Part I of II – The Problem with the ‘Numbers Game’

Coming Next Tuesday – Part II – Your Found Money

In case you’ve somehow missed the news, on October 3 the ‘bailout bill’ was signed into law, creating a $700 billion Troubled Assets Relief Program to purchase failing bank assets.  Essentially, what the plan provided was ‘found money’ for investment banks who made bad choices that eventually resulted in massive ‘distressed assets, especially mortgage-backed securities.’

All other opinions aside, my big beef with this whole situation is that anyone is surprised that the situation came to this.  Things like interest-only-mortgages and high-risk credit approvals have been around for years.

How scary is this (some highlights from):
Beware Interest-Only; Liz Moyer, 12.07.05

“For years, it was a perk for the rich, but 2005 saw an explosion of sales to ordinary folks of a product known as interest-only mortgage loans. And now, the lenders themselves are starting to get worried while mortgage brokers continue to push these products for all they’re worth…Lenders piled into interest-only product, eager to keep underwriting volume alive.”

“Some consultants say aggressive sales tactics by mortgage brokers eager to get commissions by encouraging people to switch from their 30-year loans to interest-only products could be the next great focus for aggressive regulators.”

“Ruth Hayden, a financial planner in St. Paul, Minn., calls the phenomenon “Yuppie Money,” and warns against the temptation. “It’s pretending you have more than you have,” she says. “It’s over-leveraging.”

The bottom line is that it is no surprise.  Many mortgage brokers were driven by numbers, the wrong numbers.  They were told to write ‘x’ number of interest-only mortgages regardless of whether the borrower would be able to pay when the term changes and the full monthly payment is due.  No one did the the long-term math to see what would happen.

On a less dramatic, but somewhat as dangerous scale, many marketers still operate in that same type of non-sensible unrealistic bubble – by focusing on numbers that are less meaningful, but easily achievable, like focusing on visitors and not paying attention to ROI.

Companies operating with these types of marketing departments are creating the same scenario as the mortgage brokers who pushed interest only loans to those who ultimately could not afford them.  They are painting a rosy picture with no substance.  Without metrics for success for every dollar that is being spent in the marketing budget, metrics that factor in sales, lifetime value, and return on ad spend; many companies are setting themselves up to need their own bailout plan.

Coming next week – how to fix this; before it is too late, where to find your ‘found money.’

It’s always nice to see the older model working well with the new one.

The first presidential debate is tomorrow night which means we are now into the home stretch of the presidential election.  Are you registered to vote? Do you know where you’re polling place is located?  Have you made your decision as to who you’ll vote for?  What do you know about the vice presidential candidates?  What are Barack Obama and John McCain saying on the important issues?

These are some of the questions that Google attempts to help answer with a series of mapplets and other tools that are available for everyone’s use.  This post gives some details on what these mapplets and tools are.

First up is the Elections ’08 Map Gallery.  This is a very interesting set of maps that allow you to gather extensive information on a wide range of topics dealing with the election.  Among the topics areas that you can view are:

• Track the candidates on the campaign trail
• View the speeches by location that Obama and McCain have given throughout the election
• Predict the election results by selecting which candidate you think will win each state
• Visually see the life journey of both vice presidential candidates
• And much more

Google has also released a mapplet that allows users to gather 2008 US Voter Information for any area in the United States.  Just enter your address and you can see how many days you have to get registered to vote, links and phone numbers to get additional voter information for your area, where to vote (won’t be available until mid-October), and directions to get to your voting location.

This could be particularly valuable for organizations that are trying to register new voters.  After they get them registered, they can direct them to this mapplet to get directions to their voting location or even print out directions and give them to the newly registered voter.  Registering to vote is only the first step, so hopefully this can help increase voter turnout.

The last tool is Google In Quotes.  This is a tool that is in Google Labs, so it’s in its experimental stage at this point, but still provides very valuable information.  The tool pulls in quotes from stories that are linked to Google News.  The idea is to allow you to see the position that each candidate has on the various issues and read quotes from each candidate.

Nate is out this week, so I am filling in.  Next week, he will be back and the political coverage will resume.

Last week, I had the great opportunity to go to the XM offices (the COOLEST offices I’ve ever seen – even cooler than the Turner Broadcasting offices in Atlanta) and meet the band Safety Suit .  Their first hit song, ‘Someone Like You,’ has been popular since even before they officially released their album mid-May.

I was blown away by how nice, friendly, humble, and appreciative all four guys were.  But, I was more surprised by what I experienced.  The band was there as sort of a ‘meet and greet’ for some of the Program Directors from some of XM’s 170 digital channels.

After being friendly and gracious to everyone they met, the band eventually ended up in a conference room with their acoustic instruments.  After introducing themselves to a room full of strangers, they performed a few songs.

When they were done, they immediately began to work the room.  I am not saying that in a negative or condescending way.  Each band member made sure that they introduced themselves to each person in the room, and not just with a passing ‘hello’ but with a decent, funny, interesting conversation.

I’ve seen a LOT of concerts and up till now, I had always figured (like I assume most people do) that famous bands have some combination of talent and luck.  That may have been true at one time, but not today.  With all of the competition, the only way to be a hit (or frontlist) and not part lost in the tail - a band must have:

• Talent – Listening to any song on the album, you will hear the talent

• Personality – Funny, funny, funny guys

• Willingness to work harder than they ever imagined – The first time I heard of Safety Suit was back in April when I was driving through Columbia, SC.  They had stopped by a radio station there to do an on-air performance.  If you Google Safety Suit, you will see that the station in Columbia is one of MANY.

• Embraced the concept of networking/marketing in a traditional sense – Using their funny personalities and humility to win over person after person as they tour and promote their album

• Embraced even more the concept of social marketing – MySpace, Facebook, YouTube – they have it covered

In talking with Doug, the singer, he mentioned that if he weren’t ‘doing what he was currently doing’ that he’d be in Advertising/Marketing.  Then, he laughed and said jokingly… ‘Well, I guess this is being in advertising.’   Not only could a lot of bands learn a lot from these guys, so could a lot of companies.

Gabriel David Rhea was born at 5:16 on Monday, September 15th 2008.

He weighed 7lbs 6.6oz and was 19 inches long.

He and his mom are both doing great.

There are few places where I feel more stupid than in an auto parts store.  Because…when I am in an auto parts store that means that there is something that is VERY basic in my car that needs fixing.

I hate knowing that everyone in the store knows more about everything in the store than me.  And I hate not having any idea of how much things should cost.

As I stood at the counter of the NAPA auto parts store this morning, trying to figure out how to purchase a gas cap to replace the one I lost, it occurred to me that many people feel the same way about finding a digital agency as I do about buying auto parts.

SEO, PPC, Social Media, and Analytics are topics that are rich with jargon and self-proclaimed experts who want you to think that there is no way that ordinary people could be successful and that the only way to be successful is to hire someone to do all the work (e.g. outsource it to them).

After many years in the working in the industry, from traditional agencies, to consultancies, to an analytics provider, I know this is not the case.  So, just like a good auto part store will help you find the tools you need, take the intimidation out of a foreign situation, and explain what you need in plain English – so should a good digital agency.

So, if you need a gas cap, I can’t recommend NAPA auto parts highly enough.  Not only did the gas cap cost less than $7 (which I assume is a good price), but the salesperson did not even make fun of me when I asked the difference between the locking and the regular gas cap.  He kindly explained to me that, ‘Well, the locking gas cap….locks.’

If you need a good digital agency, contact us – we can explain to you how your current campaigns are doing and train you on how to do better.

Now that the Democratic and GOP conventions are over, I thought it would be a good opportunity to take a look at how the search volume for each candidate was impacted.  While this likely does not indicate how the campaign will turn out, it does show the interest level that is there for each candidate.  Before looking at how the two conventions impacted the search volume for each candidate, it is good to take a look back to see the search volume for each in the previous few months.

The chart below shows the search volume for Obama and McCain from May through July.

As you can see Barack Obama crushed John McCain during this time period with an interest level that was 68% higher (28 for Obama, 9 for McCain).  Check out what the numbers mean for an explanation of how they are calculated.  Obama was still fighting it out with Hillary Clinton for the party’s nomination until early June, which you may think would lead to a higher interest level for him compared to McCain.  You can see, however, that after he clinched the nomination – which is when there was the largest spike on the chart – Obama continued the same dominant share over McCain.  So, both during the primary and after the nomination was clinched, Obama had a commanding lead in search volume.

With the end of the summer came both parties conventions with each strategically trying to build buzz for their respective candidate.  How did they do?  Well in terms of search the chart below shows the results.

Obama had a commanding lead leading up to the democratic convention, but both candidates saw a significant spike during the convention with McCain beginning to close the gap.  McCain then surged ahead of Obama for the first time during the GOP convention with Obama seeing a slight spike, but nothing like McCain saw during the democratic convention.  McCain has since slipped back and Obama has regained the lead in search volume.  Overall, in the last 30 days, Obama’s lead in search interest has declined but he still commands a 36% lead (31 for Obama, 20 for McCain).

There was, however, more than just the presidential candidates that took center stage during the conventions.  Joe Biden was chosen as the democratic vice presidential candiate and there was also the seemingly – out of nowhere - nomination of Sarah Palin as the GOP vice presidential nomination.  What impact did each have?

There was huge impact, which probably does not come as a huge surprise given the media frenzy that ensued after Palin was picked.  The chart below compares both presidential candidates and their running mates over the last 30 days.

As you can see, Palin wasn’t even on the radar, but has since surged ahead of the other three.  Biden, meanwhile, saw a slight spike in interest after he was chosen, but has remained low relative to the other three.  The interest level for each over the last 30 days was:

• Palin – 39
• Obama – 31
• McCain – 21
• Biden – 6

Obviously, McCain picked a running mate that has generated significantly more buzz than Obama did, but does that translate into more votes?  Only time will tell if the GOP can keep up the momentum.

Based on the search volume, one could argue that the presidential election has turned into the Palin-McCain ticket versus the Obama-Biden ticket.  The search volume also indicates that Obama is now up against a two-headed beast with Biden taking a distant backseat and having a minimal impact.  We all know, however, that in the age of 24 hour news channels, or more accurately 24 hour entertainment news channels, and the influence that partisan bloggers now wield, momentum can change quickly.  So too can the level of search interest fluctuate, but only time will tell if it’s an indicator of which way the election will go.

With Barack Obama and John McCain now in full battle mode, I thought it would appropriate to take a look at some online metrics and make some comparisons to how each is using the internet to help their campaign. In the lead up to the election, I will post my findings and observations.

Some topic areas that I will likely include are:

• Search volume relating to each candidate in key “battle ground” states
• How they are using search
• Analysis of their Websites
• Analysis of their involvement with social media
• Other areas that seem appropriate as we move close to the election

One quick observation is how they have each reacted to hurricane Gustav. The republican convention scaled back the schedule of events and speakers on the day the hurricane hit. Instead, they focused on its potential impact and the states that could be affected. McCain’s team also made sure to give it prominent placement on their homepage and highlight speeches that were given by Cindy McCain and Laura Bush.

Not to be outdone, the Obama team has put up a splash page that has temporarily replaced their homepage. It calls for individuals to make a donation to those affected by Gustav.

So, even in times of tragedy the candidates are jockeying to show American citizens that they are in tune with the needs of those that have been affected and are working to help provide relief. And, this is just the beginning of what is sure to be a nasty battle in the coming months.

My wife and I have been watching the Olympics whenever we could over the past two weeks.  We’d watched almost any sport that was on and usually enjoyed it.  But on Saturday, NBC did something I couldn’t believe.  They aired about two hours and ten minutes straight of the most boring TV I have ever sat through (and why I did, I’m not totally sure).  They aired every minute of the men’s marathon run.

Now, I have nothing but respect for anyone who can run 26.2 miles straight.  I’d be hard pressed to run 26.2 feet – let alone recreate Pheidippides’ historic run.   But, that doesn’t mean that I’d like to spend 2 hours watching someone else do it.  I’d have been fine with watching the first ten minutes, cutting back to it every twenty minutes, and then watching the end. 

But seriously, why would you televise the entire race?  Show me something, anything else!  Watching linoleum curl would have been more interesting (if nothing else for that cool/geeky science aspect).  Plus, commentators run out of interesting things to say in an exciting sport so you can only imagine what they came up with during this riveting spectacle.  “Look they’re at a water station.”  “It really cools them down when they pour it on their heads.”  “Yeah, they sure like water, Bob.” or “These runners are really… running…”  I was on the edge of my seat.

So, why would NBC in its infinite wisdom show such fascinating TV during prime time? (Granted it was on Saturday, which is not a historically high-rated TV night).  I can only come up with two reasons:

1. They thought live-and-boring would trump taped-and-interesting or…

2. They didn’t think it through.  In either case, I think number 2 applies.

So, the moral of this story?  When you spend billions (or just hundreds) of dollars on a marketing campaign, think through how the audience will see it/hear it/understand it.  Throwing  money at anything only makes you poor.  Make sure your campaign is thoroughly thought through (say that three times fast). 

Try to look at it from the perspective of your target audience.  If I was X target audience demographic, how would I interact with Y marketing materials whether it’s a print piece, a Web piece, or a TV/Radio piece.  Don’t assume they’ll jump through whatever hoops you’ve laid out. 

Think about how you would react to the same sort of materials if you were in someone else’s target demographic.  If you take the time to think through every aspect of the life cycle of your campaign, you’ll see better responses, happier customers, and possibly a blacker bottom line.

Remember slow and steady (and thought through) wins the marathon (sorry, I just had to).

Is there a trend that is slowly developing of users moving away from using AOL’s AIM? I don’t have hard data – so, this is a unscientific post. But, based on my friends’ usage and other young professionals I’ve heard from – the answer is a definite yes.

Being a 20 something, do you really want to have a massive list of contacts from college or all the way back to high school or even earlier (many of whom you really don’t care to hear from) IMing you? The likely answer is no. That is one reason why I believe a growing number of young professionals have stopped using AIM altogether.

Where are many of these young professionals turning to? Google, of course. Just as we became accustomed to using Google for search, many are turning to Google for other needs as well. Virtually everyone I know has a Gmail account, and for most it has become their primary email…that is when email is actually used instead of Facebook, but that’s a whole other topic.

Along with Gmail comes the ability to use gchat which is what many young professionals are now using for IMing…or more appropriately called gchatting. It’s very simple and can be used directly in Gmail or by downloading Google Talk.

And best of all – it doesn’t have your long list of “friends” from college, high school, or for some middle school. I suspect this will be a growing trend as more and more young adults enter the work force and start a new chapter in their lives.

So, will the term IMing be replaced by Gchatting? Who knows, but based on my unscientific data it would seem like it’s moving that way.