Building Your Facebook Community

In July, 2010, Facebook announced that more than 500 million people worldwide were actively using the social media site to connect with family, friends and, yes, increasingly, brands. While Facebook continues to evolve as a marketing platform, a growing number of marketers are looking to leverage this channel to engage consumers and build communities. But what are some of the secrets to success, and how can you leverage these best practices to build a powerful community of brand advocates?

In July, 2010, Facebook announced that more than 500 million people worldwide were actively using the social media site to connect with family, friends and, yes, increasingly, brands. While Facebook continues to evolve as a marketing platform, a growing number of marketers are looking to leverage this channel to engage consumers and build communities. But what are some of the secrets to success, and how can you leverage these best practices to build a powerful community of brand advocates?

Listen. Understand. Then frame the conversation.
Before attempting to develop a full Facebook fan page for your brand, first determine the nature of the conversation between your brand and its customers. When it comes to framing the conversation, the brands that build successful Facebook communities take their cues from their customers and don’t try to dictate or dominate the relationship. They do this by listening. Follow these tips to tap into multiple listening sources to uncover shared passions:

Brand audit. Type your brand name into Facebook’s search bar to take a pulse of the nature of the conversations already taking place about your brand.

Leverage traditional market research. Collect information about how your customers use social media, and what kind of content and conversations are important to them. Survey your customer base through database marketing, website intercept surveys and third-party research panels. Use focus groups to drill down into the attitudes and particular content, features and functionalities that will set you apart.

Listening tools. Use powerful monitoring tools to filter the immense amount of discussions and activity surrounding your brand, and to identify opportunities and key areas of interest.

Acquire and grow: Build your fan base. So you’ve identified a shared passion that will underpin your general community framework. Up next: building your base. The best acquisition strategies leverage existing customer touchpoints as well as opportunities within Facebook’s ecosystem. Take the following steps:

  • secure a vanity URL and make it easy to be found;
  • clearly define the benefits of joining your page;
  • invite existing customers via email;
  • offer something unique or exclusive, giving those who like your brand a reason to visit, engage with and recommend your page;
  • test different placements of the “Like” button across your existing digital touchpoints;
  • include your Facebook page’s link on relevant paid search terms;
  • include Facebook URLs/tags on traditional advertising efforts (e.g., print, TV, radio);
  • “favorite” related brands; and
  • test Facebook advertising.

Stir the pot: Engage your fan base. Once you’ve acquired fans, create a compelling experience that keeps them engaged and actively participating. Keep in mind that engaging your fans is a journey, not a destination. Do the following to keep fans engaged:

  • provide them with unique access to special content and/or offers;
  • create and test applications like polls, trivia, simple games and widgets, making sure the underlying subject of those applications syncs with the shared passion of your community;
  • shower your fans with public recognition;
  • encourage user-generated content;
  • rotate and target content (e.g., geo-posts) to keep it relevant;
  • think internationally; and
  • adjust your content strategy accordingly.

Build trust. Being open isn’t always easy. Many brands shy away from social media out of fear that their fans and followers may say something negative or turn on them. Deal with issues and problems in an open, transparent way. In fact, if you’ve done a good job offering value and engaging those who like your page, you may find they’re your biggest defenders. To build trust with your fans, do the following:

  • post a comment policy;
  • remove spam;
  • be transparent and authentic;
  • remain calm and think before you act (i.e., respond/post);
  • train and communicate your goals with those responsible for managing/engaging fans; and
  • build a corporate policy and communicate that policy internally so employees understand how to engage consumers in a transparent manner.

Have fun: Analyze and optimize. So, how do you know if you’re doing a good job? Tracking and analytics will help you get a handle on your page’s performance. Try the following tracking tactics:

  • use unique tracking codes for Facebook posts;
  • leverage Facebook Insights to understand activity and usage;
  • identify brand advocates and tag them in your database — you may even want to consider rewarding them for their support with bonus points; and
  • communicate your learnings and institutionalize them.

Finally — and perhaps most importantly — don’t lose sight of the fact that Facebook is an evolving platform. No one person can keep up with all the developments, so make sure you partner right. Find an agency and/or support system that’s well-versed on Facebook best practices and your brand, and has shown a proven ability to engage consumers.

75 Years Ago, Three Young Men …

I’ve always loved reading old magazines. As a kid in the mid-1970s, I spent hours on rainy afternoons with issues of Look, Sport, and Life saved by my mom and dad from the early 1960s. It wasn’t just the pictures and stories about JFK, Willie Mays and the Beatles that pulled me in; it was also the advertising. The cars, the foods, the TVs — a lot of it was already pretty different from what I knew.

I’ve always loved reading old magazines. As a kid in the mid-1970s, I spent hours on rainy afternoons with issues of Look, Sport, and Life saved by my mom and dad from the early 1960s. It wasn’t just the pictures and stories about JFK, Willie Mays and the Beatles that pulled me in; it was also the advertising. The cars, the foods, the TVs — a lot of it was already pretty different from what I knew.

The other day, I went further back in time – 75 years – via the March 1935 issue of Popular Mechanics that I had picked up at a yard sale. There are articles on developments in television, solar motors, and around-the-world travel on the Graf Zeppelin and the PanAm Clipper. And, the city of the future (1960!) is shown on the cover: a fantasy of terraced skyscrapers, giant pedestrian bridges and rooftop helicopter buses. (See image in the media player to the right.) Oh, well … “The future,” said French poet Paul Valery, “isn’t what it used to be.”

So, then I turned to the ads. Some of the brands are still around (Ford, Harley-Davidson, Simoniz), even though their products have changed in some big ways since then. And there are companies that have disappeared over the decades (LaSalle Extension University, Plymouth, Midwest Radio Corp.).

But for most of the ads, whether full page, fractional or classified, there was only one reply option: the mail. That’s right, no websites, no Twitter or Facebook, not even a phone number … just a mailing address for the prospect to reply to. Many of them even had a clip-out coupon.

Because only the inside and back covers were in 4-color (selling cigarettes), many of the rest have to rely a lot on their copy (and the emotional appeal behind it) to draw a response. “Send for FREE BOOK,” “Become a RADIO EXPERT.” Legendary bodybuilder Charles Atlas promises salvation with a new physique: “I’ll prove in ONLY 7 Days that I can make YOU a New Man!”

This is great stuff! As antiquated as the ads may appear, a lot of these techniques and rules are still at work today, in a variety of media, including direct mail and email. But what made my jaw drop was a page spread (see image in the media player to the right.). On the left page, the headline for a half-page vertical for the Encyclopedia Britannica: “He’s the best paid man here because he is the best informed.” At right, the full page for International Correspondence Schools (now Penn Foster Career School) shows three identical male faces, and asks: “WHICH ONE gets the job? They’re alike in everything — except just one thing! [O]ne factor … makes one of these applicants the logical man for the job! HE HAS TRAINING!” (See image in the media player to the right.)

I instantly thought of “Two Young Men,” Martin Conroy’s 2-page letter for The Wall Street Journal, the most successful advertisement in the history of the world (and which Denny Hatch discusses in his forthcoming book about copy drivers for DirectMarketingIQ.) That mailing was its control for 29 years starting in 1974, and earned it well over $1 billion. It tells the story of two men who go to their 25th college reunion, and while they’ve turned out alike in many ways, and even work for the same company, one of them is its president, because of what he knows — that made the difference.

That this classic mailing used a similar comparative technique to space ads from 40 years earlier is not surprising. Even in recent years, a dozen or more direct mailers have their own mailings that echo, loudly or otherwise, Conroy’s effort. They’ve just “stolen smart.” It’s more proof, that as much as culture and technology have changed, as sophisticated and clever as we may now think we are, the direct marketing rules and techniques of the past are still quite valid, and profitable, today.

Are Ads Ubiquitous, Intrusive, Irrelevant and Offensive?

I’m reading “The Next Evolution of Marketing” by Bob Gilbreath, and he delivers an interesting message about how marketing that has meaning is more effective than traditional advertising. However, Gilbreath drives his message home behind a point that consumers are irate at ads and avoid them like deadbeats dodging collections agents. But me, I don’t hate advertising, and I don’t think most people care that much, either.

I’m reading “The Next Evolution of Marketing” by Bob Gilbreath, and he delivers an interesting message about how marketing that has meaning and adds value to consumers’ lives — before they buy anything from you — is more effective than traditional advertising. It’s an interesting book I’ll probably talk about more in a couple weeks.

However, Gilbreath drives his message home behind a point that consumers are irate at ads and avoid them like deadbeats dodging collections agents. He sharpens this attack with facts and stats such as 76% of Americans joined the National Do Not Call Registry, most people who own a DVR skip commercials, and software for blocking banner ads (Adblock Plus, and yes, it blocks regular, static banner ads, not just pop-ups) won PC World‘s “best product” award. Gilbreath describes a world where people hate advertising the way the Tea party hates taxes, and over the course of the first chapter says traditional messaging is “everywhere,” “intrusive,” “irrelevant” and “offensive.”

He’s certainly not alone in that opinion. Comedians and consultants alike love ranting about stupid advertising, and I’ve edited more than one article about advertisers basically wasting their money. The tradiitonal, godawfully expensive commercial is easy fodder for anyone recommending a new approach.

But me, I don’t hate advertising, and I don’t think most people care that much, either.

The squeaky eyeball gets the Visine, so when someone complains about advertising it makes the news — Gilbreath points out that a handful of calls can get companies to pull national campaigns. But I’m in my thirties, and I’ve got a lot of positive memories of traditional advertising. The Bud Bowl, Geico’s Gecko, pretty much any ad run during the Super Bowl … they can add to the fun, so I give them a chance. Same with movie previews — I really don’t know if I want to see a movie or a new show until I see some ads for it — and coaster ads at the bar. I commute by train, so I relish reading something, anything, interesting on a billboard while waiting for a late one.

Ads can annoy me — anything can annoy me — but I’m not hostile to them. If commercial breaks are reasonable, I’m liable to let them run. I’ve even flipped channels to find spots I was interested in. If someone puts an ad in the restroom, I really couldn’t care less (unless it’s lookin’ at me; that gets weird). I give web banners a chance to catch my click so long as they don’t take 60 seconds to scroll down, stall my browser, or do something else ridiculous to tick me off (many do in fact do ridiculous things that tick me off, but that’s for another future post.)

It’s easy to overstate consumer hostility toward any for-profit project, but it’s a mistake to attribute isolated outbursts to the whole audience. No one complains about marketing messages that interest them and convey information they want. And I think we’re all going to be shocked by just how many consumers are happy to participate in initiatives, like Facebook’s new privacy settings and global “like,” that help you target marketing to them even more.

(If you want me to look at a book, send it to me at the NAPCO offices: 1500 Spring Garden St., Philadelphia, PA 19130. I make no promises. We’re not doing book reviews or a book of the week or anything that relies on me consuming more than a dozen pages a weekend. But I will take a look at anything you send. If it sparks an idea, I’ll work it into Ways of Thinking.)

Melissa Campanelli’s The View From Here: Promoted Tweets, A Marketer’s Dream?

Well, it’s finally happened. Earlier this week, after several months of buzz on the blogosphere, Twitter launched its Promoted Tweets program, a new advertising strategy that delivers contextually relevant ads in a user’s search results. At launch, advertising partners include Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks and Virgin America.

Well, it’s finally happened. Earlier this week, after several months of buzz on the blogosphere, Twitter launched its Promoted Tweets program, a new advertising strategy that delivers contextually relevant ads in a user’s search results. At launch, advertising partners include Best Buy, Bravo, Red Bull, Sony Pictures, Starbucks and Virgin America.

“Promoted Tweets are clearly labeled as ‘promoted,’ but in every other respect they will first exist as regular tweets and will be organically sent to the timelines of those who follow a brand,” according to an April 13 blog post on Twitter by Twitter co-founder Biz Stone. Users can retweet, reply or bookmark the messages, which are called out at the top of some Twitter.com search results pages.

Twitter is working hard to distance Promoted Tweets from other sponsored ad programs, such as Google AdWords, in my opinion. In his blog post, Stone wrote, “since all Promoted Tweets are organic Tweets, there is not a single ‘ad’ in our Promoted Tweets platform that isn’t already an organic part of Twitter. This is distinct from both traditional search advertising and more recent social advertising.”

There is one big difference between a promoted tweet and a regular tweet, Stone said: “Promoted Tweets must meet a higher bar — they must resonate with users. That means if users don’t interact with a Promoted Tweet to allow us to know that the Promoted Tweet is resonating with them, such as replying to it, favoriting it or retweeting it, the Promoted Tweet will disappear.”

A home run?
Advertisers and users are cautiously enthusiastic about Promoted Tweets, at least according to what I’ve read in the blogosphere this week.

They’re not sure whether the program will succeed, especially since corporations can already use Twitter to advertise to a targeted audience just by having Twitter followers. Why should they buy a promoted ad when they’re already interacting with customers and prospects? Others are concerned that Twitter-based advertising is similar to unsolicited email.

Two things are clear, though: One, users and advertisers are curious about the program and will be watching it closely in the days and weeks to come. And two, this program was created to generate revenue for Twitter beyond the search deals it’s signed with major search engines.

What do you think? Will you be experimenting with Promoted Tweets? If so, let us know. We’d love to follow up and do a bigger story on this.

The Yin and Yang of Dealing with Good and Lousy Customers

For years I used to quote the statistic that a satisfied customer will tell three people, while an unhappy customer will tell 11 people. This was B.I. (before the Internet).

Today, an unhappy customer can go online and reach tens of millions of people around the world with an angry message.

One of the most fascinating figures in modern retailing is Bradbury H. (Brad) Anderson, a Northwestern Seminary dropout who went to work for a small midwestern music store called Sound Music. Over the years, Anderson turned the little shop into electronics behemoth Best Buy, with 1,400 stores across the United States and Canada, $45 billion in sales and 155,000 full- and part-time employees.

The corporate philosophy of most giant retailers is to drive every possible consumer into the store with TV advertising, cents-off coupons, mail shots, special newspaper offers and all the other bells and whistles of marketing wizardry.

But Anderson saw that many of these giants were performing poorly.

Several years ago in analyzing Best Buy’s customer file, he discovered that of the 500 million customer visits a year, 20 percent—or 100 million—were unprofitable.

So he hired on as a consultant Columbia Business School Professor Larry Selden, author of “Angel Customers and Demon Customers: Discover Which Is Which and Turbo-Charge Your Stock.”

It was Selden who came up with the revolutionary theory that a company is not a portfolio of product lines, but rather a portfolio of customers.

Direct marketers have operated on that premise since the 1920s.

Selden divides customers into “angels” and “devils.” Angels are the desirable customers who buy stuff and keep it—the kind of folks worth doing business with.

“The devils are its worst customers,” writes Gary McWilliams in his Wall Street Journal account of Best Buy. “They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts. They load up on ‘loss leaders,’ severely discounted merchandise designed to boost store traffic, then flip the goods at a profit on eBay. They slap down rock-bottom price quotes from Web sites and demand that Best Buy make good on its lowest-price pledge.”

As with direct marketers, Best Buy carefully analyzes its customer base, spending time and money to lure the angels into the store and eliminate promotional efforts to the devils. It is also enforcing a 15 percent restocking fee for bad actors.

Unlike direct marketers, Best Buy cannot keep these sleaze balls out of its stores. But it can make life difficult for them while, at the same time, giving excellent service to its good customers.

On the other hand, when you have 155,000 employees, not all are smooth schmoozers or judges of people and absolutely “go by the book.” The result, nice folks can have miserable customer experiences and tell the world.

Satisfied Customers vs. Angry Customers
For years I used to quote the statistic that a satisfied customer will tell three people, while an unhappy customer will tell 11 people. This was B.I. (before the Internet).

Today, an unhappy customer can go online and reach tens of millions of people around the world with an angry message.

What triggered this story was the following e-mail forwarded to me last week by a long-time colleague that directly relates to Brad Anderson’s customer angels-and-devils policy.

Dear friends:

I received several copies of this email. My own take on dealing with retailers like this: Use a credit card.

BEST BUY, MY FOOT
Best Buy has some bad policies…. Normally, I would not share this with others. However, since this could happen to you or your friends, I decided to share it. If you purchase something from Wal-Mart, Sears etc. and you return the item with the receipt they will give you your money back if you paid cash, or credit your account if paid by plastic.

Well, I purchased a GPS for my car, a Tom Tom XL.S from ‘Best Buy’. They have a policy that it must be returned within 14 days for a refund!

So after 4 days I returned it in the original box with all the items in the box, with paper work and cords all wrapped in the plastic. Just as I received it, including the receipt.

I explained to the lady at the return desk I did not like the way it could not find store names. The lady at the refund desk said there is a 15% restock fee for items returned. I said no one told me that. I said how much would that be. She said it goes by the price of the item. It will be $45 for you. I said, all you’re going to do is walk over and place it back on the shelf then charge me $45 of my money for restocking? She said that’s the store policy. I said if more people were aware of it they would not buy anything here! If I bought a $2,000 computer or TV and returned it I would be charged a $300 restock fee? She said yes, 15%.

I said OK, just give me my money minus the restock fee.

She said since the item is over $200, she can’t give me my money back!!!

Corporate has to and they will mail you a check in 7 to ten days. I said ‘WHAT?!’

It’s my money! I paid in cash! I want to buy a different brand. Now I have to wait 7 to 10 days. She said the policy is on the back of the receipt.

I said, Do you read the front or back of your receipt? She said well, the front! I said so do I. I want to talk to the manager!

So the manager comes over, I explained everything to him, and he said, Well, sir, they should have told you about the policy when you got the item. I said, No one has ever told me about the check refund or restock fee, whenever I bought items from computers to TVs from Best Buy. The only thing they ever discussed was the worthless extended warranty program. He said, Well, I can give you the corporate phone number.

I called corporate. The guy said, well, I’m not supposed to do this but I can give you a $45 gift card and you can use it at Best Buy. I told him if I bought something and returned it, you would charge me a restock fee on the item and then send me a check for the remaining $3. You can keep your gift card, I’m never shopping in Best Buy ever again, and if I would of been smart, I would of charged the whole thing on my credit card! Then I could have canceled the transaction.

I would of gotten all my money back including your stupid fees! He didn’t say a word!

I informed him that I was going to e-mail my friends and give them a heads up on this store’s policy, as they don’t tell you about all the little caveats.

So please pass this on. It may save your friends from having a bad experience of shopping at Best Buy

It’s true! read it for yourself!!

Takeaways to Consider

  • As a result of this letter, I will think twice about ever shopping at Best Buy.
  • If this letter was forwarded—and re-forwarded—around the world, tens of thousands of wary prospects will drive right past Best Buy make a point of shopping at Wal-Mart, Target or Radio Shack.
  • It is assumed that you analyze your customers every which way to Sunday. The simplest formula in the direct marketing community is recency-frequency-monetary value (RFM). (Other highly sophisticated systems are available and should be looked into.)
  • Divide customers into quintiles, with the top quintile being your caviar and cream.
  • The bottom quintile is very likely costing you money.
  • The object of marketing is to move customers in the second quintile into the first quintile, the third quintile customers into the second quintile and so on.
  • In direct marketing, it is relatively easy to control the bottom quintile by marketing to it with less frequency, but keeping the addresses current so you can make money off of list rentals.
  • In retail, the bottom quintile is a nightmare. It’s tough to keep undesirable customers out of stores. One possibility is to divide the bottom quintile into its own quintile with the bottom two-fifths—the serial returners and shysters whom you do not want as customers—dealt with firmly.
  • This must be handled with great delicacy. Otherwise consumer activist groups can get on your case and create a flurry of poor publicity.
  • When you go to www.bestbuysux.org, you will find that Best Buy owns it and has turned it into a sales pitch for its products and services.
  • You may want to own the following URLs: www.[YourCompanyName]sucks.org and www.[YourCompanyName]sux.org and follow Best Buy’s example.
  • It used to be axiomatic that a happy customer will tell three people; an unhappy customer will tell 11 others. Today, with the Internet, an unhappy customer can tell the entire world.

Trade Associations Bond on Industry Self-Regulation

With the threat of an online privacy bill looming, some of the nation’s largest media and marketing trade associations released self-regulatory principles on July 2 to protect consumer privacy in ad-supported interactive media.

With the threat of an online privacy bill looming, some of the nation’s largest media and marketing trade associations released self-regulatory principles on July 2 to protect consumer privacy in ad-supported interactive media.

The seven principles will require advertisers and Web sites to clearly inform consumers about data collection practices and enable them to exercise control over that information. The collaboration includes the American Association of Advertising Agencies, the Association of National Advertisers, the Direct Marketing Association and the Interactive Advertising Bureau.

The Council of Better Business Bureaus is also part of the effort and has agreed, along with the DMA, to implement accountability programs to promote widespread adoption of the principles.

This is a big deal: Taken collectively, the participating associations represent more than 5,000 U.S. companies, and the task force represents the first time all advertising and marketing industry associations have come together to develop self-regulatory principles.

And it should be a big deal, quite frankly. Concerns around government regulation on the use and collection of data on the Internet has been swelling in the industry over the past few years as the medium has become all-encompassing. What’s more, the House Communications Subcommittee Chairman Rick Boucher (D-Va.) is preparing an online privacy bill right now that may contain an “opt-in” provision that would prevent companies from targeting consumers without their explicit permission.

The seven principles
The self-regulatory program is expected to be implemented at the beginning of 2010. The process, however, started in January, when the task force announced it was working on developing these principles in direct response to calls by the Federal Trade Commission.
The principles are designed to address consumer concerns about the use of personal information and interest-based advertising, while preserving the robust advertising that supports free online content and the ability to deliver relevant advertising to consumers.
The seven principles include the following:

  • The Education Principle, which calls for organizations to educate individuals and businesses about online behavioral advertising. Along these lines, a major campaign — expected to exceed 500 million online advertising impressions — will be launched over the next 18 months to educate consumers about online behavioral advertising, the benefits of these practices and the means to exercise choice.
  • The Transparency Principle, which calls for clearer and easily accessible disclosures to consumers about data collection and use practices associated with online behavioral advertising.
  • The Consumer Control Principle, which requires Internet access service providers and providers of desktop applications software such as Web browser toolbars to obtain the consent of users before engaging in online behavioral advertising, and take steps to de-identify the data used for such purposes.
  • The Data Security Principle, which calls for organizations to provide reasonable security for, and limited retention of, data collected and used for online behavioral advertising purposes.
  • The Material Changes Principle, which calls on organizations to obtain consent for any material change to their online behavioral advertising data collection and use policies and practices to data collected prior to such change.
  • The Sensitive Data Principle, which recognizes that data collected from children and used for online behavioral advertising merits heightened protection, and requires parental consent for behavioral advertising to consumers known to be less than 13 on child-directed Web sites. This principle also provides heightened protections to certain health and financial data when attributable to a specific individual.
  • The Accountability Principle, which calls for the development of programs to further advance these principles, including programs to monitor and report instances of uncorrected noncompliance with these principles to appropriate government agencies.

Sounds like a plan to me. What do you think? Do you think this initiative will stave off government regulation for good, or should these trade groups be doing more? Leave a comment here, and let us know how you feel.

Baby Boomers, Gen Y Embrace Personalized Online Ads

This past week, I came across a new study by Q Interactive, an advertising network specializing in predictive behavioral targeting. It found Generation Y Americans (individuals born between 1982 and 1995) and baby boomers (individuals born between 1946 and 1964) are the two most active generations, with the greatest willingness to provide information online in exchange for more personalized advertising.

This past week, I came across a new study by Q Interactive, an advertising network specializing in predictive behavioral targeting. It found Generation Y Americans (individuals born between 1982 and 1995) and baby boomers (individuals born between 1946 and 1964) are the two most active generations, with the greatest willingness to provide information online in exchange for more personalized advertising.

The study’s core finding showed that when given the choice, 63 percent of Gen Yers would provide personal data in exchange for targeted advertising. In addition, 53 percent of baby boomers would do the same.

The study surveyed more than 1,500 consumers on their feelings about targeted online advertising, and these groups had the highest percentages.

“The findings were surprising to us, because they go against a lot of perceptions advertisers have about what consumers will provide in order to receive personalized advertising,” Q Interactive’s President/CEO Matt Wise told me this week.

It’s little surprise that Gen Yers are used to providing personal information on social networking sites such as Facebook and MySpace, Wise said.

But baby boomers’ comfort with providing this type of information online was more surprising, Wise said. “Baby boomers finally really understand the value proposition of offering personal information online in exchange for something now,” he said. “If we surveyed them in 1999, I’m sure we would have gotten a different response.”

The study also found consumers, as a whole, value online advertising targeted to their individual needs and interests. Additional findings from the survey included the following:

  • 56 percent view advertisers “favorably” when ads are tailored to a personal interest; and
  • approximately one in three Gen Yers and baby boomers feel more relevant ads tailored to personal interests improve their online experiences.

So, if you’re targeting either Gen Y or baby boomers, try testing a program that offers more personalized advertising in exchange for their information. But make sure you do it the right way by following behavioral targeting best practices.

Bright Spots Few and Far Between According to New Online Advertising Spending Surveys

Online advertisers and marketers can rest on their laurels no more: A pair of surveys published earlier this week showed online advertising spending is not growing as fast as it has in the past — or as fast as it was expected to despite the dismal economy.

Online advertisers and marketers can rest on their laurels no more: A pair of surveys published earlier this week showed online advertising spending is not growing as fast as it has in the past — or as fast as it was expected to despite the dismal economy.

One report from the Interactive Advertising Bureau, based on a study conducted by PricewaterhouseCoopers, showed that while 2008 Internet advertising revenues totaled a record $23.4 billion — exceeding 2007’s performance by 10.6 percent — it was the slowest growth rate since 2002.

The 2008 figure compares with $21.2 billion in 2007, when online ad revenue grew 26 percent over 2006. The data suggests the recession is having a serious impact on one of the few drivers of robust growth in media and advertising.

Moreover, the road ahead will be even slower. Revised projections by eMarketer indicate that U.S. online ad spending growth will halve in 2009, with just a 4.5 percent increase, to $24.5 billion, compared with a previous prediction of 8.9 percent growth.

But David Hallerman, a senior analyst at eMarketer, looks at the figures and sees a glass half full. In an eMarketer article earlier this week, he said that in this economy, “it has to be considered good times when U.S. online ad spending reaches record highs, as it did in Q4 2008 at $6.1 billion and as it will in 2009 at $24.5 billion.”

In addition, some online ad formats are faring better than others, according to the IAB. Search advertising is holding up relatively well at $10.5 billion for 2008, which is up 19.8 percent over last year. Digital video, though still a small overall contributor, more than doubled its revenue with an increase to $734 million from $324 million in 2007.

E-mail held steady, accounting for 2 percent of all digital advertising spend in both 2008 and 2007. In 2007, actual e-mail advertising revenue was $244 million; in 2008, it rose to $405 million.

As in 2007, retail, financial services, computing and automotive remained the four largest verticals among Internet advertisers in 2008. Consumer packaged goods, an industry vertical historically slow to embrace interactive advertising, notably increased its share of total Internet ad revenues by 60 percent over 2007.

Is Microsoft’s Live Search Cashback Service Good for Advertisers?

By now, you probably have all heard about Microsoft Corp.’s new service, Microsoft Live Search cashback.
In case you haven’t, the service will offer ad-funded cash rebates to customers who find and purchase products.

According to a Microsoft press release, “the Live Search cashback product portfolio includes more than 10 million product offers from more than 700 merchants, including more than 13 of the top 40 U.S. retailers.”

By now, you probably have all heard about Microsoft Corp.’s new service, Microsoft Live Search cashback.
In case you haven’t, the service will offer ad-funded cash rebates to customers who find and purchase products.

According to a Microsoft press release, “the Live Search cashback product portfolio includes more than 10 million product offers from more than 700 merchants, including more than 13 of the top 40 U.S. retailers.”

Live Search cashback, according to Microsoft, “helps merchants maximize their advertising investments and drive more sales by providing consumers with an added incentive to buy — a cash rebate. Participating merchants choose to pay Microsoft a [cost-per-acquisition] fee each time a customer completes a sale through Live Search cashback. The fee is a percentage of the retail price, and when that transaction is complete, Microsoft returns that fee to the consumer in the form of a cash rebate.”

However, the current cost-per-click model charges advertisers for every click on a sponsored link associated with certain keywords, whether or not the potential customer makes a purchase.

But, not to worry, according to Microsoft: In the press release, the software behemoth said the CPA model gives advertisers a more precise return on their advertising investment, and is currently being deployed on a relatively limited basis.
“The CPC and CPA search advertising models represent the most targeted advertising approaches available today, but there is still room for improvement,” the company said.

Do you agree or disagree? Let us know by posting a comment.

Consumers Know They Are Being Tracked

According to a recently released study by consumer privacy organization TRUSTe and global market insight
and information group TNS, consumers generally know that their internet activities are being tracked for purposes of targeting
advertising.

Are they OK with it? Not really. They study also revealed a high level of concern associated with that tracking,
even when it isn’t associated with personally identifiable information.

According to a recently released study by consumer privacy organization TRUSTe and global market insight
and information group TNS, consumers generally know that their internet activities are being tracked for purposes of targeting
advertising.

Are they OK with it? Not really. They study also revealed a high level of concern associated with that tracking,
even when it isn’t associated with personally identifiable information.

Behavioral targeting, which enables marketers to deliver customized experiences and improved marketing
metrics, also runs up against consumer privacy concerns and calls for greater
transparency around emerging tracking and targeting techniques.

Based on
the results of the survey, lack of transparency may factor into privacy
concerns. In fact, 71 percent of online consumers are aware that their browsing
information may be collected by a third party for advertising purposes, but
only 40 percent are familiar with the term “behavioral targeting.” In addition, 57
percent of respondents said they are not comfortable with advertisers using
that browsing history to serve relevant ads, even when that information
cannot be tied to their names or any other personal information.

Meanwhile, a majority (91 percent) of respondents expressed willingness
to take necessary steps to assure increased privacy online when presented
with the tools to control their internet tracking and advertising
experience, and this, accoridng to TRUSTe and TNS, suggests a need for added education, transparency and choices
for behavioral targeting. Nearly two-thirds (64 percent) would choose to
see online ads only from online stores and brands that they know and trust
and 44 percent of respondents would click buttons or icons to make that
happen.

To the contrary, a similar proportion of consumers (42 percent) said they
would sign up for an online registry to ensure that advertisers are not
able to track browsing behaviors, even if it meant that they would receive
more ads that are less relevant to their interests.

What these results boil down to is that consumers say they want more relevant advertising, but don’t want
to be tracked in order to get it.

What is the key takeaway here? Transparency, transparency, transparency. Consumers today are more sophisticated and educated than ever before. They understand advertising, and in many cases, respond to it and even enjoy it. So don’t take chances–be a trustworthy and transparent company.