Archive for the ‘Personalization’ Category

Consumers Rejecting Targeted Ads

Wednesday, October 21st, 2009

targeted ads unwanted

One of the promises of digital marketing that has kept our industry excited and optimistic for the past 10-plus years has been the opportunity to learn about individual consumers and serve them relevant advertisements. The hypothesis is that more relevant interruptions will be more engaging, incite positive action, and reduce waste. Aside from behavioral targeting, which uses cookies to help websites personalize banner ads for individual site visitors, social-media services such as Facebook have promised to open up further opportunities by reading into what people are posting about themselves. Even cable companies are experimenting with personally addressable TV commercials.

But despite all of the hope and hype, targeted ads have not become the revolution that we digital marketers have longed for. Not only are people ignoring highly targeted ads just as much as they do all other banners, but new research suggests that many consumers are outright rejecting the idea of personalized marketing.

I’m a few weeks late in catching the results of a new survey by professors at the University of Pennsylvania and the University of California, Berkeley in which represents one of the first pieces of research not done by digital marketers (who have an understandable bias). In their telephone survey of 1,000 adults nationwide, they asked: Do you want websites you visit to show you ads, discounts, or news tailored to your interests? Before getting to the results, let me first say that this is an excellent way to word the question. It does not introduce the idea of cookies or other privacy third-rails. If anything, this question format seems to emphasize the positive aspects of advertising and content targeting.

Even as a hardened digital marketer I was surprised at the results: 67% of Americans do not want advertisements that are tailored to their interests. A further 51% reject personalized discounts and 58% don’t even want tailored news. Again, this is without seeding survey respondents with doubt and questions about how their personal information is captured and turned into tailored ads. This is a very, very bad sign for the digital advertising industry and website content creators.

What’s worse, when the researchers started describing how their information was tracked, even more people rejected the idea of personalization. From The New York Times:

“The respondents’ aversion to tailored ads increased once they learned about targeting methods. In addition to the original 66 percent that said tailored ads were ‘not O.K.,’ an additional 7 percent said such ads were not O.K. when they were tracked on the site. An additional 18 percent said it was not O.K. when they were tracked via other Web sites, and an additional 20 percent said it was not O.K. when they were tracked offline.”

Some believe that this data has little impact on the industry; sure, people will always say that they hate advertising, they say. Others add that people will protest ads until they learn that it’s the only way they will get free content. The problem is that the government is getting very close to stepping in and regulating targeted advertising. David Vladeck, the new head of the Bureau of Consumer Protection at the Federal Trade Commission, has promised to look closely at such online ad targeting, and has already publicly called some tactics “Orwellian.”

Here’s the problem for marketers: No one is going to stand up and tell the FTC to back off us. We advertisers as an industry have punished consumers for years with meaningless messages pressed against their eyeballs by the thousands each day. Because we can, we have hit them with ads everywhere from their email inboxes to elevators and gas pumps. Our level of society respect lies with used-car salesmen. Who is going to protest in favor of more advertising, even when we threaten that we’ll take away our free content?

With data like this study, Vladeck and the FTC essentially have a mandate to act against personalized targeting. It gives them impartial proof that the people don’t value personalized offers, and their job is to, well, do what the people want. Lawmakers and the FTC can also recall how the National Do Not Call Registry unanimously sailed through Congress and home phone numbers have been registered by more than 70% of Americans. The Direct Marketing PACs could do nothing to stop that legislation and there is little hope that we can stop this, either.

Look, I’m an executive at a digital marketing agency and I will feel the pain like anyone else in this business if this legislation goes through. But I also realize that you can’t force people to view or accept your advertising. This is why I am so passionate about the concept of Marketing with Meaning. I fundamentally believe that the only thing we can do to survive in this business is to create marketing that people choose to engage with and advertising that adds value to people’s lives.

So, people don’t like and genuinely fear personalized advertising. I take that as a sign that we’ve got move on to something that they do value. That is why I believe in creating content that people choose to view, read, or listen to. That is why I believe the future of digital, and marketing overall, lies much more in creating services and positive social movements. So while my company and I still make a lot of banner ads, we are also driving ourselves and our clients to create more meaningful marketing.

Isn’t it time we as an industry stop trying to fight against public opinion and do everything we can to make the public embrace our brands?

Kroger Shows Loyalty to Customers (from #DHI09)

Wednesday, September 30th, 2009

Kroger mymagazine

One of most exciting things about the DHI Non-conference last week here in Cincinnati was a session by The Kroger Company, one of our clients at Bridge Worldwide. Through its various banner stores, Kroger is a major player in the retail food business, capturing 10 cents of every dollar spent on food in the United States. The company is not secretive, but it doesn’t go around regularly beating its chest about how it is winning in a very competitive market. In a session titled “Innovation and How to Meet New Expectations for Media Delivery,” RW (Kirk) Douthit and Angie Rose from Kroger shared several nuggets about how they are working to evolve to digital marketing by putting their customers in the center.

The main focus of the discussion revolved around Kroger’s work with its database marketing partner, dunnhumby, to provide personalized messages and offers to its loyalty cardholders. The company has the second-largest database in the U.S., after the Census Bureau. Kirk kicked off the discussion by reframing how Kroger thinks about the loyalty program:

“It’s not about customers’ loyalty to us; it’s about Kroger’s loyalty to its customers.”

This message permeated everything in the company’s session. Kirk and Angie spoke about the company’s use of quarterly coupon magazines (such as the one pictured above) that are personalized for its top shoppers based on their purchase habits. This helps the company drive sales of new products and larger baskets sizes from the 20% of customers who drive up to 60% of total sales.

The Kroger team spoke about how it is gradually embracing digital tools where it makes sense for its customers. They admitted that progress is slower than some customers want, but that it takes time to get things right. And while some shoppers are ready for innovations such as mobile coupons and online circulars, the company still has to provide mailed offers for the many who are not living in the digital future yet.

One of the really interesting digital services that Kroger is planning to release soon is the chance to pull up your Kroger shopping history. It’s a way of giving people a digital receipt and something unheard of in the industry to date. This could help people, say, track their spending on pharmaceuticals over the course of the year so that they can be properly charged back against flexible healthcare spending accounts. It’s a great example of how customers can see additional benefit from using their Kroger loyalty cards.

Finally, I also appreciated the Kroger team’s willingness to share how the decline of traditional media is happening faster than digital is ramping up. For example, a staple marketing tool for decades has been the daily newspaper. When sales needed a boost, Kroger has frequently used newspaper ads to drive traffic to stores on specials. But the decline of newspaper subscriptions is seriously weakening the impact of these ads, and there is no digital solution with the same scale impact. It’s another example Bob Garfield’s The Chaos Scenario come to life.

The entire audience really enjoyed Kirk and Angie’s open and honest communication about the opportunities and challenges in digital marketing. By better understanding their world, those of us who serve them can do much more to help Kroger crack the code.

Dunkin’ with Meaning

Friday, September 18th, 2009

dunkin with meaning

Regular readers know that I’m a big fan of any marketing campaign that gives people the chance to squeeze their creative juices in and around a brand.  So it should be no surprise to hear that my favorite case study from the iMedia Brand Summit where I spoke this week was the “Create Dunkin’s Next Donut Contest.”  The case was presented by Cynthia Ashworth, Dunkin’ Donuts VP of Consumer Engagement (a title the audience loved).  It was obviously not the first “make your own product” contest, but the results show that people’s hunger to be creative and make a brand their own can never be satiated.

Business Challenge

In 2008, Dunkin’ Donuts saw the donut consumption rate among its core users drop.  The main cause was the concern about carbs and growth of the Atkins diet. Franchises were looking for help from the corporate brand to increase sales of this key profit and passion driver.  The company took several measures to improve, including various promotions and some new product launches, but a bigger marketing pop was required to jump-start sales.

Insight

Dunkin’ Donuts ran research with lapsed donut buyers.  They found that there were two key drivers of their love of donuts: (1) variety of choices and continuous new options, and (2) nostalgia for simpler times and basic pleasures.  The marketing team identified a “sweet spot” for its efforts to do something that rekindled these desires for variety and nostalgia.

Solution

The brand responded with “Create Dunkin’s Next Donunt,” a chance for the company’s core fans to have a hand in adding to the variety of the lineup, while triggering nostalgic memories of their first Dunkin’ Donuts experiences.  PR, TV, in-store, and out-of-home advertising drove fans to a very slick online donut creator developed by our WPP sister agency, Studiocom. Of course, the agency included a bevy of ways to share creations via social media. Many of the 12 finalists actually created and drove traffic to their own Facebook pages, which they used to solicit votes.

There were four key opportunities for press coverage and consumer engagement in the campaign: the contest announcement, the start of the contest, the vote for finalists, and the announcement of the winner. The winner turned out to be Jeff Hagar, with his creation, “Toffee for Your Coffee.”  Here’s a YouTube video from the brand that offers a great recap of the contest:

Results

The contest was an unqualified success.  In terms of engagement, there were 129,000 entries and 174,000 votes, and people spent an average of nine minutes on the site.  There were 90 million national media impressions (a $10 million marketing value). An online media plan was cut after three days because traffic was already far ahead of expectations. Franchises chose to get very engaged in the program, and supported it with more contests and offers in store.

The business results followed this strong engagement. Dunkin’ Donuts enjoyed its highest sales since December 2007. According to Cynthia Ashworth:

“The sales volume was huge, and all of our donut metrics during this period were through the roof.  America’s in love with donuts again.”

Conclusion

In my book, I spend several pages writing about how brands can forge meaningful connections with customers by allowing them to be creative, personalize their brand experience, and share with others.  I talk about how brands such as Kroger, M&M’s, Jones Soda, LEGO, The Simpsons Movie, and Pringles have all seen strong marketing results from this way of meaningful engagement with customers.  The core reason for success again and again is that people are literally putting themselves into the brand when they have a chance to co-create. Instead of just leaving a dull “impression” with traditional, interruptive advertising, customers who co-create a brand build a deep link to the core of what makes them who they are.  And they often cannot resist sharing their creations–and a little piece of themselves–with the friends and family in their digital worlds.

Milk-Carton Ads Don’t Build Strong Brands

Thursday, September 10th, 2009

oreo milk 1oreo milk 2

Last week was back to school for my two daughters, which means I was right back into the habit of making them breakfast in the morning. When I pulled the jug of milk out for their cereal on Tuesday, I noticed something new and unexpected: an ad for Oreo cookies where I would usually expect to see the usual milk-brand package logo. I grabbed my iPhone and snapped the photos above. It seems many other people were waking up to this new media channel, as The New York Times featured it in an article on August 27. It is an interesting test case in “new media” and makes for a blog post that I hope you dear readers will weigh in on.

The rationale for milk-jug advertising makes a lot of sense from a traditional marketing perspective, of course. There are millions of gallons of milk that appear in grocery-store aisles and home refrigerators each day. That’s many billions of impressions that have gone uncapitalized on, until now! With people increasingly ignoring or avoiding traditional advertising media such as newspapers and TV, this is a viable alternative for eyeball harvesting. Because people drink an average of 20 gallons of milk each year and often leave it out on the counter or at the table during breakfast, this makes for a very long-term exposure.

It can also be very relevant to advertise on milk cartons. One of my coworkers pointed out that his grocery store has placed a display of Oreos right across from these milk ads. The New York Times reports that milk ads can be customized by type of milk—say, higher-end product ads for low-fat milk, which people with higher incomes tend to choose. And because kids drink a lot of milk it’s an easier way to connect with a generation that grew up with one finger on the DVR skip button. Ads are starting to show up on single-serve milk cartons at schools, and Disney and Build-A-Bear have already gotten on the bandwagon. No wonder there’s already at least one advertising company with a specific focus on selling milk-carton media. The firm, BoxTop Media, ran a study that showed a large brand got a 4% to 6% increase in sales.

Despite the new hype around this old/new media idea, I don’t think it has much of a future. New places to put your interruptive ad represent a fight against the grain and offer only temporary sales gains at bestLast year I wrote about how Zappos was advertising on airport security bins, for example. These ads are temporarily cute and stand out the first few times you see it, but over time people just learn to tune out the new ad space. And the ad networks that quickly form around them do not limit their space to clever and relevant marketers; rather they will “monetize” these impressions to whomever is willing to pay, which further deteriorates any hope for the new medium.

I also wonder about potentially negative consequences. A key problem with mass interruptive advertising is that people increasingly feel offended when it comes at them unwanted. In this case, imagine the parent who puts milk into the grocery basket and hears a child say, “Oh, Mom, can we get some Oreos?” That moves from mere interruption to a negative externality, and it could lead to a very poor brand impression for life, if not an all-out boycott campaign. Today’s social-media tools make this much, much easier for consumers to take actions like this.

Switching around among new interruptive media might be a viable strategy for some brands, but I doubt it would work for many. Instead, why not choose to create marketing that is more meaningful to customers’ lives? Imagine what a great brand such as Oreo could to do make its product more fun, engaging, and buzz-worthy. Perhaps taking a chapter from My M&Ms and allowing customers to buy personalized cookies. Let us choose the colors of cookies and cream, inject different flavors or designs, and miniaturize, double-, or triple-stuff ‘em. That’s just one minute of thinking and one possible avenue. But I’m sure that the Oreo team could come up with a lot more meaningful ideas based on their years of experience and customer understanding. And if they are looking for more ideas we’re always here to help.

ExactTarget Visualizes Personalization Payoff

Monday, July 20th, 2009

Last week a group of us at Bridge Worldwide got to spend some time with a team from ExactTarget. ExactTarget is a leading provider of one-to-one communication services, with particular leadership in email delivery. A former colleague of mine at P&G, Tim Kopp, is now the CMO of ExactTarget. Great things are happening with their business: The company’s revenue growth is accelerating, and it recently raised $70 million in funding during one of the worst periods in market history. I love the services the company offers and we’ll be exploring ways to work with them in the future. But for this post I wanted to share something special that stood out in their presentation last week: a chart (above) that shows the evolution and payoff of meaningful marketing.

I apologize if this is a little difficult to read, but the visual above is an incredible way to diagnose where your brand lies in the evolution of one-to-one communication. Many brands begin at the far left segment, blasting out the same email to everyone in their databases. But over time, some discover the need for and benefit of adapting their communication by using customer profiles—information such as age, income, and purchase history. Some then do research into the goals of their customers and progress to Persona-Driven models. A small number of brands are using historic and real-time behavior to adapt messaging, and a rare few leaders have modeled their entire database of customer activity in order to predict the rhythms of customer engagement and give them the content they want before they even know they want it.

As this graph shows, case study after case study proves that the more sophisticated companies become at serving meaningful communication to their customers, the higher the return on investment. And this is a payout with increasing marginal returns. For example, a blast email that creates a 1X return on investment might move to a 2X return through Persona-Driven modeling, and to a 10X return with Predictive Messages.

As one might expect, the companies that are doing the most in this space are those with heavy e-commerce businesses, such as Retail and Travel. The reason is that the impact on sales from these adjustments can be measured through actual purchases in real time. To date, industries such as CPG, Healthcare, and Automotive have been slow to adopt sophisticated personalization of messages because they are a step or two away from the final purchase, and the purchase might not ring up for weeks or months after the email arrives.

It takes a leap of faith to make the financial and time investment to turn your one-to-one marketing efforts into something more personalized and more meaningful. But the accelerating benefits make this very difficult to ignore for much longer. Fortunately, companies such as ExactTarget exist to help do the dirty work of making sophisticated marketing happen, and I look forward to working with them in the future.

Proof of the Power of Personalization

Thursday, November 6th, 2008

Once in a while I bring up a topic that is such a no-brainer that it almost writes itself. This is one of those occasions. From the headline you likely got it right away: People absolutely love to personalize the products and services they buy. The overall concept hits on both sides of the brain. The rational, left side believes that there is a perfect package of features that will maximize the utility of a given purchase. Meanwhile, the right side loves to create something and show it off to others. More and more marketers have discovered the power of product personalization across one or both of these lines, and they are discovering that such meaningful marketing leads to great sales results.

Let’s start with M&Ms, a brand that has been in the personalization game for some time now, and was recently featured in a 3-minute Ad Age video. It’s a pretty simple concept: Let people go onto a website and create a personalized message to print onto their M&Ms candy. After starting in 2005 with simple messages of a few words, the company’s manufacturing process now allows faces, sports logos, and pretty much anything a customer can imagine. In other words, M&Ms helps people make more out of special occasions and personal passions. The result is a value-added experience that connects people deeply to the M&Ms brand. When people create a bowl of M&Ms with their wedding date on it, or buy a package of M&Ms with the Phillies 2008 World Series logo, they are creating a permanent bond with the brand that drives loyalty beyond reason.

People want to express themselves more and identify themselves more… and a brand like M&Ms can really enable that and evolve that.” (Ryan Bowling, PR Manager, Mars North America)

But the business benefits of personalization are just as powerful as the customer payoff. The candy itself returns a huge margin. One 7 oz. pack of Kyle Busch-themed candy sells for $12.99, which runs to $38.97 (plus shipping) in the three-bag minimum. Compare that to less than a dollar for regular M&Ms at the checkout lane. Personalized products also enjoy a strong word-of-mouth factor, as people often give these as gifts or can’t wait to show off their creations to friends and family. In the Ad Age video, Ryan Bowling, PR Manager for Mars North America, describes some of the other key marketing benefits of the program:

  • “Opened up new partnerships and allowed the company to reinvest in its manufacturing systems”
  • Led to a similar initiative with Dove bars called “My Dove“—which specializes in chocolate for weddings
  • Finally, he credits the program with: “Nothing less than revitalizing the brand.”

More and more companies are getting the message that personalized products represent a model of meaningful marketing and strong business results. Per my left brain/right brain comment above, product personalization seems to work best in categories where people have specific tastes (food and otherwise) that they want to get just right and/or where they can show off their creativity to others. Here are some of my favorites:

NIKEiD—This maximizes both logic and emotion by offering up the chance to pick the perfect shoe fit and a range of colors and styles. Nike continues to evolve this business and marketing machine with experiments in mobile and even a Times Square billboard.

Jones Soda—Add your photo and choose your flavor, and for only $29.99 per 12-pack (plus shipping), you can have your personalized Jones concoction.

Pringles Pop Art—I’m proud to say that we just launched this tool a few weeks ago at Bridge Worldwide. The Pringles can is iconic and with this simple tool you can create a new label, print it, and tape it on. With barely any media support so far, we’ve had thousands of people create and share personal labels. I’m amazed that: (1) people are already creating holiday versions; and (2) one of the senior Pringles leaders has already created eight cans! You can check out and vote for mine here (a remembrance of Pringles inventor Fred Baur, who was buried in a Pringles can this year):

Pop Art: vote for my design

LEGO Factory—Use special software to design whatever you come up with, then upload the design, and order the LEGO kit needed to make it a reality. Happy kids and high profits.

Heinz—The new labels are funny, but you can come up with a better one on your own, right? My only ding on this program is that there is some pretty heavy editing for trademarks.

Scion—The Gen-Y brand from Toyota came to market built around the idea of personalization. Car lovers continually tune their cars after purchase, so why not allow personalization off the assembly line? They have built on this theme of personalization with Scion Speak, a tool that lets you create your own coat of arms.

Of course, personalization hasn’t worked for every brand. I recall Millstone coffee offering a personalized-blend product several years ago through Yahoo! stores. It did a great job of asking questions about your taste preferences, and then made a personalized blend of beans under the name of your choosing. The plug was pulled on Millstone, however, as owner P&G discovered that the high-maintenance packing process was not paying out. I do wonder if the company could have figured out a success model by staying in the game over time. This also might have given Millstone a stronger competitive position in the marketplace.

Despite a few challenge and brands that have no right to play here, product personalization offers huge prospects for meaningful marketing and business success. If you are not at least experimenting here, your brand—and its most loyal customers—are missing out.