March 2010 – Channel Crossing: Mobile

The Battle to Shape the Future of Mobile Computing

Apple and Google are engaged in an epic battle to profit from mobile computing, as mobile phones become the computers of the future, according to a recent article in BusinessWeek. These two companies are similar in many ways. Both are admired by consumers, they each have over $20 billion available for research, product development and acquisitions, visionary founders, competing smartphones, web browsers, music and tablet computers, which positions them as major rivals moving forward.

Google became a direct competitor to Apple’s iPhone with the recent introduction of its Nexus One smartphone that utilizes Google’s Android operating system. Apple recently purchased Quattro, which specializes in mobile advertising that targets consumers based on their behavior, after being outbid by Google for mobile ad company AdMob. With the acquisition of Quattro, Apple is aiming to make the current form of mobile search obsolete by developing new types of mobile ads.

MOBILE MARKETSHARE
Steve Jobs is trying to revolutionize mobile advertising the same way he changed music players and phones. One way he could accomplish this is by using Apple’s geo-location technology to deliver ads that are relevant to your location. Apple also has access to valuable consumer information, including which apps, videos and songs mobile users downloaded and detailed customer data such as credit card numbers and home addresses that will allow them to combine advertising and e-commerce in new ways, per BW.

It’s predicted that within five years, more people will access the Internet through mobile devices than through desktop PCs. Mobile advertising today is only $2 billion compared to the $60 billion online ad market. Mobile search is still in its infancy, but it will account for 23 percent of all searches in 2016, up from 5 percent today. So there’s potential for Google and Apple to tap into billions of dollars in revenue through the sales of mobile phones, software, ads, apps and services as the mobile market grows.

The key to success is through Google or Apple figuring out a way to make mobile more profitable by winning the mobile ad battle and sharing the revenue with app developers. “The mobile platform that creates the most ways to make money wins,” noted David Hyman, CEO of MOG, in BusinessWeek. Apple has a big lead over Google with 125,000 apps developed for Apple devices vs. only 18,000 for Android devices.

Google CEO Eric Schmidt believes that mobile ads will become more important than PC advertising because of the personalization and localization, according to BW. Schmidt speculates that mobile phones might one day be free with advertising paying the way. “If Google could do that, they would be untouchable. Apple wouldn’t be able to come up with an answer for that,” commented technology consultant John Metcalfe to BW.

The rivalry between Google and Apple should be fascinating to watch as these two technology titans battle to dominate the mobile computing space in the years to come.

Peter Koeppel is a Wharton MBA and president of Koeppel Direct, a full-service media buying agency based in Dallas. He can be reached at (972) 732-6110, or via e-mail at pkoeppel@koeppelinc.com.

March 2010 – Column: Best Practices in Online Marketing

How Can One Website Outperform Another?

Our clients tell us that every web marketing company out there claims their DRTV landing page websites have the best performance. By “best performance,” I think we all understand it as a website that will generate the most revenue per visitor or, put another way, the highest conversion rate and the highest average sale.

I guess we (web marketers) all better say that if we want to get clients and stay in business. So I make the same pitch. But inevitably the client or prospect says, “You guys all say you have the best performance. So what makes yours better than the next guy’s or the one my friend built me. How can any one website outperform another?”

This is a good question. How can one website possibly outperform another? To the uninitiated, it may not even seem logical that this could be possible.

A MULTITUDE OF LITTLE THINGS
The truth is, we have done thousands of tests over many thousands of orders. In doing so, we have discovered a multitude of (seemingly) little things that affect performance and, as a consequence, we have discovered that one website truly can outperform another.

We have won and lost thousands of tests against ourselves over the past three to four years, and we continue to discover new things that both help and hinder performance. And knowledge of each is equally important.

Speaking of this “multitude of little things,” can you guess what a few of them are? Can you estimate how significant of an impact they can have on your business? Without getting so specific as to give away trade secrets, we know that by doing one certain thing on a landing page, we can improve your conversion rate by 50 percent or more.

Did you know that by structuring the presentation of your offer in a certain way, you can improve your RPO significantly?

Did you know that placing text in a certain location or picking the wrong headline can cut your response rates in half?

Two websites rarely perform exactly the same even if you change only small, seemingly innocuous elements. In fact, I have seen the scenario with two otherwise identical websites, where two–two!–words were added to a page on one of them–and in 10-point type–and response dropped by 80 percent!

So believe me, seemingly similar websites do perform quite differently, and the difference in results can have a dramatic impact on your bottom line. In this sort of environment, there is but one truism: you gotta test, and test constantly!

Think about it, would you have the guy down the street who has a video camera shoot your commercial instead of hiring a talented producer with the experience needed to make it a success? Of course not!

Why? Because you know that two different commercials for the same product can yield drastically different results. The one produced by your neighbor and his camcorder would never get the same response as the professionally shot and edited version from a pro.

The same is true on the web.

If you are only running one version of your website–in other words, if you’re not testing–you’re getting out-hustled and out-performed by the guy down the street. Assuming you have multiple website creatives for the same product running on a single platform, here are the four fundamentals you need to have in place to determine which one is the best-performing site.

You need a traffic splitter and an accurate reporting mechanism.

You then need some kind of testing plan to determine which items to test. (This would include things like the positioning of different site elements, headlines, form configurations, Flash vs. HTML, plus dozens of other items.)

You need a platform on which to conduct progressive A/B split or multivariate tests against a control, continually moving forward with the winners of each test.

You also need a technical platform specifically designed to execute and report usable test data. We have one we call AutoCart.

Once you have these basic elements: a traffic splitter, parties focused on accurate results, a testing plan and a testing platform, you are ready to begin.

As an example, let’s say you want to begin by testing something simple like background coloration or the positioning of the video on your website. To test the video player, you would build four or five versions of your site with the video player in various locations on the page. Then, run a minimum of 1,000 orders through the splitter and you would notice that at least one of the five sites will provide higher conversion and revenue. (In a recent test case we conducted, the location of the video that provided this boost was the lower left position.) Next, you would apply this to another five websites for other products and see if the results replicated. If they did, you would know you were onto something and could expand your testing process to additional items. Once you tested those, you could move on to the next ones. The process needs to be continual.

Once you have done this process for three to four years, conducted over 1,000 tests on all elements of website designs, layouts, buttons, logos, seals, copy, upsell configurations, positioning, etc., we think you’ll have a different view on whether all websites perform the same.

Bob Greenstone is CEO of Permission Interactive Inc. in San Diego. He can be reached at (619) 708-7456 or at bob@permissioninteractive.com.

March 2010 – Feature: The Mobile Frontier

An Examination Of Recent Legal Developments In Mobile Advertising Along With Practical Considerations For Direct Response Retailing Over The Mobile Channel

By Karen L. Neuman

The accelerated growth of mobile commerce, combined with the acuity of location-based applications makes it possible for direct response retailers to use the mobile channel for locally targeted mass marketing. One estimate, according to Mobile Marketer, puts worldwide mobile phone connections at 4 billion; while another by Neustar and SMS Mobile Marketing predicts that mobile revenue in the United States will reach $3.3 billion by 2013. SMS text messages dominates mobile advertising in markets like the U.S.

Regulators and courts are trying to keep pace, attempting to balance business interests in accessing consumer data and tracking habits for operational and transactional efficiencies against consumers’ interest in protecting privacy and controlling the collection, storage and use of their information.

This article highlights some recent legal developments that could be important as you consider adding the mobile channel to your ad campaigns, and offers some practical tips that can be taken to address potential risks.

FTC PRIVACY ROUNDTABLE DISCUSSIONS
The Federal Trade Commission (FTC) has broad jurisdiction to protect consumers from unfair and deceptive practices and promote fair competition. It has used these powers to protect against fraudulent or deceptive advertising. A familiar example for the direct response industry are the October 5, 2009 amendments to the agency’s long standing guides concerning the use of endorsements and testimonials in advertising. The FTC has also exercised its authority to engage the industry and the public in formulating an appropriate framework for protecting privacy and ensuring data security in online behavioral advertising and the mobile marketplace.

The linchpins of the current approach to privacy in the United States are privacy policies, industry self-regulation and nonbinding fair information principles (FIPs). The FTC is now examining, through a series of “privacy roundtable discussions,” whether this approach is sufficient given perceived new risks to privacy posed by the proliferation of more invasive data collection and tracking technologies.

The FTC seems to be particularly interested in: 1) the convergence of offline data collection technologies–such as biometrics and loyalty card analytics–with online data to create a ubiquitous data environment; 2) technologies such as “flash” or other “super” cookies that override consumer privacy preferences; 3) the sharing of social networking data with third parties, including mobile applications for advertising; and 4) how far down the chain consumer preferences should be honored as between first and third parties.

The roundtables are not formal rulemaking proceedings. They do suggest, however, that the FTC is questioning whether the current approach to privacy and data protection goes far enough. It is unclear if there will be immediate regulation. One probable outcome is increased enforcement under the Federal Trade Commission Act. Other plausible scenarios include revisions to the FTC’s FIPs and heightened degrees of protection for sensitive data, such as individual financial or health information. In addition, the record developed from the roundtables could form the basis for an FTC report to Congress in which greater rulemaking authority is sought. This could, in turn, result in proceedings to codify existing guidelines and some of the proposals discussed at the roundtables. These could include regulations aimed at bad actors with safe harbors for other entities that meet specified requirements.

Given this fluid regulatory environment, there are some practical steps that can be taken when planning a mobile ad campaign.

• Comply with industry best practices and be familiar with the FTC’s Online Behavioral Advertising Guidelines.
• Disclose the extent of tracking, retention and uses of data, including your policies for sharing with third parties, and provide opportunity for meaningful notice and consent. Tailor disclosures to mobile device screen size and resolution.
• Undertake a review of your terms of service, privacy policies and data security policies, updating them as necessary to address new technologies or to reflect actual or anticipated changes in the law.
• Refrain from using flash cookies, other super cookies or technologies that override consumer privacy preferences. Refraining from using these tools is a good way to differentiate your company from others. Otherwise, fully disclose their use with clear opt-out directions.
• Collect only as much information as necessary for the specific transaction and retain it only as long as necessary.

SMS TEXT ADVERTISING
SMS text advertising involves sending no more than 160-character messages directly to customers’ mobile phones to deliver information about a brand or product, direct them to websites or call centers, or otherwise engage them with mobile coupons, contests and sweepstakes entries or products like DVDs. SMS enables marketers to target and reach an audience that has elected to receive messages and is seen as more likely to respond with greater immediacy than they would with other media.

The features that make SMS appealing to advertisers also raise red flags for regulators and consumer groups. They include the uniquely personal, location-based nature of mobile phones and the corresponding ability to mine, acquire, retain and share individual data for profiling and targeting. SMS technology increases the potential for the receipt of unsolicited text messages or mobile spam in violation of federal and state consumer protection laws. In addition, multiple parties are typically involved at various stages of creating and sending SMS text ads, increasing the possibility that a customer’s consent to receive content from one party will be improperly shared with third parties. This in turn heightens the risk that a customer’s stated preferences will be ignored and their information misused.

A federal appeals court in California recently addressed these concerns in Satterfield v. Simon & Schuster. In that case, the plaintiff brought suit under the federal Telephone Consumer Protection Act (TCPA) for an unsolicited text ad received by her son after she downloaded a free ringtone for his cell phone. The ringtone was downloaded from a website operated by Nextones. The text ad was sent as part of a book promotion launched by publisher Simon & Schuster. The publisher outsourced the campaign to a marketing firm that obtained lists of cell phone numbers, including the plaintiff’s, purchased by another entity from various websites, including Nextones. During the course of the ad campaign, five companies accessed or acquired the plaintiff’s phone number before the text ad was ultimately received some two years after the ringtone was downloaded.

First, the court had to consider whether the TCPA applied. The court concluded that it did, finding that 1) SMS messages are calls within the meaning of the statute, and 2) equipment with the capacity to store, generate randomly or sequentially dialed numbers and call those numbers is automatic dialing equipment within the meaning of the statute. It returned the case to the lower court to determine whether the equipment used to generate the SMS message met those criteria.

The court went on to examine whether the consent given for the ringtone applied to each of the entities in the campaign chain. The court concluded it did not. The third parties involved in the campaign were not “brands” or “affiliates” to which the original ringtone consent applied because they shared no corporate structure or corporate relationship with Nextones. The fact that Nextones licensed its subscriber list for use in this campaign was found to be an insufficient degree of affiliation for purposes of the reach of the Plaintiff’s consent.

This case offers some practical “dos and don’ts” when planning an SMS campaign in the U.S.:

• Know your privacy policies and TOS agreements and follow them.
• Know which law(s) could apply based on the equipment used to store and disseminate the campaign’s SMS.
• Specifically identify the ad campaign and the entity that will be sending the SMS text. Do not send messages to a consumer who has not given express consent to receive these messages. Confirm that third parties with whom you contract comply with required consent(s).
• Do due diligence on lists of cell numbers used for the campaign to determine the precise nature and extent of provided consents.
• Do due diligence on all companies in the campaign chain that obtain a consumer’s mobile number for compliance with the consumer’s consent, including any stated restrictions.
• Comply with industry best practices governing recommended disclosures.
• Although not an issue in the case, refrain from engaging in practices that could reach or attract children. If you do engage in those practices, make sure you comply with applicable laws and regulations.

This case and the FTC roundtables suggest that the interests of direct response retailers and those of your customers may be more closely aligned than you might assume. While it may seem burdensome to implement some of the practical steps suggested here, doing so could differentiate your company, creating a competitive advantage and building good will for your brand or product.

FCC “NET NEUTRALITY” RULEMAKING
An important proceeding that could affect how direct response retailers use the mobile Internet to reach customers is the Federal Communications Commission’s (FCC) net neutrality rulemaking proceeding.

The FCC has jurisdiction over domestic and international communications involving wireline, wireless, satellite, radio and cable. The D.C. Circuit Court of Appeals is considering a case that could clarify the FCC’s jurisdiction over the Internet and the extent of its authority to regulate mobile and other broadband Internet Service Providers.

In October 2009, the FCC initiated a proceeding to consider draft rules that would require broadband ISPs, including various providers of mobile wireless broadband, to provide Internet access for unaffiliated applications, services, content and devices on a nondiscriminatory basis and subject to “reasonable” and “transparent” network management practices.

There are two aspects of this rulemaking that direct response retailers should be aware of.

First, the FCC is considering whether it will permit ISPs, including mobile broadband providers, to employ certain practices to manage traffic over their networks. Some of these practices include using tools that enable ISPs to distinguish among different classes of traffic for prioritization and scheduling transmission, particularly for high bandwidth use applications like video, gaming, and streaming content. Other proposed network management practices include usage-based mobile data pricing or time of day pricing.

Second, the proposed transparency requirement, if adopted, will require ISPs to disclose their network management practices. It is possible, therefore, that ISPs will compete on the basis of these practices, thus enabling businesses, including direct response retailers, to “comparison shop” as they formulate their mobile advertising plans. With sufficient competition, for example, time of day pricing could be a factor in launching an SMS contest or other campaign. The potential for latency could vary from one carrier to another and should be similarly factored into when a campaign’s SMS messages are sent. Similar consideration should be given, if possible, to terms in agreements among ISPs disclosing the extent to which transmission prioritization determinations will be honored as traffic is handed off from one to another.

In the context of this rulemaking, the FCC is exploring ways to find new spectrum (the range of electromagnetic frequencies allocated for various purposes, including mobile communications), and better use existing, underutilized spectrum (through compression technologies, sharing and other arrangements) to support the rollout of 4G mobile networks. Increased spectrum availability could enhance mobile advertising by adding capacity to mobile networks. In order to add this capacity, the FCC could try to create incentives to encourage existing spectrum holders to relinquish or share their spectrum. For example, the FCC could guarantee broadcasters distribution of their content in exchange for their spectrum. It would be important to know the practical consequences of any such agreements for purposes of planning your campaigns and anticipating the potential for latency as a result of these agreements.

THE TAKEAWAY
This article examines some recent federal regulatory initiatives and legal proceedings that you should be aware of when adding the mobile channel to reach consumers. You should also be familiar with applicable data protection laws, including those intended to guard against identity theft, and pertinent state consumer protection and common law–topics that are beyond the scope of this article. There may also be instances where laws of foreign jurisdictions apply, and you should know when those laws are triggered.

A common theme that connects the proceedings discussed here is a focus on meaningful disclosures of terms and conditions that enable users to make informed decisions about participating in the mobile marketplace, whether the user is a consumer receiving content over their mobile device or a DR retailer seeking optimal circumstances for delivering mobile advertising messages to consumers. Companies that take proactive measures to address these issues will be better positioned with respect to potential enforcement or other legal proceedings. They will also put themselves at a competitive advantage in the mobile marketplace as the mobile channel expands beyond existing technologies and mobile marketing continues to mature.

Karen L. Neuman is a partner in St. Ledger-Roty Neuman & Olson LLP, a Washington, D.C. law firm specializing in technology, media and telecommunications. She can be reached at kneuman@slrno.com.

March 2010 – Cover Story: ShopNBC Revisited

CEO Keith Stewart Breathes New Life Into What He Calls An “18-Year-Old Startup.” The Industry Veteran Talks About Changing The Company Culture And Restoring Customer Confidence In The Brand.

By Vitisia Paynich

For years, ShopNBC had been struggling to capture market share, while its rivals vied for the No. 1 and 2 spots. To differentiate itself from the competition, this $517-million multichannel retailer, headquartered in Eden Prairie, Minn., focused its energy on more high-end product categories with a high pricepoint to match. The average selling price was around $200. However, this business model proved too challenging, leaving the company with mounting debt and growing customer dissatisfaction. And in the past 18 months, the company has had three CEOs.

ShopNBC, owned and operated by ValueVision Media, was determined to shift the tide and transform itself into a formidable adversary in the electronic retailing space. In 2008, the company coaxed Keith Stewart out of retirement and convinced him to take on the role of COO.

Stewart joined the company with impressive credentials. He spent 20 years in retail, 15 of which were with QVC in merchandising and operations. In 1998, he relocated to Germany where he successfully launched QVC Düsseldorf. Prior to his retirement, Stewart had created the largest international televised retailer outside of the U.S.

Why did this industry veteran come out of retirement? “Because I’m a lousy golfer,” quips ShopNBC’s CEO. Although Stewart was self-effacing when first asked this very pointed question, he insists that he was up for the challenge. In fact, he believes in the company so much that he elected to forego his first year’s salary to prove it.

In addition to jewelry, ShopNBC now concentrates on other product categories like apparel and home goods.

Stewart was named president and CEO one year after coming on board. And in the time he has taken the reins, ShopNBC has turned the corner by not only broadening its customer base to 1 million but also increasing its online business by 38 percent–a number that continues to climb. In addition, he’s aligned himself with other seasoned home shopping experts including fellow QVC alums Randy Ronning, who serves as ShopNBC’s chairman, and Bob Ayd, who was promoted in January to president.

Electronic Retailer caught up with Stewart to learn more about how he’s been able to put ShopNBC on the right path.

Electronic Retailer: When ShopNBC approached you to come on board nearly 18 months ago, how would you describe the company’s financial state at the time?

Stewart: It was tenuous at best. You have to be candid with yourself if you’re going to take a big step like that and you have to take a very objective look. At that point in time when I was interviewing, the balance sheet was OK. They had a very long list of strong assets, but the company had been losing thousands of customers every month. And for almost 18 years, the company did not deliver a profit. So, that’s an immense change to have to make, not only in business results but also in the overall culture of the organization. But there was just an awful lot of opportunity in front of us.

ER: Did this cause you to reconsider joining the company?

Stewart: No. I’ve spent considerable time at a startup in Germany and I viewed this as an 18-year-old startup. They have plenty of opportunity and with the right business decisions, the right direction, and the right team, success is imminent.

ER: During that time, about two-thirds of ShopNBC’s distribution agreements were due to lapse at the end of 2008. How did you turn that around?

ShopNBC crew members prepare the set for the next show.

Stewart: I wish it were just the distribution agreements; it would have really simplified everything. Looking at it from an employee’s perspective and vendor’s perspective, there were three CEOs in 18 months. The morale was very low among the organization. As I mentioned, the company was losing thousands of customers every month for quite some time. The business operations itself really drove high return rates and low customer service ratings. We were focused primarily as a jewelry retailer, and we had looming debt of $44 million coming due very soon. On top of that, we had distribution contracts that were set to expire. So, there was an awful lot going on all at once.

Carving out the distribution footprint, what we did was put together an affiliate relations department. Secondly, we knew we had complete control of the negotiations with the MSOs and satellite companies and we approached this very much as a win-win situation. They knew from our requests that we had to lower our costs. They also knew it was important that we continue to provide content for them and for their customers. Fortunately, we did renew 100 percent of those contracts. And not only were we successful in re-upping the distribution, but we also dropped $24 million out of the expense line. In many of the larger markets, we improved our channel positioning.

ER: Part of your new business model includes recruiting what you’ve described as the “Gold Standard” of executives. How does their experience factor into the restructuring process?

Stewart: Their experience complements the larger group of employees at ShopNBC. And that mix is a very powerful one. Many of these people you are referring to have seen the movie. It’s a very competent group of people who are focused on business results and on customer centricity.

ER: When Electronic Retailer interviewed ShopNBC in May 2007, the company was on the path toward becoming more multichannel-oriented. Does this remain part of your current marketing strategy?

Stewart: It’s central to our marketing strategy. We’re going to serve the customer any way he or she wants to be served. So, those portals–as technology grows–go beyond the platform of merely television. It is a dot-com platform. It is a mobile platform. And we were the very first electronic retailer to launch on a mobile platform with the iPhone. While we continue to improve that technology, one needs to bear in mind that the customer is everywhere. If it’s on Facebook, MySpace or Twitter, we need to continue to service them in the many ways that they want to be serviced. So, we’ll continue to broaden the ShopNBC strategy as part of our multichannel distribution efforts.

ER: What is ShopNBC’s unique value proposition?

Stewart: The unique value proposition starts with our positioning in the market as the premium lifestyle brand. At the end of 2008, our average selling price was over $200. And we knew we had to lower that average selling price to open up access to more and more customers. Our stated goal by the end of 2009 was right under $100 and we did hit that goal. However, that is not about lowering quality–it’s about opening pricepoints and broadening our appeal to our customers. We continue to offer big brands like Movado, Sony and Samsung. And we will continue to build new product categories with notable brands and intellectual properties. Recently, we launched Ted Gibson hair care, Vapour color cosmetics and Via Spiga handbags. Ed Hardy is very timely and profitable and we’ve been very successful with that brand. It’s about offering different products that are meaningful and relevant to the customer.

ER: So, with a lowered average pricepoint of $98, you’re not going after a completely different customer but broadening your customer base?

Beauty is just one of the product categories that ShopNBC intends to expand by offering top name brands.

Stewart: That’s exactly the point. We’re broadening our customer base and in fact, our customer base in 2009 grew 36 percent amid some very difficult economic times for retail. Our new customers grew over 520,000–that’s 60-percent growth in 2009. When we hit the milestone of 1 million customers at the end of December, it was an immense change in the overall structure of this organization. So, we’ll continue that torrent customer growth as we continue to successfully turn this company.

ER: The jewelry category was once a mainstay of the company’s overall product mix. Going forward, will this still be the case?

Stewart: Jewelry is still an important part of our business and will continue to be, but it won’t be the only business in which we operate. We’ll be a general merchandise retailer offering many different product categories to our customers. As I mentioned, we’ve gotten very serious in the beauty category with hair care and color cosmetics. We’ll continue to grow our apparel business. We’ll continue to expand our home business with our domestics and textiles. We’ve been very successful in launching gourmet foods. As we continue to launch different product categories and expand our existing ones, it’ll be a complement to jewelry. But we certainly aren’t planning at all on doing anything but growing that business and making it productive.

ER: Prior to you joining the company, ShopNBC was plagued by high return rates on merchandise. What changes have you made to reverse those numbers?

In 2009, Suzanne Somers joined ShopNBC with her full product line and loyal legion of fans.

Stewart: The first thing we had to do was change the culture. We had to say our high return rates were bad because the customer didn’t want to keep the product, and thus, returned the product. Now that may sound over-simplified but it’s something you really have to look at as a culture of an organization. We started with customer centricity. What does he or she want from ShopNBC as it relates to product and services? Second, once we changed and accepted that, we had to install systems that allowed us to measure the business results specific to cancellation and return rates, productivity and the like. We did install those systems and put in place benchmarks for each product category. We also installed rigorous QA and QC standards and systems in our business process. Now we have total transparency as it relates to our overall goals and targets. Again, these goals and targets are not merely financial. This is all to benefit the customer and it’s not only about creating customer centricity, but connectivity to the customer. So, our goal is to offer that customer a meaningful and relevant product that she likes. If she opens the box and we exceed her expectations when the product arrives at her home, then we’ve done our job.

ER: Given your vast experience in the international marketplace, are there plans for global expansion?

Stewart: This is in our future without question. However, we have much to do domestically before we start to lay the plans for global expansion. We are focused on driving shareholder value, growing our customer accounts, improving our customer service metrics, leading connectivity with our customer, and delivering consistent results each quarter. And as this business continues to be more consistent and predictable, we will start to lay the foundation for additional, organic growth opportunities.

ER: What is your personal stake in ShopNBC?

Stewart: I think the more important question is: What is the insiders’ stake? And, that means the management, the employees and the board. Of the total economy, insiders are 12 percent. So, certainly you can see this organization is very much aligned with the shareholders and the stakeholders like our vendors. As it relates to my personal stake, it’s a little less than half of that.

ER: You’ve set a goal of three to five years in which ShopNBC will double its sales. Given that the economy is still struggling to recover, is this a realistic timeframe?

Stewart: The economy does not control our future. This is an 18-year-old startup. If you look at the productivity, we are about $7 in sales per home. That contrasts with others that are $58 in sales per home. So, there is a lot of opportunity with our existing distribution to become more productive. I would say certainly, a three- to five-year time period is more than reasonable.

February 2010 – Channel Crossing: Online

Abandonment Marketing: Maximize Onsite Revenue

Website abandonment is a recurrent thorn in the sides of all e-commerce teams. Optimizing conversion is rarely a simple quick fix, and often turns into a seemingly infinite journey with no end in sight.

The industry abandonment rate normally hovers around 65 percent. But in the weeks leading up to Black Friday and Cyber Monday, shopping cart abandonment rates swung wildly as customers postponed purchases in anticipation of deep discounts. What happened over the Christmas period gives a rare insight into the changes in customer behavior that directly affect conversion rate. This holds important lessons for e-commerce teams trying to optimize their conversion rates: It’s hard–in part because you don’t control all the moving parts.

Conversion–A Closer Look
Conversion is a measure of the effectiveness in getting website visitors to do what you want them to do on your site. It doesn’t have to be transactional, but in this case, we’re focusing on gaining revenue through an e-commerce shopping cart. Measurement of this type of conversion usually translates into dollars.

In the early days of the web, we focused first on page views. Then conversion become a core method of measuring site success, as the dotcom bubble burst and eyeballs became secondary to revenue.

Approaches to optimizing conversion are varied, but mainly focused on reducing the complexity of the conversion process itself (for example, with fewer steps), adapting the process (so that, for example, shipping rates are shown early on) or making it more intuitive.

When thinking about your process, you also need to consider the emotional state of your visitors as they progress through your conversion funnel. Buying from a particular website for the first time carries with it an inherent risk. Your visitors will feel insecure during the checkout process, with this heightening at the point of payment. It is therefore important that you view your entire checkout process from the point of view of a risk-adverse customer.

A recent PayPal/ComScore survey reported that 21 percent of customers buying online had abandoned one or more checkout processes due to security concerns. So check your process end-to-end for testimonials, security seals and customer reviews, and have very clear warranties and return policies.

But We’ve Done That and Our Abandonment Rate is Still High
The harsh reality is that process optimization can take you only so far. Conversion is complex and, unfortunately, e-commerce teams do not control all of the moving parts which affect conversion. Brand reputation, reviews and social commentaries, competitors’ promotions, promotional activity, price-comparison websites and affiliates all have a direct impact on conversion.

The impact of customers anticipating Black Friday promotions is just one such example. Before November 23, the average industry abandonment rate on Sundays peaked at 83 percent. But once the promotions had been rolled out, the rate dropped dramatically to “only” 64 percent, a massive swing in such a short period of time. This was not within the control of an e-commerce exec, but rather reflected a mass change in customer behavior. The lesson learned is simple: conversion optimization will only take you so far, and customers will still abandon your site in numbers much higher than you’d like.

It’s also useful to segment your abandoners into the five main groups:

• Window shoppers–those unlikely to buy;
• The undecided–they may buy from you, but the items abandoned in the shopping cart are acting as a shopping list while they decide;
• Deal seekers–they will only buy with a deep discount;
• Research online and buy in-store–customers likely to buy from you via a different channel (e.g., in store or by phone); and
• Brand-loyal customers–likely to buy from you, but the timing is not quite right.

Because of all these different types of customers who abandon, it’s important to consider not only how to optimize your onsite conversion process, but also your re-engagement process once they have abandoned your site.

Re-Marketing Completes the Process
Re-marketing is used today by only a small minority of sites, but the results speak for themselves: conversion rates of website abandoners of up to 50 percent are both compelling and offer very high ROI. This applies across all of the different types of abandoners: For example, re-marketing, done well, will nurture your brand-loyal customers and encourage them to make a purchase from you, feeling in the process that you care and want to deliver exemplary customer service, thereby reinforcing your brand values and making a purchase from a competitor less likely. Likewise, the undecided and deal seekers are also very effective re-marketing targets, provided they are shown appropriate content.

Follow-up re-marketing often gets forgotten, in part because e-mail marketing may be the responsibility of a different marketing group. If you are responsible for your website only, then have a chat with your colleagues in e-mail to figure out a joint approach to the problem.

A recent survey of U.S. e-retailers by E-tailing Group, found that 76 percent of e-tailers ranked “targeted e-mail” as the top initiative to improve website conversion. Following up on an abandoned session is also the fastest-growing technique to increase website conversion across the industry.

It’s easy to see why. If you have an industry average 63-percent checkout abandonment rate and 1,000 visitors enter your process each day, then while you convert 370 visitors to customers, 630 abandon your site without purchasing. Using abandonment re-marketing, you can reasonably expect to get back up to 50 percent of these visitors, making a dramatic impact to both your conversion rate and your bottom line.

Charles Nicholls is founder and chief strategy officer at SeeWhy, an Andover-Mass.-based agency specializing in the optimization of website conversion by leveraging real-time analytics. He can be reached at charles.nicholls@seewhy.com.

February 2010 – Channel Crossing: Mobile

Per Inquiry Goes Mobile

Many advertisers have come to recognize that per inquiry television advertising is a great strategy for generating leads or calls on a cost-controlled basis. This form of guaranteed advertising has been around for more than 25 years, and it has matured into a “must have” for many DRTV advertisers.

It follows that mobile should be a great way to generate qualified responses, with 275 million subscribers (and growing)! More and more DRTV advertisers say they’re considering dipping their toes in the mobile per inquiry waters. But are they ready?

The attraction to mobile PI is obvious:

• Low cost of entry – a banner ad or text message and landing page can get it started;
• Multiple ways to capture responses;
• Ability to geo-target consumers;
• Flexibility for controlling response volume; and
• Cost-controlled results – pay only for qualified responses.

SO WHAT’S NOT TO LOVE?
Think back to the early days of the Internet, when exaggerated promises were made regarding the ability of sites and networks to generate qualified responses (actually, this still occurs today). Many responses were not qualified, and there were costs attached to finding that out.

Mobile PI advertising is viable and clients are reaping attractive ROI from the responses being generated. Many, however, agree that finding the right approach for generating consistent, qualified lead flow can be challenging.

A client is ready if they are prepared to:

Test and re-test – Each test will help to refine the best approach for generating qualified responses. This will often differ among mobile partners, since their methods for engaging consumers differ (downloaded apps, display ads, audio placements and more).

Monitor results constantly - Mobile vendors are pretty nimble when it comes to making changes in order to get a campaign on the right track. Optimize based on results and be prepared to implement more stringent qualifiers to enhance lead quality.

Change the way the lead is captured – Having consumers call a toll-free number may be the best way to generate qualified leads on TV, but that’s not necessarily true with mobile. The simplicity of mobile’s “click to call” makes it almost too easy for consumers to connect by phone, only to discover they hadn’t intended to make the call at all.

Set realistic expectations – Mobile is a new medium for both advertisers and consumers. Consumers are experimenting with it. While response levels don’t yet rival those from the Internet, the quality of the mobile responses is proving to be much higher.

Partner with an experienced mobile team – Avoid trial and error by working with a team that has vetted many of the mobile partners by running numerous campaigns with them. Over the past year, a solid number of mobile vendors have embraced the PI concept and proven that per inquiry campaigns can–and do–work!

Sally Dickson is president of MMSI in Warwick, R.I. She can be reached at (401) 737-7730.

February 2010 – Column: Rick Petry

Make Social Networking Work for You

Last July, comedian Dave Chappelle showed up unexpectedly in Portland, Ore., telling a local retailer he planned on giving a free, impromptu stand-up concert in the city’s Pioneer Courthouse Square at midnight. Starting at 5 p.m., through Twitter, then Facebook and texting, news spread. By the witching hour, 4,000 fans had turned out.

The following month, Best Buy mistakenly listed a Samsung 52-inch flat screen television set valued at $1,700 on its website for $9.99. News swept wildfire-like via the same social networking mechanisms, as thousands ordered as many as 10 sets only to find out that an obvious pricing mistake would not be honored save for five lucky souls.

These stories contain valuable lessons. In both cases, the lure of something clearly ephemeral became irresistible and caused a groundswell of organic promotion. No wonder. People have always loved to share information–especially when it’s fresh or exclusive–and spreading that news in the digital age is as easy as two thumbs up. The notion of scarcity has always fueled direct marketing. Now, marketers can create an army of word-of-mouth grassroots promoters to help them succeed.

Consumers are smart. They’re going to do their homework. While the idea of a limited-time opportunity sounds smart, its overuse and abuse in infomercials–where the promise of exclusivity is evergreen–has created cynicism and indifference among the public. One of the major advantages of home shopping is that its rolling offers are promoted in real time, creating a genuine sense of urgency that, when combined with a network’s reputation, can produce a formidable one-two punch. Similarly, news of special deals spread via the virtual backyard fence that are indeed limited, have the benefit of drafting off the goodwill of the communicator. They create a sense of now that is compelling.

For the cynical who think this is just about selling blenders and jewelry, rest assured it is not. After the devastating earthquake in Haiti, news spread that by simply texting 90999 via cell phone, an individual could make a $10 donation to the American Red Cross to help with the relief effort. In a matter of days, $11 million had been raised through this tactic. As the world observed during the uprising that followed the recent elections in Iran, these social networking tools operate without boundaries. It’s why marketers better deliver on their promises–because just as these tools can be used for one’s benefit, they can also destroy a brand’s reputation.

So what’s a marketer to do? First, pay vigilant attention to what’s being said on these channels. Discourse on the Internet is as vast and ever-changing as an ocean current. It can’t be merely spot-checked. Second, you need to use these new tools to communicate timely, newsworthy information that will motivate consumers. In a recession where everyone is looking for a deal, the opportunities presented by social networking are unlimited. It’s a chance to take what some may have viewed as mere monkey business and turn it into sound business–the sound of a cash register ringing.

Rick Petry is a freelance writer who specializes in direct marketing and is a past chairman of ERA. He can be reached at (503) 740-9065 or online at rickpetry.com or http://twitter. com/thepetrydish.

February 2010 – Feature: Your Online Ad Network Cheat Sheet

A User-Friendly Guide for Understanding–and Fully Optimizing–Online Display Ad Networks

By Mark Simon

Need to get up to speed on the plethora of online display ad networks out there? You’re not alone. The world of online display advertising–and the networks that the ads run through–is changing so quickly that it’s hard to keep track. That’s why I’ve created this “cheat sheet,” which describes how ad networks help you target customers in different ways, the various pricing models they work through and a few things to watch out for.

TARGETING
To find your best customers, meet them where they are and deliver an appropriate message to them. Different kinds of ad networks help you achieve this goal in different ways:

Vertical Networks - Fashionistas read fashion magazines and sports fans read sports publications. People consume content that relates to their interests. That’s why, in many cases, all you need to do to find the right audience is to find the content consumed by your core audience.

Enter vertical ad networks, which run advertising on sites catering to specific verticals–such as the Travel Ad Network and the fashion-focused Glam Media. An April 2009 comScore study found that vertical networks have phenomenal reach across the Internet and offer extremely high engagement levels. Of course, this shouldn’t come as a surprise: Vertical networks focus on running ads on sites geared around the things that their visitors are passionate about.

Contextual Networks - If you want to target customers reading a publication outside of your vertical, you’ll need to expand your reach.

Contextual ad networks analyze the content on partner site pages and match ads to this content. Typically, the content matching is keyword-based, which means that advertisers select keyword lists they’d like their ads to run against (similar to choosing keywords for SEM). When the network sees a page with a selected keyword, the ad runs. Not surprisingly, some of the largest contextual networks–like Google AdSense and the Yahoo Publisher Network–have ties to search engines.

Contextual networks offer a wonderful way to get your ad in front of an audience that’s already engaged with content relating to the things that you sell, and on some of the best-trafficked sites on the web. One thing to watch out for, however, is “dumb” networks that parse words without understanding their meaning. This can result in embarrassing situations for your brand–from an irrelevant ad to bona fide idiocy (like the contextual system that ran an ad for rabbit stew recipes against a heartwarming story about a young girl’s search for a home for baby rabbits).

Some networks and third-party providers have begun to engineer semantic solutions, which not only scan the words on the page, but better understand the meaning on the page as well.

Behavioral Networks – Contextual advertising helps advertisers find targeted consumers in non-targeted publications. But it doesn’t let advertisers find targeted consumers on non-targeted sections of those publications.

Enter behavioral networks. Rather than tying ads to the content on a publisher’s pages, behavioral networks are able to identify who the user is, what kinds of prior activities he or she has engaged in on the web and what kinds of ads might be relevant to this person–regardless of the website on which the ad appears. For example, let’s say that a user reads six hockey-oriented pages or has indicated through other online activities a passionate interest in the sport. This user will be exposed to ads for hockey-oriented products and services, even when he or she is reading web pages with content related to business-, travel- or automotive-focused topics. Any additional demographic data the network has–such as information provided from an e-mail signup–can be used to add further detail to the picture.

Often, networks will target users by labeling them based on “buckets” comprised of a combination of demographics and site-viewing activity. For example, the 40-year-old mother who frequents cooking sites may be categorized as a “soccer mom,” the web user who reads auto pages may be categorized as an “auto enthusiast,” etc. Some of these networks observe users’ web habits in very fine detail. Yahoo’s Smart Ads system, for example, matches users’ search records with their activity across the vast array of Yahoo content sites, creating a very rich user profile.

Behavioral targeting does raise privacy concerns–an inevitable by-product of creating a system that’s designed to monitor web users’ activity. To mitigate privacy issues, be sure that the network you’re working with properly anonymizes user data, and allows users to easily opt out of targeting.

PRICING MODELS
Ad networks utilize various pricing models, with associated benefits and drawbacks. Following is a rundown of the major pricing models:

CPM – CPM stands for “cost per 1,000 impressions” (”M” being the Roman symbol for 1,000). CPM is shorthand for a flat-fee pricing model based on the number of times your ad runs. On a poorly trafficked site, the CPM may be only a few pennies per ad; on a very highly trafficked page–like the Yahoo homepage–CPM rates rival prices for prime-time TV.

CPM is a term that originated in print media, but highly granular web metrics makes things more complicated online. Historically, CPMs have been set based on the number of a site’s pageviews–the more times a page is looked at, the more the network can charge (all things being equal). But there’s a new movement–driven by advertisers–to shift pricing based on pageviews to pricing based on unique visitors (new visitors who arrive at a site). To me, this pressure from advertisers is legitimate, because if you want to maximize the number of people who see your ad, then you’ll want to pay differently for a visitor who’s never been to the place where your ad lives than you would for someone who’s already been to that site multiple times.

Pay Per Click/Pay Per Performance - While traditional brand advertisers might be satisfied running ads that people simply look at, many Internet advertisers are looking to drive some kind of further engagement with their businesses. For this reason, some networks offer cost-per-click pricing, a pricing system familiar to those engaged in search advertising. In this model, advertisers only pay when a user clicks on the ad. Some networks go a step further–offering pay per action advertising: The advertiser sets a desired action on the destination website, and pays only when the user takes that desired action via the ad.

Exchanges - This allows advertisers to buy ad inventory via auction, in a manner that’s very similar to the search advertising model. The two best-known exchanges are Google’s DoubleClick Exchange and Yahoo’s Right Media.

Ad exchanges were initially created as ways to sell remnant ad space that publishers couldn’t sell otherwise. By putting this ad content up for auction, publishers and networks were able to connect with the advertisers for whom that space would be valuable (and maybe even create competition to drive up the price on those ads). Recently, the Right Media platform was re-branded as a “premium” network–meaning that it’s now a destination for buying prime ad inventory.

BUYER BEWARE
I’ll close with a bit of warning:

Most of the reputable ad networks have earned their reputability. This being said, there are two cautionary issues to think about when you’re considering entering into a relationship with a network: the ability of the network to accurately provide what it’s promised and the willingness of the network to give you control over your data.

Accuracy - When I refer to “accuracy,” I mean that you need to be sure that you’re getting what you’ve actually paid for. Sometimes, ad networks can inflate their numbers, or claim that they’re offering far more precise targeting than they really are, or otherwise charge you as if they’re delivering more than they actually are. For example, while a given ad network might be able to run highly targeted ad inventory, the space where this advertising actually appears may be a spot on the page that’s so low that it will rarely be seen. Obviously, you shouldn’t pay premium rates for such ads.

Unfortunately, some of these errors are the result of simple dishonesty. Often–and more benignly–they’re the unfortunate by-product of a poorly managed network. Either way, you’ll want to stay vigilant to be sure that you’re getting your money’s worth. Before you get involved with an ad network, make sure you’ve done your homework on which networks are reliable and which aren’t as good to deal with.

Data Ownership - Ask yourself this question: If you left your ad network today, how easy would it be to take your data–your traffic statistics, your ad pricing and the places your advertising runs–to a different network? For that matter, how easy would it be for you to use the data developed in one network to duplicate your campaigns in a different one? Some ad networks work hard to make it difficult for you to transfer your data over to a competing network–making it a challenge for you to repeat success, or to start anew if the relationship with that ad network doesn’t work out. So when you enter into a relationship with an ad network, be careful as to who really owns the data you might someday want to export–find out if the owner of the data is you, or the network you’re advertising on.

Mark Simon is vice president, industry relations at Didit, a firm specializing in search marketing and targeted display ads. He can be reached at mark.simon@didit.com.

February 2010 – Cover Story: Have You Called Jenny Craig Lately?

The Weight Management Service Company Earns Electronic

Retailer’s Direct to Consumer Marketer of the Year Honors.

By Vitisia Paynich

Not since her role as the quintessential “girl next door” on the hit ’70s TV sitcom “One Day at a Time” has actress Valerie Bertinelli attracted so much media attention. Thanks to the Jenny Craig weight-loss program, the actress dropped 40 pounds and unveiled her bikini-fit body in a national commercial. The spot triggered a public relations windfall leading to talk show appearances, magazine covers and book deals for Bertinelli–and major brand exposure for Jenny Craig.

However, PR and general advertising are simply not enough for this iconic brand. To maintain its competitive edge in the $40 billion weight-loss market, Jenny Craig, which is owned by Nestle, embraces a multichannel strategy that encompasses DRTV, print and online, as well as social media.

The weight management service company combines its arsenal of top-celebrity spokespeople with infomercials, blogs and direct mail to engage clients in their preferred medium and promote shared dialogue. What’s more, the company features webisodes on its site highlighting both celebrity and client success stories.

This outside-the-box thinking has garnered Jenny Craig Electronic Retailer’s 2009 Direct to Consumer Marketer of the Year Award.

Electronic Retailer spoke one-on- one with Steve Bellach, senior director of North America marketing, to discuss the marketing strategies that have helped make Jenny Craig a leading weight-loss brand, along with future plans for expanding its global operations.

Electronic Retailer: What do you believe has made Jenny Craig such a strong competitor in the weight-loss category for three decades?

Steve Bellach: It really starts with the brand, the program and the fact that it’s a clinically proven weight management solution. It’s important that we have a science-based, personalized approach to weight management. And what really differentiates us from others are our one-on-one consultations.

The Jenny Craig website features a host of e-tools, links to celebrity blogs, as well as access to a library of webisodes.

ER: Jenny Craig embraces a multichannel marketing strategy that comprises traditional and new media. Why was it important for the company to concentrate on multiple channels as opposed to just one–such as television?

Bellach: As you know, the media environment has become so fragmented and consumers seek information through many media channels. We want to be in front of them in all those channels. At the end of the day, if the consumer decides they are ready to make a lifestyle change–and whether they’re watching TV, reading a magazine, on Facebook or whatever it might be–we want to make sure we’re in front of them talking about how effective our program is.

ER: How do you make certain that your branding remains consistent across all marketing channels?

Bellach: One strategy we use and have used over the years is our celebrity tactic. The celebrity helps put a face on the brand across channels. So, for example, if you see Valerie Bertinelli–or one of our current celebrities such as Sara Rue or Jason Alexander–on TV, on the website or in print, that brings some consistency to the brand. We are very strict in terms of our brand standards and how our brand is presented. A lot of my background is in classical brand marketing, so I like to make sure that every touchpoint a consumer uses to interact with us gives them a similar brand experience and communication.

ER: Which celebrity campaigns have been the most successful for the company?

Bellach: We’ve used a number of celebrities over the years. They’ve all been very successful in losing weight in their own way. With Valerie, we’re now in our third year with her and she’s really been very powerful for us. Queen Latifah was effective. We’re now just launching Sara Rue. Nicole Sullivan has been on the program for several months and she’s been very effective in generating publicity for us. One of the powers of working with a celebrity is the publicity topspin. So in addition to TV, print and online, we can generate magazine covers and significant television talk show appearances.

We think what makes our celebrity program most effective is we’re the only company out there that launches them before they’ve lost the weight. Think about any other competitor who uses even regular clients. They only show them after they’ve lost the weight. We stick our necks out there and say, “Hey, Sara’s joined Jenny Craig and she wants to lose 30 pounds.” And, she hasn’t lost the weight yet, but we’re so confident in the efficacy of the program that we then show their journey almost in real time–on TV, on the website both through written and video blogs, on Facebook. We give clients and consumers as many ways to connect with our celebrities as possible.

ER: You mentioned that actor Jason Alexander recently partnered with Jenny Craig. In recent years, you’ve mainly featured female celebs. Is this a way of focusing more on the male demographic?

Bellach: Yes, we just announced him in January and we’re very excited. Naturally, we hope it will reach a new demographic. It’s important to note, however, that we have used male [spokespeople] in the past, about 10 years ago. But you’re right, recent celebrities have been women. Right now, roughly about 10 percent of our client base are men and obviously, the obesity epidemic has affected everybody. We feel our program and the flexibility of it works for everybody–whether you’re older, younger, male or female. We just launched a microsite called Jenny Craig Type 2. The program is very effective for people with Type 2 diabetes. Again, it’s not necessarily a new program for communicating to men, but it’s more like saying, “Hey, Jenny Craig works for you, too.” We’re using Jason in the ad and Valerie will be featured, as well.

ER: When did Jenny Craig begin marketing through DRTV?

Bellach: Actually for many years, we have been in spot DR. It’s probably within the past five years or so that we have been national–primarily cable. And we feel that the comprehensive, hybrid approach gives us a nice balance between the efficiency of DR and the brand building with some of the other channels out there.

ER: Can you tell us about some of the company’s other marketing efforts?

Bellach: Well of course, TV advertising is critical. We also do a lot of print and a lot of magazine advertising. We make a significant investment in public relations. I’ve never been with an organization that gets the People magazine covers and talk show appearances. We also do a lot of direct marketing through direct mail with post cards, e-mail marketing, and also in the social media arena. In the past two years, we’ve ">been active on Facebook and Twitter.

ER: It’s clear that the web is also a big part of your overall marketing. What online tools and features do you utilize to assist existing clients as well as engage new ones?

Bellach: We offer a suite of free e-tools. You don’t even need to be a client, just a registered user. You have access to recipes and health help tools. Also on our website, there’s a menu planner to make it more efficient for existing clients. They don’t need to come into the center to go through all the details of planning their weekly menu; they can get a lot of the work done ahead of time.

In terms of reaching new clients, in the past year or so, we’ve launched a strategy against microsites. So, we have, for example, a microsite called JennyCraigAtHome.com. And on January 4, 2010, we launched three new microsites: JennyCraigForMen.com, JennyCraigType2.com and JennyCraigSilver.com. It’s really in the spirit of trying to reach new segments. We have some banner advertising out there as well against these microsites. There’s much richer content that would be relevant to these segments.

ER: When did you first venture into webisodes and how do your campaigns complement your DRTV efforts?

Bellach: Webisodes have been part of our mix for a little over a year. In late 2008, we launched our first webisodes. Consumers generally don’t know a lot about our program. And once they understand it and how comprehensive it is, they’re more compelled to join. It’s really hard to communicate a lot about the program in a 30-second ad. The webisodes have provided a great complement to our DRTV efforts to give a lot more information about the food, which is more about portion control and about the body or activity component, which is really not about joining a gym. It’s about getting off the couch and walking. There’s also the mind component. What are the motivators and how do we really help you with the lifestyle change that you’re looking for?

We’ve been working with Waldorf Crawford and they’ve been a great partner for shooting the infomercials, which kind of dovetailed into the production and creative development of the webisodes.

ER: You spoke earlier about Facebook and Twitter. How does social media play a role in your marketing and branding?

Bellach: With celebrities, we’re communicating a journey. It’s almost a reality show of their weight-loss progress. It’s for people who want to come to our website and read the written blogs or view the video blogs, which are monthly. Or maybe they want to go to Facebook and see how Sara’s doing at a certain stage of her weight-loss progress. So, it’s just another avenue to reach consumers and update them on the celebrity progress. It’s also about non-celebrity clients’ progress. If you went to the Jenny Craig fan page, for example, on Facebook there’s a lot of dialogue. One of the things we know is that if people have a support system and try to lose weight with somebody or at least know other people trying to lose weight, they’ll be more successful. And, it’s just really gratifying to read strings of comments and see how people are cheering each other on and providing support.

ER: Is the company currently doing mobile marketing?

Bellach: We’re evaluating that. Again, given that we’re so direct response-oriented, if we can find a way for it to generate efficient phone calls and efficient sales, we will pursue it. We just want to make sure that before we make a significant investment we really understand how it is going to work for our business.

ER: What does the future hold for Jenny Craig and the brand?

Bellach: We’re part of the Nestle organization, which is the largest food company in the world. They’re shifting their focus to be much more focused on health and wellness. Thus, there are significant resources around program innovation, around investment in the business, and we are looking at some global expansion opportunities. So, we really fit in the sweet spot of that.

January 2010 – Channel Crossing: Affiliate Marketing

Designing a Successful Affiliate Marketing Program

Forrester Research recently forecast U.S. affiliate marketing spending will reach $4 billion in 2014. Is your company taking advantage of this opportunity?

Although many direct response marketers, including Fortune 500 companies, have embraced online affiliate marketing, there are still some DR marketers hesitant to step outside their areas of expertise.

SIMPLE TIPS
Do not let fear of the unknown hold you back; following a few basic rules of traditional marketing can significantly minimize risk and enhance ROI.

Choose your partners wisely. There are branding implications to consider when working with an online agency or affiliate network. Potential partners should be put through the same rigorous interview process used to hire new employees.

• What level of experience and breadth of services do potential partners have?
• Does the agency share the marketer’s values?
• What type of vetting process is used for affiliates in the network?
• Do they provide ongoing campaign monitoring and brand protection services?
• Do they have an independent best practices or compliance departments?
• Do they stay up to date with industry standards and regulatory issues?
• Can the company provide references?

Select online advertising channels based on your target market. Hiring partners with expertise in market segmentation is essential. Reaching female baby boomers requires a different online advertising mix than reaching male Gen-Xers. Equally important is avoiding channels that could negatively impact the brand.

There are a variety of affiliate marketing channels that might work for DR marketers, including loyalty, social media, virtual currency, e-mail, search and display. The key is to test and find the most effective mix to meet lead generation or ROI goals.

Make sure you know where and how your ad campaigns are running. The word “transparency” is used a lot these days, but with various meanings. True transparency answers the questions “who, what, when, where and how.” If an affiliate network or agency will not disclose specifics about the distribution of a campaign, the marketer is at risk of receiving fraudulent leads or damaging its brand. The source of many problems can often be a single affiliate who merely jumps from network to network after being identified. Without true transparency, DR marketers forfeit visibility and lose control.

Not all leads are of equal value. Lead value may vary by channel, so why pay the same amount for lower quality leads? Working with a transparent network allows a marketer to see which channels are most valuable and set payments accordingly. It is often useful to work with a partner who has experience managing multiple networks. They can help analyze media buying options and make pricing recommendations to simplify the process.

Affiliate marketing is being used by many DR marketers to reach potential customers online. With initial due diligence, affiliate marketing can be a highly profitable component of your advertising mix.

Janice Roetenberg is director of corporate marketing for Adperio, a leading performance-based online marketing and advertising agency. She can be reached at jroetenberg@adperio.com.