Over the years, I’ve spent many a frustrating hour explaining why online selling is coming/is here/is here to stay/is just in its first phase and so on. I’ve debated it internally as a marketing strategy when people were still getting used to email and as a fact of life and within BETA Council meetings when certain people were hoping to ‘ban’ it (how, exactly?!). I even found myself having to defend it at the end of a speech to the National Equine Forum! When it comes to e-commerce, I’m quite firmly planted in the ‘Pro’ camp.
And yet, not everything in the virtual garden is rosy. Chiefly, look at the way digital marketing is measured and made accountable.
Once upon a time, you’d spent £X on a direct marketing campaign, divide the number of orders it yielded into the number of customers contacted and get a Response Rate. You’d also divide the revenue it brought into the aforementioned number of orders yielded and you got an Average Order Value. All you needed was a trustworthy ‘quote the code’ response mechanism. You knew how many copies you were sending out so, aside from all the sales, you also got a lovely source of comparison data. Then, using something called segmentation, you could have even more nerdy fun, all the time seeing how much money you were making.
Compared to retail, which struggled to tie a transaction to a name in a database (although that’s more achievable now), all this customer-centric data was a revelation. Information that became knowledge, which, as we all know, is power.
And then along came the Internet – simultaneously the biggest blessing and the greatest curse to hit direct marketing. Yes, it offered 24-hour, borderless trading, much greater agility in presenting one’s offering, a promise of cost-free mass mailing, something called social media and so much more lovely data! How many people viewed page 26 of your paper catalogue? No idea but I know how many online views we got for each of the products it features.
Online selling offered nothing short of a revolution of data and visibility – if marketing went from the Medieval era of retail to the Renaissance of direct marketing, the web quickly whizzed us through the Industrial Revolution and straight into the Space Age. Cosmic, man! ‘Newer’ equals ‘better’, doesn’t it?
Well, yes and sometimes no. This myriad of metrics may look like your friend but it can often give you useless information – or worse still, misleading data that fails to alert you to a problem. Sure, if customers want to buy online, you have to operate in that space but e-commerce tends to make a huge mess of your internal reporting – for two main reasons:
1) There’s no clear link of ‘cause and effect’ between your stimuli and your incoming orders like there used to be, which means you can’t make solid conclusions about your effectiveness and efficiency quite so easily. Consider the paradox that spending more on offline material increases web orders because, guess what, people will always do what suits them and not follow the ‘rules’ of whatever tidy flow-chart we might be tempted to think they inhabit. Now, if a sale depends upon both a stimulus (to compel a customer to order) and then a referral (where they may need to find your site as a means to place that order), do you credit the offline activity or a Google Adword for that sale? What if there are more than two stages to the process? Even if you know when all of this is happening, how do you decide to attribute each of those sales?
2) Most of the data on which you depend isn’t generated internally any more, raising questions about its reliability. Data collation is now usually subcontracted to the very digital channels you use: Google, Facebook, Twitter, whatever SEO ‘partner’ you’re using, Remarketers, Affiliates, email handlers and so on. At best, they’re all innocently taking sole credit for potentially the same order (see above); at worst, it becomes a case of paying a bunch of turkeys who keep telling you it isn’t Christmas. You can’t replicate their data (which usually forms the basis of their charges) but you do know that if you add up all the ‘sales’ that each of them claims to have led you to, you should be turning over far more than you actually are. Something is amiss but you’re next to powerless to find out any more than that.
You have paralysis by analysis: more information than you can handle and less knowledge than ever before – and a nagging feeling that somewhere along the line, some of this lack of clarity is hurting you.
If you think this is just me checking into middle age by having a rant about the object of my prior fascination, you may have a point but bear this in mind: clients like The Guardian have started to sue agencies that they believe are misreporting their own performance stats. The incoming Chief Brand Officer of Proctor & Gamble recently gave a blistering speech in which he told the digital ad world in no uncertain terms to clean up its act, provide the transparency that clients always used to expect or kiss goodbye to the promotional budget that supports P&G’s $65bn worldwide sales revenue. There’s a sense that a fightback has begun against the charlatans and snake oil salesmen and that, in time, better regulation of one form or another, will follow.
To answer the incendiary question I initially posed, the Internet hasn’t gone too far – it has indeed, as Karen Carpenter once sang, only just begun. The Web has, in a human generation grown from a preposterous daydream to dominating most forms of marketing. Inevitably, its forms of regulation and control have struggled to keep pace. Perhaps they always will.
Whatever happens next, an important lesson is there to be learned: it’s still selling, the same as it ever was. Just because it’s on the Internet doesn’t mean the same basic rules, disciplines, checks and balances that we came to expect in the analogue world shouldn’t continue to apply.
- Look out for my next column, about the difficulties of applying simple rules to resolving customer disputes, in the September issue of the ETN, out September 1st.