Nelson Elliott

Nelson Elliott

Nelson started Marketsaurus in 2012 to build his web presence and share marketing ideas. He has a Bachelor's degree in Marketing from Southeast Missouri State University and an MBA from Saint Louis University. He currently works in digital advertising for a major agency.

His opinions are his own and not his employer's.

Website URL: http://www.marketsaurus.com

11 November 2015

You Can Ignore One-Star Reviews

“This product sucks. Took ten day to arrive. DO NOT BUY.”

That’s all actual language from reviews on products I’ve recently purchased on Amazon. These particular products actually all had overwhelmingly good reviews; I had to dig a bit to find the bad ones, but choosing to which product to buy online isn’t always so easy.

When faced with a few product options, none of which have clearly better reviews, which one do you choose?

My trick is that, if I can’t find a choice I like with roundly great reviews, I always look for products with polarized reviews. That is to say, I would much rather see a bunch of one-star reviews than a bunch of three-star reviews.

I would much rather see a review distribution like this:

Polarized Reviews

Than one like this:

Even Reviews

It seems counter-intuitive to prefer the product with *more* crappy reviews. So why do it?

My experience has been that products with a bunch of one-star reviews fall into one of three categories:

1. Poor quality control. Most products ship just fine, so most reviews are just fine. A few people get totally defective versions that don’t work at all and leave bad reviews. I’ve never worried much about this scenario, since I’m not buying much lifesaving equipment and I’m confident I can get an exchange.
2. Polarizing qualities. Some people love the thing. Some people hate it. For much of what I buy online – books and video games – I enjoy things that are bold enough to really piss some people off. In this case, a few one-star reviews might even be a good thing.
3. Overreacting reviewers. The product wasn’t perfect and the recipient was bored, angry, or drunk enough to write a misspelled, insulting, ALL CAPS review of why the product “blows.” I’ve always felt I could pretty safely ignore these.

Three-star reviews, on the other hand, describe a totally different scenario. These reviews indicate a product that isn’t polarizing, it’s just meh. And that isn’t an overreaction. These reviewers carefully thought through the balancing factors, both good and bad. They arrive at the conclusion that, while this product isn’t TEH WERST EVER, it’s lacking in some key areas.

So, one-star reviews are safe to ignore, they rarely indicate a major problem with a product. To the contrary, middling reviews indicate that serious, thoughtful reviewers were disappointed with the product. Three-star reviews mean it’s better to keep searching.

01 March 2015

Prepping for Your First Marketing Interview

A friend of mine with an impressive technical background, but no business experience, recently landed an interview for a marketing position. He asked for some help getting up to speed on marketing. Although the focus would be on his mathematical skills, he felt knowing a bit more about the business context would help.

With that in mind, I pulled together a few of the most important concepts. I thought there might be other people out there who had the same questions, so I’ve posted my write up below.

Professional marketers have a different concept of what “marketing” means than people outside of business. “Marketing” is a more-specific function than just hucking new gadgets. At a high level, marketers work to change a few specific variables in order to sell more of a product, profitably. So:

What is marketing?
More than just advertising, professional marketers think of marketing as the Four Ps:
- Product (what are its features and benefits?)
- Price (especially relative to competitors, is price point higher or lower?)
- Place (where is the product available for sale?)
- Promotion (advertising, coupons, PR, etc)

These are the variables within a corporation that the marketing department typically controls. But marketers and the role are only two parts of the equation. How do customers react to changes to the Four Ps?

Customer reactions
There are many models, but a popular framework for discussing customers and how they interact with a product is the Conversion Funnel. In this model, buyers move down the funnel below, with some number leaving at each stage. 

Conversion Funnel

AWARENESS – The customer must know that the product exists, right?
CONSIDERATION – The customer has a need/want and actively considers whether the product (or its competitors) will be a good solution.
PURCHASE – The customer makes a decision and buys the product. Yes! Sweet revenue!
AFFINITY – The customer uses the product and likes it. She likes it so much, she recommends it to friends and colleagues.

Four Ps + Conversions Funnels
The goals of marketing, by adjusting the Four Ps, are to:

a. “Widen the funnel”, get as many potential buyers in the funnel as possible; and,
b. “Keep people in the funnel”, minimize losses between each stage.

Big marketing departments have entire units dedicated to each P. Even smaller companies have staff that specialize to a degree. You probably won’t be working with the entire spectrum of marketing. Regardless of the specific function, knowing the big picture will be helpful.

As you get ready for your interview, consider how your skills will help widen funnel and keep people in the funnel longer. Make the case that you can do that and you’ll be on the right track. Good luck!

06 January 2015

Dear Plaza Motors

Plaza Motors Mercedes

Dear Plaza Motors,

Why do you make it so hard to do business with you? Do you really have enough business? If you'd like to have more business, one simple change to your service model would go a long way to making customers feel more welcome.

The Issue

Last time I called for service, it took half an hour to get someone on the phone. Once I got someone, she had to contact two different departments to price the work I was asking about. She called back two hours later with an estimate. Total time to get an estimate: 2.5 hours (150 minutes).

NTB answered the phone immediately and got me an estimate on the spot. Total time: 10 minutes. FIFTEEN times faster.

You have two related problems here: 

1) It takes customers too long to get a price and make a decision. By the time you called back, I'd already found an acceptable price and taken the car elsewhere.

2) It takes your staff too long to answer simple inquiries. Because they are tied up, your customer-facing staff is stretched too thin. It takes half an hour to get someone on the phone, feeding back into problem 1.

You don't need to add staff to fix these problems. A simple upgrade to your systems will do the trick. And I do mean simple. Excel simple. Google Docs simple. Not Oracle, not SPSS, not even Access.

Let's break the problem down a little more. I called asking about simple work: some new brake pads and some regular transmission maintenance. Your rep had to call the parts and labor departments to get prices. Why? I don't drive anything exotic. I see the same model on the roads all the time. I know I'm not the only one who needs brake pads. So, why does your rep need to call two different departments like this is the first time anyone ever asked for brake pads on C class?

The Solution

The solution is simple: put together a price list of common maintenance tasks and repairs. It can be an Excel spreadsheet or Google Doc. I call for brake pads, the rep looks at the spreadsheet, I have a price, and I'm back off the phone in 10 minutes.

It doesn't have to be a complete list. I'm betting car maintenance is Pareto. I bet 80% of your work is on just a few things. Get those high-volume items priced once and now your rep is free to spend more time with face-to-face customers or pricing out the really sticky stuff.

Prices for labor and parts change indepedently over time? Use two columns and add them together. Run a pricing exercise once a quarter.

ANYTHING is better than re-pricing brake pads and transmission service every time someone calls. Somehow, some way, pull together a price list. You'll have more business, happier customers, and a happier, less-audibly-stressed staff.

If you really have enough business, this still applies. You should be raising prices or expanding your facilities, not filtering customers out through poor experience. Even customers who aren't price-sensitive are sensitive to other factors, like time and annoyance.

It wouldn't hurt if you could get oil changes done in half an hour (like Valvoline) instead of three hours either, but that's another post.

Best,
Nelson

17 November 2014

Agency of Record

1. An advertising agency that has been legally authorized to generate creative or purchase media and services on behalf of a client. Sometimes abbreviated as "AOR".


Historically, the agency of record was an exclusive agreement between an advertiser and a single lead agency. Other agencies may have been involved for small projects, but did not have as much involvement with client teams or as long a tenure as the AOR.

As the the media industry fragmented, it became harder for a single agency to offer the wide array of skills necessary to buy across media. As multiple agencies began working more closely with client teams, the role of the AOR has diminished or, in some cases, been done away with entirely.
10 May 2014

Google's $10 Billion Problem

Google has parlayed their success in dominating the search engine market into an empire that that dominates internet technology, computing, and media. It is also gaining ground in automobiles, communications infrastructure, clothing, cell phones, and more.

At the heart of this empire, however, Google has a problem. Their $10 billion keystone product, their search engine, is under attack. The barbarians – spammers, ghost pubs, and black hats – are not just at the gate, but through it and running amok.

Siege on Google

What makes me say this? Their increasingly prominent use of “manual penalties” to control their organic SERPs.

THE LINE BREAKS

The Internet is way too big to evaluate and rank manually. It has to be done algorithmically. Google itself is estimate to have 50 billion pages in its index. The reason the company grew so large was because they came up with a better algorithm than everyone else for ranking web pages.

At its simplest, that algorithm was based around counting links between pages instead of counting keywords on pages. Since then, SEOs estimate several hundred other factors have come into play, but the links at the heart of the algorithm remain.

These hundreds of other factors kept Google (largely) one step ahead of the spammers for over a decade, but they aren’t doing the trick anymore. The entire algorithm has been compromised.

How bad is the damage? It’s bad enough that Google has taken to manually reviewing and manually penalizing pages. By doing so, they’ve signaled to the world that their algorithm isn’t cutting it; they need people involved.

The approach is doomed.

Bad actors can launch sites faster than Google can manually review them. I’ve seen, firsthand, technology designed to publish hundreds or thousands of sites at the push of a button. It wasn’t designed to cloak itself to defeat Google, but I think that could be done.

Once the people who know how to defeat the algorithm (and earn a manual review) get together with the people who know how to publish at scale, Google’s SERP quality is going to suffer.

THE ENDGAME

If Google’s quality suffers, that raises the chances an upstart could succeed by writing a better algorithm. With billions of dollars on the line, the incentives are huge. What that algorithm will look like, I don’t know. If I did, I’d be planning how to manage a billion-dollar fortune, not writing blog posts.

Of course, I wouldn’t count Google out yet. They need to make a move soon to seal the breach before it is pried open by spammers with scalable technologies, but they have options.

They are now a massive conglomerate with a diversified revenue base, deep pockets, and lots of defensive hedges. They may buy new technology or lobby it out of existence. The next search engine may be powered by something more capital intensive or something more complex than a single algorithm, like AI.

What? You thought that self-driving car was just for fun?

17 February 2014

Why Use an Ad Agency?

Long before I ever joined an agency, I used to wonder why companies paid ad agencies. Why pay the extra fees for an agency instead of doing the work in-house? It made sense that small companies might not have someone who knew how to put together a TV spot or run a programmatic display campaign, but why would Fortune 500s use agencies? Surely, they have the money to pay their own advertising staff and, with multi-million dollar budgets, the incentive to cut out agencies, right?

Ad Agent

Not exactly. As it turns out, there are some very good reasons to use an ad agency, even for large companies. There are two main types of ad agencies, media buying and creative development. Here are three big reasons companies use media buying agencies:

1.    Scale
As with many other things, advertising gets cheaper the more of it you buy. It also gets cheaper when negotiated peer-to-peer. Even large ad buys make up a small percentage of total revenue for a major media company, which limits leverage and makes it hard to negotiate rates. Large ad holding companies like WPP* and Publicis-Omnicom use their size to negotiate lower rates for their clients and deal with large media companies as peers.

2.    Specialization
Different types of advertising are purchased in very different ways that go well beyond TV v. radio. In TV, there are differences between local buys on syndicated networks and national broadcast buys. In digital, just a few of the options include traditional display, programmatic display, paid search, and content syndication.

Other types of advertising (e.g. events, print, out-of-home, etc.) are just as complex. Each media type and sub-type has its own vendors, platforms, technologies, and jargon. Making effective buys requires the type of expertise that is often developed over an entire career.

Even the largest brands rarely need all types of expertise, all the time. By allowing an agency to split a specialist’s time across multiple clients, companies get the benefit of having the best talent in the field, but without the overhead that comes from keeping them on full time.

3.    Simplicity
Agencies function much like media wholesalers. By serving as a central node between advertisers and media companies, agencies reduce the total number of relationships in the network that need to be managed. This makes for fewer conference calls, contracts, and invoices for everyone, reducing the total overhead in the system.

This is a point that is easier to grasp visually. In the figure below is a small media industry without ad agencies:

Without Ad Agencies

Each company has its own relationship with each media outlet. There are a total of nine relationships in the industry that must be contracted and managed.

However, the overhead is reduced when those companies contract with an ad agency, as shown in the next figure:
 
With Ad Agency

The total number of relationships is reduced to six. More importantly for each individual company, they must now only deal with one ad agency instead of three media vendors. Although the relationships and management aren't always as straightforward in the real world, there are even more companies and media outlets that must be managed, meaning the gains can be even greater than illustrated here.

These three S's are the reasons that media buying agencies exist. Companies that consider bringing their advertising in-house should think just as carefully about it as they would think about eliminating their distributors and selling to customers directly. Of course, there are other reasons to use agencies, such as strategic focus on core competencies, access to media research, leveraging established reach for new product launches, etc. Creative agencies have their own value propositions. The bottom line, however, is that agencies serve a crucial role in the media industry and often save money for their clients, even with their fees included.

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*Full disclosure: At the time of this writing, I work for a WPP-owned agency. The opinions expressed here, however, are entirely my own and are not sponsored or endorsed by my employer.

05 February 2014

Spreading Hope: 6 Questions About Non-Profit Marketing with Billy Paymaster

When people think about “marketing”, they often think about clothes, movies, and other commercial products. Marketing can be put to much more noble purposes, however.

Billy PaymasterBilly Paymaster is COO and Director of Marketing & Communications for Hope for Young Adults with Cancer. The organization was started two years ago to help meet the needs of a too-often ignored demographic: young people with cancer. This group lacks the major non-profit support of children’s organizations and often lacks the savings, home equity, and other resources of older cancer patients. To date, the organization has provided nearly $35,000 in direct aid to its target benefactors.

I recently sat down with Billy to learn how marketing has helped him build a successful, growing non-profit.

You also work for a major ad agency; how does marketing a startup non-profit differ from marketing Fortune 500 brands?

When marketing for Hope For Young Adults With Cancer, we are still trying to build our name recognition and get people familiar with our organization and what we do. Even though we have had great success in a little under 2 years of existence, most people still probably haven’t heard of the charity. They definitely don’t know what our mission is and what we have already accomplished.  

When marketing for Fortune 500 brands, in most cases, you are building on an already established name that you are trying to build on or maybe promote a new product of service of. Mostly, everyone knows of the brand and its products and services, you are just trying to make that brand number one in its market or demographic and expand on its popularity.

Are there differences in how you market to possible donors and how you market to possible beneficiaries?

Absolutely. When marketing to donors, your message has to resonate with them and make them feel like, no matter what the donation amount is, they can help you make a difference. With so many charities available for individuals to support these days, when someone sees your ad, they are most likely seeing it along with other charities’ ads, so you have to choose your headlines and descriptions very carefully so that they are drawn to your ad and your organization and want to learn more.

As far as marketing to beneficiaries, we market primarily to 18-40 year-old young adults with cancer and their families or caregivers.  We also market towards the different types of cancer that are unfortunately out there. We do that because a lot of times individuals are searching for information on the certain cancer that they or their loved one is battling. Marketing the fact that we give direct financial support is also key for Hope4YAWC along with “young people with cancer”, which on the search side of our marketing drives a lot of traffic toward our site.

 
Hope for Young Adults with Cancer Logo
What are the biggest challenges in marketing Hope4YAWC?

One of the biggest challenges of marketing Hope4YAWC is that a lot of people originally assume that we are a children’s cancer charity. Even though “Young Adults” is in our name and we state that we help those 18 – 40, more times than not we get grouped with children’s charities. Believe it or not, another challenge is the misspelling of our abbreviated name, Hope4YAWC. We see HopeFYAWC a lot, which isn’t one of our registered names and can create confusion whether or not we are in fact the organization that they were talking about.
 

Which challenges do you think are due to the organization’s size and which do you think are specific to the non-profit world?

The biggest challenge that we face due to our size is the fact that we still have to market to build our name recognition. While individuals might not fully know what all major charities do, they recognize the bigger names and probably have a general idea of what that organization does or knows someone that has been involved with them or volunteered or fundraised for them. This allows them to market their programs and incentives more directly as opposed to just marketing their name as they have already established a certain brand awareness.  

The major challenge in marketing in the non-profit world is differentiating and separating yourself from the pack. Most individuals feel strongly about one, possibly two, organizations that they donate to regularly or constantly support in a variety of ways. Trying to become that one organization that someone fully buys into out of all the options out there is a major challenge, especially when you are still relatively small.

What do you think are the best and worst things that larger nonprofits do in their marketing?

The best marketing tactics that larger non-profits use build on their successful programs or event(s) that most people know and are aware of. These programs or events speak for themselves, and by just running ads across all media reminds individuals to sign-up, register or to donate towards that particular event or program keeping it top of mind to everyone.

In contrast, the worst thing that they do is spending way too much money on marketing that doesn’t provide the return in investment in the long run. Most marketing campaigns have a ceiling, and just because you have unlimited money to spend doesn’t mean you have too, especially when you can use that money to help individuals in need. They can spend their money more effectively and still get a massive return of investment and exposure over most non-profits without just blindly spending money.

What marketing tools have worked best for you? Why?

Google AdWords, Facebook, and especially Twitter have worked very well for us. We were able to get approved for a Google Grant which allows us up to $10,000 per month in in-kind AdWords advertising, to promote our missions and initiatives. We are able to generate a lot of traffic to our website through a very extensive campaign and keyword build out on various charity, cancer, branded and program-related terms. Facebook has worked especially well for promoting events, but Twitter has hands-down been the most successful platform.

We tweet about cancer-related stories and news every day along with our own incentives that we currently have running and those of other young adult-related cancer charities. Through proper use of hash-tagging (we were even a part of getting a registered hash-tag approved #ayacsm) along with tagging other groups and individuals, we have been able to gains thousands of followers worldwide. We have also seen a lot of success when attending young adult cancer-related conferences and tweeting nonstop when using the official conference hashtag.

By having our account constantly showing up in that hashtag feed, we make an impressive first impression. Those who don’t know of @Hope4yawc want to quickly find out more and in a lot of cases follow us. We have forged a ton of our partnerships with other organizations through dialogue that was first communicated via Twitter.


03 February 2014

Counterpoint: Super Bowl Ads are Worth the Money

Bruce Willis Super Bowl CommercialYesterday was the Super Bowl. This also means that, for the rest of the month, marketers will have a heyday pointing out all all the other ways that you could spend $4MM on advertising. They'll talk about demographics, total audience, and number of impressions.

But these metrics miss the point of advertising in the Super Bowl. Where Super Bowl ads win, hands down, is engagement.

During the game last night, I was sitting a bar, talking with some friends - a few bankers, a government official, and an HR consultant, among others. What were we talking about? The ads, of course. We weren't just talking about them, but really digging in and dissecting them. 

Topics included: Did Honda's commercial with Bruce Willis resonate with the right demographic?(Verdict: Probably not.) Was the Radio Shack ad brutally on-message? (Verdict: Yes.) We were not just paying attention to the ads, but to the brands and the message behind them.

Marketers will finish breaking these down piece-by-piece over the next month or two, but when was the last time you had an audience engage with an ad like that? Ever? Sure, you could have spent the money on billions of banner impressions instead of millions of viewers, but when was the last time a banner ad (or 1,000 banner ads) got a bar table of non-marketers talking?

Never happened.


13 December 2013

Let's Stop Talking About "Mobile"

Everyone in digital publishing and advertising is talking about "mobile." Web traffic from mobile devices is rising rapidly. For some sites, it has already exceeded "desktop" traffic. But people talking about the future of mobile are barking up the wrong tree. The world is not moving to a binary model where mobile has simply beaten desktop, but to a world where device type and use case expand into a continuous spectrum.

Mobile vs Desktop


The evolution to a spectrum of devices started long before mobile was the hot thing. In the days when bored commuters played Snake instead of Angry Birds and DoubleClick was a gleam in a techie's eye, laptop computers had already begun filling the space between cubicle desks and trouser pockets.

Tablets added another distinct point on the spectrum when introduced by Apple, but the distinct points are fading fast. Device SKUs for tablets range from large, laptop-like devices with attachable keyboards to small, possibly phone-replacing units barely larger than some Android phones. Devices in the market will multiply, not just in size, but in form. Think smartwatches, Google glass, and smart TVs.

Just as devices will proliferate, so too will the way consumers use them. The world will no longer be divided between "at the desk" or "on the go." Consumers already use tablets to browse, banter, and buy from their living room couches and airport lounges. Devices have made their way into commerce, food, health, transport and more. Other use cases pop up faster than Silicon Valley VCs can fund them.

So, what does this mean? Well, for publishers, it means that "responsive" design is no longer optional. It has to be there and it has to be good. A "mobile" site won't cut it.

For advertisers, device targeting will die and alternative, behaviorally-focused targeting will become paramount. These techniques may include buying audiences based on cookie profiles, dayparting, and granular geofencing (think targeting consumers in stores or residential zones).

The transition from binary and device-focused will not happen overnight, but it will happen. When it does, the focus will not be on device type, but on the consumer and the use case. One might argue, that's where the focus belonged all along.
27 August 2013

Why RTB Is NOT Like the Stock Market

RTB
In digital display advertising, there has been a lot talk and excitement about the emergence of technologies that allow advertisers to bid for available inventory in real-time. These technologies and the buying methodologies behind them are called "auctions", "programmatic", or "RTB" (Real-Time Bidding).  

Regardless of what you call it, RTB has the potential to make buying and selling digital advertising space much less reliant on direct sales forces, spreadsheets, and endless I/Os. Because of its similarity in function - and probably the prestige of stock markets - many people have compared RTB to the stock market.

In some ways, that's true, but getting wrapped up in the stock market metaphor ignores some key differences and poses dangers for both advertisers and publishers.

At the core of what makes RTB special is that the value of an impression purchased will vary based on which advertiser wins the auction.* Take, for example, an RTB auction in which Bentley Motors and Johnny Walker Blue Scotch are both competing for a single impression. A crude model of the value of that impression to each advertiser looks something like this**:

Value of Impression = Chance to Influence * Value of Purchase

So, if Johnny Walker costs $250 and a Bentley costs $250,000, the Johnny Walker ad would have to have 1,000 times the Chance to Influence the consumer that the Bentley ad does in order to be able to pay the same price for the impression. That may be reasonable, but it shouldn't be taken for granted.

This is very different from the stock markets, in which a single share of stock will generate the same cash flows regardless of who buys it.^ Individual buyers may price it differently and realize different post-purchase returns, but the stock will not perform any differently.

This has important ramifications for advertisers and publishers who have been approaching RTB like the stock market:

For advertisers, it is important to note that Chance to Influence is not a constant for any brand, industry, etc. The quality of the creative and its ability to actually be seen are very important. It can't be left to the publishers to influence your customers. Messaging, design, and placement are just as important as ever.  

For publishers, this is why initiatives to measure visibility should be embraced and why advertisers should be given more impression data, not less. Until advertisers are comfortable that their Chance to Influence is just as high with RTB impressions as with direct-sale impressions, there will be a gulf in CPMs. Treating all inventory as homogenous forces advertisers to price based on worst-case scenarios.

If handled properly, RTB is capable of living up to its promise of bringing efficiency to the selling and pricing of digital display inventory. In that regard, it will be like the stock market. Approaching RTB like a stock market, however, will probably turn out to be counterproductive. Both advertisers and publishers need to keep in mind how RTB is not like the stock market.


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*The value of an impression will vary based on the consumer generating that impression as well, but to keep things simple here, let's just assume that the impression(s) we are talking about come from a single person.

** This model could be expanded to include recency, frequency, CLV, etc., but, again, let's keep it simple. The model presented gets to the heart of the issue.  

^ I know, I know: unless the buyer is Icahn, Ackman, Buffet, Schwarz, etc., but let's stick to passive investors for now.
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