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Join Our Research Team at DMA 2014
Jun 29, 2004
Case Study

Personalized, Permission-based Banners Get 4-11% Click Rates for Only $20 CPM

SUMMARY: Are you fed up with trying to reach customers and best prospects through permission-based email? Now there's a new game in town -- permission-based banners.

That's right. You ask folks for permission to promote to them via personalized banners they'll see as they surf the Web on sites such as NYTimes.com. The cost is only $20cpm (cost per thousand) to run the personalized banners, and they can be as targeted as you like -- with personal name, even by zip code.

This week Audio Book Club and Orbitz are among the first US marketers to test the...
CHALLENGE

"Our banners were generating clicks around .34%," says Yoni Waksman, CTO at Israel's largest travel agency, Ophir Tours.

.34% is nothing to be ashamed of. However, Waksman is an inveterate tester of new technologies to get better response rates. For example, he's been testing SMS offers (sending offers to customers' cell phones) for the past year.

He both loved and hated the SMS tests. "It's personal because what's more personal than your own phone? But it's also intrusive. You might disturb someone with your message."

When he heard about a way to personalize the ad banners Ophir Tours ran on third party sites such as Yahoo Israel, Waksman wondered if this could be the best of both worlds -- combining the power of personalization without potentially offensive intrusiveness....

CAMPAIGN

Running a personalized banner campaign is remarkably similar to sending email offers to your opt-in house list.

Step one: Get opt-ins

Legally and technically you don't need permission to start running a personalized banner campaign if you have the basic tech set up (see link below to vendor). All you need is to place a cookie on a user's computer and tie it to what you may already know about them in your marketing database.

Then when they surf sites where you've bought banners through the vendor's system, the system can personalize the banners to a certain degree -- by name, offer, zip code, etc. (That is, if the cookie still exists - see link below to study data on the percent of users who wipe cookies weekly.)

You can't behavior-target based on the third party pages a surfer has visited, except for what they've done on your own site.

However, the Ophir Tours team rightly feared that if they suddenly placed personalized ads on third-party sites without pro-actively asking each individual surfer to opt-in first, there could be a nasty backlash.

So, the team set up a pop-up page on their own site to garner permission. (Link to sample creative in Hebrew below.) They also ran banners on third party sites with offers to generate more opt-ins.

The offer was for a discount coupon. If you signed up, you got a coupon worth 100 Skelels (about $20) good for any future travel booked through Ophir Tours. (Note: To put this in perspective, Ophir Tours' average sale is about $800.)

Step two: Set standardized creative rules

Just as you should standardize your email creative sent to house lists to some extent to build a relationship through familiarity, Waksman believes strongly that you should also standardize personalized banner creative.

"It's a good idea to get your customers familiar with a certain pattern. So many banners fly over and under and across the screen that people tend to ignore them all. So we wanted to get them used to our banners."

The rules were Ophir Tours' logo would always be in about the same place and size. And the user's name would always stand out. "If you try other creative, sometimes the name will not stand out."

Plus, the majority of Ophir Tours' personalized banners were limited to a few standard sizes and shapes, mainly the classic horizontal 365x60. The personalization and offer would be exciting -- not the shape or rich media.

Step three: Test a variety of offers

The marketing team tested matching offers to user preferences - such as a skiing holiday trip offer sent to opt-ins who like skiing. They also tested limited-time discount ticket offers.



RESULTS

Click throughs with the personalized banner system ranged from 4% for general travel offers to as high as 11% for discounted ticket offers.

Waksman says, "Creative is important, but in our business price is everything. You can have spaceships flying around but if the price is too high, they won't buy it." So, offer continues to rule.

Other advertisers testing the personalized banner system in Israel have reported that their click results surge upwards for a short time as users see their names for the first time, and then click rates settle down to highs of 7-12% for the very best offers.

However, Waksman notes his users' responses haven't changed that much over the year of testing. He's got roughly 11,000 users opted in to see personalized banners. We suspect this may be because he's been cautious in his use of the system, not overusing.

If you compare personalized banners to opt-in emails, this data makes perfect sense. According to MarketingSherpa data, email house list response rates haven't dropped significantly in a few years for marketers who are using best practices in communication.

Waksman notes that marketers should not consider personalized banners as a replacement for email, but rather an additional communication tool to build relationships with your best prospects and customers. Ophir Tours' email program is continuing as a strong part of their relationship marketing plans.

By the way, he also notes that in Israel these days there's a new problem -- SMS spam. Oh yuck.

Useful links related to this article:

Creative samples of personalized banners (English-language versions) and Ophir Tours' pop-under to collect opt-ins (Hebrew version):
http://www.marketingsherpa.com/dot/ad.html


Dotomi - the company offering the technology and media buying for personalized banner programs in Israel, and now in the US
http://www.dotomi.com


Past article - "Study Data: 40% of consumers zap cookies weekly"
http://www.marketingsherpa.com/sample.cfm?contentID=267
(Open access article)

Ophir Tours
http://www.ophirtours.co.il/

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