Is your current targeting strategy fundamentally flawed? Baynote Inc.'s marketing director looks to the tiny kings of communal thinking for a better way to reach customers.
The challenges for today's online marketers have become increasingly daunting. They are tasked with researching, procuring, deploying and managing an incredibly wide array of processes and technologies aimed at revealing truths about their customers' needs, delivering the right content and products and ultimately increasing conversions. Internet users hold tremendous buying power; however, consumers are becoming more and more web savvy -- and increasingly less patient when navigating sites. In fact, a commonly cited statistic is that site browsers will abandon a site after three clicks if they don't find what they are looking for.
Let's look at a traditional internet marketing campaign. The world of e-marketing today begins with the monthly web analytics report, which serves as the foundation for various online marketing campaigns. For example, insight gained from its results are generally used to create an email campaign; in turn, email management software then tracks the result of that initiative. Next, the data from web analytics and email management systems need to be synchronized so that the campaign can be further improved the next time around. This process leaves plenty of room for error, however. You hope the data was collected accurately; you hope to have interpreted it properly; you hope you've drawn the right conclusions and, most importantly, you hope you have taken the right action. Connecting the dots among all of these activities is difficult, especially when you only have three clicks to impress.
One school of thought says the problem can be solved with a combination of personalization, profiling and behavioral targeting. The idea is to target and recommend products to consumers based on individual browsing history, explicit feedback from surveys and demographic information.
Social science research, however, has proven that this thinking is fundamentally flawed. Individuals have thousands of profiles and dynamic interests; a person can be a father, son, brother, golf lover, traveler, wine drinker, engineer and HR benefit seeker all at the same time. When taken out of context, our past behaviors are not necessarily the best indicators of our future. On Amazon.com, for example, cross-product recommendations have seen plenty of misfires outside of book suggestions that worked beautifully. The reason is simple: A book recommendation is within the context of the book. But to always recommend diapers to an individual who recently bought a baby gift will most likely miss the mark, and lose the shopper.
The core essence of marketing is about how to connect with your audience. But with the rapid increase in ways for consumers to connect with brands (direct mail, email, chat, blogs, video, RSS, etc.), the marketer's job has become more about generating web analytics reports and less about, well, marketing. Even though user mindshare spans multiple media, capturing the implicit behaviors and true intent from buyers visiting your website is still a great way to target your customer and generate profits. And fortunately, recent developments in Web 2.0 technology and proven social science theory are making it possible for online marketers to accomplish this goal and move beyond the challenges outlined above.
Online marketing of tomorrow: taking cues from the ants
The job of the online marketer is not to draw conclusions from disparate systems and make disparate actions. Our focus needs to be on engaging customers and generating revenue lift. In order to be successful, however, it is imperative that the customer data be:
- Accurate and divorced of bias
- Captured in real-time
- Able to span multiple media
- Collected implicitly by people acting in their own self interest (versus explicitly via user surveys).
The last one is the kicker, but believe it or not, it is easier than you might think; it all lies with the ants.
Steven Johnson's book "Emergence" described an amazing scientific phenomenon: A colony of seemingly unintelligent ants can together form a highly intelligent society, as ants communicate with each other via chemical trails. The academic term for this miracle power is called emergent behavior, and it is the social science foundation for the wisdom of human society.
Applying this to the online world, web users can become visible to each other if websites can observe behaviors and connect them with like-minded users by their invisible "chemical" trails. Product or content recommendations driven by like-minded peers are the web equivalent to passing down collective wisdom. For example, if your customers are high-end bikers, they would appreciate insight and recommendations from fellow high-end bikers. This guidance not only helps them make better decisions -- whether it be items to purchase, articles to read or, in the case of web self-service, finding solutions to their problems -- it also connects them to web users with similar interests.
Importance of contextual recommendations
It is important to note that when applying emergent behavior to the web, the chemical trails must accurately reflect user interest, context and value. Just tracking clicks or page views is misleading, as these tend to be a function of site design rather than an indicator of whether the user actually likes the content. If there is a large, enticing ad on the home page, users might click it to check it out -- momentarily deterring from their initial purpose -- but then go back to their intended browsing.
Companies should therefore not just focus on whether a consumer viewed a product or piece of online content, but instead on whether they truly considered it, compared it and actually liked it. This level of understanding about the user enables companies to understand the user's true intent, and then see what content and products satisfy that intent.
In short, intent-driven recommendation engines can be the chemical trails that connect your ants (consumers) with their like-minded peers online. They can guide your customers to products, content, search, email and advertising through observing other people's past success and failure in the same context. The collective wisdom is dynamic and adapts to seasonality, news, fashion, trends and context, yet it is not susceptible to fads and self-fulfilling prophecy.
All wisdom can be carried on to the next group of users. A "real world" generation takes 25 years; online, a new generation can trail the pioneers by a week, a day or even an hour. A website with highly connected and self-governed users can build and evolve its intelligence almost instantaneously.
By understanding the silent majority of your website visitors and their intent, you can identify the thousands of micro-segments of shoppers who come to your site and, ultimately, match each one with the best products available. What's even more remarkable is that with this model you can let your customer base do the selling for you, allowing you to stay focused on generating more revenue.
Mike Svatek is marketing director at Baynote Inc. Read full bio.
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