• by Tameka Kee , March 26, 2008

Companies like Google are developing products designed to bring the Web's metrics to bear on traditional media, but with the launch of Autotarget, iPost is flipping the switch--using traditional direct marketing metrics to streamline email campaigns.

Autotarget is Novato, Calif.-based iPost's email marketing tool that helps advertisers target their campaigns using the Recency, Frequency and Monetary (RFM) analysis employed by print catalog retailers. With RFM analysis, retailers can predict purchase behaviors (including response to emails, requests for information and actual sales) based on the behavior of previous like-minded customers, aggregated over time. They can then streamline their campaigns according to these market segments to improve open rates, profitability and retention.

Using a year's worth of back-end data on purchases via email, Web site, catalogs and brick-and-mortar stores, Autotarget pulls RFM-style segmentation into a simple tool that is compatible with multiple third-party analytics (including Omniture, Coremetrics and Google Analytics) and email marketing platforms.

"With data streams from tools like Omniture, Autotarget can update the recency and frequency parameters with actions other than just purchases," said Russell McDonald, iPost's CEO. "So the segments can be updated every 24-hours, increasing the overall effectiveness of future campaigns." Retailers can also sift through customer data to quickly find their most consistent customers and launch loyalty programs.

According to McDonald, RFM analysis arose because direct marketers wanted to better target their audience, and spend less money sending catalogs to customers who were unlikely to purchase. "So they started with the RFM metrics, divvying everyone up on a scale of one-to-five in each parameter, ranking them all in terms of predictive power, and analyzing them over time," McDonald said.

While the high cost of shipping heavy catalogs drove retailer adoption of RFM analysis, that concern has lessened in the age of cheap email campaigns. "The industry didn't care about doing this kind of analysis anymore--hence the days of email blasts and the ensuing backlash," McDonald said. "We're trying to bring the tried and true practices of direct marketing back in a good way."