2011 Digital Marketer

The 2011 Digital Marketer:
Benchmark and Trend Report

Connect with today’s unique and empowered customers

Foreword
This past year, we’ve seen and experienced remarkable change in terms of the
economy and its effect on consumers and marketers alike. The emergence of
new media and an ever-growing population of highly connected and empowered
consumers has challenged brands to work smarter and more effectively to stay
engaged and relevant. In this environment of constant, hyper-innovation, very little
remains the same.

The broad availability of smartphones, and the iPad along with the rest of the
tablets, is set to revolutionize the opportunities for mobile marketing. Other
dramatic changes that occurred in 2010 that will have long lasting impact on
how we market to consumers include the dominance of Facebook, the dramatic
growth of group buying sites and the renaissance of addressable advertising.
Technical innovations aside, we’ll also need to account for and recover from
our unprecedented focus on steep discounting as the antidote to consumers’
unwillingness to spend.

The fundamentals of today’s consumer-driven market have been altered to the
point that some economists are saying that many of us have re-calibrated our
purchase behavior to a “new-normal” of reduced discretionary income, low home
values, and less willingness to take on debt. The economic outlook for 2011 is
mixed, as rising consumer confidence and spending is at risk of being stifled by
increasing oil prices.

So, given the complexity of digital channels, the myriad of customer data and
changing consumer behavior, what will make for a successful digital marketing
strategy in 2011? The only answer is to focus on a better understanding of
our customer.

In the pages that follow, you’ll find detailed analysis and data drawn from the
breadth of experience and expertise of Experian Marketing Services, a leader in
digital marketing.

In 2011, there’s one thing you can count on — change will endure. At Experian
Marketing Services we look forward to being your partner in navigating that change
through a better understanding about consumers and the best way to engage them.
Cheers to successfully marketing forward.

Bill Tancer

General Manager, Global Research, Experian Marketing Services
Author of Click: What Millions of People Are Doing Online and Why It Matters

Experian Marketing Services helps leading organizations connect,
engage and empower customers to be loyal and active brand
advocates through a full suite of digital marketing capabilities.

MARKETING FORWARD
means engaging customers
wherever they are

Table of contents
Introduction .......................................................................................... 1
Meeting the challenges of uncertainty ............................................. 2
Consumer insight............................................................................... 13
Key findings ........................................................................................................13
Technological novices going digital .................................................................14
Most common uses of digital .............................................................................14
Cell phones vs. television....................................................................................16
Surprising findings on American consumer credit........................................17
Discretionary spending segment quick tips ....................................................17
Wealthy Americans search for deals................................................................18
Word of mouth influential in driving purchases..............................................18
Mom’s influence on household purchases ......................................................19
Positive results for Hispanic targeted emails ..................................................20
Hispanic mobile phone usage represents “mobile” generation ..................23

Addressable advertising .................................................................. 25
Key findings ........................................................................................................25
Evolution of the online display advertising market .........................................26
Addressable advertising growing at rapid pace .............................................28
The next evolution, integrated campaigns .......................................................28
Case study: targeted online advertising, finance............................................29
Steps to compete in digital advertising ............................................................30
Case study: targeted online advertising, retail................................................31

Email..................................................................................................... 33
Key findings ........................................................................................................33
Value of email continues to climb ......................................................................34
Emails consumers are most likely to open .......................................................35
“Friends-and-family” email performance ........................................................36
Email subject line influence on revenue ...........................................................39
Performance of holiday-related email...............................................................42
Tips for improving email data quality ................................................................48
Case study: improving email data quality.........................................................48

Mobile .................................................................................................. 49
Key findings ........................................................................................................49
Mobile market growing at rapid pace ................................................................50

Key mobile trends .................................................................................................51
Consumers receptive to mobile ads ..................................................................52
Most popular mobile activities ...........................................................................53
Consumer adoption of mobile purchasing ......................................................54
Most popular mobile shopping locations ........................................................55
Case study: mobile couponing...........................................................................56
Smartphone consumer affinity for gaming and entertainment....................57
Targeting behavior of mobile consumers ........................................................58
Reach of text messaging .....................................................................................59
Reaching affluent consumers with tablets ......................................................60

Social ................................................................................................... 61
Key findings ........................................................................................................61
Social networks surging over search ................................................................62
Older adults using social networking ...............................................................64
Combining social media and email ...................................................................65
Online shoppers’ use of social networks .........................................................66

Search.................................................................................................. 67
Key findings ........................................................................................................67
Google’s share of search market ......................................................................68
Search query word use ........................................................................................69
Adult online comparison shopping...................................................................69
Increase in traffic to flash sales Websites ......................................................70
Tips for improving conversion optimization online ........................................71

Multichannel customer experience ................................................. 73
Key findings ........................................................................................................73
Marketer’s needs...................................................................................................74
Offline data leverage tactics ...............................................................................74
Pairing direct mail with mobile engages your audience ................................75
Contact data inaccuracies ..................................................................................76
Best practices for multichannel marketing ......................................................77
Bad data equals bad business results ..............................................................78
Data quality quick tips .........................................................................................79
Multichannel marketing integration quick tips ............................................... 80

Introduction
Today’s digital marketing channels, such as email, search, mobile phones,
addressable advertising, online communities and social media, give
marketers the ability to know their target audience in greater depth than
ever before and to foster customer engagement effectively, in real time.
When fused with these channels, consumer insight, benchmark data and
analytical expertise can help marketers create meaningful and precisely
targeted communications that will amplify customer advocacy and drive
greater return on investment (ROI) now and into the future. The findings,
projections and recommendations within this report provide actionable
and unique insights for the progressive digital marketer.

An Experian benchmark and trend report | Page 1

Meeting the challenges of uncertainty in 2011
Consumers remain “cautiously optimistic”
Moving into the second quarter of 2011, key indicators about consumers’
expectations and spending confirm continued economic uncertainty.
While consumer spending, which accounts for roughly 70 percent of our
economy, looked strong for the fourth quarter of 2010, a Gallup poll1 paints
a darker picture for the new year, reporting that daily spend was down
significantly the first two weeks of January.

Facing another year of “cautious optimism” will mean another year of
margin pressure as marketers seek to drive growth through increased
advertising expenditures. However, the reaction to the recession over the
past three years where marketers slashed prices across the board in a race
to attract cautious consumers needs to be replaced with a more rational
approach that is tailored to their target consumer.

In fact, this approach is supported by our data revealing that consumers’
economic outlook and resulting purchase behaviors differ by a multitude of
factors including their age, gender, income and socio-economic status.

In an environment of significant change in consumer behavior and the
expectations of businesses to grow, the path to increased profitability
for marketers in 2011 will be based on a better understanding of their
customers and key purchase drivers beyond price.

The negative correlation between age and economic optimism
To understand consumers’ heterogeneous response to market conditions,
Experian Marketing Services developed the Experian Consumer
Expectation Index (CEI), leveraging our National Consumer Study of more
than 25,000 adults. By employing Experian Simmons DataStream, we have
the ability to dissect, on a weekly basis, economic sentiment by more than
8,000 variables, from basic demographics to attitudinal variables.

Analyzing consumers’ expectations of their economic future illustrates
that there is a near-perfect negative correlation between age and economic
optimism. In other words, the older consumers get, the more pessimistic
they are about the health of the economy.

1
Gallup, U.S. Consumer Spending Down Sharply in Early January, January 2011

Page 2 | The 2011 digital marketer

Experian Consumer Expectation Index (by age)
105

100

95

90

85

80

75

70

11/02/2009
11/05/2007

11/03/2008

11/08/2010
05/03/2010
07/05/2010
09/08/2008

01/05/2009
02/02/2009
03/09/2009
05/04/2009

09/07/2009

03/08/2010

09/06/2010
03/03/2008

07/07/2008

01/04/2010
01/07/2008

05/05/2008

07/06/2009

Age 18–34 Age 35–49 Age 50–64 Age 65+

Assuming that there is a link between economic outlook and price
sensitivity, the key takeaways for digital marketers are that when marketing
to consumers between the ages of 18 and 49, deep price discounts are less
important than when marketing to consumers over the age of 50.

One of the counterintuitive findings regarding age is that, despite recent
positive news surrounding the end of the recession, the economic
outlook gap between younger and older consumers is widening. The key
takeaway — focusing on price when marketing to 18- to 24-year-olds will
most likely result in leaving money on the table.

A better understanding of customers and how their economic viewpoint
changes over time is only the first step to becoming a well-informed
digital marketer.

Change in household composition: Boomers and Boomerangs
In the USPS® publication Deliver, renowned demographic analyst Peter
Francese states: “There is no longer an average American. When I was a
child, people used to talk about John Doe; he was the average American in
a relatively even society. Today, we are not just a multicultural nation, but
also a multisegmented nation and a multigenerational society.”2

2
USPS, Deliver: Volume 7, February 2011


Experian Mosaic3 segmentation reveals in-depth nuances to the evolving
multisegmented American household. In a new Mosaic segment, Boomers
and Boomerangs, adult children are returning home to live with their baby
boomer parents due to economic pressures. Analysis of the composition
for these households indicates that elderly parents are also moving in with
their boomer children to reduce elder-care costs.

At a time when precision is becoming critical to relevant customer
communication, it is imperative that marketers understand shifts in
household composition and how that changes the way they market
to consumers.

As we’ve seen before, taking Boomers and Boomerangs as an example,
certain conclusions are intuitive, such as the cost-saving behavior of the
multigenerational household. For example, this segment indexes high
for using coupons from newspapers (138) and coupons from in-store
packages (137) when making purchases.

Based on the cost-saving behavior exhibited by Boomers and
Boomerangs, one may jump to the conclusion that price alone drives
purchase behavior. However, analysis of shopping attitudes for this
segment reveal that, more important than price, this segment is very
brand-loyal when making purchase decisions.

Commoditization and the importance of loyalty
The ability to perform searches for products based on price, be it from
one’s home computer or using a U.P.C. search app such as Red Laser
on a smartphone while walking the aisles of a store, is leading to the
commoditization of products and services. This trend, combined with
deep discounting in retail, travel and other service sectors, has led to a
downward pricing spiral and corresponding reduction in profit margins.

There are antidotes to commoditization, one of the most powerful being
brand loyalty.

As we discussed above, certain Mosaic segments such as Boomers and
Boomerangs identify themselves as being very brand-loyal. In fact, when
studying brand loyalty by age group, there is a positive correlation based
on age. In other words, the older the consumer, the more brand-loyal
they become.

3
Mosaic USA is a consumer lifestyle segmentation system developed by Experian, providing
comprehensive and robust insight available for understanding the American consumer dimensions that
include demographic composition, ethnicity, socioeconomics, behaviors, habits and purchase choices.


Brand loyalty increases steadily with age
Young consumers are the least likely to be brand-loyal, and older
consumers are the most likely.

Age Brand Loyals Non-Loyals
All U.S. adults 34% 35%
18–24 26% 36%
25–34 27% 39%
35–44 29% 40%
45–54 33% 35%
55+ 44% 28%

In addition, factors other than age, such as education level, can exhibit
differences in brand loyalty. While concluding that the more educated
consumer might be immune to the draw of branding, preferring to compare
products and services strictly on price, the opposite is true; the more
educated the consumer, the more loyal they are to a brand.

Highly educated adults are the most likely to be Brand Loyals
Adults who attended graduate school are 14 percent more likely to be
Brand Loyals than the average adult.

Education Brand Loyals Non-Loyals
High school or less 33% 33%
Attended college (<1–3 years) 34% 36%
College — four years (graduated) 37% 37%
Graduate school (any) 39% 35%


In fact, digital marketers that focus on brand through email marketing
campaigns find that loyalty programs can boost open rates by as much as
40 percent and click rates by 22 percent.

Loyalty mailings boost open rates by 40 percent
and click rates by 22 percent
30%
27.4%

25%

20% 19.6%

15%

10%

5% 4.0%
3.2%

0%
Total opens Total clicks

Loyalty Non-loyalty promotion mailings

The next big thing: Group buying
While understanding evolving consumers and their purchase drivers is
critical, in the current environment of hyperinnovation, it’s imperative that
marketers keep on top of consumer adoption of new technology. In 2010,
driven by consumer focus on discounted pricing for products and services,
group buying fueled by companies such as Groupon arrived as a new
buying modality.

Groupon, the privately held Chicago group couponing company, gained
immediate notoriety by rejecting Google’s $6 billion acquisition offer in
late 2010.


U.S. market share of visits to Groupon.com

0.05%

0.04%

0.03% 0.030%

0.02%

0.01%

0.00%
2/27/2010

4/24/2010

6/19/2010

8/14/2010

10/9/2010

12/4/2010

1/29/2011
1/2/2010

Weekly market share in “all categories,” measured by visits, based on U.S. usage.
Created: 02/02/2011. Source: Experian Hitwise U.S.

Since its founding in 2009, Groupon has grown to more than 5 million visits
per week to take the number 25 spot in the Experian Hitwise Shopping &
Classifieds category for the week ending Jan. 29, 2011. However, is
Groupon, or more generally the category of online group buying, a fad or a
significant change in the way we buy online?


Here are three things to consider about the group coupon phenomenon.

Group buying has reached mainstream adoption
While the social buying craze started like many new technologies, fueled
by young and hip urban technocrats, the profile of the average Groupon
user has changed dramatically from the early days of 2010. Today,
you would be completely off the mark. According to Experian Hitwise
Demographics for the four weeks ending Jan. 29, 2011, the largest age-bin
for visitors to Groupon.com are those Internet users over the age of 55
(37.5 percent).

Age of visitors to Groupon.com

40% 37.52%

32%

24%
19.06%
16.02% 17.13%
16%
10.27%
8%

0%
18-24 25-34 35-44 45-54 55+

Source: Experian Hitwise U.S.


The race to dominate the space is heating up
LivingSocial’s Amazon play did more than just put up impressive numbers;
it was a clear sign that the site is a viable threat to category leader
Groupon. According to Groupon CEO Andrew Mason, Groupon has more
than 500 competitors in the marketplace and growing.

U.S. market share of visits to Groupon.com
and LivingSocial.com

0.05%

0.04%

0.03% 0.030%

0.02%

0.013%
0.01%

0.00%

01/29/2011
01/09/2010

02/27/2010

04/24/2010

06/19/2010

08/14/2010

10/09/2010

12/04/2010

www.groupon.com www.livingsocial.com

Email is the driving force behind group buying
While group coupon sites have often been characterized as the Web 2.0 of
online shopping, social networking sites are not the driving force fueling
their growth; that distinction belongs to email.

In analyzing the upstream traffic to a Website, or a category of sites, it is
possible to visualize the “tipping point” of that site or category by looking
at visits from social networks versus visits from another source such as
search or Web-based email services.

The theory is that in the early-adoption phase of a new category of site,
word-of-mouth spreads via social networking sites such as Facebook.
Then, as sites become mainstream, consumers begin navigating to a new
category by traditional means such as search engines or responses to
email blasts.


While digital marketers spend a lot of time understanding and
implementing social marketing plans, in many categories, now including
group coupon sites, email remains a critical factor in consumer social
engagement.

Upstream traffic to social buying Websites

60%

50%

40%

30%

20% 17.38%
11.72%
10% 11.05%

0%
November 2009

January 2011
March 2010

August 2010
February 2010

February 2011
July 2010
January 2010

December 2010
September 2010
April 2010

November 2010
May 2010

October 2010
June 2010
December 2009

Social networking and forums Email services Search engines

Monthly upstream of percent of “Social Buying” (Cust. Cat.), based on U.S. usage
Created: 02/11/2011. Source: Experian Hitwise U.S.

During the very early phases of social buying, back in
November 2009, visits to group coupon sites came predominately
from social networks (49 percent) versus email (9 percent).

By the summer of 2010, social buying sites experienced a tipping point
in source traffic, with email services assuming the role of traffic leader.
Since most group coupon offers are driven by a daily deal delivered to
consumers’ inboxes, the fact that email services account for more than
17 percent of traffic to the category is not surprising.


Let your customer guide you
There are certainly signs that 2011 will be a more prosperous year than
recent years past, but there is still significant economic uncertainty for our
immediate future.

While Joe Kennedy’s old adage still holds that “when the going gets tough,
the tough get going,” in the digital world, to be successful, the tough also
need to get smarter by understanding their customers and how external
forces such as economic turmoil alter purchasing behavior.

Checklist for the 2011 digital marketer

 How well do you understand the target customer for your products
and services?
 How have market conditions affected purchase drivers for your
target customers?
 Have you found the right balance between competing on price versus
relying on brand loyalty? Are you leaving money on the table by
focusing too heavily on discounting?

In light of the critical questions above, digital marketers can benefit by
utilizing data-driven consumer insight from Experian Marketing Services
to develop successful and profitable marketing strategies in 2011. Read on
for more detailed information, recommendations and industry benchmarks
pertaining to email, search, mobile, online communities and social media
with insights on consumers’ preferences across the digital landscape.


Consumer insight
Consumer insight

Consumer insight
Consumers today are more responsive to and reliant on digital
communications and technologies. As they spend their time crossing
channels to do virtually everything, from booking vacations via their
mobile phones to researching products on social networking sites, they’re
becoming less tolerant of any irrelevant message and more receptive to
interconnected and integrated marketing.

As with any marketing campaign, the first step to success is gaining an
understanding of the consumer segment you’re trying to reach. Marketers
must arm themselves with precise consumer insight and behavioral data to
survive, and ultimately flourish, in the cluttered digital landscape.

Key findings
• More than half of Novices, the segment known for being the “least
connected to emerging technology and very resistant to adopting
a new technology-focused life,” are now sending and receiving
email, texting and visiting social networking sites.
• Eighty-four percent of Americans today email on a regular basis,
and 74 percent send and receive text messages.
• Over the last year, there have been significant increases in consumer
use of television program or movie downloading and decreases in
the use of RSS feeds.
• Compared to other age groups, consumers ages 18 to 34 are much
more reliant on their cell phones.
• More than 30 percent of the American population has little or no
credit history.
• Top visits to Flash Sales Websites include the lower income Mosaic
segment “Urban Diversity,” followed closely by the most affluent,
“America’s Wealthiest.”
• The most influential element driving purchase decisions today is still
word of mouth (54 percent), followed by information from a Website
(47 percent).
• Ninety-four percent of moms with children under the age of 18 at
home say that they are the most influential people in households
when it comes to making purchasing decisions.
• Emails sent to the Hispanic market have an average of 43 percent higher
click rates when compared to current “All Industry” benchmarks.
• Hispanic mobile phone owners are 63 percent more likely than the
average mobile phone users to represent the mobile generation.


Even the most technologically novice consumers are going digital
The Experian Simmons Technology Adoption segmentation system
delivers the mindset of American consumers, providing vivid details of
their use and adoption of technology. More than half of online Novices, the
segment known for being the “least connected to emerging technology and
very resistant to adopting a new technology-focused life,” are now sending
and receiving email (75 percent), texting (60 percent) and visiting social
networking sites (55 percent).

Email and text messaging are the most common uses of digital media
by consumers
Eighty-four percent of online Americans today email, and 74 percent send
and receive text messages. From 2009 until 2010, there have been notable
increases in consumer use of TV program or movie downloading, as well
as social tagging and bookmarking.

Meanwhile, the use of RSS feeds and playing video games on computers
has declined. Consumer usage of RSS feeds is also one of the most
uncommon digital activities (7 percent) along with the use of TV
redirectors, most likely due to the increased usage of online community
Websites such as Twitter and the increased downloading of TV programs
online, respectively.


Use of key digital media in the last 30 days
Relative
2009 2010 percent
change
Downloaded a TV program or a movie 13% 19% 49%
Used social tagging or bookmarking 9% 13% 39%
Used a TV redirector 5% 6% 29%
Watched movies online 26% 33% 25%
Visited social networking sites 59% 71% 22%
Used GPS/personal navigation system 25% 29% 20%
Visited video-sharing Websites 41% 47% 17%
Visited virtual experience sites 7% 8% 17%
Visited professional networking Websites 10% 12% 11%
Sent or received a text message 69% 74% 8%
Sent or received a multimedia message 44% 47% 7%
Visited online forums/message boards 22% 23% 4%
Made a phone or video call through pc 30% 30% 1%
Visited photo-sharing Websites 35% 35% 0%
Sent or received email 85% 84% -1%
Played video games on a console 38% 37% -2%
Listened to internet radio 17% 17% -2%
Watched TV programs online 25% 25% -2%
Played video games on port gaming device 14% 13% -5%
Visited torrent Websites 8% 8% -7%
Listened to or watched podcasts 12% 11% -8%
Visited online blogs 19% 17% -10%
Played video games on a computer 14% 12% -15%
Used RSS feeds 9% 7% -22%

Source: Experian Simmons
Base: Online adults


Cell phones are becoming more important to the younger generation,
at television’s expense
Although TV and computers are important across the board, consumers
ages 18 to 34 are much more reliant on their cell phones — with only 13
percent deeming TV as the media they cannot live without, and a whopping
22 percent relying on their cellular phones with Internet access.

Media they cannot live without, by age

50%

40%

30%

20%

10%

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All adults 18-34 35-49 50+


Tip: Consider more mobile marketing for the younger market and
targeted television advertising for more mature segments.


More than one-quarter of American consumers have little or no credit
Digital marketers across all verticals thrive on identifying consumers who
have not only the willingness, but also the means to spend on goods and
services. Using proprietary Experian credit data, the following data points
paint a broad picture of consumers with little to no credit history today:

• Overall, 31.7 percent of the population has a thin credit file4
• African-Americans account for 20.1 percent of the thin-file population
• Hispanics account for 17.1 percent of the thin-file population

Discretionary spending segmentation quick tips
Marketers should leverage the growing amount of data and analytics
available today to help identify and effectively target consumers who are
spending on nonessential purchases. Listed below are three key points
to consider for marketers in industries that use discretionary spending
predictors to target their audience:

• Ensure discretionary spending predictors are recalibrated throughout
the year to take into account econometric changes that are often
regionally based
• Make sure you know the total dollar amount each household is projected
to spend on discretionary products and services in order to best target
the appropriate product or service offer
• Understand what other discretionary spending categories your target
consumer might be interested in; these categories are your competition,
as other marketers are also fighting for a portion of consumers’
discretionary dollars

Traveler alert: Affluent urban professionals and prime middle-America
segments tend to have higher propensities for taking cruise vacations.
However, prime middle-America cruisers have 46 percent less in annual
discretionary spending for their cruises than affluent urban-
professional cruise vacationers.

Nonprofit alert: The “greenest” consumers tend to be charitable givers
and have higher average discretionary spending abilities than “nongreen”
consumers. It is important to further segment that universe to identify which
consumers have the financial ability to give to its cause.

4
Experian® defines a “thin credit file” as zero to two lines of credit per consumer.


Even America’s Wealthiest are among those in search of deals
Flash sales, or time-limited offers of high discounts, are increasingly in
popularity across customer segments. Examining the Mosaic types visiting
the Flash Sales category allows for the analysis of what segments of U.S.
consumers are most likely to surf for affordable luxuries.

Surprisingly, the top types, by representation, for visits to the Flash
Sales category include the lower income segment “Urban Diversity,”
followed closely by the most affluent type in the Mosaic breakdown,
“America’s Wealthiest.”

Mosaic USA type of visitors to Flash Sales
Mosaic USA type (60 returned) Visits share Representation

K04 — Urban Diversity 9.79% 699
A01 — America’s Wealthiest 7.10% 572
H01 — Young Cosmopolitans 7.22% 305
E01 — Ethnic Urban Mix 4.59% 300
J02 — Latino Nuevo 7.40% 299

Four rolling weeks ending Feb. 5, 2011, compared with “Mosaic USA Type of the Online Population”
Source: Experian Hitwise

Experian Hitwise analysis5 indicates that affluent consumers are known to
engage in online deal hunting regardless of economic conditions. Lower
income segments, however, can become more active in finding online
deals as confidence in the economy decreases, exhibiting behaviors that
reinforce the theory of affordable luxury.

Word of mouth is still the most influential factor in driving purchases
Despite consumer reliance on digital devices and Internet-provided
information, the most influential element driving purchase decisions today
is still word of mouth, followed by information from a Website (47 percent)
and email sent by familiar peers (42 percent). Advertising in video games
and on mobile phones seems to influence far fewer consumers in
purchase decisions.

5
Experian Hitwise, Affluent shoppers love coupons too, January 2011


Purchase influences

Highly influential in decisions to purchase a product or service All adults

Word of mouth 54%
Information from a Website 47%
Email sent by someone you know 42%
Something you read in an online review 31%
Something you heard on the radio 29%
Television ad 27%
Something you received in the mail 25%
Magazine ad 23%
Newspaper ad 22%
Online ad 17%
Email sent by an advertiser/company 16%
Infomercial 12%
Mobile phone ad 11%
Video game ad 10%

Base: Online adults

Moms have the strongest influence on household purchases
Ninety-four percent of moms with children under the age of 18 at home say
that they are the most influential people in households when it comes to
making purchasing decisions. It is important that marketers understand
their target customer — especially when the target has a strong and
growing influence on household purchases. Explained below are three key
trends to help marketers connect with the critical mom consumer segment:

• As couples delay starting families, the average age of moms continues
to increase. Over the past four years, the segment “moms 35 and older”
has outpaced “moms under 35” in each children’s age category, with one
exception: children under the age of 3.
• There is a corresponding shift in online demographics, with 24- to
35-year-olds decreasing their visits to parenting Websites by almost
7 percent from July 2008 to the same time period in 2010.6
• Moms are most likely to report that they are the sole decision makers when
it comes to the purchase of household products (62.9 percent) and clothing
(60.8 percent), while they are most likely to share the decision-making
process with someone else in their households for higher-ticket items such
as automotive (77.7 percent) and major appliances (71.7 percent).

6
Experian Hitwise, Custom analysis.


Purchase decisions influenced by moms
Total Sole With someone else
Automotive 93.2% 15.5% 77.7%
Clothing 88.2% 60.8% 27.4%
Food 88.2% 54.4% 33.8%
Home electronics 89.9% 23.2% 66.7%
Home furnishings 90.2% 27.1% 63.1%
Household products 88.7% 62.9% 25.8%
Major appliances 93.3% 21.6% 71.7%
Sporting goods 93.2% 30.0% 63.2%

Source: Experian ConsumerView and Simmons, Mom’s Trend report, May 2010

Creating targeted email marketing specifically for the Hispanic segment
yields positive results
As the Hispanic market grows in size and spending power, it is important
to consider including specific messages to this group as part of an overall
marketing program. The engagement metrics show this group to be highly
engaged with email campaigns.

Of the emails sent to the Hispanic market, 70 percent were in Spanish and
30 percent were in English. As a group, these Hispanic market mailings
had 26 percent higher open rates and 43 percent higher click rates when
compared to current “All Industry” benchmarks.


Hispanic market emails generate
high open and click rates

20%
17.8%
18%
16%
14.1%
14%
12%
10%
8%
6%
3.9%
4%
2.7%
2%
0%
Unique opens Unique clicks

All industry Hispanic market emails

Separating the English language and Spanish language emails sent to
Hispanic segments, emails targeting Hispanics in Spanish had 41 percent
higher open and 59 percent higher click rates than those sent in English.

Mailings written in Spanish had significantly higher open
and click rates than those mailed in English
20%
18.8%
18%

16%

14% 13.3%

12%

10%

8%

6%
4.3%
4%
2.7%
2%

0%
Unique opens Unique clicks

English Spanish


Marketers that choose to mail in Spanish should be sure that their spelling
and grammar are correct. Mailings sent with incorrect translations had
24 percent lower open rates and 3 percent lower click rates than mailings
with proper Spanish grammar.

The Hispanic market responds best to promotions with dollars or percent
off. Email campaigns with these types of financial “rewards” had 81 percent
higher transaction rates and three times the revenue per email when
compared to Hispanic promotions with “nonfinancial” rewards
(free gifts, movie tickets, free shipping, etc).7

Hilton’s campaign includes 30 percent off in this inviting Getaway email.

Experian CheetahMail’s Strategic Services team analyzed the performance and content of
7

mailings targeting the Hispanic market from 27 businesses, July 2009 to June 2010.


Hispanic mobile phone owners are 63 percent more likely than the
average mobile phone users to represent the mobile generation
In addition to email, engagement metrics also show the Hispanic group
to be highly engaged with mobile campaigns. Hispanic mobile phone
owners are 63 percent more likely than the average mobile phone users to
represent the mobile generation — cell phone devices are a central part of
their everyday lives. In accordance with this trend, Hispanic mobile phone
owners are also 33 percent less likely than average to use their cell phones
just for the basics. They treat their cell phones as much more than just
another communication device.

Mobile segmentation, Hispanic versus Non-Hispanic
40%

35%
32%
30%

25%
23% 22% 23%
21%
20%
18% 18% 17%
15%
15% 13%

10%

5%

0%
Mobirati Social Pragmatic Basic Mobile
connectors adopters planners professionals

Hispanic Non-Hispanic



Addressable advertising


Advanced advertising is finally becoming a reality. For the first time,
advertisers are able to precisely predict what messages will be most
relevant and engaging to unique segments of their target market. While
the industry has been pursuing the means to deliver personalized ads
for years, the recent implementation of real-time digital technology
throughout the advertising ecosystem has the industry poised to finally
deliver highly relevant and measurable advertising. 8

Key findings
• Through addressable advertising, the advertiser is able to better
predict whether a message will resonate with a specific
consumer segment.
• Addressable TV advertising spend is projected to total $11.5 billion
in the United States by 2015.8
• The integrated multi-channel campaign will become a reality in 2011,
and will build to scale in 2012 and beyond.
• A well-establlished international bank used addressable advertising
online to achieve a lower Cost Per Acquisition (CPA) and an
approval rate double its initial expectations.
• A national specialty retailer used Audience IQ to serve online ads to
current customers, resulting in an average 60 percent lift in Internet
response, as well as response increases of more than 50 percent in
both the mail-order (55 percent) and retail channels (57 percent).

8
The Wall Street Journal, Targeted TV Ads Set for Takeoff, December 2010


The evolution of the online display advertising market
Traditionally, advertisers looking to make advertising buys have been
limited by media’s rudimentary audience measurement samples,
segmented only by basic demographics. Advertisers have had to base
the performance of the ad buy on recall studies or loosely correlated
syndicated purchase behavior panels.

The Internet promised to change all of that with its ability to track
direct response in the form of clicks. But while that helped improve the
measurement of the ad performance, it did nothing to help marketers
efficiently reach their audience with highly relevant messaging.

The online display advertising market has evolved in such a way that
advertisers have had to choose between two models, depending on their
particular goals.

Model 1. Publisher or Ad Network data

• Provides very broad reach and scale
• More akin to a traditional mass-media model
• Low relevancy that requires a high number of impressions to
be successful
• Expensive
• Difficult to forecast performance

Model 2. Premium Tier 1 Segments

• Lack of scale for advertisers who want to reach millions of consumers
• Potentially attracts regulation to protect consumer privacy
• Provides high-degrees of accuracy when targeting a specific audience
– Behavioral targeting
– Retargeting
– Real-time bid management


Digital advertising technology landscape

High precision
2. Premium tier 3. Addressable
1 segments advertising
Broad spectrum of
(i.e. behavioral
available consumer targeting, retargeting) (broad spectrum of
information effective marketing
tactics available at scale)
Effective marketing tactics –
but not scalable

Low precision
Limited data 1. Publisher or ad
available on network data
consumers (i.e. run of network)

Scalable marketing tactics –
but not effective

Low reach High reach
Small addressable audience Large addressable audience

Despite some of its challenges, the data-driven model delivered something
marketers were hungry for: confidence that they could reach their desired
audience. In response to this desire, marketing technology has now
evolved into addressable advertising, a third form of digital advertising that
combines precision and scale in one solution.

Model 3. Addressable Advertising

• Combines best of Models 1 and 2
• Real-time execution of online display media buys on an
impression-level basis
• Meaningful reach and scale
• High precision


This latest, most valuable advertising model has been created using high
quality, consistent data sources with meaningful reach. The introduction
of high-quality, consistent data sources with meaningful reach have
delivered a new and uniquely valuable asset to the real-time media buying
ecosystem. Through these data sets, advertisers have been able to
leverage impression level data, optimize their bidding process and pay only
for the media that is relevant to their marketing objectives. This data also
helps improve performance because it enables advertisers to align their
creative treatments to their own target customer segments.

Addressable advertising is growing at a rapid pace
The new addressable advertising capabilities are helping to create a
renaissance for display advertising. Spending on targeted display ads
will increase nearly 60 percent in 2011, helping to push online ad spending
to nearly $52 billion next year.9 Additionally, addressable TV ad spend is
projected to total $11.5 billion in the United States by 2015, according to
The Wall Street Journal.10

The next evolution, true integrated multi-channel campaigns
The integrated multichannel campaign will become a reality in 2011,
and will build to scale in 2012 and beyond. Because of the data available
through addressable advertising, digital media advertising (online display
media and televisions with digital set-top boxes), offline direct mail and
email campaigns can now be coordinated across the same segments
and measured precisely according to response rates and conversions,
effectively closing the loop on return on advertising spend.

9
Borrell Associates, Borrell Associates’ 2011 Ad Forecast Memo, 2011
10
The Wall Street Journal, Targeted TV Ads Set for Takeoff, December 2010


Case study: targeted online advertising, finance
Challenge:
An Experian Marketing Services client and well-established international
bank providing personal, business and corporate banking and credit
services to customers in nearly two dozen countries, including the United
States, was looking to improve the ROI of its online advertising. The bank
sought to dynamically present ads for its ultra-premium credit card to
1 percent of the U.S. population.

Historically, however, it has proved extremely difficult to reach these
individuals online. Moreover, the CPA for a single high-value prospect
had previously topped $500, which the client considered prohibitive. With
a CPA goal of less than $500 and a desired approval rate of 15 percent or
more, the bank began evaluating online ad-targeting technologies.

Solution:
Citing superior data and matching capabilities, streamlined targeting
and rapid deployment, the bank chose Experian Marketing Service’s
Audience IQ. Through partnerships with leading online media companies,
Audience IQ enables highly targeted addressable advertising platforms
while preserving the anonymity of targeted prospects.

With guidance from Experian Marketing Services, the bank based its
campaign on the highest qualifying custom segmentation schema, called
the “Consumer Value Index (CVI).” The CVI segment includes individuals
in good financial standing with a propensity for high-end luxury items.

Results:
Through addressable advertising and other unique features, the bank
exceeded all acquisition goals in an online, luxury-credit-card marketing
campaign. Post-campaign analysis revealed that the client had achieved —
and in fact exceeded — both primary marketing objectives: lower CPA and
an approval rate double its initial expectations.


Three steps to competing in the digital advertising space
Ad exchanges, Demand Side Platforms (DSPs) and agencies are all vying
for a share of the display advertising pie. Listed below are three tips for
competing in a marketplace like this.

• Simplify — One of advertisers’ key pain points is interacting
with nearly a dozen providers just to serve an online ad. Campaign data,
targeting, and measurability have historically necessitated the
involvement of specialty providers every step of the way.

In today’s overworked and understaffed environment, marketers should
find a partner that can alleviate some of the burden in coordinating the
online advertising process — a one-stop shop for advertisers.
Companies such as Experian Marketing Services are able to wrap
measurement, reporting, optimization, data, and planning into one,
simplifying the advertiser’s life.

• Smarter ad units — One way to monetize the Internet is by making the
advertising inventory work harder. Advertisers are willing to pay top
dollar to target visitors, but have historically been limited to targeting
based on generic segments such as age, location, and income.

Advertisers would be happy to pay more for media if they could find their
target audience segment as they defined it. Through addressable
advertising, an advertiser can do just that. Addressable advertising
shows ads only to the target segments the advertiser has selected,
based on media that has been enriched with consumer insights. More
online ad revenue is created because the same inventory can now be
sold for more — all because that media includes a clearly defined picture
of its particular consumer segments.

• Enhance existing channels — Advertisers have been buying spots on
TV for decades now, using old and pre-established processes as the
basis for making ad-buying decisions. Now there is a way to bring the
same accountability of online advertising to traditional TV advertising.

Experian® partners with companies such as INVIDI Technologies
Corporation and TRA® to provide advertisers with unprecedented
precision regarding which household is tuning in to a specific show or
commercial. This audience insight provides a level of ad customization
that revolutionizes TV advertising. For example, even if you and your
neighbor are watching the same TV show at the same time, you could be
served different ads. Combine this level of ad targeting with reporting
that draws a one-to-one correlation between ad spend and sales, and
you have a recipe for success.


Case study: targeted online advertising, retail
Challenge:
A national specialty retailer was looking to drive holiday sales in a cost-
effective manner. Their goal was to deliver an online ad campaign that
produced measurable results, tracking mail order, retail and Internet
response rates.

Solution:
The retailer used Audience IQ to serve targeted online ads to current
consumers. Audience IQ measured the incremental reserve of the
retailer’s multiple channels to determine the impact of online ad spend.

Results:
More than $14 million in incremental sales and an average 60 percent lift
in Internet responses were generated through the 60-day targeted online
campaigns. Although the campaigns were delivered exclusively online,
there was a greater than 50 percent lift in both the mail order and retail
channels, both of which were attributable to the online campaign.


Email
Email is a vital part of the consumer’s digital experience — from social
network alerts and mobile marketing opt-ins to search activity-based
messages and mailings sent based on preference center forms. The
advancement of mobile Internet devices and the rapid consumer adoption
of this technology have strengthened the revenue generation and customer
engagement opportunities of the email channel.

Key findings
• Email volume increases ranged from 29 percent to 32 percent from
the first quarter of 2009 through the fourth quarter of 2010, while
revenue increased from 10 percent to 23 percent.
• Friends-and-family emails have 43 percent higher open rates,
29 percent higher click rates and three times higher referral rates
than bulk promotions.
• “% Off” and “$ Off” are the most popular single offer types in
subject lines overall, and combination offers can be particularly
strong. “$ Off with Free Shipping” had the highest transaction rates
of any offer type during the 2010 holiday season.
• For the Valentine’s Day, Mother’s Day and New Year’s Day holidays,
total clicks tend to peak on the date, as well as one week after the
actual holiday.
• Total clicks for Christmas emails peak one week after the holiday,
perhaps due to interest in post-holiday sales, while transactions
peak three weeks prior.
• Consumers are most likely to open emails containing promotions or
coupons, followed by news stories and links to Websites.


The volume and revenue value of email continues to climb
The amount of email, as well as the amount of revenue that email is
bringing in for businesses today, is continually rising. From the first quarter
of 2009 through the fourth quarter of 2010, volume increases range from
29 percent to 32 percent, while revenue increases are from 10 percent to
23 percent.

Volume and revenue increases year-over-year
(2010 compared to 2009)

35%
32%
30% 29%
27%
25% 24% 23%

20%

15%
10% 10%
10% 7%

5%

0%
Q1 Q2 Q3 Q4

Volume Revenue

Source: Experian CheetahMail
Based on a matched set of 130 clients from Q1 2009 through Q4 2010

Channel-crosser:

To capitalize on the rapid growth of mobile email users, marketers
should strongly consider implementing a mobile messaging
strategy including mobile-commerce-enabled sites and email
acquisition through Short Message Service (SMS) campaigns.


Furthermore, consumers continue to spend a significant amount of
time checking their email. Seventy-seven percent of consumers access
their primary personal email accounts at least daily or more frequently,
according to The Relevancy Group. While the majority of consumers
maintain multiple personal addresses, 27 percent of consumers overall
dedicate an email account purely to receive email marketing messages.11

Consumers are most likely to open emails containing promotions
and coupons
A 2010 study of online adults12 indicates that consumers are most likely to
open emails containing promotions or coupons, news stories and links
to Websites. They are most likely to forward news stories, followed by
promotions or coupons and jokes.

Likely to open Likely to forward

Promotions or coupons 78% 55%
News stories 75% 58%
Links to Websites 73% 54%
Newsletters 69% 39%
Information about new products/Websites 69% 47%
Jokes 68% 55%
Online videos 63% 43%
Podcasts 43% 24%
Blog posts 42% 22%
Links to online games/info about games 40% 26%


Tip: Make it easy for subscribers to share the email with friends.
Emails including Experian CheetahMail’s Refer-a-Friend functionality
have been shown to greatly increase referral rates.

11
The Relevancy Group and David Daniels, The Social Inbox: The Impact of Facebook
Messages on Email Marketing, January 2011
12
Online adults: adults who spent one hour online in the past seven days doing something other
than email


Emails with refer-a-friend functionality
Lift in total Lift in unique
Industry
referrals referrals
Catalog 2.5x 2.3x
Multi-channel retail 15x 14.6x
Publishing 30x 25x
Travel 5x 5x
All industries 6x 5.6x


Friends-and-family emails significantly outperform other types
of campaigns
Today, most friends-and-family campaigns are not targeted, but instead
distributed to entire customer files. Despite this trend, data from an
Experian CheetahMail study13 indicates that the perception of friends-and-
family offers being “special” continues. Specific findings in support of this
observation include:

• Customers engage with friends-and-family emails at a much higher rate
than they do with promotional campaigns.
• Friends-and-family emails have 43 percent higher open rates and
29 percent higher click rates than bulk promotions.
• The exceptionally high open and click rates underscore the opportunity
for companies to introduce new products and services to highly engaged
customers through these emails.

13
Experian CheetahMail, evaluation of the friends-and-family emails from 79 clients to non-friends-
and-family bulk campaigns from the same businesses, July 2009 to June 2010.


Subscribers open and click on friends-and-family emails
at higher rates than bulk promotions

25%

20.4%
20%

15% 14.3%

10%

5% 3.7%
2.9%

0%
Total opens Total clicks

Friends-and-family emails, promotions or campaigns Bulk promotions


High revenue-per-email results and strong transaction rates demonstrate
the significant monetary value that friends-and-family messages can
add to any email program. Compared to standard promotional mailings,
friends-and-family emails average 2.5 times higher transaction rates and
85 percent higher revenue per email.

Tip: To increase the potential of reaching new and existing
customers who might not have received the initial email campaign,
maintain sharing features in their usual location (i.e., forward to a
friend, share) while also adding larger call-outs that enable sharing
within the body of the email, near the offer. Consumers are very
accustomed to sharing friends-and-family offers, so it’s important to
make it easy for them to do so.


Friends-and-family campaigns tend to generate an average of three
times the referral rate of bulk promotions. Friends-and-family emails also
produce an average of twice the number of unique referrers, and an
11 percent increase in the number of referrals made by each unique referrer
(1.44 referrals for each unique friends-and-family referrer, compared to
1.29 for bulk-promotion referrers). These metrics demonstrate the viral
power of friends-and-family messaging and supports the branding
potential inherent in friends-and-family promotions.

Friends-and-family emails are meant to be shared

0.04%

0.03%
0.03%

0.02%
0.02%

0.01% 0.01%
0.01%

0.00%
Referrals Unique referrers

Friends-and-family Bulk promotions


Tip: Friends-and-family emails should become part of your
overall promotional playbook. These campaigns perform all year
long — even during the fiercely competitive and discount-heavy
holiday season.


Offers in subject lines are especially valuable for driving year-end revenue
through email marketing
Subject-line trends are extremely indicative of the email marketing
landscape in general. By looking at promotional mailings with offers in
the subject lines for August through December — the months when
email marketing volumes are the highest — the following conclusions
can be drawn:

• The percent of subject lines including an offer increases throughout the
last few months of the year, mainly due to the holiday season.

The percent of subject lines with offers increases during
the holiday season

50%

43%
40% 37%
33% 32% 33%
30%

20%

10%

0%
August September October November December

Based on promotional mailings of more than 360 Experian CheetahMail clients, August to
December 2010

On average, campaigns with offers in the subject line tend to have
Tip: The holiday season is a great time to include the subject line. It
higher transaction rates than emails without offers inoffers in your
is subject lines. During the 2010 holiday season (October to December),
important to remember that emails with no mention of an offer in the
subject may still have anoffersin the body of the message, however.
campaigns with such offer had 40 percent higher transaction rates
than campaigns with offers not mentioned in subject lines.


• “% Off” and “$ Off” are the most popular single offer types in subject
lines overall. During the holiday season specifically, “$ Off” can have
significantly higher transaction rates, and combination offers can
be particularly strong. “$ Off with Free Shipping” had the highest
transaction rate of any offer type during the 2010 holiday season.

“$ off with free shipping” in subject lines had the highest
transaction rate of any offer type

0.25%

0.20%
0.20%
0.18%

0.15%

0.10%

0.05%

0.00%
Pre-holiday Holiday

Based on promotional mailings of more than 360 Experian CheetahMail clients, August to
December 2010

Travel alert: Travel companies should plan a strategic ramp-up of loyalty-
based emails toward the end of the summer to maximize results. Loyalty
program emails, particularly those for the travel industry, tend to have higher
transaction rates in August and September.


• While gift card offers are not always mentioned in subject lines, the
trends seen in mailings with “gift card” in the subject line do show a nice
boost, especially in the month of November. In November 2010,
transaction rates were 0.55 percent higher for emails that promoted gift
cards in their subject lines than they were in August of the same year.

“Gift card” in subject lines peak in frequency and
transaction rates during November

60 0.70%
0.64%

50 0.60%

0.50%
40
0.40%
30
0.30%
0.27%
20
0.20%

10 0.09%
0.04% 0.10%
0.09%
0 0.00%
August September October November December

SL per month Transaction rate

Based on promotional mailings of more than 360 clients, August through December 2010


Holiday-related emails outperform standard promotional mailings
Holiday-related emails, before and on the celebrated dates, are a
wonderful way to engage with email subscribers. Most brands begin
marketing a holiday campaign early — many up to four weeks before the
actual date. Promotional emails sent on actual holidays perform quite well,
too, with transaction rates outperforming the “All Industry” promotional
benchmarks.

All promotional mailings on holidays: transaction rates
0.35
0.31%
0.30
0.26%
0.25

0.20% 0.20% 0.20%
0.20

0.15% 0.15% 0.15%
0.15 0.13% 0.13%
0.10%
0.10

0.05

0.00 as
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ay

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Holiday “All Industry” promotional mailings benchmark

Promotional mailings of more than 400 industry-diverse clients throughout 2010

The findings that follow, based on the 2010 holiday mailings of more
than 400 Experian CheetahMail clients across industries, will help email
marketers plan their campaigns throughout the year by effectively
adjusting timing and messaging around specific holidays.


New Year’s Day — Subscriber interest in New Year’s campaigns begins
to rise two weeks prior to the actual holiday. Total clicks and transaction
rates peak on New Year’s Day, as well as for the six days afterward. Early
advertising via email can help consumers plan their spending.

New Year’s Day — holiday subject lines and total click rates

50% 4.50%
3.9%
4.00%
40% 3.4% 3.3%
3.1% 3.50%

2.5% 3.00%
30%
2.50%

2.00%
20%
1.50%

10% 1.00%

0.50%

0% 0.00%
4 weeks 3 weeks 2 weeks 1 week Holiday
prior prior prior prior + 1 week

Percent of holiday subject lines Total click rate

New Year’s Day — holiday subject lines and transaction rates
50% 0.14%

0.11% 0.12%
40%
0.09% 0.10%

30% 0.08%
0.08%

0.06%
20% 0.05%

0.04%
0.02%
10%
0.02%

0% 0.00%

Percent of holiday subject lines Transaction rate



Valentine’s Day — Total clicks peak on the actual holiday, Feb. 14, until
Feb. 21. Interestingly, transactions peak one week prior. The data supports
the assumption that many last-minute gift buyers could use reminders
right before and on the holiday.

Mother’s Day — Like Valentine’s Day and New Year’s Day, total clicks
tend to peak on the date of, as well as one week after the actual holiday.
Transactions peak two weeks prior, indicating an opportunity to begin
marketing around that time frame.

Mother’s Day — holiday subject lines and total click rates
45% 3.00%

40% 2.6%
2.50%
35%

30% 1.9% 1.8% 2.00%
1.7%
25% 1.5%
1.50%
20%

15% 1.00%

10%
0.50%
5%

0% 0.00%


Mother’s Day — holiday subject lines and transaction rates
45% 0.20%
0.18% 0.17%
40% 0.18%

35% 0.16%
0.14%
0.14%
30%
0.12%
25% 0.08%
0.10%
20%
0.08% 0.08%
15%
0.06%
10% 0.04%
5% 0.02%

0% 0.00%




Memorial Day — Total clicks peak at two weeks prior to the holiday,
while transactions peak one week prior to the holiday and on the date itself.
The data indicates a higher level of browsing before the holiday compared
to after.

Tip: Because Memorial Day evokes thoughts of barbeques, outdoor
gatherings and parties, it’s worth highlighting these types of items
three to four weeks prior to the holiday.


Father’s Day — According to Experian CheetahMail client mailings, the
earliest occurrence of Father’s Day in a subject line was six weeks prior to
the holiday. Total clicks and transactions peak one week after the holiday,
including the holiday itself.

Thanksgiving, Black Friday and Cyber Monday — Total clicks peak
at one week prior to each holiday, while transactions peak one week later,
including the holiday days themselves. It is important to note that the
peaks occur after three to four weeks of consistent increase in subscriber
response before each particular date.

Thanksgiving, Black Friday and Cyber Monday —
holiday subject lines and total click rates

80% 3.5%
2.96%
70% 3.26% 3.0%
60% 2.83%
2.5%
2.55%
50% 2.30%
2.0%
40%
1.5%
30%
1.0%
20%

10% 0.5%

0% 0.0%



Thanksgiving, Black Friday and Cyber Monday —
holiday subject lines and total click rates

80% 0.18% 0.20%
0.16% 0.18%
70%
0.18% 0.16%
60%
0.15% 0.14%
50% 0.12%
40% 0.10%

30% 0.08%
0.06%
20%
0.04%
10% 0.03% 0.02%
0% 0.00%



Christmas — The earliest occurrence of Christmas or related holiday
season words in a subject line was 17 weeks prior to the holiday, according
to Experian CheetahMail’s study. Total clicks for Christmas emails peak
one week after the holiday, perhaps due to interest in post-holiday sales,
while transactions peak three weeks prior to the holiday, in time for
holiday delivery.

Tip: Begin advertising Thanksgiving and Christmas sales earlier
than November. This trend, reflected in subject lines, has proved to
engage customers to click and transact.


Tips for improving email data quality
Email validation provides a myriad of benefits, including higher returns on
marketing campaigns and increased customer satisfaction. Companies
interested in improving email data quality should:

• Evaluate the current problem — Which collection channels produce bad
email addresses? Is one channel more susceptible to errors than the
others? How much marketing budget is wasted on undeliverable emails?
• Determine your email validation requirements — Which channels will
benefit? Will you leverage email validation on the front end, back end
or both?
• Identify criteria for the ideal email validation tool — Does it leverage
multiple verification techniques? Can you prove a strong ROI in a
short period of time? Will it fit seamlessly into your existing
customer experience?

Case study: improving email data quality

Situation:
Cabela’s® the World’s Foremost Outfitter ® had amassed a large number
, ,
of suspected “bad” email addresses. The retailer wanted to confirm
that these emails were truly invalid, so that it could ensure that all opt-in
subscribers wishing to receive Cabela’s communications were included in
weekly email marketing campaigns.

Solution:
Cabela’s decided to purchase an email cleansing service from Experian
QAS to identify any potentially valid email addresses in the suspected bad
email address population.

Results:
A sizable portion of the suspected bad emails were recovered, tested
by the marketing team and then added back into the retailer’s marketing
database, meaning that Cabela’s is now able to contact as many
subscribers as possible through email.

“We reached ROI on the project in far less than two weeks. The
data test had given us an estimate of what to expect from the
cleansing — but the results far exceeded expectations. This was
100 percent worth our time and money.”

Dean Wynkoop, Manager, Data Management, Cabela’s


Mobile
Businesses working to integrate mobile into their marketing mix have the
ability to prompt immediate response and establish a two-way dialog with
consumers. As smartphone usage and market penetration continues
to grow, the mobile channel is a sure investment for marketers today,
regardless of industry or target market. As time goes on and technology
advances, mobile marketing will become more cost-effective and cross-
channel-friendly.

Key findings
• Mobile phone usage by American adults has increased
21 percentage points from 2006.
• Consumers are finding mobile advertising more valuable over
time — especially those containing coupons and special offers.
• While phone calls and text messaging (SMS) still dominate regular
mobile usage, taking and sharing photographs (MMS) is the next
most frequent activity.
• Of those 36 percent of consumers who plan to use their phone for
shopping-related activities, 59 percent plan to purchase from their
mobile phones.
• The most popular mobile shopping activity is checking prices
(24 percent), while the most popular place for mobile shopping
activities is the home (59 percent).
• Twenty-eight percent of consumers perform shopping activities
from their phone in brick-and-mortar retail stores.
• The majority of mobile applications downloaded are for gaming
and entertainment.
• Text messaging reaches the widest breadth of consumers.


The mobile market is growing at a rapid pace
Marketers are committed to increasing investment in mobile advertising
with spend in the channel expected to near $3 billion annually by 2014. This
growth trend was buttressed in 2010 by two leaders in the mobile space
making significant investments in mobile advertising, with Google paying
$750 million for AdMob and Apple purchasing Quattro Wireless.

U.S. mobile ad revenues, by format, 2009–2014

$3,000 $1,581

$2,500
$954
$2,000
$548
$1,500
$307
$1,000 $163 $803
$714
$59 $554 $652
$500 $356
$206 $468 $562
$226 $271 $325 $309
0
2009 2010 2011 2012 2013 2014

SMS Display Search

Note: includes local and national revenues
Source: BIA/Kelsey, “US Mobile Ad Revenue Forecast (2009–2014),” Dec. 1, 2010

Nine in 10 American adults now have mobile phones, up from seven in 10 in
2006. This is an increase of 21 percentage points. Even kids as young as
6 years old are getting in the game, with more than one in five kids ages 6 to
11 reporting that they have a mobile phone.14

14
Experian Simmons Spring 2010, Spring 2009, Spring 2008, Spring 2007, Spring 2006 National
Consumer Study, Teen Study and Kid Study. Mobile phone ownership was not measured in the
Spring 2007 or Spring 2006 Kid study.


U.S. mobile phone owners, 2006-2010
100%
90%
87%

80% 78%
73% 75%
72%
69% 69%
62%
60%
53%

40%

23%
20% 19% 21%

0%
Adults Teens Kids
18+ 12–17 6–11

2006 2007 2008 2009 2010


Key mobile trends
Listed below are three key trends that mobile marketers should be mindful
of this year according to iLoop, a premier solutions and services mobile
marketing provider to the world’s most successful international brands,
marketing agencies and media companies and a partner of Experian
Marketing Services’ CheetahMail.

• There’s no such thing as an SMS campaign — The emphasis is no
longer on the SMS technology itself, but the overall marketing objective
that it enables. Leading brands are no longer seeking SMS campaigns;
they’re seeking ways to build mobile communities, create loyalty
programs and facilitate geo-specific shopping alerts. SMS, of course, is
still the root technology that delivers these experiences, but it is now a
means to an end.

Tip: SMS programs have many opt-in methods, all of which should
be activated, including email, Website, point of sale promotions and
Facebook pages.

• Mobile site traffic nears the height of Website traffic — Last year,
the monthly mobile site traffic of E! Online, an iLoop client and “The
source for entertainment news, celebrity gossip and pictures,” came
significantly closer to that of its traditional Website traffic. This
confirmed the company’s long-held belief that much of their audience
preferred to consume content on mobile devices.


• The intersection of mobile and social marketing — Integrated
mobile and social media strategies have become a critical success factor
for top brands. Customer reviews, social links and sharing functionality
have all become the “norm” and found their way into the constantly
evolving set of best practices. It is important to note, especially for
brands that need mobile solutions that provide scale, that most of
today’s new and buzzworthy technology options, like check-in apps, have
less than 5 percent adoption in the United States.15

Retailer alert: Mobile experiences serve shoppers anytime,
anywhere — especially those using an iPhone. In November and
December 2010, PriceGrabber ran paid campaign promotions to the
PriceGrabber mobile download landing page and the PriceGrabber
MobileShopping Facebook page. Results were strong across all mobile
devices, but the number of referrals from Apple iPhones beat out those of
Android phones and the Apple iPad.

Consumers are becoming more receptive to mobile advertisements
The increases in ad spend also were supported by greater openness on
the part of consumers to receive ads on their mobile phones. As indicated
in the following chart, regardless of the type of advertising, consumers
are finding mobile advertising more valuable — especially advertisements
containing coupons and special offers.

Percentage of mobile phone owners who find the
following types of ads useful

2009 2010 Percent
change
Text or multimedia messages sent to your phone from 13% 18% 32%
businesses without first getting your permission
Text or multimedia messages sent to your phone from 35% 45% 27%
businesses that you have given permission to send
Online banner or pop-up ads in the phone’s Web browser 12% 16% 31%
Text or multimedia messages notifying you of current sales and 29% 38% 33%
promotions available to everyone
Text or multimedia messages including coupons or special offers 36% 44% 23%
redeemable by showing the phone message at the business
Advertisements for businesses located nearby (based on your 33% 42% 28%
current location)

Base: Online adults who use a mobile phone

15
comScore, Mobilens, November 2010.


Taking and sharing photographs is the most popular mobile activity aside
from talking and texting
While mobile phones are a reality of everyday life, not everyone uses their
phone the same way. In fact, while making phone calls and text messaging
(SMS) still dominate regular usage, taking and sharing photographs
(MMS) is the next most frequent activity. Visiting the mobile Web for things
like checking email, accessing the Internet or using Internet applications
are regular activities of only 31 percent of mobile phone users.

Activities done on mobile phone in last 30 days
Sent or received
text messages 76%

Took photos 72%
Sent or received a
48%
multimedia message

Accessed the Internet 39%
Sent or received
personal email 26%

Listened to music/ 25%
other audio

Took videos 25%

Played games 24%

Downloaded ringtones 23%
Maintained calendar/
23%
appointment/meetings

Accessed GPS 21%

Accessed your social 15%
networking account
Sent or received 14%
business email

Downloaded music 14%

Downloaded an application 13%

Uploaded pictures 12%
to sharing site

Banking 11%

Watched video down/ 9%
uploaded to phone
Watched video 8%
streamed to phone

Shopped 6%

0% 10% 20% 30% 40% 50% 60% 70% 80%

Base: Online adults who use a mobile phone


Channel crosser:

Marketers need to ensure that their email programs support mobile
viewing. Given that consumers are becoming more comfortable
with purchasing items from their mobile phones, email is another
great medium to drive customer engagement and sales.

Consumers are adopting mobile purchasing at a slow and steady rate
Consumers’ thirst for getting the best deals, coupled with an increased
market penetration of smartphones, has created the perfect storm for
comparison shopping from a mobile device. According to an October 2010
consumer survey by PriceGrabber.com, more than one-third of consumers
plan to use their mobile phones for shopping-related activities. Of those
36 percent of consumers, 59 percent plan to purchase from their
mobile phones.

Retailer alert: There is no time like the present to invest time and money
in enhancing your mobile ecommerce site. In the next few years, when
consumers begin making more purchases from their mobile phones, retailers
who have had a difficult mobile experience could miss out on some potentially
big revenue because they have branded themselves with a poor mobile
experience in the past.

The most popular mobile shopping activities include
checking prices and using comparison-shopping apps
24%
24%
Use mobile phones to check
prices online before making
offline purchases
20%
Plan to use mobile phones
to use comparison-shopping
applications
16%
Plan to use mobile phones 13%
to check store inventory 12% 12%
before shopping in 12%
brick-and-mortar stores

Plan to use mobile phones
to view retailer emails with 8%
coupons/discounts
while shopping in stores
4%

0%

Source: PriceGrabber, Winter Consumer Survey Data, Sept. 14–Oct. 6, 2010;
sample size: 1,839 U.S. online consumers


Home is the most popular location for consumers to engage in mobile
shopping activities
The most popular place for mobile shopping activities, including
comparing prices, making purchases and reading reviews, is the home.
PriceGrabber.com’s October 2010 consumer survey found that 59 percent
of mobile consumers fall into this category, while 30 percent conduct
mobile shopping activities from their phones anywhere they can and
28 percent perform these activities from their phones in brick-and-mortar
retail stores.

Of course, home is also one of the places that individuals are most
likely to have a computer or laptop available. The aforementioned trend is
a true testament to consumers becoming more and more attached to their
mobile devices.

Retailer alert: The large percentage of consumers shopping from their
mobile phones within brick-and-mortar stores shows that people are checking
prices. Retailers should keep this trend top-of-mind when setting pricing
strategies and in-store sale promotion plans, such as offering the same
discounts offline and online.

Of those consumers who shop on their mobile phones, the most popular
mobile purchases include digital content such as ringtones, video clips
and apps (28 percent), clothing (23 percent) and consumer electronics —
excluding computers (23 percent).


Case study: mobile couponing
Situation:
The owner of two IHOP franchise locations was searching for new ways
to stimulate sales. Money Mailer of Greater Morris County had previously
executed several successful shared mail campaigns for them for more than
a year and suggested integrating mobile marketing into the restaurants’
marketing strategy.

Solution:
Money Mailer utilized the iLoop Mobile Platform,16 a hosted self-service
SaaS software solution for creating and analyzing SMS/MMS messaging
campaigns and services, mobile Internet sites, mobile-enabled Websites
and other technologies for state-of-the art mobile marketing.

In-store marketing collateral supported the mobile campaign, and
employees were trained on how to discuss the promotional opportunities
with customers. Customers who opted in were welcomed with a free-
pancakes offer and continued to receive new offers every other week,
including free soup or salad with purchase of an entrée, and a free sundae
with the purchase of a dinner entrée.

Results:
IHOP’s mobile campaign has resulted in more than 300 opt-ins since its
launch, for an average of about 100 per month. Nearly 10 percent of those
receiving the mobile coupons have redeemed them.

Channel crosser:

Quick Response (QR) codes, or 2-D bar codes, can be used on
direct-mail pieces to automatically facilitate a purchase directly
from a consumer’s mobile device. When consumers scan the codes,
they are sent to special landing pages on a brand’s m-commerce
site where they can discover more information.

16
iLoop is a valued partner of Experian CheetahMail. For more information, please
visit www.iloopmobile.com.


More than 30 percent of mobile application downloaders show an affinity
to use their smartphones for gaming and entertainment
Most mobile apps downloaded are for gaming and entertainment.
Secondly, consumers use apps for accessing other content like weather,
sports and news. However, consumers also download useful application
tools that help them be more productive regarding utilities, travel,
communication, banking and shopping.

Types of mobile applications downloaded, last 30 days
Entertainment 44%
Games 41%
Weather 38%
Utilities 31%
Social networking 29%
Sports 25%
Communication 25%
News 22%
Finance 21%
Travel 19%
Shopping 17%
Reference 17%
Other 2%

Base: Online adults who downloaded a mobile app in the last 30 days

While more than 50 percent of the apps in Google’s Android app store
are free, all other app stores, including Apple’s App Store, are dominated
by paid applications.17 When developing apps for marketing purposes,
businesses must decide whether to develop free apps; paid apps; or
“Freemium,” which offers a free app with the option to pay for additional
content or features.

Tip: Decide on your specific goals before looking for a way deliver
value to the consumer in the form of a mobile application. For
example, do you simply want to advertise your brand or products via
search or display ads, offer transactional services or provide content?

17
Distimo, Distimo Apple App Store Report, May 2010.


Targeting consumers based on mobile behavior
In order to help marketers understand how best to engage customers
with mobile marketing, Experian Marketing Services recently identified
five major segments of Mobile Consumers based on data from Experian
Simmons National Consumer Study:

• Mobirati — They represent the mobile generation, having grown up with
cell phones and cannot imagine life without them. Cell phone devices
are a central part of their everyday lives.
• Social Connectors — For them, communication is central in their lives
and cell phones allow them to keep up to date with friends and social
events. The mobile device is the bridge to the social world.
• Pragmatic Adopters — Cell phones came to being during their adult
years. They are now learning that there are other things they can do with
mobile phones beyond just saying “hello.” Cell phones are more a part of
their everyday lives than ever before, but still more functional than
entertaining to them.
• Basic Planners — They are not into cell phones or the world of
technology. They use cell phones just for the basics. The cell phone is
just another communication device for these consumers.
• Mobile Professionals — Mobile phones help them keep up with their
professional lives in addition to their personal lives. More likely to own a
smartphone. Their phones have become their all-in-one device for all
communication and information needs. Features are important
and used.
Mobile consumer segments

Mobile Mobirati
Professionals 19%
17%

Basic
Social
Planners
Connectors
20%
22%

Pragmatic
Adopters
22%

Base: Adult cell phone owners


AT&T customers tend to be Mobile Professionals, while Verizon’s users
are more likely to be Pragmatic Adopters. Sprint has concentrations of
customers in both segments. T-Mobile consumers tend to have similar
consumers as AT&T, but with much higher concentrations of the young,
tech-savvy Mobirati.

AT&T Verizon Sprint Other
T-Mobile
Wireless Wireless Nextel Providers
Mobile Professionals 126 101 123 111 78
Pragmatic Adopters 100 115 97 99 112
Social Connectors 99 105 122 107 81
Basic Planners 93 105 80 65 122
Mobirati 81 70 75 117 105


Text messaging reaches the widest breadth of consumers
Texting is a daily activity for many Mobirati, Social Connectors and Mobile
Professionals. Pragmatic Adopters are just beginning to use this feature
of their basic phones. Further, Mobirati are the most open to receiving text
messages from businesses on their phones, with nearly half of consumers
in this segment saying they find text messages featuring coupons or
information on sales useful.

Channel-crosser:

Use enticing calls to action, such as “text to win” or “text for a
discount,” on in-store signage, screens and through employee
communication to encourage mobile sign-ups.


Tablets provide marketers with more opportunities to reach affluent
consumers on-the-move
It was only last spring that Apple introduced the iPad to revive the tablet
market. Apple will have sold 8.5 million iPads in the United States by the
end of this year, eMarketer estimates.181That makes up the vast majority
of total U.S. tablet sales, at 88 percent. With Internet-enabled e-readers
like Amazon’s Kindle and Barnes & Noble’s Nook, as well as other mobile
device manufacturers entering the tablet market like Samsung with the 7’
Galaxy, marketers will have more opportunities to reach consumers with
advertising and applications.

U.S. tablet installed base, 2010-2012 —
Millions and percent of population

50
40.6
(12.8%)
40

30 24.0
(7.6%)

20
9.7
(3.1%)
10

0
2010 2011 2012

Source: eMarketer, Dec. 2010

According to the Pew Internet & American Life Project, September 2010,
tablet ownership is significantly higher among the affluent, which makes
advertising on these devices an important consideration for reaching
this sought-after demographic. Based on survey respondents, tablet
penetration was 9 percent for households with income higher than $75,000,
compared to 5 percent for households with income between $50,000 and
$75,000 and just 2 percent in the lowest-income group of $30,000 or less.

18
eMarketer, iPad Sales to More Than Double Next Year, Dec. 9, 2010.


Social
Social media budgets will grow in 2011, with 80 percent of companies
that have 100 or more employees allocating funds for this purpose.192
Marketers have certainly caught on to the reality that social media is an
ideal outlet for creating content and engagements that start conversations
and build relationships. Be it with a customer, a blogger or a business
partner, marketing campaign implementation across online communities
and social networks will be booming throughout 2011 and beyond.3

Key findings
• As a category, social networks now surpass search engines as the
most visited group of Websites on the Internet.
• In 2010, Facebook.com surpassed Google.com as the most visited
domain for U.S. Internet visitors for the first time.
• Four of the top 10 most searched terms contain the word “Facebook.”
• More than half (51 percent) of online adults ages 50 and older use
social networking sites today.
• The percentage of adults making monthly visits to social networking
sites has grown in the last year, while visits to blogs are down.
• Emails with the word “Facebook” in the subject line have 10 percent
higher unique clicks than other promotional mailings.
• In the two weeks following the deployment of an email with
Facebook in the subject line, 75 percent of brands experienced
a 16 percent or more increase in Web traffic from Facebook to
their Websites.20
• According to a recent consumer survey, 40 percent of online
consumers who use social networking sites plan to use
Facebook for feedback from family/friends to help make a decision
about a product.

19
eMarketer, Top Picks, December 2010
20
Experian CheetahMail Strategic Services analyzed mailings with Facebook in the subject line
from 60 clients from January 2010 to September 2010. Other promotional mailings analyzed
were based on the same clients and time frame.


Social networks are surging over search
While surges in social networking were noticeable as early as 2005 with the
rapid growth of MySpace, it wasn’t until mid-2009, leading into 2010, that
social networks as a category became the most visited group of Websites
on the Internet in our U.S. data set.

Monthly visits to search engines and social networks (U.S.)
18%

15.61%
16%

14%

12%
11.28%

10%

8%

January 2011
July 2009
May 2009

May 2010
November 2009

April 2010

November 2010
December 2009
January 2010
August 2009

July 2010
October 2009
March 2009

March 2010
April 2009

June 2010

September 2010

December 2010
June 2009
January 2009

August 2010
February 2009

February 2010

October 2010
September 2009

Search engines Social networking and forums

Monthly market share in “all categories,” measured by visits, based on U.S. usage
Created 02/14/2011. © 1996–2011 Hitwise Pty. Ltd.
Source: Experian Hitwise U.S.


Analyzing the top visited U.S. sites for 2010, we find further evidence of the
surge in social networks versus search. For the first time, Facebook.com
surpassed Google.com as the most visited domain for U.S.
Internet visitors.

Top 10 most visited Websites
2009 2010
1. www.google.com 1. www.facebook.com
2. mail.yahoo.com 2. www.google.com
3. www.facebook.com 3. mail.yahoo.com
4. www.yahoo.com 4. www.yahoo.com
5. www.myspace.com 5. www.youtube.com
6. mail.live.com 6. www.msn.com
7. www.youtube.com 7. www.myspace.com
8. search.yahoo.com 8. mail.live.com
9. www.msn.com 9. search.yahoo.com
10. www.ebay.com 10. www.bing.com

Note: Data is based on U.S. visits for January to November 2009 and 2010

While visits to Websites can be influenced by marketing programs, traffic
sources and other external forces, search volume gives an excellent view
into the equity of leading online brands. Yearly search terms for 2010 show
the dominance of Facebook for the year. Terms containing “Facebook”
took four out of the top 10 positions, including the number one search term
for the year, “Facebook.”

Top 10 most searched terms
2009 2010
1. facebook 1. facebook
2. myspace 2. facebook login
3. craigslist 3. youtube
4. youtube 4. craigslist
5. yahoo mail 5. myspace
6. google 6. facebook.com
7. yahoo 7. ebay
8. ebay 8. yahoo
9. facebook login 9. www.facebook.com
10. myspace.com 10. mapquest



More than 50 percent of online adults ages 50 and older use social
networking sites
Social networking sites cross the majority of all online adult age groups,
from 18 years of age on. Although the younger demographic still reigns,
with 90 percent of 18- to 34-year-olds visiting social networking sites,
more than half (51 percent) of online adults ages 50 and older are also on
the social media bandwagon. Visiting professional networking Websites,
such as LinkedIn, is the most equally common social networking activity
across age groups.

Demographic composition of social media users, 2010
18–34 35–49 50+
Visited professional
13% 13% 9%
networking Websites
Visited online blogs 27% 14% 11%
Visited social
90% 76% 51%
networking sites
Visited online forums/
34% 23% 14%
message boards
Used social tagging or
22% 12% 5%
bookmarking


The data further exemplifies the continued overall growth of social
networking sites. As illustrated in the “Consumer insight” section of
this report, the percentage of adults making monthly visits to social
networking sites has grown in the last year, while visits to message boards
has remained flat (increasing a relative 4 percent) and visits to blogs are
actually down, suggesting that people are getting more of the content they
previously got from blogs through social networking sites.


Combining social media and email increases consumer response
In a recent Experian CheetahMail study, emails with the word “Facebook”
in the subject line had 5 percent higher total click and 10 percent higher
unique clicks than other promotional mailings from the brands.

Mailings with “Facebook” in the subject line have higher
click rates than other promotional mailings

0.035

0.030

0.025

0.020

0.015

0.010

0.005

0.000
Total clicks Unique clicks

Facebook in subject line Other promotional mailings


Furthermore, the same study found that Facebook links in emails where
“Facebook” is in the subject line and is the main call to action averaged
42.5 percent of all unique clicks. They make up just 1 percent of unique
clicks when just the Facebook icon is included in the mailing and is not part
of the main call to action.214

In the two weeks following the deployment of an email with “Facebook” in
the subject line, 75 percent of the brands analyzed experienced a 16 percent
or more increase in Web traffic from Facebook to their Websites — further
proving that email increases consumer engagement with social media and
vice versa.225

21
Experian CheetahMail Strategic Services analyzed mailings with “Facebook” in the subject line
from 60 clients from January 2010 to September 2010. Other promotional mailings analyzed
were based on the same clients and time frame.
22
Experian Hitwise and Experian CheetahMail analyzed results from 30 clients, March to
September 2010.


Channel crosser:

Add social media to your email marketing campaigns. Links within
friends-and-family emails tend to have much higher referral rates
than emails with no social network links.

Half of online shoppers use a social network to share great deals
on products
According to an October 2010 consumer survey by PriceGrabber.com,236
shoppers use Facebook and retailer list features to get feedback from
friends and family when making a decision about products on their gift
lists. Of the 70 percent of online consumers who use social networking
sites, 40 percent plan to use Facebook, and 16 percent plan to use the gift
list feature on retailer Websites for feedback from family and friends to
help make a decision about a product.

The same survey found of the 70 percent of online consumers who use
social networking sites, 51 percent have used a social network (Facebook,
Twitter, etc.) to tell friends and followers about a great deal they found on a
product or a service. Of the same group, email (74 percent) and Facebook
(37 percent) are the most popular ways shoppers use the Internet to
communicate their gift lists and favorite products.

Publisher alert:

Consider taking a new print idea you have created and incorporate
it into social media. For example, run a social campaign allowing
“friends” and “followers” to vote on the cover image of your
next publication.

Cataloger alert: Incorporate customer reviews into your print publications,
making sure that the reviews focus on the products themselves rather than
speed of service, for example.

23
PriceGrabber Winter Consumer Survey, Sept. 14 to Oct. 6, 2010; sample size: 1,839 U.S.
online consumers


Search
Search is a powerful online navigation tool for even the less tech-savvy
consumers of today. Gaining a firm understanding of the terms that drive
both paid and organic traffic to Websites can provide marketers with more
customer engagement opportunities and competitive advantage while
planning and measuring search marketing activities.

Key findings
• In the United States, Google’s share of executed searches has
dropped for the second year in a row, to 68 percent.
• There is a recent increase in usage of midtier query lengths
(three-to four-word queries).
• Seventy-three percent of adults compare prices online before
making a purchase.
• Seventeen percent of adults search social networking sites before
making a purchase, and the number is growing.
• Traffic to flash sales Websites increased more than 70 percent from
January 2010 to January 2011.
• Websites that don’t engage in conversion optimization typically
run at just 1 percent to 5 percent, with variation between
different industries.


Google’s share of searches dominates across markets
The global picture for search engine share across the top markets
indicates that except for the United States and Hong Kong, Google’s
dominance of executed searches is nearly insurmountable.

Share of searches by search engine — January 2011

100%

80%

60%

40%

20%

0%
U.S.A.

U.K.

Brazil

Australia

Canada

France

Hong Kong

Google Yahoo! bing


In the United States, Google’s share of executed searches, which peaked in
2009 at 72.1 percent, has dropped for the second year in a row, to 68 percent.
While the combined Yahoo! and Bing share continues to grow steadily,
the combined share of 27.4 percent is a distant second to market-leader
Google’s slice of the pie.


Searchers are using fewer words per query
Changes in words per query are another indication of changes in the
search landscape. When we look at year-over-year data for fourth-quarter
search query length, we find an increase in three- to four-word queries in
Q4 2010 versus the same time period in 2009.

U.S. Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010
5+ words 16.10% 17.40% 18.60% 18.38% 17.94%
3–4 words 34.50% 36.70% 36.70% 34.23% 35.01%
1–2 words 49.40% 46.00% 44.70% 47.39% 47.06%


While these statistics appear to buck the trend of longer queries over time
as searchers become more sophisticated and aware of search engine
capabilities, the increase in the midtier query length is likely due to the
introduction of Google Instant in Fall 2010. This new Google feature
automatically populates the search engine results as the end-user types a
query. Many searchers are clicking on results in advance of finishing their
search requests,

Seventy-three percent of adults compare prices online before making
a purchase
When it comes to researching products online, the most popular activity is
price comparison, followed by general product research. Only 17 percent of
adults search social networking sites initially, but the number is growing.

Agree: All adults

I price-compare online before making a purchase 73%

I research products online before I make a purchase 69%
I search blogs for information on products before I make
20%
a purchase
I search social networking sites for information before
17%
making a purchase


Channel-crosser:

Combine a series of search and offline data points taken over time
to obtain a 360-degree view of a consumer. An isolated online
experience gives a marketer one real-time view. When combined
with other data sources, the picture tells a more complete story.


Traffic to flash sales Websites increased more than 70 percent last year
Despite economic turmoil, declining consumer confidence and decreases
in consumer spending, traffic to limited-time discount luxury goods sales
(flash sales) has increased more than 70 percent from January 2010 to
January 2011. While at first it appears counterintuitive that consumers
would spend their recession dollars on high-end labels, the growth of the
flash sales category reinforces the theory of affordable luxury.

Market share of U.S. visits to flash sale sites

0.020%

0.015%

0.010%

0.005%

0.000%
03/01/2008

08/23/2008

12/13/2008

04/04/2009

07/25/2009

11/14/2009

03/06/2010

06/26/2010

10/16/2010

03/05/2011

Flash sales (customer category)

Weekly market share in “all categories,” measured by visits, based on U.S. usage
Created: 02/06/2011 © 1996–2011 Hitwise Pty. Ltd.


Tips for improving conversion optimization online
In conjunction with search marketing strategies, marketers must also
focus on improving the conversion of Web traffic to sales and email
subscribers. In 2011, the adoption of conversion optimization services
will accelerate as awareness of sales growth and Website profitability
becomes known and accepted.

However, research shows there is a significant lack of investment into
practices intended to convert Web visitors into customers. Unfortunately,
conversion rates on most Websites that don’t engage in conversion
optimization typically run at just 1 percent to 5 percent, with variation
between different industries.24 If you’re looking to become one of the
pioneer businesses optimizing conversions online, here are a few insights
from Experian Hitwise to help you get started:7

• Know what your customers want — Website copy needs to be
concise and objective. High-quality Website copy that resonates with
your market can have a dramatic impact on your site’s ability to convert.
• Present an appropriate call to action — Always have a clear call to
action. You may want customers to provide contact details or sign up for
an offer. You should not, however, prompt a consumer to buy too early
into the sales process.
• Design forms with the user’s goal in mind — Design your pages to
present the information in an easily digestible format and help users to
complete their tasks. Marketers sometimes forget that visitors don’t want
to fill out forms; they want what will be given to them as a result of filling
out the form.
• Test your processes — Even though a one-page checkout may seem
like a good idea, it may not perform better than a four-step checkout.
Whenever you’re making substantial changes to processes like this, it’s
important to test them or risk a drop in conversion rates. Like forms,
marketers sometimes forget that checkouts need to feel painless to
customers.
• Simplify navigation, search and filtering — The ease of finding
important, decision-making information on a Website can affect
conversion rates. Helping visitors to narrow and refine their searches
can help them find the most appropriate product (e.g., birthday gifts
under $75).

24
Experian Hitwise Australia and PureProfile, May 2010, survey of more than 300 marketing
professionals across industries and roles.


Multichannel
customer experience

customer experience
Multichannel

Multichannel customer experience
As new technologies evolve, marketers are left scrambling to implement
strategies that reach their customer targets through preferred channels in
ways that drive desired behavior. By including more ways for consumers
to interact with a brand, marketers can significantly drive the likelihood for
customer response upward.8

Key findings
• Fifty-seven percent of marketers measure results for each channel,
but only 28 percent measure the influence of one interactive channel
on another.25
• Direct mail is still effective, with an ROI of $12.53 for every dollar
invested, according to published results from the United States
Postal Service® and the Direct Marketing Association.
• Direct-mail spending is projected to grow 5.8 percent to $47.8 billion
this year, driven by acquisition mail increases.
• Using Quick Response codes allows marketers to monitor the
success of their direct-mail campaigns as it ties to digital
efforts — such as online traffic and coupon downloads.
• Ninety percent of U.S. businesses suspect that their customer
and prospect data might be inaccurate in some way.
• Worldwide, 59 percent of businesses identified the main reason
for lack of trust in contact data as human error.

25
Forrester Research, Inc., Upgrading Your Interactive Measurement Strategy, December 2010


Marketers need more multichannel measurement and optimization
In a marketing environment where customers purchase and interact across
multiple channels, measurability and efficiency become increasingly
important. Through a December 2010 study of U.S. interactive marketing
professionals, Forrester Research reports that 57 percent of marketers
measure each of their channels, but only 28 percent measure the influence
of one interactive channel on another.269

Tip: When using multiple promotions at the same time, it is critical
to have a solid program that can analyze incremental sales from
campaigns to better establish metrics, attribute response, measure
performance and model future behavior across all channels.

Tactics for leveraging offline data to optimize digital targeting
Offline data is very predictive and effective when used in both traditional
marketing and online for email and digital targeting. For example, a
consumer’s physical address is a key factor needed to accurately assign
demographic and geo-summarized data attributes that fuel targeting and
segmentation. As marketers transition more of their campaigns online,
they can leverage their offline data and intelligence about customers and
apply that in a digital fashion. To ensure that your data file fits the above
criteria, ask the following key questions:

• What are the data sources? Just because information is available
online doesn’t mean it is available for marketing use. Data found online
can be copyrighted or restricted by terms of use provisions for that site.
Ensure your information is acquired from reputable sources — public
information, self-reported information and transactions.
• What measures are in place to determine accuracy and quality?
Consumer information changes constantly, so it’s important to take
reasonable precautions to ensure and maintain the accuracy of that
information. Understand how consumer information is going to be used,
and audit it to maximize its accuracy and quality.
• Does the data meet Direct Marketing Association (DMA)
guidelines? As more and more companies use online sources to
compile their data, it has become even more important to be confident
that the data complies with all laws and applicable industry codes. For
the latest guidelines, visit www.the-dma.org/guidelines.

26
Forrester Research, Inc., Upgrading Your Interactive Measurement Strategy, December 2010


Pairing direct mail with mobile can deeply engage your target audience
Direct mail is alive and well. In fact, according to published results from
the United States Postal Service (USPS®) and the DMA, direct mail is
not dead. In fact, it’s still effective, with an ROI of $12.53 for every dollar
invested.27 Furthermore, direct-mail spending is projected to grow 10
5.8 percent to $47.8 billion this year, driven by acquisition mail increases.2811

Cataloger alert: Rest assured that this year’s price increases are modest.
The USPS rate increase is limited to the Consumer Price Index (CPI) cap of
1.7 percent, with the new prices becoming effective April 17.

Marketers working to integrate mobile into their marketing mix have
the ability to engage their audience and facilitate immediate two-way
communication with consumers using QR codes. QR codes allow
consumers to immediately and seamlessly access special online coupons,
specific landing pages and other data directly from their mobile devices.
These QR codes allow marketers to monitor the success of their direct-
mail campaigns as it ties to online traffic and coupon downloads.

Channel-crosser:

While group coupons are seen as the perfect solution for local
online commerce, successful deals with national retailers, both
bricks-and-mortar and online pure-plays, indicate that this
movement will take its place alongside email and search as a key
channel for multichannel marketers to consider.

27
Winterberry Group, Outlook 2011: What to Expect in Direct and Digital Marketing, January 2011
28
USPS, Deliver: The Resurgence of Mail, December 2010


Contact data inaccuracies persist
In the digital age, businesses are relying more heavily on contact
data for a variety of critical business functions across channels, from
communicating with customers and prospects to generating analytical
data that can inform a variety of business decisions. Because of this, it
is important for even the most basic contact information to be complete
and accurate.

A recent Experian QAS survey confirmed that businesses do realize the
importance of accurate contact data; 87 percent of surveyed organizations
stated that they have a documented data quality strategy. However,
businesses are not doing enough to solve this problem. Ninety percent
of U.S. businesses suspect that their customer and prospect data might
be inaccurate in some way. In fact, respondents said that as much as 23
percent of their total records might be inaccurate.

Tip: Find data sources that successfully link email addresses,
IP addresses and mobile numbers to a name and an address. This
ensures demographic, behavioral and transactional data necessary
to drive marketing is properly linked.


Best practices for addressing key multichannel marketing challenges
of today
This is an exciting time for the data-driven digital marketer. As the
promises of one-to-one marketing made in the mid-1990s are coming to
fruition today, never before have marketers had so much to work with in
terms of consumer data. The good news is that while the challenges that
we face today are complex, the solutions are in the foundations that we
have already put into practice within our marketing database platforms.

These challenges, and proposed solutions, include the following:

Challenge:
Creating a consistent, coordinated contact strategy across channels and
all points of contact.

Solution:
A centralized marketing database. Having the right tools accompany your
database to manage content and execute campaigns will help ensure
efficiency, synchronization and overall relevance.

Challenge:
Using data to properly identify individuals in unique channels, such as call
centers, Websites and in-store.

Solution:
Expand the data elements used in the customer data integration (CDI)
functions of your database. Data hygiene, data parsing and robust
matching technology will help to create a clear, single view of the customer
across all interaction points.

Challenge:
Customers control the interactions today, not marketers. However, we can
ensure that we’re in the right place at the most optimal times.

Solution:
Be prepared. In addition to the steps listed above, your marketing efforts
should be coordinated and prepared to react in a real-time manner — able
to send triggered relevant messages through a variety of mediums.


Challenge:
Finding the ability to listen to customer conversations and react in an
authentic voice. After all, your brand is not what you say it is; it is what your
customers say it is.

Solution:
Integrate social media and brand monitoring solutions into the database to
understand who is saying what, and react in real time to the conversation.
For example, high-value customers who have a complaint can immediately
be addressed by a phone call or a return tweet. Less-valuable customers
may only need a Twitter response or a direct message.

Bad data is leading to increasingly negative business results
Because of low accuracy levels, 81 percent of organizations said that they
have experienced at least one negative consequence during the last three
years as a result of bad data. Inaccurate data has caused 26 percent of
organizations to lose a potential customer and 30 percent to feel that poor
contact data has negatively impacted customer perception of the brand.

Budget has also been wasted as a result of poor data. Ninety percent
of organizations think departmental budget is wasted as a result of
inaccurate contact data. On average, 15 percent of departmental budgets
were wasted, but this number jumped to 25 percent when the question
focused on marketing departments.

Worldwide, 59 percent of businesses identified the main reason for lack
of trust in contact data as human error. In the U.S., lack of trust was also
attributed to insufficient budget (30 percent), a lack of internal manual
resources (25 percent) and an inadequate data strategy (25 percent).2912

29
Experian QAS and Dynamic Markets, 1,320 respondents from seven countries, across industries and
functions, January 2011.


Data quality quick tips
Fortunately, many tools exist to help businesses clean contact data.
Because each business has different contact quality problems and needs,
it is important to tailor strategies to fit each business. However, there
are some similarities, as illustrated by the aforementioned research. The
following tips can help businesses choose the right solution:

• Data usage — Understand how your data is used and which data is
used most frequently. Do you rely more heavily on email campaigns
or direct mail? Does your organization remove duplicate records by an
address or a phone number? How are statements or bills sent to
customers? Answers to these questions will help determine which data
should be corrected first.
• Entry points — Understanding how data enters a database will allow
you to select tools for those given points of entry. Websites, call centers,
point-of-sale locations and in-house data entry processes should all be
reviewed. It is also important to take note of what types of data are
coming in at each entry point.
• Data errors — Figure out what type of data seems to be the most error-
prone within a specific database. Running data through a batch-type
engine and flagging the most prevalent errors will be helpful in this step.


Multichannel marketing integration quick tips
Even though most companies are doing multichannel marketing, very
few are truly integrating their cross-channel initiatives. Gaps include
the lack of a unified customer segmentation framework across channels
as well as incomplete measurement of the impact of each marketing
touch on customer behaviors. Here are a few quick tips to keep in mind
when planning and assessing the performance of a multichannel
marketing initiative:

• Bring all marketing leaders together to determine the right cross-
channel approach for an organization
• Agree on metrics that define business success-revenue, profit,
customer value
• Consider testing business rules for attribution based on business
experience and an objective view of customer touch-points
• Move to the next level by identifying an analytic partner to analyze
data and apply intelligence from the analysis to determine the best
attribution method
• Continue refining the process and adjusting marketing
investment accordingly

Tip: According to the Marketing Analytics experts at Experian
Marketing Services, “last click” is still the most popular method for
attribution measurement. However, marketers should use more
sophisticated analytic methods for multichannel attribution to help
ensure that marketing budgets are allocated for the most impact.


Experian Marketing Services
955 American Lane
Schaumburg, IL 60173
1 888 404 6911
experian.com/marketingservices

experian.com/marketingforward

© 2011 Experian Information Solutions, Inc. All rights reserved.

Experian and the Experian marks used herein are service marks
or registered trademarks of Experian Information Solutions, Inc.

Other product and company names mentioned herein are the
property of their respective owners.

Experian is a nonexclusive Full Service Provider Licensee of the
United States Postal Service ®. The following trademarks are
owned by the United States Postal Service ® : USPS®, Standard
Mail ®, United States Postal Service ®, ZIP™, ACS™, NCOALink®
and ZIP+4™.

The price for Experian’s services is not established, controlled or
approved by the United States Postal Service.

2011 Digital Marketer

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