Wednesday, July 02, 2008

To Our Brand Manager Friends: Keeping Your Marketing Budget and Your Job

Your marketing budget is an investment, not an expense…

To our marketing friends, I am writing this after a discussion with my wife. She is a marketing director and her company is looking at cutting the marketing budget. If possible, I would like a few moments with your CFO. It’s OK, I will wait while you go find him or her.

Stuck in a budget meeting? Well, maybe you could take a message:

We just want to say that something about staring at numbers all day must affect your vision, because we're hearing from our marketing brethren about shortsighted attempts to reduce company expenses by cutting the marketing budget.

Far be it from us to explain to those in offices that marketing spend is slightly different from the costs associated with the office coffee service, but let's just say your hell bent to put a dent in these "outrageous" costs for promoting your company's products and services.

We can only assume that to this belief means you'll lay off all those "money-grubbing" employees, shut down those retail outlets and then put all those savings into a nice bank CD where it can earn a staggering 5.4 percent.

Or maybe, just maybe, you don't want to do that. Maybe running a company can generate a return slightly higher than that stellar 5.4 percent and you see the value in keeping the doors open, the offices staffed.

Super, then why, do you refuse to see that what you spend on marketing is not an expense of doing business, but an investment in your business. Done properly, your marketing has an effective ROI yes, that's return on investment that generates additional revenue.

Of course, there's nothing wrong with altering your marketing mix to get the most efficient use of your dollars…that makes sense. Recent numbers show that every dollar spent on direct marketing generates $16 in revenue - three times higher than general advertising.

Cutting your marketing budget may save you $1, but it's costing you $16, on average, in revenue. So be sure to lower your revenue targets for the coming year.

Or better yet, regard this as the way you would any business investment - something you need to do for the good of your company. Oh, and while you're at it, give the members of your marketing team a bonus.

Monday, June 23, 2008

How Brands Become Part of People's Lives'

All brands can gain consumer respect. But how do you identify which elements you need to put in place to become a part of the brandthread of people’s lives’? A brand doesn't just get respect, it depends on three criteria:

Does the brand offer better quality in comparison with its competitors?
Does the brand strive constantly for innovation, improvement and flawless service?
Do you have the feeling you're getting value for money?

How trustworthy is the brand?
Can you always count on the brand?
Does the brand always meet your expectations?

What is the brand's reputation like? Is it a leader in its category?
Is the brand honest and does it own up to any mistakes?
Does the brand operate as a “good citizen” and does it work for a better world?

For brands to become part of peoples’ lives' they need to use these life pillars (Language, Music, Fashion, Sports, Food, Family, Activities) to diffuse their message. Brands must associate with these pillars, each of which can influence one another:

Creating Interest
Are there any brand myths?
Does it have a rich tradition and history?
Does the brand make you dream?
Does the brand have a recognizable logo, symbol or icon?
How much does the brand play on the senses?

Thread of People’s Lives'
How close to its consumers can the brand get?
Is there two-way communication between the brand and the consumer?
Does the brand exhibit interest in its consumers and their individual needs?

Saturday, January 12, 2008

When Targeting Multicultural Audiences

Doing It Wrong Is Worse Than Not Doing It at All
When it comes to making ads relevant for multicultural audiences, doing it wrong is worse than not doing it all.

A new study from OMD Worldwide found that ethnic groups are turned off by ads that rely on stereotypes and caricatures rather than meaningful cultural cues. "The respondents were saying, 'We want to see ourselves represented in ads, but not in a stereotypical matter,'" said Pamela Marsh, group director-primary research and insights at the Omnicom media agency.

Multicultural Consumer behavior
The OMD study, a telephone survey of 1,453 respondents 18 and older, sought to understand how ethnicity affects consumer behavior and advertising receptivity. Four different groups were represented: blacks, Asian-Americans, Hispanics and the general market (which was about 76% Caucasian in the study).

The ethnic groups agreed that messages should be culturally relevant, but they responded more positively to ads with multicultural cues, such as ethnic characters, phrases, expressions and values, than ads that were simply translations of general-market ads. "Ad relevancy is more about communicating in kind than speaking in a language," Ms. Marsh said. Cultural relevance is also important for media placement, the study said, noting that ad models created on the basis of general population statistics, such as channel planning, are likely to fall short if they do not take relevant ethnic differences into account.

How to Reach Multicultural Segments
Though all segments in the survey gravitated toward the same top four media -- TV, radio, internet and mobile -- different ethnic groups spent different amounts of time with each of them. Blacks, for instance, spent the most time with TV; Hispanics spent more time with radio; and Asians used the internet at significantly higher rates.

The study also found that black consumers place a higher premium on word-of-mouth information before making buying decisions -- particularly when seeking feedback about a product. Asian-Americans also rely heavily on word-of-mouth because they are less receptive to ads than other segments of the population, according to the study.

Marketers have a significant opportunity to influence the purchases of blacks and Hispanics, the study said, because they are more open to advertising than other groups but feel as though most marketing messages are not relevant to them.

Win Back Inactive Subscribers

A reactivation campaign can help you revitalize your list
How many email messages did you send out in your last campaign? Really? That many? Wow! Now, how many of your recipients actually opened or clicked on your email?Yeah, that's a different story. Remember that with email, size doesn't really matter. Performance is what counts, not just for your email program and its bottom line but also for your sender reputation.

A reactivation campaign is the answer here, and it's just as important as any acquisition campaign. It will help you clean out the dead wood, re-energize your list and reclaim some of the money you spent acquiring and engaging those addresses in the first place.

Why reactivation works: Your email service provider might be thrilled that you ship out millions of messages in each campaign, but you could actually hurt yourself and your sender reputation and spend money you don't have to when you send to people who never bother to open or act on your messages.

Sure, maybe they did sign up with you once upon a time. Since then, though, they abandoned those mailboxes, and you never noticed. The ISPs are noticing, and they'll treat your email accordingly.

Many use these long-dead email addresses as spam traps to monitor your list hygiene and measure your sender reputation. The dirtier your list, the more likely they'll route your email messages to the junk folder or block you.

Just by looking at your database, you can't tell which subscribers actually abandoned their mailboxes, who deletes your messages without opening them or who still is sort of interested in you but hasn't seen any reason to open.

A reactivation campaign will identify which addresses you can safely drop from your list without killing off live ones and re-establish connections with past customers. Think of it as going on a second honeymoon. Just like a tired marriage needs a spark to keep it going, your subscribers who take you for granted need a fresh, new reason to keep opening your messages.

You know you get the most action from your newest subscribers. Apply the tactics you use on them to rejuvenate the inactives on your list instead of spending more money to replace them.
Ready with the virtual flowers and candy?

First, identify your inactives. This takes a little database work. Create a separate mailing list, and add anyone who hasn't opened or clicked on a message in, say, six months or longer, to it. Send a message with a pleading subject line, such as "We miss you! Please come back!" Go ahead, grovel a little. Include a special offer or invitation to fill out a new profile or encourage them to unsubscribe once and for all.

Move any responding addresses back to your active list. Send the message again, this time saying you'll take them off your list if they don't respond in, say, a week. Then, scratch them from your list if they don't respond. It might kill you to do that, but a smaller, more vital list will do you more good than one where nobody's home anymore.

Keep everybody interested...
These tactics will keep your whole list engaged and energized:

1. Ask them what they want to get. It could be you have lots to offer, but your subscribers aren't getting what they really want. For example, if you're a book seller it may be that someone subscribed to your general list is really only interested in mysteries. Ask recipients to take control of what they want to get, and you may see renewed interest.

2. Make them an offer they can't refuse. Discounts, new products, samples and free shipping can work wonders for retailers. B2B marketers can renew interest with a special white paper or discount on a conference or webinar.

3. Incentivize! Ask users to update their profile, and give them a chance to win a big-screen TV. (iPods are, well, kind of over unless it's a really upscale one.) Be careful to keep the focus on the email, though. If the prize is too good, people will re-engage, only to click the spam button when your email actually arrives.

4. Threaten to break up. Tell subscribers if they don't click, you're going away. It's possible that your heavily texted message is in fact being read, but you can't know it because recipients don't enable the images. It's fair to say that if recipients don't let you know somehow that they're still there, still breathing, that you'll drop them from the list.

5. See what's on their minds. Simple surveys, sweetened with a little incentive (see No. 2), can help you find out what's going on. Maybe you're sending too often and they turn a deaf ear. Or, you're not coming around enough and they drift away.

6. Change your format. Are you sending long, chatty emails to people who read them on their phones and don't get down to your offer? Or, do you stuff all your content into a single large image that won't show up? Offer a text format to people who read email on alternative platforms and make it short and sweet.

The effort you spend now to wake up your list and re-engage with them will pay off in better deliverability and a higher ROI.