2018 will be the year of direct mail as technology evolves and direct mail becomes part of an individualized customer experience.
Do customer really want to be marketed to? 2 Guys talk about what consumers and customer really want and the data you need to deliver on customer expectations.
Allen Abbott: Hello and welcome to Two Guys and Some Data podcast. This is the show
where we tell you how to use data to actually make money.
Larry Kavanagh: I'm Larry Kavanagh.
Allen: And I'm Allen Abbott, and today we're going to talk about an interesting topic,
which is do people really want to be marketed to, and if they do, how can data
actually help you figure out what people really want and how do you get that
data and how do you deploy it and can this really work?
If you go up to 100 people on the street and say, "Do you like to be marketed
to?" 99 of them will likely say no, and the one who says yes is probably in the
advertising business and is just curious. Think about how many times you've
been asked the question when you're interacting online on someone's
website, would you like to receive emails telling you about events and
promotions? I know when I see those, I say no probably 100 out of 100 times,
and I'm not alone. So, 90 percent of people skip the ads that appear before
videos online. Almost 90 percent of DVR users fast-forward through the commercials and the average person can't even remember five ads that they've seen in the previous week.
So, digital marketers are going to lose as much as $27 billion by the end of
2020 due to all the ad avoidance that's taking place, including ad blockers. So,
do people want to be marketed to? It certainly doesn't look that way. So,
when people do say yes, why do they say yes, and, for me, it's really only if I
get something that just is really interesting to me.
For example, I am a single malt scotch drinker and if I get an email from the
Pennsylvania state store, they still have state stores in Pennsylvania, that I
frequent saying, "Would you like to be notified when we get a new shipment
of single malt scotch from the Islay region of Scotland?" I would absolutely say
yes, but the generic stuff just doesn't work for me.
Larry: Allen, I've got kind of a different take on it. I'm coming at it from a different
direction. I agree, of course, if you ask people do they want to be marketed to,
they'll say, "Heck, no," but I look at it from really sort of the businesses' side. I
mean, businesses have to get their word out. They've got to find new
customers. They've got to get existing customers to come back to them, and
what I'm really looking at is what is their opportunity to advertise to
customers today? You kind of hinted at what's going on with the advertisers' opportunity.
You go way back in time, the dawn of the 1900s, there was really just catalogs,
actually. Outside of traveling salespeople, direct mail was the first form. That
big old Sears catalog was the first form of advertising. Then radio came along,
and all of a sudden there were a lot more opportunities for advertisers to
expose people to their products. Then TV came along. The number of
opportunities increased once again. Much more opportunities to advertise.
Then TV channels exploded into, instead of the three networks, into hundreds
of networks and the number of opportunities exploded again.
Then the internet came along and the number of impressions and the number
of opportunities has continued to explode. Up until about 10 years ago, it
looked like the opportunities for business to advertise were only going one
direction, but that's changed. In the last 10 years, although there's a still a lot
of opportunities to advertise, I mean, as you point out, things like DVR have
reduced the opportunity to advertise on TVs. Things like streaming services,
paid content streaming services. Netflix, Hulu commercial-free, again, is
reducing the number of ad opportunities. Spotify reduces the number of radio
opportunities. Ad blockers reducing the number of opportunities for digital
ads to get across.
So, I think the big change that marketers need to be aware of is sort of this
shrinking inventory of opportunities. Now, what does that mean? I think that
means that advertisers have really got to think about how do I make the most
of those opportunities that are left, and I'll get into that in a minute, but
before we do any more, Allen, l's do our trivia question. I think it's your turn
to ask me a question, so what do you got?
Allen: I have a really appropriate one, given the topic today. So, we've been talking a
bit about ad blocking, but what a lot of people don't realize is there are a lot of
ads that don't get seen not because the users are using ad blocking software,
but because Google finds them really objectionable and they remove them
from the AdSense network. So, my question for you is, how many unique ads
did Google block in the year 2016?
Larry: That's a really good one and I, off the top of my head, don't have any idea, so
let me think about that.
Allen: Okay. Very good. So, how can we deliver advertising to consumers that they'll
welcome? Let's go back to the single malt scotch example. It's so much more
compelling than a generic sign up for our email message, and when that new
shipment arrives, the advertiser has a lot of options in terms of how to
communicate with me. Most advertisers' first choice would be, okay, we're
going to send them an email, the new shipment's in. Here's what it is and you
can't take 10 percent off unless the state has decided they're advertising that
product this week. I'm going to continue to rail against the state of
Pennsylvania's liquor policy, but you can also send direct mail.
Direct mail is more responsive than email and from a visual standpoint and a
storytelling standpoint, it is so much more powerful. Now, if you also take into
account that millennials, and everyone wants to market to millennials, and we
did a podcast about that a while back, they block more digital ads than anyone
else and that's not a surprise, and they're also the most receptive group to
individualized advertising. So, if you put that together, the question becomes
how do we give the millennials, and people like me, how do we give them something of value?
Larry, what do you think?
Larry: Well, I think you're right on and I think it really gets down to what is the
message. It's got to be a compelling message. It's got to be a relevant
message. They do have to get it, if it's a compelling, relevant message that
you're trying to deliver through digital display advertising and they're blocking
the pop-up, they're not going to get it, but to me I think it gets back to starting
with how do you create that message that is what someone is really interested
in and it gets to their interest.
Allen, you're talking about scotch and it sounds like you really like scotch and
maybe you really don't like the state of Pennsylvania's rules about selling
scotch. There is a solution for that. You could just move, but that's okay. But
your interest in scotch may extend beyond just buying a bottle to drink. If I
know that you're interested in scotch, maybe you might be interested in taking
a trip to visit Scotland and visit some distilleries there. There's more things you
can do with that interest. There's more opportunities to advertise to you, but
the key is knowing that that is your interest.
In the past, when you go back to the radio and the TV of the past, a lot of
those decisions of what are the audiences to market to and what should we
market were made based on things like how old are you, what's your income,
where do you live, and in today's world, that just doesn't cut it. You've got to
get to what people are actually interested in and then craft advertising around
Now, fortunately, whereas 20, 30, 40 years ago, it was pretty hard to figure
out what someone's interests are, there's a lot more data available today. It's
something that you can actually find out. So, what do you think?
Allen: Well, first of all, that trip to Scotland to visit the distilleries is definitely on the bucket list.
Larry: Of course. Of course it is.
Allen: That is going to happen. So, yeah, the data is available to drive all of these
things and all these communications with consumers, and how do you get to
that single view? I mean, that's a question we've discussed in other
conversations, but the real key, you have to identify them across devices, and
Larry mentioned last time that using mobile phone number to be able to do
that is really the key to making that happen. Every little bit of information you
have can help you determine whether that person is just interested in buying a
bottle of scotch or whether they're interested, perhaps, in taking that trip to
I'll use a similar example. In addition to being a scotch drinker, I'm a tea
drinker, and I brew my own tea at home. I don't use tea bags, and I have a
small collection of cast iron Japanese teapots. So, if you look at two customers
online and maybe you're selling tea as your only offer or part of your offer,
they could look identical based on their purchase history. They both bought
four ounces of Irish breakfast tea and four ounces of Darjeeling and they look
to be exactly the same, but if you really look at how they're behaving on your
website and if you can tap into what they're doing on social media, you may
find out that one of them really just wanted to buy tea and that's all they
wanted and that's all they're ever going to get, but you could find out that
someone like me is actually interested in Japanese cast iron teapots, which are
not inexpensive, and that's enough of a hint for an advertiser to get out there
and say, "Okay. How do we get this guy to the point where he'll buy another
one of those from us instead of just buying tea for $20 every couple months?"
Also, in terms of understanding your customers and what they want and when
they want it, in addition to capturing the data and getting that single view and
matching across devices, the data analytics part of it is becoming more and
more critical, and what we've learned at NaviStone is the ability to take that
data and make decisions about who is ready to purchase and what they might
be ready to buy is really one of the key components of what we do.
So, if you don't know who you're marketing to, you'll never get them to listen
to your message. That's pretty sure. So, Larry, what do you think about that?
Larry: I think you're right on. At NaviStone, people are using our data pretty well
right now to figure out where someone is in the path to purchase, but I think
actually as an industry where we're headed, is actually going to take a lot more
advantage of that interest type of data. In your black tea example, my guess is
you probably would have looked at more than just English black tea. You
probably looked at 50 different black teas, and that's probably giving someone
a clue that you're a very different kind of tea drinker than the person who just
went straight to the English black tea and purchased that and left. It's really
using the data to understand not just where someone is in their path to
purchase, but what they like.
I think where this is all headed, and Allen, I know because I know one of your
favorite TV shows, I know you'll be excited to hear this. I think this is all
headed to a place where the creative that we actually send to people becomes
way more important again. I know Mad Men is one of your favorite shows,
and certainly a lot of what they talked about in terms of how you craft a
message to appeal to a particular group, I think that is where we're going to
come back to. In fact, ironically, I think if you look at what's been happening in
some of the political campaigns, we're already seeing signs that that kind of
micro targeting with messaging is happening.
There's a story that was reported, I think it was in the BBC news, I think it was
also in a documentary, around the Brexit campaign, where the group that was
trying to encourage people to vote for Brexit micro targeted fishermen in a certain part of England and delivered through Facebook a message to them
saying, "Hey, if we vote to leave the EU, we'll get to control our fishing
regulations in our seas more effectively," and they did this not just to the
fishermen, but they did this all over the place, and that's where you're
combining that creative, the marketing message that's really going to impact
somebody with that audience targeting.
Ultimately, I think that's where we're all headed. But, of course, your ads have
to be seen in order for this to actually work, which brings me back around to
your trivia question about Google shutting down ads before they reach
Allen: Of course. Good segue, Larry. So, what do you think? How many ads were blocked by Google last year?
Larry: Well, like I said, I have no idea and so I'm a little bit torn in terms of thinking it
must be a small number because Google is a for-profit entity, you may have
heard, and giving up revenue doesn't seem to be in their nature. So, if I think
about it from a revenue standpoint, you said AdSense, so that's of course
Google's display network, not the pay per click where you're bidding on search
words. AdSense click-through rates are around .1 percent. Maybe someone
pays 75 cents for a click, so that means like 1,000 impressions. If they blocked
a thousand impressions, it costs them, I think, 75 cents, so if you expand that
out, if they blocked a million impressions, it would only cost Google $750.
So, as I think about it, as I sort of walk through the numbers, it's probably not
an economic question. It's more a question of how many bad ads do people
put out there, and so now you're getting into a human nature question. I tend
to be an optimist, so I'm going to guess what I think is a low number. I'm going
to say 500 million ads blocked. Insignificant revenue number for Google, like
$350,000, but I'm saying there's only that many bad ads out there.
Allen: Well, that's a good guess, and one of the things I've been thinking about is I
attended a conference not too long ago and there was a panel on fake news
and fake advertising and the editor of Forbes was one of the panelists and the
founder of Craigslist was one of the panelists. It was fascinating. So, it's not
only objectionable content. I'm wondering if there's a true/false monitor
somewhere in that Google process. Actually, you're way off because Google
blocked 1.7 billion ads in 2016.
Larry: So there are three times more bad people out there, more than that, than I imagined. Like I say, I'm an optimist. What can I tell you?
Allen: Yeah, and I'd wager that most of those 1.7 billion were completely unwanted
advertisements. Something that people wouldn't have looked at anyway, even
if they had been displayed because they want something that speaks directly
to them, and if they get that, they'll be responsive and they won't even know
they're being marketed to. They'll just think you're being helpful.
Larry: Well, it does make me a little curious as to what they are, but I have a funny
feeling if I actually saw them, I would wish I had never seen them.
Well, anyway, so that's it for this episode of Two Guys and Some Data. We'll
be back with more tips that can help you use data to actually make money. In
the meantime, if you're interested in reading more about customer
expectations, check out our article With Great Amounts of Consumer Data
Comes Great Responsibilities. Head on over to our website at
navistone.com\blog. If you like what you heard today, we encourage you also
to head over to iTunes and leave us a five-star review. Thanks for listening and
we'll see you next time. I'm Larry Kavanagh.
Allen: And I'm Allen Abbott and thanks for tuning in.