Buying a Kindle DX ten months ago and now an iPad (delivered in the first batch on April 3rd), it really struck me recently how messy (or exciting!) everything is getting.  Mash-ups of business models are happening everywhere, and at an accelerating pace.  Here are a dozen big trends that I'm watching for this year, some relevant to Bazaarvoice and others not so much:

1. After Amazon.com launched the Kindle, it quickly became their number-one seller.  The free wifi to download a book from anywhere was just too compelling to pass up, along with the very easy to read screen.  Amazon projected that it would increase compulsive buying of books to the point where the wifi was subsidized by Amazon.com.  And it is working (for now).
2. And while we're talking about compulsive buying, consider Amazon.com Prime for "consolidated" buying vs. other retailers.  Other retailers have tried to emulate Prime and failed to do so.  It is difficult to do – you have to be very quick to ship (i.e., many distribution centers), with the availability (i.e., tons of inventory), to really trigger the compulsive buying effect.  There are profound implications on the long-tail as Amazon.com expands.  And, in their most recent quarterly report, Amazon's same-store U.S. sales were up a staggering 75%.  It seems that both the Kindle and Prime are triggering the compulsive buying effect, coupled with Amazon's long-tail inventory.  Many retailers same-store sales are flat to down as we come out of the Great Recession, and Amazon.com's stellar performance has to be noticed by them.  Our Chief Marketing Officer, Sam, blogged about this in November of 2008 and it is even more true today.
3. Enter the iPad.  The week Apple launched the iPad it sold 450,000 units with 600,000 books (via iBooks) shortly after.  Now that I have had the iPad for awhile, I don't just think of it as competitive with the Kindle or other eReaders or "tablets" – it is also competitive with netbooks (another mash-up), as Steve Jobs eagerly stressed.  Just project out a few years when the iPad has 256gb capacity, instead of the 64gb my model has today, combined with the new iPhone 4.0 OS (coming out at the end of this year) that enables multitasking, a micro-USB port or two, and wireless streaming everywhere allowing for seamless connectivity no matter where you are.  The iPad already has a keyboard docking station, which I also bought, and, of course, bluetooth for connecting to wireless keyboards.  And new TVs and DVDs are coming out with built-in home network and wireless capabilities, allowing you to stream TV to laptops, netbooks, desktops, iPads, iPhones, or whatever you choose to use around the house (or while you are on the road if you have a Slingbox or something similar).  The bottom line is that the genius author, Kevin Kelly, got it right in this Wired magazine article (comparing tablets to a portable window into the world).
4. Will the iPad hurt Kindle sales?  Many Wall Street analysts and journalists think so.  My personal take?  Well, I was skeptical about whether or not I would enjoy reading books on it as much as I do the Kindle.  Initially we were just buying the iPad as a family device for watching movies, playing games, and keeping up with blogs, Facebook, and Twitter.  But now with the Kindle app loaded on my iPad, adjusted to a sepia "paper" color and 60% brightness, I can read for hours just fine.  But to really see how the iPad transforms books, just check out the book it comes pre-loaded with (a Winnie the Pooh children's book, which is, of course, in beautiful color).  No color on the Kindle.  Every try to read a no-color book to a child?  And then check out the app, The Elements, which has gorgeous color, 3D illustrations, and full-on video.  Or look at what Wired magazine may be planning to do with tablets.  I was watching Alice in Wonderland with our daughter recently, and Alice said (shortly before falling down the rabbit hole), "What is the use of a book, without pictures or conversations?".  Just look back in history at the adoption rates once color television came out vs. black-and-white television.  It is just a matter of time before our children are carrying interactive tablets in their backpacks instead of heavy textbooks.  Yes, I think it is going to impact Kindle sales.
5. Ok, let's talk about mobile.  Google's Android (open platform) continues to gain traction vs. Apple's iPhone OS (closed platform).  It wasn't surprising to me when Eric Schmidt resigned from Apple's Board of Directors.  I moderated a panel of amazing venture capitalists at NRF and Shop.org's Innovate conference back in March, where my good friend Peter Fenton of Benchmark Capital predicted that Android would overtake the iPhone OS over time.  Of course, Android will power tablets too.  We've seen this movie before as Apple stayed closed vs. the PC world being open.  Will the movie be the same this time?
6. Mobile is now at a tipping point, with GPS built in, good camera phones, and great web browsers (e.g., Safari and Chrome).  We'll see a lot of mash-ups in this area as mobile is increasingly used by consumers while in stores, which will one-up the mobile use we've seen in social commerce so far.  Interestingly, the VCs on my NRF and Shop.org panel in March thought it would take several years, so our prediction about "the year of mobile" in 2009 may have been a bit early, although I would argue that the iPhone's rapid adoption that year did change the game.  And it certainly hasn't slowed down Mary Meeker at Morgan Stanley to produce the most comprehensive report (at 424 pages) I've ever seen on the state of the mobile industry, nor did it prevent NRF and Shop.org from having a Mobile Boot Camp at the March conference.
7. How about blogging?  My guess is that blog-post length has decreased (this post aside!) as Facebook has increased to a longer status format and people have become more and more used to Twitter's 140-character length updates.  Perhaps blog views have also decreased.  This leads to more "lightweight", or surface-level, conversations than the deeper-thinking conversations on blogs.  But we'll survive just fine.  I simply don't buy Nick Carr's arguments but I'll debate that later if you wish.
8. Although this would be the obvious place to discuss this trend, I'll purposely stay away from Facebook Like vs. Google Buzz vs. Google AdSense as my co-founder and our Chief Innovation Officer, Brant, is addressing that in a future post.  But needless to say, social is permeating the Web and that trend is accelerating, so we will continue to innovate quickly in this area.
9. Let's talk about transparency.  At the Liberty Interactive NetLeaders Forum in 2008, I remember Rich Barton, founder of Expedia and Zillow, presenting, "everything that can be reviewed will be reviewed [on the Web]".  He showed us examples of CEOs being reviewed on Glassdoor.com.  My opinion?  This will lead to a company culture revolution, which is part of the reason I feel so compelled to write my forthcoming book, How to Make Your Company Suck Less.  And Chris Fralic of First Round Capital as well as Kamal Kirpalani of Bazaarvoice recently asked me to review them on Unvarnished.  I wrote about transparency awhile back, based on a leadership talk I gave at The Wharton School.  In short, I think this is a very profound trend that will not only cause a renaissance in commerce but also in politics, government, and all types of human activities and relationships.
10. At Bazaarvoice, we're leading a revolution of marketing and merchandising with social commerce and user-generated content – or (my preference) digital word of mouth.  Digital word of mouth is quickly becoming the central point of insight for marketers and merchants.  We are writing the marketing and merchandising textbook of the future in our work with our clients (read my previous thoughts on this, from when we reached out 100-billion-impression milestone in February).  Digital word of mouth is getting mashed-up versus the aging focus group, NetPromoter, customer survey, and other methods that get "close" but aren't nearly as pure as how customers speak to each other with no bias vs. how they communicate while in the context of talking to the company.  Things for you to consider here: a) the market has always been based on conversations (read this chapter that was the namesake of our company), b) reviews are the new advertising as we are already beginning to commonly see, c) consumers write reviews to help each other (i.e., altruism, or with no bias), and d) this trend is why Google and Nielsen partnered with us.
11. Channel marketing is becoming more wired.  We see a major trend in this area with the adoption of our BrandVoice and BrandAnswers solutions.  We are at the beginning of this shift, and it is logical to think that, just as offline to advertising shift has fueled online advertising, we will see a similar accelerating trend as suppliers of retailers become more savvy at online channel marketing in a world where 80% of consumers read reviews while they are shopping (Nielsen's most recent stat).  And, of course, mobile is a major accelerant of this trend.
12. Finally, the digital executive will continue to rise in prominence as companies work hard to make sense of the rapid shift to a more digital, hyper-connected world.  For some early indicators of this, look at Raul Vazquez's promotion from CEO of Walmart.com to EVP and President of Walmart West.  Or Toby Lenk's, the founder of the original eToys, rise to President of Direct at Gap.  (I should mention that both are among the best speakers we have ever had at Shop.org events, where I proudly serve on the Board of Directors.)  These are very exciting times for those who really "get it" in digital.

For the long-term potential of the Web, I recommend you check out Kevin Kelly's speech at TED in Dec 2007 or his similarly brilliant article in Wired magazine.  And if you have time to get really far out in thinking about technology's impact on the world, just read chapter 1 (trust me, it's enough) of Ray Kurzweil's The Singularity Is Near: When Humans Transcend Biology (thanks to my good friend, Ethan Holland at American Eagle, for suggesting it to me).

Click here to view the embedded video.

A few weeks ago, during a visit with my almost four year old niece, Zoey, I heard her scream, "I hate commercials!" during a commercial break as she watched one of her favorite TV shows.  Toyota, this is your nightmare.  Or at least, this will become your nightmare in about 12 years, when my sixteen year old niece starts begging her parents for a car.  It will probably be whatever make and model her friends are raving about at the time, not the car she saw advertised on TV or the Internet.  [For the record: I am the very satisfied owner and primary driver of a Toyota-made automobile.]

All of this brings to mind a short essay called "Brandalism" written by Banksy, the semi-anonymous British street artist that some authorities call a vandal.  He happens to be my favorite artist, as I find his work to be more thoughtful and politically and culturally relevant than most of the work I see in contemporary art exhibits.  Moreover, his work is truly public, whereas most "art" as we commonly know it sits in private collections, to be appreciated by only a privileged few.  In his book, Wall & Piece, Banksy writes:

"People abuse you every day. They butt into your life, take a cheap shot at you and then disappear. They leer at you from tall buildings and make you feel small. They make flippant comments from buses that imply you're not sexy enough and the fun is happening somewhere else. They are on TV making your girlfriend feel inadequate. They have access to the most sophisticated technology the world has ever seen and they bully you with it. They are The Advertisers and they are laughing at you.

"You, however, are forbidden to touch them. Trademarks, intellectual property rights and copyright law mean advertisers can say what they like wherever they like with total impunity.

"Screw that. Any advert in public space that gives you no choice whether you see it or not is yours. It's yours to take, re-arrange and re-use. You can do whatever you like with it. Asking for permission is like asking to keep a rock someone just threw at your head.

"You owe the companies nothing. You especially don't owe them any courtesy. They have rearranged the world to put themselves in front of you. They never asked for your permission, don't even start asking for theirs."

To some, the passages above probably sound a bit militant.  To me, they are a wake-up call and a vision of the future.  The day is coming.  My niece is already there.  Colin Anderson, the 'community organizer' behind the Facebook group mentioned above, is already there.  With those qualifications, he'll probably be President one day.  The question is when will The Advertisers get there?

It will take some time.  In the meantime, advertisers will attempt to delay the inevitable by paying their agencies to build websites that allow us to create clever commercial mash-ups that we can send to our friends and post on our Facebook profiles.  In my opinion, that's the equivalent of handing out free bags of rocks for us to throw at our friends' heads (see first rock reference above).

For the record, I don't have the perfect answer to this quandary.  At Bazaarvoice, we're developing alternative ways for consumers to learn about brands, products, and services and arm themselves with the information and confidence to make the best decision for their needs.  The consumer perspective is the most important one in our product development process, although we sell to . . . The Advertisers.  Products like Ratings & Reviews, Ask & Answer, and Stories are the result.  We're in the first phase of a massive change in the power structure, and we're doing what we can to make that transition a smooth one, one that CMOs and CFOs and CEOs are comfortable with.  We're enabling companies to engage and communicate with consumers in ways they would have never conceived of just a few years ago.  A great example is the Christmas campaign launched by Canadian Tire using our Stories product.  Rather than bombard consumers with a repetitive advertising message (and risk a backlash like the one Toyota has recently experienced), Canadian Tire has simply enabled their best customers to create and BE the advertising for them.

In closing, if you are responsible for your company's advertising spend or if you report to the person that is, please read and share this post.  This post isn't a threat, it's just an opinion piece, and my opinion is that there are other "Saved by Zero"-style backlash movements out there just waiting to happen.  Don't be one of them!  There are more authentic, creative, and meaningful ways to accomplish the same goal and enlist the passion of your most loyal and satisfied customers at the same time.  If you give your customers the tools, they'll become the Sales & Marketing department you wish you had – millions strong, absolutely ecstatic about your products, and willing to work overtime to help you succeed.  (No offense intended to Bazaarvoice's Sales & Marketing teams, who are the best I've ever worked with!)

1. ATG is well known for its personalization capabilities. How would you grade US online retailers, overall, on the quality and efficacy of their personalization strategies? What are the key obstacles these companies must overcome to implement more sophisticated personalization approaches?

I think we need to start with a quick definition of personalization, as it is a term that has been used in many different ways. At the highest level I define personalization as presenting the most relevant information to each customer during each interaction through each channel. In my view it doesn’t mean an individual plan for each individual visitor but rather a refinement of the content presented – images, messages, assortments, promotions, etc. – where appropriate, based on your knowledge of the customer and the reason she’s in your store. I believe the “1 to 1” view of personalization in itself overwhelmed many retailers and stalled adoption.

Based on this definition, I would give online retailers as a group a “C” for their personalization strategies to date. There are a few notable exceptions – and of course ATG clients would rate higher – but in general, industry personalization strategies haven’t moved much beyond a segmented email and a welcome back on the corresponding landing page. However, we’re seeing lots of momentum in the market and many of the obstacles holding retailers back have been removed. Retailers have traditionally been held back by either a lack of actionable knowledge of their customer base or a limitation in available resources or tools to act on the knowledge once gathered.

With the maturing of the e-commerce market, shoppers have mainstreamed and customer segments and shopping patterns have become more evident and defined. And the technology has advanced as well. Business data, merchandising applications, and automation have evolved to the point that merchants can identify trends as they’re happening and respond effectively to deliver more relevant interactions. As e-commerce and online shoppers continue to mature, growth will increasingly depend upon customer loyalty and lifetime value. Personalization is the ultimate loyalty platform and I look forward to the continuing evolution.

2. As personalization continues to mature, what steps has ATG taken to give the merchandiser more (and easier) control to deliver tailored shopping experiences? How do you see user-generated content playing a role there?

We have done a variety of things to continue to enhance the merchants control and capabilities around personalization. First and foremost we have insured that merchants have a consistent and complete view of the customer – all the products they view and purchase, and all the interactions they have with the site. Secondly, we have developed business applications that help merchandisers use this knowledge to easily implement personalized promotions, merchandising strategies, marketing campaigns, and search rules without having to go to IT. Most recently we have added algorithms and automation to our offering that help merchandisers even better negotiate the delicate balance of rules-based vs. automated personalization.

The growth of UGC and consumer participation in general only increases the need for personalization. UGC, while incredibly valuable, can also quickly become overwhelming. As the sheer quantity of content grows, it becomes more important to help each consumer filter through it and find the perspectives, people, and advice most relevant to him in particular. In many industry surveys, consumers have said they value opinions from others “like them.” Personalization provides the ability for sites to connect the right customers with each other.

3. Acquiring eStara in 2006 was a great move for ATG, both for the business and as a value add for your clients. How does this technology extend a brand’s ability to converse with its customers, and what are some of the more innovative things you’ve seen clients do with this solution?

The eStara products have been a great addition to our offering. Today, e-commerce is multi-channel. Shoppers see stores and brands; they don’t think in terms of channels. They expect seamless transitions and consistency across every interaction with a brand, no matter what channel they use. Some customers still prefer to complete a purchase directly with a real person, regardless of how good your site may be. The eStara products enable merchants to proactively reach out to customers on a Web site who may be highly valuable, may be researching a high consideration product, may be stalled online, or may simply have a history of researching online but buying by phone or in a store. These customers can be connected directly from the site to a customer service representative (CSR) who is immediately aware of who they are, their history with the company, and their current activity on the site. The CSR can immediately help the customer accomplish her goal. This ability has an immediate impact on conversions and customer satisfaction and goes a long way to build loyalty.

The eStara team has been incredibly nimble and has worked closely with customers to evolve the product set to meet a very interesting mix of needs. I could spend hours talking about customer examples but I’ll narrow it done to just a couple. Jenny Craig uses eStara to connect browsers on their corporately run Web site directly to their local franchisee. Franchisees love this as it provides a direct business channel for their local outlet. Customers love this as it provides an easy way to get engaged with a local person who can immediately get them started on their weight loss goals. And Jenny Craig loves it as it enforces their brand difference which as they state is “a personalized approach.”

There’s also a viral marketing use of the eStara services that’s taking hold and getting huge media attention, especially in Europe right now. Just one example is of Sporting Portugal, a major Portuguese soccer club, which created an interactive viral marketing campaign using eStara Click to Call. The campaign aimed to increase membership and attendance at games by phoning soccer fans as they’re watching a video online. As a result of the campaign, the all time record for season ticket sales was broken the first day of the season, and the creativeness of the drive resulted in massive interest from the local and national media.

4. Our readers like actionable ideas that are feasible to execute. What are your top 3 ideas for merchants integrating ATG and Bazaarvoice to drive value for consumers and growth?

There are an endless number of actions that a merchant can take once they’ve integrated Bazaarvoice with ATG. The first three things I’d consider are:

A. Combine ratings & reviews with personalization to show top-rated product recommendations by customer segment on your home, search and category pages. Drive more sales with relevant and highly rated products for all visitors.

B. Include top-rated products in campaigns triggered by customer actions such as order confirmation and shipping emails, abandoned cart follow-ups and messages to shoppers using gift lists.

C. Use Click to Call or Click to Chat to reach out to highly engaged customers by targeting personalized invitations to active reviewers. Keep these customers engaged, informed and they’ll happily sing your praises!

5. Tell us about how a customer who really gets it would use ATG's capabilities far more extensively and intelligently than the average.

The customers who truly “get it” realize that one size does not fit all. Different shoppers reach their stores with different goals, needs and tastes. The better merchants are able to understand what the varying desires are and the faster and more completely they are able to respond to them, the more successful they will be.

It’s a simple thought – shoppers return to stores where they have had success. The complexity lies in recognizing that success for one shopper may in fact be failure for another. Some shoppers want to browse, connect with merchants and fellow shoppers and extend and enjoy the process. Others want to get in the store and get out. Some shoppers know exactly what they want and simply want to purchase it in the most convenient manner while others want detailed information, recommendations and advice from others and want to consider their purchase across visits and channels. Further complicating the story, success for a single shopper will vary across shopping trips. History provides a good view of the customer but not necessarily an understanding of how they want to shop today.

I believe the merchants who “get it” are those who think about their Web store as a living entity that is constantly learning, reacting and enhancing customer visits – across channels. They are merchants who plan at a segment level but react to each visitor when they’re in the store. Merchants who balance direct control and automation to deliver effectively and efficiently. Merchants who have moved beyond guided navigation and strive to deliver guided serendipity – where shoppers not only accomplish their initial task but are also delighted by the products that they trip across along their path through your store.

6. The eCommerce space is still quite fragmented, and much of it is beginning to tie into the enterprise marketing space. What are your projections for consolidation in this industry, in light of your recent acquisitions?

I don’t believe any of these “spaces” are distinct – obviously you can’t do commerce without marketing, just as you can’t do commerce without servicing your commerce customers. The smart merchant looks at the end-to-end customer experience holistically, plans an architecture that enables a single view of the customer, then selects a platform that implements the architecture and add-on products and services that fill out all the functionality the consumer expects – without regard to what “buckets” or “spaces” someone thinks they fit into.

The first was a banner ad from The Home Depot, which promoted two eco-friendly products, encouraging shoppers to "Go Green & Save." 

The second was a catalog from Design Within Reach, which cleverly asked "What is Green?" on its cover and featured, again, eco-friendly products, many manufactured from reclaimed materials. 

The last was a direct mail piece from The Container Store, which featured green products from Umbra, a brand I really like.  

As an eco-conscious consumer, I appreciate any company's genuine efforts to go green.  Ideally, this transformation should start with the company's selection of materials, suppliers, and manufacturing processes, so I'm a bit skeptical when I see green marketing without having any knowledge of the company's environmental track record.  Green marketing elicits a Pavlovian response from many consumers, so the lure of easy money makes me wary of "greenwashing" campaigns.  And I'm not alone.  Just Google "greenwashing" and take your pick of websites dedicated to blowing the whistle on companies that stretch the truth on their environmental resumes.

As a professional working within the word of mouth marketing industry, it struck me that green marketing represents a rare, macro-level opportunity for rapidly building or destroying credibility with a very large number of consumers.  I'm creating terminology on the fly here, so bear with me (BTW, I consulted WOMMA's Terminology Framework but didn't find terminology that describes the "why" of word of mouth). 

I think of micro-level word of mouth as something that companies can create for themselves by developing fantastic products, delivering fantastic service, and doing the right things in their advertising, sales, support, etc. to be memorable to consumers, somewhat independent of the external business and consumer environment (never completely independent, but relatively-speaking).  

Green marketing represents a very different opportunity, because the green trend is an externality.  Virtually every company has an opportunity (not all equal, of course) to benefit from increasing consumer sensitivity to the environmental practices of the companies they do business with, directly and indirectly.  To use a metaphor, green marketing is a big wave that everyone gets a chance to surf.  Some will surf it beautifully (authentically), while others will eat sand, and the majority of those in the latter category probably had no business surfing it in the first place.  Which are you, honestly?   

Coincidentally, the day I decided to write this post, eMarketer's "How Green is the Online Environment?" article appeared in my inbox.  It mentions new green marketing-focused research studies from DoubleClick and eMarketer, which may be worth a read if you are planning a green marketing campaign.  Just this morning, eMarketer followed up with another email newsletter article on green consumer demographics.  In summary, there is a strong positive correlation between environmental sensitivity and online engagement, especially among younger consumers.  "Green teens" indexed well above their non-green peers in multiple forms of engagement, from e-commerce and mobile content sites to using digital photo services and participating in chat rooms.  

Clearly, the green segment is a valuable one to target both online and off.  But before doing so, marketers should get comfortable with complete transparency.  The reputation risk of less than authentic green marketing is high, and as we've seen too many times in the recent past, today's online consumer is very adept at uncovering the truth in just a few Google searches.  On the flip side, if your brand has long upheld the green values that mainstream consumers are only now beginning to appreciate, you should absolutely consider using word of mouth marketing tactics to reach new consumers through the experiences, opinions, and recommendations of your satisfied customers.  

1. Let's discuss Omniture Test&Target – I associate Test with Offermatica and Target with TouchClarity, two companies and technologies that Omniture acquired separately.  Why do they fit together so cohesively?

The capabilities that TouchClarity and Offermatica delivered separately didn’t really overlap and are even more powerful when used together. People often think of basic A/B testing as being on one end of the online optimization spectrum and fully automated one-to-one predictive targeting as being on the other. But in between are a variety of other capabilities like geo targeting, targeting to marketer-defined behavioral segments, multivariate testing, and automated champion-challenger tests. Marketers can benefit from all these capabilities and, with Test&Target, can use them together to truly change the game for their business. You may learn from a one-to-one campaign on your home page that a particular behavior is predictive. Well, you might then target the segment of visitors that hasthepredictive characteristic in a landing page campaign. At the same time, you might be running a multivariate test (MVT) on your registration page and an A/B test on calls to action throughout your site. Test&Target averages about 14 active tests or campaigns per customer at any time, which is a testament to the impact of putting marketers in control, enabling them to try ideas quickly, and automating key parts of the optimization process.

2. Our customers are often interested in A/B testing the impact of customer reviews and other user-generated content.  What are the key considerations and test design factors to keep in mind when planning this type of test? What types of impact should customers look for, beyond the obvious like conversion?

Every test will have a specific goal and will be associated with a success metric. A company’s initial tests typically focus on conversion rate or revenue per visitor, but more sophisticated tests also consider metrics like registrations, cart abandonment rate, newsletter sign-ups, and participation in a site’s community. With product reviews, a key event is always review contribution. But whether people page through reviews as a result of your test is also important since it reflects meaningful engagement with the content.

In addition to thinking about success events, marketers should also consider visitor segments when creating their tests. Different types of visitors will respond differently to your alternatives. What matters to the person who frequently contributes to reviews might not matter at all to someone who only reads reviews, which of course suggests that I need to target different experiences and content to different types of visitors. We published an interesting case study from CNET related to this concept. On their mp3.com site, they relocated an artist photo widget to the top of the page for visitors who had previously interacted with that widget in its original, below-the-fold location. They saw a double-digit increase in engagement for those customers. And, the best part of the story is how quickly they turned a simple idea into an effective test using Test&Target. It took less than an hour to create the visitor segments, design the test, and launch it. Nobody from IT was even involved.

With product reviews, there are a lot of opportunities for testing and targeting beyond the product detail page. How can I use product review information in gift registries? Do star ratings in the cart reduce abandonments? Do I get more reviews when I target a homepage review solicitation to past purchasers?

3. The possibilities of behavioral targeting based on social engagement are virtually limitless – how should companies leverage the behavior of writing a review, asking a question about a product, or simply using reviews (sorting, searching, etc.)?

When people interact with UGC, they’re telling you something about what is relevant to them. Marketers can use these signals to target more and more relevant experiences. Of course, they’ll need to use testing to evaluate their efforts because people’s interests change – what was effective last year, last month, or last week might be less effective today. Companies using Test&Target to capitalize on this opportunity have developed a culture of optimization that embraces the ongoing and iterative nature of testing and targeting. Marketers are empowered to make site changes without waiting for IT, can try new ideas quickly, and can use predictive models that respond instantly to changes in interests. Gone are the days when you had to write one MRD to put up a new promotional banner and another MRD to pull it down a week later.

4. How are Test&Target customers using testing & targeting off site, beginning with an online advertisement, to set off a chain of dynamic experiences that result in a purchase on the site?  Can you walk through a real scenario?

Your customers don’t interact with only a single page, and you don’t engage with them only on your site. Optimizing customer experiences across all interactions from the point of acquisition, through the conversion, and in your retention efforts is very powerful. We worked with Bantam Press a few months ago on a campaign to promote a book called SuperCrunchers. One test involved serving different display ads for the book on NYTimes.com and reinforcing those ads on-site after the click. When ads were reinforced on-site, results were dramatically higher than when the on-site experience was unrelated to the ad. And, after the best banner creative for click-through was determined, different types of on-site reinforcement were evaluated. We’re also seeing an increase in email testing and in testing combinations of email and on-site elements. For most companies, even a small increase in conversion off email can have a substantial impact. But testing email in the traditional, serial manner can be slow and inconclusive. With Test&Target, a single email template can be used to evaluate different content – one list of recipients, one email template, many email versions, and a clear winner delivered automatically at open time.

5. How can Test&Target be used to define and analyze different customer personas?  For example, many of our clients have “super reviewers” that have written hundreds of reviews, but many consumers may write only a single review.  There are various types in between.  How can Test&Target help to identify those types?

The anonymous visitor profile in Test&Target is completely open to the marketer who can capture the behaviors associated with different personas. As a marketer, I may have special incentives or offers for people who have contributed over a hundred reviews. I can use the Test&Target profile to store the number of reviews written for each user and then target my incentive only to people who are in my “super user” segment. I might also tell the segment of users who have written 50-75 reviews about the benefits of becoming a “super reviewer”. Combining the Test&Target profile with SiteCatalyst or Omniture Discover, which gives you real-time insight into segments that matter, becomes very powerful. It allows you to easily and quickly act on your analytics and deliver relevance.

1. It’s 2008.  By now, every online business understands that without a web analytics solution, they are flying blind.  That said, not all businesses are sophisticated users of web analytics.  On average, how would you grade the industry overall?

I think it’s fair to say that most online business owners recognize that flying blind is far from ideal.  Understanding an issue and actually working to overcome it are two entirely different activities.  I would give the entire industry a C- overall.  That said, there’s certainly a class of businesses that are far and away excelling at their use of web analytics.

2. What are companies doing extremely well?

Looking at the leaders in the field of using web analytics to manage their business, a casual observer would likely conclude the secret to their success is that they are actively and constantly monitoring the Key Performance Indicators (KPI) of their web business.  That’s a common trait among each of these, but what we’ve seen that separates the high performing companies from the distant followers is that their organizations truly embrace the notion of data driven decisions.  I realize that is easy to say, but these companies look at both the macro trends of their business and constantly break down each KPI to understand the causal factors that drive those trends.  From that, they build business models that describe how a % increase or decrease in those causal factors will impact the value created servicing their online visitors and customers.  It isn’t easy!  Businesses that lead in this area work hard to map their online and offline investments to their topline objectives: Sales, Leads Generated, Advertising Revenue Generated, Bookings, Applications, and the many metrics for Customer Satisfaction, Engagement, and Service.

3. What big opportunities are routinely being overlooked and why?

The odd thing about the online business is that there are so many articles, case studies, and books available on the best practices online businesses are deploying, that it can be daunting to know where to start.  What I see is that many companies don’t start or don’t value the importance of constantly evaluating their business for improvement.  I think there are two areas where a majority of business owners have huge opportunities:

First, many don’t do the math to understand the impact they could have on their business top and bottom line.  Many businesses only look at their KPIs, but have little time, expertise, and patience to look further upstream to explore the complexity of inputs that can impact each and every KPI.

Second, only the very best companies routinely ask their customers if each point of their website is easy to use, meets their needs, and could be improved.  My second point doesn’t stop there, the best companies actually take and embrace that feedback to improve the overall customer experience.

4. Coremetrics has invested heavily in product development that helps online marketers attribute conversions to the right marketing sources.  The online advertising landscape is already complicated enough, so how does the rise of social media and user-generated content further complicate the process of attributing your marketing results accurately?

Since our founding in 1999, Coremetrics has been focused on delivering analytic solutions that provide marketers the most accurate measure of conversions to each and every marketing source, whether it’s a first click, last click and/or any click in between.  To do this, Coremetrics doesn’t rely on just measuring a visit or session, but is focused on measuring each and every interaction a Visitor and Customer has over time with all Marketing and content.  Measuring the impact, influence, and value of social media and user-generated content on Customers and the business is something Coremetrics does right out of the box without need for additional site tagging or customization.   Measuring and attributing value to these is not hard for a web analytics solution that is inherently Visitor based.  What’s hard is determining how to influence customers in both the social networks and those users generating content.   If you dialed back to year 2000 to the first marketing message of Coremetrics, you would find our tagline was short and to the point: Optimizing eMarketing.  And to that point, that is exactly what we are focused on today as we continue to enhance our applications that optimize eMarketing: Coremetrics Search, LIVEmail, and Intelligent Offer.

5. Product recommendation solutions are becoming a must-have technology for many of our customers.  Coremetrics’ Intelligent Offer solution competes with offerings from Aggregate Knowledge, Baynote, Certona, and several other vendors.  What are the key advantages of using Intelligent Offer vs. going with a “best of breed” vendor that is exclusively focused on this space?

The VC investments in companies that offer product recommendations has really heated up over the past 18 months and we’ve seen a lot of new players enter this market in that time.  What many people don’t recognize is that Coremetrics started developing Intelligent Offer in 2002.  The very first client we delivered this solution to 5 years ago achieved more than $5 million in incremental revenue in the first year.  Since 2002, we’ve invested years into the R&D on the algorithms to deliver highly relevant recommendations that dramatically improve upsell, cross-sell, and merchandising depth.  In 2008 we are on track to deliver over 150,000,000 product recommendations.  Intelligent Offer stands apart from the “pure plays” on three distinct fronts:   

• Business User Interface – Most of the pure plays have early stage technologies lacking in flexible and accessible user interfaces.  This means professional services are required to tune the algorithm and set up business rules.  Intelligent Offer provides an application interface distinctly designed for the needs of online retailers.  The algorithm is easily tailored for a site’s behavior patterns, product mix and recommendation use case.  The impact of these changes can be previewed instantaneously right in the application interface.  Intelligent Offer is integrated across the Coremetrics application suite.  For Example, Clients using Coremetrics LIVEmail to target customers via personalized e-mail marketing can automatically insert Intelligent Offer recommendations into their e-mail program.  

• Easy Implementation – Intelligent Offer is designed specifically to be implemented quickly.  It requires no new tagging and utilizes the largest and most detailed Customer Behavior dataset.  All the new pure plays require site tagging and considerable time to build up the data from which highly relevant recommendations can be generated.  There is a substantial opportunity cost when you consider lost revenues during the “cold start” and “tune” period.  

• Greater ROI – Intelligent Offer allows clients to quickly leverage product recommendation data across more customer touch points to achieve greater ROI.  Distinct recommendation styles can be enabled for various site touch points such as product page, cart and order status.  Recommendations can be scoped to match items in print catalogs so call center representatives can up-sell callers within the context of the print catalog the caller has in hand.  

6. Congratulations on the recent launch of Coremetrics Connect.  How is Connect different from other partner programs and integration platforms?

We designed Coremetrics Connect from the ground up as an integration platform that facilitates the ability for our clients to achieve closed loop marketing.  Unlike other programs in the market that are primarily promoted as partner programs, Coremetrics Connect is distinctly providing certified technical integrations that are focused on achieving one click integrations with leading solution providers servicing the online marketing industry.

7. How will you gauge the success of Connect after 1 year?  After 5?

We expect the primary measure of success will be based on how rapidly our client base adopts the Connect Certified solutions.  Already we are hearing directly from our client base concerning the vendors that they want certified in Connect.  We certainly recognize that our partners have a limited amount of resources to devote to partnering activities.  Therefore, we’ve identified a set of technologies and more importantly a Product and Service team that will work directly to enable our partners across more than 1100 client sites.  Whether the time horizon is 6 months or 60 months, the success of Coremetrics Connect will be measured by the value our client base recognizes as they continue to adopt these solutions.  

8. Bazaarvoice and Coremetrics offer an integrated reporting solution through the Connect program.  How do you see our integration evolving as our joint customers become more sophisticated in their use of web analytics and social commerce?

I think the first reporting solution we jointly developed really helped the early pioneers in this market explore the value created by customers using the social commerce solutions.  Those early case studies certainly helped the market accelerate the adoption of the wide variety of social commerce solutions available from Bazaarvoice.   As social commerce continues to grow and evolve the analytic needs have expanded.  To meet that rising analytic need, Coremetrics introduced an exciting new application named Explore.  This new set of analytics enables our joint clients to deeply and flexibly analyze the business impact of social commerce.

9. Understanding the conversion impact of user-generated content is very important, but what are the deeper analytics questions you would be looking to answer if you were VP eCommerce of a company that uses Coremetrics and Bazaarvoice?  

We are hearing from our clients that it is imperative to measure the value of engaging the customer community over time.  The VP of eCommerce is being measured on consistently delivering value to the business utilizing a wide range of technologies and services that are ultimately focused on creating a compelling multi-channel experience for their client base.  The questions we help our customers answer include “What is the long term impact of engaging customers via the Bazaarvoice solutions? What is the lifetime value of customers that engage? What are the multi-channel impacts?  What are the surprising unintended positive impacts to my business?"  The surprising part about user-generated content is both how rapid its influence on online business has grown and how willing unique customers are to share their time and energy interacting with a brand.