The Secrets to Customer Acquisition—Data-Fueled Media and Lead Generation Strategies

Media wastage. Sluggish click-through rates. Poor-performing leads. Are these the “necessary evils” of the online marketing world? As online targeting evolves, new data sources have emerged to pinpoint your audience online for maximum brand impact and response. And marketers have become more sophisticated in using insights to verify and score leads — letting them more effectively engage and convert high-value customers.

Whether you’re an ad network maximizing your clients’ dollars or an advertiser converting a lead, you can’t operate in an environment devoid of smart data. In this session, panel members will talk about using real-time insight and predictive analytics to optimize your customer-acquisition cycle — from display advertising to lead generation to lead scoring. If you want to improve online targeting, increase click-through rates and focus on the best leads, be sure to attend this panel discussion to get tips, tricks and sage advice from top ad networks, innovative data providers and industry-leading technology companies.

MODERATOR:
David Helmreich, VP, Interactive Markets, TARGUSinfo

As one of the leading voices in predictive targeting for digital marketers, David Helmreich is responsible for building optimization solutions for the interactive advertising industry at TARGUSinfo. Formerly the Director of Sales for Interactive Markets he managed more than 150 accounts and all sales efforts. Dave joined TARGUSinfo from The Advisory Board Company (ABCO), where he directed the development and launch of their health care business intelligence solutions, representing more than $25M in recurring revenue only 18 months after launch. Dave received an MBA from the Smith School of Business at the University of Maryland and a BS in Computer Science from the United States Naval Academy.

PANELISTS:
Jim Waltz, President, Traffic Marketplace

Leon Zemel, Senior VP, Analytics, [X+1]

Neil Kaplan, Senior VP, Business Development, Vantage Media

Zach Weinberg, Co-Founder and CEO, Invite Media

I’d really like some stats, but let’s assume that due to eBay and Kayak, BlueKai has an audience in excess of 60M users / cookies, I’ll bet that less than 120k users have viewed their profile, and less than 60k have modified it.

Love to be proved wrong on this.   But seriously – do we really care?

A core preoccupation of online targeting has been to locate the most likely prospects to pursue among the millions of active Web searchers, shoppers and browsers. In this pursuit, marketers have increasingly moved from a focus on the Web page to the person, and ultimately tracking their behavior online.

In theory, online behavioral targeting (BT) opens up a far larger universe of potential inventory than contextual or demographic targeting. Once a consumer is identified as “in market” by their actual online activities, they can be reached anytime, anywhere online.

Studies have documented the superiority of BT in some key performance metrics. A recent study, conducted by JupiterResearch for Revenue Science Inc, (now Audience Science), found that online consumers are consistently more receptive to behaviorally targeted ads than to contextual ads, with behavioral ads outperforming by as much as 22%.

The study also found that consumers who responded most often to behaviorally targeted ads skewed to higher income brackets, spent more money online and shopped online more frequently than those favoring contextual ads.

The “Hidden Weakness” of Behavioral Targeting

For all its strengths, BT remains beset by limitations — some technological and others more intrinsic to its marketing model.  One nagging difficulty… BT is notoriously difficult to scale. Large networks have hundreds or thousands of sites that they’re trying to monetize and they really have no idea who their visitors are. The extensive variety of BT methods makes it difficult to buy a standard set of behaviors across multiple networks and third-party solutions.

Another weakness in the current practice of BT is its audience-narrowing nature. Though most BT platforms are sold as “self-learning,” evolving systems, most can only take into account the fact that site visitors are “in market” for a single product or product type.

Pros:
•    Indentify “In-Market” Status
•    Focus on the Individual User
•    Tracks Only One Product
•    Stale Data; No Feedback Loop
•    Blind to Ability to Buy

Cons:
•    Not Scalable
•    Reflects Online Behaviors Only

The infamous spyware company, Gator, having rebranded at least twice and most recently losing several of their "key" employees to the toxic, ISP behavioral targeting firm, NebuAd, had shuttered it’s doors.

http://venturebeat.com/2008/10/06/controversial-ad-company-jellycloud-shuts-down-citing-industry-consolidation/

Some of the interesting tidbits from the article follow – don’t you think they would have been better prepared to deal with the consumer privacy backlash?

If this is the prevailing wind in the EU, would any of the national US-based ISPs every allow a company like Phorm, NebuAd, AdZilla and others to deploy their boxes on the network?

A dedicated protest site has gone live at badphorm.co.uk, and an Web page has been set up to petition the Prime Minister.

“We petition the Prime Minister to investigate the Phorm technology, and if found to breach UK or European privacy laws then ban all ISP’s from adopting it’s [sic] use,” reads the petition, which has been signed by over 1,000 people.

What is the impact of consolidation in the industry if traffic is the ultimate commodity.? Over the past couple of years, the acquisitions in the market have been around data and traffic.

If better connecting the advertiser and user is the ultimate goal, what is the ideal method to increase the relevance for? the user?? Many of the prominent BT providers use Age, Gender, Location (which is often inferred or user submitted) as the primary keys upon which they derive their segmentation methodology.? I don’t know where to start poking holes that method – it’s just too easy.

I have included a few below:

• “No, I do not think it is an invasion of privacy. It’s no different than your favorite Visa or Mastercard sending you targeted inserts or coupons in your statements based on your spending habits on that card. I don’t complain when Discover sends me 10% of at Home Depot. Do I want someone tracking my online purchase, viewing habits, etc, probably not, but I also don’t want the local Chinesse delivery joint storing my cc# in theit computer. It happens, it’s called technology and it allows companies to more effectively and effeciently target their audience. Basically, I don’t want to see any regulations that limit the ability of the free market system to grow and flurish. I don’t want to see further handcuffs on small or large business trying to operate in the US.

  As a user, I’d much rather see an ad targeted to me based on exhibited behavior than a RON/ROS ad that I have no interest in.”

• “Regarding privacy, BT is not an “invasion” it is an “invitation.” Everyone accepts and understands the quid pro quo of the free internet content world is having ads – lots of them – served up on top, behind and along with the editorial. So my view of the next wave of BT is a manner, method, and process for the user to create a managed ad profile with selective inclusions and permissions. This profile starts very simply with standard gender, age, income, zip code information. It is enhanced with certain data points or beacons linked to multiple ad networks and sites. Importantly these data need to be complied into major classes of customers as already defined by services like Nielsen and comScore so the data becomes actionable and useful information.

• BT is not an invasion of privacy.It infact is a great means for both the advertiser and the targeted user-to keep out stuff / audience which is irrelevant to both. But the big question is that BT in its present state with publishers leaves much to be desired and is not effective due to various loop holes.For BT to be a success,a lot needs to be done by websites offering it as an advertising option,at a premium rate.

• Spending and where it is going
  • US Internet Advertising Spending – $50B in 2012
  • US BT Ad Spending, $3.5B in 2012
    • As share of spend, 9.6% of total US Internet Advertising Spending in 2012
  • BT will get a 27% budget increase in 2008
• Why dollars don’t deceive – stats for 2008
  • Google net revenue (US Only) 8.4B
  • Retail ecommerce – $161B
  • Internet Advertising – $26.7B
  • BT advertising $925mm
• Forces for change
  • US Marketers say BT among one of the most important tactics (online and offline)
  • BT – top performing tactic for great ROI -outperforming contextual, affiliate, rich media
  • 79% of most ad execs agree “Long tail always existed, technology makes it easier”
  • Advertisers and Agencies prefer specific publishers over networks for targeting

• Less change than you might think
  • In general, 80% of respondents think that data accuracy makes web analytics and ad tracking problematical
    • 40% had concerns with the validity of cookie-based measurement
  • Top three marketing trends in 2007:
    • Marketing Basics
    • SEO
    • Personalization
  • 74% of respondents only put between 1% and 20% to new media properties and experimentation
  • The largest US advertisers still (mainly) put small share of spending online
    • 3.1% share among top 100
    • Top 10 all less than 6%
      1. P&G – 1.1%
      2. AT&T – 5.1%
      3. GM – 3.6%
      4. Time Warner – 2.9%
      5. Verizon – 4.4%
      6. Ford 3.8%
      7. GlaxoSmithKline – 0.6%
      8. Disney – 5.7%
      9. Johnson and Johnson – 1.5%
      10. Unilever – 1.3%

• What people really want
  • People don’t want to be targeted
    • Call people, “people”, not consumers, Internet users, target audience
  • Relevancy – but they’re not crazy about being targeted
  • Privacy – and yet they want personalization
  • Transparency – think of it as marketer ultra-honesty
  • Control – not just in word – and difficult indeed

Panelist: Molly Hop, Group Media Director, Critical Mass;
Jeff Freedman, Director of Business Development, MillionsofUs
Davis Brewer, Lead Digital Strategist, Spark Communications
Arnie Gullov-Singh, VP, Product Management, MySpace/Fox Interactive Media
Basem Nayfeh, Chief Technology Officer, Revenue Science

Overall, the panel agreed that this is a tremendously exciting time in advertising. As users are adopting social media, we increasingly have the ability to make advertising both effective and more efficient. through increased relevance. Social networks gives us a massive platform for self-expression. When consumers raise their hands and indicate their interest, it creates very powerful opportunities for targeting.

There seems to be a clear opportunity to utilize outside data on top of existing user submitted information. It was mentioned in the previous session with regard to the work that [x+1] is doing, and continues to be raised in most conversations on the stage and in the room. Rather than just targeting on what someone has just told you, it has been discussed that actual behavioral data acquired from other places on the web should be utilized on top of existing user-submitted information. The reverse of that can also be true – now can we take that profile data and actual conversions and analyze the efficacy of targeting methods – these feedback loops (if in place) will drive advertisers, publishers and service providers closer together.

There was a consensus that increased relevance of advertising would reduce some of the current privacy concerns. People are sharing a significant amount of data about themselves, especially for those that are using social media.

Let’s assume that BT, appropriately integrated with offline behavior and online user submitted profile data, will drive up CPMs, increase CTR, and reduce advertisers CPA.

For as much interest and success as we have had in BT – what we are seeing and doing now is the very very early stages.

“What is the business of Media and Advertiisng really all about?”

Media is the business of offering marketers access to audiences of influential and affluent buyers.

The Pendulum Swings – we are heading into an age of intent-driven media.

• First, media planning by approximation
  • Targeting based on the audience demos of a medium
  • Placement on context not the behavior of a specific consumer
  • Balancing comp, coverag, creativity and impact
• Then came behavioral targeting – and everyone went crazy with hyper-targeting

What’s so wrong with Hyper-Targeting?

• A trip to Detroit that made everyone unhappy
• Efficiency at the expense of effectiveness
  • Transforming an audience of millions into a tiny club that you could call on the phone
• The job of advertising to convert not to just preach to the converted

BT is not enough by itself

The goal is a targeting strategy that balances efficiency and scalability – driving enough leads to make a difference profitably

Long term effectiveness, though is still dependent on building brands

• Brands (like people) are still known by the company they keep
  • There is rub-off from the environment where your ads run

A strong brand makes everything work well. With the goal of ROI and selling product, never discount brand. Context still matters – the environment still matter.

What is IAC working on now?

• Environmental Targeting
  • Advertising on commerce sites
    • Closer to the transaction
      • And, yes, this is a behaviorally targeted ad
  • Vertical ad networks

• Audience Targeting
  • Zip+4
    • Inheriting fuller profiles
  • Persistent profiles

There will be news ways to engage with audiences – [x+1] is using PRIZM clusters at the edge of your network – who are these folks coming in, how do I market to them – it gives you a much richer profile. Back to the notion of scalability – everyone that comes to your site will have a profile attached. Content, monetization, targeting will all be based on Zip+4.

They can will also have certain non-PII based information that will be cookied and carry across the network. direct marketing conventional wisdom is that if I know what you buy, that is the best information – actual purchase behavior.

And ten years from now, we will migrate to 1 to 1 targeting – “an audience of one”. One man, one woman, one family. We are heading toward a world where relevance is important. Where you are speak to relevant consumers in context. It is a much better experience and much more powerful from a marketing perspective.