Dear Catalog CEOs:
Who is right?
Who knows?!
Those of you who run mail/holdout tests probably know the answer.
Take a look at this test, run for three months.
| Online | All Other | ||||
| Phone | via Catlg. | Online | Search | Totals | |
| Mail Group | $10.00 | $10.00 | $10.00 | $5.00 | $35.00 |
| Holdout Group | $0.00 | $7.00 | $12.00 | $2.00 | $21.00 |
| Change | $10.00 | $3.00 | ($2.00) | $3.00 | $14.00 |
Look at the "Search" column. Let's assume that we're focusing on Paid Search here, though Natural Search can be analyzed as well.
When you see something like this ... a case where the mailed group outspent the holdout group in search, it tells you that YOU MUST EMBRACE SEARCH. It means that your catalog drives customers to Google, for whatever the reason.
When you see that the mail group and the holdout group have the same spending levels (say $5.00 in each row), then search takes on a different role. It means that the customer does not use search as part of the catalog marketing process. Here, you may or may not need to embrace search.
Holdout tests will tell you the answer. Ask your Chief Marketing Officer for a report, just like the one illustrated above, that will tell you how catalogs and search interact with each other.
Hi Kevin, I'm a bit confused. It seems to me if the numbers indicate that the cohort spent the same amount (in your second to last para: $5 each) wouldn't that suggest that it is the catalog that is unnecessary for that subset?
ReplyDeleteWe in the search space can't selectively serve ads based on who's on your housefile and who isn't; the engines serve the ads, so we can't target browsers at this level. Turning off search would mean turning off ads for those who do receive catalogs and for those valuable new-to-file folks who don't know your brand. Seems like the wrong lever to pull.
Am I missing something?
Yes, go ahead and turn on/off ads selectively, that's fine.
ReplyDeleteThe point of the article was to demonstrate how one might analyze whether search is appropriate within a catalog marketing environment.
This is a mail/holdout result, so the results are not for search customers, but rather, the results indicate how all customers responded to search ... there are search customers and non-search customers in each test group.