Microsoft targets tech-savvy via e-mail

In September, U.S.-based Internet research firm Jupiter Communications released the results of a study showing that only one in five online retailers makes use of such new Web technologies as Java, Flash or chat functions to improve their customers' online experience....

In September, U.S.-based Internet research firm Jupiter Communications released the results of a study showing that only one in five online retailers makes use of such new Web technologies as Java, Flash or chat functions to improve their customers’ online experience.

Critical of that fact, Jupiter’s analysts said too many online retailers were following the ‘shortsighted’ strategy of designing their Web sites to meet the technical capabilities of the ‘lowest common denominator’ in their target audiences.

Not surprisingly, Jupiter suggested that more advanced Internet users – that is, those who have upgraded their hardware, added software plug-ins and moved to faster Internet connections – spend both more time and money online than do their less technologically equipped Netizens.

That view was given some support by the Gartner Group, another U.S.-based Internet research company, which released a report in October indicating that by 2005, consumers will spend 20 times more on the Internet when using a high-speed broadband connection than they do with traditional analogue dial-up modems.

According to Gartner, several benefits inherent to broadband Internet connectivity portend well for an increase in consumer broadband access in the near-term future, namely convenience, improved response time, user-friendly interfaces, and a greater potential to enjoy a customized online experience.

In this special report, we take a look at two companies that have made an early commitment to using available e-commerce technology to offer their online customers a highly customized and interactive user experience on the Web: Handspring and Microsoft.

The target audience was decidedly on the radical side of the technology adoption spectrum, so Microsoft Canada, putting together its first online shopping tool for consumers, felt it needed to employ some truly out-of-the-ordinary marketing techniques to get noticed.

Laying the foundation for an increased focus on direct response selling, Microsoft Canada launched an outbound e-mail campaign in early November that allowed recipients to browse and shop for new computer products – without ever having to leave their e-mail program and log onto the Web.

To set the stage for the expected launch later this month of the Shop.microsoft.ca e-commerce site – which is modelled after Microsoft’s U.S. e-commerce site that went live a year-and-a-half ago – Microsoft Canada put together a mini-site just in time for the holiday season.

‘The site [was] really a quick and convenient way for consumers to buy Microsoft products in the holiday time frame,’ says Microsoft Canada marketing manager Sue Borden. She says the company is confident the full-scale site will experience strong demand once it launches, as a large number of Canadian consumers had tried, unsuccessfully, to buy products on the U.S. site, which was designed solely for the U.S. market.

To promote the mini-site, Microsoft, working in partnership with Toronto-based gaming entertainment centre chain Playdium, developed an outbound e-mail campaign that was sent in waves to more than 300,000 individuals who had opted to receive future communications from either Microsoft or Playdium.

The pitch was to purchase games, hardware and software, such as Mech Warrior 4 Vengeance – a recently released video game that’s being heavily promoted in the Microsoft ‘Game Zone’ at Playdium’s flagship location in downtown Toronto.

Because the target audience comprised mainly tech-savvy ‘influencers,’ including many hardcore video game players who are members of Playdium’s ‘Player One’ club, Microsoft felt it was important to hit them with a message that would both capture their attention and compel them to respond. That’s why, working with agency of record Publicis, Microsoft decided to test out a proprietary interactive e-mail application, called Interactivebyte.

The application, developed by Toronto-based Innovative Information Technologies Inc. (IITI), is designed to deliver rich-media messages directly to recipients’ in-boxes, using software that allows them to view a full-motion, animated Flash presentation within the e-mail message itself – without having to download any files or attachments or to launch their Web browser.

Munir Panjvani, a partner in IITI, says Interactivebyte can deliver rich-media e-mails to just about anyone, regardless of what kind of e-mail browser he or she is using, as the technology has been optimized for delivery to computers with 56K modems, the de facto standard on most home computers. For those people who can’t open the Flash presentations because their modems are too slow or because their security settings don’t allow them to, they can still go to a Web site to view the presentation, often just by clicking on a hot link within the e-mail message.

Beyond its strengths as a compellingly creative marketing tool, Interactivebyte offers marketers unprecedented levels of intricate reporting functionality, Panjvani says. Using proprietary tracking tools developed by IITI, a marketer can tell whether their Interactivebyte message got through to the intended audience, when it was being viewed, which elements of the message were being lingered over, how much of the recipient’s ‘eyeball time’ was captured, and whether the message was passed along to someone else.

In the case of the Microsoft campaign, IITI is tracking 58 discrete elements, in real time, according to Panjvani, who adds that the Microsoft opt-in list is being tracked on an aggregate basis, and the Playdium list is being tracked right down to the individual user.

Mirroring the content on Microsoft Holiday site, audio and visual samples from each of the games were accessible within the e-mail’s Flash presentation, and each product on display could be selected and dropped into a shopping basket right within the e-mail.

Using Interactivebyte, the Microsoft/Playdium campaign also featured a shopping cart system installed within each e-mail message, allowing products to be selected and dropped into the shopping basket right within the e-mail. The only time the e-mail recipients needed to log onto the Web was to make an actual purchase, as they needed to go to a secure site where they could enter their credit card information.

‘We thought this would be a fun and cool way to talk to our consumers, because we’re allowing users to have the Web experience right within their e-mail,’ says Borden, describing the process as ‘one-click shopping.’

Projecting campaign response rates in the vicinity of 35%, Borden says, ‘one of the key drivers for us in deciding to use this technology to communicate with our consumers is that the response rates are much better than they are for, say, banner ads.’

Although the campaign was still in market at press time, Borden says early response rates have been excellent. ‘Based on the preliminary stats we’ve seen, the responses are coming in at the levels that we expected,’ she says, adding that it was still too early to measure sales conversion rates.

Acknowledging that the novelty of the medium may be generating as many clickthroughs as the product offer itself, Borden says she’s seen enough conversions on this campaign to convince her to roll out similar types of interactive e-mail communication efforts in the future.

‘Ultimately, our goal is to maximize the user experience,’ she says, ‘so we’re going to look at anything and everything that will enhance the customer’s experience when they come and visit us, whether it be on a campaign basis or whether it be to the full-fledged e-commerce site in the New Year.’

Also in this report:

- Handspring keeping flexible, organized p.D14