If It Ain't Broken Don't Fix It

Last week I became involved in a discussion about metric selection. I proposed moving away from using Click Through Rate as the primary indicator of the success of the campaign. Some where along the line the rationale of "It has worked in the past, why move away from it?" All of a sudden I had the feeling deja vu. It gave me an uneasy feeling, flashes of a high school debate on whether or not the electorate college should be abolished. It was debate in where someone used the reason "If it ain't broken, don't fix it" as a reason to keep the electoral college. Back then, I felt that there was something inherently wrong with that reasoning..



How do you know if something is working? How do you know if something is NOT broken? The idea of if something is broken is arbitrary, its in the eye of the beholder. Using CTR as the KPI on a campaign is probably not the best indicator of campaign performance, regardless of the goal of the campaign (I'll make a data case for this in a future post..) In this case the CTR could be used to optimize a campaign to achieve higher CTRs. We can take our optimizations of CTRs to the client and tell them that we've made the campaign performed better. Yay! They are going to be impressed, because this is what we did in the past and they were happy in the past. Unfortunately, people don't live in vacuums tubes; things change, people change. The client may have come to realize that CTRs may not be the best indicator of performance for the campaign's objectives. Maybe there is a new brand manager who has seen it done differently. The optimization process is this case is broken, because the client says it is, while we thought it wasn't; in the eye of the beholder. At any rate, we'll be stuck with explaining/defending the rationale for why we did what we did. We can always break out the trump card, "If it ain't broken, don't fix it." I kidd.

As of lately, we're seeing a lot of companies declaring bankruptcy and many others are near the brink of doing so. I'll spare us the details. When we are in a situation where we are okay with operating businesses as we've done so in the past on the rationale that its worked in the past and/or operate on assumptions or do things that we know are not right, can we really write everything off as a string of bad luck? Maybe the situations for some of our companies might not be as dire if these practices and the culture of settling were not so prevalent.

The next time we think about settling and doing things as they've "worked" in the past, I hope we'll all think due diligence, do whats right, innovate. At the very least, it'll keep us from getting an uneasy feeling.. "Never Settle, Never Stop."

Digital Ad Spend and the DisConnect

I've heard many within the industry say that the Digital ad space should be shielded from most of the experienced in the economy. After all, digital advertising is accountable, it takes less to attain that reach, there is no upfront commitment, etc. When money is allocated to marketing, it should be spent online first. So with the recent turn in economic conditions, in theory companies should be looking to spend money in marketing channels that are more efficient and accountable. Digital advertising spend should maintain consistency and maybe even experience some growth.

Lets look at how companies approach budget allocation for advertising. Most brands haven't achieved a method in quantifying the value and ROI of advertising. There is a disconnect between finance and marketing. The CMO and their team is responsible for the marketing/advertising but at the end of the day, the budget allocation for marketing comes from the finance group. The finance group generally does not have the same appreciation of the value of advertising and marketing. Without a reasonable measure of ROI, the general view of marketing from a finance's point of view is that its value can not be demonstrated, its spending becomes discretionary.

In Q4 2008, we've already seen many brands cut their already budget allocated ad spend for Q4. I am interested in hearing from people within finance on how the marketing budgets have been reallocated and what the mandates on budgets from management have been.