Getting technical

Are limitations on the technology available to marketers and an over-reliance on IT departments hindering the progress of fully personalised direct marketing? By David Reed

It is easy to believe that the era of fully personalised marketing is within reach. The talking posters shown in the film Minority Report, for instance, seem to be just an extension of existing online marketing practices. Haven’t all organisations been gathering personal data and gearing themselves to deliver this kind of customer experience?

The reality is slightly less sophisticated. “Marketers are still less adoptive of technology than other departments,” says Emma Chablo, marketing director of SmartFocus, a data management and analysis software vendor.

This situation will not last for long. As visitors heading to the Technology for Marketing exhibition next week will discover, there are dozens of applications jostling for space on their desktops and servers. While it is tempting to deploy only those that will automate existing processes, the more forward-thinking have realised that an entirely new process is now possible, enabled by this technology.

“Technology takes away the hard work and gives marketers more time to be creative,” says Chablo. The heart of this new approach is data – the bringing together of multiple files into a single customer view and the use of analytical tools to identify marketing opportunities and customer needs.

For many years, marketers have had to queue outside the IT department to get their requests processed. Starting with software such as SmartFocus’s Viper and Alterian’s Marketing Suite, marketers can now have databases at their fingertips, combined with the tools to interrogate them.

Complementary approach

“We’re not competing with high-end statistical tools such as SAS and SPSS, we complement them,” says Chablo. “Most companies have those already, but there are not a huge number of trained analysts available. So we provide the tools that can work with the big systems used for business modelling.”

Two key features of these solutions have helped to drive their uptake. The first is that they allow non-specialist users to build complex models and solve queries using simple processes, such as drag-and-drop. The second is that the outputs can be fed into the corporate statistical engines, and vice-versa.

As a result, many of the delays and obstacles that marketers face when working on data are being removed. This is timely, as frustration has been growing within marketing departments that know the importance of being data-driven. “A lot of people have the technology, but not everyone who needs it is getting it,” says Alterian chairman David Eldridge.

A survey carried out by his company in October 2003 identified the extent to which technology is becoming a driving force in marketing. It found that 84 per cent of in-house marketers want to be able to carry out analyses on their desktop or within their own department. Underlying this is the recognition, identified by 68 per cent of respondents, that the selection and segmentation of data is the most important step in planning a campaign.

Blaming the tools

The problem is that without their own suite of software tools, marketers have to wait – 36 per cent say it takes days or even weeks to get results back from IT. Although more than half of marketers do have these tools, 29 per cent do not.

Eldridge says that even with the technology in place, marketing departments still have a lot of learning to do. “They are not in a position where they can jump from a one-to-many communications method to where they are sending pieces one-to-one. What we are seeing is people moving to one-to-five or one-to-six segments,” he says.

Over-hyping of the concept of one-to-one marketing during the dot-com era may have set back progress towards a genuinely valuable goal. When the first wave of digital channels failed to deliver good business results, many organisations backed away from the one-to-one marketing that had been so closely linked to it.

E-mail and internet marketing are starting to yield positive outcomes. Pure-play dot-coms have evolved with these technologies at their heart. For those businesses more used to working in the physical world there are considerable challenges to overcome.

Flexible friends

“The ability of clients with an off-line presence to adapt to the cycle times online is a function of the flexibility in their organisation,” says Skip Fidura, director of European operations at Digital Impact. His agency was created around a suite of proprietary software that manages digital communications either as a fully serviced outsourcing operation or on a hosted basis.

The technology-driven dream of marketing has been based around getting the right message to the right person at the right time. “If staff at Travelocity know somebody is planning to travel to the Bahamas, they want to be able to send a message at the right time with an offer. But it is rare to get that level of information,” says Fidura.

Digital channels can make event-driven marketing a reality, allowing the company to respond rapidly to customer and prospect behaviour. But that does not resolve the question of whether marketers can actually live at this pace. “If you have to get all your marketing copy passed by the legal department, you have to explain that they have only got four hours, not four days,” he says.

To add to the complications, marketing is operating across more channels than ever. At the same time, the concept of individual silos to handle each channel has been eroded. Cutbacks in marketing headcounts mean there are fewer specialists and a greater desire for true integration.

The multi-channel world also makes consumer behaviour harder to predict. “People may get promoted to through one channel, but buy in another,” says Court Cunningham, senior vice-president of marketing automation at DoubleClick.

“Research shows that one-third of people promoted to through a catalogue will shop in the retail store. If you have 40 per cent of people viewing your website, 20 per cent will buy via your shop. That creates merchandising problems and response attribution problems,” he says.

One of his company’s clients, the financial services provider Fidelity, was having to wait 30 days to input data from its customer touchpoints in its data warehouse. With marketing campaign cycles of six weeks, this meant that linking marketing effort to outcomes was proving impossible. “And the problem is getting worse,” says Cunningham.

DoubleClick’s solution, called Channel View, is designed to provide an answer to this challenge. It sits in the response streams, such as e-mail or call-centre servers, and picks up responder data, which is then referenced to its channel of origin.

Before the rise of e-mail, direct mail used to be the most personalised form of media. Using laser printing, attributes from the database could be used to make offers seem targeted at the individual. In reality, this continues to involve little more than a degree of variable text dropped into a single master creative execution which is sent to every target.

Digital solution

Digital printing has been promising for some time to change this model. In theory, it should allow for every single item of mail to be fully personalised, matching the execution and offer to the profile of the individual.

Tequila London has been chosen by HP Indigo as a strategic partner to allow both parties to learn how to best apply digital printing to the communications process. Chief executive Tim Bonnet says there is an important learning curve. “We went through that education process with our creative and production people last year,” he says.

The production process has already been applied to work on the One Account for offset mortgages. The concept of the mail pack was a street sign carrying the address of the recipient. Digital printing allowed this to be changed for every single target, while the product illustrations could also be varied.

“We looked at property prices in every area and were able to identify the style of mortgage our targets were going to be interested in. Somebody in a three-bedroom terrace in Scunthorpe may have a £20,000 mortgage – the same house in Battersea is worth £500,000. So the information on the product advantages was relevant to each individual,” says Bonnet.

The agency would have liked to push the personalisation further, varying the image on each pack so it would reflect the type of house the target was living in. Getting copyright clearance on enough photographs proved impossible, however, underlining the fact that not all of the barriers to data-driven marketing are technological.

If marketing can break free from the limitations imposed by in-house IT and master the complexities of multi-channel campaigns, there is still a further challenge – establishing controls and measures that earn the respect of the rest of the organisation. Marketing resource management is likely to be a significant growth area for the next three years.

Divide across the pond

Carol Meyers, head of marketing at Unica, which offers solutions under the name Affinium, says: “The idea comes from a couple of different areas. In Europe, the IT group is more involved than in the US, where 70 per cent of the drive for solutions comes from marketing, with IT playing a role. In Europe it is more 50/50, or even 40/60.”

Just as marketers want to be free of their reliance on IT, the reverse is also true. “There are too many demands on IT – they want marketers to be self-reliant,” says Meyers. With the opportunity to combine analytics, campaign management, response tracking and reporting within a single, integrated solution, marketers should be better placed than ever to justify their activities. As Meyers says: “Marketing becomes more useful, as long as it is done correctly.”

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