This article was published in a special edition of Website Magazine (June 2009 - distributed early next week). To ensure you receive the valuable insights published in each special monthly issue, upgrade to a professional-level membership today at WebsiteMagazine.com.
Giving Customers What They Want with the Privacy They Deserve
E-commerce and Internet marketing professionals have always
grappled with personalizing online content for each visitor while
preserving privacy. Many have given up, relying instead on opt-in initiatives
such as newsletters, RSS alerts and social networking tools.
Others spend enormous amounts of time and money monitoring and
manually updating their sites at great expense while lowering profit
margins. Neither of those options deliver sustainable results.
In response, leading technology firms offer Web-based self-optimizing
behavioral targeting and personalization solutions that
help firms of all sizes increase online conversions, average order value
and online revenues while still protecting the visitor’s right to privacy.
How it works
Instead of requiring demographic or classification information, these
dynamic systems automatically generate representations of visitors
solely from current website interaction. These self-optimizing tools
leverage visitor traffic patterns to provide the most relevant Web experience
without the need for any personal information, third-party
cookies or special interaction with the individual. This allows retailers
to transparently target each visitor individually, without compromising
This is the most effective way to deliver content, because consumers
present the most accurate representations of their interests and
needs at that time — not the demographic information they filled out
months ago. As a result, self-optimizing behavioral targeting solutions
make it possible to enhance a site’s product cross-selling, up-selling
and content personalization capabilities while preserving privacy.
These types of solutions also provide an enhanced Web experience for
the customer by bypassing a requirement to fill out pop-up
surveys or lengthy, intrusive online registration profiles. And, they
don’t track visitors site to site.
Proof in results
A leading American catalog merchant and online retailer implemented
a third-party, self-optimizing behavior targeting and personalization
solution prior to the 2007 holiday season. Since then, the company’s
e-commerce site witnessed an increase of more than 15 percent in
converted online visitors and an increase of more than 18 percent in direct revenue
contributions. Moreover, the system provides higher clickthrough
rates on content as well as increased conversions, site stickiness
and repeat purchases. It also eliminates the tedious task of
manually generating product recommendations and personalized
promotions to online visitors.
Other retailers claimed that such systems accounted for 20 percent
of their online revenues. The average order value from visitors
who acted upon the platform’s automated, personalized recommendations
was more than 60 percent greater than those who didn’t.
Such testimonials speak clearly to the value of these solutions to add
to the bottom line.
Editor’s note: Due to the competitiveness of this industry, businesses such
as those mentioned above, prefer not to release the names of the systems
they use. The purpose of their secrecy is to give themselves an advantage
over their competitors.
Intelligence benefits abound
Self-optimizing behavioral targeting and personalization solutions also
provide significant intelligence-gathering capabilities, including shopping
basket analysis, expert systems, content analysis and collaborative
filtering algorithms. By profiling entire individual click stream behavioral
patterns, the systems focus on person-to-content affinities and are
not limited to content-to-content modeling often represented by, “people
who bought this item also bought these items.”
Self-optimizing solutions are completely data driven, thus processing
large and diverse transaction histories. Furthermore, these types of
systems do not rely on anything other than the user’s interactions. This
greatly simplifies integration and unified content profiles across all
types, from text to multimedia. Solutions can scale to large user bases
and catalogs while providing acceptable runtime performance.
Personalization in all environments
Because of their automated profiling, content neutrality and adaptive
content indexing, these types of systems can be embedded into almost
any environment that can capture online behavior. Moreover, self-optimizing
solutions allow like-minded visitors to be dynamically grouped
together for predictive purposes. This provides additional functionality
to such applications as community radio, movie guides, gift registries
and social shopping.
These systems can also be combined with other enterprise data to
produce broader predictive models of customer behavior. Doing so
extends their benefits to off-line campaigns, like direct mail, telemarketing,
media advertising and customer loyalty marketing campaigns.
Benefits to any organization
Virtually all types of businesses see value from self-optimizing behavioral
targeting and personalization solutions. An added attraction is
that these systems can usually be implemented in just days or weeks.
So, very quickly businesses can begin understanding behaviors without
invading personal privacy. The result is building long-lasting and
profitable relationships with consumers.