January 09, 2011

From Database Marketing to Web Analytics

Have you seen this chart?

I have.  The Web Analytics community likes to send this image to me, with comments like "... you are a Database Marketer, how does it feel to be overtaken by those who have the keys to the future?  Ha!  :) :) :)"

How does it feel?

It feels great.  I'm more than happy to pass the torch to you.  In fact, let's do it right now, in a formal ceremony.





Now, to whom much is given, much is required.


Oh oh.

Oh boy.


Might we explore what is required of you?




It's Not About The Community, It's About The CEO:  Database Marketers spent two decades trying to impress each other ... trying to top each other using fancier and fancier techniques, until we couldn't even explain what the heck it is we were doing and how we were doing it (i.e. Neural Networks).  Read your typical Web Analytics blog or read the tweets of a Web Analytics expert, and you see the same thing happening in this community.  Enough of the "Eight Steps To Using Google Website Optimizer To Foster An Analytics Culture" stuff.  If you own the keys to the future, start acting like you own the keys by speaking to the right audience.  That audience is the CEO.  Communicate to the CEO, using a form of language that the CEO understands.


Stop Ripping HiPPOs, Stop Being A GIPPO:  You embraced the phrase "HiPPO", or "Highest Paid Person's Opinion" as a way to criticize Executives who rely on gut instinct instead of data to make decisions.  That's cute, funny, and insightful.   But is it possible that you are the problem?  Is it possible that you are asking an Executive to trust the "Geekiest Individual's Preferred Productivity Option?"  Database Marketers made this mistake for two decades, speaking a language that made it next to impossible for Executives to understand or trust the Database Marketer.  Database Marketers created overly simplistic solutions without having a broad understanding of overall business issues.  The Web Analytics community is heading down this path.  DON'T BE A GIPPO!


Don't Lose Focus:  Database Marketers lost focus in the late 1990s, embracing technology and diving into the four-letter word known as "CRM".  This distraction led to a new generation of analysts, called "Web Analysts", and these folks created a new generation of software tools.  Web Analytics leadership are doing the same thing in 2011, focusing on topics like "Do Not Track".  Sure, this is an important topic ... it's been an important topic for fifteen years.  Here's what history tells us ... once you get distracted, somebody else picks up the torch and runs with it.  Two years from now, you may still be fighting an important issue while others have created the mobile analytics software of the future.  Keep your focus on what matters.  It's ok that online individuals don't want to be tracked.


Empires Never Last:  Have you ever reviewed "Rand McNally's Histomap of World History"?  Nothing lasts.  Nothing.  Database Marketing gave way to Web Analytics.  Web Analytics, most assuredly, will give way to something else.  What is your career development plan for 2015 and beyond?  The online world operates faster than the offline world operated.  So if Database Marketers enjoyed two decades of thought leadership, Web Analytics experts have, what, another five years?  Something else is going to come along and disrupt the Web Analytics empire.  Again, what is your career development plan for 2015 and beyond?  Make sure your career is dependent upon your skills, not software.


Bigger Picture:  I cannot tell you how often this happens.  I'm sitting in a Board Room.  The Web Analyst shares a story of what is happening with online customers.  Then the CEO asks the Web Analyst a question about overall customer behavior, across all channels, and the Web Analyst goes silent.  The CEO turns her head to another individual in the room, asks the same question, and receives an answer ... maybe not the right answer, but an answer.  The CEO smiles, then moves on to another topic.  Database Marketers failed by always having a narrow focus on customer behavior, failing to take into account interpersonal dynamics or business issues.  Web Analysts are failing by having a narrow focus on online customer behavior.  It is good to expand your horizons, focusing on more than just the online world!


Focus On The Future:  I make a living because Web Analysts spend their time looking into the past, measuring what happened in the past within just one channel.  CEOs hire me to analyze what happens across all channels, and more important, they ask me to forecast what is going to happen in the next five years.  When is the last time you read something from the dozen or so Web Analytics gurus who dominate the blogosphere, where the author outlined a methodology for predicting the future, then demonstrated that she was right based on prior predictions?  The data exists to take what happened in the past, analyze it, then use it to forecast with accuracy how customers will behave in the future.  This is what CEOs care about.  Database Marketers did a terrible job of predicting the future, and by doing so, pigeon-holed themselves into a CRM-based world of analytics observations about campaign performance.  Please, do not follow Database Marketers into this hole of doom!


It's The Story, Not The Tools:  The Web Analytics community seems to replicate the errors of the Database Marketing community.  Database Marketers became "SPSS" or "SAS" or "R" or "SQL" or "Business Objects" or "MicroStrategy" wonks ... there were long and boring arguments about which tool better achieved business objectives, with evangelists passionately offering an elaborate defense of each tool.  Fast forward to 2011, where Web Analysts argue about Omniture or Coremetrics or Google Analytics.  Please, be agnostic about tools, focus your efforts on telling a story about how customers behave.  Outside of the Web Analytics community, nobody cares that Omniture or Webtrends have better optimization solutions than Google Analytics.  Tell a story that a CEO cares about.




I could go on forever on this topic.  I'm part of the Database Marketing generation, and we failed miserably.  We represent a generation of unrealized potential.  You don't have to repeat our mistakes.  Now take the torch, and do something great with it.  To whom much is given, much is required.

14 comments:

  1. Good Post.
    I think I would argue that Web Analytics is really DM in an online environment - so really I am not sure if there is too much real difference here.
    In my experience, tools where never a core part of the conversation for DM. The main focus was always, what is the marginal value of taking an action A,B..n. wrt the client's objects. Sure there was noise about CRM, SAS/SPSS, ANN vs Logistic vs C4.5 trees, but all communities have tool/process conversations/debates. I am sure music producers prob went on quite a bit about Pro Tools vs Cakewalk vs MOTU etc. That dosn't mean that they didn't get the music out.
    I would love to see more DM/WA discussion.
    Thanks again!

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  2. Database marketing is not dead, it's evolving. The label 'Database Marketing' might be fading away, but the skills and discipline that database and direct marketers have developed for years are becoming more relevant. More and more marketing data is being collected from more sources today; This includes web data, social data, email, data, offline data, etc. Marketers are begining to attempt to understand the interactions of all these sources. The best way to understand these relationships are with 1) consolidated databases and 2) skills and analysis techniques that can process, understand, and make sense of this data. To me that is database marketing.

    With a few exceptions I'm not sure our industry is quite ready to capitalize on all this information, but as it evolves database marketing skills and techniques become more valuable. We'll probably call it something else to be more current, but at the core database marketing is still relevant, it just has to continue to evolve to better incorporate digital and online channels.

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  3. Simply put - THANK YOU! I wish more people understood the larger picture of executive requirements. It is nice that you can share a report on the website utilization but what do you expect and executive to do with that? At best you would get a smile and a nod. Put all the data together, create actionable results and then share the path to improvement - across ALL channels.

    -Lee

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  4. Thank you! Thank you for saying out loud what most people in our little community are too afraid to say out of fear of having those gurus despise them or become outcasts. Who dares to challenge them!

    A little reality check is welcome - as Scott pointed out, the term "direct marketing" might be fading away. Some others look at "business intelligence" people with suspicion... as the “old school”. We have so much to learn from other fields of expertise. One thing for sure: be it “direct marketing” or “web analysts”, those who can speak the business language and see the broader picture have a bright career ahead of them!

    St├ęphane Hamel
    http://immeria.net

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  5. Great post Kevin. The truth is, very little is ever truly new and so different that you can't learn from existing/previous fields. There are decades of experience out there - it is ridiculous to try and reinvent the wheel. Leverage the experiences of offline, traditional media, business analytics, database marketing, etc. Even all the discussions about social analytics, "how on earth do we measure something sooooo different?", miss the point that it's all just an evolution. Don't throw out everything that has been done in related (and unrelated, sometimes!) industries to date and think you need to start again. Leverage and build upon what's been done before, and supplement and further develop as needed for the new and unique challenges.

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  6. Bravo! You forgot the most important credo/manifesto point though - it isn't what you measure, but the incremental difference you bring the table that matters. Without testing and continuous improvement through facts you bring little to the table - or in this case both tables.

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  7. Read every comment ... truth ... sometimes we get so into black and white issues, when in reality, it's not that way, things are very grey!

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  8. Kevin,

    It's interesting that you keep attracting my attention lately and I mean for all the right reasons. I think we're grappling with the same issues.

    The goal of everything I do is business improvement. It should all be about optimization which by default is using relevant information to take action and improve. I also emphatically agree that the geek talk has to stop, especially when you're talking to executives.

    Prediction is still in its infancy in my opinion. BI tools do as you say offer a narrow but strong focus on customer data, web analytics offers additional previously unknown insight into non-customer data and social analytics tools compliment web analytics even further. Combining it all allows a level of prediction; (based on what customers do we can predict it makes sense to do xyz with customers and abc to attract new customers) but it's still difficult to do despite the number of tools available.

    Interesting post.
    Cheers
    Steve

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  9. Matthew Tod3:48 AM

    Dear Kevin,

    Thank you for passing the torch, and yes I am scared by now holding it and I also acknowledge that 'Hippos' are a symptom of our failure in the past.

    But please let me redefine what we are going to do, because it is not Web Analytics that you are passing the torch to but a new group.

    I believe we need to work on what we call our new discipline of database marketing merged with web analytics. To me this fusion of groups creates a new area should be called something like Behavioural Analytics. I am sure this would be the final name, but name it we must or otherwise how can we tweet about it! ;)

    Behavioural Analytics (or whatever name it is given) will be defined by others far smarter than me but I hope the definition includes:
    - Our goal is to use data to understand human interaction with a business
    - The value we create is the provision of actionable insight to senior execs to improve future growth and profitability plans
    - We are data source, tool and channel agnostics
    - We fully respect the right of an individual to privacy
    - We rename our industry association as the Behavioral Analytics Association or something similar

    Thanks for the interesting post
    Matthew

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  10. @Matthew: I like the acronym. Baa! (baa black sheep). :)

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  11. In many ways web analytics can be seen as a "front end" to traditional DB marketing that answers all those questions we used to wonder about in offline direct: Did they receive the piece? Did they look at it or throw it in the trash? How much time did they spend on the cover / envelope? On each page? Did they read immediately or later? Did they save the BRC? etc.

    Really, what we need is the realization that the "front end" and the "back end" each have a lot to offer to each other, in terms of optimizing for profit.

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  12. Matthew Tod11:05 AM

    @Jim: I agree with you as an old database marketing hand myself. In fact I find myself going back to my roots more than ever now. But you know how it goes, Emperor's new clothes and all that mean we need to define something 'new'.

    Interesting that both "web analytics" and "database marketing" are terms that don't describe what we actually do for the business.

    @Steve: I love the idea of being 'Black sheep' of the web analytics world! Anyway WAA is not a good sound!

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  13. It is truly humbling to discuss the destiny of the current and past with such a constellation of brilliant people, but I think I'll get over it. :) In my neck of the woods more and more companies have been using the term "User Experience Management" to describe precisely the topic of the discussion: the accelerating merging of the online and offline analytics to create a comprehensive and truly cross-channel view of actions taken by the consumers to produce actionable insight. I know the term is not new and has been used to describe the value proposition of packet sniffers, for instance, but it seems to be acquiring a new meaning. Not sure UEM is better than BAA though.

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  14. Great post!
    Pass that torch, really it's ok. Because in a couple of years, when web-data is included in the database next to "our" data, they will have to return it. Web analytics is currently a different discipline, because the data is hosted externally, only accessible through dreadful tools that DM GIPPO's have refused to work with :-)
    I think it is ridiculous to "segment" analysts by the source of the data. We do not have separate mail, e-mail, fixed telephone, mobile, pager, fax- and social media- analysts, do we? So why should web analytics be any different?

    ReplyDelete

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