Your Ideal Customer Is a Myth

We talk about finding the “ideal” customer so often that it practically becomes a fetish. But that’s how you grow, right? You find more people like your ideal customers and get them to be your customers, too, right? What if that idea of an ideal customer is a myth, and chasing it is about as useful for growth as hunting Bigfoot?

We talk about finding the “ideal” customer so often that it practically becomes a fetish. But that’s how you grow, right? You find more people like your ideal customers and get them to be your customers, too, right? What if that idea of an ideal customer is a myth, and chasing it is about as useful for growth as hunting Bigfoot?

Looking for your ideal customer makes as much sense as hunting for Bigfoot and the Lochness Monster.
And your personas might be, too.

How to grow your business — specifically through “growth hacking” to expand as quickly as possible — was the topic on everyone’s mind at Growth Marketing Conference East in Brooklyn on May 4. And no doubt, many of them were thinking about exactly how to find more of their ideal customers.

But in the opening keynote, Derek Halpern, Founder/CEO of Social triggers, spun the idea of who marketers should be targeting for growth on its ear.

“How do you acquire new customers? Find new areas for growth,” said Halpern.

The Ideal Customer Struggle Is Real, and a Blunder

According to Halpern, most companies, especially early stage companies hoping to grow, try to acquire new customers by focusing on who they think of as their ideal customers. Then they fight for the people in that demographic/psychographic/targeted category.

The problem is, every company in your market thinks of these as their ideal customers, too, and they all want them.

So instead of growing dynamically, Halpern sees too many companies fighting over this known pool of customers.

  • They fight by targeting competitors customers, instead of bringing new customers to their market.
  • They focus on persuading other company’s customers to switch, often by spamming and hounding them with marketing messages.
  • They fight against cancellations to keep customers.
  • They fight for conversions through micro-optimization tactics that bring incremental improvement, but not the big shift you’re looking for.

Fighting is a slog. You struggle for every customer you get and every customer you try to keep. And then, Halpern said, growth marketers fight even harder! They announce New features, new messaging, new headlines … and soon they have dead customers “who are so jaded they’re just never going to buy anything from you again.”

And that’s the real problem with fetishizing “ideal” customers. They become exhausted customers, and they stop responding.

“When you’re fighting for customers who are being bombarded by 30 different companies,” explained Halpern, “it becomes very hard for you to acquire a new customer.”

That’s not growth hacking. That’s the opposite of growth hacking.

Where the Growth Is

According to Halpern, if you want to grow — if you’re trying to “hack” growth — you need to stop aiming for “ideal” customers.

In fact, the whole “idea of an ideal customer is a myth,” said Halpern. “You may have 50 different kinds of people who want what you sell for different reasons.”

Instead of fighting over the market all of your competitors know is there, you need to find those customers who need your products or services, but don’t know about them, or don’t know how they can help.

You need to target customer who don’t even realize they’re in your market, yet.

From a conventional, ideal-customer point of view, these customers are too far from the known sales funnel to be worth targeting. They’re indirect customers. They’re harder to find, and they seem like a longer shot to convert.

According to Halpern, most marketers ignore them because they’re so far from the sale. But once you have them interested, he said, they’re much easier to convince to buy.

“To them you’re the only solution,” said Halpern. “They’ve never heard of anything else.”

How to reach these indirect customers could be a blog post on its own. They don’t necessarily know you or your market, so your marketing has to be indirect — focusing on creating a market out of ignorant customers rather than convincing knowledgeable customers to buy from you instead of a competitor.

As Halpern put it: “The less they know, the more broad you go” in your marketing.

But if you’re looking for room to grow, broad is exactly the kind of market you need.

What do you think? Is your company slogging it out over those precious, “ideal” customers? Or are you creating your market through indirect marketing?

Growth Hacking for Direct Marketers

The term “growth hacking” first appeared about three years ago to describe generating sales using non-traditional channels at no cost, or low cost. At first, “growth hacking” was considered just another marketing buzz word that would fizz out over time. But it’s reportedly …

The term “growth hacking” first appeared about three years ago to describe generating sales using non-traditional channels at no cost, or low cost. At first, growth hacking was considered just another marketing buzz word that would fizz out over time. But it’s reportedly growing in use.

Wikipedia, the go-to place for definitions, probably sums it up best:

Growth hacking is a process of rapid experimentation across marketing channels and product development to identify the most effective, efficient ways to grow a business. Growth hackers are marketers, engineers and product managers that specifically focus on building and engaging the user base of a business.

Another definition:

Growth hackers often focus on low-cost alternatives to traditional marketing, e.g. using social media, viral marketing or targeted advertising instead of buying advertising through more traditional media.

Where do we see growth hacking most? Start-ups. The goal is to generate rapid growth in the early stage launch, and at the same time, make the growth sustainable and retain customers for the long-term. Another way you might think of growth hacking is to get earned media (no cost) instead of using paid media.

So how would a traditional direct mail marketer use no or low-cost growth hacking techniques? I think one application would be to integrate direct mail with digital channels using automated software platforms to create nurture marketing strategies.

  • Sync email contact with in-home direct mail delivery. Make sure you encourage anyone who comes to your website to opt-in to your email list.
  • Test multiple landing pages with email, and when you have multiple segments of customer email, test a variety of options.
  • Use Facebook sponsored posts or retargeting campaigns to serve ads to people matched from your email list or who have visited your website. Test a small budget that you’re comfortable spending daily.
  • Frequently generate new content your customers and prospects want to know about. The written word is good. Video recorded from a smartphone can be authentic.

Growth hacking might not be part of a traditional direct mail marketer’s vocabulary and approach, but thinking out-of-the-box with how you can sell for no or low cost digital channels might yield some profitable surprises.

(My new book, “Crack the Customer Mind Code” is available at the DirectMarketingIQ bookstore. Or download my free seven-step guide to help you align your messaging with how the primitive mind thinks. It’s titled “When You Need More Customers, This Is What You Do.” )

A Welcome to the 74th Postmaster General and CEO Megan Brennan

Happy President’s Day, and a warm welcome to the new USPS Postmaster General and Chief Executive Officer Megan Brennan. In a recent letter to USPS employees, upon her term of service beginning February 1, Brennan shared these statements, which I thought would be noteworthy enough to share here.

Happy President’s Day, and a warm welcome to the new USPS Postmaster General and Chief Executive Officer Megan Brennan.

In a recent letter to USPS employees, upon her term of service beginning February 1, Brennan shared these statements, which I thought noteworthy to share here:

  • We will invest in the future of the Postal Service. Investing in our future means creating the best opportunities for long-term growth and profitability.
  • We will speed the pace of innovation. The coming years will see greater focus on innovation, with pilot projects designed to test new delivery offerings, new tools to better meet the digital and mobile expectations of our customers, and new offerings designed for America’s small businesses.
  • We will develop strategies to better engage and empower employees.
  • We will also build the most efficient and productive network to support our growth products.
  • We have made tremendous progress streamlining our operation footprint in recent years—allowing us to keep our products and services affordable.

Updates to the USPS five-year business plan and strategic initiatives are certain to follow.

From a USPS customer perspective, it’s hard to argue about any one of these objectives, and it’s tempting to say she has put emphases exactly where they need to be: innovation, investment, productivity, affordability, engagement and infrastructure.

While Postal Service customers are not called out directly here in this excerpt—all of these goals speak to keeping the Postal Service attractive, accessible and responsive to marketplace needs and realities. The PMG also stated in her letter, “Your commitment to our public service mission and to delivering for our customers defines who we are as an organization and is the bedrock of all of our successes.”

There are certainly challenges ahead: Marketing organizations are well aware of the difficulty of working with a quasi-independent governmental entity that does not have total control over its finances, and taps the business sector unpredictably as a result. The whole rationale of past postal reforms was to instill predictability, manageability, cost controls and some semblance of logic. We can say with certainty that that most recent postal reform law fell short, and created huge liabilities in funding that clearly were not sustainable, nor grounded in logic, which brought on USPS default and financial uncertainty. And I’m not talking about the crown jewel in that law, from mailers’ perspective: the CPI-indexed annual rate cap. But rather Congressional mandates for pre-funding certain civil service and retiree benefits, and we’re still awaiting the collective political will to fix these mandates.

Thankfully, the PMG is inheriting a growing US economy which helps USPS financials, but the fix-its still need to happen on The Hill. Let’s make sure some of this needed emphasis and impetus can find its way into the Postal Service’s working more closely with the business community, engaging USPS employees too, for these legislative changes to happen very soon.

I’d love to hear some positive developments here by the time the PMG addresses the National Postal Forum in May.

5 Shades of Pop-Up Email Acquisition

As marketers, one of the biggest challenges we face is growing our marketing list at a rate higher than our attrition. On average, companies report an attrition rate of about 20 percent, which means in order to show a growth of just 10 percent per year, we need an actual growth of 30 percent. That’s a lot of growth and yet many of us simply have not developed a concrete plan to achieve this goal

As marketers, one of the biggest challenges we face is growing our marketing list at a rate higher than our attrition. On average, companies report an attrition rate of about 20 percent, which means in order to show a growth of just 10 percent per year, we need an actual growth of 30 percent. That’s a lot of growth and yet many of us simply have not developed a concrete plan to achieve this goal.

In the age of shiny, new objects, we have at our disposal tools, widgets, scripts, and doo-dads all designed to entice, encourage, beg, and withhold in order to garner the most valuable of data: our prospects’ email address. I’ve tried all of these approaches I’ll describe below, either on our site or on a client’s site, and there’s not one right answer. The big question is: Why do pop-ups work?

Most of us swear we hate subscriber pop-ups; they’re annoying; they make us want to leave the site immediately—but is this actually true? Studies show it’s simply not. The web abounds with case studies by companies of all sizes who verify their pop-ups are effective conversion tools and there’s a reason: pop-ups—though annoying—jolt your visitor with a persuasion technique called pattern interrupt. This identifies a situation where something unexpected happens after your brain has become lulled into a rhythm. You can interrupt a pattern with just about any unexpected or sudden display, movement, or response. When you interrupt the visitor, they usually experience momentary confusion, and sometimes even amnesia. This confusion state causes the visitor to become open to suggestion—they become willing to trade this uncomfortable state for clarity offered by another state. Your clear call to action displayed in a pop-up offers them a path to end their confusion.

With that said, and understanding how a pop-up works, you then need to choose the right pop-up approach. You’ll find some pop-ups are better aligned with your business than others, but that knowledge is usually gained through trial and error. If you’re using a CMS site such as WordPress, Joomla, or Drupal, you can test any/all of these approaches simply by installing plug-ins. With HTML, it become more difficult as you sort through different jQuery or JavaScript tools, but it’s not so difficult as to deter you. In the end, pop-ups are a great way to chip away at your pursuit of 30 percent growth.

On-enter Gated
Of all the annoying pop-ups, on-enter gated is the one I personally find the largest deterrent from continuing my engagement with a site. Figure 1 in the media player at right is an example is from JustFab.com, and their pop-up experience begins the moment you land. A pop-up first offers product options you must click through so they can build a profile of your style preferences. With that done, you complete the form shown in figure 1 before being allowed to continue your shopping experience. You cannot dismiss this pop-up without providing the required information. I suffered through this process only to be able to capture this screen shot, but I can tell you I have abandoned every other site that required me to log in to view their content. Similarly, I nearly always abandon a site that allowed me to read part of an article and then withheld the ending until I proffered my email address.

On Enter
For me, pop-ups on enter like the one shown in figure 2, are far less annoying than on-enter gated. These pop-ups might display as soon as you land, after a period of time, or after you begin scrolling. These have a dismiss icon, so you can close the box without providing the information. If you choose this route, you’ll want to do some testing around the ideal time to let pass before displaying. I’ve found giving the reader 15 to 30 seconds to get a taste for the content produces better results. If you ask for their email address before they have determined the value of your site, you may scare them off.

Header (or Footer) Notification
Header or footer notifications are far less intrusive, and thus could prove to be less effective. It’s easy to miss a message displayed at the very top of the page since the visitor’s eye is more typically drawn to the area that usually displays the menu bar. If you choose a header or footer notification like the one shown in figure 3 from infyways.com, try using a heat map to ensure your visitors are even looking at the notice before you decide the effectiveness of this approach.

On Exit
The on-exit pop-up (figure 4), displays automatically as someone makes a move to leave a site. I like these pop-ups because it’s the what-have-I-got-to-lose? approach. Displaying a message after your visitor has already decided to leave your site is a great way to cause them pause and reconsider what they’ve just read. Was it really of no value? Did it have value only today? Did it have long-term value? If so, would they like to be notified of new, similar content?

Scroll-Triggered Pop-up
This pop-up (figure 5) is triggered to display along the bottom edge (configurable) of the visitor’s browser window as they scroll down the page. It will display on any/all pages of the site, so it’s effective even if they’ve clicked a link directly through to a landing page.

A/B Testing and Analytics
There are probably as many approaches as there are businesses and websites, but this list is a good overview. Don’t stop at just installing the form or plug-in, without analytics and careful monitoring, you’re not getting smarter about what works and what doesn’t. If you’ve installed a subscriber pop-up plug-in and you’re not getting sign-ups, first make sure the product is working properly and then check your analytics. Are you actually getting traffic to the page where you’ve included your capturing system? Using a heatmap, are people viewing it? Lastly, these products are not mutually exclusive. Try lots of approaches all at once—that in itself can be the A/B test: which product is most effective on which pages?

Automation
Most of these products will capture your prospects into a database of some sort, but automating the passing of leads into your email system will make the entire process more valuable to you. By passing the data automatically, you can also create instantaneous auto-responders welcoming your new subscriber. While you’re shopping for a product, ensure you check to see if it supports your chosen email-automation platform, and if not, look to see how you can automate this process. We use Zapier and have found we can directly support the client’s application about 90 percent of the time.

For most of us, we have a methodical approach to building a marketing campaign and I think this same approach can be used as a plan for growing your list:

  1. Define a measurable goal
  2. Choose tools you will use for measuring success/failure of the effort
  3. Outline with metrics are important to showing success/failure
  4. Define A/B testing points
  5. Analyze results

If you’ve had success with a particular product, please share your experience in the comments below. I’m always eager to learn about new products that can make me a better marketer—as I’m sure this blog’s readers are as well.

Mindset and Measurement

In her book, “Mindset: The New Psychology of Success,” Stanford University Professor Carol Dweck purports that people possess one of two mindsets: the fixed mindset or the growth mindset. Fixed mindset people are “always trying to prove themselves and they’re supersensitive about being wrong or making mistakes.” They fear failure. They feel that they are always being judged. Fixed mindset people feel that they have fixed traits and talents, and that they’re never going to get any better. For them, success is about proving they’re smart or talented. Validating themselves.

In her book, “Mindset: The New Psychology of Success,” Stanford University Professor Carol Dweck purports that people possess one of two mindsets: the fixed mindset or the growth mindset.

Fixed mindset people are “always trying to prove themselves and they’re supersensitive about being wrong or making mistakes.” They fear failure. They feel that they are always being judged. Fixed mindset people feel that they have fixed traits and talents, and that they’re never going to get any better. For them, success is about proving they’re smart or talented. Validating themselves.

Growth mindset people believe that “your basic qualities are things you can cultivate through your efforts.” They welcome failure as a learning experience, an opportunity to grow. For them, success is about stretching themselves to learn something new. Developing themselves.

Which mindset a marketer possesses affects the way they approach testing and results measurement. Beginning my career in a traditional direct marketing environment, I learned early on that failure is a good thing. It tells you what doesn’t work. I thought everyone developed tests that had limited downside risk to determine the best media, creative and offers. We roll out the winning campaign and test against it time and again. Success is always evolving.

It wasn’t until I started in the agency business that I learned there was another mindset—one where in-market testing might uncover flaws in a campaign that could open it up for judgment. In the fixed marketing mindset, the agency team and the client select what they believe is the best approach. If time and money permit, then perhaps they do some research to validate their choice. But as David Ogilvy pointed out so many years ago, “Research is often misused by agencies and their clients. They have a way of using it to prove they are right. They use research as a drunkard uses a lamppost—not for illumination but for support.”

The fixed mindset marketers measure to validate their campaigns. The growth mindset marketers measure to challenge their campaigns.

Agency people can be especially prone to the fixed mindset, particularly when it involves admitting that the agency’s initial work or recommendation was not perfect. Once, I was analyzing conversion from visit to lead at a website. I found a problem with the way leads were being directed to the landing page; it wasn’t an intuitive interface for the visitor and it was a spot where visitors were abandoning the site. When I informed the account person about the issue she said, “We can’t change it now. The client already approved it.” Classic fixed mindset. Being wrong equals failure, even if admitting it means better results, learning and growth.

Clients who have lengthy, multi-layered approval processes are also prone to the fixed mindset. They resist testing because it’s too difficult to get multiple creative/offer variations approved. But perhaps they’re reluctant to admit to people across several departments and levels of the organization that they don’t know prospectively what’s going to work best.

The good news is people can change their mindsets if they change their perceptions of what it means to succeed and what it means to fail. Dr. Dweck relates that “John Wooden, the legendary basketball coach, says you aren’t a failure until you start to blame. What he means is that you can still be in the process of learning from your mistakes until you deny them.”

Testing new approaches and learning what doesn’t work is a step along the path of continuous improvement. If we’re going to take our marketing results to the next level, we need to challenge the status quo, not preserve it.

Use Social Media and Email to Get More Customers and Keep Them Coming Back

Apathy kills more customers than bad service and poor quality products combined. Loyalty is inspired when people are interested, engaged and valued. The top priority of every business that wants long-term growth and profitability is acquiring customers and keeping them coming back. Focusing on one without the other is a recipe for disaster.

Apathy kills more customers than bad service and poor quality products combined. Loyalty is inspired when people are interested, engaged and valued. The top priority of every business that wants long-term growth and profitability is acquiring customers and keeping them coming back. Focusing on one without the other is a recipe for disaster.

Customer acquisition without retention is expensive. Costs typically run $25 to $75 per customer depending on the industry and competition. Three or more orders are required to break even. Profitability and growth come when people continue to buy year after year. Companies that excel in acquiring customers but don’t retain them will eventually crumble under the high costs.

Retention without acquisition is equally dangerous. Natural attrition will eventually leave the company without customers. When people complete their buying lifespan, they leave. Replacements are vital to keep the company moving forward. Companies without a stable of new customers coming in on a regular basis are dying. It is only a matter of time until operating costs exceeds revenue.

Apple is a good example of a company that has a good balance between acquisition and retention. The company keeps people coming back even when the products offer less performance than those from competitors. Loyalty remains high even after “antennagate” in 2010 because people are so emotionally invested in Apple’s culture leaving is harder than staying. Any company without a customer cult-like obsession for its products would have suffered irreparable damage from a similar challenge.

What if your company isn’t Apple and has little hope of creating an obsessive fan base? How do you continuously acquire customers and keep them coming back? Creating an integrated strategy that uses the best features of individual channels to connect with people and provide an engaging experience is the key to your success. Start by combining social activity with email campaigns and expand from there. Here are some ideas to get you started:

  • Let people know that you value their business. Neglect is one of two components that make it easy for competitors to snag your customers. Use custom emails to keep the connection between customer and company strong. People know the difference between “personalized” (insert name here) and “personal” (specific messages about orders or challenges). The same technology that creates personalized messages can create personal ones. Make the effort to send custom emails that invite a two-way conversation on a regular basis. Most people won’t respond, but you will still plant a seed that can grow into loyalty.
  • Keep things interesting. Boredom is the second component that opens the door for competitors to steal your customers’ attention with flashy ads, deep discounts, and the promise of something new. Shake things up by injecting new templates in your email campaigns and offering fun activities on your social platforms. After receiving the same format multiple times and repeatedly seeing the same types of posts, people miss the message because their mind tricks them into thinking they’ve seen it before. Avoid this by injecting fresh looks and participation opportunities.
  • Have a plan that moves people from participating in social communities to subscribing to your emails and vice versa. An email sign-up page on Facebook and links to your social platforms at the bottom of emails is not a plan. You need specific calls-to-action that include good reasons for people to move between channels. The process needs to be easy and fun. The more fun you make it, the more likely they will respond.
  • Reward people. Use great offers to get people to convert from prospect to customer. Provide even better benefits for long-term loyalty. Create a special club for people to join when they’ve placed their fifth order or reached a sales benchmark to encourage them to keep coming back. Include membership in private groups on social platforms and exclusive email messages. Let the people who provide the most benefits to your company receive the best offers first.

Doubling Down on Google+?

When determining how to integrate Google+ brand pages into your planning for 2012, it’s important to understand what Google+ is and what it isn’t. By Google’s own admission, Google+ isn’t meant to be a social network. Or so it says.

When determining how to integrate Google+ brand pages into your planning for 2012, it’s important to understand what Google+ is and what it isn’t.

By Google’s own admission, Google+ isn’t meant to be a social network. Or so it says. Google+ Pages will help brands in terms of search position and relevance with more real-time content that’s prioritized above other search results. But it’s not designed to drive the type of deeper engagement true social networks allow. While Google+ should be part of your overall media strategy, it won’t replace other social efforts anytime in the near future.

For example, there are limitations placed on Google+ Pages right now regarding promotions and contests. Specifically, the inability to host any promotions or competitions directly on Google+ Pages may actually end up driving more promotional traffic to Facebook. This is further made likely by Facebook’s own policy requiring that contests running on its site be hosted there.

The threat to the existence of Google can’t be understated. How real is this threat? Google certainly feels confident that it owns the internet and mobile web based on current platform dominance. But it should remember that it’s benefited from disruptive shifts in technology and user behavior.

For mobile specifically, this threat is embodied not only in Siri, which we know Google fears, but also potentially in Windows Phone. From a user experience perspective, Windows Phone represents a paradigm shift. Flameouts show how a dominant position can be compromised by complacency and failure to shift product strategy to reflect evolving tastes.

What further increases this risk for Google is that TV online advertising rates are on track to return to prerecession levels, while the overall ad industry is still below 2007 spending levels. While 2012 will see the growth of online ad spending surpass TV (11 percent growth versus 7 percent growth), brand advertisers are still spending more on TV. With more and more ads driving traffic directly to Facebook in search of deeper engagement, we see yet another strong channel that bypasses search-driven web use, even websites, entirely.

While I’ll be the first to admit that speculation on Google’s ultimate demise may be a bit premature, it does lead to some questions about what this all means in the short term. While Google+ will most likely have to be part of your overall search marketing consideration set, it’s a nonstarter from a social platform or deeper engagement perspective. Plans should reflect that. Google’s impulsive product strategy should also pause brands when considering how much effort to expend on Google+ as a whole. What it’s already shown us with the recent product cancellations and refocusing is that on Larry Page’s watch, anything is possible.

Retargeting With Demand-Side Platforms in Display Performance Media

A key driver for growth in display advertising is the rise of technology that seeks to bring efficiency to ad impression buying — i.e., demand-side platforms (DSPs). Approximately 10 percent of today’s online spending flows through DSPs, with forecasts calling for that figure to increase to as much as 50 percent over the next few years.

A key driver for growth in display advertising is the rise of technology that seeks to bring efficiency to ad impression buying — i.e., demand-side platforms (DSPs). Approximately 10 percent of today’s online spending flows through DSPs, with forecasts calling for that figure to increase to as much as 50 percent over the next few years.

Large brands will fuel much of this growth as they shift large ad network budgets to DSPs for better pricing, increased transparency/brand safety, centralized ownership, protection of visitor data, among other benefits. Even marketers who failed with display in the past can achieve success with the ad vehicle in the present via DSPs, thanks to the inherent advantages some DSPs bring to the table.

Many direct and performance-based marketers who were unable to measure traditional display buys to a reasonable return on investment in the past are starting to explore DSPs as a new source of incremental sales and leads. Since a retargeting buy is publisher agnostic (i.e., the advertiser is buying impressions served to specific cookies, not impressions served on specific websites or content channels), DSPs offer the most scale and efficiency, reaching 98 percent of internet users through one-bid management platform using global frequency controls.

Thanks to these advantages and the relevance they offer, retargeting campaigns often convert two times to 10 times more than traditional display ads, and can, at times, show an ROI equal to or better than generic search or content targeting campaigns.

Display advertising continues to evolve, and certain key strategies are starting to take shape that can help advertisers control risk while gaining valuable insights for future channel maximization. Depending on website traffic and ROI flexibility, performance-based advertisers typically have the most success kicking off testing with site-based retargeting.

This strategy enables advertisers to retarget consumers who visited their site, browsed and left without ever converting into a lead or sale. By placing a retargeting tag in the footer of these pages (e.g., the home or shopping cart pages), advertisers can build and bid on multiple retargeting segments using segment-specific messaging or offers across the web through an ad buy on either a DSP or ad network.

So why not just limit testing to retargeting? Although advertisers may be able to achieve ROI close to search or affiliate campaigns with retargeting, impression volume will eventually limit growth. Similar to the role of generic terms in driving brand term volume in a paid search campaign, it’s important to test and explore a broader set of display performance media strategies that may work at higher, more flexible RS/CPA levels in conjunction with retargeting to help drive site traffic that feeds a retargeting cookie pool.

DSPs can help advertisers implement these strategies. Run of network buys (testing different DSPs/networks with and without filters), contextual targeting and site targeting, when bought in a biddable marketplace, are all viable in driving cost-effective traffic to an advertiser’s site. If an advertiser has the right tools and processes in place, DSPs can even be profitable in and of themselves.

For advertisers that are willing to be more flexible and effectively leverage it, display performance media can quickly become the next big untapped channel. These emerging strategies will continue to evolve and pave the way for targeted display advertising for years to come.

Special thanks to contributing author Kirstin Peters of Performics.

Forecasting a Cheery 2010 Holiday Shopping Season for Paid Search Campaigns

With the holidays fast approaching, news and economic trends relevant to this year’s holiday shopping season have been mixed, though generally favorable. A recent study by ChannelAdvisor revealed that 81 percent of shoppers plan to spend the same or more on holiday gifts this year. The study also found that more of that shopping will be conducted online.

With the holidays fast approaching, news and economic trends relevant to this year’s holiday shopping season have been mixed, though generally favorable. A recent study by ChannelAdvisor revealed that 81 percent of shoppers plan to spend the same or more on holiday gifts this year. The study also found that more of that shopping will be conducted online.

From a performance perspective, actively managed holiday paid search campaigns delivered impressive results during the 2009 holiday shopping season in comparison to the rest of the year. In 2010, these campaigns have already achieved strong year-to-date (YTD) growth. This strong YTD growth will likely continue into the fourth quarter, and Performics predicts this will net out to 15 percent year-over-year (YOY) growth for actively managed holiday paid search campaigns. The results could be even stronger for search advertisers who are able to make Q4 outshine the rest of the year like they did in 2009.

Either way, all signs point to growth for these campaigns, and marketers should keep the following opportunities in mind:

Continued emphasis on value. Free shipping and discounts have become standard as retailers continue to vie for cost-conscious consumers. Average order value is down 9 percent YTD according to a Performics Holiday Retail Group report, and this trend will likely continue into Q4. Providing offers on upsell or cross-sell products can help boost order totals and offset free shipping and other discounts merchants offer.

Delayed shopping as savvy consumers research and wait for late sales. The first two weeks in December 2009 saw sales increase by 27 percent compared to 2008, while Black Friday sales decreased 17 percent YOY. Sales during the last week of free standard shipping prior to Christmas also increased significantly in 2009. However, numbers may shift this year if consumers feel more confident with compelling sales already underway. The recently released Compete Holiday Insights survey found that 50 percent of consumers have already started holiday shopping.

Shoppers are reaching for their phones. Nearly half of adult smartphone owners younger than 25 will use their smartphones to shop this holiday season, according to a new survey from the National Retail Federation and BIGresearch. An increasing share of overall clicks are coming from mobile — 6.7 percent in September, and projected to be greater than 10 percent within 12 months.

Improved efficiency of last-minute shopping. Consumer spending and cost per clicks dropped dramatically following the last week of free standard shipping prior to Christmas 2009. Active paid search advertisers can do more for less after Dec. 17.

Marketers looking to capitalize on these opportunities and improve holiday performance should consider the following recommendations:

  • follow best practices to actively manage campaigns and effectively respond to market forces;
  • offer aggressive promotions early to capture shoppers;
  • actively participate in the last week of free standard shipping prior to Christmas;
  • embrace mobile to ensure the channel’s increasing user base can find you when searching; and
  • continue active management of paid search beyond Dec. 17 to further boost efficiency.

By following shoppers’ changing behaviors this holiday season — and planning and executing campaigns accordingly — marketers can boost their odds of a jolly holiday.