July 24, 2014

What Has Changed Since "Hillstrom's Catalog Marketing PhD"?

This booklet came out at exactly the right time in history ... 2010, coming out of the Great Recession.

Catalogers were busy finding ways to trim expenses. The key methodology in the book (click here), called the "organic percentage", would finally answer a question that nagged our industry for a decade ... "why, if matchbacks prove that catalogs drive online traffic, are catalog businesses not growing?"

The organic percentage was derived from mail/holdout tests. Repeatedly, I noticed that when catalogs were not mailed to online buyers, half or more of the demand still happened. And in a retail environment, ninety percent or more of demand still happened! All of this demand was matched back to the catalog, causing catalogs to get credit for orders catalogs did not cause.

It became obvious why matchbacks were touted so heavily by the vendor community.

  • By giving catalogs credit for orders catalogs did not create, co-ops generated more revenue, paper reps generated more revenue, printers generated more revenue, merge/purge vendors generated more revenue, and basically all vendors supporting the catalog industry generated more revenue ... for them.
I had to write the booklet. 

For the next twenty-four months, the consulting projects rolled in. This book, coupled with blog articles, resulted in about 70% of my consulting revenue in 2011.

What changed?

Big Data and Attribution.

The vendor community rebranded matchbacks as "attribution". Now, more sophisticated techniques are used to parse the twenty-four channels a customer touched, in order to understand how each channel impacted the order. Most of the time, the attribution routines are as flawed as matchbacks ... not employing any semblance of print mail/holdouts, email mail/holdouts, or search spending changes to identify incremental orders.

And big data is the center square in your buzzword bingo game. Now, you have to combine data from myriad channels and sources, so that you can unearth nuggets of gold in your database. Your data has to be linked to "the cloud", so that vendors can absorb your customer purchases, merging them with social data and mobile data, allowing the vendor to make money off of you. Yup, your vendors slice and dice your data and re-sell your own data back to you, in a different form. In other words, the Catalog PhD seems dated in a world of a thousand channels, big data, and attribution routines.

In reality, the concepts in the Catalog PhD booklet will help you be just that much smarter, because the concepts apply to the big data / attribution environment that dominates marketing four years after the release of the Catalog PhD booklet.