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Back in the day we used to talk about 'above-the-line' and 'below-the-line' as a proxy for advertising versus direct marketing (and never the twain shall meet).

Digital has changed all that - we need to redraw the line.

We spent ages arguing about whether online was direct marketing or advertising before we realised it could do both - as, today, can print, tv, radio and so on thanks to web addresses, call centres and text responses.

So let's not obsess about that line any more.

Let's think instead about the line between acquisition and retention.

I think this is a much more meaningful line, and the crossover point is the moment of 'conversion' - i.e. whatever you're paying your CPA network for (a sale, registration...)

Does this matter? Well, yes. I think it does.

Agencies in the UK (with only a few exceptions) are so focused on getting people across the line that they typically don't get engaged with what happens next.

Understandable, I guess, as that's where the big ad spends tend to be. And yet, for marketers who pay attention to this stuff, the other side of the line is where the real value comes in.

The other side of the line is where you continue the conversation your audience have invited you to have with them (they've given you permission to talk to them).

It's where you start driving relevance through dynamic content management on your website and using engagement marketing techniques like individualised RSS, email, mobile marketing or loyalty cards.

The penalty for staying acquisition side is a lifetime of playing the AdWords lottery every time you want to sell a widget.

Mike Weston

Published 22 February, 2008 by Mike Weston

9 more posts from this author

Comments (1)

Dixon Jones

Dixon Jones, Managing Director at Receptional Ltd

I absolutely agree that the "above the line, below the line" terminolgy needs to be changed, but if we are to change it, we can struve to do better. Looking at the Lifetime value of a client and therefore the client retention costs is worthy and is at least within the realms of accurate tracking - so I agree that this is good. Where I do think the agency world has failed, though, is in demonstrating the relationship between brand building and CPA rates. In other words, with the exception of one or two studies on the subject, the majority of people in the agency world believe that brand building is core, whilst the majority from the "search" world believe that search alone is where all the conversions are coming from. The majority of people in the operations side of the business believe that all the value is in the ongoing relationship.

Intuition says both views are correct - but what is sadly lacking is the ability to track offline brand building with online conversion tracking at the very core of web analytics. Certainly, attempts have been made to do this with "ABC" like measurements, but there is no reason (other than a lack of political will) why considerably more of the brand building equity could not be built into existing tracking and analytics systems if only everyone opened up to this as a core methodolgy to best practice. For example - I'm advertising on the right of this page. That's great. Somewhere from e-consultancy there will be a report on the number of impressions I receive. I bet it's quite a lot. At the moment I track clicks and conversions from these adverts within our analytics. This is worthy - I can now compare E-consultancy campaigns with PPC campaigns and other campaigns.

I can also see whether that person has also come to our site previously from PPC or search or other means and how many times they had to come before asking us for something.

I am tracking lifetime value, through our CRM system, but at the moment I can only assign the lifetime value to a single originating "source".

But wait... I am not tracking tying advert impressions to specific visitors on some campaigns within my analytics. I could, if I put some other code into the adverts, but most "banner" style adverts don't allow this. Moreover - even if I did, this would show huge amounts of impressions - other opportunities to see - which I cannot easily also compare with my PPC campaigns without building speadsheets extraordinaire.

And even if I did have all the opportunities to see integrated into one place, the real question is how would I represent these infinite views graphically or numerically in a way that can tell me with certainty that increasing my exposure on e-consultancy by £X will result in a Y% increase in conversions or indeed will decrease retention rate (or increase lifetime value) by Y.

So I am back to defining KPIs that are meaningful. I genuinely believe there is some high level mathematical modelling that could be carried out that would help us to build predictive systems based on multplie campaigns... but in anything but the most developed of B2C industries I doubt that the data would be statistically relevent.

So I am all for cost of retention as a KPI, but I am also keen that the lifetime value of a customer is somehow accredited proportionately to the opportunities to see and other brand building elements instead of a "winner tales all" approach of the last click before sale getting all the conversion credit. At the same time, then, the lifetime value will also need to be tracked against lifetime marketing costs... all those RSS feed articles, emails, even the effort put into how you send invoices counts as part of the marketing animal when it comes to measuring lifetime value.

(No. I am not assigning the stamp costs of the accounts department to marketing. Perhaps I should though?)

Dixon.

almost 9 years ago

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