Why You Hate It: Internet Advertising

A Familiar Tale

I have posted previously about the annoying tendency of ads for products we have already purchased to follow us around the internet. My favorite recent example is the ads I see for the hotel I frequently stay at. When I connect to the internet in my hotel, I am automatically routed to the hotel’s website. I quickly exit the site, so I probably look like someone that was considering booking a reservation, but didn’t. I cannot imagine that it is very difficult to segment out the visitors to the hotel’s website that occurred inside the hotel, but apparently it’s not worth this hotel’s time to avoid wasting money on me.

This problem is not unique. It happens frequently and is the subject of many complaints. The problem, I believe, is the result of an inefficient market for online advertising, and is exacerbated by the fact that marketers are trapped in a prisoners dilemma. Advertisers may not want to show us ads for products that we have already purchased, but since they don’t know what their competition will do, it is their best defensive move.

The financial model for most websites (especially free ones) is this: companies that collect data on us and sell ad space on the internet know that I have “expressed interest” in a given product. They then let marketers purchase my attention by showing me the same product I have viewed previously, when I visit various websites around the internet. If this works correctly, I will only see products that I have considered purchasing, but have not yet. However, as we all know, it is very common to see ads for the products we have purchased. The result is an inefficient marketplace with a poor user experience.

Setting The Stage

To help illustrate this scenario, let’s say that I have recently purchased Marmot Men’s Traverse Glove and that I purchased them through Backcountry.com. Purveyors of data recognize this and lump me in with a group of people that are “very interested” in this product or similar products. My attention is then put up for auction. To anyone. So when I traverse the web, ad tech companies let the entire business world know that someone who is very interested in Martmot Men’s Traverse Gloves is about to view a certain web page. Keep in mind that Backcountry is not the only retailer that offers these gloves, and that these gloves are not my only option to keep my hands warm. Backcountry has just become the prisoner in our example.

Now, let’s consider what happens from my side of things. One website I frequently visit is WGR550.com. When I visit, I often see the products I have either browsed or purchased recently. This is a local sports radio station’s website in Buffalo. Traffic to this site, compared to NYTimes.com or WSJ.com, is relatively low. So from an advertiser’s standpoint, it’s a pretty inexpensive way to get my attention.

Back to the dilemma facing Backcountry – our prisoner. They understand that I have been very far down their sales funnel. They just don’t realize that I have been all the way through the funnel. Sure, they have a general understanding that there is a chance that I have actually checked out (they probably even know the % likelihood that I have), but they aren’t able to connect the dots that the person that just checked out on their site is the same person that is now visiting WGR550.com, and whose attention is currently up for sale.

Think about his. They have put in all effort to merchandise their site with quality products, marketed it well enough to drive me to their website, designed a user experience that got me to check out, and worked out the logistics of shipping me the gloves. Yet, they don’t have the confidence in their marketing program to believe that they closed the sale. They keep marketing to me even though they executed everything to perfection.

It makes sense for them to want to close as  many sales as possible. So maybe they have made a conscious decision to lump in the people that have already purchased the gloves with their target audience of of people that are “very interested”. It may make sense for them to be a little overly aggressive with this group. However, they also need to consider that if they don’t continue to market to me, what if someone else does? This is why I consider this to be a type of prisoner’s dilemma.

Who else knows about me?

Based on my interactions with Backcountry’s (and other retailers’) various digital properties, ad tech firms have likely identified me as someone “highly likely to purchase outdoor apparel”. While Google and Facebook can’t sell the fact that I have bought the gloves to other advertisers, they could certainly slot me into a segment of consumers that would likely buy a similar product. And there is nothing preventing them from selling my attention to someone else that sells those same gloves.

In an efficient market, with rational actors, the prudent course of action for Backcountry would be to rely on the same marketing strategy that got me to their site in the first place. They should have confidence in their own metrics, which would tell them that at least some of the people that have been to the “view cart” page have continued to complete their order. The problem is that ad tech firms knows this too – maybe not to the degree that Backcountry does – but they know enough to be dangerous. And they are willing to sell this information to one of Backcountry’s competitors. So Backcountry has to swallow the cost of advertising the same gloves to me that I have just purchased to prevent their competition from having the opportunity to start a new relationship with me and win my next purchase. My guess is that this is cheaper than building an effective post-sale media campaign. After all, they have my email address now so they can worry about post-sale tactics via email.

Why am I confident that this is the case? Because I see ads for products that I have bought. And it is also highly likely that the people that pay for these ads also have the same terrible experience shopping on the internet. They have to know what a horrible ad buy this is, and they still proceed.

Why don’t I ever see the competition’s ads? Well, to all other advertisers, I am much further up their sales funnel, and therefore my attention is worth less. Even if Backcountry figures out a lot of the people they are targeting with these ads have already purchased from them, they are still forced to buy my attention because ad tech firms are holding them captive. If they don’t pay for my attention, one of their competitors will.

A Terrible Experience

What we are left with is a terrible user experience on the internet. With the effectiveness of UX experts and Optimization teams today, this kind of efficiency should be eradicated from the internet. At least it would be if the inefficiency were plaguing the internet’s customers. We’ve all heard the cliche that if you aren’t paying for a service, you are the product, not the customer rings true here. With Facebook, Twitter, Google – we are certainly the product. When we are surfing the web, we are more of a hybrid. Content is crafted for us, in the form of video and text. However, for the advertiser’s whose money keeps the internet running, we are the product. I also find this problem to exist on sites I do pay to access content on.

UX and optimization won’t save us from this either. This is a fundamental flaw in how the economics of the internet work. Unless we all as a society reach a point where we are willing to pay for content on the internet with something other than a willingness to view ads, this problem won’t go away.

Economic Theory’s Blind Spot

Richard Thaler won a Nobel Prize in Economics for building the case that economists need to pay more attention to human behavior, and that we are not all rational actors. One of the foundations of economic theory had been that humans behave rationally and make decisions based on our best interests. This is what drives an efficient market. Thaler essentially proved this not to be the case.

I bring this up because it is doubtless that the ad tech marketplace has become extremely inefficient. My theory about the prisoner’s dilemma may border on conspiracy, but there is no denying that a lack of efficiency exists in this market. While it is unfortunate that marketers are wasting money, the real victims are consumers. Consuming content has become a headache of auto-play ads startling you at work and dynamic ads pushing text off the screen as you try to scroll through an article. We tolerate this because much of the content we consume on the internet is free. However, like with Spotify, consumers have shown a willingness to pay for something that provides value over a free alternative. Let’s just hope that some rationality finds its way to the ad tech marketplace soon.

 

 

Ads That Follow You

Do you ever buy something online, and then have an ad promoting that same product follow you to every website you visit for the next two weeks? I remember complaining about this to someone at Google, who told me “that should never happen”. I took this to mean that technology and digital media buyers were savvy enough to know the difference between me buying a product and me showing interest in that product.

I think it is now time to draw the conclusion that we have not reached that point. My experience was not an aberration, I still see this consistently. I don’t think it’s a technology or a strategy issue, it’s an incentive issue.

Media buying companies want to connect supply with demand, and remove as many barriers as possible. If I fall into a bucket of customers that are interested in a product,  they have more supply and demand to make money off of. I believe the technology exists to segment me out from the people that never actually purchased the product, but that would require more effort on their agency’s part. Effort = cost, and for now clients aren’t screaming loud enough for that extra effort.

I am not inclined to be overly critical of clients here. These media buys are likely a small piece of their marketing plan. They correctly allocate their time elsewhere, generating the demand that got me to buy their product in the first place. However, there has been a lot of talk about major CPG companies reviewing digital spend, so maybe there is hope.

I hear clients talk about personalization to the point that the term loses its meaning. I think Seth Godin makes a great point when he says that personalization is overrated and personal marketing is underrated. Market to me like you know me, and we might develop a relationship. Showing me ads for a product I’ve already bought is not how you do that. Marketers should seek to use technology to return to the days when we’d shop at stores where everyone knows us by name. The recommendations should make sense, and further our trust with the brand. It really isn’t that difficult to just show me a similar or complimentary product to the one I already purchased. Unfortunately, I think we have a long way to go.

Re-entering the Real World post-MBA

There are plenty of complications when entering the real world after taking a few years off to get your MBA. One thing I realized quickly is that I was no longer analyzing things from the perspective of a CEO. Most of the thinking you do in MBA coursework is through the eyes of an executive, which makes sense. It also makes sense that I should return to my place as a cog in the wheel immediately following my MBA. Nevertheless, it can be jarring.

I never expected my clients to hand over the reins of their companies and ask me to make key strategic decisions for them. The issue that I had, was the realization that my work was not directly related to what I had learned in school. It further compounded the already complicated question of “am I using my MBA?”.

I remember early on in my first year, hearing a second-year student say, “this isn’t trade school”. He advised that we seek to learn as much as possible and not focus on building skills for a job. I still think that this is valuable advice. But it doesn’t counteract the steep learning curve waiting for you post-MBA. It also requires that you find ways to bring out the value of your MBA for your employer. I like to think of the equation as this: the experience everyone else has + MBA = more valuable employee. The key to the equation is “the experience everyone else has”. This assumes you can acquire all this experience. This is where networking, rolling up your sleeves, volunteering and internships all come into play.

No road out of business school is an easy one. MBAs are expected to tackle difficult tasks, work long hours, and be prepared for anything. This road might not be easy, but it is rewarding. It offers flexibility and plenty of career options.

Jason Alexander Gets Business Leadership

Jason Alexander gave a tremendous interview on WTF with Marc Maron recently, during which he used a metaphor to talk about acting that resonated with me. While studying acting in college, he learned the tools of acting, but was never taught how to turn those tools into a successful career. He has obviously succeeded, but had he not found fame, he argues that he wouldn’t have known how to create work for himself. He didn’t understand the politics of getting something made, he didn’t know how to write parts for himself, and he certainly didn’t understand the business side of things.

His metaphor was that had he been studying to become a construction worker, he would have been taught how to swing a hammer, how to use a saw, and how to use all of the other tools that are used in construction. However, if someone asked him to build a house, he’d be lost.

I find this metaphor to be very relevant to a post I wrote on specialization. In it, I argued that recent college graduates seeking a career in digital marketing should seek to specialize in a skill or tool. The specializations I refer to are similar to the acting tools that Jason Alexander refers to.

However, I think Jason Alexander provides some additional insight, where my post fell short. That is how valuable the skill of the generalist/strategist are. Far too often, for those that know how to swing a hammer, every problem looks like a nail. It’s great to be able to swing a hammer well, but the hammer needs to be used skillfully and to address the right problems. Believe it or not, this is not always the case.

This is where I come in – the generalist, the strategist. I may not swing a hammer well or even know how to swing a hammer, but I know when to pull in the hammer swingers (or throwers). Using Alexander’s metaphor, I can design the house for you, but I’m going to pull in the right person to use the right tools at the right time. If you were to go directly to the expert hammer swinger, guess what they would start doing immediately? Start hammering.

What Alexander is very keen to that I omitted – is that understanding your craft or specialization is crucial. If he didn’t have the tools of acting, he never would have made it as George Costanza. However, turn that skillset into a successful career you should seek to understand the bigger picture. Understand how your work fits into the overall strategy of what your organization is trying to accomplish. If your role is to optimize your company’s website, understand that this is tied to a larger goal – to generate awareness, drive sales, to collect information. Understanding how you fit into the overall puzzle, and how the other pieces of the puzzle fit together is the key to leadership.

I realize that co-opting a metaphor for a completely separate point is not the greatest writing, but I TOLD YOU MARC MARON WOULD HELP YOUR CAREER!

Podcasts

I spend a lot of time listening to podcasts. Probably too much. Many of the podcasts I listen to are purely for entertainment purposes, but I believe that there are some that  help me to learn and grow. For the latter group, I created this list: Podcasts that will help your career.

I do think there is a lot of value in podcasts as a medium. It’s great to have a forum for intelligent, entertaining and engaging people explore interesting topics or just share their thoughts for as long or as short as they deem reasonable.

On this list I share why I think each podcast can be beneficial to your career. I will update the list periodically, since I am always on the lookout for new podcasts to listen to. Suggestions and feedback are always welcome.

 

Specialize

Digital marketing is often talked about in general terms. I hear young people describe their career goals as wanting to become a “digital marketer”. They have identified a growing field to join, which is good, but this is far too general. What do you see yourself doing, I will ask? On a given day, in a given moment? Are you pushing out an email? Are you sending a tweet? Analyzing web traffic? Designing a mobile app?

The thing about digital marketing is, everyone gets it at about 10,000 feet. However, when you start to zoom in, it can be difficult to get everything at 1,000 feet. It is nearly impossible to get everything, or even more than two or three things at 100 feet. An optimization expert probably can’t design an effective email campaign. A social media strategist would probably struggle to build actionable segments in a database. Each of these things requires a different skill set, and requires that successful individuals spend a lot of time developing their expertise. It simply isn’t reasonable for someone to be an expert in all areas of digital marketing.

Depending on your level of experience, you may not need to have a specialized skill set just yet. However, I have found that it is beneficial to have a specialized area of interest that you can speak to intelligently. There are plenty of areas worth specializing in that don’t require many extra years of advanced education. You can specialize in a function (email or analytics) or specialize in a specific tool (Google Analytics or Adobe Campaign). The specialization doesn’t necessarily require a certification (but those help). It is important that you quickly acquire relevant experience that you can speak to. What’s the best way to get this experience? See above comment about certifications.

I fall into the category of a generalist. If I’m trying to sound important, I’ll call myself a Digital Strategist.  If I could do it all over again, I’d probably have at least one specialty that I could fall back on. While I have managed to succeed as a generalist, certain doors within the consulting world have remained closed to me.  Being a generalist requires you to be develop a reputation for having “softer” skills, such as problem solving, industry expertise, quantitative skills, business acumen…and it helps if you can bundle more than one of these. It does offer some flexibility – I don’t have to worry about a tool or technology falling out of favor. But I can’t even count the number of times I’ve been asked if I have experience with email, asset management, analytics, or lead tracking tools. This specialized experience would have opened doors for me, leading to even more valuable experience.

Growth Is Painful

Your job won’t be easy. But it won’t be challenging in the way a difficult test is. It is messy, without a clearly defined problem, much less an easily identifiable solution. It will feel like you are spinning your wheels, wasting time. It will feel like you aren’t good at your job. This is how it should be. Because this is why a robot can’t do your job.

Look back a day, a week, a month. Has progress been made? It may not have been pretty, but the job got done. Most importantly, a replicable job got done. You are now the person that knows how to handle this particular challenge. You’ve learned. You’ve grown. It was painful.

These are the building blocks to a career. We learn through experience, which is why employers place such a premium on it. The only way to grow, to gain quality experience is to embrace the slog. Embrace the messy, painful, difficult situations that make you want to bang your head against the wall. Dive into the problems that shouldn’t be there, the ones that make everyone throw their hands in the air in frustration. Volunteer to figure out how to navigate politics, antiquated systems, difficult supplier or clients.

We aren’t all Nobel prize winners discovering game theory on a white board. This is how most of us will figure out what we are good at and establish our place in the world. It’s painful, but it’s worth it.

Digital Marketing Career Paths: Consulting

College students or recent college grads that are interested in a career in digital marketing will reach out to me occasionally. It’s a topic I know a lot about, but I almost always disappoint them when I tell them that I don’t actually do digital marketing. I consult on it. I help digital marketers leverage new tools and marketing teams develop new digital capabilities. But I don’t actually stick around to do any of those things. It’s worth noting that my firm does have people that stay behind to do the actual work, but that’s a different post.

So what do I do? Well, the common thread for me has been to work with marketing departments that are undergoing some kind of change. This change is usually geared towards becoming more digital and more data-driven. This may sound simple on the surface, but once you start to dig a little it gets complicated. Really complicated.

We help them organize their data. We help them organize their teams. We help them decide which digital capabilities they want. We help them understand which technologies and tools they should invest in. We help them install these tools. We develop org charts, processes, and governance to ensure everything runs effectively. Within each of these categories, there are other tricky problems that emerge and we help our clients solve these too. With as fast as technology and media is changing, there is plenty of work for consultants in the digital marketing world.

This path has been interesting and frustrating at the same time. You get to work with very smart, very senior, very cool people that do some cutting-edge things in digital. However, like I mentioned earlier – I don’t stick around to DO any digital marketing.

For those that want to become real digital marketers, there is an important caveat here. I have plenty of colleagues that started in consulting and are now DOING digital marketing in another industry. So if that is your end goal, consulting can help you get there. You also develop very valuable problem solving, critical thinking, presentation, leadership and teamwork skills, among others.

What are we doing here?

As a college student majoring in marketing looking to embark on a career in that field, I knew remarkably little about what potential career options were available to me. My approach was to begin my career search with the list of companies that were coming to recruit on campus – eventually landing in a sales role with Cingular (soon to be rebranded as AT&T Mobility). This isn’t necessarily bad, after all my family and I had spent a large amount of money on my education, so it made sense take advantage of the career resources available to me, and get a job.
Fast forward to me as a first-year MBA at NYU. This was me hitting the reset button on my career. Taking on loads of debt to make the move from my sales role at AT&T to…something cool in a marketing related field. I hadn’t really defined what I wanted to do, but figured I was in the right place to figure it all out. Naturally, I got pulled into pursuing one of the three main tracks: consulting, banking or brand management. I was going to pursue brand management. I was excited about this career path, but ultimately the CPG firms looking to hire brand managers weren’t excited about me. Accenture eventually found me and I dove into consulting. I am very fortunate this happened, but as you can tell, I kind of lucked into the best move of my career.
What was I lacked at each of these steps was a general understanding of the potential career paths that matched my interests and skills. I was just taking swings at job openings.
I don’t regret any of my career moves, but I feel lucky to be where I am today considering that I never really had much of a vision for myself. I accepted my job with AT&T because they had a great training program, lasting six months. As a senior in college, I couldn’t even imagine being more than six months out of school. The real reason I pursued my MBA is that I had friends applying to business school and law school, and I wanted in on the excitement. I also fell in love with a romanticized version of NYU. By some miracle, it lived up to the hype. Finally, I joined Accenture assuming I’d be out of consulting within two years. The snag in that plan was that I enjoyed what I did at Accenture, which again is a lucky coincidence for me. So here I have I stayed, having enjoyed some successes, and most importantly, still excited by the work.
The reason I state all of this is I don’t think it was entirely my fault. What exists to help students (undergrad and graduate) can struggle to keep up with a rapidly changing marketplace. I recall hearing from a lot of successful people whose careers I would have loved to emulate, but they didn’t get their start in any of the avenues that were open to me. So I formulated a plan to join the burgeoning field of digital marketing. It really lacked specifics.
Now that I am in the position to have students reach out to me, I find that they are in a similar position. They want a career in digital marketing, but don’t elaborate much beyond that. This is too broad of a term for anyone to have a meaningful conversation about how to approach their first job after school. There are many different functions, career paths, areas of expertise, and revenue drivers that make up the world of Digital Marketing. I do my best to turn these into productive conversations with the students understanding what I do in consulting, mainly because I completely understand what it’s like to be in their shoes.
I believe there is value for students to break down digital marketing into its component parts, they can have conversations that go beyond role descriptions. I also believe that it is very beneficial to specialize to have a successful career in digital marketing, and understanding the specialties helps with career planning. I know, because I didn’t do this.
As I have made my way through the twists and turns of my career, I have always been envious of the people whose career moves seem logical, building upon each step as they rocket towards success. They specialized in something early in their career that either became their career or positioned them perfectly for their future.
We all know what happens to the best laid plans. But a comprehensive understanding of the various career paths in digital marketing can only benefit those that are just striking out. Best of luck.