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Top 4 Reasons... …

Top 4 Reasons...
Advertising & Marketing Efforts are Failing Today!

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  • 1. The Top 4 Reasons… Advertising and Marketing Efforts Are Failing Today Even the savviest executives need to understand the complex issues causing advertising and marketing campaigns to fail today
  • 2. Researched and produced by: Sponsored by: © HALO Branded Solutions - 2011
  • 3. Why did HALO commission a study?
    • In our work with a variety of companies, and industries we see the marketing and advertising challenges they face in connecting with their targets
    • Advertising and marketing options are changing rapidly, and confusing even the most savvy marketing experts
    • We know these challenges are taking a toll, so we hired an independent research company to investigate some of the reasons why and find solutions
    • We are pleased to share this executive briefing with you
    © HALO Branded Solutions - 2011
  • 4. Areas covered
    • Why many businesses remain disconnected from the prospects and clients they are trying to reach
    • Why advertising and marketing efforts are failing
    • The risks you haven’t thought about
    • Ways to overcome marketing and advertising challenges in today’s environment
    © HALO Branded Solutions - 2011
  • 5. A Look at Advertising and Promotional Marketing Trends
  • 6. Consumer spending has plummeted… perhaps indefinitely
    • From 2000 to 2010, the US share of global consumer spending has dropped from 36% to just 27%
    • In late 2010, the savings rate for American households increased to 6.4%, the highest level since June 2009, to $725.9 Billion
    • “ The consumer is less willing to spend. Soft labor markets are likely to remain so through 2013”
      • Guy LeBas
      • Chief fixed income strategist Janney Montgomery Scott in PA
    • JP Morgan, Share of global consumer spending, 3/12/10: Bloomberg.com Consumer spending and incomes in U.S. stagnate 8/3/10
    © HALO Branded Solutions - 2011
  • 7. Brands are failing more than ever
    • Annually more than 156,000 products debuted in stores globally – 75% of these failed
    • 80% of those new brand failures occurred within the first 3 months
    • Success or failure of a brand introduction is now determined in just 12 to 18 months
    • PricewaterhouseCoopers ,2010 Food, Beverage, and Consumer Products Financial Performance Report Forging Ahead in the New Economy, 2010
    Failures Successes © HALO Branded Solutions - 2011
  • 8. Businesses are desperate
    • In an effort to compensate for the drop in consumer spending businesses are increasing their advertising expenditures
    © HALO Branded Solutions - 2011 Business Breakthroughs International, 2010
  • 9. Advertising in vain
    • The amount of money spent on advertising each year may have increased, but the number of customers gained has not
    • What does all of this mean for the marketing budget?
    © HALO Branded Solutions - 2011 Business Breakthroughs International, 2010
  • 10. Advertising dollars are being wasted
    • The message that doesn’t get through is a waste of time and money
    • As John Wanamaker put it in his age old adage, "I know half my advertising is wasted; the trouble is I don't know which half"
    • Experts agree with John, at least 60% of all advertising dollars go to waste
    © Halo Branded Solutions - 2011 Making Advertising Really Pay, TV Week, May 2007, Go to War Against Wasted Marketing Spending, Advertising Age, 12/17/08
  • 11. How much is being wasted?
    • The total wasted advertising dollars annually is over
    • $167,767,000,000
    • With that much money, a brand new Cadillac Escalade could be purchased for every man, women, and child living in Brooklyn, NY (2.5 Million people)
    Making Advertising Really Pay, TV Week, May 2007, 2011 Cadillac Escalade ESV 4-door Sport Utility, Kelly Blue Book, 2011, Population Estimates, U.S. Census Bureau, 2000 © HALO Branded Solutions - 2011
  • 12.
    • It used to be easy to reach a target…
    • In 1965, 80% of 18-49 year-olds in the US could be reached with only three 60-second TV spots
    What is happening? How Effective are Video Ads On Social Media Sites?, Media'ZBiz, December 1, 2009 © HALO Branded Solutions - 2011
  • 13.
    • To achieve the same result today, it takes 117 prime-time commercials
    • That’s a 3800% increase in the amount of advertising messages needed to reach someone
    • Advertisements are not connecting with audiences the same way they used to
    Why has it become so expensive? How Effective are Video Ads On Social Media Sites?, Media'ZBiz, December 1, 2009 © HALO Branded Solutions - 2011
  • 14. Consumers are bombarded
    • In 1970, the average person was exposed to about 500 advertisements each day
    • In the early 1990s, it was 5,000
    • Today people are exposed to close to 30,000
    • Thanks to technology, people are exposed to 590% more advertising messages than 20 years ago
    Cutting Through Advertising Clutter, CBS News, September 17, 2006; Prudential Douglas Elliman, 2009 © HALO Branded Solutions - 2011
  • 15. What is the effect of this bombardment?
    • Individuals see more than 3,000 commercial advertising images daily
    • The subconscious absorbs 150 of those images
    • And only 30 reach the conscious mind
    • In fact, 90% of people pay almost no attention to online advertisements
    Celebrity Endorsements Still Push Product, Advertising Age, 9/22/10 © HALO Branded Solutions - 2011
  • 16. And the message is not sticking
    • In 1965, consumers recalled 34% of commercials they had seen
    • In 1990, that number had dropped to 8%
    • And by 2007, consumers could barely name 2 commercials that they had seen in a given day
    Business Market Research Makes the Difference, Empire Research Group, 2011 © HALO Branded Solutions - 2011
  • 17.
    • Companies are under increased pressure to connect with their target market
    • Most industries today face more competition than ever making it harder to keep market share
    • Things like clutter and consumer apathy create a critical barrier
    • Wasted advertising dollars mean that it costs much more to reach each individual
    Today’s reality © HALO Branded Solutions - 2011
  • 18. What’s next?
    • Let’s take a deeper dive…
    • and explore the reasons marketing and advertising efforts are failing
    © Halo Branded Solutions - 2011
  • 19. Not Knowing How To Reach a Target Audience
    • Reason #1
  • 20. Not knowing the target audience
    • Advertisements can change the way individuals view products
    • For example, businesses are always trying to find ways to connect with women since they make 85% of all brand purchases
    Ad Clutter Reduces Ad Effectiveness, Burst Media, MarketingCharts.com, November 2008 © HALO Branded Solutions - 2011
  • 21. Sending the wrong message
    • However, nearly 60% of all women will perceive an advertised product negatively, if it clutters their web viewing
    • Women are also more likely to leave a website that appears cluttered
    • How well are businesses adapting to the needs of their target audience?
    What Women Want From The Web Report, Unicast, June 2010, © HALO Branded Solutions - 2011
  • 22. Offending the target
    • Even the most subtle techniques are seen
    • Nearly 2/3 of consumers believe advertisers should not be able to use online tracking to match advertisements to their website usage or interests
    • 2/3 also view this practice as an invasion of privacy
    • Their disapproval is directed at the companies using this advertising method
    U.S. Internet Users Ready to Limit Online Tracking for Ads, Gallup Poll, 12/21/10 © HALO Branded Solutions - 2011
  • 23. How do people feel about advertising in general?
    • In a recent Gallup Poll respondents were asked to rate various professions on their ethical standards and honesty
    Honesty/Ethics in Professions, Gallup, 11/21/10 © HALO Branded Solutions - 2011
  • 24. How trustworthy are advertising agencies?
    • Only 11% perceived advertising agencies as honest and ethical
    • Only 2% viewed them as having very high ethics
    • The only professions ranked lower were members of congress, car salespeople, and lobbyist
    Honesty/Ethics in Professions, Gallup, 11/21/10 © HALO Branded Solutions - 2011
  • 25. Ad agencies don’t always get it right Palm and Modernista Part Ways, Advertising Age , Apr 5, 2010, Smartphones Last Quarter, Business Insider, 3/18/10 © HALO Branded Solutions - 2011
    • Choosing the wrong partner can be costly
    • Palm, Inc. worked with it’s long standing ad agency Modernista to promote their new line of smart phones
    • Palm invested $35 Million in marketing the new phones
    • But in the end reported a net loss of $22 Million
  • 26. Paying More For Less ROI
    • Reason #2
  • 27. Companies are desperate to reach their audience
    • In 1980 , businesses collectively spent $53.5 Billion on advertising
    • In 2007 , that increased to more than $279 Billion
    • An increase of 421%
    • Even in 2011, with a struggling economy, marketing budgets showed large increases over 2010 budgets
    • Businesses are spending more and more for advertisements that are less effective
    Internet Advertising Expenditures, Compilation of sources (Cohen, Galbi, etc.), 9/14/08 © HALO Branded Solutions - 2011
  • 28. The high costs being paid
    • Lets say a company hired a specialist to generate leads through E-mail advertising
    • The cost of 100 leads would be $8,385
    2010 Response Rate Report, Direct Marketing Association, 6/15/09, Benchmarking an Average Conversion Rate, ClickZ, 6/4/04 © HALO Branded Solutions - 2011
  • 29. The low value received
    • Now, lets look at the actual conversion rate of those 100 leads
    • 2 people bought the product/service
    • Which means it cost $4192.50 to acquire each new client
    • Was it worth it?
    2010 Response Rate Report, Direct Marketing Association, 6/15/09, Benchmarking an Average Conversion Rate, ClickZ, 6/4/04 © HALO Branded Solutions - 2011
  • 30. Why is it costing so much?
    • Experts have discovered there are two main sources for the majority of wasted advertising
    • Advertising the wrong message accounts for $30 Billion annually
    • And having the wrong timing accounts for $20 Billion more
    Industry Identifies Fifty Billion Dollars In Ad Waste: Wrong Messages, Wrong Timing, Advertising Research Foundation cited by Media News Daily, 9/21/04 © HALO Branded Solutions - 2011
  • 31. Ineffective Brand Strategy
    • Reason #3
  • 32. The top 3 brand strategy mistakes
    • Industry experts have identified the top three branding mistakes as follows:
    • Inconsistent corporate identity
    • Poor visuals
    • Lack of brand controls
    Top Ten Branding Mistakes, Precision Intermedia © HALO Branded Solutions - 2011
  • 33. Inconsistent identity
    • When trying to manage a brand, companies often focus more on their intentions for the brand without adopting the consumer’s viewpoint
    • For example, Cadbury spent over $32 Million rolling out a new campaign with the intention of promoting the rich smooth qualities of their chocolate bars
      • - Customers came into contact with huge stacks of candy bars in the stores
      • - The Cadbury logo was emblazoned everywhere
      • - Customers bought candy bars at 2 for 1 pricing during the promotion
    © HALO Branded Solutions - 2011
  • 34. Sending the wrong message
    • Rather than receive the message that the chocolate bars were uniquely smooth and rich, customers viewed the product as a mere commodity
    • Although there was a huge surge in demand during the promotion, there was a sudden drop once the promotion ended
    • The message did not get through
    © HALO Branded Solutions - 2011
  • 35. Poor visuals
    • Many companies confuse their audience by using different logos and taglines
    • Constant change leaves people unsure of who they are dealing with and what type of service they will receive
    Top Ten Branding Mistakes, Precision Intermedia © HALO Branded Solutions - 2011
  • 36. Lack of brand control
    • No branding control is costly and irresponsible!
    • By allowing every department to make branding decisions you jeopardize the integrity of your brand and create additional expense for the company
    • The choices made by unqualified buyers may be putting your company at risk
    Top Ten Branding Mistakes, Precision Intermedia © HALO Branded Solutions - 2011
  • 37. The importance of brand control
    • Brand Managers need to govern the use of your logo and advertising messages and approve all purchases in order to:
      • Ensure branding success
      • Maintain brand integrity
      • Save the company from risk
    © HALO Branded Solutions - 2011
  • 38. Public Relations Disasters
    • Reason #4
  • 39. Promotional product safety
    • The number of incidents reported to the Consumer Products Safety Commission has been increasing at a rapid rate
    • Despite the risk of litigations and bad PR, companies continue to source their promotional product needs to overseas third party vendors they know little about
    • Promotional products continue to be a source of an increasing number of safety incidents reported
    Source: US Consumer Product Safety Commission, November 2011 © HALO Branded Solutions - 2011
  • 40. Destroying relationships and more…
    • Consumer safety incidents that involve promotional products can lead to a lack of trust from clients as well as litigation
    • The following examples show companies that thought their promotional advertising campaigns were on track
    © HALO Branded Solutions - 2011
  • 41. Lead paint lunchboxes
    • The California State Health Department gave away promotional lunch boxes in a campaign to promote healthy eating
    • The lunch boxes were found to contain high levels of lead
    • This prompted an embarrassing recall of nearly 300,000 lunch boxes
    Lead-Tainted Lunchboxes Trigger $10 Million Fine, San Mateo County Time, 5/22/08 © HALO Branded Solutions - 2011
  • 42. The cost of negligence
    • In a promotion for the movie Shrek Forever After, McDonald’s sold collectible glasses for $2 each
    • They were forced to recall and refund 12 Million glasses
    • The glasses contained cadmium, a poisonous metal that can cause kidney and liver failure
    McDonald's Recalls Movie Themed Drinking Glasses Due to Potential Cadmium Risk, CPSC, 6/4/10 © HALO Branded Solutions - 2011
  • 43. Endangering customers
    • Nissan recalled nearly 87,000 mugs that it had given to customers in Japan as part of a promotion
    • The mugs contained lead-laced paint that exceeded the legal limits by 30 %
    • The mugs put thousands of customers at risk for lead poisoning
    • Nissan did not even know the identity of the manufacturer in China
    Test-drive a Nissan, win a lead-laced mug, Reuters, 9/7/07 © HALO Branded Solutions - 2011
  • 44. The ultimate cost
    • As a promotion Reebok gave a charm bracelet with the purchase of every pair of children's shoes
    • Sadly, a child swallowed part of a bracelet and later died of lead poisoning
    • Reebok settled with the family of the child for an undisclosed amount and had to recall 500,000 bracelets
    • According to US health officials the bracelets were 99% lead
    • Reebok said they were manufactured by a contractor in China, they did not know how the bracelets reached the market with such high risk levels
    Reebok Recalls Bracelet Linked to Child's Lead Poisoning Death, CPSC, 3/18/08, Reebok to Pay Record $1,000,000 Civil Penalty for Violation of Federal Hazardous Substances Act, CPSC, 3/18/08 © HALO Branded Solutions - 2011
  • 45. Why do PR disasters happen?
    • There are a number of reasons PR disasters occur in promotional advertising, but topping the list are:
      • Using multiple disjoined vendors
      • Cutting cost in the wrong places
      • Not building safety management into contracts
      • Not knowing the supplier
      • Vendors that don’t know their suppliers
    © HALO Branded Solutions - 2011
  • 46. Key oversights © HALO Branded Solutions - 2011
    • Focusing more on promotions rather than the consumer relationship with the brand
    • Purchasing promotional items over the internet and not investigating their overseas manufacturers
    • Even financially capable companies that have the resources to manage things properly, often don’t
  • 47. The result of these challenges…
    • Businesses are not connecting with their targets
    • Billions of dollars are being wasted
    • Brands are being forgotten
    • Liabilities are ruining brand reputations
    • Businesses need to rethink their strategies before its too late
    © HALO Branded Solutions - 2011
  • 48. How To Achieve Success Where Others Are Failing
  • 49. Change your brand strategy
    • Corporate Branding is changing and companies need to find ways to differentiate their brand from the competition
    • Targeted promotional marketing is fast becoming the medium of choice because of it’s strong pulling power
    • Today more and more companies are using dimensional direct response advertising to achieve marketing objectives
    © HALO Branded Solutions - 2011
  • 50. Consider this example…
    • Jennifer worked for a relatively new technology firm. The company was going to be involved in several upcoming conferences and it was the perfect opportunity to make some valuable connections and grow the company 
    • After researching the benefits of promotional marketing she decided that giving a gift to the conference attendees would help get the company’s name in the hands of the right people and make a lasting impression 
    • She tasked one of her employees with finding a product. The employee went online and found a great price on laptop cases and ordered them in a hurry since the first conference was right around the corner 
    © HALO Branded Solutions - 2011
  • 51. What went wrong?
    • After the first conference, Jennifer saw several of the cases in trash cans at the conference center and afterwards they had little success with leads
    • Jennifer discovered the cases ordered were outdated and built for 14 inch laptops and most of the people at the conference were using larger laptops so the laptop cases were useless to the attendees  
    • The laptop cases became an embarrassing situation and a waste of money
    © HALO Branded Solutions - 2011
  • 52. Jennifer changed her strategy
    • Jennifer recruited the help of a brand marketing specialist who was able to help her strategically plan for using branded merchandise
    • With the specialist’s help she found an effective product at a great price to give as gifts, she also found other strategic products that she could use at trade shows and in connection with their online marketing efforts to boost sales and create buzz
    • Jennifer appreciated the fact that she had a working plan for the products and was guaranteed against any safety risks 
    • The trade shows were a success. The company made many valuable connections, website traffic increased, people were saying positive things about them in the blogs, and sales were increasing
    © HALO Branded Solutions - 2011 New Team Strategy
  • 53. Some companies are starting to find solutions
    • More companies are focusing on promotional marketing to get their products seen
    • The money spent on promotional programs has increased more than 100% in the past decade
    • Yet, many companies are still learning about target marketing
    GMA Insights into the Food, Beverage, and Consumer Products Industry GMA Overview of Industry Economic Impact, Financial Performance, and Trends © HALO Branded Solutions - 2011
  • 54. Targeted marketing builds relationships and motivates
    • Which medium has the greatest ability to provide someone an incentive to take action?
    • Consumers overwhelmingly favored promotional products
    • The goal of all marketing efforts should be to motivate the target audience to action
    • Some marketing tools motivate better than others
    Promotional Products Association International, 2010 © HALO Branded Solutions - 2011
  • 55. Speak to them often
    • Promotional marketing creates a message frequency that other forms of advertising can’t achieve
    Unaided Ad recall Comparison by media, Marketing Charts, May 2007, Promo Products Relatively Strong on Consumer Recall: PPAI Study, Promo Magazine, 2/24/10 © HALO Branded Solutions - 2011
  • 56. The other benefits of promotional marketing
    • Promotional products stimulate all 5 senses simultaneously
    • 55% of people keep promotional products for more than one year
    • Nearly 50 % of people use them daily
    • And 76% can recall the name advertised on the product
    • This is why companies are turning to promotional marketing, because their clients remember them 15% to 50% more with promotional products than they do with other media
    Come to Your Senses, PPAI, 2009, Promotional Products and Other Media: How the media compare on reach, recall, and reaction, PPAI © HALO Branded Solutions - 2011
  • 57. Getting face time
    • Businesses can no longer rely on passive advertising methods as primary relationship building tools
    • It is essential to have one on one personal contact
    • For example, trade shows offer an incredible opportunity for relationship building with existing clients as well as generating new leads
    Do Trade Shows Pay Off in Big Sales?, Oxford Economics cited by BNET, 3/10/10 © HALO Branded Solutions - 2011
  • 58. Making it personal Promotional Products And Other Media: How The Media Compare On Reach, Recall And Reaction PPAI Research, Market Tools, Inc. 2009 Thank You! © HALO Branded Solutions - 2011
    • No one likes feeling like a number
    • Personalizing the message and medium to clients and prospects is a great way to connect with them
    • Branded gifts are a powerful tool in building a personal connection
    • Remember “business goes where its invited and stays where its appreciated”
  • 59. Why is promotional marketing so effective?
    • Higher rates of recollection are linked to positive emotions
    • For example, branded products have a high recollection rate
    • This may be due to the fact that 59% of individuals that receive a branded product have a greater positive reaction than they do with other forms of advertising
    © HALO Branded Solutions - 2011
  • 60. Vendor selection and planning © HALO Branded Solutions - 2011 Look closely and take your time
  • 61. How to find the right partner
      • Look for a vendor that you can Trust
      • Look for a vendor that offers marketing program solutions
      • Look for a vendor with international purchasing power
      • Look for more then just a product vendor, look for a Strategic Promotional Marketing Partner
    © HALO Branded Solutions - 2011
  • 62. Things to watch out for
    • Beware of vendors who only talk about products with low prices
    • Never make an online purchase from a vendor until you research the company
    • Look out for the vendor who does not offer a written guarantee
    • Beware of the vendor that asks for a cash pre-payment
    © HALO Branded Solutions - 2011
  • 63. Ask the important questions
    • Do they require indemnification from all suppliers to protect their clients?
    • Do they guarantee comprehensive product safety to their clients?
    • Can they help with goal setting?
    • How do they measure success?
    © HALO Branded Solutions - 2011
  • 64. Steps to achieve branding success © HALO Branded Solutions - 2011
  • 65. Key points to remember
    • Know your target audience
    • Focus your marketing message on your customer
    • Initiate branding controls
    • Enlist the help of a Brand Marketing Specialist
    © Halo Branded Solutions - 2011
  • 66. Making your plan successful
    • Choose wisely Resist the urge to pick trendy items and opt for items that are a true reflection of your company image and theme
    • Beware of poor quality Low quality or poorly made products cheapen the image of the advertiser – quality ensures that the product will get used and protects businesses from costly PR disasters
    © HALO Branded Solutions - 2011
  • 67. Things to remember
    • Know your target market Unless a product is a good match for the audience it will not be used – utilize testing and market research
    • Enlist the help of the right expert A brand management specialist can help you avoid wasteful mistakes and ensure that your choice in products makes the most sense for your business and your plan
    © HALO Branded Solutions - 2011
  • 68. Summary
    • Key Points To Remember
    • Build Marketing Messages with the Consumer in Mind
    • Test, Track & Measure Advertising Messages and Programs
    • Re-Think Your Current Advertising Media Mix
    • Strengthen Branding Controls and Purchasing Practices
    • Work with Your Primary Vendor to Help Set Budgets
    • Always use a Secure Source Vendor
  • 69. It has been a pleasure to share the results of this study with you
    • Our hope is that you learned how to improve advertising and marketing effectiveness with the help of the right promotional marketing specialist
    • This presentation was sponsored by HALO Branded Solutions
    • We have a three minute presentation about our company that we would like to share with you
    © HALO Branded Solutions - 2011
  • 70. Introducing…
  • 71. We are the relationship experts © HALO Branded Solutions - 2011
  • 72. What we offer
    • Personalized attention from an experienced brand marketing specialist
    • Expansive global product sourcing with pricing leverage
    • Complete fulfillment capabilities
    • Online and traditional marketing solutions
    • Comprehensive product safety and social compliance
    © HALO Branded Solutions - 2011
  • 73. How we do it
    • We combine cutting edge technology and caring personal service to create an exceptional dimensional advertising product purchasing experience
    • We have spent decades as the global leader in client promotional solutions with one simple philosophy, "Success is created one order, one Client and one promotion at a time"
    © HALO Branded Solutions - 2011
  • 74. Value we bring
    • We offer more than just products, but guidance and strategy on which products to use as well as how to use them and why
    • We provide a team of experienced brand management specialists to help you increase income, reduce expenses, and manage risk
    • Through operational efficiency we can meet the tightest deadlines every time on every order
    • Our effective supply chain management ensures low-cost, safe and compliant products
    © HALO Branded Solutions - 2011
  • 75. Some of our other partners
    • We specialize in brand management for clients with national presence and global reach
    • Let us bring our experience, expertise and value to you
    • Experience the HALO difference – Innovation, Trust, and Strength
    © HALO Branded Solutions - 2011
  • 76. Thank You!