Marketers should learn from Wells Fargo’s mistakes and avoid incentivizing hollow counts
Whistleblowers from Boeing’s South Carolina factory claimed this spring that plane safety was compromised by production issues. Metal slivers hung over wiring, or tools and other debris littered the jets’ 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 2016 investigation found that Wells Fargo employees opened new accounts for existing customers without their authorization, 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 “teach to the test” 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. “We, as managers, need to be very careful to make sure that the culture doesn’t communicate the idea that the objectives come first, and the integrity of the organization comes second,” Schweitzer says.
The Problem with Quantitative Goals
In his research, 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.
“When 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,” he says.
Marketers often measure their progress through such quantitative goals, particularly in digital advertising. But these numbers don’t always tell a full story about the quality of the data. Exchange-based digital ad buys have created a “weirdly incentivized market,” says Kevin Stalder, vice president of client services at Trust Metrics, a brand safety planning tool for programmatic advertising. Because there’s an endless demand for digital ad metrics, such as views, companies have raced to place their ads anywhere on the internet—including on platforms that post false or misleading information.
Stalder references Goodhart’s law, which states that when a measure becomes a target, it’s no longer a good measure. “[Marketers] can kind of be duped into these fallacies of, hey, viewability is a good thing,” Stalder says. “Let’s just drive everything toward viewability. Much like the Wells Fargo case, if you want people to open accounts, that’s what you’re going to get—you just may not like how they’re going to get there.”
Some companies have the goal of running digital campaigns that have extremely high viewability rates. But Stalder says, “You have to ask yourself: ‘How are these guys constantly doubling what the average site would realistically be doing?’”
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 “next,” there may be another two ads. Perhaps there are six ads per page on four pages of content. “In an Excel spreadsheet, that site’s going to look great because you’re going to have really good performance, lots of ads served almost all in view,” 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’t a good experience. “The low-ad clutter sites have the highest click-through rates. There’s an inverse relationship there.”
An April 2017 guest post on Marketing Land by Ipsos U.S. President Peter Minnium explored the “perverse incentives” of digital marketing. “While the sell side of the industry has woken up to the perils of perverse incentives, with efforts like the Coalition for Better Ads, the real driver of change will come from marketers who clearly articulate objectives that drive the right behaviors from the start,” Minnium wrote.
Using the example of ad viewability, it’s obvious that viewed ads have greater consumer engagement, simply because a reader cannot engage with an ad they don’t see. But correlation isn’t causation. While viewability is measurable, the real goal is conversion.
“That’s how you get into the Wells Fargo situation. Yes, you’re opening bank accounts, you’re getting viewed ads, but it’s being done in a way that’s inorganic and therefore not actually driving the real numbers you want,” Stadler says. “Nobody really cares about a viewed ad. We’re not here to just sell advertising. We’re here to actually drive business.”
Leading with Quality Goals
It’s 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. “We might have goals—sales goals or some production targets—but you need to communicate at all levels that the ethics and integrity of what we do matters,” he says. Two: Be transparent, so that the company and consumers see that process matters.
Schweitzer cautions against management by objectives—“I tell you what I want, here’s the goal, I don’t care how you get there.” 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’re playing a game.
“You shouldn’t have a whistleblower that has to tell the world that your priorities are screwed up,” Schweitzer says. “It’s also long-term versus short-term thinking. That is, what’s the long-term health of the organization?”
Incentivizing one metric—clicks, views or other tallied units—can 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’s 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.
“You’re going to cut out a little bit of good inventory by doing that,” Stalder says. “But that’s the ethical obligation that we’re 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.”