ThoughtStream

What a Week It Was!

Wed, 30 Sep 2009 13:47:52 -0500

Last week was a momentous one for ChoiceStream after it was announced that billion dollar online retailer Zappos.com has chosen ChoiceStream for personalized product recommendations for its shoppers. Then it was time for the Shop.org 2009 Annual Summit in Las Vegas where positive vibes were the norm — not the exception (see the accompanying photos).

Shop.org 2009 proved that online retail has survived — and even thrived — the economic storm and is beginning to feel reinvigorated as the holiday shopping season approaches. One of the more compelling stats underscoring this sentiment is that Shop.org’s organizers confirmed registered attendees were up 10% year-over-year from 2008.

At ChoiceStream’s booth, we saw a steady stream of interested retailers seeking to learn more about how ChoiceStream RealRelevance® Recommendations and Advertising solutions are increasing average order size, conversions and revenues for leading retailers while creating a relevant experience for shoppers that builds loyalty over time.

One of the highlights of the week was a guest appearance by Zappos.com’s Director of User Experience Brian Kalma where he discussed how vital personalized product recommendations are for Zappos.

Brian noted that not only do personalized product recommendations create a better user experience but they also drive measurable lift in incremental sales. Brian pointed out that recommendations driven by ChoiceStream have helped Zappos see a “nearly 30% increase in pages viewed per visit, a 12% to 13% click-through rate on recommendations and nearly a 3.5% lift in sales.” And that’s with recommendations deployed on only 40% of the site for a mere four weeks!

It was clear retailers both large and small are committed to providing a more personalized experience for their shoppers in 2010. And, as the “largest and longest-standing of the ‘pure-play’ personalization engines,” (according to Forrester’s Sucharita Mulpuru) ChoiceStream is uniquely poised to help retailers succeed by delivering personalized product recommendations and advertising that ultimately increase revenues!

One final note — many retailers said personalization was on the roadmap for the future — but it’s not too late to deploy personalization to positively impact holiday sales this year! Contact us to find out how.

ChoiceStream's marketing and advertising team celebrate with OverStock's Rob Gallaugher (center) and Nick Taylor (right)

Brian Kalma of Zappos (in checked shirt) details the positive results from personalized product recommendations using ChgoiceStream RealRelevance

Another Lucky Winner at Shop.org with ChoiceStream's Amy Vener

In-Booth Candid Photo (l to r) - Bryce Neal (ChoiceStream), Derek Mellencamp (Dell) and Bruno Sarda (Dell)

Some of the Zappos team savor their winnings at ChoiceStream's booth during Shop.org

Zappos Brian Kalma discussing personalization with a representative from Gap Direct

Don’t Gamble on Your Personalization

Mon, 21 Sep 2009 08:00:00 -0500

Choosing a personalization provider is a big decision. Find out why Zappos.com and other Top 50 retailers choose ChoiceStream. Stop by our booth (#114) at Shop.org at the Mandalay Bay Resort & Casino in Las Vegas and meet Brian Kalma, director of user experience at Zappos, and other leading retailers.

And don't miss our ChoiceStream Chip Giveaway! We'll be giving away hundreds of cash prizes. No purchase necessary. ;-)

See you in Las Vegas. And remember...what happens in Vegas, appears on YouTube. So, be careful out there...

Shining A Light On Performance Display Advertising

Wed, 02 Sep 2009 10:23:20 -0500

The following post was originally published as a byline article on Adotas, a premier news publication focused on the Internet advertising and media industry.

As a reader of ADOTAS, you’ve no doubt heard the recent buzz around performance display advertising.

A striking departure from classic ad campaigns measured via clicks and impressions, performance ad campaigns rely on metrics that really matter to retail advertisers, namely conversions and revenue. To boost those metrics, today’s retailers are applying recommendation and targeting technology to display ads. With the in-market relevance of search and the reach of display, this type of performance display advertising is quickly becoming the preferred way to spend ad dollars — and new ‘performance metrics’ the only way to truly measure ROI.

There have been several ADOTAS articles recently that brushed the subject of performance advertising (articles by Zephrin Lasker and Chris Neuner come to mind) but it’s time to go a little deeper into what actually makes this type of display ad perform better, how best to measure its effectiveness and why advertisers need to welcome new attribution models. The holiday shopping season is nearly upon us – there is no better time than the present to get up-to-speed and start testing to find what works for you.

Contrary to what some might say, better display ads are not all about size, better placement and clever campaigns. Grabbing attention is only half the battle. The other half – the half that drives sales—is taking those creative display ads and making them relevant to each consumer who views them. What good is a perfectly branded, perfectly placed, creative ad if it’s for a product the consumer doesn’t need or want?

Regardless of the negative attention on behavioral targeting, research shows that consumers do want personalized recommendations to help them with their purchase decisions. The best performance solutions on the market today are the ones that merge personalization technology with display ads. These solutions rely on actual shopping data from advertisers to create ads with immediate, in-market relevance for each individual shopper. As more shoppers go online to look for deals and to research their purchases, e-retailers (Overstock, Zappos) and multichannel retailers (JC Penney’s, Staples) will look to this breed of technology to drive conversions and boost their sales both online and off-line.

The case for performance ad technology is clear, but it’s not only about finding the right performance solution. There are two other key factors that advertisers need to embrace in order to truly make an impact on ROAS:

Advertisers must make better use of shopping data to learn from every interaction with consumers. To capitalize on performance technology, you need to really understand each shopper’s tastes and preferences by analyzing all of the behavioral and shopping data you have available. That includes purchase data (both online and in-store), loyalty card transactions, online click and browsing behavior, etc. You’re missing a huge opportunity if you’re not learning from every engagement a customer has on your site, in your store and with your brand. It’s that precious data that enables personalization and creates unique occasions to purchase for each shopper.

Advertisers must use more robust performance metrics and models of attribution. Advertisers that focus solely on traditional metrics like clicks and viewthroughs are missing the big part of the revenue picture. Those metrics do impact ROI; but there are also other, less direct, metrics that are just as important. While every campaign should stand on its own in terms of direct performance metrics, understanding the indirect impact of display advertising is critical to making the best investment decisions when allocating dollars.

Quantifying metrics such as an ad’s impact on search engine traffic, social media buzz and message boards are all important in valuing ads correctly. For example, according to a recent study by Forrester Research, almost as many Internet users respond to online display advertising by performing a search on a search engine (27%) as by clicking on the ad itself (31%). This finding speaks to the symbiotic relationship between the two channels, and the power of display advertising to boost search engine traffic. If marketers are going to invest in online display, they should consider the broader impact of their campaigns to help them track their full value.

Unfortunately, this type of comprehensive attribution tracking is not the norm for online display advertising. These metrics can be hard to measure, but they’re not impossible. Online advertisers need to understand the value of measuring immediate, ad-specific actions (e.g., clickthroughs) as well as in-direct behaviors (e.g., performing an ad-related search on a search engine or message board). This will help advertisers come up with a system that provides correct attribution to their web marketing initiatives across the board.

There have been a lot of changes this year in the industry – it’s great to see performance-based advertising help advertisers go beyond the click and start paying attention to what actually drives results. The next steps are to ensure that we use all the data available to us to put the right products in front of the right shoppers and to fine-tune revenue attribution so that it provides a more comprehensive view of the impact of display ads. Once we do that, we’ll all be seeing display advertising in a whole new light.

Measurement for Today's Multichannel Retailers

Tue, 25 Aug 2009 14:44:43 -0500

Pre-shopping online before buying in-store is a common consumer behavior that has grown rapidly over the last few years. According to BIG Research, 89% of consumers are doing this on a regular basis. It's also true that consumers who pre-shop online and buy in-store spend more overall than their counterparts who only shop online or in-store, but not both. Recognizing this, many multi-channel retailers are using the Internet to drive true sales performance. In this new ROBO (research online, buy offline) reality, the retailer's online advertising initiatives and web site activity plays a very important role in influencing the eventual in-store purchase.

Unfortunately, though, the ability to measure the impact of ROBO on revenue has not caught up with consumers' use of this practice. The success of this interplay cannot be measured solely by click-through rates, online conversion rates or online average order size. And because there isn't an established way for retailers to quantify the impact of ROBO behavior, retailers' marketing budgets are often allocated inefficiently, where too much is allocated to programs that don't produce results and not enough to programs that actually work. Once accurate ROBO measurement tools evolve and the marketing mix is optimized for overall company performance, we are going to see even bigger spending differences between the multi-channel and single channel customer.

With a better understanding of multi-channel attribution, there is a new opportunity for retailers to drive growth for their overall business through the use of personalization technology. With retailer's looking more holistically at their online activities, personalization technology has a big role across many consumer touch points and purchase channels, both online and in-store. When a large traditional retailer is able to use all kinds of aggregated consumer data (online, in-store, 3rd party) to provide their consumers personalized product recommendations in email, banner ads, catalogs and direct mail, on the web site and in the store at the point of sale, that retailer has a true 360 degree relationship with their consumers.

This kind of marketing is happening now. The faster the measurement capabilities catch up with the practices, the more productive those marketing programs will be.

Re-building Your Team: Display Advertising in the Marketing Mix

Mon, 13 Jul 2009 13:41:09 -0500

Note: The following blog submission was contributed by Range Online Media's VP of Strategy & Media Dustin Engel. Dustin will be presenting a Webinar on Thursday, July 16th with ChoiceStream's Cheryl Kellond entitled "Attribution: Proving Online Display Ads Drive Sales for Retailers".

As an avid professional basketball fan, I am watching the frenzied free agent market and teams looking to put the right pieces together to make a run at the NBA championship next year. Disclosure: I am an avid Lakers fan since birth so I wish all of the other teams the best of luck.

It does make me think about our industry though and how the NBA has a big edge. The role of each player is very tightly defined and the amount of statistics on each player and how they affect the team performance when they are on the court is a huge edge for General Managers trying to get ahead. In the online advertising industry, the majority of advertisers tend to focus on the last ad (87% of advertisers according to a 2008 Jupiter Research report). This is the equivalent of basketball statisticians only looking at who threw the ball in the basket. No assists, no second chance points, and no turnovers. Can you imagine the job of a basketball General Manager if that's all they tracked? It would be a guessing game with big leaps of faith on where to spend their budgets...wait, this sounds familiar.

The question that plagues online marketers is "how do I know which marketing activities are generating results if I'm only looking at what puts the ball in the basket?"

There are many answers to this question, but they all center around the concept of attribution — that is the exercise of understanding the proper valuation across your "team" of advertising to make the most of your entire marketing mix. It is about collecting the right data and making that information actionable. It is about focusing on the most measurable and ROI-friendly activities without starving your upstream channels.

Take display advertising as an example: I've been in the online media business for more than a decade, and the potential for display ads is still largely untapped — especially when you look at how display ads interact with other marketing channels and how the emotional connection opportunity in display ads can not only increase the education level of the consumer in regards to the brand...but also intent.

Recent research by the Online Publishers Association, in conjunction with Comscore, in a presentation entitled "The Silent Click: Building Brands Online" (PDF), underscores the power of display ads have on driving sales:

18% of consumers actually search on an advertised brand while nearly 30% visit the advertisers site as a result of seeing branded display ads;
Branded display ads actually improve advertiser site engagement as consumers spend more time on those sites;
Consumers exposed to display ad campaigns spend on average 7% more than those consumers not exposed to online display ad campaigns.

Furthermore, my colleagues at Range Online Media's parent company, iProspect, recently released a study that showed that more than two thirds of online users respond to display ads in ways other than clicking on the banner.

So, there are some of compelling reasons why display ads are getting a closer look these days by smart marketers. If you're out there re-building your team, this is the free agent you can pick up to play a variety of roles in your marketing mix.

I'll be hosting a Webinar on July 16 with ChoiceStream's Cheryl Kellond on the subject of online display ads and how smart online marketers can use actionable attribution, to determine how each advertising source, campaign and individual ad impacts your bottom line by properly assigning the conversion credit across the series of ads that contributed to a sale or conversion. If you seek to gain a better understanding of how to create an attribution model that works for your unique business goals, or are even just looking for case studies to prove to those in charge of budgets how intricate yet actionable the new media landscape is, I invite you to attend.

Thickening the Silver Lining

Mon, 22 Jun 2009 17:26:18 -0500

This year's Internet Retailer Conference in Boston left me nostalgic, proud and in need of more shiny stuff (don't worry, I'll explain). On the plane ride home, I thought about the journey that e-commerce teams in large, multi-channel retailers have taken the past ten plus years. Starting back in the late 90's, we were a rogue group of innovators with some great ideas about a new shopping channel accessed from the ease of a consumer's couch, then quickly became the group that 'wanted more resources,' to now — a team of seasoned executives with power but still separate from their store counterparts. Today, e-commerce teams have successful lines of business and are more integrated into the overall retail organization than they have ever been.

Even with all this progress, multi-channel retailers are in a financially sensitive situation given the state of the economy and the impact that it has had on consumer spending. eBay's SVP and GM of North America, Stephanie Tilenius , shared in her keynote address last Tuesday that many retailers have been reporting negative in-store sales growth, but are seeing continued positive growth in their e-commerce channels. Recent numbers from Gap, Kohl's and others confirm this trend.

And while the online growth story bodes well for all the hard work and smart decisions these teams have exhibited over the years, the reality is that e-commerce still only accounts for 3.5% of overall retail sales in the US. Consumers still prefer to make purchases in actual stores.

Let's use an analogy to help bring this multi-channel evolution to life visually. Picture the proverbial silver lining. Its thin shimmery metallic material surrounded by a much larger volume of less shiny material. So while this lining of e-commerce growth is thin — less than 5% of the whole package of retail sales — it is the layer with the most shine and sparkle.

At the show this week, speakers and panelists focused their remarks on the technology and innovation fueling the growth of the e-commerce channel. But, what if the attitudes and aptitudes being applied to e-commerce solutions directly impact online pre-shopping and influence the decisions made by those shoppers who prefer to buy in-store? Will the online teams show their counterparts in the rest of the retail organizations how to communicate with consumers online at each stage of the buying cycle and attribute purchases – in-store or online – to the right campaign? What would this look like? Isn't it possible to leverage the silver lining online marketers created to reverse the current trend of declining in-store sales?

WOWed by Zappos

Thu, 11 Jun 2009 14:36:36 -0500

Yesterday we had the incredible good fortune to host Alfred Lin, Chairman and COO of Zappos, technology guru and ChoiceStream advisor Esther Dyson , Joe Chung of Allurent, Ed Macri of CSN Stores , and Harvard professor Richard Zeckhauser . This diverse group launched into an insightful discussion about trusted brands using what they know about a consumer's preferences to improve the consumer's every interaction with the brand — for instance, personalized recommendations while shopping, targeted offers in email, and advertising that gets noticed not because of its size or flash, but because of its personal relevance. We shared our visions of the future, and debated the logic of getting there from here — how consumer demand for relevance will (or won't) move brands to pool their information to benefit consumers, how brands will communicate their policies on data to their customers, and Esther's favorite — giving control to the consumer so when she's in market for a product or service, brands can readily find her and bid for her business. No evil in this room — everyone recognized that consumers are in the driver's seat.

This visit was made even more memorable when Alfred spoke to all of ChoiceStream's employees — at what we called our first 'All-Feet' meeting, in honor of the visit from the biggest shoe retailer in the world, Zappos! At Zappos, they emphasize delivering WOW through service — going above and beyond what's expected — and there is no question that this core company value at Zappos (among 10 in all) contributes to the company's success.

A lot has been written (and tweeted) about the culture Zappos has created, and people want to know the secret. I think what impressed all of us yesterday was the simplicity of the goals Zappos created years ago — break the billion dollar sales mark and be recognized as one of the best places to work. Zappos achieved both before their 10th anniversary last month.

When Zappos was founded 10 years ago, industry analysts and pundits predicted the certain demise of the start-up determined to sell shoes over the Internet — after all, 'Who would ever buy shoes online?' Zappos decided people would buy with the right kind of service. If shoppers could easily buy, try, and return, then shopping for shoes on the Internet — or for apparel of any kind — could become as commonplace as buying books, music, or electronic gear. Well, $1b in sales and millions of pairs of shoes later, it turns out a lot of people would, and do.

Alfred talked about how Zappos' culture of a relentless focus on delivering WOW through customer service helped the company prove the naysayers wrong. The focus on service permeates everything Zappos does—from how they train their employees, to their call centers and shipping practices, and everything in between.

Alfred's talk was a great reminder for ChoiceStream to strive for WOW in every interaction with our customers and to keep improving our technology to put the WOW in the personalized experiences our customers are creating for their shoppers. 'Good enough' is never good enough. Not for Zappos. And, definitely not for ChoiceStream.

We look forward to working with this first class team. Thanks Zappos!

MITX Award Finalist: Online Advertising's Not Just a West Coast Sport Anymore

Tue, 02 Jun 2009 16:06:27 -0500

We recently found out that our new display advertising product is a finalist for the 2009 MITX award for excellence in online advertising. Companies were evaluated based technical merit, scalability and innovation among other criteria.

We're really excited about being recognized — especially since our product is a relatively new entry in a pretty competitive marketplace. It gives us a chance to promote the exciting innovations going on in advertising technology out here on the 'other coast,' in Massachusetts. (Forgive me for the 'coast complex' — it stems from my years of playing volleyball on the eastern seaboard.) And most importantly, it gives us the opportunity for a shout out to our team, which has been working on perfecting personalized product recommendations for 9 years now, long before the technology was considered the next big thing.

Kidding aside, we're proud of our team here and the work they've been doing. The award ceremony — where the winners will be announced — is on June 16th in Boston. Wish us luck!

Attribution in Display Advertising: We Can Do Better

Fri, 15 May 2009 12:03:28 -0500

I was starting a blog post in response to John Squire’s recent MediaPost article about attribution tracking and Coremetrics’ new Impression Attribution product when I ran across this survey data from an iProspect study:

What I like about this study is how it takes a holistic view to measuring display ad attribution. It doesn’t just measure clicks and view throughs; it also measures the searches an ad generates on search engines, social media and message boards. Unfortunately, though, this type of comprehensive attribution tracking is not the norm for online display advertising.

One of the hardest things about driving a new solution in the display advertising space is the varying degree of expertise and sophistication around attribution tracking. It amazes me how an industry that has tried and true models around attribution modeling for TV and outdoor advertising does not have even a basic set of agreed upon best practices for measuring the effects of display advertising.

We recently had some disagreement on my ad:tech panel around the value of display advertising as a customer acquisition tool. I realized that the argument came down to how the different panelists were attributing value. Some were using simplistic ‘last click’ based tracking which is hard for networks to perform against and which, in turn, pushes networks to ask for attribution around view through conversions. And we’ve all seen cases where too much focus on view through conversions has led to some shady practices, as David Kopp and I discussed in our recent Retargeting Renaissance webinar.

In far too few cases are advertisers working with their networks to look at the broader effects of their display advertising, beyond clicks and view throughs. Even fewer are running controlled A/B testing that measures display advertising’s impact on search the way the iProspect study does.

And that’s really too bad, because there is a proven, measurable link between display ads and search behavior as illustrated not just by the iProspect research, but also by a robust set of studies done by Yahoo! a couple of years ago. That research showed that users exposed to display advertising demonstrated:

⇒ 26% increase in trademark search
⇒ 60% lift in clickthrough rate on search results
⇒ 35% lift in conversion rate after clicking on search results

It’s true that these metrics can be hard to measure, but they’re not impossible. If we, as an industry, can measure the revenue impact of roadside billboards and 30-second TV commercials, we can surely figure out how to accurately measure online display advertising attribution.

I’d love suggestions as to best practice articles and studies around attribution tracking. I am also in the process of lining up a webinar on the topic, pulling some industry expects into the fold with very practical, prescriptive and actionable advice for online marketers. Stay tuned.

Conversion Success Stories

Wed, 29 Apr 2009 11:43:11 -0500

It was great being at ad:tech last week where I was on a panel called ‘Conversion Success’ along with execs from Overstock, Sketchers, and Optiem. The panel was awesome and, as always, it was exciting to see what’s new and different in ad technology. For anyone interested in learning more about the Conversion Success panel, you can download a PDF of my presentation.

Happy to participate in Zappos culture

Mon, 27 Apr 2009 16:20:18 -0500

Last week I had the pleasure of touring the Zappos headquarters in Las Vegas and seeing first-hand how the company prioritizes its culture and employees. There is no debating that Zappos is killing it – more than $1 billion in online revenue, an impressive growth plan, a new standard of customer service and a social media strategy that every retailer wants. What might not be so obvious is how much fun they’re having in the process.

Recently, Zappos received one of those powerful Blendtec blenders in the mail. The Zappos team was quick to conduct their own “will it blend?” research with jolly ranchers, teddy bears and the like. During my visit, I was inspired to up the ante a bit and donate my iPhone to the cause. Let’s face it – we’ve all been driven to the point of destroying the choke-hold our mobile devices have on us. This presented a perfect opportunity for me to fulfill a guilty pleasure and join in on the Zappos fun.

I’ve been inside lots of companies and Zappos is the real deal. As far as I’m concerned, they’ve got this culture thing figured out – they use social networks to listen to their customers, promote transparency and communication among employees and foster an environment that is innovative, collaborative and fun. While, it’s getting a bit expensive for me to continue meeting with the Zappos team – last visit resulted in my American Express landing in the blender – it’s 100% worth it to see that kind of energy and passion drive a company and I look forward to working with them for a long time.

Too Much Room for Interpretation in the FTC’s Privacy Guidelines

Fri, 17 Apr 2009 11:10:19 -0500

As most of you undoubtedly know, the FTC recently issued a report that finalizes its 2007 draft of Self-Regulatory Principles for Online Behavioral Advertising. The document provides privacy and security guidelines for advertising that targets individual consumers based on their searches, Web site visits, page views or other Internet activity.

The document has generated a lot of controversy as advertisers, agencies, media pundits and marketing consultants analyze it from every conceivable angle. In many cases, the controversy seems more spectator sport than hard analysis based on fact; but there are some areas of the new report that should give online advertisers pause -- even those that are not technically using personally identifiable information (PII) to target their ads.

Among a number of concerns with the new guidelines, two in particular rise to the top in prominence. The first major concern is the broadening of the scope of the guidelines. Traditionally, the FTC saw its mandate with respect to consumer privacy as providing guidelines for the safe and secure use of PII online. PII was defined as a user’s name and address, social security number, or other data that could easily and directly identify a unique individual.

The new guidelines have dramatically broadened the scope of that mandate by stating that the traditional distinction between PII and non-PII should no longer determine whether or not the privacy guidelines apply. The FTC cites the increased use of static IP addresses as an example of non-PII data that could compromise privacy. The FTC notes that the widespread use of static IP addresses (as a result of the transition to Internet Protocol v6) will make it possible to identify individual users from non-PII data. As a result, the report maintains that *any data* (PII or non-PII) that is collected for behavioral advertising and could be associated with a specific user or with a specific computer or IP address is covered by the report’s guidelines.

Broadening the scope of the guidelines to include what was traditionally considered non-PII has the potential to make a whole new class of advertisers subject to the guidelines. In fact, this could one day include advertisers who are not personalizing or targeting their ads and in turn require their unnecessary adherence to these guidelines.

The second major concern regarding the new guidelines centers on the implementation requirements surrounding ‘notice’ and ‘choice’. While the report pays great attention to the need for clear notice and choice, it fails to offer specific information to help advertisers figure out how to achieve them. For example, the report explicitly declines to take a stand on whether choice should be opt-in or opt-out. Instead, it offers the dismayingly unhelpful guideline that it should be “clear, easy to use, and accessible to consumers.” This abstract advice is open to broad interpretation, which may result in widely varying policies from one advertiser to the next and leave those advertisers open to the possibility of inadvertent violations of the FTC Act.

In addition, the FTC encourages advertisers to experiment with alternative methods of providing notice and choice in an effort to further best practices. Unfortunately, and fatally, there is no safe harbor for such experimentation and therefore no real benefit, only increased risk, to being on the cutting edge and experimenting with novel methods of providing notice and choice.

The guidelines outlined in the FTC report are incremental steps toward furthering self-regulation, but to be truly useful--and widely adopted--I believe that they need to be more specific. The Internet, by its nature, is fundamentally self-regulating. Those companies that succeed in providing a transparent exchange of value will prosper and establish best practices and model self-regulatory guidelines; those that are not transparent or do not provide value will fail. More detailed guidelines will set the boundaries within which those market forces can efficiently and effectively play out.

Personalization Beyond the Web Site

Wed, 01 Apr 2009 10:36:39 -0500

ReadWriteWeb is currently doing a great series on recommendation engines. They started with an overview of the market and a guide to recommender systems, and have since moved on to look at individual vendors in the space—from big players like Amazon to startups like Jinni and Mufin.

All the activity in the personalized recommendation space, and the attention being paid to it, is a great thing for the industry and for consumers. Innovation thrives on competition. Competition forces everyone to play their best game or risk being left behind.

So, where is all this competition leading us? I believe it’s leading to personalization that goes beyond a particular retailer or publisher’s web site and extends to the larger shopping experience as a whole. That experience typically cuts across multiple sites and even goes beyond the web to bricks-and-mortar storefronts.

In the months and years ahead, recommendation providers will be working on figuring out how to extend personalized advertising and marketing across the entire shopping experience. They’ll be thinking in a more holistic way about how consumers navigate their way through a purchase—from awareness to research to the final click—and how best to support and influence that purchase through personalization.

Personalized recommendations on web sites are great, but they’re just the beginning. There’s so much more that retailers and consumers can gain from this technology once it’s unleashed into the rest of the marketing mix like advertising, email, in-store kiosks, and direct mail.

Where do you see the next frontier of personalization taking shape? Write us and let us know.

Retargeting Gets Personalized

Tue, 31 Mar 2009 09:16:42 -0500

Retargeting is making a comeback and justifiably so. In a down economy when shoppers aren’t banging down the doors, the best way to bump up revenue is by going back to consumers with an affinity for your brand.

There’s a lot of activity in this space and in general retargeting technologies are getting pretty good at figuring out who to target, but the actual content and offers in their ads are sorely lacking.

The retargeting I see -- both from the startups and the established players -- are based primarily on proxy behaviors such as browsing. Advertisers pixel shoppers when they visit their site and then serve up generic category ads with what they think shoppers might be interested in based on their page views.

Don’t get me wrong, this approach can help boost sales. But, with all the data at our fingertips today, we can do better. Instead of serving up generic ads based on broad-based categories and audience segments, what if these retargeting ads are personalized for each shopper and contain specific product recommendations?

The key to figuring out which specific products to promote lies in analyzing shoppers’ actual e-commerce transactions. This goes far beyond reformatting shopping cart abandons into display ads which, at best, have a shelf life of only a few days. Personalized product recommendations are based on deep analysis of all of a shopper’s e-commerce transactions and commerce-related search. They key in on each shopper’s interests, buying preferences, and brand affinities and motivate consumers to purchase.

Personalized retargeting campaigns are empowering marketers to create new occasions to purchase for a broader audience online. We think this is the technology that will re-energize display advertising and will give it an ROI that looks more like search. What do you think?

If you’re interested in learning more about personalized retargeting, check out our recent webinar recording, “Retargeting Renaissance: The Solution for Retailers in Rough Economic Times” featuring David Kopp of Yahoo!’s Ad Product Marketing team and our very own, Cheryl Kellond.

Personalization vs. Privacy: Can Consumers Have Both?

Mon, 16 Mar 2009 14:59:28 -0500

There’s a ton of debate going on these days over online consumer privacy. And, that’s a good thing. For personalized advertising to really flourish, our industry has to take a hard look at itself and figure out how to get to a place where the ‘rules of engagement’ are clear and consumers are comfortable with those rules.

One thing we know for sure is that consumers want personalized advertising. We’ve been surveying consumers for years on their attitudes towards personalization. Their interest in personalized advertising online has never wavered, with more than 72% indicating interest in last year’s survey.

We also know that consumers are increasingly savvy about the need for retailers to collect information about them to make those ads relevant. According to our survey, 60% are aware that retailers use their click and purchase data to target advertising to them. A recent TRUSTe survey showed that number to be even higher at 68.6%

Interestingly, what concerns consumers most about retailers monitoring their online activity is not the invasion of privacy. Instead, it’s the security of their personal information. According to our survey, 59% of consumers express concern over data security, while only 38% indicate concern over privacy.

Consumers are also concerned about retailers sharing the information they collect with other retailers. As our data and the TRUSTe survey pointed out, consumers know that the retailers they visit track information about them. For the most part, consumers are beginning to trust those ‘known’ retailers. What concerns consumers is when those retailers share their information with other retailers. That’s where things get complicated.

As an industry, we need to take these concerns seriously. We have a responsibility to consumers to:

• Keep their information safe
• Provide transparency in how that information is used and shared
• Offer ways for consumers to control their information

Look for future blog posts in which we talk more specifically about how we approach privacy and address these concerns.