Denigrating Customer Engagement

A recent article in Ad Age claimed that:

New research from Omnicom Group’s OMD may move the seemingly fuzzy concept of engagement beyond the realm of academic debate by proving it really does move sales. The research indicated that not only does consumer engagement with media and advertising drive sales, but it also can drive sales more than media spending levels.”

The study, which covered three unnamed financial services brands, found three drivers of consumer brand preference: 1) how engaged consumers were with the ad itself, with a weighting of 49%; 2) how engaged consumers were with the media where the ad appeared, weighted at 31%; and 3) how much consumers like the brand at the outset, with a 20% weighting.

My take: The problem with these conclusions start at the beginning — with the definition of customer engagement as time spent viewing an ad.

A few months ago, I proposed a definition of customer engagement:

Repeated — and satisfying — interactions that strengthen the emotional connection a consumer has with a brand (or product, or company).”

According to Wikipedia, this definition “has gained currency and was used in the first international Annual Online Customer Engagement Survey“, conducted by British consultancy Cscape (which built upon, and improved, my definition).

But OMD (and, for the most part, the rest of the advertising industry) ignores this definition. It reduces the concept of engagement to the level of interaction a consumer has with an ad, and then equates time spent viewing an ad with driving “brand preference.” These findings are hard to swallow. They ignore:

1) Customer experiences.
The extent to which a consumer’s experiences — sales experiences, support and service experiences, and experiences using the product or service — impact brand preference is either completely ignored or buried in the concept of “how much a consumer likes the brand at the outset” before viewing an ad.

2) Direct marketing. Financial services marketers are active direct marketers, extensively using direct mail and email. How OMD can tie ad “engagement” directly to sales, without incorporating the impact of these other marketing channels, was not explained. Increasingly, financial services marketers are adopting net measurement techniques, and developing uplift models to predict and measure the incremental impact of specific marketing actions. Yet OMD apparently has no problem directly attributing sales to time spent viewing ads, without factoring in the impact of other influences.

3) Sales effectiveness. If the OMD study had linked its measure of engagement to brand affinity, I might not have such an issue with it. But taking the impact to ROI (i.e., a sale), the study ignores the fact that many financial product sales are intermediated by a sales person. An ad may drive response, but to simply assume that that response produces a sale is wrong. Many a bank branch or mortgage rep has blown a sale due to poor salesmanship.

The question the study attempts to answer — “what impact does ad viewing have on sales?” — is simply not an answerable question.

The questions that need to be answered are “how do consumers buy?” and “what is the appropriate role and impact of various media and touchpoints in the consumer’s decision process?”

To address these questions, financial services marketers need to develop a “theory of the customer” — what kinds of relationships do they want, what does it mean to be engaged given different types of relationships, and how to measure and drive those forms of engagement. Reducing the concept of customer engagement down to “time spent viewing an ad” denigrates a potentially important strategic concept.

Unfortunately, financial services marketers looking for help answering those questions and addressing these issues are going to have to wait while the advertising industry plays its “my metric is better than your metric” games.

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6 thoughts on “Denigrating Customer Engagement

  1. Hi Ron,

    I’m going to disagree with you on a key point above but let me make it clear from the outset that many of the things you say are 100% correct. Engagement as you’ve defined it has meaning. The definition you discuss above is nothing more than ad exposure. Also, any study based on a sample of three is by definition questionable. Anyway the bit I don’t like.

    You say that you cannot answer the question “what impact does ad viewing have on sales?” – I completely disagree. From Kraft in the 60’s to Samsung and Ford in the present day, there are now thousands of companies looking at econometric models to address this question. It cannot be done in isolation and MUST include Direct channels etc in the analysis. The great thing about econometrics (when done correctly) is that it measures the impact of all drivers on an equal and unbiased basis. The error that many studies make is to assume that the ad campaign generated all incremental business by ignoring other channels – I can’t believe OMD did this.

    The ROI question for Financial Services is obviously more tricky. Impact on LTV is by definition determined by customer experience. My guess is that ATL advertising has little impact on existing customers beyond generating awareness of new products.

    You are right to suggest that we need better understanding of the consumer decision making process – before that though, we clearly need a better set of terms to describe what’s going on here. Agencies of all types use terms interchangeably to suit their own purposes. Clear definitions (like your one for engagement) will help to cut through the BS.

    All the best,
    John

  2. The good news: Brand Marketers are starting to see the value of tying their work to sales results. They’re trying to figure out how, exactly to measure and quantify the impact of their advertising. If they can accurately figure this one out, that equates to more campaigns and job security.

    The bad news: I still think there’s a long way to go in insuring the accuracy of these measurements. Ron, you’re exactly correct in stating that the impact cannot be measured without considering the original banking relationship (experiences with the bank), the sales process, and without considering other marketing that’s going on at the same time.

    Intuitively I think we understand that if a customer/prospect is engaged with us and with our advertising that they will be more receptive to hearing our message. I would love to see how that might equate to increased sales or increased customer value.

  3. So when people are engaged with a product/service/company or its messages, sales increase??? Wow, go figure…

    While far from surprising that sales increase as engagement grows, a far more interesting question is, “HOW do I engage people, specifically through advertising.”

    It’s frustrating that the article doesn’t offer its own definition of “engagement.” I like Ron’s definition though.

    And I’m with Suzanne. A sample size of three doesn’t measure anything, and it especially doesn’t “bolster…the fledgling science of engagement measurement…[with] some tangible evidence of its worth.” Especially when you realize they’re talking about financial services brands.

    The article reminds me of an Ad Age piece that came out today. It’s about a TiVo study to see who fast-forwards through which commercials (shocker: direct response ads were the least-skipped).

    http://adage.com/article?article_id=119267

    From the article: “The relevance of the message to the audience could be the deciding factor. If you’re not interested in a home gym, I could see why you would just zap through that. But if you are interested and you’re about to plunk down $500, you will watch the whole ad.”

    So essentially, if you show me an ad that has a relevant message, I am more likely to be ‘engaged’ and therefore make a purchase.

    Advertising agencies and brand marketers aren’t doing anyone any favors with remedial and rhetorical research as the industry struggles to find meaningful measurement systems.

  4. Jeffry: I couldn’t agree with you more, but I think marketers have to first define what it means for a customer to be “engaged” that’s relevant to their products, services, etc. THEN go about figuring HOW to engage them. Considering that I spend a lot of my time in the financial services world… I find it hard to believe that someone who stares at a rates chart for 10 minutes is “engaged”. It could be “confused”.

    Suzanne: Here’s a radical thought: The most highly engaged customers don’t need marketing messages. They’re ALREADY loyal — they become deliverers of the message, not deliverees.

  5. Suzanne: That’s why I said to Jeffry that task #1 is to define WHAT engage means. In an earlier post (https://marketingroi.wordpress.com/2007/01/02/engagement-myopia/) I put out one set of factors, specific to banks:

    1) moving money between accounts, and 2) checking savings rates online (two factors demonstrating “product” engagement); 3) viewing educational material online and being satisfied with it (demonstration of turning to bank for more than just parking money in a checking account); 4) paying bills online at bank’s site (demonstration of commitment to keeping account at bank); and 5) willingness to refer bank to family/friends (“advocate” status).

    First thing marketers need to develop is a theory of what behaviors and attitudes comprise engagement that fit with their products, services, and strategies. THEN they can obsess over how to drive those behaviors and attitudes.

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