Cliff Kurtzman, Ph.D. Photo Courtesy EPIZENTRUM   AD:TECH IMPACT Conference Review A Special Report from the Online Advertising Discussion List by Cliff Kurtzman, March 6, 2006 With an archive of more than 13,000 postings, since 1996 the Online Advertising Discussion List has been the Internet's leading forum focused on professional discussion of online advertising and online media buying and selling strategies, results, studies, tools, and media coverage. The list also provides editorial coverage of interactive industry conferences. Operated by ADASTRO Incorporated and moderated by Internet marketing industry pioneer and conference speaker Cliff Kurtzman, this forum provides information and discussion essential for anyone within the online marketing and advertising industry. Join Cliff at AD:TECH San Francisco on April 27th, where he'll be giving a new session (with William Morrison) called The Economics of Interactive: Industry Investment and M&A for Fun and Profit. More details are here. “You get paid to impact the world, not be impacted by it.” ----Mal Pancoast. Last week, as a guest of AD:TECH, I had the opportunity to attend the kickoff event in Seattle for AD:TECH's new IMPACT series -- a one-day seminar program focused on analytics and metrics for online marketers. The IMPACT program is being repeated in a total of 10 cities in the United States between February 28th and April 6th. I wrote this report to try to show you in words and pictures what it was like to be there, and to provide you with an opportunity to benefit from some of what was covered at the event. I'll brief you on Jim Sterne's keynote, provide an in depth review of a presentation on word of mouth marketing by Bazaarvoice's Brett Hurt, give you photos from each of the sessions, and comment on what I liked and didn't like about the seminar. AD:TECH Chair Susan Bratton joined AD:TECH Content Director Warren Picket in introducing the program. With around 120 people attending and just ten companies exhibiting at the back of the main conference room, the feel of IMPACT was a lot more intimate and relaxed than attending the larger AD:TECH conferences that take place in New York, Chicago, and San Francisco. The focus was also on providing educational content rather than on being a trade show. While there were not as many people to network with, it surely seemed far easier to connect with those attending (both speakers and attendees) and get to know them a bit. When I first looked at the program agenda online, I must admit I was concerned about what I might be walking in to hear. The agenda includes several 75 minute sessions, with up to eleven presenters listed for those sessions. I couldn't imagine how eleven people could give a session in that period of time that I would find any value in attending. I was also concerned in seeing that a sizable segment of the seminar was given to 25 minute presentations from each of the five Platinum Sponsors of the event--would they educate, or would they sell? Thankfully, my fears were largely unfounded. Because the program is being given in so many cities, there will be different presenters for the same content, and all the possible presenters are listed on the agenda, even though they don't all present in each city (this should have been clearer in the conference agenda). At most, the 75 minute sessions were divided up between three speakers, and there were no panels at all. With only one real exception (a substitute speaker that wasn't on the agenda and was filling in for someone else) there were no pitches and I found the content generally informative and educational. While it comes nowhere near providing the educational depth and learning opportunity of a three-day Emetrics Summit, the event did provide a very good orientation at a tactical level. Further, it was easy to attend by those working in the event city, requiring only one day out of the office and minimal travel costs. The seminar wasn't really like an AD:TECH trade show at all (although AD:TECH will undoubtedly use these seminars as a way to build new relationships with those that attended to attempt to bring them to their trade shows). Think of it as an "Emetrics Summit light." IMPACT Attendees kept on smiling throughout the program. AD:TECH IMPACT Quick Dashboard Conference Rating -- How This Event Shaped Up Educational Content: B+. Good orientation information and idea generation opportunities for online marketers. Vendors that spoke gave brief overviews of their products/services, but generally provided content that was not sales oriented. Probably too basic for the experienced practitioner, whose needs would be better served by the Emetrics Summit. Venue: B. Not a resort, but a first class conference venue and accommodations. No wireless connection in the conference area. No electrical connections in the conference room except for the speaker. This may differ at other venues. Food: B. Very good box lunches and salads, plenty of drinks, continental breakfast in the morning, cookies in the afternoon... much better than an AD:TECH trade show, but not nearly as nice as the lavish fare at an Emetrics Summit. Cost: A. At $395 online / $450 at the door... it can't get much less expensive for this kind of a program. The extensive event sponsorships from the supporting vendors keeps attendee costs down. Networking: B. Not a huge audience, but I liked the ability to easily network with those that where there, including the speakers. With a largely local audience, it is a good way to make connections with people with similar interests in your own community. Exhibits: C. This is nothing like a trade show environment, and most of the people that attended came to learn, not scout out products. If I were with a company that had a speaker at the event, I might consider exhibiting here... otherwise I'd pass. Photos of the exhibit area are below. Parties: None. AD:TECH trade shows are known for having great parties, but if there was a party associated with this seminar, then I wasn't invited. We did, however, have a happy hour at the end of the program that included time to socialize, have an AD:TECH Connect Live session where people got to spend three minutes on a "hot seat" answering audience questions, and watch some hoola hooping, see photos. Where they blew it: Lack of copies of the presentations... If I'm coming to this kind of a seminar to learn, I want to have copies of the presentations in front of me so I can make notes on them as the speaker speaks, and then go back and easily give my boss and co-workers highlights the very next day. That means the event needs to either give me a paper copy of the handouts at the seminar itself, or send me a link to download and print them before I attend. I shouldn't have to give the speaker my business card and wait a week or more to get a copy of the content that I expected to be included with my registration. At IMPACT, we were given a link to download some of the presentations after the event (there was no wireless to do it during the sessions), but many of the presentations still have not been placed online, even though some of the speakers explicitly told us we would find them there. Bad, bad, bad. Sucky name badges. A good name badge has my first name and company name on it REAL BIG so it can easily be seen by someone walking by me, not so small that I have peer and squint to see who I am talking to (particularly embarrassing when the person is female). The AD:TECH IMPACT program will repeat in Los Angeles (March 7 -- tomorrow!), Dallas (March 9), Atlanta (March 14), Denver (March 16), Boston (March 21), Toronto (March 23), Cincinnati (April 4), and Ft. Lauderdale (April 6), with a possible new IMPACT series in the Fall as well. If you like this program you might also like: Dr. Ralph Wilson's Internet Marketing Best Practices Briefings -- Atlanta, Dallas, Seattle, San Francisco, Chicago, Denver, New York, Washington DC in 2006. Jim Sterne's Emetrics Summit -- Santa Barbara (about to sell out), London, Munich and (soon to be announced) Washington, DC in 2006. and some of our previous conference coverage white papers from the Emetrics Summit: Attack of the Amazons: Data Mining at Amazon.com Land of Lost Revenue: What's Important to Measure in E-Commerce? Are you interested in receiving our reports on the following events? March 27 - 28, 2006: OMMA Conference and Expo West - Los Angeles, CA April 18 - 20, 2006: Emetrics Summit 2006 - Santa Barbara, California April 26 - 28, 2006: AD:TECH San Francisco - San Francisco, California May 2 - 5, 2006: T.R.A.F.F.I.C. West 2006 - Las Vegas, Nevada May 21 - 24, 2006: iMedia Agency Summit - Amelia Island, Florida July 9-11, 2006: Affiliate Summit - Orlando, Florida July 24 - 25, 2006: AD:TECH Chicago - Chicago, Illinois If so, please tell us NOW. Use this link to help us decide which events to cover and let us know your level of interest. Now on to the content... Jim Sterne Tracking the Customer Funnel: Measuring the Success of Your Website by Jim Sterne Target Marketing's Jim Sterne, who runs the successful Emetrics Summits and is President of the Web Analytics Association, gave the opening keynote at the event. Jim's keynote was similar to the one he gives in opening up the Emetrics summit, but I would expect that I was one of the very few in the audience that have attended that event, so it still worked well as an audience orientation. Jim started out with a brief history of web metrics: what you can learn from log files; cookies; page tagging; and how the data can be processed to try to really understand what is going on. He talked about the different levels of customer understanding that can be obtained, ranging from basic web behavior; assessment of retention, frequency, and recency; one-to-few demographic and psychographic segmentation; and finally one-to-one targeting and correlation with off-line databases. Jim talked about the pros and cons of client-side surveillance and web visitor tracking, and how one can best implement such systems and keep visitors happy. Jim talked about the incredible measurability of email marketing, looking at factors such as transmission, opening, clickthroughs, forwards, unsubscribes, and net sales. He reviewed email scenario management -- the process of developing procedures for interacting with customers via email based on their actions and responses. Next Jim described how to assess how your customers feel about their online interaction with your company -- gauging factors such as your web site's visible appearance and layout; its style, tone, and character; ease of navigation; web site response speed; features which are liked best / least; and whether visitors will be inclined to return. The most important things to learn are why people are coming to your web site, whether or not they achieved their objective, and if not, why not? Jim also mentioned using panels to track web site behavior, and more sophisticated and expensive techniques such as usability testing, including eye tracking, to really tune in on user behavior. Jim talked about things that make your web site look more credible, and recommended a site out of Stanford University, webcredibility.org, for a list of things you can do that will make your web site appear more credible in the eyes of your site visitors. Jim emphasized that a company web site should NOT be thought of as a library of information about your company and your products. Rather, it is a communication device that allows you to communicate with people to try to get them to buy things. First you want to raise awareness and get attention--that's advertising. Then you want to educate people as to what you are selling, why they should buy it, why they should buy it NOW, and why you are the best one for them to buy it from--that's marketing. Next you want to sell it to them--that's sales. And finally you want to answer their questions and solve their problems--that's customer service. At the end of the day it comes down to: 1) are we raising revenues? 2) are we lowering costs? and 3) are we increasing customer satisfaction? You can tell if your advertising is working by measuring clickthroughs. You can tell if your marketing is working by measuring pageviews and site behavior. You can tell if your sales are working by measuring revenues, and you can tell if your customer service process is working by measuring attitudes. Jim then focused on on how metrics can be used in each of these areas. For advertising, the goal is to make noise and get people to respond. One wants to measure where people are coming from and how much it costs to get them, so they can assess if the traffic is worth the expense. Once they get to the site, it is important to look at factors such as where they entered the site, what they looked at, how long they stayed, how deep they clicked, where/why they left, and what can be learned from the behavior. And it is important to distinguish how behavior differs based on various factors, such as how the visitor came to the web site in the first place. In the end, the goal is to use web analytics to measure attention, navigation, content quality, conversion, and customer experience. The customer life cycle funnel was reviewed, to provide a visualization technique whereby one can quickly determine the roadblocks and bottlenecks that customers encounter in terms of acquisition, persuasion and conversion. Next Jim talked about measuring customer experience... how you measure branding, delight and frustration, impressions of your reputation. Jim described about how to summarize your site performance in terms of profit by customer segment, in order to learn about where to invest in promotion, where to invest in navigation, and where to invest in content. Finally Jim talked about the different types of skills required to pull it all together. The technology people need to acquire the data and make it available. The analytics people need to evaluate the data to turn it into information. The business/marketing folks need to determine what actions and decisions to take based on those numbers. It is also important to have these people work in an environment that fosters continuous improvement, where risk taking is embraced, where some failures are expected and viewed as learning experiences, and where numbers are not taken personally. Jim described the organizational feedback loop that needs to be in place with this team (see figure). One captures information, cleans and processes the data, does the measurements and analysis, reports the results with the right information to the right people at the right level in the company, and then interpret the results to plan what to do next and make appropriate changes. It is all about making incremental changes, and the hard part right now is the "Interpret" part of the feedback loop. The objective of the IMPACT program, Jim explained, was make sure that attendees would be able to go back to their company and explain what all the numbers mean and how they can be used to make decisions. In addition to his opening keynote, Jim also gave a 75 minute break out session at the seminar entitled Web Site Checklist: The Twenty Fundamentals of Web Site Design. Brett Hurt Making Word of Mouth Work IN Your Business by Brett Hurt, Founder and Chief Executive Officer, Bazaarvoice (This presentation was part of the Buzz, Blogs and Beyond: Consumer-Generated Media and On-Demand Email Marketing break out session.) Brett started out by noting that research shows that about 65% of customers actively use reviews to make purchase decisions. The latest industry statistics also show that out of every 100 people that visit a sales oriented web site, only 2.6% of them (on average) end up making a purchase. We can rationalize this away because it is so easy to click around and price compare... but Brett thinks that this number is pretty abysmal, and in the end, the numbers are so low because most web sites are not a tactile shopping environment--you can't touch and you can't feel and you can't communicate about products. So it makes a lot of people nervous to make a purchase decision while web browsing, so a lot of people will research online and then buy offline in a tactile environment. Most consumers (56% according to BizRate) for mass market goods start shopping at a branded retailer's web site, rather than through searching on Google or on a comparison pricing site. The trick is to capture them at that moment in time and not send them off to go researching, because if they go researching, then they will be in a price comparison environment, and that could be a really bad thing. So if we are in this globally connected community now, and people are going to want to see and find word of mouth information about your products anyway, then you might as well include it on your web site, rather than lose the customer by having them go elsewhere to find it. Brett talked about the Word of Mouth Marketing Association (WOMMA). In the year since it was founded it has grown to around 250 members and it is really formalizing the study and practice of word of mouth with online advertising. Word of mouth is the oldest form of advertising -- it has been around since the dawn of the first marketplaces, but it is growing in importance now because the Internet is so viral and it allows us to become so connected. Companies like MySpace, Facebook, BizRate, Shopping.com, Ebay and Amazon.com are making this trend accelerate. Brett explained that there are three main reasons why word of mouth marketing is becoming a top priority for marketers. The first reason is that eCommerce has gone mainstream. He noted that for a week in November, walmart.com had received more visits than amazon.com, according to Nielson/NetRatings, and that this is a signal that the eCommerce has gone mainstream and the Internet has hit a true critical mass. According to research by Forester, around 7% of purchases are actually made online, but that is expected to go to 13% by 2010, and that is a pretty significant number, because the research also shows that five to seven times as many purchases are made offline because of online influences. The second reason why word of mouth marketing is gaining importance is that consumers are getting overwhelmed with advertising and product choices. There are too many things to choose from, and too many providers to choose from. There is a great book out called The Paradox of Choice, about how choices can paralyze behavior. A Froogle search on a "stapler" turns up 25,000 results in 1/4 of a second, along with links to hundreds of people from whom one can purchase staplers. The third reason why word of mouth marketing is important is that consumer-generated content is exploding. More than 80,000 news blogs are estimated to be being created daily, and every hour there are 50,000 posts within blogs. Even though much of that content is garbage, it is all getting indexed by search engines, and at a time at which someone is making a purchase decision, product references in those blogs may become very relevant. Brett referenced a study done by Marketing Experiments Journal. They did an A/B test where they put a product up for sale with reviews, and they put the same product up for sale without reviews. The test showed that conversion rates went from 0.47% without reviews to 0.88% with reviews... nearly a doubling in conversion rates by showing reviews with a product. In another example which Brett had personal experience with, on a web site where people were given a choice of clicking on a tab to read reviews, people that clicked the tab and read the reviews had 92% higher conversion within their session than those that didn't. Brett's company provides the tools for managing and hosting customer ratings and reviews on web sites, and he related an experience that he had working with CompUSA, where they did a study of photoprinters. They found a lot of people were talking about a positive experience of going into a store and having a sales associate ask them if they had their memory card on them. And they were able to test out the photo quality on different printers they were assessing with their own photos, and this was influencing purchases. Recognizing that it was important to have a store associate ask if a customer had their memory card was a big insight to CompUSA at the corporate level. Prior to having the customer reviews online, recognizing the advantages of this would have required that the store associate anecdotally tell their sales manager, the sales manager tell the regional manager, and have the chain of communication eventually reach up to the EVP of merchandising, and then have the EVP realize the true importance of the information and then disseminate it downwards back through the chain to the store associates in all the stores. By putting the reviews online, it allows the most senior people in the organization to see direct feedback and customer-to-customer conversations in a way they never have before. Brett then ended his presentation by reviewing five ways that a company can use word of mouth inside their business: Align marketing prioritization with customer voice. You can spend your marketing effort where your customers care and where they want to hear from you, and merchandise products that score high with customers. If you go to PETCO.com today, and start looking for products for your dog, you will see that the first category that will pop up will take you to "top rated products." This wasn't there on the site four months ago -- you just had to wade through thousands of product choices without guidance on which ones were "best." But now, you can immediately see which items are best rated by customers in categories such as food, leashes, toys, grooming, etc. And they've found that people that go through the site using a "top rated" path spend 40% more than those that drill through the site by category using a more traditional path, and they convert 35% more frequently. This has been such a huge home run for PETCO that they are actually going to bring in the customer web reviews for their top rated products into the stores. Circuit City has already started to do that too. In an email campaign that PETCO tested out, they showed a 500% increase over any other campaigns that they were running that month in terms of clickthroughs and ultimately sales. In the email campaign, instead of using their own product copy, they used customer reviews from their site. They are also starting to use snippets from reviews to merchandise products on their web site. Brett emphasized that this only works when the company is open, and they allow both positive and negative reviews. If the company only allows positive reviews, customers will discount the value of the reviews. Use customer radar to discover missed opportunities. It lets you look at the reviews and better understand what the customers perceive as key features and benefits. It also tells you what products or features people want that you are missing. Get to know your most influential customers. These are the 10-15% of your customers who may be the most vocal (positive or negative), even if they are not always the highest revenue customers. By embracing and enabling these customers, you use them to help you improve on behalf of all your customers. Pull new customers in by pushing feedback out. From an advertising perspective, consumer generated content indexes very highly in natural search. Create search optimized pages for each product and its reviews to pull new traffic into the site. Take online feedback offline. You can put reviews in catalogs and ads, make them accessible to phone sales and support reps, add them to in-store merchandising, train store associates, and provide feedback to your suppliers to get better products. We need your help to determine which of these events are most important to cover in future reports: March 27 - 28, 2006: OMMA Conference and Expo West - Los Angeles, CA April 18 - 20, 2006: Emetrics Summit 2006 - Santa Barbara, California April 26 - 28, 2006: AD:TECH San Francisco - San Francisco, California May 2 - 5, 2006: T.R.A.F.F.I.C. West 2006 - Las Vegas, Nevada May 21 - 24, 2006: iMedia Agency Summit - Amelia Island, Florida July 9-11, 2006: Affiliate Summit - Orlando, Florida July 24 - 25, 2006: AD:TECH Chicago - Chicago, Illinois Please use this link to help us decide which events to cover and let us know your level of interest. And now on to photos and quotes from the rest of the event... Online Advertising Analytics Overview: Media Planning and Buying, Ad Effectiveness Continuity Programs, Site Selection and More... “CPG (Consumer Packaged Goods), Auto(motive), Pharma(ceuticals), Telcos (Telecommunications), and Electronics Technologies -- those make up close to three quarters of all the spend(ing) of the top 100 (online advertisers).” ----Charles Buchwalter. “Online advertising doesn't universally work. Targeting can make it work much better. If you are going to do targeting, start with what you know, which is your own data.” “The age of silver bullets is over, and now it's all about silver buckshot.” ----Scott Howe. “Advertisers can now get very, very precise about what kind of impact frequency is having on their campaigns.” ----Young-Bean Song. Charles Buchwalter, Vice President, Industry Solutions, Nielsen//NetRatings (left) and Scott Howe, President, DRIVEpm Young-Bean Song, Director of Analytics and Atlas Institute, Atlas Planning and Budgeting for a Successful Search Engine Marketing Strategy and Integrated SEM Campaigns Fredrick Marckini, Founder and Chief Executive Officer, iProspect (left) and Dave Williams, Chief Strategist and Co-Founder, 360i Customer Analytics and Marketing Dashboards: Rolling Up Your Numbers to Create Data-Driven Business Advantage David Schatsky, Senior Vice President, JupiterResearch Stephen DiMarco, Vice President of Marketing and Client Services, Compete, Inc. Marketing Performance Management: Gaining Advantage in Today's Marketing Chaos “We are in the midst of the biggest transformation in marketing history.” “Marketers today are in a really tough position. They are sitting in an era of complete chaos, where nobody knows where to put the dollars, the audiences are being fragmented, yet the pressure on marketers to perform, to be accountable for every dollar spent, has never been greater.” ----Brent Hieggelke. Brent Hieggelke, Vice President of Corporate Marketing, WebTrends Take Control of Hidden Media Costs by Optimizing Your Process “I didn't say measure everything, I said measure something.” ----Scott Nelson. Scott Nelson, Founder and Chief Operating Officer, TruEffect Email: The "Linchpin" of Effective CRM “The bottom line gang is that the bar keeps getting higher and higher. If you want to compete for your share of the inbox, if you want to get opened, if you want to get read, if you want to drive clickthroughs, there are right ways and there are wrong ways to do it. I want to show you what four companies that we work with are doing and why its working for them.” ----Joel Book. Joel Book, Director, eMarketing Strategy, Exact Target Best Practices 2006: Optimizing Online Advertising Effectiveness “Stop paying attention to what's the cool new thing -- there is so much in Internet advertising that we know works effectively. What advertisers really ought to be doing is getting out the brass tacks and figuring out the tools, the strategies, the tactics that we have available today and how to make them to work the most effectively.” ----Rick Bruner.   Rick Bruner, Research Director, DoubleClick Digital Advertising Solutions You Know What Your Site Visitors Did. Now Find Out Why... and What They'll Do Next “I want to prove what I'm measuring is having a difference in my company's bottom line... and if we don't produce those kind of figures, it is likely that those budgets start to shrink.” ----Lee Pavach.   Lee Pavach, Director of Marketing, ForeSee Results Designing the Conversion Funnel: Using Personas to Drive Bottom-Line Results “Our customers, more than any other time in history, resemble the behavior of cats much more than do the behavior of dogs. A dog simply is a man's best friend. But a cat can be very different motivationally. A cat serves his own or her own purposes first and foremost.” ----Howard Kaplan.   Howard Kaplan, Senior Conversion Specialist, Future Now, Inc. Campaign Optimization: Ad Formats, Creative and Program Measurement Options Rick Bruner, Research Director, DoubleClick Digital Advertising Solutions (left) and Matt Roche, Co-Founder and Co-Chief Executive Officer, Offermatica Web Analysis Unleashed: More Than Just Behavioral Tracking Shane Atchison, Co-Founder and Chief Executive Officer, ZAAZ (left) and Karen Breen Vogel, President and Chief Executive Officer, ClearGauge (right corner) Buzz, Blogs and Beyond: Consumer-Generated Media and On-Demand Email Marketing “Recommendations from consumers are the single most trusted form of advertising available, so you need to be able to understand it, measure it, and ultimately act on it.” ----Jay Stockwell. “The welcome email is probably the single greatest opportunity missed by all marketers. It is the one email in your marketing mix that will be the highest opened and most highly read and clickthroughed email out of any that you send. And most marketers send a simple text only confirmation message.” ----Barry Stamos. Jay Stockwell, Senior Vice President, Sales, Intelliseek/BuzzMetrics (left) and Barry Stamos, Senior Director of Strategy, Responsys The Exhibit Areas AD:TECH Connect “If you think you're too small to have an impact, try going to bed with a mosquito in the room.” ----Anita Roddick.