Create and Satisfy Demand: Two Tools to Complete the Marketing Loop Plus the Advertising Equation

Today Steve Mulder gave us “Create and Satisfy Demand: Two Tools to Complete the Marketing Loop,”, an academic piece in iMediaConnection that well-defines the fundamentals between demographic segmentation and behavioral targeting or what he referred to as “goal targeting.”


Steve talks about customer segmentation based on demographic and psychographic profiling.  Of course you can push this farther and consider buying habits, product preferences and other known store-interaction behaviors which can be categorized.  Anything you know about your customers can be grouped and segmented.  So while Steve talks about the anonymous segments, when we’re talking about customers we can dive deeper and look at the information that our eCRM systems can capture and that our site-side analytics can measure.  If I have a customer who purchases monthly, like electronics (i.e., Target.com) and spends on average over $100 per transaction, I can drop that user in a bucket with other like-demographic customers.  The segmentation possibilities go much deeper.


This is not to suggest paralysis of analysis by creating too many segments, however if you are a Target.com, a BestBuy or other big box retailer, you have many, many customers and you have the ability to create 10-20-30 customer segment groups.  If you are an e-tailor like LLBean, or Amazon or Overstock.com, you can create these segments.


Steve talks about Personas, as a defined “who or what,” meaning “…Why does this product or service make sense to your target audience? Why do the people represented in this audience need it, and why will they use it? How should we structure and design it to satisfy how people will be using it? How do we make sure the site gives people the experience they need and the business results we need?” 


In Steve’s discussion, Personas are the other side of the equation, the behaviors that you target or goals.  This article focuses on web site content placement which is vital to the emarketing equation.  How you react to your customers when they are identified on your site will directly correlate to your recurring revenue potential.  I have discussed the integration of CMS and dynamic content many times before.


When someone logs-on an identifies themselves, you tap into eCRM and you can tap into the segment relationship and/or bucket that user belongs to.  They you can target them with content and messages to promote recurring revenue opportunities.


External marketing, such as email marketing can tap into these buckets as well with customer segment targeting as well.


But a topic we have talked about many times before is how you can recognize and target someone BEFORE they come to your site and identify themselves.  Well, what about when they come to your site and don’t login.  Using cookies enables you to recognize someone and still tap into your customer segment models right?  So you don’t have to wait until they login to identify them.


That takes care of returning customers.  What about someone who blows out their cookie?  Well, as soon as they login you can re-recognize them and re-cookie them right?  Cool.


What about someone new?  They click on an ad and come to your site, you grab the click-thru URL and interpret the source and put that into the cookie as a prospect and let CMS take over until they create an account.  Cool.  Once they become a customer, segment membership begins and more data can be written to the cookie for future recognition and content targeting – more CMS.  CMS is Content Management System btw.


Then there is the external recognition of your customers – what about the topic of choice with regard to advertising.  If you are spending time creating customer segments and you are spending time creating goals for CMS targeting.  Why wouldn’t you leverage that knowledge to benefit from being able to recognize your customers when you advertise online as well?  If you can recognize your customers while you advertise online, you can extend your goal-oriented messages, drive recurring revenue opportunities and motivate your customers to return.  When they do, your site-side BT efforts can take over as Steve discusses and your drive home those sales opportunities.


With both of these efforts in place.  Taking the time to create and analyze your customers to create segments and creating targeting goals that affect both internal, site-side and external, advertising-side efforts you will gain huge insight into what works.  The knowledge gained will improve your ability to make better decisions about your future marketing efforts, both site-side and external.


Reactionary with Insight

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Behavioral Targeting, What Ethics?

Earlier this month, Doug Wintz gave us an inspiring article in iMediaConnection.  The Ethics of Behavioral Targeting offers a glimpse into what behavioral targeting could be like in the offline future.  Transfixing our imaginations into the likeness of the futuristic worlds painted by author Philip Dick, Wintz helps us to question interactive advertising beyond the banner.  But there is a big leap between the 728×90 banner and the beams of light that could be reading our retina in the shopping malls. 


Several years ago people screamed about the use of cookies: “VIOLATION OF PERSONAL PRIVACY!”  The industry cried that we must educate the population so that they realize that cookies are not bad, spyware is bad.  Antispyware came out, and adware came out.  People now feel protected from persistent spyware and third-party cookies now get deleted 45% of the time.  The dust cleared from the cookie fight and yet cookies are still in common practice.  The funny part is that people still don’t understand cookies.  But the industry has moved on; it has stopped trying to educate and now the next crisis has moved to the forefront – behavioral targeting.


BT still involves the use of cookies but the technology is less of the issue.  It is the overall concept of tracking and oversight that people care about.  Once again there are those in the industry that are trying to educate, but then there are many of us that know that you can’t educate people coming from a position of fear.  Moreover, once politicians get involved it’s about swaying popular opinion and not about providing rational explanations.  Remember that some people get charged by the fight while others stay in the background, continuing to develop and position their cards so that they are ready when the dust clears.  A new crisis always moves to the forefront to replace the existing one, right?  Where will you be when that happens?  Battle scared or primed?


Is it ethical to behaviorally target?  Is the internet really free?  Is it ethical to target consumer behaviors like catalogers do?  Doug has a fair argument when he says we probably won’t even care by the time the technology is mainstream.  Right now there is kickback on behavioral targeting, but that doesn’t stop publishers and networks from offering it or from advertisers from buying it.


So where are the ethical lines in all of this?  Publishers use site-side analytics to track your patterned behavior while you are on their site.  It is their site.  You use much of it for free.  So is it ethical?  Is it okay for Safeway or Kroger to track your shopping habits in the supermarket?  You get discounts for using that shopper’s card that also tracks your behavior.  What about Amazon keeping track of your book-buying preferences?  You get recommendations right?  You get benefits in return for providing information about yourself, even online.  So where is the difference between what we have come to accept offline and what we protest online?


Why do people get so crazy about the web?  The point of the whole thing is to put advertisements that are more relevant in front of you.  Contextual advertising has done a great job at this and nobody seems to complain about that.  In fact a lot of people don’t even know that the links along the side of the Google and Yahoo pages are paid listings, nor would they necessarily care since they are usually relevant links that often lead to qualified destinations.  Relevance.  If Behavioral targeting has the ability to present a user with advertisements that are relevant, is there still an ethical violation? 


P-ersonal I-dentifiable I-nformation (PII) is the red line that can’t be crossed and yet it is crossed all the time in the offline realm.  I think that in the end it’s not a question of ethics.  It’s a question of fear.  The futuristic movies like the Minority Report scare people.  They don’t get it and other people take advantage of it to promote their own agendas (like politicians looking for platforms).


 Customer re-targeting introduces the ability to recognize customers – not anonymous individuals – anywhere on the web in real-time using first party ad serving.  Advertisers can recognize their existing customers, not based on events but based on customer profiles.  This is identical to what already goes on in the offline world.  A different message can be positioned to a customer than to a non-customer based on customer profiles – not based on event-based behaviors.  Is this a violation of privacy?  We can go around and around on this one, like we did with the cookie.  And it is the cookie battle that leads me to believe that the smoke will clear before we settle it.  When the next technical invasion comes to the forefront it too will shadow this one.  Maybe it’ll be iTV, which will be more invasive and wider-spread when it hits people while they are relaxing in their living rooms! 


You can go down the ethical rabbit hole if you want with behavioral targeting, just like you can jump into the political debate or stand up on the soap box and try to educate.  But frankly, people will continue to develop and drive forward with anonymous event-based targeting, customer re-targeting, site-side analytics and first party applications that empower advertisers to message to users with the most relevant information, advertisements and content.  Operating as if the dust will clear as oppose to getting caught up in the fight makes more sense.  Helping the web to become an increasingly more efficient use of people’s time with behavioral targeting techniques is not a violation of privacy, it is a provision of relevance.


Reactionary with Insight

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How to Conquer an Inventory Crisis Lacks Advice

Eric Porres is a partner with Underscore Marketing and he wrote a 6-page In-Focus piece in iMediaConnection today about behavioral targeting entitled: “ How to Conquer an Inventory Crisis.”  Eric is a media guy and he knows the space pretty well, moreover he is a BT guy and has made some contributions to the industry on the topic in the past.  But this time around where you would hope for some meaty substance and take-away advice, Eric comes up a bit short.


He does a sharp job at getting a reader to agree that the point of any online campaign (direct response anyway) is capturing new customers and recapturing existing customers.  I guess not everyone wants to write the proverbial 10-step to … article, and thank god for that, but you still want the In-Focus pieces to give some practical steps about what you should do when you find yourself in the related conundrum.


Inventory is getting more competitive.  Finding the niche sites is harder to do.  Eric illustrates how to use MediaMetrics to your advantage but what about his mentioning of Alexa and Quantcast?  How are leading media buyers and planners using those as well?  How do you integrate to become more effective in an increasingly competitive marketplace?  With over 20M sites, Quantcast is one of the fastest growing media planning tools out there – especially for the smaller agency who can’t afford Comscore.  The cutting edge sites recognize that, and so they are flocking to Alexa and Quantcast for that reason.  They want the new, new media dollars.


Re-targeting is hot.  Ouch!  Eric glosses over this with a simple explanation.  He knows this topic better and to assume that the audience just get’s it, is part of the problem in this space.  People are not spending time going deep with the details.  I blog about this topic too frequently to go off on it now, but I do think that when we get into an In-Focus article we should see more practical insight into how to use these technologies so that there is a take-away that we can apply ourselves. 


When you advertise on the same sites, month after month, the composition of your advertising audience is increasingly becoming more and more comprised of both your customers and your previous leads.  People frequent the same sites.  If you advertise in the same places – presumably because they continue to perform – you will be exposing yourself to more and more of the same people.  You still perform well because the audience is large enough to generate new opportunities.  But there are existing customers and former leads there too.  Re-targeting is very important to advertisers who spend money on the same sites.  Having the opportunity to communicate to your existing customers and your former leads is vital.  Why re-prospect your customers when you can cross-sell, up-sell and regenerate more revenue from them?  Why re-pitch a lost lead the same way again?  Acknowledge their disinterest the first time around and play on it, maybe it will work.


Everyone likes to use buzz words, I’m guilty of it too.  Long tail and Web 2.0 are two of my favorite.  People don’t even necessarily know what they mean any longer.  Or they never did.


“To be fair, the dilution of context when weighed in the balance of media efficiency may not justify the exercise, but in the end, we’re really interested in the behavior of our prospects.”  Huh?  Okay, actually this statement by Eric makes more sense in this blog than it did in his article.  I am pretty sure he was trying to explain that undervalued inventory, when bought in larger volume, can have as great of an impact as that premium space.  So look into that.  RightMedia Exchange is a great source of decent inventory at a great price.  And of course there are a ton of networks out there.  Eric did point out that buying behavioral targeting services will boost your response rates and if you buy that inventory at auction, you could be doing even better with your ROI.


Of course, there are always the non CPM models.  If you are buying direct response, you don’t have to buy CPMs.  Can you still deploy BT if you are not buying CPMs?  Actually you can.  You can’t count impressions, but you can cookie your visitors and your customers and use an ad server to serve your ads.  Obviously you will be serving a huge number of impressions, so find an ad server willing to negotiate a great rate for you – use a low file size and agree to a high volume commitment and some ad servers will play ball.  But if you use a first party ad server (TruEffect) or a BT-providing ad server (DoubleClick’s Boomerang) then you can still do it.


What about Search?  Can you do BT?  You can’t on the serve, but you can once the click takes place.  You can cookie the user or read the cookie on the user’s browser and then drive them to unique landing pages using something like CoreMetrics. 


This is the kind of information that Eric could have provided to us in his article.  The deep-dive In-Focus articles are meant to give us some meat where the daily 800-word essays don’t have room to provide.  Of course, Eric only used 1,000 words.


Reactionary with Insight

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Lead Gen 2.0: The New Opportunity and More if You Follow-Through

Michael Rosenberg has provided us with a good foundation to use for evaluating and selecting lead generation partners in his Lead Gen 2.0: The New Opportunity from MediaPost’s Performance Insider.  Michael illustrates some fundamental requirements that we should be demanding from a solid lead generation partner including:


(1)    24/7 real-time reporting


(2)    Access to multiple verticals


(3)    Access to and ability to leverage “your” customer once you acquire them


(4)    Low transaction costs


But when you work with a lead generation partner it is important to think about how you will leverage the assets you are generating through that relationship so that you can maximize your investment.  Lead-generation processes expose your offers to a huge base of prospects, and deliver qualified leads to your offering on a direct response basis.  You pay for performance and when someone actually becomes a lead, they are delivered to your doorstep. 


The lead information may be delivered to you, or they may be passed over to you for you to collect the information.  I always prefer to host the pages that are collecting the information.  Big difference as to whether you are collecting the information or if it is being collected for you.  The sooner you have access to the lead, the sooner you are controlling the conversion process.


Matt Wise discussed the concept of “data skimming” in his MediaPost article in 5 Questions to Ask Your Online Lead Generation Provider where he said “Most marketers should retain 100% ownership of the consumer data. Providers who practice data skimming — reselling your lead’s personally identifiable information — pose a serious risk of compromising your trusted relationship with the consumer.” 


I have a client who spends roughly $300,000 a month on lead generation alone and they actively are aware of the fact that they are getting skimmed data.  They are in such a niche industry that they have little control over the publishers that they work and therefore accept the practice.  But they are accepting poor quality leads too.  The leads are collected on their behalf and they receive the information after the fact.  Some publishers pass the individual to the advertiser so that they may collect the lead information directly and obviously those sources result in much higher conversation rates.


When you have access to the user sooner, you can immediately start to develop that relationship and rapport.  You can also start to do something else … tracking and measurement. 


As Michael indicated in his article, you want to make sure that you select a vendor who gives you access to 24/7 detailed reporting.  Jere Doyle, President & CEO of Prospectiv contributed an article to MediaPost on this topic entitled, Qualifying Your Online Lead Generation Partner wherein he said that you should insist that your vendor is “…measuring key data such as response rate, cost per lead, conversion rate, revenue by source….” 


But once you have access to your lead, you can start to lay down your own reporting processes too.  Let’s start with the cookie.  When you first receive the individual, you can leverage a cookie to track the user’s behavior.  First, you can use a site-side analytics tracking beacon – like an Omniture, WebSideStory or WebTrends to track the user from source through the lead reception process through to (hopefully) a sale. 


From the sale point forward you will be able to track that individual based on their source once they join your eCRM system as well leveraging your own additional first party cookie.


But what if that person bails out before the sale?  Do you let them off that easily?  Hell no!  You can use event-based behavioral targeting to cookie the user as they go through the lead generation process to source the user just in case they bail in addition to the site-side analytics tracking described above.  This way if they bail, you have them tagged for future targeting using banner advertising.  If you work with TACODA or Advertising.com you can use their pixels to deploy behavioral targeting later on and try to recapture the lead again with messages that speak to the fact that they were previously a lead.


Third option is that you use a first party cookie during the lead reception process.  Integrate the event-based targeting process using the first party cookie so that the advertiser is tracking the lead reception process with their own cookie.  If the lead converts – you have the first party cookie in place for site-side analytics and eCRM.  If the lead bails, you have the behavioral targeting in place but it will be site and network agnostic meaning that you will have deployed it across the internet instead of just across a network.


Furthermore, you will also have deployed re-targeting even if the person is not a customer.  While going through the first party cookie writing process, you can write details to the cookie about where they are in the lead generation process so that if they bail you can target them based on where they bailed – like traditional behavioral targeting.  But if they return to your site directly you can also content-target them based on the same information that you’ve written into the cookie since it is your first party cookie.  Your content management system will be able to read the cookie and know this is a former lead and can receive them accordingly.


Lastly, if you used first party cookies, and they convert, you can re-target them as customers out on the web as I have discussed in the past using DirectServe™.  As a customer you will be able to recognize them, distinguish them from someone you don’t know and message to them accordingly.  You will be able to do this if they are a lead or a customer as I have just described. 


So again, why first party cookies instead of third party behavioral cookies:


(1)    If the lead converts you can use re-targeting


(2)    If the lead converts you can use site-side analytics and eCRM with the cookie fully integrated


(3)    If the lead bails you can behaviorally target anywhere on the web, not just on one network


(4)    If the lead bails, you can recognize them if they return to your site independently and message to them accordingly


(5)    If you happen to reach them through an email marketing campaign that delivers creative, and they open it, you will be able to recognize them and message to them accordingly


(6)    Third party cookies get deleted over 40% of the time – Jupiter Research


(7)    First party cookies persist over 95% of the time so you will have a greater chance of keeping your data current


Lead Generation 2.0 brings forth a lot of possibilities and we have to be aggressive in what we get for what we pay for.  But is equally important that we also leverage technology to maximize what we do with what we get after we pay for it.  If that last sentence makes sense to you, you’re already half way there!


Reactionary with Insight 

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3 Steps to Targeting Nirvana, Bennett Zucker Gives Us Open Market Benefits that will Improve BT

Go-Bennett, a great article in iMediaConnection on Thursday.  Three Steps to Targeting Nirvana defines behavioral targeting today and outlines an open marketplace, an open technology platform and what he characterizes as ‘an open mind.’


Up front, Bennett makes the argument that the onus of responsibility for accurate and aggressive BT should not fall on publishers.  Efforts results in wasted inventory, poor performance and lack of attention that should truly benefit the advertiser.  Advertiser-directed BT is where it’s at.  We have the technology and the science is far more impactful.  In fact, Bennett does a great job of presenting an example of a car-buying scenario which illustrates how advertiser-driven BT better serves publishers.


In the section on open market place, Bennett tries to present a clean argument.  Advertisers ideally should have the opportunity to cherry pick the inventory they buy, so as to promote the opportunity to select the inventory that will meet their BT needs.  I know that Bennett has struggled with the “I don’t want to be a self-promoting author” and so kudos for giving us several examples in your story.  Right Media is clearly the leading auction exchange model in the space.  But AdBrite is a solid player and a good alternative for people to be looking at, especially if they want to have an alternative to Right Media or want to investigate options before jumping into bed with a specific vendor (if you can even call RM a vendor, more like a facilitator). 


Anyway, Bennett is trying to paint the utopian picture for us here – advertisers cherry picking inventory.  I know that in theory that is what the auction model enables you to do – bid on the inventory that you want and forego that which you don’t want.  But most of the inventory on the Right Media Exchange is network  inventory so you really can’t be so laser targeted.  The RM Direct Exchange, however, may be something to look at in terms of publisher-specific inventory.


Bennett is honest to himself and us insomuch that he acknowledges that networks are inherently limited by the design of only being able to offer BT within their own network.  So even if you could cherry pick the inventory you wanted, you could only deploy BT on that network.  Using an ad server with BT would overcome that, if the ad server BT can be deployed across the networks.  Bennett surprisingly does not go into this in his article.


Here is where I think the article could use a fourth and maybe even a fifth section.


Requirement 4 – Ad serving that Re-targets With BT Agnostically


Several ad server offer BT that can extend across multiple networks.  Event-based BT like Boomerang by DoubleClick for example can enable and advertiser to track behavioral of people who have been on their site and then target them across the web – including across networks.  If an advertiser were to deploy event-based BT in conjunction with selective inventory buys on an auction exchange, they could be deploying BT with far more refinement.


Deploying first party ad serving by TruEffect is a second alternative.  With first party ad serving, the inventory acquired through the auction can be targeted using re-targeting methods of the first party cookie and any existing customer can be recognized and re-targeted in real-time.  Treated like any other inventory, all inventory bought through the network could easily be re-targeted using a DirectServe™ implementation.


Requirement 5Ad Serving that Integrates


A final consideration today, and a growing requirement is a concept that I have heard advertisers call a ‘universal’ or ‘megapixel.’  In the days where sites are getting tagged by ad servers, publishers, networks, site-side analytics and pretty much any other tracking mechanisms, there is a need for a single pixel that can shoulder other tracking beacons.


Dynamic Logic’s Universal Tag is one example of this kind of technology.  Shouldering multiple tags, this universal pixel enables an advertiser to tag the site one time.  DoubleClick has an alliance with DL so that they can offer this solution to their clients.  TruEffect has a similar technology called TruTags™ whereby they have one tag that is placed on the site and through it, multiple tags can be managed so that an advertiser only has to tag the site one time and any other tags can be added or removed through a single common interface.  The piggy-backing enables the advertiser or agency to eliminate the need to go back and keep tagging the site eveytime a new netrok buy comes into play.


The great benefit of these megapixels is that with Bennett’s story, one could buy inventory at auction – which will almost always be network inventory – use an ad sever that deploys BT like event-based or First Party DirectServe™ and then use a universal tag or megapixel to reduce tagging requirements as each new network is bought.  Snazzy.  Good article Bennett.


Reactionary with Insight.

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