• by Steve Smith , Staff Writer @popeyesm, August 17, 2007

Not all behavioral targeting involves media buying, Offermatica CEO Matt Roche reminds us. Coming out of Mediapost's own Behavioral Marketing Forum last month, Roche was eager to widen the conversation about BT beyond the hot news about Tacoda/AOL, perennial concerns about scale, and the privacy hot button. Offermatica provides a content management solution that encourages multivariant testing of offers and copy to determine their best effects on conversions and engagement. It then turns these learnings into more customized and personal content delivery based on user profiles and past behaviors on-site. Engaging users require a more engaged marketing effort, Roche likes to say. He works with CNet, eLoan, MusiciansFriend.com, among others and thinks marketers need to leverage more effectively the profiles of their own customers at their own sites. We asked him to scratch that surface for us with a few recent examples.

Behavioral Insider: You like to say that marketers are not making use of the data that comes from their own sites and that, as you put it, ‘you get an engaged customer when you have an engaged marketer.' Give me an example from one of your own clients.

Matt Roche: We found on large media sites that the less you have on the page, the better. It is all relevance. You can't take something off the page if you don't have a sense of who that person is.

So with MusiciansFriend.com, [when] someone comes to the home page we know nothing about them, so they get the home page. What if we repeat the keyword that they searched on to get there, just show similar information? That increased the conversions. We repeat your keyword so you have a connection. Then we install affinity targeting that says when you go to the drums section and come back to the home page it will show you more drum offers. It increased the conversion rate in double digits on all the categories where we did category affinity

What was more important, in my opinion, was that the guy who was running the category for drums has never had his stuff on the front page. The front page is reserved for those departments inside a company that have the power. But if you suddenly say that the front page visitor is not just a MusiciansFriemd front page visitor but a MusiciansFriend drummer, then you say, Mr. Head of Drum Merchandise, you tell me what I should show them. In the past you sat back and prayed people get to the drum section. Now he is leaning forward and saying, I know they are a drummer, [so] what should I be showing them?  When the marketer becomes engaged, when they do something and see the result of it, then they do things that are in the end more engaging for the consumer.
 
Behavioral Insider: But the perennial irony of interactive marketing seems to be that we have so much data and act on so little of it. How do you get marketers to engage the data that has always been there?

Roche: What we ultimately made was a marketer-friendly interface. I have been doing e-commerce and online for ten years. I ran Four Point Partners and we built Nike.com and JCrew.com and BestBuy.com. The one consistent thread through all of these projects was that the marketers would never touch it. Inevitably it was the marketers thinking of ideas and going to IT and asking them to implement it.

But when it is in the middle of IT, marketing is not marketing anymore. So we try to create an interface for the marketer to say, I wonder if targeting a different message to people coming from a different place would lead to a different result, and I wonder if I could figure it out by Friday. Should it be ten CDs for a penny or eleven?

We built a front end so people could type in what they want to see, press OK, and their existing site would be able to change it. We subsequently extended that, because we found advertising had the same situation where they were provisioning an ad out onto a network and they wouldn't find out what happened for six weeks or at the end of the quarter. On the Internet you should know ten minutes after putting out an ad whether people are acting on it, and you should be able to respond to it.

Behavioral Insider: Bring me to that next level of behavioral targeting on-site.

Roche: It is absolutely open territory. Most customers have probably four segments that they can reliably exploit, meaning that those segments behave so much differently from each other that targeting to them will yield benefit. So the No. 1 question that any marketer has is figuring out who those segments are and how to identify them in real time. What we have to start doing is experimenting to figure out what sources of traffic are reliably correlated with a certain persona or segment. That is one big exercise that can take two years of experimentation.

The second [question] is, how do I reduce what I show and really focus everything from taglines to level of copy to number of products offered so that I can exploit it to the highest degree? We have done tests where we did head keywords and tail keyword and those are reliably different behaviors. That's not saying they are different people; it could just be different stages in the purchase life cycle. But I will tell you the behavior of searching on the head word like Turbo Tax versus a tail word like accounting is so different that the pages on the site based on it led to 168% higher engagement. When I carry it through, it can be offers and products I show on every single page. 

Behavioral Insider: You object to behavioral targeting being defined narrowly in terms of media buying and ad networks rather than on-site tools. Like yours.

Roche: Unless you broaden it to think that BT is trying to understand how we can provide a more targeted overall experience that leads to a better outcome, then you are just seeing half the picture. For marketers, [media] will be a shiny object. A couple of companies will get bought for a very high premium and then it will go away. But if you start saying part of it is the personalization that Google has done, part of it is what Tacoda and Revenue Science are doing , and part of it is what LowerMyBills is doing but also what Offermatica, TouchClairty and Right Media are doing -- if you expand it -- then it is a marketing approach that has ten years of life on it as opposed to being a sub-sector of ad serving.
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