This feature first appeared in the September 2011 issue of Marketing magazine.

 

They say if you really want to get to know a person, you need to walk a mile in their shoes. Matt Granfield talks to some of Australia’s savviest digital marketers and finds out how they’re tracking the digital footprints of the nation and then using that information to lead consumers to the checkout.

You’re being watched. Every move you make is being tracked.

Keep your head down. Stay calm.

Whatever you do, don’t look behind you. That’s not where they are. They’re in front. In the screen. In the computer. They know everything. Everything.

Sit down. Go to google.com/history. Log in. There it is. Everything you’ve ever searched for. How to yodel – the number to order a pizza – the answer to the pub trivia question you were asked in June 2006 (the capital of Turkmenistan is Ashgabat, in case you’ve forgotten). Google hasn’t forgotten.

And that’s just one website. There are thousands, perhaps millions more. You have been watched since the moment you first went online. The news knows what news you like. Facebook knows who your friends are. Your bank knows when you last checked your balance. Your favourite charity knows precisely what time you read your email. You will be watched tomorrow. If you’re on a computer, or a mobile device, you are being watched right now. Don’t worry though. They’re watching you for your own good.

They’re watching you, so they can help you.

Does it sound creepy? You’d want to hope not, because you’ve probably done a bit of watching yourself.

You’re a marketer. You use Google Analytics. You know where your visitors are from. You know how long they stay. You know what keywords they use to find your site and you know which pages they visit. Whether you realise it or not, you’ve been placing cookies on their computer so you know when they come back. It’s all good though, cookies are cute. Cookies never hurt anybody.

Actually, that’s a lie. Maureen Govern was hurt by cookies… 650,000 of them, in fact. Govern was the chief technology officer at AOL in 2006 and she was in charge when the company publicly released the search history of 650,000 users for ‘research’ purposes. The users were identified only by a number, but The New York Times did some snooping and discovered that it was fairly easy to connect a person’s search history to a person. They released some names, and let the world know there were people out there searching for ‘Beauty and the Beast Disney porn’, among other more sordid queries. Govern resigned.

Your search history may be vanilla by comparison, but that doesn’t make your digital footprints any less interesting to marketers. In fact, as the world’s information shifts into a digital cloud, smart marketers are getting more and more sophisticated in the measurements they take – if you can learn to read the cloud properly, you’ll know when it’s about to rain money – and the technology is getting a lot more sophisticated than Google Analytics.

 

The shift from website analytics to customer intelligence

While Google’s website visitor analysis program (or its earlier forefathers) was the first stepping stone on a path to online enlightenment for many marketers, companies like Experian have made multimillion-dollar businesses out of showing companies a lot more than just the IP address of a user. In fact, online customer behaviour is now starting to drive innovation in areas as diverse as product development, supply chain management and purchasing trends.

Matt Glasner, general manager of Experian Marketing Services, explains how the world has changed. “Australian consumers are spending more and more time in the online space. The increase in digital media usage has subsequently increased the collection and analysis of data, which was very difficult in an analogue world,” he says.

“Not only are organisations now capturing customer data from online activity, they’re also analysing and drawing insights from the activity. The data that this consumer activity provides can drive innovation through the detailed measurement of customer and market data that is more readily available in a digital world.

“Businesses can take this data and use it for not only product development, but also marketing material. For example, (budget electronics retailer) Kogan recently launched above the line ads based on recent real-time social media feedback, so they are taking the sentiment of their existing customers online and replicating this to their target audiences on a larger scale above the line.

“When businesses harness the power of these technologies and interact directly with consumers online, they provide a faster, more relevant and responsive way of engaging with existing and potential customers.”

And that engagement gets a whole lot more profitable once you can lead it down a sales funnel in an online shopping environment.

Paul Downs is the co-founder and director of Hitworks, an ecommerce consultancy that helps retailers make the most of their online stores. A former CIO (chief information officer) of City Beach, he decided to start Hitworks when he realised just how little Australian retailers knew about what was actually possible when they started tapping into the data available online.

“One of the biggest opportunities online is in the wealth of data you can capture through the transactions your customers are making,” says Downs.

“The data allows you to get a much better understanding of what your customers’ buying patterns are, and you can start a dialogue with them and you’re then able to tune promotions to what they’re looking for. Through continual harvesting of information on their buying patterns, and by talking to them, you can start to do that. You can get to a level of sophistication where your ecommerce system tailors the products that are presented to the customer when they come to the site. The Utopia is that you end up presenting the right product at the right price to the right person at the time they’re looking for it.

“Amazon is a good example. When I log in to my Amazon account, it recommends me products because it knows what I look at and it knows what I’ve bought. So, rather than me logging in and just cruising around looking for stuff, it says, ‘Hey, you might be interested in this’.”

Downs says smart retailers are doing more with user data than just deciding which products to show people. Smart marketers, he believes, use data to profile their customers in detail and then use that knowledge over time.

“Great retailers in this space understand their customers’ consumption behaviours and are therefore better placed to understand what a certain type of customer will spend in a given cycle, say annually. That then drives the level of discount and offers presented to that customer to drive increased sales.

“My experience with a number of Aussie retailers is that they are a million miles away from the concept of customer intelligence, let alone the execution of it – which means there is a fantastic opportunity for those prepared to embrace what Europe and the US have been doing for some time.

“For example, if you know customer type ‘A’ spends a few thousand dollars with you a year, you’re more likely to give them a 20 percent discount than someone who shops with you once. The software and platforms to do this are available now.”

 

Remarketing

But it’s not just website visitors who are providing marketers with digital footprints to follow. Tracking technology is now being applied to online advertising, allowing brands to target ads to people who’ve visited their website once they’re long gone.

In 2010, Google launched an innovative ad product called Remarketing, which allows advertisers to show ads to users who’ve previously visited their website as they then go on to browse the web. It works by allowing a company to tag pages of its site that correspond to certain categories it wants to promote. For example, an electronics retailer could add a ‘TV’ tag on all of the pages where it sells televisions and then create an AdWords campaign to show messages to people who’ve visited these pages as they browse TV-related sites across the Google Display Network (publishers who have elected to display Google ads on their web pages).

Google Remarketing product manager Aitan Weinberg says companies have been quick to embrace the technology.

“We rolled out Remarketing one year ago across the Google Display Network, and we think we have a hit on our hands,” he says. “In 2010, the total number of advertisers using Remarketing grew an average of 113 percent every quarter after launch.”

He adds that Google is continuing to develop the product and is beginning to use complex algorithms to mine user data for the best results.

“In the year since launch, we’ve boosted performance and scale with three key enhancements to make Remarketing even more powerful for the largest to the smallest of advertisers. First, we now enable you to show a relevant ad right after a potential customer leaves your site, when our internal analysis shows they’re most likely to click. Second, we’ve improved the algorithm that helps determine, in real time, how much you should pay for each impression in order to maximise the possibility that a user will click on your ad. Finally, the growing reach of the Google Display Network means you can reach your customers on more and more sites across the web.

While Google can’t point to any specific Australian case studies, Weinberg highlights three US firms that have experienced success with the program:

• the Yankee Candle Company, which used Remarketing to re-engage shoppers and increased conversion rates by 600 percent while cutting cost-per-conversion in half
• Lenovo, which increased sales by 20 percent and lowered its overall expense-to-revenue ratio by 14 percent in a campaign that included Remarketing and display across multiple networks, and
• etrailer.com, an online towing parts retailer that saw twice the click-through rate at a 75 percent lower cost-per-click with Remarketing, compared to its typical display advertising campaigns.

 

Digital footprints in email and B2C communications

While the retail industry is starting to get display advertising runs on the board by utilising smart data, it’s still the one traditionally struggling to get its head around how to communicate directly with consumers without being labelled as spammers.

Lisa Arthur, chief marketing officer of marketing automation software company Aprimo, says that satisfying educated consumers requires that marketers provide the right information, when, where and in what forms these educated consumers want it.

“The blast campaigns of the past produce low response rates, and just a half a percent spam complaint rate will start to get you blocked by major mailbox providers all over the world,” she explains. “As a result, marketers must master new ways to answer critical, long-standing questions about the overall effectiveness of both traditional and new interactive online marketing programs. For example, what level of interest was generated by last week’s special offer? Is the marketing program reaching the desired demographic regions?”

Arthur says that to take full advantage of interactive marketing, B2C marketers need to adopt a holistic approach based on the simplification of processes and the integration of deep customer intelligence.

“Email blasts of the past have been replaced with online marketing that creates a dialogue with consumers, requiring the creation of custom content that can hold the attention of the educated consumer,” she says.

Arthur outlines three key ways a B2C marketing strategy should be using data to achieve maximum results:

• built-in capabilities for triggered/event-based email marketing to allow marketers to personalise content and introduce rules-driven communications that can be scheduled to meet campaign objectives
• interactive dialogues that can be triggered from email or landing page responses, as well as web-browsing history on company website properties, and
• the ability to quickly and flexibly set up m-sites, landing pages, and forms to suit each project.

Arthur says that interactive marketing also requires marketers getting access to the right information – particularly in heavily ‘siloed’ organisations where IT, customer service and marketing all keep different sets of data on who is interacting with the brand.

“Customer data is typically gathered and managed by multiple departments and organisations within each business,” says Arthur. “Many marketing tools limit the amount and type of customer data that can be referenced. B2C businesses must fully leverage deep data drawn from multiple channels from offline connections to email response, form and survey data and company website browsing history. As a result, marketers can create highly focused content for uniquely engaging customer experiences.”

Successful campaigns, she says, should be able to segment users into groups based on the frequency of marketing communications they respond to, send ‘win back’ messages to those recipients who aren’t engaging, use social media to invite opt-in subscription requests from new fans and followers, and create interactive experiences on dedicated landing pages to engage users.

“Clearly, to build trust and loyalty, you can’t spam your customers and their contacts. The era of the educated consumer is here, unleashing revolutionary changes in how B2C marketers must interact with audiences. Nowhere is this new balance of dialogue, education and selling more evident than on the web,” concludes Arthur.