Archive for March, 2007

Wal-Mart Goes With Direct Response Media Buying

A significant event in the history of direct response advertising transpired in late October. Wal-Mart, the world’s largest retailer with a $580 million ad budget, selected a direct response media buying agency to help it overcome slowing sales growth. People in our industry would classify the winning agency, Draft FCB, as a branded direct response agency, but nevertheless, it is a direct marketing agency. It beat out some of the largest traditional ad agencies in the world to secure the coveted Wal-Mart account, according to a October 26 Wall Street Journal (WSJ) article. Although other big marketers like Microsoft and P&G have used direct response advertising for certain brands, I can’t recall a company the size of Wal-Mart selecting a direct marketing agency as its lead agency.
 
Major marketers have seen the type of accountability and customization that Internet advertising can provide, and now they are looking to more accurately measure their return from their offline advertising. Savvy media buying executives are finally realizing direct response advertising can provide them with a way to measure the ROI from their advertising expenditures.
 
With the tenure of CMOs averaging about two years, media buyers are under the gun to deliver results. Wal-Mart recently recruited senior marketing experts from top consumer products companies, such as PepsiCo, Target and DaimlerChrysler, to help overhaul its marketing efforts. Based on their selection of a direct marketing agency for Wal-Mart, these marketers clearly understand the power of direct response advertising.

Neuromarketing can help marketers and media buyers

Neuromarketing can help marketers and media buyers determine the right message and the right design before a campaign even goes out. “What kind of information can you provide that will make an emotional connection with consumers and lead them to read the rest of your information?” asks Rao. “Should it be words? Pictures? In color or black and white? In the top left corner or the bottom right? What about font size?”

One company that uses neuromarketing to sharpen its marketing message is Vistage International, which provides networking and educational opportunities to CEOs. And one of the areas in which neuromarketing has made the biggest difference for Vistage is direct mail.

Laura DiPietro, Vistage chief marketing officer, says that although direct mail has always been a key element of her company’s strategy, the organization’s direct-mail pieces were “blah” before Vistage began working with SalesBrain, a marketing company that specializes in neuromarketing.

Vistage’s old direct pieces were very conservative, with visuals of white men in their fifties, says DiPietro. She and her associates learned from SalesBrain that the look didn’t elicit an emotional response in prospects, and therefore wasn’t memorable, nor did it motivate consumers to take action.

Vistage began the makeover in May, and the company’s direct mail pieces and Web site now feature elements that resonate far greater with their target customers. “We’ve really tried to modernize our direct-marketing tools by including something based on neuromarketing. Our new pieces incorporate a more active sense,” says DiPietro. “The photos we use now do not just focus on people but are more high-concept pictures. The colors are new and fresh and the direct pieces always have a question and then a payoff line.”

Pay-per-click is a powerful and rapidly expanding advertising medium

Over the past holiday season online ads were everywhere, promoting everything from low-priced flat screen TVs to digital cameras. Many of these advertisers are still analyzing the ROI delivered by these campaigns. One of the areas advertisers are starting to monitor more closely is just how much of their pay-per-click (PPC) or search-marketing budgets were lost to click fraud. Retailers spent more money than ever before on online advertising, including media buying into the popular search marketing–or PPC advertising–medium. PPC advertising is one of the fastest growing segments of the online advertising market. It works by allowing the advertiser to buy the rights, for a period of time, to search terms or words that a consumer might type into a search engine. When a consumer uses that word or term in a search, the advertiser’s ads are displayed in the context of the search results.

The market for search or PPC advertising has grown considerably (to $4.8 billion in 2006), representing more than 42 percent of the total online ad spending. But as advertisers continue to embrace this popular medium, they are doing so more carefully because of the growing problem of click fraud.

Click fraud occurs when someone clicks on an ad without any intention to purchase or register. The person or “bot” (a computer-generated user) has no intention of taking the action the advertiser is paying to get. The perpetrator could be a company trying to eat up its competitor’s media buying or advertising budget, a dissatisfied consumer or a ring of people working together to make money off the advertising campaign.

electronic retailer magazine

Media Buying and Branding for Success

View Branding as an Ongoing Business Strategy
 
Branding is not something you do for a few days and then forget about. Branding must be a constant in your company’s business strategy. Brand loyalty and brand recognition can decline unless you revitalize your brand on an ongoing basis. Many businesses reinvent or rebrand themselves every few years to achieve a higher level of consumer recognition or because of problems or negative stigma associated with their current brand. Regardless of your product or brand, or how long you’ve successfully had it, to remain competitive, you must adapt your brand based on changing trends in the marketplace.
 
Branding for Success
 
Remember that branding takes time. That’s why you must integrate all these strategies over the long-term to build a brand. No matter when you start your branding efforts, branding your business is an important part of any successful marketing strategy. You want your customers to think of high value and quality when they think of your product or service. By branding your business, you make that happen. A strong brand also makes your company more valuable. When you successfully follow these strategies for branding your business, you can enjoy the name recognition and increased profits that come from having a great brand that everyone knows and loves.

Peter Koeppel is founder and president of Koeppel Direct, a leader in direct response television media buying, marketing, campaign management and creative strategies. With more than 20 years of marketing and advertising experience, Koeppel has helped Fortune 500 companies, small businesses and entrepreneurs develop marketing campaigns to increase profits. Koeppel is a Wharton MBA, and improved the media buying strategies and advertising for clients such as The Hair Club for Men, Berkeley Premium Nutraceuticals, Ben Hogan Golf, H.J. Heinz and DIRECTV.