Taguchi Optimization Claims Success

In a rare display of serious mathematics in advertising, Kowalick, Inc.’ James Kowalick introduced the Taguchi method of ad testing. The Taguchi method was first invented in the 1950 by a brilliant Japanese electronics engineer who later used it to propel Japanese car manufacturers to the forefront of the automotive industry.

In it’s simplest form, the Taguchi methods takes the grunt work and prolonged time out of testing using combinations and permutations of multiple variables in an ad campaign. For example, in an email campaign, the system can test thousands of variables such as subject line, text, price of offer, sender address and images. The method is automated through a software package that manages the pre-determined test variables and automatically determines the optimal combination of variables. The system has been proven to increase campaign success by hundreds to thousands of percent. This is certainly a bold claim, but it has been shown to work many times. In this session, the success was demonstrated by a case study for a computer manufacturer that increased campaign response from 0.1 percent to 3.7 percent.

Currently, Kowalick is conducting an optimization case study for his own company, which is uses the Google AdWords program. Results were promised by summer.

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Networks Will Bring Scale to Contextual and Behavioral Marketing

The session on Packaging Online Audiences was moderated by Interep Interactive SVP Tim Mahlman. The panel included Mass Transit Interactive CEO Jason Heller, Wall Street Journal Online Advertising VP Randy Kilgore, Tacoda Systems CEO Dave Morgan and Revenue Science SVP Peoduct Marketing Omar Tawakol.

While much of the session was bogged down by long-winded statements that could have been made in less than half the time, the panelists were in agreement that behavioral targeting and contextual targeting are not in competition. The two will work towards bettering the ability of advertisers to increase relevancy. The biggest change coming to the targeting category will be the formation of behavioral and contextual ad networks. Mass Transit’s Heller said this move to networks will make it easier for advertisers and agencies to scale their behavioral and contextual efforts.

Measuring Word of Mouth Effectiveness

Measuring WOM (Word of Mouth) Effectiveness was moderated by Intelliseek CMO (and Customer Satisfaction Officer) Peter Blackshaw and featured buzzworthy experts like Dave Balter, CEO of BzzAgent, Jonathan Carson, President and CEO of BuzzMetrics and Steve Knox of the Tremor Division of Procter & Gamble.  P&G’s Tremor is looking at how much of the packaged good giant’s marketing budget should go to Word of Mouth. The message from the agency and measurement side was that as this growing field becomes more measurable and predictable, then increased budgets are justified. 

Tremor’s experience yields two insights:
1. There is a key difference between trendsetters and trendspreaders (and you need both)
2. Trendspreaders will only advocate your brand if its easy for them to talk about. Some products (e.g., Depends, teeth whitener strips) are embarrassing to talk about and do not lend themselves to WOM marketing.

Some take away buzzwords: “CGM” (Consumer Generated Media) and measuring your customers’ “virality”

The panel announced the formation of WOMMA (http://www.womma.com) the Word of Mouth Marketing Association. You can tell a marketing discipline has arrived when it generates its own industry association.

Best quote:
“The measurable propensity of a customer base to recommend a product or a service is fast emerging as the single most important driver of brand equity.”

Sales and Marketing? No, Consulting.

Session: Optimize the Buying Process (Transactional Vs. Consultative Marketing Models)

Todd Forsythe, vice president of global marketing for Oracle Corp. wasn’t able to make it to Ad:Tech, but his proxy, Bill Carper, senior director of global marketing, stepped up with fine style and a solid, last-minute presentation about Oracle’s approach to transactional and consultative marketing.

After quickly riffing through the primary differences between transactional and consultative marketing, Carper used several campaign case studies to highlight the tactics and strategies Oracle applies to consultative marketing. While the value of transactional marketing is clear, I’m much more interested in and fascinated by the nuances and complexities of consultative marketing. Your organization becomes a consultancy of sorts. You focus on solving business problems, not merely selling a product or service. And you approach existing and potential customers in a very different way.

While Carper covered a lot of ground over the course of almost an hour, the key takeaways from his session are as follows:

• Identify a pain point.
• Focus on business needs and solutions.
• Be prepared to walk away. “Some stuff is not worth winning,” he says. “It behooves you to walk away from accounts that just won’t work. It’d be smart to spend your money somewhere else.”
• Synchronize customer contact. Connect your marketing and sales efforts by aligning activities to the stages in your sales cycle, enable one-to-one account-based communication, and market to and through sales. “Market through sales,” Carper said. “As a marketer, that’s a little hard to swallow, but if you’re smart, you’ll realize that field sales have a lot of enterprise knowledge.”
• Influence the influencers. “Influencers are either subordinates in an organization or peers - or a third party outside the company. Enlist them as advocates to generate awareness, interest, and add credibility to build demand.”

While BzzAgent’s Dave Balter might challenge the importance of the role of the influencer, Carper’s consideration of working with the sales team - and outside partners - is as insightful as his comments on surrounding potential clients by targeting multiple executives within a company. In fact, the closing statement of his presentation could warrant a session of its own: “Develop strong agency relationships,” he says. “Work to develop partnerships. Don’t approach agencies as vendors.”

The parallels between agency partnerships and consultative marketing are intriguing. And Carper may have said it best himself: “We essentially played a service bureau role in this case.” Is that the future of consultative marketing?

A full transcript of this session is also available.

Ramsey Predictions Pitted Against Tchong Trends

Session: Is Your Guess as…? Interactive Outlook

This session pitted Trendsetter Trend Analyst Michael Tchong against eMarketer CEO Geoffrey Ramsey in a battle to predict the future of online marketing. Tchong and Ramsey donned their boxing gloves in a nine round pro/con style debate, with each full round ending with the audience participating in an SMS based, real-time vote in the relevant issue.

B2B Audiences, Understanding Grow Slowly

Session: B2B Interactive Marketing Strategies

I popped by the B2B Interactive Marketing Strategies session this morning. Business audiences are certainly harder to aggregate online. All panelists agreed on this. They also seemed on the same page when it came to big brands often making big mistakes with this audience.

According to eMarketer, the B2B audience today represents 12.8 percent of total online ad dollars. This is projected to hit 14 percent by year end. While slow growth is expected in both short- and long-term outlooks, we need to take a step back and consider a few things we’re doing with the existing audience. Think of a few top B2B brands and check out the sites. What do you see? Then look at B2C sites. Almost everywhere you look, you’ll see smatterings of business-related copy. The brands are failing to differentiate the content with the different audiences.

The panelists and audience harped on the misuse of Flash. (Seems to be the topic of conversation in most sessions and hallway discussions here.) My pal Scot McLernon of CBS MarketWatch spoke of their use of “intramercials.” He said, “It’s a small price to pay to see content 24/7 that you can pull anytime you want.” Hmm…

Ad-Tech Tsotchke Report, Day One

We’re still a long way from the glory days of trade show tsotchkes, but if the Ad-Tech give-aways are any indication, things are looking up for Internet marketing.

Sure there was the usual assortment of pens, mints and stress balls that have been the sum total of the loot at trade shows in the past three years. But there were a couple of really cool goodies and promises of more to come over the next two days.