Not only did the shift towards digital communication cause a continuing decline in revenues, the lack of innovation caused the U.S. Postal Service to fall far behind able competitors like FedEx, UPS, etc. (lowering prices is not innovation; and delivering 3 days a week is not innovation either.) We are at a point now where if the USPS disappeared, consumers will shift their remaining habits towards digital and existing delivery competitors will (gladly) absorb the incremental business (because they already work the routes anyway, and can even lower prices due to extra volume).
March 4 (Bloomberg) — The U.S. Postal Service, facing a $238 billion budget deficit by 2020, should consider cutting delivery to as few as three days a week as the agency attempts to pare costs, a consulting firm said.
Those cuts are among changes McKinsey & Co. presented in a report this week at a postal conference in Washington. Options also included expanding business lines and restructuring retiree health benefits.
The Evian baby viral ad (red spike) got almost as much search volume as eTrade’s Superbowl ad of 2009 (blue spike). But Evian paid millions less by skipping the expense of airing the video on traditional media; instead they just posted it to YouTube for free. But notice that in both cases the effect was ephemeral (not long lasting) — notice the narrowness of the spike. Interest in the viral video also subsided quickly. But at least Evian didn’t waste millions on producing and airing it — thus achieving a massively larger ROI than Etrade who paid to make the ads and then air it at great expense on the Superbowl for the last 3 years.
My main issues with the Net Promoter Score (NPS) is that it doesn’t tell me anything new, is based on flawed math, the number cannot stand alone, and is not actionable (does not tell marketers what to go do).
Just as physicists and mathematicians have been searching for the grand unified theory of the universe, I have been looking for a way to tie together the disparate disciplines of marketing and advertising, a way to correlate metrics from different industries that interrelate with marketing (e.g. market research, Nielsen, etc.), a way to put all past theories in context and perspective (Michael Porter’s Five Forces, Net Promoter, etc.), and a way to explain marketing successes and failures — all in one.
My method is the scientific method – which is simply put doing experiments and making observations that either support or refute hypotheses.
A grand unified theory will also need to be able to take into account phenomena such as social networks, etc. What are the organizing principles of such; what is the value? Why now?
Using digital tools — such as search volume trends — we can start to correlate marketing spend effectiveness across different forms of media and also different advertising and marketing techniques. The example below compares eTrade and Drobo. What is most embarrassing is that eTrade, a well known brand from the first dot-com heyday, spent lots of money creating and airing TV ads which it hoped would go viral. They even paid for Superbowl ads for the last 2 years to promote the “eTrade talking babies” as you see from the 2 spikes in search volume during February of 2008 and 2009. However, when compared to Drobo (a startup company that developed a very easily upgradeable back up hard drive array), it is shocking to note that Drobo spent NOTHING on advertising and relied entirely on word of mouth and an awesome product. And their search volume is not only larger than eTrade but also sustainably larger despite zero advertising and media cost. The “totals” even suggest that the volume under the curve of Drobo is 8X (EIGHT TIMES) that of eTrade.
So if you consider that eTrade spent millions of dollars to create the TV ads and even more millions of dollars to air them on TV in order to drive interest, demand, and hopefully new customers, then Drobo can be considered to have gotten the equivalent of 8X more dollars in advertising and media – for FREE using techniques and channels other than TV advertising. So what does that say about the relative value of TV advertising compared to these other, newer techniques?
Chocolate covered cherries are more popular (more searched) at Christmas; but chocolate covered strawberries are more popular at Valentines. By observing what people pull for, we can derive insights that are useful in business strategy, inventory planning, and marketing (by ads around chocolate covered strawberries for valentines but cherries for christmas)
Source: Google External Keyword Tool – Search Volume Trends
via Niall McKinney, uTalk Marketing. At Valentines, women need more help picking gifts (search volume for “gifts for guys” consistently higher every February for the past 5 years). But “gifts for girls” shows dramatically higher volume every Christmas.
godaddy superbowl ad spending led to sharp spikes in search volume every February for the last 5 years straight. Other advertisers who spent on Superbowl ads have similar lift in search volume from the TV advertising.
If you believe that lift in search volume indicates interest and intent and if you consider that each 30-second ad cost $3 million in 2009 (WSJ: NBC Super Bowl Ads to Cost $3 Million) and assuming GoDaddy’s ad did not air more than once, they spent $3 million to get their ad in front of a TON of people and to get people’s attention. Those people who saw the ad and were interested enough to take action went online and searched for more information by typing godaddy into search (see lift in search volume during February of each year) .
If we assume that it took $3 million to generate a certain lift in search we can use multiples to calculate the media dollar equivalent of any lift in search — for example, if godaddy spent $3 million to get X lift in search, then a 2X lift in search would have required $6 million of media (in a very very simplified back of the envelope estimate; it usually would cost more than 2x to get that lift) — i.e. it would have cost at least $6 million in superbowl ad media dollars to achieve a 2X lift in search volume.
So, if we now compare search volume on megan fox side by side with godaddy search volume, we will see that in Feb 2009 Megan Fox was indexing at 21 while godaddy was indexing at 12 (this is normalized to a scale of 0 – 100). So search volume on megan fox indicates she was getting the equivalent value to $6 million of super bowl media ad spend – FOR FREE — roughly 2X the search volume of godaddy in the same time period.
At the peak of her search volume in June 2009 (corresponding to the release of Transformers 2: The Revenge of the Fallen), she was indexing at 100 and godaddy at 7. This is 8x the index of godaddy of 12 during the Feb 2009 time period when they were airing their superbowl ads. This implies that she was getting the search volume that would have required the equivalent to a $24 million super bowl ad spend to achieve — again for FREE!
If you want to research futher, use the following link to bring up Google Insights for Search to see relative search volume
In February 2008, Megan Fox indexed at 8 and GoDaddy at 8. In 2008, Superbowl ad spots cost only $2.7 million — so she had the equivalent search volume as a paid advertising spending $2.7 million on a Superbowl ad.
In 2007, Godaddy indexed at 6 during Feb 2007 Superbowl. Megan Fox indexed at 43 during the July release of the first Transformers movie — this is an 8X multiple on Superbowl ads that cost $2.6 million — or $21 million
So the perfect “product placement” of Megan Fox in the two Transformers movies garnered her nearly $50 million worth of advertising based on search volume equivalency. This does not even take into account her sustained and increasing search volume, compared to most advertisers’ search volumes which drop right back down to pre-ad levels once the ad is finished airing.
… saw the ad, recalled it, and thought it relevant enough at the time to make the effort to take action — search for more information about it (beyond the tidbit of info contained in the 30 second ad, print ad, radio spot, or banner ad).
But traditional ads are still very very costly and inefficient due to the extremely large media cost.
For example, at the extreme cost of a Superbowl ad, the following advertisers were able to drive fleeting (short-lived) lift in search volume: godaddy, etrade, sobe lifewater, dennys.
interest in Harry Potter movies (indicated by search volume) match exactly to the launch of the movies themselves. What is interesting is that the current movie (Half Blood Prince) and the upcoming 7th Harry Potter Movie (Deathly Hallows) had enormous search volume over 2 years ahead of each movie, 2005 and 2007, respectively. See second chart below.
Daniel Radcliffe…Harry Potter
Michael Gambon…Professor Albus Dumbledore
Dave Legeno…Fenrir Greyback
Elarica Gallagher…Waitress
Jim Broadbent…Professor Horace Slughorn
Geraldine Somerville…Lily Potter
Bonnie Wright…Ginny Weasley
Julie Walters…Molly Weasley
Rupert Grint…Ron Weasley
Emma Watson…Hermione Granger
Helena Bonham Carter…Bellatrix Lestrange
Helen McCrory…Narcissa Malfoy
Timothy Spall…Wormtail
Alan Rickman…Professor Severus Snape
Oliver Phelps…George Weasley
is keep your audience, keep them interested, or provide enough value to them to get them to switch or get them to come back.
Case in point, Wolfram Alpha. In many ways it is superior (in a different way) than Google because it is a computational search engine — its results are focused on things that can be calculated — e.g. distance between NY and San Fran, etc.
Interest has waned (see search volume chart) and traffic has dropped (see Compete chart).