Identify Top Advertising Targets by Merging, Mining Email Databases: 6 Steps to Double Ad Sales

CHALLENGE

Edouard Leeuwenburg, Email Marketing Product Manager, Telegraaf Media Groep N.V, recognized that his publishing company wasn’t realizing the potential of their large email database.

The Dutch publisher had more than 5 million subscribers to various email newsletters associated with their 26 publications. But their email databases weren’t integrated, and there was no coordinated newsletter strategy. So, there was little insight into subscriber demographics, and little revenue generated from the newsletters.

“We have 5.2 million unique email addresses in our database with a lot of customer information, which is a lot when you consider Holland has only 16 million people,” says Leeuwenburg. “For a media company with more need for segmentation and customer knowledge, it’s a real asset.”

To capitalize on that asset, Leeuwenburg and his team wanted to create a centralized email database and develop a sophisticated banner ad program that used cross-indexed subscriber profiles to segment and target campaigns. It all started with convincing chief executives to invest in a new system, and coaxing product managers to share access to their individual databases.

CAMPAIGN

Here are the six steps Leeuwenburg and his team took to create a centralized email newsletter database and develop targeted, segmented campaigns:

Step #1. Gain support for centralization from top execs and product managers

To get buy-in from top executives and product managers, Leeuwenburg and his team outlined the benefits of a centralized database and a new email banner ad program. They first met with managers in charge of individual newsletters:

- They held information sessions to share tips on how each group could enhance their email marketing programs through segmentation.

- They made a business case for the change by offering to have the centralized email team pay for infrastructure and all message sending in exchange for letting the team sell banner ad space in those newsletters.

- They demonstrated that each newsletter group had valuable data to contribute to the overall goals, and that each would receive additional benefits for sharing their data.

For example, owners of some of the larger email databases argued that their volume of names made them more valuable to the program. But Leeuwenburg’s team explained that many of the smaller databases collected more demographic data, which would add value to cross-indexed campaigns.

Next, they met with the company’s board of directors to make the case for investing in a new email management system:

- Based on their meetings with newsletter managers, they demonstrated that there was demand from the lines of business for more resources.

- They outlined their goals for revenue from selling profile-targeted banner ads across newsletter titles to demonstrate the potential ROI for the new system.

“We said, ‘Let’s use the newsletters to get more loyalty from our readers and really use them as a marketing channel,’” he says.

Step #2. Combine email databases into one platform

With approval from the board and product managers, the team selected a new ESP and began migrating individual databases into a central list of names.

- All the databases were connected to the central system using APIs. Each night, the system automatically queried individual databases to download all new subscriber information into the central database.

- The next day, a data-mining engineer logged into the system to see whether new sources of data had been imported into the central database. Then, he could compare new email address and subscriber information to existing files and see which were unique consumers, and what additional information fields were available for individual subscribers.

- Newsletter managers wanted to retain some control over the information they requested on their opt-in forms, so the team did not create a standard opt-in template for all newsletter subscriptions.

However, they received backing from the board of directors to implement a standard, company-wide privacy statement for all newsletters, which allowed them to use those email addresses for cross-indexed campaigns.

Step #3. Create matrix of customer profiles and segmentation options

Creating customer profiles that could be cross-referenced for campaign segmentation was the goal of the centralization program. To help the team determine what segments were available, they created a matrix that represented different customer profiles.

- The matrix featured rows representing every newsletter database in the company. Columns represented different pieces of information available for the subscribers within that database, such as:
o Email address
o Name
o Postal code for geo-location and housing value estimates
o Age
o Gender
o Employment information (from the company’s job-search site)
o Automobile ownership information
o Financial interests (form the company’s financial-services site)

- The matrix used color coding and percentages to represent which newsletters had high concentrations of specific types of demographic information because each database collected different information about subscribers. For example:
o Fields in green indicated a high degree of information available in that category
o Fields in orange indicated a medium degree of information available in that category
o Fields in red indicated little information available in that category

In addition to color-coding, each field displayed the percentage of subscribers for which information was available. For instance, if 50% of the addresses in a database contained geographic information, the field would be colored orange and the figure “50%” would appear in the appropriate field of the matrix.

“[Our data mining engineer] has a pretty cool overview of the entire database,” says Leeuwenburg. “He can see what segments are possible.”

Step #4. Target banner ad campaigns to subscriber profiles and available space

Using the matrix, the team began offering advertisers segmented banner ad campaigns based on their goals and target audience.

- First, the team asked the advertiser to outline the purpose of the campaign, such as branding or lead generation.

- Next, they asked for the advertiser’s ideal target audience, based on categories represented in the centralized database, such as:
o Age
o Gender
o Geographic location
o Interest area (e.g., cars, financial services)

- Based on those characteristics, the team would query the email database to develop a list of email subscribers with the right profile. Then, the system would map which newsletters those subscribers received, and which banner ad space was available in the upcoming newsletters.

- The team then created a campaign ID in the system, which would automatically serve a relevant banner to subscribers on the segmented list.

Step #5. Monitor campaign metrics for further targeting

The team used email metrics to further refine targeting capabilities and improve campaign performance.

“What you fill in on a registration form is not who you are,” says Leeuwenburg. “What you click on – that’s what you really are.”

- The team traced specific clicks on a banner ad back to customer profile group. They could see which types of subscribers responded to specific campaigns and offers.

An automobile manufacturer running a campaign with the company, for instance, wanted to target young consumers, based on the profile of the car’s typical buyer. But when examining metrics from the campaign, the team saw an equally strong clickthrough rate from older consumers. That data gave them additional targeting options to present to the advertiser for future campaigns.

- They also compared email metrics for segmented versus non-segmented campaigns that ran across newsletter titles. They compared the response rate for targeted ads to those sent to a broader audience.

Step #6. Use newsletter banners to promote subscriptions

Besides serving advertisers, the team began using segmented email inventory to target subscription offers for their paid publications. In August, 2008, for example, the team created a promotional offer for subscriptions to their flagship newspaper, De Telegraaf:

- The “8/8/08” campaign offered new subscribers eight weeks of the newspaper for eight Euros.

- Using information from the centralized database, they targeted offers to email newsletter subscribers who were not yet subscribers of the newspaper.

- They also ran banners for the promotion on the newspaper’s website, to compare results from the targeted email to a non-segmented audience.
RESULTS

Combining email lists and offering segmented advertising campaigns has created a powerful new growth engine for revenues:

o Clickthrough rates for targeted email banner ads increased 900% over CTRs for non-targeted campaigns.
o Email banner ad sales increased 94%
o Cost of email marketing declined 25%

They saw the power of segmentation first-hand with their own subscription promotions:
- Newsletter ads for the “8/8/08” campaign delivered 650% more subscribers than the website banner ads did.

“The banner space is our focus for earning money from email marketing in the short term, with room for growth.”

Based on the success of banner ad campaigns, the team is working on strategies to expand their email marketing efforts. They’ve begun offering premium co-branding deals that let advertisers sponsor editorial content and receive 30% of the banner ad space available in the newsletter.

They’re also implementing a Web analytics system that will use cookies to collect additional data on email subscribers’ online activity. Combining the information from their email system with their Web analytics system will allow the team to further refine their behavioral targeting capabilities for email campaigns.

Useful links related to this article:

Creative Samples from TMG’s Email Newsletter Campaigns:
http://www.marketingsherpa.com/cs/tmg/study.html

TMG uses Silverpop as its email service provider
http://www.silverpop.com

Telegraaf Media Groep
http://www.telegraaf.nl/