Social media monitoring goes mainstream

I've long contended that social media is a vital part of the marketing mix and that the analysis of social commentary has fundamentally changed marketings function.  When any communication is put in the market it will be discussed somewhere on line.  The marketing message is no longer fully under the control of the brand. 

This is so important for so many reasons - it used to be that a badly written piece of copy or a badly targeted campaign might have lead to a few conversations down the pub, well no longer are those conversations private, they are wide open and easily discoverable, it is vital that this kind of reaction is assessed and the impact measured.

I've met a number of big brands that are running scared, but I think that this is actually a great new way to really gather feedback, far more interactive and all encompassing than a focus group.

So putting our money where our mouths are, Alterian has acquired a social media monitoring company, Techrigy, that has indexed more than 1.5bn conversations and can put that data right into the hands of marketers so that they can really assess their impact of their messaging.  I believe that all marketers need to access this data so that they can capture the zeigeist and ensure that they are making the most of their communication opportunities.

Digital Britain: are marketers ready to benefit?

So, according to the governments report every home in Britain will have 2mbps broadband by 2012.  That, coupled wth significant plans for improved 3G is set to open the way for much more interactive marketing.

At the moment 1/3 of homes in the UK won't get broadband due to commercial efforts, but a 50p tax levied on all fixed line phone users will provide a fund to remedy that.

With all household in Britain able to get an Internet connection fast enough to provide streaming video the options for creating interactive communications and targeted advertising will increase significantly.

Increasingly video content is being watched on the Internet and ITV player forces viewing commercials within programmes, but at the moment many of these are not targeted at the individual viewer - this could be set to change. 

A whole new generation are growing up with the laptop, Facebook, YouTube and the Internet as their primary entertainment - a wider spread of broadband will perpetuate this trend, leading brands into new areas in order to get their value across.

Faster mobile broadband is also a theme of the report and will offer brands new possibilities for delivering engaging, and individually targeted content to users on the move.  Mobile also offers the possibility of location based services.

Already one US organisation I've been working with is intending to target users mobile devices with offers when it predicts that they will be receptive and near an outlet.  We're going to see more and more of this clever and generally beneficial marketing over the next few years.

Digital marketing mavens are the new "Mad Men"

Digital marketing is hitting the mainstream with journals like the NY Times running stories on the new ways of identifying and targeting communications.

Trying out offers with immediate response helps brands like Vespa to pick the ideal offers and put them in front of the audience at the right time.  It's a far cry from Mad Men.

The NYT recently ran a story on Varick Media Management who use data as the primary driver of message and offer management for their clients.

With WPP, Havas and the like all citing data as a critical requirement for campaigns there's a new race to provide scientific marketing. 

Forrester see the emergence of a new class of "Customer Engagement Agency" that combines the traditional strategic and creative skills with the left brain data skills necessary to build highly targeted individual communications.

Forrester and Alterian surveys reveal database marketing's big swing to digital

Alterian held its annual partner day last week, attended by nearly 100 senior executives of 45 of the UK's top marketing agencies and service providers. The likes of Rapp, Targetbase, Occam, GB Group, Dataforce and Experian were all in attendance.

The big draw? Dave Frankland from Forrester Research was keynote speaker and talked about how marketing agencies need to change to adapt to the emerging kind of consumer that wants a more engaging experience. His words had strong resonance with the audience.

Dave has recently published his research on UK based marketing service providers The Forrester Wave: UK Database Marketing Service Providers (www.forrester.com) and has also produced a document on how British firms use database marketing services (www.forrester.com). Both are well worth a read if you are thinking of implementing a new system.

Dave's research is enlightening. When he surveyed clients about their recent implementation of marketing databases, asking for the top 2 reasons for vendor selection, he found that 58% cited 'fit with requirements', 53% said 'cost', and 32% cited 'expertise'.

One of Dave's key insights was that "customer Intelligence has moved to the front of the room".

Alterian conducted its own research during the event, electronically surveying the attendees on a number of key questions and discovered some interesting facts and trends about digital marketing: – 53% of clients now demand a digital element in every campaign – 41% have seen a significant increase in digital demand in the last 12 months – 88% have seen some increase in demand.

Alterian also asked why clients were changing their activities: – 65% said it was due to their customers wanting to research and transact on the internet – 28% cited marketing becoming a dialogue and the need to understand and engage with social media.

While Dave Frankland's 'agency of the Future' - the 'Customer Engagement Agency' - strongly aligned with 45% of the audience's own corporate strategy (and was similar to 38% more), the attendees claimed that the client base was lagging behind with only 25% of customers being ready to grasp customer engagment as a core principle, although the groundswell is building with a further 49%.

These trends show that it's now vital that marketing agencies champion these new engagement strategies, as it will take a combination of creative, data and planning skills to create compelling campaigns across the wide range of touch points customers now interact with.

Oracle buys Sun: so did the Earth move for you?

Larry Ellison's Oracle has spent $7.4bn buying Sun Microsystems.  It's no secret that Sun has been up for sale for a while with IBM the initial suitor.  Now Oracle has done the deed and the world has changed.

How will this affect those of us in direct marketing?

Firstly, Sun Solaris is the preferred operating system for Oracle - so no surprise that there was interest on that front.  Oracle now have the ability to produce "appliances" that combine ideal software and hardware combinations and that could be a major push for against Microsoft for scalable solutions. 

Ellison quoted Solaris and the programming language Java as the primary drivers for the deal.

Java is the programming language behind many developments, and importantly for marketers behind many web sites.  Currently Java is open-source and that means free - Oracle aren't well known for selling free software so it is an open questions as to whether they may start charging for it in future - that would certainly change the dynamics a bit. 

The other common technology for web site creation is ASP.NET from Microsoft - if you want to run that software you are forced down the Microsoft track, needing their operating system and Internet Information Server to produce web sites.  Java's big selling point has always been that you can run software written using it on many different operating systems including those produced by Microsoft, if Oracle were to change this it might forced many people off Microsoft and onto an Oracle owned platform - there would certainly be commercial drivers for this, but perhaps a little far fetched in the near term.

Sun have been the bastion of the open source community - they were keen to sell their hardware and provide powerful software effectively for free.

Oracle are now the proud owners of Star Office, the only real open source competitor to Microsoft's Office range - not something mentioned in dispatches, but surely a platform for further encroaching into Microsoft's domination of the desktop.

For me the most important "unmentioned" part of the acquisition is MySQL - bought by Sun a little over a year ago for $1bn, but previously a target of Oracle who at one point offered $850m for the open source database that has 11m installations worldwide.  Oracle have a problem getting into the mid market with their highly performant and complex database offering - MySQL could be the foundation of a new push from Oracle. 

Currently SQL Server from Microsoft is the commercial database that most easily fits the mid market space and Microsoft have been successsful in finding in roads into the back office using it. 

MySQL gives Oracle the chance of competing in this coveted space and may perhaps create a commercial product from the source code.  Currently MySQL only generates about $60m in support revenues,

A commercial Oracle driven database in the mid market space would open up lots of possibilities for direct marketers wanting to build robust, scalable marketing databases and would really open the market to competition.  Currently many organisations cannot afford the high costs of Oracle licenses and are forced to choose other routes.

When the MySQL purchase completed there were rumours that Oracle money was behind the financing - so perhaps this downplayed part of the deal is actually more important that it looks.

There's plenty of comment out there, so if you want to read more try out this article on the tech fall out or this analysis on mycustomer.com

US marketers set to spend less money online

It appears that the downturn is affecting spending on the web.  Some people had believed that on line advertising was going to be recession proof but latest results indicate that this is not the case..

While online spending is still likely to perform better than many other marketing areas, there are indications that the years of growth are set to turn into a period of decline.

The hardest hit area is apparently going to be display advertisments on web sites while search, where costs are largely driven by clicks rather than impressions, is predicted to hold up better.

Clearly behavioral targeting offers marketers an opportunity to more easily target their display ad spending, but this technology is currently under pressure from privacy groups and political pressure.

Brian Quinton has more information and figures on his blog.

Marketers aren't any smarter now than Mad Men's Don Draper

On the Forrester blog for product management and product marketing, Tom Grant examines the recent trends in marketing and concludes with the following paragraph:

The marketing acumen of yesterday...today!

Product marketers today should not be congratulating themselves on how much smarter they are than the Don Drapers of some mythic marketing past. Instead, we should take a humbler view of how the marketing discipline adapts to current exigencies. That perspective makes it easier to understand why some traditional elements of the marketing mix, such as direct mail, haven't withered in the light of social media.

It seems to shock some new marketers that the traditional channels like direct mail continue to be an important part of the marketing mix.

Perhaps this is due to the wide audience for products with some of the older generation not being the "on-line" connected kiddies that have taken social networking to heart.

I'm not sure that's it though. Different channels have ways of addressing an audience when they are in different moods and while the brand message is now open for discussion on the web the brand image does still need to be promoted with consistency and clarity.

Consumers identify with brands, certainly that brand identity is up for grabs on blogging sites today, but the initial seed still needs to be put out there.

Certain industries are not going to be able to use social computing in the same way and their on line activities may be limited to Google AdWords while still needing to talk to an audience whose first instinct is not to type a search string into Yahoo or the like.

In the rush for the new, we should ensure that we don't ignore other important ways of promoting our brands.

Twitter hit by advertorial scandal

Over Easter popular micro bloggig site Twitter was hit by a scandal.  A number of popular twitterers were exposed as tweeting for profit. 

You might not think that this is the same thing as "cash for questions" but avid social networking fans are outraged when corporations try to muscle in on the action and throw their cash about.

The backlash has hit some large brands like Apple and Sony, even though they weren't directly involved in soliciting tweets for profit - this just goes to show that the rules of the game are changing, especially when it comes to community created content.

Phorm blocked by Amazon

Web tracking service Phorm has been officially blocked from scanning Amazon web pages according to a news story from the BBC.

The controversial service being trialed by BT scans keywords on the web pages visited by browsers by analysing data at the ISP, this information is then used to serve adverts.

While this is technically legal a lot of controversy still exists over how users should sign up for the service and there is significant indignation about the invasion of privacy caused by such indiscriminate tracking.

My earlier post gives details on the FTC ruling on hehavioural targeting in the states, while the European courts are discussing the possibility of regulating the storage of cookies in browsers, more details on that from Patricio Robles.

All in all it looks like the privacy pressures are coming at the Behavioural Targeting industry from every side.

Marketers Focus Technology Spending on Hosted Solutions and SaaS

Alterian's financial year ended on the 31st of March so I've been spending the last few days reviewing the trends in the business over the past 12 months.  It's been a turbulent ride for some marketing technology vendors with a significant series of bumps in the road especially towards the end of the calendar year 2008 in North America; although there has been a surge in interest during the first quarter of 2009 as people start to focus their marketing activities on retaining existing good customers and making use of cost effective channels. 

There is a significant downward trend in license sales for software companies that rely on high cost perpetual licenses with many in of the businesses in that sector finding their sales falling off the proverbial cliff.  Software installed on site typically has a large services element alongside it and represents significant investment ahead of returns.  So the theme for marketers appears to be out with CAPEX and in with OPEX.  Hosted solutions and software as a service are definitely coming to the fore, such solutions offer marketing departments the ability to get the software and solutions that they need without having to go cap in hand to the finance director for a large up front fee.  Such solutions mitigate risk while frequently providing high quality solutions delivered for a fraction of the cost and put in place far quicker than traditional packages.

Measurability and accountability have been key factors driving sales in the last 3 months, with direct marketing, email DM and web sites being areas where we have seen new investment.  Making email a strategic channel was the subject of an earlier post of mine on this site and I see a set of key skills for brands to develop in order to maximise the advantages of the newer channels. 

It's high time agencies started thinking of strategies that leverage the new channels' abilities for personalisation and one-to-one contact. There is a new type of agency appearing in the US market that is a hybrid of the traditional brand agency and the marketing service provider, this type of agency uses an understanding of the creative direction, the analytical approach and the enabling technologies to create a new type of customer engagement strategy. Indeed Engagement has recently become the watchword for enabling the multi-channel communication and individualized experience that consumers are now demanding.  Denise Shiffman's Age Of Engage blog provides some interesting insights into this new approach and is well worth a look as is her book. 

So my summary of recent market trends:

• Focus on SaaS and hosted solutions using OPEX not CAPEX
• Increased use of measurable channels like Direct Mail and email
• Exploitation of digital channels to become more relevant and engaging by personalization
• Requirement rather than desire for quick implementations and quick wins
• New focus on Customer Engagement

10 Tips For Making Email A Strategic Channel

Lots of recent studies have shown that brands intend to invest more money in the digital channels this year with a recent CMO Council study showing that more than 44% intend to deploy new email automation systems in 2009 – this makes email the biggest new investment for CMOs this year, beating Social Networking into second place. 

Making email a strategic channel is a real headache for the marketer, coping with the issues of relevance and maintaining a relationship through a channel that can easily make the brand communications appear to be noise or even worse: spam.

Email isn’t a cheap channel either – it may be cheap to send when there is no stamp involved, it may be easy to customize when there is no costly paper and printing involved, but that’s not the whole story.  Each creative still costs money to build and that’s nothing compared to the cost associated with having a customer or prospect unsubscribe from the mailing list because your communications are not relevant; even worse, you could be flagged as a spammer.

So here are my top tips for compelling, engaging email.

It is vital to understand whether the recipient of an email will find your message relevant.  The obvious part about relevance is audience selection; you need to make sure that the recipient is the kind of person to whom your brand or product applies. However, relevance may also be affected by where the recipient is in the purchase cycle for a product, how recently they purchased from you, what other products they hold or have bought - maybe just what they have clicked on or opened in the recent past.

Some individuals will react well to being sent messages on the same subject, others will not.  If you are going to be relevant you need to capture all of the responsive data and combine that with your knowledge of the recipient from your customer or prospect database. This will enable you to select an audience that are most likely to be interested in your message right now.

Email is a highly dynamic medium in which you can cheaply and easily send different messages and offers to different groups of recipients.  It is a total waste to send one generic email to every recipient when we know that different identifiable groups will be more engaged by targeted messaging and content.

Don’t treat email as a silo channel, use data and knowledge from off line systems to target your email  communications as well as information on how a recipient reacted to a previous message.

Where possible make it personal, address the communication by name. Use the segmentation described above so that you can use imagery and copy that fit with the person you are speaking to.  You might choose to split out your creatives by life-stage using a subtly different message for young singles, families and empty nesters.

If you are going to make an promotional offer consider splitting this out by different groups – saving £10 on a £150 transaction might appeal more to a younger cash strapped individual – whereas an older, affluent person might react well to a larger discount on condition of a much bigger order.

There is nothing worse than sending out a personalized communication when you don’t have the data to support it in some cases.  If some of your database doesn’t have forename make sure that your email template will cope and not leave embarrassing blanks!

Also, don’t make your copy or creatives too explicit and ensure that you have up to date product information – we all hate receiving communications offering us a product we actually bought the month before.  These blundering messages damage the brand more than anything else because we are promoting a relationship and clearly have no idea about the recipient.

Communications are better received when there is some interesting content, be that endorsement, gossip or some exciting piece of creative that engages the recipient.  Recent viral campaigns like the T Mobile dance are exciting and engaging and a recipient that finds a communication engaging is far more likely to absorb other sales messages alongside the interesting content.

Recipients are more likely to consider a communication relevant if they find any part of it interesting.  It therefore suggests that a “newsletter” format communication, with multiple offers is far more likely to be engaging than a message conveying only a single offer.

You are lucky if a recipient opens one of your communications, if they do then having more than one opportunity to be relevant is a big bonus.

Newsletter format also enables us to choose a series of best next offers for an individual and push them out around a central piece of relevant or interesting content, that is the main focus of the communication.

It is vital to test out strategies on small groups and measure what works and what doesn’t.  It’s also very useful to look for unexpected groups and segments who are interested or disinterested in an offer and use that to refine the targeting and segmentation strategy for the whole campaign.  Sometimes we find niche groups that react particularly well or poorly to an offer or a treatment – email gives us the ability to exploit these groups rather than designing the perfect “camel” that has generic, but lower level appeal.

The email channel is a fantastic source of data – we can see when people open emails, when they click through to a landing page, then even measure the amount of revenue generated from the on line channel or impute revenue generated by offline sources.  All of this adds up to create the best possible measurement of campaign ROI.

Email lets us see how a prospect reacts to our message in a way impossible with traditional direct marketing approaches – this gives us an unprecedented ability to tailor our communications and promote the brand in the best possible light.

Feed the email response data back into the Marketing Database so that off line campaigns, customer segments and models can be built using the responsive data. 

Appearing joined up is one of the most important things a brand can do to appear relevant and aware of its customers and prospects, the email response data is a vital part of the picture of a customer and should be used across all channels of communication to inform offers and target communications.

Email provides a very quick way to build and send communications that are relevant to current events – perhaps world events, perhaps competitor actions. 

This velocity is made possible when email sending is combined with easy to customise templates; now marketers can get relevant offers out into the market very quickly while maintaining the brand image and values.  By being able to react quickly and push messages into the base there is a natural increase in the general sense of relevance surrounding the brand.

Australian and American DM Trends

I'm just back from an extended trip that took me to America and Australia to meet with clients and partners involved in the direct marketing business: this yielded a couple of insights.

America is definitely fully aware of the depths of the financial crisis and budgets for both above and below the line marketing are being cut.  The biggest cuts are certainly above the line, but it's interesting to see that there is huge margin pressure being exerted on data suppliers and on hygiene processes. Such pressure clearly has to have a floor and if reductions continue I have to say that makes me worry - as a statistician and data junky I know the danger of garbage in - what comes out? Unhappy customers and damaged brand integrity.  Smart brands are concentrating on better data and less communication to well targeted audiences, increasing response rates and reducing volume costs.  The only people reporting increased or maintained spend are the email and web site vendors - brands are concentrating on the cheapest methods of communicating and ensuring that their online identity is up to scratch. However, it doesn't seem that many are really taking advantage of the enhanced response tracking features of these channels though - it looks like brand marketers are looking to repeat tried and tested advertising strategies in the e-channels, a big missed opportunity in my humble opinion.

Social is in the news all the time and viral campaigns like the excellent T Mobile Dance are still proving that innovative advertising is far from dead.  I've blogged enough about social recently, but there's a daily stream of interest stories - today it's damaging the fabric of Facebook with a story of the other kind of "viral" attacks, this time on users' personal data.

Australia is not quite so mired in the throes of the financial crisis.  Certainly the banks and automotive manufacturers are under pressure but the mood is considerably more upbeat in all of the other sectors when compared to the UK and US.  My contacts in the direct marketing world are happy as the budgets they are interested in are being maintained if not raised with most companies aiming for saving on expensive above the line campaigns.  With a reasonably small population direct marketing is far less costly in Australia than it is in the US with hardware and software requirements being considerably lower. Exchange rate fluctuations are probably helping the Aussie economy which is fairly reliant on the import market for luxury items produced in territories suffering greater hardships.

Federal Trade Commission Sets Guidelines for Behavioral Targeting

The FTC has announced new guidelines to cover Behavioral Targeting.  Further to my post on ethical self regulation, it seems the FTC has the same idea when it says that it will "evaluate the development of self-regulatory programs and the extent to which they serve the essential goals set out in the Principles".  Steve Smith has written an interesting summary on Behavioral Insider.

Interesting additions include the concept of Personally Identifiable Information - which goes further than knowing who a person is, to encompass knowing that this is an individual and these are their behaviors, even without knowledge of their formal identity.  That has far ranging consequences for tracking IP addresses, cookies and browsers.

The FTC are clearly targeting advertisers and don't make comment about "within site" product or content recommendations - which I believe is really the way forward with building an engaging web presence.  They do indicate that single site data collection and targeting are considered to be reasonable behaviors and are focusing their attention on cross site and ISP gathered data.

Ethical self regulation, before it's too late...

I'm increasingly concerned about privacy, it seems technology has advanced to the point where it's all too easy to breach fundamental rights of personal confidentiality.  Since my last blog post I've been working with a number of clients and partners that want to look further into behavioral tracking and social media monitoring.

In genetics: cloning, embryo screening and fetal research are carefully monitored by committees to avoid lasting damage or unethical practices.  So when marketing technology gets to the point where companies can effectively follow their customers and prospects around, even rifle through their garbage, I think that it is time for some self regulation before the law makers take a heavy handed approach and stop even reasonable behaviors in order to protect the populous.

Here's the problem, this is all just data stored on computers and fundamentally necessary to maintain the Internet and Web 2.0 practices.  We blog in public, my Facebook page is public, my tweets are public and has to receive all of the searches I type in while my ISP must provide me with access to the web pages I want to view.  Computers are all too good as processing vast volumes of information, mining that data and providing insights - the technology is right there.  The question is: "Should we do it?"

I believe it's time that some industry bodies created a commission to review and set guidelines on best practice - we need to debate these things, set guidelines and publicly identify bad practices before they become the breaking news on Twitter.  Government may have to legislate to protect personal information, the data protection act may need to be modified or clarified to include information derived from publicly available sources - though that itself is a minefield.  If government is to legislate I'd rather it was informed by a well versed body that has considered the position in advance.

I abhor the idea that I might lead a client into a strategy that would cause public outcry over privacy invasion - but like the geneticists my problem solving left brain quickly spots opportunities to capture more information and provide more insights.  I don't believe that this is something I should make the call on alone and indeed the fears over privacy invasion are causing lots of companies to ignore possibilities that would be perfectly acceptable to the masses.

In the first instance the DMA would seem to be an ideal body to form such a commission, they provide an interpretation of the Data Protection Act for marketers and have a good understanding of privacy issues.

I public profile information actually personal data?  Do you have a privacy strategy? Does it make you competitive or uncompetitive? It's high time for a debate...

Hey, are you following me?

No not a Twitter reference, though TweekDeck seems to be constantly on my screen at the moment.  I'm talking about Behavioral Targeting.

There have been a number of interesting articles on this over the last few days, but back in September Brand Republic's title Media Week had identified the trend and on February 5th the Wall Street Journal carried an article talking about how the downturn was pushing an increase in on line spend and in better advertisement targeting.  A lot of this relates to tracking and understanding customer behavior and using this to drive messaging.

This is a great trend; for a long time shops have been merchandised to fit their local area, but the web has remained largely static. Corporate sites try to be appeal to everyone with one face.  I find this strange as the web represents one of the cheapest channels for personalization and testing.  There are many strategies for tailoring sites, even if you don't know who the visitor is, many of these rely on understanding something about the behavior of the visitor on the web.  Where does that leave us on privacy?

There are probably two different areas here - targeting advertisements on social media and other portal sites and tailoring the brand's web property to the individual visitor.

For me, understanding the behavior of a visitor on a site is no different from a sales assistant watching a customer move around the store.  They can see how the customer is dressed, what product displays they visit and how long they spend at each.  After a while that assistant might walk up to the customer and engage them in conversation, help them to find what they are looking for and provide additional information.  Let's say that you are in an electrical store, the assistant comes over and helps you research a number of different televisions, you feel good that you've got the information you want.   The problem with privacy is this; say you walk out of that electrical store and head into Boots next door - the salesman follows you and starts to suggest what deodorant you might like!

That's the dilemma of Behavioral Targeting.  We want to provide the visitor with the best possible experience, they've given us permission to engage with them by visiting our place of business and we should do our best to offer the most relevant communications possible - but we need to do this without becoming creepily like Big Brother, sneaking around and following people.

Is that by asking for permission?  Certainly that is a requirement if we are going to use cross site behavioral tracking that could be provided by an ISP...  What about behavioral tracking on sites that we visit for pleasure like Facebook or MySpace?  Is that like the salesman sitting in the pub and watching us with our friends, building up a picture of us when we are unguarded?

We certainly need to be educating the actual visitor audience about what we can do as this article on Behavioral Insider suggests, because without that the public and legislators will live in a vacuum. There's a lot of thinking going on in this area right now and the outcomes will have massive influence on the way we advertise in the future, one interesting series of interviews and editorial by Sean Egen was published in January and makes interesting reading...

My view is that we can and should use behavior on our own sites to target communication - we need much more explicit permission to do any more.