OMMA Magazine Presents: Performance Anxiety

It's not just about luring and keeping leads. These days, marketers have to jump through hoops to prove their marketing works.

The business of acquiring customers has never been more important than it is today and online it's harder than ever before to lure and keep them. With consumers increasingly in the driver's seat and the use of opt-in and permission-based marketing techniques growing, it's getting tougher to reach customers who can easily tune out, turn off, and skip ad messages.

If consumers don't know you, it's often because they choose not to know you. So how can marketers break through and earn consumers' attention if they don't already have a relationship with them? Even harder, once marketers get in front of consumers, they have only a split-second to win them over and attempt to turn a short dialogue into a long-term relationship. Shrinking audiences for some traditional media aren't helping matters either. What's a marketer to do?

Better Tools Generate Better Data

Recent advancements in data-gathering and analytics tools have increased message relevance, in turn increasing the effectiveness of marketers' lead-generation efforts.

"There have been a lot of learnings and improvements," says Brian Powley, managing director of Modem Media West. "There are shorter forms with more meaning and relevance, and those forms are creating a better experience." In addition, Powley says, "Clients are getting better at segmenting leads. Many have sophisticated scoring methods with 40 different criteria. And a more advanced technical underpinning of the marketing process is enabling those leads to get to the right places."

In addition, data mining and aggregation technologies have grown more sophisticated. "The whole notion of XML and programming languages that allow data transfer and integration with sales-force automation tools is simpler now," adds Powley. "Profiling technologies are better at integrating transactional and psychographic data, resulting in a better profile. And real-time provisioning has improved significantly. All of that makes it more complex, but it also helps create a better user experience in the long term," Powley explains.

Ad networks have also helped generate advances. "I am able to recognize whether I'm talking to a customer or a prospect, and can give cross-sell messages to the customer and acquisition messages to the prospect," says Steve Kaufman, senior vice president and media director at Digitas in New York. "Then, for existing customers, I can back them out of my acquisition costs so that number becomes more accurate and it brings a new level of effectiveness to the process." The simple tactic of recognizing an existing customer during a lead generation process can increase conversion by three to six times, Kaufman notes.

Behavioral targeting definitions and parameters have been standardized, providing opportunities for scale across multiple sites rather than on a site-by-site basis, says Alan Schanzer, managing partner at MEC Interaction, North America.

And finally, online data co-oping sites such as aCerno are helping companies locate new opportunities for online targeting. Based on the catalog-industry co-op model, online data co-ops are "similar to a [blind] ad network, but behaviors are driven by what consumers are doing on a corporate Web site rather than a publisher's Web site," Schanzer notes. "So if I'm Ford and I want to sell a family minivan, I could base my buy on all the indicators of consumers whose behavior matches a

family orientation."

More Precise Data Delivers More Qualified Leads

Just a few years ago, experts say, companies would try to generate big, quick, high-volume leads that weren't particularly relevant and didn't work very well. But as the ability to determine the true value of those leads has grown through the use of analytics tools, marketers have learned that lack of relevance comes at a price.

"The offers have to be tied more directly to the product," says Modem's Powley. "The days of giving away tchotchkes are over. It's no longer about, 'Sign up here and you'll get a $10 gift certificate for X.' If it doesn't tie into the product, you're not getting a hot lead. Marketers have gotten smarter than that." Now, Powley says, many clients use pricing strategies such as "Buy now, get X off your leasing or loan options" or a "No obligation, 30-day free-trial offer." As with any kind of lead-generation, "the more appropriate the offer, the more qualified the customer," he says.

In addition, marketers are starting to establish customer lifetime value metrics, says Reid Carr, president of Red Door Interactive. "And they know they have a threshold to how much they're able to spend to acquire a customer in order to achieve optimum lifetime value."

Integrating search-engine optimization functions with the rest of the marketing strategy is also key to optimizing lead-generation success. "Too often, SEO work is performed in a silo," Carr adds. "SEO managers must possess a keen understanding of the business value and the competitive advantages of the company, as much as they understand the keyword-index rating structure. Focusing on keyword insertion by itself does not mean that a company's message and value proposition will resonate with customers, prospects, and partners."

Identifying Lead-Generation Metrics

While conversion is the holy grail of lead-generation metrics, it doesn't always lead directly to a sale - its definition depends on a company's goal. "The goal might be getting the consumer to understand your performance, then you could be putting a long-term goal at risk," he adds, noting that lead-generation isn't really a Web 2.0 application. "You're doing the same stuff you've always done, you're just doing it better. But there is so much data, it's important to distill it down to the things that are really important."

When possible, basing cost-per-customer decisions on previous campaign outcomes rather than an actual "cost-per" can be beneficial, says Digitas' Kaufman, and may be the way of the future. "When I've got historical click and conversion rates, the more I can share that outcome data with a publisher, the more I am able to say 'When you back into that, I need this CPM. The more we can negotiate on outcome, the better it is for our clients."

Partnerships Serve as Lead Drivers

For JP Communications, which runs vertical search engines and directories for retailers includ-ing TopTenWholesale and OffPriceNetwork, partnerships are key to the lead- generation process. "I look at partners as one of the more critical elements in my business," says JP's president, Jason Prescott. "As Web 2.0 picks up, we should no longer look at magazines and search engines as potential competitors but should instead look at them as potential partners."

Prescott adds: "I tell my competitors that I would prefer my salespeople not to have to blindly prospect all the customers they have and vice-versa. I say, let's pool our data and work together. Let's see what we can do to help each other grow." Prescott says the companies he approaches are receptive to that. "We share data with our partners and we market each other online. Basically, we fill in each other's gaps. I will even put tabs on my sites where people can view my competitors' ads. All they have to do is promote me and run my ads," he notes.

Ultimately, MEC's Schanzer says, it's not about online versus offline or lead generation versus retention: "Strategies are changing because the world around us is changing. It's becoming a three-screen world and the lines are much more blurred. So we've got to step back and look at the communication mix more broadly. If we're doing something online, what component should be offline? Or on the back end? We're analyzing our campaigns from that perspective and getting much deeper into our client's own databases to understand what caused the campaigns to be successful and how can we do more of that."

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