Yesterday saw the announcement that
house prices rose by nearly 1% in February
and for the first time in months the stock
market crossed the 4000 barrier. Then we had
the surprising unity at the G20 AND a
beautiful sunny day! Suddenly the world looks
a more hopeful place.

But we think there are deeper-seated reasons
for optimism, we see many of our clients now
starting to invest again after months of
restraint. They know that being first to spot
the bottom and react presents a significant
market advantage.

In this issue we take a look at how to
choose how much data you hold on customers -
we ask, can you have too much, we take a look
at e-marketing in the recession and we report
on a new study comparing new media to old.
Have an insightful week.

James Pearson - Editor

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Are you holding too much customer data?

Every week there seems to be a report about a
major data loss somewhere. And more and more
of our clients are expressing real concern
about whether they should be holding the
volumes of data that they do. Customer
records go back 20 years in some cases, yet
the data never gets looked at.

According to Wharton marketing professors
Eric Bradlow and Peter Fader companies should
deploy a technique called "data
minimization." The concept is simple:

"Keep the customer data a company needs
for competitive advantage and purge the
rest."

Holding data has significant costs - apart
from the raw storage cost, the more data you
have the harder it is to keep it up to date
and the harder it is to sort the good from
the bad. And if you have a breach then the
costs are much higher.

A US study by the Ponemon Institute found
that the cost of a data breach in 2008 was
$202 per compromised record, Ponemon's
estimates are based on interviews with
companies that have suffered breaches to
customer records that include credit card
numbers and, in some cases, personally
identifiable information. Apart from the
direct costs of the breach the Institute
found that companies lose customers in the
year following a data breach. For example,
health care and financial firms lost 6.5% and
5.5% of customers, respectively, after such
incidents.

Data minimisation is all about aggregating
data together at the level at which it is
useful. For example, instead of holding every
transaction that someone has undertaken, just
hold the most recent, a frequency score AND
the lifetime total. You dramatically cut down
on data as a result.

Click here to read the full Wharton article

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E-mail a "vital tool" in the recession

The 2009 Email Marketing Census' study by
E-Consultancy and Adestra says that Email has
become a crucial weapon for organisations
that are trying to increase the effectiveness
of their marketing efforts during the
recession. The study found that 78% of
marketers rate email as "excellent" or "good"
in terms of the ROI. Email also scored higher
for ROI than other digital marketing
channels. This is something that is being
borne ourt by many of our customers who are
diverting significant budgets to email marketing.

But surprisingly the study suggests that many
marketers still do not have a good grasp on
email marketing - for example many are
failing to get to grips with deliverability
issues. Only 18% said they know what
percentage of their email budget is lost
through non-delivery.
At the same time, a lack of email strategy is
now more likely to be a significant barrier
to effective email marketing (44%), up from
32% one year before.
The study suggests that email has become a
crucial marketing technique during the
recession because, when it's executed
properly, it can deliver an exceptional
return on investment compared to other
digital marketing channels. But interestingly
nearly half of the marketers surveyed said
they hadn't quantified their ROI.

On average, 42% of emails (by volume) sent by
the email marketers surveyed were
acquisition-focused, compared to 58% for
retention-based messages.

Perhaps most surprising of all was that 72%
of email marketers said they are not using
email marketing as effectively as they could.

Click on the link below and you can download
a free copy of Tim Beadle's book on email
marketing and see for yourself how you stack up.

Click here to download the e-book

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The Influence of New Media Versus Traditional Media

Ad-Ology's latest research suggests that the
consistently high levels of influence by
online media are on par, if not greater than,
traditional media. Across various consumer
product types, user generated content
including blogs, product reviews, and social
networks had some or significant influence on
buying decisions.

Ad-ology's research shows new media influence
is significant for many products:

· A majority of recent computer buyers said
they were influenced by manufacturer Web
sites (74.5%) and online product reviews
(68.2%).

· More than one third of consumers (39%) were
influenced by positive user-generated
comments/reviews in their choice of hair
salon or spa services. Another 27% were
influenced by negative comments/reviews.

The report also emphasises how viral buzz and
word-of-mouth are catalysts that can lead to
new customer insights as well as new sales.
Given that very few planned viral campaigns
actually succeed in their goal of "going
viral" then perhaps this suggests that a
better way of viewing them is as a "market
test" of new ideas or concepts in a way that
traditional media simply cannot do.