Tag Archives: Reality checks

July 24, 2017 · 11:46 am

Nobody Knows Anything

I’m going to start the week by running the risk of bumming you out. At least we’ll have the rest of the week to recover, right? I was looking at some analytics data this morning and as I looked at it, I realized that much of it is wrong. So is a lot of the other information this client is using to make decisions. Yours is too, by the way. I’ll explain why but along with the realization came an insight that I think will be helpful to your business.

When I began in digital we used server logs to track traffic. They were pretty accurate although pretty limited as well. Web analytics came along and the quantity and quality of the information we got about who was coming to our web sites, how they got there, and what they were doing improved quite a bit. As business people, we were able to make content and marketing decisions based on the data we were getting.

Things have grown quite a bit more complex over the last 20 years and that complexity has obscured much of the good, useful information. Anyone who knows analytics will tell you that much of the referral data you see (where traffic comes from) is wrong. “Direct” traffic is way overstated. “Referred” traffic is encumbered by referrer spam. A lot of so called direct traffic is really dark social traffic (I send you a link). Transfers from HTTPS to HTTP sites report as direct as well. Keyword data is “not available.”

I’m not trying to make your head hurt nor to get really wonky. The point is that if you’re relying on that data to make decisions, you’re really just guessing. It’s the same with much of your ad data. I’ve written before about the lack of transparency in the programmatic ad markets and that opaqueness obscures the validity of the data as well.

I can add search data, email data, and more to the list of what probably isn’t what you think it is, but all of this fostered a thought: what do we really know that’s truly actionable?

I can answer that. We can know how our products and services are really differentiated and how much better we are at solving peoples’ problems. We can know (yay review sites!) how good our customer service is. We can know how our revenues and costs and changing and we can ask why.

I’m the last guy to say we should ignore that large and growing amount of data every business gets each minute. But maybe the time has come to act on what we KNOW and less on what we really don’t. What do you think?

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Filed under Consulting, Helpful Hints, Huh?, Reality checks

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July 17, 2017 · 11:41 am

Buy Less, Get More

I recently bought a Chromebook that has a touchscreen. I’ve been using a MacBook Air for half a dozen years as my primary computer but it has slowed to a crawl and work was taking much longer to get done. I debated replacing the Mac but then I took a hard look at what functions the laptop served. Over the last few years, nearly everything I have been doing is done in the cloud and having a device that’s basically a glorified web browser actually seemed like a good idea. I moved my accounting to a cloud-based system and started using the Google suite of office programs (Docs, Sheets, etc.) in lieu of the programs on my Mac. I’ve been a lot more productive and I got a large Android tablet out of it to boot (the Chromebook flips around to be a tablet!).

There are a few other things that I noticed. First, this device reminds me of the Mac when I first got it. The thing just works. It updates itself, it’s safe from malware, battery life is good, and it’s easy to add extensions to customize it to my liking. I can run any Android app the will run on a phone (admittedly, that’s often a so-so experience) and that opens up a ton of additional software on a bigger screen than my phone.

This isn’t a screed to get you to buy a Chromebook. The point, rather, is to get you to think about why you buy, build, hire, or otherwise add to your organization. Another Mac would have been overkill based on what I needed the device to do. I saved money (the Chromebook cost about half of what a new MacBook would have cost) and I’m more productive. We often spend our precious resources on unnecessary things and that’s bad management.

Some examples. Most of the people who buy Microsoft Word have no clue how to use most of its features. The same with Excel. They are both wonderfully powerful programs but there are so many features that they become difficult to use and simple tasks can become daunting. There are free programs out there, and there are some great alternatives to the Office suite that have 99% of what most of us will ever need. You buy less and get more.

Another one. I worked with some managers over the years who would always put new positions into their budgets. Did they need them? Nope, but since other departments were growing, they felt as if they had to grow too. A corporate form of keeping up with the Joneses, I guess. We can’t manage our businesses to impress other people or out of jealousy. We can’t spend on a Rolls Royce when all that’s called for in order to get the job done is a Volkswagen.

Buying less can often get us more. It certainly did in my case. Give it a try?

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July 12, 2017 · 12:15 pm

Is The End Near For Sports?

I know you might be thinking that my headline is just some outrageous form of click bait and that I can’t seriously think that big time professional sports are heading down the same path as traditional big media. Let me throw a few recent articles at you and maybe you’ll come to a different conclusion (which I do hope you’ll post in the comments).

The sports business is based on a few large revenue streams. One is income from the games themselves: ticket sales, concessions, merchandise, etc. What makes many of those things possible is a nice facility – an arena or stadium. We’ve seen franchises move (and piss off their fans) over the stadium issue, sometimes even before the bonds on the last stadium built for the team are paid off. I urge you to watch the John Oliver piece on the relationship between teams and towns but here is why I suddenly think there is an issue. As reported by Mondaq:

A bill has been introduced that would eliminate the availability of federal tax-exempt bonds for stadium financing… The bill would amend the Internal Revenue Code to treat bonds used to finance a “professional sports stadium” as automatically meeting the “private security or payment” test, thus rendering any such bonds taxable irrespective of the source of payment.

In other words, it will make public spending on a private facility way more difficult. That will lead to fewer new facilities and a much harder path to growing that revenue stream. Strike 1.

Then there is the largest revenue stream for most big leagues: TV. Kagen recently reported that the U.S.pay-TV industry will lose 10.8 million subscribers through 2021, according to their latest forecast. You might already know that ESPN has been losing subscribers – May 2017 estimates were 3.3% lower than the year before. For every million subs lost, ESPN takes in roughly $7.75 million less PER MONTH – or $93 million a year, and they have already lost multiple millions of subscribers. Yes, some are being replaced via the sale of OTT services, but that requires spending to sign customers, something ESPN hasn’t had to do before. The same subscriber loss issue is true of every other sports network albeit to a lesser degree since their monthly fees are less than ESPN’s. Smaller subscriber fees mean a diminished ability to pay those large rights fees. Sure, other channels (some would say suckers) will step up – Facebook, Twitter, YouTube, and others. But my guess is that the outrageous increases many entities have secured over the last few rights cycles are gone for good. Strike 2.

Finally, costs are not going to go down, at least not without major disruptions such as the two recent NHL lockouts. Players aren’t going to make less (the downside of the salary cap), team personnel probably won’t, at least not without a lot of turnover, and many of the other costs are either already low (minimum wages) or difficult to cut (food costs in the concessions, etc.).  In an effort to mitigate some of the lower revenue and growing costs, some of the entities involved in sports are beginning to do what the airlines have done and make what was once part of the deal (in-flight meals, free bag check) part of an a la carte menu to grow revenue. Specifically, look, for example, at what NBC has done with their Premier League package. They are doing away in part with their NBC Sports Live streaming coverage in favor of a new premium streaming service called “Premier League Pass” that will be in addition to the matches that are already broadcast on live TV. The stand-alone streaming service will cost $50 in addition to whatever you’re paying for your cable subscription. That will bring in more dough but it will also anger fans. Strike 3?

Don’t misunderstand me. I think interest in sports generally has never been higher, and I think any sports entity that doesn’t rely on a big TV contract and employs athletes as independent contractors (I’m looking at you, LPGA) will be in good shape. I just think there is a major disruption coming in the next few years as we’ve seen in the TV and music businesses. Watch out as the next cycle of TV deals begins and if this bill is passed. It’s going to be a bumpy ride, don’t you think?

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