Meyer: Where will BI be in 5 years?

Messenger: From my perspective there is an ever-increasing interest in one-to-one communication.  People are now talking the language of Segment-of-One and actually doing it.   In the future it is going to become more profound in a number of ways.  In the UK we are seeing an explosion of people communicating through stuff that can be downloaded from the web and played back with MP3 players.  You are getting enormous amounts of exposure.

Similarly, in terms of the amounts of money people are spending on above-the-line advertising is shrinking in response to the budgets going more towards one-to-one communications.  In the UK Heinz stop doing television advertising.  They are actually doing everything in a mixture of direct marketing and marketing through stores, because the stores have become marketing media in their own right.  They can track people’s expenditure and they can sift people in terms of how the supplier and the retailer work together to manage the customer base.   It is emerging and it is evolving, but it is happening. 

A long time ago there was a moral discernment of space between programming, call it life, and advertising, at least as seen on TV.  Now it is a complicated relationship.

Absolutely, now the phrase ‘integrated marketing and ‘media-neutral’ campaigns is endemic in the UK.  You can’t think of a marketing strategy limited to television; you have got to include other aspects. 

Meyer: Do you think BI will inexorably shape the future of marketing as fact-finding engine?

Messenger: From the work that I do, in this area of maximizing what you are getting out of advertising or what you are getting out of marketing, has 2 aspects.  One is what are we getting in terms of return on investment now?  I have been doing this for a longtime and the tools have effectively been getting better and better. 

Because what you are trying to understand is that if I got a certain amount of communication expenditure for whatever means what is it doing to influencing people’s decisions in terms of what they are going tom buy, take off the shelf.  To do that you need good quality information and to give you an example, is things like direct response television, there is a thing called the red button where you can actually respond to the ad.  We are now in the state where we can take information from the broadcaster, list the people who we know have seen the advertising, we take information from the retailer, and because we are a market research organization we can do this confidentially, so we can take information about who is seeing the advertising.  We can take information from the retailer to see that has done to their purchasing behavior and we can actually evaluate the effects of the advertising.  So this study that we did for P&G was able to understand the contribution that the television advertising made to the sales of that product, from which they then decided to continue or not to invest in that channel.  

We found it was 4.5x the rate of sale increase for the people that seen the ad and knew about the product compared to those that didn’t and from that they were able to justify a very straight forward decision about how much they spent, how long they continued to spend, is it working, is it taking stuff of the shelf – all in a very quick space of time.  The interesting dynamic is the fact that we, because we are market researcher agency we can do that, where as the advertiser won’t tell the retailer who these people are because they feel they are their customers; the retailer won’t tell the manufacturer who these people are because they think they are their customers. 

So we act as a neutral 3rd party because we are not a direct marketing agency; we are literally just looking at the objective angles. 

Meyer: Do you think television will morph into a fully-addressable medium?

Messenger: Well it has already gone that way.  Obviously all the cable channels know whose households they are transmitting to.  But now with digital satellite television, this is where this interactivity is coming from and there actually reduces costs as they have already invested in the infrastructure.  Connecting new subscribers is all about advertising and persuading people that the content is there that they want – once they bought a dish that’s about it.  There is no more investment.  But it is got full interactivity, so people can have on demand television and they can see the ads they want to see, and at the same time through things like direct-response mechanisms or telephone response numbers the media agencies are keeping those records, supplying them back to the manufacturer, and the manufacturers, through agencies like ourselves, are able to relate that information back to individual purchasing behavior. 

It is a bit Big Brother’ish but it is happening.

Meyer: What you are saying is that the momentum of technology is taking marketing into a BI territory.

Messenger: Absolutely.  There are two aspects of it.  There is the creative side.  When I use these tools I am trying to, on the hand, uncover insights.  Now those insights may be connections which people never have made before.  For example, we work with a direct marketing agency through a number of clients we have and they just won a gold award, for direct marketing intelligence, which is basically how you use data to understand how you run campaigns.  Effectively, by going through this immersion phase, as they call it, once they won the account, this is for Marriot Hotels, they wanted to run a campaign to drive sales of the their short-term holidays and instead of just mailing people, they went through this phase of quite a lot of quantitative and qualitative market research where we had to talk to these people, what would change their mind and make them book a holiday, what are the key drivers?  They led to insights about how people’s behaviors towards these short-term breaks were, what were the key drivers, how far would they travel, how does the booking take place, who is the person researching it, is that the same person who books it, and very often it isn’t.  So through this immersion phase a lot of understanding and gaining a number of insights. 

Now the creative agency is able to take those insights and come up with executions that actually leverage those insights.  They are guided by insight.

The business intelligence application, which takes everybody in the database and does the usual thing of segmenting them combine that with an immersion phase, basically a research phase where we put together studies what is driving different types of behavior, that leads to a number of insights which the creative agency is able to create creative message about which is far more powerful than sending someone a straightforward mailer, with ‘hears the price’, ‘here’s what it is’.  They are actually able to address people’s needs and talk to people in the way they want to be talked to.   BI is plays an obvious vital role in informing creativity but never will create that creativity.    

Meyer: For BI, the ability to focus in on the person is the critical factor and leads the creative towards a resonating message.

Messenger: Absolutely, you got to find the message.  You divide the message into a level that is manageable which is for most marketing departments is somewhere between 6 and 20 segments.  That becomes a manageable database.  In terms of creating the message, it could be different for each segment.  You need to identify what are the relevant messages that go with each segment – and that’s where bringing together the information in the database with market research structured in a number of ways enables you to answer those questions that informs the creativity.    That gets you to the first place of what it is you are actually going to communicate.  What then the BI is able to do is to track the effectiveness of the campaign and that has in the past never been possible with marketing.   There is an element now in today’s marketer’s have been taught to expect to have these things measured, whereas in the past it was totally down to creativity and intuition. 

That said, there are still many companies that have an aversion to research.

That is a fundamental mistake.  If I am Company A and buy all my SAS technology, I got my campaign management tool, and my database.  I am Company B and I can do the same exact thing.  You are then down to who can make the best use of that technology, it the person who knows what to say and the person that knows what to say is the person that is skilled at bringing together the sort of stuff that we’ve been working with 1-to-1 agencies, in actually uncovering, what we call, motivations, people’s motivations for doing things.  Not just what they have done and who they are, you can see that from the data, that’s all backward looking.

You are either going to change their behavior for the future or predict what they are going to do in a new market environment.  The market environment last week is not the market environment next week, something will have changed.  So what you are trying to do in terms of that predictive nature is not just be -– cause if you have the same technology as the guy next door he is going to come up with the same forecast as you for what’s going to happen next week.  So if you can bring up some other information which he hasn’t got, from more touch points in the industry, more understanding what the customer is looking for, you are going to have the advantage.

Meyer: Tell me more about the trend towards one-on-one sensitivity and connection.

Messenger: If you understand where the messages are, the key motivating messages that go with the segments you have got, suddenly the segments you are seeing in the data really do make sense.  

Let me give you an example.  We did some data mining and we came up with some segments, and they were behaviorally driven segments.  The company couldn’t figure out why the segments were different.  When we did the research and understood the motivations and not just what they have done and how they done it but what were the circumstances – all the things that you don’t usually get in the database, i.e., how old are they, how big is there house, how big the garden is, all these things we were able to do through a structured study and bring that with their attitudes.  Because 2 people may live next door to each other, one will do a lot of DIY and the other no DIY and the difference between them from a geo-demographic database says they will be doing the same thing but no.  There are actually different attitudes.  One may hate DIY and sees it as a total necessity when things go wrong.  Understanding that difference in attitude combined with their difference in the circumstances means you can then develop the appropriate message and feed what they are trying to achieve.  You become a solution provider and for them that builds a relationship, because a person goes to look to ideas from the supplier that is working with them. 

The evidence of that is in the DIY retail in the UK.  One is called B&Q is like Home Depot.  HomeBase is a little more like Loews.  With a bit of a downturn in the housing market and B&Q suffered more than HomeBase who are actually growing their business because of the fact that they know how to communicate to the customers who they know are going to continue to -- are not simple the ones who are up and down aligned with the housing market – but the ones who they know will continue to spend year in and year out, and they know what they can spend, and how they can stretch their spending into other areas. 

It is forming that bond.  It was P&G called, in terms of marketing, the art of marketing is to be able to understand and satisfy your consumers better than the competition.  That is what BI is enabling people to do, if they do it properly. 

Meyer: There is a lot of talk of an analytic space and a creative space in the business world as if humans can be divided in this sense. Do you think this is a legit dichotomy or means to gain attention?

Messenger: That’s interesting.  In a former life, I was in charge of marketing analysis for DIGO, a drinks company.  Most of their products are being marketed to young people.  Part of the marketing is that it is all about image.  One alcoholic drink is very similar to any other drink.  It is very cheap to produce compared to the price you can sell it at and the price you can sell it at is driven totally by image you create for the brand.    The marketing is what makes the difference.   That creativity that creates the image around the brand, there are processes which enable you to uncover what themes you can create that resonate with consumers, what will make them feel inspired, what will inspire them to be apart of that brand, and then are lots of ways you can probe and understand as to what creativity will put that message across most effectively.  That a computer can never take away.  That is coming out of pure creative genius.   It is what keeps advertising agencies in business, because of the fact they are able to come up with more inventive, more creative, and engaging ways to sell a product.

Consumers have become very savvy. They know that this is indeed the case.  But there is an unwritten contract: if you entertain well, I will reward you by buying your product.  

That’s part of it and you will never take that away.  On the other side you have a bunch of shareholders who want a return on that money that you are investing in the brand and part of that comes down to maximizing the return on the investment.   Basically you are doing that with marketing and you are doing it with every tool that you can to understand how well your marketing is working, where you can take advantage of different types of deals, for example, when you are advertising on television there is a sophisticated software programs which enable you to optimize which spots you buy, what time of day you buy, in order to actually get the most communication that you can for the amount of money you are putting behind the brand. 

This is not going to go away.  In fact, with one-to-one and more sophisticated ways of tracking what people are doing, that’s all the time getting all the time more sophisticated and squeezing more value out of the marketing bucket.

Meyer: So is the current dichotomy I noted missing the point?

Messenger: It is missing the point totally.  They have their own reason for being and their own role to play and what they should be doing is working together and not representing themselves as alternatives.  In fact if you go totally with the analytic you will not get a very successful brand.  P&G went so aggressively down the analytic market that they forgot what they were trying to do and now if you talk with people with P&G they are really engaged in the creative side, because they realize that creative and emotional message is what they need to grab the consumer because basically any washing powder does its job now a days – that’s the nature of the market.