• by Phil Leggiere , January 21, 2009

One clear shift in the zeitgeist driven by economic strain and uncertainty is currently being referred to as "the flight to quality."

As investors are forced to shift from trading to value investing in their stocks, so advertisers must seek ways of shifting from quantity to quality. This shift can manifest itself in numerous ways, including the eschewing of "me-too" ad networks with minimal or deficient targeting capabilities. It can, and increasingly will need to, include more intensely scrutinizing the blind spots in current display spending strategy and tactics, especially areas where behaviorally based targeting has been under-utilized, or entirely ignored up till now.

One major area of "low-hanging fruit" till now almost entirely ignored is lead generation, according to Keith Johnson, vice-president of product management at i-Behavior, Inc., a database firm.

"One big problem that's coming to the fore among retail and other direct response advertisers in this economy is the deterioration of quality of leads obtainable through conventional, less efficiently targeted lead generation methods," says Johnson. " Advertisers have invested heavily in getting qualified leads -- but the problem is, if you go by the practices of lead generation 'screening,' you need to ask 20 questions to filter out the customers who are truly qualified leads. This is an area where behavioral targeting has been underutilized -- because it can give you a big jump in knowing who it is you're qualifying."

For example, 'if a user shows up to your Web site, and you know that he or she is in market for a new car based on the Web sites they have recently visited, why not jump directly to that portion of your screening and turn the lead over?" Johnson asks. "Alternatively, if you know a consumer doesn't have kids, why start with the screening questions about diapers and formula?"

A second area marketers (along with ad networks and other firms offering behavioral targeting) should be paying far more attention to, Johnson adds, is on moving behavioral profiles and segmentation beyond merely identifying "in-market" customers to engaging "high-value" customers.

"Very often the behavioral models remain a black box," Johnson explained. "The BT network may produce clicks and even conversions -- but the question is, how close a fit the methodology is to the key issues that really drive strategically high-value customers. It's [dramatically] easier to identify a consumer who appears to be 'in-market' from a customer whose purchase profile fits a marketer's goals as a high-value customer."

Transparency in this context, according to Johnson, means allowing marketers to customize their own model of "high value" customer based on the criteria that correlate with their strategic goals.

With this in mind , I-Behavior currently looks at over 1000 variables ranging from where and how often customers shop, to how much they spend on various items, to how price-sensitive they are.

"All of these things mean something very different to different marketers and brands," Johnson explains.

Identifying these high value customers, Johnson says, is only the beginning. Another critical component of a high-value strategy is to move is in the direction of synergy across channels. "This is another area," he says, "where there's been a gap between potential and business as usual for many marketers. For retailers ,this means doing everything possible to connect online, offline (for example, catalog) and in-store retail purchase behavior for known direct channel buyers. Once you overcome these silos you can quickly get to the point where each individual channel mutually reinforces efforts in the other channels."