4 strategic opportunities for driving break through marketing performance

1. Driving Customer Engagement
through Multichannel Marketing
Feb 2010

2. Agenda
• Today’s consumer & marketing environment
• Implications & issues
• 4 strategic opportunities
• Payoff & roadmap
2

3. The consumer is boss
• Unparalleled choice & information
• Multichannel, with or without you
• New attitudes: frugality, sustainability, activism
7% savings rate reduces US consumer 1.7 billion Internet users worldwide
spending by $1 trillion
182,000 new consumer products /yr 4 billion handsets worldwide (1B browsing)
170 million shop online in US 130 TV channels in avg US household
$622 billion global ecommerce OOH innovation (car, plane, gas station)
3

4. Marketing undergoing enormous change
• Drive for accountability in a budget constrained world
• Technology is a game changer
– Innovation in targeting, versioning & analysis
– Media unlocked & abundant
– CRM becomes CMR (ex: Pepsi)
• Direct share growing. Boundaries blurring. (ex: P&G)
Digital/Direct Share of US advertising
2010 59%
2009 58%
2003 48%
4

5. But, substantial barriers gate progress…
• Spend mismatched to consumption driven by legacy media planning practices
• Spend mismatched to customer value driven by outdated success metrics
• Complexity in execution, compliance & attribution
• Who owns the customer?
5

6. …yielding suboptimal results
• Traditional advertising is less effective
• Legacy media suffers
• Marketing platforms being overrun
$112 billion wasted advertising in the US every year
85% of brands stagnant or declining
-21% NPS
Advertising = FALSE
-18% decline in US above the line advertising in 2009
6

7. Change May Be Necessary
7

8. 4 strategic opportunities
• Remix media to consumer
consumption
• Invest to enable recurring revenue
and customer engagement
• Discipline in improving media
effectiveness
• Recognize customer information
as a key asset (really)
8

9. Strategic Opportunities
1. Remix media to consumer consumption
Metrics High Payback Applications
2X purchase lift v. search.
Audience-based targeting & versioning
Display Equal to TV purchase lift
Intent-based (re)targeting.
Just 5% brand advertising is online
$44 revenue per $1 invested. 16X profits, targeted v blast Cultivate customer interactions. Newsletters/alerts
Email 42% buy offline in response to email (11% buy 4+) Integrate mobile, social, e-commerce
247B emails/day worldwide Target by clicks, purchases, profits, social influence.
42% look up product information in the store. 28% purchase Geo-marketing. Location finder. Coupons. Alerts.
Mobile online if not available in the store.
Integrate email/display
4.5B text/day/US. 2.3B app downloads/yr
Cultivate social influencers in new product launch
Social 2-4x link performance v all others
Cross-sell by friends products owned
Creative versioning - see their story
Interactive 15MM households with iTV – 25MM by end 2010
Order product with remote
TV 7% CTR – minutes of engagement.
Request samples/coupons.
9

10. Strategic Opportunities
2. Invest to enable recurring revenue & customer engagement
Real-time recognition – registration, cookies, IP, linking
Recognition & personalization Dynamic personalization – versioning. offers. testing
create differentiation opportunities CMR Preference centers. Infocards
4-15X returns possible
Many products are digital – content, handsets, eReader
Digital product opportunities Leverage messaging opportunities. Education. Service. Offers.
Create subscription businesses. Content anywhere
Liberate/distribute content. Let Distributed commerce. Do business wherever your customers are
customers distribute for you. Apps/widgets. Brand engagement. Consumer insights
10

11. Strategic Opportunities
3. Discipline in improving media effectiveness
Harvest overlapping & interrelated TV was the tribal camp fire – now just another light source
effects Attribution Framework unlocks media effectiveness
80% online advertising fails to reach intended audience
Reach with certainty Reach just your audience – 200M online, 86M email, 40M mobile
3-5x revenue/ad dollar.
Right audience (and just them)
Right message (content versioning)
Relevance Right time (trigger-driven).
Engage in Surround Sound. Cross media institutional memory
Leverage cross-channel insights – customer behavior & value
Combine direct skills with digital Leverage direct methodology – targeting, testing, measurement, etc
Leverage cooperative ventures – list/data exchange.
11

12. Strategic Opportunities
4. Recognize customer information as an asset (really)
Coordinated multichannel Just 32% of marketing decision makers understand their
customers multichannel behavior…yet multichannel buyers are
marketing information 4-5x more profitable
Value varies by purchase volume, frequency, loyalty, NPS, service costs
Invest according to DVOC (differentiated Measure customer value. Consistent segments & metrics
value of customers)
Invest based upon predicted impact on CLTV
New behavior - social conversations, online footprints, set top box data
New preferences – explicit/inferred – product, media, channel
Store/utilize new forms of data Integrate cross-media, cross-channel insights
Harvest – measure & recalibrate
Mythical average customer. Interaction history, brand advocacy,
interests & attitudes, life stage, ethnographic variances
Dig deeper (don’t settle) Changing market research role. Seeing v asking. Census v panel
Harvest – measure & recalibrate
12

13. Sound obvious?
“… too many shortcomings to be seriously considered as a means
of communication. The device is inherently of no value to us.“
Western Union memo on potential for the telephone, 1876.
13

14. Sound obvious?
"We don't like their sound, and guitar music is on the way out.“
Decca Recording Co. rejecting the Beatles, 1962.
14

15. Sound obvious?
“Needs a stronger supporting cast.“
“Almost totally free from humor”
Audience testing for Seinfeld, 1989.
15

16. Payoff & roadmap
Key payoff principles…and Acxiom multichannel investment focus
Enable cost-effective
1. Correlate specific customer behavior to specific integration & scale via
marketing investment MarketEdge & Abilitec
Digital
2. Recruit, recognize & harvest explicit & inferred Integrate & optimize first
party relationships via
relationships across channels Impact
Integrate customer insight
3. When consumers are not directly engaged with your into digital targeting &
brand, ad media relevance is key to reengagement creative via Relevance
Design & execute high
4. Invest & engage proportional to customer value. performing marketing
programs
Enable real-time decisions
5. Optimize customer value at every interaction that improve CLTV
16

17. Payoff & roadmap
A closer look at the differentiated value of customers
30% of customers deliver the majority of profits
50% Add nothing
20% Cost companies money
SAS 17

18. Payoff & roadmap
A look at site traffic at world class brands
Cadillac American Express
UV Index
UV Index
PersonicX Consumer Segments PersonicX Consumer Segments
Hershey Allstate
UV Index
UV Index
PersonicX Consumer Segments 18 PersonicX Consumer Segments

19. Payoff & roadmap
…and consumer shopping behavior
300
300
250
Shopped at 250
Ordered from
200
Banana Republic BestBuy.com
UV Index
UV Index
200
150
150
100
100
50
50
0
0
PersonicX Consumer Segments PersonicX Consumer Segments
350 350
300
Ordered Flowers 300
Shopped at
online Ann Taylor
UV Index
250 250
UV Index
200 200
150 150
100 100
50 50
0 0
PersonicX Consumer Segments PersonicX Consumer Segments
19

20. Payoff & roadmap
Profile of traffic is much different at major online sites
MSN Yahoo
96 MM UV’s 148 MM UV’s
UV Index
UV Index
PersonicX Consumer Segments PersonicX Consumer Segments
eBay AOL
56 MM UV’s 70 MM UV’s
UV Index
UV Index
PersonicX Consumer Segments PersonicX Consumer Segments
Acxiom, comScore 20

21. Payoff & roadmap
300
…and at broadcast networks 300
250 FOX 250 ABC
200 200
UV Index
UV Index
150 150
100 100
50 50
0 0
PersonicX Consumer Segments PersonicX Consumer Segments
300 300
CBS UV Index
250 NBC
UV Index
250
200 200
150 150
100 100
50 50
0 0
PersonicX Consumer Segments 21 PersonicX Consumer Segments

22. Payoff & roadmap
Traditional media buy = FAIL on a massive scale
80% of online advertising fails
to reach its intended audience
22

23. Payoff & roadmap
Concentrate on just your audience. Sample ROI Model
DVOC-led Traditional Variance
Campaign Cost
Impression Volume 37,500,000 100,000,000
Cost per Thousand $ 8.00 $ 3.00
Total Campaign Cost $ 300,000 $ 300,000 $ -
Revenue Generated
Revenue/conversion $ 500 $ 250
Purchase rate 0.020% 0.010%
Total Purchases 7,500 10,000
Total Revenue $ 3,750,000 $ 2,500,000 $ 1,250,000 50% higher
Total Revenue/Ad Dollar $ 12.50 $ 8.33 $ 4.17 50% higher
CLTV $ 4,000 $ 1,250
Total CLTV Impact $ 30,000,000 $ 12,500,000 $ 17,500,000 140% higher
Premise
Concentrating impressions on high value visitors…
>Enables higher conversions (message is more tuned)
>Enables higher revenue & CLTV/ad dollar (visitors buy more)
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24. 24

25. Payoff & roadmap
Huge payoffs are achievable
4x “orders per thousand” $200M revenue / $4.5M
– Connecting print & digital OpEx savings
3x applications; 5x online – Connecting call center & digital
revenue; same head count $100M/yr EBIT impact
– Connecting call center & digital – Multichannel connection
2x online bookings 9-figure/yr revenue impact
– Connecting outbound & website – Multichannel connection
7.5x website spend
– Connecting mobile & email
17x response
– Connecting TV & offline
25

26. What could have been
owned
Portable Music
but couldn’t
become
It’s not enough…
A great customer base
owned
A great product
On-Demand Info A great strategy
but couldn’t A great team
become
owned
Darwin always wins.
Movie Inventory
Will you?
but couldn’t
become
26

27. Thank you.
The global interactive marketing services company
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/acxiomcorp /companies/acxiom /acxiom
27 /user/AcxiomCorporation /Acxiom