Marketers should learn from Wells Fargo鈥檚 mistakes and avoid incentivizing hollow counts
Whistleblowers from Boeing鈥檚 South Carolina factory claimed this spring that . Metal slivers hung over wiring, or tools and other debris littered the jets鈥 interiors. In some cases, the whistleblowers said that their bosses knew of quality violations but incentivized them to focus on speed.
Boeing is the latest company to unintentionally incentivize bad behavior by focusing on a particular metric, rather than how it could ethically reach its overarching goals. Wells Fargo is another well-known example. A found that , the result of workers being evaluated and paid based on how many new accounts they opened. Or consider educational goals linked to test scores, leading schools to 鈥渢each to the test鈥 and not emphasize well-rounded education.
Maurice Schweitzer, a professor at the Wharton School of Business at the University of Pennsylvania, says that when a company or manager creates a metric, the result may be measurable but may not be the desired outcome. 鈥淲e, as managers, need to be very careful to make sure that the culture doesn鈥檛 communicate the idea that the objectives come first, and the integrity of the organization comes second,鈥 Schweitzer says.
The Problem with Quantitative Goals
, Schweitzer, co-author of Friend & Foe: When to Cooperate, When to Compete, and How to Succeed at Both, found that goals can be motivating, but can cause people to cut corners.
鈥淲hen we have these kinds of incentives in place, people are super motivated to hit that target, but they might either fudge numbers or do things to misrepresent their performance. [Or] they might engage in unethical behavior to achieve a particular goal,鈥 he says.
Marketers often measure their progress through such quantitative goals, particularly in digital advertising. But these numbers don鈥檛 always tell a full story about the quality of the data. Exchange-based digital ad buys have created a 鈥渨eirdly incentivized market,鈥 says Kevin Stalder, vice president of client services at , a brand safety planning tool for programmatic advertising. Because there鈥檚 an endless demand for digital ad metrics, such as views, companies have raced to place their ads anywhere on the internet鈥攊ncluding on platforms that post false or misleading information.
Nobody really cares about a viewed ad. We鈥檙e not here to just sell advertising. We鈥檙e here to actually drive business.
Kevin Stalder, vice president of client services, Trust Metrics
Stalder references Goodhart鈥檚 law, which states that when a measure becomes a target, it鈥檚 no longer a good measure. 鈥淸Marketers] can kind of be duped into these fallacies of, hey, viewability is a good thing,鈥 Stalder says. 鈥淟et鈥檚 just drive everything toward viewability. Much like the Wells Fargo case, if you want people to open accounts, that鈥檚 what you鈥檙e going to get鈥攜ou just may not like how they鈥檙e going to get there.鈥
Some companies have the goal of running digital campaigns that have extremely high viewability rates. But Stalder says, 鈥淵ou have to ask yourself: 鈥楬ow are these guys constantly doubling what the average site would realistically be doing?鈥欌
The answer: ad clutter. For example, four ads may be placed above the fold on a webpage. Once you read down the page and click 鈥渘ext,鈥 there may be another two ads. Perhaps there are six ads per page on four pages of content. 鈥淚n an Excel spreadsheet, that site鈥檚 going to look great because you鈥檙e going to have really good performance, lots of ads served almost all in view,鈥 Stalder says. But more companies, such as Trust Metrics, are beginning to ask whether these are worthwhile metrics. The user may have seen a high number of ads, but it wasn鈥檛 a good experience. 鈥淭he low-ad clutter sites have the highest click-through rates. There鈥檚 an inverse relationship there.鈥
An explored the 鈥減erverse incentives鈥 of digital marketing. 鈥淲hile the sell side of the industry has woken up to the perils of perverse incentives, with efforts like the , the real driver of change will come from marketers who clearly articulate objectives that drive the right behaviors from the start,鈥 Minnium wrote.
Using the example of ad viewability, it鈥檚 obvious that viewed ads have greater consumer engagement, simply because a reader cannot engage with an ad they don鈥檛 see. But correlation isn鈥檛 causation. While viewability is measurable, the real goal is conversion.
鈥淭hat鈥檚 how you get into the Wells Fargo situation. Yes, you鈥檙e opening bank accounts, you鈥檙e getting viewed ads, but it鈥檚 being done in a way that鈥檚 inorganic and therefore not actually driving the real numbers you want,鈥 Stadler says. 鈥淣obody really cares about a viewed ad. We鈥檙e not here to just sell advertising. We鈥檙e here to actually drive business.鈥
Leading with Quality Goals
It鈥檚 up to company management to maintain quality goals that incentivize the ethical action, rather than keep a tally on empty results. Schweitzer underscores two management actions. One: Communicate strong values. 鈥淲e might have goals鈥攕ales goals or some production targets鈥攂ut you need to communicate at all levels that the ethics and integrity of what we do matters,鈥 he says. Two: Be transparent, so that the company and consumers see that process matters.
Schweitzer cautions against management by objectives鈥斺淚 tell you what I want, here鈥檚 the goal, I don鈥檛 care how you get there.鈥 Instead, company leaders must clearly articulate that they care how goals are reached. Otherwise, the firm risks fostering a climate where employees feel like they鈥檙e playing a game.
鈥淵ou shouldn鈥檛 have a whistleblower that has to tell the world that your priorities are screwed up,鈥 Schweitzer says. 鈥淚t鈥檚 also long-term versus short-term thinking. That is, what鈥檚 the long-term health of the organization?鈥
Incentivizing one metric鈥攃licks, views or other tallied units鈥攃an cause employees to ignore other key parts of the process in favor of hitting quantitative goals for reward. A focus on these counts runs the risk of disincentivizing a team鈥檚 creativity or teamwork, for example.
Digital marketers may need to loosen their grip on certain measurements and start embracing more qualitative goalposts. For example, Stalder recommends taking a greater stand against bad publishers and partnering with companies that can help them create whitelists of reliable websites. Brand viewability on these reputable sites are both more ethical and more likely to result in higher conversion.
鈥淵ou鈥檙e going to cut out a little bit of good inventory by doing that,鈥 Stalder says. 鈥淏ut that鈥檚 the ethical obligation that we鈥檙e faced with right now. And if everybody does it, if everybody suffers 5%, but we strangle out the incentive to create any kind of fake publishing environment, everybody would win in the end.鈥
Sarah Steimer is a writer, editor, podcast producer, and yoga teacher living in Chicago. She has written for Marketing News, Chicago magazine, Culture magazine, the Pittsburgh Post- Gazette, and other outlets.