Even if a PPC ad has double the conversion to sale versus a banner ad or email campaign, it does not necessarily mean that PPC should receive the highest allocation of marketing investment. Smart advertisers have learned to track and study the contribution of each marketing channel in order to map the effectiveness and efficiency toward delivering one or several stages. The stages could apply to the AIDA model (Attention, Interest, Desire and Action) or to standard models used that chart Awareness, Consideration, Trial, Use, Useage Frequency, Loyalty.
While TV and Print are often used to build brand awareness and consideration, online marketing often impacts trial, use, frequency and loyalty. Today however, online offers plenty of opportunity to cover the full marketing spectrum from awareness to loyalty. However, to optimize efficiency and effect of marketing investments, we must be able to determine which channels are the most effective and efficient means to achieve a desired marketing objective. Here are a handful of examples of online opportunities and their strengths:
Web advertising is used often to communicate the brand's position, build consideration, raise awareness for new products and maintain top-of-mind awareness for established products. In addition it works well to encourage trial, acquire new customers as well as retain established customers and increase loyalty.
Online promotions are often used to encourage trial, stimulate word-of-mouth and improve use or purchase frequency
Search marketing is often used to encourage trial.
Email is often used to encourage trial, stimulate purchase frequency and improve customer loyalty.
All marketing channels have a synergy and contribution to one or several marketing measurement stages. (Aware - Loyalty) To begin to understand the direct effect and contribution of each marketing channel, tracking must be set up in advance to capture performance. To use brand awareness as an example, we would need to know how brand awareness will be measured, what metrics will be used in the calculation, and how much weight of importance should be assigned to each metric. Relationships with customers takes place over time. How they interact with any single campaign is just one touch point. To understand the true impact of marketing campaigns, we need to study how consumers interact with those campaigns over time.
The more competitive the marketplace, the higher the need to measure performance and the more potential marketing strategies exist to fulfill marketing objectives. In order to best navigate the opportunities, the contribution of all marketing activities to site visits and subsequent purchase behavior must be understood. The triggers to sales conversion must be identified.
An important role of a marketing strategist is to maintain a comprehensive and accurate insight into every click of every visitor, and how those relate to sales and other conversions.
Wednesday, October 1, 2008
Wednesday, September 17, 2008
Getting the CEO to "Get" Marketing
Getting the CEO to "Get" Marketing
By John Graham, Contributing Editor Industrial Distribution May 1, 2006
This may seem like an exercise in frustration to marketing directors, sales managers and others, but it's a battle worth fighting.
"What does it take to do good marketing?" This is the question a speaker asked of 50 seminar participants from financial services companies. No sooner had the question been asked when a woman said, "Keep the CEO out of it." Along with laughter, heads were nodding all over the room.
"How can I get my CEO into a marketing mode?" Many a company president would be surprised to learn that I've been asked this question more than any other over the years. It comes from entry-level employees and sophisticated sales executives—from engineers and frustrated marketing directors. The question is always serious, and the voice, more often than not, conveys signs of desperation and discouragement.
"The president can't see how we're slipping," says a frustrated sales manager. "He thinks the problems are only 'temporary.' He sees us like we were 30 years ago. But nobody knows us today. How can I get him to understand what's going on?"
Then there's the thoughtful and well-educated marketing person who reports that her job is "churning out proposals." This is her boss's uninformed view of marketing.
Perhaps the most common form of idiocy is a CEO's benighted belief that the role of marketing is to make sales. Instead of looking at the sales force to see if it is following up on the leads generated by marketing and actually closing sales, marketing gets the blame. Far fetched? Check it out by asking any marketing manager.
Marketing strategy is a source of conflict in many companies, but it's a concept worth fighting for.
Sales vs. marketing
It's not surprising that CEOs focus on sales. That's what gave them their starts and that's where they were successful, so that's what they see as the solution to the problem. "Make more calls" is their mantra and magic solution to everything.
"I just can't understand how this guy can be so blind," said a confused young marketer at a manufacturing company. "He's on top of so many things, but marketing is certainly not one of them."
Those CEOs who are blind when it comes to marketing tend to view themselves as entrepreneurs, and everyone knows that an entrepreneur is an "expert on everything," including marketing.
Marketing can be all but irrelevant to a CEO, other than providing "glitzy" sales materials and puffed-up press releases filled with unsubstantiated claims and finessed figures. And under the guise of marketing, there are the countless vendor-funded "events" specifically designed to showcase the CEO as the head duck in a not-too-large pond.
All that's not marketing; it's B.S., a technical term brilliantly articulated by Princeton professor Harry Frankfurt in his ground-breaking book, On Bullshit, and ably articulated by another academic, Laura Penny, in Your Call is Important to Us.
Ignorance is never bliss, and in the case of marketing it only leads to unsatisfactory results. As the art of attracting and holding customers, marketing is too important to be thwarted and dismissed by ignorance, misunderstanding and misinformation.
Aside from not having a clue how to move recalcitrant CEOs to see the light and embrace marketing, there are a couple of questions that may be worth discussing:
1. Where does growth come from? For many companies, it comes from acquisitions, increased prices and just plain luck.Being able to say, "We're the third-largest widget works in the world," floats some boats, even though the achievement may be built on something other than growth in actual sales.In the insurance industry, for example, luck plays a key role. Every insurance executive lives for what is called "a hard market"—the increase in insurance rates by insurance companies or the regulators. Higher rates mean higher commissions, which translate into higher revenues, all without raising a finger. Every industry has such gimmicks for pseudo growth.Getting new customers can be more of an exercise in customer replacement, rather than an activity of growing the customer base.
2. Why should anyone want to do business with us? A real estate broker showing an attractive condo regaled prospective buyers during an open house with the virtues of the property. Realizing that none of the visitors expressed an interest, an observer recognized that the salesperson made little or no attempt to discover what the prospective buyers were looking for in a home. Without understanding customer dreams and expectations, how can the salesperson make a sale?Just because we want to make a sale doesn't mean someone wants to buy. The only reason anyone chooses to do business with a company is because of that company's ability to meet customer needs. It's not an accident that Apple Computer's incredible success has come at the moment when it has been rated as "the most innovative company." Apple is about marketing—understanding what the customer wants—not about technology.
Fighting the good fight
So, where does this leave us with attempting to help CEOs recognize the role marketing can play in growing the business? Here are a few thoughts for consideration:
1. Admit to marketing ignorance. No one is expected be an expert on everything; we all have our blind spots. And believe it or not, that goes for CEOs, particularly when it comes to marketing.Marketing is not about personal preferences ("I don't like green"), or individual likes and dislikes ("Nobody reads mail today"). But it's sometimes shocking to hear a company president display what in other circles would be called ignorance.There's nothing wrong with asking questions, and there's everything right about relying on those with specialized knowledge and experience for recommendations. One can certainly hope that the CEO finally sees the light and acknowledges that marketing isn't about the company, but about its customers. It's a difficult concept, but another worth fighting for.
2. Become brand conscious. As difficult as it is to grasp, marketing is about value to the customer. This is not the ever-popular "value-added" idea, but something far more important and rare. We call it "value-inherent," and it's what sets one company apart from everyone else in the same business.
3. Stop chasing the competition. While they appear strong, CEOs are often vulnerable, particularly when it comes to following the competition. They jump around from one sure-to-fail initiative to the next, aping competitors. The truth is that competitors are doing the same thing. Just because they are advertising in a particular publication doesn't mean it's effective.
4. Figure out what's going on. Far too much money and time is wasted on fooling around with the CEO's "great ideas." Chances are, these almost other-worldly insights are "borrowed" from a competitor or another company, but they instantly become the "property" of the CEO. The tragedy is that the entire organization must stop in its tracks and make the useless and unproductive nonsense happen.
On the other hand, it's often difficult or impossible for CEOs to grasp the value of research. They are so committed to "going with their gut" that facts are unnecessary, even irrelevant. If you know everything, then research is borderline ridiculous, right? It's far too easy to be exuberant, excited and totally committed to the brilliance of our own untested ideas.
Marketing myopia
Here's the point: today's General Motors is the poster company for enterprises where those in charge don't have a clue about marketing. The Big GM blinds them. The ideas of their executives are often far different from those in the heads of their customers.
More than 40 years ago, marketing guru Theodore Leavitt of the Harvard Business School labeled this CEO disease "marketing myopia." Unfortunately, his insight continues to stand the test of time.
By John Graham, Contributing Editor Industrial Distribution May 1, 2006
This may seem like an exercise in frustration to marketing directors, sales managers and others, but it's a battle worth fighting.
"What does it take to do good marketing?" This is the question a speaker asked of 50 seminar participants from financial services companies. No sooner had the question been asked when a woman said, "Keep the CEO out of it." Along with laughter, heads were nodding all over the room.
"How can I get my CEO into a marketing mode?" Many a company president would be surprised to learn that I've been asked this question more than any other over the years. It comes from entry-level employees and sophisticated sales executives—from engineers and frustrated marketing directors. The question is always serious, and the voice, more often than not, conveys signs of desperation and discouragement.
"The president can't see how we're slipping," says a frustrated sales manager. "He thinks the problems are only 'temporary.' He sees us like we were 30 years ago. But nobody knows us today. How can I get him to understand what's going on?"
Then there's the thoughtful and well-educated marketing person who reports that her job is "churning out proposals." This is her boss's uninformed view of marketing.
Perhaps the most common form of idiocy is a CEO's benighted belief that the role of marketing is to make sales. Instead of looking at the sales force to see if it is following up on the leads generated by marketing and actually closing sales, marketing gets the blame. Far fetched? Check it out by asking any marketing manager.
Marketing strategy is a source of conflict in many companies, but it's a concept worth fighting for.
Sales vs. marketing
It's not surprising that CEOs focus on sales. That's what gave them their starts and that's where they were successful, so that's what they see as the solution to the problem. "Make more calls" is their mantra and magic solution to everything.
"I just can't understand how this guy can be so blind," said a confused young marketer at a manufacturing company. "He's on top of so many things, but marketing is certainly not one of them."
Those CEOs who are blind when it comes to marketing tend to view themselves as entrepreneurs, and everyone knows that an entrepreneur is an "expert on everything," including marketing.
Marketing can be all but irrelevant to a CEO, other than providing "glitzy" sales materials and puffed-up press releases filled with unsubstantiated claims and finessed figures. And under the guise of marketing, there are the countless vendor-funded "events" specifically designed to showcase the CEO as the head duck in a not-too-large pond.
All that's not marketing; it's B.S., a technical term brilliantly articulated by Princeton professor Harry Frankfurt in his ground-breaking book, On Bullshit, and ably articulated by another academic, Laura Penny, in Your Call is Important to Us.
Ignorance is never bliss, and in the case of marketing it only leads to unsatisfactory results. As the art of attracting and holding customers, marketing is too important to be thwarted and dismissed by ignorance, misunderstanding and misinformation.
Aside from not having a clue how to move recalcitrant CEOs to see the light and embrace marketing, there are a couple of questions that may be worth discussing:
1. Where does growth come from? For many companies, it comes from acquisitions, increased prices and just plain luck.Being able to say, "We're the third-largest widget works in the world," floats some boats, even though the achievement may be built on something other than growth in actual sales.In the insurance industry, for example, luck plays a key role. Every insurance executive lives for what is called "a hard market"—the increase in insurance rates by insurance companies or the regulators. Higher rates mean higher commissions, which translate into higher revenues, all without raising a finger. Every industry has such gimmicks for pseudo growth.Getting new customers can be more of an exercise in customer replacement, rather than an activity of growing the customer base.
2. Why should anyone want to do business with us? A real estate broker showing an attractive condo regaled prospective buyers during an open house with the virtues of the property. Realizing that none of the visitors expressed an interest, an observer recognized that the salesperson made little or no attempt to discover what the prospective buyers were looking for in a home. Without understanding customer dreams and expectations, how can the salesperson make a sale?Just because we want to make a sale doesn't mean someone wants to buy. The only reason anyone chooses to do business with a company is because of that company's ability to meet customer needs. It's not an accident that Apple Computer's incredible success has come at the moment when it has been rated as "the most innovative company." Apple is about marketing—understanding what the customer wants—not about technology.
Fighting the good fight
So, where does this leave us with attempting to help CEOs recognize the role marketing can play in growing the business? Here are a few thoughts for consideration:
1. Admit to marketing ignorance. No one is expected be an expert on everything; we all have our blind spots. And believe it or not, that goes for CEOs, particularly when it comes to marketing.Marketing is not about personal preferences ("I don't like green"), or individual likes and dislikes ("Nobody reads mail today"). But it's sometimes shocking to hear a company president display what in other circles would be called ignorance.There's nothing wrong with asking questions, and there's everything right about relying on those with specialized knowledge and experience for recommendations. One can certainly hope that the CEO finally sees the light and acknowledges that marketing isn't about the company, but about its customers. It's a difficult concept, but another worth fighting for.
2. Become brand conscious. As difficult as it is to grasp, marketing is about value to the customer. This is not the ever-popular "value-added" idea, but something far more important and rare. We call it "value-inherent," and it's what sets one company apart from everyone else in the same business.
3. Stop chasing the competition. While they appear strong, CEOs are often vulnerable, particularly when it comes to following the competition. They jump around from one sure-to-fail initiative to the next, aping competitors. The truth is that competitors are doing the same thing. Just because they are advertising in a particular publication doesn't mean it's effective.
4. Figure out what's going on. Far too much money and time is wasted on fooling around with the CEO's "great ideas." Chances are, these almost other-worldly insights are "borrowed" from a competitor or another company, but they instantly become the "property" of the CEO. The tragedy is that the entire organization must stop in its tracks and make the useless and unproductive nonsense happen.
On the other hand, it's often difficult or impossible for CEOs to grasp the value of research. They are so committed to "going with their gut" that facts are unnecessary, even irrelevant. If you know everything, then research is borderline ridiculous, right? It's far too easy to be exuberant, excited and totally committed to the brilliance of our own untested ideas.
Marketing myopia
Here's the point: today's General Motors is the poster company for enterprises where those in charge don't have a clue about marketing. The Big GM blinds them. The ideas of their executives are often far different from those in the heads of their customers.
More than 40 years ago, marketing guru Theodore Leavitt of the Harvard Business School labeled this CEO disease "marketing myopia." Unfortunately, his insight continues to stand the test of time.
Friday, August 29, 2008
Balancing the knowledge of cost and value
Marketers typically proclaim that procurement knows the cost of everything and the value of nothing. Finance and procurement typically proclaim that marketing has their head in the clouds. Managing directors often have to choose the most convincing arguments between marketing and finance when it comes time to sign off on budget approval.
With deep respect for the role of finance helping ensure companies use fact based forecasting methods, a paradox is observed when considering how seldom finance departments introduce marketing mix modeling, econometrics, neural networks or ad tracking as a tool. I am not sure why finance has not entered this domain but I would have to guess it has something to do with the grey area between marketing and finance.
In the same manner, marketing has made tremendous changes over the last 5 years; in particular, getting involved with fact based marketing measurement methods. Less and less decisions are being made by gut (which is never smarter than your head!) Though best practice is on the right track, I believe however that among the majority of business to consumer companies today, there is a lack of people who understand both the cost and value of marketing. Here enters the concept of marketing intelligence. Understanding both the cost and value should be improved and if the concept of forming a marketing intelligence department should catch on, to whom should these people report too?
Marketing, Finance or direct to the CEO?
Consider this scenario: A person with strong marketing intelligence skills who has the capability to determine return on marketing investment by scientific methods reports to a marketing director. The latest campaign results are not turning out better than the previous campaign. (Neither did the campaign before that) The marketing director must report to finance and the managing director on performance. What does the marketing director do?
We can use our imagination here – pause – reflect – hmmmm.
How would a marketing intelligence person fit into a finance department? Would they feel comfortable? Would they miss the buzz and excitement of the marketing process and become auditors/controllers? (This is not meant to sound like a bad thing but for some people I know it would be a turn off ;-) I wonder if auditors and controllers also have a deep passion for marketing and get a kick out of taking calculated, intelligent risks?
Can the concept of marketing intelligence survive reporting to a marketing director where it is obvious that at some point information about the effect and efficiency of marketing activities will not appear flattering in some given quarter?
With deep respect for the role of finance helping ensure companies use fact based forecasting methods, a paradox is observed when considering how seldom finance departments introduce marketing mix modeling, econometrics, neural networks or ad tracking as a tool. I am not sure why finance has not entered this domain but I would have to guess it has something to do with the grey area between marketing and finance.
In the same manner, marketing has made tremendous changes over the last 5 years; in particular, getting involved with fact based marketing measurement methods. Less and less decisions are being made by gut (which is never smarter than your head!) Though best practice is on the right track, I believe however that among the majority of business to consumer companies today, there is a lack of people who understand both the cost and value of marketing. Here enters the concept of marketing intelligence. Understanding both the cost and value should be improved and if the concept of forming a marketing intelligence department should catch on, to whom should these people report too?
Marketing, Finance or direct to the CEO?
Consider this scenario: A person with strong marketing intelligence skills who has the capability to determine return on marketing investment by scientific methods reports to a marketing director. The latest campaign results are not turning out better than the previous campaign. (Neither did the campaign before that) The marketing director must report to finance and the managing director on performance. What does the marketing director do?
We can use our imagination here – pause – reflect – hmmmm.
How would a marketing intelligence person fit into a finance department? Would they feel comfortable? Would they miss the buzz and excitement of the marketing process and become auditors/controllers? (This is not meant to sound like a bad thing but for some people I know it would be a turn off ;-) I wonder if auditors and controllers also have a deep passion for marketing and get a kick out of taking calculated, intelligent risks?
Can the concept of marketing intelligence survive reporting to a marketing director where it is obvious that at some point information about the effect and efficiency of marketing activities will not appear flattering in some given quarter?
Wednesday, August 20, 2008
Marketing Departments apply 80/20 principle backwards with Media Management
The 80/20 principle is a formula that can be applied to most areas of business with much success. The formula can be used in various ways by marketing departments; typically the core 20% of brands or services generate 80% of the profit, or 80% of your attention should be given to the most important 20% of your business. More often than not, this rule is applicable to most situations. Why then do many marketers reverse this rule in relation to Advertising and Media focus?
Take for example a very fortunate company that may have 10 million euro as a total marketing budget. Let's say 1-2 million is used to create and produce good advertising (20% is a reasonable amount)
To be sure this campaign will be a success, many marketers will make a strong effort to gather brand insight, engage in focus groups, and engage the ad agency over and over again using countless hours of scrutiny of every detail. Important considerations of background environment, the size of the logo, the manner and tone in the voice, color and shapes portrayed all fall under a microscope. The CEO may get involved and ask for his opinions to be considered - a new tone is considered - text adjusted, story boards altered - again many hours are used in this process. Does this story sound familiar?
Now....compare this above scenario to the process that takes place to develop a media plan. Hmmm. Let's not forget this part ...considering it is where 80% of the marketing budget is visible to the consumer!
Time was most certainly taken to create a fantastic media brief ;-)
The media agency had ample time to create the strategy and also had access to all the latest brand research ;-)
The media agency had the ability to recommend the media before the ad agency went into production with whatever was considered most relevant ;-)
Hopefully the point is clear. Often a minority of engagement is made with the media agency responsibilities. Most disturbing is the lack of engagement of marketing departments to dive deep into post evaluation of campaign performance. Here are the hidden gems. Post evalutions can unlock improvement potential of upwards of 35% based on my past experience. (Plenty of case histories available..just ask)
Between Advertising and Media, it is fair to say that Marketing spends at least 80% of its time on Advertising. It is reasonable to assume that B2C advertisers allocate 80% of their Marketing budgets to Media. If these assumptions are true, it would be fair to conclude that use of time may be somewhat out of balance.
Internal media management within companies should be improved. Though it may be neither possible to imagine nor appropriate for a Marketing Department to spend 80% of its time focused on media, it should be reasonable to expect an active engagement with the processes surrounding media planning, implementation and post evaluation.
Media management advisors have an important role with growing responsibility. For the good of the future, companies should look more to drive this development by asking better questions and posing better challenges. This will only happen if engagement in media, facts and figures is demonstrated. Some may feel numbers are not sexy...but I do. (Guess that's why I like doing what I do :-)
Take for example a very fortunate company that may have 10 million euro as a total marketing budget. Let's say 1-2 million is used to create and produce good advertising (20% is a reasonable amount)
To be sure this campaign will be a success, many marketers will make a strong effort to gather brand insight, engage in focus groups, and engage the ad agency over and over again using countless hours of scrutiny of every detail. Important considerations of background environment, the size of the logo, the manner and tone in the voice, color and shapes portrayed all fall under a microscope. The CEO may get involved and ask for his opinions to be considered - a new tone is considered - text adjusted, story boards altered - again many hours are used in this process. Does this story sound familiar?
Now....compare this above scenario to the process that takes place to develop a media plan. Hmmm. Let's not forget this part ...considering it is where 80% of the marketing budget is visible to the consumer!
Time was most certainly taken to create a fantastic media brief ;-)
The media agency had ample time to create the strategy and also had access to all the latest brand research ;-)
The media agency had the ability to recommend the media before the ad agency went into production with whatever was considered most relevant ;-)
Hopefully the point is clear. Often a minority of engagement is made with the media agency responsibilities. Most disturbing is the lack of engagement of marketing departments to dive deep into post evaluation of campaign performance. Here are the hidden gems. Post evalutions can unlock improvement potential of upwards of 35% based on my past experience. (Plenty of case histories available..just ask)
Between Advertising and Media, it is fair to say that Marketing spends at least 80% of its time on Advertising. It is reasonable to assume that B2C advertisers allocate 80% of their Marketing budgets to Media. If these assumptions are true, it would be fair to conclude that use of time may be somewhat out of balance.
Internal media management within companies should be improved. Though it may be neither possible to imagine nor appropriate for a Marketing Department to spend 80% of its time focused on media, it should be reasonable to expect an active engagement with the processes surrounding media planning, implementation and post evaluation.
Media management advisors have an important role with growing responsibility. For the good of the future, companies should look more to drive this development by asking better questions and posing better challenges. This will only happen if engagement in media, facts and figures is demonstrated. Some may feel numbers are not sexy...but I do. (Guess that's why I like doing what I do :-)
Post evaluating marketing performance
Managing and Marketing Directors are all conerned about how campaigns perform। Often post evaluations of marketing campaigns are summarized by how many units more or less were sold. This is a shame because there is significant insight that can lead to 10%, 20%, 30% or more improved return on marketing investment by deep diving into the data that exists within the post evaluation of every marketing campaign.
Agencies and consultants typically take the lead in post evaluating media buying performance। Most companies do not feel comfortable about what to ask for in a post evaluation and thereby receive a presentation of all the things the agency feels is most important. This process can and should improve.
Agencies need good sparring partners in order to excel. Good sparring partners create challenges that foster learning. Without the challenges, agencies can become complacent and far too often "ask" what they should do next. If companies do not make an effort to understand how media works, often the best ideas that come from agencies are misunderstood or are not recognized.
There is big money at play - media investment represents >70% of most B2C marketing budgets। Deeper evaluations that go beyond sales should be performed। Awareness, Trial, Use and Loyalty should all be measured on a continual basis. The ratio of working vs. non-working media investments must be monitored and kept in check. The contribution of each marketing channel, online and offline should be understood. All of these factors are measureable today which leaves companies with few if any excuse why proper evalutions of marketing performance are not being performed. If your company does excercise best marketing practice...you are obviously enjoying the success and wondering what the heck this blog is about!
Agencies and consultants typically take the lead in post evaluating media buying performance। Most companies do not feel comfortable about what to ask for in a post evaluation and thereby receive a presentation of all the things the agency feels is most important. This process can and should improve.
Agencies need good sparring partners in order to excel. Good sparring partners create challenges that foster learning. Without the challenges, agencies can become complacent and far too often "ask" what they should do next. If companies do not make an effort to understand how media works, often the best ideas that come from agencies are misunderstood or are not recognized.
There is big money at play - media investment represents >70% of most B2C marketing budgets। Deeper evaluations that go beyond sales should be performed। Awareness, Trial, Use and Loyalty should all be measured on a continual basis. The ratio of working vs. non-working media investments must be monitored and kept in check. The contribution of each marketing channel, online and offline should be understood. All of these factors are measureable today which leaves companies with few if any excuse why proper evalutions of marketing performance are not being performed. If your company does excercise best marketing practice...you are obviously enjoying the success and wondering what the heck this blog is about!
Subscribe to:
Posts (Atom)
