Driving Customer Engagement Through Multichannel Marketing

Driving Customer Engagement through Multichannel MarketingFeb 2010

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Agenda• Today’s consumer & marketing environment• Implications & issues• 4 strategic opportunities• Payoff & roadmap

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The consumer is boss• Unparalleled choice & information• Multichannel, with or without you• New attitudes: frugality, sustainability, activism

7% savings rate reduces US consumer spending by $1 trillion

182,000 new consumer products /yr

170 million shop online in US

$622 billion global ecommerce

1.7 billion Internet users worldwide

4 billion handsets worldwide (1B browsing)

130 TV channels in avg US household

OOH innovation (car, plane, gas station)

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Marketing undergoing enormous change• Drive for accountability in a budget constrained world• Technology is a game changer

– Innovation in targeting, versioning & analysis– Media unlocked & abundant– CRM becomes CMR (ex: Pepsi)

• Direct share growing. Boundaries blurring. (ex: P&G)

48%

58%

59%

2003

2009

2010

Digital/Direct Share of US advertising

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But, substantial barriers gate progress…• Spend mismatched to consumption driven by legacy media planning practices

• Spend mismatched to customer value driven by outdated success metrics

• Complexity in execution, compliance & attribution

• Who owns the customer?

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…yielding suboptimal results• Traditional advertising is less effective• Legacy media suffers• Marketing platforms being overrun

$112 billion wasted advertising in the US every year

85% of brands stagnant or declining

-21% NPS

Advertising = FALSE

-18% decline in US above the line advertising in 2009

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Change May Be Necessary

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4 strategic opportunities

• Remix media to consumer consumption

• Invest to enable recurring revenue and customer engagement

• Discipline in improving media effectiveness

• Recognize customer information as a key asset (really)

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Mobile42% look up product information in the store. 28% purchase online if not available in the store. 4.5B text/day/US. 2.3B app downloads/yr

Geo-marketing. Location finder. Coupons. Alerts.

Integrate email/display

Metrics High Payback Applications

Display2X purchase lift v. search. Equal to TV purchase lift

Just 5% brand advertising is online

Audience-based targeting & versioning

Intent-based (re)targeting.

Social 2-4x link performance v all othersCultivate social influencers in new product launch

Cross-sell by friends products owned

Email$44 revenue per $1 invested. 16X profits, targeted v blast

42% buy offline in response to email (11% buy 4+)

247B emails/day worldwide

Cultivate customer interactions. Newsletters/alerts

Integrate mobile, social, e-commerce

Target by clicks, purchases, profits, social influence.

InteractiveTV

15MM households with iTV – 25MM by end 2010

7% CTR – minutes of engagement.

Creative versioning - see their story

Order product with remote

Request samples/coupons.

Strategic Opportunities1. Remix media to consumer consumption

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Strategic Opportunities

Recognition & personalization create differentiation opportunities

Real-time recognition – registration, cookies, IP, linking

Dynamic personalization – versioning. offers. testing

CMR Preference centers. Infocards

4-15X returns possible

Digital product opportunitiesMany products are digital – content, handsets, eReader

Leverage messaging opportunities. Education. Service. Offers.

Create subscription businesses. Content anywhere

Liberate/distribute content. Let customers distribute for you.

Distributed commerce. Do business wherever your customers are

Apps/widgets. Brand engagement. Consumer insights

2. Invest to enable recurring revenue & customer engagement

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Harvest overlapping & interrelated effects

TV was the tribal camp fire – now just another light source

Attribution Framework unlocks media effectiveness

Reach with certainty80% online advertising fails to reach intended audience

Reach just your audience – 200M online, 86M email, 40M mobile

3-5x revenue/ad dollar.

RelevanceRight audience (and just them)

Right message (content versioning)

Right time (trigger-driven).

Engage in Surround Sound. Cross media institutional memory

3. Discipline in improving media effectiveness

Combine direct skills with digitalLeverage cross-channel insights – customer behavior & value

Leverage direct methodology – targeting, testing, measurement, etc

Leverage cooperative ventures – list/data exchange.

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Coordinated multichannel marketing information

Just 32% of marketing decision makers understand their customers multichannel behavior…yet multichannel buyers are 4-5x more profitable

Invest according to DVOC (differentiated value of customers)

Value varies by purchase volume, frequency, loyalty, NPS, service costs

Measure customer value. Consistent segments & metrics

Invest based upon predicted impact on CLTV

Store/utilize new forms of dataNew behavior - social conversations, online footprints, set top box data

New preferences – explicit/inferred – product, media, channel

Integrate cross-media, cross-channel insights

Harvest – measure & recalibrate

4. Recognize customer information as an asset (really)

Dig deeper (don’t settle)Mythical average customer. Interaction history, brand advocacy, interests & attitudes, life stage, ethnographic variances Changing market research role. Seeing v asking. Census v panel

Harvest – measure & recalibrate

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Sound obvious?“… too many shortcomings to be seriously considered as a means

of communication. The device is inherently of no value to us.“

Western Union memo on potential for the telephone, 1876.

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"We don't like their sound, and guitar music is on the way out.“

Decca Recording Co. rejecting the Beatles, 1962.

Sound obvious?

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“Needs a stronger supporting cast.““Almost totally free from humor”

Audience testing for Seinfeld, 1989.

Sound obvious?

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Payoff & roadmapKey payoff principles…and Acxiom multichannel investment focus

1. Correlate specific customer behavior to specific marketing investment

Enable cost-effective integration & scale via MarketEdge & AbilitecDigital

2. Recruit, recognize & harvest explicit & inferred relationships across channels

Integrate & optimize first party relationships via Impact

3. When consumers are not directly engaged with your brand, ad media relevance is key to reengagement

Integrate customer insight into digital targeting & creative via Relevance

4. Invest & engage proportional to customer value.Design & execute high performing marketing programs

5. Optimize customer value at every interaction Enable real-time decisions that improve CLTV

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Payoff & roadmapA closer look at the differentiated value of customers

30% of customers deliver the majority of profits

50% Add nothing

20% Cost companies money

SAS

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Payoff & roadmap

Cadillac

AllstateHershey

American Express

PersonicX Consumer Segments PersonicX Consumer Segments


UV

Inde

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V In

dex

UV

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V In

dex

A look at site traffic at world class brands

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Shopped at Banana Republic

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Ordered from BestBuy.com

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Ordered Flowers online

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Shopped at Ann Taylor

UV

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xU

V In

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UV

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…and consumer shopping behaviorPayoff & roadmap

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MSN96 MM UV’s

AOL70 MM UV’s

eBay56 MM UV’s

Yahoo148 MM UV’s



UV

Inde

xU

V In

dex

UV

Inde

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V In

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Acxiom, comScore

Profile of traffic is much different at major online sitesPayoff & roadmap

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UV

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UV

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PersonicX Consumer Segments PersonicX Consumer Segments0

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ABC

NBC

FOX

CBS

…and at broadcast networksPayoff & roadmap

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80% of online advertising fails

to reach its intended audience

Payoff & roadmapTraditional media buy = FAIL on a massive scale

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Payoff & roadmap

DVOC-led Traditional VarianceCampaign CostImpression Volume 37,500,000 100,000,000Cost per Thousand 8.00$ 3.00$

Total Campaign Cost 300,000$ 300,000$ -$

Revenue GeneratedRevenue/conversion 500$ 250$ Purchase rate 0.020% 0.010%Total Purchases 7,500 10,000

Total Revenue 3,750,000$ 2,500,000$ 1,250,000$ 50% higher

Total Revenue/Ad Dollar 12.50$ 8.33$ 4.17$ 50% higher

CLTV 4,000$ 1,250$ Total CLTV Impact 30,000,000$ 12,500,000$ 17,500,000$ 140% higher

PremiseConcentrating impressions on high value visitors…>Enables higher conversions (message is more tuned) >Enables higher revenue & CLTV/ad dollar (visitors buy more)

Concentrate on just your audience. Sample ROI Model

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Payoff & roadmap4x “orders per thousand”– Connecting print & digital

3x applications; 5x online revenue; same head count– Connecting call center & digital

2x online bookings– Connecting outbound & website

7.5x website spend– Connecting mobile & email

17x response– Connecting TV & offline

$200M revenue / $4.5MOpEx savings – Connecting call center & digital

$100M/yr EBIT impact– Multichannel connection

9-figure/yr revenue impact– Multichannel connection

Huge payoffs are achievable

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What could have been

Portable Music

owned

but couldn’t become

On-Demand Info

owned


Movie Inventory

owned


It’s not enough…A great customer baseA great productA great strategyA great team

Darwin always wins.

Will you?

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The global interactive marketing services company

Thank you.

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Driving Customer Engagement Through Multichannel Marketing

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