From the Editor: It’s 1999. But let’s look back at 1998 for a moment .an exciting year for online marketers. Last year brought us much closer to figuring this whole web thing out, bringing us further along in learning how to leverage web technologies for online marketing. And 1999 will propel us that much further along the path toward the Holy Grail of one-to-one marketing.
So in the spirit of the New Year, The ClickZ Network is launching KnowledgeZ’s Precision Marketing column. As a new regular weekly feature of ClickZ (publishing every Tuesday), KnowledgeZ is sponsored by Engage Technologies and offers up straight talk about targeting on the web.
In this space every Tuesday, you’ll read about one-to-one marketing not as the Holy Grail, but as the end result of targeting. We call it Precision Marketing because it gives marketers the how-tos and whys of precisely targeting their market audience.
In ClickZ’s classic how-to style, the column will be a roadmap of targeting and its practical applications. No techno-terms here Precision Marketing aims to help marketers reach the audiences they want to reach in the most efficient and effective manner possible. Of course, this is one place where you can count on the requisites being fairly entertaining to boot.
The column also introduces sometime ClickZ contributor Deborah Kania as a regular weekly columnist. A self-described “webologist,” Kania professes to being a ‘net marketing and e-commerce practitioner since the stone age of the Internet, or early 1995. She is the co-author of two Internet books: Internet World Guide to One-To-One Web Marketing and Web Catalog Cookbook (John Wiley).
The web has created a new way to market indeed. Marketing buzzwords like “targeted marketing,” “precision marketing” and “one-to-one marketing” are no longer buzzwords. They are realities on the web.
But I’m getting ahead of myself here. First things first. In fact, this inaugural KnowledgeZ column does take a step back by talking a bit about the basics of data and data collection.
After all, if the key to precise marketing is knowing your customer, then data collection becomes the first step in building a knowledge base for targeted marketing to particular customers or market segments.
In The Beginning There Was Data
and data was good. Actually, it’s downright critical if you’re an online marketer. According to Webster’s New World Dictionary, “data” is defined as “things known or assumed; facts or figures to be processed; evidence; records, and statistics from which conclusions can be inferred; information.”
Data is in fact the launch pad for the process of identifying and learning about customers and customer segments. The appeal and strength of the web is its ability to record and track user interaction, which allows us to collect facts and statistics. Collecting real-time data via the web has stunned we marketers seasoned by other mediums.
Many of us who have been using the Internet for sales and marketing for the past three or four years will be familiar with the excitement of seeing the “hits” on our web sites grow. Hits were the primary measure of success on the ‘net back then. How many of us eagerly studied our web logs on an hourly, daily, weekly and monthly basis?
Then, as web traffic increased, web logs became unwieldy. There was more meaningless web site log data than there was meaningful data. Thus, we found that more log data wasn’t necessarily better, and defining web success wasn’t as simple as it was in the beginning.
But with the introduction of web log analysis tools, data collection and web databases, we’ve been given more power and far more flexibility. There are several ways to collect data online, from the simple (anonymous) to the complex (individual user identities):
- Web logs – Every time someone accesses your web site and clicks on a graphic or link, his or her interaction with your site is logged on your web server. Web logs are useful in telling you what web pages are popular, the duration of users’ visits, the referring web site (the web page the user was perusing before they came to your site), and so on. Web log analysis will give you insight about your web site usability, but it will not provide you with data that will help you with one-to-one web marketing.
- Interaction/click-stream tracking – Web marketers can rely on their web logs to make inferences about user “behavior.” By monitoring user interaction over time, marketers can learn more about users by what they do on web sites. If each user has a unique ID, then marketers can track each and every user’s “click.” So as the user surfs the web site, this creates a unique “click-stream.”
Wouldn’t it be useful to know when users are stopping short of the online order form? Or wouldn’t it be useful to know what related items are of interest to users when they move from one item to another? Click-stream tracking and analysis can do this. When combined with online profile/registration information and/or cookies, web marketers have a powerful tool to singularly target a user with advertising, product recommendations, etc.
- Cookies – Cookies are associated with the web browser. They are bits of data stored in a text file on a user’s computer. Cookies help marketers identify users and display customized/personalized web pages and advertising. Cookies primarily will identify the computer (not the user) accessing the web site. So by themselves they are not very precise. But when cookies are used in conjunction with online registration forms, they can be used to store a unique user ID and password that can identify the user each time he or she visits.
- Customer feedback – Although collecting customer feedback will not directly aid in one-to-one web marketing, it can provide some useful data. Web-based feedback forms and online surveys can aid in data gathering.
- Online registration/profiling – Online registration is a popular feature on web sites because it provides “declared” user data, which is data actively provided by users themselves. Marketers can build in-depth online user profiles using registration forms. Online profiles can also be built using a registration form along with profiling questions embedded through the web site, and other interaction/transaction data.
Unfortunately most of the web sites that collect information via a registration form do not provide users with anything useful in return. Plus, the majority of online users are skeptical of web marketers, so they tend to not provide accurate/truthful information when they fill out these forms. Online registration and profiling will not be as powerful as they might be if web marketers don’t do two important things: 1) build a trusting relationship via privacy policies; and 2) provide valuable web site services using online registration/profile data such as personalized information and recommendations in exchange.
- Online transactions – If your site sells products or services, then online transaction histories offer additional data that can be collected, analyzed and utilized in one-to-one web marketing. Online transactions provide a useful combination of “behavioral” data and “declared” data, because the transaction is a recording of an action, and the user actively provides unique and personal information to you via the transaction.
- Customer/offline databases – Other customer databases and offline databases provide additional sources of data that can be integrated with your online data collection efforts. There is a lot of overlap with, as well as gaps between, web sites and traditional marketing and sales methods.
No doubt you have customers that use your web site for commerce research. But when it comes to purchasing, they call an 800 number. Or you have customers who have purchased both online and offline over the duration of their relationship with you, but this data is kept in two distinct databases because you have not merged your online and offline transaction or customer databases.
Other offline data that can assist in your one-to-one web marketing efforts include demographic and psychographic (i.e., interests, lifestyles) information from surveys.
Data is Data. But Knowledge is Power.
Webster’s New World Dictionary defines “knowledge” as “the act, fact, or state of knowing; specif., acquaintance or familiarity all that has been perceived or grasped by the mind; learning; enlightenment ” Based on this definition, the concept of knowledge embodies data plus a keen understanding of what the data means to your business.
By itself, data doesn’t provide the necessary insight and understanding for one-to-one web marketing. You can have gigabyte-sized log files and databases, but by themselves they are meaningless.
What’s really valuable is knowing your customer more intimately by getting inside their heads and tracking their interactions with you. In order for data to become knowledge, each of your customers will have to play a part in the process by interacting with you via online profiling and transactions. In the words of the one-to-one marketing gurus, Don Peppers and Martha Rogers, “In the 1:1 future, it won’t be how much you know about all of your customers that’s important, but how much you know about each of your customers.”
So why should web marketers collect data in the first place? The answer varies for each web marketer.
Some marketers will find that one or two approaches to data collection are sufficient to meet their marketing objectives. Other marketers will want to rely on all of the techniques. The answer should be inextricably linked to your online marketing plan — it gives you the purpose behind the data collection.
And because collecting, analyzing and utilizing data in your online marketing efforts is both time-consuming and potentially expensive, the goal of this column is to help you determine what you need to collect and why you should collect it, as well as how to do so.