Subject: Maybe the Cookies Aren't Crumbling

From: Chief Marketer <[email-masked]>
Date: Tue, 26 Apr 2005 10:10:06 -0500

April 26, 2005 | A PRIMEDIA Property |

Table of Contents
Maybe the Cookies Aren't Crumbling After All
Priming the Pump for Long-Term Value
Branding Lessons from Eddie Bauer
Nielsen Update: Still Feeling Some Heat
Time to Invest in Rich Media?
Home Depot: Using Tech to Nail Down Relationships

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This Week's Stories
Maybe the Cookies Aren't Crumbling After All
By Brian Quinton
SEARCHLINE
JupiterResearch set the Web metrics world ringing a month ago with a published report that found Web users deleting cookies in numbers far larger than previously thought. But another study suggests that users in fact may not be practicing the rigorous anti-cookie habits they're preaching--good news for those that rely on cookies-based Web analysis to gauge the effectiveness of their online marketing.

In a survey conducted in February and March, Jupiter researchers discovered that as much as 39% of the U.S. Web-using audience say they delete cookies from their computers at least once a month. In fact, 17% of consumers polled told Jupiter they erased cookies once a week; 10% said they cleaned out cookies on a daily basis.

If true, those Jupiter findings would add a large element of uncertainty to many measures of Web behavior, including unique site visitors, sales conversion rates, customer targeting, and the effectiveness of advertising.

But the research division of digital marketing firm Atlas DMT found in an August 2004 survey that what consumers say they're doing and what they actually do are two distinct things. Atlas Institute director Young-Bean Song says his group not only surveyed consumers but also went a step further and deposited a third-party cookie on respondents' browsers, then used its ad tracking network to trace the lifetime of that cookie. As a result, Song's team was able to amass actual behavioral data on how the respondents handled their cookies over a set period of time.

What did Atlas find? Respondents who said they deleted their cookies every week actually kept them for an average of 45 days; those who claimed to erase them monthly kept them an average of 59 days. And users who reported deleting cookies every three months in fact held onto them for an average 127 days.

Another factor moderating the effect of any increased cookie deletion is the finding in the Atlas study that 70% to 90% of sales conversions happen within 24 hours of a click or impression. "If someone is deleting their cookies weekly, you're certainly going to lose that data if they convert eight days after seeing a banner or clicking through a search ad," Song says. "But the bulk of the activity is well short of that, you're going to capture most of that activity. Cookie deletion is not going to have this gigantic impact on conversion tracking, whether for search or for banner advertising."

To read more, visit SEARCHLINEINFO.COM.

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Priming the Pump for Long-Term Value
By Sherry Chiger
Identifying your key prospects is of course critical to marketing success. But as Janet Rubio, a partner with marketing services firm Austin Direct Impact, said during last week's Direct Media Mailers Conference & Co-op, "a target may not be interested just because he's qualified."

Generating interest and winning the prospect as a customer is "not about sending a message and getting an immediate response," Rubio said. "You may have to prime the pump a little."

By way of example, she referred to a client that sold computer accessories. It created editorial-based e-newsletters for customers and prospects who registered on its Website--nothing earth-shaking there. But the company also created an online fantasy-football game primarily for the purpose of building a relationship with customers and prospects. In fact, the company waited 12-18 months before sending its first sales-related message to Website registrants.

In the meantime, the fantasy-football game kept the participants returning to the Website. And it had a viral-marketing effect, as participants e-mailed the link to associates worldwide.

The result: The average customer value of these users ended up being 30% above average, Rubio said. The moral here is clearly that good things come to those who wait--and bolster relationships while doing so.

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Branding Lessons from Eddie Bauer
By Mark Del Franco
CATALOG AGE
Now that Spiegel Inc. has yanked Eddie Bauer off the selling block and is committed to revitalizing the $1.3 billion apparel business, many industry observers are waiting to see just what the company plans next for the brand. Others are looking at the cataloger/retailer as a cautionary tale of what can happen when a brand's message becomes muddied.

The brand could use a boost, several marketing consultants agreed. "The brand is comatose," says Katie Muldoon, president of Tequesta, FL-based direct marketing consultancy Muldoon & Baer. "There's no real identity that separates it from its competitors such as L.L. Bean or Lands' End. Ask people on the street and most couldn't tell you the brand stands for. That's a problem."

One step the company has already taken is to exit its home accessories business, to focus almost exclusively on apparel. "Eddie Bauer thought the solution to fixing and growing their business was to expand into the home category," says Cindy Fields, the former president/CEO of Victoria's Secret Direct and now a New York-based catalog and retail consultant. But unless your existing business is going strong, expanding into a new category is generally a mistake. "It's always more glamorous, more fun, more 'sexy,' to try something new rather than doing the hard, sometimes boring, sometimes tedious work of evaluating results....The best approach to fixing and/or growing a business is to strengthen the core business. That is best accomplished by having a clear point of view, sticking with it, and doing disciplined merchandise analysis."

To read more, visit CATALOG AGE.

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Nielsen Update: Still Feeling Some Heat
By Andrew Grossman
It's bad enough for Nielsen Media Research that stations are unhappy with its new Local People Meter (LPM) system, but now the company is under scrutiny for its traditional sampling methods.

Regarding Nielsen's longstanding use of passive household meters to count viewers in local markets, the Media Ratings Council (MRC), an industry overseer that has declined to accredit the LPM system in New York, said it was investigating problems in Nielsen's sample. "In the 2004 audit of Nielsen's local service, we saw some slippage related to certain areas," says Anthony Torrieri, a senior vice president at the MRC. Basically, he says, response rates have fallen off either because of faulty meters or Nielsen's inability to recruit enough people to act as "Nielsen families" in some markets.

Nielsen was none too happy that the MRC's probe became public two weeks ago, but officials say they are working hard to fix any problems.

Last week it was back to the LPM brouhaha when a public relations firm, the Glover Park Group, said on its Website that News Corp., the parent company of broadcaster Fox, had masterminded the campaign of the Don't Count Us Out Coalition, a vocal, minority-led anti-LPM group that has been lobbying Congress against the new system. Glover Park said that News Corp. had hired the company to stir up opposition to the meters, which have hurt Fox's local ratings. The LPMs have come under attack from Fox Television Stations and some minority groups for ostensibly undercounting African-American and Hispanic viewers.

In response, Don't Count Us Out accused Nielsen of trying to change the subject in order to take the focus off its meters. Spokesperson Gil Casellas said in a statement that the group has "always readily discussed the fact that we receive financial and logistical support from News Corp."

Station executives also weighed in on the LPMs. Lew Leone, general manager of WCBS-TV in New York, a Viacom property, says the new system continues to suffer odd ratings quirks -- such that some syndicated shows are far more popular in some cities than in others. And he objected to Nielsen's problems in keeping enough meters reporting in homes involving minorities, the heaviest viewers of television in New York. Leone does concede, however that the LPMs are superior to the old system of counting demographics, in which families filed out diaries. No one was happy with that system because people's recall of which shows they watched tend to be faulty.

The new system has proved a boon to cable networks, which have enjoyed ratings gains in the LPM markets. Most observers believe that the diaries put cable nets at a disadvantage because people are more likely recall heavier promoted programs on the broadcast stations.

For its part Nielsen has promised to spend more money to recruit minority participants, but a spokesperson says the company was waiting to hear from the MRC as to whether it could "oversample" minorities in order to get enough valid responses from their sets. Nielsen says it may also change its policy of excluding homes from the sample for an entire day if they fail to report data in any part of that day.

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Time to Invest in Rich Media?
Many marketers still perceive rich media -- animation, streaming audio and video, and other nonstatic online tools -- as bells and whistles suitable for branding but for little else. Yet increasing penetration of broadband Web access and higher click-through rates for rich media suggest that the time has come to view rich media as more of a standard tool and less as a novelty.

Of the nation's 71.5 million Internet-enabled households, more than 98% have a Flash player, according to NPD Group, and 87% can read Java. What's more, 36% of online households have broadband access, according to eMarketer. This combination of faster Web access and desktop technology means that most Web users can accommodate at least some form of rich media.

In addition, click-through rates for rich media ads are more than four times higher than for static ads. According to DoubleClick, during the third quarter of 2004 the average click-through rate for rich media was 1.17%, compared with 0.20% for non-rich media.

Little wonder, then, that while eMarketer expects overall online advertising spending to grow 21% this year, to $11.5 billion, it projects that rich media ad expenditures will increase more than 35%.

But so far, according to Advertising.com CEO Scott Ferber, most marketers view rich media advertising as a branding rather than a direct selling tool. "Movement conveys 'essence,'" Ferber said in an eMarketer white paper, "Rich Media: At the Tipping Point," "so [rich-media animation] helps branding." Nonetheless, he added, "the ability to capture information in an interactive environment is an incredible tool for direct response."

Indeed, according to DoubleClick, conversion rates for people who clicked through on a rich media ad averaged 2.30%, compared with 1.47% for static ads.

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Home Depot: Using Tech to Nail Down Relationships
By Brian Quinton
DIRECT NEWSLINE
Technology plays a part in creating a customer bond, but it can't be the sole element, said John Costello, The Home Depot's executive vice president for merchandising and marketing, at 2005 Ad:Tech San Francisco yesterday.

"The success of technology in the future may be defined more by how it engages and interrelates to other aspects of the business than by pure innovation," he said. "There was a feeling that technology would change the world and replace old media, old retailing, old product development. But we're seeing a convergence of technology and those old business elements."

For instance, Home Depot found that it was overmarketing to men, even though half of its transactions were with women. So more than a year ago, it inaugurated a series of in-store "Do-It-Herself" classes targeting women. Home Depot used conventional TV and print marketing to publicize the classes but also used e-mail, direct mail, and postcards to reach the target audience. A microsite allowing women to register for the workshops online proved particularly effective, because the students could also use it to give the company feedback on what they wanted to learn. To date, 200,000 women have signed up for the workshops, and 97% have said they would attend another one. The top complaint, Costello said, was that the courses weren't long enough.

Other touch points where technology can aid with customer engagement include digital in-store signs that answer simpler product questions -- about extended-life light bulbs, for example -- and free up salespeople for more-complex questions. Home Depot is also mining its warehoused sales data for new ways to build customer relationships.

To read more, visit DIRECT.

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