(Adobe Dig­i­tal Mar­ket­ing Sum­mit 2012 Break­out Ses­sion Recap)

I hate base­ball.  Before all of the base­ball fans out there decide to click-through to another blog, let me explain.

Even though I played base­ball for seven years as a child, I was always that kid … you know which kid I am refer­ring to – the one in the out­field throw­ing his glove in the air, chas­ing bugs and but­ter­flies, and wait­ing for some­thing … any­thing to hap­pen. My dis­like for base­ball most likely resulted from bore­dom and my gen­eral lack of inter­est and tal­ent.  How­ever, after watch­ing Mon­ey­ball last Novem­ber I could not help but fall in love with the game.  Mon­ey­ball pro­vides a nexus where past and future col­lide between pro­fes­sional sports and pre­dic­tive ana­lyt­ics – mak­ing both sub­jects more inter­est­ing to the masses. Just as Mon­ey­ball has trans­formed the pro­fes­sional sports indus­try, there is an equally pow­er­ful impact from the appli­ca­tion of pre­dic­tive ana­lyt­ics to dig­i­tal mar­ket­ing – Pre­dic­tive Marketing.

Mon­ey­ball Marketing

Dur­ing Adobe’s Dig­i­tal Mar­ket­ing Sum­mit in Salt Lake City last week, I out­lined the value propo­si­tion and asso­ci­ated solu­tions in a pre­sen­ta­tion enti­tled, Mon­ey­ball Mar­ket­ing: How Pre­dic­tive Mar­ket­ing Changes the Game. By lever­ag­ing pre­dic­tive mar­ket­ing, mar­keters can elim­i­nate the guess­work in mar­ket­ing and take a proac­tive, rather than reac­tive, approach to opti­miza­tion.  Pre­dic­tive mar­ket­ing empow­ers a dig­i­tal mar­keter with the abil­ity to essen­tially change the future of their busi­ness. Though mar­keters face com­pet­ing mar­ket­ing bud­gets and fierce com­pe­ti­tion within their indus­try, pre­dic­tive mar­ket­ing pro­vides a means for lev­el­ing the play­ing field.

In Mon­ey­ball, Peter Brand (Jonah Hill) explains to Billy Beane (Brad Pitt), the Gen­eral Man­ager of the Oak­land A’s, that “there is an epi­demic fail­ure within the game to under­stand what is really hap­pen­ing and this leads peo­ple who run major league base­ball teams to mis­judge their play­ers and mis­man­age their teams.” The dig­i­tal mar­keter faces a sim­i­lar challenge –

There is an epi­demic fail­ure within dig­i­tal mar­ket­ing to under­stand what is really hap­pen­ing and this leads peo­ple who run dig­i­tal mar­ket­ing pro­grams to mis­judge their cus­tomers and mis­man­age their busi­nesses.” Pre­dic­tive mar­ket­ing offers the cure to almost every ill-informed analy­sis and poorly man­aged opti­miza­tion effort by unearthing hid­den pat­terns in large sets of data and pro­vid­ing fore­sight for future deci­sions. Pre­dic­tive mar­ket­ing pro­vides the mar­keter with the abil­ity to intel­li­gently inter­act with their cus­tomers at every stage of engage­ment – dis­rupt­ing past web per­for­mance with unprece­dented lev­els of success.

Spring Train­ing – Suc­cess Story

By not really under­stand­ing what has hap­pened or what will hap­pen, dig­i­tal mar­keters are ill-equipped to cap­i­tal­ize on future oppor­tu­ni­ties and mit­i­gate future risks with cus­tomers and their busi­nesses.  For exam­ple, a lead­ing tech­nol­ogy com­pany part­nered with Adobe’s Pre­dic­tive Ana­lyt­ics Con­sult­ing team to help them build a pre­dic­tive model that would fore­cast traf­fic lev­els and iden­tify the pri­mary acqui­si­tion levers that they could “pull” that would have the great­est expected impact on future traf­fic lev­els.  Weeks before Black Fri­day / Cyber Mon­day, the model fore­casted a 20% decline in year-over-year traf­fic (back-testing of the model showed 98.9% accu­racy) dur­ing their biggest sales sea­son of the year.  Rather than wait­ing to receive a report on per­for­mance after Black Fri­day / Cyber Mon­day, a proac­tive approach to opti­miza­tion was taken. In an effort to increase the expected traf­fic lev­els, the key stake­hold­ers for each mar­ket­ing chan­nel along with Adobe Con­sult­ing met and strate­gi­cally planned ini­tia­tives to take advan­tage of those traf­fic acqui­si­tion levers that had been pre­vi­ously iden­ti­fied.  By imple­ment­ing every ini­tia­tive with Site­Cat­a­lyst tags, we were able to mea­sure the incre­men­tal impact of our efforts.  Though eco­nomic and com­pet­i­tive fac­tors ham­pered demand for this company’s prod­ucts, we were still able to increase the year-over-year traf­fic from a fore­casted 20% decline to an actual 8% decline – lead­ing to $2.5M in incre­men­tal rev­enue in two days.  This is but one of many appli­ca­tions for pre­dic­tive marketing.

What Is Pre­dic­tive Mar­ket­ing, Really?

Many of you have prob­a­bly heard of “pre­dic­tive ana­lyt­ics” and may be won­der­ing what the dif­fer­ence is between “pre­dic­tive ana­lyt­ics” and “pre­dic­tive mar­ket­ing”.  While pre­dic­tive ana­lyt­ics can be applied to a wide range of fields and indus­tries (e.g., sup­ply chain, secu­rity intel­li­gence, real estate, pro­fes­sional sports, sales and CRM, mar­ket­ing, insur­ance, etc.), pre­dic­tive mar­ket­ing rep­re­sents the direct appli­ca­tion of pre­dic­tive ana­lyt­ics to the needs and chal­lenges of the mar­keter.  As the leader in pre­dic­tive mar­ket­ing, Adobe seeks to empower dig­i­tal mar­keters with the abil­ity to make intel­li­gent, forward-looking deci­sions through automa­tion, visu­al­iza­tion and user expe­ri­ence inno­va­tions cou­pled with pow­er­ful pre­dic­tive models.

The Ben­e­fits of Pre­dic­tive Marketing

Pre­dic­tive mar­ket­ing pro­vides value to every­one from ana­lysts to tech­nol­ogy experts to web con­tent man­agers in all indus­tries.  For the adver­tiser try­ing to iden­tify which vari­ables are most pre­dic­tive of increased CTR (click-through rate), pre­dic­tive mar­ket­ing pro­vides a solu­tion.  How­ever, pub­lish­ers can lever­age pre­dic­tive mar­ket­ing to fore­cast adver­tis­ing inven­tory for future peri­ods. The fol­low­ing table rep­re­sents some exam­ples of the types of chal­lenges solved by pre­dic­tive mar­ket­ing for dif­fer­ent types of dig­i­tal mar­keters:The Aberdeen Group recently pub­lished an arti­cle enti­tled Pre­dic­tive Ana­lyt­ics for Sales and Mar­ket­ing: See­ing Around Cor­ners that out­lines the sig­nif­i­cant ben­e­fits that come to those orga­ni­za­tions that apply data min­ing and sta­tis­ti­cal mod­el­ing to opti­mize mar­ket­ing efforts.  Pre­dic­tive mar­ket­ing dri­ves as much as 2X lift from mar­ket­ing cam­paigns, 76% higher click-through rate, and 73% higher sales lift.

Pre­dic­tive mar­ket­ing rep­re­sents the next phase of ana­lyt­ics and opti­miza­tion for dig­i­tal mar­keters.  We have com­pleted our pregame warm up and we are now ready to enter the big leagues.  Over the com­ing weeks I will take time to dive deeper into spe­cific appli­ca­tions of pre­dic­tive mar­ket­ing and how dig­i­tal mar­keters can lever­age pre­dic­tive mar­ket­ing in their deci­sion processes and workflows.