Campaign results improve when marketers close the direct response loop with offline data.
Most digital marketing campaigns serve ads based on the last click. But a click-through is not a sale. Too often, marketers optimize campaigns for click-throughs, even though optimizing for actual sales transactions is far more effective.
Direct response marketing techniques are among the most effective available to marketers. They involve advancing an audience one step at a time through a conversion funnel by:
This technique benefits consumers by providing them with relevant information. It benefits marketers by delivering measurable improvements in campaign results. Closing the direct response loop is central to realizing these benefits, and it has long been considered the Holy Grail of online advertising.
Online campaigns often attempt to close the direct response loop using click-throughs as response data, even though campaigns perform best when they optimize against the campaign's actual goal - sales transactions. Click-throughs are often used as a substitute because most sales transactions occur offline in ways that can be difficult to measure, and once obtained, offline transaction data can be hard to correlate to the campaigns that influenced them. But the walls preventing solutions to these problems are breaking down.
Recognizing that unique data (and the relationship assets that provide exclusive access to it) are sources of competitive advantage, digital marketing firms have begun investing in partnerships that provide access to this offline sales transaction data. And fundamental technology breakthroughs in big data analysis now enable digital marketers to correlate offline sales transaction data to the campaigns that influenced them in ways previously not possible.
For example, [x+1], a leading online marketing technology provider, has innovated in its use of big data technology to track attribution across both digital and offline channels. As [x+1] Chief Analytics Officer Leon Zemel states, "Historically, we talked about lift in the response rate or the conversion rate. Now we're talking about lift in total digital sales. And we're seeing a big year-over-year impact - 20 percent growth. Net-net, the client is seeing more revenue from more customers." Additional detail can be found here.
Datalogix, an integrated database marketing and digital media firm, has also innovated in online targeting based on purchase data. "Our targeting isn't about clicks, it's all about sales," says Joseph Benjamin, chief technology officer at Datalogix. "Look at the growing amount of time people are spending online, and then compare that with the amount of purchasing done offline - maybe 90 percent," says Benjamin. "We're bringing those two worlds together. We can tell the retailer when an online campaign drove purchases to the call center, the store or the website. In fact, in one representative campaign, the Datalogix platform's unique ability to leverage offline data for online ad targeting increased the campaign response rate we delivered by 50 percent over that delivered by our competitors." Additional detail can be found here.
Marketers understand that when their marketing tools each operate on independent data sets, much of the value in their underlying data is being lost, and that the more marketing data silos they unite, the more value they create. But smart marketers also understand that different types of data have different value in the context of their marketing campaigns. And there is no data more valuable to a marketer than customer-linked sales transaction data. So while a stepwise approach to uniting the disparate data silos created by various marketing technologies is a smart approach, offline sales transaction data belongs at the top of every marketer's priority list.
Open Book image on home page via Shutterstock.
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Brad Terrell is responsible for maximizing the value that Netezza technology delivers to the many innovative digital media firms that power their large scale data analysis initiatives with Netezza's analytics appliances.
Before joining Netezza (IBM acquired Netezza November 2010), Brad led digital media initiatives at Endeca as director of business development and helped fuel the firm's rapid growth from $10 million to more than $100 million in annual revenue. Prior to Endeca, Brad helped design and launch products including the Spyglass Mosaic web browser, IBM PowerPC microprocessor, H&R Block online investing website, and FlightSafety International's FAA Level C-certified flight simulators.
Brad's entrepreneurial experience includes co-founding and serving as president of ElectricWish.com, ranked among the top five e-commerce sites on the web by ZDNet in 1999, and M-Nova, a pioneer in product development outsourcing to Eastern Europe. Brad holds an MBA from MIT Sloan and a computer science degree from Rice University.
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