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6 degrees of separation: The Kevin Bacon effect | The Grapevine S1:8

10 April 2023

What can Kevin Bacon teach you about marketing?

Fresh on the podcast today, Ed and Tom discuss the idea of 6 degrees of separation, otherwise known as the “small world effect”.

We’re all six or fewer social connections away from each other. The world of Hollywood has taken this one step further – you can search how many connections separate Kevin Bacon from any other actor  (check out “The Oracle of Bacon” for that one!).

When it comes to influencing behaviour (a change, a purchase, a call to action), that effect is reduced to “three degrees of influence” (a friend of a friend’s friend). 

What can this teach us as marketers?

Most marketing messages don’t work like the Bacon effect – people have to be motivated to share a message, and they’re usually more likely to if they’ve seen a message several times from the people in their network.

  1. Consider your audience as a network
  2. Consider the relationships in your audience
  3. Think about how you might activate and utilise them
  4. Create campaigns that gets shared between people who are interested in the same thing
  5. Map your network and use those tools to inform your marketing (hello Herdify!)
  6. Check out the full episode for more detail!
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Tom
Welcome to another edition of The Grapevine brought to you by Herdify. This week, we are breaking the mould ever so slightly. And we’re not going to have a guest because we’ve got something really, really exciting to talk about. And that is Performance Marketing World Unlocked that has just taken place this week as we record. And we thought as opposed to just our normal format where we get guests on (and we’ve got a great backlog of guests coming. So don’t worry about that) – we’d unpack some of the key questions and the key observations and as usual, apply a bit of a sort of behavioural science analysis and behavioural science lens to it to really help help you drive your businesses forward. So without further ado, we’re gonna crack on with that, as usual, though not to disappoint. I am of course joined by Ed. Ed, how are you?

Ed
Hi, Tom I’m all good. Thank you just back from the Excel in London from Performance Marketing World Unlocked. So kind of ready, ready to talk about it? And try and remember what was two busy days!

Tom
Well, I think yeah, I think that’s the really interesting thing today as I actually wasn’t there. So my, my view of PMW, as I’m now going to call it, was very much WhatsApp driven and Teams driven between you and Vicky, who were there and subsequent notes. So I think yeah, it’d be great to dive in, I think a great place to probably start really as there’s a lot of content from two days from what I could make out. If you kind of had to take away, you know, if you had to distil that down to your your top three takeaways, you know that, let’s do that. And then from there, we can sort of dive into each one a bit further. And then at the end, we can try and pull that together with some sort of takeaways that, you know, in the next 20-25 minutes, that people can walk away and hopefully take some stuff back into their businesses to make their marketing perform better. So top three takeaways…

Ed
So there was a lot, there was a lot to cover, although it was a lot covered, I think, to set the scene for anyone that hasn’t heard about Performance Marketing World Unlocked. So it’s a performance marketing conference, which was attended by brands of all sizes, you know, there were very big brands like HSBC and Vitality, and also much smaller kind of ecommerce brands as well.

Ed
And a lot of it was targeted at very different markets as well. So you know, some of it was very much targeted at big corporate businesses and how they can, you know, use performance marketing to support their brand, which everyone already knows about. Well, at the other end of the scale, some of it was about how you can use performance marketing, when you’re a startup, to break out and kind of break it, break out your brand, and start getting that brand recognition starting from zero, right. And what was really interesting that there are a few themes that really ran across that whole marketplace, and kept going up time and time again.

Ed
And those themes were, if I was to narrow down to three: they were less being spoken about by name. Now, they’re nearly nearly out the door. But it was definitely noted that they are still hanging on in there. And more it was the conversation of okay, post cookies, what are people doing? How are people managing their data? And how are people trying to get the most out of what they’re left with now? So I think I think we’ve got past the point where people are still trying to hang on to cookies, or, to a certain extent, recreate cookies, and now it’s okay, how can we do the most we can with the data we have.

Ed
Interesting. And what’s interesting there and we’ll go into this later is that really it speaks to this sort of it depends on where you are in your journey and what size you are, like, you know, someone like a really big bank could do very different things with its data

Ed
than the average ecommerce business. So for our listeners, it’s important for them to kind of understand where they sit in that scale say of size and therefore where the benefits are for them.

Ed
But more than that, I think, performance marketers are sort of becoming a bit more suspicious of attribution, within platform attribution, and in particular, when it comes to measurement, measuring cross platform performance is becoming really hard. It is something people are really facing up to, especially as the number of platforms is growing, you know, when we’re talking about performance marketing, yeah, we’re talking about Google, and Meta, but now we’re also talking about TikTok. And potentially things in the future, like Be:real, you know, social networks that haven’t even haven’t even started having advertising on them yet. And also, combined with that those platforms are offering a whole bunch more places to place your adverts or ways to interact for advert so, you know, I know, stores have just been shut on Instagram, but Instagram, did have stores Tiktok has stores, right, you can put your product directly in there.

Ed
let’s say, two different Instagram post sponsored posts, campaigns, but how would you compare an influencer campaign to a sponsored post campaign, that sort of question of attribution and measurement came up time and time again, and I think, related to that as the third thing that came up, repeatedly, and that was the increased amount of the interest in brand effects of online marketing and even using online marketing as a brand marketing channels. So thinking outside that a lot, a lot of businesses kind of historically have thought about performance marketing, and search, say, in particular, as a way of generating sales today, when now, people are starting to think, Okay, actually, what this what is this doing for our brand? What does it do in terms of long term sales? And how can we, as a result, and this relates back to the measurement piece has a result? How can we measure its performance if we’re now looking at different objectives? Yeah, it’s interesting that last one or more will be interesting to pull this apart, and we dive into it. But it comes back to this phrase that I had kicked about the internet quite a lot, that there’s no such thing as digital marketing is just marketing, you know, marketing is marketing. And digital is just part of that. So it shouldn’t be just where where people are now. Yeah, you know, just because digital is seen, as you know, enter the funnel quite often, and where to get the sales? Maybe it’s not the right way to look at it. And and it’s a we’re seeing more customers from our side as well, you know, from the edify side of things, who are who are contemplating that type of thing as well. So yeah, it’s an interesting trend. Okay. So cookies, I love that because I think probably one of the first things we started talking about in this podcast was cookies. So it’s great that that’s still still part of the conversation all these years later, or he’s much straighter attribution, and sort of more focus on brand in that sort of typical performance online online world. So three, three areas, and we’ve spent a few minutes sort of pulling apart each one.

Tom
Then what, what the question that jumped into my head, when you sort of said cookies was around this different work between sorry, the different things that are possible within, depending on what your scale is, you know, if you’re if you’re a big company versus a small company, so be great to pull apart some solutions in there. But first, I guess, thought in my head is, does does this now put more onus on the companies to be able to work with data more? So does it potentially put, you know, smaller businesses that don’t have those skills at a disadvantage? Do you think?

Ed
I think the the undoubted answer is yes. Unfortunately, that, you know, bigger companies have bigger budgets, they can afford more complex solutions. But at the same time, smaller companies can be more agile with them. And I think that’s that’s the is the sort of the trade off that exists. And also, I think it’s important to think, and to kind of understand that as a smaller company, you know, it’s just the way that sort of the business ecosystem works, right? Smaller companies are rarely at the cutting edge of things that are not within their product. And so there’s still advantages to be had for smaller companies. And I think, when we look at the solutions that are on offer, then sort of understand that you can see how they all sort of mimic most of the solutions really mimic like similar ideas. And it’s really about implementation. And then it’s almost like what possibilities does that solution open up? Right? So I think the problem of cookies disappearing, as the kind of reduced that can almost completely reduced the use of third party data in a cookie like third party cookies, right? No one was talking about third party cookies. Interestingly, what people are talking about now is the extent to which you’re allowed to use first party data in your marketing. So it’s almost like GDPR is also coming back back to bite really now. Yeah. Right. So if someone has opted out of marketing, you’re obviously not allowed to market to them. But a lot of people, a lot of businesses are still using sort of legitimate interest or implied interest, as the reason to market to their current customers to to use their first party data, you know, their sales data. And what was really interesting was the point that HSBC made, which they their understanding, or their legal understanding, is that that’s not that bad. That isn’t okay. Or is it? Definitely okay. So they’re obviously worried about that. And that, that means you have a much smaller set of data to work with, right? Yeah, if you can’t target your own customers. Now, the solutions to these sort of cookie problems, I would say, boiled down into like, three broad categories. The solutions, sorry, that were discussed, discussed a lot of performance marketing world. So at the sort of most cookie like, let’s let’s start with most cookie, like, you had something called, like web service, eye tracking, which is basically generating cookies, but instead of generating them in the browser, so instead of first party cookies being generated in the browser, when the user clicks on something, you’re detecting that event back at your website, where your website is stored right on the server? Yeah. So backdoor cookies. Yeah, so they they’re kind of backdoor cookies, the difference is like the infrastructure to associate that cookie back to a customer is much more difficult, much more complicated. You basically have to have like, a specialist service to do that. And it’s a very expensive service to set up, right? If you want to know what someone in your CRM has done on your website, using server side. There’s quite a lot of infrastructure and processing that goes on in that gap. And thus, it is quite expensive. And therefore it’s not really accessible for a lot of businesses. Now, a version of that is conversion API’s. Okay? So these are provided by Facebook, or Google. So Facebook’s is called Conversion API. Facebook’s Google’s is called I think it’s the Google Ads API, slash conversion. So b2b People have started just calling it converted API or Cappy for sure. Because marketers love acronyms. And what the conversion API does is it It tracks traffic on your website, and then gives that instead of Back to you, it gives it directly to Google or Facebook. So it’s kind of like a kind of think of as like a short lived cookie. But on the server side, again, that can enhance your ad campaigns. But doesn’t give the information back to you and the way you support conversion API’s. You put your first party data into that so you might connect it to your CPM. I don’t mean CPM. Do I know sorry, Harry,

Tom
as in short file,

Ed
no, your IMS CMS? Yes, yeah. Yeah. customer management systems, right? You can actually

Tom
do want to go back, give them a nice, nice little.

Ed
So yeah, so connects you to your customer management systems, your customer data systems, you give your data to Facebook or Google. And what Facebook and Google do is use that to make your ads better right to target your ads, because they they understand more about what people who click their ads then go to do on your site, and how many of them become customers and things like that. Now taking that step of that idea of giving your data to someone else, and then then doing something with it one step further, we have data cleanrooms, which came up quite a few times. So a data or data cleanroom is, is taking that idea of you give your first party data to someone. And then they give you some information that based on that, and what the beauty or the kind of the idea of the data cleanroom is, instead of giving your data to a third party who does some analysis on it, you give your data to a cleanroom. For other first party data, for example, like experience, data comes into the cleanroom. It gets matched inside the algorithm. And then you can do a segmentation, for example, and the results come out. So you get the results of the segmentation. But you’ve never seen any other first party data, your first party data has not actually gone to anyone else. It’s like this grey matching happens. But no, it’s not possible to kind of pick apart and get back your customer data from it. So you can get more general targeting information out of that, rather than just for Google or just for Facebook. But you can’t get sort of the customer matching stuff that we used to be able to do.

Tom
But like data, a data cocktail shaker, yes, one of the ingredients is your own data, there’s loads of other ingredients that you’re not sure about. And you just get a nice drink out the end, but you can reverse engineer

Ed
it. Exactly. Yeah. So it prevents anyone reverse engineering. What any of your customers are doing, for example? Interesting. Okay. Nice. Okay. And, and when it when it comes to e commerce with those solutions, I mean, everyone in E commerce is probably jumping towards conversion API as a solution, because that’s the platform they play in a lot. Yeah. And is they are also the cheapest and easiest to use. In theory, in practice, the getting your customer data, is by all accounts not that. Not that simple. And in fact, HSBC implied that they despite being the first in the UK, to start trying to start working with Facebook, they are not yet integrated, interests interest early with all the customer data they want to get in now, they are a company that has very complex customer data structures and lifetimes. And we can imagine it’s to do with all of all of that sort of thing. Like, you know, you they sell multiple products, their products that people turn on and off, or, you know, they have a complex customer data structure. And it might be that an E commerce firm does not have that complex customer data section. Structure and it’s much easier to integrate. And it wouldn’t surprise me if given their general mark the market for their marketing, Facebook, a matter have targeted ecommerce companies, right? A lot of their marketing is that shopping side of things. So I imagine it’s a lot easier for those people. So I wouldn’t take that as too much of a warning. But that’s definitely the easiest thing I think for E ecommerce companies to

Tom
try. What was the yeah, that’s, that’s great, it’s more accessible. And they get that do are there any downsides or what what was exposed that they had access to? What what are they lose, I guess by doing that.

Ed
So what you’ve lost in doing all of these things is the ability to do as much with your data and the ability and really the ability to own as much of that data right? And to do innovative new things yourselves with it. So in particular, the conversion API’s are very obvious answer, you know, way that this happens is what Facebook works out is good for you. You can only then apply and Facebook. They won’t tell you what they’ve worked out right if they if they work out. If Facebook works out that people who have an interest in a particular sport are really Good customers for you. You’re not sport related, you know, not not sport related clothing brand. Yeah, you don’t get that information back. So you can’t use it in your other marketing channels, which And it very much keeps you inside these walled gardens. Yeah,

Tom
which coming back to the point, you mentioned in the beginning, in terms of people struggling to measure campaigns across channel, it makes that job even harder, right? It’s one thing if you’ve got comparative measurements, and if you’re not even sure what they’re going after you even if you can compare that they’re working, you don’t know why they’re working, which, therefore to replicate. Great. This one works better. Let’s do what that one’s doing over here. Well, what was that one doing? I don’t know. So it doesn’t doesn’t help doesn’t help, even if you can understand necessarily.

Ed
Yeah. And it’s, it’s very much I think a trap that people can fall into is they end up with a marketing mix, which is being dictated by the marketing tool providers, not what they’re what’s best for their company, because it’s great point. Because meta or Google, keep all the information in and they’re like, Well, you can spend your money efficiently with us. And you can’t say that you can’t take that out the information out.

Tom
And then it comes almost self fulfilling, because there might be better areas out there. But if you’re not, if the platforms are directing where you’re spending, as in, they say, put more in here, and they can make it look good. Yeah, it might be good. But there might be a 10x opportunity over here somewhere that you’re just because you’re not making that decision of that mix. Proactively. You’re Yeah, I guess limiting the potential for potential returns that you could actually be generating.

Ed
Right? Exactly. And, and also, as these tools pull in, okay, if you if you imagine the way that Google’s algorithm works, right, it competes against itself. So it pulls in data from your trainer brand, and tries to sell your trainers is actually trying to sell trainers for 20 Other trainer brands at the same time, right. And what was really interesting, there was there was a provider there who has like a, kind of like a machine learning thing that sort of sits inside Google and does keyword search in Google. And they specifically only work with one company from each niche. Right? They would not, they won’t work from two companies with that with the same niche. Because the AI will not work properly, because it’ll be competing against itself. Yeah.

Tom
Wow, that seems quite, they’ve got a limit. There’s not that many issues in terms of customers. But hey, hopefully won’t dive into that. Okay, great. I think that’s a really good, a really good overview, while could deep dive into the cookie conversation and, you know, some some things they can take away. So the next year, we’re talking about attribution and measurement. And I love this conversation, because, you know, it won’t surprise you that I have this conversation daily. And for me, it’s always a big swing between business metrics, you know, how much are we spending? And how much value? How much bottom line? are we generating for the business, versus the continual tension? With performance metrics, you know, you know, sometimes the performance metrics might tell one story, but the revenue tells another story. And even if the revenue story is better, often the performance metrics still went out, which is, which is an interesting conversation. So yeah, really interested to see what that conversation that like yesterday, and, you know, how can we? Well, I don’t think we’re going to close the door on attribution today. But how can we how can we help people feel a bit more comfortable with with attribution? And, and I guess, maybe it’s comfortable the right word, you know, is, is maybe the question, do people have to be feel more uncomfortable with attribution? You know, do we need to be more uncomfortable? or so more comfortable with being uncomfortable? You know, we’re not gonna know the answers. And I don’t know. So yeah, I’d be interested to hear what was talked about.

Ed
So I think I think there’s a few things to kind of pull apart here. And I think it was summarised in one, there was one talk by I think his name is Frankie at Hill, who did a very interesting talk, kind of based around the the results of a survey had conducted among and these are scale up e commerce, C, CMOS. And he and they, they’re the results of the survey, basically, that I think it was, you know, over 70% of people have CMOs are unhappy with how they’re doing that attribution or that understanding the effects of each of their channels. And what’s interesting is anyone who had a specific tool People with specific tools to try and do that when less happy with the solution than people who were who didn’t have specific tools to do that, which I think tells ever tells you all you need to know about how well it’s really going. Right? And how nervous marketers in general are. So I think that’s the first the first message that came out was like, if you’re nervous about your attribution, don’t worry everyone else’s, too.

Tom
Okay, so they’ve just done that. So sorry. For me, 70% of people were unhappy with attribution is a massive number. And you’re saying more people are unhappy if they’re actually paying for it all?

Ed
Yes.

Tom
What did he did he get that he

Ed
did? But I’m afraid I don’t have it in my notes, we can put it in the show notes, because I will have I will.

Tom
That’s crazy. There’s probably, let’s say, at least 80%, annual or at least Yeah, at least 95%. So that’s crazy. If you’re if you pay for attribution, so if you’re

Ed
unhappy with the way it does, I mean, those people are facing up to the question. So the particular question that the that’s been faced up to here is, is how do as a as a CMO, how do you decide which channels get your money? Right? Yeah. Okay. Now, then the reason the reason that’s kind of the level, I think that’s the level where the most uncertainty sat that that was definitely the summary that came from, from from a lot of the speakers. So if you go lower than that, so you ask, okay, what’s going on inside channels, where or inside platforms, then people are a little bit happier. That’s not to say that they should be. Right, because they’re not answering the ultimate question. They’re not able to do their comparative analysis, right. And here, I think it’s important to pull out pull apart two different factors, really. And that’s the difference between attribution and sort of what you might call incrementality, or effect. Right? So attribution being okay, how many sales did this generate? Judging using this model, a particular model? Versus incrementality, which is actually by spending x amount of pounds? How much did that generate in revenue? Yeah, and they are actually very different questions. And what tends to be the case? And is the case is that when you go from inside channel to outside, sorry, when you go from in one platform to across platforms, that’s when you have to stop asking the what sales did it generate buyer model question. And start asking about money and money it generated in general. And the reason for that is that the insider platform, the models that attribute sales are relatively stable. And there is like some sort of analysis that the you can use. So and in particular, something that a lot of people didn’t talk about was data driven attribution, which is like a Google model, which does sort of cross channel attribution, actually. And it is, is, is better than nothing. Yeah. But it doesn’t tell it doesn’t ultimately answer the question of what if I spend less or spent more on that channel? Yeah. Yeah.

Tom
It’s really interesting that when you’ve spoken there, I always pull it back to Byron sharp, I think we might spoke about him last time. Either way, he’s a sub market marketing scientist. And he talks about, you know, the benefit of ads are there to renew memory structures, you know, so really, that they benefit that summary, somebody already knows about your product, and an ad is there to renew that memory structure to keep them to keep them going. And when it comes to understanding the right channels? You know, I think it’s often hard to understand, which was totally butchered that we might just cut that out here. And so everybody, there’s a thought in my head that just as I started going down, and that doesn’t work. Let me find a job at the jump off point to what you were just saying. Yeah, it’s really interesting the way what we need to kind of mentioned there, right at the top of that is about CMOS understanding which channels and we’ve talked about it before. And to be fair, it’s linked to the previous previous part of the conversation, actually. But I think sometimes it’s kind of the platform’s dictating the budget that should should, where it should go, rather than them understanding Well, look, you know, this is what my audience looks like. This is where they hang out, and in this area, this channel might be more appropriate and over here error might be this channel, and here, it’s this, this this channel, and therefore, the appropriate amount of spend in each one is, well, we should probably spend this much will allocate this to tick tock this to this to Google and this to Facebook and and then then you go through the platform based metrics, which keep you spending on those platforms are not as opposed to that sort of, where are our customers? And what are our customers look like? First, and I think in this new world, you know, we’ve got so many digital channels, you know, GMs, necessarily don’t give us J dams don’t give us necessarily that much depth in terms of what we’re trying to do.

Ed
Yeah, I agree. Like, it’s always worth worth understanding that like the channels job, or the platform’s job is to get more, you get you to spend more money on the platform. Right? Yeah. And for that reason, they will, you know, performance Max, great example of this, like, you kind of Google’s performance Max, you give it some money, and it does the optimization, because the general opinion at Google, and it does look like the feedback. We’ve discussed it before. And the feedback was quite mixed. But now it seems like generally people are finding performance market Max is improving their results. And when you think about it, that really was Google’s is sort of saying there is your we gave you at all, you weren’t good enough at using it. Yeah. So we’re going to help, we’re going to tell you how to use it. And the trade off is that then you’re going to be able to put more money into it. Because you’re getting more sales per pound of advert, right? More rowers. The point is, is that you can’t really can then compare that performance across system. Yeah, it was very hard to compare that to how your meta performance is. Because A, the metrics and the data doesn’t get shared, and then be like, the realistic customer journeys are actually touch both points, right. And so they’ve really, they’ve kind of got to share the attribution, or the incrementality shared the effect. And what none of these systems really account for is the if you had if you hadn’t spent that pound on Facebook, or meta, what would that have done to your Google results? And that, and that’s something that you need much more complex models for. So this is where mix marketing mix models come in that like lots of people have spoken about. And then also experiments, right? So do using lift experiments to say like, okay, let’s spend no money on Google, and then do and then and then see, in some places, or some areas, or let’s spend extra money on Google in some areas of the country and not others?

Tom
What’s the lift experiment? Sorry?

Ed
So sorry, yeah, lift experiment, I’ll explain. So So lift experiments, they, they come in two forms based around the same idea, right? The simple idea is, you find some places in the country, or in a region where you say, increase or decrease your ad spend, you do something differently. And then other places where you leave it the same. And then you compare the results of those two processes in those two places. So say, let’s say, Okay, we’re going to send double our ad spend in some of our areas, and that and then ask how many more sales does that lead to? And that tells you what the value of double doubling your ad spend was? Now, inside both Facebook and Google, you can do this automatically, for Facebook and Google ads. What you can’t do is say, Okay, actually, what if I move 10 pound from Facebook to Google? With that, what is the effect of that? And then you have to be able to do the experiments yourself. Now, marketers do get kind of nervous about this thing, right? Because it’s, it’s this sort of test to learn, but it’s definitely the fact that everyone wants to be doing it all the time. They’re just slightly nervous of the implications. Yeah. And I think that’s what drags people back to in channel metrics a lot. Especially people who have view of the whole, the whole stack so so people in smaller companies where they’re deciding when the same person is deciding how much do you spend on Facebook and how much you spend on Google. And once it’s on Facebook, how Where do you spend it? In those companies, people get dragged down towards the performance metrics, the the attribution metrics, because they get updated daily, whereas you might be able to conduct an experiment every couple of months and there And to go one step further, like people talk about media mix modelling, on marketing, mix modelling, which is like a big project includes lots of data, it’s expensive to do. And you might do it at most at once every six months. And that’s the way to get the best impression of the impact your marketing is having. But you’re just limited by time and budget. You can’t do that all the time. Yeah. And therefore you can’t act on it all the time.

Tom
Yeah. But it’s funny that yeah, I get that. And you see why people go back to the metrics. But then on the flip side, and this is this is a trend that we see quite a lot with our customers in the certify, so is that the attribute ID sales in the platform, I can kind of well off when you just when you simply analyse, you know, sales in those areas, you know, so what we’re what we’re really talking about here is direct and indirect effects, you know, indirect, or being these, you know, word of mouth influence, whatever, whatever is happening here, but you know, we had a customer the other day, and in in kind of the hotspots where word of mouth activity was high, I think the platform was missing nearly 80%. So the the performance metrics didn’t look great. But you could see a solid trend that the ads, were doing a great job at causing ripples. You know, I like to visualise a throwing a stone into the lake. And, you know, it’s these ripples that carry on long after the ad has landed, which meant the ad the performance of the platform metrics, which is well off. Not so they should stop spending. But it kind of brings in this brings in this one to many relationship, I think which people don’t consider with ads, you know, the ads are typically seen as a one to one, you know, I said one ad impression, I hopefully get a response from that. And that’s how we work out the success. Whereas the platform’s missed is one too many, you know, where one ad causes a cascade or a ripple, that causes 5678 activities to happen, because it’s being propped up. And I think is going to be really interesting that as we get more and more complex with the digital landscape, you know, there are social platforms, as you say, that are not yet using advertising, let’s, let’s keep, let’s keep looking forward, there’s gonna be many more social platforms that come out. So where we spend our ad pounds is going to be even even higher in terms of variety, pulling that back into a story, just gonna get a get harder. Which brings me back to this, we always need to understand it. I wonder whether we’ve also got to get slightly more comfortable with not being able to tell the full picture and sort of basing our early decisions on something a bit more grounded?

Ed
Yeah, I think that’s that’s definitely the sort of like the way things are going, right. Yeah, as you say, like, a good? Well, I think a good question people can ask themselves is, what fraction of all of their sales are attributed anywhere, and particularly if you’re an E commerce brand that’s only doing you know, only really doing online ads and digital ads? Then ask yourself, once you’ve taken away all the sales, like for some of our customers, you take away all their attributed sales. And they might be left that with the conclusion that 90% of their sales are organic, right? Now, ask yourself, Is that realistic? That if you turn if you and what that means that Is that realistic? If you turned off all of your digital channels, would you expect only to lose only 10% of your sales? And then and if you do agree with that, then how much you’re spending on marketing? And do you expect better returns from it? Right? Yeah, I think that’s a really good way of looking at the other things to mention, with extra social channels coming in here is were something that was wasn’t one of my top three, but also something that was mentioned quite a lot is retail marketplaces, right? Very much feel like they’ve really exploded last year. So for anyone that isn’t aware of retail marketplaces, where your brands, and you’re, you can sell products through another website, right? The most prominent of these is Amazon. Yeah. But no

Tom
boots. For example. If I if I sell health care products, I can actually advertise on the Boots website close to my target customer. So they see Tom’s vitamins as opposed to somebody else’s.

Ed
Exactly and what boots Tescos and to a greater extent Now Amazon have worked out in the last year or definitely reveal to the world that they’ve worked out in the last year is that the margin or most sites is in the advertising on site. So banner ads on on Amazon as an example but also search rankings and things like that. And when as a marketer, what that means is, that’s another channel you’ve got to pay for. It’s another channel you’ve got to manage, and it’s another channel you’ve got to optimise for. And rather than giving you a job, it then becomes a question of okay, okay, is it worth spending as much time in those channels as you do on Google? And that’s only an answer, you can really answer yourself. But like, in terms of measurement, it means you really have to have a view of these wider things right out of channel attribution, because otherwise, so much of your money is going to be split up that you need to decide it, you need to be able to have a decision making process which says, Okay, there’s a new art RTM, retail network available, do we use it? So you think about trying to answer that, and some people might think that’s a business decision, but that’s really a marketing decision. A lot of the time. Low, can we actually get sales out of it, which have value?

Tom
Yeah. Okay. Right, that’s a good deep dive on attribution. Let’s go for one more. Let’s jump into that you were saying brands starting to move their brand activity into the sort of traditional performance channels, or to assign What are traditionally seen as performance channels? Yeah,

Ed
so I think this was this was really interesting actually brings together kind of what we were just talking about, right? Like, when you have all these different performance, marketing touchpoints. Actually, that becomes a bigger and bigger share of your overall amount of marketing. And, and it becomes more clear to people that digital has a role in brand building, or performance has a role in brand building. So there are a couple of interesting sort of tidbits of information that were dropped in here. So HSBC, was saying that they have merged, I think this was their personal banking, marketing, they have merged brand new performance teams and budget into a single, but like budget for the year, this year for the first time. And partly, that’s come with a big budget cut. That was one of the reasons for it. But also, as a result of this, they’re running their first kind of like, digital brand and performance related campaign. So it’s mainly executed by performance, but it has brand and ambitions. And what that means for them is that the metrics, it’s judged on our long term brand, sales and brand building metrics, as opposed to those performance metrics, they don’t really care about them. An interesting kind of related thing was was Apple, at least used to run brands campaigns, but through their performance channels. So it would be the brand team dictating the campaign. And the goal of the campaign would only be to get to the top of search of a certain keyword, right? And there wasn’t, and that wasn’t because they thought that getting to the top meant they got more sales on that keyword, it was to get to the top increase that brand relationship with that keyword.

Tom
Right, interesting.

Ed
And I think this is really kind of interesting as like an idea that we need to be thinking more broadly about, okay, what does digital what what is the goal of your digital ads? And it talks to this attribution piece, like, okay, it’s not just about getting someone to click on it, get them on site, and then convert them. Right? It’s about that, that journey.

Tom
And that goes back to the bar chart stuff that we’ve talked about, before, that it’s about renewing memory structures. And then I’ve often thought, coming from outside the industry that that lit using performance just as a harvesting tool. This is great if you’re a global brand, right? And it’s literally when am I when am I trying to buy people who suddenly people who’ve got intent and know about it, if you’re not well known everywhere, which is trying to keep memory structures alive. And you know, I think, I think that sort of influences where I’ve watched YouTube videos of people who I think I know and watch and they recommend a product and you know, I’ve clicked so many of their links and gone that’s a cool product. I want to buy that one day. And I couldn’t tell you any of those products right now because I’ve forgotten them, right? And so the influencer has done his job, they’ve got me to click the website. But then they needed to keep B they needed to you know, I needed to keep seeing or hearing about that. Which brings together this it’s not just about conversion. I wasn’t ready to buy that there’s some brand building there that need to do.

Ed
So I think the that’s actually one of the most active spaces in this is the influencer as a performance Mark. thing like they the idea of long term brand relationships with influencers and that’s about building brand as you know, using the influencers brand to mentor their the products brand, as much as it’s about. Bill, you knowing that using that kind of a long term relationship is it does drive kind of short term results as well. Right. So that but there’s lots there about like, yeah, use it building kind of influences almost as like retailers, right? They you’re kind of looking at their digital space, and using that as a space that plays your product. Now, that kind of leads into a point that was made a few times, which is the younger generation, so spend so much of their time on digital, that your brand is defined by its digital ads? Because they are the adverts that you see of from you know, sorry, they are the adverts that younger people, you know your under 20 fives are saying they don’t see your your non digital ads as much, or as a fraction of all the ads they see. Now an interesting part of that is that really, then what we’re really talking about is that they were saying that digital or performance ads or ads you can measure the impact of? And really, it’s kind of ironic that we’ve gotten to the point where like, that’s not the point of them, you know, not all at not all ads. Not all digital ads need to be measured straightaway as a performance ad.

Tom
Yeah, I think there’s a really good point there in terms of, if I was, if I was working full time data says performance performance marketer. You know, the climate we’re in, it’s tough, because, you know, ad costs, or acquisitions costs are going up. And there’s less people buying with the current kind of climate. But if you can reposition your role in that, yes, you know, we absolutely have got performance element to it. But also, it’s about some of these longer term metrics, and some of these ripple metrics, you know, to coined the phrase that that I talked about earlier. It can help you, it can help you sort of paint a picture to your leadership team, that your your ads are actually working a lot harder. If you look at some of these other metrics, with a longer term lens, your ads are actually working a lot harder than the short term performance metrics show. So it’s not about spending less on ads, but it’s about trying to paint the bigger picture and maybe taking a bit more credit for the work the performance team are doing in some of these other areas. Even if it’s not a company strategy to say we’re going to be brand building with performance, it’s already going to be going to be working in it. So we’ve got brands moving that way. And as before, as markets are helping your company move that way. This gets you more recognition, I think for the work that you’re already you’re already doing within the business.

Ed
Yeah, exactly. And I think I think there’s, there’s actually been a false equivalent, or a false wall, or separation being being constructed over the last, I would say 1015 years since the internet came around. When the internet was text base, then it made more sense to talk about performance marketing on the internet as a like, okay, it’s a conversion tool, right? We’re trying to get the people on the internet to our site. Now, the incidents moved on a long time since then, is now broadly video based. And that doesn’t allow, and we’ve kind of stuck with those metrics, right? Another way of looking at this is if you could put a camera or something on top of a billboard, and then track everyone who looks at it. Would you then judge the performance of billboard campaigns by the number of people who then bought the product in the next seven days? The answer is probably Well, the answer is all brand marketers say no, it’s long term marketing. Right? Yeah. And the same is true of line. It’s almost like because we can measure it. In the short term. We focus on the short term. Yeah. And and we assume that the thing that’s good in the short term is good in the long term, which is definitely not necessarily the right, the right conclusion to make.

Tom
Yeah. Okay. That’s a good a good place to start to wrap it up. I think I think there’s been three three things, cookies, attribution, and kind of shift towards brand with some of the typical performance channels. And I think, three takeaways for me, are, I think the fact that this conversion API, you know, theme will be that through meta or through that through Google or the other channels is a good way for sort of E commerce businesses to start getting on board with this and get ahead of some of the cookie problems. attribution and measurement. I think the big takeaway there is most people are unhappy with it. I think, you know, it’s you’re looking in your business and you’re you’re worrying about it like, you know, so most other people, that’s not to say we can’t, it’s not to try and fix it. But I think also what we’ve talked about there, there’s a lot of indirect effects that you’re not going to be able to measure. No, even with the most complex models. So there are better ways to look at it. But I think it’s an interesting area that we’re going to see more development on. And then the final one is, is, I think, really what I said there around performance marketers in these businesses that you’re already doing a lot of work that’s contributing towards brands, and I think you can, there’s more targeting that can be done around that. But actually, the work you’re doing there and trying to find some non performance metrics to demonstrate to the business, the value you’re already doing, you know, be that from these indirect sales that are not being attributed through the platform, because the longer term lens, or other kinds of brand metrics, I think there’s a lot that these you can kind of demonstrate to the business, which will help you hopefully build a leadership build a more cohesive strategy, right, and rather than the platform’s dictating it, and you can show that there’s having different impacts than you may have originally thought. Then my takeaways any for you

Ed
know, I think, I think that’s that’s kind of a very good summary of the conference, you weren’t at surgery’s Viserys is discusses go well, in terms of policy or the information, I think, for me, the summary was the performance marketers need to or can think bigger, in terms of their role. It’s also worth saying, like, we’re getting to the stage where a lot of CMOS came up through the performance world. And that’s definitely helping I think, the process and so for performance marketers or digital marketers, they is individuals can think about, okay, all these like, think about how to measure, really an art help them use use data to answer the questions that they actually face in their job and demonstrate the true benefits, right, of your of their campaigns, because I do think they are undervalued at the moment. And I think the E commerce in particular, the goal there is to understand, okay, where are your sales coming from? And how do you get more of them. And you can only really understand that once you understand that the the ripple effects as you say, of your advertising.

Tom
Great, well, let’s bring it to an end. All I will do is because I just haven’t got a guest, I think we should still do our recommendations. As we do every week. I am gonna go first, just because I’m feeling selfish, and I’ve got a good one bit left field, but it’s a coffee manufacturer called Redburn R ed d u r. And they are a coffee wholesaler in Surrey. Now the reason I like these guys is because they typically I believe they sell to more trade. So they sell in volume. Therefore their prices are good. But also the quality of the coffee is excellent. So I’ve recently been drinking coffee, matured in rum barrels. So which choice the it’s a bit weird at first, because like a lot, there was a bit there’s a bit of a trend out there to age stuff in barrels of whiskey and rum. And most of them I don’t have a taste of the thing. The dish you can taste the room. Now as obviously no alcohol in there. So but it’s a bit weird when you have a coffee at six o’clock in the morning and there’s aftertaste of rum, you’re late. I’m not sure I want to be tasting rum at six o’clock in the morning. But nevertheless check them out. They’re they’re great. Invite whatever quantity and the same pricing is really good for good quality coffee. So yeah, enjoy. It’s got any recommendations this week? Well, I

Ed
think it’s only fair to recommend for his marketing world unlocked, which I did think was a very interesting conference. And they’ve already announced the dates for next year. There’s some time a similar time, early March next year. So yeah, if you’re into performance marketing world, if you’re in performance marketing, it’s definitely something to have a look at.

Tom
I think from what we’ve said even if you’re in brand marketing, you should maybe start having a look as well. I should add the the number of conversations that being you have about how many poor events there are out there. The fact that this has made it as a recommendation is means a lot means even more. So Some great stuff well thank you for taking me through that glad I got the condensed version so hopefully our hopefully our listeners can take away some some useful things we’d love to know from you you know if you disagree with anything that was talked about performance marketing world today Is it right that brands moves on? It moves into part of the performance channels or not you know, are you actually really happy with attribution you know, if you’re one of those 30% be great to understand why and so you know, drop us a drop us a line you know, on the usual social channels you can find this or if you want to email us were heard phi.com say hello out or we’ve got the website WW dot how to fight.com hopefully hear from you, but if not, we will see you again for two weeks for another episode where we have got very exciting guests to leave the suspense there until next time, so until then, take care and see you soon.

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