TruthyPR

Target Analytics National Fundraising Index and the Cone Nonprofit Power Brand 100

"Figures don't lie, but liars figure."  -Mark Twain

Target Analytics National Fundraising Index 2009Q1
There is no worse combination of forces than statistically based studies and our soundbite culture.  Such studies are always based in a crucial context that needs to be understood when interpreting results, and our soundbite culture removes that key element.

Last month Target Analytics released their National Fundraising Index for Q1 2009 showing, of course, that fundraising is completely down across the board.  Average gifts are down, new donors are down, and total dollars are down. 

The report admits that Q1 of every year for a nonprofit is hard, following on the end of year giving cycle that most nonprofits experience.  The real question to ask yourself though, is "does this even apply to me?"   For example, small businesses and small nonprofits may not feel much of the impact of the recession, depending on their sources of revenue.  If you're a nonprofit that gets most of its donations from financial industry employees, then yes, it feels like a hurricane.

If you have a small set of donors spread across all industries, then it may not seem so dramatic.  Blindly applying the results of these surveys to your own organization and taking action without considering your existing context is problematic at best, and possibly destructive.

Where I do find these valuable is in terms of trends.  If you look at Target data for the last five years, and it follows your own revenue, then it probably has some value.  If your ups and down don't match it, then it's not particularly valuable.

Cone Inc. Nonprofit Power Brand 100
Another survey to come out (along with a built-in critic) was the Cone Nonprofit Power Brand 100.  While it is not difficult to see why a PR firm that does nonprofit brand advertising would publish a list of organizations that have executed great brands, it seems somewhat superfluous at best, especially when the report is described as "the first public ranking in the United States to value nonprofit organizations by more than financial standing alone."

Much like measuring websites in "visits" rather than in "donations" or "sales", measuring nonprofits by brand is great until the money runs out.

Considerably damning was criticism from Brian Reich, a former Cone Inc. employee (and a former colleague of mine at Virilion) who served as Director of New Media at Cone Inc.  He says:

"The Cone study/ranking represents an old way of viewing what makes an organization strong and worth of support or recognition.  And I fear that by celebrating the organizations on the list, and reinforcing the behavior (marketing, promotion, branding) that earned these groups high marks for brand, we are making it even harder for group to focus on the impact that is needed, or for groups who are being recognized for their impact to find the support they need to scale up."  (The bold emphasis is mine -Shabbir)

In short, the value of brand is about who can "talk the talk", and it does not measure who most effectively can "walk the walk".  I hope someone commissions that one someday.

The death of authority and the wisdom of crowds

 

If I were going to identify grand themes about the impact of the Internet of the last fifteen years, one of them would be the death of authority.  The fact that we no longer automatically assign credibility to big enterprises of any sort has been a factor in:

• the inability of the record labels to get us to keep buying crap, once we had a medium to help us find other artists they weren't promoting or signing;
• the inability of newspapers, already reeling from the instant-gratification of cable news, to show us why they were relevant;
• the lack of usefulness of the Encyclopedia Britannica, once we realized that if we did a tiny bit of search engine work, we'd get a better, more current answer.
• The list goes on and on...

Into this vacuum goes the optimists who cite the wisdom of crowds as a replacement for authority.  They would tell you that you don't need a Zagat's, because Yelp's crowd-sourced reviews would give you a good idea of where the really good restaurants are.  The reviews on Amazon would guide you in considering the right product.  You could depend on tripadvisor.com to tell you what the real deal was with hotels and resorts before you booked your vacation. And digg.com would provide a better filter for the news that you should be paying attention to than the editors of any major daily newspaper.

The problem, of course, is that all of these have had incidents that really show that the crowds do have wisdom, but they also have all the negative aspects that come with crowds: hucksters, thieves, and charlatans.  Where's there's money and people, there are incentives to pervert the marketplace.  For example:

• Yelp's ad sales staff have been caught (and not denied) selling advertising in exchange for hiding negative reviews of businesses.
• Earlier this year, Belkin, a home electronics maker, was called out for paying people to write positive  reviews on Amazon.com.
• Vendors are selling votes on digg.com from armies of "phantom" users.

And the story that inspired me to write this:

• Hotel reviews on TripAdvisor.com have been manipulated by the properties to artificially raise their popularity index.  The site admits it.

The relevant thing to understand here isn't such behavior exists, its human nature.  When the first three homosapiens gathered in a group, I can guarantee that at least one of them was trying to figure out how to get the other two to feed him for free.

Even on my tiny personal blog, because I am ranked well for various poker terms, I have people stopping by to leave a comment that seems to make no sense and then links back to their blog.  I unpublish it, of course, but even at the low end, you have to watch out for these sorts of things.

The important thing to notice is how each of the sites in questions deals with it.  Fair marketplaces are possible, ignoring both the optimists and the pessimists at each end of the scale, its how you handle the troublesome ones that determines your long term viability, and the wisdom of your crowd.  For example:

• Amazon responded to the paid review crisis and suspended third party sellers who engaged in the practice.
• TripAdvisor started marking entire destination properties as tainted, because they suspected manipulation.

Longevity in this medium will be defined by the effectiveness with which each of these properties deals with hucksters.  If they fail to, users will notice (probably before management does) and go to another property.

Photo credit: Creative Commons-licnesed photo of street con man in France by Flickr user Nelson Minar

When online criticism subsides, does that mean the problem has gone away? Apple's 3GS upgrade problem

[Since this was first published on PRNewsOnline.com, Apple and AT&T announced an extension of upgrade subsidies for several people who are coming due.  It's probably not enough to mollify the overall complainers, but certainly enough to take the wind out of its sails.  I expect that Apple decided to look forward, and grow the overall iPhone market, as opposed to fighting over the existing users they already had. 

After all, if you've been a loyal iPhone user for a year, and someone whose never had one goes and buys a better one, how long are you likely to hold out?

Though internally executives at Apple and AT&T know exactly how many 3G owners decided to pass on the upgrade to 3GS, I doubt they'll ever release those figures.  -S]

Last week, Apple announced a new iPhone model, the 3GS, and a very unpopular pricing plan built around AT&T’s standard two year service agreement.  Apple’s desire to sell a new iPhone more often than once every two years created a lot of angry iPhone owners who just recently bought the 3G model last year and will have to pay as much as $600 to upgrade to the new model because they don't qualify for a carrier subsidy mid-contract.  A twitter-based petition, numbering 12,000 signatories at last count, was driving attention to the issue.

Look at this graph below.  I used one of my favorite tools, Radian6, to find all the online conversations about this topic:

Indeed, 4,000 posts about this topic at its height is a lot.  What does this graph, and in particular the falling volume on the right, really mean though?

1. There’s a lot of angry iPhone customers, but they’re over it.
2. There’s a lot of angry iPhone customers, but they’ve forgiven you.
3. There’s a lot of angry iPhone customers, and they’re just catching their breath before yelling again.

Depending on the particular client situation, any of these things could be true.  It takes a savvy professional who understands a client’s specific situation to discern what this data really means.  In the end, Radian6 is simply a tool, albeit a powerful one, for those who understand the dynamics of communications.

In this case, with the new model going on sale on Friday, the very heavy competition for the iPhone coming from every carrier, it’s entirely possible that there’s a fourth option:

1. There’s a lot of angry iPhone owners who have decided to sit out this upgrade cycle unless Apple finds some way to change the economics of this upgrade.

This data point would never show up on a graph, because it’s an offline action.  It’s not measurable in Radian6, but it will most certainly be measurable in Apple’s sales numbers on Saturday morning.  Even if people threatened it online, that’s still a poor approximation of actual behavior.  After all, people consistently complain about privacy intrusions by major corporations while still posting drunken photos of themselves on facebook.   What you say is not the same as what you do.

I certainly hope Apple’s PR department isn’t looking at this same graph and patting themselves on the back.

The problem doesn’t lie in the tool.  Radian6 is an excellent tool.  My t square in my basement shop is excellent as well, but not if I don’t use it correctly, or fail to understand how to use it.  I could probably use the edge of it as a screwdriver, but that doesn’t make it a good screwdriver, no matter how much I told myself using a Tsquare edge as a screwdriver is smart.

So what should Apple do now?
Apple has traditionally not responded to its critics with a change in pricing or policies.  Even when Steve Jobs health was an open secret pummeling Apple’s stock price, Apple’s black hole of a PR department continued to toe the line that everything was fine and Jobs health is a private matter.  (To the shareholders of Apple, it clearly was not)

There are two recent occasions when this silence has been broken:

1. When Apple needed to assuage early iPhone adopters about the fact that months after they bought their phones, Apple dropped the price by $200. 
2. In 2008, when Apple deeply screwed up the Mobile Me rollout so badly that it affected adoption rates.

I believe that this shows that Apple doesn’t bother to respond to criticism except when it appears to affect their product adoption cycle.  In many ways, this is an excellent ego-less approach to communications for a consumer products company, because it puts the products front and center.  For a company that makes products with such a strong brand halo, this strategy maximizes the products' market position.

However Apple doesn’t ignore these topics entirely, and the current protest on Twitter and the criticism in the press has the potential to really damage Apple’s product launch when the 3GS goes on sale Friday.  If existing iPhone users decide to skip upgrading to the iPhone 3GS this summer, there are a number of very bad outcomes along with the significant loss of revenue to Apple which is made both on the hardware as well as in a bonus paid to Apple from AT&T on every iPhone activation.

Worse yet, the protest creates a window for competition: You can already see every tech reporter writing the story headline, “Don’t want to pay a $200 premium to AT&T for a new iPhone?  Here are 5 phones on other carriers that will give you almost the same features when you switch.” 

Apple will never forget the lessons of the PC wars: that having the best product doesn’t guarantee success against a motivated, opportunistic opponent who see non-textbook market opportunities you miss.

The problem lies not in recognizing the issue at hand, but in solving it.  AT&T’s exclusive contract with Apple for the iPhone is up next year, and they are eager to lock in those customers.  They don’t want to pay the cost of reducing the upgrade premium, and frankly, neither does Apple.  Both companies are probably currently having a very tense discussion right now about whose hide this is going to come out of, since letting the customer base foment protest means that many will simply stick with the phone they have. 

This is the downside of making really great products, sometimes, what people have is good enough.

What’s really unique about this protest is that it’s purely Twitter and media-based.  No Facebook groups and no flash protest websites.  In this case measurement tools might suggest that what you have are 12k users who have gotten an inordinate amount of ink for their issue, but I would disagree.

There’s a reason that communications is not a discipline that can be driven entirely by algorithms.  That difference in scale between coverage and names on a petition suggests there is a larger amount of discontent at work.  And the nuanced position that Apple is in with their new product launching in a few days is something that not even the best algorithms could detect.

As these conversational monitoring tools become more and more prevalent, the tendency to equate subsiding conversations with “all’s well” becomes more and more tempting.  Don’t give in to it.

Dell makes $3 million dollars through Twitter; twitterati injure themselves patting own backs

I love the news this week from Dell that visitors driven to their website from their DellOutlet Twitter account have made $3 million in purchases.

 

To know this you have to be measuring your website with any of the standard products like Google Analytics or SiteCatalyst, and then specifically hunting for which feeders of traffic are most effective at driving sales.

 

For Dell, which had revenue of $12.3 billion in the first quarter, $3 million may not seem like much, until you consider that the DellOutlet channel can be run by one person (or less) and that twitter doesn't charge for accounts.

 

Suddenly the return on investment of tweeting makes a little more sense for an e-tailer.  Of course the key is in effective website measurement  Dell didn't just track direct tweets-to-sales, but tweets that brought visits that eventually resulted in sales.  This is crucial in an interconnected world where everyone uses an enormous mix of twitter, facebook, e-mail, or blogs.  Twitter may have brought them in initially, but then they may have returned directly to the site to purchase several days later.

 

Only if you're effectively measuring your website and where your traffic comes from, can you truly understand how to credit the sales and know what's working.  For more, see this NYT blog post.

How to shut up a domain squatter using your trademark? Let them take you to court.

Mike Morgan’s domain name dispute with Wall Street bank (and my alum) Goldman Sachs over goldmansachs666.com has gone a little differently than most domain name disputes.  As is typical, Goldman sent Morgan a legal love note (known as a “cease and desist letter”) that suggested all sorts of bad things but had little actual legal content. 

I’ve actually gotten two of these in my life, one from Fannie Mae, and one from the Church of Scientology.  The Fannie Mae one frankly, was scarier to me, since I was working in DC and around the turn of the century Fannie Mae owned the entire town, with almost every one of my other customers on retainer.

Often the dispute ends here because the trademark owner doesn’t really have any legal recourse, and they hope a nasty letter is sufficient to dislodge the domain.  Sometimes the trademark owner files a complaint via the uniform dispute resolution process, and then depending on the facts.

What doesn’t happen?  The domain name owner doesn’t usually file suit preemptively against the trademark owner to force their use of the domain to be recognized.  Mike Morgan did this, and found himself in the very unenviable position of needing to press an issue in court, which often requires the good graces of the presiding judge.

Because Morgan didn’t want to aggravate the judge who was about to hear his plea, as well as not wanting to give ammunition to Goldman Sachs attorneys arguing that he was actually an infringing party, Morgan had to stop posting on his GoldmanSachs666.com domain.  That exactly was what he didn’t want to do, because, as this graph shows, nobody is paying attention to him:

The blue line is Google Search relevance of “Mike Morgan”, and the red line is relevance of the search term “goldmansachs666”.  Attention had waned before he had to go dark for legal positioning reasons in mid-May, and this is just going to hasten the slide.

This, of course, is the kiss of death for Morgan.  Already struggling with obscurity, as this chart shows, going dark just continues to drive his anti-Goldman Sachs campaign into obscurity.  It all suggests the campaign and the legal strategy wasn’t particularly well thought out from the beginning. 
Mike Morgan’s larger strategy, to attract attention to his criticism of Goldman, can’t survive the silence.  What he’s done to date has been to position himself with the tin foil hat crowd, instead of couching his criticism as a securities analyst.  And now he's stopped using the only tool he has to rally even that audience.

I suppose someone had to try this as a tactic, but as this example shows, running a word of mouth campaign while trying to avoid angering a judge hearing your plea are two tactics that don’t go well together.

I note that Morgan has a heart attack and bypass at the end of May, which will probably sideline his campaign for a while.  My best wishes to him and his family on his speedy recovery.

Disclosure: I worked at Goldman Sachs for five years.  I have not done any work for them (either in computer security or in communications strategy) since my departure.

What would you clear your homepage for?

Last week I was on a panel talk at USC's Annenberg School of Communication to discuss "Measuring New Media" at the Beyond Broadcast 2009 conference.  My slides are available online. 

I am starting to get used to being the guy that calls the emperor out on his new clothes.  I made the provocative statement at one point that social media is useless if it doesn't lead to donations or some other big ask.  I know this goes against current herd-think, but "engagement" and even "visits" are not some kind of currency, easily converted into US Dollars.  You should be measuring your efforts in how they translate into dollars or some other big ask (like B2B leads).

The question I like to ask organizations when we set out talking about measurement is "If you were going to clear your homepage to ask your visitors to do just one thing, what would that one thing be?"

The question and the way it's answered is telling.  If it's something that you need a knowledge of web technology to understand (visits, hits, pageviews, even conversion rate) then it's the wrong answer.  It should be one thing that would be universally understood across the organization, such as "new corporate donor leads" or "donations".

Whenever someone says, "We have a lot of priorities" I know that in fact, they don't have any.  And when they say "it changes regularly", then I know they are not being led well at the top of the organization.  Nobody can have a healthy workplace where the measures of success shift in unpredictable ways on a quarterly basis.

Ask yourself the question, "What's the one thing I would clear my homepage to accomplish?".

Of course, if you'd like help measuring how effectively your website accomplishes it, please give me a call.  I can help you put in place a metrics program that will make your job easier, by focusing your senior management on the right things.

Panel talk on new media measurement at USC today

I'm doing a panel talk today at USC in Los Angeles on new media measurement for the conference Beyond Broadcast.  My slides and additional material are online.

How do I budget my staff time and online resources when a new social network pops up every day?

[This article first ran in PRNewsOnline.com.  Go check them out!  -Shabbir]

In the last few articles I’ve described the importance of measurement to your website, and how to examine whether your social media efforts are working or not.  Now it’s time to look at the big picture.  Are your efforts in each medium actually working, and how should you budget in the coming year?

If you haven’t discovered yet, when you start using twitter, Facebook, YouTube, and press releases written with search engine optimization in mind, you’ve become a marketer who uses PR as your medium.  Congratulations!  PR is a very valid way of approaching marketing, and if it hasn’t already happened in your company, PR and marketing staff overlap.  (In smaller organizations, they can be the same person or even the same department!)

In this article we’ll examine some data from each medium, and give you a method for examining whether your efforts there are actually working and planning for next year.

First, gather your data
For a defined set of time, you’ll need to gather data from your webs statistics that show you the conversion rate and total numbers of goals you’ve accomplished.  This is pretty straightforward in a program like google analytics.  You can do this with a month’s worth of data, but six month’s worth is better.  Make sure you’ve tagged the “thank you” or “receipt” pages of your lead generation forms or e-mail subscribe forms.

Next, compute your return on investment
Once you’ve got the data, create a custom report that measures each goal’s conversion rate, and total number of completions.  Have it break out these results by the dimension “medium” and voila, you’ve got your website results broken down by medium.

I used this technique to pull the results for a lead generation effort from a client engagement.  Here’s what I got:

I measured one of the three ‘asks’ on the website and then the different activities that fed it.  The partners category are simply referral web links from specific partners that support the organization.  It’s a quarter of the goal total, a small effort, and has a very high conversion rate and return on investment.

Generally when you look at what’s working with your website, you want to approach it with an open mind.  Only then will you see the unintended successes, and only then will you discover new techniques.  Ask someone who manages AdWords advertising and they’ll tell you that sometimes the keywords you throw in as an afterthought end up performing surprisingly well.  If you’re only examining the efforts you have made predictions on, you won’t discover these gems.

Then, figure out where to optimize and where to reduce
For this data, the first question you should ask yourself is “Are there more partners we could be asking for links here?”   Sometimes you max out a particular channel.  You buy all the inventory on a perfectly targeted website, for example.  If this isn’t the case, this is where you should start funding your efforts.    Find more partners to link to you.  If their link pages are generating only a little bit of traffic, ask them to feature you for a short time.

In this data, the second best performing marketing technique in this example is your organic search work.  It contributes to over half of your total goal accomplishments, and has a good return on investment.  If you haven’t already, you may want to start a more formal SEO program to garner more leads from this channel.  It may be a good time to look at some new terms to develop to diversify your traffic.

In this case, your e-mail list is definitely producing leads, but while it’s conversion rate is good, it’s not producing a volume of leads that justifies the time invested.  Unless you can easily raise your conversion rates of your e-mail list, I would suggest looking at ways of bulking up your e-mail list.  It’s the equivalent of pouring more into the top of the funnel.

Your cost-per-click campaigns (search marketing like Google AdWords) are about a fifth of your workload, and a fifth of your results.  This is great, but it would be nice if it was more productive.  If you’re managing it entirely internally, you may want to get a marketing audit from an agency.

If you’re already using an agency, you may want to rebid the work.

The social media data is quite real.  This particular client just isn’t seeing the results from Facebook and twitter.  I would recommend cutting back the weekly effort to just 10% or 15% at the most.  That doesn’t mean you can’t re-energize it later on, but someone has to demonstrate some results before you would put in your precious resources.

Conclusion
People always complain about the budgeting process cutting things they need, but wouldn’t it be awesome, for once, to have a real concrete basis for your budget requests?  What’s more, wouldn’t it be great to directly tie your budget and efforts to the company’s bottom line?

You can do this with a little preparation and a little discipline, but you have to be prepared to live with the consequences of what the numbers tell you.  The data will set you free.

Shabbir Imber Safdar spends his days at Virilion Inc, an eleven year old full service interactive agency.  He still can’t decide if he should have “marketer”, “online pr guy”, or “digital public affairs” in his title.  He blogs about all of these at TruthyPR.com

The Internet Poised To Play An Even Larger Role In Shareholder Activism

The Internet is about to become an even more powerful tool for shareholder activism, thanks to Chairman Schapiro at the Securities and Exchange Commission.  (That's her, announcing the proposed rule on May 20th)

The Chairman announced that the SEC is going to put out for comment a rule that would allow any investor, or group of investors, holding a minimum amount of securities in a company to nominate up to 25% of the directors for a board election.  The company would be forced to put these nominations on the proxy ballot.

There are restrictions on this to keep people from buying securities before the election and then dumping them afterwards, as well as minimum holdings for the nominees or group supporting the nominees, but the Chairman knows this is a big deal.

By allowing a single shareholder to pool groups of other investors to aggregate the minimum amount needed, it seriously weakens the ability of companies to fight off non-political activist shareholders.

The CEO's nightmare scenario
What's the scenario that most CEOs are probably worried about?

1. An activist shareholder decides to run a slate of board seats.  (25% = 2 seats possible on an 8 director board)
2. S/he files a nomination with the SEC and puts up a website with the forms for others to join the campaign.
3. Using guerilla marketing techniques and the voracious nature of the financial press for a serious proxy battle, the campaign gets a lot of free media attention, driving people to go to the website and use their shares to "second" the nomination by submitting the paperwork to the SEC.
4. Potential members of the nominating group include people who directly own the stock, as well as people who own it indirectly through mutual funds.

It's this last category that will be stunning in its effect.  Let's say I went crazy and bought Vanguard's S&P 500 Index (VFINX) for my IRA.  Because it's a retirement account, I almost certainly bought it and held it, and probably forgot it.  I, along with every other person holding that, is a target for the activist director campaign because I have held it for more than a year.  With the addition of a few professional investors with a sizable holding and a little money to bankroll an online campaign, I could be sitting on the board within a year.

The reason this is so groundbreaking is because non-politically motivated activist shareholders are a "perfect storm" of financial public relations.  They bring together all the factors that make for a great media story and a headache for upper management:

1. A company in trouble (the media loves to kick people when they're down);
2. A David v. Goliath story (financial press loves to run stories about "the little guy" keeping the big guys honest);
3. A conflict/showdown between two parties (this is true in non financial journalism as well.  When two people are arguing, the story is writing itself and people want to watch/read)

When a company is in trouble is when an agitating shareholder emerges, and that's when the rest of the shareholder base is ripe for an activist nomination slate.  It's a steamroller that gets worse and worse.

Who wins and loses

Currently "regal" boards lose
Corporations that don't already have some shareholder nominated board seats are about to lose their power over 25% of their board.  When agitators emerge, if they aren't handled well and feel like they have to run for director seats, they will pose a very real threat.  A good lesson in how to handle them badly can be taken from the case study I wrote about Eric Jackson's campaign against Yahoo!'s management. [PDF]

Non political activist shareholders (small/med/large) win
All that web traffic generated from stories about your disagreements with the current management over their running of the company?  That just became a marketing campaign for the board seats you so desperately want in order to effect a management change of direction.  You could, in theory, accomplish it without paying for a single piece of direct mail.  You could even do it through a Facebook group.

Political activist shareholders - no effect
Political activist campaigns continue to struggle because they simply do not speak to the needs of shareholders.  Shareholders want to make money, and political activist shareholder campaigns usually fail to address that need, focusing entirely on non-revenue issues. 

While they may see a little bump in effectiveness,  I don't think this is a game changer for them.  Folks like the unions, who run activist shareholder campaigns from time to time, will be happy but won't be sitting on a lot of boards a year from now.

What's the Timeline?
Chairman Schapiro made her announcement (text version) on May 20th, and once the proposed rule is posted on the website there will be 60 days for comment. 

Given the Chairman's language, there seems little chance of this proposed rule not becoming policy.  Over and over again, the Chairman has tied issues of "questionable and illegal corporate practices" to shareholder participation on corporate boards.  This steamroller appears to have momentum.

Experienced web talent available!

Are you looking for someone with fifteen years of experience web development, online strategy, and infrastructure management? Do you want someone whose actually managed a website with more than 11,000 pages of content and eight million pageviews per year? The economic downturn has hit the nonprofit sector hard, and one of my colleagues at the Human Rights Campaign was the latest casualty. She strategized and executed campaigns in all forms of digital media (traditional websites, e-mail campaigns, and social media) and has also got significant experience doing online get out the vote work. If you're interested in interviewing this person formally or informally, drop me a note and I'll introduce you.