Web Analytics Will Emerge As A Cornerstone Of Customer Intelligence

Last week I hit a major personal milestone.  My first report as a Forrester analyst went live!

As thrilling as this is for me, I hope it will be even more exciting for Customer Intelligence professionals.

The report is titled How Web Analytics will Emerge As A Cornerstone of Customer Intelligence, and is based on the premise that the web is the common demoninator for customer experiences and that this information can be harnessed and subsequently applied throughout the enteprise. This report outlines the future trajectory of Web analytics technology and gives CI professionals pragmatic advice about how to use that technology as a foundational component for customer intelligence that fuels multichannel marketing effectiveness.

Marketers today have a dizzying array of online and offline touchpoints at their disposal, but without a doubt all roads lead through the Web. For most organizations, Web sites, microsites, landing pages, communities, and other interactive properties are mission-critical for acquiring, retaining, and nurturing customers and other target audiences. By definition this reality makes the Web one of the most crucial sources of insight for Customer Intelligence (CI) professionals. To put that insight into action, firms must leverage Web analytics beyond isolated Web site marketing and operations to feed analysis, decision support, and execution for the entire marketing function.

I believe that Web analytics will extend beyond the Web site in two phases. 

First - Web analytics platforms will cement their position as the nucleus of online measurement by continuing their current diversification efforts to extend beyond core Web analytics capabilities.

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The Data Digest: Interest In Mobile Coupons

A recent published report called 'Mobile Coupons: Gold Rush Or Fool's Gold?' shows that both consumers and advertisers are curious about mobile coupons but that few consumers have trialed mobile coupons. Our Technographics data uncovers that only 3% have requested a coupon via cell phone, and only another 3% have actually used a mobile coupon. But mobile coupons help marketers reach new audiences, particularly those consumers ages 18 to 24 — 79% of whom typically spend less than 1 hour per week reading a newspaper. Younger consumers are most interested in mobile offers, especially for restaurants, drinks, and music/DVDs.

Advertisers will need to realize that some consumers — especially younger, new customers — may be mobile-only and that this mobile-only audience requires different promotions to encourage the behavior that merchants seek. Start with campaigns that are close to their heart (or mouth to be more precise) to win them over.

Climb mountains, not molehills

When your data is myopic, it can lead you in the wrong direction. That's a lesson that The Coca-Cola Company learned famously with its failed attempt to launch a sweeter, milder Coke in response to consumer taste tests. And it's a point I find myself making time and again in my conversations with heads of marketing and other business leaders. Now, thanks to a stunning recent blog post from Eric Ries, I have a new way of explaining this point: "the local maximum problem". Eric visualises the myopic use of data like this:

Whenever you’re not sure what to do, try something small, at random, and see if that makes things a little bit better. If it does, keep doing more of that, and if it doesn’t, try something else random and start over. Imagine climbing a hill this way; it’d work with your eyes closed. Just keep seeking higher and higher terrain, and rotate a bit whenever you feel yourself going down. But what if you’re climbing a hill that is in front of a mountain? When you get to the top of the hill, there’s no small step you can take that will get you on the right path up the mountain. That’s the local maximum. All optimization techniques get stuck in this position.

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Raising The Bar on Mobile Advertising: Apple's OS 4

Apple announced iAd today as part of their OS 4 program today. I speculated in this post on why they purchased Quattro Wireless a few months ago, but now we have more details. This post is on iAd only - my colleague Charles Golvin has a more complete analysis in his post.

First, looks like Apple will leverage Quattro's business model and use their sales force to sell ads. This should work early on for large buys.

They are continuing to be very supportive of their developer community with 60% of the ad revenue going to the developers. Not a lot of details now, but this could be generous. Part of the revenue needs to go to the sales team as well. There will be less leftover for Apple. Models such as Admob's have more of a self-serve model that have the potential to be more cost-effective especially with smaller buys. The types of companies that will have the budgets to develop interactive ads that take full advantage of the platform - accelerometer and location plus rich media - will have the budget to spend on media as well - not just on the creative.

Beyond developers, Apple is continuing their focus on the consumer experience. They are looking to protect the quality of the user experience by controlling the ad experience. Steve has raised the bar on quality of mobile ads by keeping consumers within their existing application or experience. He anticipates that the ads will be engaging enough to be considered entertainment.

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Another Loyalty Program? Damn right!

Hi Marketing Leaders,

I stopped by Office Depot yesterday to purchase some office supplies. While I was waiting (for an extremely long time), the representative asked if I was a member of their loyalty program called Worklife Rewards. It’s always an interesting question, and many times my answer is: “I think so.” I DO know I am a member of six frequent flyer clubs; seven hotel guest clubs; and several other retail loyalty programs.

Office Depot offered a free program with cash-back. Hey, it wasn’t another credit card – how bad could it be? I joined because I can easily see myself purchasing ink toner, paper and other supplies and getting a “kick-back” in the process – that’s future loyalty in a one-person sample of everyday life.

There are only two problems with loyalty programs as I see it:

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Why and Where Apple Should Innovate with iPhone OS 4

Everyone agrees Apple is innovative. Even mobile industry insiders reluctantly admit Apple is now a leader in mobile. But one set of innovation isn't enough, especially in the competitive mobile market. Apple has to continue to improve, to continue to break new ground, and to expand its product line to catch new opportunities. That was the formula that enabled Apple to resist all-comers in the mp3 player market for many years after the iPod's 2001 launch. With the iPod, Apple kept improving both its hardware and software and shifted from offering a single model with a single form factor to selling four models: Shuffle, Mini/Nano, Classic and Touch and in so doing reaching a range of price points.

So, where should Apple focus with the next version of the iPhone software? I'm approaching this from two angles: what are the new opportunities that Apple should seize? What are the weaknesses of its current offering that need improving? Here's my take:

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Why are folks so interested in Apple's ad inventory?

It has the potential to be more valuable than inventory on many phones.

Why?

People who own smartphone devices are more active on their cell phones than your typical cell phone owner. For simpler tasks like SMS, they are moderately more active. For more complex tasks such as shopping, using maps, banking or doing product research they are significantly more active. iPhone users are some of the most active smartphone users when it comes to commerce-related activities.

Advertisers have held back on spending more on mobile marketing for many reasons. One of the primary reasons has been their inability to demonstrate the effectiveness of the medium or calculate an ROI. It gets a lot easier to calculate the ROI when consumers are buying items or using services such has mobile banking to deposit checks. Consumers are spending real money. My colleague Sucharita Mulpuru will be working on a mobile commerce forecast later this year. Anecdotally, we saw consumers spend in the hundreds of thousands of dollars with individual merchants/hotels/restaurants in 2009. We're likely to see run rates in the low millions for a few companies within a few industries by the end of this year.

The more consumers spend, the more advertisers will be motivated to spend. Consumer product and service companies will invest in mobile services such as "find the nearest," consumer reviews, available inventory, etc. to support commerce-related activities. The greater the supply of services (of great services), the more adoption and usage we'll see among consumers. Then consumers will spend more because the experiences will be convenient - it'll be easy to buy books or toothpaste.

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Does Money Belong in Social Media?

Domino's Pizza UK & IRL plc

Image via Wikipedia

Let me answer my own question immediately by saying: Yes, money belongs in social media.  It costs money to host social networks, develop social applications, create content, moderate dialog in social channels, and launch community platforms.  VCs want to see money returned, Facebook and Twitter want to earn money, marketers want to invest money wisely and brands want people to spend money. 

But should money be everywhere in social media?  That's the question that came to mind as I read about a new social ad program being launched by Domino's Pizza.

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Thoughts on Demandware's New Link Program

By Brian K. Walker
Earlier this week, Demandware announced their new Link program. This program enables Demandware to make it relatively easy to add many SaaS-based point solutions to their clients’ sites in a pre-integrated fashion. The list includes Cybersource, Bazaarvoice, Baynote, PayPal, among many others. In today’s eCommerce technology environment it is extremely common to integrate various third-party technologies with the eCommerce platform for a variety of reasons – from payments to search to recommendations to content – and increasingly these third party applications are being delivered through services which must be integrated first to receive data to use on behalf of their client or to deliver their service. This integration may not be overly burdensome or complex, but it takes away from other resource needs and may limit a company’s experimentation with various tools and capabilities.  The Link program gets at the heart of what SaaS platforms have promised for some time, and it is a great to see a platform provider move forward by investing in this. By implementing what we could consider in some ways an “app store for the enterprise eCommerce business” Demandware has certainly innovated here.
Why Link matters:

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Who's leading mobile innovation?

Conventional wisdom in the mobile industry is that Japan and South Korea are the most advanced mobile markets worldwide while US is lagging behind and Europe somewhere in the middle. This is less and less true.

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