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Online Strategies Summer 2009
tableof
CONTENTS
FEATURES
24
The Third Pillar of Digital
Direct Marketing
6
Proud of his Ignorance
Anything but uneducated, Tim Ash’s
talent isn’t in telling you what will
move your customers to convert.
It’s in letting your customers tell
you themselves.
By Tom Dellner
The waiting game is over. Mobile
marketing is not just a viable marketing channel—it’s well on its way
to becoming an essential one. The
time to embrace mobile is now and
these six tactics are both proven
and easy to implement.
By Brian Deagan
12
An Ounce of Prevention
A thorough review of any e-commerce website is essential to avoid
a potentially nightmarish legal
quagmire down the road. Here are
the key issues your legal team
should examine.
By D. John Hendrickson, Esq. and
Philip Rebentisch, CP.
COLUMNS
3 Editor’s Perspective
A Few Sterne Words
By Tom Dellner
4 Speaker Spotlight
Ken Burke
By Kelli Tejada
16
Search Marketing: A
Portfolio Approach
ONLINE INSIGHTS
Borrow a proven investment technique to help maintain your
PPC campaign’s ROI in an increasingly competitive environment.
By Allen Hammock
28 Innovation
Drive Your Business With
Innovative—And Low Cost—
Marketing Tools
By Adam Boyden
20
30 Data Security
Tokenization Gains Traction
By Gary Palgon
The Ultimate
Performance Metric
A misunderstood and undervalued
business measure, customer satisfaction can be used to predict customers’ likelihood to shop again,
buy more or to remain loyal to your
company in the future.
By Larry Freed
32 E-mail
Integrating Social Media
By Jeanniey Mullen
34 Performance Measurement
A Map for the New Frontier
By Jascha Kaykas-Wolff
36 Viewpoint
Is Search Retargeting for You?
By Mark Simon
2
ONLINEstrategies | Summer 2009
Online Strategies | Summer 2009
Online Strategies magazine
West Coast Office
1001 Avenida Pico, Suite #C 606
San Clemente, CA 92673
Phone: 949-489-5501
ERA BUSINESS OPERATIONS
Executive Vice President of Media - Education
Gina Mullins-Cohen
[email protected] | Phone: 949-489-5501
Vice President of Creative Services Kim Lewis
[email protected] | Phone: 951-277-8259
Director of Content Tom Dellner
[email protected] | Phone: 949-240-1429
EDITORIAL
Editorial Director Gina Mullins-Cohen
[email protected] | Phone: 949-489-5501
Editor Tom Dellner
[email protected] | Phone: 949-240-1429
Vice President of Creative Services Kim Lewis
[email protected] | Phone: 951-277-8259
eMedia Editor Patrick Cauley
[email protected] | Phone: 703-908-1030
Editor of Government Affairs Bill McClellan
[email protected] | Phone: 703-908-1032
Editorial Intern Heather Fishel
Contributing Writers Brian Deagan, Larry Freed, Allen
Hammock, D. John Hendrickson, Esq., Philip
Rebentisch, CP.
Contributing Columnists Adam Boyden, Jascha KaykasWolff, Jeanniey Mullen, Gary Palgon, Mark Simon,
Kelli Tejada
ADVERTISING
Publisher Gina Mullins-Cohen
[email protected] | Phone: 949-489-5501
Associate Publisher/Operations Debbie Duhn
[email protected] | Phone: 541-952-0300
Director of New Business Technologies Ruth Wheeler
[email protected] | Phone: 949-459-0495
Advertising Sales & Sponsorship Manager Debbie Skerly
[email protected] | Phone: 949-743-0319
ELECTRONIC RETAILING ASSOCIATION EXECUTIVE STAFF
ERA President & Chief Executive Officer Julie J. Coons
Executive Director, ERA Europe Marcel Avargues
Executive Vice President Gina Mullins-Cohen
Vice President of Finance & Administration Kevin L. Kelly
Vice President of Creative Services Kim Lewis
Vice President of Government Affairs Bill McClellan
Vice President of Marketing David Martin
Vice President of Membership Robin Greenspan
EDITORIAL SUBMISSIONS
Send press releases and other information to the editor.
SUBSCRIPTIONS
E-mail Ashley Cavell at [email protected]
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Page 3
editor’s PERSPECTIVE
TOM DELLNER
A Few Sterne Words
i
I recently attended the eMetrics Marketing
Optimization Summit in San Jose, Calif. The
eMetrics events are perennially among my
favorites of the many online marketing conferences. The topic areas are always fresh and
thought-provoking, and the speakers are consistently industry leaders in their respective fields.
I also get a kick out of the host of these
events, Jim Sterne. Granted, that’s in large part
because I enjoy his sense of humor and delivery,
which is dry as a West Texas wind. But it’s also
because of the perspective he brings to his presentations and to his conferences as a whole.
Believe it or not, Sterne has been educating
online marketers in events like these since
1995. He’s seen businesses—entire industries—rise and fall and heavily hyped new
technologies gain traction or vanish without
a trace. Perhaps as a result, he’s a realist—
intellectually curious enough to be interested
by any truly promising trend or technology,
but pragmatic enough to see past the shine
and gloss to discern whether a viable business
application lies at the core.
You’ll be sure to leave a Jim Sterne presentation with a few nuggets jotted down on the ubiquitous, conference center-supplied notepad.
Here’s one I scribbled down in San Jose,
regarding the application of analytics. “You
don’t need to be precise; you need to be compelling.” In other words, if the numbers suggest an obvious business decision, don’t waste
time figuring out the “why” to a scientific certainty—have the guts to be a change agent.
Go to the decision maker and present your
case passionately. (Sterne used an example of
a retailer who noticed a hotbed of online
shopping in a region where no brick-andmortar store existed and where there was little brand presence. They were essentially
clueless as to why this phenomenon was
occurring. But they did have the business
sense to place a store [now, a very successful
one] in the middle of this hot spot.)
Here’s another one that’ll get you thinking:
“In five years, your business will be utterly
dependent on technology that doesn’t exist yet.”
With that remark, Sterne introduced Rene
Dechamps Otamendi. Otamendi, the Belgian
CEO of NextStage Analytics, then described
his company’s Evolution Technology.
According to Otamendi, all humans have a
sort-of “map” and subconscious rules they
apply when making any decision. Evolution
Technology identifies and reads our maps
and rules as we navigate a website. This infor-
He’s a realist—intellectually curious
enough to be interested by any truly
promising trend or technology, but pragmatic enough to see past the shine and
gloss to discern whether a viable business application lies at the core.
mation can then be used to dynamically rearrange the elements of an e-commerce site
to conform to the individual, making navigation easier and presenting purchasing decisions in the way most likely to promote the
desired outcome.
Sound far-fetched? The technology has
been proven to predict age and gender to 99
percent accuracy. The realist Sterne is a
believer in the technology’s validity. So are
executives from The World Bank, Mitre
Corp., Bristol-Myers Squibb and HP.
Stay tuned. We’ll take a harder look at the
technology and its applications in the next
issue of Online Strategies.
Summer 2009 | ONLINEstrategies
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SPEAKER SPOTLIGHT
Integrated Marketing Campaigns and
Online Selling: The One-Two Punch
BY KELLI TEJADA
t the Electronic Retailing Association’s 2009 D2C
Convention at The Paris Hotel in Las Vegas, September 1315, Ken Burke, the chairman of MarketLive and author of
“Intelligent Selling: The Art & Science of Selling Online,” will speak
about effective strategies for out-maneuvering the economy with
the one-two punch of effective marketing strategies and an intelligent e-commerce site that works hand in hand for retail success.
Ken observes that retailers face the double-edge challenge of finding
innovative ways to drive growth while holding the line on expenses,
and asserts that merchants who continue to invest in their online
channel will stay competitive now and in the future—without
breaking the bank.
MarketLive research shows that retailers who continue to innovate their online campaigns and storefronts
are building more customer loyalty, driving revenue and
weathering the economic storm more effectively.
Investment in the online channel is key to success now
and in the future. Shoppers are increasingly experienced—more than 30 percent have been shopping
A
Ken Burke
Retailers that continue to innovate their online campaigns
and storefronts are building
loyalty, driving more revenue
and weathering the economic
storm more effectively.
online for more than seven years—and their expectations for relevant, helpful shopping experiences continue to grow. This is especially true as they thoughtfully
select products and brands and consider each purchase
more carefully. Additionally, online sales continue to
drive overall retail growth.
Smart new strategies, technologies and marketing
tools will help retailers win. The key to success is twofold. First, retailers must hone their marketing tactics
with search strategies and effective campaigns that
attract new shoppers and bring existing customers back
again and again. Second, e-commerce sites must effectively merchandise products and lead the shopper
through the path to purchase. In his speaking engagement, Ken will outline marketing tactics and simple onsite changes that will achieve this one-two punch.
FIRST: ATTRACT NEW CUSTOMERS AND
STRENGTHEN EXISTING RELATIONSHIPS
Merchants are watching every campaign dollar they
invest to ensure maximum ROI. E-mail marketing
remains one of the most efficient tools available.
Segmented, personalized e-mail has proven to increase
sales as shoppers are presented with relevant offers that
consider their preferences and buying behaviors. Any seg4
ONLINEstrategies | Summer 2009
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mentation is better than a “batch-and-blast” approach.
MarketLive research shows that 78 percent of marketers
use some sort of segmentation to deliver personalized
offers—although it often still falls short because it lacks
sophisticated targeting and messaging. Merchants that
understand shopper behavior at a deeper level, and that
can segment and target shoppers accordingly, achieve as
much as 30 percent better returns than standard e-mail
campaigns. Ken will explore tactics for personalizing the
content and promotions in e-mail and tools that leverage
customer profiles and purchase histories to dynamically
serve appropriate offers.
SECOND: POLISH THE SITE FOR
INTELLIGENT SELLING
Today, more than ever, retailers must prioritize site effectiveness and address known home- and product page
weaknesses. Using proven on-site best practices, retailers
can create shopping experiences that serve appropriate
content, satisfy customers and start the customer down
the path to purchase. Ken will explain how to leverage
user feedback and analytics data to prioritize improvements and create “personalized” shopping experiences
that drive sales.
The product page is a crucial waypoint on the path to
purchase; it’s where browsers become shoppers and commit to adding items to the cart. While many merchants
leverage rich imaging, cross sells and “recently viewed”
functionality, they often neglect the text on this critical
page by failing to enhance it beyond printed catalog copy
or manufacturers’ product descriptions. Application of
best practices on the site, and content that bridges the
shopper from the campaign to the product they’re interested in on the site can accelerate sales.
Cart abandonment rates continue to hover above 50
percent—and shoppers are increasingly relentless in their
search for bargains online. It’s more important than ever
to be transparent about the total order cost. Ken will discuss the ideal, transparent shopping cart.
For more detail on all these topics and the latest
Intelligent Selling best practices and research from
MarketLive, join Ken at the session: “Small Steps, Big
Gains: Cost-Effective Steps for Big Revenue Gains,” at
10:00 on Sunday, September 13. For more information or
to register for the ERA’s D2C Convention, visit
www.d2cshow.org.
Page 5
Online Strategies
Goes Monthly!
Online Strategies magazine will now be
published 12 times
each year. Each issue
will deliver features
and columns that outline the latest trends
and best practices in
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thought leaders.
Go to www. online
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SUNDAY, SEPTEMBER 13, 2009
10:00 a.m. - 11:00 a.m. Small Steps, Big Gains: CostEffective Steps for Big Revenue Gains
Summer 2009 | ONLINEstrategies
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PHOTOS BY KIM LEWIS
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Proud
of His Ignorance
Having earned an advanced degree studying neural networks and artificial intelligence, Tim Ash is anything but uneducated.
Yet he speaks of being proud of what he
doesn’t know about e-commerce. In fact, he’s
often surprised at what moves consumers to
action. But his talent isn’t explaining what
your customers might respond to. It’s allowing your customers to tell you themselves.
BY TOM DELLNER
Chances are, if you’ve attended your fair share of online marketing conferences,
you’ve seen a presentation by Tim Ash, president of SiteTuners, a leading testing
and optimization company based in San Diego. And if you have, we bet you
remember it well.
The personable Ash isn’t you’re typical conference speaker. He’s engaging,
blunt, funny and often controversial. He’s not afraid to bust a salsa-dancing
move if it helps reinforce a point. He’s also perhaps the industry’s foremost
authority on testing and optimization—a rapidly developing and absolutely crucial discipline.
We sat down with Ash for a wide-ranging and fascinating conversation which
covered the early days of online marketing, to tweaking sites to the tune of $48
million in added revenue—in a month!—and common e-commerce mistakes
which might surprise you.
Summer 2009 | ONLINEstrategies
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coverSTORY
Online Strategies: When did your
interest in e-commerce develop?
Tim Ash: Back in the early to mid’90s, when companies first thought
about getting on the web, they talked
about a web “presence” and a web
“page.” Basically, they borrowed the
copy used in their print communications, thinking of it as a passive representation or “calling card” on the web.
I was always interested in trying to
do more on the Internet. Together
with my business partner Robyn
Benonsohn, we launched a company
called Future Focus (this was in
1995). It was a dotcom incubator. We
helped companies raise money and
were an acting CTO on their management team. But from the very start,
our focus was always on function—
on doing something, whether it was
selling product or building some sort
of web database application. We’ve
always had a focus on e-commerce,
on an actionable Internet strategy.
least to the degree they should. There’s
still a revolution that needs to occur
with respect to how functional, useful
and intuitive web interfaces are.
OS: When did your interests turn
to testing and optimization?
Ash: As an undergraduate, I studied cognitive science and computer engineering. As a graduate student, I studied neural networks and artificial intelligence.
So I’ve always had experimentation and
scientific methodology in my blood.
As far as the corporate odyssey, we did
a lot of large-scale campaign management in the early days of pay per click.
Again and again, we saw that the quality of the landing page was “gating” the
OS: How difficult was it to get
companies to appreciate the value
of testing and optimization?
OS: You were something of an ecommerce pioneer. Back then, did
you and your peers anticipate the
evolution of online marketing as
it occurred? Which developments
came as a surprise?
Ash: The production quality improvements you could see coming—they are
so immediately obvious and striking
when you view a screen capture from
the early days of e-commerce. The
standard in 1995 was a plain page with
text links. Then people started throwing in graphics. Next came animated
images and we had those flashing smiley faces all over the place. It didn’t
take too much imagination to foresee a
day when rich media, video and the
like would be commonplace.
Unfortunately, what I had hoped to
come to pass really hasn’t, and that’s a
dramatic improvement in usability.
Basically, we see people designing
more for dramatic impact. Very few
are taking the user into account, at
8
ONLINEstrategies | Summer 2009
results. Again, the scale of our programs
was determined by the quality of the
publishers’ landing pages.
It was a painful lesson to learn,
because it was money out of our
pockets, but we saw that the bigger,
more systemic problem—and business opportunity—lay in being able
to improve the landing page.
We did a quick state-of-the-state
analysis and found that the testing
tools being used were very rudimentary—allowing only for very small
scale tests—and assumed that everything on the page was independent of
everything else (which is patently
absurd because we know that the elements on the page work together synergistically to affect conversion rates).
So we went back to the drawing
board and—over the course of several years—developed our tuning
engine, which is at the core of what
we now do today at SiteTuners.
We have the
attention span of a
lit match and usually
hit the back button
when we are
confronted by too
much copy.
size of the campaign. In other words, the
efficiency of the landing page determined to a great extent how much
money could be devoted to the search
campaign (and how much money we
earned). We eventually became a superaffiliate and started sending the traffic
directly to clients and were paid on
Ash: It was quite difficult at first. It’s
easier to get your head around something more tactical, like controlling
your traffic sources. Even something as
complicated as pay per click is an
understood field—you do your keyword research, you write your copy and
you adjust your bids. Testing and optimization, by contrast, requires a lot of
skill sets. Because people didn’t have all
of the skill sets necessary, the field kind
of languished. It’s always been something of an evangelistic sell. We’ll go out
there and sort of cry in the wilderness.
People hear us out and say, “Wow, that’s
interesting. In theory,” and then go back
to their offices and do nothing about it.
OS: Today, are people beginning
to appreciate the importance
landing page optimization?
Ash: Even now, the penetration of
landing page testing is very low. A
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lengthy updates or coding. With just a
couple of mouse clicks, MLB is able to
update any element of the toolbar,
which gets the word out about new
products and offerings immediately.
LET YOUR COMMUNITY
SPEAK FOR YOU
People trust other people. They trust
their peers, and they also trust personal relationships. You want to
encourage that dialogue instead of
getting in the way. Some of the most
successful online selling campaigns
have spread virally, through word of
mouth alone. Two examples of companies that let their communities
speak for them are Craig’s List and
Dell Computers.
Craig
Newmark,
founder
of Craig’s List, likens online reviewing and rating on his site as a civic
act, not dissimilar to public service.
You want your community to
approach your business with this
intent, as it generates goodwill and
can lead to better customer service
and better customer experiences.
Consider a discussion forum, online
community or blog where customers
can speak not only to you, but also to
each other.
Dell is a good example of a company that once had a major image
problem—it was known throughout
the blogosphere as “Dell Hell.” The
company learned—the hard way—
that customers should be in control,
and the best thing to do is to work
with them and learn from them. By
answering issues directly through
forums and blogs (and, for Dell,
Twitter has proven to be an effective
platform), as well as working to
improve the company based on feedback, Dell was able to regain control
of its image. Today, the company has
a number of blogs that allow for dialogue and feedback.
THE CUSTOMER
IS NUMBER ONE
Your existing customers are your most
2:54 PM
Page 29
precious assets. They are the easiest to
market to and the most likely to
buy. Your competitors can buy their
way into your market by matching
your pricing, copying your product
and even imitating the look and feel of
your brand. What they can’t buy are
your relationships. Placing your customer above all else should be of para-
their relationship marketing efforts.
An example of successful relationship marketing is seen at
Babystrology.com, which created a
baby countdown widget. The pregnancy ticker is an addictive, constant
reminder of the brand, and features
special offers, new products and
more. There have been nearly
You shouldn’t have to spend an inordinate
amount of time updating your marketing
tools. They should be working for you.
mount importance at all times.
An excellent example in this
regard is Travelocity and their newly
launched custom toolbar for Firefox
and Internet Explorer. This new toolbar allows customers to book flights,
hotels and vacations at any time.
This is aimed at current Travelocity
customers. The toolbar is extremely
convenient and opens a direct selling
channel—right in the customer’s
browser—for Travelocity. The special offers encourage travelers to
interact more frequently with the
Travelocity brand and to hopefully
increase their travel arrangements
with the company.
RELATIONSHIP MARKETING
Today’s customers are different than
those you encountered in the past—
even those from just a year ago. They
expect more: more information,
more choices and more convenience.
Relationship marketing is the new
approach, and there are a variety of
methods available to increase your
value to, and interaction with, customers. Make coupons and special
products available exclusively on
your websites, blogs or toolbars, host
customer forums, syndicate your best
content, offer “how-to” videos,
deploy surveys and provide a direct
link to customer service, among
many other activities. Large and
small organizations can learn to hone
630,000 installs of the widget, which
links customers and users to the
Babystrology online store.
MAKE YOUR TOOLS
REFLECT YOUR BRAND
Every tool should look and function
as an integrated element of your
online marketing presence if you
want it to help with conversion and
retention. Without consistency, you
run the risk of appearing disjointed,
or worse, unrecognizable.
Tools such as WidgetBox’s
Blidget (www.widgetbox.com/make
_blidget.jsp) allow you to do just that
by giving users the opportunity to
easily brand and control updates.
Pioneered by WidgetBox, Blidgets
are widgets built from a company’s
own content (a “blog feed” plus a
“widget” equals a “blidget”). Today,
companies are able to turn all their
content—from blogs, YouTube,
Flickr, Twitter, Vimeo and more—
into dynamic, customizable widgets.
With some strategic planning,
smart thinking and solid execution,
small businesses can realize positive
results throughout the coming year
with only minimal investment.
Adam Boyden is president of
Conduit, a leading provider of website
syndication solutions for web publishers. He can be reached at
[email protected].
Summer 2009 | ONLINEstrategies
29
onlineINSIGHTS
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data security
Tokenization Gains Traction
BY GARY PALGON
30
ONLINEstrategies | Summer 2009
Protecting confidential customer information from theft and accidental loss is a
critical business challenge for retailers,
whether you sell your products in stores,
online, via mail order, from a call center,
or a combination thereof. Wherever payment card information is collected and
stored, it is at risk. This applies equally to
personally identifiable information (PII),
whether it is customer loyalty information
or employee data. No one in this industry
needs to be reminded of the many highprofile, reputation-damaging and costly
data breaches that retailers have suffered
in just the past few years.
We’ve seen state breach notification
laws and international privacy laws
enacted, as well as industry mandates
such as the Payment Card Industry’s
Data Security Standard (PCI DSS). Most
large retailers and many smaller ones
have adopted some form of data encryption to protect the payment card numbers entrusted to them.
While there is no question that data
encryption—when combined with data
security best practices—is effective for
protecting sensitive data and for complying with PCI DSS, the encrypted data
remains in the applications and databases.
Any system that contains this encrypted
data is a point of risk and, therefore, considered “in scope” for PCI DSS compliance and annual
audits. Moreover, as
retailers seek security for more diverse
types of confidential
information such as
social security numbers for employees,
commercial driver’s
license numbers for
company driv-
ers, as well as passwords and other sensitive data, data encryption becomes more
complex and resource intensive.
Another challenge is that encrypted
data takes up more space than unencrypted data. Many forms of PII contain
many more characters than a 16-digit
credit card number—all of which can
pose a “square peg into a round hole”
storage problem with consequences that
ripple through the business applications
that use the data. Retailers must often
contract for costly modifications to existing applications and databases.
To reduce the points of risk as well as
the scope of PCI DSS audits and to provide another level of security, a new data
security model—tokenization—is gaining traction with retailers.
WHAT IS TOKENIZATION?
Tokenization is an alternative data protection architecture that is ideal for some
retailers’ requirements. It reduces the
number of points where sensitive data is
stored within an enterprise, making it easier to manage and more secure. The
newest form creates a token—or surrogate
value—that represents and fits precisely in
place of the original data (instead of the
larger amount of storage required by
encrypted data). Additionally, to maintain
some of the business context of the original value, certain portions of the credit
card can be retained within the token. The
encrypted data the token represents is
then locked in a central data vault and
protected by encryption keys.
Because tokens are not mathematically
derived from the original data, they are
arguably safer than encrypted values. A
token can be passed around the network
between applications, databases and
business processes safely, all while leaving
the encrypted data it represents securely
stored in a central repository. Authorized
applications that need access to encrypt-
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ed data can only retrieve it using a
token issued from a token server,
providing an extra layer of protection and preserving storage space.
One large retailer recently performed an internal audit and discovered credit card information stored
in more than 200 places. Even with a
strong encryption and key management solution and excellent internal
procedures, this was unmanageable
and an unacceptable level of risk.
The company first deleted credit
card information from places where
it wasn’t truly needed. The next step
was to reduce the number of
instances of the information to four
encrypted “data silos” and substitute
tokens for the credit card information in the remaining locations. This
created a highly manageable architecture and reduced the risk of
breach dramatically.
DATA ANALYSIS:
BUSINESS AS USUAL
Referential integrity can introduce
problems where various applications (e.g., loss prevention, merchandise returns, data warehouses)
and databases use the sensitive data
values as foreign keys for joining
tables to run queries and perform
data analysis. When the sensitive
fields are encrypted, they often
impede these operations since, by
definition, encryption algorithms
generate random encrypted values.
While there are methods to remove
the “randomization,” there are risks
involved. A consistent, format-sensitive token eliminates this issue. It
also reduces the number of employees who can access sensitive data to
minimize internal data theft risk.
Under the tokenization model, only
highly authorized employees have
access to encrypted customer information—and even fewer have access
to the unencrypted data.
REDUCING AUDIT SCOPE
When you undergo a PCI DSS audit,
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all of the systems, applications and
processes that maintain or have
access to credit card information are
considered “in scope.” However, if
you substitute tokens for the credit
card information and the systems,
applications and processes never
require access to the token’s underlying value, they are taken “out of
scope” and do not need to comply
with the PCI DSS requirements.
IS TOKENIZATION FOR YOU?
Tokenization, for all its benefits, is not
a silver bullet for every retailer. Is it
right for your company? For many, the
best solution is a hybrid approach: a
combination of localized encryption,
centralized tokenization and data
security best practices. Tokenization is
worth considering if your company:
• Wants to avoid costly modifications to applications and databases
to store encrypted data.
• Conducts trans-border business.
Retailers who do business in
Europe must obey European privacy laws, which prohibit certain
employee and consumer information such as social insurance numbers from being electronically
transferred across international
borders without express written
consent. Because tokens can be
transmitted in place of confidential
information and referential integrity is preserved, application development, testing and data analysis
can be conducted on information
collected in other countries while
complying with international law.
Tokenization reduces the scope
Tokenization reduces the scope both of
risk and data storage requirements, while
maintaining referential integrity and
streamlining the auditing process for
regulatory compliance.
• Collects and stores large volumes of
structured data (e.g., credit card
numbers and PII such as social security numbers, customer buying habit
information, salary records, etc.).
• Has a fully interconnected IT environment, whereby systems with
confidential information are connected to a central application and
data vault. Centralized tokenization doesn’t work in a disconnected environment; localized encryption or “in-place tokenization”
works well in those systems.
• Wants to reduce points of risk and
make compliance with PCI DSS
easier and less costly. Tokenization
reduces the points of risk by removing encrypted data from applications and databases throughout the
enterprise, thereby taking those systems out of scope for compliance
and audits.
both of risk and data storage requirements, while maintaining referential
integrity and streamlining the auditing process for regulatory compliance. The higher the volume of data
and the more types of sensitive data
you collect, the more valuable tokenization becomes. Fortunately,
incorporating tokenization requires
little more than adding a token server and central data vault. For retailers
with a combination of disconnected
and interconnected data entry systems, incorporating local encryption
and tokenization with centralized
encryption key management will
provide the best protection.
Gary Palgon is vice president of product management for data protection
software vendor nuBridges, Inc. He
can be reached at gpalgon@
nubridges.com.
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e-mail marketing
Integrating E-Mail
and Social Media
BY JEANNIEY MULLEN
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In 2009, e-mail marketing entails much
more than sending a message out to a
list. From mastering the art of deliverability, the science of creative imagery
and design and the basic strategy for
messaging frequency, e-mail marketing
is anything but simple. In addition to
the tactical elements that each successful
e-mail marketer is required to master,
we are now challenged with merging
consumers’ increasingly “on demand”
daily media consumption habits into
our strategic approaches.
Less than 60 percent of people read their
e-mail messages exclusively on a laptop or
PC. Digital devices like the BlackBerry,
iPhone and other wifi-enabled products
provide consumers immediate access 24/7.
Scanning, accessing and taking action on
e-mail marketing messages has never been
easier, faster and more convenient.
This means that the conversation surrounding electronic messages we receive
has increased. With social networking
tools like Facebook and Twitter,
consumers can simply and quickly share
offers and insights, conversing about
brands they love or hate.
A NEW CHALLENGE
With the ease and increase in conversation
comes a new challenge related to capturing
the focus and attention of the reader.
Instead of being able to present your company’s story, offer or information to a per-
Today, your message
must stand out and be
successfully processed
within milliseconds
of viewership.
son who is focused on nothing else expect
your message, mobility often means that emails are scanned and processed with less
than 35 percent of the full attention they
deserve. This means your message must
stand out and be successfully processed
within
milliseconds
of viewership.
It also means that
your e-mail marketing
efforts
must evolve. No
longer can you
rely on your email message to
carry your product offering the
entire way. The
effectiveness of a
single e-mail as a sales
vehicle, lead generator
and interest driver are reducing. They are giving way to other
forms of mass influence. The interesting thing about e-mail’s loss of influence is that it is not giving way to one
other single channel, such as a social
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site or search, but instead it is
becoming part of an array of influencing factors a digital consumer
will rely on to make a purchase or
take an action.
BEST PRACTICES
In 2009, we see four critical areas
inside e-mail marketing that you can
adapt, adopt and employ to ensure
you are on the right track. These
four areas of influence include:
Identifying social influencers on
your e-mail marketing list;
Designing e-mails that work;
1
2
3
4
Creating integrated messages to
maximize response; and
Preparing for the increasing
mobility of e-mail access.
Social influencers have comprised
an area that has seen extremely rapid
growth, even within the last 90 days.
If you haven’t started thinking about
putting Twitter and Facebook links in
your e-mails or integrating your
efforts, you could be missing out.
Most company lists are divided
into segments such as best customers (high purchasers, high-dollar buyers or even long-time consumers), worst customers (people
on the verge of being removed from
the list due to non-response), new
customers (who often went through
a 60- to 90-day on-boarding process
to determine what other categories
they would fall into) and unsubscribes (people who used to be on
your list, but aren’t anymore).
Across these categories, many subcategories and variations of messaging are being sent out. Best customers
often receive exclusive pre-sale
notices or are asked to “refer a
friend.” New customers are often sent
surveys and other educational messages to help increase brand strength.
Understanding the impact of
social media on our targeted e-mail
campaigns opens up an entirely new
set of segments to leverage. Consider
how you can split your list, not
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according to dollars customers individually spend, but rather to the collective dollars they influence others
social efforts perform, you’ll be excited to try more. You might even get
addicted to it! Integrating social
Consider how you can split your list, not
according to dollars consumers individually
spend, but rather to the amount they influence others to spend on top of their own.
to spend on top of their own.
In the past, those people who
responded marginally or not at all
to your messaging were typically the
people you would consider removing from your list. Today, though,
those people may not individually
respond, but might tell others about
your offer, news or sale. These people could very well become your
best ambassadors and drive sales.
Once you start seeing how your
media and e-mail will ultimately
help improve the strength of your
company’s brand, and drive revenue
and your social buzz on the web.
Jeanniey Mullen is an accomplished
digital marketer and the executive
director of the E-Mail Experience
Council. She is advocates for and drives
change that redefines various marketing channels. She can be reached at
[email protected].
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performance measurement
A Map for the New Frontier
BY JASCHA
KAYKAS-WOLFF
We are currently on the edge of a new
frontier that holds the promise of entirely new data sets. This data is ripe for analyzing, but as with many expeditions that
venture into uncharted territory, inexperience and lack of preparation can lead to
costly failures. One thing is certain—a
successful expedition, like a successful
corporate marketing program, requires
an understanding of where you are now
and where you ultimately want to be, and
a roadmap outlining the best possible
way to get there.
Pioneer analogies aside, 2009 may well
go down in history as the year that digital
supplanted offline media as the driving
force behind corporate marketing programs and business media. A recent study
by the Chief Marketing Officer Council
found that spending on online and on Web
2.0 initiatives aimed at demand
generation and advertising
The creation of the DM3
introduces a benchmark for an organization’s digital marketing
measurement and optimization capabilities
that goes far beyond
mere web analytics.
will exceed traditional media by almost 50
percent in 2009. These findings are not
surprising given the extraordinary growth
rate that social networks and online communities are experiencing.
So what does all this mean for the marketing community? Online marketing
continues to grow and mature, and
organizations need a structured
approach to build and maintain mature
measurement programs across all types
of digital marketing activities. This structured approach has been non-existent in
the web analytics industry, which fueled
the Webtrends’ Digital Marketing
Optimization team to develop a model,
based on more than a decade of experience working with leading companies
and brands such as Microsoft, Coca Cola,
Disney and General Mills to build successful measurement programs.
ENTER THE DM3
The creation of the Digital Marketing
Maturity Model (DM3) introduces a
benchmark for an organization’s digital
marketing measurement and optimization capabilities that goes beyond mere
web analytics. DM3 provides a framework and objective criteria for assessing
the strategies, skills, tools and best practices that support the successful measurement of all digital marketing activities. Until now, other web analytics
34
ONLINEstrategies | Summer 2009
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models have focused exclusively on
website measurement, whereas the
goal behind the DM3 is to help
build consensus around the essential ingredients of effective digital
marketing measurement, which
include the new online communities that incorporate the entire
“social” web.
If online marketing is to continue to
grow and mature, the web analytics
industry needs a standardized, structured approach like what has been proposed with DM3. In order to have
assurance that an organization is getting the most return on its digital marketing dollars, a model needs to be put
in place to objectively assess current
capabilities and map out future growth.
With DM3, organizations are
given a standardized approach to
help gauge their capabilities to execute and measure the effectiveness of
their digital marketing campaigns.
The benefits of DM3 are threefold,
allowing a company to:
Measure the maturity of an organization’s ability to execute and measure
digital marketing programs across six
core areas (below you will find more
detail regarding the six core areas);
Gain organizational consensus
and support for measurement practices; and
Pinpoint the skills, staffing and other
investments needed to advance within
the model’s four maturity levels.
Going back to the six core area
mentioned above, DM3 provides a
framework that includes four levels of
maturity within each of the six core
areas that works to assess a company’s
digital marketing maturity, referred to
as “Six
Pillars
of
Digital
Measurement.” The core areas help to
define the level of maturity on a ranking of 1 to 4, given the various profiles
outlined in each level that describe the
measurement practices common to
each. The six core areas include:
• Measurement strategy;
• Analytics resources and
domain expertise;
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• Data integration and visualization;
• Data analysis and insight;
• Adoption and governance; and
• Ongoing optimization
The first pillar, measurement strategy, should be considered the most
important. In order to ensure that all
digital marketing activities contribute
to the organization’s bottom line, there
needs to be a formal measurement
strategy in place that aligns properly to
the overall business objectives. Given
the current micro-economic environment that marketing departments are
dealing with, alignment of the measurement strategy can work to demonstrate the value of digital measurement
to executive management, while justifying budget and resources to decision
makers, as well.
Analytics resources and domain
expertise stress the importance of having a team in place to help effectively
run a digital marketing campaign. It’s
people that will determine the success
of a digital marketing analytics program, and the number of people and
resources dedicated to that effort will
ultimately affect the results.
Data integration and visualization
also play an important role, as the ability to marry multiple sources of data
will create a more complete picture of
an organization’s customers and busi-
tion that organizations can use to
drive smarter marketing and business
decisions.
Finally, there is a need for adoption
and governance. Without set rules in
place to ensure consistency and quality over time, digital marketing data
has little value. Training is essential,
and having the right people aligned to
sift through the organization structure
will create a more defined process for
managing various aspects of digital
marketing programs.
Ultimately, even with the most
sophisticated or automated tools,
effective digital marketing measurement is anything but a plug-and-play
task. It requires significant planning
and organizational coordination.
Additionally, different types of vertical industries use digital marketing in
a variety of ways to achieve different
business goals. Having said this, it’s
important to keep in mind that digital marketing maturity looks different
for different types of organizations,
and is rarely achieved overnight.
The more knowledge and understanding you have of your goals and
the journey you’re embarking upon
with your digital marketing campaign, the better prepared and more
prosperous you will be when venturing into that new frontier.
A successful expedition, like a successful
corporate marketing program, requires an
understanding of where you are now and
where you ultimately want to be.
ness. Combined with a visualized
approach to organizing this data, your
digital marketing will be able to better
meet the needs of different groups
throughout your organization with a
more universal form of presentation.
Because different types of data
require different types of analysis
skills, focus on data analysis and
insight is essential for turning webbased data into actionable informa-
For more information, and to provide feedback on the beta version of
DM3, visit www.webtrends.com/
Services/Digital-MarketingMaturity
-Model.aspx.
Jascha Kaykas-Wolff is vice president
of marketing for Webtrends, a web
analytics company headquartered in
Portland, Ore. He can be reached at
[email protected].
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BY MARK SIMON
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Is Search Retargeting For You?
Paid search marketing is now the benchmark for efficiency and effectiveness in
online marketing. Even in a poor economy, search spend hasn’t dramatically
declined (although bullish growth projections have been moderated).
However, it has one fundamental flaw.
Put simply, the unit for which advertisers
pay (the click) isn’t what advertisers really want to buy (which is, of course, the
conversion). Furthermore, no two clicks
have the same value. Some may have
great value, but the majority of clicks
don’t result in conversions. This waste is
something we’ve all learned to live with;
we devote much of our day-to-day efforts
to keep it within reasonable ranges.
Search engines have given us tools to
minimize this waste: geo-targeting, dayparting, and—to a limited extent—demo-
The gap between
clickers and buyers is
narrowing, and one
great way to close
this gap is search
retargeting.
graphic targeting. Correct use of such
technologies does reduce e-tailers’ exposure to clicks with little conversion potential. Additionally, SEM agencies have
developed proprietary software that couples ROI (or other meaningful success
metrics) to spend levels, continuously
adjusting campaign parameters to optimize conversion rates.
But determining—in advance—which
clicks are worth bidding high for is still a
maddeningly difficult task. We lack the
“holy grail” enjoyed by offline marketers
who target their DM campaigns to lists of
ONLINEstrategies | Summer 2009
qualified purchasers. The good news is that
the gap between clickers and buyers in the
online world is narrowing, and one great
way to close this gap is search retargeting.
Search retargeting uses search query data
to establish a user profile against which to
target customized ads, which run across
third-party (non-search) sites. This allows
advertisers to apply the technology against
much larger traffic streams. The real payoff
for advertisers comes with the increased
conversion rates associated with such retargeting, making their non-search ad targeting far more efficient than contextual targeting, and (according to early anecdotal
tests), as cost-efficient as search itself.
Of the “big three” search engines,
Yahoo has been the most aggressive in
terms of offering search retargeting, and
recently announced a major new service
called Yahoo Search Retargeting, which
uses search query data to retarget display
ads through sites in the Yahoo network.
Because of search retargeting’s upside
potential, third-party agencies and ad networks have also entered the search retargeting game, and you should familiarize
yourselves with solutions from companies
like Advertising.com and Audience Science
(formerly Revenue Science). My own firm,
Didit, has recently rolled out a product
called Blizzard which incorporates retargeting. These new solutions go a long way
toward reducing—and hopefully someday
eliminating—the divides separating clickers, searchers (who you may or may not
want to reach, depending on the price) and
buyers (who you almost always want to
reach, even if you must pay handsomely
for the privilege).
Mark Simon is VP, industry relations at
Didit, a digital advertising agency specializing in paid search. He can be reached at
[email protected].
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recent study I came across showed that
for every $80 spent in driving traffic,
one dollar is spent on optimizing the
pages on which that traffic lands.
However, there was a real gamechanging moment a few years ago when
Google launched their free optimization
tool, Google Website Optimizer
(GWO). It allows people to do both A/B
split and multivariate testing. It’s been a
huge boon, having Google’s momentum and stamp of approval behind it.
It’s a fantastic tool and it’s raised awareness in addition to giving companies the
means to do testing.
OS: Does the existence of a free tool
from a company as powerful as
Google help or hurt your business?
Ash: It absolutely helps. The problem
was that people weren’t doing testing.
The free tool has removed the biggest
impediment keeping companies from
doing it. In addition to being free, it’s
very easy to get up and running,
unlike some other tools.
But just having the tool doesn’t
mean you can make effective use of it;
if I give you a hammer, it doesn’t mean
you can build a house. You still need
someone with extensive testing experience, with proven ideas about what to
test, how to set up the test and avoid
some of the practical “gotchas” regarding the type of traffic sources you’re
driving to it and other real-world factors that can impact the accuracy of
the results. That’s where we come in.
OS: And you also have your own
tuning engine. How does it differ
from other testing tools?
Ash: We created it, not because we like
building software, but because of a
variety of needs. There are several limitations that exit with the first-generation tools out there. The first is test
size. Because of the math they’re
using, you’re forced to use fewer of
your ideas in the test. For example,
you can only run, say, three headlines,
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More About Tim Ash
im Ash was born in Russia, immigrating to the U.S. with
his family in the early 1970s when he was seven years
old. He lived in Albany, N.Y., Ann Arbor, Mich., and Cherry
Hill, N.J., before moving to California to attend the University of
California at San Diego on a regent scholarship.
At UCSD, Ash studied cognitive science and computer engineering. As a graduate student (also at UCSD) he studied neural networks and artificial intelligence.
Upon graduation, he worked in a number of high-tech roles, all related to programming and machine learning, until he was bitten by the entrepreneurial bug.
He started his own company—Future Focus—15 years ago, and is still riding the
entrepreneurial roller coaster today.
Future Focus was an Internet business incubator, helping to launch early-stage
dotcom companies and developing some of the first database-enabled web applications with clients such as CompUSA and American Express.
Future Focus went up—and down—with the dotcom wave. As Ash surveyed the
wreckage of the company after the dotcom crash, he decided the next venture had
to focus on something accountable.
He then started Epic Sky eight years ago (now the parent company of SiteTuners)
which managed (and still manages) large-scale PPC campaigns. But this discipline
has become largely commoditized, in Ash’s view. To remain relevant in a fast-moving business such as e-commerce, he believes vendors need to keep swimming
upstream to the more difficult stuff that is less commonly understood.
He now sees the battleground as landing page testing, and started SiteTuners
five years ago. His career has come full circle, though. Ash has finally found a place
where he can match his personal skills—being an entrepreneur, leader and visionary—with the subject matter that he loves: math, statistics and the psychology of
human decision-making.
T
so you are forced to self-censor and
leave what might be winning ideas out
of the test. (If you knew which headlines to leave out, you wouldn’t need
to be doing testing in the first place.)
Also, context and juxtaposition are
important. For example, certain pictures next to certain copy might produce a poor result, but if they were
assembled in the right combination,
they might have spectacular results.
Our tool permits large-scale tests,
considers context and juxtaposition
and is fully automated—you push a
button and get an answer. You aren’t
required to apply statistics or make any
judgment calls; you simply get the bestperforming version and how it performs statistically against the original.
OS: There are so many areas on a
site you could test. When working
with a client, how do you know
where to start?
Ash: Let’s take the common example
of a retailer who sells a catalog of
products. Typically, these sites have a
homepage, a category page, a search
results page, product detail, the shopping cart and the various steps in
check-out. So it’s really only a few different page templates.
We’ll assess which are the most
flawed and which have the most value.
For instance, you might have some
people landing on your homepage, but
because of your direct-linking efforts,
most of your traffic is actually hitting
your product detail page. So we would
focus our efforts there: from the product detail all the way on down through
check-out, because almost all of the
traffic has to go through that route.
(We find that most check-out pages
are dramatically sub-optimal, by the
way.) And we will usually start by
making local changes on a single page
versus global changes to a page shell
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coverSTORY
and layout—that would be a pretty
major undertaking as an initial test.
OS: What are some common mistakes that you see?
Ash: Clutter and overload of information—we see this all the time. Too
much text on a page. We don’t read on
the web; we have the attention span of
a lit match and usually hit the back
button when we are confronted by too
much copy. Inappropriate use of eyecatching graphics is another common
mistake, graphics that don’t support
the conversion goal. If the goal is to
have someone click on a button and
you have an animation or a picture of
a person on another part of the page,
I guarantee that the customer’s attention is not going to be on the button.
Ultimately, we often find that the
versions that perform best are relatively stripped-down. It’s a page
where the eye can rest, where there’s a
clear set of decisions with a limited
number of choices that can be made
and where people are guided naturally (not by something shouting above
the rest of the visual din) to focus on
the right parts of the page.
OS: Any other common mistakes?
Ash: Giving the customer too many
choices on a page. Copy in paragraph
form rather than in bullet points with a
clear call to action. While there’s strong
evidence that certain features like walkon video spokespeople can be very powerful, as a general rule, rich media with
motion should be used with caution.
Long forms can be a huge hurdle, too;
never ask for more information than
necessary to complete a transaction.
And finally, you need to tie the content
to what happened upstream, what
drove the traffic in the first place. You
need to meet their expectations and
keep the promises you made upstream.
But usually, we find that there’s not
We had a recent test
that ran for three
or four weeks
and resulted in
$48 million in
additional revenue
to the client.
results clients can expect, in
terms of conversion improvement and bottom-line results?
Ash: Let’s put it this way. The three
main activities of an e-commerce
operation are acquisition (through
search or display advertising), conversion and retention or maximizing a
customer’s lifetime value (through email). The first and last activities are
pretty well understood and the best
practices are fairly mature. You would
be hard-pressed to increase cost-effective traffic by 50 percent or increase
the average customer’s lifetime value
by 50 percent. But we consistently get
double- and even triple-digit increases in conversion, from 20 percent on
the low end to well over 100 percent.
It’s easy to calculate the financial
impact of a test, as well. You take the
percentage by which conversion is
improved and apply it to the revenue
value that runs through the page. Single
tests can have a value of hundreds of
thousands or millions of dollars. We
had a recent test that ran for three or
four weeks and resulted in $48 million
in additional revenue to the client.
OS: Is there a risk of losing brand
image with such a plain page?
OS: How do you see testing and
optimization evolving over the
next few years?
Ash: It’s about business objectives.
Do you want the visual impression or
do you want the conversion? Of
course, it doesn’t have to be so cut
and dried. You can have multiple
goals. We’ll weigh each goal and place
our emphasis accordingly. You may
want certain content on one part of
the page specifically designed with
more of a branding goal in mind—
and we can measure its success—and
have the rest of the page furthering a
conversion goal.
Also, one must not confuse simplicity with cheapness. A page can be
optimized, very uncluttered, but with
outstanding production quality that
enhances the brand image.
Ash: First, I see it becoming a dedicated
practice area within companies, just as
SEM is today. People will learn that testing is not optional. If you put up content that has value running through it
and you haven’t optimized it, you will be
shut out of the game by people that do.
Also, the tools will become more
sophisticated. There will be more and
more automation until we get to a
point where there is no start or end
point to a test. You’ll be able to throw
in ideas on the fly, which will be
implemented—or not—in the way
that maximizes conversion. The optimization tool will simply be built in
to your platform and run constantly
and automatically.
10
ONLINEstrategies | Summer 2009
one mistake that is the source of the
problem. Landing pages are often death
by a thousand cuts. It’s tweaking
numerous elements in the same direction to achieve a more integrated
design that produces significant results.
OS: How significant are the
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stores and an online presence have
myriad mobile tactics available that
are more tailored to their business
model. Some effective mobile programs for these hybrid retailers are
targeted at a segment of the mobile
consumer market that prefers to
shop online and buy in store. Rather
than executing digital marketing
programs and tactics designed to circumvent customer shopping preferences, effective mobile marketing
takes advantage of current shopping
habits. Here are some examples.
SENDING THE SHOPPING
CART TO A MOBILE DEVICE
M-commerce (making an actual purchase from a mobile device) has not
reached mass consumer adoption
yet. In fact, a significant segment of
consumers still shy away from making purchases online, even though
they spend a great deal of time
researching their purchase before
going to a store to “kick the tires” and
buy. Marketers have long been seeking a way to measure this elusive segment of consumers, and allowing
online browsers to build a shopping
cart and send it to their mobile
device is one way to connect the dots.
Clothing retailers are in an especially
advantageous position here. A shopper can go online and choose color,
style and size for the clothes they
want, place them in their shopping
cart, then send that cart to their
mobile device. Once in-store, a clerk
can easily help the shopper find the
clothes they picked out because the
shopping cart includes important
information like SKUs.
SENDING COUPONS
TO A MOBILE DEVICE
Many consumers research big-ticket
items, like appliances, online before
purchasing in store. Rather than
providing these consumers with
aggressive offers to entice them to
purchase exclusively online, it’s easy
to use the mobile channel to give
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them a coupon offer they can use in
the store. Present the coupon online
during the research process and
allow the shopper to forward the
coupon to their mobile device. The
coupon can include a quick
response code for easy scan and
redemption, or it can include a personalized coupon number to track
redemption. Both redemption
methods are effective and help you
create more enticing future offers
for a specific segment of buyer.
STORE-FOCUSED
MOBILE ALERTS
The previous hybrid retailer mobile
tactics are examples of companies
giving control over the timing of a
purchase to the consumer. While
It is easier to get these tactical
mobile programs started now than it
was 12 or 18 months ago. However,
there is a time investment required
to get mobile marketing programs
up and running. In addition to the
time needed to provision a short
code, every mobile program must be
approved by the mobile carriers
before it can be executed on their
respective networks. E-commerce or
hybrid retailers seeking to expand
their direct digital marketing strategy to include mobile marketing must
find a good partner who has solid
relationships with the U.S. Common
Short Code Administration (CSCA)
and a carrier aggregator to ensure a
program is approved as rapidly as
the system allows.
Effective mobile programs for hybrid
retailers are targeted at a segment of the
mobile consumer market that prefers to
shop online and buy in store. Rather than
circumventing customer shopping preferences, effective mobile marketing takes
advantage of current shopping habits.
effective, there are times when store
traffic is unexpectedly light or when
monthly forecasts are bleak. A
mobile alert sent by a store manager
to a segment of local customers is a
useful method for creating foot traffic that moves inventory within a
tight time-frame. The corporate
entity can tightly control content
and frequency by giving store managers the option of choosing from
several pre-approved campaigns, or
store managers can devise their own
campaign and tailor it to their specific markets with light corporate
governance. The right mobile marketing partner is able to execute
either program type and provide
measurable results that continually
improve sales.
Mobile marketing is sensible
because the investment in creative,
overhead and technology infrastructure is relatively low while the
benefit of increased measurable
sales and enhanced consumer loyalty are substantial. Though getting a
program in market does initially
take time, the benefit and value of
opening an additional communications channel with willing consumers is important, and the business value is being realized more
quickly than ever before.
Brian Deagan is the co-founder
and CEO of Knotice, a direct digital
marketing solutions company. You
can
reach
Deagan
at
[email protected].
Summer 2009 | ONLINEstrategies
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innovation
Drive Revenue With Innovative,
Low Cost Marketing Tools
BY ADAM BOYDEN
Despite reports of the continued recession, small business innovation, along
with smart thinking and entrepreneurial
spirit, can continue to drive business forward. In fact, small businesses can take
advantage of this economic climate by
using it as an opportunity to assess the
effectiveness of their marketing campaigns, and to adopt new strategies as
needed. Many small businesses and
would-be entrepreneurs know this, but
aren’t sure how to begin. Here are six tips
to adapt your business to the new reality
and to continue to thrive, not just survive.
DON’T PAY FOR YOUR
MARKETING TOOLS
Developing custom applications for your
business can be expensive, time consuming and redundant. Often, a tool that will
meet your needs is already available.
Whether it is for customizable landing
pages, toolbars, ad campaigns or other
applications, most are available for a low
cost or are free and on-demand. The best
offerings will have a point-and-click wizard that guides you through the installation and development process. With a little research, you can find tools that are
well-suited for your business.
Three popular examples are Facebook,
28
ONLINEstrategies | Summer 2009
Twitter and Ping.fm. By setting up a
Facebook group or fanpage, you can promote brand presence while sharing news
and events with the group members and
offering a place for discussion. Mashable
has a great resource to help you determine
whether a fanpage or group is right for
you
(www.mashable.com/2009/05/
27/facebook-page-vs-group).
Twitter has to be included in any mention
of free marketing tools these days. For some
organizations, Twitter is a great opportunity to have one-to-one conversations with
followers that might be interested in what
the company is offering. It’s also a means to
publicize specials or promotions and drive
people to a company website, blog or
another online presence. Companies like
Comcast (twitter.com/comcastcares) and
Constant Contact (twitter.com/ctcthelp)
are getting great results from it.
Ping.fm is an excellent tool for managing the updates on more than 40 social
networks simultaneously. Working with
sites such as Facebook, Mashable, Flickr,
Tumblr and others, Ping.fm saves you
time and energy. And, best of all, it’s free.
FIND TOOLS THAT
ARE EASY TO USE
You shouldn’t have to spend an inordinate amount of time updating
your marketing tools. They
should be working for you, not
the other way around.
Particularly useful if you are
offering a promotion, coupons,
discounts or other incentives,
these tools can get the word out
quickly and painlessly.
For example, Major League
Baseball (www.mlb.com) has a
community toolbar from which
it sells seats and promotional
items. MLB’s promotions update
in real time, so that an administrator is not bogged down in
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Rich Media and Conversion
igger data pipes into our homes
and businesses have made highbandwidth video, animation and
interactive applications possible within
our web browser. Video producers, animators and game designers are rushing
in to take advantage of this seemingly
enormous and profitable opportunity.
More is better—right?
Not necessarily.
Undoubtedly, rich media will lead to
better, more immersive experiences for
some entertainment-related online
activities. But is it right for online marketing? Just as the supersizing of our
fast-food meals can lead to all sorts of
health problems, excess in online marketing can often have deleterious
effects, as well.
Several factors need to be considered:
Expense – Although authoring tools
are improving and becoming less expensive, finding the right people to create
and modify your rich media content can
still be a challenge. There is a high bar in
place in terms of people’s expectations
of quality. Plan on spending substantially
more money to create and future-proof
your rich media assets against the emergence of higher-quality standards.
Attention diversion – In the landing
page optimization testing that we’ve
conducted, we carefully try to balance
all of the visual elements of the landing
page in order to focus awareness and
attention on the critical conversion ele-
B
ments. Often, this requires a toning
down of visual clutter on the page so
the call to action naturally and organically arises out of the relative stillness.
Unfortunately, many uses of rich media
do not consider this. In fact, they often
go in the opposite direction, figuratively and literally screaming for attention,
trying to out-compete the rest of the
page elements. Motion, contrast, audio
and prominent page placement can
easily conspire to steal precious attention away from the call to action.
Particular care needs to be paid to
the auto-playing of video or audio. The
use of walk-on video spokespeople
tends to have either an extremely positive or negative effect on conversion
often requires the latest versions of specialized browser plug-ins, and results in
an extremely unfriendly and bewildering experience for those who do not
have them installed.
Immature design sensibilities – Much
of the rich media being created today is
similar to the early days of other new
media. Think back to some of the synthesizer-heavy rock music of the 1970s
or the tacky animated icon smiley faces
that were the bane of early web pages.
Each new technology was enthusiastically adopted, but it was often used at
first in a gleeful “gee, look at what I can
do now” method. The often-unasked
question with rich media needs to be
the following: does this presentation
Many uses of rich media figuratively and literally scream for attention, trying to out-compete the rest of the page elements. Motion,
contrast, audio and prominent page placement can easily conspire to steal precious
attention away from the call to action.
rate because of its unexpected nature
and the use of moving and talking people. It all depends on execution and
how it is tied to the conversion goal.
Browser and hardware differences – It
is notoriously difficult to make even
basic standards-compliant HTML code
look the same
across different
browsers and
browser versions.
All kinds of hacks
are required, and
still some compromises remain. This
problem is multiplied when rich
media taxes the
bandwidth, CPU,
memory and operating system of the
computer to a
much greater
degree. Rich media
method provide clear and compelling
advantages over the use of traditional
web design? You may find the answer is
no. If so, save yourself the trouble and
expense of creating it.
Difficulty of tracking and testing –
Although there are well-defined standards for measuring and tracking traditional web content, the same is not true
of rich media. Different metrics exist to
measure engagement and the effect of
the rich media. It is also difficult to track
events embedded in the Flash or other
rich media files, making it problematic
to set up landing page tests.
The bottom line is that rich media is
not a panacea. Much care must be
taken when using these powerful new
tools. You can be pretty certain that
they will have a strong effect on conversion. But the devil is in the details,
and you may not know whether the
effect will be positive or negative.
—Tim Ash
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An
Ounce
Prevention…
of
A thorough review of any e-commerce website is essential to
avoid a potentially nightmarish legal quagmire down the road.
Here are the key issues your legal team should examine.
BY D. JOHN HENDRICKSON, ESQ. AND PHILIP REBENTISCH, CP.
A commercial website that is highly
functional, conveys an effective sales
pitch and is easy to use can result in
a successful revenue source for a
company’s products or services.
However, if the website does not
abide by state-based advertising
statutes as well as federal regulations,
this highly-prized revenue source
can become an expensive, nightmarish problem. For this reason, a thorough legal review of a commercial
website is essential to avoid potential
legal entanglements with federal or
state authorities.
So what type of red-flag issues do
attorneys and paralegals look for
when evaluating a site? To simplify,
we examine advertising claims, no
matter where they are found in the
site; the content, placement and use
of disclosures; testimonials; usergenerated content; copyright or
trademark infringement issues; the
site’s terms of use and privacy policy
(or lack thereof); the structure and
content of any sweepstakes or contests on the site; and the use of
appropriate notices of designation of
trademark and copyright ownership.
FTC REQUIREMENTS
In addition to state laws and regulations, a website is subject to Federal
Trade Commission jurisdiction. As a
result, it is imperative that the site
conform to the FTC’s requirements
regarding advertising claims and
related disclosures, especially if the
product category has been historically subject to FTC scrutiny. Claims
must be reasonably substantiated,
inherently truthful (expressly and
impliedly) and cannot otherwise
misrepresent the product or service.
If sales transactions involve club
buying or negative-option features,
have these terms been adequately
disclosed? In short, as with all other
advertising mediums, any and all
claims must be factual and transac-
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legalREVIEW
tional items cannot be deceptive. To
do otherwise runs the risk of FTC
enforcement activity or action by a
state Attorney General.
Advertisers can take heart because
the FTC publishes a very useful document titled “Dot.com Disclosures,”
which can be found on the FTC’s
website at www.ftc.gov. At a bare minimum, the FTC requires the following
for clear and conspicuous disclosures:
• Place disclosures near, and whenever possible, on the same screen
as the triggering claim;
• Use text or visual cues to encourage consumers to scroll down a
webpage when it is necessary to
view a disclosure;
• When using hyperlinks to lead to
disclosures, make the link obvious;
• Label the hyperlink appropriately
to convey the importance, nature
and relevance of the information
it leads to;
• Use hyperlink styles consistently
so that consumers know when a
link is available;
• Place the hyperlink near relevant information and make
it noticeable;
• Take consumers directly to the
disclosure on the click-through
page; and
• Assess the effectiveness of the
hyperlink by monitoring
click-through
rates
and make changes
accordingly.
14
ONLINEstrategies | Summer 2009
If the legal team and
the client are on the
same page throughout the design
process, this may
eliminate wholesale
changes prior to, or
worse, after the
website’s launch.
Legal professionals take these
requirements into account when
reviewing the site. If a potential issue
is discovered, a simple remedy may
be to change the color or font size of
an HTML link, or perhaps to move
the disclosure link closer to the claim
itself. Effective counsel strives to be
aware of creative design elements
when suggesting changes, but if a red
flag is raised, it’s best to minimize
the risk in some manner.
Testimonials are another area where
caution is warranted. The FTC requires
the same standards for online testimonials as it does for all other mediums. If
testimonials are used, the website must
contain any required disclosures. Keep
in mind that text-based testimonials
are no different than video or film testimonials; all are held to the same FTC
requirements. Briefly, endorsements
must always reflect the honest opinions, findings, beliefs, or experience of
the endorser. Furthermore, they may
not contain any representations which
would be deceptive, or could not be
substantiated if made directly by the
advertiser. The legal team will want to
ensure that the client obtained appropriate testimonialist affidavits—and
requisite substantiation—that support
any and all statements.
UGC AND COPYRIGHT LAW
If the site incorporates user-generated
content or an interactive community
section, there should be affirmative
opt-in mechanisms relating to the use
of such content. This may include a
statement that the user has read the
site’s terms of use or other “rules”
associated with this type of content.
Counsel will also examine potential
risks relating to UGC as well as community sections, and develop strategies to mitigate the risk.
A U.S.-based commercial website is
generally protected under U.S. copyright and trademarks laws. If a client
utilizes trademarks or copyrighted
material (including graphics, copy,
music or “look and feel”) from
another website without permission,
there is a risk of trademark or copyright infringement. If a client has
incorporated an entity’s intellectual
property (or a similar version thereof) into the website, an attorney will
want to evaluate whether it falls within the “fair use” doctrine, or if it does
not, whether the client has obtained
permission to use such material.
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TERMS OF USE
AND PRIVACY POLICIES
A website’s terms of use (you know, the
thing no one ever reads) is invaluable to
the client. In reality, the TOU is a legal
contract between the site owner and the
site user which quite literally spells out
the terms of use for the website. The
legal team will first determine if the site
has a link to the TOU, then review the
terms as last updated and assess whether
the TOU are still applicable to current
company practices. While most TOUs
may appear to be exactly the same, it is
important that the terms match the
content of the site in order to protect the
client. For example, if user-generated
content or community sections are utilized, the TOU must clarify the rights
granted to use such material; establish
rules for submission and participation;
indemnify the client from any intellectual property infringement actions; and
use language required under the federal
Digital Millennium Copyright Act.
Other TOU examples include language for e-commerce (and applicable warranty and liability language),
promotional or interactive elements,
third-party linking and how an individual may (or may not) use content
within the site. In short, a simple
TOU template is not one size fits all;
rather, it needs to accurately reflect
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Act of 1998. If the site encompasses
user-generated content, does the privacy policy affect such use? Lastly,
does the policy address general FTC
concerns regarding protection of personally identifiable information?
If the site is used by California residents, under California’s Business &
Professional Code: An operator of a
commercial website…that collects personally identifiable information
through the Internet about individual
consumers residing in California who
use or visit its commercial website…shall conspicuously post its privacy policy on its website….” The statute
lists the requirements that the policy
must disclose. If applicable, legal professionals will review (or draft) a client’s
privacy policy to ensure it meets
California’s requirements. Further,
California law sets forth company disclosure requirements regarding the use
of its customers’ personal information.
The legal team will also review any
sweepstakes or contests that may be
part of the website or are an entirely
separate entity. Sweepstakes laws vary
from state to state, but it is essential
that a few basic guidelines are incorporated. For instance, it’s important
that adequate short-form rules are
displayed prominently. Also, the
complete official rules must be prop-
An easily overlooked—but vital—website component is the protection of intellectual property
rights through proper notice of ownership.
the site’s actual content and purpose.
Like the TOU, a privacy policy is
also essential. The legal team will
want to confirm when it was last
updated, whether it accurately reflects
current company practices or
whether those practices have changed
since the last update. Another important element is whether the site collects information from children
under the age of 13. If so, the site
must conform to the federal
Children’s Online Privacy Protection
erly drafted and readily accessible
prior to entry. Finally, attorneys must
assess whether the structure and
entry mechanism of the promotion
complies with applicable FTC policy
and state laws regarding sweepstakes
or contest promotions.
An easily overlooked—but vital—
website component is the protection
of intellectual property rights
through proper notice of ownership.
The first time a trademarked term is
used within the website, it is impor-
tant that the appropriate ™ or ®
symbol is seen. In addition, it’s also
important that the owner utilizes the
copyright symbol © and the relevant
year or years for which it applies.
This also serves notice to users that
the website, the content and the
design are protected intellectual
property. From a design perspective,
we generally recommend the © is
seen on the footer of each webpage.
While each topic discussed herein
could easily constitute an entire article, they represent the primary elements of a thorough website review.
As mentioned above, legal professionals strive to maintain a website’s
creative elements and will work with
the client to maintain the site’s creative vision. Many times, needed
changes are minor in nature.
However, even minor issues can lead
to major problems if they are not
corrected. We recommend that
clients contact their counsel early in
the design phase to help them stay on
track throughout the process. This is
also a more cost-effective method for
ensuring regulatory and statutory
compliance. If the legal team and the
client are on the same page throughout the design process, this may eliminate wholesale changes prior to, or
worse, after the website’s launch. As
the site evolves over time, it is also a
good idea to have the legal team
review the changes. Of course, the
expression “better late than never” is
also applicable; as long as problems
are addressed before the FTC or an
Attorney General comes calling, then
you’re still ahead of the game.
D. John Hendrickson is a principal
at Manhattan Advertising & Media
Law. Philip Rebentisch is a nationally certified media paralegal and a former digital media producer. The contents of this article do not constitute
legal advice or the establishment of an
attorney-client relationship. Should
you need legal advice, please consult
a qualified attorney.
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Search Marketing:
A
Portfolio
Approach
Borrow a proven investment technique to help maintain your
PPC campaign’s ROI in an increasingly competitive environment
BY ALLEN HAMMOCK
Over the last decade, paid search marketing has grown
from a fledgling, experimental advertising medium with a
multitude of providers and players into one of the largest
budget considerations for advertisers, offering unparalleled
measurability. As we all know, it’s also a marketplace with
one large player overshadowing everyone else.
As the paid search marketplace continues to evolve and
grow, the strategies advertisers employ must also evolve. A
recent U.S. Search Engine Performance Report by Efficient
Frontier shows that between Q4 2008 and Q1 2009, advertisers increased their ROI by 10 percent while spending 3.3 percent less. They have found ways to achieve their ROI more
efficiently by identifying less costly sources of traffic.
While some ad managers may be finding efficiencies
within their current ad campaigns, ultimately they will still
be held accountable for driving growth from advertising
efforts. How can an advertiser continue to meet their
growth goals while maintaining an efficient ROI?
I suggest a portfolio approach.
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ONLINEstrategies | Summer 2009
WHAT IS A PORTFOLIO APPROACH AND
WHY IS IT IMPORTANT?
The idea behind a portfolio approach to paid search marketing is similar to the approach used in the stock market:
instead of concentrating your budget in one place, distribute that budget over several different sources of paid search
marketing to help you maintain your ROI goals by incorporating less-competitive sources of traffic at lower costs.
Diversification of a search-marketing portfolio can contribute positively to an advertiser’s bottom line.
These sources of traffic are abundant, but the challenge is to
find the right traffic providers that meet your goals.
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portfolioAPPROACH
PRICING AND QUALITY
Advertisers must identify sources of
incremental traffic that provide the
right mix of traffic quality and price.
On Google and Yahoo, you probably
assume a certain uniformity of traffic
quality, but when considering alternative sources, it’s necessary to balance
the mix of quality and cost. You have
to measure your ROI separately for
each source, and price accordingly.
You must identify sources of incremental traffic that provide sufficient
sources of volume—enough to justify the time spent. As the number of
traffic sources increases, the time
you spend managing budgets and
optimizing for conversion targets
can
climb
disproportionately.
Therefore, it is paramount that
sources meet volume, price and performance goals combined. Your own
time spent in creating value has to be
considered as part of the total equation—some providers will recognize
this and help you diversify without
requiring you to increase your staff
or take valuable time from the management of other sources.
IN PURSUIT OF A
PORTFOLIO APPROACH
Advertisers who take a portfolio
approach to paid search marketing
diversify their efforts by replicating
works aggregate traffic from low-volume sources like meta-search
engines, domains and smaller sites to
offer lower CPCs on traffic not monetized by Google and other entities.
EVALUATING ALTERNATIVE
SOURCES: FIND THE
FEATURES THE MATTER
Once advertisers begin to explore
their options outside of Google and
Yahoo, they quickly find that there are
dozens of networks to choose from.
One of the first questions you should
be asking yourself is whether or not
the networks you are evaluating have
platforms that accommodate the
essential features necessary to support your campaigns. Here are some
factors and issues to consider:
One of the first questions you should be
asking yourself is whether or not the networks you are evaluating have platforms
that accommodate the essential features
necessary to support your campaigns.
existing campaigns on alternate
sources of traffic with less-competitive CPCs. In my opinion, the best
alternate sources of traffic are searchadvertising networks: Ask Sponsored
Listings,
Miva,
AdKnowledge,
Advertise.com, ValidClick
and
LookSmart are just a few. These net18
ONLINEstrategies | Summer 2009
• Does the network support geo-targeting? Do you need granular controls in order to target your audience?
• Can you focus your campaigns to
target budget dollars to certain
times of day or days of the week
when conversions are highest?
• How complex are your current
Google or Yahoo campaigns? Do
you have millions of keywords
under management? Do you use ad
groups and automatic optimization
through ad rotation? Not every ad
network platform supports these
features and some may not scale to
meet your particular needs.
Of course, you won’t require every
feature an ad network platform provides for each ad campaign.
However, you need to make sure the
particular combinations of features
are available to meet your minimum
requirements. By choosing ad networks with platforms offering a
wide range of features, significant
changes will not be needed in order
to transplant campaigns from one
ad network platform to the next.
A recent internal study of
LookSmart’s biggest Managed Service
clients revealed that they spend, on
average, 23 hours per person each
week managing Google campaigns.
Advertisers that may already be interested in expanding their campaigns
via a portfolio approach may be concerned—and rightfully so—that
there simply aren’t enough hours in
the day or week to add additional
sources of traffic. Maintaining
Google campaigns is itself a barrier to
many of you interested in implementing a portfolio approach.
Fortunately, some ad networks
offer products and services to ease the
time and resource burden, or neutral-
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ize it almost completely: managed
services, robust targeting features and
platforms that are compatible with
bid management software can make a
portfolio approach easier to implement. As you evaluate ad networks in
terms of the resources you’ll need for
campaign management, keep a few
questions in mind:
• How easy is it for you to keep your
bids up to date? Can you make
sweeping changes with a few clicks?
• Can you automate changes
through scripts or make bulk
changes with a spreadsheet?
• Does the provider have an open
API and do automated bid management solutions support it?
• Can you get support from the ad
network to assist in campaign
optimization? What additional
services does the provider supply
in order to minimize your total
time commitment?
• Additionally, what kind of coverage
does your chosen ad network provide? Do you need to shop around
for multiple providers or does the
ad network aggregate publisher
networks into a single meta network or exchange? Many ad networks assume their customers are
comfortable with the self-service
model, but some provide valueadded services and consultation
that leverage advertisers’ existing
campaign assets and resources.
JUMP-STARTING YOUR
DIVERSIFIED PORTFOLIO
Ultimately, advertisers need to prove
to themselves that they can diversify
their PPC portfolios without overextending their resources to the
detriment of their overall ROI. This
can be challenging, especially as the
performance demands on campaign
managers increase and costs continue
to rise. Fortunately, the competition
for your business is increasing and
viable solutions exist in the market to
achieve these goals. A few simple tips
will get you started:
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Compatibility – Find the ad networks that meet the minimum
requirements needed to port your
Google campaigns.
Service - Call the ad networks and
ask them if they can convert your
campaigns for you. What additional
services do they provide to help you
maintain your ROI goals?
Scale - Can they provide the scale
and quality you need to increase
your productivity and reduce your
costs at the same time? Some networks will test your keywords and
work with you to find the right scale
at the right price.
a portion of your budget to test out
potential “portfolio traffic sources.”
Communicate Often – For those ad
networks that have customer and managed services, communicate your goals
clearly to them, so that they can help you
create the best campaigns possible for
their network. Since each network has
different offerings, some may be better
suited to accommodate your campaigns.
Solve for the Bottom Line – When
evaluating new sources of traffic, advertisers should re-evaluate success metrics. If a traffic source offers significantly lower CPCs than Google in addition
to managed services, it stands to reason
The idea behind a portfolio approach to paid
search marketing is similar to the approach
used in the stock market: instead of concentrating your budget in one place, distribute that
budget over several different sources of paid
search marketing to maintain your ROI
goals by incorporating less-competitive
sources of traffic at lower costs.
There are providers out there that
can augment your existing plan and
provide you with incremental scale at
a reasonable price. The key is to set
aside a small amount of your time to
evaluate the alternatives in the marketplace and to find those providers
who will work with you to make your
time worthwhile.
ACQUIRING VOLUMES OF
TRAFFIC AT APPROPRIATE
PRICES - THE HEART OF A
PORTFOLIO APPROACH
A portfolio approach to search marketing isn’t meant to turn your world
upside down, but rather to slightly
change your current approach for
improved results. Here are a few
guidelines to ensure your success:
Invest in Testing – Advertisers aren’t
going to know what traffic sources
work until you try them out. Set aside
that conversion rates can vary and still
meet ROI or CPA goals.
It is understood that the main
source of PPC traffic for most advertisers is Google. The reality of the
marketplace is that the majority of
searchers use Google, so focusing on
Google is understandable. However,
focusing on a single provider to the
exclusion of all other PPC opportunities could be a serious tactical error.
There is a lot of opportunity out there
for any advertiser willing to expand
the scope of their search campaign to
alternate sources of search advertising
traffic from networks.
Allen Hammock is senior product
technologist and director of emerging
markets at LookSmart. He is a 14-year
veteran in online advertising. You can
reach
Allen
via
e-mail
at
[email protected]
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The Ultimate
Performance
Metric
A misunderstood
and undervalued
business measure,
customer satisfaction can be used to
predict customers’
likelihood to shop
again, buy more or
to remain loyal to
your company in
the future.
BY LARRY FREED
From Wall Street to Main Street,
looking at the connection between
revenue and the bottom line is the
norm. Revenue is an excellent indicator of past and current performance,
but e-retailers are struggling in an
economic downturn to identify key
indicators of future success.
In a landmark ongoing study,
researchers at the University of
Michigan have conclusively established a crucial—and very strong—
connection between customer satisfaction and a company’s financial
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future, whether the markets are up or
down. Companies that perform well
on the University of Michigan’s
American Customer Satisfaction
Index (ACSI) enjoy better revenues,
profits, loyalty, word-of-mouth recommendations and return visits.
They even achieve higher stock
prices. The University of Michigan’s
findings have been corroborated by
other universities, and the findings
are consistent: high customer satisfaction, when measured accurately,
predicts success.
WHY CUSTOMER
SATISFACTION?
Most e-retailers know the importance
of online metrics in managing their
business. Online marketers tend to
know a lot about their shoppers’ basic
behaviors: where they came from,
which pages they clicked on, how
much they spent and what they abandoned in their cart. There is no question that all of these metrics—clicks,
hits and revenue—reveal a great deal
about the state of the industry and of
an individual company, as does
reviewing the rate and trajectory of
growth or decline. However, there
have typically been severe limitations
to understanding what is fueling the
growth or decline, the conversions or
cart abandonments and the changes
in traffic. That’s where understanding
customer satisfaction of online shop-
pers comes in. It’s the difference
between behavioral and attitudinal
data. You need both to succeed
online—and you can’t fully understand one without the other.
A world-renowned economics professor at the University of Michigan
was the first to create a methodology
that measures customer satisfaction
in such a way to predict customers’
likelihood to shop again, buy more or
to be loyal to the company in question. Used as a leading macro- and
micro-economic indicator by governments around the world, the ACSI
methodology has been proven again
and again in extensive, academic,
peer-reviewed research to be a predictive indicator of customers’ future
behaviors. A January 2006 article in
The Journal of Marketing even highlighted the connection between the
ACSI and future stock prices: an
ACSI-based portfolio substantially
beat the market and has for more
than eight years in a row, in both up
and down markets.
In other words, the higher your
online customer satisfaction, the
more likely your customers are to buy
from you, recommend you and be
loyal to you.
In fact, the stakes are very high: in
a recent study of the Top-100 online
retailers (as determined by sales volume), a single-point increase in customer satisfaction predicted an aver-
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performanceMETRIC
age increase of nearly 9 percent in
online sales year-over-year (according to the Top-100 E-Retail Index,
May 2009).
Moreover, our research shows that
a highly satisfied online shopper is 71
percent more likely to purchase
online from the retailer than a dissatisfied online shopper. It has traditionally been difficult, if not virtually
impossible, for a multichannel retailer to quantify the value of the online
shopping experience at the store level,
but we find that a highly satisfied
online visitor is 44 percent more likely to purchase offline and 72 percent
more likely to recommend the website. These figures help to quantify the
multichannel value of the website.
There can be no doubt that when
measured correctly, customer satisfaction tells you what customers will
do and why they will do it, allowing
companies to have a powerful tool at
their disposal to predict the future.
METRICS THAT WORK
What do I mean when I say, “when
measured correctly”? There is no
shortage of ways to track online customer satisfaction, but you need
online metrics that track it in a way
that is credible, reliable, accurate,
helps companies know how to predict and shape customer behavior
in the future. Any measure worth
tracking should meet all of the following criteria:
Credible - How widely accepted is
the measure? Does it have a good
track record of results? Is it based
on a scientifically and academically
rigorous methodology? Will management trust it?
Reliable - Is it a consistent standard that can be applied across the
ACSI methodology has been proven again
and again in extensive, academic, peerreviewed research to be a predictive
indicator of customers’ future behaviors.
precise, actionable and predictive.
These online metrics also need to be
continuously gathered and dealt
with promptly. If any of these qualities are missing from a metric or
suite of metrics, a company cannot
expect to be able to positively impact
the bottom line.
It’s never been easier to collect
voice-of-customer feedback, but
the challenge is putting that feedback into a scientific context that
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customer lifecycle and across multiple channels? When all remains the
same, do we get the same results with
every measurement? (If my watch is
correct today, but isn’t tomorrow, it
isn’t reliable.)
Precise - Is it specific enough to
provide insight? Does it use multiple
related questions to deliver greater
accuracy and insight? (A watch without a minute hand may be accurate,
but without the precision of the
minute hand, it does us little good.)
Accurate - Is the measurement correct? Is it representative of the entire
customer base, or just an outspoken
minority? Do the questions capture
self-reported importance or can they
derive importance based on what
customers say? Does it have an
acceptable margin of error and realistic sample sizes? (Most customers will
report that a lower price is important
to them, but lowering the price may
not induce them to buy.)
Actionable - Does it provide any
insight into what can be done to
encourage customers to return to the
site, buy again or recommend it?
Does it prioritize improvements
according to biggest impacts? (A
methodology without actionable
insight helps us keep score, but it
doesn’t help us improve results.)
Predictive - Can it project future
customer behaviors based on their
satisfaction with the site visit? (The
goal is to invest our efforts in those
things that will yield value. Without
predictive capability we are left to
shoot at our targets in the dark.)
Metrics that don’t have the abovelisted qualities can do more harm
then good. They will provide you
with a false sense of security that will
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lead you to make bad decisions based
on bad data—if you put garbage in,
you get garbage out.
YOU CAN’T MANAGE WHAT
YOU CAN’T MEASURE
In many cases, customer satisfaction
data has taken a back seat to other
kinds of metrics. But if metrics don’t
provide a complete picture, a business
is hamstrung: it can’t manage what it
can’t measure.
A good customer satisfaction
methodology can help address all of
the following common problems
faced by online retailers:
Companies have reams of customer
data but no idea what to do with it –
Computers and the Internet make it
easy to collect all kinds of customer
behavioral data, but the result is often
piles of numbers and yardsticks without any insight into what they mean
or how they can help move the needle. Customer satisfaction can help
businesses prioritize what will most
influence customer behavior.
The metrics show what the customer
is doing, but not why he or she is doing
it – Many measurement systems
reveal nothing about the driving factor behind behaviors. Following site
visitor paths throughout a web session will show where a customer has
been and what he or she bought, but
it provides no information about the
customer’s website experience, satisfaction or loyalty. Did they visit 15
pages because they were incredibly
engaged or because they couldn’t find
what they were looking for? Tracking
sales data is absolutely essential, but it
doesn’t grant insight into what they
didn’t buy, why they didn’t buy it or
what it will take to get them to buy it
next time. Customer satisfaction metrics answer those crucial “why” questions and allow managers to make
decisions accordingly.
If there are satisfaction metrics in
place, they are not consistent and scientific – Medical diagnostic tools stand
up to the rigors of science and acade-
1:34 PM
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mia. The health of a business deserves
the same sort of scrutiny. A scientific
approach helps create consistency
and predictability as managers determine the cause-and-effect relationship between customer satisfaction
and future behaviors. A consistent
metric allows for benchmarking over
time and against others that are competitors or best in class.
The value of a website is measured
only by its sales or its ability to generate
leads – The website should be integrated with the rest of your business’s
channels. Even if a consumer doesn’t
execute a purchase on your site or
submit a request for more information, their experience will shape their
future buying decisions and their
ties. Sound investments are based not
only on what the customer has done
in the past, but on what she will do in
the future. You need a metric that is
linked to future behaviors (such as
likelihood to return to the site, recommend it or buy again) and future
financial performance. Driving a car
forward while looking only in the
rear-view mirror invites disaster; similarly, businesses cannot only rely on
making decisions based on the past.
A BUSINESS-WIDE PRIORITY
In the current hyper-competitive
environment, customer satisfaction
monitoring is the single most important tool for separating companies
that will succeed from those that will
It’s never been easier to collect voice-of-customer feedback, but the challenge is putting
that feedback into a scientific context that
helps companies know how to predict and
shape customer behavior in the future.
overall impression of your company.
Customer satisfaction metrics will
allow a business to understand what
needs to be done to ensure that those
decisions and impressions are favorable, and to maximize the value of the
online channel to their organization
overall.
Most metrics provide only an
instant snapshot of customer behavior
without long-term implications – Just
as it’s important to measure website
traffic on a continuous basis, companies should be measuring customer
satisfaction continuously to observe
the impact of seasonality, competitive activity and other changes in the
market that affect the demand for
their products and services (e.g., high
gas prices, legislative changes, seasons or holidays).
Most metrics look at the past, but
reveal nothing about the future – Most
web metrics have no predictive quali-
fail. The pace of evolution in the
Internet age necessitates immediate
action because the customer will not
wait. They’ll just find a more satisfying experience elsewhere on the web
after being frustrated by your site.
A satisfied customer is a customer
that will return, buy again and tell
people about a company. A dissatisfied customer has the power to tell
millions of people about their bad
experience and prevent hundreds of
thousands of people from interacting
with a given business in the future.
This kind of power is reason enough
to make customer satisfaction a business-wide priority.
Larry Freed is an expert on online customer satisfaction. He is also president
and CEO of ForeSee Results, a market
leader in customer satisfaction measurement. He can be reached at
[email protected].
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The Third Pillar of
Direct Digital
Marketing
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The waiting game is over. Mobile marketing is not just a
viable marketing channel—it’s well on its way to becoming
an essential one. The time to embrace mobile is now and
these six tactics are both proven and easy to implement.
BY BRIAN DEAGAN
As one of the three pillars of direct
digital marketing, mobile marketing
is no longer an emerging channel
worth only a casual glance from
marketers. In fact, today—according
to Nielsen—the average mobile subscriber sends and receives more text
messages
than
phone
calls.
Fortunately, many effective mobile
marketing tactics are readily available to capitalize on these existing
consumer behaviors, further engaging customers while driving revenue.
SOME GROUND RULES
Before you can realize the full benefit and value of successful mobile
programs, it is important to grasp
some helpful guidelines for mobile
marketing. First, the success of a
mobile program is determined in
part by participation. Choosing a
widely adopted consumer use for the
mobile device, like SMS text messages, is fundamental for the shortand long-term success of a mobile
program. A text-centric strategy is
particularly relevant for opening up
all of the opportunities within the
mobile channel, from reminder messages to more complex mobile dialogues. Second, it is important to
avoid generic messages that hold little value for the recipient, because
they can be mistaken for mobile
spam, a label that can derail a good
mobile marketing concept before it
gains momentum. Third, mobile
marketing is like e-mail marketing in
that good data is required. The better
the data is, the more effective the
mobile tactics are. Of the three
aspects to direct digital marketing—
e-mail, web and mobile—mobile is
the most personal. Therefore, an
impersonal
batchand-blast strategy is
both obvious and
intrusive to the recip-
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mobileSTRATEGIES
ient—a sure-fire way to turn off
potentially loyal consumers. Mobile
programs need an extra touch of
personalization and message relevance to engage the consumer.
Pure-play e-commerce companies
have a variety of effective mobile
marketing programs to choose from.
Here are three widely applicable tactics that have been proven to
enhance the consumer experience,
reinforce brand and drive revenue
for companies with an exclusively
online presence.
IN-STOCK ALERTS
One effective way to leverage the
mobile communications channel is
to give consumers information they
would not customarily receive
through other channels. The best
example of this type of mobile program is an in-stock alert. The ideal
mobile marketing partner has software capable of integrating with
existing inventory management systems. When a website visitor tries to
order a product that is currently out
of stock, allowing that visitor to sign
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Today, according to
Nielsen, the average
mobile subscriber
sends and receives
more text messages
than phone calls.
up to receive a mobile alert when that
product is back in stock is a valuable
service. Additionally, prompting that
visitor to specify size, color or other
preferences for the in-stock mobile
alert provides key information to
entice the purchase. Having mobile
marketing software that captures key
preference data and then uses that
data for personalized, triggered messages is crucial for executing effective
tactics like mobile alerts.
SALES ALERTS
In today’s economic climate, alerting cost-conscious shoppers to special, limited-time-only sales events
is a good way to boost sales in a
short time-frame. While the sales
alert is traditionally an e-mail tactic,
extending the e-mail
experience
to
mobile affords
the mar-
keter more options, such as timeoriented (“Sale ends in 10-minutes”) and inventory-sensitive
(“Only 10 items remain”) incentives.
Because consumers carry their
mobile devices everywhere, they are
better equipped to take advantage of
limited-time offers. A good mobile
marketing partner is able to store
mobile data in the same database
with the website activity history.
Drawing on both data sources to
build powerful segments enables
mobile communications to be more
personalized and relevant to an
individual consumer.
MOBILE NOTIFICATIONS
Mobile notification programs are
used for a variety of reasons—they
can provide consumers with vital
information about recent purchases,
or provide the necessary push to
make a previously delayed purchase.
A mobile marketing partner with
software capable of storing both website activity history and mobile data is
crucial for this tactic. Specific programs include sending a free-shipping notification to a consumer who
has recently abandoned their shopping cart, or sending a notification
about a new product offering from a
preferred brand. Providing ample
opportunities on the website for consumers to opt-in to these types of
useful mobile communications
creates the right conditions for
quickly building up a mobile database and offering a brand experience web-only consumers will
jump at the chance to explore.
While e-commerce companies
stand to gain a
great deal by successfully incorporating the mobile
channel into their
overall direct digital
marketing
strategy, hybrid
retailers with both
brick-and-mortar