Many marketers and advertising agencies have spoken of ‘integrated marketing’ or ‘the halo effect’ when building campaigns; trying to convince senior management/a client of a marketing strategy or the effectiveness of a particular medium in adding to the impact of the overall marketing message. But what exactly has digital and social media done to the ‘marketing mix’ and where does it fit now?
My first experience of the ‘marketing mix’ and media was when I started my career in Brand Management at Procter & Gamble in 1994 – leading the Hugo Boss fragrance brands in the UK. This was in the pre-digital days: the Internet was pretty much unheard of (15million users worldwide compared with 2.5billion today); webmasters were yet to evolve; Google was a very long number… and a certain Mark Zuckerberg had only just passed his 11th birthday and was yet to enter high-school. Me, well I was on the development team for P&G’s new designer fragrance (Hugo by Hugo Boss) and was also responsible for launching it in the UK. We had managed to secure the world exclusive launch for it in London, a first for any global P&G designer fragrance at the time and also deliver many other firsts such as launching it with the new fashion sub-brand of the same name; gaining agreement to a female franchise; and launching the fragrance above-the-line building equity not via TV but initially with targeted cinema, magazines, radio and sampling. The media strategy led by Mediacom was award-winning and I named it the rather unscientific sounding ‘trumpet strategy’ based on its visual representation – a strategy which I still use today (Figure 1 above).
I recall a pre-launch meeting for Hugo where the German brand team (who were leading product development along with the US brand team and ourselves in the UK) were talking about using a ‘new, innovative, digital medium for launch… called CD-Roms’. Many of us in the room just did not buy it let alone understand it – and so, I passed over on my ‘first digital marketing’ activity. Needless to say this early digital activity would have been at the mouth of the trumpet targeted to the core-target audience. The German brand team used it – much as we all use targeted digital media today. However, back then we still talked about vertical segments: ‘age group 16-24 years of socio-economic demographic ABC1’; however, for Hugo we added ‘horizontal’ psychographic elements of ‘young, hip, urban trend-setters interested in music, fashion and technology… (figure 2 below shows a model used for targeting). We built early interest, buzz, awareness and sales through ‘word of mouth’ and sampling fragrance sachets. How much easier would this have been in today’s social media world where you can identify and target audience groups by the more pertinent ‘horizontal’ elements of values, beliefs and opinions that can more readily drive consumer behaviour. In essence, today ‘you are defined as much as by what you share as opposed to what you say or click’.
We must have done something right back then as the typically riguorous P&G analysis and financial modelling using @risk (yes, we have significantly more advanced programs today but these still work!) showed that we only had a 55% chance of a positive net present value (NPV) in the UK. In addition, the Financial Times had stated that most new designer fragrance brands had a shelf life of less than 3 years. Well, it’s more than fifteen years on – and Hugo remains P&G’s most successful fragrance launch and still is a top seller in the UK and globally. A significant part of this success was due to: 1) listening in as much as real-time as possible to the core target audience by being directly with them and gaining insights quickly; 2) developing a product and marketing strategy based on what they were saying in their distinct geographical and trend-setting groups in their own environment; and 3) then getting them to spread the word quickly. Effectively, that real-time listening, quick development and encouraging word-of-mouth is what marketers are doing for organisations today using online listening tools and digital and social media sites to spread the word.
Indeed much credit is due to Procter & Gamble who wrote the book on Brand Management and Marketing – as many of those early principles that I learnt and used are just as valid today. As I mentioned, the ‘media trumpet’ strategy of targeting a core audience defined by horizontal segments, their ‘likes’ and broadening out over time is used successfully by many brands. Indeed the original advertising strap-line from the Hugo launch of ‘Don’t imitate, innovate!’ still resonates today and the innovation in product and its digital marketing strategy is evident.
After P&G, I joined Orange and yes ‘the future was bright, the future was Orange’ as the millennium was approaching. With an unrelenting focus on the customer and innovation, Orange was delivering great products and service. This was reflected in its valuation (by France Telecom in 2000); its per subscriber value was at a significant premium to the other three UK mobile operators. Prior to all the takeover activity, I was responsible for International Products and Services. It was actually easier to gain a mortgage approval than it was to have roaming on your mobile back in 1998. One of my first wins was to change the credit criteria to enable the whole base (only1.5m at the time) to have IDD and over 60% to have roaming from a standing start. From a digital perspective, we actually had a debate on whether to build a website for the new products and services… oh, how times have changed! There was only one person responsible for the whole Orange website at the time as opposed to the large teams, many agencies and multiple-millions of pounds in budget today. Obviously, online has become a significant sales and customer service channel today. The parallel I see today is with social media – much as back then as we all debated the importance of the Internet and websites, their relevance to business goals and the need for resource if online became a significant channel. Many organisations are having the same debate today about social media and online community management. If we believe that social media can deliver against typical business objectives (such as: profitable growth, great customer service, gaining recommendations and advocacy, managing costs and increasing investor sentiment) then as with the early Internet days we need to plan and resource for it accordingly.
When we have seen the impact of the Internet and websites on many organisations – we should not be myopic, but invest accordingly when it comes to social media, the ‘mobile web’ and their integrated nature. Industries such as music (given file sharing and disaggregated online purchases), retail insurance (given direct online sites and price comparison aggregator sites) and high-street stores (given online sales channels) have been redefined in only a decade and have seen core profitability decline as they were not ready or accepting of the consumer and technology changes.
The two figures illustrated here show the media trumpet strategy and target audience segmentation – both of which can help organisations and marketers today. The big change is with digital media especially social media and mobile providing the real-time and relevant insights that can help shape product development and add to a marketing strategy throughout the ‘trumpet’ providing greater engagement. In addition (as previously discussed elsewhere on this website), they act as channels in their own right (supporting sales, advocacy and service).
As business development and marketing have developed with the changes in consumer behaviour, technology and distribution channel – so has our view on measurement. Particularly in B2B environments – where there is an increased focus on ‘conversation’ as opposed to ‘pure conversion’ or ROI. The typical marketing flow seems dated and too short-term on immediate conversion when customer lifetime value is the better measure now – with ‘engagement and intelligence’ being used to convert at the appropriate time in the purchase cycle.
To help address some of the issues raised here and help us move forward do we need digital departments, digital champions or both or board level officers responsible for digital or customer experience officers across all channels? The next blog will deal with this… and the rise of or the need for the Chief Digital Officer…?
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