Clients hire Magnetic to help them increase revenue online and offline. The company also offers media execution services, site personalization, and email personalization services.
For Magnetic, media execution isn’t traditional media planning and buying process. It has a programmatic platform, and a data management platform (DMP)/demand-side platform (DSP), and tech “stack” that connects with exchanges and inventory demand sources. Half of Magnetic’s more than 750 clients are agencies, half are client-direct.
Within “madtech,” Swadia cites Adobe, Oracle, Salesforce, and ExactTarget, among others, that are within Magnetic’s sights and approach the market similarly. Swadia maintained that in order to be successful in the “madtech” space, companies must have first-party data and a data network. In Magnetic’s case, it has more than 300 retail clients, plus clients in the auto, finance, consumer package goods, and travel sectors. Retail represents its largest customer base.
“We have strong signals on what people are buying and what they’re looking for,” Swadia said. Magnetic builds profiles on consumers using customer relationship management (CRM) and DMP data. It curates the data of hundreds of thousands of data partners. For example, it will analyze data from sites where consumers research, like product review sites. Magnetic seeks to understand who is looking for what and then connects first- and third-party data.
Critical to this process is creating a unified view of the customer. “We have proprietary data that can tell someone what they want to buy and we can create a single view across devices,” Swadia explained.
One of Magnetic’s differentiators is that it stitches together channels that are typically siloed. For example, when a consumer buys a shirt, then, two days later, is retargeted with an ad for the shirt from the same retailer, it's because different parties are running the ad-tech, email, and ad experiences. Magnetic is building media and site personalization to address this issue, enabling marketers to coordinate across channels and devices.
With personalization, Magnetic offers the example of a car rental company client that wants consumers to pre-book cars online. Magnetic runs the firm’s prospecting. It helps bring consumers to the rental car company’s Web site, which is personalized with specific recommendations when consumers arrive on-site to prebook.
"If the media company didn’t talk to the site personalization company, this could never happen,” Swadia said.
One of the big challenges of personalization is having proprietary data and then building an identity layer so cookies can be rationalized. Once you have those assets, they can be leveraged across all channels.
“Our clients are now asking us ‘how much of my spend is driving offline value?’ We address that by trying to provide a single view of the customer across all channels,” Swadia said. “Companies are trying to marry first- and third-party data in order to do this.”
Real-Time Daily asked Magnetic client Russell Ackner, Chief Marketing Officer, Swiss Watch International, about his challenges, successes, and the “madtech” mashup:
RTD: What are retailers struggling with most?
Russell Ackner: Consumer expectations are higher than ever, frankly. Free, second-day shipping, constant communication from the retailer, and an excellent customer experience regardless of point of purchase are really taken for granted now. Traditional online marketing campaigns simply do not work as they once did. There are now so many channels that the consumer can potentially be influenced by that retailers truly need a comprehensive plan to retain customers and keep them focused on their differentiators as an authority in their space.
RTD: What does the merging of ad tech and martech mean for retailers?
Ackner: Up until recently ad tech was a broad net cast to acquire new customers in the hopes of pulling in some interested and potential customers. The data-gathering techniques that are in play now, however, along with the advent of merging third- and first-party data sources makes marketers smarter than ever.
Knowing how to use this information and having the resources to leverage it are game-changers. It essentially lowers acquisition costs and helps retain customers for longer periods of time but only if you’re smart enough to leverage the information.
RTD: What challenges are Magnetic helping you solve?
Ackner: First and foremost, the customer’s expectation of a personalized shopping experience. To replicate those efforts would take four-plus, full-time people -- and even then, we could never keep up with the demands of the implementation and merchandising of those learnings. There’s a resource advantage that the platform provides.
Understanding cross-device purchasing habits and presenting products that a shopper is most interested in at the most opportune times on the most opportune devices, helps solve some basic conversion and merchandising challenges.
In triggered email, one of our most profitable channels, our click-to-open rate is approaching 40%. That’s much higher compared to email without personalization. In aggregate, Magnetic increases our revenue per session by over 120%, making budgeting and forecasting easier as well.
Revenue per session is defined as a group of interactions that one user takes in a given timeframe on the Web site. Whatever a user does before they leave is defined as a “session." We can determine all users who interact and buy product via recommendations from Magnetic vs. those who don’t.
RTD:Why did you choose to work with Magnetic when there are so many other service providers?
Ackner: There are a lot of choices in the space now, however the combination of account management, access to leadership, and its collaborative culture put Magnetic above the rest. Magnetic invested an inordinate number of hours into understanding my business upfront and offered a solution that was both financially feasible and has an immediate positive impact on sales.
We started working with the company in late 2013. Within 30 days of full rollout, we’ve seen a 57% increase in conversion rate across all devices and a jump in average order value of 20%. In addition, implementation and ongoing support has been nothing short of stellar.