Tuesday, January 30, 2007

How Do You Justify a Personalized Billboard?

Yesterday’s The New York Times reported on personalized billboard messages directed at Mini Cooper owners identified by RFID tags in their key fobs (“Billboards That Know You By Name”, January 29, 2007, Business Day, page 3). Although this is the first I’ve heard of such an application, it has been so obviously on the way that its actual arrival is barely worth noting. But it does raise some interesting issues.

I'm not talking about safety and privacy. Those are obvious, and the article raises and dismisses them. Since Mini Cooper owners sign up to participate, and not much beyond their name is displayed, it’s hard to consider the program invasive. The obvious fact that the same key fobs allow their movements to be captured for other purposes in other situations apparently doesn’t bother them either. One might suspect that people who drive Mini Coopers want to stand out from the crowd to begin with, so perhaps this a particularly privacy-insensitive segment.

I’m actually more interested in the business justification for this program. In Client X Client terms, the personalized message on a billboard is a “slot” that can be filled with a variety of messages. Each slot has an optimal use with an associated financial value. Any use that generates less than that value is suboptimal. So the question is, given the opportunity to have so many people see that billboard, is the personalized message to a single Mini Cooper owner really the best use for it?

First of all, it’s important to clarify that the personalized messages only appear when a participating Mini Cooper is detected. This will be a tiny fraction of the time, so the billboards will usually display their conventional messages, which are worth whatever they’re worth. Thus the opportunity cost of the personalized messages is very low—probably close to zero, if you assume the standard message will be seen anyway by everyone who also sees the personalized message. In fact, the very fact that the sign sometimes changes may attract more attention, so the standard messages might actually seen more even though they are displayed less. (The same technology could probably detect other RFID tags, and therefore the slots could be personalized with other messages, perhaps sold to the highest bidder. But let’s not worry about that right now.)

What about the messages themselves? The article says Mini Cooper’s advertising agency hopes to “intensify the already strong ‘tribal’ feeling among Mini owners and stimulate their desire to support the brand.” In other words, it’s not about stimulating the owners’ purchases, but about making them more enthusiastic brand advocates. Big Brother connotations aside, the whimsical nature of the messages does match the light-hearted image of the Mini Cooper brand. They certainly should reinforce the owners’ attachment to it.

Beyond warm and fuzzies, the financial payoff would be measured in referrals—something that’s difficult to capture, but not impossible in the case of an auto purchase. There may also be some easily-measured behavior changes among the customers themselves for things like using the dealers for service. Given the obscure nature of the actual messages, it’s hard to imagine they would have much impact on non-Mini Cooper owners. At best, some people with a pre-existing interest in Mini Coopers might be encouraged to explore further.

It probably doesn’t take many incremental auto sales to pay for the incremental costs of this program. (This assumes the costs are they’re truly incremental; that is, that you’d rent those billboards anyway). And it may take quite a while for the results to appear, since automobiles are not an impulse purchase. But my point is simply that even a soft program like this, aimed largely at brand image (and of course generating publicity), can be measured as a real investment and eventually judged accordingly. Whatever image Mini Cooper chooses to project, this is not just fun and games.

2 comments:

Ron said...

ok... this is only half thought out (at best), so don't jump all over it, but...

...I've been thinking lately that there are two types of companies: those that believe in the value of customer relationships and those that don't.

Now, few firms are going to SAY they belong to the 2nd category, but, show me a firm that wants to see the ROI on EVERY LITTLE THING they do and I'll show you a company that I think belongs in the 2nd category.

Companies in the first category believe (implicitly) that "anything that deepens the emotional connection a customer has with us pays off in future business -- even though we may not be able to tie that future business back to a specific investment made in the past".

just a thought.

David Raab said...

I agree -- you absolutely can't measure everything. I'll admit I felt a little uncomfortable that my post might be read as suggesting you can or should. But there still has to be some sort of cost / benefit analysis, if only to compare different options for building emotional relationships.

And frankly I'm a little skeptical of a company that claims to value customer relationships and yet avoids trying to calculate the actual value. That seems to allow too much subjectivity in deciding what to actually do. (Cue the Einstein quote: "Not everything that can be counted counts, and not everything that counts can be counted")