Why Contextual Advertising Is Still Hard

Contextualized advertising is serving the right message to the right person at the right time. Standing in the way of that goal are several hurdles. Among them: user personalization, segmentation and a deluge of data

Contextualized advertising is serving the right message to the right person at the right time. Standing in the way of that goal are several hurdles. Among them: user personalization, segmentation and a deluge of data.

Mobile personalization can create additional complexities that we don’t generally see on the PC side of the world. This can be both a challenge and an opportunity, but adds some new dimensions to how we work to connect with consumers.

This difficulty in leveraging user behaviors makes micro-segmentation more difficult. This is where real value from contextualized ads is found. As close to one-to-one as you can make an ad, the more value it has for the recipient. Having segments that are too large can decrease the overall impact of the ads for a given consumer.

Advertisers can improved their segmentation by sifting through omnichannel data sets. While there’s great progress in this area, attributing online, real world and mobile actions to an end result remains elusive to some of the industry.

New Tools Making Contextual Advertising Easier
New data tools, optimization techniques and leveraging exchanges are all emerging to make contextual advertising easier.

Algorithms that can recognize and contextualize mixed data sets are paving the way for more relevant contextual ads. You can target based on location (information that’s automatically provided by a mobile device), behavior and by predetermined personalization rules. So, someone is now seen as a specific category of user based on what they do, where they are and other relevant data. Messages can be personalized based on these characteristics to get the right ad in front of the right person.

Once a user can be tied to a mobile number, this opens up a world of contextual opportunities. These IDs can be closely tied to segment and location, and passed along to real-time-bidding (RTB) exchanges. Here, brands and advertisers can serve a contextualized ad to the correct mere moments after he/she makes a trigger action. Where as before, this data would be aggregated and analyzed monthly or weekly, we are getting close to the point of real time analysis and optimization.

The Impact of Future Technology and Contextual Ads
The “Holy Grail” of contextual advertising is connecting relevant ads that are optimized for a single individual. Technology is heading in that direction.

Wearables will feed advertisers never before accessible biometrics that could indicate when someone needs a sandwich or bottle of water before the person realizes it.

Interactive TVs and cross-screen attribution will pull together all parts of a person’s day. Ambient qualities, like time of day or weather, will become data points that advertisers can assess and use to target consumers.

As these technologies, combined with faster servers, make valuable contextual advertising an everyday occurrence, we will see a shift in the advertiser/consumer relationship. It will become more symbiotic. Users will be able to decide with what and whom they want to interact. Those advertisers who can use data to provide users the greatest value will prosper. Those who can’t make sense of data will suffer as consumers take their business elsewhere with a quick click on an iPhone.

Direct Marketing Day @ Your Desk Recap: Mobile Strategy

If you didn’t have the chance to attend Direct Marketing Day @ Your Desk, you missed out. Lucky for you, I wanted to quickly recap my session on creating a successful mobile strategy.

If you didn’t have the chance to attend Direct Marketing Day @ Your Desk, you missed out. Lucky for you, I wanted to quickly recap my session on creating a successful mobile strategy.

When looking at businesses that are truly successful in mobile, you’ll find everything they do is based off of the Mobile Success Pyramid. This is based off of Bruce Hershey’s “4 Pillars of Mobile Marketing” in that with a pyramid, each section can only be supported by the piece beneath it, making the foundational elements more important.

Let’s look at the pyramid from the bottom up:

At the foundation, you have Strategy.

Strategy is made up of a handful of things:

  • Who is your customer? If you haven’t already created customer avatars, you should do so in order to have a target marketing message.
  • What are you trying to accomplish? This is where you identify your business objectives and goals and assess your current marketing strategy.
  • Why are you in business? What is your mission, unique selling proposition or value proposition?
  • When do you need to reach the goal? All good strategies have a time associated with them. Give yourself a deadline to reach your goal and create a roadmap to get there.

As you define your objectives, make sure:

  1. They are measurable and quantifiable. Example: Increase sales by 15 percent.
  2. A timeframe is associated to the goal. Example: Increase sales by 15 percent in six months vs. the same six months last year.
  3. Your goal is realistic. Can you really increase sales by 15 percent? If your goal doesn’t mesh with your historical performance or competition, then adjust.

When you put these three together you may have a goal such as: “Increase sales by 5 percent in six months vs. the same 6-month period last year.”

The next piece of they pyramid is Tactics.

Because you’ve already defined your customer persona, you want to understand how they use their mobile devices. Knowing how each persona uses their mobile devices will lead you to your tactics.

These new mobile personas will offer you the right mix of tactics to generate the most reach and engagement with your customers.

Making our way up the pyramid, we have Integration.

Ultimately, you need to promote your mobile initiatives via other marketing channels. Mobile is the most dependent channel that exists.

Review your media channels and promotional calendars and make sure you have mobile call to actions throughout your media.

Lastly, you need to consider CRM.

This is the most difficult part for marketers today, as most use separate systems. But your goal is to combine all your data from all media channels and create highly targeted messaging campaigns.

Collecting this data throughout the customer journey means you can learn what areas convert the best for each and every customer.

This ends up with you being able to send the right message to the right customer at the right time.

Now it’s on you.

If you are just getting started with mobile, you should complete the pyramid for your own business. Don’t jump right into the tactics as, although it may work in the short-term, you will likely fail in the long run.

So how are you getting started?

Wanted: Data-Driven, Digital CMOs

There was a time, not so long ago, that the firm’s CMO basically acted as the chief brand steward, running a marketing department that focused on maintaining brand equity and making sure the company was sending out the right message to the masses. Data and analytics? They were usually scoffed at … That was the purview of the down-and-dirty world of the direct marketer, right? Direct marketers were the ones who obsessed over response rates, cost per order, lifetime value and so on.

There was a time, not so long ago, that the firm’s CMO basically acted as the chief brand steward, running a marketing department that focused on maintaining brand equity and making sure the company was sending out the right message to the masses. Data and analytics? They were usually scoffed at … That was the purview of the down-and-dirty world of the direct marketer, right? Direct marketers were the ones who obsessed over response rates, cost per order, lifetime value and so on.

Well, suffice it to say that those days are over—marketing in today’s multichannel environment is about much more than just cute creatives and killer copy. Today’s marketing is increasingly digital and data-centric. A recent article appearing in Ad Age explained that “real-time data-driven decisions, enabled by technology, have made the marketer’s job much more measureable and accountable.” Interestingly, the same article also points out that the average tenure of a CMO is a meager 28 months. No coincidence.

What it boils down to is that today’s CMO is expected, de rigueur, to be a pro when it comes to all things digital. We have two important trends to thank for this fact. The first one of these trends is the general transition to digital. Look, it’s no secret that over the past few years there’s been an incredible shift of marketing spend from traditional over to digital media. It’s the scale and speed of this transition that’s so breathtaking.

According to a June 2012 survey by RSW/U.S., 44 percent of marketers report that they are now spending at least half of their budgets on social and digital media. This represents a 42 percent increase from 2009 alone! And this is not the end of the process. I think it’s safe to say now that the proverbial tipping point has been reached—this trend will only accelerate in coming years.

Anyone who’s worked in the digital marketing arena knows that success in the space all really boils down to data: Impressions, clicks, conversions, opens—this is the vocabulary of the digital world. Well, guess what? Today’s CMO needs to have a deep understanding of these terms, what they mean and how the underlying technologies work—at least on a high level—and be generally comfortable playing in the digital space. Think about it: without a significant digital background, how on Earth can a CMO possibly be expected to run a marketing machine where at least half of the marketing dollars are being spent in the digital space? Not happening.

The other major trend is the inexorable fragmentation of the IT infrastructure within enterprise firms. Basically, what’s happening is that because technology has evolved radically over the past 10 years, it’s giving different stakeholders at companies the ability to purchase and use technology outside of their organization’s firewall, and often without IT’s involvement. Very often, in fact, IT is even without IT’s knowledge!

This is huge shift. Just a few short years ago, mind you, software was what you ran on your computer or on the company mainframe, and it was pretty much always purchased and managed by IT. Well, those days are most definitely over. What’s happened is that the emergence of the SaaS/Cloud model of software delivery has turned that world on its head.

Today, any marketer with a credit card can sign up for, say, a CRM tool or a marketing automation tool and be off to the races in seconds flat. Ask any marketer and they’ll explain how this has been a huge boon to their departments, liberating them forever from the clutches of IT.

Now, of course, a big reason for this excitement is the oftentimes frosty relationship between marketing and IT. Personality types side, in its essence this rocky relationship actually has a lot to do with conflicting mandates. It’s the IT department’s mandate to act as the stewards of the firm’s information and technology infrastructure. Essentially, it’s their job to keep internal systems running and make sure they’re secure. That’s about it. No, it’s not their job to build you a new landing page, or set up a new email campaign for this fall’s reactivation campaign.

Today’s marketing department, on the other hand, is much more focused on operations than anything else. Today marketing is about creating, testing and launching numerous marketing campaigns across various channels using different tools, and evaluating their performance using real-time analytics. And running an operationally focused marketing team requires the ability to build, dispatch and analyze lots of campaigns in rapid succession. Until recently, this heaped loads of pressure on the IT folks, who groaned under the strain. So you can see why marketers have cheered and embraced the emergence of Web-based SaaS marketing tools.

Okay, I got a little sidetracked there, so I’ll get back to the central point, which is that because marketing is rapidly becoming the de facto owners of their own IT infrastructure, this mean that they now control the technology itself and the data contained therein. It’s a big responsibility, requiring marketers to manage and safeguard this vital corporate infrastructure and information, taking on the dual roles of chief marketing technologist and data steward. But with this responsibility comes great power—to use these awesome tools and information to really, truly understand who customers and prospects are, and send out highly personalized and effective marketing campaigns with demonstrable ROI.

But evaluating performance in this environment means not only using new marketing tools and digging through mountains of data. Just as importantly, it also means understanding what it all means. In other words, just because you’re a CMO does not mean you don’t need to know how many opt-ins you have in your company database, or how many fans on Facebook.

And guess what? It’s hard to be comfortable with digital if you’ve never played in the space. But how many CMOs are also digital pros? Not too many. So not surprisingly, firms are finding that it’s incredibly difficult to find leaders with the hard-to-find combination of senior management leadership and digital marketing experience. Given this reality, it’s not too surprising to discover that many companies are running through CMOs in a conveyor belt-like fashion.

Do you know any data-driven digital pros with senior marketing leadership experience?? If so, bet your bottom dollar these executives will be cashing in big time in coming years.

—Rio

Getting Started With Email Segmentation

Creating effective email connections that drive response and revenue requires segmentation. That sounds fine in concept, as many marketers know they need to do more segmentation in order to engage subscribers and break through the clutter. However, many marketers struggle with getting access to data and developing creative approaches that match the customer lifecycle. I urge you to not be intimidated. Demand greater data integration and access from your vendors. Start testing new content and creative approaches so that you can be automated and fully functioning immediately.

Creating effective email connections that drive response and revenue requires segmentation. That sounds fine in concept, as many marketers know they need to do more segmentation in order to engage subscribers and break through the clutter. However, many marketers struggle with getting access to data and developing creative approaches that match the customer lifecycle. I urge you to not be intimidated. Demand greater data integration and access from your vendors. Start testing new content and creative approaches so that you can be automated and fully functioning immediately.

Ease into segmentation to avoid overtaxing your precious resources. Use early tests to learn about subscriber interests and understand key success metrics. Doing so will build your confidence and help you make a case for automation, data integration and creative services — all of which are essential for advanced segmentation and better results.

There are two ways to get your arms around your segmentation opportunity, both with the goal of “right message, right person, right time.”

  1. Segment by customer profile and craft messages around customer demographics, firmagraphics and behavior.
  2. Segment by customer life stage and speak to customers who are in specific life stages.

Customer profile segmentation: With profile approaches, even simple segmentation can make a big difference. Separate your file into large segments that distinguish subscribers by a factor that has significance to your business. Clickers are a good place to start. Those subscribers who have clicked on something in the past month are more likely to be engaged than those who haven’t.

You can do less storytelling with clickers. For example, a retailer may simply alert clickers that a sale continues until Friday or put in specific sale prices for pants, sweaters and scarves. A business software marketer may send clickers three of their most popular whitepapers or an invitation to participate in a LinkedIn community. In both cases, clickers need less background info and more options to get them to act, whereas nonclickers may need more guidance and education prior to taking action.

Why burden clickers with info they don’t need and that gets in the way of their actions? At the same time, don’t skimp on critical storytelling information for nonclickers, as they clearly don’t have a strong connection with your offer yet.

Other starter segments worth testing include new subscribers versus long-time subscribers, buyers, geography (e.g., north versus south) and gender.

Draw segment lines around key drivers for your business — i.e., differentiators that give you a clear path to a custom message that will make an impact. For many B-to-B marketers, the most important driver of customization is job title. For B-to-C retailers, the key data point is most recent purchase. Don’t choose geography if location has no bearing on purchase behavior. Your business is unique, but good marketers understand the key customer attributes that lead to increased sales and satisfaction. Focus there for your segmentation and you’ll be rewarded with the biggest lift.

Life stage segmentation: To effectively segment by life stage, first abandon the notion that every email program has to be a long-term affair. Short-term email conversations can be even more powerful, particularly because they address a specific need at the time when that need is most acute. A four-message reminder series that disrupts the messaging flow around renewal time can be much more powerful than a generic newsletter which comes like clockwork every two weeks. Why not replace the newsletter with custom messaging for all customers who are up for renewal in a particular quarter? Similarly, create custom series of two messages to 20 messages that cluster around that particular life stage.

Remember to think through the dialog of the conversation if the message series is longer than three messages so that you can intensify, cease or adapt the message stream to accommodate response. For example, stop pitching the purchase midstream if someone has already upgraded from a free trial.

Not every email program has to be long term. The goal of “right message, right person, right time” can be achieved through segmentation that focuses on a specific life stage as well as customer profile.

What are your biggest challenges when it comes to nurturing engagement via segmentation strategies? Perhaps I can address them in a future blog or learn from others handling of them.