Bill Nussey is the president and CEO of Silverpop, a provider of permission-based email marketing solutions, strategy and services. Ranked as having the highest business value and richest feature set by JupiterResearch in 2004, Silverpop was also acknowledged by research company Forrester as a "strong performer" that "stands out with an interface that is quite easy to use while providing strong functionality."
Before joining Silverpop, Nussey was president and CEO of iXL, Inc., a publicly traded e-business consulting firm. During his three-year tenure, iXL executed its initial public offering, increased revenues from $10 million to $120 million per quarter and grew from 400 to over 2,000 employees. Nussey has also served as an investment professional with the venture capital firm Greylock Management Corporation. He co-founded and was CEO of DaVinci Systems, an award-winning email software company.
Simms Jenkins: How would you describe the state of affairs, in general, for the email marketing industry?
Bill Nussey: Overall, the world of email marketing continues to grow and prosper. A multitude of studies -- from click-rate trends to consumers' willingness to put up with spam -- support email’s continued efficacy as a marketing channel.
Despite the fact that email has been around for years, it remains a highly specialized field. Serious email marketers have long since evolved past batch-and-blast (or spray-and-pray) strategies. In many cases, marketers now give email the same care and attention they’ve been giving direct mail for years. That kind of strategic focus is generating results. As I noted in a recent teleseminar that Silverpop co-hosted with eMarketer, marketers believe that email has the highest ROI of any online medium. And a 2004 Forrester Research study found that permission email ranks ahead of radio, TV and print for developing trust with consumers.
Over the last five years, email marketing has undergone a sea change from a prospecting tool to a relationship and retention tool. In that capacity, email is without peer in terms of ROI, online or offline.
Jenkins: More specifically, what are the biggest issues that email marketers have today?
Nussey: The largest issue today is deliverability. Every time we conduct a seminar or conference, we're deluged with questions about improving deliverability. Most studies indicate that deliverability remains the number one concern among email marketers. There is good news, though. Delivery rates continue to climb, and the standards and practices behind deliverability are becoming more widely known and applied.
Another issue marketers must grapple with is gaining a solid understanding of true multi-channel campaigns. For example, I know a company that regularly executes campaigns across both direct mail and email. Internally, its direct marketing team and its email marketing team are constantly battling over whose response rates are higher. The company's analysis showed that, while email’s response rate is a little higher than direct marketing's response rate, they are fairly close overall. Unfortunately, the company has invested so much energy debating response rates that it has completely missed the point, which is that each email contact costs about one-twentieth that of direct mail. In terms of ROI, email is the runaway winner. But, until the company has a true multi-channel view of its campaigns, it will continue to spend far more than it needs to.
Jenkins: Can you tell us what has your interest and gets you excited within the industry these days?
Nussey: It's easy and convenient for CMOs to ignore email today. Its negligible cost is almost a rounding error in most marketing budgets and, by ignoring it, senior marketing execs can avoid answering difficult questions about whether they are spamming their customers. The truly exciting news is that all of this is starting to change.
As ROI and customer satisfaction with email marketing continue to climb, senior marketing execs will have no choice but to look past the popular conception of “email as spam” and see the medium for all its potential. This will unleash a whole new level of budgets, strategic thinking and overall success of email marketing.
On the technology front, I see two trends emerging that will further fuel the growth and impact of email.
The first is a blurring of boundaries as email is combined with other push media such as RSS, SMS and chat. Each medium has its unique qualities, but from a direct marketing point of view, they all benefit from targeting, analysis and campaign management.
Second, and most exciting, is the continued proliferation of campaigns using life-cycle automation. Whereas today, even the most targeted and relevant campaigns still are sent all at once to a group, life-cycle automation only delivers messages one-at-a-time based on an external, time-based event such as a subscription renewal or home purchase. Studies indicate that time-based, life-cycle messages can get two-to-three times higher response rates. This is clearly the future.
Jenkins: For the people in the trenches, actually managing email campaigns, implementing best practices, testing, segmenting et al, what would be your advice to them?
Nussey: It’s all about three things: execution, execution and execution. All the targeting and creative in the world can’t undo the damage of a message that starts out, “Dear $first_name$." At some point, everyone has received one of these messages, and they are all too often followed up by another blast from some VP apologizing for the error.
Email is deceptively complex and many marketers often under-invest in the day-to-day processes that drive tight execution. At best, the result is wasted time. At worse, it’s a brand damaging, embarrassing message that is delivered late and full of errors.
Areas marketers need to focus on include: defining a process that they stick with; taking the time to actually perform tests, and subsequently measuring every campaign; and making sure that proper QA is done every time. One of the most overlooked aspects of execution is the email marketing tool itself. Is it easy to use? Can it flag mistakes such as a missing opt-out? Does it make testing easy? The right tool can make the difference between two hours and 12 hours per campaign.
Jenkins: On the other end, for the people that hold the purse strings, the CMOs, CTOs and CFOs, who are responsible for email marketing’s budget, but are not involved in day-to-day operations, what should they be focused on?
Nussey: Ironically, the biggest risk to email marketing is not too little budget, but rather, too little focus from the CMO. Because email is so inexpensive, the CMO often overlooks not only its opportunities but its downsides as well. Where the CMO will force traditional direct marketers to target and analyze results in order to ensure high ROI, email marketers often are not put under the same pressure to prove performance. When email campaigns do get more budget, it often is to grow larger lists or to make fancier creative. Budget increases are rarely earmarked for more staff or more time allocated to test and segment. CMOs are only slowly realizing that the old adage of marketing, reach and frequency, are the worst possible approaches to take with most email marketing campaigns.
In the end, the success of an email channel is entirely about relevance. As CMOs incorporate this into their strategic planning, they will find even higher levels of success with their email channels.
Jenkins: As a result of your book, "The Quiet Revolution in Email Marketing," have you gained any additional insight on email marketing and the people using it? Meaning, has the response to the book increased your confidence that email will become a sophisticated and interactive communications medium?
Nussey: I’ve been very pleased at all the positive feedback I’ve received. I was visiting a marketing friend the other day who had purchased my book and evidently read through it quite a bit -- it was dog eared and full of hand-written notes. He apologized for its poor condition, but I could not have been happier.
The most common feedback I’ve heard is that the book helps the day-to-day email marketer make the case to his or her boss about how the medium should really be used. Think about it. If a monthly campaign nets $100,000 in incremental revenue, it’s perfectly reasonable for the boss to come back and say, "Let’s do campaigns four times a month instead of just once." The book helps make the case for the trade-offs in over-sending and lowering relevance.
Next week: Simms Jenkins and Bill Nussey continue their conversation, talking about metrics, CAN-SPAM, RSS, blogs and where email marketing will be in five years.
G. Simms Jenkins is Founder and Principal of BrightWave Marketing, an Atlanta-based email marketing and customer relationship services firm. He has extensive relationship marketing experience on both the client and agency side. Jenkins has led BrightWave Marketing in establishing a large client list, including marquee clients like GMAC Insurance, CoreNet Global and The Atlanta Journal - Constitution. BrightWave Marketing has become a leader in the Email Marketing outsourcing space by using their expertise in strategy, design, list management, segmenting, delivery and analysis. Jenkins has been recognized by many media outlets as an Email Marketing and CAN-SPAM expert. Prior to BrightWave Marketing, Jenkins was Director of Business Development at two high-tech start-ups and headed the CRM group at Cox Interactive Media, a unit of media giant Cox Enterprises.
Online acquisition for My Coke Rewards is truly about finding the right, interested consumers and cost-efficiently converting them into active members of the program. The critical importance is in who we reach -- not where we find them -- and then in clearly delivering the "What's in it for Me?" or why they should join. In the case of My Coke Rewards, MediaVest developed a multifaceted, direct response online advertising campaign that merged low-cost broad-based tactics -- such as SEM and ad network buys -- with behavioral targeting initiatives to ensure mass reach and low costs. This was coupled with a smart, passion-based targeting technique via BT networks such as TACODA.
The MediaVest team worked closely with Coca-Cola and the behavioral targeting networks to really characterize active participants for My Coke Rewards and what most interests them about the program. This understanding was critical in order to map out a clear BT plan that enabled us to effectively reach people who were likely to have an interest in My Coke Rewards and our program's vast offering of rewards and sweepstakes.
For example, we leveraged Tacoda's innovative Spectrum program to help define the My Coke Rewards customer experience. We cast a wide net to several dozen behavioral segments that relate to the My Coke Rewards related passions. Tacoda then auto-optimized the ad delivery to focus more impressions against those segments that drove the highest-qualified participants to the program.
Knowing that we were delivering a very specific passion-based BT media campaign, we challenged our online creative agency, Moxie Interactive, to be smart about our creative development. Moxie devised a creative plan that could best deliver on the "why?" or "What's in it for me?" to excite our specific behavioral segments while still being general enough that the same creative could be used throughout our broad-based campaign messages as well.
The creative showed specific rewards, sweepstakes and "free points" offers that spoke to the passions, while still offering general appeal. This approach was a cost-effective way to be relevant to our behavioral target segments and still have creative that can meet the needs of a mass reach campaign, reducing the need to produce hundreds of pieces of creative down to a few dozen pieces.
Moxie took a test-learn-reapply approach to the creative that could work seamlessly with Tacoda's Spectrum program. We delivered several creative concepts with multiple combinations of graphics, copy and offers that were rooted in messages consistent with the target segment passions. As Tacoda auto-optimized the media targeting, we also optimized the creative delivery based on which creative ad units were top performers among the most responsive behavioral segments. This media and creative collaboration between Tacoda, MediaVest and Moxie helped ensure we made smart optimization decisions based on a complete picture of performance… not just creative or media in isolation.
Creative that targeted based on passion
As you might expect for an online acquisition campaign, the My Coke Rewards program success metrics were focused around driving maximum participation in the program among the right people, in a cost-efficient way. We measured the number of consumers acquired as the ultimate sign of success. In-process metrics used to optimize and monitor ongoing performance were based around cost of acquisition, clickthrough rates and conversion rates. At the end of the day, the funnel for our acquisition was:
- How many people did we reach with our message?
- At what rate did they click or view-through to visit MyCokeRewards.com?
- Of those who visited, at what rate did they actually convert or join the program?
By managing these levers, we isolated the drivers of our success and maximized our ultimate results.
By leveraging BT as an element of the online acquisition campaign, My Coke Rewards was able to exceed all acquisition expectations. The Tacoda BT elements of the program outpaced the base plan performance, specifically on creative that aligned the offer messaging to the behavioral targeting segment's passion. The BT campaign clickthrough rate rivaled that of the total My Coke Rewards campaign, while the click-to-conversion rates for the BT campaign dwarfed that of the total plan by more than 250 percent!
While BT can be more expensive than other media buying and targeting approaches, if done properly, it can also deliver greater results. In the case of My Coke Rewards, our total media strategy -- which leveraged broad-based, low-cost elements to drive down our total acquisition costs, coupled with smart behavioral targeting media and creative tactics -- has proven to be the right mix to exceed our brand objectives.
Through effective planning and strong collaboration between partners, we have successfully acquired millions of consumers into the My Coke Rewards program, in large part due to the strong work of the behavioral target program.
Personalized content curation and consumption
This reorganization and repackaging of the web's growing content is an example of the consumer's desire for personalized experiences. Consumers are no longer reliant on brands or news outlets to satiate their intellectual curiosities. Instead, we are seeing the rise of user-centric platforms that discover, reformat, and organize a myriad of digital content outlets. Spawned from crowd-shaped content discovery tools like Digg, BuzzFeed, and Reddit, the next generation of content consumption platforms is highly personalized, catering to users' interests, social networks, and preferred learning style.
Consider Flipboard, the mobile application that lets users aggregate content from the news, blogs, and their social networks into a magazine style format, heavy on visual and sensory cues. Upping the ante of content personalization, Flipboard recently purchased Zite, a competing content curation platform that relies on algorithms and user feedback to personalize the stream of articles displayed to users. On the other end of the content customization spectrum, there's the app Umano. Serving the busy lives of consumers on the go and catering to audiophiles, Umano reads articles aloud to users so they can catch up on the news at the office, while driving, or while working out. The iPhone app relies on a mix of behavioral algorithms and editorial oversight to curate important news stories each day and then has voice actors record audio clips of top stories. Another interesting upstart in the space is Wibbitz, an app for iOS that creates short video summaries of news articles, combining the key points in the article with easily recognizable images.
"Flipboard recently hired its 100th employee and surpassed the 100 million-user mark."
-- Mashable, 10/2013
[Left to right: Wibbitz, Flipboard, Zite]
Implications for marketers
Brands should strive to become both creators and curators of great content. Understand that there is diversity in not just the topics that users enjoy but also the formats. In creating great content, experiment with different styles and presentations, including long form text, audio recordings, videos, and slide shows. Include images whenever possible, but don't rely on them, as many of today's content consumption apps are reliant on text to repackage content for users.
Become a part of the content ecosystem by sharing and aggregating great content from others. The most successful curators, including The Huffington Post and Mail Online, do not rely solely on in-house content development resources. They create some original content, but they also utilize user generated content and curate/discover content via manual and algorithmic discovery.
Internet of things
The internet has allowed consumers to manage and automate the flow of massive amounts of information and communication. Smartphones have enabled them to bring the power of the connected universe with them wherever they go. As a result, many consumers have come to expect all experiences to be as automated and convenient as their smartphones and PCs. This expectation has led to the rapid expansion of the internet of things, where many of the products we will soon purchase will be connected to the internet through Wi-Fi and mobile networks. Consumers, though sensitive about privacy, will welcome more and more connected objects into their lives to help them get things done, save money, and improve their health and fitness.
"In 2009, there were 2.5 billion connected devices, most of these were personal devices such as cell phones and PCs. In 2020, there will be up to 30 billion connected devices, most of which will be products."
-- Gartner, 10/2013
"The wearable technology market will ship at least 20 million units in 2014 and reach $4.5 billion in revenue. Over 100 million units will ship by 2020."
-- Deloitte Consulting, 1/2014
Right now, many home electronics and appliance companies, including Samsung and LG, are scrambling to ensure their products are as connected as the phones in consumers' pockets, launching a full line of Wi-Fi enabled "smart" appliances, including televisions, refrigerators, and washing machines. Other companies like digitalSTROM and Plugaway retrofit "smart" capabilities to existing products. Using Plugaway and digitalSTROM, anything with a plug can be connected to the web, controlled remotely via a smartphone, and monitored online.
[Image: Samsung LCD Refrigerator]
Further extending the possibilities of the internet of things is the convenience of wearable technology, including accessories like glasses and wristbands that enable a more seamless connection with the internet, infusing the technology into the human experience. Connectivity will soon become contiguous with consumers wherever they are, whatever they're doing. Currently the wearable market is dominated primarily by products that are health and fitness focused, including Nike+, FitBit, and JawBone, as well as products like G-Shock's Bluetooth Watch and Pebble, which allow users to connect to an existing smartphone. But Samsung, Google, and Apple are all racing to develop smart watch technology that could potentially change the way consumers connect to their smartphones.
Implication for marketers
The internet of things is expected to produce enormous amounts of data previously unavailable to marketers. Keen brands and agencies should take advantage of the opportunity and consider harnessing the data to create applications that benefit the end user by adding genuine value in the form of task automation, rewards, and information. The Nike+ API, for example, connects application developers with users' activities, including the type of sport, distance traveled, calories burned, and location. Imagine the possibilities. Would a runner wearing a smart watch want to know if vitamins are on sale at her local store? Would a biker wearing a fitness tracker want to know if there is a special discount on granola bars at a health store nearby?
Although the vast majority of retail sales are still made in-store, online shopping is grabbing market share at an explosive rate. As consumers become more reliant on online shopping, the demand for expedited shipping will continue to grow, especially for high-income tech-savvy Millennials. Major tech companies and retailers are taking notice and scrambling to meet the demand. eBay, Google, Amazon, and Walmart are all actively testing same-day delivery offerings.
"KeyBanc retail analyst Ed Yruma thinks the need for speed in delivery will only get stronger, with rapid shipping replacing free shipping as almost a requirement for consumers."
-- CNBC.com, December 2013
In late 2012, eBay launched eBay Now, allowing consumers in targeted metro areas to receive products from local merchants, including Target, Best Buy, and Walgreen's, within one to two hours for $5 per order. Orders are delivered by the courier closest to the merchants in question, and users can track the delivery's progress and phone the courier directly. While it's currently available in just four metro areas, eBay has plans to expand the service to over 25 cities in 2014.
[Image: eBay Now]
Amazon charges $8.99 for most same-day delivery purchases, or just $3.99 for Amazon Prime subscribers, who already receive free two-day shipping for their $79 annual membership fee.
Same-day delivery is available as long as the item is in stock at a nearby warehouse or a third-party seller can quickly send the item. To further improve delivery time, Amazon is building new warehouses, adding refrigerators and robots to existing warehouses, and routing deliveries through multiple carriers, including FedEx, UPS, and now the USPS for Sunday deliveries.
Implications for marketers
Shipping and delivery times will become a much more important incentive for marketers to use in converting shoppers into buyers. E-commerce and brick-and-mortar retailers will need to cater to demanding consumers by shortening fulfillment and shipping times, along with concrete delivery dates and times. There is an opportunity to work with established shipping services (e.g., UPS and FedEx) or integrate third-party crowdsourced services like PostMates, Deliv, Zipments, or WeDeliver. Deliv, for example, connects e-commerce retailers with local crowdsourced delivery personnel to allow online shoppers to receive their orders in hours, not days. Postmates, on the other hand, serves local brick-and-mortar retailers by offering delivery from any local store or restaurant within an hour.
Consumers will also place increasing pressure on retailers to offer universal free shipping for all non-expedited orders. For years, e-commerce retailers have fought offering free shipping on all purchases due to costs, but with the advent of same-day and near-instant shipping options, consumers will further question the value of paying for regular ground shipments. Retailers will need to adjust their strategy or lose the business.
The entrepreneurial consumer mindset
Now more than ever, consumers are clamoring to be involved with and purchase pre-launch products and services that connect them to the cult of entrepreneurialism. This is demonstrated by the explosive growth of crowdfunding platforms like Kickstarter and Indiegogo, which have become virtual marketplaces for purchasing pre-launch goods and services.
"Kickstarter passed $1 billion on March 3, 2014... pledged by 5.7 million people ... More than half was pledged in the last 12 months alone"
-- Kickstarter, 2/2014
What's driving this consumer trend? Among other things, the entrepreneurial consumer mindset is driven by a need for status and belonging. Consumers gain status when they purchase pre-launch products by being able to talk, tweet, and post about their find. That story is even more potent when it conveys a sense of belonging or connection to a niche cause, or even a broader movement such as crowdfunding. The trend is most prevalent in Millennials, who witnessed the global financial crisis of 2008, ensuing unemployment, and fiscal debt at a formative time in their maturation. Millennials learned to idolize tech entrepreneurs like Mark Zuckerberg and Sergey Brin and eschew the (in)stability of established brands and institutions.
Brands are taking notice of the entrepreneurial consumer mindset and are using this trend to reach new consumers and deepen relationships with existing customers by allowing them to help shape their products, services, and advertising campaigns. Meow Mix recently launched Catstarter, a Kickstarter platform for cat lovers. The platform allows fans to vote on their favorite cat-related inventions and submit ideas for improving the lives of our feline friends. Honda's Project Drive-In launched in late 2013 as a campaign to help struggling local drive-in's switch to digital projectors to prevent them from going out of business. The innovative campaign leveraged crowdfunding platform Indiegogo and encouraged users to pledge to visit their local drive-in theater on Twitter and Facebook.
Implications for marketers
Brands looking to connect with and engage entrepreneurial consumers should start to consider reaching them through crowdsourcing methods. Allow them to vote on their favorite ideas and give their opinion on your advertisement before it launches. Encourage them to participate in the formation of new products. Not only will you build a stronger connection with customers, you'll also create a highly cost effective market research and R&D lab. Another opportunity for brands is to partner with independent designers and businesses to launch new products and services. Allow your customers to choose the best offering and go to market. Finally, brands should consider pre-selling or beta testing new products whenever possible. Pre-sales help build die-hard brand advocates, and consumers may even be willing to pay more for the privilege of early access.
Careful evaluation of consumer trends is an essential first step to uncovering innovation opportunity. Consumers around the globe are looking for innovative businesses to serve their evolving preferences and desires. Brands and agencies should be excited by the potential offered by consumer trends and use them to inspire new marketing campaigns, products, and experiences.
On Twitter? Follow iMedia Connection at @iMediaTweet.
"Girl with shopping bags" image via Shutterstock.