By Rod Ford, President and CEO
Over the past few weeks our Specialty Retail team has spent an appropriate amount of time reflecting and projecting into our strategy model. Through the lens of servicing over 120 specialty retailers, as well as managing the customer intelligence and campaign execution platform for over 40, I thought you might enjoy learning about the marketer sentiments to which we are exposed and the conclusions we derive that formulate our strategies to serve the industry this coming year.
What we saw in 2011:
#1. The continued growth in digital channel marketing spend.
Social 4.1%
Search 3.9%
Mobile 3.8%
Display 3.6%
#2. Marketers continued to recognize the effectiveness of connected media as direct mail spend, increasing by 2% in 2011. Subsequently, standard-class mail continued to rebound, growing volumetrically by 1.8%.
#3. Used primarily for non-marketing purposes, first class mail continued to succumb to pressures from alternative channels and dropped slightly over 5% in volume from the previous year.
Concerns, Challenges, & Opportunities in 2012:
#1. Evolving Channels: The inevitable reality of accessing new audiences through social media is finally upon on us. There exists a line of sight today of how social media can be used for pragmatic purposes for the first time since we began the social discussion. Of course this realization is introducing new challenges such as access to new audiences and results in (1) further fragmentation of customer audiences—requiring more sophisticated ways of viewing audience segments—and (2) a plethora of new data streams that must be managed and rationalized.
#2. Display: New capabilities in the data management platforms that power the targeting of display are quickly evolving to convert unknown browsers to a known audience, thus increasing the audience and further pinpointing the offer through deeper levels of personalization. The integration of digital assets and new data management approaches are resulting in a level of targeting sophistication previously unachievable.
#3. Technology Convergence: The proliferation of all the data exhaust in the emerging channels has resulted in an arms race to develop the convergent data management hub and become the “data management platform of record” for the marketer. Marketers are very confused in the capability differences between Customer Intelligence databases, Lead Generation platforms, Analytic Marts, and Marketing Automation tools. They are not the same thing and it pains us to see marketers making poor decisions because of vendors’ overzealous aspirations to stretch their capabilities beyond their core competencies.
Wednesday, January 25, 2012
Tuesday, December 20, 2011
December Point of View: Why We Are About to Deliver the Holy Grail
I am extremely bullish that the direct marketing industry is upon the precipice of some truly “sonic boom” breakthroughs in innovation that will fundamentally change the way we select, promote, and measure 1:1 marketing programs.
For well over 5 years now, we have possessed the analytics and intuitive tools to create and execute individually personalized contact strategies for our customers, but there has existed one single limitation keeping these innovations from seeing the light of day, and keeping us in our spreadsheet-driven, file-passing entrapment. That one missing thing is the ability to assimilate, manage, and organize structured and unstructured data into a single, real time environment, thus allowing analytics to be applied across a common, yet media independent view.
Existing marketing databases were built to manage large amounts of STRUCTURED DATA. They were organized around customer records (a name and associated transactions as well as a few other unique descriptors about that customer). However, much of the client oriented data generated today is in the form of UNSTRUCTURED DATA, information about a customer’s purchase quest that is not tied to a specific customer or conforming to a consistent organizational pattern.
Integrating unstructured data into a managed data environment where repetitive formulas can be applied requires a uniformed data management platform that transforms, compiles, standardizes, and segments digital and traditional data elements to make them appropriately actionable in real time. New advancements in process controls, storage technologies, and transformation algorithms now allow us to manage high volumes of all types of data. The ability to hold “anonymous” data over time and convert it into a known customer when the identity becomes available allows us to look in arrears at all the promotion history and response behaviors, instantly providing more data power to the analytics.
The end result of a robust managed data environment of all customer values, promotional history through all media, response history, and anonymous response capture and convert will allow us in the very near future to predict the optimal contract pattern by media, sequence, and cadence for each unique individual in your customer universe.
In the words of Howard Schultz of Starbucks fame, “Expect more than others think possible.”
Very, very cool stuff ahead. Stay tuned—we are hard at work.
For well over 5 years now, we have possessed the analytics and intuitive tools to create and execute individually personalized contact strategies for our customers, but there has existed one single limitation keeping these innovations from seeing the light of day, and keeping us in our spreadsheet-driven, file-passing entrapment. That one missing thing is the ability to assimilate, manage, and organize structured and unstructured data into a single, real time environment, thus allowing analytics to be applied across a common, yet media independent view.
Existing marketing databases were built to manage large amounts of STRUCTURED DATA. They were organized around customer records (a name and associated transactions as well as a few other unique descriptors about that customer). However, much of the client oriented data generated today is in the form of UNSTRUCTURED DATA, information about a customer’s purchase quest that is not tied to a specific customer or conforming to a consistent organizational pattern.
Integrating unstructured data into a managed data environment where repetitive formulas can be applied requires a uniformed data management platform that transforms, compiles, standardizes, and segments digital and traditional data elements to make them appropriately actionable in real time. New advancements in process controls, storage technologies, and transformation algorithms now allow us to manage high volumes of all types of data. The ability to hold “anonymous” data over time and convert it into a known customer when the identity becomes available allows us to look in arrears at all the promotion history and response behaviors, instantly providing more data power to the analytics.
The end result of a robust managed data environment of all customer values, promotional history through all media, response history, and anonymous response capture and convert will allow us in the very near future to predict the optimal contract pattern by media, sequence, and cadence for each unique individual in your customer universe.
In the words of Howard Schultz of Starbucks fame, “Expect more than others think possible.”
Very, very cool stuff ahead. Stay tuned—we are hard at work.
Tuesday, November 1, 2011
Rod Ford, president and CEO, featured in DMNews
Rod Ford, president and CEO of Merkle subsidiary CognitiveData, a marketing services company, explains why digital will never be a standalone media and why marketing cadence is just as important as segmentation.
Direct Marketing News (DMN): It's been about six months since CognitiveData acquired Lenser. What have you been able to accomplish in that time?
Rod Ford (CognitiveData): We purchased them to be able to integrate strategy into our database solution. We have a customer insight and contact management platform for specialty retailers. A lot of those clients were asking for strategy capabilities. They wanted to know how to utilize the platform more efficiently. We wanted to bundle and package strategy into our database offering. We've done that. It's been very successful.
DMN: Companies strive to be valued in the eyes of consumers. But your services are designed to also enable companies to also appropriately value consumers. Can you talk about why this is important?
Ford: This evolution originally started with the increase in costs-to-promote, including postage, paper and print price increases. Marketers began to look at their own customer base and tried to find ways to extract more value out of existing customers as opposed to heavily prospecting. A lot of dollars were redirected into understanding the value of existing customers. This started the evolution of CRM post-2006. The ability to manage your customers, have the analytics to segment them in different ways and promote to them differently, and have an intimate dialogue with them is how the business has changed. Everyone must have a CRM platform to manage data in a highly accurate environment, analyze the data, and see the customers changing over time.
DMN: A plethora of customer data is being generated on social media. What can companies like yours do to help brands capture that information?
Ford: Social media is just a feed that's available to come into the database. If you have a database designed for that, then social is just a feed like Web analytics, email and mail campaigns. You can use it as a well-designed database to manage those feed attributes coming off social. You capture them and assign them to a particular customer. You can use them for event-driven campaigns or attributes that feed into the model for scoring.
DMN: You recently wrote that you're bullish on direct mail. Can you explain a few of the reasons why digital might not be the magical cure-all that marketers make it out to be?
Ford: It's all about integrated marketing. Digital as a standalone will not bear itself out to be a standalone replacement media. What we see in our business is that direct mail is the foundation. It's compulsory, it's a requirement for any sustainable marketing program, but it's not the highest growth area. Our customers' direct mail programs are growing in single digits while digital is exploding. But you have to have direct mail in place to make digital explode. But it's certainly true that digital aspects are the major growth areas.
DMN: What's next for CognitiveData?
Ford: We're spending more money and effort on innovation than we ever have. It's innovation in customer insight platforms. People want to see better targeting. We're investing in contact stream optimization, which has been built into our last two database installs. New [contact stream optimization] innovations will be generally available by the end of December. At an individual level, it's designed to determine the proper cadence for each individual consumer. You as a consumer may maximize your spend when you get three emails followed by a catalog. I may prefer three catalogs and an email. We can analyze and set up cadences at an individual level as opposed to segmentation for larger groups.
To see the original article, click here.
Direct Marketing News (DMN): It's been about six months since CognitiveData acquired Lenser. What have you been able to accomplish in that time?
Rod Ford (CognitiveData): We purchased them to be able to integrate strategy into our database solution. We have a customer insight and contact management platform for specialty retailers. A lot of those clients were asking for strategy capabilities. They wanted to know how to utilize the platform more efficiently. We wanted to bundle and package strategy into our database offering. We've done that. It's been very successful.
DMN: Companies strive to be valued in the eyes of consumers. But your services are designed to also enable companies to also appropriately value consumers. Can you talk about why this is important?
Ford: This evolution originally started with the increase in costs-to-promote, including postage, paper and print price increases. Marketers began to look at their own customer base and tried to find ways to extract more value out of existing customers as opposed to heavily prospecting. A lot of dollars were redirected into understanding the value of existing customers. This started the evolution of CRM post-2006. The ability to manage your customers, have the analytics to segment them in different ways and promote to them differently, and have an intimate dialogue with them is how the business has changed. Everyone must have a CRM platform to manage data in a highly accurate environment, analyze the data, and see the customers changing over time.
DMN: A plethora of customer data is being generated on social media. What can companies like yours do to help brands capture that information?
Ford: Social media is just a feed that's available to come into the database. If you have a database designed for that, then social is just a feed like Web analytics, email and mail campaigns. You can use it as a well-designed database to manage those feed attributes coming off social. You capture them and assign them to a particular customer. You can use them for event-driven campaigns or attributes that feed into the model for scoring.
DMN: You recently wrote that you're bullish on direct mail. Can you explain a few of the reasons why digital might not be the magical cure-all that marketers make it out to be?
Ford: It's all about integrated marketing. Digital as a standalone will not bear itself out to be a standalone replacement media. What we see in our business is that direct mail is the foundation. It's compulsory, it's a requirement for any sustainable marketing program, but it's not the highest growth area. Our customers' direct mail programs are growing in single digits while digital is exploding. But you have to have direct mail in place to make digital explode. But it's certainly true that digital aspects are the major growth areas.
DMN: What's next for CognitiveData?
Ford: We're spending more money and effort on innovation than we ever have. It's innovation in customer insight platforms. People want to see better targeting. We're investing in contact stream optimization, which has been built into our last two database installs. New [contact stream optimization] innovations will be generally available by the end of December. At an individual level, it's designed to determine the proper cadence for each individual consumer. You as a consumer may maximize your spend when you get three emails followed by a catalog. I may prefer three catalogs and an email. We can analyze and set up cadences at an individual level as opposed to segmentation for larger groups.
To see the original article, click here.
Tuesday, October 25, 2011
POINT OF VIEW: Where Have All the Innovators Gone?
By Rod Ford, President and CEO
The recent passing of Steve Jobs prompted me to reflect on innovation. I think of Steve Jobs as the Thomas Edison of our time. The light bulb changed the way we live and so did the innovations that Apple produced. Specifically, I began to reflect on new ideas and innovations that have benefited our specialty catalog market. I was able to identify a few innovations that have provided measurable benefit in our industry, such as:
• Co-op Databases
• Add-a-Name & Drop-a-Name
• Co-mailing
• Variable Print
The more I thought about it, the more depressed I became that I couldn’t think of more innovations or I couldn’t think of any recent innovations that have truly made a dent in our market space.
• What was the last truly innovative idea brought forth and adopted by our community?
• Why do we still primarily utilize RFM + P + C for scoring?
• Why are the large majority of customer marketing databases not truly integrated with web analytics or truly integrated with email deployment? Why aren’t we truly triggering emails based upon real-time customer behaviors?
• Why haven’t we adopted contact stream optimization as a defacto standard?
• Why do we have to pass files back and forth across disparate systems just to execute a multichannel marketing program?
• Why does our industry primarily rely upon counts presented through spreadsheets for customer insights?
On a long flight recently, I read Steven Johnson’s book Where Good Ideas Come from: The Natural History of Innovation. There were several years of good times for merchant mailers, up until the cost of promotions began to escalate. In the book the author elaborates that “It's not that good times are bad for innovation, necessarily”. “Easy money just tends to generate more followers than leaders”, says Johnson. He uses a metaphor from biology: nature has evolved several tiny critters that reproduce asexually when food is plentiful. "Just make a copy of ourselves, because this is working," Johnson said. “When resources are scarce, though, suddenly there are males that mate with females to produce a more diverse next generation.”
Something like that happens in business when resources become scarce. Instead of companies trying to simply duplicate existing success, they're more willing to mix up the old formulas. "There is more of a drive for experimentation in the lean times and more of a copycat model in the fast times," Johnson says.
If this is true, I am wondering where are all the innovators in our industry? Whether good times or bad, my observation is that our industry has just made a copy of itself. It is time for innovators in the service community to step up and deliver true innovation that pushes us to the next level of marketing effectiveness. Never before has there been a better time for the vendor community to push through its short term thinking and deliver upon the Howard Shultz mantra, “expect more than others think possible”.
It’s an exciting time to be an innovator and a dangerous time to be a copycat.
Be on the lookout for some really breakthrough ideation being piloted in our labs as I type.
The recent passing of Steve Jobs prompted me to reflect on innovation. I think of Steve Jobs as the Thomas Edison of our time. The light bulb changed the way we live and so did the innovations that Apple produced. Specifically, I began to reflect on new ideas and innovations that have benefited our specialty catalog market. I was able to identify a few innovations that have provided measurable benefit in our industry, such as:
• Co-op Databases
• Add-a-Name & Drop-a-Name
• Co-mailing
• Variable Print
The more I thought about it, the more depressed I became that I couldn’t think of more innovations or I couldn’t think of any recent innovations that have truly made a dent in our market space.
• What was the last truly innovative idea brought forth and adopted by our community?
• Why do we still primarily utilize RFM + P + C for scoring?
• Why are the large majority of customer marketing databases not truly integrated with web analytics or truly integrated with email deployment? Why aren’t we truly triggering emails based upon real-time customer behaviors?
• Why haven’t we adopted contact stream optimization as a defacto standard?
• Why do we have to pass files back and forth across disparate systems just to execute a multichannel marketing program?
• Why does our industry primarily rely upon counts presented through spreadsheets for customer insights?
On a long flight recently, I read Steven Johnson’s book Where Good Ideas Come from: The Natural History of Innovation. There were several years of good times for merchant mailers, up until the cost of promotions began to escalate. In the book the author elaborates that “It's not that good times are bad for innovation, necessarily”. “Easy money just tends to generate more followers than leaders”, says Johnson. He uses a metaphor from biology: nature has evolved several tiny critters that reproduce asexually when food is plentiful. "Just make a copy of ourselves, because this is working," Johnson said. “When resources are scarce, though, suddenly there are males that mate with females to produce a more diverse next generation.”
Something like that happens in business when resources become scarce. Instead of companies trying to simply duplicate existing success, they're more willing to mix up the old formulas. "There is more of a drive for experimentation in the lean times and more of a copycat model in the fast times," Johnson says.
If this is true, I am wondering where are all the innovators in our industry? Whether good times or bad, my observation is that our industry has just made a copy of itself. It is time for innovators in the service community to step up and deliver true innovation that pushes us to the next level of marketing effectiveness. Never before has there been a better time for the vendor community to push through its short term thinking and deliver upon the Howard Shultz mantra, “expect more than others think possible”.
It’s an exciting time to be an innovator and a dangerous time to be a copycat.
Be on the lookout for some really breakthrough ideation being piloted in our labs as I type.
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