The Journey's the Destination

Some people view your emails, a proportion click the links, a number of those look round your site and a subset of the rest buy your product. Each time the recipient is telling you something more about their interests. Retargeting is a way of using this information for subsequent communication.
 
Any email database will have some degree of segmentation based on declared preferences – for instance at registration e.g. an interest in Iceland.
 
This information can be supplemented with observed behaviour – which emails they viewed, which links they clicked, what pages on your site the viewed and what they bought (looked at weekend breaks but didn’t purchase?).
 
This information can then be used to determine the nature and content of follow up messages to retarget customers (weekend breaks in Iceland?).
 
The possibilities are endless, and the deeper you track behaviour, the more engaged you can make the conversation – offering dozens of unique offers to different customers (a weekend break at the Ice Hotel in Reykjavik? With an option for car hire?). It can all happen in real time, with systems which flow content dynamically into templates for follow up emails and ad servers which select banners dynamically based on your criteria.

Subsequent communications can reflect prospect’s interests, based on which pages they viewed while on your site the first time. Another option is to follow prospects who abandon a shopping cart with a particular product in it - when they see the retargeted message, it can be geared directly at the product that they almost bought.
 
The underlying technology is driven by cookies and embedded pixels logging opens and views placed in emails, on ads and on the around the client’s website
 
Specifics of how consumers buy a particular product can also get in the way, it works best for products with a longer buying cycle which people might research, but not work so well for products with a shorter buying cycle.
 
For retargeting to really work, the approach needs to encompass all of your digital communications in an integrated way, using the same methodology and tools to track and control email, banner, search, affiliate and website traffic.
 
Retargeting also requires bigger campaigns to generate a critical mass of traffic –as leads are better qualified over time, the volumes reduce – it can use a lot of coverage on ad networks and so it may not work with smaller clients.

Ofcom’s recently published Communications Market Report makes interesting reading for anyone in business and the media. The internet really has passed the tipping point, with over 50% of UK households using broadband, 56% of internet users using every day and 66% of users intent on making purchases online (although people spend the most time on Ebay and social networking sites).

Probably more interesting is that even though take-up is highest among the young, silver surfers are the most active - spending on average almost 42 hours online every month (Nielsen//NetRatings and ONS data)

See my point? We’re at critical mass, and the challenge for businesses is not longer about whether to embrace digital channels but how to get them central to the business – both internal and customer facing. So what do companies need to do?

Base your digital strategy on changing customer needs

It’s not as easy as putting up a whizzy flash site and some forums. An effective digital strategy will make online channels a primary customer interface - where people can spend time with your brand and products, before choosing to buy something.

We need to understand the reasons people are interested in your products and build journeys based around those needs. Today’s pace of change means that brands are presented with a constantly moving target, where customer needs and your market situation can change over night. The question is, can you respond?

Measurement isn’t just about reporting, it’s about action

Digital media give us an unprecedented ability to measure transactions and behaviour in real time and new online tools enable us to commission qual and quant research in hours rather than weeks. If we integrate this with segmentation built on customer contribution, we’re in a great place to get a total view of a customer, in real time.

All too often, businesses fail to use the information at hand. It’s vital to develop an ongoing process of testing hypotheses and taking action.

Moving things forward needs an integrated team

Making change is never easy, there’s always a reason to wait and detractors who are reluctant to try new things. We’ve found that to really make a difference you have to work with a hit squad of stakeholders (marketing, propositions, IT and operations), partner agencies and customers. This approach guarantees a consensus and generates the momentum needed. In the wise words of Machiavelli; “Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.”

Imagine knocking on a random stranger’s door and trying to sell them something. How likely is it you’ll end up as a life long friend? It could happen, but it probably won't. You’re more likely to have a door slammed in your face. Why, then is our industry still sending out cold prospecting packs to people who we have no connection with? Packs which work less and less well and which once they successfully annoyed their target, end up as land fill. No wonder our industry is still tainted by the ‘junk’ label.

I worry about our industry's luke-warm response to the possibility of Opt-in legislation (that all customers will have to specify at point of data collection that they give permission to be communicated to cold). It feels like an industry that is at best unwilling to change and at worst self-serving.

Some of the industry’s great and good tell me it's about being 'sensible' about Opt-in – comments like “it’ll happen but we want it to happen on our terms”.

To me, the advantages of reducing the volume unwanted direct mail in land fill is a given. Another argument centres around how empowered consumers are better informed and know how to find what they want when they want it. They’re also adept at choosing how they’d like to communicate with each other and with brands, and so increasingly just screen out cold approaches.

With this in mind how can Opt-in not be a step forward? Surely these days we should be embracing ‘pull’ rather than more disruptive ‘push’ strategies.

If we look at things from consumer’s perspective, we need to make sure our propositions are good value, accessible, and make it a pleasure to engage with us. Then we'd create more loyal, higher value customers, who actually want to have a relationship with our brands.

As direct marketers, I think we need to find structured ways to integrate channels like search marketing and behavioural retargeting (where behavioural data is collected in real time and used to target tailored messages). And let’s opt-out of printing millions of unwanted cold prospecting packs.

Have you noticed that direct marketing is going through the biggest crisis ever? I’m not talking about the advance of online, the lack of retainers or how much the Royal Mail is going to charge us for delivering big envelopes. The change I’m talking about is the movement of ‘data’ out of direct agencies and into standalone data agencies and departments in client companies – and with it, much of our power. It’s easy for many to forget that our industry was founded on data; creative, brand, big ideas have only come to the fore in recent times. I’d draw a parallel with what happened above the line, when media departments (originally the heart of ‘full service’ advertising agencies) were moved out and became separate brands, and now, frankly, are often considered more strategically important than the creative agencies that follow.

Yes, there are plenty of big and established DM agencies who do data well - but I feel that the last DM agency to really get it right heavily invested in it over 10 years ago (TMW). So what for the new agencies today? Who are we? What are we? And can we be ‘direct marketing’ agencies if we don’t have rooms full of data jockeys?

Maybe agencies just haven’t invested enough, and need to get into data planning and interrogation, if not processing? Perhaps it’s this lack of investment that’s let data agencies get a foothold.

And with the ever growing market for online services (particularly eCRM), are we going to be able to deliver at the speed they demand if our clients’ data is at arm’s length?

Or are we, like ‘advertising’ agencies, becoming media neutral ideas agencies, lead by creative planning and research, and our future challenge is how we make the most of that opportunity?

So which way to go? Ideas only? Data? Media? Have you read any of those big strategic plans that management consultancies create for clients (for about a quarter of a mill)? The last page usually says, “And to do all this, you need a big idea”. Is that where we come in?