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.