David Baker: Consumers have changed, so why hasn’t your marketing?
Consumer digital consumption has changed a ton over recent years. While consumers are Snapchatting on iPhones and shopping on iPads while watching connected TVs, the email experience hasn’t changed a lot, outside of location. Looking through rose colored glasses tells us the ROI is still significant, and a mainstay for virtually every marketer that has a digital presence, which has led to a consistent, but not that impressive industry growth over the last decade. The bad news is, it’s not grown proportionate to other advertising channels as a percentage of total marketing spend.
So the big question to ask ourselves: Is email really evolving? And how much innovation can it absorb or can it? We can’t control the inbox or ISPs, we can’t control regulations or country level privacy laws. The challenge that email marketers face is how to balance the utility of email with innovations in technology. It’s like trying to juggle knives while playing dodge ball. You don’t want to cast aside tried and true characteristics just to chase some trendy new thing. But at the same time you want to ensure that your program is optimized to the current shifts that digital consumers are going through. The need for instant gratification, the need to be entertained and the need to fulfill on many of the things you do online (subscription services, orders, managing your online persona) - all still have deep roots into the consumer’s habits, that vary by generations. To break this down, you need to look at the root of where innovation could potentially evolve.
- Email has a functional value to consumers. Consumers prefer to hear from brands via email over any other channel, according to Marketing Sherpa. But the value exchange varies greatly. Email is a preferred channel for notifications, information, and promotion, but the timing of each is the real key to the brand value exchange. This is where many email marketers miss, largely due to technology limitations and/or resource constraints. Innovation in this area is both technology and in process. The old campaign production process will fail to scale and offer little adaptability in a resource constrained world. We are already seeing a backlash to this as the Large marketing clouds eliminate their service layers and more technology marketers are taking control of their programs vs. outsourcing. The new world will require you to look at location, timing and content in entirely new ways and outsourcing this will drain the valuable Intellectual Property you develop. To deliver on this it will require prioritizing your portfolio of email in new ways and aligning around these. To limit subscriber decay that is roughly 2.4% per month, the new threshold will be content timed to “me” vs. “we”. The days of mass customization or mail merge will be a race to the bottom. Focus on the value exchange and the program will force you down a different path.
- The mediums have changed. In the old days, we checked our email on big stationary computers, tethered by the power cords. The old days of sitting in the Starbucks parking lot to answer emails has changed. We are perpetually connected, everywhere. As the shift to small devices hit a peak, the industry pushed back and we’re seeing a rise in smartphone getting larger and tablets getting smaller. All trying to adapt to this entertainment convenience culture we’re seeing. Its evolved very utilitarian user interfaces clearly aligned around two dominant operating systems (Android and IOS). the industries answer over the past decade has been in redesigning the email layout to adapt to the smaller devices. Yet, what we are clearly seeing is as you go smaller, so does your engagement (in terms of conversion). The days of one email = conversion is shifting dramatically. Innovations will be centered on deep linking email with mobile apps, the continued emergence of smart payment systems on mobile and how you coordinate content cross email, mobile web and in-app. It will take more communications at the right time, vs. more of the same. If you aren’t synched with your mobile partners, you better schedule lunch soon.
Consumer habits are largely dictated by marketers. Why is 8am-10am a preferred time to drop catalog or promotional messages? Sure, you might say, that is when people go to work, are commuting in and don’t forget the rejuvenation factor of caffeine induced mornings and its sway on shopping. This is one of the classic examples that the industry has battled for a couple of decades. Do we race to get Pole Position in the morning or have we developed a business rule where consumers now expect that email in the morning? I think the stats and trends tell us, it works for 20% of your viewers, 3-5% of the people that take action beyond the email and less than 1% that actually buy. For a retailer, this is adequate, as long as you can replicate it regularly. For a content marketer, it’s about the eyeballs and less acceptable. Send Time Optimization that lends more insight into patternistic views of engagement has been around for quite a while, but the algorithms behind it are much smarter today. This innovation will go much farther when it begins to break this down by location inferences (who really is commuting, vs. sitting in the office, vs. at home) and by device biases and it is tied into conversion traits that can be optimized. The new world will be less about the schedule and more about being programmatic. Less about deadlines and more about continually running programs. The real benefit is not optimizing the 20% or the 1%, it’s optimizing the 80% and the 4% new members you’ll add each month. To deliver on this, it will require more progressive views of automations, more real time views of optimization and liberal uses of machine learning to help predict potential patterns.
- Interactions are the new value exchange. Being real-time and contextual is the true value exchange nowadays. Problem is “real-time” means something different to different people. Do I want a purchase confirmation within 1 minute or is 5 minutes acceptable? Do I trigger off a cart abandonment immediately or a day later? There isn’t one right answer. How can a marketer operate if the playbook is changing so often? But thats the point, interactions will vary so greatly by audience, device, location, preferences, and the context of the interaction. This is where machines help. These interactions are the catalyst to value exchanges, even if they don’t end in a purchase. This is where innovations in understanding event data will take you to new places. Innovations in automation will help you think about scenarios, not static interactions. The days of setting up a shopping cart automation and the inability to test within is over. Throw your playbook out and you will think about traffic, engagement, audiences at new dimensions you’ve never been able to see in near real-time. The balance of great personalization, great timing with being too creepy is the art every business will need to address, all driven by event data. The real innovations will be in data visualization and the portability of decisioning. You have to be faster, you have to maximize inbound, Not sure if Artificial Intelligence and Bots will bridge this, but I”m really bullish on this transformation of interaction management. it is primed for disruption.
- How we look at testing hasn’t changed much. Testing one or two attributes at a time makes it difficult to come up with meaningful insights. A/B testing is only as good as the hypothesis going in and is rarely institutionalized in ways that build on each test. This is what algorithms do, this is what new approaches to sampling brings, it makes you rethink what you want to optimize, when and how often. Email has always suffered the statistical significant drag. When you have less than 20% that is digitally breathing, 5% clicking, and you drop all your email within an hour, you have inherent limitations to what you can optimize. Email marketers need to think like ad optimizers, not catalog marketers with a send button. Tests will be iterative and ongoing, not point in time best guesses. Institutional learning will evolve from what subject line worked on this campaign to what categories of subject line strategies work by audience type in tandem with creative , messaging and offer strategies. The real innovation in this area, will be a combination of technology and reinvention of how organizations look at optimization. In a perfect world you’d optimize for all variants at the same time. This isn’t Pavlov’s Dog anymore. 20% off works til 20% is a business rule to buying, then it simply becomes a lifetime value devaluation game. This is fundamentally a different range of thinking and a long-tail view of performance optimization. Innovation will be defined by marketers ability to scale new thinking and incorporate into how you operationalize it. Marketers won’t solve this looking at testing alone, it requires programmatic changes to your email marketing portfolio.
Innovation doesn’t always mean bending lasers. All major innovation in mankind’s history all have centered on the compression of time and space, and this is no different. The consumers will dictate marketers focus and real-time, whether you read the leading indicators of change or react on a business downturn, innovation will happen. Which part of the curve will you be on and who will be in the sandbox with you.