Lenny Raymond's Blog

Time for a 'Net Politician

There is a really insightful, thought provoking post on BLDGBLOG about how American politics, and politicians, are fixated on the notion that rural, small town America is the "real" America, and its values and problems are the ones that should be of greatest concern, whereas in reality the vast majority of Americans live in urban environments and the domestic problems of greatest importance to the nation are fundamentally urban. The well argued point of the piece is that knowing what it's like to live in an apartment New York City is far more relevant to knowing how to govern than is knowing what it's like to live on a ranch in remote Montana.  One of the factoids cited by the post is that there are more World of Warcraft players in the United States than there are farmers.

The fact that there are more WoW players than farmers in the country, I think, speaks to a larger point.  There are now far more people in the US that effectively make their livings, spend the  majority of their leisure time, do most of their communicating & socializing, and consume most of their media in cyberspace than there are farmers (or firefighters, or doctors, or you name it). While these people are not a coherent demographic group, they share a lot of concerns, have more than a few values in common, and are effectively addressed in more or less the same way - put those things together and you have a group that politicians should court. As today's kids who are natives on Twitter, Club Penguin, Facebook, etc. grow into increased political activity they will become a powerful social force, and possibly a powerful voting block.

Parallel Kingdoms - the First Location-Aware Mobile MMO

TechCrunch notes the first iPhone/Android location-aware MMO, Parallel Kingdoms, is launching soon.   I love location-aware games (worked on my first one in 1998!), and I'm a big believer in MMOs on mobile, and a proponent of mixed reality games, but I'm not so sure about this one, despite it being a cool idea on some levels. I have to admit, I haven't played it yet, so my interpretations may be way off base, but ....

Aside from rough graphics, which can be forgiven or overlooked for a lot of games, Parallel Kingdoms has some serious issues. Moving large distances in physical space does nothing to make the game more fun, but certainly makes playing it actively harder and more time consuming. There is no real-world physical tie-in to the online component, so essentially, moving in the real world is just using the world as a cumbersome, gigantic controller for a purely virtual-space game. Of course, the use case, as demonstrated by the company's video, is that people will semi-passively play in a go-about-your-business / tower-defense mode.  Maybe, but that doesn't sound like a level of engagement that makes for a compelling experience. On top of that, it is an MMO, so there should be some sort of social component to it, but social games require a certain density of proximate players to work, so a game like this might work in dense city centers and on campuses, but even that is a bit of a stretch.  Nevertheless, cheers to the Parallel Kingdoms peeps for trying something new.

Doing a geocacheing meets Assassin meets MMO for mobile would be pretty interesting.  The mechanic practically writes itself, and the business model was obvious 11 years ago....

Ad Targeting Post, with Long Winded Reply

Jeremy Liew has a worth-reading post over on Lightspeed's blog, with a rather long winded reply from me.

Behavioral Segmentation /=/ Demographic Segmentation /=/ What Really Matters

Another eMarketer article that is illustrative of the primitive state of thinking that prevails in web marketing: Behavioral Targeting and Customer Segmentation .  It seems like people still are dazzled by the possibilities of having so much fine-grained data, not remembering that having lots of the wrong data is no better than having none, and maybe worse.

It would seem that few marketers are using behaviorally-based segmentation to do their ad buys because they do not believe it is effective.  No surprise there.  A quote from the article: " 'Despite the inherent logic of placing consumers in various affinity groups based on their actions rather than their demographics, testing which segments work best leads back to behavioral targeting's Achilles' heel: reduced reach,' said David Hallerman, senior analyst at eMarketer. "  A more or less true statement, in and of itself, but it completely misses the point. 

In the first place, one does segmentation precisely because one wants to reduce reach.  It's more important, and generally more efficient, to reach a few of the right people than a lot of the wrong people.  That's what segmentation is for, at least as far as media planning goes.  However, saying that behavioral targeting is ineffective relative to demographic segmentation is like saying pigs are poor at flying compared to fish.  The right way to do segmentation (and yes, there is a right way) is to do it based on needs.  Demographics can be correlated with needs, so if all you can get are demos, then you may be better off than with nothing.  It is possible that behavioral patterns (meaning clickstreams in this context) correlate well with needs, but that is by no means demonstrated, and there is a penumbra of evidence to the contrary.

What the article gets 100% right is that segmentation is only useful if one picks the right segments.  A corollary to that is that to pick the right segments, one must pick the right basis for segmentation.  If you want to sell something to someone, it sure helps to know if they need it.  It helps to some degree if you know that person can afford it, lives where they can get it, consumes "X" media so you can tell them about it, etc, but those are all secondary.  Knowing some people have clicked here, there, and in that spot, in this sequence, within the narrow context of what you've provided them, are of tertiary significance at best.

Pick the right segmentation basis: needs.  Do a valuation on the resulting segments - serve the high value ones.  Make sure your segmentation solution includes major dimensions that show if/where those high value segments are accessible. If they turn out to not be accessible, tweak and rerun until you get accessible, high value, needs-driven segments. Then place ads.

Contextual Advertising is a Poor Proxy, but Sometimes Funny!

Mashable has a great post here. 1,000 words worth:

This is bad in so many ways. Adam discusses most of them so I won't bother to here.  However, there's one other way in which this ad's placement is bad.  It is contextual advertising.  Contextual advertising, even when the content context matches the ad and isn't a bad venue for a brand, is a poor way to target.  Context is just a presumed indicator of the reader's interests (if you're reading it, you must be interested in it).  Wouldn't it be better to know what the ad viewer is actually interested in?

Behavioral Targeting – Not the End Goal

Behavioral targeting is the new frontier in internet advertising. There’s an interesting article on were we are today here in an article on eMarketer. The gist of the article is that it’s not quite there yet – despite all the buzz, there is very little being done among advertisers that takes advantage of behavioral analysis-based ad targeting technology. Partly because it’s new and immature, partly because of privacy concerns, and partly because of the adjacent content –placement problem.

More fundamentally, the real reason is that behavioral targeting is just another proxy. It doesn't solve the real problem.  It gets you part of the way there, and maybe part way isn't enough to really motivate advertisers. Sure, behavioral targeting can help you understand what customers have done within the context they have been provided, and thereby helps predict what new customers exhibiting similar patterns in similar context might be inclined to do. This can be quite valuable. However, it doesn’t get to the heart of what strategic ad targeting is all about: knowing who a customer is, what her needs are, and providing something truly, personally relevant.

Behavioral targeting, like nearly all internet ad targeting and behavioral analysis, is essentially forensic. You can only predict based on what you test. You can only test within the narrow context of your existing site design, content, information architecture, etc. Run A/B tests all day long, use really spiffy experimental designs, and use all sorts of fancy math, but at the end of the day you are constrained by your context, and only get viable analysis within a narrow scope. The resulting prescriptions are tactical, not strategic.

To come up with the right creative, to find the right venue to place it, you need to know the customer – who they are, what they need – not their clickstream. Don’t get me wrong: the clickstream is a valuable data set, and is certainly better than nothing. Knowing what your customers do when confronted with a certain situation is certainly better than just guessing and hoping. However, to act strategically, you need to know your customers’ real interests, needs, and preoccupations. Fundamentally, behavioral targeting is destination-centric. Effective advertising needs to be people-centric.