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Commentary & Analysis

Meeting the Media Selection Challenge: TransPromo is the Answer

Traditional media spending has declined since 2004, but Internet spending continues to rise with no end in sight. With new technologies emerging, media trendsetters have fallen behind the curve of cultural change. With technology driving such rapid change, it is no wonder that marketing communications have not kept pace.

By Barb Pellow
Published: August 20, 2007

Traditional media spending has declined since 2004, but Internet spending continues to rise with no end in sight. With new technologies emerging, media trendsetters have fallen behind the curve of cultural change. With technology driving such rapid change, it is no wonder that marketing communications have not kept pace.

Today, a single company can provide telecom, wireless, Internet broadcast, and communication services. More music is downloaded than is packaged. PDAs and cellular phones are one device. Thanks to wireless technology, PC hardware now seamlessly links with consumer home electronics. All of these innovations change the face of marketing.

Changes in social behavior as a result of technology present an enormous opportunity for advertisers to engage audiences through new pervasive, customer-preferred media channels.
Put yourself in the shoes of today’s agency or marketing executive. The CMO faces four critical media challenges:

  • Relevance of the message
  • Connecting with customers through media clutter
  • Reaching the target audience through multiple channels
  • Delivering a measurable return on investment

The objective of this article is to assess the challenges and consider how “TransPromo” marketing—combining promotional messages with transaction documents—can meet the media challenge.

Relevance of the Message

Under a constant onslaught of advertising, consumers have adapted and evolved. To process information, they’ve learned to be more vigilant and listen to messages designed explicitly for them. Today’s consumers have unprecedented access to information and selectively choose the content they receive.

In the recent “Future of Mail” study conducted by InfoTrends, both consumers and business-to-business targets showed that they will listen—and be receptive—to a truly relevant message delivered at the right place and time. Of the 412 survey respondents, the preferred method of marketing contact was via direct mail.

Figure 1: What is your preferred method of contact for marketing and promotional purposes?

Respondents also had a high preference for highly personalized direct mail with messages and offers that were designed to reflect their needs and interests (56%). In return for business, consumers expect a level of intimacy similar to what was enjoyed when business was more personal. The goal is to utilize technology to generate information that is of interest to the recipient.  

Figure 2: Which type of hard copy direct mail would you prefer to receive?

It’s time to really get to know who you're talking to—this is a simple but true statement. Marketers can’t blast messages at consumers anymore. They need to choose messaging that means something to targets. It’s time to more intimately connect with prospects and customers.

Connecting through the Clutter

Today, consumers are surrounded by various media sources that are competing for their attention. While they do pay attention, they are often focused on more than one medium at the same time. In the world of media planning, this reality is often ignored. So much of the $175 billion worth of advertising messages that are placed each year are issued based on the assumption that they will receive the exclusive attention of their target audiences.

Today's media planning tools do not reflect how media is actually used, and the result is that many of those dollars are wasted. According to BIGresearch of Worthington, Ohio, rather than using one medium exclusively at any one time, more than half of all people use multiple media types at the same time.

During primetime, for example, nearly 70% of people say they watch television, 43% go online, and 22% read magazines. To put this more simply, at least 35% of these people are using more than one media type during primetime. BIGresearch conducted its study with 7,800 online respondents.

Moreover, nearly two-thirds of men and women say they go online while watching television, half have the radio on while reading magazines, and more than half read the newspaper while watching television.

Reach

In April of 2007, MediaPost reported the results of an annual survey conducted by the Association of National Advertisers, which asked 100 senior marketing executives to list the most important issues in the advertising industry. For the past several years, the number one answer has been "accountability," as more marketers have felt the demand to demonstrate a return on investment for their clients. This year, though, "integrated marketing communications" moved up from a fourth-place finish in 2006 to take the top spot. From this data, it looks like marketers are starting to view integration to be just as important as ROI, which may have important implications for in-store media programs.

The fact that these two items would be at the top of most marketers' lists is not exactly remarkable. Even before Proctor and Gamble made its landmark announcement two years ago that it would be diverting funds from traditional media into below-the-line programs that could deliver a more measured ROI, agencies and consulting firms were scrambling to provide their clients with some way of measuring the effectiveness of their marketing programs. As the impact of TV advertising continues to decline and Americans continue to augment their traditional media consumption with heavy doses of Internet and out-of-home exposure, the need to prove that a particular ad or campaign is working will only increase.

With a tighter focus on integrating different marketing efforts, marketers are now focusing on multi-channel promotional tools. Multi channel promotion includes direct response ads (including Web ads) that contain a phone number and a Web site, or an invitation to visit a retail outlet with a coupon. Multi channel promotions also include direct mail and catalogs, e-mail, and outbound telemarketing.

McKinsey & Company studies show that in retail banks, multi-channel customers are 25% to 50% more profitable than their single-channel counterparts. Other industries, including transportation, telecommunications, and hospitality, are also enjoying big dividends from the multi-channel approach. This is because customers who are multi-channel users receive benefits that lead to higher purchasing activities, such as:

  • More convenient experiences, thanks to fast access to information, the ability to shop from home, and more personalized service
  • More targeted and actionable information in the form of personalized suggestions and advice

To capitalize on these profits, marketers are emphasizing the delivery of consistent messages across several different media channels. Obviously, everybody's goal is to sell more products and satisfy the consumer through effective integrated multi-channel marketing.

Response Measured Media

In today’s environment, marketing effectiveness and achieving measurable business objectives is a mandate—not an option. In a just-completed study on marketing effectiveness by Prophet, 60% of respondents reported their marketing budgets as flat or down for 2007. As a result, spending must be more effective and more efficient—it must go farther and work harder. To that point, over 75% of the survey participants rated improved marketing effectiveness as one of their companies’ top three priorities.

Marketers need to close the measurement loop. To really understand the critical tradeoffs that contribute to marketing effectiveness, marketers must adopt a more consistent and disciplined approach to measurement. A clear sense of objectives, systematic use of tracking mechanisms, and consistent scorecards enable marketers to gauge whether investments are truly creating the desired outcomes.

This discipline not only enables meaningful assessments of a single campaign but also enables marketers to make comparisons across initiatives. With such a fact base to work with, marketers are better able to build their cases and adjust their playbooks for the future. Moreover, this allows for better alignment with senior management's expectations—offsetting the possibility of mandated mid-course changes.

The ROI calculation is simple. ROI (return on investment) is one of the most common ways to measure the economic benefit derived from an investment in a marketing program or initiative. The simple formula for ROI is:

(Total Incremental Profit - Total Investment)
Total Investment

The result is expressed as a percentage. The challenge is developing mechanisms to capture the incremental profit. Based on the abundance of new media, channels, and greater customer control, marketers can’t afford to look in the “rearview mirror” at historical performance on prior marketing investments. Forward-looking marketers are taking a “test and learn” approach, testing elements of the marketing mix on a smaller and more controlled scale. This can be a more effective option, particularly when funds are scarce and the techniques are new.

TransPromo: Meeting the Media Challenge

The emergence of new applications, such as TransPromo documents that combine transaction and marketing communications, offers a tremendous opportunity to meet the media challenge in today’s complex communications environment. Transactional documents are evidence of a business agreement and include statements, invoices, notifications, proposals, policies, and contracts.

Based on InfoTrends’ data on the broad transaction market, we believe that the total cost for generating 66.4 billion transaction documents in 2005 was $120.25 billion in North America, including printing, paper, envelopes, and inserting.

Figure 3: What percentage of your transactional documents do the following applications account for?


TransPromo is the inevitable combination of transactional printing and proactive marketing. The key for the marketing executive is that TransPromo documents are uniquely capable of meeting the media marketing challenge like no other communication vehicle. First, TransPromo documents are based on knowledge of client demographics and consumer markets. This means that the promotional messaging can be directly linked to relevant information about the consumer. The marketer can utilize existing data to cross-sell, up–sell, and build customer loyalty.

Second, it is a well-known fact that statements and invoices are still the most frequently used communication between businesses and clients/consumers. Since consumers expect these documents and know they contain relevant information, they will open and read them. Various recent studies have shown that, on average, a consumer will spend 42.5 seconds reviewing a bill. That’s the amount of time you have to grab a client’s attention while the prospective purchaser is not interrupted with competing media. The combination of statement information with relevant, personalized, and proactive marketing ads can capture the client's attention, enhance perception of the corporate brand, and potentially increase spending. When presented with examples of traditional statements and marketing inserts and then with a TransPromo document, 63% of consumers favored the TransPromo document.

TransPromo documents are easily adaptable to multi-channel integrated communications techniques. Savvy retailers are including personalized URLs on statements with offers of coupons accessible via the Web. The consumer links to a customized landing page, provides the retailer with some additional and desired information for relationship-building on a survey form, and prints the coupon for a visit to a store or accesses a promo code for a shopping discount on Web-based purchases. Some catalogers have found that a free gift coupon using multi-channel technology to their gold customers (60% of sales) increases sales among these customers by 18%. It improves their average order size, number of orders, and retention rate.

Finally, TransPromo is measurable. Marketers can clearly track offer and acceptance. They can leverage combinations of digital print technology and Web-based solutions to make real-time adjustments to campaigns.

TransPromo: The Time is Now!

Every month, millions of statements, invoices, and checks are printed. With TransPromo, marketers can make the most of every one. With a combination of bold design, color printing, and variable data, the transactional document can become a valuable marketing tool. It has relevance, reaches the customer through the media clutter, offers a multi-channel communications opportunity, and delivers the most essential ingredient…ROI.

A digital printing and publishing pioneer, marketing expert and Group Director at InfoTrends, Barbara Pellow helps companies develop multi-media strategies that ride the information wave. Barb brings the knowledge and skills to help companies expand and grow business opportunity.

Please offer your feedback to Barb. She can be reached at barb_pellow@infotrends.com.

 

 

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