Start Up Goldilocks

Unicorns: A Cautionary Tale

Recently, I was brought in to consult a venture capital fund as they interviewed an acquisition target. (Fun project! Help total strangers decide to avoid or create a massive wealth event for other total strangers, all while never leaving your home. I've had worse times, honestly.)

This mostly consisted of spending time in remote meetings, asking questions about the offering when pertinent, and taking a lot of notes to share with the VC later.

It was an interesting project, and the agency that hired me was pleased with my work... but that's not the point of the story. (Also, I'm not going to disclose the outcome of the decision, because confidentiality and the such.)

 Without getting into the details of what was discussed and decided, what the most striking point to me about the entire experience was how similar the prognosis for the target company was to other companies that I've known.

To wit: you can try to change the world and create amazing value for your clients with something new and exciting and game-changing...

But if what you are doing is really all that and a bag of chips, and the market shows it with explosive growth and revenue...

Well, why wouldn't a whale (i.e., Google, Amazon, Adobe, or maybe their Chinese competitors) just swim on in, buy your company or similar tech, and just be done with the category?

And if that has not happened... well, is your category or technology really all that, and if the answer is no, then why should the VC be around to put more cash into something that isn't going to change the world and cash out?

It all puts you in a Goldilocks moment -- markets that are neither too big nor too small, but *just* right -- and, well, having your start up win is hard enough without adding extra hoops to jump through.

I know, I know -- I'm missing the point of Start Up, which is when your stock option lottery tickets cash out and you get enough moolah to afford real estate in any market, all while setting yourself up to either continue working with the whale (unlikely) or buy yourself a lot of runway to take off with another plane.

But on some level, well, having a steady gig is its own reward, and companies that keep their people tend to do things like keep communities together. Kind of useful things, those.

So, maybe I'm just old fashioned here... but how about we just have companies that turn a profit as soon as humanly possible, and reduce their need for outside capital in the first place?

Pitch Drunk

In my free-lance and consulting life, I get to hear and deliver more sales and marketing pitches in a year than most people see in a lifetime. I'm also enough of an "In The Weeds" nerd to never, ever consider the following game. Nope, not ever. 

You Are What You Is

It's a way to learn French

(H/t to Frank Zappa, and a song  that you really can't quote in its entirety any more...)

In the past few months, I have taken on some bigger clients in consulting agreements, as part of a larger consortium. This has been very productive and even reasonably lucrative, and while I do not think that I am going to avoid full-time work for the rest of my career, the work has been interesting and I have learned a lot. I also definitely have added some things to my skill set.

What is even more intriguing about these experiences is how they inform past professional stops. Especially when you get a fresh perspective.

This is because when you are at a start up, it can be completely immersing in ways that warp your view. If your management communicates change every quarter - not unusual in a hot sector - you can definitely feel that things are different now than what they were before, and that the rest of your industry is either responding to your change, or soon will. You eat your own dog food, become a fan of the product as well as the people, and move with the times.

However, if your sales pitch is ineffective and you have whale clients that dictate the terms of your road map, you run the risk of being left out to dry on an initiative that is not really supported by reality.

The reason why is that just because the product changes or you are hearing new things in meetings and hallways, that does not mean the management, or the perspective that they bring to the problem, has truly become very different. Start-up culture in particular has a very high count of people who need to be the smartest people in the room, and if that translates to also feeling like you are smarter than your clients and know what they really should be doing...

Well, that mindset may be more meaningful than what is said in the pitch. That perspective can be very helpful for the people you talk to at your next engagement.

So if you are doing your due diligence on a start up, see if you can find an old deck. Talk to anyone in your network who they ran into a while ago. Go on the specialty sites and see the turnover rates, and how much their advertising copy has changed over the years. Find out if the benefits and offers are wildly different, and if their clients seem to have taken over the wheel and driven their development.

If all of this is true, you do not have to avoid working with that company. Especially if they are upfront about it. It may not even be a red flag that pitch and execution are going to be wildly different.

But if you are doing a deal with someone, you owe it your client and company to do the due diligence. Because when people show you what they are, you should believe them... but you may need to dig a little to find a true look.

The Next Passion Project

Kill It By Doing It, Maybe

So I want to tell you about the latest project, even though it's:

1) Not a revenue event now, and very likely not ever

2) Not anything remotely like anything I've ever done before, which is a hard and amazing thing to say after 20 years in marketing and advertising

3) Highly dependent on the product of others, who also haven't done this kind of thing before

4) Possibly never going to see the light of day if it doesn't achieve a certain degree of quality, and

5) Incredibly irresponsible, in that it's distracting me from actual revenue events at a time when that sort of thing is critical.

Needless to say, it's all I can think about, and the scope of it just seems to keep growing and growing in my mind, to the point where I can even imagine spin off lines from the base project, and grandiose dreams of What It Might All Become.

Which is all an absurd and ludicrous amount of teasing for something that might never happen, but isn't that the best kind of project, really? No matter what, I'm going to learn something from this experience, even if it's that I'm not suited for this kind of work and I need to have the courage or discipline to get back to my usual pursuits. (But the folks that I've shown the v1 work to... are dangerously excited. Enough to want to contribute.)

Of course, thinking about this sort of thing is dramatically easier than doing it, and the danger of success is also a potent issue. Success in this endeavor might mean a whole lot more of this kind of thing, without a clear revenue stream, and falling in love with the output so much that it also does damage. For fans of "The Marvelous Mrs Maisel", there's an episode in Season 2 where an artist has a piece of work that he keeps in a private room and never displays, and will never sell, because he knows this is the best thing that he will ever do. I feel the same way about a single chapter of a self-published novel I wrote 15 years ago, actually.

Putting your whole heart into anything -- whether it's art, a start up, a song or even the housework -- is a rare skill and indulgence. Most of the time, people get distracted by more pressing needs and easier things, and as my "Mrs Maisel" aside shows, I'm not immune to distractions.

But what you gain is this: the knowledge that you are capable of going all in and finding hills to die on.

Which is something your clients and co-workers tend to remember and appreciate.

More later on this. (Next Sunday being the later.)

I hope...

The Lost Art Of The Mid-Range (Retargeting) Game

Jerry West, AKA The Logo

Longtime readers of the blog may remember my fondness and long-term enthusiasm for the NBA. With this year's Finals nearly upon us, I started thinking a little about the game, and how one aspect of it relates to digital marketing.

In the past few years, professional basketball has seen a radical change in tactics, with teams getting better at and taking more long three point shots. With the area that teams have to defend extended, the other most efficient offensive tactic, high percentage two point shots from close in, gets easier to achieve.

So the goal is three pointers and dunks, and what has been steadily beaten out of the game is the long 2-point shot, known as the mid-range game. By the numbers, it's a losing proposition, since it goes in about as much as the three-pointer and is, of course, 50% less valuable. Take enough long twos, it's presumed, and you are most likely going to lose.

But if you watch the actual games, rather than just the statistics, what will you see deciding the outcome in close contests? More often than not, it's the unloved long two. Because it's the shot that you can take when everything else has been taken away, with the defense guarding the arc and the paint. And when the difference between teams is close, whether or not you make those shots may be the difference between winning and losing.

The corollary to the mid-range game in digital advertising is mid-term retargeting. For the most part, short term retargeting is settled law. You dynamically populate the item that was abandoned into your ad unit, maybe goose it with a sale price or shipping offer, and create the digital advertising equivalent of a post-it note to remind users to complete an action.

Long-term retargeting is less settled, but also usually a done deal. You shock the user with a previously unseen, presumably very aggressive, offer. Perhaps you give them ultimatum copy that tells them they are being opted out of offers. The difference in branding will be strong enough to provoke a reaction, and so long as you are taking seasonality and working from good data in terms of estimating the buying cycle, the tactic should work to re-start the weaker parts of your funnel. Or maybe you just send them your best acquisition ad, and consider the retargeting behavior no longer valid.

But what should you do with the leads that are no longer white hot, nor ice cold? Assuming your impression count and due diligence are up to the task of having mid-range ads in the first place, you generally use an expanded set of items, and maybe mix in search functionality, soft sell content, or a social media play to get the leads re-engaged.

But all of these suppositions are just that -- theories that marketers use to add meaning and rules of the road to a churning universe that can seem devoid of consistent best practices.

Mostly because many funnel strategies in retargeting make the assumption that the prospects have seen and thought about every step of the creative work to date, because the marketers themselves certainly have. (If you want to throw some philosophy at this, the Naturalistic Fallacy applies.)

So the best tactics to use in mid-term retargeting... usually start with making absolutely sure about viewability and list quality, to prove that this specific market exists in the first place. (Hint: it might not.)

Then, test a lot of the suppositions that you've been treating as settled law, and let the data drive.

And if you still need a coach?

Well, M&AD has watched an awful lot of games and seen an awful lot of data. Let's play.

A Brief Longing For The Busy Signal

Nope. Nope. Nope.

The other day, I heard one of my favorite rock songs by the British recording artist Richard Thompson. It's "Tear Stained Letter" ( here's the link to the live version), which dates back to 1983. It contains the following lyric:

I went for the phone, but the line was busy

Which got me to thinking about busy signals. They were a constant, universal and dreaded factor in everyday life that has more or less just gone away due to technology.

Busy signals used to be a very big deal. You'd dread getting them, worry about being on the phone too long and giving one to someone else, get very frustrated with whatever entity was causing it, and so on. As phone tech improved, we moved on to call waiting, and getting straight to voicemail, and at this point, voicemail is pretty much a lost art as well. If you want to reach anyone under the age of 25, text or their preferred social network is pretty much becoming your only channel, especially with the scourge of robo-calling.

But I want to get back to what the busy signal represented. There was a democracy to them. Rich and poor, urgent and trivial, the busy signal was a simple and complete hard stop to whatever the caller thought was important and had to happen right now now now. If you couldn't figure out some other way to solve your problem, your only option was to redial or wait.

Maybe really wealthy people had other options - private lines and such - but for the most part, it was a shared and universal inconvenience. At any point in the day, you had the means to immediately communicate with the person you wanted to talk to, but there was a really good chance it wasn't going to work. The busy signal encouraged back up plans, alternatives. Creativity.

Now, of course, the call goes through, but with less of a chance of success. Maybe it goes straight to voicemail. Or blocked. You can send email, but there's no guarantee it won't trigger a spam filter or get buried under other messages. What used to be an absolute and mechanical disconnect is now set to the preference of the recipient, who holds all of the power. They decide whether to answer the call or not from the information they receive on their screen.

I think this means that we talk to each other less than we used to, but there's really no way to know for certain. Perhaps we are all just busier now, less apt to do the small reach of making the first call, more prone to cultivating our feeds and inboxes and to do lists.

No one wants the busy signal back, of course, and it's never coming back. Good tech always displaces bad.

But that doesn't mean that when it went away, we didn't lose something as well.

AI, Paper Clips and Criteo Boxes

All Hail The Criteo Overlords

This is going to get pretty esoteric pretty quickly, but I think it will get to a place that's helpful to marketing and advertising folks. Let's dig in.

In a recent interview on NPR's Fresh Air, Bill McKibben spoke about his latest book, where he outlined threats to humanity. (Mostly, spoiler alert, climate change.) At the tail end of the talk, McKibben also noted the threat posed by Artificial Intelligence (AI), loosely defined as computers making decisions based on a virtuous learning loop built on data accumulation and analysis.

McKibben did so with a fairly famous thought exercise known as the Paperclip Problem, or to get more high faluting, instrumental convergence. In this, an AI robot with a seemingly good but unbounded mission (say, the most efficient manufacture of paperclips) would quickly move to terminate its human masters, since they would likely shut off the robot at some future point, and thereby prevent paperclips from being made.

Now, at this point, you might be wondering how we're getting to digital advertising challenges. And with that, I give you the Criteo Box, which is a term that some in our field use to describe template retargeting ads made (in)famous by the dominant player in the space, Criteo. (Example above.)

Criteo boxes are loathed by many design and brand marketing professionals, because they are machine and data driven utilitarian shopping bots that seem to eliminate the need for design. The challenge becomes all about the dynamic product recommendations shown in the ads, because by whatever analytic standard is being used to determine good ads from bad, the data has driven you to this, the final plateau of performance.

An inelegant bare bones box with as many recs as you can fit, Because Data.

Which might lead you to think that design doesn't matter, because it's been solved by AI. Like betting that you will win in chess against IBM's Watson, it's a losing proposition. Just accept the box and move on, with the small possible caveat that it's only solved for remarketing and not acquisition. (But will also likely be solved at some point for acqusition, again, Because Data.)

But here's where I'd like to hold out hope for humanity's continued presence in my life's work, while still being OK with analytics. My belief is that the Criteo Box is only dominant due to an over-reliance on short term goal events.

If you are judging only by clicks, an ad with multiple entry points and good dynamic SKUs might always win over something more brand related. (Side note: please don't use clicks as your goal event, as it's really a bad idea due to bad actors and fat fingering on mobile, and it's not 2001. Tangent over.)

But what if you were looking at, say, purchases? Or the lifetime value of the consumer? Or the margins driven from that value? Or...

Well, you get the point.

The reason why we don't judge ads by these longer funnel approaches is because no advertiser is going to run just display ads. They are also going to follow up with email, have a social and native presence, perform work in search engine optimization for paid and native, and upsell the user on site. All of which will have impact on the performance of the ads, and possibly not an equal one.

In addition, advertisers are going to rise or fall based on customer service, their offline presence, print and broadcast and podcast and heaven knows what else. (Oh, and a side note? Advertisers don't exist in a vacuum without competition, and if everyone in your space is making nothing but Criteo Boxes, your non-Criteo Box ad is likely going to stand out. And, perhaps, perform better.)

Because life is about a lot more than paperclips. Strong performance practices are rarely so cut and dried as to be about a single factor or a single metric. Things that you think you know probably need to be re-tested, and re-thought, rather than assumed to be settled law.

People who design ads without consulting the data are, I believe, acting in an irresponsible manner to their clients.

But so are the ones that act only from data, rather than be inspired by it.

(Also, beating Criteo Box controls? Not a new trick for me. Reach out and let's talk.)

Shovels Not Grails

Let's Get Digging

This week, a good friend and better business associate may complete a quest.

It's taken years of his life and tens of thousands of hours of work, but he's attracted great partners, and the business is nearly complete on a life changing round of funding. Soon after that, we may witness the spread of this tech for marketing and advertising professionals.

Exciting times! (And yes, I'm hoping to work with him on it, mostly because he inspires me to do good work, and you really want to spend your time with people like that.)

Why is his tech life changing? Because he's made something that other people will use to solve a problem and chase their dreams. More importantly, he's done it with a solution that is completely self serve, easy to use, and (this is critical) limited in scope. Instead of threatening the current way of doing things for people in the space, it's just a supremely cool thing that they will use to be more effective. Without a ramp-up period, a forced breaking of silos, or a lockout of current partners.

You can explain his solution in a sentence. Without leaving out stuff that some clients will value, while others ignore.

In other words, he's not selling the Holy Grail.

He's selling the shovel that you need to find it.

(Much better business than Grails, honestly. Also, he's not going to use the shovel for you.)

Part of this echoes what many of the start ups that I've worked for in the past two decades have looked to do. But while it's easy to state your vision, the details of what's involved (primarily account management and customer success) usually destroys those intentions. Clients want to know what you know, have you do things for them that they would rather not, or expand the use of your tool into areas that it might not support to the same level of expertise.

Your customers aren't wrong to want these things, of course. Their concern about your business model probably doesn't go beyond polite interest, and at the end of the day, everyone just wants to solve their own problems, not yours.

With your solution or someone else's, with the usual mix of great, cheap and fast (pick two!) impacting their business decision.

More about this soon, I hope. (And yeah, I'm under NDA, which explains all of the vagueness.)

The Peril of Perfection

The Gong Is Necessary

Back in my pre-marketing and advertising past, I was a musician.

Well, to be completely honest about it, I was a singer/songwriter, who also bankrolled a band. Musicians, generally, have more skill in their instruments than I do, and I was never completely secure in the title. I worked hard at it, took voice lessons, thought about it all the time, and hustled up hundreds of gigs. We completed four recording projects and I don't regret the experience.

Anyway, back to the story. (I promise this will have something to do with marketing and advertising. Honest.)

We had a drummer that wanted to be John Bonham (that's the guy who played for Led Zeppelin, and is also pictured above). Which is a fine thing for a drummer to want to be, honestly. But his ambitions, at least at the point in time when we recorded, weren't quite up to his chops.

On a specific track in question, he was trying to execute a particular difficult part, and he didn't quite get it right. It was close, but it wasn't in the exact point. He could have just done something simpler, but that wasn't where his art demanded him to be.

Enter technology.

At the time, we were recording on analog tape, which is prized by many recording musicians and studio engineers for its warmth. The story goes is that since digital music is all just 1s and 0s, you don't get the full nuance. (It's a similar story with people who prefer vinyl.)

Which means that you can only edit, or "punch", the tape so much before the tape degrades. And if you are editing the music in question, you have to be extremely exact, and maybe even break out a razor and do splice work, to get a "correct" track.

Which is how we spent way too much time into the wee hours of a Saturday night / Sunday morning, at billable hours, to get a single drum hit in a complicated fill to move a fraction of a percentage of a second... all so the drummer was happy. (Well, more relieved than happy.)

To him, that fix meant everything. It meant that he could hear the song in the future without dwelling on his mistake, that he could take pride in ownership, and that his dreams of sounding like his hero weren't beyond his grasp.

Needless to say, no other person in the world noticed it.

Also, everyone else in the room wanted to murder him.

Which leads me back to digital advertising, and our nearly limitless ability to get things just, exactly, perfect. Often, to the pixel.

And which leaves me thinking, far too often, about my old drummer.

And how often people need to be just like him...

Stepping In The Same River

Deep

“No man ever steps in the same river twice, for it's not the same river and he's not the same man.”

- Heraclitus, a Greek philosopher (544 B.C., so let's forgive the pronouns)

For roughly my entire career as a marketing and advertising professional, especially one who has been on the inside at places that have held the data, there has been one consistent inquiry.

"How do we get our (insert metric) up?"

Typically this is clicks, but it's also been opens (see email roles). Sometimes it's view based, other times its conversions, your best bet is probably a hybrid measurement that's mid funnel, and there's even been downloads or user time. You name the success metric or KPI, show me some creative, and I can probably tell you a half dozen things that could positively impact success.

In seconds, without research. It's something of a party trick that comes from decades in the space.

But the question also betrays a fundamental misread of the mission.

Short term wins over your control, especially if they are from something as transitory as a design only refresh, gives you a diet of popcorn -- and a very finite amount of popcorn at that. Especially in a typical marketing and advertising mix of multi-channel touch and communication, or with (and here comes the river) a fluctuating supply of impressions.

(You remember the river, right? It's important. Sorry it took me a while to get back to it.)

Especially in broad campaigns and programmatic plays, the quality of traffic can vary wildly, even among people who aren't scouring the Web for low CPMs. Online publishers are under constant pressure to keep the lights on, and that can lead to unfortunate decisions on frequency. There's also the very real spectre of outright fraud, which is slowly getting beaten down due to better tech, but, well, not all at once.

So what's needed is testing. Constant, disciplined, with an emphasis on reporting, preferably with your analysts having a strong dose in significant confidence levels. With a plan that attacks structural differences (i.e., offers) as well as surface changes, and KPIs that don't change with the weather.

Oh, and when you think you've determined, for once and for all, a stronger practice?

Well, that's when you have to run a back test... because the river has changed.

And if you need help navigating those waters, I'm happy to guide your boat.

There and Back Again

Yes, The Author Is A Short Fellow

Last Thursday (3/21/19), RevJet ended my role as part of a force reduction. It wasn't for cause, I don't bear them any ill will, and a wide range of senior personnel have reached out to express their condolences and willingness to help. There's even a chance that I'll work with them again, once they get past their current issues, and in some ways, I feel more valued now than I did when I worked there.

I believe in their application and value proposition, and the future of digital advertising is going to look a lot like what they do. As to whether it will be their name when the dust settles... honestly, I have no idea. There are a lot of good competitors in the space, and as last week shows, they don't have the deepest pockets.

Which brings me to, well, why the blog wasn't getting a lot of updates.

RevJet is many things: a boon to marketing and creative personnel, a way for ad ops people to get their lives back and do more interesting things with their time, a DAM and an ad server and a test machine and a dessert topping and a floor wax.

On a personal level, I learned a lot -- about strong practices in creative, about durable learnings in dayparting, about animation cycles and creative heat maps and reporting and a ton of far more technical ad ops stuff than I had ever been exposed to before.

It also wasn't, well, lucrative.

I took their first offer and drove to California as fast as I could to work for that company. I lived in a 200 square foot hut (that cost over 40% of my mortgage back in New Jersey). I spent the past two years away from friends and family, doing everything I could to ensure optimal service for clients. At the end of every day there, no matter how much stuff we had to do, I left with a clean in-box, set agendas for the next day, completed documentation and a sense of accomplishment.

And then I'd work 5-7 hours as a rideshare driver to cover the shortfall, and 12-14 on weekends, and served M&AD clients.

It was an interesting ride and a great learning experience, and more proof that when I believe in something, I go all-in. (See also past gigs, my time leading a rock band, putting mysef through college, and such.)

It's also made me dramatically more useful to, well, the next employer. (If that's you, please get in touch. Papa needs a new pair of health benefits.)

More about what I've learned later, and thanks for reading.