Database marketing is based on sending messages to known individuals. This has always been in sharp contrast to conventional mass media, such as television and print advertising, where marketers never know exactly what audience they are reaching.
Online marketing has blurred this distinction. Online marketers often know a great deal about the people they interact with, even when they don't know their actual names and addresses. This means that they can gather, analyze and react to data in ways similar to database marketers. But without personal identifiers, online marketers cannot integrate this data into individual profiles that are the heart of a conventional marketing database.
One result has been a surprising separation between online and database marketers. Even though both disciplines rely heavily on technology and apply analytical approaches, each has developed its own universe of service and software vendors.
Database marketers rely on marketing services agencies and marketing automation systems with a core competency of building and managing customer databases.
Online marketers rely on search marketing, Web analytics and website development vendors that are skillful at attracting traffic and tailoring Web treatments to visitor behaviors.
Email and e-commerce are exceptions; they are online activities dominated by database marketing vendors and techniques. But they merely prove the rule, since both face situations where personal identities are known and it's possible to build a conventional marketing database.
Another result has been continued fragmentation among online marketing subspecialties. Search engine optimization, paid search marketing, site personalization, Web display ads, mobile marketing, downloadable applications and social media tend to be managed separately, even though they rely in part on traffic statistics from the same Web analytics systems.
Some fragmentation is inevitable. New varieties of online marketing appear so quickly that marketers must rely on internal or external specialists for quick deployment. But this fragmentation, as well as the separation from conventional database marketing, imposes extra costs and prevents consistent treatments for individual customers.
If it were easy to integrate online with offline data, the database marketers would have been doing it all along. Social media can help by providing an additional source of personal identifiers that can link individuals across sources. But what's really needed is a change in attitude: one that recognizes that it's worth centralizing information even when it cannot be tied to a specific individual.
This is a radical switch for database marketers who have spent their careers looking for better ways to identify individuals. But they (and the rest of us) need to adjust to a concept of "semi-anonymous" marketing, which means being able to reach individuals who share certain characteristics even if their actual identities are unknown.
To bring home the importance of this concept, let's look at the types of information available in online marketing channels.
Cookies are the primary means of tagging individuals who visit a website. By itself, a cookie only identifies a computer, but it can be linked to additional information that's either observed (e.g., pages visited) or provided by the visitor (e.g., registration). This data can be stored within the cookie or, preferably, in a database linked to the cookie ID. For example, this means you can use a cookie to show an ad with a discount coupon to someone who previously discarded a shopping cart, even if you don't know who that person is. In other words, even anonymous cookies let you put people into identifiable marketing segments and send them appropriate messages.
IP address (showing where a user has connected to the Internet) and other information provided with each Web visit (browser type, operating system, etc.) can sometimes act as a proxy identifier for individuals, since many systems keep their IP address over time. However, this is controversial in privacy circles and not wholly reliable. Even discarding this approach, an IP address can often be traced to a corporate account owner. (This works for business computers, not for home computers which typically connect through an IP address registered to a phone company or other Internet service provider.) And nearly all IP addresses can be mapped to a geographic location, which in turn can be linked to geodemographic databases such as Nielsen PRIZM clusters. Again, this information can be used to target messages to unidentified individuals.
Mobile phone location is known to the phone network operator, although how much they share with marketers depends on privacy and commercial considerations. It's possible to target messages to people within a certain geographic area, either in network-based advertising or through user-downloaded apps. More advanced but still semi-anonymous applications, such as targeting based on whether someone is outside of their usual territory, are possible but demand more data retention.
Social media supports many kinds of marketing, including advertising based on member profiles and groups, direct messages where a prior relationship exists, monitoring public activities by user names, and linking user names to email and other personal identity information. The opportunities depend on the particular medium and the operator's terms of service, but it's worth building a history that may later become useful - even if you can't market to it directly today.
As marketers centralize their online information, technical demands will increase. Marketing databases not only become much larger, but they will hold more kinds of information, much of it less structured than the traditional customer and transaction records. There will be more opportunities to use sophisticated matching techniques to associate specific individuals with semi-anonymous information, although this will also raise privacy concerns.
But even if an addressable individual is never identified, marketers will benefit by integrating information across channels at the level of the semi-anonymous segments themselves. It will allow marketers to identify similarities in interests and behaviors, which in turn will lead to coordinated messages and clearer understanding of results. The ultimate impact will be to help unify marketing departments themselves, ending the fragmentation that detracts from business performance.
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