4-page Case Study - Posted 11/21/2007
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Microsoft Online Customer Story: AG Interactive
“I like to push the envelope.”
Pushing the envelope
Maintaining an online presence is non-negotiable in business today—companies have to go where the customers are. But determining where and how online customers are searching is another matter entirely—and not all customers are the same. So how can today’s businesses do better than maintain an online presence? How can they maximize it, use it to drive more business, and spend less money doing it?
Greeting card companies make big business out of getting personal—and few do it as well as AG Interactive (AGI), a division of American Greetings Corporation. Offering everything from musical birthday cards to virtual sticky notes for your desktop, the company understands that every customer is looking for something a little bit different. And that’s why of all the people who e-mail, text, and instant message 30-second sentiments across the globe, more than 3.4 million of them do it through AGI. Those numbers speak well of the company’s online presence and success—but as an industry-leading business, AGI knew it could do better.
For solutions, they turned to Microsoft® adCenter. AGI’s agency of record, Range Online Media, had been aggressively marketing AGI to the MSN® audience since Microsoft adCenter first launched its pilot program in late 2005. Microsoft adCenter was created not only as an advertising vehicle, but as a tool to help companies determine their target audience, analyze campaign performance, and use those results to improve campaign performance.
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Demo targeting verified what we knew about our audience and allowed us to increase our ROI significantly. |
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Misty Locke
Co-founder and President, Range Online Media |
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Before the test, MSN advertising was delivering a customer conversion rate about equal to that of two other major search engines, at a cost that was comparable to AGI’s other search marketing efforts. Range wanted to improve that conversion rate, the return on investment (ROI) through audience segmentation, and the number of subscriptions gained through MSN advertising.
Microsoft adCenter’s analysis showed that AGI’s primary audience is women over the age of 25, with women between 30 and 55 comprising the core of that audience. So that’s who they set out to reach. Using a very carefully devised methodology and controlled test environment, Microsoft’s Search Media Operations team segmented the audience and created test accounts for active orders, in order to help Range and AGI tailor their messaging to different age groups within the primary audience.
“We intend to build off these results by continuing to test multiple variables and to bid more aggressively on AGI’s highest-converting demographics.” —Misty Locke, Co-founder and President, Range Online Media
“Audience segmentation through demo targeting is an important advancement in search marketing. We agreed with the thought leaders at Range that this targeting test with Microsoft adCenter could greatly inform and impact our marketing strategy going forward,” says Sally Babcock, Senior Vice President and General Manager of AmericanGreetings.com.
So what were the results of Microsoft adCenter’s analysis, methodology, and testing? Perhaps the most dramatic result was a 42 percent lift in incremental return on investment. Click-throughs by women between the ages of 25 and 65 increased by eight percent, and the test produced a 31 percent higher subscription rate at the highest-yield subscription level of $29.99 per month.
According to Misty Locke, Co-founder and President of Range Online Media, “Demo targeting verified what we knew about our audience and allowed us to increase our ROI significantly.”
Results were impressive:
42% lift in incremental ROI
31% higher subscription rates at the highest-yield subscription level
6% reduction in overall cost per acquisition
Beyond improved performance, working with Microsoft adCenter resulted in some impressive reductions in cost. While the overall conversion rate improved by three percent and the average daily revenue increased by seven percent, there was a six percent reduction in overall cost per customer acquisition. While total subscriptions increased by 4 percent, their cost to AGI was reduced by two percent.
Going forward, these results create some exciting opportunities for increasing revenue and reducing costs. Now Range has compelling evidence for allocating a bigger budget to its target audience over a longer period of time. Says Locke, “We intend to build off these results by continuing to test multiple variables and to bid more aggressively on AGI’s highest-converting demographics.”
For more information, go to www.microsoft.com.
