Nick Martin's Marketing Pages

Google grips its social tiger firmly by the tail

Google+, the search giant's new social sharing project, looks like it's going to be a blockbuster.

In beta phase by invitation only or by request from the Google+ page, beta user numbers shot up to 10M before Google temporarily closed the platform to new requestors.  

Most beta users have GMail accounts, a rich future seam of (currently) 170M consumers worldwide.

Econsultancy report that several thousands brands are said to be extremely keen to get involved early.   

There are two aspects of Google+ that excites me as a marketer:

• Google Circles enables the user to categorise groups of connections or friends according to interests. This compartmentalisation makes sense from the user perspective and may encourage more mature consumer groups to use social media in a more widespread sense. From a brand marketing perspective, it permits a higher degree of segmentation and targeting, should make it easier to tap into the long tail.

• Google+ takes an important step to evaluating the relative behavioural strength of social networks. Just because you're highly connected on Facebook doesn't mean that you're friends with all of them, or that they have any influence over the things you decide to do or buy.  Functionality within Google+  opens up possibilities to sift and separate the relevant from the irrelevant. An individual may have lots of apparent connections, but how many of them have significance? 

Understanding these nuances should help brands determine who is influential within groups and what recommendation strategies are likely to be most powerful in kicking off purchasing journeys.

July is shaping up to be a good month for Google. On the back of tremendous quarterly results showing a 36% jump in earnings, could Google+ represent a major new marketing channel, where the undoubted power of trusted recommendation takes a further significant step in capturing a material slice of online marketing spend? 

 

Email marketing maturity profile?

The latest research from Marketing Sherpa, looking at the most commonly utilised performance metrics by maturity phase of the email marketing enduser, provides some interesting insights into how deeply practitioners systematically measure. 

Of particular interest is seeing the proportion of endusers who do not measure things, even at the mature, strategic, end of the scale. Take a look at the following graph:

So, 40% of mature users don't analyse the different link click-throughs; 56% don't look at the performance of different data segments; and 38% don't or can't analyse post click conversion rates.

This fresh-to-release  study, conducted a few months after the European benchmark survey I authored for FEDMA last year, reminded me of some of the key conclusions of that earlier report. Strikingly, users who had considered themselves strategic email marketing practitioners hadn't projected that sense of savvy when it came to campaign performance practise. Those who saw email marketing as strategically important for their organisations nonetheless often had poor visibility of metrics such as conversion to sale and conversion to action.

With just 16% of campaigns entirely data driven, and 38% of campaigns driven by some data, it is apparent that there is a way to go before the critical insight and testing necessary for optimising the email marketing channel is systematically practised.

Even when metrics are in widespread use, such as delivery rate, are practitioners really measuring in full awareness and knowledge? Most practitioners will determine deliverability as delivery to Internet or to mail server as the primary measure (i.e. less the hard and soft bounce codes), but delivery to inbox or Inbox Placement Rate (IPR) is a far better measure. Why? Because around 18% of email never ends up in the Inbox, or even in a Spam folder; nor  is it accounted for in the bounce data. It simply disappears, into a virtual Bermuda Triangle. The worse your reputation, the greater the problem. 

Much in the same way practitioners focus on improving their click through rates, they must also monitor, manage and take steps to continually improve their reputation to improve IPR, campaign performance and user engagement.

What this evident gap in email practise perception and reality truly highlights, is that whilst we tend to view email as a mature marketing channel, there is still a way to go to master it. Whilst email may have been around as a viable marketing channel for more than a decade, we are far from the point where outstanding direct marketing disciplines are routinely applied to it, and where the nuances of the medium are yet globally understood and managed.

Questionable ethics of data collection

Who is collecting data on behalf of 'The British Consumer' using offshore call centres? Despite being on the UK's Do Not Call List, The Telephone Preference Service (TPS) for 3 years, I'm getting duplicate calls from an offshore call centre requesting permission to undertake a 'survey' on behalf of this dubious entity.

Various tactics are being employed, from a request to verify address and telephone details before launching into a lifestyle questionnaire - and including one that promises to ensure that your details are taken off our list before then saying we'd just like to verify the details we hold about you and your household.

Either no record is maintained of previous contact or they just aren't bothering. All part of a truly low-cost, low-ethics exercise...

One can easily see how hundreds of thousands of consumers are surely being duped by these approaches, that seriously misrepresent, flout TPS regulations by calling under the guise of research when what they are doing is data gathering (but clearly not market research), and damage consumer confidence.

When I pushed representatives to disclose which legal entity they were calling on behalf of, the phones were put down. So they might be naive enough to call repeatedly in spite of several bruising encounters, but not that naive! 

Here's the thing; if data collection goes down an ethical slippery slope in pursuit of the lowest cost collection, campaign performance will follow. Not only that, execution comes with hidden costs arising from higher than average complaint rates. All of which feeds into a negative cycle of brand perception, at a time when reputation and trust is more important than ever.

Among other parameters, being able to provide a simple audit trail to complainants in respect of their personal information when asked, helps allay concerns and restores trust. Transparency is more important than ever, and practitioners using poorly acquired and badly permissioned data run greater reputational risks than ever before.

PETs to the rescue of OBA?

Industry presented plans for self regulation to the European Commission last month , following a public statement by Commissioner Neelie Kroes, in which she established clear benchmarks that a self-regulatory instrument would need to meet in order to be deemed acceptable and sufficient by the Commission.

These are:

1. Effective transparency (paramount). This means that users should be provided with clear notice about any targeting activity that is taking place.

2. Consent, i.e. an appropriate form of affirmation on the part of the user that he or she accepts to be subject to targeting.

3. A user-friendly solution, possibly based on browser (or another application) settings. Obviously we want to avoid solutions which would have a negative impact on the user experience. On that basis it would be prudent to avoid options such as recurring pop-up windows. On the other hand, it will not be sufficient to bury the necessary information deep in a website’s privacy policies. We need to find a middle way.

On a related note, I would expect from you a clear condemnation of illegal practices which are unfortunately still taking place, such as ‘re-spawning’ of standard HTTP cookies against the explicit wishes of users.

4. Effective enforcement. It is essential that any self-regulation system includes clear and simple complaint handling, reliable third-party compliance auditing and effective sanctioning mechanisms. If there is no way to detect breaches and enforce sanctions against those who break the rules, then self-regulation will not only be a fiction, it will be a failure. Besides, a system of reliable third party compliance auditing should be in place.

During the round table, Robert Madelin, Director General of DG INFSO, clarified that the Commission position is in favor of an opt-out approach for cookies. He also clearly stated that profiling is an appropriate tool for marketing purposes and that its use both online and offline needs no distinction. Finally, the Commission stated its interest to find the right balance between data protection and the legitimate interest of data processing for a balanced economy. 

This is good news, and takes us back to the fundamentals of the European Data Protection Principles. Those principles (subject to a EU statutory refresh of the legislation) should be applicable irrespective of channel or marketing application. 

Enter stage right, Microsoft announced its plans to roll out the functionality to block all online tracking as part of its new Internet Explorer 9 (IE9). This announcement, whereby the new IE9 will feature an "opt-in mechanism" and "tracking protection lists", comes only days after the publication of a report on the protection of online privacy by the US Federal Trade Commission (FTC). In its report the FTC prominently calls for industry to provide internet users with a functionality to block online tracking activities, often referred to as a "do-not-track list" (similar to a do-not-call register).

Mozilla are also known to be working on a do not track technology by 'cloaking' the user's internet activity, though they are citing technological difficulties.

In responding to the latest FTC concerns that current tools for blocking online tracking are blunt instruments, Microsoft may nonetheless have gone too far in proposing 'opt-in' for behavioural tracking, (depending on how the technology worked in practise and what they mean by opt in). 

Read more: http://online.wsj.com/article/SB10001424052748704594804575648670826747094.html#ixzz1AoD0nIJm

Spying for Secrets?

Late last year the European Parliament and Council set the scene for a potentially dramatic challenge to the way online advertising is developing, enabling targeting of advertising content based on online activity collected via cookies.

Online behavioural advertising  (OBA) uses  information  to  target  the consumer with advertising messages  that  match  their  interests and presumed buying intentions.  Information derived from online activity determines what ad or what version is served to whom (or not), dramatically improving targeting and reducing wastage.

OBA is a game changer, improving the consumer experience, cutting out irrelevant content, and delivering a better marketing return to brand owners.

As well as agreeing a revision of the EU Telecoms Package - designed to update the legal framework for the telecommunications sector – in slipped an e-Privacy Directive that requires consent prior to the setting of cookies on a web browser.  EU member states have until next May to implement the package.

At the EU-level, MEPs claimed success in introducing an opt-in regime; industry and some national governments maintain that the wording implies keeping the opt-out. This leaves it to the national governments to specify the meaning of “consent” when implementing the Directive. Plus ca change, and a recipe for wildly differing local implementations as we already have seen with the original Data Protection Directive, where they range from explicit prior consent to implied consent and soft opt-in for customers.

Against this backdrop the Article 29 Working Party published their opinion in the summer. It appears to significantly extend the definitions of personal data and comes down heavily in favour of explicit, prior consent prior to the collection of behavioural online data via browser cookies.

 1. That Article 5.3 of the ePrivacy Directive (the basis for setting and accessing cookies on a browser) applies irrespective of whether the information constitutes personal data or not.

 2. Where the tracking process involves personal data, the relevant provisions of the general Data Protection Directive have to be applied as well such as subject access rights. 

 3. That tracking usually involves personal data, because the cookies contain a unique identifier, or are linked to an IP address, which either identify a data subject or relate to them.

 4. Any party that stores or accesses a cookie must collect the user’s consent, regardless of whether this party acts as a data controller or as a data processor. In the case of 3rd party OBA this obligation falls to the ad network provider.

 5. The opinion stresses that consent, which must be freely given and specific, needs to be obtained before the cookie is stored. In order for consent to be valid, highly visible information must be provided. Information about the use of cookies also needs to be provided prior to the processing. In order to collect valid, informed consent, the working party recommends that ad network providers create prior opt-in mechanisms that require an affirmative action by the data subjects. Once given, it would not be necessary to request consent for each reading of a cookie.

 All this begs the question, how clearly do legislators really understand the use of anonymous cookies in 3^rd party OBA?

How would subject access requests work in the situation where vast number of cookie IDs containing recent behavioural data used in raw or aggregated form for advertisers from different sectors, nonetheless contain no personal data?

Do legislators really think that cookies are used to spy on consumers? Is there a common (mis)understanding of the benefits cookies offer to faster navigation and better user experiences, delivery of more appropriate offers, and data transparency?

The political dimension isn't helped of course when Wall Street Journal publishes an ‘expose’ on how tracking technologies are designed to share consumers’ secrets.

The WSJs investigation found that the nation's 50 top websites on average installed 64 pieces of tracking technology onto the computers of visitors, usually with no warning. A dozen sites each installed more than a hundred. The nonprofit Wikipedia installed none.

Tracking technology is getting smarter and more intrusive, they concluded.

“Monitoring used to be limited mainly to cookie files that record websites people visit. But the Journal found new tools that scan in real time what people are doing on a Web page, then instantly assess location, income, shopping interests and even medical conditions. Some tools surreptitiously re-spawn themselves even after users try to delete them.”

It’s time to address key concerns of user protection and security, in applying key principles of Data Protection to these burgeoning, global advertising channels.

a) For example, surely we should be insisting that a broad definition of sensitive data be used to ensure that offers such as dietary plans ought to be subject to explicit consent.

b) Deep Packet Inspection (DPI) has caused deep concerns for years, gaining Phorm notoriety, enabling an ISP uses technology to inspect the entire clickstream of a browser, and inevitably will end up subject to an explicit consent regime.

c) Where personal information that identifies a user by name, sex, age, household composition etc. is combined with online behavioural data, the use of that ensuing personal profile ought to be notified as a specific and fresh use requiring consent.

d) Certain uses of non-personally identifiable data collection may need to be proscribed such as using tracking to support discriminatory pricing, an issue of concern to legislators.

e) Lastly, Privacy Enhancing Technologies (PETs), overlooked beyond the basics such as SSL security over the last decade, may well be about to come of age, faced with an internet-wide challenge of incomparable commercial scale.

     

Technologies that separate data, that anonymise through splitting or masking and destroy personal data, as well as those that limit use are urgently needed to demonstrate users can be exceptionally well protected at the same time as experiencing the benefits of OBA.

As the market for well-executed OBA starts it’s long road towards maturity, organisations that aggregate user behaviour data are perfectly placed to apply these technologies to their platform, and must prepare to play their forthcoming role of responsible and respected data controllers.

For now the focus is on cookies. Browser settings do at least currently provide a consumer dashboard to express preference. In a recital to the e-Privacy Directive, non-binding guidance suggested that browser settings would indeed serve as a consent mechanism, which was interpreted as a pointer towards an opt out regime.  Whilst on the face of it, the Working Party’s guidance blows that interpretation out of the water, no one should conclude that that is the endgame.

This winter looks set to be one of the most significant in the history of the Internet.

Thanks to FEDMA for providing access to many of the source material used for this article, and from which I have borrowed.

Email marketing on a wing and a prayer

Email marketing is poised for strong growth this year at the further expense of traditional offline channels. 

Having recently completed the survey analysis and report for FEDMA, here are some key excerpts. You can purchase the full report from FEDMA here.

In FEDMA’s first European Email Marketing Benchmark report published in April 2010, 19% of the respondent Email Service Provider (ESP) base expected their clients to increase volume of email marketing between a quarter and a half year on year; a continuation of the shift from offline to digital channels.

Hardly surprising when you consider the results of the Ipsos Mori poll for the Chartered Institute of Marketing’s report,The Shape of Digital to Come?. The question was asked which activities delivered the best return on investment. Top of the charts came CRM by some margin, followed by online advertising (12%) and email marketing (11%). Those activities considered to deliver the worst return were direct mail, sponsorship, and internal marketing, mirroring the evident shift in spend.

Econsultancy’s Email Marketing Census 2010 also predicts a net increase in email marketing over the course of the year, with the greater proportion coming from retention marketing, where 71% expect to ramp up their activities in this area, and only 1% expect to reduce activity on email marketing activity to their customer base. This reflects a growing recognition that email marketing is the perfect medium for customer management and development, and a key component within integrated multi-channel consumer engagement.

To that end, newsletter and related customer management activity is likely to be a key growth area over the next 12 months. This is reflected in the difference in click through rates reported in FEDMA’s Email Marketing Benchmark Report 2010 between newsletter and sales or product/service information campaigns, which average 17% higher. 

Practitioners need to plan use of email marketing more strategically to gain greater payback from ongoing customer engagement and the up and cross sell opportunities arising.  For example, 53% of respondents to FEDMA’s report do not use email marketing for customer or product (development) surveys. Where they do, they experience excellent results.

The majority of companies do not use email marketing for win-back campaigns following the loss of customers. The minority of respondents who do use email for win back see conversion to sale or action of between 2% and 5%. Nor do they systematically use transactional emails for cross and up selling.

In both cases here are clearly opportunities missed, which once again suggests that email marketing is deployed typically as a series of standalone activities, in some cases integrated with online and other channels, but generally not implemented as an end-to-end programme or integrated with other customer channels.

Whilst end users overwhelmingly believe email marketing to be strategically important, that belief is yet to translate into a rigorous approach around execution.

  Poor visibility of conversions to sale and conversions to action, and the lack of testing around aspects such as creative templates and frequency suggests there is much more critical measurement and insight needed. Practitioners would do well to test more rigorously each element of an email campaign, beyond the generally adopted focus on subject lines, sender name, time of day and week, and spam filter scoring. 

Continued growth may well be anticipated and planned for by the majority of respondents, but it should not be assumed at any cost. The future growth – and health – of email marketing will depend on some key factors:

 

• Better targeting, measurement and the use of properly permissioned and managed customer information databases and lists; the relevancy of campaigns and careful application of local/ EU laws.
• Careful stewardship of customer information, and developing its use further into the consumer/ buyer engagement process. The impetus to increase volume and activity can only be successfully achieved where it remains engaging.
• Delivery to inbox, which will be increasingly seen as a barrier to overcome, especially in B2C.

Whilst Deliverability rates are optimistically expected to improve or remain the same, this raises a key question of how deliverability is measured.

Most practitioners will determine deliverability as delivery to Internet or to mail server as the primary measure, but delivery to inbox or Inbox Placement Rate (IPR) is being seen as an increasingly key metric. 

IPR is tied in with reputation. If reputation is poor, acquired through issues like indiscriminate use or poor targeting, large groups of consumers belonging to the same ISP domain, for example, such as GMail or Hotmail will not receive bulk email from that source into their inbox. It is estimated as a much as 7% of email marketing campaigns go missing, which historically has not been accounted for. 

Marketers need to understand what their reputation is, and much in the same way they work to improve their click through rates, they need to monitor, manage and improve their reputation. If ISPs migrate from identifying sender by IP range to identifying the sender by their domain name, as some commentators believe may have already started to happen, this issue could become even more significant.