Blogger and new media guru Greg Satell
“Fear is a great motivator.” Art Bell
Just like the brain has two incongruous hemispheres that somehow work together so that each of us can walk in a straight line (some of the time), two types of people operate businesses. Good organizations need both.
Without intuitive, creative visionaries, who understand what motivates and satisfies people, there are no products and no customers. Without managers, accountants and engineers, the products do not get built, delivered or serviced correctly. Is it true that the members of the first group are generally daring and the people in the second group cautious? Yes it is. A balance between the two is the perfect order of the business world.
Yet, as a company gets larger the chances increase that the risk-averse, fearful group will gain control, in partnership with financiers — people who have no knowledge of the customers, products, manufacturing, distribution or service. When that happens, they sustain themselves with analytics and statistics, the business world’s universal shield for cowardice.
Greg Satell, an American who runs an Internet consulting company headquartered in the Ukraine called Digital Tonto, is great with numbers . . . and math. Greg published an excellent article, Less Numbers — More Math that explains how using analytics is a shell game (my conclusion, not his).
“Numbers drive Media and Marketing today,” Satell writes. “This is a ridiculous situation. Most simply find the numbers that will support the case they want to make. As the new digital world creates ever more data, the problem is only getting worse.”
The battle between the bean counters (demanding accountability for spending) and the sizzle masters (who know there’s no accounting for human behavior) has been going on for a long time. The tide seems to be turning because the research companies and digital marketing experts contend that they can really track and predict human behavior as precisely as Google Earth lets you see the house you lived in 25 years ago. Don’t believe it.
The bold claims are about the new media competing against the old media to convince:
- Big advertisers to migrate from newspaper, radio, magazines, and direct mail.
- Medium sized advertisers that they can afford to do the same kind of advertising that the big guys do.
- Entrepreneurs and “wanna-be” business people that they can get into the game and be just as sophisticated as the big guys.
Digital media pitchmen need Omniture, WebTrends, ClickTracks, CoreMetrics and Google Analytics the same way television needed Nielson, radio needed Arbitron and print needed SRDS. The media have done nothing wrong by competing and companies are justified in making them as accountable as possible.
The problem has come from marketers and financial decision makers becoming emboldened by and dependent on the statistical snake oil. In the past, executives had to be brave and spread their money around because everyone knew that Nielson and Arbitron logs were just fancy “guesstamations.”
Now, the cowards are getting the upper hand. Because new media is so cost-effective, they can insure success (that is a good-looking report that claims fantastic ROI) by spending more on the analytics than on any other part of their campaign. They don’t need or want brilliant, daring and risky marketing when they can precisely select the target audience, then deliver an unlimited number of campaigns costing almost nothing. The sophisticated analytics are rigged in advance.
“When we work with numbers, we make assumptions whether we know it or not,” Satell writes. He says that marketers with the best intentions are “generating numbers without understanding the assumptions” on which they base their statistical models. When they do that, the “numbers lie.”
Plans based on lies are the tools of cowards. Insightful business people must be equal partners with the numbers crunchers before new mathematical analysis can deliver solid value.
