Electronic Retailer - October 2012 - 22

IT’S ALL ABOUT THE NUMBERS
clients include retailers Tumi, La Perla, Road Runner Sports and J.Jill. Marketsmith seeks to differentiate itself by analyzing direct response campaigns at a more granular level – a level of greater detail – than other firms. In calculating the ROI on media buys, its formulas blend customer data (Who took the upsells? How many provided an email address and agreed to receive mailings or a newsletter?) with retail data (assuming that one campaign objective is to drive traffic to stores), to arrive at a comprehensive picture of which media buys produce the best results. In a direct mail campaign, Smith says, that might involve telling a client that purchases mailing lists from Bloomingdale’s that $50 Bloomingdale’s buyers do not respond to the campaign in the same way as $100 Bloomingdale’s buyers. “So you know you have to buy a different list to get those $100 customers.” In direct response campaigns of all sorts, Smith says, the principle of granular analysis means that she can treat figures such as a marketer’s cost per order (CPO) as variables, rather than as fixed costs. “Most agencies, fulfillment houses and telemarketers have to use fixed numbers for costs that are really variable,” she says. “They say, ‘Give me a number for your cost of acquiring a customer, or getting a package out the door or handling a phone call.’ Then they take that cost and run with it.” But in fact, the cost of acquiring a customer differs according to several factors, the weightiest being the media you bought, Smith says. “You can say, ‘It costs me $14 to acquire a customer,’ but the truth is that the cost to acquire Customer No. 1 was $13.50, and the cost of Customer No. 2 was $14.75. … We can tell [marketers] things like that because we take in more data and we have analysts who know how to organize it.”

“I looked at the DRTV model and fell in love. I saw the true entrepreneurial spirit. It was like I had been reborn.”
– Monica C. Smith of Marketsmith, Inc.

course of a week. Barrocas says that Marketsmith handles media optimization and provides strategic consulting for all of it. He adds that Euro-Pro’s DRTV efforts are complicated by the fact that a major goal is to drive buyers to retail stores, where the company makes most of its money. “[Marketsmith] has brought great metrics to [determine] how we spend our media dollars and how that media impacts the retail drivers of our business,” he says.

Automating it All
When Barrocas left ARAMARK in 2008 to become president of Euro-Pro, supplier of the Shark and Ninja lines of household products, he called on Smith once again. That was her introduction to DRTV. In a world driven by numbers such as CPO and MER (media efficiency ratio), Smith felt right at home. “I looked at the DRTV model and fell in love,” she says. “I saw the true entrepreneurial spirit. It was like I had been reborn.” Smith and her team set out to adapt their methods of detailed data gathering to the television medium. When it comes to DRTV media buying, she says, “Most people look at comparables and gross averages. But running an infomercial on [cable network] AMC at 7 a.m. on a Monday is not the same as running at 7:30 a.m. on AMC on Monday. We look at those differently.” And if there are four Mondays in a month, “then our job is to get all four 7 a.m. slots on AMC, if that’s what’s working. We manage down to that level of detail.” This is the kind of thing that genuinely excites Smith. “We may not be the best people to go out to dinner with,” she says, “but we’re the best at getting the work done day to day.” Marketsmith’s DRTV campaign clients now include Paul Fredrick menswear, Philosophy skin care products, the Ahh Bra, Sheer Control shaping underwear, the Workout 180 home gym and allergy blocker Nasal Guard, among others. Euro-Pro, Smith’s biggest DRTV client, spends more than $1 million a week on television air time. It might run up to 15,000 half-hour infomercials in the The new I.Predictus Intelligent Palette platform will perform an automated version of the analysis behind Marketsmith’s media optimization work. Using data pulled in from media agencies, call centers, and online activity, Smith says, the software is designed to answer questions that boil down to these: Who are your customers? Where do they come from? How much money did you spend to get each group of them? Where did you spend it? And where should you logically spend your media dollars next? The software will organize all relevant data in a single dashboard view, updated on a daily basis, Smith says. The dashboard offers actionable bricks of data, displaying information of value to decision-makers at different levels of the marketing hierarchy. First is an executive overview for the chief marketing officer. Second is a Buy/Evaluate/Sell/Terminate model for effective media buying. A third brick tracks online activity – web sales, site visits and so on. A fourth displays data about customers’ profiles, tied to the media that attracted them: males vs. females; buyers of single products vs. multiple products or continuity programs; customers who bought from you in multiple channels; and more. Smith says that I.Predictus might introduce similar software in the future, designed for direct mail, catalogs or other types of DR campaigns. She is starting with DRTV for a simple reason. “I think it is the most powerful medium out there today,” she says. Evidently, when Monica C. Smith met DRTV, she really did fall in love.

DRTV
One of Smith’s longtime clients is Barrocas, who used Marketsmith for various projects while he served as president of apparel company Broder Bros. and later as president of the WearGuard division of ARAMARK Corporation. 22

electronicRETAILER | October 2012

Electronic Retailer - October 2012

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