Billy Beane, the man on whose career the movie “Moneyball” is based, shared his story of building a successful baseball team against the odds with search marketers in Huntington Beach yesterday.
"Lets get a few things straight," he began. "I didn't invent anything, and I really suck at math. But I hired really good people to have around me."
The keynote speaker at Covario’s InflectionPoint 2012 conference, Beane shared the tale of his introduction to 24-year-old Harvard grad Paul DePodesta and how, together, the two used mathematical formulas and quantitative analysis to level the playing field.
Beane doesn't begrudge teams like the New York Yankees and their comparatively huge player salary budgets, he said; it's just business and they have successfully built a brand around the team. Teams like the Oakland A's, however, have had to learn to compete. Under his leadership, they did just that.
If you've seen “Moneyball”, or better yet, read the book “Moneyball, the Art of Winning at an Unfair Game” by Michael Lewis, you have an idea of how the story goes, at least as it pertains to baseball. As Beane pointed out, though, the concepts and strategies he used to lead the Oakland A’s to unheard of success against teams who traditionally would have bought the talent and therefore the wins, are just good business.
Here are five tips from Billy Beane’s keynote presentation at Covario’s InflectionPoint 2012 that translate to success in search marketing:
1. The Numbers Always Play Out, if You Have the Discipline
Beane likens playing the odds in business to counting cards in blackjack; you know your number is going to come up but you have to stick with it. He tells the tale of a blackjack player making a bet, losing, doubling up because the odds tell him to, only to lose again. Though his odds are even better the third hand and he knows he’s going to win, the player is nervous and feels ill - emotions are playing a part in his decision. Some would walk away and call it a loss, so influenced by their emotions that they ignore the basic math concepts that ensure their success, if only they stick it out.
How often do we see this play out in online marketing? You may face the pressure of higher-ups demanding results faster than you can produce them. You may fight your own fear an the urge to pull the plug when a campaign or strategy doesn’t produce as soon as you’d hoped. If you have the data, you’ve projected an outcome, and your strategy is based on hard numbers, ride it out.
2. There’s No Room for Romance in Baseball or Business
Sports is a very romantic business, Beane said. People are passionate about their favorite players and teams. Management decisions in baseball, over the last 150 years, were largely based on a combination of gut feelings, the knee-jerk emotional response, and the same old metrics everyone had been using as the basis for decision-making – runs batted in, bases stolen, a player’s potential based on a feeling, etc.
Those emotional responses just cloud our judgment, he said. When he began to examine the numbers, Beane found that on-base percentage was a far more important metric when it came to winning games than the ability to steal bases, for example, or even to hit home runs. It’s not as exciting, but it produces results. In choosing players and building a team, he found that those players one might traditionally pick, those attractive to fans and scouts, weren’t necessarily the best choices, all things considered.
In your campaigns, how much weight do you give gut feelings or theories based on what you’ve always done? More importantly, do you allow these feelings to influence decisions when the numbers tell you otherwise? There may be valuable opportunities being overlooked because, at a glance, they’re just not as attractive.
3. Turn Down the Noise if You Want to Stay Objective
“Beane clearly has grown too full of himself... The A’s boy-wonder general manager is trying to show his protege, LA Dodgers GM Paul DePodesta, that he can be even crazier at concocting loony deals... Beane needs psychological testing.”
That was Oakland Tribune columnist Dave Newhouse, in December 2004. Beane had a lot of detractors, as do most who challenge the status quo. Beane joked that he had told his wife not to read the newspaper if she wanted to be happily married to him.
Your detractors might be internal; they could be colleagues or management. The noise could be coming from competitors or others in the online space. We’re not all as visible as a baseball team, though within the hyperconnected and perpetually plugged in online marketing arena, it might feel as though you are. Turning down the noise doesn’t mean you stop listening; it means you stop letting unnecessary commentary through.
“I didn’t want anything affecting my decision-making,” Beane said. “I didn’t really want to hear what people were saying. I wanted to be very objective in every decision. Therefore, eliminating the noise was important and continues to be important to me today. If you don’t think that public opinion... affects your decision making, you’re crazy.”
4. There’s a Metric for Everything
Through DePodesto’s regression analysis and a variety of mathematical equations, Beane had data to consider as part of his decision-making process that was virtually unheard of in baseball to that point. He could compare correlation co-efficients with team winning percentages. He had a probability template on how to manage a game. They are now even measuring velocity off the bat and the number of rotations from the time a ball leaves the pitcher’s hand.
“The ability to collect accurate information has really sped up the process... some of the things we’re measuring are just absolutely amazing,” Beane said. “And when it gets to the point that you no longer have humans doing any collecting, that everything is being collected through technology, you can eliminate human error.”
Beane explains how some calculations have evolved over time; for example, evaluating high school ball players has become far more precise, as those players are involved in more games and there is a wealth of data available about them that wasn’t there 10 or 15 years ago.
Kenshoo’s Aaron Goldman referred back to Beane’s presentation, as he explained why companies are failing in moving from impression-based to engagement-based measurement, in the panel discussion following the keynote. He pointed out that although the paid search funnel is well-established, our understanding of the social funnel is still developing.
Those who struggle to understand social metrics, said Goldman, should think of social as their on-base percentage. “How can I get more people on base so when they are ready to buy, it’s my brand they’re thinking about?” he asked. “It’s not all about giving credit to the person who crossed home plate.”
5. You Don’t Have to Win Every Game
The game has changed considerably since back in the day, 15 years ago, when the Oakland A’s had one statistician and were doing things in a way that made many think Beane was crazy. Now, analytics are a part of the game.
The A’s still have one statistician, but now the New York Yankees have 21 people data mining, projecting, and analyzing, said Beane. Even still, that one statistician can get a good handle on the metrics that matter to their team through the use of data mining and analysis technology.
And so it is with search marketing, as well. Smaller companies and agencies, like ball teams, can still compete. Obviously the scale is different, but technology is breaking down barriers in affordability and accuracy.
“We can’t afford the on-base guys anymore; the game has changed, thanks to other clubs using these metrics.” Later, Beane added, “Even if we don’t always win, we’re always going to operate as a good, functioning business.”
Every campaign doesn’t have to be a “win” in the sense that the competition is annihilated. It does need a basis in sound metrics, with a projected outcome, and it needs to succeed in moving the company forward as a whole. Even if, as in a baseball league, you feel like you’re one small entity up against giants, technology and smarts have a way of leveling the playing field. Focus on the metrics that matter and on building a strategy based on experience, hard numbers, and devoid of emotion and gut reactions.