3 themes shaping behavioral targeting

imediaconnection - As marketers test BT waters, they will need to come to grips with a still-evolving landscape and integrate some of the key lessons of the past 10 years.

The tantalizing promise of behavioral targeting — delivering ads precisely to the right internet users at the right time based on their past web behavior — has been touted for nearly a decade. While advertisers have been relatively slow to adopt BT as a mainstream marketing method, there are indications that this technology is gaining traction and may even be reaching a tipping point. A recent eMarketer report projected that advertisers will spend $1 billion on behaviorally targeted ads in 2008 and upwards of $3.8 billion on them by 2011. As marketers, and brand marketers in particular, start to test these waters, they will need to quickly come to grips with a still-evolving landscape and integrate some of the key lessons of the past 10 years.

Ad networks and publishers that offer BT develop audience segments based on common content consumption patterns (say “Sports Enthusiasts” who consume a threshold level of sports pages in a certain time period), then use information collected on individuals’ web browsing to categorize users in those segments. BT providers then sell advertisers media buys that deliver ads directly to segments likely to be influenced by them.

This approach requires a shift in thinking for many marketers. BT is about buying relevant audiences, not relevant context. If a user’s consumption of auto content suggests that he is in the market for a car, behavioral targeting offers automotive advertisers a way to reach that user with a relevant message when that user is not consuming auto content.

Benefits
The benefits of BT can be significant, especially in categories like automotive, travel and pharmaceuticals in which certain predictable patterns of online content consumption strongly suggests immediate interest in buying something:

• Behavioral targeting can make acquisition marketing easy and powerful by generating “lists” of good prospects that can be mined efficiently and anonymously.
• Behavioral marketing can be used on its own or in conjunction with other forms of targeting based on factors like geography or demographics.
• Audience-based targeting enables advertisers to reach audiences of interest beyond limited, and often expensive, contextually relevant inventory, thereby increasing frequency and the potential for cost efficiency.

Shortcomings
While the benefits of behavioral targeting can be impressive, marketers must evaluate whether or not BT is a good fit. Limitations of BT include these:

• BT is really good at generating small lists of buy-now prospects, but not so good at achieving mass levels of reach or addressing and developing consumers who are “up the funnel” from the immediate point of purchase.
• The lack of standard segment definitions across BT providers puts the burden on advertisers to cobble together disparate groups in an attempt to replicate its real target, with limited ability to plan and view a cohesive whole.
• For the most part those offering behavioral targeting have yet to define an application for marketing “upstream” — in the areas of awareness building and preference shaping that account for the bulk of media spending by large, sophisticated brand marketers.
• The direct response metrics typically used to measure and manage behaviorally targeted campaign effectiveness may not be relevant to brand marketers.

Three themes for the future
As more and more marketers turn to the web to help them achieve their branding objectives, the following three themes are likely to shape the structure of the industry and new product innovation:

1. Transparency
When assessing the validity of any behavioral target classification, it is essential for the marketer to understand the assumptions used to define the target. All too often the assumptions used are not particularly transparent and are shrouded in “black box” mystery. This is particularly an issue as firms work to standardize segment definitions in an attempt to increase their potential reach. Is someone who has visited auto content once in 45 days really an “Auto Enthusiast”? Increasingly savvy buyers will demand more transparency around qualifying behavior.

2. Privacy Protection
A global concern often associated with behavioral targeting is whether a user’s privacy is compromised in the process. The simple answer is no. Behavioral targeting only tracks where an individual has been online; it does not identify the individual through any personal data such as name, address or email.

However, consumers increasingly are concerned that personally identifiable information is mingled with non-personally identifiable information, which they fear might be used to discriminate against them at some point in the future. Groups representing a small handful of privacy-concerned consumers have pressured the FTC to make all cookies opt-in rather than opt-out, a radical approach that would bring the entire internet advertising industry to its knees. Unless the industry quickly develops privacy protocols that are effective, the government is likely to step in with solutions of its own.

3. Predicting Behavior vs. Reacting to It
Rather than picking off individuals who have “tripped a trigger” indicating they are in the market for something and attempting to influence their decision at or close to the point of purchase, the next generation of targeting will focus on helping marketers “fill the funnel” with more of the right people before they register interest.

One such approach is psychographic targeting. Marketers have long known that psychographic characteristics correlate strongly with brand affinity and buyer behavior, but they have had no way of targeting them in media. Psychographic targeting would enable marketers in highly competitive categories, where psychographic traits such as spontaneity, pragmatism and assertiveness spell the difference between brand devotees and the merely indifferent, to effectively turn up the volume against their most important consumers.

Without question, it’s an exciting time to be in the media and advertising business. Today, the leading behavioral targeting firms are effective list generators for direct response advertisers. But as brand dollars follow mass audiences online, behavioral targeting is destined to become a more important tool for marketers looking to efficiently and effectively reach their target audiences. Those firms that are able to define relevant segments for brand advertisers with mass reach will succeed.

2 email strategies most marketers forget

imediaconnection.com - Welcome and transactional emails both provide great opportunities for engaging with potential customers but are greatly underutilized.

Often when I’m working with clients, they just want to focus on their marketing messages or newsletters and whether or not they are getting good delivery or open rates. The problem is that no matter how great your newsletter might be, you could be missing out on another great opportunity to interact with your customers.

In my experience, the two most overlooked engagement opportunities are welcome and transactional messages. Both of these message types are highly underutilized by most marketers as a way to engage their customers.

First and foremost, the welcome message should be used to build off the initial engagement you created with the recipients when they first signed up to receive future campaigns. Many senders just send a text welcome message or a simple opt-in confirmation. There is so much more you can do with a welcome message, and the opportunity should not be wasted.

Welcome emails
Here are some tips for creating an effective welcome message template:

• Don’t be afraid to send an HTML message. A welcome message that looks like future mailings will let users know what to expect.
• Give recipients a sneak peak of the type of content they will be receiving. If you have a weekly newsletter, put one article in your welcome message from the week before to show the benefits of the information they will be receiving from you.
• Ask those who have opted in to add you to their address books. The welcome message provides the best opportunity for interested people to add your sending address to their address books, since you know they are currently engaged with your company.
• Thank the recipient for subscribing. Recipients have just done you a favor by signing up for your campaigns — remember that and tell them you appreciate their trust in you and their future business. People get a lot of email in their inboxes, and you want them to know they are special and a vital part of your business.
• Give those receiving your email an easy way to unsubscribe. By giving them an example of what the messages will contain, they might realize that it was not what they expected. Let them go now before sending multiple messages to them and eventually having them mark your message as SPAM. It is better to have them formally unsubscribe from your list right away then have them mark you as SPAM later.
• Give people an incentive to take further action now. If you want them to buy something, offer them a discount on their first purchase with a coupon code in their welcome message. They might have been thinking about eventually purchasing something from you, which is why they signed up for your messages in the first place. By giving them a little nudge, they might make the purchase sooner rather then later.

Transactional emails
The other major opportunity that’s often forgotten is the receipt or order confirmation message. While it is true that CAN-SPAM prevents these emails from being full-blown marketing messages, there can be some promotional aspects to them.

Some of the best examples of these messages usually come from the travel industry. It is a common occurrence to receive an email from an airline confirming a flight purchase, which provides links to rent a car, find a hotel or any number of other options.

These companies are always looking for opportunities to up-sell their customers. They have realized the importance of the order confirmation message and have used this to their advantage.

So what is the right amount of marketing in one of these messages? I usually suggest to my clients that if they lead with the transactional message and then add 30 to 40 percent of marketing messages, they should be OK. That way the main reason for the message is still intact, from the customer perspective. On a personal note, I appreciate these types of messages when they’re done properly.

Let’s consider these two message types in the offline space for a minute. I will use an example that happened to me just last week, when I took my truck in for some transmission work. When I went to the local shop that was referred to me, I not only received great customer service, but I was told by the shop workers exactly what to expect.

Now if the shop’s “welcome message” also included an upsell, I might have known that I could have also had my oil changed while my car was there, which is something I needed done. Furthermore, if someone had also offered me a discount on that oil change as a first-time customer, there would have been no question that I would have taken the shop up on that offer, right there on the spot.

When I was paying for the work that had been done, the shop had another opportunity to get repeat business from me. If on the receipt it was explained to me that if I brought in another car for any work within one month I would get a 10 percent discount, there is a good chance I would have brought in my wife’s car sooner, rather than later, if it needed some work.

So remember: Email is a lot like life. When you have someone engaged — even if it’s only for a short time — you need to take advantage of it. Don’t waste any opportunity to reach out to your customers and explain your worth at every chance you have. Good luck and happy sending.

Don’t slam the door on parting subscribers

imediaconnection.com - Yes, you have to honor unsubscribe requests, but you don’t have to cut off communication. Here are five ways to salvage a relationship.

The research is in, and it shows clearly that email marketers don’t take rejection well. Unsubscribing is a landscape full of wasted opportunities, but it doesn’t have to be that way. You and your subscribers don’t have to part forever, and I’ll show you how.

First, here’s what two separate surveys on marketers and unsubscribes found:

• Marketers told EmailLabs they aren’t doing all they could to encourage unsubscribers to stick around. Less than 20 percent send a goodbye message, and fewer than one in 10 tell subscribers other ways they could stay in touch.
• Chad White’s Retail Email blog analyzed unsubscribe practices at 94 online retailers and found four in 10 don’t do any kind of outreach to engage unsubscribers.

Both surveys found most marketers honor unsubscribes almost immediately, and that’s good. But that better not be the best thing anyone can say about how you end email relationships. If it is, you’re letting the door slam on a relationship that might not really have to end.

Maybe that’s because a lot of you still think the unsubscribe is strictly a technical maneuver. Or are you so afraid of being sent to spammer jail that you’d just as soon cut off your unsubscribers than reach out to them with a follow-up email?

You can keep the conversation going, without violating any government regulations on commercial email, and maybe even salvage a stronger relationship on new grounds. Here are five ways:

1. Let subscribers choose how often they want to get email from you.
Sure, you’ve heard this advice before, but if Chad’s statistic is correct, only 16 percent of you have taken it to heart and actually give subscribers a chance to receive fewer emails. So you send offers two to three times a week? Offer a weekly alternative if the links stay active that long. Think of it as a cheap way to repurpose your daily content and keep the clicks coming in.

2. Let subscribers pick the content they really want, not just what you think they like.
Another not-earth-shattering suggestion, but again, one that only a few email marketers have taken to heart according to the research. You don’t even have to have a fancy content-management system that generates dynamic content down to the most granular level. Just create a new list that spins off one segment of your market and could appeal to a lucrative niche in your subscriber base.

3. List all the ways subscribers can receive information from you.
Sure, I love email, but I know it’s not the only way people want to receive information. Today, your subscribers have so many communication channels open to them that if one doesn’t work anymore, another one surely will. RSS feeds, blogs, podcasts, IM deals, even old-fashioned paper catalogs are all ways you can keep the relationship alive if email no longer works.

4. Tell them in each email message how they can change or update their subscription records.
Think of this as a pre-emptive strike. Assuming they still open their email messages from you, you can put this important information where they’ll see it quickly, no matter whether they see a truncated version of your email in their preview pane or on their cellphone, or the whole message in all its HTML glory on a 21-inch desktop monitor.

Not everybody who unsubscribes really wants to leave. They might just want to change an email address because they’re switching email providers or dumping their current address because of spam from other senders. (Certainly not from you!)

5. Wrap it all up with an easily accessible subscriber page that loads with their data and lets them update with just a few clicks.
This means “no passwords.” If their records include sensitive data such as credit-card numbers or bank accounts, save that information on a separate page and restrict access to it there.

Look for other barriers, too. Do you still force confirmation on opt-outs as well (I hope!) as on opt-ins? Drop that barrier too. Instead, put a resubscribe line in a follow-up email or a confirmation page on your site. If they really did screw up and unsubscribe when they just wanted to change, they can resubscribe there.

If you spend even half the time on the back end of your email relationship with your customers as you do on the front end with acquisition, you’ll find you keep more of them around, and they’ll be a happier group.

More usable email campaigns, by design

imediaconnection.com - Nearly all direct marketing email campaigns can benefit from bringing in oft-overlooked user experience principles. See how it can be done.

Each time you send someone an email, you create a little user experience for them. Yet most companies don’t involve their user experience teams in the creation of email marketing campaigns. What’s more, email newsletters or sales messages are almost never usability tested. What’s happening here?

Of course, for the most part, the success of an email campaign depends on the offer, the supporting content and the targeting of the messages. These things are not typically driven by usability concerns — in most organizations, they are (appropriately) owned by people with a direct marketing background. And for the most part, the best way to optimize email campaigns over time is by paying close attention to performance metrics such as open rates, clickthrough rates and conversion rates — not the kind of data you could get from running a usability study.

Usability still matters
It seems that email is essentially a direct marketing competency — not something companies typically assign to their “user experience” group. Yet, I have almost never seen an email campaign that could not be improved by making it more sensitive to user experience principles. Many messages are still too wide to display comfortably in the recipient’s chosen email client — the kind of problem that may be invisible in tracking statistics but is easily discoverable with just three hours of usability testing. In other cases, key contents are essentially invisible or impossible to scan quickly. Worst of all, users are still receiving too many messages that are irrelevant to them.

The business case for user-centered email design
While it may seem too simple to be a big priority, the design of your emails definitely represents an opportunity to communicate with customers and prospects, and to become a smarter and more sensitive marketer. This is especially true for companies that run multiple or integrated campaigns, or those that send out various types of status or confirmation messages in the same time span.

In addition, many cherished metrics are no longer as reliable as they used to be. Open rate is now a rough measure, currently used only to confirm that a severe problem has not occurred, such as when all or most of your messages are blocked by spam filters. In the absence of perfect information, it makes sense to consider usability.

Making your newsletters and other email campaigns more usable will not only help you squeeze out better results across all the relevant metrics, it will also lead to other benefits, such as the degree to which people trust your brand and find it relevant.

Making email messages more usable
Here are some simple techniques and principles borrowed from the world of usability and experience design that you can apply to the creation of your email campaigns.

Display system status
Let’s start with the sign up process itself. A basic attribute of any usable software product or website is its ability to display system status accurately. In other words, it should tell you what’s happening when you ask it to do something. Usable products don’t leave the user guessing about whether some process failed behind the scenes. Yet dozens of large companies don’t clearly communicate what just happened when you opt into their email campaigns. In such cases, the user has no way to know if the sign up process was successful, so they sometimes repeat the process, compounding the mistake.

Enable user control and freedom
This is another “ancient” usability principle (or heuristic) that was first used to evaluate desktop software, but also holds true for the emails your company sends. Are your users in control? Do you tell them how many emails they will receive if they subscribe and give them some way to manage this? Can they immediately unsubscribe, or do you put them through annoying confirmation loops? Can they easily scan to the content they value and skip the rest? Can they freely reply to your messages by hitting the reply button, or do they have to take extra steps to contact you on your terms.

Respect the context of use
Email marketers have historically been too insensitive of their recipients’ real context of use. What’s the context of use for receiving an email in 2008? In most cases, it’s about rushing to dig through a mountain of spam. Jupiter Research recently projected that spending on email will surpass $2 billion by 2012, so any single message is just a tiny part of that growing mountain. Yet many marketers continue to focus on creating fancy business rules based on trend analysis, pumping out millions of increasingly irrelevant messages. A few hours of interviews with real life users might just bring a fresh blast of reality into their planning processes

 Amazon.com’s subject line gets the story across even if you’re too busy to open the actual message.

User-driven design elements only
Once you have something relevant to say, make sure not to hide it. There’s no need for a tall header area or a standardized set of links at the top of your message. Remember, no one subscribes to a campaign in order to be reminded about links to standard website sections. The recipient’s task is to determine whether this message has something relevant for them. User-driven design elements begin with anything that helps the user answer that question quickly and without having to think too much.

Behavioral targeting?
You don’t always need deep analysis of trends data to target your messages. User experience designers know how to pay close attention to where the user is within the overall workflow. Consider a customer who has just purchased a gift. It’s probably not a good idea to waste their time with messages about the product, unless you can figure out the next occasion of the gift. The recipient, on the other hand, might be a fan of your product and a good candidate for a follow-up survey or offer.

Don’t just track people, interview them
The reality today is that people scanning their inboxes are in a serious hurry to separate what’s relevant to them from the spam. It makes little difference how excited the recipient was when they initially opted into your campaign. At this point, chances are they are not nearly as excited, because yours is one of a dozen emails they’re scanning through. Remember that people use email more than they search, or conduct any other online activity, and much of this time is already wasted on filtering out spam. The result is that receiving additional email messages, even from a fascinating non-spammer such as yourself, may be less a cause for celebration than it might have been in the pre-spam era.

This ad for the New Yorker goes to a standard Conde Nast ad that barely
mentions the New Yorker. A quick usability study would have shown just
how confusing this is for many users.

But you won’t find out about this by looking at your tracking figures. You might see your open rates declining, but you won’t know how all those unopened emails you keep sending are affecting your brand — unless you interview a few recipients and watch them check their emails.

Here, I suggest you observe five test users in action and find out for yourself about their habits and preferences as they hunt for relevance. Then apply what you’ve learned to your next email campaign. Ideally, email should be considered as a basic piece of the customer experience, and evaluated as part of website usability studies. These suggestions should get you on track.

Make the click worth their time

imediaconnection.com - Before making a deeper connection, consumers want to have confidence that their clicking time is worth the effort. HypeCouncil’s founder shows how to make them glad they said yes to your brand.

Consumer confidence in online advertising has eroded to an all-time low. We package clever, but elusive, copy and flashy graphics inside of a display ad and buy up every available impression on the internet only to wonder why no one is clicking. What are we exchanging with consumers that gives them the confidence to interact with our message? Simply broadcasting a message to the masses doesn’t necessarily leave consumers with enough information, or the confidence, to act on what they see.

I’ve often likened this confidence-building process to asking someone out on a date. I haven’t been single for a number of years, but I remember the delicate dance of trying to engage a person in conversation as an entrée into spending some more quality time together.

A long time ago in a pub far away, I happened upon an attractive woman who was chatting with some mutual friends of mine. Aside from the occasional comment directed to the group, this woman and I said very little to each other. Still, she seemed nice and she was a knockout, so at the end of the evening, I sidled up to her and made some wise comment — I can’t remember now what it was, but it was probably related to the band Hanson and how important they were to modern American music. Whatever I said was enough to make her smile and nod which, for me, was a real bonus. And so, I asked her out.

She said “no.” Not, “I have plans.” Not “I have a boyfriend.” Not even “Hanson. Are you kidding me?” She just said “no.”

I eventually got over the rejection, but a few years later, I bumped into this woman again at a party. We struck up a more direct conversation that lasted most of the night. I finally worked up the courage to ask her about that fated evening and why she didn’t go out with me. She told me that she had no clue about who I was and what I was about, and she didn’t want to invest her time and energy based on a two-second conversation. She said that she needed more to go on before making that kind of a decision. I asked her out again, and this time she said “yes.” We’ve been together ever since.

I learned two very valuable lessons that night. Never, EVER bring Hanson into a conversation with the opposite sex. It only serves to prove that you are, in fact, a moron. More importantly, I learned that the less you allow a person to engage with you, the less likely you are to get that person to do what you want. The same works with online advertising; the more you commit to engage the consumer, the more of a commitment you get in return.

As online marketers, we underestimate the level of commitment involved when a consumer clicks through to a website. The consumer is making several assessments in the blink of an eye — will this be a waste of time? Will the site I click to be safe? Will the information I seek be relevant? Will I get what I need efficiently? There is a risk vs. reward scenario that we all play out when deciding to interact with an online advertisement. If we rely too heavily on the website destination to do our talking, we will likely find that no one will be around to listen.

There are a dozen or more practical applications of this for online advertising. Let’s take a look at banner ads and use three examples to determine the level of information that is shared prior to making a commitment to act or, in this case, to click.

Read the rest of the article >