“So you think you know MULTI-CHANNEL?” September 17th, 2007, Women’s Wear Daily.

Chris Paradysz is CEO of PM Digital and Suzy Sandberg is the company’s Managing Director. PM Digital is a leading interactive marketing agency and a business unit of ParadyszMatera, an industry leader in customer acquisition strategies involving online and offline media.

WWD: Let’s begin with some background on the company and its business.

Sandberg: PM Digital is an online division of ParadyszMatera. We provide traditional agency services and search engine marketing. For the agency side of the business, we generate sales using the most appropriate online media channel and creative tactic. For example, our publishing clients ask us to monetize their content using Internet marketing tactics. For our online retail clients, we primarily manage their paid search campaigns, data feed marketing programs, such as participating in the comparison shopping engines, and search engine optimization; with data feed marketing, clients send us data files with all of their SKUs and information pertaining to the SKUs and we send that out to various shopping portals. Once an advertiser has submitted the data feed, they can then appear in the search choices on these online shopping destinations.

WWD: How much of your current work involves retail clients and retail apparel clients?

Sandberg: About 75% of our clients are online retailers and about half of those are apparel. Apparel is a big part of our business and has unique challenges. One of the things that differentiates us is we have the technical capacity to handle the high turnover with trendy apparel merchandise. Large retailers have huge volumes of turnover in a steady frequency. If you’re dealing with a client that has 10,000 SKUs and you're feeding to 20 different shopping destinations, which is what we do for clients, that’s a lot of turnover requiring real scale.

Paradysz: In the context of search generally, you have the same challenge. Like a retail store, you’re changing your merchandise constantly and the technological capabilities are a critical requirement. When you have the apparel component and add the fashion twist, you have tremendous turnover. From the technological point of view, the system has to be fast and simple.

Sandberg: We also have to manage inventory so even if we are doing particularly well selling certain merchandise, we have the same inventory constraints as in catalog and other channels. It’s another complexity we have to be constantly on top of.

Paradysz: We call this “warehouse to web” technology. In the context of the retail apparel market we use the word “impeccable” when we describe our service because we have to be on top of our clients’ marketing game, their merchandising game and fashion trends. We can’t just react to the trends; we have to anticipate change in the market because that will affect how we market.

WWD: How would you define multi-channel marketing?

Paradysz: We define it as the business of marketing capturing the measurements of transactions across multiple channels. The Internet changed everything because now customers can do anything, anytime, anywhere. So the capture part of this is huge. Then you have to figure out how to measure it in order to know how to employ your dollars. You have to see all of it from your customers’ point of view.

WWD: What are the most significant changes you’ve seen in multi-channel marketing over the last few years?

Paradysz: One of the significant changes is broadband penetration. It has changed the game from the Internet being a transaction-based relationship to being a marketing opportunity.

Sandberg: Also, the customer is in control. So many companies try to force a particular activity on a customer by channel. You have to provide choice to accommodate in which channel the customer wants to make the purchase.

Paradysz: Also, you can’t downplay the impact of search and how that changed behavior. Search sophistication has evolved rapidly both from the technology standpoint and the user. And another major change is the ability to finely segment the audience.

WWD: How close is retail in achieving real-time, transparent, one view of the customer across all touch points?

Paradysz: The media reports say it’s getting better all the time, but in reality it's not that great. The consumer begins by assuming that the retailer has their act together. They think everyone talks to one another but they continue to experience a very different reality. Until many of the internal organizational issues get solved, the channel problems of recognizing customers will continue.

WWD: You say that finding and developing customers is both an art and a science. Would you elaborate on this?

Sandberg: With search, you need technical sophistication in order to process data. It comes down to the fastest, best technology to make sure everything gets listed, tracked, and reported on and switched out. If you don’t keep your technology up to date, you can’t participate with the new offerings search engines put forward. We don’t outsource our technology, we build it ourselves.

With regard to automated search bid technology, let’s say we have a client where we are managing 50,000 key words and the bids change on an instantaneous basis. The automated bid management system lets us systematically call into the search engine and grab the bidding information, figuring out what the optimum bid can be based on our clients’ ROI metrics. We can then change the bids for everyone, automatically, en masse. It’s a lot more efficient than trying to manage bids manually.

The art of what we do, unlike other forms of direct marketing, is knowing specific merchandise, because that is the basis for the ad copy and everything we do. The apparel industry has very specific language that we have to know.

Paradysz: The art is the nuance of understanding the consumer. You cannot outsource apparel to a company that does not understand these particulars. And there are so many global cultural idiosyncrasies. We hire people to follow this from a trend standpoint.

WWD: There is a disconnect today in terms of a company's advertising spend allocated to online vs. offline; particularly when online is accounting for more and more of overall sales but not accounting for a similar increase in online ad spend. How do you view this?

Paradysz: Many often think about offline efforts driving business to online but they don’t often think of the reverse. You need to understand both sides, the movement from one source to the other and the value of an incremental customer; and then using that data to decide where to spend your marketing dollars. Traditional advertising is very expensive and online is highly efficient and cost effective. In general we are however, seeing increased budgets for online.

WWD: Finally, if there were one decision or one area to invest in to improve a retailer’s multi-channel marketing capability, how would you advise them?

Sandberg: When I go to the trade shows, I see some of the most incredible technologies; every single one of them would radically improve the online businesses of so many marketers. If I had to pick one, again recognizing the fact that you have limited resources, I would put my money on web analytics because that provides you with a roadmap as to what the issues are.

Paradysz: You should be willing and be brave to look deeply and objectively at all your sources of advertising. Be willing to integrate your offline and online marketing. The value of integration is geometric.