Contextual Marketing: How Data is Fueling Marketing

Marketing efforts rely heavily on performance and thorough research. However, in today’s world of fast moving technologies and mass amounts of data, traditional marketing techniques alone aren’t enough to obtain the full potential from the massive amounts of data available today. Businesses are turning to contextual marketing and data driven methods to help companies better understand their customers, new techniques like clustering and text analysis help identify influencers and non-obvious factors that can affect buying behavior. The most creative companies combine these techniques to improve customer engagement, and by contextualizing customer interactions, create more relevant product experiences.

For years marketers have most focused on email and traditional mail campaigns to generate demand, however, many find traditional campaigns becoming less effective over time. According to Forrester research, no more than 32% of US online adults trust ads, regardless of the channel. As a company founder and long practicing marketer, I know that customers exhibit less loyalty to any brand than ever before. And, marketers, despite the time spent on campaigns, no longer control how customers interact with their brand. Customers may experience your brand before purchase, and connect with others via social media to discuss and even organize activities. Social media and new media channels can overwhelm even the most carefully crafted marketing messages — triggering the type of word-of-mouth comments that define your brand image. IT’S THE CONTEXT of all those interactions, which will determine whether those customers will engage and transact with your brand again. Simply put, your product or service is defined by the interactions that people have with it.

Contextual Marketing, What Is It?

Contextual marketing is about understanding not just about who someone is, but where they are, what they are doing and what they are likely to do next. It’s about combining the right information (data) about the customer and the context to deliver the right services and communication at a precise moment, in offers the most value.

By contextual marketing, we mean that marketers gather as much as they can about customers and their interactions with your brand, to create personalized behavioral models, predictive algorithms, identify influencers and critical channels. That means, delivering the right content, to the right people, at the right time, or the way HubSpot puts it, using what you know about your customers to provide supremely relevant, targeted, and personalized marketing in real-time,rather than one size fits all. Here’s a real simple example — Jane Googles comfortable shoes, afterwards she goes on Facebook and the ads displayed alongside her friend feed, are for Aerosoles. Jane is already thinking about buying comfortable shoes, clicks on the ad to check out the latest styles. Most major websites run contextual ads to match the content being viewed. Social Media sites and blogs use keywords in your posts and comments to trigger contextual ads. When Jane is on her iPhone, geolocation is used to provide the context for special offers, showing Jane promotions going on at a nearby Aerosoles store. Contextual marketing is constructed on the basis of listening to your customers, your “context strategy” takes the channel, content, and tools and fits them to the specific customer like Jane and delivers the right content at the right time to the right channel. In other words, you’re trying to get that “piece of marketing” to the users on their terms, in a time and place where and when they are comfortable receiving it. This type of marketing will become about the relationship your product/service works to build with the customer rather than the relationship the customer has with your product/service. Contextual marketing becomes more powerful and effective the more time customers spend online or on their mobile devices.

Example: Contextual Advertising

Objectives of Contextual Marketing

By showing customers ads and products that actually interested in, your business:

  • Decrease customer add annoyance and fatigue
  • Eliminate unprofitable ads
  • Increase the number of clicks
  • Increase the number of actual conversions to sales

Places where you most commonly see contextual ads

  • Social Media (Facebook, Twitter, Yelp, Pinterest)
  • Mobile Apps and Websites
  • Search engines (Google, Bing, Yahoo
  • Video and Video Search (someone watching all those cat videos)
  • Video games (this is quite new)
  • Billboards (Street marketing)

To succeed with contextual marketing you need to change your focus from customer acquisition to managing customer interactions, and from media pushes to customer moments. Focusing on customer interactions and customer moments helps differentiate your brand from competitors when you target your audience.

According to Forrester research, to achieve this you need to build acontextual marketing engine — a new way of marketing, based on agile thinking, self-sustaining, self-perpetuating iteration cycle of real-time, two-way, insights-driven interactions with individual customers. Contextual marketing engines enable highly engaging environments for customer interaction and generate data that was never available before. The outcome will be higher customer engagement, increased revenue and a better customer experience overall.

Your job as a marketer is to identify and use context to craft repeatable exchanges, which will drive deeper engagement and will allow you to learn more about your customers in the process. The more you can learn from your insights, the easier it becomes to craft future interactions that are much more engaging.

How can you have access to this type of data? As you may know, SAP, Oracle, Salesforce and IBM have created a “marketing cloud”, these tools enable marketers to use data science for contextual marketing. The marketing cloud, offers marketers three primary features: collection of customers’ behavior data, predictive analysis of ad optimization and workflow automation.

Examples of Contextual Marketing Done Right

Contextual relevancy means, you have to be where your audience is in real-time. You also have to carefully study your audience and segment them inside your contextual marketing engine. Responding in real-time is good, but responding with the right message at the right time is even better. The following examples do an excellent job demonstrating the power of contextual marketing.

Citibank uses their customer data to provide personalized offers while upselling its own products. When you use your Citibank card to make a purchase, Citibank shares information about how to save you money on that purchase by activating a “Citi Price Rewind” a complimentary perk only available to Citibank customers. The benefit creates goodwill with customers and makes them feel valued, these two qualities generate word-of-mouth and brand kudos on social channels. Even an additional 5 minutes of engagement per day has potential to deepen your relationship with your customers, this generates more data ultimately creating new revenue opportunities.

Nike uses health data from theFuelBand to steer consumers back to its digital platform Nike Plus. While customers use this app every day, the platform uses social sharing and fitness contests to generate more interactions, producing more data, which leads to new product suggestions and better-targeted ads. The Nike Plus community is using its own social graph to market to their customers; they provide services that those customers find useful and get back data on product use and customer similarities. Rather than just pushing messages to customer segments, women 24–35, they’re creating a continuous cycle of insights-driven contextual interactions. Personalized integration data creates context.

An outlier example is the WebSummit and how they are revolutionizing events by using data science to drive context. While traditional conference companies hire event managers, they hire physicists with PHDs in areas like complex systems and network analysis. These experts apply their knowledge and understanding to the task of creating and optimizing real life networks. They build algorithms to figure out who their customers are and who they might benefit sitting next to or meeting with. This data driven approach has taken WebSummit to scale from 400 attendees to 20,000 in only 4 years.

What all this means is that CONTEXT MATTERS

  • Context drives relevance
  • Relevance helps build relationships
  • To build customer relationships, we have to understand consumer context
  • A condition to understanding consumer context is making sense of lots of unstructured data

A simple Facebook comment or a Tweet is only a tiny slice of insight; its only when everything is pieced together into a larger context, these pieces of unstructured data can bring us valuable customer purpose, motivation and behavior.

Moving Towards an Agile Marketing Approach, Assembling a Contextual Marketing Engine

A contextual marketing engine is a brand-specific platform that exploits customer context to deliver utility and guide the customer into the next best interaction. (Forrester Research, Inc.)

Your contextual marketing engine will be assembled from your existing tools:

  • Real-time analytics (Google Analytics, Mixpanel, Kissmetrics, Reinvigorate)
  • Marketing automation (HubSpot, Constant Contact, Marketo)
  • Customer databases (CRMs)

On top of your existing tools your data science team will help you integrate other sophisticated tools to develop that interaction cycle, a sort of self-perpetuating circle in which those insights will spark interactions with your customers in-real time, which will intern generate new contextual insights.

The new way of marketing is all about personalization; as I’ve mentioned earlier it’s based on agile thinking, self-sustaining, iteration cycle of real-time, two-way, insights-driven interactions with specific customers. To start implementing contextual marketing, you need to think about your strategy. As all of your products and services generate more and more data, the context resulting from that data will give you a competitive edge in your industry. Your ability to actually figure out that customer’s identity across all those fragmented channels, just like Nike was able to do, is the core of contextual marketing. Here are some steps that you can take to move toward a contextual, agile marketing approach:

Define your strategy ⇒ whatever your brand is really about, comfortable shoes, fun to drive cars, fast food delivery, this iteration cycle has to reinforce that value.

Facilitate customer journeys ⇒ figure out how to address the customer journey, before, during and after purchase. Focus on customer experience.

Content is still king ⇒ every piece of content that you deliver during an interaction must be tailored not only to the customer but to a specific moment, based on the data you gathered from past interactions.

Work with you IT department ⇒ to bring in the right tools to execute automation and engagement. You can’t buy a contextual marketing engine off the shelf, you have to assemble one using existing tools and new ones.

Agile marketing demands fast test-and-learn approach, you must apply analytics on the fly within the iteration cycle. We’re all sitting on top of massive data sets; tap your data science team to help you experiment with new predictive analytics tools and methodologies to apply machine learning and adjust customer decisions to customer interactions. As your data engine advances, it will fuel much of the machine learning capability that is necessary to power your contextual marketing.

Final Thoughts

Today a wealth of insights is available to us as marketers if we are willing to dig into it. Search, mobile device usage, content browsing and Social Media activity reveals the journey a customer takes throughout their lifetime. Redefine the purpose of campaigns, invite your customers to not just purchase your product or service but also to establish a deep relationship with you. Manage this new contextual marketing engine as a product not a project. What I learned from all this — it’s crucial that marketing teams collaborate with IT in order to develop a data driven culture of marketing. Without IT support, we will fail to realize contextual marketing’s full potential.

See the presentation that goes along with this post on Slideshare.

A side note

I did a presentation to cover this content at a women in data science event, where the audience was primarily data scientists and engineers — I asked a question: Is anyone currently collaborating with their marketing teams? Not a single person raised their hand. I was very surprised and am very curious if anyone is actually building a contextual marketing engine in-house. Or if any marketers can share how they’re working with their data science and/or IT teams.

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