"Using behavioral targeting with email is not a new idea," says Shar VanBoskirk, senior analyst with Forrester Research in Cambridge, MA. "It is something that good, smart marketers have been tuned into for several years: understanding that the activities within an email are good clues to the types of offers that would be useful to send in a subsequent message. In fact, email used BT even before other types of online advertising did."
So it's no surprise that right now email is where advertisers are best integrating BT with all their other customer information.
Let's examine the current use of BT with email in more detail:
Primary ways to use BT with email
"The database is king," says Michael Della Penna, chief marketing officer of Epsilon and Epsilon Interactive, providers of multi-channel marketing services, technologies and database solutions. "Marketers who are looking to build effective programs must understand the multi-channel approach is most effective. The profile of the customer and the touch points you have with that customer make the data richer. To do a really good job, you have to tap into multiple channels with that customer-- email, sending a direct mail piece, updating customer service reps at a call service, and other things."
Says Greg Cangialosi, president and co-founder of Blue Sky Factory, a Baltimore-based provider of full-service and self-service email solutions: "On a simple level, it takes only a basic amount of data integration to market to conversions (people who have already purchased). It's also easy to target people who have spent a certain amount on your website over a certain period."
It's a little more difficult to build an effective "remarketing" campaign, such as sending a follow-up email to people who have opened or clicked on particular links in a previous email. Because marketers can easily track whether an email recipient opens an email, looks at specific pages, or clicks on specific links, any combination of these actions can be used to dynamically generate and send behaviorally targeted email.
"A lot of marketers are also looking at counteroffers and triggers based on a combination of email responses and website activity," says Della Penna. "For example, a person might go from an email offer of a new credit card to a website where he applies. If he gets rejected, that information could be used to send a counter offer (based on the person's credit score) for another card that he might still qualify for."
This approach can also produce a follow-up email to an abandoned shopping cart, using the information on what the individual put in the cart to generate a better offer that might produce a conversion.
"There is a whole analytics component to this," says Della Penna. "It requires a very deep understanding of the customer, so analytics plays an incredibly important role: being able to slice and dice the data so you can execute a program that is relevant. Obviously, some people are smarter than others in analyzing this data."
In addition, as you accumulate more data and become more sophisticated in your marketing and targeting techniques, there's room for a deeper understanding of the idiosyncrasies of individual customers.
"You're starting to see better executions," says Jere Doyle, CEO of Prospectiv, a company that helps brands build customer files for behaviorally targeting email, "using BT with email both to determine when to send an email and what content to include."
Adds Cangialosi: "And what's beautiful about email marketing is that you can continually test it. If something stops working, you just kill it."
How well it works
Broadcast email strategies generally produce an average open rate of about 20 percent and a conversion rate of about 1.1 percent. However, when marketers actively target their email campaigns to specific behavioral and demographic characteristics, they can produce more than 18 times the profits that broadcast messages produce, according to Jupiter Research.
"If you start looking at the numbers," says Della Penna, "even the lowest common denominator of behavioral targeting gets you a win. Just understanding that BT plays a role in the equation, just scratching the surface gets you a better response. Particularly with customers getting bombarded by messages and wanting more control, if you're not building relevant profiles against your customer preferences, your performance is going to suffer in the long run."
And the more targeted the offer, the better the response rates.