December 10, 2009 09:02
Several years ago there was a lot of buzz in the retail industry regarding cross media promotions that impact marketing events. During a span of two to three years the Interactive Advertising Bureau (IAB) sponsored a large study with around one dozen cases with major manufacturers and retail companies ranging from McDonalds to Kleenex to Pharmaceuticals in order to determine whether promotions that are planned across more than one media channel can return better results. You can find some of the case studies at the IAB website. Each of these studies were funded by both the IAB and a company engages in retail advertising and the results showed that allocating marketing dollars across more than promotion channel indeed did return superior performance.
The conclusion of the study was overwhelmingly positive. Reaching out to targeted consumers using more than one media channel increases sales. Because the studies were designed as a budget reallocation study to determine the most efficient mix of media spending, they came up with the saying “Same Budget, Better Results” to highlight the outcome of the study.
In summary, the study concluded that across all of the case studies and categories that they represent, the optimal mix of expenditures for promotions are as follows:
As its name implies, The IAB studies were focused on determining the efficacy of advertising on the web so stakeholders in the print media felt that the study did not represent print media fairly. Still, while the allocations may be disputed, the companies that sponsored the studies came away convinced that they need to pay attention to more than one advertising channel. We also believe that this is the case.
There is an interesting discussion that has started up on RetailWire on one facet of print advertising – the weekly circular. In whatever form it is distributed in the future (via newspapers or as a circular bundle with no news) there is a strong case to be made that so far no other medium is successfully replacing it, so far. As a couple of responders state, weekly circulars are the primary vehicle retailers have to go to market and sales often decline when the circular is pulled. Our retail contacts have told us the same.
Newspapers are getting smarter by allowing retailers to target ads by geographic criteria. Not to be outdone by the on-line community, the Newspaper Association of America and MORI Research published preliminary results of an advertising study that concluded that “Newspaper advertising remains the most powerful tool for advertisers who want to motivate consumers to take action.” The study notes that 59% of adults identify newspapers as the medium they use to help plan shopping or make purchase decisions and that 82% “took action” as a result of newspaper advertising. And finally, a poll from AdWeekMedia and Harris Interactive sites that TV ads are helpful to 37% of respondents, and Newspapers coming in 2nd at 17%.
Where does this leave us? Probably the safest conclusion for the retailer’s bottom line is that no one advertising channel reaches everyone and that synchronizing ad placements across channels yields to improved event performance. The next questions that we will address in this discussion is what is keeping retailers from executing the best possible promotional events while keeping their ad budgets level or even by doing more with less. Please visit us again as we continue our theme of Smaller Ad Budget, Better Results. We will discuss organizational/business process issues, technology implementation and business models that will get retailers where they need to be.