Dave Wilson, president of Wilson Relationship Marketing Services wrote in iMediaconnection today bout extending offline direct mail practices to the online world.  His incite about the established world of customer segmentation and modeling in the offline world stimulates the mind about the possibilities online but then he only scratches the surface with regard to what’s out there.

Dave says that unlike offline, “…in the online world marketing activities are geared towards “pulling” prospects from an audience of identified potential customers. To understand and identify the right targets, marketers need to know the key attributes of prospects and customers online just like in the offline world. As a result, customer segmentation becomes imperative online, whether the media channel is search engine marketing (SEM), banner ads on portals or email campaigns.”

So media selection is a key component of segmentation.  That is common practice today.  Vertical sites, networks and search are all widely accepted.  Dave talks about subject-matter verticals like news or entertainment-rich content sites being capable of delivering a specific demographic while specific networks may be capable of delivering another demographic type.  Search engines can deliver keyword targets and some even go so far as provide vertical search on a site-by-site basis.  LookSmart is a vertical search engine provider for example.  This is all good when you are looking to drive traffic which, of course, is a huge component of online advertising.  But with online marketing – like offline direct marketing – there is more.

The web is the newest greatest one-to-one communication mechanism of our time right?  The greatest thing since the TV, only now you can communicate and not just broadcast.  So segmenting an audience is about generating a response.  Segmenting prospects is about generating customers.  Segmenting customers is about driving repeat business.  Direct marketing covers both.  Not just one.  When we examine the direct to consumer communication capabilities of online marketing we have to go beyond the geo-targeting, day-part targeting and demographic preferences of a site, search engine or email list.  We have to also look at behavioral targeting.  We have to look at psychographic segmentation.  We have to look at cross-channel customer knowledge and segmentation data.

Okay-okay.  Where is the lunatic going?  First of all behavioral targeting.  My good friends at TACODA and Advertising.com offer healthy targeting capabilities based on event-based behaviors.  Pixel your advertisers’ sites and you can target users across their networks based on people who have been on your site in the past.  Or, can you do it better?  Yup – but that way works well if you are targeting their network.  You can use an ad server to pixel your web pages and target users web-wide, including users across a network who have conducted specific events on your advertisers’ sites.  So if they have seen a product page in the past and then you encounter them on the web, you can target them with specific ads.  Better prospecting.  The network model works great is you are primarily advertising on the network.  The ad server model works better if you are casting a wider net across the internet.  Check out DoubleClick’s Boomerang or TruEffect’s DirectServe for basic behavioral target prospecting.

Now, direct marketing is also about going after existing customers too.  Catalogers don’t just go after prospects, they hit the hell out of existing shoppers.  And so should you.  Creating customer segments of your online customers is vital.  Remember I said cross-channel segmentation?  If your business has an offline component and an online component like – say Target or LL Bean – then you should be marrying your offline and online data.  The deeper your customer database the more you can segment your customers for online direct marketing.

Online direct marketing should be conducted in two places simultaneously, site-side and web-wide.  Site-side is customer targeting while they are on your web site.  Using first-party cookies in conjunction with user logins is paramount.  Know your customers and leverage that information to guide them through to buy-buy-buy.  Okay, maybe not that aggressive, but your content management system should be geared towards displaying optimized products based on the segment membership buckets you have placed them.  Categorized behavior and predictive modeling should enable you to increase the likelihood to buy and to increase the amount per purchase per visit.  Once someone logs-on you can access their account and user personally identifiable information.  Prior to logging on you can use first party cookies and anonymous profile data.  Both are very powerful.

And here it is, my little plug.  Web-wide direct marketing to existing customers may be accomplished through customer re-targeting through your online advertising campaigns.  If you are advertising online, and you frequently advertise on the same sites because you perform well on those publisher sites you have to know that your customers frequent those sites too.  That means that you are paying to re-prospect your existing customers.  What % of your advertising audience is comprised of existing audience.  How many impressions are you wasting on people who already shop with you?  Would your dollars be better utilized direct marketing to existing customers on those sites while you simultaneously prospect-message to non-customers?  Then read anyone of my many posts that talk about DirectServe and first party ad serving.  Because that technology will tie it altogether for you.

One last tid-bit.  TruEffect offers something called TruTags™.  Neat little patent-protected item they threw out for 2007.  It is a site tag that you put on advertiser web pages that will simultaneously fire other tags.  So you only need to tag your advertiser’s web pages one time and you can add as many other tags as you need to the TruTag™ repository.  Its really nice for those advertisers who are difficult when it comes time to adding tags to their web pages for additional tracking mechanisms.  You simply TruTag™ their site and then as an agency you control the addition of extra tracking tags.  So you can use behavioral targeting of other providers and things like that without having to re-tag.  Nice.

Reactionary with Insight.

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