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Data exhaust moves beyond targeted marketing and into financial services decision making November 27, 2010

Posted by jeremyliew in data, financial services, marketing, targeting.
2 comments

Fascinating article in the WSJ a couple of weeks ago about how the big insurance companies are testing using data profiles to identify risky clients. Using the data is potentially an alternative to the costly physical exams currently used to underwrite health insurance policies:

 

In one of the biggest tests, the U.S. arm of British insurer Aviva PLC looked at 60,000 recent insurance applicants. It found that a new, “predictive modeling” system, based partly on consumer-marketing data, was “persuasive” in its ability to mimic traditional techniques…

Making the approach feasible is a trove of new information being assembled by giant data-collection firms. These companies sort details of online and offline purchases to help categorize people as runners or hikers, dieters or couch potatoes.

They scoop up public records such as hunting permits, boat registrations and property transfers. They run surveys designed to coax people to describe their lifestyles and health conditions.

Increasingly, some gather online information, including from social-networking sites. AcxiomCorp., one of the biggest data firms, says it acquires a limited amount of “public” information from social-networking sites, helping “our clients to identify active social-media users, their favorite networks, how socially active they are versus the norm, and on what kind of fan pages they participate.”…

Acxiom says it buys data from online publishers about what kinds of articles a subscriber reads—financial or sports, for example—and can find out if somebody’s a gourmet-food lover from their online purchases. Online marketers often tap data sources like these to target ads at Web users.

Not everyone is comfortable with this approach. Some regulators have raised potential concerns:

“An insurer could contend that a subscription to ‘Hang Gliding Monthly’ is predictive of highly dangerous behavior, but I’m not buying that theory: The consumer may be getting the magazine for the pictures,” says Thomas Considine, New Jersey’s commissioner of banking and insurance.

I think I’d bet against Mr. Considine on this one.

I’m fascinated by the idea of using publicly available data to make better underwriting decisions, whether for insurance or for lending. This isn’t a new idea. Student loans first became a growth industry when someone decided that using a students major (pre-med vs liberal arts) or GPA could help them decide who to lend to and how much. But as the amount of data available has exploded, whether directly reported (e.g. on social networks), inferred from behavior (e.g. web surfing and ecommerce habits) or volunteered as part of an application (e.g. bank account log in info, as supplied to Mint, that can show regularity of income and cash payments), a financial instituions ability to underwrite more individually goes well beyond FICA scores.

I’m interested in any companies looking at doing something like this. Email me.

 

Three tips on Search Marketing October 22, 2008

Posted by jeremyliew in marketing, Search.
2 comments

Marketing Sherpa recently surveyed around 2000 search marketers for their 2008 Search Marketing Benchmark Guide. Some interesting tidbits from their summary:

Focus on long tail keywords:

Search is orienteering, not teleportation:

Well, if you actually look at the distribution of how many searches are out there based on how many words long they are, and you also look at the distribution of where marketers are putting their money, what you’re seeing is that almost 50% of searches are one or two words, and that same trend tends to follow in dollars spent.

But, the interesting thing is that, if you actually pay attention to the way people convert and use the search engines, what they’re likely to do is: start out with a simple search, such as “MP3 player”. So, they get the search engine results page, see that there are multiple brands of MP3 players, and then from that, refine their search. And, maybe when they first made the search, they didn’t realize just how many MP3 brands were out there. But then, once they do the search, they realize that they’re really just interested in, let’s say, Apple iPods, at which point they refine their search, do three- or four-word search, such as, “Apple iPod in Chicago for sale”.

So, once they do that, they’ve massively narrowed the field and get much more relevant search results. And those relevant search results result in much higher likelihood to click and much higher likelihood to convert after the click.

Mention your brand in your search marketing.

STEFAN TORNQUIST: … And this addresses one of the big questions that’s really been going back and forth between the search engines themselves and agencies, and, of course, the big brands, which is, does search have a brand effect? This is a chart that really requires some explanation. Tim?

TIM McATEE: Yeah. Well, if you’re familiar with a dynamic logic or insight express brand effectiveness study– I think a lot of people who have worked in online advertising have seen these over the years. But what they do is, they go through and they compare a simultaneously collected control and exposed group, so that exposure to the advertising is really the only variable in between these two groups. And, then they attribute any difference between the control and exposed to the advertising, since there’s actually no other difference between the two.

So, this chart in particular, this was a brand effectiveness study done looking just at search engine results pages. And, it was conducted by Enquiro for a major cell phone manufacturer. This particular question is actually looking at the likeability of the brand. So, they’ve actually asked, which of the following brands do you like best? Which do you like least? What we’re seeing is that the brand came in at 49% liked for control, but then increased, from 53% to 68% to 77% with multiple and all these different levels of exposure.

So someone who just saw a side-sponsored link with just kind of a short…(inaudible) stashed off on the side, right there, that bumped it up a little bit there from 49% to 53%. When the generic keyword or the branded keyword was in the top organic spot, we saw a massive jump there from 49% all the way up to 68% or 74% when it was in the top-sponsored as opposed to the side-sponsored. But the top-sponsored and the top organic, it jumped all the way up to 77% and 72%.

So, the point being that, just being there on the page is definitely going to have some effects on the way people perceive your brand. Being in the top natural spot is huge. I think it’s kind of omission if you’re not there. If someone is to search for, say, cars, and your car brand doesn’t come up, I guess that just says something about your brand, that you haven’t optimized your search. So it really has to be there.

These are just three of the nineteen slides in the presentation. The full presentation is here and the transcript for the presentation is here; worth checking out.

How to capture your user value proposition August 4, 2008

Posted by jeremyliew in marketing, start-up, startup, startups.
9 comments

In the past I’ve written about encapsulating your business plan for potential investors in an executive summary, or even more succinctly as a high concept startup pitch. This is helpful for communicating to angel investors and VCs, but it doesn’t help you communicate to new and potential users of your product why they should try your site.

Whether you plan on acquiring new users through viral growth, SEO, SEM or banner advertising, the basic principles of marketing apply. You need a Value Proposition and a Call to Action. It helps a lot if your value proposition is unique so that it stands out from its competitors

I sometimes ask entrepreneurs “What would a banner ad look like for your site?”. This isn’t because I expect startups to be buying banner advertising, but because the discipline of condensing your consumer value proposition to fit into a 728 x 90 banner forces you to crystalize what is unique about your site. It forces you to focus on your value proposition in absolute terms, not relative to a competitor (“Higher quality video sharing than Youtube” doesn’t fly for example), without using any buzz words (“File class agnostic media sharing” would not make a good banner ad). Often it surfaces a key issue for startups going up against an incumbent – if your banner ad could equally apply to the leader in the space as it could to you, then you likely have a hard hill to climb to drive traffic to your new site.

Some examples might include, for Youtube “All your online video”, for Streetfire (a Lightspeed portfolio company), “Car videos for car guys”, for Hulu, “Watch your favorite TV shows online”, for Wonder how to, “Every how to video that exists”.

Mike Spieser recently gave startup marketing advice of a similar nature, focused on optimizing the vale proposition and call to action in your Google Ad Sense copy. Although he focuses more on the A:B testing aspect that Google offers to refine your value proposition (improving copy is an easy way to increase user interaction), the constraints imposed by the marketing medium still serve to distill your sites value proposition.

I’d like to hear from readers some examples of banner ad copy, whether for their own site or for various well known websites.