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We all know business is tough right now..
• Consumers are under pressure…so they are doing more research,
and giving more consideration to their purchases and relationships
• Consumers continue to migrate more and more of their personal
time and “media consumption” time online…even as traditional
media vehicles like newspapers and magazines falter.
• Meanwhile, many industries face unprecedented financial stress…
• …and marketers in all industries are under pressure to justify and be
accountable for their budgets as never before.
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A new take on “performance marketing”
• What is performance marketing
• Three pillars of performance marketing:
• An new purchase funnel
• All marketing is response marketing
• Return on behavior
• Example: Performance marketing at work
• Making it work in your organization
• Building a roadmap to success
• Existing skills in a new context
• New technologies
• Example metrics
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Performance marketing is…
• Marketing that is continually optimized to perform (deliver positive
ROI), based on measureable consumer response metrics.
• Direct response marketing is performance marketing
• Search marketing is performance marketing
For considered purchase categories, even brand marketing can be
performance marketing, if it puts digital at the center of the marketing plan.
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awareness
consideration
intent
purchase
The Traditional Purchase Funnel is wrong
• In the traditional
purchase funnel,
there was a bright-line
distinction between
“awareness” and
“conversion” and the
corresponding “brand
marketing” and “direct
marketing” budgets,
strategies and tactics
employed.
Search marketing has changed the consumer’s buying process forever.
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need or desire
A New Purchase Cycle*
• As control has shifted
toward the consumer, a
“cycle” has replaced the
funnel
• Need is immediately
researched
• Search both drives
awareness and establishes
consideration sets
• Options are instantly
ranked and refined
ranking and
refinementconversion & purchase
awareness
& investigation
search
*Thanks to Ed See, Principal, Ed See and Associates
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Implications of the New Purchase Cycle
• Lessens the impact of mass media
• Impairs the incumbent advantage for cross sell/upsell
• Shifts focus to your website
• Collecting and leveraging the right information
• Managing the experience
• Aggregation, “review” sites and blogs become important arbiters
Search and websites provide a simple means for consumers
to act, and for marketers to track that action.
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It is only prospect recognition and expected timing of
response that differentiate our marketing disciplines
Known prospect
Purchase laterPurchase now
Unknown prospect
Promotional
Marketing
Classic Brand
Marketing
Relationship
Marketing
Direct
Marketing
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Building awareness, changing attitudes are weak goals:
instead, drive to immediately measureable action.
• New architecture: Build marketing
plans to put digital consumer behavior
at the center
• New metrics: Define behavior-based
metrics. Survey-based metrics such
as “awareness,” “attributes” and
“intent” are insufficient.
• New campaign management: Manage
campaigns to success by monitoring
real-time consumer behavior
metrics…ideally calibrated to ROI.
Performance Marketing optimizes campaigns to measureable
consumer behaviors…even classic brand marketing.
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Performance marketing drives Return on Behavior
• Performance marketing applies direct response concepts, even to
brand campaigns:
• by overcoming prospect anonymity
• by identifying indicators, or constructing behavioral proxy
measures for movement through the purchase cycle
• by calibrating those measures to sales
• by then optimizing the campaign to the approximated ROI
measures
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Case Study: Kraft’s Approach
• Kraft launched an online “performance branding” campaigns based
on research on “recipe clipping”.
• Recipe clippers where identified as a segment of consumers who
saved printed recipes, then reported behavior around trying those
recipes, and ultimately adopted some of them into their regular meal
routines.
• Most importantly, Kraft found that recipe clipping translated directly
into more sales of Kraft products.
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Case Study: Kraft’s Implementation
• Calibrated a value for a
downloaded recipe
• Built an ROI based branding
campaign around recipe
downloading.
• Campaign optimized to an
allowable cost per recipe
• Eventually, campaign expanded to
include other interactions, including
shopping lists, email registrations
and magazine sign-ups.
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Case Study: Kraft’s Results
• Kraft’s performance branding campaign led to millions of
downloaded recipes… and measureable Kraft sales.
• Although it used direct marketing skills, all the campaign’s
messaging reinforced Kraft’s ethos: “For busy moms, Kraft makes
nutritious meals easy”.
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Companies need a roadmap to help them build
marketing performance capability
Benefits / Characteristics
• Improved Digital Performance
• Increasingly Dynamic
• Greater Prospect Knowledge
Use a maturity model to set
priorities and articulate value
• What are your current capabilities
to manage marketing
performance?
• Where do you want to get to,
what is the business value of
getting there?
• Implementing a plan:
Required capabilities, programs,
and skills to deliver on the vision
Digital Performance-Based Marketing Maturity Model
1 Broadcast Marketers
2 A/B Advocates
3Personalization Pros
4 Value Validators
5 Channel Champions
17
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Three keys to success
• Integrate your company’s direct marketing, brand marketing, and
digital skills…
• Get experience with new “one to one” digital technologies
• Display ad exchanges 2.0
• Audience tracking and profiling
• Web page personalization/optimization tools
• Create simple, trackable metrics and discipline for continuous
optimization…even for your TV and mass print advertising.
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Integrate skills
• In many industries, the skills you need are already in your organization
• Necessary skills reside in:
• Direct mail analytics team
• Web development/ecommerce/online analytics
• Search
• Advertising/Branding/Marcom
• Breaking down functional silos (or working around them!) is the biggest
challenge for marketers
• Set up cross functional teams around behavioral campaign objectives
• How will the campaign impact each stage of the purchase cycle?
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21
Online ad exchanges allow display ads to target
individual consumers or consumer segments
• Online ad exchanges bring open market bidding to display ads.
• Exchanges provide access to inventory on a per cookie/per impression, real
time bid basis much like a stock or commodities exchange.
• Based on search experience, marketers will buy display on a ROI basis, but
new skills/capabilities are required.
• In the absence of publisher and context, online data that can inform both
targeting and the price an advertiser should pay for inventory becomes critical.
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Visitor A:
• Frequent flier
• Skymiles Member
• Weekend trips to Colorado during the
winter months
Visitor B:
• New to Delta.com
• Searched for a flight to Des Moines
Are you giving them the right offer or experience?
VAR 1
VAR 2
VAR 3
VAR 4
VAR 2A
VAR 5
Close the deal when you have the chance, with just the right offer.
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Website Traffic, Clicks
and View-throughs
Direct Traffic
(URL input)
Search
Velocity
Are they responding?
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Performance Marketing Payoff: Do more with less
• Companies with a strong DM competency and culture will get there
first
• Their agencies will have to adapt:
• More integrated planning
• More analytic competency
• More creative assets to address segments
• More fiscal accountability
• Marketers will have to shed old biases to respond to new consumer
realities and technology opportunities.
Just maybe… do more, with more!
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Section Title
[x+1] provides tools and predictive response models
for advertisers and agencies to optimize response
from display media, search landing pages and
websites.
Visit www.xplusone.com/lessismore to review John
Nardone’s keynote presentation and find how you
can do more with less.
To learn more about performance marketing, please
contact Mike Dillon at
[email protected] or call (203) 984-2403