The Key to Revenue? Ads. Predictive Analytics Not So Much
January 16, 2016
I read a darned amazing write up in a marketing blog. First, the story the marketing blog turned into “real news” is a sponsored study. That means an ad. But, even more interesting, the source of the funded study is a mid tier consulting firm. Now you know there are blue chip consulting outfits. I used to work at one and have done consulting projects for other blue chip outfits over the last 40 years. The blue chip outfits are more subtle in their thought leadership, which is one reason why there are blue chip outfits sitting on top of a pile of azure chips and gray chip vendors of expertise.
The second point is that the sponsored study conveniently converted into “real news” is that revenue comes from predicative analytics. Excuse me. But if a company is paid to flog an ad messages, doesn’t that mean the revenue comes from advertising or, in this case, clumsy propaganda. If the predictive analytics thing actually worked revenue wonders, wouldn’t the mid tier consulting firm use predictive analytics to generate cash? Wouldn’t the marketing newsletter use predictive analytics to generate cash?
To see this sponsored content daisy chain in action, navigate to “Forrester Report: Companies Using Predictive Analytics Make More Money.” The mid tier outfit in question is Forrester. Is their logo azure tinted? If not, maybe that is a color to consider. None of the stately expensive tie colors required.
The publication recycling the sponsored content as “real” news is Marketing Land. The name says it all, gentle reader.
What is the argument advanced for EverString by Forrester and Marketing Land?
Here’s the biggie:
The big takeaway: “Predictive marketing analytics use correlates with better business results and metrics.”
That is, compared with those in the survey who do not use predictive analytics (which it calls Retrospective Marketers). “Predictive Marketers,” the report notes, “are 2.9x more likely to report revenue growth at rates higher than the industry average.” They are also 2.1 times more likely to “occupy a commanding leadership position in the product/service markets they serve” and 1.8 times more likely to “consistently exceed goals when measuring the value their marketing organizations contribute to the business,” compared to the Retrospective Marketers in the survey. Forrester analyst Laura Ramos, who was involved in the report, told me the main point is clear: “Predictive analytics pays off.”
What froth? The 2.9x suggests real analysis. Sure, sure, I know about waves and magic squares.
There are companies delivering predictive analytics. Some of these outfits have been around for decades. Some of the methods have been known for centuries. I won’t remind you, gentle reader, about my wonky relative and his work for the stats guy Kolmogorov.
Suffice it to say that EverString paid Forrester. Forrester directly or indirectly smiled at Marketing Land. The reader learns that predictive analytics generate revenue.
Nope, the money comes from selling ads and, I assume, “influence.”
Put that in your algorithm and decide which is better: Selling ads or figuring out how to construct a predictive numerical recipe?
Right. Mid tier firms go the ad route. The folks recycling ads as news grab a ride on the propaganda unicycle.
Stephen E Arnold, January 16, 2016
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