The Future of DigitalDelivering high performing digital
marketing & advertisingTim SutherSVP, Multichannel Marketing [email protected]
http://www.linkedin.com/in/timsutherhttp://twitter.com/timsuther
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Living next to the train tracks
$112 billion of advertising is wasted each year in the US alone
$4 trillion excess brand valuation
22% of consumers feel advertising is credible…compared to 45% for talk shows
42% of consumer media consumption is online
7% of disposable income is now saved – was 0%
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The differentiated value of customers
30% of customers deliver the majority of profits
50% Add nothing
20% Cost companies money
SAS
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A look at “who” at world class brandsCadillac
AllstateHershey
American Express
PersonicX Consumer Segments PersonicX Consumer Segments
PersonicX Consumer Segments PersonicX Consumer Segments
UV
Inde
xU
V In
dex
UV
Inde
xU
V In
dex
Source: Acxiom comScore (July 2009)
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…and at leading publishers
MSN96 MM UV’s
AOL70 MM UV’s
eBay56 MM UV’s
Yahoo148 MM UV’s
PersonicX Consumer Segments PersonicX Consumer Segments
PersonicX Consumer Segments PersonicX Consumer Segments
UV
Inde
xU
V In
dex
UV
Inde
xU
V In
dex
Source: Acxiom comScore (July 2009)
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Like a box of chocolates…
• With most media, you never know whoyou’re gonna get.
• Knowing who determines:
– How much to invest…if anything
– What to say…without guessing
• Most firms…
– Over-invest in low value relationships
– Under-invest in high value relationships
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Avoid the illusion of science
• Acquisition metrics, in isolation, create…– “leaky buckets,” “zombies” & the “quiet types”
• Incorporate “acquired value” metrics– Longevity of relationship– Upsell/cross-sell potential– Influence– Service costs
• Key takeaway: measure customer value per ad dollar– Value beyond the click & initial transaction
The Concentration MultiplierDriving much higher ROMI
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The Concentration MultiplierConcentrating on the most valuable “who’s”
1. Identify customer value
2. Invest proportionally
3. Find/recognize & engage accordingly
4. Measure acquired value
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Concentrate ad spend to drive valueTypical payoff of 3-5x revenue/ad €
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Concentrator Multiplier ROI illustrationConcentration Traditional Variance
Campaign CostImpression Volume 10,000,000 10,000,000Cost per Thousand € 5.00 € 2.50
Total Campaign Cost € 50,000 € 25,000 (€ 25,000)
Revenue GeneratedRevenue/conversion € 20 € 10Clickthrough Rate 0.15% 0.10%Latent/viewthrough revenue 50% 50%
Revenue from clickthrough € 300,000 € 100,000Total Revenue € 450,000 € 150,000 € 300,000
ContributionFrom clickthrough € 250,000 € 75,000
Total Contribution € 400,000 € 125,000 € 275,000
Revenue per Ad DollarFrom clickthrough € 6.00 € 4.00
Total Revenue/Ad Dollar € 9.00 € 6.00
PremiseConcentrating impressions on high value visitors…>Enables higher financial return (because of focus on more valuable visitors)>Enables higher CTRs (because creative can be versioned)
Even if visitors don't click, advertisers will generate significant online/offline lift (halo/viewthrough effect)
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Sound obvious?
“… too many shortcomings to be seriously considered as a means of communication. The device is inherently of no
value to us.“
Western Union memo on potential for the telephone, 1876.
The Marketing CascadeHarvesting the interrelated & overlapping effects of media
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The overlapping & interrelated effects of media
McKinsey/BAIcomScore
Display Viewthrough Effect
eHarmony/Dynamic Logic
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Understanding these effects is critical to ROMI
• Significant arbitrage opportunity – 47% of advertising is wasted
• Understanding specific cause & effect is essential
• A multichannel marketing database plays a crucial role
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Select:Most Profitable
Demographic: Most Profitable
Illustration only
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Target: Television
3245K Cash & Careers Digital TV households:Current customers: 548K Top prospects: 798K Lower value non-customers: 1863K
Illustration only
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Assess & Recalibrate: Online Search
comScore Top Search Terms Category: “Banking”
• Bank of America Online Banking• Bank of America• Washington Mutual• WAMU• Citi• Commercebankonline• Commerceonlinebanking.com• Commercebank.com• USBank• US Bank Internet Banking
Illustration only
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Assess & Recalibrate: Site Traffic
comScoreSite TrafficSegment Metrix
• Bank of America UV Index 189• Citi UV Index 177• WAMU UV Index 164• HSBC UV Index 134• Chase.com UV Index 117
Illustration only
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Relevance View Index
Assess & Recalibrate: Conversion
280 270
75 70
Cash & Careers EstablishedElite
Percentage of Visitors to Landing Page
Percentage of Visitors to Confirmation Page
Illustration only
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Integrate: TV plus Online Display Ads
Current customers: 548K Top prospects: 798K
Lower value non-customers: 1863K
8MM daily online display impressions available for this specific cluster
Illustration only
Drive Acquisition
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Integrate: TV plus Online Display Ads and Social
Count %Avg
NetworksAvg
Friends
Wide Netters 54252 10% 6.0 122
Selectively Social 53704 10% 2.0 38
Social Placeholders 52608 10% 5.5 3
Getting Started 191252 35% 2.0 0
Undeclared 191800 35% 0.0 0
Illustration only
54K “wide netters” for this specific cluster
Drive Acquisition
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Integrate: TV plus Email, Mobile and Direct Mail
Illustration only
Drive Customer Value
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The Marketing Cascade in practice…
4x “orders per thousand”– Connecting print & digital
3x applications; 5x online revenue; same head count– Connecting call center & digital
2x online bookings– Connecting outbound & website
7.5x website spend– Connecting mobile & email
17x response– Connecting TV & offline
$200M revenue / $4.5MOpEx savings – Connecting call center & digital
$100M/yr EBIT impact– Multichannel connection
9-figure/yr revenue impact– Multichannel connection
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This is obvious also, right?
"We don't like their sound, and guitar music is on the way out.“
Decca Recording Co. rejecting the Beatles, 1962.
10 Easy Money ideas
Remarketing generates $4–10 revenue per ad dollar at other clients
53% of shopping carts abandon. Remarket based on specific site behavior / lifestage
Retarget site visitors that do not convert
Personalized site experiences drive 4–15X ROI
Test content with Impact Site.Implement View tags to measure conversion funnel progress by lifestage
Improve the site experience
The bottom three deciles can likely be eliminated without impacting conversions
Build / implement predictive models to screen out low value leads providedConsider a test with ACXM CoReg services and / or e-list rental
If receiving third-party leads, implement lead scoring
72% of GOOG CTR is organic. A proper audit enables more free traffic
Identify opportunities to improve organic visibility, & possibly reduce paid expense
Do an organic search audit
This is the highest performing email application at another client
Email a branded transcript back to site visitors. Include buttons to “buy” or to “subscribe” to other services
If chat available on their site, offer to send a branded transcript of the chat
2X website conversions achieved at another client
Following the digital footprints to recalibrate outbound marketing
Connect Web analytics with outbound messaging
$2M / year cost displacement & $200M / yr influenced revenue at another client
Identify high-volume drivers of calls –requests for info, small cross sales, etc.
Examine call center patterns to identify content for future emails
Integrated with Impact. Likely halo effectAvg. mobile purchaser has higher income & spends 2X as a Web-only buyer
Test mobile as a lifecycle messaging tool
Match against 500M socially active individuals (~60-70% of any email list)
Use existing email addresses to recognize socially active customers & prospects
Recognize & connect with social influencers
3-5X revenue / ad dollar at other clientsExisting customers respond 17X to prospects to digital TV ads
Concentrate ad impressions on visitors most likely to be valuable, loyal, etc.
Test Collaborative Targeting & Relevance with Internet properties. Then follow up with television
The BenefitHow & WhyThe Idea
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Marketing/Advertising in the Reset Economy
• Concentrate on the most valuable who’s Concentration Multiplier
• Arbitrage your media Leverage the Marketing Cascade
• Harvest the confluence of insight & media Engage, don’t just target
• Take the “easy money” Swallowing Atlantic Ocean not advisable
• Connect & leverage institutional memory (multi-channel database is essential)
Lessons from leaders…
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What could have been
Portable Music
owned
but couldn’t become
On-Demand Info
owned
but couldn’t become
Movie Inventory
owned
but couldn’t become
It’s not enough…A great customer baseA great productA great strategyA great team
Darwin always wins.
Will you?
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The global interactive marketing services company
Thank you.
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