Personalization and the Future of Database Marketing - Michael Stich, Bridge Worldwide - 5-2010


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Personalization and the Future of Database Marketing - Michael Stich, Bridge Worldwide - 5-2010

  1. 1. Creating Relationships: Recognizing the Value of Database Marketing Michael Stich, Group Director, Strategic Planning
  2. 2. Michael Stich – Group Director, Strategic Planning, Bridge Worldwide  Currently provides interactive planning to clients. Focus areas: e-commerce, digital retail, analytics/measurement, mobile, social media, and relationship marketing.  Published author and featured speaker: E-commerce, the Digital Home, Home Networking, the Future of Broadband, The Asian Internet  Technology and Telecom Strategy / Marketing background (Dell, McKinsey, TI)  B.S. in Computer Engineering from Tufts University and an M.B.A. with Marketing focus from the MIT Sloan School of Management.
  3. 3. Bridge Worldwide - Key Facts Staff 290 Digital Professionals Founded 1979 Awards Services Strategic Planning, User Experience Planning, Visual Design, Technical Development, Social Marketing, SEO, CRM, Emerging Platforms, Account/Project Management Culture Top 25 Small Companies to work 4 years running 2006, 2007, 2008 & 2009 Cincinnati (HQ) New York 302 West Third Street 498 Seventh Avenue Suite 900 New York, NY 10018 Cincinnati, OH 45202 Main: 917.224.9573 Main: 513.381.1380
  4. 4. Bridge Worldwide – Our Difference
  5. 5. Database Marketing: Why Bother?
  6. 6. Consumers have unprecedented choice and control What I want, When I want it, Where I want it, In the forms I want, As much or as little, Filtered by my peers, Backed by expert opinion, Without unwanted interruption, And then I’ll share it with my “friends,” But don’t you dare tell a soul you know me.
  7. 7. Result: Marketers expected to respond – using data and personalization • Clients increasing their analytics resources across marketing and IT • Data quality control growing more important • Resulting Winners: those who know and focus on data reliability • Resulting Losers: those who fail in- market measurement validation
  8. 8. Database Marketing: The Basics
  9. 9. What Is Database Marketing? Database marketing is a form of direct marketing using databases of consumers or potential consumers to generate personalized communications to promote a product or service for marketing purposes. Database marketing emphasizes the use of statistical techniques to develop models of customer behavior, which are then used to select consumers for communications.
  10. 10. But the opportunity is much greater… Create an ongoing, 1:1 relationship with a large, diverse population
  11. 11. Why Do It? To Create a Relationship When to Build When Not to a Database Build a Database Consumer Segment Size Large, Heterogeneous Small, Homogeneous and Diversity % Online High Low Database Potential for Brand Marketing High Low Engagement is a way to create a personalized, Number of ongoing Communication Multichannel Single Channel relationship with Channels a large, diverse Trial, Loyalty, Consumer Care, population. Marketing Increased Usage, Cross-Sell, Mass Awareness Objectives Line Extensions Example Multibrand/Scale Promotion Single Brand Promotion
  12. 12. Best Practices
  13. 13. Database Quality (Over Quantity) • 80 For 20 Rule Applies • Budweiser: 1.2% of buyers = $170/year • Iams: 1% of buyers = $93/year Source: Catalina/CMO Council study of 1,300 brands
  14. 14. Brand Collaboration (1+1=3)
  15. 15. Segmentation and Targeting: Potential Ways to Personalize Behavioral Environment • New/returning user • IP address • Clicks • Country / population • Category affinity • OS / browser • Purchases • Screen resolution • Visits Existing data Time-based • Analytics • Time of day • CRM • Day of week • Demographics • Season • Psychographics • Recency • Frequency Traffic source • Organic search • PPC • Email • Direct • Display / iMedia • Affiliate
  16. 16. Personalization Through Increased Segmentation
  17. 17. One Voice Across Touchpoints (By Segment)
  18. 18. Watch-Outs
  19. 19. Don’t Spam
  20. 20. Respect Consumer Privacy
  21. 21. Who’s Doing It Well? Some Case Studies
  22. 22. Email Personalized by: As many as 7,000 unique • Demographics monthly email layouts • Product codes entered Research proves that • Rewards received personalization drives • Sweepstakes entered engagement. • Website activity • Time in program And, engagement drives sales.
  23. 23. Personalized Offers Drive Results • +100k users in first month, +600k today • Email open rate of 40% - vs. 16% industry average • 34% incremental volume - People who did not use newspaper coupons • Targeted emails result in 2x redemption • Further builds the P&G Everyday Solutions database • Kroger enjoys higher share on new P&G items
  24. 24. Nike Is Shifting Its Entire Marketing Model “We’re not in the business of keeping the media companies alive. We’re in the business of connecting with consumers.” - Trevor Edwards, VP Global Brand Management “If we can do something to benefit our consumers and serve the needs of athletes to perform better, they will return to our brand.” - Stefan Olander, Global Director for Brand Connections “Nike+ has become an indispensible service, giving runners a continued deep connection to our brand.” - Michael Tchao, General Manager for Nike Techlab
  25. 25. And Experiencing Strong Results Successfully defending against Adidas/Reebok and Under Armour. In its first six months, Nike+ helped drive an 8% increase in profit. CEO Mark Parker promised to grow sales 50% in the next five years.
  26. 26. But it’s turning “mass” and But it’s turning “mass” and “scale” on its head… “scale” on its head…
  27. 27. Emerging Trends in Database Marketing
  28. 28. Consolidation Underway: Islands Giving Way to Unified Views of the Customer • Google + AdMob Demographics, Life Stage • Omniture + Adobe Rebate Attitudes & Sampling Interests Activity • Nielsen + facebook + Catalina Web Site Syndicated Activity Data • comScore + Omniture • New media-planning tools from Promotional Transactional History Data audience measurement firms Media Predictive • Google measuring across Habits Models platforms…
  29. 29. Benefits of a Unified View Centralized, all-media view of the consumer More robust consumer data, the trusted source for targeting Action-driven system to enable 1:1 communications with consumer Flexible, real-time, targeted offers/messages delivered at moment of consideration Easy access to data and reporting to help marketers make informed decisions Scalability without significant increases in cost or resources Centralized data/list management for maximum cost-efficiency Analytic “playground” to support testing, scale opportunity identification, modeling & measurement SOURCE: TARGETBASE
  30. 30. So Where Is This Headed?
  31. 31. Unified Customer Intelligence Raises the Role of Analytics in Marketing SOURCE: FORRESTER
  32. 32. Brand management will shift focus TODAY TOMORROW Hub and spoke Connected nodes Command and control Listen and respond Militaristic Cooperative Mass messaging Two way dialog Sales in the channel Sales everywhere and integrated Regional Truly global Trial and awareness Connection and retention
  33. 33. The value equation for database marketing MEANING RELEVANCY VALUE To move them Connect with When, where and beyond consideration consumers where how they want to to purchase and they are connect with you advocacy
  34. 34. Database Marketing in 2020 • Simplified, natural, universal access to unified data • Data structures: from developer- defined to user-defined • Data values: from dynamic to real-time BUT: • Increased automation = increased volatility!
  35. 35. Summary • Consumers Demanding Personalization, Marketers Have The Tools • Data Can Be Used For Help OR Spam – Be Careful! • Great Examples: Coke Rewards, P&G eSAVER, Nike + • The future: More meaningful and relevant experiences, delivered by more integrated, dynamic and automated database marketing
  36. 36. Thank You! Michael Stich Group Director of Strategic Planning Bridge Worldwide, a WPP interactive and relationship marketing agency, was named one of the Top 25 Places to Work in America in 2006, 2007, 2008 & 2009 by the Great Place to Work Institute. Bridge Worldwide Address and Map ph 513.618.6788 cell 513.545.2627 fx 513.381.0248 Email | LinkedIn | Twitter | Facebook | SlideShare | Bridge Worldwide Home Page | Marketing With Meaning Blog