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  • POWERING PERFORMANCE on a Field Marketing Level Through Localized Content, Advertising, Promotions, Search Contacts, and Cyber Community Connections EXECUTIVE SUMMARY
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM CONTENTS 3 Executive Summary 4 Research Scope 5 Executive Summary of Key Findings 7 Sponsor Contributions 12 About the Sponsors 13 About the CMO Council© Copyright CMO Council. All Rights Reserved. 2011 2
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM EXECUTIVE SUMMARY Despite the homogenization of markets, media channels, and brand experiences globally, localization of messages, images, creative executions, offers, deals, and interactions is still critical to marketing effectiveness and customer relationship building across many business categories. While the Internet may have eclipsed the trusty Yellow Pages book as the primary go-to resource for finding things locally (and providing third-party validation), consumers still desire a very local buying and service experience from a trusted community participant and presence. The advent of multi-channel, digital marketing is transforming customer engagement, both globally and locally. It is giving local businesses a global presence, and it gives global businesses a local face and pipeline into micro-populations, prospects, and continuity customers. Local marketing automation platforms and solutions are enabling national or regional marketers to produce, package, distribute, and digitally repurpose multiple versions of content, collateral, advertising, direct mail, promotional, and in-store merchandising materials very cost-efficiently and effectively. It is enabling marketers to truly localize and customize campaigns by community and to accommodate factors such as climate, geography, ethnic composition, demographics, shopper- graphics, psychographics, politics, and even neuro-sensory influences. Media companies in the cable, broadcast, print, mobile, Internet, outdoor display, and digital signage sectors are introducing more targeted zone, ZIP code, and even location-based messaging and media-buying capabilities. And the same is true at the point of sale, with behavioral targeting leveraging the transactional histories of loyalty and rewards club members shopping at supermarkets, drug stores, and mass merchant outlets. Downsizing the World Wide Web to a neighborhood locator network is transforming the classified advertising and local listings business and bringing localized search marketing innovations to the demand-generation and traffic-building capabilities of field networks, sales channels, service locations, and merchant outlets of national brand marketers. These include local agents, dealers, franchisees, branch offices, manufacturer reps, consultants, brokers, restaurants, hotels, and retail stores. Localized social marketing is also harvesting the audience reach and viral value of hundreds of millions of active and addicted social gamers, personal content publishers, brand and personality fans, as well as community networking enthusiasts. Advances in media, buying, tracking, and reporting systems using the Internet are also introducing higher levels of transparency, accountability, reporting, and measurement to co-op, localized, and network marketing programs on a grassroots level. Centralizing the origination of localized marketing content and programs also delivers significant cost savings, assures greater brand integrity, reduces errors, and improves time-to-market. In addition, localized marketing support drives participation, interest, and enthusiasm in the field, boosting sales effectiveness and closure.© Copyright CMO Council. All Rights Reserved. 2011 3
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM RESEARCH SCOPE "Localize to Optimize Sales Channel Effectiveness" teamed the Chief Marketing Officer (CMO) Council with its sister affinity network, the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), collectively reaching more than 20,000 senior marketing, sales, and channel professionals. A select group of underwriters supported this thought leadership program, including BrandMuscle, Matchbin, and MediaTile. The study has been focused on helping marketers optimize the delivery of localized marketing support, engaging and acquiring customers on a local level, as well as connecting and resonating with local community interests, icons, preferences, and hot buttons. Qualitative and quantitative interactions were undertaken in the second and third quarters of 2011 with leading brands in the automotive, retail, business services, insurance, banking, real estate, restaurant, lodging/hospitality, consumer electronics, entertainment, and healthcare sectors. A leadership committee of more than 20 corporate executives in the localized marketing field was assembled, and an online survey of more than 300 marketers audited and assessed issues, obstacles, competencies, proficiencies, experiences, successes, outcomes, and intentions in the area of localized marketing. The majority of respondents to the CMO Council survey hold senior marketing roles including CMO, EVP, SVP, VP, and director of marketing and communications. In terms of company size, 16 percent of participants represented companies with annual revenues of more than $5 billion; 15 percent were from companies with annual revenues between $1 billion and 5 billion; 17 percent were from companies with annual revenues of $250 million to $1 billion; 16 percent were drawn from companies with $50 to $250 million in annual revenue; and 36 percent came from companies with less than $50 million in annual revenue. Some 68 percent of respondents were drawn from North America; 14 percent from Europe; 7 percent from Asia Pacific; 4 percent from the Middle East; 4 percent from Africa; and 2 percent from South America.© Copyright CMO Council. All Rights Reserved. 2011 4
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM EXECUTIVE SUMMARY OF KEY FINDINGS The “Localize to Optimize Sales Channel Effectiveness” study by the CMO Council reveals 86 percent of national marketers surveyed intend to look for ways to better modify, adapt, and localize their marketing content, messaging, and prospect engagement practices. Clearly, localized marketing is becoming a critical area of strategic focus and competitive advantage for brands. Most do not rate their capabilities very highly, and many are exploring new channels and modes of localized marketing content delivery. Only 52 percent of marketers are satisfied with the leadership, innovation, and effectiveness in this area. At the same time, marketers recognize the value of localized market and community engagement and how it can drive lead flow, differentiate brands, and create more lasting relationships for their channels, field agents, and sales representatives. Just 12 percent of marketers believe they have highly evolved campaigns and analytics on a local level in contrast to nearly 50 percent who see themselves as underperforming or needing new strategic thinking and capability development in local marketing. Findings from the online survey of 300-plus members across all leading industry sectors indicate traditional print and broadcast/cable media are losing ground to more targeted, personalized, interactive, and measurable forms of local engagement across diverse audiences and communities. The most preferred channels for localized marketing are experiential and relationship-building events, direct mail, localized websites, social networks, and electronic messaging. These were far more popular selections than cable and broadcast television, radio, local magazines, and even daily and weekly newspapers. Surprisingly, the Yellow Pages (online and offline) and local online deal delivery networks, such as Groupon and LivingSocial, lagged behind all channels of localized marketing choice for national brands. Significantly, the study found that: • Nearly 49 percent of marketers believe localized marketing is essential to business growth and profitability, particularly as it relates to demand generation and sell-through of products and services. • Just 30 percent of marketers have embraced local marketing automation platforms, resources and tools compared to 62 percent who either don’t have them or only now evaluating these options. • A sizable 23 percent of marketing respondents allocate over 50 percent of their marketing and merchandising budgets to local programs; another 41 percent spend between 20 and 50 percent of the budgets on local marketing. • Only 36 percent of marketers have a formalized process or system for tracking the impact of national brand advertising on local market development and customer acquisition. Some 61 percent either don’t measure this or have an ad hoc system for tracking national advertising effectiveness. • For those who do track the impact of national brand advertising on local business performance, the most common methods include response to offers or deals (45 percent); awareness and recognition studies (41 percent); lead and prospect flow (37 percent); web site analytics (37 percent); field and channel feedback (31 percent); local inquiries and calls (30 percent) and share of market data (28 percent). • Cable and broadcast television, local magazines, and radio reportedly deliver the lowest return on spend, compared to top performers like local events, direct mail or FSIs, local partner or channel web sites, social networks and electronic messaging.© Copyright CMO Council. All Rights Reserved. 2011 5
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM • Factors that most influence localization of marketing messages include demographic (45 percent); geography/location (44 percent); socioeconomic (28 percent); psychographic (27 percent); cultural (22 percent); shoppergraphic or buying history and behavior (19 percent); as well as language (19 percent). • Major obstacles or challenges to marketing localization include understanding local market dynamics or variables (30 percent); determining the right cost/benefit models when it comes to spend (24 percent); and measuring and evaluating campaign effectiveness on a local level (23 percent). • Top benefits and competitive advantages from localized marketing strategies and programs include: 1) greater customer relevance, response and return (67 percent); 2) better customer conversations and connectivity (39 percent); 3) improved loyalty and advocacy (29 percent); 4) brand differentiation, distinction and preference (27 percent). Marketers are looking to make significant changes and improvements in how they implement local marketing activities. These changes include efforts to: • Automate the development and delivery of local marketing materials and content • Explore and test localized marketing approaches and strategies • Embrace more localized channels of targeting and market access • Expand localized marketing budgets and programs A good percentage of respondents believe localized marketing platforms and systems can be most beneficial in areas like: • Handling the logistics and intricacies of localized marketing • Creating relevant and meaningful versions of content • Controlling brand assets and uniformity of brand messaging • Measuring and evaluating campaign effectiveness and content usage Ownership of localized marketing programs and budgets tends to be fairly distributed across different functional areas. Just 33 percent of CMOs personally direct and control local marketing efforts, while in the main cross-section, middle managers take responsibility for local marketing. These include those with ownership of channel/field marketing or merchandising, key accounts, district/territorial sales, business development, regions/countries, communications, marketing operations, and lines of business. This CMO Council engagement program reveals huge upside potential for brands implementing localized marketing strategies that enable their sales and customer-facing networks to be more adept in connecting and communicating with consumers and prospects on a more personal and relevant level. Early adopters of hosted platforms and cloud-based services in this area will gain competitive advantage in their ability to execute campaigns more effectively, provision their channel and field organizations more efficiently, better control their brand assets, and track the performance of their marketing content investments.© Copyright CMO Council. All Rights Reserved. 2011 6
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM SPONSOR CONTRIBUTIONS MediaTile’s HumanKiosk Brings Personal Engagement to Local Points of Service Using Remote Experts and Visual Interaction Transforming B2C to “B2Me” With the HumanKiosk and MediaCast Video Presence Getting Personal With “B2Me” All business is now personal in the digital age. Consumers expect facts and information to be tailored to them while shopping, working, banking, attending events, and even while in transit. Businesses that anticipate these demands and provide customized information with personalized services can immediately influence customer decisions and create a lasting relationship. “B2Me,” or Business-to-Me, involves user- or buyer-initiated interaction, conversation, inquiry, or communication. B2Me helps consumers better understand, validate, or consummate a considered purchase using trusted networks, third-party experts, and vendor sources of information. Just as permission marketing changed the past decade with personal opt-in control, B2Me is now transforming classic B2C communications, which only deliver generic information to anonymous audiences. B2Me communication is highly targeted, responsive, and relevant to individual consumers. With a B2Me solution, customers engage in a personal dialog—when and where they need it most. Introducing the HumanKiosk, Powered by MediaCast Video Presence—It’s Personal The MediaTile Company, a recognized leader in cloud-based digital signage systems, has developed a next-generation interactive video engagement solution for point-of-sale or point-of-service environments. Now businesses can humanize their brand interaction, improve the customer experience, and deliver their messages with absolute control using expert interaction from remote locations. Powered by the cloud-based MediaCast Video Presence system, the HumanKiosk revolutionizes in-field customer service and support. The solution fulfills the promise of B2Me communications. It delivers a unique personal advantage by combining the capabilities of interactive digital signage with on-demand, face-to-face video interaction. “MediaTile’s HumanKiosk and MediaCast solution is in exact alignment with today’s requirement for brands to have an in- market promotional system that delivers a localized and tailored experience for the consumer in order to optimize sales. This new level of consumer personalization combined with the brand’s ability to deliver accurate and immediate information, regardless of where the consumer is located, will certainly usher in game-changing results across many retail markets.” Donovan Neale-May, Executive Director of the CMO Council© Copyright CMO Council. All Rights Reserved. 2011 7
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM Personal and Engaging Digital Interactivity on a Local Level The HumanKiosk solution attracts, influences, and engages consumers in dynamic new ways at the point-of-sale or service so they can be encouraged to make smarter and more informed buying, financing, or ownership decisions…on-the-spot. In a familiar but oversized smartphone and tablet-like format, it attracts consumers to scheduled, interactive digital promotions and dynamically generated media based on time, day, location, and environmental factors. For improved relevance, users are also afforded the ability to navigate information using a touch-screen interface for enhanced interactivity. The HumanKiosk not only delivers highly targeted brand and product- specific messages, it also captures consumer intelligence. Get Face-to-Face With Consumers The ultimate breakthrough is achieved through MediaCast Video Presence. With the touch of an on-screen button, consumers instantly enter a two-way, high-definition, face-to-face conversation with a remote expert. Remote experts support consumers directly, rather than solely relying on often poorly trained sales associates or other on-site intermediaries. These remote experts are available on-demand, and are automatically matched with the consumer’s on-screen selections, which might include product-specific features, services, and/or language. This intelligent video call routing ensures that the customer receives a positive brand experience and accurate, immediate, and relevant answers to their specific questions. Marketing With Personal Precision With the HumanKiosk solution, brands are now able to engage consumers directly and take control of the brand-bias in the conversation. Remote experts, trained by the brand marketer, use a personal approach to influence the consumer through natural conversation and relationship building. They can deliver personal service, even in the customer’s native language, directly from the brand authority. These experts can also stimulate immediate interest to reinforce a call to action, or they can encourage ongoing engagement. It also allows for cost-effective personality or spokesperson appearances at multiple retail locations without travel, security, or logistics complications. “The HumanKiosk is an innovative and ground-breaking solution whose time has now come. The HumanKiosk is an extension of our current offerings as it enables us to cover our clients’ secondary and remote markets with an equivalent level of personal service and expert knowledge and with the addition of multi-language support.” Dave Treadway, President and CEO of MarketStar The MediaCast Video Presence system also captures the consumer’s touch-based and conversational interactions. This provides an invaluable source of consumer intelligence data for brands at a fraction of the cost compared to traditional interview methods, such as on-site intercept or feedback polls. Five Times the Market Reach at a Fifth of the Cost of Traditional Staffing Product experts are delivered through the cloud and can be located virtually anywhere. Customers and partners have estimated that they will realize a gain of five times the market reach at around a fifth of the cost of traditional human staffing options. This cost-effective and efficient solution improves the customer experience and augments the services provided by on-site associates. A self-contained and highly secure solution, the HumanKiosk includes built-in wireless network services from leading carriers. The HumanKiosk, therefore, requires nothing more than on-site power for operation. Using the latest 4G/4G LTE network services and cloud-based technology, the system eliminates the need for on-site network costs, complexities, and associated Internet intrusion threats.© Copyright CMO Council. All Rights Reserved. 2011 8
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM Delivering Business and Brand Value The HumanKiosk and MediaCast Video Presence deliver true business value. By fulfilling customer expectations and informational needs and delivering a personal approach to service and support, in many cases brands can realize the following advantages: Increased viewer relevance: By combining the capabilities of interactive digital signage, dynamically built content, and personal, cloud-based, face-to-face services, brands are better able to influence individuals, prompting them to take immediate action. Through this unique combination of elements, a four- to six-times increase in personal relevancy can be achieved over traditional display and print messaging. Heightened customer engagement: The synergy of advanced dynamic media, on-the-fly QR-codes, smartphone interaction, and face-to-face conversations heightens customer engagement and builds the foundation for an ongoing relationship. Brands can leverage their on-demand experts to assist viewers with personalized transactions, essentially behaving as “human middleware,” simplifying and expediting consumer transactions. Extended market reach and personal interaction: Delivery efficiencies and coverage areas can be expanded dramatically by leveraging a cloud-based delivery model for both digital media promotions and providing face-to-face customer services. On-demand agents in video-call centers are accessible across wide-geographical areas while personalized, dynamically generated digital promotions are tightly scheduled to appear at the right place and time thus delivering a four- to 6-times increase in market reach. Realize faster time to market: Manual processes and logistics-related dependencies can be virtually eliminated. This ensures a significant time-to-market advantage for all product promotions and launches, service delivery needs, training and education, as well as customer support. A two- to three-times improvement in time to market can be realized using this efficient cloud-based customer service methodology. Increase personnel utilization: By centralizing and training your video call agents, you can dramatically improve personnel utilization and realize new levels of cost efficiency. Staffing centralized video call centers eliminates the significant down time associated with in-location personnel travel, lodging, time zone changes, etc., while increasing the overall availability of specialists, multi-language services, and hours of operation. Cost efficiencies of two- to four times can be realized, dramatically increasing ROI. For more information, contact MediaTile at www.mediatile.com or info@mediatile.com.© Copyright CMO Council. All Rights Reserved. 2011 9
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM The Proliferation of Digital Media Creates Unique Challenges and Opportunities for Local Marketing By Philip Alexander, President & CEO, BrandMuscle, Inc. Changing trends in consumer behavior, proliferation of new media, and the advancements in technology are all driving a complex network of opportunities for national brands to engage one- on-one with consumers at the local level. According to the CMO Council’s "Localize to Optimize Sales Channel Effectiveness" report, nearly 50 percent of marketers believe localized marketing is essential to business growth and profitability, yet only 12 percent believe they have highly evolved campaigns and analytics in place to execute and measure their local marketing efforts. National brands with decentralized marketing organizations are increasingly turning to local marketing automation platforms to meet the needs of local affiliates (stores, agents, dealers, franchisees, and resellers) who desperately need an easy way to create and deploy more targeted, personalized and interactive sales and marketing materials and campaigns. Fulfilling these needs was a challenge for decentralized marketing organizations when media options were limited to print and broadcast. The stakes have only become higher as CMOs look for ways to achieve greater customer relevance and seamlessly deliver the brand promise across dozens of new digital media channels. By the time the consumer enters the local store, it’s likely he or she has already made a decision based on some form of online research. This presents a significant opportunity for marketers to improve the value of their creative and marketing assets by impacting consumer demand prior to purchase. As the report suggests, BrandMuscle has also seen an escalation in demand across its client base for tools that allow local affiliates to easily create local microsites, social media content, electronic messaging, local events, and online advertising. As the search industry grows, the drive to innovate and optimize local efforts continues to increase demand for technology that can streamline how these new forms of media are used to produce results in a way that complements the national brand rather than competing with it. Three particular trends we see dominating marketing communications today: 1. Large, national advertising campaigns are being replaced by activities that are locally focused This trend is being driven by media fragmentation and an increase in consumers who want to connect one-on-one with brands and support businesses that will boost their own local economies. 2. Significant shift in spending from traditional forms of media to digital Local businesses are embracing email and other forms of online marketing (microsites and landing pages, paid search, banner advertising, and now SMS) because they deliver a relatively low-cost way to reach consumers quickly via smartphones and mobile devices. 3. Considerable shift from mass production of marketing materials to advertising on-demand Economic challenges have forced marketers to re-analyze expenditures to ensure every dollar invested is generating the best possible return. While long-run printing still has valid applications, many have found that recent advancements in digital printing is allowing for© Copyright CMO Council. All Rights Reserved. 2011 10
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM cost-effective production of more personalized and effective pieces while reducing the cost and waste associated with warehousing materials that quickly become outdated. Digital media further accelerates the shift to personalized one-to-one communications. Web-based local marketing automation solutions like BrandMuscle’s make it possible for corporate marketers to support brand-compliant local customization and deployment of marketing campaigns by local affiliates to address geographic, demographic and local competitive considerations. From customizing a print ad to delivering an email containing a link to a personalized landing page, BrandMuscle’s solution provides a cost-effective way for marketers to ensure global brand compliance, improve operational efficiency, and increase speed-to-market. While having the right technology in place is critical to executing local marketing in a decentralized environment, it’s equally important to provide ongoing professional support to ensure local affiliates adopt and use the solution vigorously. While ease of use remains a key consideration, BrandMuscle also provides tactical and strategic local marketing support to both the corporate marketer and local affiliate to achieve optimal ROI. A key challenge many local affiliates face is understanding what types of advertising or campaigns will work best for their businesses and limited budgets. BrandMuscle addresses this by providing an option for local affiliates to work one-on-one with local media planning and buying specialists who can make recommendations and execute more strategic buys that will generate favorable returns. As Donovan Neale-May, Executive Director of the CMO Council notes, “Localization is the name of the game for national brands with significant field, channel or network marketing organizations.” With today’s consumer driving the conversation, marketers are forced to rethink their messaging and how it’s delivered to increase relevancy and speed-to-market. Local marketing automation platforms deliver a way for brands to centralize the origination of localized content while providing significant cost savings, global brand compliance and increased participation, interest and enthusiasm by the field to drive channel, and field sales performance. As new forms of media emerge and are tested with favorable results by corporate marketing organizations, it becomes even more critical to leverage technology that allows the brand to quickly scale high-performing tactics across sales channels to secure a competitive advantage. About BrandMuscle, Inc. BrandMuscle is a leading provider of web-based local marketing automation software and unparalleled end-user support for companies with decentralized sales and marketing channels. Using the company’s proprietary BrandBuilder® software, marketers can empower field-level customization and execution of personalized advertising and marketing campaigns to optimize local sales and marketing performance. Founded in 2000, BrandMuscle is headquartered in Cleveland, Ohio, with a regional service office in Los Angeles, California. BrandMuscle clients include many of the nation’s most recognizable brands including Allstate Insurance, Chase Bank, PPG Automotive Refinish, BMW of North America LLC, DIRECTV, Hunter Douglas, and T-Mobile. For more information visit www.BrandMuscle.com.© Copyright CMO Council. All Rights Reserved. 2011 11
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM ABOUT BRANDMUSCLE BrandMuscle provides end-to-end technology-based marketing solutions, expert client services and ongoing support to enable corporate clients with distributed advertising needs the ability to customize and distribute brand and legal compliant advertising for virtually every media type at the local level. Its specialties include Marketing Services Technology, Brand Management, Marketing Asset Management, Ad Customization, Local Media and Distributed Advertising. ABOUT MEDIATILE MediaTile is the worldwide leader in cloud-based digital signage solutions. MediaTile is transforming traditional B2C communications into B2Me communications – delivering information and personal interaction tailored to a viewer’s specific wants and needs. A digital signage innovator, MediaTile was the first company to deliver the advantages of cloud- computing using the unique combination of Cellular connectivity and a SaaS-based application. Our MediaCast Content Management and revolutionary MediaCast Video Presence systems enable you to attract, engage, and directly influence your audience with a unique ”personal advantage.” Digital signage networks powered by MediaCast are simple to deploy, easy to use, and enable you to achieve your communications goals and ROI faster. Our solutions have garnered customer praise and industry awards for increasing market reach and viewer interaction, while reducing costs and complexities. info@mediatile.com (t) 831-439-8786 ABOUT MATCHBIN Founded in 2004, Matchbin is transforming hundreds of newspapers, radio stations, and TV stations from traditional media companies to new online media success stories. Matchbin’s technology platform ensures our media partners can quickly capture a significant share of the rapidly growing local online advertising market. Since Matchbin launched their Community Marketplace technology in January 2008, the Matchbin network has grown to over 750 local media partners, 6.1M unique visitors, and 80M page views per month.© Copyright CMO Council. All Rights Reserved. 2011 12
  • LOCALIZE to OPTIMIZE Sales Channel Effectiveness TM ABOUT THE CMO COUNCIL The Chief Marketing Officer (CMO) Council is dedicated to high-level knowledge exchange, thought leadership, and personal relationship-building among senior corporate marketing leaders and brand decision-makers across a wide range of global industries. The CMO Council’s 6,000 members control more than $300 billion in aggregated annual marketing expenditures and run complex, distributed marketing and sales operations worldwide. In total, the CMO Council and its strategic interest communities include more than 12,000 global executives across 100 countries in multiple industries, segments, and markets. Regional chapters and advisory boards are active in the Americas, Europe, Asia Pacific, Middle East, and Africa. The Council’s strategic interest groups include the Coalition to Leverage and Optimize Sales Effectiveness (CLOSE), Marketing Supply Chain Institute, Customer Experience Board, LoyaltyLeaders.org, Online Marketing Performance Institute, and the Forum to Advance the Mobile Experience (FAME). www.cmocouncil.org© Copyright CMO Council. All Rights Reserved. 2011 13