The 2011 Digital Marketer:Benchmark and Trend ReportConnect with today’s unique and empowered customers
ForewordThis past year, we’ve seen and experienced remarkable change in terms of theeconomy and its effect on consumers an...
Experian Marketing Services helps leading organizations connect,engage and empower customers to be loyal and active branda...
MARKETING FORWARD  means engaging customers  wherever they are
Table of contentsIntroduction .......................................................................................... 1...
Key mobile trends .................................................................................................51Consu...
IntroductionToday’s digital marketing channels, such as email, search, mobile phones,addressable advertising, online commu...
Meeting the challenges of uncertainty in 2011Consumers remain “cautiously optimistic”Moving into the second quarter of 201...
Experian Consumer Expectation Index (by age)            105            100             95             90             85   ...
Experian Mosaic3 segmentation reveals in-depth nuances to the evolvingmultisegmented American household. In a new Mosaic s...
Brand loyalty increases steadily with ageYoung consumers are the least likely to be brand-loyal, and olderconsumers are th...
In fact, digital marketers that focus on brand through email marketingcampaigns find that loyalty programs can boost open ...
U.S. market share of visits to Groupon.com0.05%0.04%0.03%                                                                 ...
Here are three things to consider about the group coupon phenomenon.Group buying has reached mainstream adoptionWhile the ...
The race to dominate the space is heating upLivingSocial’s Amazon play did more than just put up impressive numbers;it was...
While digital marketers spend a lot of time understanding andimplementing social marketing plans, in many categories, now ...
Let your customer guide youThere are certainly signs that 2011 will be a more prosperous year thanrecent years past, but t...
Consumer insightConsumer insight
Consumer insightConsumers today are more responsive to and reliant on digitalcommunications and technologies. As they spen...
Even the most technologically novice consumers are going digitalThe Experian Simmons Technology Adoption segmentation syst...
Use of key digital media in the last 30 days                                                                              ...
Cell phones are becoming more important to the younger generation,at television’s expenseAlthough TV and computers are imp...
More than one-quarter of American consumers have little or no creditDigital marketers across all verticals thrive on ident...
Even America’s Wealthiest are among those in search of dealsFlash sales, or time-limited offers of high discounts, are inc...
Purchase influences    Highly influential in decisions to purchase a product or service   All adults    Word of mouth     ...
Purchase decisions influenced by moms                          Total                 Sole                      With someon...
Hispanic market emails generate                                high open and click rates        20%                       ...
Marketers that choose to mail in Spanish should be sure that their spellingand grammar are correct. Mailings sent with inc...
Hispanic mobile phone owners are 63 percent more likely than theaverage mobile phone users to represent the mobile generat...
Addressable advertising                          Addressable advertising
Addressable advertisingAdvanced advertising is finally becoming a reality. For the first time,advertisers are able to prec...
The evolution of the online display advertising marketTraditionally, advertisers looking to make advertising buys have bee...
Digital advertising technology landscape High precision                          2. Premium tier                      3. A...
This latest, most valuable advertising model has been created using highquality, consistent data sources with meaningful r...
Case study: targeted online advertising, financeChallenge:An Experian Marketing Services client and well-established inter...
Three steps to competing in the digital advertising spaceAd exchanges, Demand Side Platforms (DSPs) and agencies are all v...
Case study: targeted online advertising, retailChallenge:A national specialty retailer was looking to drive holiday sales ...
Email        Email
EmailEmail is a vital part of the consumer’s digital experience — from socialnetwork alerts and mobile marketing opt-ins t...
The volume and revenue value of email continues to climbThe amount of email, as well as the amount of revenue that email i...
Furthermore, consumers continue to spend a significant amount oftime checking their email. Seventy-seven percent of consum...
Emails with refer-a-friend functionality                                                                  Lift in total   ...
Subscribers open and click on friends-and-family emails                           at higher rates than bulk promotions    ...
Friends-and-family campaigns tend to generate an average of threetimes the referral rate of bulk promotions. Friends-and-f...
Offers in subject lines are especially valuable for driving year-end revenuethrough email marketingSubject-line trends are...
•	 “% Off” and “$ Off” are the most popular single offer types in subject   lines overall. During the holiday season speci...
•	 While gift card offers are not always mentioned in subject lines, the   trends seen in mailings with “gift card” in the...
Holiday-related emails outperform standard promotional mailingsHoliday-related emails, before and on the celebrated dates,...
New Year’s Day — Subscriber interest in New Year’s campaigns beginsto rise two weeks prior to the actual holiday. Total cl...
Valentine’s Day — Total clicks peak on the actual holiday, Feb. 14, untilFeb. 21. Interestingly, transactions peak one wee...
Memorial Day — Total clicks peak at two weeks prior to the holiday,while transactions peak one week prior to the holiday a...
Father’s Day — According to Experian CheetahMail client mailings, theearliest occurrence of Father’s Day in a subject line...
Thanksgiving, Black Friday and Cyber Monday —                         holiday subject lines and total click rates         ...
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
Experian Marketing Services 2011 Digital Marketer
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Experian Marketing Services 2011 Digital Marketer

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Covering key marketing channels including: email, digital advertising, mobile, search, and social media, the Experian Marketing Services’ annual Digital Marketer report contains trend information, predictive benchmark data, and analytical insight necessary for business leaders to maximize digital marketing opportunities and return on investment.

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Experian Marketing Services 2011 Digital Marketer

  1. 1. The 2011 Digital Marketer:Benchmark and Trend ReportConnect with today’s unique and empowered customers
  2. 2. ForewordThis past year, we’ve seen and experienced remarkable change in terms of theeconomy and its effect on consumers and marketers alike. The emergence ofnew media and an ever-growing population of highly connected and empoweredconsumers has challenged brands to work smarter and more effectively to stayengaged and relevant. In this environment of constant, hyper-innovation, very littleremains the same.The broad availability of smartphones, and the iPad along with the rest of thetablets, is set to revolutionize the opportunities for mobile marketing. Otherdramatic changes that occurred in 2010 that will have long lasting impact onhow we market to consumers include the dominance of Facebook, the dramaticgrowth of group buying sites and the renaissance of addressable advertising.Technical innovations aside, we’ll also need to account for and recover fromour unprecedented focus on steep discounting as the antidote to consumers’unwillingness to spend.The fundamentals of today’s consumer-driven market have been altered to thepoint that some economists are saying that many of us have re-calibrated ourpurchase behavior to a “new-normal” of reduced discretionary income, low homevalues, and less willingness to take on debt. The economic outlook for 2011 ismixed, as rising consumer confidence and spending is at risk of being stifled byincreasing oil prices.So, given the complexity of digital channels, the myriad of customer data andchanging consumer behavior, what will make for a successful digital marketingstrategy in 2011? The only answer is to focus on a better understanding ofour customer.In the pages that follow, you’ll find detailed analysis and data drawn from thebreadth of experience and expertise of Experian Marketing Services, a leader indigital marketing.In 2011, there’s one thing you can count on — change will endure. At ExperianMarketing Services we look forward to being your partner in navigating that changethrough a better understanding about consumers and the best way to engage them.Cheers to successfully marketing forward.Bill TancerGeneral Manager, Global Research, Experian Marketing ServicesAuthor of Click: What Millions of People Are Doing Online and Why It Matters
  3. 3. Experian Marketing Services helps leading organizations connect,engage and empower customers to be loyal and active brandadvocates through a full suite of digital marketing capabilities.
  4. 4. MARKETING FORWARD means engaging customers wherever they are
  5. 5. Table of contentsIntroduction .......................................................................................... 1Meeting the challenges of uncertainty ............................................. 2Consumer insight............................................................................... 13Key findings ........................................................................................................13Technological novices going digital .................................................................14Most common uses of digital .............................................................................14Cell phones vs. television....................................................................................16Surprising findings on American consumer credit........................................17Discretionary spending segment quick tips ....................................................17Wealthy Americans search for deals................................................................18Word of mouth influential in driving purchases..............................................18Mom’s influence on household purchases ......................................................19Positive results for Hispanic targeted emails ..................................................20Hispanic mobile phone usage represents “mobile” generation ..................23Addressable advertising .................................................................. 25Key findings ........................................................................................................25Evolution of the online display advertising market .........................................26Addressable advertising growing at rapid pace .............................................28The next evolution, integrated campaigns .......................................................28Case study: targeted online advertising, finance............................................29Steps to compete in digital advertising ............................................................30Case study: targeted online advertising, retail................................................31Email..................................................................................................... 33Key findings ........................................................................................................33Value of email continues to climb ......................................................................34Emails consumers are most likely to open .......................................................35“Friends-and-family” email performance ........................................................36Email subject line influence on revenue ...........................................................39Performance of holiday-related email...............................................................42Tips for improving email data quality ................................................................48Case study: improving email data quality.........................................................48Mobile .................................................................................................. 49Key findings ........................................................................................................49Mobile market growing at rapid pace ................................................................50
  6. 6. Key mobile trends .................................................................................................51Consumers receptive to mobile ads ..................................................................52Most popular mobile activities ...........................................................................53Consumer adoption of mobile purchasing ......................................................54Most popular mobile shopping locations ........................................................55Case study: mobile couponing...........................................................................56Smartphone consumer affinity for gaming and entertainment....................57Targeting behavior of mobile consumers ........................................................58Reach of text messaging .....................................................................................59Reaching affluent consumers with tablets ......................................................60Social ................................................................................................... 61Key findings ........................................................................................................61Social networks surging over search ................................................................62Older adults using social networking ...............................................................64Combining social media and email ...................................................................65Online shoppers’ use of social networks .........................................................66Search.................................................................................................. 67Key findings ........................................................................................................67Google’s share of search market ......................................................................68Search query word use ........................................................................................69Adult online comparison shopping...................................................................69Increase in traffic to flash sales Websites ......................................................70Tips for improving conversion optimization online ........................................71Multichannel customer experience ................................................. 73Key findings ........................................................................................................73Marketer’s needs...................................................................................................74Offline data leverage tactics ...............................................................................74Pairing direct mail with mobile engages your audience ................................75Contact data inaccuracies ..................................................................................76Best practices for multichannel marketing ......................................................77Bad data equals bad business results ..............................................................78Data quality quick tips .........................................................................................79Multichannel marketing integration quick tips ............................................... 80
  7. 7. IntroductionToday’s digital marketing channels, such as email, search, mobile phones,addressable advertising, online communities and social media, givemarketers the ability to know their target audience in greater depth thanever before and to foster customer engagement effectively, in real time.When fused with these channels, consumer insight, benchmark data andanalytical expertise can help marketers create meaningful and preciselytargeted communications that will amplify customer advocacy and drivegreater return on investment (ROI) now and into the future. The findings,projections and recommendations within this report provide actionableand unique insights for the progressive digital marketer. An Experian benchmark and trend report | Page 1
  8. 8. Meeting the challenges of uncertainty in 2011Consumers remain “cautiously optimistic”Moving into the second quarter of 2011, key indicators about consumers’expectations and spending confirm continued economic uncertainty.While consumer spending, which accounts for roughly 70 percent of oureconomy, looked strong for the fourth quarter of 2010, a Gallup poll1 paintsa darker picture for the new year, reporting that daily spend was downsignificantly the first two weeks of January.Facing another year of “cautious optimism” will mean another year ofmargin pressure as marketers seek to drive growth through increasedadvertising expenditures. However, the reaction to the recession over thepast three years where marketers slashed prices across the board in a raceto attract cautious consumers needs to be replaced with a more rationalapproach that is tailored to their target consumer.In fact, this approach is supported by our data revealing that consumers’economic outlook and resulting purchase behaviors differ by a multitude offactors including their age, gender, income and socio-economic status.In an environment of significant change in consumer behavior and theexpectations of businesses to grow, the path to increased profitabilityfor marketers in 2011 will be based on a better understanding of theircustomers and key purchase drivers beyond price.The negative correlation between age and economic optimismTo understand consumers’ heterogeneous response to market conditions,Experian Marketing Services developed the Experian ConsumerExpectation Index (CEI), leveraging our National Consumer Study of morethan 25,000 adults. By employing Experian Simmons DataStream, we havethe ability to dissect, on a weekly basis, economic sentiment by more than8,000 variables, from basic demographics to attitudinal variables.Analyzing consumers’ expectations of their economic future illustratesthat there is a near-perfect negative correlation between age and economicoptimism. In other words, the older consumers get, the more pessimisticthey are about the health of the economy.1 Gallup, U.S. Consumer Spending Down Sharply in Early January, January 2011Page 2 | The 2011 digital marketer
  9. 9. Experian Consumer Expectation Index (by age) 105 100 95 90 85 80 75 70 11/02/2009 11/05/2007 11/03/2008 11/08/2010 05/03/2010 07/05/2010 09/08/2008 01/05/2009 02/02/2009 03/09/2009 05/04/2009 09/07/2009 03/08/2010 09/06/2010 03/03/2008 07/07/2008 01/04/2010 01/07/2008 05/05/2008 07/06/2009 Age 18–34 Age 35–49 Age 50–64 Age 65+Assuming that there is a link between economic outlook and pricesensitivity, the key takeaways for digital marketers are that when marketingto consumers between the ages of 18 and 49, deep price discounts are lessimportant than when marketing to consumers over the age of 50.One of the counterintuitive findings regarding age is that, despite recentpositive news surrounding the end of the recession, the economicoutlook gap between younger and older consumers is widening. The keytakeaway — focusing on price when marketing to 18- to 24-year-olds willmost likely result in leaving money on the table.A better understanding of customers and how their economic viewpointchanges over time is only the first step to becoming a well-informeddigital marketer.Change in household composition: Boomers and BoomerangsIn the USPS® publication Deliver, renowned demographic analyst PeterFrancese states: “There is no longer an average American. When I was achild, people used to talk about John Doe; he was the average American ina relatively even society. Today, we are not just a multicultural nation, butalso a multisegmented nation and a multigenerational society.”22 USPS, Deliver: Volume 7, February 2011 An Experian benchmark and trend report | Page 3
  10. 10. Experian Mosaic3 segmentation reveals in-depth nuances to the evolvingmultisegmented American household. In a new Mosaic segment, Boomersand Boomerangs, adult children are returning home to live with their babyboomer parents due to economic pressures. Analysis of the compositionfor these households indicates that elderly parents are also moving in withtheir boomer children to reduce elder-care costs.At a time when precision is becoming critical to relevant customercommunication, it is imperative that marketers understand shifts inhousehold composition and how that changes the way they marketto consumers.As we’ve seen before, taking Boomers and Boomerangs as an example,certain conclusions are intuitive, such as the cost-saving behavior of themultigenerational household. For example, this segment indexes highfor using coupons from newspapers (138) and coupons from in-storepackages (137) when making purchases.Based on the cost-saving behavior exhibited by Boomers andBoomerangs, one may jump to the conclusion that price alone drivespurchase behavior. However, analysis of shopping attitudes for thissegment reveal that, more important than price, this segment is verybrand-loyal when making purchase decisions.Commoditization and the importance of loyaltyThe ability to perform searches for products based on price, be it fromone’s home computer or using a U.P.C. search app such as Red Laseron a smartphone while walking the aisles of a store, is leading to thecommoditization of products and services. This trend, combined withdeep discounting in retail, travel and other service sectors, has led to adownward pricing spiral and corresponding reduction in profit margins.There are antidotes to commoditization, one of the most powerful beingbrand loyalty.As we discussed above, certain Mosaic segments such as Boomers andBoomerangs identify themselves as being very brand-loyal. In fact, whenstudying brand loyalty by age group, there is a positive correlation basedon age. In other words, the older the consumer, the more brand-loyalthey become.3 Mosaic USA is a consumer lifestyle segmentation system developed by Experian, providingcomprehensive and robust insight available for understanding the American consumer dimensions thatinclude demographic composition, ethnicity, socioeconomics, behaviors, habits and purchase choices.Page 4 | The 2011 digital marketer
  11. 11. Brand loyalty increases steadily with ageYoung consumers are the least likely to be brand-loyal, and olderconsumers are the most likely. Age Brand Loyals Non-Loyals All U.S. adults 34% 35% 18–24 26% 36% 25–34 27% 39% 35–44 29% 40% 45–54 33% 35% 55+ 44% 28%In addition, factors other than age, such as education level, can exhibitdifferences in brand loyalty. While concluding that the more educatedconsumer might be immune to the draw of branding, preferring to compareproducts and services strictly on price, the opposite is true; the moreeducated the consumer, the more loyal they are to a brand.Highly educated adults are the most likely to be Brand LoyalsAdults who attended graduate school are 14 percent more likely to beBrand Loyals than the average adult. Education Brand Loyals Non-Loyals High school or less 33% 33% Attended college (<1–3 years) 34% 36% College — four years (graduated) 37% 37% Graduate school (any) 39% 35% An Experian benchmark and trend report | Page 5
  12. 12. In fact, digital marketers that focus on brand through email marketingcampaigns find that loyalty programs can boost open rates by as much as40 percent and click rates by 22 percent. Loyalty mailings boost open rates by 40 percent and click rates by 22 percent 30% 27.4% 25% 20% 19.6% 15% 10% 5% 4.0% 3.2% 0% Total opens Total clicks Loyalty Non-loyalty promotion mailingsThe next big thing: Group buyingWhile understanding evolving consumers and their purchase drivers iscritical, in the current environment of hyperinnovation, it’s imperative thatmarketers keep on top of consumer adoption of new technology. In 2010,driven by consumer focus on discounted pricing for products and services,group buying fueled by companies such as Groupon arrived as a newbuying modality.Groupon, the privately held Chicago group couponing company, gainedimmediate notoriety by rejecting Google’s $6 billion acquisition offer inlate 2010.Page 6 | The 2011 digital marketer
  13. 13. U.S. market share of visits to Groupon.com0.05%0.04%0.03% 0.030%0.02%0.01%0.00% 2/27/2010 4/24/2010 6/19/2010 8/14/2010 10/9/2010 12/4/2010 1/29/2011 1/2/2010Weekly market share in “all categories,” measured by visits, based on U.S. usage.Created: 02/02/2011. Source: Experian Hitwise U.S.Since its founding in 2009, Groupon has grown to more than 5 million visitsper week to take the number 25 spot in the Experian Hitwise Shopping &Classifieds category for the week ending Jan. 29, 2011. However, isGroupon, or more generally the category of online group buying, a fad or asignificant change in the way we buy online? An Experian benchmark and trend report | Page 7
  14. 14. Here are three things to consider about the group coupon phenomenon.Group buying has reached mainstream adoptionWhile the social buying craze started like many new technologies, fueledby young and hip urban technocrats, the profile of the average Grouponuser has changed dramatically from the early days of 2010. Today,you would be completely off the mark. According to Experian HitwiseDemographics for the four weeks ending Jan. 29, 2011, the largest age-binfor visitors to Groupon.com are those Internet users over the age of 55(37.5 percent). Age of visitors to Groupon.com 40% 37.52% 32% 24% 19.06% 16.02% 17.13% 16% 10.27% 8% 0% 18-24 25-34 35-44 45-54 55+Source: Experian Hitwise U.S.Page 8 | The 2011 digital marketer
  15. 15. The race to dominate the space is heating upLivingSocial’s Amazon play did more than just put up impressive numbers;it was a clear sign that the site is a viable threat to category leaderGroupon. According to Groupon CEO Andrew Mason, Groupon has morethan 500 competitors in the marketplace and growing. U.S. market share of visits to Groupon.com and LivingSocial.com0.05%0.04%0.03% 0.030%0.02% 0.013%0.01%0.00% 01/29/2011 01/09/2010 02/27/2010 04/24/2010 06/19/2010 08/14/2010 10/09/2010 12/04/2010 www.groupon.com www.livingsocial.comEmail is the driving force behind group buyingWhile group coupon sites have often been characterized as the Web 2.0 ofonline shopping, social networking sites are not the driving force fuelingtheir growth; that distinction belongs to email.In analyzing the upstream traffic to a Website, or a category of sites, it ispossible to visualize the “tipping point” of that site or category by lookingat visits from social networks versus visits from another source such assearch or Web-based email services.The theory is that in the early-adoption phase of a new category of site,word-of-mouth spreads via social networking sites such as Facebook.Then, as sites become mainstream, consumers begin navigating to a newcategory by traditional means such as search engines or responses toemail blasts. An Experian benchmark and trend report | Page 9
  16. 16. While digital marketers spend a lot of time understanding andimplementing social marketing plans, in many categories, now includinggroup coupon sites, email remains a critical factor in consumer socialengagement. Upstream traffic to social buying Websites 60% 50% 40% 30% 20% 17.38% 11.72% 10% 11.05% 0% November 2009 January 2011 March 2010 August 2010 February 2010 February 2011 July 2010 January 2010 December 2010 September 2010 April 2010 November 2010 May 2010 October 2010 June 2010 December 2009 Social networking and forums Email services Search enginesMonthly upstream of percent of “Social Buying” (Cust. Cat.), based on U.S. usageCreated: 02/11/2011. Source: Experian Hitwise U.S.During the very early phases of social buying, back inNovember 2009, visits to group coupon sites came predominatelyfrom social networks (49 percent) versus email (9 percent).By the summer of 2010, social buying sites experienced a tipping pointin source traffic, with email services assuming the role of traffic leader.Since most group coupon offers are driven by a daily deal delivered toconsumers’ inboxes, the fact that email services account for more than17 percent of traffic to the category is not surprising.Page 10 | The 2011 digital marketer
  17. 17. Let your customer guide youThere are certainly signs that 2011 will be a more prosperous year thanrecent years past, but there is still significant economic uncertainty for ourimmediate future.While Joe Kennedy’s old adage still holds that “when the going gets tough,the tough get going,” in the digital world, to be successful, the tough alsoneed to get smarter by understanding their customers and how externalforces such as economic turmoil alter purchasing behavior.Checklist for the 2011 digital marketer How well do you understand the target customer for your products and services? How have market conditions affected purchase drivers for your target customers? Have you found the right balance between competing on price versus relying on brand loyalty? Are you leaving money on the table by focusing too heavily on discounting?In light of the critical questions above, digital marketers can benefit byutilizing data-driven consumer insight from Experian Marketing Servicesto develop successful and profitable marketing strategies in 2011. Read onfor more detailed information, recommendations and industry benchmarkspertaining to email, search, mobile, online communities and social mediawith insights on consumers’ preferences across the digital landscape. An Experian benchmark and trend report | Page 11
  18. 18. Consumer insightConsumer insight
  19. 19. Consumer insightConsumers today are more responsive to and reliant on digitalcommunications and technologies. As they spend their time crossingchannels to do virtually everything, from booking vacations via theirmobile phones to researching products on social networking sites, they’rebecoming less tolerant of any irrelevant message and more receptive tointerconnected and integrated marketing.As with any marketing campaign, the first step to success is gaining anunderstanding of the consumer segment you’re trying to reach. Marketersmust arm themselves with precise consumer insight and behavioral data tosurvive, and ultimately flourish, in the cluttered digital landscape. Key findings • More than half of Novices, the segment known for being the “least connected to emerging technology and very resistant to adopting a new technology-focused life,” are now sending and receiving email, texting and visiting social networking sites. • Eighty-four percent of Americans today email on a regular basis, and 74 percent send and receive text messages. • Over the last year, there have been significant increases in consumer use of television program or movie downloading and decreases in the use of RSS feeds. • Compared to other age groups, consumers ages 18 to 34 are much more reliant on their cell phones. • More than 30 percent of the American population has little or no credit history. • Top visits to Flash Sales Websites include the lower income Mosaic segment “Urban Diversity,” followed closely by the most affluent, “America’s Wealthiest.” • The most influential element driving purchase decisions today is still word of mouth (54 percent), followed by information from a Website (47 percent). • Ninety-four percent of moms with children under the age of 18 at home say that they are the most influential people in households when it comes to making purchasing decisions. • Emails sent to the Hispanic market have an average of 43 percent higher click rates when compared to current “All Industry” benchmarks. • Hispanic mobile phone owners are 63 percent more likely than the average mobile phone users to represent the mobile generation. An Experian benchmark and trend report | Page 13
  20. 20. Even the most technologically novice consumers are going digitalThe Experian Simmons Technology Adoption segmentation systemdelivers the mindset of American consumers, providing vivid details oftheir use and adoption of technology. More than half of online Novices, thesegment known for being the “least connected to emerging technology andvery resistant to adopting a new technology-focused life,” are now sendingand receiving email (75 percent), texting (60 percent) and visiting socialnetworking sites (55 percent).Email and text messaging are the most common uses of digital mediaby consumersEighty-four percent of online Americans today email, and 74 percent sendand receive text messages. From 2009 until 2010, there have been notableincreases in consumer use of TV program or movie downloading, as wellas social tagging and bookmarking.Meanwhile, the use of RSS feeds and playing video games on computershas declined. Consumer usage of RSS feeds is also one of the mostuncommon digital activities (7 percent) along with the use of TVredirectors, most likely due to the increased usage of online communityWebsites such as Twitter and the increased downloading of TV programsonline, respectively.Page 14 | The 2011 digital marketer
  21. 21. Use of key digital media in the last 30 days Relative 2009 2010 percent change Downloaded a TV program or a movie 13% 19% 49% Used social tagging or bookmarking 9% 13% 39% Used a TV redirector 5% 6% 29% Watched movies online 26% 33% 25% Visited social networking sites 59% 71% 22% Used GPS/personal navigation system 25% 29% 20% Visited video-sharing Websites 41% 47% 17% Visited virtual experience sites 7% 8% 17% Visited professional networking Websites 10% 12% 11% Sent or received a text message 69% 74% 8% Sent or received a multimedia message 44% 47% 7% Visited online forums/message boards 22% 23% 4% Made a phone or video call through pc 30% 30% 1% Visited photo-sharing Websites 35% 35% 0% Sent or received email 85% 84% -1% Played video games on a console 38% 37% -2% Listened to internet radio 17% 17% -2% Watched TV programs online 25% 25% -2% Played video games on port gaming device 14% 13% -5% Visited torrent Websites 8% 8% -7% Listened to or watched podcasts 12% 11% -8% Visited online blogs 19% 17% -10% Played video games on a computer 14% 12% -15% Used RSS feeds 9% 7% -22%Source: Experian SimmonsBase: Online adults An Experian benchmark and trend report | Page 15
  22. 22. Cell phones are becoming more important to the younger generation,at television’s expenseAlthough TV and computers are important across the board, consumersages 18 to 34 are much more reliant on their cell phones — with only 13percent deeming TV as the media they cannot live without, and a whopping22 percent relying on their cellular phones with Internet access. Media they cannot live without, by age 50% 40% 30% 20% 10% 0% st me on o es s t er ce e ce t h in er di ac on ad in te pu s em si a c wi pr ss sy ga Ra ap s et ph az vi re in et r sp eo le rn te ag ok rn s s Te ew t e es id ok M bo V in irel in om N Bo E- C i th w w lar/ lu el C All adults 18-34 35-49 50+Source: Experian Simmons Tip: Consider more mobile marketing for the younger market and targeted television advertising for more mature segments.Page 16 | The 2011 digital marketer
  23. 23. More than one-quarter of American consumers have little or no creditDigital marketers across all verticals thrive on identifying consumers whohave not only the willingness, but also the means to spend on goods andservices. Using proprietary Experian credit data, the following data pointspaint a broad picture of consumers with little to no credit history today:• Overall, 31.7 percent of the population has a thin credit file4• African-Americans account for 20.1 percent of the thin-file population• Hispanics account for 17.1 percent of the thin-file populationDiscretionary spending segmentation quick tipsMarketers should leverage the growing amount of data and analyticsavailable today to help identify and effectively target consumers who arespending on nonessential purchases. Listed below are three key pointsto consider for marketers in industries that use discretionary spendingpredictors to target their audience:• Ensure discretionary spending predictors are recalibrated throughout the year to take into account econometric changes that are often regionally based• Make sure you know the total dollar amount each household is projected to spend on discretionary products and services in order to best target the appropriate product or service offer• Understand what other discretionary spending categories your target consumer might be interested in; these categories are your competition, as other marketers are also fighting for a portion of consumers’ discretionary dollarsTraveler alert: Affluent urban professionals and prime middle-Americasegments tend to have higher propensities for taking cruise vacations.However, prime middle-America cruisers have 46 percent less in annualdiscretionary spending for their cruises than affluent urban-professional cruise vacationers.Nonprofit alert: The “greenest” consumers tend to be charitable giversand have higher average discretionary spending abilities than “nongreen”consumers. It is important to further segment that universe to identify whichconsumers have the financial ability to give to its cause.4 Experian® defines a “thin credit file” as zero to two lines of credit per consumer. An Experian benchmark and trend report | Page 17
  24. 24. Even America’s Wealthiest are among those in search of dealsFlash sales, or time-limited offers of high discounts, are increasingly inpopularity across customer segments. Examining the Mosaic types visitingthe Flash Sales category allows for the analysis of what segments of U.S.consumers are most likely to surf for affordable luxuries.Surprisingly, the top types, by representation, for visits to the FlashSales category include the lower income segment “Urban Diversity,”followed closely by the most affluent type in the Mosaic breakdown,“America’s Wealthiest.” Mosaic USA type of visitors to Flash Sales Mosaic USA type (60 returned) Visits share Representation K04 — Urban Diversity 9.79% 699 A01 — America’s Wealthiest 7.10% 572 H01 — Young Cosmopolitans 7.22% 305 E01 — Ethnic Urban Mix 4.59% 300 J02 — Latino Nuevo 7.40% 299Four rolling weeks ending Feb. 5, 2011, compared with “Mosaic USA Type of the Online Population”Source: Experian HitwiseExperian Hitwise analysis5 indicates that affluent consumers are known toengage in online deal hunting regardless of economic conditions. Lowerincome segments, however, can become more active in finding onlinedeals as confidence in the economy decreases, exhibiting behaviors thatreinforce the theory of affordable luxury.Word of mouth is still the most influential factor in driving purchasesDespite consumer reliance on digital devices and Internet-providedinformation, the most influential element driving purchase decisions todayis still word of mouth, followed by information from a Website (47 percent)and email sent by familiar peers (42 percent). Advertising in video gamesand on mobile phones seems to influence far fewer consumers inpurchase decisions.5 Experian Hitwise, Affluent shoppers love coupons too, January 2011Page 18 | The 2011 digital marketer
  25. 25. Purchase influences Highly influential in decisions to purchase a product or service All adults Word of mouth 54% Information from a Website 47% Email sent by someone you know 42% Something you read in an online review 31% Something you heard on the radio 29% Television ad 27% Something you received in the mail 25% Magazine ad 23% Newspaper ad 22% Online ad 17% Email sent by an advertiser/company 16% Infomercial 12% Mobile phone ad 11% Video game ad 10%Source: Experian SimmonsBase: Online adultsMoms have the strongest influence on household purchasesNinety-four percent of moms with children under the age of 18 at home saythat they are the most influential people in households when it comes tomaking purchasing decisions. It is important that marketers understandtheir target customer — especially when the target has a strong andgrowing influence on household purchases. Explained below are three keytrends to help marketers connect with the critical mom consumer segment:• As couples delay starting families, the average age of moms continues to increase. Over the past four years, the segment “moms 35 and older” has outpaced “moms under 35” in each children’s age category, with one exception: children under the age of 3.• There is a corresponding shift in online demographics, with 24- to 35-year-olds decreasing their visits to parenting Websites by almost 7 percent from July 2008 to the same time period in 2010.6• Moms are most likely to report that they are the sole decision makers when it comes to the purchase of household products (62.9 percent) and clothing (60.8 percent), while they are most likely to share the decision-making process with someone else in their households for higher-ticket items such as automotive (77.7 percent) and major appliances (71.7 percent).6 Experian Hitwise, Custom analysis. An Experian benchmark and trend report | Page 19
  26. 26. Purchase decisions influenced by moms Total Sole With someone else Automotive 93.2% 15.5% 77.7% Clothing 88.2% 60.8% 27.4% Food 88.2% 54.4% 33.8% Home electronics 89.9% 23.2% 66.7% Home furnishings 90.2% 27.1% 63.1% Household products 88.7% 62.9% 25.8% Major appliances 93.3% 21.6% 71.7% Sporting goods 93.2% 30.0% 63.2%Source: Experian ConsumerView and Simmons, Mom’s Trend report, May 2010Creating targeted email marketing specifically for the Hispanic segmentyields positive resultsAs the Hispanic market grows in size and spending power, it is importantto consider including specific messages to this group as part of an overallmarketing program. The engagement metrics show this group to be highlyengaged with email campaigns.Of the emails sent to the Hispanic market, 70 percent were in Spanish and30 percent were in English. As a group, these Hispanic market mailingshad 26 percent higher open rates and 43 percent higher click rates whencompared to current “All Industry” benchmarks.Page 20 | The 2011 digital marketer
  27. 27. Hispanic market emails generate high open and click rates 20% 17.8% 18% 16% 14.1% 14% 12% 10% 8% 6% 3.9% 4% 2.7% 2% 0% Unique opens Unique clicks All industry Hispanic market emailsSeparating the English language and Spanish language emails sent toHispanic segments, emails targeting Hispanics in Spanish had 41 percenthigher open and 59 percent higher click rates than those sent in English. Mailings written in Spanish had significantly higher open and click rates than those mailed in English 20% 18.8% 18% 16% 14% 13.3% 12% 10% 8% 6% 4.3% 4% 2.7% 2% 0% Unique opens Unique clicks English Spanish An Experian benchmark and trend report | Page 21
  28. 28. Marketers that choose to mail in Spanish should be sure that their spellingand grammar are correct. Mailings sent with incorrect translations had24 percent lower open rates and 3 percent lower click rates than mailingswith proper Spanish grammar.The Hispanic market responds best to promotions with dollars or percentoff. Email campaigns with these types of financial “rewards” had 81 percenthigher transaction rates and three times the revenue per email whencompared to Hispanic promotions with “nonfinancial” rewards(free gifts, movie tickets, free shipping, etc).7Hilton’s campaign includes 30 percent off in this inviting Getaway email.Experian CheetahMail’s Strategic Services team analyzed the performance and content of7mailings targeting the Hispanic market from 27 businesses, July 2009 to June 2010.Page 22 | The 2011 digital marketer
  29. 29. Hispanic mobile phone owners are 63 percent more likely than theaverage mobile phone users to represent the mobile generationIn addition to email, engagement metrics also show the Hispanic groupto be highly engaged with mobile campaigns. Hispanic mobile phoneowners are 63 percent more likely than the average mobile phone users torepresent the mobile generation — cell phone devices are a central part oftheir everyday lives. In accordance with this trend, Hispanic mobile phoneowners are also 33 percent less likely than average to use their cell phonesjust for the basics. They treat their cell phones as much more than justanother communication device. Mobile segmentation, Hispanic versus Non-Hispanic 40% 35% 32% 30% 25% 23% 22% 23% 21% 20% 18% 18% 17% 15% 15% 13% 10% 5% 0% Mobirati Social Pragmatic Basic Mobile connectors adopters planners professionals Hispanic Non-HispanicSource: Experian Simmons An Experian benchmark and trend report | Page 23
  30. 30. Addressable advertising Addressable advertising
  31. 31. Addressable advertisingAdvanced advertising is finally becoming a reality. For the first time,advertisers are able to precisely predict what messages will be mostrelevant and engaging to unique segments of their target market. Whilethe industry has been pursuing the means to deliver personalized adsfor years, the recent implementation of real-time digital technologythroughout the advertising ecosystem has the industry poised to finallydeliver highly relevant and measurable advertising. 8 Key findings • Through addressable advertising, the advertiser is able to better predict whether a message will resonate with a specific consumer segment. • Addressable TV advertising spend is projected to total $11.5 billion in the United States by 2015.8 • The integrated multi-channel campaign will become a reality in 2011, and will build to scale in 2012 and beyond. • A well-establlished international bank used addressable advertising online to achieve a lower Cost Per Acquisition (CPA) and an approval rate double its initial expectations. • A national specialty retailer used Audience IQ to serve online ads to current customers, resulting in an average 60 percent lift in Internet response, as well as response increases of more than 50 percent in both the mail-order (55 percent) and retail channels (57 percent).8 The Wall Street Journal, Targeted TV Ads Set for Takeoff, December 2010 An Experian benchmark and trend report | Page 25
  32. 32. The evolution of the online display advertising marketTraditionally, advertisers looking to make advertising buys have beenlimited by media’s rudimentary audience measurement samples,segmented only by basic demographics. Advertisers have had to basethe performance of the ad buy on recall studies or loosely correlatedsyndicated purchase behavior panels.The Internet promised to change all of that with its ability to trackdirect response in the form of clicks. But while that helped improve themeasurement of the ad performance, it did nothing to help marketersefficiently reach their audience with highly relevant messaging.The online display advertising market has evolved in such a way thatadvertisers have had to choose between two models, depending on theirparticular goals.Model 1. Publisher or Ad Network data• Provides very broad reach and scale• More akin to a traditional mass-media model• Low relevancy that requires a high number of impressions to be successful• Expensive• Difficult to forecast performanceModel 2. Premium Tier 1 Segments• Lack of scale for advertisers who want to reach millions of consumers• Potentially attracts regulation to protect consumer privacy• Provides high-degrees of accuracy when targeting a specific audience – Behavioral targeting – Retargeting – Real-time bid managementPage 26 | The 2011 digital marketer
  33. 33. Digital advertising technology landscape High precision 2. Premium tier 3. Addressable 1 segments advertisingBroad spectrum of (i.e. behavioralavailable consumer targeting, retargeting) (broad spectrum of information effective marketing tactics available at scale) Effective marketing tactics – but not scalable Low precision Limited data 1. Publisher or ad available on network data consumers (i.e. run of network) Scalable marketing tactics – but not effective Low reach High reach Small addressable audience Large addressable audienceDespite some of its challenges, the data-driven model delivered somethingmarketers were hungry for: confidence that they could reach their desiredaudience. In response to this desire, marketing technology has nowevolved into addressable advertising, a third form of digital advertising thatcombines precision and scale in one solution.Model 3. Addressable Advertising• Combines best of Models 1 and 2• Real-time execution of online display media buys on an impression-level basis• Meaningful reach and scale• High precision An Experian benchmark and trend report | Page 27
  34. 34. This latest, most valuable advertising model has been created using highquality, consistent data sources with meaningful reach. The introductionof high-quality, consistent data sources with meaningful reach havedelivered a new and uniquely valuable asset to the real-time media buyingecosystem. Through these data sets, advertisers have been able toleverage impression level data, optimize their bidding process and pay onlyfor the media that is relevant to their marketing objectives. This data alsohelps improve performance because it enables advertisers to align theircreative treatments to their own target customer segments.Addressable advertising is growing at a rapid paceThe new addressable advertising capabilities are helping to create arenaissance for display advertising. Spending on targeted display adswill increase nearly 60 percent in 2011, helping to push online ad spendingto nearly $52 billion next year.9 Additionally, addressable TV ad spend isprojected to total $11.5 billion in the United States by 2015, according toThe Wall Street Journal.10The next evolution, true integrated multi-channel campaignsThe integrated multichannel campaign will become a reality in 2011,and will build to scale in 2012 and beyond. Because of the data availablethrough addressable advertising, digital media advertising (online displaymedia and televisions with digital set-top boxes), offline direct mail andemail campaigns can now be coordinated across the same segmentsand measured precisely according to response rates and conversions,effectively closing the loop on return on advertising spend.9 Borrell Associates, Borrell Associates’ 2011 Ad Forecast Memo, 201110 The Wall Street Journal, Targeted TV Ads Set for Takeoff, December 2010Page 28 | The 2011 digital marketer
  35. 35. Case study: targeted online advertising, financeChallenge:An Experian Marketing Services client and well-established internationalbank providing personal, business and corporate banking and creditservices to customers in nearly two dozen countries, including the UnitedStates, was looking to improve the ROI of its online advertising. The banksought to dynamically present ads for its ultra-premium credit card to1 percent of the U.S. population.Historically, however, it has proved extremely difficult to reach theseindividuals online. Moreover, the CPA for a single high-value prospecthad previously topped $500, which the client considered prohibitive. Witha CPA goal of less than $500 and a desired approval rate of 15 percent ormore, the bank began evaluating online ad-targeting technologies.Solution:Citing superior data and matching capabilities, streamlined targetingand rapid deployment, the bank chose Experian Marketing Service’sAudience IQ. Through partnerships with leading online media companies,Audience IQ enables highly targeted addressable advertising platformswhile preserving the anonymity of targeted prospects.With guidance from Experian Marketing Services, the bank based itscampaign on the highest qualifying custom segmentation schema, calledthe “Consumer Value Index (CVI).” The CVI segment includes individualsin good financial standing with a propensity for high-end luxury items.Results:Through addressable advertising and other unique features, the bankexceeded all acquisition goals in an online, luxury-credit-card marketingcampaign. Post-campaign analysis revealed that the client had achieved —and in fact exceeded — both primary marketing objectives: lower CPA andan approval rate double its initial expectations. An Experian benchmark and trend report | Page 29
  36. 36. Three steps to competing in the digital advertising spaceAd exchanges, Demand Side Platforms (DSPs) and agencies are all vyingfor a share of the display advertising pie. Listed below are three tips forcompeting in a marketplace like this.• Simplify — One of advertisers’ key pain points is interacting with nearly a dozen providers just to serve an online ad. Campaign data, targeting, and measurability have historically necessitated the involvement of specialty providers every step of the way. In today’s overworked and understaffed environment, marketers should find a partner that can alleviate some of the burden in coordinating the online advertising process — a one-stop shop for advertisers. Companies such as Experian Marketing Services are able to wrap measurement, reporting, optimization, data, and planning into one, simplifying the advertiser’s life.• Smarter ad units — One way to monetize the Internet is by making the advertising inventory work harder. Advertisers are willing to pay top dollar to target visitors, but have historically been limited to targeting based on generic segments such as age, location, and income. Advertisers would be happy to pay more for media if they could find their target audience segment as they defined it. Through addressable advertising, an advertiser can do just that. Addressable advertising shows ads only to the target segments the advertiser has selected, based on media that has been enriched with consumer insights. More online ad revenue is created because the same inventory can now be sold for more — all because that media includes a clearly defined picture of its particular consumer segments.• Enhance existing channels — Advertisers have been buying spots on TV for decades now, using old and pre-established processes as the basis for making ad-buying decisions. Now there is a way to bring the same accountability of online advertising to traditional TV advertising. Experian® partners with companies such as INVIDI Technologies Corporation and TRA® to provide advertisers with unprecedented precision regarding which household is tuning in to a specific show or commercial. This audience insight provides a level of ad customization that revolutionizes TV advertising. For example, even if you and your neighbor are watching the same TV show at the same time, you could be served different ads. Combine this level of ad targeting with reporting that draws a one-to-one correlation between ad spend and sales, and you have a recipe for success.Page 30 | The 2011 digital marketer
  37. 37. Case study: targeted online advertising, retailChallenge:A national specialty retailer was looking to drive holiday sales in a cost-effective manner. Their goal was to deliver an online ad campaign thatproduced measurable results, tracking mail order, retail and Internetresponse rates.Solution:The retailer used Audience IQ to serve targeted online ads to currentconsumers. Audience IQ measured the incremental reserve of theretailer’s multiple channels to determine the impact of online ad spend.Results:More than $14 million in incremental sales and an average 60 percent liftin Internet responses were generated through the 60-day targeted onlinecampaigns. Although the campaigns were delivered exclusively online,there was a greater than 50 percent lift in both the mail order and retailchannels, both of which were attributable to the online campaign. An Experian benchmark and trend report | Page 31
  38. 38. Email Email
  39. 39. EmailEmail is a vital part of the consumer’s digital experience — from socialnetwork alerts and mobile marketing opt-ins to search activity-basedmessages and mailings sent based on preference center forms. Theadvancement of mobile Internet devices and the rapid consumer adoptionof this technology have strengthened the revenue generation and customerengagement opportunities of the email channel. Key findings • Email volume increases ranged from 29 percent to 32 percent from the first quarter of 2009 through the fourth quarter of 2010, while revenue increased from 10 percent to 23 percent. • Friends-and-family emails have 43 percent higher open rates, 29 percent higher click rates and three times higher referral rates than bulk promotions. • “% Off” and “$ Off” are the most popular single offer types in subject lines overall, and combination offers can be particularly strong. “$ Off with Free Shipping” had the highest transaction rates of any offer type during the 2010 holiday season. • For the Valentine’s Day, Mother’s Day and New Year’s Day holidays, total clicks tend to peak on the date, as well as one week after the actual holiday. • Total clicks for Christmas emails peak one week after the holiday, perhaps due to interest in post-holiday sales, while transactions peak three weeks prior. • Consumers are most likely to open emails containing promotions or coupons, followed by news stories and links to Websites. An Experian benchmark and trend report | Page 33
  40. 40. The volume and revenue value of email continues to climbThe amount of email, as well as the amount of revenue that email isbringing in for businesses today, is continually rising. From the first quarterof 2009 through the fourth quarter of 2010, volume increases range from29 percent to 32 percent, while revenue increases are from 10 percent to23 percent. Volume and revenue increases year-over-year (2010 compared to 2009) 35% 32% 30% 29% 27% 25% 24% 23% 20% 15% 10% 10% 10% 7% 5% 0% Q1 Q2 Q3 Q4 Volume RevenueSource: Experian CheetahMailBased on a matched set of 130 clients from Q1 2009 through Q4 2010 Channel-crosser:To capitalize on the rapid growth of mobile email users, marketersshould strongly consider implementing a mobile messagingstrategy including mobile-commerce-enabled sites and emailacquisition through Short Message Service (SMS) campaigns.Page 34 | The 2011 digital marketer
  41. 41. Furthermore, consumers continue to spend a significant amount oftime checking their email. Seventy-seven percent of consumers accesstheir primary personal email accounts at least daily or more frequently,according to The Relevancy Group. While the majority of consumersmaintain multiple personal addresses, 27 percent of consumers overalldedicate an email account purely to receive email marketing messages.11Consumers are most likely to open emails containing promotionsand couponsA 2010 study of online adults12 indicates that consumers are most likely toopen emails containing promotions or coupons, news stories and linksto Websites. They are most likely to forward news stories, followed bypromotions or coupons and jokes. Likely to open Likely to forward Promotions or coupons 78% 55% News stories 75% 58% Links to Websites 73% 54% Newsletters 69% 39% Information about new products/Websites 69% 47% Jokes 68% 55% Online videos 63% 43% Podcasts 43% 24% Blog posts 42% 22% Links to online games/info about games 40% 26%Source: Experian Simmons Tip: Make it easy for subscribers to share the email with friends. Emails including Experian CheetahMail’s Refer-a-Friend functionality have been shown to greatly increase referral rates.11 The Relevancy Group and David Daniels, The Social Inbox: The Impact of Facebook Messages on Email Marketing, January 201112 Online adults: adults who spent one hour online in the past seven days doing something other than email An Experian benchmark and trend report | Page 35
  42. 42. Emails with refer-a-friend functionality Lift in total Lift in unique Industry referrals referrals Catalog 2.5x 2.3x Multi-channel retail 15x 14.6x Publishing 30x 25x Travel 5x 5x All industries 6x 5.6xSource: Experian CheetahMailFriends-and-family emails significantly outperform other typesof campaignsToday, most friends-and-family campaigns are not targeted, but insteaddistributed to entire customer files. Despite this trend, data from anExperian CheetahMail study13 indicates that the perception of friends-and-family offers being “special” continues. Specific findings in support of thisobservation include:• Customers engage with friends-and-family emails at a much higher rate than they do with promotional campaigns.• Friends-and-family emails have 43 percent higher open rates and 29 percent higher click rates than bulk promotions.• The exceptionally high open and click rates underscore the opportunity for companies to introduce new products and services to highly engaged customers through these emails.13 Experian CheetahMail, evaluation of the friends-and-family emails from 79 clients to non-friends- and-family bulk campaigns from the same businesses, July 2009 to June 2010.Page 36 | The 2011 digital marketer
  43. 43. Subscribers open and click on friends-and-family emails at higher rates than bulk promotions 25% 20.4% 20% 15% 14.3% 10% 5% 3.7% 2.9% 0% Total opens Total clicks Friends-and-family emails, promotions or campaigns Bulk promotionsSource: Experian CheetahMailHigh revenue-per-email results and strong transaction rates demonstratethe significant monetary value that friends-and-family messages canadd to any email program. Compared to standard promotional mailings,friends-and-family emails average 2.5 times higher transaction rates and85 percent higher revenue per email. Tip: To increase the potential of reaching new and existing customers who might not have received the initial email campaign, maintain sharing features in their usual location (i.e., forward to a friend, share) while also adding larger call-outs that enable sharing within the body of the email, near the offer. Consumers are very accustomed to sharing friends-and-family offers, so it’s important to make it easy for them to do so. An Experian benchmark and trend report | Page 37
  44. 44. Friends-and-family campaigns tend to generate an average of threetimes the referral rate of bulk promotions. Friends-and-family emails alsoproduce an average of twice the number of unique referrers, and an11 percent increase in the number of referrals made by each unique referrer(1.44 referrals for each unique friends-and-family referrer, compared to1.29 for bulk-promotion referrers). These metrics demonstrate the viralpower of friends-and-family messaging and supports the brandingpotential inherent in friends-and-family promotions. Friends-and-family emails are meant to be shared 0.04% 0.03% 0.03% 0.02% 0.02% 0.01% 0.01% 0.01% 0.00% Referrals Unique referrers Friends-and-family Bulk promotionsSource: Experian CheetahMail Tip: Friends-and-family emails should become part of your overall promotional playbook. These campaigns perform all year long — even during the fiercely competitive and discount-heavy holiday season.Page 38 | The 2011 digital marketer
  45. 45. Offers in subject lines are especially valuable for driving year-end revenuethrough email marketingSubject-line trends are extremely indicative of the email marketinglandscape in general. By looking at promotional mailings with offers inthe subject lines for August through December — the months whenemail marketing volumes are the highest — the following conclusionscan be drawn:• The percent of subject lines including an offer increases throughout the last few months of the year, mainly due to the holiday season. The percent of subject lines with offers increases during the holiday season 50% 43% 40% 37% 33% 32% 33% 30% 20% 10% 0% August September October November DecemberSource: Experian CheetahMailBased on promotional mailings of more than 360 Experian CheetahMail clients, August toDecember 2010On average, campaigns with offers in the subject line tend to have Tip: The holiday season is a great time to include the subject line. Ithigher transaction rates than emails without offers inoffers in youris subject lines. During the 2010 holiday season (October to December), important to remember that emails with no mention of an offer in thesubject may still have anoffersin the body of the message, however. campaigns with such offer had 40 percent higher transaction rates than campaigns with offers not mentioned in subject lines. An Experian benchmark and trend report | Page 39
  46. 46. • “% Off” and “$ Off” are the most popular single offer types in subject lines overall. During the holiday season specifically, “$ Off” can have significantly higher transaction rates, and combination offers can be particularly strong. “$ Off with Free Shipping” had the highest transaction rate of any offer type during the 2010 holiday season. “$ off with free shipping” in subject lines had the highest transaction rate of any offer type 0.25% 0.20% 0.20% 0.18% 0.15% 0.10% 0.05% 0.00% Pre-holiday HolidaySource: Experian CheetahMailBased on promotional mailings of more than 360 Experian CheetahMail clients, August toDecember 2010Travel alert: Travel companies should plan a strategic ramp-up of loyalty-based emails toward the end of the summer to maximize results. Loyaltyprogram emails, particularly those for the travel industry, tend to have highertransaction rates in August and September.Page 40 | The 2011 digital marketer
  47. 47. • While gift card offers are not always mentioned in subject lines, the trends seen in mailings with “gift card” in the subject line do show a nice boost, especially in the month of November. In November 2010, transaction rates were 0.55 percent higher for emails that promoted gift cards in their subject lines than they were in August of the same year. “Gift card” in subject lines peak in frequency and transaction rates during November 60 0.70% 0.64% 50 0.60% 0.50% 40 0.40% 30 0.30% 0.27% 20 0.20% 10 0.09% 0.04% 0.10% 0.09% 0 0.00% August September October November December SL per month Transaction rateSource: Experian CheetahMailBased on promotional mailings of more than 360 clients, August through December 2010 An Experian benchmark and trend report | Page 41
  48. 48. Holiday-related emails outperform standard promotional mailingsHoliday-related emails, before and on the celebrated dates, are awonderful way to engage with email subscribers. Most brands beginmarketing a holiday campaign early — many up to four weeks before theactual date. Promotional emails sent on actual holidays perform quite well,too, with transaction rates outperforming the “All Industry” promotionalbenchmarks. All promotional mailings on holidays: transaction rates 0.35 0.31% 0.30 0.26% 0.25 0.20% 0.20% 0.20% 0.20 0.15% 0.15% 0.15% 0.15 0.13% 0.13% 0.10% 0.10 0.05 0.00 as ly ay ng ay an een ay ay ay y ay da Ju tm D D id lD D vi D on w Fr gi s rs s of is rs ia lo e ks M er hr k or h he al tin a ac th 4t er C Ye H em ot en Bl Fa yb Th ew M M l C Va N Holiday “All Industry” promotional mailings benchmarkSource: Experian CheetahMailPromotional mailings of more than 400 industry-diverse clients throughout 2010The findings that follow, based on the 2010 holiday mailings of morethan 400 Experian CheetahMail clients across industries, will help emailmarketers plan their campaigns throughout the year by effectivelyadjusting timing and messaging around specific holidays.Page 42 | The 2011 digital marketer
  49. 49. New Year’s Day — Subscriber interest in New Year’s campaigns beginsto rise two weeks prior to the actual holiday. Total clicks and transactionrates peak on New Year’s Day, as well as for the six days afterward. Earlyadvertising via email can help consumers plan their spending. New Year’s Day — holiday subject lines and total click rates 50% 4.50% 3.9% 4.00% 40% 3.4% 3.3% 3.1% 3.50% 2.5% 3.00% 30% 2.50% 2.00% 20% 1.50% 10% 1.00% 0.50% 0% 0.00% 4 weeks 3 weeks 2 weeks 1 week Holiday prior prior prior prior + 1 week Percent of holiday subject lines Total click rate New Year’s Day — holiday subject lines and transaction rates 50% 0.14% 0.11% 0.12% 40% 0.09% 0.10% 30% 0.08% 0.08% 0.06% 20% 0.05% 0.04% 0.02% 10% 0.02% 0% 0.00% 4 weeks 3 weeks 2 weeks 1 week Holiday prior prior prior prior + 1 week Percent of holiday subject lines Transaction rateSource: Experian CheetahMail An Experian benchmark and trend report | Page 43
  50. 50. Valentine’s Day — Total clicks peak on the actual holiday, Feb. 14, untilFeb. 21. Interestingly, transactions peak one week prior. The data supportsthe assumption that many last-minute gift buyers could use remindersright before and on the holiday.Mother’s Day — Like Valentine’s Day and New Year’s Day, total clickstend to peak on the date of, as well as one week after the actual holiday.Transactions peak two weeks prior, indicating an opportunity to beginmarketing around that time frame. Mother’s Day — holiday subject lines and total click rates 45% 3.00% 40% 2.6% 2.50% 35% 30% 1.9% 1.8% 2.00% 1.7% 25% 1.5% 1.50% 20% 15% 1.00% 10% 0.50% 5% 0% 0.00% 4 weeks 3 weeks 2 weeks 1 week Holiday prior prior prior prior + 1 week Percent of holiday subject lines Total click rate Mother’s Day — holiday subject lines and transaction rates 45% 0.20% 0.18% 0.17% 40% 0.18% 35% 0.16% 0.14% 0.14% 30% 0.12% 25% 0.08% 0.10% 20% 0.08% 0.08% 15% 0.06% 10% 0.04% 5% 0.02% 0% 0.00% 4 weeks 3 weeks 2 weeks 1 week Holiday prior prior prior prior + 1 week Percent of holiday subject lines Transaction rateSource: Experian CheetahMailPage 44 | The 2011 digital marketer
  51. 51. Memorial Day — Total clicks peak at two weeks prior to the holiday,while transactions peak one week prior to the holiday and on the date itself.The data indicates a higher level of browsing before the holiday comparedto after. Tip: Because Memorial Day evokes thoughts of barbeques, outdoor gatherings and parties, it’s worth highlighting these types of items three to four weeks prior to the holiday. An Experian benchmark and trend report | Page 45
  52. 52. Father’s Day — According to Experian CheetahMail client mailings, theearliest occurrence of Father’s Day in a subject line was six weeks prior tothe holiday. Total clicks and transactions peak one week after the holiday,including the holiday itself.Thanksgiving, Black Friday and Cyber Monday — Total clicks peakat one week prior to each holiday, while transactions peak one week later,including the holiday days themselves. It is important to note that thepeaks occur after three to four weeks of consistent increase in subscriberresponse before each particular date. Thanksgiving, Black Friday and Cyber Monday — holiday subject lines and total click rates 80% 3.5% 2.96% 70% 3.26% 3.0% 60% 2.83% 2.5% 2.55% 50% 2.30% 2.0% 40% 1.5% 30% 1.0% 20% 10% 0.5% 0% 0.0% 4 weeks 3 weeks 2 weeks 1 week Holiday prior prior prior prior + 1 week Percent of holiday subject lines Total click ratePage 46 | The 2011 digital marketer
  53. 53. Thanksgiving, Black Friday and Cyber Monday — holiday subject lines and total click rates 80% 0.18% 0.20% 0.16% 0.18% 70% 0.18% 0.16% 60% 0.15% 0.14% 50% 0.12% 40% 0.10% 30% 0.08% 0.06% 20% 0.04% 10% 0.03% 0.02% 0% 0.00% 4 weeks 3 weeks 2 weeks 1 week Holiday prior prior prior prior + 1 week Percent of holiday subject lines Transaction rateSource: Experian CheetahMailChristmas — The earliest occurrence of Christmas or related holidayseason words in a subject line was 17 weeks prior to the holiday, accordingto Experian CheetahMail’s study. Total clicks for Christmas emails peakone week after the holiday, perhaps due to interest in post-holiday sales,while transactions peak three weeks prior to the holiday, in time forholiday delivery. Tip: Begin advertising Thanksgiving and Christmas sales earlier than November. This trend, reflected in subject lines, has proved to engage customers to click and transact. An Experian benchmark and trend report | Page 47

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