Have Data, Will Target

Coremetrics, featuring a real world case study with Estee Lauder, hosted a webinar today on retargeting emails based on behavioral triggers. Beauty products are a tactile product, meaning customers like to touch and feel the product at a store counter before purchasing; and one might assume that customers would rather do that at a brick-and-mortar place than online.

Estee Lauder's toolbox includes:

• Coremetrics for enterprise web analytics
• Coremetrics LIVEmail (not to be confused with Windows Live email)
• Experian's CheetahMail for email delivery metrics (opens, clicks, opt outs) and automated email campaigns
• Online display ads paired with cookies and search keywords with select ad networks
• A network of more than 250 websites, 50 of which are e-commerce sites
• An in-house list (does not use 3rd party lists at all)

EL's approach for retargeting emails:

• Determine segments and top performing product categories
• Customer service-oriented messages to customers
• Free shipping plus samples; call-to-action embedded in the ad itself
• Use registration confirmation, cart abandonment, and cookies that track categories browsed
• Segmentations based on visitor engagement, category affinities (serves up specific ad displays), referral sources (Google, Facebook), site tools (product reviews), level of engagement, and customer value

The results:

• Remarketing email open rates were 3-5x higher than broadcast emails
• Revenue per email was 6x higher than broadcast emails

When asked in the Q&A section about the open rates for broadcast emails, Estee Lauder commented they were average for the industry. This suggested that for the beauty and personal care segment, open rates were roughly 15% with a 3% click-through rate. Open rates this low usually means that the data hasn't been cleansed in a few years, there's plenty of duplicate customer records, fake customer records from users wanting to take advantage of single-use offers multiple times, or there's simply GIGO in their database. But, I digress. Back to the webinar... 

Re-messaging for online display ads looked at customer behavior while visiting EL's website(s) or partner websites, specifically targeting customers who interacted with the site but did not purchase which triggered an ad to appear via browse cookie on the ad networks used.

In context, ad serving in the example of Clinique ads went like this:

• skin care shopper gets a skin care ad
• make up shopper gets a make up ad
• abandoned cart shopper receives and offer ad

Re-messaging (targeting specific tailored ads to specific product interests) for display ads resulted with significant ROI improvements such as more impressions and click-based revenues. 

On the whole, EL has few challenges and they are common to just about everyone who transacts and tracks marketing spends online such as privacy concerns, measuring ROI, or determining the number of touch points within a 24-hour period.

If you're getting higher quality responses (more clicks, higher revenues) from your customers because you've now sent them a targeted email specific to their interests instead of one intended for all audiences, of course you'll get a higher response rate.

EL has either a really good design team or a great ad agency that can produce color-rich imagery that sticks to each product's brand. They aren't really challenged with lack of content like the rest of us. This chart shows some of the challenges faced by content marketers in the US:

Don't let the lack of content stop you from setting up parts of the process for demand generation or automated email follow-ups. Estee Lauder uses one creative per branding ad campaign and rotates it with fresh content every few months. This insight didn't happen overnight and takes careful market planning for budgetary spends and execution.

Geospatial Tweet Mapping

I have this love-hate relationship going on with Twitter. For starters, I hate the disproportionate amount of time it takes to manage the site for the value it creates. Marketers struggle with how much more time it takes to analyze campaign data (leads generated, mentions, retweets, followers gained, referrals, etc.) that uses Twitter as a communication channel to decide whether or not to employ the same techniques again for future campaigns. I love how the concept spurred lots of 3rd party app creators to make life easier using Twitter.

The idea that 140-character feeds could be so time consuming to manage and aggregate into meaningful data points is a challenge for most online marketers. The more apps that are created, the lazier marketers get in dealing with data. Like a multiverse gaming console, I just want a one-stop-aggregator for multiple platforms.. which means the ultimate, master API that thinks for itself, automatically adjusts to accept new connections and ports many data formats into one cloud repository. The latter incarnations actually exist. For now, we have to rely on and contend with the more sluggish, manual human interface.

Because the public sector is always shorthanded, much of the data aggregation comes from outside sources using non-standard perimeters. Even how coordinates are stored have three or four different formats. Ever look at a physical topo map for hiking? The degree and UTM systems are both listed. Google Maps uses the decimal system. Anyhow. Geospatial analysis (GIS) typically refers to sets of longitude/latitude location markers designated to individual data points and was originally developed to help solve problems in environmental and life sciences, ecology, geology, and epidemiology. It has expanded to include a lot more industries like defense, intelligence, utilities, natural resources, social sciences, public safety, etc. Marketers use geospatial data to target customer segments that are based in certain zip codes, cities, or metropolitan areas, though largely for direct marketing efforts.

Here are a few geospatial web tools for Twitter trend watching:

• Twitter API for geolocation
• Landsat Data for the World by ESRI, a tweet mapping template
• OpenStreetMap, a free editable map of the world

Here are a few examples of geospatial mapping using Twitter data:

• GPS Brand of Choice, using SurveyMapper
• Global McDonalds Big Mac Prices 2007, using MapTube
• City-based tweet counter, using Tweet-o-Meter
• Active Floods in the USA, using ArcGIS

Here's a BHAG (big hairy audacious goal) to ponder about. Hardly anyone is going to contribute public data without a benefit in return. Let's say that you own a parking structure that is adjacent to a hotel or a shopping district. Wouldn't it be in your interest to log the check-ins at the structure and make that data available to nearby establishments via RSS or Twitter feed? It would deduct from a fixed number of spaces how many vehicles are parked there, updating every five to ten minutes. It might be a spammy channel but end-users would just have to visit, not subscribe to, a parking structure's online site feed to see if there was parking available. A tool like this would have been tremendously helpful on the weekend of the Northwest Food Service Tradeshow since there were multiple large events and a marathon being held near the Oregon Convention Center and it took more than a half hour to find adjacent parking. It's a winning outcome for everyone. The parking structure would get to maximize occupancy, the convention center/nearby shops/hotels would have more bodies inside for point-of-sale transactions, and the visiting end-users would be able to get on their day instead of driving around in circles in downtown Portland.

Private Company Valuation

Two of my grad skool classes (econ & finance) taught this topic as part of its curriculum and both professors had us neophytes look at quantitative data with respect to publicly traded companies; but what if you are trying to do a valuation of a privately held company. Can you train your intuition to be as good as the eons of financial valuations done by the professionals?

What do we know about a company? Does it matter who founded it or who their VC backers are? Does it matter more if end users actually like the products and services offered? And, how would you even know if it's the right time to buy? What can LinkedIn do that similar competitors cannot? What is their competitive advantage?

First things first. I haven't invested in the stock I'm about to talk about in this post. I thought about it quite a bit, but a SaaS vendor that is relatively new on the block and as one that embraces emerging technologies, it falls outside my personal criteria for investing in new stocks. I have been a basic end user since they launched; and I heard about it from a colleague. Word of mouth marketing is pretty powerful stuff. These days, it's nearly mandatory for business students at the undergrad or graduate level to have a LinkedIn profile. I have a user profile where I allow some public (non-login) access to; though you can see much more if you are also a member of the site. And, for the most part, for those of you without a dedicated site for your resume or portfolio, this is a good business networking site to connect with or show others in the industry or prospective markets what you are all about.

The site serves three distinct markets: human resource professionals, business end-users, and advertisers that want to market products/services to site users. For business networking sites, LinkedIn has few competitors using the freemium model, such as Germany's Xing (65 million members) or France's Viadeo (30 million members). Bloomberg, D&B, or Hoovers often provide basic data and company overviews. If we looked purely at the site being for mid- and executive level job seeker members, the site also competes for pocketshare with Execunet and TheLadders.

Over the last couple years, LinkedIn had been quietly rolling out web technology advancements and key partnerships with app add-ons, relevant ones that help sell a user's online business persona. Google AdSense ads have also recently appeared on the site too; though, they appear to be there to help the site pay for itself rather than be direct attempts at forming partnerships with key advertisers (though, the site has that feature too).

The target offering price of $45 is fair. It's the starved market that has pushed the price above $100/share. Is it sustainable at that price? Probably not, but investors don't care. If you're looking for a rational explanation for the jump in price, you won't find one on talk radio or the financial news hour on television. Investing isn't about rational decisions, it's based on GRIEF (according to one of my professors): Greed (Return, Income, Earnings) Fear. Anyhow, back to the topic at hand.

Companies typically go public to raise their status (more media coverage, more marketing), attract new customers, fund business expansions or R&D initiatives, and/or pay off existing debt and early-stage investors. Private company valuations are done to help sell the company, raise additional capital from investors, for a management buyout, for estate planning, for creating an ESOP plan (employee stock ownership plan), or for tax purposes.

To valuate a private company, one method is to look at the pre-IPO or SEC filings of existing competitors that are publicly traded or who are open about their earnings and revenues. The statements that privately-held companies make in these filings shed the best possible light into who they are and what they stand for; and are pretty good browsing for those who want to launch a similar concept or business.

A second method is to look at quantitative figures such as beta (how much market risk when compared to others in the industry), cash flow, or market capitalization (share price x outstanding shares). Here is a decent overview of how to calculate beta and total risk; this PDF link comes from Aswath Damodaran's NYU page.

A third method is to use Inc Magazine's valuation calculator or site resources. Industry data is already neatly aggregated for users to see sector averages for different types of businesses; and from the options of the drop-down box for industry, it is based on standard industry classification (SIC) categories, or its more modern counterpart NAICS. The interactive visual calculator looks at multiple quantitative data points such as industry median sales and revenues, net sales, gross profit, EBIT (earnings before income and taxes), EBITDA (earnings before interest, taxes, depreciation and amortization), discretionary earnings (operating profit, owner compensation, and noncash charges), and BVIC (book value of invested capital).

There are a lot more strategies out there beyond the top three listed here. To make an informed decision about whether or not to buy the stock of a privately-held company, you'll have to engage in more than one method of valuation.

Google Analytics: Annotations

At the end of an online campaign or for month-end reporting, I bet you've wondered where all the traffic spikes should be attributed to. Rather than shuffle through piles of paper lurking about, Google Analytics makes it easy to keep track of what happened by allowing users to add data point notes (annotations) to one's traffic feed. Unfortunately, there doesn't seem to be a way for marketers to download or export just a timeline of the annotations. Maybe someone will write an API to compensate for this undersight.

TheFoodening blog - a bump in referral traffic from a niche food site

The above image shows a steep bump in new visitors and is an example of a cross-posted recipe that I did (pizza balls) between my food blog and a popular food community on LiveJournal, food_porn. It doesn't have to be a direct post to gain residual traffic among an audience with similar interests. I still get long-tail hits from recipes x-posted years ago.

US Oil Consumption and GDP

The price of gas is climbing towards $5/gallon in the US and it's making all of us consumers leery about commuting to work, driving between places for vacation, or consolidating food runs to the grocery store. Here's an interesting graph about oil consumption and GDP.

Source: US Department of Energy, US Bureau of Economic Analysis, Thomson Reuters

The chart suggests that the rising price of oil isn't having much of an impact on continued economic expansion, at least according to analyst Theodore Gilliland of Fisher Investments.

What makes Goldstar Events different

Email marketing is not dead, really. Just ask the people who run Goldstar Events. Back in 2002, their email list only had 10,000 registered users on it. Today, it does about $40 million a year in ticket sales and has 1.2 million subscribers. The founding principle behind this privately held company is similar to Priceline.com, except it's for the entertainment sector and doesn't rely on a reverse auction system. The notion of "not every show sells out, so instead of letting seats go empty, venues list them with us to sell to our members" is what drives customers to buy up tickets at half price. Sometimes tickets are even free, but it's on a first come first served basis.

Goldstar's forte is having deals in major metropolitan areas. When I lived in Los Angeles, I thought it was a real treat to sit at the very front of a jazz or classical music concert. It just tickled me pink to see all the septo- and octogenarians wondering how I got there. They're still a little skinny on venues in the Portland metro area.

How a customer opts in for email through Goldstar was really well thought out. You can add and remove venues by zip code, and Goldstar will serve up content to your specifications. Even if you don't live in a metro area, you can still buy tickets for other people. All they need to do is show the ticket registration (which, by the way is delivered by email to you and to your guest) at the venue's ticket counter with a photo ID and they're all set. Newsletter spam too much for you? Simply log into the site and turn it off for a while. Your venue interests will still be there if you want to see what's going on in your metro area.

Here is a shameless plug for my referral link, if you wanted to subscribe. Every referral earns me a service fee credit. Even at half off a ticket, Goldstar charges a small, but fair fee per ticket purchased. This is how they make money to run the site. It's still a lot better than paying full price.

Sure, they have joined the social media platform bandwagon, but they have never lost sight of their core strengths in this market and whatever additional buzz is created by Facebook and Twitter, it can only help to create more mindshare about their services.

Google Fusion Tables

"When it comes to free data and transparency, the United States of America is one of the best." --Hans Rosling, TED Talks

In looking for fun things to do with Google, compared to similar services offered by Microsoft or Yahoo, I found that Google really doesn't invest its resources onto frivolous notions like 3rd party online games. Instead, Google seems to have everyone else beat in terms of web-based productivity tools. 

First launched in mid-2009, Google's Fusion Tables offers a means of geospatial data visualization and collaboration using public or private datasets. In its Example Gallery, the sample that caught my attention was the one done by WikiEdData about poverty in Washington state school districts. Here is a TED video of Hans Rosling using motion charts and speaking about a historical view of worldwide GDP, per capita income, and mortality rate.

Key features:

• Longitude/Latitude supported by the decimal degree system (same as Google Maps)
• Import CSV files up to 100MB
• Fusion Tables API
• Sharing and merging of tables
• Images cannot be uploaded but can be displayed using a URL

i.e. versus e.g.

Occasionally I have to remind myself about proper Latin syntax when mixed with American English.

i.e. stands for "id est", which means "that is" or "it is". For example: 

I am going to make the best grilled cheese sandwich, i.e., with grilled bacon.
e.g. stands for "exempli gratia", which means "for the sake of example" or, in modern use "for example", e.g.:

I am going to make the best grilled sandwiches, e.g., grilled cheese and smoked ham, roasted vegetables and bacon on toasted panini bread, or grilled portobello mushroom with red peppers and eggplant sandwich.

Secondary Market Research Tactics, part 1

Secondary market research consists of data points and report findings that were conducted and/or compiled by another source. It is typically used by students (for a college course that requires industry data about a company, a niche market, or an industry), businesses, and sometimes consumers who want to see who else is in the industry that could provide complementary products and services so they can make better purchase decisions. While research gathered this way is often inexpensive, it is also less accurate and doesn't provide a complete picture about a niche industry (e.g., Mazda aftermarket auto parts).

Perhaps a client or constituents within your firm have asked about growing market share or starting a new business line in other verticals or market segments. Maybe searching for this data validates or invalidates questions you have about a particular industry. Or perhaps, you are just looking for additional data to support primary research findings before presenting them to a client. All these are common uses of secondary market research findings.

There is a multitude of general use and industry sources where users can get a hold of published market data. The main types of secondary market research sources include government, trade associations (National Association of Realtors, National Automobile Dealers Association, commercial (e.g., JD Power & Associates, NPD, Nieslen), and national or international institutions (e.g., RAND) 
General use public sources:

• US Census Bureau - www.census.gov
• US Bureau of Labor Statistics - www.bls.gov
• National Institute of Health - www.nih.gov
• US Patent and Trademark Office - www.uspto.gov
• Science Accelerator - www.scienceaccelerator.gov
• Newspaper/magazine articles, press releases, and trade publications

Subscription-based sources:

• Lexis-Nexis (legal articles & risk assessment), Atypon (journal article search)
• Enerdata (energy research), OpenThesis (Theses, Dissertations & Academic Docs)
• Biomedical Search

When compiling secondary research data, don't forget to cite the source used and the link where it was found, this can be helpful in verifying your sources.