Glenn: Hi, everyone. I’m Glenn Gow, Founder & Advisor of Crimson Marketing. Welcome to Moneyball for Marketing where we talk about the incredible changes happening in marketing organizations around big data and marketing technology. We feature marketing technology insights from the top marketers in the world. The reference to Moneyball is from the story of how the Oakland A’s baseball team were able to win and win and win because they figured out how to use data and technology to their advantage. If you’d like to learn about how to use big data and marketing technology and marketing to help you win visit us at CrimsonMarketing.com or email us at info@CrimsonMarketing.com. And now on to our podcast.
Today I am very pleased to welcome Gilad de Vries, Senior VP of Strategy, Products, and Business Intelligence at Outbrain. Gilad leads the strategy, corporate development, product management, and business intelligence at Outbrain. So how does Outbrain describe themselves? Outbrain is the world’s largest content discovery platform bringing personalized relevant online mobile and video content to audiences while helping publishers understand their audiences through data. As all the listeners know I like that part of what Outbrain does. So Gilad I would love to continue the conversation we had earlier about the changes that are going on in marketing that we’re all very well aware of. Those related to how the consumer really has choice now. I’d love to hear your perspective on that.
Gilad: First of all thanks a lot for having me. It’s a pleasure, I love the podcast and I think you’re providing an awesome service to listeners. The world of marketing is changing in front of our eyes, and it’s really a change that I don’t the world the marketing has seen in the last hundred years something of this magnitude, and the main reasons for the change is that for the first time consumers have two things they didn’t have until now. The first is choice as you mentioned which is the ability to block, disregard, ignore, skip, forward, and not even be exposed to a lot of the advertising that is being thrown at us.
Glenn: Right and I would even we try to get rid of it right?
Gilad: Yea. And the other is the ability that for the first time, consumers can actually talk back to marketers right? Marketers cannot just shout at them from the rooftops and expect their message to get through. Consumers can actually talk back to the brand, they can go on twitter and Facebook and comment and respond and that freaks out a lot of marketers actually.
Glenn: That’s right some don’t really like that do they?
Gilad: No, not at all, it requires a totally new strategy. You need to look at your whole game-plan for how you go to market as a brand, as a marketer, and to rethink everything that you’ve been accustomed to doing.
Glenn: I would argue it’s only going to get more and more so that consumers are going to try to control what’s presented to them.
Gilad: Absolutely, I completely agree and I think the way to think about what brands should do about it is that they need to switch from a push advertising mindset which is, let’s look at all the channels all the mediums we can talk to our potential consumers through, whether that’s TV, radio, online or whatever, and think about OK this is our push strategy, and our push advertising strategy essentially, and now we need to think about our pull marketing strategy. The difference between push and pull is that in push you basically usually think about yourself, and about your product, your features, your advantages, in the marketplace, and you kind of talk about yourself. And because of choice and because of the fact that consumers can talk back to you, you need to think about your pull marketing strategy, and pull means how do you attract people to come and listen to you and actually want to have a conversation with you the brand. And the secret to any successful pull marketing strategy is to stop thinking about yourself and everything that you want to so, talking about yourself etc. and alternatively think about your consumer and what he cares about and what interests her, and how can I add value to her life that’s the magic word adding value. And that would drive everything in pull marketing, and today pull marketing in most advertisers, marketing mix models, probably less than 10 percent. And I argue that in the next years, a brand that doesn’t create a blueprint that gets their pull marketing spent to about 50 percent of their total marketing mix, 50 percent, if they don’t reach 50 percent in the next 5 years, they’re probably dead as a brand.
Glenn: And so just to clarify, pull marketing is about creating value for the consumers so that they want to come to me.
Glenn: OK good.
Gilad: So let’s talk a little bit about what that means, what does it mean to add value? When you think of a brand like Red Bull right? They’re developing a lot of content that is extremely interesting for the adrenaline junkies right? Now these people are the people that are actually looking for, that’s their audience, that’s the cult that they wanna create around brand. So they are going out there and creating a lot of great content that naturally gets their audience to gravitate towards it. That’s how they pull their audiences into their content. And they’re adding value to their lives. And adding value, you can think about it in three dimensions, it’s either about providing great information, or providing great entertainment, or providing great utility. So let’s think of American Express when they do the American Express open form, that’s an amazing platform if you’re a small medium business owner and you’re like thinking about how do I get my business to the next level and what do I do etc, first and foremost you can go there and get advice from people like Guy Kawasaki and Richard Branson, so that’s adding value to your life. But they went a step further and they’re starting to create utility, that means that when you become a member of American Express open forum, you start to get a lot of services, they created a platform that allows you as an SMB to run your business more effectively and more efficiently. So they went a step further from just providing great value, informational value, to also providing utility and that’s what great pull marketing is all about.
Glenn: Let’s also talk about how do we track the effectiveness of this? Since I mentioned earlier about data being so critical here, how do we begin to understand whether or not this is more than just theory.
Gilad: That’s a great question, and I think it’s an area where a lot of marketers are struggling today because they’re trying to impose the same ways of measurement from the push advertising world that they know so well onto the pull marketing world which they’re just starting with. I’ll give you an example, when you’re doing push advertising you might push an ad like a banner ad online, and that banner ad when someone clicks on it gets to a direct response landing page, and you expect to have a very strong call to action button in the middle of that landing page. What you’ll from the measurement perspective is how many people did I get to be exposed to the banner, get to my landing page and boom convert.
Glenn: That’s what a lot of marketers are focused on that’s right.
Gilad: So think of it as the one two punch combo. You put the banner on get people to the landing page, boom they convert. And when you try to apply that kind of measurement on pull marketing you usually fail, and the reason you fail is that you’re missing a huge step in the middle of what pull marketing is all about.
Glenn: Alright now tell us about this I’m fascinated now.
Gilad: That is all about, what you’re trying to optimize for. If you’re trying to optimize pull marketing to conversions, you’ll probably fail. If you try to optimize first to engagement, and then optimize some of that engagement to conversion, that’s when you can succeed and that is why I refer to it as a 123 punch combo as a opposed to a 12 punch combo. Because you have to have the optimization to engagement piece in the middle of your measurement funnel. And that is very different than the push advertising methodology. So let me give you an example. In push advertising you’ll try to get your bounce rate to be the minimum. Get people to my page, from my page I want them to go to conversion, so if they went from landing on my page to a conversion the bounce rate would be low and I’ll look for maximum conversions. When you do pull marketing you have to think about it like you have court someone, you’re going on a date, you’re not trying to go to third base immediately, you need to nurture that engagement. So if you just focus on bounce rate you might completely miss the fact that people were really delighted by a piece of content they landed on your site for. And therefore you need to tweak your analytics to not only look for bounce rates, but look for bounce rates with the combination of time on site. So if someone read my article and spent on this page more than 20 seconds, I don’t want to count it as a bounce rate, I actually want to count it as a success. An engagement. That’s an indication of engagement. So if you first optimize engagement and you really look hard at how people reach your site or get pulled into your sphere get pulled into your universe in the first place and you optimize for engagement with your content, with the value that you’re providing and then try to go for not necessarily a direct conversation immediately but rather a sign up to my newsletter or getting someone to read another article from me, that’s what you should try to focus on and the better you get at that, there is higher likely hood that you will succeed in your pull marketing strategy overtime. But unlike push advertising which is a sprint, pull marketing is a marathon.
Glenn: I really like this concept because I have a hypothesis that there is a growing percentage of the population that will never convert on your website. They’ve decided I understand what it means to give you my email address and I just don’t want a part of that. And yet if I can measure engagement for that percentage of the population and that percentage of the population actually tips in my favor in terms of their decision making, I’ve succeeded.
Gilad: Exactly and it’s also sometimes, if you focus on your push advertising strategy then you’re gonna hit only the people at the bottom of the funnel that are ready to convert right now. What pull marketing enables you to do is nurture people at the top of the funnel that may be interested in your solution half a year or a year from now, but you start that engagement, you start that conversation, you start that courting with them way in advance of them having that intent to purchase. And then yes it’s way more difficult to be able to track the people that converted today are actually people I started courting a year ago. It’s way more difficult than trying to just measure people that had intent yesterday and I converted them today. But that’s what the future of marketing is going to be all about.
Glenn: Well maybe more difficult but also represents the reality of a purchase for many products and services where people just aren’t ready make a purchase and yet they do engage with a brand.
Gilad: Correct. I highly recommend for people to download online the zero moment of truth ebook from google, which is great at providing you a lot of data on how people purchase today, and it’s fascinating to see how in the last few years we’ve moved as an audience, as a population we’ve moved from having to engage with something like 5 pieces of content before making a purchase decision to over 10, so the amount of information we are seeking before making a purchase doubled over the last 5 years. As a marketer what if you can influence whether people will engage with two or three pieces of content from you as part of that journey of engaging with ten different pieces of content before making a decision. And that’s what you need to strive for so not necessarily just looking at the conversion at the end but how many engagements out of those 10 did I get to be in front of that person.
Glenn: And the other part I find fascinating about this is that I had a guest from google on my podcast talking about that, and the example he gave was for a consumer packaged good item, that there were more than 7 different digital touch points before that person made a decision. Imagine if they’re buying something that’s very expensive and very complex, that number has to go through the roof.
Gilad: Exactly. And another way to look at this is just to understand the data and understand how consumer’s engagement with content and how that relates to decision purchase. And as you said the decision purchase is not just about buying online goods, it’s about buying anything right? So another way to look at how this shifts today is to look at a research that Nielson released just a month ago called the global trust study of advertising mediums.
Glenn: You sometimes don’t hear the word trust and advertising in the same sentence.
Gilad: Correct and that study is fascinating. They’ve been doing this for years now and every year they’re updating this research and when you look at the data on what mediums do people trust in advertising, the most versus what they trust the least there is a certain level of distrust in any medium of marketing except for word of mouth. So basically getting a recommendation from someone I know which is obviously the highest most trusted form of being notified or being alerted about any kind of product of service. But if we look at everything else, then it’s interesting to see that people trust the least basically almost all of online mediums. And that includes online and mobile mediums, that includes text ads on mobile phones, that is the least trusted medium of marketing today, then people trust the least banner ads on mobile devices because it’s my personal device, it blocks the view of what I actually want to read on a publisher’s site. But then people also say if you go up up the ladder of distrust then you see banner ads on my desktop and then search ads that are company search results which I thought was a little bit surprising and even video ads which a lot of marketers think it’s the same how I did TV commercials and now I’m doing it online. But when you actually look at the data, that people actually trust that less than they trust TV ads. Which is why I guess a lot of marketers are continuing to poor so much money into TV ads although they know Tivo, the programs the shows, and they skip ads, people intuitively know that because they do it themselves, but yet they’re continuing to poor a lot of money into TV ads.
Glenn: Well it’s curious Gilad yes, we try to skip ads and now brands and television programming enable ads to be stuck on the screen during programming, so that I actually can’t get rid of it, and it would be curious to understand the trust factor on those. But let’s talk about what people do trust.
Gilad: Yea so you know as I said, the number one medium of trust is obviously recommendation of someone I know, but number 2 is extremely surprising for most brands, and that is that the number 2 most trusted medium in advertising is their own website. Even more than number 3 which is editorial articles. Intuitively brands know that if they get a story on the Wall Street Journal talking about them that’s amazing earned media, very trustworthy, and extremely valuable from the standpoint of getting consumers to know more about your brand, your service etc. But the fact that there own website, so branded websites, is number 2 after a recommendation from someone I know. So let’s think about why do people trust brand’s websites so much? If you really think about it let’s take Pampers as an example. So Pampers is obviously a great brand right? And they have tons of content on their site which is amazing, content about all the dilemmas, all the challenges you have as a young parent with your first child. And it makes sense that we trust that site so much because we know that Pampers knows that we can talk back to them, so they would go through a lot of length to make sure that every single piece of content that shows up on the pampers.com site was validated by probably 5 doctor’s and 10 lawyers. So we know we can trust the content that is there and unsurprisingly it’s not very self serving, it’s not just talking about diapers, it’s talking about a lot of other challenges with relation to health, and the security and the well being of our kids. And we trust that content coming from them just like we trust content on the American Express open forum or we trust greatly the content about innovation that would show up on the GE technologist site, an amazing site of great content about ingenuity and innovation and the great things that were invented in the last century and the things that we will invent in the next century. And that content on the clearly marked GE site makes sense to us, and that is something that we trust a lot, so it’s really not surprising that when you look at the trends of marketing you ask CMOs what is the thing they’re going to invest the most in 2016, there’s a lot of research now that comes out that shows that content marketing or pull marketing is essentially the fastest growing trend in digital. But not only in digital, but in marketing in general as well. And that’s where brands are putting a lot of their investments moving forward.
Glenn: Believe it or not we’re almost out of time, so is there any last point you’d like to highlight or any last story you’d like to share with us?
Gilad: I can share a story of one of the largest tech companies we all know, I won’t name them but they have among a lot of services they provide a great cloud service, and they try to attract to their site by creating some content that talked about the importance of cloud computing to start-up entrepreneurs. That was their target audience and were trying to attract that content. And when when they started up they were in the same mindset we were talking a lot before, they put a lot of call to actions, try to get people to come to the content, sign up for our cloud service right here, and that failed miserably, but lucky for them they had the patience to go back to the sketch-board and think or rethink how should we approach content and how should we approach what we’re looking to achieve with this site. So instead of putting a lot of call to actions to register to the cloud service right here and there, they started to produce a lot of great content that is of interest for the founders of start-ups. And it didn’t just talk about cloud service, and how you choose the right provider which is sort of like yea of course that’s the piece you’re most interested in getting people to read but that’s not necessarily what most people are interested in reading about. So they created great content, foreign entrepreneurs, and they started to gain a follower-ship of people to their blog of people that started to read great content from their website that allowed them to improve as founders in their start-ups and slowly they got people to register to a newsletter in which they were also continuing to provide a lot more information and great value. And only after half a year or so they started in the newsletter to also hint about the opportunity to actually talk to an expert on how to think about your IT, and how to think about whether to put something on the cloud, and what potential cloud services are out there, and which one you should choose etc. and how to chose a provider etc. And slowly but surely, their pull marketing strategy, this strategy of nurturing a community, providing value, and not asking for anything in return, not hitting people on the head with a call to action immediately, slowly but surely now if you ask the head of marketing there, they would say that content marketing is by far the most ROI positive channel that they have. It’s actually delivering more leads that lead to more sales than any other channel they have in the marketing mix. So they’re switching to more than 50 percent investment in their pull marketing. So it’s just an example of how patience in content marketing is really the key to unlocking their rewards that come with it.
Glenn: That’s a great summary. Patience is the reward. So Gilad thank you so much, this has been fascinating to me, I’ve learned a great deal and I really appreciate your time.
Gilad: Thank you for having me. This has been a lot of fun.
Glenn: My pleasure thanks I’ll talk to you soon.
Gilad: Alright no problem.
Glenn: If you like this podcast please subscribe and rate us on iTunes and tell your friends about us. You can also go to our website, CrimsonMarketing.com, and sign up for our free monthly newsletter featuring the very best of our marketing insights, featured Moneyball for Marketing podcasts, and one of our favorite features called, “Bad Marketing,” or email me at info@CrimsonMarketing.com. Thanks for listening to Moneyball for Marketing from Crimson Marketing. Have a great week and let us know if we can help you in any way.