Episode 12: Understanding the Digital Path-to- Purchase

Transcription

1 Episode 12: Understanding the Digital Path-to- Purchase profitero.com/the-profitero-podcast Merrihew comscore Anderson VP of Strategy and Insights, Profitero Hello and welcome to another episode of the Profitero Podcast, I'm Anderson Anderson, VP Strategy and Insight for Profitero. We've got another great episode for you today, this time with Merrihew of comscore. This is the first episode we've actually recorded on-site here in our office where the guest came to visit us. is responsible for some of comscore's behavior analytics, path to purchase research and behavioral segmentation, really a complementary area to a lot of what we do at Profitero. He interacts with many of the same companies and types of companies but often with different folks and he had some really interesting thoughts on consolidation within the data and measurement industry itself. How brands and even companies in other verticals are organizing to win in what's clearly a really volatile space. I learned a lot and had a great time speaking with I'm sure you're going to enjoy it too. Without any further ado let's meet. Today I'm very excited to welcome to Profitero's Boston offices for the first ever on-site podcast episode, Merrihew of comscore. Formerly Millward Brown Digital, formerly Compete. welcome and tell us a little bit about you and where do you work? Hi Anderson, it's great to be here, thanks for having me. Yes, comscore is my current employer, which mines a well of consumer behavior data as consumers shop across the whole internet, and from that we deduce insights that our clients can use to drive their business. It sounds exciting and it seems as the technology landscape has evolved and measurement challenges have increased there has been some of that consolidation. Episode 12; Understanding the Digital Path-to-Purchase 1

2 We think consolidation on the research side and even on the client side as well. As companies get more focused on the power of digital, we've seen competitors in the market research space consolidate and get more focused and we've also seen our clients change their focus. We used to be digital on the side, "We're going to worry about our website, that's all we're going to do." Was one way to look at it and now there are VPs at digital and their focus is to integrate all the digital across the company. Marketing, website, path to purchase, search effectiveness, advertising effectiveness. Basically digital has just become much more elevated in the business ecosystem. I want to drill in on that a little bit. We may come back to what you do and your role personally but let's just jump right in. When you and I have spoken in the past, we've talked a little bit about how organizations have evolved and as you mentioned digital has been elevated. I was just at an ARF event this week where you had shopper marketers, you had consumer marketers, shopper insights, consumer insights. The boundaries around who is researching what and who does what I think are getting ambiguous again in a lot of ways because if you take all those touch points you just listed, your own website, social media, the open web- Search. Search, retailers websites which as you know is where we focus most of our analytics. Some of these are really well defined inside of companies and others are hot potatoes. There's often the case where the left hand and the right hand aren't aware of what the other is doing inside a lot of these companies. What are you seeing in some of the companies that you work with or that you observe as digital becomes more strategically important and as it becomes more pervasive in the way that these companies are operating? I think you raised a good point, I think it was distracted in the past in the right hand and left hand and I think that you've seen your digital people that a lot of these companies have hired, their job is to corral those horses and make everything consistent. It's almost like in the old days where if you had someone in charge of billboard messaging, traditional billboards and television and radio, if they all put different messages out into the market place, it could confuse consumers, same as digital. Making everything consistent drives economy as a scale, return on investment, fewer confused consumers. I think what has also changed is companies were so excited when they built their very first own websites, whether they were transactional or not. They're like, "Wow, look how great this is." Then later it was like, "Wow, we added video and on site search." Now they're really understanding as part of a complete network of how consumers shop and behave. Great question, you build a great brand website, do consumers go there first to gather information or do they go to the retailer and try to get prices then go to the brand site to get the specs and details? Something as simple as that can completely juxtapose or change how your site is structured and how your retail partnerships evolve. Episode 12 profitero.com/the-profitero-podcast 2

3 The good news is there's a lot of tools out there to track consumers across the whole behavioral sphere and that's really what comscore does, that's the good news. The bad news is every single consumer acts independently and in their own way. If you have fifteen thousand people or a million people, you have a million different paths and it's really coalescing and digesting all that to come up with something interesting and relevant. Thematically that was one of the things that we talked about in Cincinnati earlier this week. As technology is moving faster and behavior is so individualized a lot of the traditional tracking studies or A based work, it's not that it's obsolete, it definitely still has a lot of value but we definitely feel and we hear from a lot of our clients that there is more need for much more continuous visibility into I suppose actual behavior but also things like the retail environment. In other words it's not necessarily helpful to know at a single point in time what your position was in search results if search results change everyday or if products can be out of stock. Maybe it would be a good occasion to go back just for a second and talk about some of the questions that you and your company help answer and the kinds of problems that you're working on because I think that will set up to talk about some of the linkage that you and I saw about what you do and what we do and why there's some interesting alignment. That's a great segue. General survey is good for understanding why you did something, specifically years ago when there was maybe one or two places you'd shop for. It's often hard just for people to remember what they did. Survey is great for why did you shop and why do you not buy potato chips online, why do you buy books on... Understanding that but the full behaviors they're so complex and you really need a little bit more rigorous behavioral tracking solution which is what our company comscore does What we then do that is distill those into patterns or recommendations. A simple example is you can watch people drive the streets of Boston or Seattle or Los Angeles and everybody takes a different route but when you assemble them together you involve patterns and trends, it's crowded in rush hour or people don't like to use this highway in a certain time or this highway backs up here. You start to distill the patterns from the individual behaviors. That's what we do with the online data. With the patterns, we can do a couple of things like understanding how long that online research process is, what touch points they use along the way typically which are most associated with purchase versus just research. How do you get people to go to those touch points to drive them to purchase ultimately? Or if they're not going to buy online how do you develop a relationship with them so that when they do buy offline you've established that trust, that bond with them along the way. Here's a great example, let's say we have a hotel client, they have a few people hitting their website and don't book a hotel and they leave. Episode 12 profitero.com/the-profitero-podcast 3

4 Their main question is what do they do next? Do they go to another hotel and book? Do they book an OTA, an Online Travel Agency. They're like go to Kayak or go to whatever? Do they go nowhere? Yup. Interestingly this is a really interesting way to look at the data. If someone hits a given hotel website they leave, they book a hotel someplace else, there's actually good news in that and you're going to think how can that be you just lost a customer? What it means is your marketing attracted someone to your site who did ultimately buy. You actually attracted in market buyers, you didn't close them on your site but you got the right people, it's a hit your site and leave and never book anywhere, you're spending a lot of dollars to attract people who aren't really in market for hotels, that's a bigger problem. Having someone hit your site, book someplace else is actually half thumbs up for the market, you have the right people. The problem or the business model is once they're on our site how do we close them? If they leave the site and never book anywhere, you're not going to close them anyway. The business challenge is how do we change our marketing to attract buyer ready people to the site. Even something as simple as that and these are solutions that clients are spending a million, ten million, twenty million dollars trying to fix. If we can just tell them look here and not here that's a huge value to them. Absolutely. Just for the folks that may be less familiar when we talk about behavioral tracking, you're tracking the actual click stream in the behavior of people I suppose on desktop, maybe mobile in some cases, the sites that they're looking at, the sequence they're looking at them in, do you go as deep as within a site how they're arriving at product pages whether it's searching or browsing or? Yes. Our core level of detail is the URL which so if you go online and you search as you're searching around the URL changes. You go from the homepage to a search on the site or a product page or anything else, those URLs all change and that's what we track for individuals. It's all anonymous by the way because we don't really... Not to insult anyone but we don't really care who they are individually because we're not a direct marketing company, were more about aggregating the behaviors just like that traffic example, we don't care who's driving the Chevrolet, who's driving the Toyota we just want to assemble the behaviors into something that someone can act on. We can see the actual pages, we can see it over time, we can see it over a month. We can see someone Google searching for toothpaste and then a week later see them arrive on the Procter & Gamble website and two weeks later we see them arrive on the CVS or Target website and purchase or not then maybe go back to the brand side Episode 12 profitero.com/the-profitero-podcast 4

5 and see that whole pattern even across days in sites sometimes. It's stronger than just a referral and referral meaning an immediate movement from one page to another. To your question one of the most interesting things we're diving into for our customers particularly the partnership work we're doing at Profitero is understanding some of the hands on particular product page, Walmart of Target, how did they get there? Did they come in directly from a search engine like Google? Did they navigate through the left side of the page? Did they do the on site search? Did they click in from an Ad? Once they're there what else did they do? What other products did they look at? We're unpacking the digital shopping cart if you will. I think that's where things get interesting because our analytics are really focused on what the shopper sees. Anything that a shopper would observe on a homepage, searcher's old page, category page. We're collecting dozens, sometimes hundreds of data points like what's the product title, description, bullets, images on a searchers old page? What are the products on that page? Who's ranked where? It sets up some interesting questions upstream basically well what are people actually searching for? Because if I'm an account manager at Walmart or Amazon I want to make sure that I know behaviorally what's actually in demand. What are the relevant terms people are searching for because those are the terms that I want to go optimize my positioning for. If I know everybody is searching for Gluten free cereal and I carry relevant products, maybe I sell some gluten free cereal, I may work with Profitero to go monitor the results for that query at Amazon and ten other retailers. Once I understand that my positioning there I want to make sure that my product page is complete and compelling so that to your point earlier if I have attracted the right person, what can I do to convert them? I've got to be in stock, I've got to be priced competitively and I've got to provide enough information that somebody who's considering purchase can actually answer all their questions and decides to buy. That even includes things like ratings or reviews, are there enough reviews and enough positive reviews that somebody doesn't get cold feet at the last minute? Then even downstream to your point, if I don't convert, I love that question that you're able to shed some light on which is what about when we don't convert that sale? What are people going to next? You can almost plot the path, the purchase and between these really different but very complementary data search. You can start to say way upstream starting at Google or even further, here is how people are arriving on retailer sites then here's how they're navigating retailer sites, here's what they're actually seeing as they navigate those sites then and here's where they ultimately end up. You can layer on top of that data like you've talked about your gluten ree cereal. We can even understand how many people went to Web MD, that website and are curious about, I don't know, stomach issues or glutton reactions or whatever, anything you want tied into that. If someone is looking at gluten free cereal are they doing it because it's trendy or because there seems to be another medical situation that they're addressing or alternatively to continue with that example were they Episode 12 profitero.com/the-profitero-podcast 5

6 researching kitchen bowls and spoons and things like that and stumbled upon cereal. The whole path, taking even a broader step for a lot of our clients we create behavioral segments. You're not building an audience to target necessarily but you're identifying the patterns that would enable you to go prioritize where to focus and because you've got some interesting demographic data and behavioral data- Behavioral, demographics we've got it. Here's a good example, we did some work for a client and I was part of the purchase and we grouped all the people who bought this product as automotive five into ten segments. Some of the segments were really short which means the first time we see them starting to research this automotive product to when they buy it could be five days. How are you going to really influence someone in five days, it's going to be pretty hard, it's a big segment you can also determine how big they are. The message to the client which were then followed up on we're not going to be able to influence them in five days, you have to influence them before they start the process and the way you do that is find out what else they like to do besides shopping for this car part. It could be sports, it could be pets, it could be adventure, it could be Sudoku, whatever it is understand that behaviorally and that's where you put your messaging. You influence them before they even get to the path. It's funny you mentioned pets, this is a couple years at this point but there was an acquisition that Purina made of petfinder.com which is in the same spirit. You can identify soon to be pet owners if you're present on the site that people used to find a pet. If you're on that site you get some really interesting opportunities to message to those Pet Finders and if you own it you get some really interesting data out of it and it's a little bit like Amazon when they bought IMDB, they knew they wanted to be in the media business. You're going to sell a lot of movies and eventually TV so why not own the site of record or one of the sites of record just that list, the cast and ratings and reviews of all those movies. It's perfect because then you know what those people are looking for in terms of movies. Then you know what the ratings are, it's how people are more likely to buy a movie because it's how they rate it or because it's less expensive or because it features characters of interest which show how many people research Bill Murray versus Liam Neeson or something like that. You start to get a lot of data related as access to the internet has migrated from a desktop computer to a smart phone, to a smart watch to a car to every other place, we're starting to see it's a really interesting dynamic, it's going to be somewhere in between rival and partner and we're not sure how it's going to play out and what I'm referring to the best example is Google and Apple inside cars. Not just that you plug your smartphone into a cable and it works but it actually interfaces wirelessly or Bluetooth into your car. Now who owns the client Episode 12 profitero.com/the-profitero-podcast 6

7 relationship? I'm driving a Ford that says the internals are powered by Apple, listening to Pandora and it's on the Sony Head Unit. I've got four brands in front of me which in my mind as a consumer what brand am I relating with there? That's one question and that's what everybody wants a piece of. The other question is who actually owns that data? Does Pandora, does Apple, does Ford? I think what will happen is a lot of companies are going to come together to try to form partnerships when it comes to leveraging the data we've already seen this starting to happen, it may pull a part a little bit of friction. I totally agree and we've been thinking about similar topics for a lot of reasons. We've spent a lot of time given some of our Amazon eccentricities certainly not the only retailer we analyze but it's a key focus. You look at a lot of what they've done with the Echo speaker and Alexa voice assistant and these dash buttons and just think about the way both our companies measure and analyze both behavior and the retail environment- That's right. Going back over decades we did a lot of physical shelf analysis. What are people doing in stores? What does that retail store environment look like? Am I in stock, am I faced the right way, am I at eye level on the shelf, all those things. Then we migrated to the digital shelf, some are the same questions, how discoverable are my products when people look at a product page it's my packaging at the visual shelf, how does it look? Fast forward a couple of years and people are speaking to order unless we're also listening in, it's not very straight forward to measure that behavior and there's really no environment to monitor, it's all in their head. There's these great examples that I think they're truly innovative and I'm really excited to see things like these happening. The Brita Dash Replenishment Service Integrated Water Filter that knows when you're due for a cartridge replacement and can even automatically replenish that cartridge. There was a really thoughtful post and unfortunately I forget the author but it's on LinkedIn and if I find it again I'll link in the show notes, I wish I had authored it because he basically said this is really cool, it's going to be great for shoppers but it's going to be even better for Amazon because Amazon is going to be the only one who really owns the consumption data, they're going to know what people are consuming, how they're consuming and if they want to maybe they'll share it with their partners or their suppliers- Or they'll sell it. Or maybe they'll sell it or maybe they won't and maybe they'll use it to develop really interesting products of their own. I'm not as concerned as some people are about Amazon using the data to compete directly but I do think you raised the right question which is who owns the data? Depending on who you are in the ecosystem do you have a pathway to generating that kind of high value data yourself and if not when you're entering into new relationships are you being really diligent and Episode 12 profitero.com/the-profitero-podcast 7

8 thoughtful about negotiating for the right access and the right usage rights at this stage to get value over time because it's moving so quickly all of a sudden. It's going to be a very interesting couple of years I think as it always is but it's going to really interesting to see who ends up with what access to what data and the brand side is a key part of it but the data is going to be a huge part of it. The main perspective is it's big data but as a small story, a small simple story just get a headline, you don't need to read everything, you just need that individual headline to tell you what to do. A lot of our clients come to us because even if they're already selling at a major retailer online either the retailer is incapable of giving our client data or won't but there's a disconnect. They've actually hired us to say, "We need you to tell us what's happening on that site." In addition to how they got there but just, "What's going on there?" Much as the same way you guys do too which is the pricing and positioning and everything else. Either the retailer won't give us or can't because they don't know or they can't give it us in a way we can digest because they're different teams. That's why they're coming to us it's, "Tell us what's happening in our own backyard." Part of what's happening with Amazon that we also talked about earlier is years ago there was a debate, "Is it possible to even sell certain goods and services online?" That debate took forever and while everyone was debating Amazon proved that it was possible. It's no longer a debate is it possible? It's just Amazon is doing it and everyone is chasing Amazon now. They may chase JED that's important but it's, "Amazon is doing it, are we benefiting? Are we at risk from that? How are we getting our slice of the pie?" There's a lot of unanswered questions, there's a lot of different ways to settle things but now there's a lot more questions to answer. I think that's exactly right, we've both been helping some of the same companies and the same types of companies for a long time. There was a very clear inflection point maybe two years ago where the questions people were asking switched from, "Is this going to happen? Do I need to do something?" To, "Okay, it is happening or it's already happened and now I need to know how do I do it? How do I do it better than my competition?" That's where I think the need for a much better analytics and measurement really comes from. I do want to come back just for a second to this question, it's related around how you organize to succeed. Because I think even though you and I have been discussing these really interesting affinities between the types of data that we produce and we're delivering to many of the same companies, I would imagine if you asked twenty of our customers, "Are you currently working with the data that you're getting from comscore?" The individuals based on their roles and functions would probably say, "You know I've heard that name but I've never seen the data or I've never used it." I'm really curious to hear your thoughts on among the companies that really are getting their arms around this and making it not a siloed group of specialists or a center of excellence that sits in an isolated way at headquarters. Have you observed anything that's really Episode 12 profitero.com/the-profitero-podcast 8

9 compelling about the way similar leaders are structuring to support digital in a way that is on offense essentially? We're not just doing this to tick a box but this is becoming something that is a priority and a focus? That's a great way to put it, digital on offense really not defense. Yeah. The companies that are doing these the best, I think there's two tenants, they've got upfront and the board is to be bold, take a chance. The second is don't assume anything. In the old days you would have companies that if the results didn't favor them they wouldn't show them. There were five charts, three look good, two look bad, they would just exclude the two. They were filtering and tailoring for whatever reasons to make themselves look good, that's old school. The new school is, "Let's just let the data talk." The companies that are best positioned to be digitally on the offense are doing this, "We'll let the data speak, let the consumers speak through the data and if we see something that's good we'll follow it up. If we see something that's bad let's figure out how to fix it." We have to fix it quickly because just like viral comments on Twitter, they can go from zero to sixty in no time. If you don't have years to fix things, you need to get on it right away, that agility is important. The other part that becomes really important is historically you have companies that have a research department, they would buy research but often didn't know how the results would be applied. They've issued maybe a RFP, a request for a proposal we want to understand how consumers extracting X,Y and Z. It's like, "Okay what are you going to do with this data once you have them?" Without answering that or without having that business application woven into what you're trying to do, you're guessing what the client wants to do. The smarter companies today we're working directly with the CMI or the SVP at digital or someone like that. We will sit down with them and ask a very simple question like, "What do you want to do with these data? If you had it what would you do differently?" Like, "Okay is it about marketing? Is it about getting people that are buying offline become online buyers because that's a lot more effective? Is it about understanding an emerging rival like JED? Is it understanding the retailer brand? What are you trying to do?" Then we orient our research around that. It's really bold, don't assume things, structure with the business mission in mind as you actually ask for the research. I love that point. I was with a client of ours last week who's expanding the relationship and said, "As we roll this out to other divisions what's your best advice for how to make sure that we get value from it?" We said, "Well let us walk you through the use cases. In other words the analytics we're going to give you should change your actions and your behaviors. I'm just going to ask you in six or seven areas who would be responsible for taking action?" If the answer is, "We don't know or nobody." It may not be the right time because the risk is you invest in the data and you expect the data to take the action but that ain't the way it works. Episode 12 profitero.com/the-profitero-podcast 9

10 The people have to take the action. You need to know going in, "Okay what are we going to do with it and who's going to do it?" I think the other thing... I wish I could reveal who it is because this was something I had never heard but I really liked the way they challenged us. They said, "We operate under a principal that if you ask better questions you get better answers." That's good. They really wanted to understand our thinking and our perspective on why we measure what we measure and why our analytics are structured the way that they are. They asked a lot of, "Why don't you do it this way?" Or, "What if we did it that way?" It's that five Whys mentality of they have a real intellectual commitment to understanding at a real level of depth what the inspiration for the analytics is. Because as fast as things are moving to your point around making assumptions, we're not making assumptions. You can be under the impression that you're killing it because you're measuring the wrong thing. It's actually really refreshing to work with companies but it's pushing us to justify why we do what we do. I think they get better and we get better when they have that really direct intellectually open engagement with us. I think those are great comments. this has been a really great conversation and I know that there are going to be folks that are going to want to reach out to you to learn more, how can they contact you? You can use my which is lmerrihew@comscore.com, first initial and Merrihew is Merrihew@comscore.com. We service today clients in the retail, CPG, Auto, travel, wireless, technology, quick serve restaurants, financial, all those different industries. I'll leave you with one interesting thought is we've seen a lot of executives as we've seen the prominence of digital become more important. We've seen executives tack into the wind and go from company to company and industry to industry. I think a lot of our clients are looking for best practices outside of their own space. I think that's something that's exciting in making people bold and reducing their risks of just sticking with assumptions. We're seeing that as well too, the cross pollination of something and in sights across industries is really the next era I think. I think so too, it's a big idea. I will say I've seen so many challenges reconciling the pace of change and some of their new capabilities and strategies that are essential to win with the legacy operating models and organizational structures. We get asked all the time which is better and which is easier, "Do I take somebody that knows the industry and have them learn digital? Or do I take somebody that knows digital and have them learn the industry?" I would advocate for either option under different circumstances. I do think to your point everybody has to be willing to look outside of their narrow competitive set and their narrow industry and be looking for those really leading practices and great ideas. If they don't have the capabilities or the organization to deliver, they've got to find a way to get there. Episode 12 profitero.com/the-profitero-podcast 10

11 Particularly in the behavioral side because it's the same internet to shop for a hotel, as it is to shop for cereal, as it is to shop for luggage. You don't use different search engines, you don't use different browsers, it's the same one. There's a commonality there in the digital product development, I think it's great to have someone very focused on a particular industry category. For behavioral and research there's a lot of uniform themes and actions that take place that should be generally transferable. It's like when the VP of Marketing for a car company leaves and joins a sunglasses company or the other way around. The idea is marketing to make something compelling, to drive the brand, basic stuff that's independent. There's a key role for both and they have to work together. Fun times, thank you again so much and we'll make sure everybody knows how to reach you. Sounds good, thanks for having me. Thanks again. Thank you for joining us for another episode of the Profitero podcast. I found it really interesting talking to somebody who's got deep experience not only in retail and CPG but some adjacent verticals like travel and hospitality and automotive and so on. Some of the topics we touched on, combining complementary data sets and the organizational and cultural changes companies are making to survive and thrive, really interesting. We really appreciate joining us, we also appreciate your feedback, please us at insights@profitero.com. Tell us what you want more of and what you want less of. You can also find me on AndersonAnderson, till next time that's it for this episode. Episode 12 profitero.com/the-profitero-podcast 11