Marketing Insights Newsletter

Special Issue: General & Consumer Products

Gaining The Courage To Tackle New Media

From: The Marketing X-Factor by 1to1 Media

It's not often that a whole industry gets called out by one of its own. But that happened recently at the Automotive News marketing seminar in Los Angeles, where Nissan's North America marketing vice president, Jan Thompson, questioned the courage of her colleagues.

"Our business is happy to take a less risky approach to marketing," she said. "We're having a hard time figuring out the right way to send the right message to the right person at the right time." Thompson backed up her tough talk with Nissan's move from television to online channels. In fact, she mentioned CBS, NBC, ABC, Fox, Google, and Yahoo in the same breath -- and with the same definition of effectiveness.

While many companies in all industries talk a good game about reallocating their advertising funds to capture the opportunities in interactive media, very few companies have pulled the trigger. Only five percent of all U.S. ad dollars are spent on interactive channels. Thompson is not the only one to question the courage and willingness to execute new programs in this area. Forrester Research released a report in May that showed that most marketers -- 72 percent in the case of blogs and mobile media -- were curious about these new tactics, but too cautious to execute.

As the critical fourth-quarter selling season approaches, a new three-part process is emerging for executing programs that reallocate marketing dollars: (1) awareness, (2) engagement and (3) relationship building. Awareness is the bulk of current ad campaigns. It is the traditional branding approaches that include TV, print, and newspaper advertising. But in the new approach to awareness, these communications must contain some call to action to be effective. Most experts say spending on awareness needs to take a cut.

Engagement is the piece of the process that allows consumers to respond, participate, and interact with a campaign's elements. Loyalty programs can be part of engagement. Relationship building is the new raft of advanced interactive media that allows consumers to stay in touch and extend their interactions: mobile marketing, experiential marketing, email, blogs, and RSS feeds.

"Marketers need to look at the whole thing, the whole chain of interactions," says Mark Taylor, CIO of AME, Wunderman's new relationship marketing division. "We've worked with clients that have done this and totally reallocated their budgets. If you look at how you want to demonstrate results from your advertising and marketing, the reallocation will almost take care of itself. Is direct mail producing the essential ROI? Can you address customers more effectively by reaching out to them through online tactics?"

Taylor recommends that marketers adopt an attitude of "risk, test, and change" as an essential element of reallocation plans.

Another reallocation tactic is to play the percentages. For example: Online B2C revenue (e-commerce) has increased an average of 20 percent over each of the past three years. If a company's marketing expenditures have not evolved to address that change, there's a strong argument that the firm is playing by old rules. The awareness-engagement-relationship approach would suggest shifting money from awareness and toward engagement and relationships.

The automotive business provides a clear look at the problem of reallocation and the possible solution. Over the past 20 years auto advertising has skyrocketed 1,378 percent, according to the NADA, while new vehicle sales during that time are up only 17 percent. According to Thompson, in 2005 the auto industry spent $4,000 per vehicle sold on marketing and incentives. Thompson says customer data analysis has taught Nissan to move a large but unspecified amount of its budget online to interactive media, gaming, mobile marketing, blogs, and search. She says Nissan spent only $950 in media advertising per vehicle sold.

A study from Atlanta-based MediaTrac shows that automotive dealers spend between $400 and $500 per month to drive foot traffic. Almost all of this comes from the awareness part of the marketing equation. Almost no money goes toward such customer retention tactics as accessory sales, special events, service, parts and other benefits. MediaTrac research shows that 70 percent of customers that have their vehicle serviced at a dealer will buy their next car from that dealer, yet little if any money is spent on maintaining relationships.

"Research is very important here," says Laura Betterly, CEO of InTouch Marketing. "It simplifies the reallocation question. You must find out what customers are responding to and then complement that with what's going on in the rest of your industry. A lot of companies just don't do that. They're not creating the warm and fuzzy stuff that engages customers."

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Unleash the Power of Events, Gift Bags, and Celebrities

Article By: Amy Chilla and Melissa Gillespie – Chief Marketer Magazine
 

All too often, we in public relations box ourselves into thinking that we are limited to press releases, editorial calendars, bylined articles, and direct pitches. But if you step outside of that box for just a quick moment, you will see that there is so much more to be had.

Like it or not, PR inevitably goes beyond press releases and garnering ink in a trade magazine to end up as part of an overall branding, marketing, and promotional campaign. A typical situation (unfortunately) is that businesses engage an outside PR agency and a marketing consultant who never connect or develop plans or promotions in tandem. The fact is, marketing and PR go hand in hand. PR and marketing efforts have even become synonymous with each other. There is a reason for that. Marketing promotes a brand. PR promotes a brand. Integrating them will often give you twice the bang for your buck.

The following are some suggestions to get you thinking outside the restrictive PR box. Let’s start with the easy and move on to the more complex.

Gift-bag inclusions There are many opportunities available to companies to get their products into the hands of consumers through gift-bag placements. Landing your product into a gift bag means that people will be talking about it. There isn’t a centralized “I need items for an upcoming event’s gift bag” directory, so you will need to do a bit of legwork to find outlets. Here are a few things to keep in mind:

• Free vs. Fee. Often you will find there is something called a placement fee, which can range from a couple of hundred dollars (think professional-athlete’s fundraiser) to thousands of dollars and a stringent application process (think Emmy’s gifting suite). Paying a fee is not necessarily a bad thing if that is within your budget. Also, keep in mind that you are donating your product, so be sure that if you sign up for something you understand the quantity requirements up front.

• Hello? Are you out there? Sure, you want to get your product in a bag at a fabulous event. You are even willing to pay a small placement fee. Now how do you start looking? In pursuit of gift bags, look for promotional opportunities spotlighted in newspapers, magazines, online calendar of events, "what's going on websites", etc. You can also go directly to the event organizers or PR firms that regularly put together events for athletes, celebrities or other entities.

• Gift certificates. If you have a fabulous or expensive product and are looking to include it in a bag, consider a gift certificate made out to the celebrity. We have put bags together for celebrities, and many of the “experiences” or trips stated that they be nontransferable.

In-kind donations: Auctions and charity events are other fairly easy ways to promote your brand and your product. An event will typically promote your donated products (“in kind”) through a link back to your Website and by placing your logo on its Website ( and/or other media material) and by listing you in the event program. The advantages to this type of promotional activity are that you are promoting goodwill alongside your brand, getting positive PR to boot.

Here’s a tip: Where some people stop is where you should pick up. Basically, you need to get some legs out of your donation and extend your promotions beyond the actual event, so mention the donation in your newsletter, post it on your Website, and promote it to philanthropy publications. (And don’t forget, you may be able to use it as a tax write-off.)

Celebrity placements: This is one of our more challenging recommendations, but when done successfully, you are not going to get more bang for your buck than this. Select a celebrity who you think would love your product and use it often. Then aim for the stars (so to speak). Think six degrees of separation. Even though you don’t know the celebrity, chances are you know someone who knows someone who can talk to the celebrity for you. This is also an area where you should probably enlist your local PR professional for some help.

Sponsorships If it is within your budget (remember, you are crossing over into marketing as well, so your budget should be bigger), consider a sponsorship that relates to an audience or activity that coincides with your product. We aren’t talking about a NASCAR sponsorship here, but something that is moderate and will get your name out there, such as a business conference or a trade industry event. You can try trading sponsorship benefits for a speaking slot at a conference or an in-kind donation. Again, follow up the marketing activity with a PR spin. Get an article about your sponsorship in trade publications, spread the word to your customers, and make sure to connect with your sponsoree’s PR team. There are always co-promotional opportunities; you just need to ask what they offer or create your own.

We have said it before and we will say it again: Go beyond the grand openings, the new-product announcements, the releases about employee hirings, to uncover PR opportunities available to you and your business. And although advertising, branding, marketing, and PR each have individual functions, the truth is they overlap and need to be handled in a cohesive, cross- functional fashion. Don’t settle for “that isn’t my job” or “the director of communications won’t share information.” Hand in hand, PR and marketing can take your branding and promotional initiatives to the next level and drive more business through the door.

Amy Chilla and Melissa Gillespie are partners in Innova Communications (www.teaminnova.com), a Ladera Ranch, California (USA)-based public relations and marketing firm.