How Can CRM Marketers Leverage RTB and Custom Audience to Drive Higher Engagement?

Email marketing is a special form of advertising.  Because of its opt-in nature, it’s mostly been 100% first party data customer targeting-based advertising. Email is CRM advertising, pure and simple. You get an email because you subscribed.

The CRM nature of email marketing is what has made it, along with search, the most intentful and successful form of advertising ever invented. When an online retailer or publisher sends out an email campaign it is confident it is sending a message to a ‘friendly’ customer who has agreed to accept messages. 

Despite a dismal 15% open rate, customers who open are so responsive that retailers keep on sending. But who can be satisfied knowing that 85% of their customers ignore them? Wouldn’t that make you sad after you worked so hard on the creative inside that unopened message?

So how do retailers get more out of the email channel in an inbox that is essentially soaked in competitive messages and controlled by Google and Yahoo?

You are probably aware of the four major tactics for increasing email engagement:

  1. Test subject lines and creative
  2. Segment Customers based on value, history, etc.
  3. Time message delivery or trigger messages
  4. Send more email

Using these four tactics alone you can create enough complexity to drive yourself insane. Is that all you can do?

Nope.

There is room for at least one more strategy.

#5. Reach your customers outside of your own 1st party email newsletters using 1st party data based on the MD5 hash of the email address

Reaching your valuable email subscribers using your 1st party data – the hash of the email address – is the most effective strategy that you have probably never used.  Because until Facebook introduced ‘custom audience’ earlier this year, it wasn’t something that was readily available.  Now, besides Facebook, other large sites are creating ad networks.  And there are email ad exchanges that allow user targeting based on the email hash.  This technique is a viable alternative to cookie-based targeting.

Why is this useful?  Using ‘Custom Audience’ targeting on Facebook or on email ad exchanges using 1st party email hash data has a 100% open rate.  It has zero breakage.  Hash-based targeting is based on your own data, not 3rd party cookie data.

Custom Audience targeting is the merger of two elements:  real-time user matching and bidding.  How does this work?

  1. Identify a segment of the customers that you want to reach, and run their email addresses through a hashing algorithm like MD5. All ESPs can do this for you.
  2. Determine the offer/creative(s) that you want to show them and the landing page for URL.  You already do this when deciding what to do within your own email campaigns.
  3. Determine the price per thousand (i.e. $7 cpm bid) that you are willing to pay to show them this highly-targeted email ad.
  4. Upload this data into an email ad exchange or Facebook.
  5. Watch the clicks and conversions.

What this technique does is place your advertisement in front of YOUR customer, where they are paying attention. On Facebook it happens in the newsfeed on the right rail, and within email ad exchanges it only displays within newsletters that your subscribers open and enable images. Newsletters and sites which they are visiting, opening and reading. It is literally waste-free. 

So, keep on sending your 1st party newsletters. They are great vehicles for your own content. But if you want to bring your email CRM data to life and reach your valuable subscribers where they are paying attention, there is no better tactic than custom audience targeting in social media and premium newsletters using the MD5 hash. 

Dave Hendricks
Chief Operating Officer, LiveIntent

Dhendricks@liveintent.com

One thought on “How Can CRM Marketers Leverage RTB and Custom Audience to Drive Higher Engagement?

  1. Hi Dave
    Interesting article particularly given the low ROI from our Facebook custom audience testing. Are there any online retailers who are succeeding with this technique that you could share?
    thanks
    Dominic

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