Powerball Vs. Moneyball Marketing

by , Feb 27, 2009, 10:15 AM
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February marks the slow transition from pro football to Major League Baseball, and while dissecting Superbowl advertising and Theo Epstein's off-season maneuvers, my thoughts gave way to a new view of marketing in 2009. I'll characterize it this way: "There are two kinds of marketing executives in the world - Powerball marketers and Moneyball marketers." Chalk my revelation up to sports deprivation, but you have to admit this analogy aptly describes how marketing executives are approaching their jobs this year.

Powerball marketers cross their fingers and hope for great outcomes. Powerball, the nation's largest lottery, promises million-dollar payouts, but not the best odds. Playing Powerball is easy; first you pay money and then you guess numbers. Whether you're right or not is completely up to chance. Sound familiar? It's hard not to compare Powerball to marketing, but it's not the size of the bet that matters, it's how marketers use the information they have at their disposal that delineates a blind bet from a smart investment.

Take the Denny's Free Grand Slam campaign, an effort to drive trial and traffic for the restaurant chain. How do you measure whether the campaign was a success? From my perspective, getting two million people to show up for free food is noteworthy. But what matters in the end is whether they come back again. And by this measure, the campaign seems like a flash in the pan. Why? According to Compete, the number of people who visited www.dennys.com increased 20-fold immediately after the Superbowl, but consumer interest since then has receded all the way back to pre-advertising levels. Using consumers' online behavior as a proxy for offline marketing impact, this suggests that Denny's strategy fed a short-term need, but isn't likely to change consumers' long-term behavior. Seriously, can a single Grand Slam be so remarkable that consumers remember to choose it over closer, more familiar alternatives? This seems like a big bet with Powerball odds.

Moneyball marketers start with data and then engineer the outcomes they want. Moneyball is the opposite of Powerball. The term was popularized by Michael Lewis in his book "Moneyball: The Art of Winning an Unfair Game," itself a great description for the new marketing zeitgeist. The basic concept is that the conventional wisdom about creating championship-caliber baseball franchises is patently wrong. In contrast to intuition, math-heavy Sabermetrics relies heavily on empirical data and a battery of new analytics to predict the outcome that matters most - winning games. Sabremetrics practitioners rely on new statistics like "on-base percentage" and "runs created" to breakdown individual player performance and better understand how each contributes to winning. The parallel to marketing is clear - better metrics and better models yield a better game plan that can consistently beat competitors.

Looking for good examples of Moneyball marketers? Hulu, the two-year-old online video service, comes to mind. Like Denny's, Hulu also bet big on a Superbowl ad to propel consumer adoption. But this was a smart investment; daily usage of Hulu is now twice as high as it was before its ad ran. The difference between the Hulu and Denny's strategies is critical. For Hulu, simply exposing new people to its service was enough to change their behavior - high quality, free, easy-to-navigate online video is indeed remarkable within the first visit. While it's tempting to think that Hulu just got lucky, and that its success was not a result of intense statistical analysis, this would be short-changing the strategy. Moneyball marketers start with the outcome in mind and then deliver the most important metrics to achieving that goal. To that end, Hulu executives smartly identified that for their service, a prior visit to the site truly is the best predictor of whether a consumer will visit in the future, and invested in the Superbowl ad to drive visitation.

We're nearly sixty days in to 2009 and no one can predict where the economy and consumer spending are headed with any certainty. What is clear, however, is that we are in a Moneyball marketing environment and that using conventional wisdom to manage your marketing can have catastrophic results. It's time to abandon the old Powerball philosophy - I'll see you on the field.

Stay tuned for next month's post: How to become a Moneyball marketer.

0 comments on "Powerball Vs. Moneyball Marketing".

  1. Giuseppe Zuccaro from www.marketing-consigliere.com
    commented on: February 27, 2009 at 10:32 a.m.

    The Denny's analogy is off mark.

    The call to action was go visit Denny's for a free breakfast. Returning to the website after the event isn't part of that transaction or necessarily critical to the customer relationship at this point in time.

    Maybe people originally visited the website merely to look for the nearest location. Now they are aware of the location and may have returned there without the website "knowing," and ultimately sales from visits to the restaurants are now the metric, not web based numbers.

    It's still a brick and mortar world to a large extent.

  2. Arthur Einstein from Loyalty Builders
    commented on: February 27, 2009 at 11:14 a.m.

    If I were Denny's I'd have had a follow-up strategy. One exposure doesn't make a customer. The second visit is critical.
    And I certainly believe in the Moneyball approach. Metrics will make you money as our Loyalty Builders clients have been proving for a decade. And getting someone to actually experience a product or service is a critical step in building a brand, which Proctor & Gamble has known for decades.
    I love the whole Powerball vs. Moneball idea.
    Can't wait till we see the next installment

  3. Paula Lynn from Who Else Unlimited
    commented on: February 27, 2009 at 12:41 p.m.

    This is not an either - or proposition.

  4. Joshua Chasin from comScore
    commented on: February 27, 2009 at 1:15 p.m.

    Hi Steve. Good column. I enjoyed reading it.

    Regarding Denny's, though, this is a case where the impact of the campaign can't really be seen online. Presumably the objective was to drive trial, in order to generate store traffic and hopefully repeat visits. I don't think there was any goal involving long term increase in web traffic. So in order to gauge the effectiveness of this campaign, one would have to be able to quantify, say, same store revenue YOY in the months following the promotion. This is not a case whee you can use online behavior as a proxy for offline behavior. We talk a lot at comScore about the latency affect of onloine advertising-- both impact on subsequent sessions, and on offline purchase. I think this is one of those cases.

    Still, point taken re: Moneyball versus Powerball. You ask me, the winners in this economy will of necessity be the moneyball players. We all love ROI in marketing, and let's face it, Theo Epstein manages to get a hell of an-field ROI.

  5. Will Larson from Ticketmaster / Live Nation Entertainment
    commented on: February 27, 2009 at 2:25 p.m.

    I agree with the comments above and absolutely must say that the average Denny's customer is a small step up from the average McDonald's customer. They're barely online! They just got laid off and they can't afford computers. The online traffic was from frugal, web savvy people like myself who are hunting down the plethora of deals during this recession. We won't be loyal customers until it's our turn to be laid off. Yes, I went to the Denny's website on Superbowl Sunday. No I didn't go in for a free Grand Slam.

    My point: the free grand slam was a definite powerball strategy that cannot be measured by web traffic--but maybe the unpublished market research that Denny's is undoubtedly conducting will demonstrate success.

  6. Paula Lynn from Who Else Unlimited
    commented on: February 27, 2009 at 2:41 p.m.

    So is anyone adding in the added value of Denny's PR going this much further than the give away? Would their meals served be more this year with it this image advertising or without it? How measurable is it as the expendable income decreases? How many people reading this are going to go to Denny's because of their freebee or because they read about it or read about it here? Is anyone going to be talking to other people about it? Will it help make their decisions? ROI?

  7. Dimarco Stephen from Compete
    commented on: February 27, 2009 at 3:39 p.m.

    Thanks for the comments.

    Did anyone go to Denny's on Feb. 3? Was it so remarkable that you'll go back again (and pay)? If the answer is no, then the Denny's campaign was a classic Powerball stunt.

    Here's a Moneyball strategy:
    Run the Superbowl Ad. Drive people to search engines and your site to find the nearest Denny's location. When they come to get their free meal, give them an online promotion code and an incentive to join the "Grand Slam Club" on the Denny's site. When people register, use their zipcode to create a Grand Slam-Google Maps mash-up to show how consumers are supporting the campaign across the US. Extend the campaign by getting people to invite their friends to Denny's for a free breakfast. Create a groundswell - ask members to compare Denny's bacon to McDonald's bacon. For god's sake don't just let the campaign die within 24 hours - use the web to get people to get people to come back again.

    Don't think for a second that the web can't be used as a channel to engage retail consumers. There are too many good examples (Doritos, Pepsi) that have tapped the web as a critical element in successful campaigns.

    Denny's created a tremendous surge in interest online and then let it disappear overnight. It's not that online isn't a good proxy for offline, it's that Denny's didn't sustain the online interest the campaign generated. And I suspect the sales and market share results will show it.

  8. Tj Mahony from FlipKey
    commented on: February 27, 2009 at 4:22 p.m.

    I'm surprised a representative from comScore would say that the Denny's campaign was not relevant to online demand measurement. If there was a 20x increase in site traffic why would any marketer not use that as a barometer for comparative performance for past and/or future campaigns. Site visitation proxies interest, interest relates to demand, demand translates to promotion/sales take rates.

    Yes, the ultimate success of the campaign will be measured in dollars at the cash register, but if you want to gauge relative recall success why would you ever ignore your web presence? Especially if your company sells web analytics?

    I will admit I didn't visit Dennys.com (I'm not a breakfast person), but I hope the campaign offered a coupon or promo print that could be obtained for nothing more than a simple online registration. The success of a giveaway campaign relies on repeat business and there is no better way to drive repeat business than through well planned email based loyalty marketing. Study after study shows direct email marketing yields the highest ROI of any channel, so if Denny didn't obtain a ton of opt-in emails during this campaign they missed a major component of their opportunity. (Note: I do not work for an email marketing company - just stating my opinions).

  9. Giuseppe Zuccaro from www.marketing-consigliere.com
    commented on: February 27, 2009 at 4:50 p.m.

    Steve diMarco and TJ Mahoney have given great rebuttals to my comment. I have learned from this. I won't speak for anyone else, but thank you for the quick and reasoned response.

    Cheers,

    Joe Zuccaro
    www.marketing-consigliere.com

  10. Pat Lapointe from Growth Calculus
    commented on: February 27, 2009 at 6:31 p.m.

    Steve - Nice post. Great bumper-sticker idea for marketing. You're right on target that Denny's could have used online vehicles to drive more tangible engagement with customers off the superbowl investment. Big swing-and-miss there.

    But I think Josh (not that I need to speak for Josh) is also right in pointing out the dangers of "Using consumers' online behavior as a proxy for offline marketing impact..." In some categories, QSR being one, that's just not a sound assumption ... yet. Inevitably, with the help of guys like you, it will one day soon be.

  11. Jim Sofranko
    commented on: March 2, 2009 at 11:43 a.m.

    I think it is pretty preposterous to compare Denny's and Hulu...the thought that people would want to come to Denny's website for anything other than a coupon and potentially to see where the closest Denny's is located is ridiculous. Denny's is not a content compan,y however, they did use the Super Bowl to raise the awareness of their breakfast offering and as you stated the success of the campaign will be the lift they receive from repeat visitors who took them up on the free breakfast offer.

    Hulu is obviously an online content company and the success of the Super Bowl ad can be measured by the sustained traffic and consumption on their website. They do not have a brick and mortar presence so comparing them to Denny's is off the mark...unless you want to see how many consumers are stopping by the Hulu store to buy videos!

  12. William Lederer from MediaCrossing Inc.
    commented on: March 2, 2009 at 10:46 p.m.

    Great topic and POV.

    Stephen DiMarco of www.Compete.com uses one recent high profile marketing campaign to illustrate the too common phenomenon of incomplete marketing integration in campaign design and execution. In particular, the Denny's campaign underlines the compelling need for both online and offline marketers to compete through fact-based, end-to-end analytics(i.e., MROI-based Moneyball).

    "What you cannot measure you cannot manage". If you are reading this column, then I know you are with me...and Stephen...on this point. That a marketer is analog and not digital does not excuse the fact that he/she needs to be accountable for what and how he/she spends and that marketers can never achieve enough Voice of Customer.

    "I waste half my ad dollars, I just don't which half". "It takes too much time, effort, and expense to track my customers anyway". To mix a metaphor, Denny's should be applauded on its bold execution, but data ostriches don't win ball games...data geeks do. The fact is that TV advertisers want and need the digital measurement tools internet marketers have come to depend upon. Without them, TV as a medium cannot hope to fix its broken model.

    Denny's missed an easy chance to measure better and to keep the conversation alive with its customers and prospects. Next time maybe they will invite a digital marketer/researcher like Stephen to the creative briefing at their agency if they really want to...Compete.

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