Moneyball, Analytics, & Online Marketing.

Can online marketers take a page from Billy Beane’s Moneyball approach to baseball?

If you’re tasked with managing your companies marketing activity and haven’t read Michael Lewis’s book Moneyball, I suggest you do. If you aren’t going to read the book, I suggest you watch the movie of the same title starring Brad Pitt. If you have no interest in doing either of these at least pay attention to the next few paragraphs, they might just change your outlook on marketing performance.

Moneyball is the true story of how Oakland Athletics manager Billy Beane turned baseball on its head by building his team using a method known as sabermetrics. Essentially sabermetrics abandoned traditional “gut” measurables regarding how baseball teams were fielded in favor of statistical and quantifiable analysis. For years baseball teams were put together looking at factors such as stolen bases, home runs, and batting percentages. The idea was that you needed players that met a given criteria in each position to compete. Being a small market team the Athletics knew they didn’t have the resources to compete head to head with big money teams like the Yankees and Red Sox. Beane and his staffed devised a method to buy runs rather than buy players. By focusing on a player’s on base percentage the Athletics were able to win 103 games in 2002 and achieve post season success. The proof was in the pudding – sabermetrics worked and the rest is history.

So how do the lessons learned from Moneyball apply to online marketing? The correlation is actually quite clear. For years the online marketing industry has fallen into traps regarding measuring campaign effectiveness. Online marketers have applied the “should” approach to just about every facet of the industry. SEO and PPC campaigns “should” attract more people to your website which “should” give you opportunity for a sale. The problem is that the effectiveness of a campaign has always been focused on buying traffic, not customers. Therefore, anything we can do to maximize traffic has traditionally been seen as a positive, even if it works directly against maximizing your opportunity to convert those leads.

By using statistical data available to us, and focusing on the marketing version of moving runners around the bases (customer behavior patterns on the website) we can effectively determine the best methods for progressing the sale. Analytics tools allow us to not only track, but predict customer behavior online which helps us to revise and model websites based off the data. Bounce rates, keywords, and onsite navigation patterns all factor in to delivering the best marketing experience. All of this data can be leveraged to improve the ultimate measurement of your marketing, the ROI.

Just like small market baseball teams can’t afford to compete with big money in their arena, small businesses can’t afford to compete with big business in the areas of brand awareness and traditional advertising. Enterprise companies simply have the financial edge and as such small businesses need a statistical advantage. By focusing on analytical reporting and building websites and social media campaigns that are consumer driven – small businesses can experience the same postseason success the Oakland Athletics achieved in 2002.