Jonathan Mendez's Blog

Unlocking the True Value of Digital with User Flows

From 2003-2005 I spent a lot of time observing people of all ages and walks of life use the web across many different sites and verticals. I watched their facial expressions and body language as they surfed. I watched their mouse movements and the locations of their clicks.  I asked them to put their brains on speakerphone and listened to what they had to say – and noticed what they didn’t say. The sessions were videotaped and I spent countless hours watching them over and over again dissecting every action in an effort to understand the way people control and navigate this medium.

What I learned:

1. Web behavior is determined by goals not who the people are
2. Every click has a goal associated with it
3. Success means anticipating and messaging to these goals, moving the person forward and creating a flow
4. People have “tunnel vision” when they are moving forward in a flow

The last piece is incredibly important. What is tunnel vision*?

• People don’t think of the online experience the same way web professionals spend their time thinking about them
• People focus on completing their goal and little else
• If elements of relevance are not in the context of focus they are likely invisible
• People pay attention to detail only when they have found what they are looking for -- even then it is only detail related to what they want to see

Tunnel vision in the flow is why 62% of people still cannot distinguish between Paid and Organic Search results. Tunnel vision in the flow is why no one clicks on banner ads. Tunnel vision in the flow is the reason online marketing can be so powerful when you design ads, pages and campaigns with the customer goals in mind, not your business goals.

Nothing has changed in web user behavior the past 5 years to adjust these findings. In fact, everything that has happened since continues to validate them. The continued effectiveness of Email, the dominant rise of Search, the fall of display CPM and the death of Behavioral Targeting 1.0 (of course the dream doesn’t die so we’re rehashing BT again and I’ve made my feelings about that known here).

Taking a step back, this all makes a ton of sense. The web is the first medium where people can easily navigate discovery and recovery paths for information and commerce. Applications like eCommerce, Search and Email are flow enablers and that is what gives them so much value. In fact, almost all of the value in the web is created and captured within the flow of people’s goalstreams.

In stark contrast to the flow creation and capture channels mentioned above, many publishers have looked at the world one impression at a time with the central node of their Information Architecture being the homepage. The rise of Search fractured this idea and the rise of Social compounded it.  There is a real threat this singular and generic thinking will continue to hold back publishers and display advertising because their manufactured content hierarchies do not correspond to the reality of how people consume the medium.

Even now with the unbundling of impressions and data little advancement is taking place in publisher environments understanding online flows. If display is ever going to “tell a story” as advertisers want, it is going to need more than one realtime bid on one page view to do it. What is required is a sequence of clicks and associated messages relevant to the goal that move intelligently downstream in parallel to the flow being created by the user.

This idea is no different than the Query> Ad>Landing Page>Call to Action flows that are enabled by Search. I find great irony and satisfaction in the fact that Search and the flows created off it are the most effective story telling medium in online advertising. Maybe then, it should be no wonder why it is the most successful.

Another great channel when it comes to creating flow is mobile applications. Apps are all about the flow mechanics and the optimization of goal paths. It’s no surprise people have been so taken by apps with this basis in multi-step experiential strategy and design. Apple’s next great frontier as they move into Advertising is predicated on the matching of relevant multi-touch messaging and every publisher I know is already jealous of the CPMs they command. And don’t think for a second flows can’t be cross platform. In fact they already are.

Everyday, each of us creates numerous flows. With our blinders on, each click of every flow we self-segment on our path towards goal fulfillment. For too long digital advertising and marketing (Search Marketers guilty as anyone) have looked through these paths, isolating each digital step. If we are truly going to advance as a medium we must first be able to recognize and capture these flows and then help people by anticipating their goals and making goal fulfillment easy. I have no doubt that the sum of each and every web experience and user flow is greater than the value of its parts.

* Credit for these definitions belong to my friends at Creative Good.

Another Brick in the Paywall

 There have been some interesting thoughts, news and events the past week in regards to paying for content online that made me realize while I hold some strong beliefs and experiences in the area I’ve not written about these ideas in a long while.

Over the past couple of years I have helped advise three of the worlds leading news media organizations on digital content paywalls and through this I’ve gained great perspective on the challenge. The first thing to understand about these institutions is that despite the fact they have websites with millions upon millions of visitors every month these are not digital businesses. Digital makes up tiny fraction of their overall revenues.

Using the New York Times as an example, total revenues in 2009 were $2.2B. Digital revenues were about $300M, only 14% of the total. That 14% is with digital properties getting roughly 60M high quality unique visitors a month. Hearst and NYTimes both built 50 story state-of-art high-rise office buildings in NYC the past 5 years. They weren’t budgeted with digital revenue projections over the next decade.

It should come as no surprise then that in last years American Press Institute Study, 71% of Newspapers surveyed indicated that preserving print circulation was a primary driver for introducing paid access to online content. While this thinking may seem ass-backwards to us in the digital world it makes all the sense in the world to these organizations.Of course the irony is that this mindset reduces the chance for success. 

It may really be too much to expect of these organizations to move into paid digital content in an effective manner. Everything they know about subscriptions offline will be of little help online. What they have done on the digital side over the past decade is build highly matrixed organizations for sales, operations and analytics all around one thing, advertising. Unfortunately, the skillsets needed to sell content online are most similar to e-commerce, not advertising. When Jeff Bezos buys a newspaper it may stand a chance.

Still, strategists and executioners (pun intended) are being charged within these organizations to wage the battle for digital content dollars.  My advice has been that winning the content paywall war requires elite sniper units, not carpet-bombing. The strategies for success are all about segmentation & testing/targeting precision.

I believe if selling bottled water can work content paywalls can work too (Evian/TBWA is a good place to look for a marketing case study). However, they will require a ton of new thought that must be allowed to illuminate organizations grounded in old ideas. It starts with re-architecting the use of data to better analyze content consumption patterns present within the domain. This begets new metrics, different datasets and much deeper analytics over those datasets. The starting point is to understand the interactions and goals of the people consuming the content. It is then imperative to understand the value of visitor and content segments based on the goals of the consumer. Consumer being the operative word here because content is what is being consumed and not all content is consumed similarly and not all consumption has the same patterns or values.

Publishers should also not underestimate the role of creative in paywall optimization. Crossword junkies, Sports Enthusiasts, Style Mavens and the like will all respond differently to different messages. Recency and frequency metrics will also play a very large part in both segmentation, messaging and possibly most of all pricing. Thinking of an entire body of a domain's content as a one size fits all product in this day and age of Nike ID and Facebook News Feed will not work.

The endpoint is creating an intuitive and value aware purchase funnel driving people into becoming paying customers by ultimately making a content purchase. To be successful these strategies for success require understanding not only the root values but the interplay of all these dynamics mentioned above, applying machine learning and pattern recognition to them and optimizing conversion rate success through lots of testing and targeting. 

Last but not least what’s required for the major news media companies is doubling down on brand. That means ramping up brand initiatives cross-media from sponsorships to advertising. Brand is the promise and while there is little promised online that actually comes true for any sustained period of time brand is a key differentiator and can ultimately be the key arbiter of persuasion and retention. We all know there is a plethora of news and information on the web but at the same time news and information consumption on a personal level has never been higher. Brand value while fragile should never be underestimated as a beacon in the fog of online news and information. In fact media brands have always been some of the most powerful brands in the world -- just ask the #1 brand in the world now, Google.

It is a huge challenge - from a data warehousing standpoint alone - but I believe it’s doable and the math makes it worth doing. If NYTimes.com can get 25% of its unique visitors per month to pay $5/month it = $420M in annual revenue. Add to that the ad sales to the other 75% and you have an almost billion dollar business on that domain alone. Add to that the other NYTimes domains and the Times quickly is 40% revenue from digital and growing overall.

Content has always been a transaction. For paywalls to be successful each piece of content must now be valued, measured and optimized the same way any other consumer product transaction would. This idea of content merchandising may be the hardest part of all for editors and journalists who run these organizations to come to grips with. But their grip is slowly slipping.