Insights for Online Acquisitions or New Talent (1,129 words)

If you're hunting for online acquisition

bargains or new talent, read this

By Tim Dolan

For interactive marketers, the year 2000 came in like a lion and went out like a lamb. List and banner CPMs fell almost as fast as dot-com stocks, and many online retailers, list owners, and interactive marketing professionals awoke New Year's morn to the reality that the ride had ended.

So what does this mean for catalogers in 2001? Two things: Buyers of interactive marketing services for new customer acquisition are in a great negotiating position and there's a lot of new talent in the marketplace. List managers, list owners and Web site managers are navigating new terrain as the value of their opt-in lists and banner inventory are furiously being reconfigured. In other words, if your opt-in list and your Web site ad revenues are your entire business model, you may want to postpone applying for that second mortgage. With demand for these advertising channels down, the channel owners are ready to negotiate. So while you still can expect some resistance, persistence will pay off. If you can define your rollout strategy, and what it could mean for the list owner or Web site owner, you'll be more successful in negotiating a better CPM, CPC or CPA (cost per million, cost per click or cost per acquisition) for your campaign, particularly while you are in the test phase—and that's where you really want to maximize your dollars.

If your firm is still building its interactive team or seeking more seasoned talent, there's a whole new batch of people entering the marketplace now. Many of the sites on which you used to advertise no longer exist, or they're on their last legs. Combine this winter's downsizing of many firms across the Internet sector and presto, you have a ripe talent pool. Granted, most seasoned players in the interactive marketing industry have about 12 to 24 months of interactive experience. But, if you're picky, you'll find some stray lions. For the first time in several years, hiring managers have the advantage. Use it.

Gladiators

It's still undetermined when the online acquisition market will recover, but it will recover. And while many of the interactive marketing vendors are licking their wounds about a fourth quarter that didn't show up, you now have an opportunity to find some bargains that will stretch your 2001 marketing budget and potentially make you look like the hero. There's more opt-in e-mail inventory than ever before, but companies still are learning how to most effectively use this inventory and find the right inventory to target their best potential customers. Catalogers got it right from the start—begin with your current customers.

Find out what works with your existing clients and use that learning to build your new customer acquisition strategy. Ask yourself:

• Who responds best to e-mail offers?

• What are the common characteristics of these responders (and more importantly online buyers)?

• How can I use this profile to target new prospects?

Yes, it's Direct Marketing 101, but it works. The challenge is that while you may have very specific profile data on your own customers, it's still difficult to find opt-in lists that have the corresponding data to match against. So you will still need to target using fewer characteristics than you may prefer, and you should plan on continuing healthy list testing.

Another strategy to employ is identifying opt-in lists that offer a corresponding opt-in e-newsletter. This generally expands your target audience significantly at a reduced CPM. Banners within e-newsletters can be very effective and lower your overall acquisition costs. When faced with an opt-in list that feels like it's a good fit but offers limited ability to target within the list, using the e-newsletter strategy can pay off. The lower CPM balances out the reduced ability to target to a more specific segment. Additionally, if you plan to rent a list for a dedicated e-mail campaign, and sponsor that list owner's e-newsletter as well, ask for a discount. The representative for these properties should offer you a reduced rate on one or both programs.

If the opt-in lists you're considering lack data depth (first name, last name, age, gender, education level, income, marital status, interests, and so on), use this to negotiate a lower price point, especially if you are testing the list for the first time. The nature of the site is telling, but there's no excuse for list owners to not be gathering this data so they can start to understand their own customer/subscriber base—let alone allow you to target to it.

The Silence of the Lambs

A great way to increase your knowledge base for online marketing is to hire some folks who've spent the past couple of years buying, selling or facilitating these very programs for other firms. The dot-com shakeout has tossed a good mix of talent back into the market. Potentially some of the same folks who left your firm 10 months ago ready to tame the Internet Economy with little more than a glint in their eye and a fistful of "options," re jobless. Maybe you don't want those folks back, but there is some very good talent in the marketplace. And if you ask the right questions you may be able to add them to your team.

Some key things to look for include:

• A mix of off-line and online experience.

• Actual project management experience. Can they oversee development, implementation and results of a project or projects?

• Probe for the grasp of the technology. They don't need to be technologists, but they should have a grasp of the technology. For instance, do they even know what technology on what platform their previous business operated?

• What is their willingness to stay in the interactive arena—even if it's the interactive group in a brick-and-mortar or traditional off-line firm? You'll be able to sense if they've lost their taste for the space. You want the folks who still see the promise and excitement of this medium.

• If their company or group failed, can they speak to the flaws in the business model and describe what they'd do differently if they had the chance to do it again? That is, what did they learn?

• If they had the chance to do it again—would they? (Hint: You're looking for the answer "Yes").

Whether 2001 becomes a lion is still to be determined. But you could capture a lion's share of bargains, be they for good acquisition tools or good people to manage them, if you ask the right questions.

Tim Dolan is vice president of list services at Bigfoot Interactive, a direct e-mail and e-marketing services firm. He can be reached at tdolan@bigfootinteractive.com.