Capitalism, Good Business or Greed?

Here is another case where I have to question is this pure capitalism, good business practices or greed praying on those who are struggling?

Progressive Insurance

My son in Boston has progressive auto insurance.  He got an email notification that his car insurance was coming due.  It was interesting the various payment options available for the six month policy. I love how they thank him for being a loyal customer then reach deeper into his pocket to extract crazy fees.

Options:

Option 1 Pay in Full – For $696.00 – this is the best “deal” for everyone. It gets my son the best price for coverage and Progressive the money up front. This does mean he is “prepaying” for his insurance. If he wants to shift it is harder to do and takes about 30 days to get a refund.

Option 2 – Automatic Deductions:  $864.00 this is a 19% premium over the base price.  At this rate, you are paying about the same as most credit card interest for people without great credit so not a bad option if you can’t pay the full amount up front. It is easy, you don’t do anything except make sure money is in your checking account. Progressive does have to wait for their money since most of these are paid even if you don’t have the money and if you don’t you get hit with overdraft. It is automatic for Progressive and the $1.00 cost for the digital transaction is still profitable. I don’t understand the reason for a 19% premium other than they can.

Option 3 – Monthly Installments:  $1,009.00 – this is a 41% premium. This should be against the law. I would call this a “broke and/or dumb person penalty” since this person is broke and can’t pay and needs to call the day of the payment and pay them OR does not have a credit card where teh interest would be lower to just pay it and then pay the credit card each month.

Both of the periodic payment options represents the risk of the customer not paying and the loss of a customer but more importantly the time value of that prepaid interest revenue.
The capitalist in me finds nothing wrong with this since you are paying for a service where you have a choice in who you do business with.   But then again, this is prepayment of the insurance which you have not consumed. We don’t really do this with anything else?  These preapyments only seem to happen on insurance other than expensive medical insurance.

The emotional human side of me thinks this is wrong to prey on people that can’t pay for the full six months. You were laid off, had a emergency payment for a doctor or a large home repair and have to pay in installments – is a 41% for “installment fees” appropriate?  If they don’t pay in that month then they get cancelled so it is not like they could actually rip off the insurance company.

Fortunately, our son is doing well and learned when he was in high school that he needed to budget and save money ahead of these large expenses so that he can pay them in full which in this case he did.

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Stupid Systems or Greedy Airlines?

A few months ago I was looking to book a flight for my wife and I go to from Sydney to Auckland New Zealand while we are in the area for a conference.  Being a “very” loyal United customer I went there first to check on flights.   I was going to one big trip – into Sydney – the hop to Auckland then back to the US from Auckland.  That was a problem so I tried to just add a simple leg to Auckland.

Now I have written about some crazy routs by United but this is a simple 3 hour flight in Economy that they thought a fair price for was over $3,000. Interestingly it would be on a code share partner Air New Zealand.

united_wtf

So like any good price conscience shopper I went ti Air New Zealand to see what they would charge to fly the exact same seat on the exact same airplane and it was starting at less than 10% of what United wanted. At the 10% rate I would get a better seat and a meal unlike what I would get with United.

air_new_zealand

You would think the systems would flag this type of thing but I guess if someone was willing to pay the yield on that route would be amazing. In my case I booked it with Air New Zealand.

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To many damn surveys

I recently traded in my tree hugger Prius for a Mini Cooper CountryMan which I love.  I really liked my Prius but got tired or not being able to quickly pull out from a cold stop and wanted something a little more upscale.   Anyways… since buying the car two months ago I have received 12 different surveys.   The first one I did since it was from Mini Cooper.  I had an amazing experience buying it from my dealer and have been very happy with the car.  Maybe that was my first mistake – actually taking the survey.

Over this past weekend I received 4 more different survey packets in the mail all wanting to know about my new car buying experience, the features and one I would almost interpret as a “why did you not buy American” since that was the sort of questions.   I just threw all of them in the recycle bin.  I have never had this many requests for information after buying a car.

Nothing more specific other than they were all very long and none of then gave me any real incentive to complete them.  All would enter me in some sweepstakes to win $50 or potentially an iPad.

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Is the bad economy creating Cowardly Marketers?

I do think the bad economy (yes, its bad and not some scare tactic by Obama) and the fear of loosing their jobs that are causing some marketers to hide their heads in the sand and allow grossly under performing campaigns and programs continue to run.

Until recently I had rarely encountered a marketer who actually admitted they were “afraid” to tell management of problems or poor performance in a marketing campaign. In most of my experiences companies wanted to know so they could fix it or not repeat it. As long as they learned from it they can and should improve it. It seems now that I encounter this fear of even knowing they have problem almost 50% of the time. At a time when we should be trying new things or wringing every dollar possible from our campaigns too many cowardly marketers don’t even want to know how poorly they are doing .

I recently did a pilot of my tool for a couple of companies that showed significant problems with their search programs. While they loved the insight and the identification of a lot of problems – two of the companies decided not to continue the pilots since they were afraid that it would showcase “too many opportunities.” I always thought it was silly when companies referred to “Challenges” and “Problems” as “opportunities” just to make themselves feel better. But to not want to know you have problems or let management know at this frequency is pretty amazing.

In one of these cases, we pulled in all of their PPC keywords and found that over 27,000 words had a negative Return on Ad Spend (ROAS)- meaning the media cost was more than the revenue generated. Not always a bad thing, but the amount of the loss in this case was just over $155,000. The company was in total disbelief that they had that many under performing keywords. Just looking at a few of the words we found significantly opportunity for changes that would improve the campaigns. Ironically, this loss for a single month was 3x their annual SEO budget which was doing nearly 50x the returns of the paid program

In another case, we found nearly 300 keywords with over $100 in organic revenue that were not in their paid program. We also found that 16 of their top 20 most expensive words were not in any sort of SEO monitoring or optimization program. If your willing to pay a premium for keywords in PPC they should also be as important to the SEO team.

While I can understand the concern letting it continue only makes it worse. I had my first “don’t tell management” experience many years ago when working in a similar “fear-based” management culture. My first job out of the Marine Corps was for a Not-For-Profit company doing medical records review for the federal government. They were part of the government but privatization sounded to the government agency good so they merged 10+ offices into one the year before I started working there. This meant there was a lot of office furniture that belonged to the government and no one knew what to do with it so they put it in storage and forgot about it but were paying nearly $15k a month in storage fees. Apparently everyone in corporate accounting thought this was medical records storage (even though there was a separate line item for records storage) and not old furniture storage. The silly part is any excess government property it can be turned into the re-utilization center at no cost. We were lucky that we had one not afar away on the Marine Corps base and even better one of my Marine buddies worked in that division.

Being the go-getter, I got the appropriate forms from my buddy, wrote database application for the inventory management so that we could quickly process the paperwork. I called a local moving company to get a quote to load and deliver the furniture to Orange County from Los Angles. Total cost out the door was about $16k given we would need to do 4 semi truck loads and half-dozen temps to load them. My budget request was “denied” due to not having the money budgeted. Ironic we could not spend $16k to save $180,000 in annual storage costs for furniture and equipment we would never use. Even worse, the local management team told me to “forget about this” because if senior management had heard that they did not dispose of the furniture and were burning that much money to store it it would be hard to explain. In the end, a financial audit found it and these incompetent managers were fired over hiding this from management.

I hope this trend does not continue and maybe when the economy gets better it is easy to piss away a lot of money but when times are tough we should encouraging our teams to dig deep into the data and find nuggets of savings and performance improvement.

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89% Uplift from Paid Search Clicks

Popular article republished from my Back Azimuth company blog. The above is the headline of a nice shinny object that Google is dangling in front of marketers. One that is being used out of context and I am sure has resulted in significant money being pissed away in paid search. Now, I am not against paid search in any way – I think it is a great tool and works even better when it is in collaboration with organic listings. That is what I advocate – co-optimization. How do we make them work better together.

Over the past few weeks I have heard that 89% quote in four countries, at every conference and at least 20 times alone at SMX in New York. So where did it is come from?

This is essentially the findings of a research study released recently by Google employees titled “Incremental Clicks Impact of Search Advertising” that said the following:

A meta-analysis of several hundred of these studies reveals that over 89% of the ads clicks are incremental, in the sense that the visits to the advertiser’s site would not have occurred without the ad campaigns.

Immediately this was translated by the market place as the following headlines in articles and blogs with the first being my favorite “doom and gloom” heading:

  • “Danger – STOP Paid Search Advertising & Lose Up To 89% Of Your Web Traffic!”
  • “89% lift when Paid Search is added to Organic Search”
  • “Studies show search ads drive 89% incremental traffic”
  • “Paid Search delivers 89% more traffic than organic SEO alone”
  • “Google Study: 89% Uplift from Paid Search Clicks”
  • “Google: Search Ads Drive 89% Incremental Traffic”
  • “Google Research Shows Paid Search Ads Get 89% More Traffic Than Organic Search Results”

Google went on to create an “idiot proof” Paid Search is Great video that showed that in some cases 98% of the traffic

For those of you that actually read Google’s study other than the half-assed paraphaseing blogs you might have noticed the “your mileage may vary clause” in the last paragraph of Section 3:

A low value for IAC may occur when the paid and organic results are both similar and in close proximity to each other on the search results page. This increases the likelihood of a user clicking on an organic result as opposed to a paid result.

Close proximity occurs when the ranking of the organic result is high, placing it near the paid results. Organic results triggered by branded search terms tend to have a higher ranking on average and this may lead to a low IAC value.

Matt Van Wagner scared me for a moment with the headline in a recent Search Engine Land article Google Study: PPC Ads Do NOT Cannibalize Your Organic Traffic fortunately Matt was not another Google fanboy and strongly suggested that people actually test the data. As I mention on my personal blog, New Venture Announcement – Voice of Consumer Data Management System I have done a few surveys and found only a few people actually combining the data and doing anything with it.

Brad Geddes has been talking about this the longest and a recent post on his blog goes into the mechanics of doing the testing of paid vs. free clicks. I had already added this specific testing into my tool and it starts to show some very interesting results.

One of the biggest reasons I found as to why people don’t do it is it is too hard to do for most.  In Brad’s post he simplifies it but what if you have a lot of keywords?  This is one of the key elements that I have built into my tool. I have only found a few companies that even know if they are ranking for key paid listing.

Below is a screen capture from my tool that shows that for the 20 most expensive words by Cost Per Click they did NOT rank on even on the first page. In this case, yes, Google’s study holds true – if you have no exposure in organic search then the only exposure you will get is from paid ads.

In this case they are paying $10.00 or more per click, their highest CPC and they are not ranking well.  We can’t even get to a collaboration scenario until we have the organic rankings.   This company was not aware of this problem since they were not looking at the data collectively.  Immediately after learning about this they went to work optimizing the pages to try to get these to rank better.  In a few cases, there were not important and they reduced their average CPC.    This is the opposite reason people use PPC – to make up for the shortcoming of their organic performance. Maybe they can redo the study and show what happens when they have organic rankings.

To help companies understand once they have an organic ranking and a paid search rankings what is happening.  I have built into the application a simple ROI calculator. For your PPC Loyalist and Co-Optimization Haters – yes there is no message context or any other variables other than the fact this word had a negative ROI.

In the example below, we have a keyword that everyone thought was performing acceptably well.  When we actually do some analysis we see that it has a negative ROI and is loosing the company $11,825 dollars in the current month the the organic term was generating $6 million.

To be fair, we can look at a positive ROI example where the paid and the organic have generated a positive ROI.

In this case organic still does out perform PPC but PPC has a positive ROI. In further tests when this PPC ad was day parted to appear less frequently, Organic did not pick up the additional clicks. This showed us that in this specific case, paid and organic were collaborative and having paid search resulted in incremental visits and clicks.

There are a few things you need to do and consider when looking at the analysis.

You don’t have to do all of your keywords.  You should decide if they are the brand name, branded product names or if they are general category or specific non-branded words you are looking at.

The tests you want to do are the following:

What happens when we have paid only?  This is a good test to do before you optimize content and do not have an organic position.

What happens when we have organic only? You can day part of pause the paid search for a period.  Most of the times a few days or a week is sufficient.

What happens when we have paid and organic? Once you rank well you can start the comparison.  This will tell you what is happening when they are both together.

We are NOT trying to eliminate paid search for all words.  Only those words there there is not an incremental lift if clicks.  If we turn off paid search and all or most of the clicks and conversions that went to paid increase the organic clicks and conversions then paid is NOT complimentary but cannibalistic.  If the clicks and conversions do not increase we can assume that they are collaborative and simply un-pause the paid ads until you can do a message test.

The point of this is just test it and see what is happening.  If you want to better understand our analysis tools send us an email and we would be glad to give you a demo.

 

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New Venture Announcement – Voice of Consumer Data Management System

Hi again, it has been way to long since I updated this blog and has been for good reason. As a few of you know I have been heads down developing a system to data mine keyword and social media data. Yes, I know the subject name sucks – any suggestions? What seemed like and easy thing to do had turned into a total beast and development feat. I am here to day that we have accomplished most of the phase 1 specification and are now ready to realize as a commercial product. We we will add features in 3 phases which I will talk about in more details later.

More information is at http://www.back-azimuth.com – if your interested in it ping me and we can do a demo and maybe make you a beta client.

For now the application does the following:

Aggregates all of your keyword related data into a single repository stored on the cloud. Then allows you to quickly identify critical issues and missed opportunities.

Why did I do this? Over my years in search marketing one of the biggest challenges have been to manage keyword data. At IBM I built a keyword de-duping application just to find and manage duplicates between 30 business units doing paid search.

Only until we had this tool did we know that 21 business units were all bidding on the same keyword phrases. Last year working with a large multinational in Europe I asked them for their keywords and it took 8 days and I received 21 different Excel worksheets from the Search manager that represented their words. In another case, a multinational with thousands of products only had selected 25
keywords for any optimization efforts meaning tens of thousands were going without any efforts. All of these led to my desire to create a tool that would eliminate problems.

Over the past few months I have conducted a few survey’s of companies and from this research I have identified a number of keyword management challenges.

Keyword Management Challenges:

  1. Companies struggle to manage keywords in Excel (99.8% of companies surveyed)
  2. No lens into collaboration of Paid and Organic data (99.87% of companies surveyed)
  3. No way to see where keywords are under-performing against KPI’s (98.75% of companies surveyed)
  4. No way to monitor if the “right” page is ranking (99.25% of companies surveyed)
  5. No way to understand keyword performance by category or buy cycle (99.98% of companies surveyed)
  6. No way to understand performance based on the Searcher’s Intent (99.98% of companies surveyed)
  7. No way to leverage searcher interest data to prioritize content in the organization (100% of companies surveyed)

If you want to add to the survey simply go and add your responses to the Keyword Management Current State Survey.

What can we do today?

1. Aggregate all of your keyword data into a single searchable repository with role-based login access by different roles in the company.
2. Conduct paid and organic co-optimization analysis – are they cannibalizing or complimenting each other.
3. Preferred Landing Page Analysis – is the page you “want to rank” the one that is ranking?
4. Rank Analysis – same as everyone else but we allow you to sort by priority words, line of business and any keyword cluster or classification
5. HitWise Integration – if you have a HitWise account we can pull in the API feed and compare HitWise trends to your actual data
6. Data mine and Report on any of 55 different keyword variables
7. Develop Searcher Intent and Persona Segmentation – using any of 50 performance or segmentation factors cluster keywords into logical segments
8. Store, sort and report on data across business units, lines of business or countries
9. Understand performance by keyword length, position and paid and organic assists
10. ROI Modeling based on multiple variables

What has been the outcome?
In my first generation I used Microsoft Access and Excel Pivot Tables to test the theory then moved into MVP “Minimum Viable Product” mode to quickly develop functions that allowed us to scale data resulting in the following success stories:

Success Story 1: UK travel site matched keywords to top ranking pages found less than optimal pages ranking – fixing just 5 pages resulted in $60k incremental revenue in 25 days.

Success Story 2: PC Maker found significant searches but no traffic for “End of Life” products that they had no web page representation for – They added new content and PPC campaigns generating $400k

Success Story 3: Fortune 50 company realigned keyword ownership and budgets based on segmentation analysis for maximum opportunity resulting in a decrease in PPC spend of 12% but 300% increase in sales

Success Story 4:
Travel site identified 50 keywords in top 5 position with less than 5% share of clicks – optimized snippets increasing click rates from 5% to 15% resulting in 85% increase in revenue

Where are we at today?
This is not a mainstream consumer site product. It is designed for a site with a large base of keywords typically more than 500,000 of them that want to get more out of the product. We are looking to develop a mainstream version of the application but seems those customers want something cheap, that does a lot of automated analysis and does not require them to think.
We are not quite thee yet and when we are we will roll that version out.

What is is not?

While the tool does a lot, it does not or will not do any of the following:

1. A bid management tool – there are plenty of them that will work great for you
2. A SEO Automation tool – there are plenty of them that will work great for you
3. A Search Analytic tool – sort of but does not replace Omniture, Google or Web Trends
4. Keyword Research tool – sort of since we can mine data but we typically are not looking for new words. Great tools like Keyword Discovery, Wordstream exist for this function.

The challenges:
Where do I start with this one – this project has taken every ounce of patience and sanity I could muster to not abort it along the way. Fortunately, I have been working with a great team at OC4 on managing this in the cloud. We have nailed most of the big issues and are just fine tuning.

Data Integration – The biggest challenge was integrating and managing the data. Readers, there is some messed up data out there. I found that there are a lot of agencies and people that should be fired for incompetence if not fraud. This was the biggest challenge of integrating the data. There are large volumes of it and we needed to suck them in and align them.

Data Clean Up – people use some crazy words to find your products and there is a lot of bot activity. We has to write a data import and cleaner tool just to parse log traffic data. Omniture does a decent job of sorting these into “Small Elements” but other tools do not. We had to develop a routine to process 286 different types of data contamination before we could import CSV files into the system. We had whole paragraphs coming in, multiple commas, and ton of scrapping strings looking for pricing or other elements that all had t be cleaned out. Not to mention beginning and trailing white space and other issues just to normalize the data. In one case there were 854 different misspellings of the company name which we leave in the tool but don’t necessary want to gather other data for.

Product Naming – Another big challenge is a name for it – My original concept was to call it “VOCDMS” – Voice of the Consumer Data Management System – but clearly that does not roll of the tongue so we are working on a better naming. We have thought to keep it aligned to Back Azimuth since that is still the foundation of what we believe – helping you get back to your consumer.

Development Teams
– I am now on the 3rd iteration of a development team. The current team from Exadel are awesome. They have fixed many of the bugs and problems from the previous India teams. I have tried local developers but they were way to expensive, too distracted or wanted a large share of the company while only offering mediocre skills.

Market Interest – This one has been strange – when I have told people about the tool they are skeptical assuming there is already one like it then realize or ask their teams to find they are like the rest of the companies using Excel or maybe a in-house database to manage it.

Whats next?
We have a few clients and pilots going now and will start to market the product to a wider audience by the end of the year. If you have an wish list items send them my way.

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Ineffeciency or Effeciency of US Postal Service

I mailed my taxes recently and sent them with delivery confirmation. I went online to get the confirmation and found that the one I sent to Hartford which is 2 towns or about 8 miles from my house took nearly twice as long as the same first class envelop going to Oregon.

Note that the Oregon letter actually beat the expectation of the postal service.

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Flight to Africa Rant #2 – Virgin Atlantic Missed Opportunity

In my previous post I mentioned I was researching flights. I had a buddy tell me he had flown Virgin Atlantic to the continent previously and suggested I check them out. So I went to “The Google” and entered “Virgin Atlantic to Nairobi” seemed like as simple and informative enough query. The results are horrific – rant below the image.

1. The paid listing to the right is total crap. I gave you a destination – why can’t you message to it. Maybe I would have free movies on my flight to Nairobi – well at least the London leg. This is why paid search fails so often.

2. The highest organic listing has a horrible snippet – I bet they got a gold star for ranking #1 with that. That is why you need to check the snippet. I click anyways and encounter another of my pet peeves – I am on the Nairobi page, from a Nairobi query – why would I want a flight from London to New York. Just a bit of coding would make life easier.

3. The #2 listing is a 404 error. Hello wasted opportunity.

4. The #3 listing is yet another 404 error – do I need to comment?

5. The #4 listing – wow – a special offer – but damn I am 2.5 years too late – why can’t it roll over to a new offer or a generic page – if anything should 404 it should be that page.

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Flight to Africa via Los Angeles – Possible Milage Run

I have been asked to keynote an event in Kenya in June. Was looking at some flight options and trusty United thought a good route would be for me to do the following:

Fly from JFK in New York to Los Angeles
Fly from Los Angeles back to the east cost to Newark (the other NYC airport)
Wait nearly 12 hours then fly from Newark to Brussels
Brussels to Nairobi Kenya

Would be nearly 3 days to get there and a ton of miles but I think I may just do the Continental Flight and cut out the coast to coast adventure. Can’t be take some of the stupidity out of these applications?

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Conflicting Ad Messages

Was on a blog today and saw the following conflicting ad messages – one warns against being the next JC Penny or Overstock and the other is pushing buying links… interesting.

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