Nowhere are the downsides of channel silos and their corresponding point solutions more apparent than with email marketing. When email took off in the late 1990s, organizations developed new email marketing teams. These email teams had separate goals and responsibilities from the existing direct/database marketing teams, which continued to manage existing customer relationships across multiple offline channels, such as direct mail, outbound call centers and others.

Email service providers (ESPs) emerged to support these fledgling email marketing teams, who used ESPs in the same way they used mail shops for direct mail or call centers for outbound telemarketing: as a convenient external service for outsourcing message delivery and fulfillment. Since email marketers at the time hadn’t progressed beyond the “batch and blast” mentality, it was relatively easy to cut a list and then use the ESP or call center to broadcast a campaign.

However, the technological silo created by ESPs served to reinforce the functional silos. Customer and campaign performance data sat in different silos, making it progressively harder to integrate email with other channels, and making it nearly impossible to deliver a relevant and consistent cross-channel customer experience. Further, a specific set of metrics was devised to measure and analyze email marketing performance — again, completely separated from how results across other channels were quantified, further exacerbating the problem.

Although the mail shop and call center continue to serve their respective channels well, savvy marketers have begun to take a hard look at ESPs. They recognize several disadvantages of ESPs, stemming from both the inherent qualities of email (compared to other channels) and limitations with the systems themselves. Let’s examine some of those limitations further.

ESPs Limit Email Marketing’s Full Potential

Unlike channels such as direct mail or voice, email is real-time, interactive, trackable and customizable. Unfortunately, ESPs prevent marketers from taking full advantage of these inherent qualities and realizing greater marketing ROI.
For one, their limited data model and targeting capabilities reduce personalization options, and they often force marketers to perform list selects in a separate customer and prospect database, and then upload the files to the ESP. The required additional steps, along with multiple systems and GUIs, significantly slow down go-to-market time, preventing email from being truly real-time.

Although ESPs generally track email interactivity, this behavioral data remains trapped on their servers and can’t be incorporated into an organization’s master customer and prospect database. Thus, the true value of this data remains unrealized, as it can’t be used to increase message relevancy and personalization.

Behavioral Data: Unlocking an Untapped Enterprise Asset

Because of its interactivity, email creates a tremendous amount of data and insight into customer behavior, before, during and after the click. With an ESP, this valuable behavioral data is trapped on the ESP vendor’s servers — a silo over which marketers have no control. While they usually get the output/visualization of this data in the form of reports, they rarely have access to the raw data, and thus can’t bring it into the master marketing database in order to enrich customer profiles and execute more targeted, relevant campaigns. The result is less effective marketing.

According to Forrester’s “The Road to the Online Marketing Suite” report, “Without centralized access to data, marketers are limited in their ability to understand their customers and execute compelling multichannel campaigns. The growing number of data sources like CRM databases, search marketing,website clickstream, transactions, display advertising, email and other messaging campaigns remain confined to disparate applications.” The goal, the report continues, should be to incorporate “insights and data from online and offline channels to support an enterprise-wide approach to segmentation, planning, and customer experience.”

A cross-channel campaign management platform allows marketers to implement such an enterprise-wide strategy by establishing — or leveraging, if it already exists — a central database of record that encompasses all known and inferred customer information, including contact information, socio-demographics, transactions, computed data, expressed interests and preferences, behavioral information, aggregates and scores. These profiles are typically updated in real time with the very latest behavioral and response data. Because all channels are natively integrated into the platform, this insight can be leveraged for progressively better targeting and offer selection across all channels, not just email. In this way, the whole becomes greater than the sum of its parts, and marketers reap the benefits in the form of greater campaign results and revenues.

Market to the Customer, Not the Channel

One of the largest systemic problems with ESPs is that they breed a culture of marketing to the channel. Each marketing team is narrowly focused on the goals and performance of the channel for which it’s responsible, with little or no regard for the overall customer experience. With multiple point solutions, it’s incredibly complex to coordinate campaigns across channels in order to establish and maintain a positive, relevant and personalized customer experience. Instead, with channels managed in silos, customers suffer from inconsistent and poorly-targeted messages, contact fatigue and frustration

A cross-channel campaign management platform allows marketers to holistically manage their marketing campaigns — and the customer experience — from a single interface, ensuring they’re always marketing to each individual and his or her interests, needs and preferences. By focusing on the customer experience, marketers will not only improve the performance of each individual channel, but also overall marketing ROI and corporate revenues.

Create Seamless Experiences across Outbound and Inbound Channels

One of the most crucial aspects to providing a seamless, cross-channel experience is achieving inbound/outbound fusion: seamlessly delivering the best marketing offers across all interactions in the customer conversation, regardless of the channel. While coordinating outbound channels alone can drive greater results, the real payoff comes from incorporating real-time inbound interactions initiated by customers via the web, call center or point of sale (POS). Study after study concurs that inbound visitors presented with a relevant offer are much more inclined to respond, compared to recipients of one-off, direct outbound communications.

Although many ESPs have begun expanding into the web channel, they are unable to truly unify outbound and inbound marketing strategies. In reality, they offer only basic capabilities for creatinglanding pages tied to specific email campaigns. While these pages often mirror the design and contentof the email, they are not personalized in real time, based on each individual visitor and his or her behavior — not only within the email, but on the web and across other channels. Moreover, ESPs lack integration with other key inbound channels, namely the call center, POS, or kiosk.

Leading cross-channel campaign management vendors, on the other hand, have made inbound marketing capabilities a native component of their platforms, seamlessly blending them with traditional outbound campaign management. Regardless of the specific channel, all known and inferred information about each visitor is used to select, personalize and deliver the most relevant offers in real time. In addition, all offer recommendations and outcomes are centrally tracked in order to enhance future interactions and the overall customer experience.

With inbound/outbound fusion, all the rich behavioral data created by email informs offer selection on inbound channels, and vice versa. If a customer ignores a specific offer delivered via email, the platform can automatically suppress that offer from other channels, so it’s not presented when that person visits the website a week later. The way a customer interacts with a specific email can even drive what content they’re presented when they click to the web just seconds later. A sophisticated platform can also dynamically insert the most relevant offers into an email at the moment of execution — e.g., they may have just declined an offer on the phone — as well as personalize an email each time it’s opened to ensure it always reflects the very latest customer information.

Break Down the Silos to Develop a True Cross-Channel Customer Experience

Customers today are more informed, more connected, and more fickle than ever. They not only control how they interact with brands, but when and where. More than ever, customer experience has a direct impact on a business’ revenue and profitability. Because of the viral nature of social media, one bad experience can quickly spread in all directions, weakening a brand and its sales.

Consequently, marketers can’t afford to continue managing their channels and campaigns in silos, perpetuated by point solutions like ESPs. This siloed approach only leads to customer fatigue and frustration. Organizations that can tear down these walls and deliver a relevant, seamless, cross-channel customer experience will be rewarded with share of mind — and wallet.

“… a unified technology platform that intakes disparate first-, second-, and third-party data sets, provides normalization and segmentation on that data, and allows a user to push the resulting segmentation into live interactive channel environments.”

I think this definition is spot on. However, over the last several months I have concluded that few DMPs are delivering on the promise suggested by the definition.

In our present parlance, DMP means almost anything to anyone. The term has become a catchall phrase with many meanings that seldom deliver against the definition in Forrester’s report. A DMP’s value and service varies greatly from company to company. Consequently, marketers face a significant challenge deciding what is essential in choosing a DMP.

The Forrester report identifies what I think is the most important trend in the DMP space:

“The past three years have seen an explosion of third-party data providers enter the market selling everything from demographic to behavioral to social data. We expect that market to condense and prices to drop as marketers turn to it merely to fill in gaps in their audience segmentation — which is increasingly built upon first-party data as marketers seek to maintain competitive advantage through deep knowledge of their customers — not to form the core of their targeting strategies.”

For years, we thought that marketers could accurately target audiences by buying online segments—and sometimes that is enough. Forrester’s report shines a light on marketers looking for technology solutions that bring together offline and online data—in a privacy compliant way. After all, marketers have spent considerable time and resources gaining these offline audience insights.

Safely harnessing these data assets will only lead to better results and improved ROI. That is why the industry is swiftly moving toward understanding consumers better through first-party data instead of trying to connect to consumers with buckets of audience segments stitched together from third-party data sources.

What’s Next?

The current ecosystem is way too complicated, seemingly working at cross-purposes. The demand side wants to reach its desired audience at the highest ROI, while the supply side wants to sell its audience to the highest bidder. Actionable insights are needed to change course where necessary, improve campaign performance, and ultimately improve each side’s return on investment. Marketers need a way to test each element of their DMP, including the buy side and the sell side.

My advice to the DMP corner of the interactive world is to focus on what our end-user needs–analytics and insights to drive ROI improvements, not more sampled third-party data with predictive modeling. DMPs should not provide estimations instead of real numbers. The best DMP solutions have a few commonalities: data accuracy and integrity, scalability, multi-channel reach, and lastly, neutrality and trust—meaning that DMP solutions should not be in the business of buying and selling data.

I would expand Forrester’s DMP definition to say that DMPs are the audience intelligence engine, while analytics with actionable insights are the media intelligence engine behind the DMP. Audience intelligence and media intelligence are not the same things, but they work in concert to provide a complete picture. Data as a stand-alone proposition is of little utility to the media buyers in the trenches.

If media buyers are spending three days a week just analyzing data, when do they actually have the time to act on what they have learned? Knowing “what to do” is far more important than “what happened.” The first-party data trend is catching on because media intelligence gleaned from first-party data and offline data is much more accurate—making “what to do” insights more actionable and reliable.

I thank Forrester for the wonderful work they did on the DMP Audience Intelligence report; now we need to add media intelligence into the mix. Media intelligence consists of facts learned in aggregate from attribution models, media and audience analytics, across all mediums (display, social, search, mobile, video, and IPTV), and across all media sources including first-, second-, and third-party, online and offline data.

We are not there yet, but Forrester’s report shows we are on the right track. By listening to what our end users want, and focusing first on guiding our clients to the most direct and accurate insight, we are one step closer to arriving at the true potential of interactive.

This is certainly the case for consumers and online privacy – particularly in the realms of behavioral advertising and mobile interactions. With the online landscape changing so rapidly, it’s challenging even for those of us involved in the Internet advertising and media industries to keep pace. For consumers, this is even more so.

In our role as the leading online privacy solutions provider, TRUSTe keeps a close eye on consumer perceptions – not only to better understand the areas of consumers concerns but also how to best alleviate them.

Together with Harris Interactive, TRUSTe recently completed two consumer research projects – one relating to issues about online behavioral advertising (OBA) and the other about mobile privacy.

Not surprising was the fact that consumers have concerns about their privacy as it relates to behavioral advertising – with an overwhelming 94% saying that privacy is an “important issue.” But our research also uncovered a few surprising consumer beliefs. Misperceptions can run both ways, and some of these findings might shatter our own industry perceptions about consumer feelings.

Most consumers believe their personal data is being shared without permission.
TRUSTe’s research has found that consumers believe data activities are more privacy invasive than they actually are. According to our OBA consumer poll, more than one in three believes that the websites they visit share their personally identifiable information (PII) with advertisers without their consent. Forty percent of those we surveyed believe, for example, that their name is shared without their consent, whereas in reality, most behavioral advertising operations only know consumers by anonymous cookies – not their names.

Similarly, our mobile privacy research revealed that 56% of consumers are concerned that their personal information is being shared with others without their permission. In the same survey, 68% of respondents said that they believe they are tracked based on their mobile activities for OBA, and 72% think that some mobile applications share their information with third parties. For all three, the reality is actually much less.

The bottom line is that sharing of personal data is a consumer hot button. When asked for their feelings about behavioral advertising when their PII was not involved, for example, consumer favorability increased by an astonishing 100%.

Consumer privacy opinions and privacy actions don’t always synch up.
Despite widespread concerns about the safety of the Internet, the OBA survey revealed that only 37% of consumers know how to protect their privacy online and consistently do so. It also showed that one in four protect their privacy by “opting out,” although the majority (53%) said that they rarely or never manage their privacy choices by opting out of OBA.

In tracking privacy behaviors, however, TRUSTe has found that the actual opt-out rate is much lower. For instance, in a 2010 pilot of TRUSTe’s TRUSTed Ads OBA platform conducted with Publishers Clearing House (PCH) only 1% of site visitors actually chose to opt out of all advertising networks. This shows an interesting discrepancy between consumer privacy opinions and privacy actions.

Yet it’s a mistake to assume that consumers don’t care about privacy just because they don’t opt out. A consumer’s perception about a website or platform definitely affects the way that they interact with it, and better privacy has been found to create more consumer trust, leading to increased interactions and openness.

Our OBA research also shows that terminology impacts consumer feelings. Words “tracking” and “targeting” have a negative impact on consumers, while the term ‘interest-based advertising’ is received much more favorably.

OBA Compliance Makes a Difference to Consumers.

Consumer awareness about the DAA’s Self-Regulatory Program for Behavioral Advertising is growing. As more ad impressions become compliant, TRUSTe expects this awareness to continue. Our research has already shown that 43% of consumers are generally positive toward advertisers who participate in the self-regulatory program.

A new report released by Forrester Research entitled “Online Advertising Data Compliance Matters” encourages marketers to “take charge” of self-regulation for the benefits of their companies’ brands as well as the overall industry. The report supports TRUSTe’s belief that the benefits of participating in the self-regulatory effort for OBA compliance far outweigh the costs.

The report also notes that companies, such as TRUSTe, are already bringing to market many of the privacy solutions that are needed for successful deployment. Finally, Forrester urges brands to take charge of their compliance obligations themselves – and not just simply rely on their ad network vendors. TRUSTe wholeheartedly agrees.

For TRUSTe, all of these findings reinforce the vital need for continued consumer education and transparency about online privacy practices – for both OBA and mobile. Consumer trust and understanding are essential to address concerns and contribute to effective usage of these online solutions.

With clear and concise information about what’s actually being done with consumer data, advertisers, publishers and media platforms can stop misperceptions from growing and begin to reap the benefits of these interactive technologies.

Based on interviews with 150 North American marketing professionals, Forrester also found that technological solutions to these problems approach them in a limited or disjointed fashion.

At an Adometry-hosted webinar next Wednesday, July 13, to Adometry Vice President of Marketing Steve O’Brien will interview Joanna O’Connell, Forrester Research’s senior analyst for interactive marketing, about the findings and the “new breed” of audience measurement solutions required to address the cross-channel needs of marketers. Read more about it on the Adometry blog or sign up here.

It’s Consumer Electronics Show-time, so us tech journalists are getting deluged with news about the hottest tech thingamabob since netbooks — tablet computers. Following tremendous holiday iPad sales, every hardware hotshot is debuting a tablet device powered by Android, Windows or pure imagination… Wait, that’s Willy Wonka’s chocolate factory.

It doesn’t look like the market will be flooded, however. Forrester Research is expecting tablet computer sales to spike this year, from 10.3 million in 2010 to 24.1 million in 2011. The market will have another growth spurt to 35.1 million sold in 2012 before leveling out in the mid-40 million area come 2015.

By then, 82 million U.S. consumers (or approximately a third of the online population) will be using tablets. Forrester also predicts that despite the influx of competition, Apple’s iPad will dominate the market through 2012.

For those in the advertising industry, you better be hard at work on your tablet-friendly creative.

A survey of 156 display media marketers by Forrester Consulting commissioned by AudienceScience found that 77% of respondents currently use or will implement audience targeting in 2010

Reaching targeted consumers was the greatest benefit for 42% of display marketers that planned to start using or increase their use of audience targeting, while 32% cited better results.

“Increasingly, marketers are realizing that audience targeting can deliver branding and direct response results, and that they can count on the channel for continued success,” said Jeff Hirsch, president and CEO of AudienceScience.

Microsoft chief Steve Ballmer said the industry is still displaying remarkable “buoyancy” but cautioned that it “isn’t immune” to negative ramifications from the roiling market.

“At least, for now, people are feeling, I won’t say optimistic, but better than you would be feeling if you are watching CNBC all day,” Ballmer remarked at a meeting in Silicon Valley yesterday.

Ballmer also believes Microsoft is perfectly poised to finally beat Google at the online ad game: “If anyone is going to provide competition to Google I think Microsoft is in a good position to do that,” he said, alluding to opportunities he sees in online marketing (not search). Analysts are backing him up: they predict an 8% increase in revenue to roughly $15 billion during the fiscal quarter ending this month.

Forrester Research is predicting a statistically significant slowdown over the next three to four quarters.

“The biggest risk to the tech market comes, not from the Wall Street collapse, but from a collateral U.S. recession,” Forrester CEO George Colony wrote on his blog. “Forrester expects a mild recession in the U.S. and Europe lasting through Q3 and Q4 of 2008, and Q1 of 2009. While tech spending grew 8% in the U.S. in 2007, we are forecasting tech purchases to be up 5% in 2008, and up 6% in 2009.”

According to Bango data, the top five countries accessing the mobile Web via Bango in July 2008 are the U.K. at 19.35%, the U.S. at 18.88%, India at 10.82%, South Africa at 8.82% and Indonesia at 4.08%. (The ranking is produced by measuring the number of user visits to mobile Web sites from each country.)

“The U.S.A. share of the browsing market has grown as an increasing number of phones come with bigger screens and service contracts that include unlimited internet access,” said Adam Kerr, VP of Bango North America at Bango. “We fully expect the U.S. will overtake the U.K. in this ranking as early as this month.”

But ulterior motives aside, it does seem that Bango is onto something. According to Forrester Research, the number of inquiries it receives from businesses and service providers wanting to talk about the mobile Web jumped 40% last year.

Bango created the world’s first global exchange for the mobile Web. By providing a common integration point for brands, businesses and individuals, Bango aims to remove the complexities that make the mobile Web difficult to exploit.

Despite all of the positive news, deliverability challenges may be the Achilles heel for email as a direct marketing tactic. The DMA’s Q2 2007 National Email Marketing Benchmark report flagged a second significant consecutive drop in deliverability, with retention email deliverability dropping a steep 80% and acquisition email deliverability sliding by 68%. Fortunately, the solution to the deliverability conundrum may lie with evolutionary changes in email technology — already underway — that will enable marketers to increase their sender credibility, trim lists, and reduce the volume of email sent, all while boosting effectiveness and ROI. Two of these evolutionary changes, email automation and mass customization, promise to help marketers improve deliverability rates, create more successful campaigns and build stronger relationships with customers and prospects.

Email automation ushers in a new era of mass customization

Email automation builds on personalization, the best practice of addressing emails directly to recipients by name, which allows marketers to go beyond one-to-many broadcast emails to establish one-to-one relationships with customers and prospects. By allowing marketers to send the right message to the right person at the right time in the buying cycle, email automation improves the likelihood that recipients will open and click through your emails.

With personalization and email automation, marketers can take the daring step of sending less email to smaller, more targeted lists. This approach improves email relevance and the timeliness of message delivery, and is ushering in a new trend in email marketing called mass customization.

Mass customization enables marketers to design email campaigns that take advantage of demographic, behavioral and transactional data they have collected about customers and prospects. This data not only provides the tools for targeting and segmentation, which can improve campaign performance; it also improves the customer experience of your brand by ensuring your email messages are relevant to the consumer. By combining the enabling technology of email automation with mass customization, marketers can quickly design and automatically deliver campaigns with customized messages based on recipients’ preferences.

While most companies collect data about their customers, actually integrating the data and using it in campaigns has taxed the capability of most email marketing solutions designed for small-to-medium sized businesses. New, affordable email automation tools are now on the market that support event and action-triggered automation, integrate with customer relationship management (CRM) and lead-generation tools, and feature robust reporting and analysis to give marketers an end-to-end view of their campaigns. These solutions level the playing field by making it possible for companies to plan and implement sophisticated email marketing campaigns using automation and mass customization techniques that were once available only through enterprise-class solutions.

Event and action-triggered automation

Personalization, segmentation and targeting are well-understood by most marketers. They are also the first steps to creating email campaigns that take advantage of email automation and mass customization. Advanced automation technologies include event or action-triggered email campaigns and integration with CRM and lead-generation tools.

Event or action-triggered automation complements segmentation, which targets campaign content to specific list segments, enabling marketers to automatically send compelling email with relevant content and offers tailored to consumers’ needs. With event triggers, these emails are automatically delivered at the right moment — for example, when a customer abandons a shopping cart, an email can be triggered with a relevant offer that also enables the customer to complete the transaction in the email.

Marketers can plan an entire campaign around automated event triggers, mapping out workflows and events including:

- The event, action or specified time that initiates the sending of an email
- Filters to include or exclude contacts
- Timer delays for scheduling and initiating message delivery
- Select customized email campaigns to send to specific contacts or contact segments
- Post-condition settings to assign value fields for tracking specific contacts once the campaign series has been executed

With today’s simple-to-use, Web-based email tools, automated trigger campaigns are within the reach of marketers without requiring IT support, giving marketers another tool to increase the ROI and effectiveness of their email campaigns.

Integrate email with CRM and lead-gen applications to speed the sales cycle

For some small-to-medium businesses, email applications have served as a CRM application, making it simple to reach out to customers and prospects while gathering basic data. However, CRM and lead-gen solutions are now available on a software-as-a-service basis, bringing advanced capabilities for collecting and managing customer data and nurturing lead pipelines, within reach of businesses of all sizes. The challenge now becomes integration of data within email campaign management, CRM and lead-gen applications.

Fortunately today’s evolved, web-based email tools can help marketers sharpen their games by speeding the integration of email campaigns with Web-based CRM systems and lead-gen applications. The advantages are clear – increased revenue-building opportunities, reduction on sales cycles, more opportunities to touch the customer or prospect, better control of messages, the ability to qualify leads and time savings.

In fact, Aberdeen Research, in a report entitled Success Strategies in Marketing Automation (July 2007), surveyed marketers who revealed various benefits of integrating email and CRM systems:

• 95% of those surveyed said they were able to reduce the sales cycle by integrating email campaigns with lead management solutions

• 66% of respondents indicated they used marketing automation tools, including email management solutions, to facilitate sharing of leads between sales and marketing – increasing opportunities to qualify, follow up on and prioritize prospects most likely to make a purchase

• 42% of those surveyed use automated email to follow up and qualify leads, improving the lead qualification and sales process.

For marketers, the opportunity to speed leads through the sales cycle with email campaigns has never been better.

Getting started with email marketing automation and mass customization

As we’ve seen, email marketing delivers results, has a superior ROI and has evolved to provide marketers with easy-to-use tools that complement the best practices of personalization, segmentation and targeting many already use. Email automation, which enables mass customization, provides the tools to improve the relevance and timeliness of your email campaigns – strategies that will improve the customer’s experience of your brand while delivering the right message, to the right person, at the right point in the buying cycle.

To get started with email automation and mass customization, consider these tips and best practices:

Start with personalization - Talk to your customers and prospects at a personal level by ensuring that all campaigns are addressed to a person – and also make sure the mail comes from a person, with a personal signature.

Harvest customer information from all sources – Collect data everywhere — in email management, CRM and lead-gen applications, for example — and look for opportunities to add profile information from other sources to create a rich database that includes demographic, transactional and behavioral information. This data will help you personalize, segment and develop tailored content for automated email trigger campaigns.

Use reports and analysis to understand buying behavior - Track and evaluate every customer interaction and build a profile of buying behavior. This information will provide the basis for trigger email campaigns that cross-sell and up-sell at the right point in the buying cycle.

Integrate email, CRM and lead-gen data – Synchronize the customer data in your marketing applications. You’ll benefit from a richer database of information that will support more sophisticated marketing, including trigger campaigns and mass customization.

Keep sales in the loop – Give your sales team regular updates on email campaigns, and pass on demographics such as opens, click-throughs and forwards that will help sales prioritize follow-ups.

Plan campaigns around automated workflows – Today’s email campaign management tools support detailed workflows that support the entire sales cycle. Plan every step of your campaign with action triggers, and watch your results improve.

Use the one-to-one communication channel of mass customization – You’ve collected data on customers and prospects, you have data about the buying cycle, and you have sophisticated email campaign tools. It’s time to use mass customization techniques to build campaigns that deliver tailored messages, at the right time, to the right person. Watch sales grow!

Last year, Jupiter had revenues of $14 million while Forrester had revenues of about $212 million. Jupiter will be folded into Forrester’s Marketing & Strategy Client Group.

Forrester and Jupiter specialize in statistics-heavy syndicated research, analysis and advice.