There is no such thing as a rational decision

There are certain things in life that we don’t get emotional about right? No one is emotionally involved over their choice of mortgage are they? We make these decisions coldly, clinically, rationally.

That’s what I’d always thought. It turns out I was completely wrong.

The things we process “rationally” are language and IQ and logic tests.

When we are making a decision about something that effects our lives this decision is always emotional. The work of Antonio Damasio, a neuroscientist based at the University of Southern California, on brain injured patients has shown the part emotions play.

In better words than mine

“Damasio’s group is probably best known for their case studies of reasoning in people with neurological damage to their emotional systems. For instance, people with damage to the ventro-medial part of the pre-frontal cortex (VMPFC) may be able to perform to a high level on most language and intelligence tests, but they display gross defects of planning, judgement and social appropriateness. Damasio’s group have shown that these defects in patients with VMPFC damage are caused by their inability to respond emotionally to the content of their thoughts. “

(Full article – http://www.hedweb.com/bgcharlton/damasioreview.html)

I don’t need my emotions to say that a melon is bigger than an orange. I do need my emotions to decide which one to eat.

All of my decisions about my life, even the ones that should be rational like money and work will be based on my emotions.

Similar is not the same

I have been reading “The New Media Marketing Manifesto” by John Grant.

It’s not about new media as in digital, but new marketing. I am early on it so can’t really judge it at this stage but wanted to comment on something I’ve encountered early on.

There is a section on two hierarchies or pyramids: Maslow’s Hierarchy of Needs and the ABC classification of people by income groups. What I think the author does is to think that just because these ideas have the same structure (or shape, i.e. the pyramid)  that the rungs or levels are equivalent. He assumes that people on the bottom level of the ABC pyramid must sit at the bottom of Maslow’s pyramid. I would suggest that the people he refers to in the UK don’t sit at the bottom of Maslow’s pyramid because this level refers to the extreme basic need for food and shelter which at the very minimum comes from state or private provision in that country. Even the people at the lowest level of his geo-demographic pyramid are several rungs up Maslow’s hierachy requiring “belongness and care” and “esteem” needs.

Arguments and ideas really benefit from having visual explanations such as pyramids. We need to make sure that we maintain rigour when using them and ensure that our arguments go deeper than visual or stuctural similarities.

Agency Thieves

Publishers and agencies sometimes have an uneasy relationship*. This article appeared in the Australian last year:

http://www.australianit.news.com.au/story/0,24897,24801357-15318,00.html

“ONLINE publishers have accused unscrupulous advertisers and their agencies of stealing their audiences by using a new form of audience targeting technology.

A special investigation by The Australian has revealed the growing use of “retargeting” technology which enables advertisers to slash their internet advertising costs by tagging visitors to premium websites.”

The key question for me is what are we buying when pay for an impression from a publisher?

If we only get the right to deliver the advertising then the technique described above obviously contravenes the agreement between agency and publisher.

However, ever since third party adserving has been in place we have been buying not only the right to display an ad but also to cookie the user and then use the fact that we’ve cookied them to report on what they do afterwards on a client’s site.

Currently the retargeting they describe here cannot be delivered via the system that tracks the impressions and clicks. Publishers can therefore see when advertisers insert additional tags to provide the retargeting options and reject these.

It won’t be long, though, until it does not require additional tags to allow retargeting. At this stage publishers will have to block third party adservers from reading or dropping cookies on users to prevent “their” users being retargeted elsewhere. This will prevent the standard tracking that adservers provide and decrease the value of online advertising.

I believe that publishers will not be able to prevent advertisers from retargeting their users elsewhere in the long term and that they should have sensible conversations with agencies about this. That said, agencies should also have the decency to speak to publishers about this and ensure that everyone understands it is being done in the best interests of the advertisers which will over time bring benefits to the online publishers.

*Despite the fact they both will do better by working in partnership, it is not a zero sum game.

What’s going to happen in 2009?

I have half an eye on the Uk where currently the sky seems to be falling in. Here in Australia no one seems to be as worried. Is this because Australia is more secure and insulated or does everyone have it wrong?

From what I am seeing I certainly think that there will be less advertising spend overall. Hopefully digital will continue to grow by securing budget from other media channels.

I will be very interested in seeing what money is spent in Q1 next year. I’m expecting that some advertisers will spend significant amounts of money but may be allocating it at short notice. At this stage suppliers seem to be keen to secue spend – there may be deals to be done for people with budgets.

Value of media exchanges

Thanks to Doubleclick for inviting me to a presentation on the launch of their ad exchange within this marketplace. As well as being great hosts they posed some very interesting questions about the value of media to advertisers and how publishers can increase the revenue they receive from their products.

Ad exchanges should be very attractive to advertisers and to the site owners.

Most large publishers have some areas of their site(s) that do not sell out. Up until now they have either had to use valuable sales team time to monetise this or to sell at less than the full value to a network who then mark it up when selling to advertisers.

The ad exchange should allow them to achieve the maximum market price for the inventory and as the process is automated it reduces admin costs.

The proposition to advertisers is that they can pay the absolute minimum necessary to achieve the inventory they need. This should reduce their media costs and therefore either their CPA or the price to reach a target audience.

The aspect that was most interesting to me (with my agency hat on) was the automation of the buying, reporting and invoicing process. Buying online media is very time consuming and agencies should welcome any opportunities to free up resource to spend on planning and client servicing. In the UK competing systems are being tested by agencies and publishers. On both the buy and sell side there are significant savings to be made and I expect systems to be in routine use within 18 months.

One week in

I’m fresh off the boat from London and starting a new job in Sydney. I’ve got a position at a media agency here in their digital department. I’m going to try and write some thoughts on similarities and differences between the two markets.

One thing a couple of people have mentioned is the position of the media owners. As there are much fewer than in the UK they are a lot more secure. They are guaranteed a higher degree of revenue than I am used to.

I am reminded of something that someone said to me before about how the balance always shifts. If the suppliers have all the power at the moment then at some point in the future it will be the buyers. At this point it is the people who work well with their partners who continue to succeed and those who take them for granted will find their revenue dry up.