The Dog Ate My Analysis: The Hitchhikers Guide to Marketing Analytics

Pat LaPointe Journal of Advertising Research Vol. 52, No. 4, 2012

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The Dog Ate My Analysis: The Hitchhikers Guide to Marketing Analytics Pat LaPointe Journal of Advertising Research Vol. 52, No. 4, 2012

The Dog Ate My Analysis: The Hitchhikers Guide to Marketing Analytics

Pat LaPointe MarketingNPV The growth of analytics in the past few years has been nothing short of phenomenal. Sparked by the birth of digital commercial platforms and fueled by the emergence of big-datastreams and cloud computing, analytics has penetrated nearly all aspects of decision making in most Global 1000 companies. As is true in any bubble,however, peoplein this case, managersfall prey to irrational exuberanceand have a tendency to under-, over-, or mis-apply the tools to often ridiculous extremes. The problem is particularly acute in the marketing and advertising business. It is astounding to me that, with all the tools at our disposal, 99.9 percent of the ads I see or hear every day are actually meant for someone else. For example, while recently listening to Pandora on my iPad, I heard a commercial for a weekend sale at a car dealer located about 50 miles from my home in New Jersey. The experience was a little creepy, but mostly amusing, as I was in China at the time. Could Pandoras ad servers not bother to check whether I was actually anywhere near my home (or at least in the same country) before choosing the ad they played? Maybe this was just Pandoras way of enticing me to sign up for the premium, ad-free service. If the phone company mis-routed 99 percent of calls, however, we would all just disconnect our phones and go back to the old reliable post office. More recently, the escalating level of analy-babble in the marketing community about digital attributionand social chatter are on a trajectory to become such an enormous waste of company time that could be much better spent on the softball field or in quality improvement process training. Though some of the core principles and ideas under pursuit are sound, the execution is flagrantly illogical. For example, if you really want to know what proportional impact a series of digital advertising exposures have on my behavior, do you not need to actually see what I do when I am not online? Otherwise, are you not just over-analyzing a very small portion of my shopping and buying behaviors? Are you not optimizing within a small box just based on what you can see? Yet, marketers are transfixed by this concept of fractional digital attributionapplying rocket-science math to a rich but limited data set in the hopes of squeezing out some insight or evidence that will stand up to scrutiny. Extending this logic, you might
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attempt to attribute my health to what I had for breakfast this morning. This is precisely the sort of myopic approach that killed earlier generations of media mix models in favor of the more holistic strategic allocation methods in place today. In that case, the very narrow framing led to over-reliance on short-term tactical promotions and eroded brand loyaltya very dangerous bias that went unrecognized for years. I suspect there is a lesson to be learned here. Similarly, if your analytics is pointed at trying to predict what I will do next by monitoring my social comments online, let me save you the effort: I am most likely to stop posting and turn off my computer. What do you infer from that? That I am no longer interested in computers? (BTW, does it strike anyone else as amusing that we are spending so much time and energy applying analytics to monitoring aptly named social chatter? ) As social measurement moves beyond the volume and polarityphase into semantic analysis and natural language processing, we run the risk of once again being seduced by precise instrumentation into a false confidence that we are reading reality. Wrong. We are reading a thin slice of reality at best. Now, if that slice happens to reliably predict behavioral outcomes, we celebrate having caught lightning in a bottle. In the vast majority of cases, however, social voice is showing up as a great lagging indicator, not so much as a predictive tool (except, of course, for the extremes of negative or positive viral reactions). The final example returns to the ubiquitous use of marketing mix models. There is so much emphasis being placed on the search for the optimal level of spending and the most efficient allocation of media dollars. True, the underlying analytical techniques and tools have improved to the point where 20 percent to 40 percent more efficiency can be squeezed out of a marketing budget. Also true: these models now are more sophisticated in their ability to parse out the relative impact of a broad range of controllable and non-controllable factors and the indirect relationships that exist between tactics. Yet, despite all that analytical horsepower, the two biggest areas of potential marketing improvementstronger relative product value proposition and more effective advertising copystill are predominantly left to gut instinct. They are not, generally speaking, reflected in most of these models. Despite study after study showing that relative value proposition and message effectiveness are the most substantial influencers of customer purchase behavioroftenbyafactorof2to10overchangesinthemarketingmixmarketers remain steadfast in their preference to steer those intimate elements by hand. Year after year, billions of dollars are spent on tracking studies to measure brand attributes (at the DMA and segment level) that are predictive of nothing. Yet, funds are not allocated to tracking value proposition strength or relative message effectiveness. In the cult classic The Hitchhikers Guide to the Galaxy, author Douglas Adams tells the tale of a far-off race of superintelligent beings who pride themselves on the application of science and technology to better understand their universe. These intrepid heroes figure out how to teleport entire communities so they can more quickly go forth to find and analyze other civilizations on faraway planets. Having chosen Earth as a likely candidate planet for intelligent life, they precisely beam themselves across millions of light years of space, only to arrive and immediately be swallowed by a small dog, owing to a gross miscalculation of scale. I think of that passage every time I set out on an analytic journey, trying hard to keep the perspectives of scale, relevance, validity, and reliability front-of-mind, lest my advanced analytics lead me to arrive in a dark and smelly place.
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Pat LaPointe is executive vice president at MarketShare and managing editor of MarketingNPV Journal, available online at www.MarketingNPV.com. Email: plapointe@marketingnpv.com

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