IQ News: Making An Impact

Digital Impact delivers its personalized e-mail marketing message. E-mail is an ideal tool for direct marketing, but making a message stand out in a sea of spam--and getting customers to respond--is becoming more of a challenge every day. Looking to help marketers break through the clutter of digital junk mail, a San Mateo, Calif.-based company called Digital Impact says its proprietary technologies, coupled with its targeting and personalization capabilities, can result in double-digit response rates and a triple-digit return on investment. "We help you acquire new customers, convert prospects to buyers and retain customers for repeat purchases," claims William Park, chief executive officer of the three-year-old company. "Direct marketers need a call to action. The answer is e-mail. And the better answer is personalized e-mail." OPT-IN FIRST Digital Impact starts with a client's opt-in list of prospects, using practices consistent with TRUSTe and CAUCE, the Coalition Against Unsolicited Commercial E-mail. It analyzes each individual's purchase history and preferences to determine what offer is best suited to them. Then it sends the offer in what it terms "visually stimulating" e-mail that goes beyond the usual boring text messages. "Most marketers stick to text-only because they don't know what e-mail software the customer is using, so they have to dumb it down," Park says. "But a marketer who sends text-only is under-marketing and leaving a lot of money on the table." Digital Impact's e-mail sensor identifies the e-mail capabilities of recipients and optimizes the message to fully utilize the graphical capabilities of its software. E-mail arrives as basic text, optimized text, HTML or DHTML. "Now you're sending a Web page, which can double the response rate," Park says. Digital Impact can also format pages specifically for AOL. Thanks to partnerships with RadicalMail, Marina Del Rey, Calif.; Personify, San Francisco; AudioBase, Sausalito, Calif.; FaceTime, Foster City, Calif.; and Akamai, Cambridge, Mass., Digital Impact's e-mail capabilities also include streaming audio and video, and Internet content delivery services. The company claims response and clickthrough rates are in the double digits, while the return on investment averages 200 to 300 percent. Park offers a few specific examples. Egghead.com, Menlo Park, Calif., one of Digital Impact's first clients, attributes a 20 percent increase in sales and a 300 percent increase in clickthroughs to the personalized e-mails sent to customers who requested such notifications. Peet's Coffee & Tea, Berkeley, Calif., reports that half of those receiving its first e-mail promotion opened it, and 75 percent of that group responded to the offer. For its second mailing, 33 percent of customers clicked through to a link on the site, and orders tripled the day after the e-mail hit. sending the right message Park stresses that messages are closely targeted to each recipient. In a recent mailing of 100,000 pieces, there were 35,000 variations, he says, "so only three people got the exact same e-mail." Digital Impact's ability to zero in on users is made possible by data mining. "We segment based on clicking behavior," Park says. "This isn't the rocket science of the next generation, it's just drilling down into the data. The only way to get relevance is to analyze what went before." The company tracks and analyzes who clicked on what and when, and uses a predictive model based on what users are buying, where they live and what people in their category like. Since the cost of developing such expertise and maintaining staff and technology is steep, Digital Impact sees a huge market for a company that can provide such services on an outsourcing basis. "Most companies don't have the in-house skill or the time to do this, so we offer it to them as a service," he says. Digital Impact currently has about 100 clients including Garden.com, Austin, Texas; Dell Computer, Round Rock, Texas; and Sharper Image, San Francisco. It also has 25 interactive and traditional agency partners that can integrate Digital Impact's technology and e-marketing services into their client offerings, including Agency.com, New York; Deutsch, New York; and Impiric, the New York-based Young & Rubicam subsidiary formerly know as Wunderman Cato Johnson. There's another compelling reason for marketers and agencies to outsource this type of service, Park adds. "Technology is moving so fast that the marketer can't be the master of everything out there," he says. "Product cycles are one year, but most companies upgrade every two years, so those that try to do it themselves are always behind the curve. We share new technology immediately and can do a test with a client if they're unsure if it's right for them." AN INNOVATIVE APPROACH Among the technological innovations Digital Impact offers are rich media and viral marketing. For the 1999 holiday season, Tower Records used a promotion with streaming audio, enabling consumers to click on a link to hear a sample of an Alannis Morissette song right in the e-mail, without having to download a player. "We're moving rich media from the Web to the desktop to make access easier for the user," according to Park. The campaign had a response rate 55 percent higher than the company's earlier mailings and a 50 percent increase in revenue per e-mail. Digital Impact added viral marketing capabilities in January, with its Forward to a Friend program. Recipients receive a reward for forwarding the e-mail to a specified number of friends. The company also launched its E-mail Exchange cross-merchandising program in January, enabling clients to introduce other clients to their customers on an opt-in, permission basis. Campaigns are priced on a per e-mail basis, similar to CPM models, Park says, adding, "Prices start at pennies per e-mail, and volume discounts kick in for larger mailings." The company has conducted over 5,000 campaigns to date and sent 190 million e-mails during the last quarter. Park sees great potential in e-marketing. "Spam has really suppressed e-mail marketing," he acknowledges, but he's optimistic about the long-term potential for marketers that rise to the challenge. "You can't kill the goose that lays the golden egg," he stresses. "It's incumbent on the industry to do a better and more personalized job." n

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IQ News: Making An Impact

Eileen Mccooey

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Eileen Mccooey