Tasman Murray is the founder and Managing Partner of Holistic Analytics. Tasman and David discuss the increasing ability of analytical modelling to refine marketing strategy, customer strategy, advertising deployment and media expenditure; the importance of developing a customer-centric analytics culture in organisations; and the contentious challenges implicit in a marketing analytics project, including trust in the analytical model, fear of what a model might reveal or determine, the need to go beyond marketing, and the role of the media agency in the process.
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Transcription:
David:
Okay, welcome to Managing Marketing, a weekly podcast where we discuss the issues and opportunities facing marketing, media, and advertising with industry thought leaders and practitioners.
My name’s David Angell, today I’m sitting down with Tasman Murray, founder and managing partner of Holistic Analytics, focused on the use of advanced modelling techniques to build a customer-centric analytics culture across organisations. Got that from your website.
Tasman:
Yeah, that’s good.
David:
To deliver next-generation business performance. So, welcome Tasman, and thanks very much for joining me.
Tasman:
Thanks for having me, David.
David:
So, let’s start with that premise of your business that I was just talking about; to build a customer-centric, analytics culture across organisations. I like the use of the word “culture.” Could you unpack that for me a bit? You know, how would you define a well-established analytics culture and what can the work that you do and with analytical modelling in general, really achieve?
You know, whether that be media or marketing mix or whether it be CX or attributional or anything else. When it’s performing well, what can it really deliver?
Tasman:
Sure. A few things around back there. I think when we talk about creating a customer-centric analytics culture, what we find most of the time in a company is analytics is buried at the bottom. So, within each vertical, you’ll have people doing analytics, but they’re solving this tiny problem.
What most companies don’t realise is that tiny problem exists across every single vertical they have. So, if you can elevate analytics up to the top of the business, you can solve that one problem once rather than solving that one problem 20 times.
And using that information, you can then realise how much the business is suffering from the same challenges. And that way, you get everyone in the business to talk about how a customer sale actually impacts the business or how every part of the business impacts the customer sale.
So, it’s no longer just sales and marketing to sell this product, it’s logistics to help sell this product. It’s your branding that helps sell this product. It’s all these different bits and pieces and how they all come together. And obviously, every business should be customer-centred.
David:
Yes, of course.
Tasman:
So, through analytics, we’re hoping to help companies understand exactly how customer-centric each part of their business is.
David:
I can see the link to the word “culture” there. I mean, you’ve described that almost as a systemic cultural thing within a business rather than a tech thing or a data thing. They’re just, people are just working in different directions.
Tasman:
Yeah, and as a business, we always try to remove analytics from tech and data. So many places have analytics under a CTO or a CDIO. If you’re building a house, data is the bricks and you can get all the bricks you want, but if you’ve got no plan of what to do with it, there’s no point.
David:
How have you approached that with your clients that you work with? I mean, it must be quite challenging for them to work in what would be a different way from usual.
Tasman:
Yeah. It’s one of the biggest challenges really. The way we generally approach it is we’ll do an audit with a company. So, we’ll talk with people across the different verticals within their business, understand the kind of problems they have, the challenges they’re having. And in, so doing that, you’re starting to flesh out these global overall problems.
A lot of the time it’s, they can’t access the information they need, they realise that information exists. It’s incorrect across multiple different platforms, but also, they don’t understand how what they’re doing is influencing what someone in another team is doing.
They’re just running their vertical entirely separately. And so, there’s all this wasted money, there’s all this wasted opportunity. So, if you’ve run that kind of audit out and you brought out a bit of a roadmap for them, you can easily put dollars on things. And solving this problem will help you as a business save 15 … not 15 million ─ solving this will do this.
David:
So, you touched on wasted money and inefficiency. And I’m also keen to consider the flip side. I’ve worked with analytical modelling. I haven’t built it, but I’ve worked with it certainly on the agency side for quite a while, for 20-odd years, really, in different iterations.
I know that the work that you do requires really highly defined skill sets and I’ve come across a challenge and I’m sure there are many listeners out there who have experienced a varying degree of quality when they’ve actually used models of this nature.
What level of damage would you say can be caused by a badly worked model? What are the common roadblocks that you come across when you walk into a situation where there’s a sort of patchwork quilt of models or data or tech or solutions or whatever it might be?
Tasman:
You see this a lot more I think with data and tech. Obviously, the analytics solutions can be an issue, but if you think of data lakes, data warehouses, now, it’s obviously cloud data storage solutions, wherever the case may be; whatever you want to call it. I like the data Suez Canal at the moment, I find that’s a nice one.
David:
I think the ship is now free anyway, yeah, so that’s a-
Tasman:
It still works.
David:
It’s just about you.
Tasman:
But the issue there is you’re spending 40 million, 50 million, 60 million on rolling out a data warehouse/this data solution that does nothing. So, you’ve got all the data in one place, so you’ve got all the bricks in one place, but you got no idea what you’re trying to build with it. And so, it doesn’t get used.
So, this company has spent $60 million in consulting fees and whatever else the case may be, and hours now and hours and hours, use of time for people and they’ve gotten nowhere. So, then this company gets a bad taste in their mouth; oh, data doesn’t work, because they’ve just ruined all the opportunity they have here.
I think if you’re running an analytics model ─ and I do hate people using gut-feel. Nothing irritates me more than people just operating on gut feel. But whenever we work with a client, we make sure we build the models with them. We don’t give them a black box, we don’t do anything like that.
If you’re given a black box, a lot of people, won’t pass the sniff test. So, most of the time, the analytics models will be limited in the damage they can do because people don’t trust it 100%. Obviously, in the share market, there have been examples of people using black-box solutions to completely crash a business which is one of the major risks, I guess, you could have with it. But as long as you’re staying away from high-volume trading, the risks are minimal.
David:
So, you touched on two really interesting things there. Firstly, the organisations that have burnt, I’ve come across that a lot; burned by something, by being sold or a bright, shiny thing.
In your experience, does that problem come about because of the C-suite putting pressure on teams to deliver what they consider to be a shiny thing, or does it come from various different points within the organisation? Where do those bad decisions happen?
Tasman:
I think a lot of the time it is coming from the C-suite, which is they’ve been sold an idea. So many times, we’ve talked to people who have gone to a conference like, “Oh, they’re doing this, we need to be doing this.”
And often it’s coming from a large consultancy telling them that they should be doing that and wherever they’re getting the idea from. But it’s being sold in a vertical and it’s not being sold across the business. It’s not being rolled out across the business. And I think that’s where the major issue is with these kinds of things.
A lot of the time I’ll be resume padding for somebody, but somebody’s saying, “We need to roll this out. We’ve got all these old systems we need to replace. This can do it.” In reality, it can’t do it. In reality, the way the roll outs been done ensures it can’t be done.
There are bad actors in the market that deliberately ruin a rollout, and then hope they can get brought back in to help fix whatever problem they caused. So, I think it’s a combination of a narrowly defined set of requirements and then a combination of bad actors kind of bringing it together.
David:
Yeah, interesting. And the other thing you touched on was trust. Trust of individuals in the model itself. I mean, even we’re getting away now from whether the model is well put together or whether it’s a black box.
But in my experience, certainly, I’ve come across marketers who’re literally just scared that their budgets are going to be taken away from them by whatever the model tells them, they have sort of an in-built layer of cynicism about a model suggesting any kind of change or evolution. What’s been your experience of that, and what sort of techniques do you use to try and get around those kind of challenges?
Tasman:
It’s not just those, there’s also an ego problem, especially in marketing. Like so many times people will have made decisions based purely on gut feel. And if the model is telling them that that was wrong, then they’re worried they’ve lost all cash that they have. They’re no longer going to be the big, bad hero … they’ve been shown to be wrong.
So, balancing those is absolutely a massive issue. The way we try to approach it is again, we avoid any black box. Any modelling we do, we talk to stakeholders first. Before you put pen to paper before you get any numbers, you talk with all the stakeholders and you understand what they’ve tried before, what they believe works, what they believe doesn’t, and why.
So, you’re bringing out all these assumptions to the fore and you’re getting these conversations across the entire marketing team, how broad or how narrow that may be. And from there, you’re starting to flesh out these assumptions, so people within the teams are actually talking about those assumptions.
A lot of the time, if the CMO has said, “This is what happens,” then that’s what happens. No one’s questioned that, no one’s gone after that. So, once these assumptions are fleshed out, they start to not necessarily lose confidence in the way they’ve been doing things, but they start to see that there may be opportunities to do things better.
So, the way we try to do it is to get the client to actually lead to themselves. We try to educate the client in such a way that they’re talking about it in the right language, but they’re the ones running the conversation.
So, the idea of presentation for us is to have the deck there, have the model there, whatever the case may be and the clients run it. They talk it through with the stakeholders, they talk it through with everybody else, we’re just there for any complicated questions.
David:
And also, that points to culture. Again, you’ve got a culture of … I mean a culture of fear is a strong term, but marketers or any kind of team with an organisation feeling threatened by what this kind of approach can do is obviously not the best cultural fit. So, you’re developing it for … you’re creating opportunities for them to lead it themselves, obviously it is going to be beneficial.
Tasman:
Yeah, you’re trying to move from a culture of instinct to a culture of information.
David:
Yeah, yeah, absolutely. Okay. You gave me another segue like we’ve rehearsed this. We actually haven’t, but you did give me another segue into the next area I really wanted to talk about here.
When you talked about egos; you talked about egos and you talked about people feeling threatened not just by budgets, but by decisions that have been made historically or for heritage reasons or for gut-feel or whatever it might be, being proved to be wrong.
The other egos in the room are often agencies, particularly media agencies. And I can say that because I’ve been in many media agencies, and I know that you have too. And I wanted to ask you a bit about your journey to Holistic Analytics and setting that up.
You know, I’m particularly interested in your move from the big agency that you were in or being part of a big agency to what is a completely sort of independent player. So, it’s great for you to tell us your thought process a bit in making that move, and maybe elaborate a bit on the pros and cons of the modelling done in-house with the agency versus the independent objective kind of player coming in and doing it.
Tasman:
Right. Obviously, I might have a slightly biased opinion.
David:
You’re going to have a bias, but you’ve been an agency person. So, be open.
Tasman:
Yeah, I think the beginning of the end to me at an agency was when I had ─ I don’t know if it was the CEO at the time, but several leaders in the business try and call me up to get me to change a model because they didn’t like the results because it showed that one of the channels that was clearly the most profitable for them wasn’t actually working for the client.
And I flat out refused, and that obviously led to some bad blood within the business because I wasn’t playing ball. So, I think the second you try to take away that independence from an agency, even if it’s an internal agency, that’s massive within the business.
I’ve found a couple of interesting things in agencies, and obviously, I’m not using fraud from a legal perspective here. But I find there is often in large media agencies, fraud intentionally, or fraud mistakenly. So, whether it’s fraud through ignorance or fraud through intention, they’re two separate things.
But we’ve received reports before from agencies, not the ones we’re working with, but from other agencies, where they’re claiming that they’ve had perfect targeting for a digital advertising campaign, hitting women in Victoria between 18 and 45. And they got 20 million unique hits. It seemed like a bit of initiative.
David:
Yes. 20 million people being nearly the entire population of Australia.
Tasman:
Correct. Yeah, as opposed to just women in one state between a certain age.
David:
Yes, of course.
Tasman:
Yeah. See, I’d call that fraud by ignorance. I don’t think they’re intentionally doing that. But people that just don’t understand the numbers or what they’re presenting can commit fraud in so doing. They can say it’s perfectly targeted and they’ve done a hundred per cent of their job correctly where clearly the numbers prove that that’s not correct.
Intentional fraud, I find a lot more with large media holding groups around programmatic or anything where there’s a large margin. They will try to over-hype the results of that. This can be through changing the metrics they’re using. It can be through looking at what a successful return is. You see this in IPOs all the time as well.
I know when Uber or when a few other companies have gone to IPO, they’ve tried to change what their success metric is. So, it’s not being active users or active monthly users, it’s being used as purchasing something or it’s been some other metric that’s been increased. So, this happens throughout a range of businesses but trying to change these metrics to suit them.
But what it shows to me is what they have at heart and what their interests are at heart is not the client, it’s self-serving.
David:
So, let’s just play devil’s advocate for a bit because I should point out and part of my question was let’s look at this from the IT perspective. Well, despite the fact that, of course, you’ve made a journey.
And I’ve written articles about it and done training about it and I’m a big believer within agencies of objective transparency and the use of. And yes, of course, there are sometimes pressures, the ones you’ve described are quite extreme.
I’ve seen a variety both in agencies and when working with TrinityP3, there is a level of disparity between networks and between certain industry players in terms of the way in which they approach this. Some are way more transparent and objective than others.
And it’s often interesting to see how an agency does respond to having an external modelling or analytics provider come in. Some will respond really well, others are not so much.
But from the agency’s point of view, if I play devil’s advocate, you could make an argument that agencies have been pushed into this position by being forced to play to the lowest common denominator; an ever-diminishing return, ever-diminishing profit margin driven by clients who are either wanting lower fees or wanting cheap media. And that’s it, forget about the quality, and agencies get driven into that position and therefore have to make revenue and have to make a profit somewhere.
So, my question to you, I guess, having said all of that is, is it naive to say, well, if the playing field was levelled for agencies to be able to make a more transparent return on their own investment, into a client’s business and be paid properly; would that solve some of these issues or are we too far gone for that to happen?
Tasman:
I think the biggest issue for agencies at the moment it’s proving value. So, a majority of agencies at the moment obviously, try to do strategy and other bits of pieces, but they’re still largely transactional. They struggle to prove the value that they can provide over any other media agency.
And I think so long as that exists, as long as that remains a problem, agencies are going to continue this downward slide. So, they need to try and find their profits elsewhere, whether it’s through doing creative, doing other things; but all those things, they’re still struggling to prove the value of.
David:
It’s interesting, I think smart agencies think much more laterally about how they can add value. And I’ll give you a specific … without naming individuals, this is literally a project I’m working on at the moment with TrinityP3.
Where we’ve been brought in to assess the capability and current performance and operational relationship between a media agency and a large organisation in Australia. And the media agency has had one of the most positive reviews I’ve ever come across. And to your point, it’s hard for media agencies to prove their worth. It’s hard for them to be trusted. It’s hard for them to deliver value over another agency.
But this particular agency and this particular organisation, there is a really stellar relationship and stellar performance. And the reason I give you this example is that one of the things that we do is we do a lot of discovery via stakeholder interviews.
And one of the things that came up continuously across a group of 10 different individuals, they kept on telling me about the fact that in the last couple of years, they’ve started doing market mix modelling, and they brought in an external player to do that.
And the agency has been so collaborative and open and willing to work with this external partner, giving building models that will either confirm or deny what the agency has been doing, and will either work for or work against deals that the agency has in place. And there was so much positive affirmation of the value of the agencies offering purely because they took the right attitude.
Tasman:
Yeah. But also, they’ve proved value. That was the whole point of marketing mix modelling, proving the value of what they’re doing.
David:
But even where they’ve had to make adjustments, they’ve made the adjustments. They’ve worked with the client who trusts them, as opposed to, and I’ve seen this happen and I’m sure you have too ─ dragging their feet, dragging their heels, wanting to do it themselves, not wanting to give information to an external provider to the point where it just seems self-defeating.
Tasman:
Yeah, you’re admitting you’ve got a problem. You don’t want to solve it at that point.
David:
Yeah. It strikes me as … it’s just contradictory, that the agencies won’t think about it in quite those terms. But I guess their behaviour is so ingrained and possibly from the agency’s point of view, the compensation model is so ingrained that they literally can’t afford to do it. And that’s where it becomes an industry problem.
And I guess that sort of circles back to what I was originally talking about, which is like how much of this can be solved by agencies changing their attitude, versus how much should be solved by organisations taking a different stance when it comes to paying their agencies, and KPI-ing their agencies.
Tasman:
Yeah. Well, you could also push it further up the line. So, the publishers they’re working with. At the moment, they’re getting deals based on the amount of stock they buy. What’s the value of that stock? “Oh, we’re getting these demographics.” “Are you? How effective are those demographics? If we advertise to those, are they going to be effective? Are they going to buy our products?”
A publisher doesn’t talk about that. They talk about reach. So, I think media agencies potentially have a chance to push this back up to publishers. Say, “What is the value of your stock? What is the value of what you’re actually giving us and what we’re buying? Why should we be paying more for you than another agency or another publisher?”
David:
Yeah, and that kind of approach is fundamentally at odds with some of the ways in which organisations want their agencies to behave, which is give me the highest multiple of impressions, clicks, inventory, whatever, which naturally leads to a drop off on the quality of, and therefore, the value of that inventory that’s being purchased.
Tasman:
Yeah, absolutely.
David:
So, it becomes a conversation about value and outcomes as opposed to cost-
Tasman:
And volume.
David:
And volume and volume outputs. So, to me, there’s a massive opportunity for analytics and modelling to help with that in tandem with a compliant agency and a sensible organisation or client who can work together to deliver value and not just volume.
Tasman:
Yeah, precisely. And as long as you prove the value at every step of the way, you can prove that value for your client, give them something they’ve never had before, and you can build that out in more depth.
So, if we think of a media planning tool at the moment, all media planning tools are based around reach, demographics, impressions. There are no dollars in there. Why does a company care about sales? So, why are we not talking about how many sales we’re going to get by running these ads?
So, if you can create a media planning tool that actually has full value and shows the value of everything you’re purchasing against demographics, you want to purchase them from, that’d be a huge outcome.
David:
Absolutely.
Tasman:
Change the conversation you have across the entire industry. And naturally, publishers don’t want this conversation to happen because they’re a volume-based business. They want to sell as many ads as they can for as much as they can. Media agencies, volume-based businesses historically.
But if you can push that back onto media agencies, push that back on to publishers ─ so publishers are then trying to create high-value content or high-value spots. Sure, they can sell them for more. If you know the value of this, you can say, “Alright, we’re going to get you this many sales. Here’s the cost of this ad.”
David:
Yes, but it takes multiple players working together in harmony to drive that thing forward. But I think. I mean, we’ve rested quite heavily there on some of the challenges, but there is a massive opportunity. There’s no doubt about it.
Give me a success story – obviously, I’m not asking you to name names, but someone that you’ve worked with in Holistic Analytics recently, who you’ve been able to demonstratively move a dial with or move a needle with.
Tasman:
I think one of the major conversations we’ve been having recently is around the long-term. Majority of attribution and obviously, digital attribution, a huge thing the last few years, focusing on the last couple of days at most; massive issues with that. Marketing mix modelling is generally looking at the short term. So, probably two weeks to 12 weeks.
Still really useful but the long-term piece, like the top of the funnel, is something most companies aren’t looking at yet. A lot of companies don’t realise you can. This idea of a full-funnel attribution is very new to businesses. We’re only really now kind of getting the metrics through that we need to do that.
But working with one company they wanted to understand if they spent more on brand, so their marketing team was split between brand and retail or brand and digital, really. And so, there was always an argument over budget. They wanted to understand … I was explaining to them that they have a long-term brand problem because they weren’t spending enough on the brand. It was all getting pushed towards digital.
So, they wanted to understand how much then they could spend on the brand and what the outcome was likely to be. So, we set out our two-year roadmap for them and we said, “Okay, you need to spend this much on brand, which meant there was an extra $2 million investment required from the business,” which would have been 8% of their total budget probably.
So, we’re saying, “Okay, with this extra investment in the first three months, these are the changes you’re going to see. Your sales are going to increase by this much, your brand preference is going to increase by this much, your CPAs are going to decrease by this much. In the next six months, here are the changes on your sales, on your CPAs on your brand preference. In the year, here’s the change; it’s going to be sales, CPA, brand preference.”
So, for each benchmark, we gave them the range that they’d be within. And it was always increasing, always improving. In the first year, they did that they saw a 60% improvement in sales, which was fairly impressive being that I think they’re already the largest actor in the market, in that industry. After two years, it was a 120% increase, outrageous numbers.
David:
Fantastic.
Tasman:
Yeah. And the kind of numbers we would never promise to any client. We were very surprised by it ourselves. But the numbers backed it up and it was just building out that brand long enough that all the digital stuff could do its work.
I think what a lot of agencies are failing to explain to people at the moment is digital can be really effective, but it needs something to leverage off. The way we always explain this to clients is by being an average looking person at the party. You will get ignored real quickly if you are an average looking person at the party that does not know anyone there.
So, you can either be the prettiest person at the party. You can be the funniest person at the party, or you can have enough people at the party to know you well enough that you won’t get ignored.
David:
Yeah, that’s a really good way of putting it, a really good analogy.
Tasman:
Yeah. So, those are your options as a business. And the longer people have known you, the better you’re going to be known at the party.
David:
So, how much traction has that … I mean, clearly there are some fantastic numbers in there, and presumably a happy client. How much traction has it got beyond marketing and into their organisation?
Tasman:
Well, the board had to approve it. Their board obviously approved further funding for that. But most of the conversations we’re having now with a range of clients is around this full-funnel piece. So, rather than just focusing on the short-term or this medium term, it’s looking at how you can change the long-term and then use the short, medium-term to leverage that benefit.
David:
Yeah, great. And thereby building a proper bridge between the gut-feel that you talked about right at the start, and actually what you want to try and do here, which is attribute sales effect.
Tasman:
Yeah, attribute value. And you can contribute value to the brand, attribute value to the creative, attribute value all the way through. And no longer have this conversation that’s either brand or retail. It’s an entire mixed message. Your budget needs to be combined to do all of this, but spending on the brand does not mean you lose short-term benefits.
Which is always the concern. People think, “Oh if I spend all this money on brand now, I’m not going to say anything for a year.” Ridiculous.
David:
Have you had much involvement directly with advertising agencies in this process as well? I mean, clearly iteration of creative has a bearing on messaging, on the mix, on flighting, on everything else. Have they got much involved or is it just a case of the agency changing, we used to call them clock numbers back in the day ─ but changing the clock number and ad to fit the model?
Tasman:
We’ve worked with a couple of companies before where we’ve seen a clear change in their outcomes from certain channels with specific creatives. And so, we’re able to see that when they’re running this specific creative over these three months, certain channels were far more effective.
Like the ROI was better on these channels, everything else was performing well. So, we were able to say, bring back that ad. So, they brought back that specific creative, saw improved results again, and then their creative agency built something off the back of that ad to be a new creative as well, which was able to see an improved performance there.
David:
So, that’s really good. I mean, that’s obviously adding another dimension to things and it’s a massive part of what a lot of these advertisers are doing and what the models need to show. So, lots of success, that’s great. Lots of trinities, that’s great.
What keeps you up at night? I mean, as a business owner and as someone who’s obviously trying to grow a practice across Australia, at least now, possibly more in the future, what are your biggest challenges? What keeps you up at night?
Tasman:
I think our biggest challenge is probably people that work in data science. I refuse to hire anyone that calls themselves a data scientist. It’s just-
David:
Apologies to all the data scientists out there who might be sending resumes and stuff. Maybe change your resume title, certainly.
Tasman:
Yeah. It’s the biggest red flag.
David:
Why is that?
Tasman:
There have been so many courses that have been data science courses, and it’s been focused on coding and how to use ri-python or a specific program in ri-python to solve a problem. So, the people can’t generally solve the problem themselves. All they can do is write code, they can’t talk to the stakeholders. They can’t do a range of things. I’ll hire someone that’s a data analyst that can code, over someone’s that a data scientist that can’t do anything else.
David:
Okay. So, just call yourself a data analyst.
Tasman:
Yeah, that will help. First step.
David:
As well as showing all the skills that are necessary.
Tasman:
For anyone applying, call yourself a data analyst. But there are so many AI solutions, ML solutions ─ the majority of them, which aren’t. I think there was some study recently that showed that 90% of solutions claiming to be AI and ML weren’t AI or ML at all. It’s just a catchphrase that people are using at the moment.
But there are all these solutions that are designed to push people out of their solutions and giving them a result rather than giving them an understanding of what’s happening. And I think that’s the biggest issue in the industry at the moment.
And for us, when we talk to people about analytics, they’ll think it’s reporting or they’ll think it’s coding, or they’ll think it’s something else. They don’t think of it as working with them to help solve a problem. It’s solving a problem for them and giving them the answer that then they can’t use.
Whereas for us, we want to work with a client, help them solve the problem, then teach them how to do it themselves. We believe that a consultancy shouldn’t be in a business for the rest of their life. Their job is to get in there, solve the problem, teach them how to do it, teach them how to fish, and get out.
David:
Yeah, that’s a philosophy that we share to a certain extent as well in consultancy terms. You mentioned AI there. I mean, yeah, it is a bit of a buzz term and I think sometimes it’s like blockchain, isn’t it?
Tasman:
Yes.
David:
Sometimes it’s genuine, a lot of times it possibly isn’t. But if you had to … and thinking about the way in which you operate now and the way in which you could be operating in 10 years’ time, what do you think the trends ─ it could be a tech trend, it could be a trend in modelling, it could be anything. But what are the trends that you see driving this part of the industry forward?
Tasman:
The cookie apocalypse is going to be one of the biggest ones. It’s going to cause a huge shift in the industry away from one-to-one personalisation, which I think was the worst thing the industry could have been doing in the first place. But I shift away from that towards behavioural segmentation. And I think behavioural segmentation is the biggest opportunity and going to be the biggest next thing for companies.
At the moment, you have Google using their FLoCs, their Federated Learning of Cohorts, which is all behavioural segmentation. I think what we’re hoping to do with clients is move towards helping them buy media on behavioural segments rather than buying their own demographics.
So, looking at how they’re advertising on certain channels or with certain publishers has driven a certain behavioural segment and then helping them buy media to those behavioural segments rather than to a demographic segment. Their targeting for the demographic segment is so loose and so poorly attributed compared to a behavioural segment that you just try … it’s a shotgun approach, which can waste a lot of money.
David:
People have been talking about behavioural segmentation for a long time. It’s only media planning terms. The implication is that there haven’t really been the real tools to … I mean, we’re saying it, but not actually doing it.
Tasman:
Well, yeah, as a media agency, what opportunity do you have to understand a behavioural segment, truly. From a client-side, you have your website, you have your customer CRM database, you have all these things that can tell you how a customer is actually interacting. And from a behavioural perspective, what their journey looks like.
From an agency side, you’re sitting in the middle where the publisher might show you that these behavioural segments exist in people that watch the TV. So, it might be people who watch rom-coms not really a behavioural segment. Well, it is, it’s not a useful one.
So, I think agencies at the moment struggle to tie that value to an actual useful behavioural segment for a business. And I think the opportunity, again, for a media planning tool would be to understand behavioural segments on the client-side and then push that back up through media.
David:
Yes. There is also the role of research in understanding behavioural segments.
Tasman:
Yeah, yeah.
David:
Care to offer an opinion about the value of research versus can it be combined with a more analytical approach or do you think the days of traditional research in this kind of area is ─ do you think those days are numbered?
Tasman:
I don’t believe research should ever stand by itself. Research can tell you that these groups exist, but they won’t tell you the value of those groups. Which again, I don’t see the real value for the business. They can tell you what people say the sentiment is towards something, they can’t tell you how they’re going to actually act towards that sentiment. Which I think is the issue.
So, if you can use research at a very high end of the funnel and then tie that through to actual behaviour and say, “Okay, when we see these things change in the research, and then this changes further on, we know that’s a value.” But if you just have those metrics high up in the funnel without trying to do anything else, you’re just chasing shadows.
David:
You’re left with 50% of knowing … what’s that phrase? You know the most-
Tasman:
Yeah. I know 50% works; I don’t know which 50%.
David:
The most hackneyed cliche in advertising, and I fail to remember it just then. Okay, well, let’s hope that we can … by the work that you’re doing and a lot of other people are doing that we can make it more than 50% at least of what we know.
Tasman:
Yeah, there’s a huge opportunity in media at the moment. In agencies and companies and everything else, there’s this massive opportunity to actually improve the way things are done to move away from the short-term, as we have with digital attribution and to move towards a method that’s more effective for customers, more effective for the businesses, and probably more effective for the economy as a whole, because there’s less money being wasted.
It’s being targeted better and people are being given what they want when they want it without some random company knowing their name, knowing when they go to the bathroom, what kind of products they have and what they’re doing at the moment.
David:
Yeah. Well, that’s a great objective to have, and I certainly wish you all the best in achieving it as you build your business. Tasman, thanks again for coming on to Managing Marketing. It’s been great talking to you.
Tasman:
Thanks for your time, David.
Ideal for marketers, advertisers, media, and commercial communications professionals, Managing Marketing is a podcast hosted by Darren Woolley and special guests. Find all the episodes here