CMA

P&G Increases its Internet Ante

At the CMA's 2nd Annual Business of Ideas Forum, Tim Penner (President of Procter & Gamble Canada) reportedly announced that his company was increasing it's online marketing spending from about 3% to 20% in the next year.

You may ask what could have triggered such a large shift? Below are some observations that I gathered through articles, conferences and monitoring P&G's marketing over the last 4 years.

Step 1: Global CMO Criticises Media Stakeholders

P&G's transformation started in 2004 when Jim Stengel (Global Marketing Officer) challenged US advertising executives at a conference and told them that core problems of media cost inflation and declining efficiencies was hurting marketing clients. Stengel assessed the Media industry was providing "C-" services. His message was...find another model and prove it's effectiveness through better measurement (better industry standards and more robust testing methods). According to the Wall Street Journal, P&G subsequently shifted 8% out of television and into alternative media.

Step 2: Testing DM & Emerging Media

So P&G started to test different forms of direct marketing and it dipped it's toe into mail, banner advertising, online contests and other interactive web elements. Direct Marketing was easier to measure and was seen as a natural "consumer involvement" lever.

P&G's mailing activity increased and there were a number of mail tests with brands. In Canada, some of these tests were with retailers (Shopper Drug Mart) and other mailers directly with brands.

In the US, P&G began experimenting with two separate viral groups of influential consumers: teens and mothers. Starting in 1999, P&G created a group of teenagers called "Tremor" (it took over 2 years to build a critical mass of 280k). Similarly, "Vocal Points" is panel of 650k engaged mothers who provide their feedback on products and who also help spread the "word of mouse" for new product launches. P&G finds that the one-to-one approach is especially effective when marketing sensitive products such as dandruff or tampons.

In 2006 at various trade shows I attended in the US and Canada, I noticed that a number of contacts mentioned that they were called by P&G for roundtable table discussions on internet marketing. The discussions were open ended listening sessions where the brand marketers tried to understand each online medium and key success factors.

P&G has significant experience with banners but is also using paid search.

Step 3: Aggressively Growing their Email Permission Base

With a critical mass of consumer opt-ins gathered through contests, P&G underwent a major email acquisition strategy to grow their Canadian permission lists to 1 million consumers. (Cdn DM News 02/01/06).

P&G's core email property is a newsletter called "Everyday Solutions". P&G have been an Epsilon/Doubleclick email customer since 2004 and has been consistently testing the email medium. P&G has one of the better approaches of relational newsletters and transactional alerts in their CPG sector.

Step 4: Focusing on Measurement

P&G used measurement through each of the previous steps and online measurement is becoming one of it's core competencies. At the end of the day, the new marketing is about measurement. Online marketing is perfect for sequential A/B tests, multivariate tests and a scalable/fast rollout.

Given their marketing discipline, I suspect that P&G examines both "above the line" and "below the line" impact. A quote from a senior US P&G exec confirms this…" Procter measures everything. We are a very data driven company, and every time we ran a program, we did a control group...and the results were significant". Leaders in online marketing have the formula and are quietly widening the gap.

Conclusion

So why is P&G upping the ante in online marketing?

This was all part of a multi-year strategy and shift to find a new optimal mix of mass media and targeted media that will drive profitability. While other CPG marketers hesitate about online, P&G is upping the ante. Now is the time for all eleaders to find their formula and stake their cyberturf.

Online marketing is effective for many marketing scenarios; it is measurable, has a high ROI and creates a Sustainable Competitive Advantage (SCA).

Geoff Linton is VP at Inbox Marketer and a Professor at Conestoga College in Kitchener-Waterloo.

To AJAX or not to AJAX: A Cambodian’s Perspective

Did you know that Canada is a Top 10 leader in global usage of broadband internet access? We are.

Did you know that Canada is in the Top 25 in terms of global internet penetration? We are.

Did you know that Cambodia has approximately 44,000 internet users (in total) translating to less than 1% of their population?
They do.

For a country with almost 14 million people (Cambodia), internet adoption, historically, has not been high.

For a country with over 33 million people (Canada), internet adoption, historically, has been very high.

According to Wikipedia and the CIA World Facts Book, in 2005, oil and natural gas deposits were found beneath Cambodia's territorial water, and once commercial extraction begins in 2011, the oil revenues could profoundly affect Cambodia's economy.

For now, they are still a developing nation.

Yet more often that not, when I am completing an online form with my mailing or contact information, the “Country” dropdown menu seems to think I live in Cambodia. It’s the first country that pre-populates the field when I type in “C” and the next country on the list after Burundi.

In this case, alphabetical listings decrease usability.

There are several solutions to this:

1. Sophisticated eCommerce sites know their customer base and they will pre-sort their dropdown menus to include, for example, the USA and Canada, at the top of the list.

2. IP Location software can pre-populate forms for users who have basic, visible data points. Take the simple example of a user login from Canada. The purchase form may be quite complex as some businesses need more information to prevent fraud and to ship and bill accurately. Certain dropdown information such as country of origin, postal code, IP and domain name can be identified and pre-loaded in to the fields using tools such as: http://www.ip2location.com/

3. Ajax (Asynchronous JavaScript and XML), is a group of inter-related web development techniques used for creating interactive web applications. A primary characteristic is the increased responsiveness and interactivity of web pages achieved by exchanging small amounts of data with the server "behind the scenes" so that entire web pages do not have to be reloaded each time there is a need to fetch data from the server. This is intended to increase the web page's interactivity, speed, functionality and usability. Type recognition also allows real-time intelligence with the database / lookup tables which can significantly increase speed and ease of use, such that a user would be able to type “CAN…” to get “Canada” rather than Cambodia, Cameroon or Cape Verde.

Milliseconds of time are saved for the user. And I need my milliseconds.

Joy Boyson is Director, Business Development, Technical Marketing at The Marketing Store in Toronto, ON Canada and a member of the CMA Digital Marketing Council. She can be reached at joy.boyson@tmsw.com

Can Direct Mail be Environmentally Friendly

I am probably going to regret opening this can of worms but lately my thoughts have turned to the impact on the environment of direct marketing. I am not crazy enough to tell you that marketing (especially direct mail) is a positive environmental force - a few industries today can claim to be that. But I do think that my colleagues and I are reducing the impact, albeit in a small way.

By focusing on customer data, companies can dramatically change the environmental impact of their direct mail initiatives. Specifically,

1. By building a complete view of the customer (linking disparate databases), companies can reduce duplicate mailings and control the flow of communication to their customers.

2. Using analysis techniques such as predictive modelling and segmentation, communications can be targeted maximizing the impact of every piece of mail. This can ensure that only those most likely to respond will receive a piece of direct mail.

3. By cleaning up databases, and fixing addresses, undeliverable mail can be reduced.

4. By enabling opt-outs (and using the CMA opt-out list)- and specification of contact preferences - companies ensure that those who do not want to receive mail do not get it.

5. By merge-purging external lists against one another and internal files, targeting of the same prospect multiple times can be avoided.

My response for years when asked "Oh, so you are responsible for all this direct mail I get" has been "No, I am responsible for all the direct mail you DON'T get". I have a feeling I might be asked that more and more in the coming years!

For more on this read the Aberdeen Group's report:
Green Marketing: Leveraging Customer Data to Reduce Direct Mail Waste by Aberdeen Group.

I am also encouraged by the new focus being shown on this issue by our key industry groups – perhaps too little too late but all action is better than nothing:

- NAMMU (National Association of Major Mail Users) has an annual award that recognizes innovation in making the mailing industry as environmentally friendly as possible. The winner in 2007 was Domtar for their EarthChoice Paper.
- DMAT (Direct Marketing Association of Toronto) has recently announced the creation of a taskforce to study the issue of environmental responsibility.
- The Forest Stewardship Council of Canada (FSC) launched their FSCXpert (FSCX) Program late last year – this is an educational program and designation for graphic designers, and communications and marketing professionals committed to responsible forest management.
- And, of course, the CMA has a variety of case studies and green tips available to marketers who want to reduce their environmental footprint.

Stop placating me and make a decision!

Don't you just get so furious when you have an issue, contact customer service, and the front line staff is wonderfully sympathetic and apologetic but cannot make a decision to resolve your issue?

I am tired of the placating and no decision making to fix my issue. I am tired of escalating to a Supervisor, then a Manager and having to wait for call backs to resolve my issue!

I was reading a thought provoking article by Graham Kingma, in April's edition of the Contact Management Magazine entitled, Empower Your Frontline Staff to Boost Profits. In it Graham talks about allowing your frontline staff to make decisions to resolve a customer's issue. What really resonated for me was that empowering your frontline staff should be viewed as allowing them the confidence to effectively resolve a customer's issue (once trained and given the tools). Empowering your frontline staff will boost profits as acquiring new customer's costs more than retaining them.

I had a recent experience at a well known telecommunications retail outlet that made me think that frontline customer service people need to be more empowered to make decisions to retain customers, enhance the customer experience and stop giving customers the run around! Customer Service people are smart, resourceful and care about helping people, so why don't companies give them the tools they need to truly be of help?

I went to this well known retail establishment (of which I am a loyal customer) to upgrade a piece of my equipment (my internet, long distance, Blackberry and digital TV are bundled into this "great deal" to save me money). Low and behold, they had a special promotion for new customers, and I, a loyal customer, had to pay almost double for the same thing! I expressed my concern and the Associate and the Manager were wonderful; they apologized, empathized and tried to explain the rationale of the new customer promotion. At this point I was livid; I proceeded to give them the following analogy:

"Imagine you are going to a wedding of a long time best friend and that best friend made a recent friendship with a cool, well connected person. You arrive at the wedding and you are sitting in the back close to the kitchen and the newly acquired friend (the cool and well-connected person) is at the head table. How would you feel?"

I felt used and taken for granted. They both got the analogy but still no decision could be made; they continued to apologize and offer kind words; lots of placating, but no authority to fix the issue.

I told them I will call head office and sort it out (one would have thought one of them would have made that recommendation and not make me do work). Inany event I called head office and got what I wanted with one phone call.

If frontline staff are empowered to make decisions it is great for the customer, employee and shareholder. As Graham said in his article; "they (frontline staff) won't give away the farm." In most cases they will make great decisions that meet the need of the customer and the business.

I sometimes think the reason most customer services jobs are not highly regarded is that most people in this role are not allowed to problem solve and provide a resolution to customers issues. I'm sure it's as frustrating for many of them as it is for the customer. If you cannot solve the customer's issue then you cannot effectively service them.

In this day and age of instant information, gratification, and busy lives, there are few organizations that ensure their frontline people are well equipped to make a decision and truly provide service, not platitudes!

The Marketing Talent Pool – Running on empty?

THE REALITY

Census Canada recently released a report that “Management and professional occupations lead the retirement wave” with 55% of the workforce 40 or older. This is a terrifying statistic and leaves us to question what this will mean for Canadian Business in the next 10 years. Ultimately the traditional way of staffing up an organization (not to mention how we structure these organizations) is going to change. The Y generation is already throwing temper tantrums and demanding better work life balance. So what happens when that 55% retires? Does this mean that the workforce mix is going to change? Historically sticking with one company for life was of the norm. That is certainly not the case in today’s market. Will there be more freelancers and consultants? Will the age of retirement evaporate? Or will senior management be comprised of part timers making full time salaries just so the company can retain higher calibre talent? One thing that is sure to be noticed is that the immediate economic crisis has hiring in check. .. so when hiring is frozen and workloads boom... what does a marketer do to manage marketing resources(MRM)?

AN ALTERNATE ROUTE

What if a corporation knew they had a service that gave them access to high quality resources in marketing that were available quickly to address interim needs of the department to meet demand. This resource would eliminate the need to hire an additional Full Time Employee (FTE) or build additional resources and/or to farm the business to the costly advertising agency. This would in turn positively affect speed to market and address work life balance issues. This is not a new concept.

ACCOUNTING VERSUS MARKETING

The concept of bringing in skilled workers for short term assignments is not a new idea. Companies such as Adecco have made a huge name for themselves delivering generalist / admin temps on an as needed basis. However, when exploring the more senior and professional calibre roles, companies are far more reluctant to entertain temporary employees. The most common objections stem from concerns of the learning curve, because the common belief is ‘their business is so unique’, to more proprietary worries about confidentiality. Both these issues are easily overcome which has been clearly demonstrated by one company who started providing temps to the vertical considered most sacred… Finance. Accountemps has grown to become the largest and most successful financial temporary staffing firm in the world. It has since become very common to see firms that specialize in outsourcing/consulting for IT, HR, Supply Chain/ Operations and Creative services. Marketing however has not been a part of the temp renaissance.

The North American market for the Marketing Staffing segment has been estimated to be worth 1-3 Billion Dollars. The question that arises is if marketing staffing is such a hot service line, why are we not seeing more staffing firms focused on this segment, especially when there is so much depth in variety for the vertical? Marketing is deep and wide particularly within Fortune 500 organizations. Roles range from database management, brand/product management, Marcom, PR and Event Management, E-commerce and Market Research. The list goes on. So what is holding us back?

THE CLIMATE

Challenges a company faces within the marketing organization are far different from 10 years ago. Corporations are experiencing accelerated growth of core brands by expanding products and marketing programs. The explosion of new channels means that organizations more frequently run into skill gaps. Efforts to drive world class productivity limits bandwidth/resources for new marketing programs. Now add the whole Economy and recession fears to that equation. Efforts to find ways to cover surges of work in marketing departments often leads to outsourcing the load to the advertising agency… at a huge cost. This cost is not only monetary. When work life balance becomes compromised an organization runs into attrition risks. One risk is that overworked staff end up burning out and become less productive and take more sick leave. Secondly the reputation of the organization that becomes known as a ‘sweat shop’ has an adverse affect on ability to attract new good replacement talent. This is fast becoming an issue in marketing departments already!

BACK TO REALITY

When a company is striving to create a winning environment that values work life balance what happens when additional full time hires are not in the budget due to a head count freeze? It is becoming clear that out of the box thinking will be needed for companies to survive over the next decade. Marketing Resource Management will be an integral tool keep in mind for your survival kit.