Analysis and the Internet: Caveat emptor

Colin Tener is president of Tener Solutions Group, a customer relationship management consultancy based in Toronto.

One of the more powerful aspects of the Internet is the ability to customize a truly one-to-one message for each prospect or customer who visits your Web site. The technical ability to push back Web content in the form of banner ads or a customized home page has revolutionized the way organizations think about the messages they can send. But if the technological problem is solved, the bigger challenge remains. Exactly what should the message be?

There are a number of software products that are designed to analyze clickstream data and match appropriate Web content to observed interests. These solutions are driven by the Web pages you’ve visited as well as the way you navigate around a site, coupled with whatever personal information you have provided about yourself in the process. By analyzing this information, patterns are identified that indicate what types of messages will be most relevant. And since these messages are more relevant, they lead to repeat visits and higher sales.

At least that’s the story the vendors tell.

As we’ve seen with other so-called software revolutions, however, caveat emptor should prevail. Many of us went through the "neural net" period a few years ago, where vendors essentially told us not to worry our little heads about hidden layers and other complicated matters and just focus on lift. The problem is that marketers actually do want to know why a particular action is recommended.

Unfortunately, many vendors of Internet analytics are reluctant to reveal the engine behind their selections. What’s behind the black box? Is it a predictive model? A neural network? Using what measure of success? If you don’t know what the process is trying to predict, how do you know if you’ve got the right decision rule? Should we be predicting banner ads that are clicked, selections that are placed in the online shopping basket or only those items that are actually purchased? How do we know that the algorithm worked if we don’t match Web-page selections back to transactions with the proper test and control protocols?

Of course, lots of low-hanging-fruit opportunities exist without getting into sophisticated statistical analysis. If someone just purchased a book on Italian cooking from your site, then maybe they would be interested in another one. Or perhaps they might like a book on Italian wine. How about travel books on Italy? And what about information on an online grocer that guarantees next day delivery of fresh, gourmet ingredients? At some point in this sequence we move from the obvious to the not so obvious, at least in terms of likelihood to buy. And at that point, the need for analytical rigour arises.

Faced with potentially thousands of choices of messages to send, we need an analytical process that will identify those with the highest potential for success, whatever that may be. Because that raises another issue altogether. What if the key message we want to send isn’t cross-sell at all? What if we suspect that this customer is planning to switch to a competitive Web site? This situation is no different than our "old economy" banking clients, for example. They want to have the results of predictive algorithms loaded into call centres so that when a customer calls in, the most likely products are displayed along with supporting scripts. But if the customer is showing signs of cancelling either specific products or their entire relationship, then they want that information highlighted to the customer service rep and appropriate dialogue initiated.

Because of this need to both tailor and control the message, I am convinced that black box Internet solutions will have a limited lifespan in the marketplace. Users will want to be able to develop their own algorithms and decision rules, since that is part of their sustainable competitive advantage. If they can’t open it up and see how it works, they will not be able to tailor it to their needs. Sooner or later, they’ll look for a solution that is more open.

Stay tuned. Next month we’ll discuss the Holy Grail: combining real-time clickstream data with offline data captured in the data warehouse.

Colin Tener can be reached at (416) 585-2900 or by e-mail at tenerc@tenersolutions.com.

Cannes Lions 2025: Canadians nab more medals on final festival day

Strategy is on the ground in Cannes, bringing you the latest news, wins and conference highlights all week long. Catch all the coverage here.

Friday’s batch of Silver and Bronze winners included the oldest category at the Cannes festival, Film, as well as Sustainable Development Goals, Dan Wieden Titanium, Glass: The Lion for Change and Grand Prix for Good. Canadians were recognized with four Lions today: two Silver and a Bronze in Film, as well as a Bronze in Sustainable Development Goals.

FCB Toronto was given yet another nod for its work, “The Count,” for SickKids, bringing the medal count for that campaign to four, including a Gold for Health & Wellness. Another Canadian agency recognized on the final day of the festival was Klick Health Toronto, which earned a Silver in Film for its work “Love Captured” for Human Trafficking Awareness and a Bronze for “18 Months” for Second Nurture. And over in Sustainable Development Goals, the Bronze went to Publicis Canada and its “Wildfire Watchtowers” work for Rogers.

Another massive win for Canada included not one, but two Young Lions (pictured above) taking home medals in the annual competition. In Design, the Gold Young Lion was awarded to Rethink’s senior motion designer Jesse Shaw and ACD Zoë Boudreau. The second, a Bronze in Media, went to Cossette Media’s business intelligence analyst Samuel David-Durocher and product development supervisor Tristan Bonnot-Parent.

Film (2 Silver, 1 Bronze)

1 SILVER: “The  Count” by FCB Toronto for SickKids Foundation

“The Count,” a striking campaign from FCB Toronto for SickKids Foundation, has earned 1 Gold, 2 Bronze and now 1 Silver for Film at Cannes. If you watch it, it’s easy to see why. The collaboration between brand and agency honoured the hospital’s “VS” platform, while steering it in a new direction from its initial development by previous AOR Cossette. The creative celebrates childhood cancer patients who have to fight for every birthday, while honouring the hospital’s own milestone – 150 years and counting.

 

1 Silver: “Love Captured” by Klick Health Toronto for The Exodus Road

Klick Health Toronto added to its medal tally with a Silver in Film for it’s work “Love Captured” for The Exodus Road. The creative features a romantic getaway that isn’t what it seems in an experiential short film for the global anti-trafficking organization. The experience takes viewers through a tragic and twisting experience of exploitation.

 

1 BRONZE: “18 Months” by Klick Health Toronto for Second Nurture

Klick Health Toronto also won a Bronze in the Film category for its work, “18 Months,” done for the charity organization Second Nurture. The animated film is based on a real-life story in which a same-sex couple adopts a baby found in a subway station, and the 18-month journey into a story of hope.

Sustainable Development Goals (1 Bronze)

1 BRONZE: “Wildfire Watchtowers” by Publicis Canada for Rogers

Publicis Canada landed on the winners board for its work, “Wildfire Watchtowers,” for Rogers. The Canadian-developed wildfire-detection tech – which has been billed as “a fire alarm in the forest” – uses AI-powered sensors installed on 5G towers to monitor vast remote areas in real time. By scanning, identifying and reporting early signs of wildfires (up to 16 minutes faster than other systems), the technology helped prevent 54 fires in 2024 alone.

Catch the Gold winners later today when they’re revealed at the gala in Cannes.