Lewis Rothkopf is the President of Martin, a media buying and measuring platform for marketers who want to measure their impact.
Lewis has more than two decades of experience in digital media and prior to joining Martin, he led sales and revenue, business development, and marketing at companies such as Millennial Media, Polymorph, and DoubleClick (each acquired by Verizon, Walmart, and Google, respectively).
The Ultimate Guide to Website Traffic for Business
What you will learn
- How to measure the effectiveness of your ads and the metrics that matter
- What ‘Incremental lift’ is and why should you care
- What programmatic advertising is
- The implications of Apple’s privacy changes to the iPhone for entrepreneurs
- The metrics you should be measuring for an eCommerce store
- Why testing is so important
- Targeting the right type of users
- Understanding the spend patterns of your consumers
00:00:04 - 00:01:05
Hi everyone and welcome to the Jeff Bullas show. Today with me, Lewis Rothkopf. Now, Lewis is in New York doing the Zoom thing. I'm in Sydney doing the Zoom thing. I just told him that I live in the future, so he's going to place a bet on the races here so he might get rich instantly. Lewis is the President of Martin, a media buying and measuring platform for marketers who want to measure their impact and make money, I'm sure. He has more than two decades experience in digital media and prior to joining Martin, he led sales and revenue, business development and marketing companies such as Millennial Media, Polymorph and DoubleClick, each acquired by Verizon, Walmart and Google. Lewis is an expert at measuring ad effectiveness and has a lot of insight to share as far as what marketers can be doing to improve their impact right now and grow their company.
So we're gonna talk a lot about how to grow your company using digital advertising. Welcome to the show, Lewis. It is an absolute pleasure to have you here, dialing in from New York.
00:01:06 - 00:01:10
Thank you, Jeff. Greetings from New York, thank you for having me here.
00:01:10 - 00:01:35
Absolute pleasure mate. So you have been basically immersed in digital for quite a long time. Okay, so where did that interest arise from? Like why did you get into digitals? Because your grandmother told you to? Was it because your professor was inspiring? What was the inspiration to get into digital?
00:01:36 - 00:04:41
I will give you the honest answer to the question because I like you already. So I went to school with a major in Advertising Management and all of my, so this was the mid-90s and all of my professors were former agency heads and they, you know, showed us the Volkswagen campaign, they created the Mcdonald's campaign, they created, and I said this is awesome. I then discovered that it's very difficult to pay off your student loans as a creative unless you are one of the very, very few that make it very, very far. And so I kind of transitioned my major over to the management side, so client management, account management.
But what we learned predominantly were things like how to research the full page rate of a magazine in this periodical that listed full page ad rates for magazines. We learned that there were these things called computers that you could do like multimedia things on like CD-ROMs and stuff. But you know, I thought I was gonna, you know, go and write the next great Volkswagen commercial. And so I graduated on May 23rd, 1999 and sort of contextualized where the world was at that point, it was kind of like the crocs of the dot com boom. And so on May 24th, I got a phone call from a recruiter who said I saw your resume on Monster.com and you know, I work for this advertising company, are you interested? And I said am I interested? And I didn't know the first thing about digital advertising and I got in and I took the job because why wouldn't you? And it was my first job out of school and they said well what do you want to make, what's your salary requirement? And I was like in the HR person's office in real time doing the math of well my rent is this and so if I have a budget of $100 a month for groceries, then here's what I need to make. And they said great you're hired.
And so I became wedded to digital advertising and over the course of the 23 years that followed. I've done a bunch of it, I did it for DoubleClick way back then. I did it for BrightRoll which was sold to Yahoo which is in video advertising. Millennial Media as you mentioned, sold to Verizon mobile advertising, and you know I think I worked really hard over the last couple of decades trying to solve the problems that the industry has created for itself starting on the supply side. And then about five or six years ago I said I've solved all I'm going to solve from the supply side. I got to get to where the money is actually being spent. And so I moved to the demand side, hoping to help solve many of the challenges that the industry has from the point of view of the people who are spending the money.
00:04:43 - 00:04:57
So you went and did your degree, which was basically about mass media and print media. How useful was that degree in terms of digital advertising?
00:04:59 - 00:06:31
I would say that the well rounded education I received at my alma mater with the core liberal arts and, no, look, I mean, it was a very different time in the world. I remember distinctly we had a guest lecture coming one day and say, how many of you have heard of Jeff Bezos? And nobody raised their hands and the professor said, okay, well that's okay because, you know, it's really just an online bookstore right now, but you should keep an eye on it. And so we weren't, as deep in the digital side as I think would have been useful. But again, the world was changing. It was a transitional time. How much of it really helped me today? A lot of it.
So, and I say that because we spend so much time in digital marketing and particularly in programmatic, talking about metrics and numbers and results and you get to a point at which you might as well be trading, you know, energy futures or, or pork bellies, what's missing is a real discussion of the creative, right? Creative matters, you know, when you're using a medium like video, you've got to be taking advantage of sight, sound and motion to reach consumers on an emotional level. Like all of the back end metrics matter and count. And ultimately, or what, you know, is going to get the repeat business. But if you're not speaking to consumers in the language in which they need to be spoken, they want to be spoken, then you're missing out.
00:06:32 - 00:06:46
So a lot of people wouldn't understand what is meant by programmatic. Okay, so it's tossed around a lot but explain little. So can you give us a quick thumbnail sketch of what programmatic advertising is?
00:06:46 - 00:09:04
So 23 years ago when I began in the space, if you wanted to buy an ad on a website, it was the same as if you wanted to buy an ad in a magazine or a television show or a radio broadcast, you would get in touch with the seller, right? The salesperson, you would haggle over the price, you would come to a deal on the price. You'd probably go and have lunch with them. You know, back when people used to leave their homes. And the final step was you would get an insertion order, an IO, and you would sign the IO which has all the details of your buy you probably fax it back to them. And okay, great. Now you're up and running.
That is how digital media was getting bought routinely up until about 10 years ago. And think about that, right? So we're not talking about that long ago, we're talking about, you know, the early 2010’s and you've still got insertion order is being faxed back and forth and this is crazy. And so a bunch of really smart people got together and said, wouldn't it be great if rather than having to do this highly manual process for every website that we want to run on, wouldn't it be great if we could do it all from our computer from our web browser and then really smart people got together and said yes, that's good. But wouldn't it be even greater if rather than buying a chunk of media? Right. So I say I want to buy a million impressions on Lewis.com. I don't want to buy a million random impressions on Lewis.com. I want to buy a million impressions on Lewis.com of people that are 18 to 24 years old and who are in the market for a luxury auto. And you know what I kind of want to decide on an impression by impression basis of how much I'm gonna bid for them because I'm getting a lot of useful information about the consumer in this bid opportunity, right? This impression, I'm not getting anything interesting on this one. So I'm gonna bid more for the user that I know more about than the one that I don't know much about. And that's how programmatic was born. And it's really why from an efficiency standpoint, it's it's kind of taken over over the last decade,
00:09:05 - 00:09:11
Essentially, it's automated at scale targeted advertising that can be measured. Is that correct?
00:09:11 - 00:09:40
Yes. To use a really imperfect analogy, it's the difference between having a seat on the New York stock exchange or being a client of someone with a seat on the New York stock exchange and handing over a piece of paper with the trade versus logging onto your online broker and saying, get me the best price for 100 shares of, you know, AT&T, and do it as quickly as you can. And of course that trade is handled by a computer.
00:09:41 - 00:11:27
Yeah. So it's basically as we've moved into the more digital age and we're moving from what we call, I suppose the physical reality to more virtual and digital reality. In fact, this is something reflected in quite a bit is that almost everything is moving towards being virtual or digital. Our shopping is like that, ordering food in. We don't go into the store, we watch entertainment on screens that are our physical reality of the actor isn't there? But it's being streamed to you by Netflix from somewhere around the world and the list goes on and on. And so the same things happen with advertising. So now measurement of results, in other words, you know, hopefully for all of us that are buying advertising and I do remember actually physically buying full page ads. I used to have a retail bedding and mattress store a long time ago. Now that was a horror show because I felt trapped in a physical store, couldn't get out of it because I was running it. Before e-commerce was sort of really grown up and I used to do ads and the way I measured this victim, so the ads was how many people turned up from a promotion where we did, you know, half price mattresses and we would break the sales record for the month.
So measurement that matters okay, maybe you can give us a quick overview of what sort of things you should be looking for to successfully measure the effectiveness of your ads and maybe some of the metrics that don't matter, that are a bit dodgy and we've already mentioned a bit before.
00:11:29 - 00:14:11
Yeah, going back to my silly little story for a second. So it's too, it's 1999 and it's back to the beginning, right? And you've got this ad that you're running on Lewis.com and you're the advertiser and you're like, all right, well, you know, is this thing working or not? You know, you've you've got the ability on the computer to click things like our people clicking and so the industry made a terrible mistake at the time and began to report results to every advertiser, in terms of impressions, right, how many times your ad was displayed and clicks, how many times the ad was clicked on. And so marketers very understandably began to become obsessed with clicks and they were graded as employees on how many clicks did this campaign generate and publishers were fired and hired from buys based upon their click through rate. The problems as I'm sure you know, is that study after study has shown that the people who clicked on display ads aren't necessarily the same people who buy things from the advertiser, maybe they're just looking for something else to do. Maybe they think the ad is pretty and they want to click on it and it tends to be a very different population of users who actually take the marketers desired action after seeing the ad versus simply clicking on it.
So, we think click through rate is bad. The industry has kind of gotten there over the last several years. Many advertisers still love it. They shouldn't though, right? Because even the newer technologies and approaches like cost per action, they tell you something very important, they tell you how many people saw the ad and took the desired action after having seen the ad. What they don't tell you is something even more important, which is how many people saw the ad and took an action because they saw the ad versus how many people saw the ad and took the action and would have done so regardless of whether or not they've been exposed to that creative. That's where we're trying to bring in the industry, right? We're trying to get folks to a place where they are basing success of the campaign on the incremental impact that the ad had on their business, on the bottles of shampoos that flew off the shelves, on the appointments that were booked for eye care surgery, right? So being able to sort of shed this notion of, well it all comes down to click through rate or it all comes down to cost per action towards one where there's a causal understanding of which of my advertising worked, where did it work and why?
00:14:13 - 00:14:19
So you guys at Martin had developed a platform to help solve that problem?
00:14:20 - 00:17:07
Yes, so we built what's called a demand side platform or a DSP and a demand side platform is a tool that lets marketers buy media across tens of thousands of open websites. So think about all of the properties that are not what we call the walled garden, so not the Googles and Facebooks of the world, but you know, other really high quality properties as well as long tail properties as well. We let them do so in a way that allows them to overlay any data on top of that buy so let's say they want to reach these 100 sites worth of consumers but they only want to reach people again who are in market for a luxury auto. And so we can layer a data overlay on top of that. We're also able to onboard their customer files. So let's say you are on a chain of bedding stores and you know who your customers are and you know that the most money you make is from repeat business. So rather than just doing, you know, a spray and pray campaign across the internet where you hope you reach your customers, you can actually take your customer file, whether it's email address or first name, last name zip, uploaded into our platform right from your desk. The file is then what we call hashed, right? It's encrypted in your browser. So we never see any of the personally identifiable information, right? Rather than seeing [email protected], we see ABC 12345. We work with partners on the back end who match that ABC 12345 with what they know about ABCDE 12345. And then you as a marketer are able to explicitly target those users and only those users or you as the retailer may decide that you know what my existing customers, they're already existing customers. They're not going to buy a new mattress for me anytime soon. So I don't want to spend money reaching them. I want to reach everybody who is not them and then you would do the opposite. You would anti target that customer list so that you're only showing your ad to people who have not bought from you in the past and you can see the possibilities there are pretty endless and what you're able to do in terms of precision and then going back to the point that I apologize, I will make over and over so please stop me. You gotta understand if it worked right? So how many people came in and bought the mattress because they saw the ad versus people who said I'm gonna go out on Sunday and I'm gonna buy a mattress and like having seen the ad was just incidental. If you can't draw that distinction as a marketer, then you're kind of flying blind.
00:17:08 - 00:17:14
So the metric that matters then is cost per action. Is that what you're trying to get to the court?
00:17:14 - 00:17:47
The metric that matters is lift, incremental lift. So how many more people took the action because they saw the ad? Cost per action is going to tell you how good you're targeting was? Right. Are you targeting the right type of users? Because you know how much you paid for an ad, you know how many conversions you got and so aha cost per action. What it doesn't tell you is how many of those conversions you got and paid for were people that were going to buy it anyhow. Regardless of whether or not they saw the ad, lift helps you make that distinction.
00:17:47 - 00:17:52
Okay so the term, I've never heard this before, incremental lift.
00:17:52 - 00:20:02
Yes exactly. And it's exactly what it sounds like, right? It is if 10 people saw the thing and bought it, how many of those 10 bought it because they saw the creative and I'll go a step further, cost per action incentivizes the wrong behaviors. So in cost per action we know that the less times you expose a user to an ad the lower your frequency, the lower your cost per action action is going to be, right? So I can show this user and add three times sort of in this silo over here and on the other side of my mouth I'm saying I get a CPA of $5, so great, right? In lift, we know that the more times you show a user an ad, the higher the likelihood that that user is going to convert. And so your CPM, right? How many dollars you spend on a per user basis is going to be higher when you're optimizing to lift than it is when you're optimizing to cost per action. But when you're optimizing to lift, remember these are net new conversions, these are conversions you would not have gotten without the campaign. And so we've seen roughly 10-13 exposures is what it takes to get a user to convert a net new user to convert and so on the cost per action side versus the lift side. If you're a marketer, do you want to spend a dollar in order to get 10 conversions or do you want to spend $2 to get 50 conversions? Most would say the latter, but most marketers are not doing it yet. And so we are not only selling our products, but we're first going to prospective customers and saying, hi, we're Martin, we're new, we're so much newer than our gargantuan competitors like Google, but before we get into why and how, you have a problem. Like do you know you have a problem? You're measuring the wrong thing. And so we have to first convince them that they're doing it wrong. No disrespect and that there's a much better way to do this that will actually help you understand shampoo that's sold because of your advertising.
00:20:03 - 00:20:09
So that was a big part of what you do is education before you leap into anything, Is that correct?
00:20:09 - 00:21:04
It’s actually one of our, yeah, it's actually one of our core values as a company. So we believe in the free diffusion of knowledge. So I'll give you, for example, we work with our clients on a monthly or more frequent basis to come in and just educate, just share thoughts with them on what's going on in the space and we don't charge people for that. Like we don't make it a sales pitch, like we really do believe that it's our responsibility as a bunch of engineers and data scientists and you know, dumb business people like me to teach and to share and and to sort of not jealously guard this secret that we have that there's a better way to do it.
The more marketers measure and optimize the right way with their digital marketing, the more money is going to be spent on digital marketing because it's gonna work better, right, more shampoo is going to be sold.
00:21:06 - 00:21:57
Yes. The whole digital landscape and marketing has just changed so much in the last 10 years. It changed 20 years ago and the last 10 years changed even more as Facebook arose and got very granular details. The thing that fascinates me but I'm hearing this a few times now is the, what are the implications and ramifications of IOS 14.5, which is where Apple was going to Google and to Facebook going, I'm not going to share the data from the phone with you anymore because my users don't want to be feel like their privacy has been invaded. What are the implications of that? Because this is only just starting to roll through the landscape now and what people need to know about that and how are you getting around it? And so I'd be interested in your thoughts on that.
00:21:58 - 00:24:11
This is a really good thing. We welcomed with very open arms that cross app ad tracking changes that Apple rolled out in 14.5. We also welcomed with very open arms, the Google Chrome third party cookie deprecation and as you know, Google sort of surprised some people, I guess didn't surprise some people, and push those changes back and we were super disappointed by that because we were, we are excited to be the first entirely cookie list DSP, which is a goal that we have for ourselves in 2022. Unfortunately, with the Google change being delayed, it took a little bit of fuel off the fire on both sides of the table, the demand side and the supply side. It took some of the urgency away. We want to recreate that urgency. We want to do it because number one, it's the right thing to do, right? Consumers deserve privacy. Online consumers deserve to not be part of a, think the term was coined this week, surveillance advertising or surveillance virtual state, right? Like that's not what we want. I mean we are consumers, we go home to our families and we consume things and we see advertising and you know, every once in a while my daughters will turn to me and they'll be like, oh, there are so many ads in this app. I hate it. And I'll say, you do know how the rent is paid, right? Like you, you do understand like where daddy makes money. But it's such a good point and that is, you can do this, you can have really good advertising and really good creative that is really precisely targeted with really scientifically valid attribution without making people feel icky. And that's really what all these changes are about, aren't they? It's about helping consumers feel hopefully not picky at all, but certainly less icky. We've all experienced this, right? We've gone shopping for a pair of shoes and then we didn't buy it or maybe we did buy. And then for the next two weeks, all we see everywhere on the internet is an ad for that same pair of shoes. And it drives us crazy.
00:24:12 - 00:24:13
And you've already bought the shoes.
00:24:13 - 00:24:15
00:24:16 - 00:24:20
Don't try and sell me something I've already bought. It's like, it's so stupid.
00:24:21 - 00:25:57
It feels creepy and it's also wasteful, right? Because that loop isn't closed. So they don't know that you're out of the funnel. You're either out of the funnel because you bought it or you've chosen not to buy it. So you see the same damn ad. And so, so many of the challenges that the industry has had were of its own creation. And so the long answer to your short question is, sorry, cookie deprecation, third party cookie deprecation, Apple’s changes, Google's changes are not only not a bad thing. They're a good thing. So I said, thing #1 is it's the right thing to do, thing #2 is if you do this the right way and you work with proper contextual understanding of the environment in which the ad is going to be delivered, completely anonymous understanding of the attributes of the pool of consumers that are seeing your type of seeing your advertising, you can actually get really granular with your targeting and you can get really precise with your attribution when you are showing ads to consumers who have consented, right? Consent and choice is absolutely critical. It's the framework that all of this is being built upon. It's why you have governments around the world and acting things like the GDPR and Europe CCPA and now CPR in California and a whole bunch of other similar pieces of legislation and law. That should be the bare minimum, right. We should hold ourselves to a higher standard of great advertising to consumers that is not picky and that doesn't misuse their information or even give them the perception that that's happening.
00:25:59 - 00:26:29
I've been hearing around the traps more that because of this change Apple’s basically and GDP are is actually imposed, and rightfully so on advertisers, that they're turning more to already organic targeted groups that sit under the likes of influences. So I've been treating your thoughts somewhere influencer marketing is at, at the moment, if that's something that you are happy to talk to and know about.
00:26:30 - 00:27:40
Yeah, it's not my, it's not my area of expertise. I did see something really interesting today which is a company that I spoke with, their called Spaceback. They're able to take social ads, right? So they're able to take an instagram post and turn it into a display ad really quickly and really easily. So that's cool, right. Now you've got, you know, your social team as a marketer that is doing a campaign. Maybe they've done a product placement with an influencer but the ad, the post lives on Instagram, right? Or it lives on Twitter. Wouldn't it be great if you could take that and make it live in all places on the open web and turn it into a display ad. So something like that and ideas and technologies like that are able to bridge that gap between what we traditionally called social marketing, influencer marketing and what we traditionally call, you know, digital marketing, be it display or C-connected television or over the top or audio or native. I think that's the future.
00:27:40 - 00:30:44
Yeah, yeah. It's just every time I have a conversation with people such as our experts and thought leaders in your space, in this space is I'm constantly blown away with the tech that is just bubbling away all around the world. I've been involved with a startup called Shuttlerock, which actually creates video advertising. It scales from static images and we're a startup. I've been on the board, no longer on the board. I've been on board for about 7 or 8 years and then, but what we've done is taken static images and use tech to turn into video and doing it at scale. And they've developed tech that is what they call creative as a service, CAAS. Because everything just like you talked about is, like programmatic advertising, is trying to do things more at scale, that scale what we do as humans and use the machines. And I remember when I start to automate my marketing on Twitter and growing my followers on Twitter using software which allowed me to follow a bunch of people quickly using software. And that was done like 10 years ago and you should have heard the human cry from my followers back then, they're going how dare you automate social media marketing and going, oh my God, but it works so I'm not listening to you. And consequently I built by Twitter following to over half a million by automating. I didn't love it manually, but I did hacks all around the place. But as we know, organic advertising is really hard to do these days because we're in the middle of the battle of the algorithms now. Everything is an algorithm from what lands in your Gmail inbox under promotion or general or spam. You know what blows me away about Google's algorithm is when they send you an affirmation or that they've actually got your ad approved, guess where it goes? To their spam to my spam inbox on Gmail.
How the hell are we going to work out what the algorithm is and how to play if Google doesn't even know how to play with its own system. Anyway, I rest my case and there's my rant for the day. But okay, so let's give the nitty gritty, someone approaches you like me going, I want to target 50 year olds that want to buy a premium newsletter. Okay. Which is about how to start a side hustle and this is the exact thing I'm working on, frankly. So what is your process with your customers? And we talked about education. So what is a quick thumbnail sketch of how you can create a great creative campaign that resonates and gets incremental lift.
00:30:45 - 00:34:14
So the first question we're gonna ask, any advertiser in any segment of the market is what's your KPI? What are you trying to do? Are you trying to get, let's say you're an auto dealership. Are you trying to get people to fill out a credit application? Are you trying to get people to come to the showroom? Are you trying to get people to buy the car? And of course the answer is yes to all of those things. But depending upon where in the funnel the marketer is, in this targeting, the advice we're gonna happen, it's gonna be a little bit different. We're able to do full funnel incrementality. So to use that probably bad auto dealership example, whether their goal for this campaign is credit applications or it is getting people to trade in their cars or come to the dealership lot will say, okay, understood. Now let's back everything we do into that. So let's think about what your creative looks like. Is there are other things that we can do to help you optimize that creative? We work with partners that do things, called dynamic creative optimization. So based upon what the ad server knows about that user, again anonymously or pseudonymously, at that point in time, they're going to architect the creative in real time in a way that perhaps matches the look and feel of the site on which it appears, perhaps is geared towards the type of vehicle that the consumer is known to be in market for. We'll say, great, you've got good creative. Where do you want to run this thing? Do you want to run this across only premium sites? Right. So only, you know, the comp score to 50 top ad supported open websites or are you happy for this to run anywhere? You have to do this to run on 30,000 sites. As long as they are brand safe and not sketchy. We'll take that information. We'll take what we know about their their KPI goal and we'll help them build the campaign and we'll say, okay, this is what we're gonna do, this is what we're going to target. This is how we're going to measure it. We're probably going to get stuff wrong and that's why it's so important for us to in real time be able to keep them apprised as to how the campaign is performing from a lift standpoint before the campaign ends, right, for way too long, you would run a campaign, you would get a lift report and then you would say, huh? I did great. Or huh? I did not so great and well, too bad. It's over. Maybe you can apply those learnings to another campaign, but you can't go back in time and fix the one that was already running.
And so we provide lift and site visits lift in online sales in near real time so that you can take the stuff that you're doing right and do more of it. Or take the stuff that you were doing not so right and do less of it. And yes, to your earlier point, much of that can be done algorithmically and or you can do it yourself. You know we have customers who really want that high touch and who really want our council and our guidance and then we have those customers who are like, hey man just give me a login like I got it like I don't, you know, your advice I'm sure is great but I don't really need it and we love both types of customer.
00:34:13 - 00:34:30
So it sounds like you actually invite some specialist partners in as part of what you do. Is that correct? In other words, the creative aspect of running and that you guys don't get into the creative side of it.
00:34:30 - 00:35:25
That's right. So we have partners on creatives, we have partners on different types of measurements. So we work with a company called Lucid which does panel based surveying for brand sentiment. So going back to what I said about what is your KPI, what is your conversion moment? Some campaigns are not geared towards driving sales or foot traffic. They're geared towards making consumers either more aware of the brand or having the brand be more present in their consideration set. And so we work with Lucid to survey users and understand what was the lift in brand sentiment or brand awareness. We work with partners that help us to find footfall measurements and that helps us do geographic measurements and understanding again depending on the KPI, how much were we able to get the shampoo off the shelf? Figuratively speaking for this client.
00:35:26 - 00:35:45
And that sort of begs the question then because a lot of retail is person walks in the store. I used to have a traffic counter. In other words how many people walk in and out and sometimes they gotta run backwards forwards the car. It's not accurate. But on the other hand, I do know that I've had a 50% lift in traffic into stock which I suppose is called footfall measurement, is that correct?
00:35:45 - 00:35:47
00:35:47 - 00:36:06
So then you've got e-commerce stores that requires a totally different type of measurement. We're not totally but a different type of measurement, additional type of measurement. So for you guys what's your sweet spot in terms of the type of customers that you believe you can serve best.
00:36:07 - 00:38:36
Yeah so we, our customers are pretty evenly split between e-commerce, consumer packaged goods, CPG and retail and you know it's something that served us really well. When it looked like the bottom of the economy fell out in March or April of 2020. I wish I could say that it was you know my brilliant management skills that had us have a pretty diversified portfolio of clients. It was luck, it was pure luck that in a once in a generation, you know, black swan event as our retail clients pulled back and spend our e-commerce and CPG clients in many cases increase their spend. So and then it just goes back to what their goals are, right? So e-commerce is almost always online sales, right? Why wouldn't it be? CPG it's often brand KPI so brand lift in sentiment in awareness and for our retail clients it is very often footfall, you said something interesting about like you had a counter at the store and now you're able to measure footfall and yes footfall measurement is great. We work with a great company called Cubic that helps us with that. However, you can supplement that with something really really special which is truth set data from your cash register, right, from your POS system. So any measurement that is done is going to have statistical significance or we're not going to put our stamp on it but it's going to have some degree of noise no matter how carefully you are to avoid bias in your measurement, there's gonna be some degree of noise if you're using cash register data, right? To understand how many people saw the ad right? I have a loyalty card that you're able to associate with that purchase in the store. Well now you've achieved the holy grail. Now you've completely closed the loop. Now it's not a mystery of, okay, we know how many people went to that polygon. But did they go to the store or did they go to the other store in the strip mall? That was across the, you know, that was across the hall or across the street. It's difficult to get the level of precision. And so if you're able to take that POS data and tie it back to loyalty card and tie that back to online ad exposure. I mean jeez like now you've got the secret code.
00:38:37 - 00:39:20
So that then raises the importance of programs such as loyalty programs. Because now you can really start to understand what's the lifetime value of a customer because the thing is you might lose money on you first sale with a customer because you got to spend $100 to get them in and only spend $50 and you only make yeah 50% margin whatever. So that's $25, $100 bucks. So it's a lost leader, okay now, but they keep coming back for five years and they buy $10,000 worth of product. So loyalties becoming very very important, isn't it?
00:39:21 - 00:40:32
It is. And look, you know this and your list, there's no this, the exchange of value as consumers has to be a fair one, right? So the implicit bargain is that I'm going to get 10% off by being a club member and putting down that card. Yes, but I'm gonna give you the ability to track my purchase right and tracking those purchases is not only good from a advertising and targeting standpoint, you know, when you pay for something at the supermarket, if you buy, you know, some maybe dodgy looking fish at the supermarket with your loyalty card and find out two weeks later that that fish was recalled because it wasn't just dodgy looking, it was straight up dodgy. I got an automated phone call from the supermarket that said, you know, something on the lines of, I really hope you haven't eaten the fish yet. If you have not, please bring it in for a refund. If you have, you know, God be with you. But the consumer understands that, you know, there is some fair exchange of value there and to your point. Absolutely, I agree. You've got to be able to understand in a meaningful way that the spend patterns of your consumers or your, again flying blind.
00:40:33 - 00:41:32
Yeah, and the rise of the mass adoption of smartphones since we had the crack barriers which were for the elite back then and Steve Jobs managed to democratize the smartphone and got us to pay $2,000 for a beefed up one. Apple, we just got to be continually blown away by what that Apple does. So the mobile phones certainly made marketing easier, but we're navigating constant changes, aren't we? So maybe just to wrap it up, Lewis. What are some top tips you'd say to entrepreneurs that want to run an effective campaign? What are the top tips you would, from your vast experience and expertise, what are the top tips for people who want to make effective use of their advertising dollars?
00:41:32 - 00:43:02
Know what you're looking to accomplish, right? So understand what good looks like. If you don't know what good looks like, if you don't know what a good outcome is, then your partners are not going to do a very good job of helping you achieve that outcome, right? Like you've got to understand what you're looking to achieve and sort of where in the funnel you're targeting or perhaps you're targeting everywhere in the funnel. The second thing I would say is don't be afraid to embrace the unintuitive so go all the way back to what I said about click through raids and the huge mistake the industry made by rallying around them in the beginning. It is intuitive to think that, huh? I ran this campaign, a thousand people saw it. Two people clicked on it. So yeah, that means only two people are interested. That's just not how this works. And you know that it is intuitive to think clickers or customers, but it is just not the case. And so really dig in on the state of the art of measurement science and marketing science and understand what are the most causal and accountable ways that I can understand, did my marketing work? And if so why? The last thing I would say is test, you gotta test, test, test, test, test creatives, test tactics, test ideas, test suppliers, test DSPs like you shouldn't bet your business on anyone horse, even if that horse happens to be, you know, a very good looking horse.
00:43:03 - 00:44:31
I was, that was one of the questions I asked you testing and pilot piloting. I couldn't agree more. We've done some testing with Facebook ads on pain points for a target group and it can vary from 6%. This is the wrong thing. But we're testing, we weren't after anything else. You want to see what the click through rate was. We don't know what the buy rate would be, but we want to see at a very, very raw level what resonates with a potential customer. So you can run Facebook ads for 20, 50 bucks just to test that very, very quickly. And it could be one of the pain points for customers that they resonate with. So testing is very, very important. You can do it so effectively these days, can't you?
Lewis, it's been an absolute pleasure to have you here and thank you for those incredible insights. I learned a shitload today. I learned some acronyms I've never heard of and thank you that you explain what acronyms were because normally one of my favorite phrases, if you see an acronym, shoot it. But I would, I would go a little bit younger that now if you see an academic, explain it, I think that's maybe what we more ought to do.
But thank you, mate for your insights. I've learned a lot, and I'm sure our viewers and listeners will have learned a lot as well, and thank you for dialing in from the other side of the planet, and it's been an absolute pleasure.
00:44:31 - 00:44:33
Thanks for having me, Jeff, really appreciate it.
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