By Charles D’Oyly, managing director of Valassis.
Life is increasingly tough for the brand manager. Less above-the-line spend on secondary brands, increasing dominance of retail own brand goods and growing pressure to invest an ever increasing proportion of promotional spend in-store are constraining opportunities for brand differentiation.
Furthermore, the ability to overlay loyalty card, EPOS and panel data has moved the goal posts. With highly measurable, data led campaigns now viable, reliance on traditional qualitative measures of marketing success are deemed inadequate in an increasingly accountable corporate culture.
Yet few brand managers have the time, skills or tools required to analyse detailed campaign performance information. So just how are organisations going to achieve the fundamental shift required to drive promotional performance from ever decreasing direct-to-consumer budgets?
Against the backdrop of a weakening economy, the need for effective brand promotion has never been greater; especially given the drastic reduction in above-the-line spend for secondary brands and increasing retailer dominance.
Sales promotions account for a large proportion of marketing spend with billions of pounds invested in it every year, yet this activity is still, in the main, undertaken without much fresh thinking or enough measurement.
Despite the growing power of the retail own brand and increasing budgetary pressure, this lack of performance measurement has inhibited the evolution of many brand promotional strategies. To date, brand managers have been constrained by a lack of highly detailed information. The result has been an over reliance upon qualitative measures that, unfortunately, give no real insight into promotional success or failure.
In an increasingly performance driven marketing environment, brand managers need to develop campaigns that build upon past performance. Simply repeating the same promotions year-on-year will not deliver better results or provide the return on investment increasingly demanded by the board.
This inability to measure, analyse or attain insights is fundamentally undermining success in what is an increasingly challenging marketplace. With nothing greater to work with than sales by store, or customer feedback via panel data, it is tough to gain in depth understanding of campaign performance.
However, by combining these data sources with the insight provided by customer loyalty data, it is now possible to gain a true picture of the promotional impact at individual customer level.
Promotional marketing can now become performance driven. Combining socio demographics with anonymised loyalty data, it is possible to create multiple consumer profiles upon which to base highly targeted promotional activity.
This activity can then be measured, both in the immediate and longer term, by combining loyalty, EPOS and panel data, providing valuable insight into the most and least responsive profile groups. Armed with this information brand managers can then target the rest of the population far more effectively based on the identified key profile groups.
Furthermore, understanding the performance of promotional activity also enables brand managers to overcome an historical disconnect between brand marketing and the national account team. With accurate predictions of likely uplift in customer demand by store, brand managers can share forecasts, with the national account team and each store manager, supporting far closer cooperation across the business and retailers.
However, while this process is now inherently measurable, analysis of performance by profile group is a major challenge. For example, how many brand managers have the resources or time to analyse detailed performance data; to assess volume uplift by consumer groups; to ascertain just which elements of the campaign were successful and why?
Few brand managers have the time, skill or desire to wade through pages of highly complex analysis and impenetrable reports. Instead, this information has to be assessed by people with the right skills, analysts who also have understanding and experience of the creative marketing process.
Successful closed loop marketing that feeds promotional results straight through into ongoing and subsequent campaigns demands a streamlined process. Tight integration is required from the initial definition of campaign objectives through identification of the key consumer audience, to developing the creatives, delivering the offer, and then processing and analysing the campaign results.
It is only by working with a specialist agency that can truly deliver all components of this activity that brand managers will be able to achieve a detailed understanding of campaign performance and critically, use this information in order to shape future promotional activity and maximise their promotional investments.
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