New metrics in online business

As you can sense and observe the powerful weaves of private shopping web sites, I have been watching and observing that the investments are still on arise for those e-tailers. The open and private shopping web sites are still on the top of the investors list since the market is eager to handle more e-tailer with new effective marketing. At the end of the day, It is obvious that the diversity and marketing are the key points of those invesments to grow into success.

However, It is becoming evident that managing the investment and tessellation of the money are getting more difficult on those investments. Understanding the ROI of a marketing activity is far more difficult than ever before since the social media is in the game.

The e-tailers and private shopping sites have developed their own way of measuring the ROI and effectiveness of the marketing efforts. Beside the conventional measurements of simple accounting, we definitely need some extra criteria to measure the performance. The key point, in new measurement criteria set, is the time frame you must choose. A simple campaign can even boom weeks after you expect it to be ignited. Thus, the key point is to redefine the word “effectiveness” related with income demand and its time frame while you are measuring your efforts by new set of criteria. Keep simple and assume something “effective” (etc. effective campaign) according to your current requirements. The second thing you have to take care into is to chop and isolate your problems from eachother. Whenever you apply disintegration in solving of the problems It becomes much simpler to resolute. Thus, unless you are applying for a long term of estimates for your business, try to keep the criteria subjects apart among different concepts (like loyalty of customer and sales runrate). By this way you can address more specific solutions to problems. Like finding new ways of customer loyalty and increasing runrate in completely different projects.

One of the new metrics that new web start-ups and mature e-tailers is called as “Acsoi” (ehrr, hard to read and pronounciate but can be animated as “Uksoee” or “Ukswa”). It is the abbreviation for “adjusted consolidated segment operating income”. It can simply be defined as “operational profit value” extracted “online marketing and acquisition expense value”. What do you get in meaning when you subtract the online marketing and acquisition expense value to from you operational profit ? It shows simply your trend to be profitable. If Acsoi becomes lower each time you measure it then there are things that you must take care of in your marketing and operational profitability. This metric can also show if the ongoing marketing campaign can endure or not, simply looking the trends of Acsoi in numbers. You invest in marketing and in a defined time frame (remember how much time you would need) you will see the Acsoi should go up and increase. If this doesn’t happen and you do not change anything in your operation the ROI of your marketing campaign is not very rich!

The second metric you might apply to consult is a new one that reveals your investment value. Many of the new online companies are managed by managers and investors that are not familiar with new media and economy. Thus, for each individual demand they hire, outsource and invest sporadically while they lose money (Well that is where we enter as consultants). At the end of the day, you must measure between necessarity of reality and necessarity of over imagination. So the new metric is called as “empowerment”. It is related with your operational cost and employee number. Just devide operational cost into departments and cost items. Group them and group the number of the people you pledge for each of those items. For example marketing department… They spend X budget and Y number of people are hired. Simply devide all spending amount to the number of people in the company the company. You will get a number. Them subtract the spendings of marketing department ( “X” Value) from over total spending and subtract the number of people from the total employees. You will get a number as well. If you divide those numbers you must get a value around “1″. If you are going away from that number then It is time to conclude that there is an extraordinary situation especially in employment wise. Or you are overinvesting to a specific department and organ of you entity.

Healty companies need more intense look in metrics

Those metrics would reveal the healthy sailing of your company. Beside all those likely new criteria and metrics, you must be watchful for metrics about your customers. However those metrics are already widely known. If you are an investor then it is obvious that some companies are trying to show themselves in the best possible situation. That is where the metrics like “Acsoi” or “Empowerment” pour in. You must always look how the core business in going and making profit, because in any extraordinary situation you can cut other budgets and look at your “empowerment” ratio and insist on going your business way. There are my other metrics that can show how healthily your business is going or how the values are exagrated like a new metric called “adjusted Oibda,” short for operating income before depreciation and amortization, and a semi-popular nonstandard measure also cited by the likes of CBS, Demand Media and Time Warner. In order to look the healthiness of you business, there are many metrics you can consult. However, please be aware of new metrics of valuetization that might boost some values without real ground. That is why each new online business must look primarily to core business and handle marketing (with budgets and ROI) seperately. That is a mistake that all of us might fall to. You can follow me on Twitter @gokalpharman or share your comments about the article and add more value.

The first thing that is evidently noticed, is the dominance and self-esteem of the women living in Iran. Although It is my intimate but premature observation, the decision maker of the country is definitely the woman. The act of their self-esteem and confidence surely comes from the culture and aside from the advertised facts, they stand very liberal and stubborn againist daily life culture. You can see many women driving in the awful (believe me it was the worst I’ve ever seen) traffic jam , they never ignore and feel a curfew of fear when you stare at them, responding with a analyzing look back to you. They never miss out. In Iran everything is just like a movie scene that was frozen in 80s and kept until present. So the gestures, general attitude of the people in public to each other, reminds the distant but kind, intimate behaviors of 80s. And the whole regulation implicitly comes from the woman, although believed to be contrary.

Branding in Iran on streets lefts from 80s

During my visit, as a marketing consultant I had the chance to observe some nifty details in marketing business that stroke me with a brutal strength. The question that bugled me was that there was a compelling attitude of branding among international companies in Iran, an attitude that is blurred in criteria. Some companies use totally localized branding images and translated brand names and some refuse to stick to the original of their heritage. You can see the brands of distant technology giants from east, some localized and remained in original form. Although I posses a very good command of the rules in applying a brand to different cultures, It is a real challenge to decide on which path you should chose as a marketing initiator in that business.

I initially assumed that more known companies were to use unlocalized branding. However, suddenly understood that the case changes according to the brand and application manner of the branding. First of all, If you have a foreign brand then you are assumed to be a real stranger in that market. The law of trade regulations are definitely changing daily without any prior notice by the government. Even an individually crafted decision for your brand can be produced or designated by government just to brake your acceleration in business or ban partially of your business. In order to be accepted as harmless and “innocent” brand, the path of localized branding can be very useful and beneficial.

Localized branding of Cocacola can in Iran

Some Turkish firms are intentionally taking the path of a localized branding. And some international firms are caring about how their brands are formed in Turkey before entering to Iran. The reason underlies beneath the 3 million people visiting Turkey every year. Also the brands of east, like Panasonic, Hyundai, are taking a non-localized path of branding since the brands are well-known in east are a common perception. Thus the decision makers about branding are looking for the movement of masses and whether their image exists commonly on those territories before. That is the second criteria you must take into consideration before applying in an isolated community like in Iran. The image of your brands really lies under the advocation of people visiting other territories.

The real challenge for me to understand was the branding of Turkish companies in the country. The technology companies of home appliances of Turkey, were taking the path of localized branding contrary to other technology companies in the area. I had the chance to ask and dig that dilemma, since Turkish companies were more welcomed than the others depending on the shares of same cultural and trading ancestry. After conversations around about those firms, I simply understood that these companies are taking the advantage of being a trusted and welcomed brand in Iran. If you are not a company like Panasonic, Dyson or Bosch, well-known around the world, you have the advantage of flexibility of bending your branding rules. Thus, if you are a pioneer in a closed community, being understandable makes you more possessed by the community directly. Thus localization might be a good challenge and a utilitarian path for presenting your brand.

Localized advertisement of a Turkish firm in Iran with localized brand in Persian lang

As the branding and advertising alternatives are numerous in that country, I humbly conclude that beside positioning and advertisement of the brands, the criteria you should primarily use, are far different from the conventional ones of west. The real challenge is the your penetrability of your brand according to the compatibility of the brand for this country. If you are an American brand or a western one, simply choose a silent and localized attitude for your company image. Also it is totally important to analyze the people of a community that is isolated over years. Your image is first seen on their path of travel and how you emerge on those travelled territories. Localized branding is also useful if your brand is not a well-known one and fastened by international branding rules. I simply would like to share those obervations since Iran is a very premature and unfed market for many different industries. BTL or ATL type marketing schemas are totally different from the ones we are used to due to the strict regulations of the government. So it is a absolute challenge to make marketing in that country. For more information about my observations and my consultancy in that country, you can reach my via email. I’d be happy to hear about your comments and your own opinions.