Visibility

February marks the slow transition from pro football to Major League Baseball, and while dissecting Superbowl advertising and Theo Epstein’s off-season maneuvers, my thoughts gave way to a new view of marketing in 2009. I’ll characterize it this way, “There are two kinds of marketing executives in the world – Powerball marketers and Moneyball marketers.”  Chalk my revelation up to sports deprivation, but you have to admit this analogy aptly describes how marketing executives are approaching their jobs this year.

Powerball marketers cross their fingers and hope for great outcomes. Powerball, the nation’s largest lottery, promises million-dollar payouts, but not the best odds. Playing Powerball is easy; first you pay money and then you guess numbers. Whether you’re right or not is completely up to chance. Sound familiar? It’s hard not to compare Powerball to marketing, but it’s not the size of the bet that matters, it’s how marketers use the information they have at their disposal that delineates a blind bet from a smart investment. 

Take the Denny’s Free Grand Slam campaign, an effort to drive trial and traffic for the restaurant chain. How do you measure whether the campaign was a success? From my perspective, getting two million people to show up for free food is noteworthy. But what matters in the end is whether they come back again. And by this measure, the campaign seems like a flash in the pan. Why? According to Compete, the number of people who visited www.dennys.com increased twenty-fold immediately after the Superbowl, but consumer interest since then has receded all the way back to pre-advertising levels. Using consumers’ online behavior as a proxy for offline marketing impact, this suggests that Denny’s strategy fed a short-term need, but isn’t likely to change consumers’ long-term behavior. Seriously, can a single Grand Slam be so remarkable that consumers remember to choose it over closer, more familiar alternatives? This seems like a big bet with Powerball odds.

Moneyball marketers start with data and then engineer the outcomes they want. Moneyball is the opposite of Powerball. The term was popularized by Michael Lewis in his book “Moneyball: The Art of Winning an Unfair Game,” itself a great description for the new marketing zeitgeist. The basic concept is that the conventional wisdom about creating championship-caliber baseball franchises is patently wrong. In contrast to intuition, math-heavy Sabermetrics relies heavily on empirical data and a battery of new analytics to predict the outcome that matters most – winning games. Sabremetrics practitioners rely on new statistics like “on-base percentage” and “runs created” to breakdown individual player performance and better understand how each contributes to winning. The parallel to marketing is clear – better metrics and better models yield a better game plan that can consistently beat competitors.

Looking for good examples of Moneyball marketers? Hulu, the two-year-old online video service, comes to mind. Like Denny’s, Hulu also bet big on a Superbowl ad to propel consumer adoption. But this was a smart investment; daily usage of Hulu is now twice as high as it was before its ad ran. The difference between the Hulu and Denny’s strategies is critical. For Hulu, simply exposing new people to its service was enough to change their behavior – high quality, free, easy-to-navigate online video is indeed remarkable within the first visit. While it’s tempting to think that Hulu just got lucky, and that its success was not a result of intense statistical analysis, this would be short-changing the strategy. Moneyball marketers start with the outcome in mind and then deliver the most important metrics to achieving that goal. To that end, Hulu executives smartly identified that for their service, a prior visit to the site truly is the best predictor of whether a consumer will visit in the future, and invested in the Superbowl ad to drive visitation.

We’re nearly half-way through 2009 and no one can predict where the economy and consumer spending are headed with any certainty. What is clear, however, is that we are in a Moneyball marketing environment and that using conventional wisdom to manage your marketing can have catastrophic results. It’s time to abandon the old Powerball philosophy – I’ll see you on the field.

* Reprinted from MediaPost's Metrics Insider.*