The Real Revolution: Microtargeting

Today’s Web marketers want you to think the Internet commerce revolution has already happened. But that will not be true until customers are getting exactly what they want, when they want it, in the way they want it. The real revolution is “microtargeting” – instead of guessing what you think customers want, you contact them directly because you know what they want, when they want it and how.

At this very minute, shoppers can find any number of opt-in e-mail services. They can use personalized, context-sensitive content and sales offers. Location-based offers are just around the corner. But are these services really unique to the Web? And are they really all that different from, or better than, the marketing tools we already have?

Spam is nothing new if you consider that direct mail to your home is just the same thing in paper form, and the increase in targeted e-mailing is starting to give consumers the same besieged feeling they’re used to getting at the mailbox. Interactive banners targeted to populations are suffering declining click-through rates (and declining cost per thousand), and Web sponsorship revenues are under increasing pressure.

The real exploitation of the Web’s marketing capabilities has yet to take place, and it won’t be realized until the quantum leaps in targeting effectiveness that we now know are possible are put into action. The Web is an interactive gatherer of statistics, but we’re just beginning to take the next logical step: making it into a true collection of preferences.

Traditional online approaches require the customer to be online in the first place, and so far the market has rushed to fix this limitation by coming up with more ways to keep people online -wireless phones, personal digital assistants and so forth. But by knowing the customer’s preferences and acting on them in a timely way, marketers can actively contact them instead of waiting for them to be available. Customers will get only those appeals they’ve already indicated they want, and marketers will contact only those customers who’ve already shown an interest in hearing from them. It will all happen at the moment the customer is most ready and willing to respond.

It all starts with knowing customers’ personalized preferences: What content or merchandise will they buy, under what conditions? In what manner do they want you to alert them to the opportunity? Would they prefer to ease the process by preregistering for these notifications? How would they like to do their purchasing? The GartnerGroup has projected that online commerce will settle at less than 10 percent of retail sales, so Web marketing can’t be effective if it doesn’t accommodate all the ways they want to buy.

Armed with this information, a marketer can deliver a compelling, interactive offer that’s simple to respond to – not a campaign designed to catch a consumer in its broad net, but a specific offer that is triggered when an individual consumer’s conditions are met. At the point of offer, the transaction will be interactive in whatever medium the customer prefers.

Remember, only 2 percent of customers who hit a site are converted, according to Business 2.0. With direct mail, response rates higher than 1.5 percent are considered good. Customers talking to sales and reservation agents buy at an average of 36 percent. Interactive microtargeting has generated closing rates as high as 70 percent. Customers don’t care whether they’re transacting with a person, a Web page or another medium – that’s the marketer’s concern. Customers just want the convenience of getting the transactions they want done.

Instead of spamming a collection of potential customers with appeals that are functionally identical to old-fashioned direct mail, microtargeting allows marketers to present customers with timely offers delivered however and whenever they want – and only when their interests and your offerings intersect. Conversion rates will climb, wasted effort will shrink, and sales will grow if customers can count on getting just what they want, just when they want it.

• Vytas Kisielius is president of Realcall, Stamford, CT.

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