Traditional and digital marketing thrive in tandem
Braun: We're doing a lot of experimentation this year with social media. What we're finding in doing focus groups on all of the exciting technologies and integrated ideas that are out there, is that you can't rely on consumers to integrate them. They really have to stand on their own.
Direct Marketing News: There has been much discussion and hand-wringing around behavioral targeting. What is your approach?
Braun: We started with segmentation and really understanding who are the customers that we want to target. We're a 150-year-old company, and we have some contracts on the books that are 40 years old. We have customers who don't even know they own a contract from us. Trying to understand what products and services we want to offer to these different segments of the market was our first goal.
Now that we've identified our segments, it is understanding how these people think and how they behave. We're doing a lot of testing, working with our counterparts at our group level, and doing overlays with our existing customer base onto prospects.
Ginny Musante (Microsoft Corp.): We have some behavioral targeting pilots right now that we're working on. One thing we're thinking about very seriously [regarding behavioral targeting] has to do with contextual relevance. It gets back to right message, right person, right time. If you give someone a message but it's completely out of context, it can have a negative effect.
Direct Marketing News: Can you give an example of your behavior targeting?
Musante: This is very personal. Friday morning my boyfriend said he wanted to marry me. I was so excited, but he didn't give me a ring. I started to search the Web because I want a ring, right? Later, when he came home, we were doing something completely different on the Web. Up pops a banner ad for a ring. It led to a pretty awkward conversation. If I privately was looking at my computer on a wedding site and got that ad, I would have been clicking on it. Instead, I had the opposite reaction. You really have to think about the environment in which you are marketing.
Kimmel: Can I make a point about behavioral targeting? I hate the term. It's the wrong characterization of what we're doing. I don't think we should ever use it. What we're doing is personalized messaging. If you change the dialogue and the thought process of what this is about, we're trying to be helpful and supportive of individual consumers. It's not just semantics. It's an understanding of the service model that's part of the heart and soul of the direct marketer's DNA.
Westerman: I think there are a couple of different actors that we're talking about regarding behavioral targeting. I think people are appreciative if you're using data to give them things that are more relevant to [them]. I think where that kind of targeting has gotten a bad name is you have a lot of data brokers and you have these aggregators who are aggregating behavioral data and turning around and selling it to people who don't understand the context in which the information was gathered and they're using it for inappropriate things.
Scott Drayer (Paul Fredrick): We take advantage of remarketing opportunities and personalize interactions with the customer based on our own internal data. If we're using information that the customer has readily provided us or modeling behaviors so that we can present them with a more relevant message, I don't think as many people are having problems with that.
Kabakow: When you're doing behavioral targeting or retargeting, you're not getting the information on where those people actually searched or looked. You just know that they've been to one of those pages or they've been to your site, so you're able to serve them a relevant banner or message when they're surfing the Web.
On the direct mail side, when you talk about behavioral targeting, you're talking about building predictive models to target best prospects. It would be very difficult, with the cost structure of direct mail today, to make direct mail work well without those types of predictive models.
Fenske: We've been talking about acquisition of new customers and house file mailings. The house file is a goldmine. It tells you what they bought, when they bought it and how much it cost.
Ginny Musante: It's not so much about behavioral targeting as it is about personalization. What we know is that with our customers, it will be personal, it will be connected, and it will be social. When you launch your Xbox and you sign into Xbox Live, you've signed in with an ID. They know who you are. Then, if you have that same ID on your mobile phone and you bring it to the Web, then it's personal.
From an entertainment perspective, we can make recommendations about what you would want to watch. It's connected to Facebook and Twitter and you can invite your friends to have the same experience with you. The same technology that allows us to do that from an entertainment perspective will ultimately allow us to do it from a marketing perspective.
Braun: I think it depends on the industry in terms of how close a customer will let you get to them. Entertainment is one thing. But when you start talking about your financial situation and the investments that you've made over time, customers don't want that information shared.
Direct Marketing News: What are the major e-commerce trends you're seeing?