Future Trends in Interactive Marketing (and the Future is Now) – Part 2

Sep 05, 2006 8:52 PM  By

Welcome to the second in our two-part series on Internet marketing and communication trends. Here we’ll look at another seven enhancements and improvements within the medium. For part one in the series, click here.

Community advertising
Advertisers are finding success marketing within user-generated content, where consumers are sharing ideas. Blogs, chat rooms, and other Internet communities are places where consumers tend to be most receptive to relevant messages, and the organic nature of online communities can enhance and even generate very powerful viral communications.

Interactive TV and digital video recorders (DVRs)
Advertising via set-top boxes or DVRs such as TiVo are targeted ways to reach consumers today. Direct response via TV menu screens and other tactics are still in their infancy and priced relatively high for the returns they are achieving. We do believe, however, that retailers and manufacturers with mass appeal will have some productive opportunities during the next few years to sell goods and grow databases using this channel.

Proliferation of broadband, rich media, and video advertising
With more than 60% of U.S. Internet users on a broadband connection, the ability to engage consumers with rich media is an enormous trend that will only continue to grow. The ability to show video, capture consumer data, and even allow a purchase within an ad is a reality that should be considered a component of online marketing campaigns. Rich media also enhances reporting and learning with the capability to track many engagement metrics that can be used to evaluate and optimize (time spent with ad or mouse-over statistics, for example).

Behavioral targeting, retargeting, and “personalized messaging”
Behavioral ads are shown on web pages that are not contextually-relevant to the subject matter, in an “uncluttered” environment, enabling the targeting of consumers based on their previous search, visitor, and purchase patterns rather than on simple demographic fit. As an example, lets take a women’s apparel merchant. This marketer may typically place display advertising on sites with content about women’s topics, fashion and style. Using behavioral targeting, this marketer would place advertising on a page with news about the Middle East. The ad is being shown on this page only to consumers who shopped for women’s apparel online at least three times in the last week. Behavioral targeting for display advertising is a relatively new technology online offered to advertisers on a network basis, which expands reach.

Retargeting allows a marketer to have a specific message delivered to a consumer who abandons a Website, shopping cart, or form. This trend has begun to show great promise for online merchants.

A newer level of behavioral messaging online is called personalized messaging, in which online display advertising is linked to a marketer’s internal databases. The display ad can recognize the consumer, then deliver a personalized message to the consumer within an ad. The message can be segmented as finitely as an e-mail, displaying preferred offer, copy, products, sizes, etc.

Gaming
Whether a game is developed around a brand or brand messaging is included in a game, numerous marketers are investing in gaming. Video gaming offers the opportunity to connect with traditionally difficult-to-reach consumers. As more companies offer the ability to measure demographics, reach, frequency, duration, and the depth of engagement in games, the value of in-game advertising will continue to develop.

Promotions, streaming video, and interactive tools
Marketers stand to benefit enormously from increased use of promotions and interactive tools on their Websites that enable browsing, product education, and registration for re-contact. Quizzes, polls, and contests that are relevant to a merchant’s products drive incremental sales. Broadband penetration allows for video product benefit demonstrations that engage users, drive viral proliferation, and ultimately sell. These are tools and directions that are continuing to gain popularity across the board.

Multivariate optimization tools
Perhaps the most revolutionary trend that we see for increasing multichannel performance is automated tools that allow marketers to easily optimize Web pages. Home pages, shopping carts, registration pages, and key product pages are typically optimized for a deeper click, registration, shopping cart inclusion, or conversion to purchase. Multivariate optimization tools test all variables on a page, in all possible non-redundant combinations in a live setting, then analyze which combinations of variables is optimal. What used to take months of A/B splitting is now reduced to a couple of weeks. Retailers such as Overstock.com and Lillian Vernon have seen double-digit increases in conversion rates from these tactics. We are using these tools successfully in conjunction with careful media and e-mail database coordination for true end-to-end optimization, from first media contact to conversion and up-sell.

Industry studies continue to indicate that online communications can improve online and offline revenue and return on investment, time after time, in every industry and category, if executed and measured correctly. By understanding and appropriately testing developing trends and technologies in online communications, sophisticated marketers can develop and optimize strategies that generate immediate behavioral response, shifts in brand perception, and positive financial impact.

Josh Perlstein is president of Atlanta-based marketing services firm Response Media.