Gathering market intelligence at a content site is one of those unkept promises of interactive publishing, a missing piece of the online business model that site owners like to speculate about but rarely pursue…until now.
Since necessity (or desperation) is the mother of invention, the recent ad depression finally spawned some genuinely interesting experiments in transforming market intelligence into a unique value add for online publishers' ad programs. Sites as different as gaming network IGN.com and CondeNet's foo-foo fashion haven Style.com are beginning to leverage the knowledge they gain about their audiences' product preferences, tastes, and even buying intentions into products that distinguish online marketing from just about any other platform.
"The industry has come a long way," says Mark Jung, CEO of IGN, which reported that it had gone profitable in the final quarter of 2002—more than two years after the company went public. The main revenue driver in that march to profit was a highly aggressive ad sales strategy that offered game and entertainment industry clients a full suite of marketing programs, including user surveys, market research, full-page, and video-enabled ads. In what is sure to be a popular model online, Jung and Co. even do "time-slotting," letting clients pay a premium to lock down the entire inventory on a given channel for the day or week that their new game, film, or video hits the streets.
These are the sorts of unique products that the more sophisticated ad clients of 2003 demand, says Jung. Many of these advertisers spend more money now, and at fewer, select sites, than they used to. "But they are rationalizing their expenditures," he says. "They are more demanding about what they want, but they are more open about what they get."
Jung is hoping that his most lucrative asset is his site's own metrics, the ways in which ad programs on IGN affect both audience behavior at his site and even their purchase intent. For instance, among the 10 million monthly visitors to IGN, about 50,000 die-hards maintain a gaming "locker" on the site. These lockers contain ongoing lists of the game titles the user already owns as well as ranked lists of titles he is looking forward to buying when they arrive on shelves. Fifty thousand is a substantial sample base of consumers, and it allows Jung to tell advertisers and potential clients the current level of interest in their products, and especially how that purchase intent compares to other competing titles. For a smart marketer, this is precious information, because it helps scope out where to expend ad dollars and which product releases are your real competitors for limited consumer dollars.
And hardcore gamers are like every other media buff, they love to show off their own tastes and preferences. These locker owners tend to update their "most wanted" list of titles daily. That means that Jung has his hands on an enormous real-time focus group for his industry, and he should be able to determine how content and advertising at his own site affect consumer interest in a product. "Tying [these lockers] with the advertising program gives clients real-time feedback on whether their campaign is having an effect," says Jung. This is powerful material that translates into real cost savings to clients, both in their ad spending at IGN and in planning their larger ad and marketing strategy elsewhere.
CondeNet's Style.com, online home of Vogue and W magazines, may seem far removed from the heavily male, ultra-violent ethos of IGN, but that site, too, is mining its own audience for the kind of market intelligence its advertisers crave and can't easily get.
Style.com's premiere feature is its bottomless pit of fashion runway images from every major show by every major designer. Site managers monitor traffic in these areas closely to determine the hottest trends among users and the sorts of product lines they are targeting. Armed with this market info, CondeNet president Sarah Chubb approached Bergdorf Goodman, a high-end department store in Manhattan that had no Web presence. "We took a look at who they sell and who our customers love the most," says Chubb. The result was an online trunk show that previewed an upcoming line by audience favorite Mark Jacobs. Users could identify the items they wanted to buy, and rather than take orders online, Bergdorf salespeople would call the customer directly about ordering and even upselling another item. "In the first three days, they did $100,000 of business," she says, and now a vendor that didn't even know its customers were online at all is a fixture on the Style.com home page.
The sort of market intelligence that Chubb and Jung are bundling into their ad products is exactly the kind of unique selling proposition that publishers need if they expect clients to shift their ad budgets from print and TV to the Web.