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Phil Nottingham - How the best strategies start with the right metrics

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Slides from Learn Inbound 2016 in Dublin, exploring the problems with bad measurement and how this affects strategy.

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Phil Nottingham - How the best strategies start with the right metrics

  1. 1. @philnottingham
  2. 2. Boston, Massachusetts is a lovely place, but it has a number of problems.
  3. 3. Chief among these problems is…
  4. 4. The mayor’s office had a bright idea to fix this
  5. 5. And it worked incredibly well!
  6. 6. Except there was one problem…
  7. 7. The app was used primarily by Boston techies, who have a lot more money than the majority of the population
  8. 8. And so the data suggested that the potholes in the rich parts of the city were causing the most problems
  9. 9. GARY KING, HARVARD UNIVERSITY “This was an example of really bad analytics and it’s even worse because it’s the kind of thing that feels like it should work and does work a little bit.”
  10. 10. What they think they’re solving for The most problematic potholes
  11. 11. What they’re actually solving for Potholes near rich people
  12. 12. What they should be measuring Potholes in areas with highest density of traffic
  13. 13. When we don’t know how to properly read and interpret data, gathering it often causes more problems that it solves
  14. 14. I think this is an endemic issue in digital marketing
  15. 15. 1 Valuing everything by ROI 3 Problems
  16. 16. 1 Valuing everything by ROI 2 Treating all metrics as KPIs 3 Problems
  17. 17. 1 Valuing everything by ROI 2 Treating all metrics as KPIs 3 Misaligning goals, channels and content 3 Problems
  18. 18. 1 Valuing everything by ROI
  19. 19. (Gain from investment - Cost of investment) Cost of investment ROI =
  20. 20. What you think you’re solving for Efficiency & efficacy of spend
  21. 21. So, you try to put a monetary value on all activities
  22. 22. The most common, and egregious way of doing this is with last touch attribution
  23. 23. Session 1 Session 2 Session 3 Session 4 Last Touch Attribution
  24. 24. When you use last-touch attribution, this is how you end up valuing the different parts of your website…
  25. 25. Product Support Blog Pricing Contact Pretty good! Meh? Rubbish Great! Amazing!!!
  26. 26. MATTHEW ZOOK, UNIVERSITY OF KENTUCKY “Once something gets measured and put into a model then everything starts optimising around that metric.”
  27. 27. No-one in their right minds would read this blog post and then buy a car insurance policy, but when you value your content by how it contributes to conversions… then you end up trying to make that happen.
  28. 28. A slightly better way to measure value is a linear or time decay model
  29. 29. Session 1 Session 2 Session 3 Session 4 Linear Attribution
  30. 30. What you think you’re solving for Efficiency & efficacy of spend
  31. 31. What you’re actually solving for Conversions
  32. 32. But this still has issues with any activity designed for brand building.
  33. 33. Lets take the example of PR
  34. 34. Earlier this year, my boss Chris Savage was on BBC news
  35. 35. Gut feel tells you that this is really good PR coverage
  36. 36. Here’s what the return looked like in Google Analytics
  37. 37. 500 visits 0 Conversions ~$10,000
  38. 38. Even with linear or even first touch attribution, this looks like incredibly poor return
  39. 39. But… maybe we can measure the value of this TV spot instead as if it were a bit of TV coverage
  40. 40. The way TV was historically measured was via impressions and how it contributed to brand salience (as determined by recall surveys)
  41. 41. This was an ok way to measure TV 30 years ago, when there wasn’t many other marketing or advertising channels available
  42. 42. But today… there’s just too much noise to make such data meaningful. Brands who still measure in this way dramatically over value TV
  43. 43. AN ALL TOO COMMON RESPONSE TO THIS PROBLEM “Lets temporarily stop all other brand activities so we can properly measure PR…”
  44. 44. But we know that PR, or advertising, or other brand building activity never works in isolation. Stopping everything necessarily reduces the efficacy of the activity you’re trying to measure.
  45. 45. So we’re left with the conclusion that…
  46. 46. ROI is just a bad way to measure PR
  47. 47. Think of it like a soccer team.
  48. 48. #WistiaFest / @philnottingham
  49. 49. “ROI” in a soccer analogy is the number of goals scored.
  50. 50. However… you wouldn’t measure every player on how many goals they score, or indeed even how they contribute in terms of assists.
  51. 51. Goal keepers are measured by saves, defenders by tackles, Midfielders by passes up the field, and strikers by goals and assists.
  52. 52. Yet you need a well rounded team, with all the different players, to be successful.
  53. 53. If you measure everything by “ROI”, you’re building a team of strikers.
  54. 54. THE WORST CLIENTS OF ANY SEO AGENCY “How much is this link worth?”
  55. 55. Anyone in SEO who’s had this question knows how problematic and widespread this mentality is.
  56. 56. What you think you’re solving for Efficiency & efficacy of spend
  57. 57. What you’re actually solving for Conversions
  58. 58. What you should be measuring A sensible proxy for ‘value’
  59. 59. Effectiveness Sum (DA^2) Efficiency KPIs for PR Sum (DA^2) Cost
  60. 60. 2 Treating all metrics as KPIs
  61. 61. Everything needs to go up. We need to get more conversions, more traffic, more links, lower bounce- rate…longer time on page etc…
  62. 62. What you think you’re solving for Optimising breadth of value
  63. 63. Here’s an example from a brand I was working with recently.
  64. 64. They appreciated the potential value YouTube could bring to their marketing, and so tried to optimise their activity for all possible value
  65. 65. Views Retention Shares Subscribes Click-Throughs Conversions TrueView Advertising Shorten Video Include Share CTA Include Subscribe CTA Include Link to Website Track Click-Through Conversions
  66. 66. What you think you’re solving for Optimising breadth of value
  67. 67. This created a frankenstein’s monster of a video that had no value.
  68. 68. What you’re actually solving for Nothing
  69. 69. What you should be measuring One specific, qualified variable
  70. 70. Here’s how we’ve tried to do this at Wistia
  71. 71. Effectiveness View-through Conversions Efficiency KPIs for YouTube Advertising View-through Conversions Cost
  72. 72. 3 Misaligning goals, channels and content
  73. 73. Here’s a strategy I was recently handed by a global insurance business
  74. 74. Strategy Industry Finance Audience Millenials Content Explainer Videos Channel LinkedIn Goal Sign-ups Distribution Budget £1M
  75. 75. What you think you’re solving for Integrated Strategy
  76. 76. Channel ContentAudience
  77. 77. The problem is that the strategy had no overlap in the channel, the audience or the content
  78. 78. Strategy Industry Finance Audience Millenials Content Explainer Videos Channel LinkedIn Goal Sign-ups Distribution Budget £1M
  79. 79. No amount of budget in the world can make this strategy work.
  80. 80. What you’re actually solving for Discrete, unconnected and fragmented problems
  81. 81. What you should be doing Creating content on channels appropriate for the goal and audience
  82. 82. Goal Audience Channel Content Distribution Metrics KPI What are you trying to achieve? Who are you trying to reach? Where can you reach them? How can you meaningfully engage on this channel? How can you get your content to the right people? What can you accurately measure? What’s a good proxy to measure the goal? Strategy Questionnaire
  83. 83. Here’s an example of how we recently applied this plan to Facebook video
  84. 84. Goal Audience Channel Content Distribution Metrics KPI Strategy Questionnaire Brand Awareness People working on video for social media Facebook Competition
  85. 85. We created a test video to see if there was any latent demand for this kind of content.
  86. 86. It worked!
  87. 87. Goal Audience Channel Content Distribution Metrics KPI Strategy Questionnaire Brand Awareness People working on video for social media Facebook Competition Promoted Posts, Word of Mouth
  88. 88. We then encouraged further distribution with a bit of light influencer marketing
  89. 89. Goal Audience Channel Content Distribution Metrics KPI Strategy Questionnaire Brand Awareness People working on video for social media Facebook Competition Promoted Posts, Word of Mouth Views, Audio, Retention, Likes, Comments, Shares Page Likes
  90. 90. Effectiveness Page Likes Efficiency KPIs for Facebook Competitions Page Likes Cost
  91. 91. This lead to a 30% increase in overall page likes over the duration of the campaign, at a cost of about $2 per like.
  92. 92. • Bad Data < No Data • Measure everything, but always optimise for just one KPI • Only use ROI for direct response & conversion activities • Ensure alignment of content with channel and audience • Tie everything back to the goal Takeaways
  93. 93. Thanks! Please feel free to follow me on the Twitters! @philnottingham

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