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New Media, Traditional Lessons

New Media, Traditional Lessons Doug Wintz

I was rummaging through some old files the other day and came across some direct mail samples for an old, old client, Texaco Star Club. This was a private label auto club for Texaco credit card holders.

Along with the samples was a direct mail matrix, containing details of a Fall campaign. We had several mailing lists, four different creative executions (one with a really neat gold embossed seal) and a couple different fulfillment packages. Add it all up, and we had about 40 mail segments each mapped with a different key code.

I remember how we used to call the fulfillment house to get responses on a daily basis. Some clients would send us a faxed computer printout with the number of new apps. And how exciting was it, that three months after the mailing, we could finally judge the "winner" in terms of list, package and conversion!? Whoopee. That's three to four months to plan and produce the mailing and three months to find out the results. That's what I call delaying gratification.

Now of course, things are different. Then again, maybe not so much. 

Planning an online campaign still takes time-- but delivery is instantaneous. And yet, we still rely on the tried and true principals of creative testing, response and conversion. The test matrix may very well resemble direct mail of old but now we live or die by the creative sword on a daily basis instead of three  months in the future.

What does all this have to do with life in ad operations? I think the point is that some advertising principles are basic and apply no matter what the medium. And the more in tune with them you are -- even as a participant in ad operations -- the more valued you will be to your company and the more prepared for what happens next.

So, if we just saw what happens when you go from direct postal mail to campaigns delivered on the internet at the speed of light-- what's next? I saw a preview of the next wave at this years' Search Engine Strategies conference in NYC. With 6,000 attendees, it certainly rivaled any ad:tech I'd ever seen.

To give you an idea of what my life is like, the most exciting thing at that conference was the seminar on landing page optimization. Rooted in search marketing, landing page optimization focuses on the conversion process. If you can find page with the optimum copy, creative execution and offer-- maybe you can increase your conversion to a sale by another 20 percent. In search marketing, that's significant and it means you can spend more on your keyword buy (more than your competition) because you can afford it based on the better back end conversion.

But remember our prehistoric direct mail example? Creating different fulfillment packages makes the test matrix more complicated. Are you going to assign your web designers the task of creating several test landing pages, the modern version of the fulfillment package? Which "versions" will you decide on when there can be so many variables?

Now, there are companies that can manage that for you, like Offermatica, Vertster and Site Tuners, who presented at the Search Strategies conference. They will all create and test landing pages for you. "Big deal", you say? Well, what if they could take 10 separate variables on the page (offer, copy, color, features, branding) and create and test all those pages on the fly against your web audience. Now multiply all the variables in your campaign and you could come up with 100s of test cells.

At the end of the campaign, and with the instantaneous compilation of results, you could know the optimal combination of creative, list and conversion strategy. And don't think this tactic will stop at search marketing, because it is migrating to every internet based response medium.

The message in all this is that even in ad operations, you need to know the basics of direct response advertising. Knowing how to plug in a graphic in an ad server is not enough. If you don't pay attention-- one day you'll be asked to schedule a campaign with 10 creatives, 10 lists and 10 different target pages. If you're not aware that there is a method to this madness you'll scratch your head in frustration, instead of appreciating that the end result will tell you and your client everything you need to know about creating success for their product.

iMedia: The check-in location services field is becoming increasingly cluttered, and the biggest online players are now getting in on the action. What does this mean for smaller independent services like Foursquare? Is there a future for them in the market, and if so, how will they differentiate themselves?

Goodman: Companies large and small are all trying to capitalize on the small-medium business (SMB) market, as well as localized retail. According to Kelsey, $133 billion was spent in 2010 on all forms of localized media -- so that's a big prize. Google putting Marissa Mayer into a new role focused on local and location is the biggest of many indicators of the importance of location, and Facebook is also now focusing on it, not to mention the yellow pages companies. When companies of this size come into a space, they bring with them a large customer base and deep pockets.

Making a consumer check in 20 times a day may be a challenging user experience for mainstream consumers in the long run, regardless of the value delivered. It may be a feature of services in the future, but many in our industry are not convinced it is a business model. Placecast has always believed that mobile programs should enable consumers to opt in and set their preferences, then their phone should just alert consumers automatically with an intelligent offer when they are near something interesting. Increasingly, we can expect Google, Facebook, Apple, Microsoft, and app developers to focus on adding functionality in this area.

iMedia: How did the introduction of Facebook Places change the way marketers think about location-based targeting (if at all)?

Goodman: With more than 500 million active users, half of whom log in every day, and millions of businesses building a presence in Facebook, they certainly have the real reach that any advertiser would want. Facebook in the location game confirms that the industry is now focused on real reach and scale for businesses vs. experiments. What we have seen so far with Facebook Places is basic functionality -- and we can expect to see a lot more. They launched Deals last year, and they just turned on mobile "push" notifications a couple weeks ago. They are probably best positioned to become the major distributor of third-party deals for SMBs.

It was also a warning shot to all the little companies out there that are structured as more of a "feature" vs. a fundamentally new business opportunity. When Facebook (or Google) turns on a new feature, it has the power to sideline smaller players in a new market just by virtue of its size.

iMedia: With so many services out there now, how can a brand that hasn't yet dipped its toe in the location-based waters decide where to start?

Goodman: We often hear from marketers that mobile programs are a lot of work. Different platforms require discrete efforts, and marketing people are already overwhelmed with lots of other media channels. One of the key design principles we adopted for our mobile service is to make it easy for a consumer and a brand to activate a program. That means it has to work on any phone (not just a smartphone), with no app to build, no testing across devices, and very little investment in building creative ad units.

The first thing we tell brands is to extend what they are already doing in marketing into mobile, rather than starting by creating something completely new from scratch. If you are a retail chain or CPG company, you already have stores to put geo-fences around and deliver offers. If you are sponsoring or running events, then you have already claimed a place -- put a geo-fence around the event and engage with your best customers. If you already have an app, push location-based alerts to the experience. To recruit consumers, leverage all your existing touch points to bring people into a program -- website, social network, email, SMS, in-store signage -- all are viable and make it easy for consumers to connect with a brand via mobile marketing.

iMedia: Looking to the future, are there any upcoming industry developments (be it legislation, general market trends, or specific company announcements) that you expect will dramatically transform location-based marketing as we currently know it?

Goodman: With the increased focus on privacy across digital media, brands will increasingly see opt-in become the standard for the mobile marketing user experience. I also expect to see the patent space heat up. Not long ago, Google was granted a patent for bidding on users in a location; Apple and others have all been filing in earnest, and we are seeing seminal patents being granted in this space.

iMedia: Beyond what we've discussed above, what is the single most important insight into location-based marketing that you wish all digital marketers were aware of?

Goodman: There is a prevailing view that location-based marketing involves shooting an offer to a consumer walking by a store, and they walk in and immediately make a purchase -- direct response in the physical world. While we are seeing substantial increases in purchase rates, only about 20 percent of consumers who buy do so immediately. The remainder makes purchases from a few hours up to several days later, and may even visit the website to shop. In the end, we see that location often acts as a very powerful reminder: After receiving a ShopAlerts message, for example, consumers make a mental note of the message and where an offer can be fulfilled. With the offer saved on their phone in a text message, they can return later when they have time to make the purchase.

Lori Luechtefeld is editor of iMedia Connection.

On Twitter? Follow Luechtefeld at @loriluechtefeld. Follow iMedia Connection at @iMediaTweet.

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Article written by media production manager David Zaleski and videos edited by associate media producer Brian Waters.

"Many the isolated portraits of people" image via Shutterstock.

  Doug Wintz is Founder and Principal of DMW MediaWorks, a consultancy specializing in digital ad operations and technology.  Since 2004, DMW MediaWorks has helped emerging companies set up their ad operations departments and...

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