The three pillars of Business Intelligence
Business Intelligence (BI) is going to evolve into a critical asset for businesses in the coming months as companies begin to hunker down and trim the fat while we all ride out this recession. Now more than ever we require business intelligence.
Many businesses fail to understand or are able to justify the value of an implementation of BI software. Instead, decisions are based off of "gut feel," advertising and marketing decisions are made based on "how we've always done it," and at the foundation of it all: inadequate intelligence.
Want to see Business Intelligence (BI) in action? Visit a hospital.
After spending 5 hours at the hospital this week for a "false alarm" (my wife is pregnant), I was fascinated by the uterine contraction machine that the hospital staff had hooked up to my wife's stomach. Through a series of sensors, this machine was hooked up to a PC and displayed a real-time readout of fetal heart rate and contractions both on the monitor and via a continuous printout on paper.
As my wife would wince with the pain that each contraction brought with it, the machine readout was right-on. Occasionally, I would see the contraction monitor start moving up (indicating a contraction was building) before she would feel it. Furthermore, over time we could see the frequency in which contractions were happening which enabled the doctors to see important trends with the contractions. As we began to recognize the trends, we could predict the next contraction for my wife within a 20-second range.
At no point were we left wondering whether the contractions were consistent or not, or how long they were lasting. It made me realize that if this was not a hospital room and if we were at any random business, chances are we'd be making decisions based on little or no data.
The three pillars of Business Intelligence execution
Our hospital visit showed "business intelligence" at its finest. In this particular case, this was a basic implementation of intelligence gathering, but essentially BI breaks down into the following:
- Establish Key Performance Indicators (KPIs) -- in this case when we were at the hospital, there were 2: fetal heart rate & contractions
- Implement a method of collecting data -- the monitoring machine
- Implement a reporting tool so you can analyze the data to base your decisions off of -- by evaluating the printed graphs from the machine, the doctor could identify trends with the contractions and determine if she was progressing with labor (in our case, it was a false alarm)
Do you have KPIs set for your business, department, website, advertising, or social media initiatives?
If you haven't identified KPIs for running your business, then collecting data and reporting against it do very little if you can't convert the data to insights. For example, consider the following scenarios when viewed in isolation, they may sound like accomplishments. Often times, quantity/volume or completion is used as a universal KPI:
- You just sold 100,000 units of XYZ widget!
- What if XYZ widget has a Gross Margin (GM) of only 5%? 10,000 units sold at 50% margin (at the same price) is just as profitable. Volume can often times be misleading because the effort that goes into selling 100,000 units can be far greater than 10,000 units.
- Your department just completed a critical project on time!
- Great, the deadline has been met. Does that mean success? Not necessarily. If each member of your department has just spent the last 6 weeks working 80-hour weeks, this is not success -- it's burnout.
- Your website had 100,000 unique visitors to your website yesterday!
- Unique visitors to your website mean nothing if you're not measuring the "next step" in the conversion funnel of your site. What does your website exist to accomplish? Generate leads? Sell products? Provide product support? Unique visits that don't convert to sales or brand advocates are just a waste of bandwidth.
- Your TV ad ran during the SuperBowl!
- How much did you spend on the ad and how many sales can be attributed to the ad? Don't know? Then running an ad during the SuperBowl is not a success.
- Your social media campaign generated 5,000,000 impressions!
- Like your TV ad that ran during the SuperBowl, how much was invested in this campaign and what time frame are you using to measure the return on the impressions generated from the campaign? Impressions are NOT a KPI for social media unless you can equate an impression to revenue or another unit of measure that is of value to your organization.
Business Intelligence tools
This this is by no means comprehensive but is a start to discovering what's available in the industry for business intelligence solutions (based on the "top of mind" companies). Rarely will you find a "one size fits all" approach -- often times you'll find yourself utilizing several niche tools, particularly as you get into advertising and marketing campaigns.
Pillar #1: KPI Tools
There's no software that can tell you what your KPIs should be for your business. KPIs vary widely by industry, type of business, department, and ultimately boil down to what you're being measured to produce.
Pillar #2: Data Warehousing Tools
This is an important pillar, and there are many options available for data warehousing. A simple Google search for the topic produces many vendors who play in this space. Visit the Wikipedia entry for this subject and check out these vendor offerings:
- Open Source
- Commercial
Pillar #3: Reporting & Analysis Tools
Once the data is collected, you must have the tools to report and analyze the data. It's one thing to see your KPIs, but the real skill behind Business Intelligence is the ability to correlate this data, mine the data, and discover information and trends you otherwise might have never known.
- Businesses & Department-Level Tools (See my BI links on delicious.com)
- Website Tools (See my web analytics links on delicious.com)
- Open Source / Free
- Commercial
- Advertising, marketing campaign measurement tools
- Social Media measurement tools
- Nielson BuzzMetrics
- BuzzLogic
- Jeremiah Owyang (Forrester Analyst) has a string of blog posts on this topic covering the likes of twitter, blogging, and most other hot technologies struggling to prove their ROI to the business world
Consistency is key with integrated, multi-channel marketing
Target is doing a nice job of creating consistent creative and messaging across channels (online and television). Here's a screen shot of an ad from the homepage of CNN.com advertising the upcoming 2-day sale for Thanksgiving weekend:
Click on it and you see this page:
Target ads still recognizable even when fast forwarding on DVR
And while fast-forwarding through DVR'd TV shows tonight, the familiar red background and white stick figure running with the shopping cart flew by on a few frames. How often do you recognize an ad and/or brand name in just a few frames of DVR fast forwarding? I've been paying more attention to this lately and it's difficult to recall anything...particularly in anticipation of getting back to your DVR'd show.
Here's a clip of similar animation which it looks like Target is recycling from this 2007 campaign (found on YouTube):
Consistency is key with integrated, multi-channel marketing
The consistency of the creative of these ads enabled me to recall the Target campaign with HIGHLY passive viewing (browsing for news on CNN.com -- which I do several times per day) and fast-forwarding through commercials on our DIRECTV DVR. I can't think of any other ways where I'm less engaged than quickly scanning for the latest news on a website or sitting on the couch watching TV.
As marketers grow to accept a world where consumers can easily ignore their ads, it's really interesting to see how Target is able to penetrate the barrier to recalling an ad. It begs the question: how does one test the "recall" and "effectiveness" of multi-channel marketing prior to executing the full media spend?
Traditionally, consumer panels are shown various ads and asked follow-up questions. The problem is this doesn't simulate a real-world environment of cross-channel entertainment & news consumption.
Think big, start small, deliver quickly
Incremental releases of ads combined with analysis of ad performance in each channel are really the only way to truly optimize a campaign -- especially across multiple channels. I'm still not quite sure if Target is at the level of being able to measure or test the effectiveness or recall of their ads if only a few frames of them are seen. In any case, this current campaign of theirs has worked on me to generate awareness. Now the question is: will I make it to Target for the sale and purchase something? 
Clever new Apple online campaign about customer satisfaction
Apple has launched a clever new advertising campaign online and it occupied a larger-than-usual amount of real estate on the CNN.com homepage this week. I snapped a few screen shots (please excuse the headlines in the images below from CNN, but this was the current news at the time of the screen shots.):
The two ads, while physically separated on the screen, were designed to interact with each other as "PC" walks away from "Mac" from the right-hand ad to the top ad to destroy the customer satisfaction odometer:
As engaging as the ad was, I realize now that I didn't even click on the ad -- probably because I'm not in the market and already am a Mac owner (and thus fully aware of my satisfaction with the Macs I own).
After "PC" is finished breaking the odometer, the ads fade out and we see the Apple logo up top and the call-to-action on the right-hand side. Very interactive and one of the few ads I've actually wanted to toggle the audio ON for. Smart of Apple to default the audio to OFF as I'm usually scrambling for the pause or mute button when audio automatically starts playing when I visit a site.
An excellent way to leverage the interactive medium of banner advertising by utilizing characters originating from traditional television spots.
Nobody is safe from an internet riot; how you react is key
Social media enthusiasts of the world often unite in the wake of internet riots with the "I told you so" speech and blog postings (present company included) about how a company or brand should have reacted to a social media meltdown. The latest debacle was made possible by Motrin with this :30 spot.
Problem: You've alienated your target demographic
The speed at which a big brand like Motrin reacted was decent. Rumblings started over the weekend and by Monday afternoon, Motrin had this announcement posted on the homepage of its website (although several hours after the entire motrin.com site was not available):
Not sure what's distasteful about the ad? Read the coverage:
http://blogs.forbes.com/sciencebizblog/2008/11/twitter-moms-si.html
http://www.web-strategist.com/blog/2008/11/17/motrin-mothers-groundswell-by-the-numbers/
http://www.readwriteweb.com/archives/motrin_bows_to_social_media_pr.php
How can this type of situation be prevented in the future?
In short, it can't be 100% prevented. At the end of the day, even the best processes and procedures can fail and its why we live in a world of product recalls and warranty repairs. Dealing with a negative reaction to an advertising campaign is similar to a massive product recall -- it's all in how you react to the problem.
How should I react to an internet riot?
I jokingly refer to these types of situations as "internet riots" however I realize they are to be taken seriously otherwise they will spiral out of control -- much like a riot.
While mommy bloggers certainly rallied and voiced their opinion to Motrin via blogs, twitter, and other outlets, we have to remember that there are other types of visitors to the site -- visitors who, like me, had never seen the commercial and had no idea what "everybody was mad about" this morning.
Plastering an announcement on the homepage of the site is probably "good enough," but not ideal. Here's why the Motrin execution falls short:
- The entire homepage announcement is an image and not text. This means Google and other search engines cannot index the contents of the image. This then means the message will not be searchable on search engines. As of this writing, "motrin moms" (the ad campaign's main message) dominates search results and motrin.com is nowhere to be found.
- The message on the homepage is not clickable -- it doesn't take me to more information on the product, status on when the rest of the campaign will be disabled, or even a way to contact Motrin.
- How long will this message stay on their homepage? What if we need to refer to it at a later date after the initial groundswell as died down?
Instead, the following steps would have been much easier and faster to produce and maintain on an on-going basis:
- Post a blog posting containing detailed information on what the problem is, what you're doing to fix it, and make sure to have keywords in the article that are found in the referenced blog posts, tweets, and articles (no need to involve IT or web developers to update the site)
- Link to the post on the homepage of the Motrin site (so it can be later removed without eliminating the content of the article!)
- Post a tweet on twitter to the channel of the dialogue with a link to the blog posting
- Openly accept comments (I like the reference to the feedback, although there's no mechanism to contact Motrin from this message on their homepage)
What can I do to monitor whether or not a riot is brewing?
In late 2006 I outlined some common ways to monitor your brand online via this post. If you find a site that is not RSS-enabled, you can also monitor it with a service such as this.
Help "steer the ship"
Posting content to your own site and managing comments on it can help you "steer the ship." The last thing you want is a situation like Motrin's that continues to spiral out of control with blog entries and tweets that carry a negative connotation about the product or brand name. By funneling all attention about the issue (good or bad) through a blog post our your website, you now function as the central source of information.
Where does SEM fall in your organization?
MediaBuyerPlanner reports "Only about 55 percent of search marketers integrate their search efforts with offline marketing efforts; the other 45 percent make no effort at integrating SEM (Search Engine Marketing) with offline initiatives, according to a new study by iProspect and JupiterResearch."
You may have an SEM management gap
The above article claims budgetary and resource concerns. I think the bigger picture is one of the following scenarios that many marketing organizations face:
- Marketing, being resourced constrained, probably pawns this off as an "IT project" because it involves technology.
- Marketing has assigned SEM efforts to a vendor specializing in SEM and no other marketing initiatives.
Scenario #1: SEM lives in IT
I can understand why SEM has traditionally been an "IT responsibility" because SEM in large part, is still a rather large mystery to marketers. They don't understand the rules of the game and the execution of your organization's SEM campaigns requires a fundamental knowledge of your website and the visitors of your website. It's commonplace that a marketing communications department, who handles traditional print and television advertising, may not be the resident experts on web strategy and design. It's easy to pass SEM off to IT -- because they handle "the technical stuff."
Scenario #2: SEM execution lives with an outside firm
There are many companies providing SEM services and not surprisingly, these companies are technical in nature and not traditional direct-marketers. Those that are direct marketers are generally small and have a localized client base, making it hard for them to penetrate the mold of Fortune 500 companies. Those that are technical may have a great technology to sell, but lack the marketing savviness of a direct marketing firm to truly bring SEM the return on investment it demands -- resulting in poorly performing SEM campaigns. This leads to the disconnect in online and offline marketing mentioned in the above MediaBuyerPlanner report.
How do you close the SEM knowledge gap? Who should manage SEM?
SEM "belongs" in marketing and should be on the radar of anyone executing any outbound marketing and awareness campaigns (email, direct mail, or otherwise). "Belonging in marketing" and "being executed by marketing" are two different things. From marketing communications, to product marketing managers, to channel marketing, each group has their own functional needs/goals for SEM. Establishing a governing body to ensure the proper SEM techniques and optimization are in place is recommended -- but simultaneously avoiding the bureaucracy that's often accompanied by "governing committees."
A good place? The web experience/usability group within your organization. SEM may be funded by marketing while the governing body and "gatekeeper" for SEM can be facilitated through the people who know your site inside and out and intimately understand the experience an end-user desires when arriving at the landing pages on your site via an ad. After all, not much ends up on the site that doesn't pass the approval of this group. Any campaigns directing traffic to the site are right up the alley of a usability professional.
Blog by Eric Long
I'm an experienced online marketer, information architect, digital strategist, and social media enthusiast. I'm passionate about providing outstanding cross-channel experiences for considered purchases (with a focus on mass customization).
About Eric Long
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