This document discusses marketing from the perspective of the end of the marketing funnel, or the point of purchase. It argues that half or more decisions are made in-store, so marketing must focus on influencers along the path to purchase. Retail is becoming more important as media fragments. The document calls for understanding how shoppers decide through in-store triggers and categorization. It suggests aligning resources with influencers and integrating shopper marketing into the broader marketing plan through tactics like packaging, signage, and shelf layout. Future research on validating frameworks and protocols is needed.

1. Marketing from the other end of the funnel MSI/NYU conference Joel Rubinson Chief Research Officer The ARF June, 2010 Follow me on Twitter as www.twitter.com/joelrubinson

3. This is marketing from the wide mouth of the funnel.

4. Awareness was assumed to be mostly spend driven

5. You timed your ad spend for when you achieved a critical level of retail distribution

6. The role of retail was to create availability

9. Brands must connect with people in the context of their lives and how they connect with each other

10. Open book exam world

11. Brands must understand what people look for as they actively decide while they shopB2 human B1 B3 4

12. I started to think about… Marketing from the other end of the funnel

13. At the other end of the funnel, the key words change From “intentions” To “how we decide”

14. Procter and store back Marc Pritchard Procter’s CMO calls for thinking “store back”, and told P&G agencies (not just the shopper marketing ones) that it means that marketers must ALWAYS have the store in mind when developing a new product, a new idea, a new statement: if it does not work at the store, it’s a miss”.

15. Is this how you test and evaluate?

16. Marketing from the other end of the funnel—more than in-store marketing It’s about thinking about the influencers and triggers along the path to purchase that directly result in purchase decisions It’s about aligning marketing resources to influencers rather than audiences Source: IPSOS Marketing

17. Five reasons to start at the other end of the funnel Half or more of purchase decisions are made in-store With media fragmentation, retail is the new Ed Sullivan show Shopper marketing opportunities can equate to increasing your advertising budget by 50-100% Shopper marketing offers tremendous targeting opportunities Manufacturers need to get smarter about the shopper as retailers increase their emphasis on “own” brands and de-SKU

19. Ogilvy Action, 2008 : 40%

20. Synovate, 2009 : 50%Source: Synovate 2010

22. Retail is the new Ed Sullivan Show Because of media fragmentation, a big rating for a TV show today is 20 million viewers The Superbowl might get 150 million viewers Walmart gets 150 million shoppers every week (Kroger gets 68 MM, Safeway 44 MM) Source: Peter Hoyt, ARF Shopper Insights council meeting

23. …a targetable version of the Ed Sullivan Show Shopper longitudinal data can be used for sophisticated targeting of advertising and promotion offers. Mobile will increasing play a role in shopper marketing

24. McKinsey: The Consumer Decision Journey…so much more than eyeballs Two-thirds of touchpoints during active consideration are consumer initiated For autos, brands get added and subtracted to the consideration set as the shopper “pulls” information The influence of individual touchpoints changes during the shopping journey 60% of buyers of facial cosmetics conduct online research AFTER making the purchase Source: McKinsey Quarterly 2009 Number 3

25. Online isn’t one thing CPG: The objectives that people have for visiting owned media are different from their objectives in going to social media sites for those brands Owned media: 70% are looking to obtain information about the brand, obtain coupons, obtain recipes vs. half that level for reasons to go to FB page Over 50% of people are motivated to share opinions and connect with other customers (the main reasons to go to the brand’s FB page) and these are higher levels vs. visiting owned media for that purpose Source: IPSOS Marketing

26. A brand I discovered while shopping Flavored pistachios; figured it out pretty fast! Since there is no advertising (other than packaging) the meaning of the brand is of my own making Shopper marketing and social media can go together synergistically I love the product, but I have no way to share my love as they have a minimal social graph BTW, according to IRI, the brand has over 1MM users

27. Shopper marketing as an advertising equivalent The ARF, Wharton, and the Ehrenberg-Bass Institute conducted an initiative regarding empirical generalizations about advertising One of the generalizations was that the elasticity for existing brands of sales to ad spend averages 0.10 (100% increase in ad spend generates a 10% increase in sales) Can you envision a 5% increase in sales based on effective shopper marketing programs?

28. Decision factors Why don’t people always buy their preferred brand?

30. Categorization and association

31. Can occur spontaneously at point of purchase

32. Usually non-exclusiveShoppers are sense-makers in an environment where maybe 1% of SKUs are relevant to them

33. Categorization effects are powerful sense makers

35. Categorization and association

36. Can occur spontaneously at point of purchase

38. While it makes sense that path to purchase should be a powerful framework for business growth, this has yet to be validated

39. ARF shopper insights council has formed a “path to purchase” working committee

40. Provide the framework

41. Identify business issues

42. Enumerate appropriate research protocols

43. The industry needs to conduct experiments to PROVE the connection.