Commentary

E-mail And BT: Where Everybody Knows Your Name

What happens when behavioral tracking techniques join e-mail delivery systems, when online behaviors get tied to your name and address? Well, Chris Baggott, cofounder and CMO, ExactTarget, hopes it means that his favorite airline, American, stops wasting his time with irrelevant weekly messages. "What is frustrating is they know where I live, and how I travel, and who I travel with; they have all this data and they choose to ignore it and send me credit card solicitations because something in their database tells them I am right for credit cards." Baggott says a large share of his e-mail service company's clients are starting to drive e-mail messaging with behavioral data. This is where advertising moves beyond the campaign model and towards the long-delayed dream of one-to-one marketing.

Behavioral Insider: How does e-mail enhance the online behavioral targeting we already see occurring across Web sites?

Baggott: You see ad companies focused on behavioral targeting of advertising, saying OK, this person clicked here, there and everywhere, and based on that data I am going to give them this ad because I think that it's going to be more relevant to them.Now with e-mail, if you are my customer and you've been to my Web site, I am able to compound it with exactly who you are. I have your demographics, and the combination makes it so much more valuable.

BI: Explain how this is working on the back end, the combination of technologies.

Baggott: Someplace in your organization you've got to have that central view of the customer, right. Now that's' a lot easier said than done. It's getting a lot easier. In the world of software as a service or Web 2.0, the idea is that through data integration all of these tools can seamlessly talk to each other. So, a huge population of our clients use what are called APIs (Application Programming Interface) to integrate their e-mail system into all of their other data source, so they are able to get this central view of the customer. When should I talk to somebody? What should I say to him? Behavioral targeting on the Web with banner ads is still relatively primitive compared to what you can do with e-mail. If they only have this anonymous click-through data--that I visited lawn mowers--then the next time I type in "john deere" you are going to assume I am looking for lawn movers. But if you also have demographic information that Chris Baggott lives in Indiana and farms 14,000 acres of corn, you may serve me something different. But if all you have is behavior, you will give me the lawn mower ad. By combining that, I am able to get a better insight and I have a human relationship.

BI: How are companies initiating the conversation with these customers?

Baggott: If you are a retailer with a large Web presence, behavioral tracking is telling me [who's] the person who is clicking on these high value areas and visiting my site often. That's' somebody I want to know. You are seeing companies doing a much better job of targeting those individuals--who are right now anonymous--to try to get them to register or opt-in, to leave a bit of themselves to begin the dialogue. Then you translate the communication to an e-mail strategy where you are proactively communicating with them and trying to drive more interest, to send them specific places or give them messages based on the relevance of what they were sniffing around at.

BI: Give some examples of how BT and e-mail are working well together already.

Baggott: We have a home improvement business, and they had hot tub promotions. In the old model [you] blast e-mail to a couple million people--hot tubs on sale this week--just like they would in the newspaper. Instead they took their Web analytics and looked at all the people who showed an affinity towards hot tubs, backyard recreation. That segment broke down to about 350,000 people. They went further by appending the demographics to that behavioral data to drive the content. So older people got pictures of an older couple enjoying the relaxing nature of the hot tub. The family-aged people got a family picture of kids jumping in and out of the hot tub. The younger people got the Tiki lights and the bachelor party picture. So the subtleties like that drive not only your behavior but also your demographics, to have a much more powerful message.

BI: What's holding more companies back from doing this with their e-mail and Web analytics?

Baggott: Old habits. Most marketers are still trained as mass marketers, and they use electronic media like the Internet [and] e-mail [the same way] they would use mass media. Which means the customer is anonymous and I am campaign-focused. Get away from the campaign and get to one-to-one, to lifetime value. Well all have the technology in our hands to leverage this data and drive better relationships, and you still have a lot of companies still focused on campaigns. I use the example of American Airlines a lot. I am Platinum with American, and they know me very well and treat me very well. And every week I get e-mail from them to get weekend escapes. And there's a laundry list of trips, none of which originate from Indianapolis, where I live. As a result, I am trained to ignore it. Four or fiver times a year there is a trip originating from Indianapolis I might be interested in if they were focused on my behavior and my relationship and only talked to me four time a year. They wind up alienating me and not maximizing their lifetime value with me.

BI: BT tends to protect itself in privacy debates by claiming they don't know user identity. But here you are fingering the person.

Baggott: The reality is that I am giving you my permission. I want you to listen to me. I get frustrated when you don't pay any attention to me or when all you're trying to do is slam stuff down my throat. I appreciate going to a restaurant and having the maitre d' say hello to my wife and seat me at the table I like and deliver the cocktail I like before I have to ask for it. That's the experience that everybody wants. Our data is abused when it's ignored. You don't pay attention to me, you just use it to drive something irrelevant to me. One of my favorite examples is Ticketmaster. They send out an e-mail every week that geotargets, so anything within 150 miles of Indianapolis, it doesn't matter what, they send it to me. Another company that I like very much, JamBase, is in the same business. The difference is that JamBase takes the time to learn what kind of music I like, what venues I go, where I click around on their site, what downloads have I done. Then, when the stars align, they send me communications that, hey, this is a cool band playing at this cool place and you can get two tickets and here is why we think you'd like this band. I may hear from them in a week or three times if they have three things to say to me. Then I might not hear from them for three or four months if they have nothing to say to me. So they are taking my data and using it appropriately, not wasting my time.

 BI: But are consumers making that connection between giving up some of their identity in exchange for personalized service?

Baggott: Consumers are signing up for e-mail in record numbers. Because the smart companies are getting relevant. What you're seeing a lot less of is "click here if you want to hear from our partner or affiliates." Which is basically a license for you to sell my name and data to someone else. And that's just a bad practice and it doesn't work, and customers revolt against it, as they should. But the reality is, I will give you better service if you tell me something about yourself, and then I follow up on that promise by giving better service.

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