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Tag Archives: Traditional Marketing

Digital Providers Say Forget Clicks – Focus on Brand Building

Recently, I wrote a post about the efficacy of digital marketing – is it really driving sales / brand building or is it just about clicks/grabbing eyeballs?  This question was was posed based on a 1/’12 article – “marketing capabilities for the digital age” sponsored by the Boston Consulting Group (BCG).   In this article about 3/4 of global CMO’s aren’t sure if digital marketing efforts can be tied to business results.  This was just one of many conclusions.

More recently, Facebook the opportunity at the 2012 Advertising Week conferences in New York City to answer questions about the efficacy of buying advertising on their site.  These set of conferences were sponsored by Mediapost communications, the mobile marketing association and interactive advertising bureau.

Brad Smallwood, director of pricing and measurement at Facebook, discussed the findings of a study the company hoped would change advertisers’ minds about depending on measurements like clicks to determine the success of campaigns on Facebook.com. The goal is to have them perceive the social network more as a medium akin to television for branded advertising

“If you ran a campaign in the last five years, you focused on clicks,” Mr. Smallwood said, but “demand fulfillment is only one piece of the marketing puzzle. We have to provide a solution for the brand marketers of the world,” he added.

The study was conducted with a new Facebook partner, Datalogix, a company that measures in-store purchases. Fifty campaigns on Facebook were measured, for brands from giant marketers like Nestlé, Procter & Gamble and Unilever. When purchase data from stores was combined with data about ad impressions on Facebook, the study found that 70 percent of the campaigns enjoyed three times greater return on their budgets, and 99 percent of the sales came from consumers who did not interact with the Facebook ads.  More details on his comments are on the link below.

http://techcrunch.com/2012/10/01/facebook-brad-smallwood-datalogix/

I do applaud Facebook efforts to help branded advertisers assess the effectiveness of their online digital efforts.  If someone could show online ad impressions efforts can be tied to in-store sales / brand building, this would be very useful.   However, you need to spend more money with Facebook to figure this out.  It is not transparent.  In other words, you need to “trust” Facebook that they can tell you the right number of impressions to reach your target audience based on their “black box model” with Datalogix – their market research provider.

Facebook says ad impressions is the standard in the TV advertising world – we shouldn’t focus on clicks anymore.  While ad impressions are a traditional TV ad world concept, their view of effectiveness is not – at least not yet.  I’m not aware of any traditional TV ad metric that can say for sure – these number of impressions can drive the desired sales result.  Yes, reach and frequency does drive effective reach and based on historical benchmarks you will have a higher degree of confidence a certain level of spending will work.  However, no one can “guarantee” a positive sales result – there are too many more variables – not the least of which is pricing and distribution – not within digital marketings’ control.  If Facebook/Datalogix have such data they should share it in the interest of driving more understanding among the branded advertising community.  If they would, they would be first to market on this piece and their business will increase.  Trust is the issue here and Facebook and other digital providers have yet to earn it.  Trust has to be earned, not demanded.  Just my take.

Rick Steinbrenner
Global Marketing Officer/Principal Brand Marketing Advisors
www.globalbrandguy.com
The Global Brand Guy 

Is Digital Marketing An Effective Brand Building Strategy?

A recent Boston Consulting Group article says most Chief Marketing Officers aren’t sure. 

Obviously, social media is important/highly efficient and holds the potential for building better relationships with communities of consumers/customers.  Traditional marketing (i.e. TV advertising / promotion / PR) historically placed a premium on brand building and transactions, but has declined in importance due to a combination of message clutter, time pressed consumers, fragmentation of media and the growth of people using the internet to research what others are saying about products/companies.  Nevertheless, what really concerns me is how “tactical” social media has become in recent years and less “strategic”.  It appears almost everyone on the social media provider side keeps looking for the latest tools / technique.  If something doesn’t work, they simply abandon the approach and go for another without regard to strategy.

Social media today seems to be just a collection of curation, SEO / SEM, permalinks, long tail key words, meta descriptions, website crawling, and click through conversation rates (to what we don’t know) and more.  Moreover, when anyone “disses” social media, most assume it’s just driven by a desire to go back to “good ole days” of traditional TV marketing / brand building and they don’t “get it”.  What makes this worse is some digital marketing providers don’t have a clue on how to make social media effective and how it ties to a clients’ business strategy.  I recently attended a social media presentation put on by top online agencies and when asked how they know if digital marketing drives clients’ sales and builds brands the response was: “I don’t know, but you just need to invest in it since it’s the right thing to do”.  No wonder, most CMO’s struggle with social media.  I think most want to use it, but don’t know how to bridge traditional TV marketing vs. the new world of digital marketing.  They also aren’t getting a whole lot of help from digital providers.

To put all this in a fact-based driven perspective, a recent BCG article below was published in January of this year.  It was based on a survey among CMO in global fortune 500 companies. The link is attached below:

https://www.bcgperspectives.com/content/articles/marketing_branding_communication_marketing_capabilities_for_digital_age/

Below is a summary I gleaned from this article. I’m sure you will have your own if you read it and it’s a good read anyway.

* Most companies do recognize the need to adopt new ways to reach consumers and build better relationships (i.e. websites, Facebook, Twitter, YouTube, mobile marketing, etc.). It can be very efficient, free / cheap, and can easily measure traffic / activity (read efficiency).

* However, some companies are still just experimenting with digital marketing; while others have developed an infrastructure that can share data with relevant internal business groups. These companies usually spend >20% of their budgets on social media.

* Roughly ¾ of all marketing executives in global Fortune 500 companies are still unsure where to best reach consumers via these new mediums. Moreover, 90% feel they don’t have the right metrics that can tie into business objectives.

* Marketers seem to think consumers want information or product reviews from websites. But consumers want marketers to give more discounts and/or access to purchasing products online vs. brick and mortar stores – This is a disconnect.

* Even the mighty Proctor & Gamble is redeploying marketing spend away from traditional media to digital since it’s more efficient and less costly. They announced recently they will lay off 1,600 people and are banking on digital ROI for long term savings.  However, I bet P&G is also developing the internal infrastructure to capture the data and share it with relevant internal business groups to help change their business models.

* Outsourcing of social media initiatives to outside agencies exclusively is probably not best option given need for integrated brand messaging.

* More companies are adding IT capabilities to marketing management job descriptions. Marketing and IT are converging into one function. Marketers now need to learn digital in addition to traditional marketing / brand building skills to be effective going forward.

Source: Boston Consulting Group

Based on this, a few conclusions come to mind.

1) CMO’s need to better understand social media and how it works beyond just giving assignment(s) to outside agency(s). 

Simply outsourcing social media will not work.  They need to know how to effectively use it for impact.  CMO’s really need to know SEO and how consumers are talking / searching about their company / brands.  They then need to have the right strategy(s) and develop the right social media tool(s) addressing those strategy(s).  It also needs to be measurable to make sure it’s working.  Developing the right kind of metrics will go a long way to proving social / digital marketing effectiveness.  This might require testing of alternative approaches to see which works / doesn’t work and not just guessing.

2) When social media / digital marketing is used there needs to be a organized and well thought out customer / consumer feedback loop to the organization. 

Comments / data from consumers, influencers, other stakeholders and communities need to be filtered back not only to marketing, but to customer service, sales, supply chain, finance and even engineering / R&D.  You need an internal infrastructure to capture this information and be able to synthesize it for these groups so appropriate changes can be make to companies business models. Social media is cheap…but there is a huge labor cost involved in using the data to help change your business.

3) Finally, using social media / digital marketing tactics exclusively is probably not a good idea. 

A good business strategy will probably require a blend of BOTH traditional TV marketing and social media / digital marketing.  We must remember digital marketing is a “slow burn” approach and in some cases won’t help brand building that quickly – just like traditional TV marketing.  In some cases traditional advertising or promotions will help jump start a strategy while social / digital marketing will help build the brand in the long run.  Using both to some degree is the best way to EFFECTIVELY grow your business, but again it needs to be driven by strategy and not the latest tool / technique.

Marketing is evolving and social / digital marketing is part of that evolution.  We all need to learn how to use the new tools as well as refining the old.

Rick Steinbrenner
Chief Marketing Officer/Principal, Brand Marketing Advisors
www.globalbrandguy.com
The Global Brand Guy

Traditional Marketing is Dead – Bill Lee – HBR Blog

by Bill Lee | 3:00 PM August 9, 2012

Comments (527)

First, buyers are no longer paying much attention. Several studies have confirmed that in the “buyer’s decision journey,” traditional marketing communications just aren’t relevant. Buyers are checking out product and service information in their own way, often through the Internet, and often from sources outside the firm such as word-of-mouth or customer reviews. Traditional marketing — including advertising, public relations, branding and corporate communications — is dead.  Many people in traditional marketing roles and organizations may not realize they’re operating within a dead paradigm. But they are. The evidence is clear.

Second, CEOs have lost all patience. In a devastating 2011 study of 600 CEOs and decision makers by the London-based Fournaise Marketing Group, 73% of them said that CMOs lack business credibility and the ability to generate sufficient business growth, 72% are tired of being asked for money without explaining how it will generate increased business, and 77% have had it with all the talk about brand equity that can’t be linked to actual firm equity or any other recognized financial metric.

Third, in today’s increasingly social media-infused environment, traditional marketing and sales not only doesn’t work so well, it doesn’t make sense. Think about it: an organization hires people — employees, agencies, consultants, partners — who don’t come from the buyer’s world and whose interests aren’t necessarily aligned with his, and expects them to persuade the buyer to spend his hard-earned money on something. Huh? When you try to extend traditional marketing logic into the world of social media, it simply doesn’t work. Just ask Facebook, which finds itself mired in an ongoing debate about whether marketing on Facebook is effective.

In fact, this last is a bit of a red herring, because traditional marketing isn’t really working anywhere.

There’s a lot of speculation about what will replace this broken model — a sense that we’re only getting a few glimpses of the future of marketing on the margins. Actually, we already know in great detail what the new model of marketing will look like. It’s already in place in a number of organizations. Here are its critical pieces:

Restore community marketing.  Used properly, social media is accelerating a trend in which buyers can increasingly approximate the experience of buying in their local, physical communities. For instance, when you contemplate a major purchase, such as a new roof, a flat screen TV, or a good surgeon, you’re not likely to go looking for a salesperson to talk to, or to read through a bunch of corporate website content. Instead, you’ll probably ask neighbors or friends — your peer network — what or whom they’re using.

Companies should position their social media efforts to replicate as much as possible this community-oriented buying experience. In turn, social media firms, such as Facebook, should become expert at enabling this. They can do this by expanding the buyer’s network of peers who can provide trustworthy information and advice based on their own experience with the product or service.

For example, a new firm, Zuberance, makes it easy and enjoyable for a firm’s loyal customers to advocate for the firm on their social media platform of choice. At the moment one of these customers identifies himself as a “promoter” on a survey, they immediately see a form inviting them to write a review or recommendation on any of several social media sites. Once they do, the Zuberance platform populates it to the designated sites, and the promoter’s network instantly knows about his experience with the firm.

Find your customer influencers. Many firms spend lots of resources pursuing outside influencers who’ve gained following on the Web and through social media. A better approach is to find and cultivate customer influencers and give them something great to talk about. This requires a new concept of customer value that goes way beyond customer lifetime value (CLV), which is based only on purchases. There are many other measures of a customer’s potential value, beyond the money they pay you. For example, how large and strategic to your firm is the customer’s network? How respected is she?

One of Microsoft’s “MVP” (Most Valuable Professional) customers is known as Mr. Excel to his followers. On some days, his website gets more visits than Microsoft’s Excel page — representing an audience of obvious importance to Microsoft, which supports Mr. Excel’s efforts with “insider knowledge” and previews of new releases. In return, Mr. Excel and other MVPs like him are helping Microsoft penetrate new markets affordably.

Help them build social capital. Practitioners of this new, community-oriented marketing are also rethinking their customer value proposition for such MVP (or “Customer Champion” or “Rockstar”) customer advocates and influencers. Traditional marketing often tries to encourage customer advocacy with cash rewards, discounts or other untoward inducements. The new marketing helps its advocates and influencers create social capital: it helps them build their affiliation networks, increase their reputation and gives them access to new knowledge — all of which your customer influencers crave.

National Instruments used an especially creative approach with its customer influencers, who were mid-level IT managers at the companies they did business with. NI engaged with them by providing powerful research and financial proof points they could take to senior management, showing that NI solutions were creating strategic benefits. That got NI into the C-suite. It also increased the reputation of the mid-level advocates, who were seen as strategic thinkers bringing new ideas to senior management.

Get your customer advocates involved in the solution you provide. Perhaps the most spectacular example of this comes from the non-profit world. Some years ago, with the number of teen smokers nation-wide rising to alarming levels, the State of Florida thought anew about its decades-long effort to reduce the problem. What could be more difficult than convincing teen smokers to quit — a problem that Malcolm Gladwell had said couldn’t be solved. Using the techniques for building a community of peer influence, Florida solved it. They sought influential teen “customers” such as student leaders, athletes, and “cool kids,” who weren’t smoking or who wanted to quit — and instead of pushing a message at them, they asked for the students’ help and input.

Approached in this new way, some 600 teens attended a summit on teen smoking, where they told officials why anti-smoking efforts in the past hadn’t worked — dire warnings about the health consequences of smoking, or describing the habit as “being gross,” left them unimpressed. On the spot, the teens brainstormed a new approach: they were outraged by documents showing that tobacco company executives were specifically targeting teens to replace older customers who’d died (often from lung cancer). And so the teens formed a group called SWAT (Students Working Against Tobacco) who organized train tours and workshops, sold T-shirts and other appealing activities to take their message into local communities. The result: despite a vicious counterattack by Big Tobacco lobbying firms, teen smoking in Florida dropped by nearly half between 1998 and 2007 — by far the biggest success in anti-teen-smoking in history.

Put another way, Florida won half of the “non-buyers” of its anti-teen-smoking “product” away from its much bigger, much better funded competitor. They did so by tapping the best source of buyer motivation: peer influence.

So can you. Traditional marketing may be dead, but the new possibilities of peer influence-based, community-oriented marketing, hold much greater promise for creating sustained growth through authentic customer relationships.

Bill Lee is president of the Lee Consulting Group, Executive Director of the Summit on Customer Engagement, and author of The Hidden Wealth of Customers: Realizing the Untapped Value of Your Most Important Asset (HBR Press, June 2012).