at your metrics and make your own decisions based on good data - which, again, might not always be easy to get - have to PLAN for it NOW). 

…instead of those expensive "phone calls" just before election day - that no one listens to - because they're "unremarkable" and too obtrusive (aka Seth Godin) - he knows what makes something "remarkable" - you get RSS feed message- right down to the district level - to the block level from the candidate.

Think how powerful that can be - if its done well (and it's inexpensive, actually)

Using metrics you might  be able to set it up to determine how many have "read" the messages and have a good idea of who's going to actually SHOW UP and vote.

You can also mobilize before elections by sending out personalized messages via RSS.

At this time, you'd not want to let the number of subscribers (sign-ups, if you want to call it that) you have in every district of the country be public knowledge - but you want to know how many you have (and how many you need to have in every district to win) and you'll be able to communicate via RSS Feeds to your subscribers by district - (by block level - if you have to).  It's all in the planning.

You can supplement all of this with Podcasts (which you can track the number of downloads of), Videocasts, emails (which you'd want to tie into metrics as well).  All of this actually makes human contact possible (it does not take away the human element - it actually augments it).

If you have a large enough subscriber base - and it's coordinated (and backed up well) …..  That's what I saw today - it just "came" to me.

So, every district has a goal - what you need to have to win in that district (you'll know that that goal is).  OK, not everyone is computer literate - not everyone is going to want to get data in RSS Feeds, not everyone uses Meetup.com (which is pretty darn sophisticated - it's gotten possible to datamine it as well) - so you still have to do regular media buys - but not nearly as much.  Much more can be accomplished this way, I feel.

I would also think in terms of having a license to HitWise (more for trending - no service is good enough to bank on - but with HitWise you can do "cause and effect" tracking based on traffic which is not really possible to do with the free tools out there - they're not precise enough in my opinion.  If your going to spend money - spend it on RSS feed development, HitWise and possibly Brand Pulse (for feedback). 

Why Brand Pulse (or something like it)?   Because your going to need to be able to pickup and categorize positive and negative feedback from blogs and message boards and mainstream media very quickly - and the free tools can't do it - but the more advanced and (expensive) tools can.  Sure, you can get some talented programmers to write you something like this - but it's probably more effective to just use what's actually out there - because a lot of money and time has gone into developing these tools - in this case - you'll probably want the best tools for metrics.

Categorization is the key - it's the key to web analytics - it's probably also the key to this.   By the way, all of these tools are a drop in the bucket to what you'd pay for one or two MSM commercials.  Perhaps BrandPulse would be the most expensive part (depends on how customized you want to track feedback).

IN order to understand all this "data" that's flooding in - you need to be able to categorize it QUICKLY - so the campaign can make a decision on it.  At least, to understand what might be happening - so you can do something about it.

One thing that's become clear - as technology has evolved - the ability to react
quickly has become even more important - a debate is constantly going on and you need to be "plugged in" or it still goes on but without your participation.

Look what happened to Dell when they had "burning laptops" and did not immediately counter (they waited a month to start a blog); or the famous Kryptonite Lock issue, or even this new thing with the Microsoft / Edelman ACER Vista Laptops they were giving away free to bloggers (to review Vista) - in one day - Microsoft had to change their story about the laptops (and that may have been too long). 

Another thought - and it's all around us now - Second Life.   Sure, the population of Second Life is only 2 million or so, and only 20,000 are online at any time, so far, but it's possible - perhaps - to put some thought into having a presence there - in Second Life.

For one thing - it's a way to bypass space and time (to have virtual meetings where it's not possible to be together physically) and also, high end businesses have been embracing Second Life.   It's an idea I've floated to some of my clients (ie: if your an architect - and one of mine is - how about having an Island in Second Life with some of the best house plans the architect's firm creates - so you can be "inside of one" and then make a decision about it.   Or say…the Edwards campaign has an office in "Second Life" and anyone who wants to ….visit the Edwards "office" can just go there whenever they want.  Why not?  It makes sense to me.

For example, you could hold press conferences in Second Life - along with real life conferences - and this will be covered very well in BLOGS -which is a segment you want to reach and fan.

Finally- custom development of Widgets that can make it easier to communicate with the campaign and coordinate are probably a good way to spend money - again.  Except - you also want to go after the 3G mobile technology….. why?  Because many of the people who are going to vote - whose votes you need use mobile devices as their primary communication device - you can see that by reading Smartmobs.com, where I also post to.  And the Mobile phone - will also give the campaign the ability to mobilize people on the ground, in real time.

Eventually, this will lead to the next class of mobile devices - Ultra Portable Mobile PC's which are now coming on the market - for the same prices as the most expensive mobile phones.  Anyway - it's fair to say 2008 will be dominated by the Internet - by mobile communication, perhaps by Second Life, and certainly by RSS Feeds (along with Podcasts and Vidcasts, etc).  The metrics need to be built around that - all of it - and in a way where you can take the data and utilize it, in real time, on a district by district basis.   If you have the districts down, you have the city, if you have the city's and suburbs, you have the states, if you have states (enough of them) you have the country.   I've rambled enough on this tonight.

I hope this helps and I'm glad for link from Scoble - that's a first for me. Thanks Robert.

In another sign of the internet's rise as the medium people prefer to consume entertainment, it's now rumored that Saturday Night Live" Rehearsals May Be Web-cast on Friday night LIVE.

"Sometimes it's a lot more interesting than the show,'' Kliavkoff joked, referring to the closed-circuit footage of ''SNL's'' Friday dry runs viewed at NBC headquarters. “It's something we watch on the cameras at 30 Rock.''

Opening the window to “SNL'' rehearsals might represent a case of art imitating art imitating art yet again at NBC, which already has mined behind-the-scenes happenings at the sketch comedy franchise as comic catnip for the Tina Fey half-hour series “30 Rock'' and dramatic grist for Aaron Sorkin's drama ''Studio 60 on the Sunset Strip.''

The truth is rapidly becoming clear - the Internet is the new testing ground for talent.

"…Much of the panel's discussion centered on whether the emergence of user-generated content will become an art form unto itself or just a way for establishment media to skim the cream of the crop. “We see the Internet as our new A&R,'' Kliavkoff said, referring to the music industry term for talent scouting. “We're out there scouting. The good stuff bubbles up to the top.''

For me, I'd look at this possibility of broadcasting SNL rehearsals on Friday night as multi channel marketing AND community building - both of which are becoming much more important as we move further into the Digital Age (or whatever you want to call the time we live in now).

And certainly - you can learn a lot more about the audience who will watch SNL on Saturday night if you can get the demographics of the Online Streaming Video Downloads on Friday night (I imagine Comscore or HitWise can provide these statistics, each in their own way).

2:30pm - 4:00pm  Technical Innovations in Video Advertising

Bells and whistles, new and cool, bigger and smaller. Video ad products and video ad serving are constantly innovating and evolving. What are some of the newest, most gee-whiz, I-didn’t-know-you-could-do-that products and services out there? Here’s the show and tell.
Moderator:
Rebecca Lieb, Executive Editor, The ClickZ Network, division of Incisive Media
Speakers:
Andrew Ellenthal, Senior Vice President, Global Sales, PointRoll, Inc.
Adam Gerber, VP, Ad Products and Strategy, Brightcove, Inc.
Michael Q. Griffin, EVP of Business Development, EyeWonder, Inc.
Len Ostroff, CEO, Rovion, Inc.
Hilmi Ozguc, Chief Executive Officer, Maven Networks
Chris Young, CEO, Klipmart

How can you tie all the assets you have onto online media?   PC vs. Mac TV campaign – but there was an online campaign that launched at the same time and having both campaigns running increased the online reach and frequency.   Anything creating online can  be measured in a Rich Media format.

Point Roll showed a Curb Your Enthusiasm online interactive piece.   There’s an online conversation between the characters that the visitor can control and get a 10% interaction rate.

You can have a Point Roll ad unit that is effective and yet not disruptive.

There were mostly demos of various platforms to create interactive video - but this would be more of interest to an Advertising Agency so I did not focus on it so much (I was busy responding to Eric Peterson).

SmartMobs posting about South Koreans who fall into two basic patterns of digital consumption, 1) those who want to be outdoors and consume digital media and information using Mobile devices AND 2) those people who want to stay at home and Cocoon themselves in, consume and enjoy digital media.

From  Emily at SmartMobs (below) -

A new lifestyle trend is springing up in South Korea, one of the world’s most advanced digital hotbeds more and more folks are retreating to their homes instead of socializing with others. The Korea Times reports.

 

Experts call the phenomenon "digital cocooning” because such a fad is enabled and accelerated by the digital revolution, which is occurring here in a full-fledged manner.

 

"The advent of Internet and wireless technology is generating two seemingly conflicting tendencies - some are enjoying a nomadic outdoor life thanks to wireless gadgets while others stay nested up at home with them,” said Park Jung-hyun, a senior consultant at LG Economic Research Institute.

"The former can be called digital nomads, the latter digital cocoons, or ones who retreat into the seclusion of their homes for privacy or escape,” Park added.

"If digital cocooning represents future trends, it is understandable that such digital alienation mushrooms in technologically-advanced Korea faster than other countries,” he said.

… Samsung Head: Most Famous Digital Cocoon? Korea’s richest businessman, Samsung Group chairman Lee Kun-hee.

Marketers will need to reach each out to people in each category differently.  For example, a combination of outdoor advertising and local advertising via Blue-tooth and Wireless advertising that is picked up while the a customer of this type is passing by a store would be one way to reach those customers who want to be outdoors.

People who what to stay inside - I know people like this and sometimes I’m like this too - would probably need Broadband videos, Vidcasts, Podcasts and a lot of good Rich Media, good Online Music, and advertising can be embedded into all of that.

Both types of  "behavior" are a reaction, I think, to how people consume and process information.  I suppose the "metrics" of engagement might also differ depending on how and where a person consumes digital information.   Would be nice to know, for example, if someone who walks by a store where advertising is broadcast via Blue-tooth or Wireless, comes into the store; and then, if that person buys something while in the store.  It’s possible to track all those things if you plan in advance for it.

I’m at the IAB Leadership Forum focusing on Braodband today in New York.  Missed the keynote and first session on Creating Content in a Broadband World: Consumer Generated vs. Original.

Talent is so censored and over produced (one part of message is focused on and taken out of context) and broadband allows Talent to reach out directly to the fans and audience.  Yahoo’s deal with Paramount to publish online clips of Mission Impossible III was discussed

Exit Polls showed that at least half of people who came to the openings of Mission Impossible III did so because of the internet (broadband reach).

My first session was

11:00 AM - 11:45 AM

Morning Keynote   Amy Powell, Senior Vice President, Interactive Marketing, Paramount Pictures

Amy Powell spoke about the broadband opportunites created by Paramount for Mission Impossible III and Napolean Dynamite.   Film Makers and Actors now involved in broadband and reaching out directly to fans because they know the audinence can make or break a film.

I also attended the following breakout session before lunch:  Breakout Session 4

As users begin to demand a richer experience online, marketers are scrambling to come up with the right mixture of smart creative, targeted messaging, and user engagement to reach their audience on the web. Measuring the effectiveness of a rich media campaign has become paramount in determining ROI on advertising spend. The integration of technology into rich media brand advertising necessitates the adoption of new and more complex metrics for measuring the success of a campaign based on User Engagement. In this session, Jason McKay, VP Unicast/KeySearch/Consulting, Viewpoint, and Caleb Hill, Director Technology Products, Viewpoint will provide a sneak preview into the ability to gain new measurable insight into the performance of rich media advertising.

Caleb Hill, Director of Products, Viewpoint
Jason McKay, Vice President of the Unicast/Key Search/Consulting, Viewpoint

Click through rate (CTR) most familar metric but CTR is not enough to measure success alone.  In fact, CTR is only one part of what you need to measure:

Measure Ad Display and Interactivity.  You need to look at CTR in conjuction with email, viral advertising and Ad Display rates.

What is Engagement?

• by ad
• by campaign
• industry vertical
• business

Viewpoint Platform measuring one.org engagement by displaying CTR and Ad Display rate.

Need centralized area to store all the metrics.  Was an interesting session but you need to run Viewpoint in order to use their metrics.