Performance Branding: Making Branding Accountable

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Performance Branding: Making Branding Accountable

  1. 1. Digitally Centric Performance Marketing John Nardone Chairman & CEO, [x+1] April 23, 2009
  2. 2. We all know business is tough right now.. • Consumers are under pressure…so they are doing more research, and giving more consideration to their purchases and relationships • Consumers continue to migrate more and more of their personal time and “media consumption” time online…even as traditional media vehicles like newspapers and magazines falter. • Meanwhile, many industries face unprecedented financial stress… • …and marketers in all industries are under pressure to justify and be accountable for their budgets as never before. Proprietary & Confidential
  3. 3. A new take on “performance marketing” • What is performance marketing • Three pillars of performance marketing: • An new purchase funnel • All marketing is response marketing • Return on behavior • Example: Performance marketing at work • Making it work in your organization • Building a roadmap to success • Existing skills in a new context • New technologies • Example metrics Proprietary & Confidential
  4. 4. Performance marketing is… • Marketing that is continually optimized to perform (deliver positive ROI), based on measureable consumer response metrics. • Direct response marketing is performance marketing • Search marketing is performance marketing For considered purchase categories, even brand marketing can be performance marketing, if it puts digital at the center of the marketing plan. Proprietary & Confidential
  5. 5. The Traditional Purchase Funnel is wrong • In the traditional awareness purchase funnel, there was a bright-line distinction between consideration “awareness” and “conversion” and the corresponding “brand intent marketing” and “direct marketing” budgets, strategies and tactics employed. purchase Search marketing has changed the consumer’s buying process forever. Proprietary & Confidential
  6. 6. A New Purchase Cycle* • As control has shifted awareness toward the consumer, a need or desire & investigation “cycle” has replaced the funnel • Need is immediately researched search • Search both drives awareness and establishes consideration sets ranking and • Options are instantly conversion & purchase refinement ranked and refined *Thanks to Ed See, Principal, Ed See and Associates Proprietary & Confidential
  7. 7. Implications of the New Purchase Cycle • Lessens the impact of mass media • Impairs the incumbent advantage for cross sell/upsell • Shifts focus to your website • Collecting and leveraging the right information • Managing the experience • Aggregation, “review” sites and blogs become important arbiters Search and websites provide a simple means for consumers to act, and for marketers to track that action. Proprietary & Confidential
  8. 8. With digital at is center, all marketing can be response marketing…
  9. 9. It is only prospect recognition and expected timing of response that differentiate our marketing disciplines Unknown prospect Promotional Classic Brand Marketing Marketing Purchase now Purchase later Direct Relationship Marketing Marketing Known prospect Proprietary & Confidential
  10. 10. Building awareness, changing attitudes are weak goals: instead, drive to immediately measureable action. • New architecture: Build marketing plans to put digital consumer behavior at the center • New metrics: Define behavior-based metrics. Survey-based metrics such as “awareness,” “attributes” and “intent” are insufficient. • New campaign management: Manage campaigns to success by monitoring real-time consumer behavior metrics…ideally calibrated to ROI. Performance Marketing optimizes campaigns to measureable consumer behaviors…even classic brand marketing. Proprietary & Confidential
  11. 11. Performance marketing drives Return on Behavior • Performance marketing applies direct response concepts, even to brand campaigns: • by overcoming prospect anonymity • by identifying indicators, or constructing behavioral proxy measures for movement through the purchase cycle • by calibrating those measures to sales • by then optimizing the campaign to the approximated ROI measures Proprietary & Confidential
  12. 12. Let’s talk cheese…
  13. 13. Case Study: Kraft’s Approach • Kraft launched an online “performance branding” campaigns based on research on “recipe clipping”. • Recipe clippers where identified as a segment of consumers who saved printed recipes, then reported behavior around trying those recipes, and ultimately adopted some of them into their regular meal routines. • Most importantly, Kraft found that recipe clipping translated directly into more sales of Kraft products. Proprietary & Confidential
  14. 14. Case Study: Kraft’s Implementation • Calibrated a value for a downloaded recipe • Built an ROI based branding campaign around recipe downloading. • Campaign optimized to an allowable cost per recipe • Eventually, campaign expanded to include other interactions, including shopping lists, email registrations and magazine sign-ups. Proprietary & Confidential
  15. 15. Case Study: Kraft’s Results • Kraft’s performance branding campaign led to millions of downloaded recipes… and measureable Kraft sales. • Although it used direct marketing skills, all the campaign’s messaging reinforced Kraft’s ethos: “For busy moms, Kraft makes nutritious meals easy”. Proprietary & Confidential
  16. 16. Make Performance Marketing Work for You
  17. 17. Companies need a roadmap to help them build marketing performance capability Digital Performance-Based Marketing Maturity Model Use a maturity model to set priorities and articulate value 5 Channel Champions • What are your current capabilities to manage marketing 4 Value Validators performance? 3 Personalization Pros • Where do you want to get to, what is the business value of 2 A/B Advocates getting there? • Implementing a plan: 1 Broadcast Marketers Required capabilities, programs, and skills to deliver on the vision Benefits / Characteristics • Improved Digital Performance • Increasingly Dynamic • Greater Prospect Knowledge 17 Proprietary & Confidential
  18. 18. Three keys to success • Integrate your company’s direct marketing, brand marketing, and digital skills… • Get experience with new “one to one” digital technologies • Display ad exchanges 2.0 • Audience tracking and profiling • Web page personalization/optimization tools • Create simple, trackable metrics and discipline for continuous optimization…even for your TV and mass print advertising. Proprietary & Confidential
  19. 19. Integrate skills • In many industries, the skills you need are already in your organization • Necessary skills reside in: • Direct mail analytics team • Web development/ecommerce/online analytics • Search • Advertising/Branding/Marcom • Breaking down functional silos (or working around them!) is the biggest challenge for marketers • Set up cross functional teams around behavioral campaign objectives • How will the campaign impact each stage of the purchase cycle? Proprietary & Confidential
  20. 20. Use new technology to enable one-to-one marketing
  21. 21. Online ad exchanges allow display ads to target individual consumers or consumer segments • Online ad exchanges bring open market bidding to display ads. • Exchanges provide access to inventory on a per cookie/per impression, real time bid basis much like a stock or commodities exchange. • Based on search experience, marketers will buy display on a ROI basis, but new skills/capabilities are required. • In the absence of publisher and context, online data that can inform both targeting and the price an advertiser should pay for inventory becomes critical. 21 Proprietary & Confidential
  22. 22. Are you talking to the right audience? Proprietary & Confidential
  23. 23. Are you giving them the right offer or experience? Visitor A: Visitor B: • Frequent flier • New to Delta.com • Skymiles Member • Searched for a flight to Des Moines • Weekend trips to Colorado during the winter months VAR 1 VAR 2A VAR 2 VAR 4 VAR 3 VAR 5 Close the deal when you have the chance, with just the right offer. Proprietary & Confidential
  24. 24. Are they responding? Direct Traffic (URL input) Search Velocity Website Traffic, Clicks and View-throughs Proprietary & Confidential
  25. 25. Performance Marketing Payoff: Do more with less • Companies with a strong DM competency and culture will get there first • Their agencies will have to adapt: • More integrated planning • More analytic competency • More creative assets to address segments • More fiscal accountability • Marketers will have to shed old biases to respond to new consumer realities and technology opportunities. Just maybe… do more, with more! Proprietary & Confidential
  26. 26. To learn more about performance marketing, please x+1] provides tools and predictive response models [ for advertisers and agencies to optimize response contactTitle landing pages and from display media, search Section websites. MikeVisit www.xplusone.com/lessismore to review John Dillon at Nardone’s keynote presentation and find how you mdillon@xplusone.com or call can do more with less. (203) 984-2403 Proprietary & Confidential

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