The Information Highway

by Bill McCloskey, Jul 13, 2005, 1:15 PM

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I'm reading a book right now called "Amarillo Slim: Memoirs of the Greatest Gambler Who Ever Lived." It is a fascinating book for what we can learn about how Amarillo Slim's form of gambling applies to the world of marketing. Slim never made a bet, as he says, unless he had already won. In other words, he never bet on anything unless he had information that the other guy didn't that gave him an edge. And he only bet on things where having that information made a difference.

For a marketer, information is key, but it is surprising how little value it actually has in our industry. Companies will invest in new e-mail infrastructures, but think they can't afford the intelligence tools that could really make the difference between winning and losing. And as we shall see, having only a partial picture can be more dangerous than no picture at all.

The following two case studies came out of our customers using our Email Analyst tool but similar case studies could have been generated by any of the e-mail intelligence tools on the market today.

The first example illustrates what happens when you don't have the full picture. One of our clients is in a market sector that depends on CPA-style leads. An affiliate network, which we'll call Network X was their best source of leads. As far as the client was concerned, everything was just fine. The affiliate was working for them and they were making money. In our Email Analyst system, you can slice and dice information in different ways. You can look at a brand and see which affiliates are driving offers to that brand, and sure enough, in our system, when our client looked at themselves in our system they could see that Network X was sending out the second-highest number of e-mails on their behalf.

But you can also look at the affiliate and see who the top brands are that they are delivering messages for. In this view, our client was 60th in their own market sector. In other words, 60 other competitors had more offers sent by their most successful list. When they contacted Network X, they were told that the Network had problems with their creative and the client was paying 10 percent less a lead than the competitors. The client was able to correct the problem and their leads jumped dramatically. Until this piece of information became available, the client was living in a fool's paradise, not realizing that with a few changes they could be supercharging their business. And Network X never told them.

The second example concerns a client that was making decisions based on what they thought was the best data available: their log files. In this case, the client was paying on a CPM basis and purchased a number of e-mail lists to drive traffic to their site. A close examination of their log records revealed that only a small percentage of their traffic was coming from their e-mail sends. As a result, they dropped e-mail from their marketing mix. Subsequently, their traffic took a nose dive, and they could not determine the cause.

In our Email Analyst product, we overlay Web site traffic numbers on top of e-mail send graphs. I've shown these graphs before in this column and you can see the correlation between e-mail sends and immediate spikes in traffic to a Web site. When the client saw the direct relationship between e-mails going out and increases in Web traffic, they determined that people seemed not to be clicking from the e-mail, but typing the name of the company directly into a Web browser. By killing their e-mail channel, they caused a dramatic downturn in traffic numbers even though that's not what the log files revealed.

It is an old saw, but a true one: information is key.

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