How Offline Advertising Influences Online Search and Purchases

A recent study by iProspect and JupiterResearch that looks at the influence of offline channels on online search behavior had some very interesting findings that helped confirm what I suspected – that offline media channels are having a major impact on online searches and online purchase behavior. The study found that 39% of online searches that are influenced by offline media channels such as DRTV, print and radio advertising ultimately make a purchase. Results from the study also showed that 67% of the online search population is driven to search by offline media channels.

 

This data from iProspect confirms what people in the direct response advertising industry have been noticing for several years, that offline media channels such as direct response TV, radio, infomercial and print are clearly influencing a staggering percentage of online searches and sales. The study clearly demonstrates that marketers who are relying on online advertising only are not harnessing the synergies that exist between search and offline advertising channels. I don’t feel this is a short term trend. I expect the influence of offline advertising on online search will continue to grow. We’ve worked with several Internet retailers that were able to take their business to the next level by adding direct response television to their media mix.

Direct Response Television Marketing Can Solve CMO’s Problems

The average tenure for a chief marketing officer (CMO) was down to approximately 23 months in 2006, according to a study by executive search firm Spencer Stuart and reported in BtoB magazine on 5/7/07. The Spencer Stuart study also found that nearly three-quarters of CEO’s and board members consider the marketing organization “highly influential and strategic” in the enterprise, but nearly two-thirds say that their top marketers don’t provide adequate ROI with which to gauge marketing’s true performance.

Another recent survey reported that only 7 percent of senior-level financial executives are satisfied with their company’s ability to measure marketing ROI. The survey also points out that less than 10 percent of these executives indicated that their company had a separate budget allocated for measuring marketing effectiveness. (Marketing Management Analytics and Financial Executives International survey, revenue magazine May/June 2007).

“I worry about what will happen to the future of marketing leadership because of the turmoil-the short life span [in the CMO position], the pressure and the high expectations,” said Greg Welch, head of the CMO practice at Spencer Stuart. The steady stream of departures among high profile senior marketing executives is evidence of this “turmoil”. Just this year, Macy’s CMO, AT&T’s CMO, Verizon’s VP of marketing and the CMO at Wachovia all left their positions. (BtoB)

The mounting pressure on CMO’s, combined with corporate executives being dissatisfied with the lack of measurement of ROI by these marketers, creates the perfect opportunity for more companies to adopt direct response marketing initiatives to address these problems. This also represents a big opportunity for our industry to step in and help these companies develop direct marketing programs. Since the direct response marketing model is all about measuring ROI, it seems like more of these marketing executives will now be open to testing out direct response advertising.

Of course there are many CMO’s outside of the direct response industry that are doing a good job. The BtoB article notes that Martin Etherington, VP-marketing at Tektronix said his marketing department is 100% accountable and measurable and it aligns its metrics with the strategic objectives of the company. However, it appears that this type of marketing measurement and accountability is not yet that widespread among Fortune 1000 CMO’s, judging by the high turnover and the survey feedback from corporate executives.

From the perspective of a direct marketer who lives in a world of total accountability, the need for more accountability and better ways to measure ROI among traditional marketers seems like a relatively easy problem to address. However, many of the Fortune 1000 brand marketers work with mega ad agencies that have been slow to move away from traditional brand marketing and adopt the principles of direct marketing. Perhaps the increasing pressure on CMO’s will force them to take a more serious look at the power and accountability of drtv marketing.

Integrated, Multi-Channel Media Buying Comes of Age

Tracking the media ratio and return on investment (ROI) of a DRTV or radio campaign has always been a key aspect of the media buying process. Through all stages of a campaign, from initial focus group testing to network testing, tweaking and rollout, direct response marketers know the value of good data, analysis and careful media buying. The best marketers are those who literally “measure twice and cut once,” working closely with their media buying partner to evaluate each market and each test before signing off on a campaign.

With this kind of rigor, it is often surprising how few direct response companies analyze all of their marketing channels for overall performance. Very few execute integrated, multi-channel campaigns where the media plan includes TV, radio, online, on-demand, print and other channels in one comprehensive package.

Online and on-demand TV are often the poorest planned and least understood of the above channels, especially by traditional marketers who view new media as more of a sideshow. With the dramatic rise of Internet advertising and the disruptive promise of video-on-demand (VOD) and digital video recorders (DVRs), this mindset will have to change.

What is needed is a new approach to direct response media buying and planning that not only treats online and on-demand TV advertising as serious channels, but also provides for integrated, multi-channel planning and reporting. This solution would include media ratio and cost per action (CPA) calculations at the media category level as well as an overall performance calculation.

Media Buying Research

It’s important to work with a media buying agency that has the capability to do research that helps identify the best media vehicles to efficiently reach the target audience. There is a wide range of media research tools that can be utilized by a media buying agency, in order to develop a targeted media plan.

 

Experienced media buying firms often review a combination of research tools, such as competitive media schedules, Nielsen ratings and data that identifies the networks watched most by people in the target audience, who have purchased a similar product or service.

 

Direct response television (DRTV) media buying firms also look at their database of results from campaigns for other products in the same category. Some DRTV media buying firms utilize a combination of traditional advertising metrics, such as ratings and impressions and combine that information with DRTV measurements to create a hybrid DRTV campaign. DRTV media buying firms for direct marketers looking to both sell product and drive retail sales often develop these types of DRTV campaigns.

The Value of Branding for Media Buyers

I started my career in marketing working in brand management on the Heinz Ketchup business. Working on a brand that was a household name and that had over a 50% market share provided me with an appreciation of the value of a strong brand. In the direct response media buying industry, many marketers overlook the power of branding and the value it can create for your company.

In the direct response TV industry, the marketers that understand the power of branding seem to be the ones that are most successful and have the longest running campaigns. Brands such as Bowflex and Proactiv come to mind when I think of successful direct response brands. Having a well-known brand can dramatically increase the value of your company. Just look at Orange Glo. I’m certain the reason the Church & Dwight was willing to pay $325 million to buy Orange Glo was because of the company’s profitability and the value of the OxiClean brand.
 
Direct response marketing provides marketers with the opportunity to both sell and brand their products simultaneously. If you can establish your brand as the leader in the drtv marketplace, it can help differentiate your product from the competition and it makes it harder for competitors to gain market share. For example, my company works with the leading ladder product. In only a few years, that product went from nothing to the leading brand in its category and knock-off products haven’t been able to gain traction. This was accomplished through effective media buying, branding and marketing of the product.

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.

Market Yourself

Due to many factors, REALTOR competition is more intense than it has ever been. According to the National Association of REALTORS, there are now over 2.5 million real estate licensees. Michigan has also seen a surge in real estate professionals over the last few years, and now MAR has over 34,000 REALTOR members. These numbers give consumers more choices when deciding which REALTOR is right for them, but this may leave REALTORS wondering how they can get and retain clients.

SIMPLE SOLUTION: REALTORS need good, solid branding, marketing, media buying and advertising techniques. That sounds good, but in reality that advice can seem more overwhelming than helpful, especially if you are a REALTOR working in a smaller office or for yourself. Where should you start? Michigan REALTOR has brought together some experts in this field to give you useful advice on how to stand out in a such a vast population.

“Many REALTORS offer very similar services. To stand apart from the competition you need to focus on what’s unique about the way you do business,” said Peter Koeppel, founder and president of Koeppel Direct, a leader in direct-response television media buying, marketing, campaign management and creative strategies. With over 20 years of marketing and advertising experience, he has helped Fortune 500 companies, small businesses and entrepreneurs develop marketing campaigns to increase their profits.

Koeppel stresses that REALTORS need to think outside the box to find out what they can offer to make them unique in the industry, suggesting it could be your level of commitment or an area of specialty. Once you discover what it is that makes you different, use that in your branding and marketing. “Narrow the focus of what you offer, so people think of you first when looking for a particular type of REALTOR,” he said.

Peter Koeppel is president of Koeppel Direct, a leading infomercial and direct response media buying firm.
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