Nielsen TV panels cover 20,000 households in US. In a Nielsen marketing video titled “Nielsen Ratings 101: Designing the Sample”, which describes sampling for their TV panels, Arthur Nielsen Jr. says:

“I try to explain how sampling works. Next time you go to a doctor and he wants to take a little bit of blood, tell him you don’t believe in sampling, take it all.”

Sampling 101 anyone?

A blood sample drawn from a single person is homogenous, whereas TV-audience watching behavior across multiple individuals is not. Any 1 cc volume of blood represents every other cc of blood in that person. If I’m watching TV at home, I might not represent at all any other 35-year-old Caucasian male in my income bracket. There is no science or even old wives’ tale that suggests otherwise. Dropping statistical jargon in the mix doesn’t change this and it’s actually not that hard to figure all of this out just by looking at the numbers.

US households receive an average of 119 channels. There are 114 million households. 20,000 is 0.02% of that; that is. Nielsen captures data from 1 out of every 5,000 households in the US. Depending on how you look at it, an average American watches live TV for about 4 hours per day. If we assume that each channel has at least 10 programs per day, an individual has a total of 1,190 choices to make during one day, out of which the 4 hours represents a max of 10 programs—less than 1% of all available programs. So let me ask you, if there are 100 people watching TV at the same time, and you know what 10 of them are watching, does it make sense to you that you can use those 10 to guess the remaining 90? 10 out of 100 is 10%, and not the 0.02% that Nielsen’s TV panel is.

Dear Nielsen marketing team, I’m saddened by how you underestimate the intelligence of your customers. I’m also saddened by how you give the whole industry a bad name with your institutionalized snake oil.

If you’re an advertiser, I highly recommend looking to alternative methods of measuring TV audiences. Methods that are not from the 50s. Maybe something like Bluefin Labs.

It’s time to ask yourself if you want to be a follower or a leader. Using something just because it’s what has always been used is what followers do, and you can’t lead by following.

When I was a little boy, I figured out that hell is the moment when you die and you realize that your life sucks. Heaven being the same moment, but you realize that your life is fucking awesome.

The 5 things you, I and everyone else can do to stay far away from that hell.

1. I will live my dreams

2. I will work enough

3. I will say what I think

4. I will cultivate my friendships

5. I’m happy

Thanks for Paul Graham for the inspiration and to Bronnie Ware for the “field work”.

The Seven Dumbest Sins of Social Media is a confusing, misleading and somewhat sad article about snake-oil and guruism. It is a great example of the wide spread ignorance of the knowledge era. But not in the way the writer of the article intends it to be.

Ranting and slander has long been used as a coping mechanism to deal with things that you don’t “get”.  I’ve seen a lot of assaults on the social media, but rarely by someone with the portrayed authority of Mark Ritson.

Social Media is Just a Fancy Name for the Internet

We’re now in the transitory period of “everyone look, it’s the social media”, but that wont last. It’s not the first naming attempt for a more human version of the Internet (semantic web, web 2.0). At the end of the day, we will call it the Internet again and then one day we will stop talking about it all together. And no, the Internet doesn’t have an ROI anymore than electricity does. It’s an enabler for other things, things that are measurable and have a potential to generate an ROI.

“would you trust a research method that excludes 90% of the population” -Mark Ritson

Almost everyone with some commercial significance is already online. In many cases conventional research methodologies tend to exclude people, often those who have something real to say. They’re already too busy saying it online. The Internet is a window to people’s lives, and often reveals hints and truths about their real behavior. It’s all already there, nobody has to be interviewed or observed.

“Focusing on what customers do, not what they say they will do, is key to building effective strategies”

Social media can be used as a powerful platform for insights work. It’s not about communities, online panels or engaging, but about listening and utilizing the naturally occurring online conversations as a sample for research projects. Cleaned, structured, anonymized and randomized it becomes a treasure trove of insights work.

I can have a N=10,000 sample on ice-cream consumption up and running tomorrow with an actual cost of below US$1,000. Using that sample I can do quantitative analyses to answer questions like “during what time of the day, and during which TV shows are people likely to crave ice-cream?” or “why are popsicles consumed for a very different purpose in China than other ice-cream types?”. With a team of one, I can turn that project around from brief to report in couple of days if needed.

According to industry estimates, there are somewhere around 2 billion conversation instances online every day. A single digit percentile of that is directly about brands, and another single digit share about commercial categories without a mention of brand. That’s 100,000,000 commercially themed conversation instances online every single day. We can do a lot more than usage & attitude study on ice-cream with just a fraction of that.

I can’t see how “it’s totally unreliable data”. How is it more unreliable than prompted, controlled, directed or observed data? If the argument is representation, then what is representative? How many % of the population are willing to participate in a focus group or respond to a survey? How well does that segment of the population represent the total population? I’m aware of the fact that some of the online conversations are marketing comm and not consumer’s voice,  but strategies exist in order to deal with that.

You Can’t Lead by Following

Mark’s article is the best evidence of what an amazing opportunity this is for brands. Those “in the know” have a chance of gaining real competitive advantage over those who are still stuck in the ivory towers. The biggest clients seem to think so as well. If you want different results, you have to do different things. A focus group is not that “different” anymore.

I’ve been to 60 countries while spending time with thousands of people and I have never heard someone share a story about participating in research as a consumer. I know some people do it, otherwise it wouldn’t be a US$30 billion dollar industry.

Maybe it’s the fact that I mostly mix with people between 20 to 50, male or female, different ethnicities, varying income and education levels. It might be that they just never ever talk about it. But they do talk about skiing, knitting, spiritual experiences, business, exotic travel, their jobs and even about Twitter. And it’s not a surprise, in Malaysia for example, over 30% of the online youth are on Twitter. In Japan Twitter reaches over 20 million people.

“maybe you can use half-decent qualitative insights into a small minority of the market” – Mark Ritson

Let’s Talk about ROI

While at Statsit we’ve done hundreds of qualitative research projects using naturally occurring online conversations as a sample, on the quant side things get really sexy. My personal favorite is how Twitter conversations are used for predicting the stock market. Close second is the UK based hedge fund that more than double over-performs average funds by Derwent Capital, calling itself “Europe’s first social-media based hedge fund”. I also like how Organic uses Twitter & Facebook conversations to predict commercial traction across different categories. Similar models exist for predicting everything from box-office revenues to book sales.

Just like with electricity, the ROI is not in the grid, and not even on the devices you plug in. It’s in what you do with the electricity powered devices. If I were to serve you a cup of tea, I wouldn’t make a big deal out of how I’m going to use the electric grid to power the water boiler. I’d explain to you the background and common uses of my Pu-erh tea that comes from an ancient tree somewhere in Yunnan province. I might also make a point out of my Japanese volcanic clay teapot, prepared according to long traditions by a 7th generation master. The internet is an enabler, just like electricity is. It doesn’t or shouldn’t have an ROI.

In reference to soft-drinks and communities, a great example is Coke’s 10 million strong online community in Japan. When Ebata-san, Coke’s VP for i-Marketing in Japan last year shared with me the amazing I LOHAS water bottle story, he mentioned how the online community helped Coke to conduct research related to the innovation and across their other product categories. I LOHAS was the market leader in bottled water one week after its launch and still is today. And yes, that’s water in a bottle. By the way, good luck finding a can of Pepsi in a Japanese super-market or vending machine.

“The future of market research is increasingly about listening to what consumers are already saying.” – Stan Stanunathan, VP Strategy & Global Insights for Coca-Cola Company

I totally agree with the fact that you can’t show an ROI on social media, just like you can’t show an ROI on electricity. But it’s also hard to measure ROI on social media campaigns. Mark got that bit right. Same goes for search and online display. Maybe marketers should stay away from those as well, after all one doesn’t want to make themselves “incompetent at best and potentially liable to accusations of malpractice at worst” as Mark provocatively puts it in his article.

The research interns I sometimes interview, will be eager to point out how click-to-conversion reports fail to give a complete picture when you’re marketing a product for which total marketing spend’s attribution towards sales is 5%. Measuring ROI is very hard for online activities, but it’s pretty much as hard for everything else. You have to have a sales attribution and marketing-mix model even to get seriously started.

Absolute and Total Non-Sense

There is something special about the Internet (yes, the social media). You get called for bs. Both brands and people. In the past a school-yard bully would get his way, and your lunch money. But not in the wonderful world of “social media”. There is a hint of democracy in the Internet and usually the voice of reason will eventually emerge.

I dropped out of school to start one of the first digital agencies in Europe. In -96 we dealt with obstacles likes “why should I have a website, I don’t even use email”. Our first project was a 4,000 product eCommerce solution, first such business application in Finland. Which at the time was one of the world’s leading information societies. I didn’t even know what ROI meant. 12 months in to the project, the client stopped printing and sending 240,000 50-page full-color mailing order catalogues per year.

Now 15 years later, the research industry is facing these same questions. When cold calling and 10 person focus groups aren’t paying off, when more and more people each day are becoming connected and the Internet is becoming an integral part of their lives, why ignore this opportunity? We bribe people to be in our studies, we hope they won’t be fatigued by millions of questions, or worry about the interviewer, or forget why they think they bought that appliance 3 months ago. Now people are throwing their responses at us – and it’s predicting real trends – is that bollocks too?

Key Learnings from Esomar Impact

September 30th, 2011

Esomar Impact was an interesting event. Relevant people, well organized and some of the content was very engaging. Best of which was Marc Lammers the head coach for Dutch National Woman’s Field Hockey Team. It didn’t hurt that the event was held in the lovely city of Amsterdam.

The Key Learnings:

  1. Smart research buyers care less about representation or methodologies and more about results
  2. The common themes in what people are looking for is quality, speed and cost
  3. Also they want their partners to have the courage to make recommendations
  4. Based on research findings, Management consultants are seen two times more credible than research agencies (ad agencies being in the middle)
  5. Clients don’t want long powerpoints, they want summaries, story telling and simplicity
  6. We can all learn a lot from the Dutch national team for Woman’s Field Hockey
  7. To be an Evolutionary Psychologist, you may not have to be a self-absorbed [insert a word of choice here] but it certainly helps

#mrx #esomar #esocong

How do you market a product that can’t be marketed? Through warning labels of course.

This brilliant warning label can be now found in ciggy packs in the Hong Kong market. It’s a class example of “things everyone can learn from tobacco marketers”. There are few things that make this an amazing tactic.

1) The image that stands out is that of an youthful beauty and perfect complexion of the woman in the front, thus sending a message which is totally contradictory to the warning text

2) Courtesy of my wonderful head of research Debbie Ko, I’ve learned that Asians respond well to health messages that are related to their collective responsibility (for example becoming a burden to their family) and badly to messages that are related to individual  responsibility

3) In a Greater China market, using such images have a strong element of nostalgia, and even Don Draper loves a bit of nostalgia

4) Similar look n feel (of the woman) was used for decades by the Chinese tobacco industry to advertise cigarettes (who doesn’t love a bit of blush on a woman’s cheek)

lg_cigaretteposter958

While it’s undeniably clear that the tobacco marketers are geniuses, how stupid does the regulator have to be in order for something like this to slip through. Or how corrupt.

Assuming based on the soaring revenues of the big tobacco (minus Philip Morris who went through a series of corporate re-structure) the labels are not stopping people from smoking, or new smokers from picking it up. So in a sense this is positive progress, I’m sure all the non-smokers rather see beautiful Chinese woman in the labels opposed to a malformed fetus.

Now that tobacco ads are gone from F1 Grand Prix (pitstop babes) for good, and all we have left are the tobacco hostess in their short skirts venturing the nights reminding casual smokers and quitters about the delights of cigarettes, it’s refreshing to see more beauty find its way back to tobacco.

I’ve had about 7000 restaurant meals in my life, counted conservatively. While I will almost always prefer a home-cooked meal if feasible, it’s been an experience from which I’ve gained deep insight in to how the restaurant industry operates. Even more importantly, in receiving services and in customer experience in general.

I realize that after such heavy saturation to any given service, few things are likely to happen.

  • The customer is very hard to be impressed
  • The customer becomes excessively concerned about quality
  • The customer develops an eye for detail

Now back to the restaurant category and towards the promised learnings. At times I eat alone. If you’re eating alone and you wish that the dinner would last a little longer, you know you have something special going on in terms of the customer experience. That leads to my first learning.

“A great customer experience is one that you hope would last a little longer. A bad one is one that you wish would take less time than it does”

Typically people enjoy their meals with a company, and the captivation and the entertainment of the experience comes from time spent with that company. A typical westernized restaurant setting offers only little attraction beyond the food, and in some rare occasions, fabulous service.

Throughout the Asian street kitchens and Japanese restaurants in general, watching the cooking process can be captivating and entertaining. It can also be educating. Last week in Okinawa Japan I had the privilege of having one of the more memorable restaurant meals of my life. Big part of it was my personal Teppanyaki chef. That leads to the third and final learning.

“Do what you love and love what you do. Do it with elegance, deliberation and with a smile on your face”

Every customer experience that I can think of, those where I’m the provider and those where I’m the receiver, work exactly the same way as the Teppanyaki course dinner does. At least in terms of the basic principle of customer service and the right approach to being a customer servant.

When was the last time you wanted a customer experience to last just a little longer?

Two guys are working late at Saturday night struggling with a problem that has been causing a lot of pain to everyone in the organization for a long time.

Client services guy goes: “I feel like a Pioneer”
Product guy replies: “I feel like an Idiot”
Client services guy turns and asks: “what’s the difference?”

Both burst out laughing and in few moments the product guy turns and says: “Pioneer starts with a P”.

A true story. Few moments after we figured out exactly how to solve the problem that had caused most of our pain in both product and services side since we started nearly 3 years ago, resulting in the most significant R&D breakthrough in 24 or so months.

Luckies1

Step 1: Create a product that is practical and addictive

Cigarettes are extremely practical. You can carry a packet of 20 doses neatly in your pocket, and lighting one up is never further than a matches stroke away. Furthermore, tobacco is highly addictive. This was all true before it became a widely available commodity. Today, if there is water near, there is most likely tobacco just as near.

If you’re thinking there is not so many such product out there, think again. Mobile phone for example is very similar to a pack of cigarettes, and now in the iPhone era just as addictive. If not worse.

Step 2: Make it a lifestyle choice, make it about being part of the in-crowd

When tobacco was popularized, it was seen as something cool. Even a status symbol. Just look at Madmen and think about being in that environment and not smoking. Smoking was seen as something exciting. Either you were one of the smokers or then you weren’t.

Less than 10 years ago in Indonesia an older man said to me “Mikko, if you want to be a real man, you smoke”. Indonesia is one of the leading manufacturers of Tobacco and has virtually no regulation related to smoking or promotion of smoking. Few years ago you could smoke in any government office or even a grocery store. As far as I know, nothing have changed.

A typical Indo tobacco advertisement positions smoking (surprise surprise) around excitement and being a man.

Step 3: Do whatever you can to keep people with your product

In the neighboring Malaysia, scarcely dressed young females venture the night from club to club selling cigarettes. After seeing hundreds of these pr girls, I’m comfortable assuming that attractiveness of the girl is a key feature in hiring.

If you’ve smoked in the past and quit or tried to quit, you know that you’re at your weakest in a bar setting after few drinks. People who smoke bring their own cigarettes, I used to bring two packs just to be sure. Why do you think the these huntress of the night circle the nightlife?

On the product development side of the fence, it is now commonly known fact that many of the additives in cigarettes exist in it solely to enhance the level of addiction consumption drives. Brands exist to drive commerce and product development always goes together with other activities.

Luckies2

Step 4: Only communicate the positives and do whatever it takes to hide the negatives

Tobacco went the extra mile to hide everything negative they knew about their product. If something got out for some reason, they didn’t shy away from using any possible tactic to shut it down. “No, Tobacco does not cause cancer” they said for decades. What do you do when it becomes impossible to deny? You do what the tobacco industry did, ignore it.

Step 5: Catch them while they’re young, when there is will there is way

This one is my personal favorite.

Once you’ve saturated the adult market, you go after the kids. That’s kind of obvious isn’t it? If your product is something not suitable for kids even in theory, like CRM for example, you can still reach out to your future prospects.

I’m born in Finland where I also spent most of my childhood. We had a tobacco advertising ban before the time of my birth in 1976. It was something that we took for granted, “tobacco is not that good for you so that’s why we’re protecting you and not allowing tobacco advertising”.

One of the favorite sports in Finland is and has been for a long time Formula-1 racing. Families would get together and watch the Friday and Saturday qualifications and then tune-in again on sunday for the actual race. This totals in good 5 hours of cars going around the circle per weekend, and there was 12 race weekends in a season. That’s 60 hours of F1 cars going around the circle. One of my clearest memories from childhood is watching the final moments of Las Vegas race in 1982 when Finnish Keijo “Keke” Rosberg won the world championship, I was 6 years old at the time.

The cars and tracksides alike were covered with colors and logos of big tobacco. There was Marlboro, Camel, Pall Mall and few others. These cars were the coolest tobacco ads, no, these cars were the coolest ads around. And they got people’s undivided and voluntary attention, from 3 years old onwards 12 weekends a year. F1 races did and still have some of the highest ratings in Finnish TV. This went on for decades, in countries many of which had laws in place to prevent tobacco from being advertised.

I started to smoke before I was 10 and so did many of my friends. When I quit 3 years ago, I had smoked for more than 20 years an average of pack per day. That’s over 7000 packs of cigarette. I had spent over $10,000 in cigarettes before I was legally allowed to buy it. How did I acquire them? Walk in to a store and buy them, obviously.

When I came to US as a 14 year-old boy, we stayed in North Carolina tobacco country. I would take the coupons from mailing order catalogues, send them to Winston-Salem and they would send few packs of Camel or one of their other flavors in return mail few days later. Delivered to right to my doorstep at zero cost. The postage in the coupons was paid by them. Gotta love it.

Step 6: Play Any Potential Future Competition Out of the Picture Before They Even Enter

How do you think that the idea of banning tobacco ads was popularized? The tobacco lobbyist took care of it. Can you imagine a better way to prevent someone entering your market than banning advertising? The tobacco marketers did eventually come up with an even more effective way.

Most of the world is enforcing warning labels on cigarette packs, usually utilizing pictures of cancer, defected babies or something equally shocking. How do you bring a new product to the market if you can’t advertise it, and your packaging is intended to turn people away. How do you build a brand when nobody sees your brand because there is a picture of black lung or the text “This product will kill you”? Imagine a mobile phone that warns you about how it’s going to boil your brain and make you sterile. Would you consider buying it if you weren’t miserably hooked on the brand already?

Going back to iPhone, in the light of the above, I wouldn’t be surprised if we saw mobile phone industry applying similar tactics in the future. After all, it’s not like you’re going to go back to landline just because there is a risk of cancer involved.

First off, thanks to Seth Grimes for getting so engaged in discussion about this important topic. Before moving on, few relevant references.

The below article is partially in response to: Is Sentiment Analysis an 80% Solution?

The original post that initiated the conversation  why sentiment analysis sucks for social media monitoring (attempt 1)

…which in turn was a response to a discussion which was ongoing at the time Don’t Get Sentimental About Tools When Measuring Attitude.

What’s Sentiment Analysis Good For (in social media monitoring)?

The fundamental flaw in number based positive/negative approach to sentiment analysis is not in the maths, technology or practicality. It is in the fact that it starts from an assumption that people are something they’re not.

Every person’s life tends to happen at the same basic levels. We’re all a person with an idea of this fixed being, which we call me. Then we go about our lifes experiencing things, these we call our first kiss or “auch, I hurt my knee”. Sometimes we feel the need to express these experiences, that is what I’m doing right here, expressing myself.

Screen shot 2010-03-31 at 1.20.52 PM

Each of these is a diluted version of the previous. As a person we feel fixed and we feel ourselves, then within that we have an experience. The way we experience events is entirely depended on our person. For example when someone dents your car, it is entirely up to you how you react in that situation. If you’re indifferent about it, then there is no significant experience. You just take his details and get it fixed. Or you get angry and talk for days about how someone dented your car.

When you take your experiences and put them in to words, they’re further diluted from the actual substance, the richness of human experience. The idea of being able to take human experience and fit it on a scale of 0-100 in terms of positive or negative is ridiculous.

When experiences are verbalized, a natural distortion happens, in a way the experience itself is corrupted by the attempt of limiting its richness to words. What sentiment analysis is trying to do, is to say that it can capture the essence of the expression (experience and person behind it) and record it as a single numeric value.

As a consumer I maybe someone who gets pissed off and expressive about bad experiences, but I’ll be the first to praise you when you redeem yourself. Or I could be someone who never says anything, good or bad. How is this accounted for in the current situation and direction for text analytics? Brands are not looking for instances, but relationships.

While I understand the usefulness of text analytics to answer yes/no questions in a closed domain with good preparation and proper customization, this is a very limited approach. I’m always more interested to know why people preferred that someone guided them personally instead of just giving directions, or how the ones who didn’t get personal guidance felt when they just got directions. The current approach to sentiment analysis at best offers limited solutions to such an approach.

Bottom line is that you can’t classify people, experiences or expressions on a scale of positive or negative. We are not that type of creatures. There is no such a situation that is totally positive or totally negative. Our relationships with brands are no different from the way we interact with life at large. Those relationships hold all the complexities and richness of our personalities, experiences and expressions.

The Human Factor

The fact that people don’t see things similarly in terms of positive or negative is no surprise at all. Classic philosophists knew this thousands of years ago, it is one of the underlying concepts in virtually every religion, philosophy or other system.

We can be affected by so many different things; weather, economics, relationships, time of day, medication. Attributes such as the ones mentioned before are used widely in econometrics to model actual situations in which commerce happens.

To further complicate things, there is the whole dimension of our relationship with ourselves, the way in which we understand and don’t understand our own personas, experiences and expressions.

We’re left with that other approach in which I show 10 different people pictures of 10 angry people and 10 happy people, or I show 10 passionate people and 10 passive people, the situation becomes much more human. We’re that kind of beings, we get angry and happy, then we’re sad. That is the level at which we relate, with each other, with brands and with the world around us.

I’m a big fan of automation and always believed that we should thrive to automate everything we believe machine can do better than us. The rest we leave for ourselves to do. The way net sentiment is utilized in social media monitoring is something I think should be left completely alone. At the level of net sentiment scoring, it is not worth the time of human nor machine.

There is a better solution for both man and the machine in this situation. The fact that something was started 15 years ago in a certain way doesn’t necessarily means it’s the best way. Our job is to make sure that we’re all open for what ever ways may be out there.

We all eventually want the same thing, so defending one’s convictions becomes a slippery slope. In Zen there is a saying: “In the beginner’s mind there exists many possibilities, in expert’s mind exists only few”. After doing one thing for a really long time, I find this to be the most valuable guideline.

So instead of using our time defending the ivory towers of the text analytics industry and where it’s at now, let’s figure out where we can take it together!

In A True Spirit of Debate

Below my responses to some of the arguments made in the post Is Sentiment Analysis an 80% Solution?

Test data about people agreeing on things with 80% accuracy has little to do with how and why a single system (social media monitor technology) has a 20% error margin. It’s like comparing pears to bananas. The way these language systems works is that there is a set of rules as base for everything and there is plenty of secret sauce in all of this.

No more seems the example about InfoGlutton relevant. When it comes to language based systems, success is all about teaching the system to work in that given environment (defining the rules). When you have a domain specific system (restaurants) with a limited number of entities (below 100k), continuously optimizing the system is an option. But when you work in an open generic domain (the internet) and you have virtually unlimited number of entities which produce indefinite amount of unique content, tweaking the system becomes very problematic. Think of the difference of learning the 300 most common words in Spanish versus internalizing all great philosophies in their original languages.

All this being said, often when you start looking things from two extremes, you’ll eventually find the golden middle way most suiting. My hope is that we can do that by working together on directions that make most sense for everyone.

Thanks so much for the chance to have this discussion Seth, and thanks everyone for taking the time to read this through.

This is such a  wonderful question, a great reality check in terms of what are you doing and why are you doing it. It’s also great to see your answer refine from something fluffy and value-based to something tangible and actionable.

It’s really a purpose question. According to a survey by NYTimes just few percentile of people know what is their purpose. Success really means “fulfillment of your purpose”.

For me success means to see people smile. I can’t imagine a better and a more tangible metric.

What’s your success metric?