Tuesday, October 24, 2006

Marketers Unite: the Web 2.0 Challenge

The onslaught of web 2.0 and the community web environment undoubtedly presents a new challenge to marketers. In an age when a video of two kids playing grunge can generate over a million hits on youtube in less than a week marketers of the world should pay some attention. (http://www.youtube.com/watch?v=TviTCFAGr6w) The challenge has not only become how to reach these growing communities environments but how to track and manage the effectiveness of the brand penetration.

Before drilling into what marketers can do about this situation, let’s look at the historical view of marketing metrics and what KPI’s organizations have been concerned about. Marketing challenges typically start with a few key challenges:

1. Lack of insight into customers
- Experiencing high customer turnover rates and customer
- Lack of insight into who their customers are, how much they spend, and which products they purchase
2. Badly targeted campaigns
- Campaigns may give a low return on investment and fail to hit targets
3. Inability to track the success of campaigns
- Unaware of which are their most and least effective campaigns
- They may continue to run badly targeted campaigns with low success rates

Given these challenges, what are marketers looking to gain visibility into when it comes to campaigns?

Customer acquisition: the success of campaigns by focusing on the number of new customers acquired measured against objectives:
How many customers did I acquire from a particular campaign?
Which channels are driving customer acquisition?

Campaign financials: analyze the performance of campaigns in terms of audience count, response rates, cost, and revenue generation:
What is the cost associated with each campaign?
Which campaign generates the highest amount of revenue/margin per response?

Success or failure rate: The success or failure of campaigns in ROI and response rates, to use for future campaigns
In future which channel/creative/incentive should I use on a target audience?
Did a particular segment respond well to this campaign?
Which channel/creative/incentive offers the best ROI?

Cross-sell: assess the effectiveness of cross-sell campaigns, and extend the breadth of the customer relationship by introducing other products or services available in the company's portfolio:
Did a particular segment respond well to this campaign?
What effect has the campaign had on cross-selling?
What is average number of products purchased pre-, during and post-campaign?

Frequency: increase the rate and frequency with which customers buy products:
What effect has the campaign had on purchase frequency?
How does the rate of purchase differ pre-, during and postcampaign?

Profile planning: create a demographic fingerprint of those who responded:
Do those who responded have a demographic profile that is different to the enterprise?
Is there a particular demographic segment that responded well to this campaign?

The web 2.0 phenomenon presents a new challenge for marketers, with this there is a new set of metrics to understand, it will be increasingly important to understand views, page impressions, and how those relate to conversion rates or lead generation efforts.

There has been a significant growth trend of viral marketing, another activity that is innately difficult to track the response. This new marketing push is all about creating awareness to this new style of ‘community’ and finding a way to impact an invisible audience. The growth of these types of marketing efforts will foster the growth of new methods of tracking brand recognition and campaign effectiveness.

There is hope for these poor marketers, thanks goodness for this as I am one of them. With the growth of the web there becomes better ways to analyze the information generated from marketing programs in simpler ways. Take a look at this marketing campaign visual model that allows you to do some simple comparative analysis of various campaigns and gain insight into their impact over time. There is a growing need for technology such as data visualization to help with topics such as understanding marketing campaigns and brand impact in the new technology age.

Have fun with it,


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