Marketing from the other end of the funnelMarketing from the other end of the funnel

MSI/NYU conferenceJoel RubinsonChief Research OfficerThe ARFJune, 2010Follow me on Twitter as www.twitter.com/joelrubinson

The way marketing used to beThe way marketing used to be• The marketer’s focus was on creating a

desired offering (right features, price, etc.) and then using advertising to rev the engine of AIDA (Awareness, Interest, Desire, Action)

• This is marketing from the wide mouth of the funnel.

• Awareness was assumed to be mostly spend driven

• You timed your ad spend for when you achieved a critical level of retail distribution

• The role of retail was to create availability• Purchases were thought to be

premeditated…shoppers entered the store planning to buy that new product.

A brave new marketing worldA brave new marketing worldOld world New world

linear Non-linear, spontaneous, inverted

individual social

Push Push, pull, CGM, instant sense-making

Superiority Relevance

Consumer utility maximization Shopper heuristics

audience community

stationary mobile

Media as persuader Media as engager

4

Human-centered marketingHuman-centered marketing

humanB1

B2

B3

» In the new solar system, brands revolve around people, not the other way around

» Brands must connect with people in the context of their lives and how they connect with each other

» Open book exam world

» Brands must understand what people look for as they actively decide while they shop

I started to think about…I started to think about…

· Marketing from the other end of the funnel

At the other end of the funnel, the key words changeAt the other end of the funnel, the key words change

· From “intentions”

· To “how we decide”

Procter and store backProcter and store back

· Marc Pritchard Procter’s CMO calls for thinking “store back”, and told P&G agencies (not just the shopper marketing ones) that it means that marketers must ALWAYS have the store in mind when developing a new product, a new idea, a new statement: if it does not work at the store, it’s a miss”.

Is this how you test and evaluate?Is this how you test and evaluate?

Marketing from the other end of the funnel—more than in-store marketingMarketing from the other end of the funnel—more than in-store marketing

· It’s about thinking about the influencers and triggers along the path to purchase that directly result in purchase decisions

· It’s about aligning marketing resources to influencers rather than audiences

Source: IPSOS Marketing

Five reasons to start at the other end of the funnelFive reasons to start at the other end of the funnel

· Half or more of purchase decisions are made in-store· With media fragmentation, retail is the new Ed

Sullivan show· Shopper marketing opportunities can equate to

increasing your advertising budget by 50-100%· Shopper marketing offers tremendous targeting

opportunities· Manufacturers need to get smarter about the

shopper as retailers increase their emphasis on “own” brands and de-SKU

Half of purchase decisions are made in-storeHalf of purchase decisions are made in-store

• Meyers Research Center (on behalf of POPAI), 1995 : 70%

• Ogilvy Action, 2008 : 40%

• Synovate, 2009 : 50%

Estimated in store brand decison rate(Average across categories)

Source: Synovate 2010

Half of purchase intentions do not translate into purchaseHalf of purchase intentions do not translate into purchase

• Flat screen TV marketer found that 25% planned to buy their brand but only 13% did so.

Source: GfK

Retail is the new Ed Sullivan ShowRetail is the new Ed Sullivan Show

· Because of media fragmentation, a big rating for a TV show today is 20 million viewers

· The Superbowl might get 150 million viewers· Walmart gets 150 million shoppers every week

(Kroger gets 68 MM, Safeway 44 MM)

Source: Peter Hoyt, ARF Shopper Insights council meeting

…a targetable version of the Ed Sullivan Show…a targetable version of the Ed Sullivan Show

· Shopper longitudinal data can be used for sophisticated targeting of advertising and promotion offers.

· Mobile will increasing play a role in shopper marketing

McKinsey: The Consumer Decision Journey…so much more than eyeballsMcKinsey: The Consumer Decision Journey…so much more than eyeballs

· Two-thirds of touchpoints during active consideration are consumer initiated

· For autos, brands get added and subtracted to the consideration set as the shopper “pulls” information

· The influence of individual touchpoints changes during the shopping journey

· 60% of buyers of facial cosmetics conduct online research AFTER making the purchase

Source: McKinsey Quarterly 2009 Number 3

Online isn’t one thingOnline isn’t one thing

· CPG:– The objectives that people have for visiting owned media

are different from their objectives in going to social media sites for those brands· Owned media: 70% are looking to obtain information about the

brand, obtain coupons, obtain recipes vs. half that level for reasons to go to FB page

· Over 50% of people are motivated to share opinions and connect with other customers (the main reasons to go to the brand’s FB page) and these are higher levels vs. visiting owned media for that purpose

Source: IPSOS Marketing

A brand I discovered while shoppingA brand I discovered while shopping

· Flavored pistachios; figured it out pretty fast!

· Since there is no advertising (other than packaging) the meaning of the brand is of my own making

· Shopper marketing and social media can go together synergistically

· I love the product, but I have no way to share my love as they have a minimal social graph

· BTW, according to IRI, the brand has over 1MM users

Shopper marketing as an advertising equivalentShopper marketing as an advertising equivalent

· The ARF, Wharton, and the Ehrenberg-Bass Institute conducted an initiative regarding empirical generalizations about advertising

· One of the generalizations was that the elasticity for existing brands of sales to ad spend averages 0.10 (100% increase in ad spend generates a 10% increase in sales)

· Can you envision a 5% increase in sales based on effective shopper marketing programs?

Decision factorsDecision factors· Why don’t people

always buy their preferred brand?

Heuristics and shopping styles

activation

meaning

Decision factorsDecision factors· Shoppers are sense-

makers in an environment where maybe 1% of SKUs are relevant to them

Heuristics and shopping styles

activation

meaning

• Messaging• Categorization and association• Can occur spontaneously at point

of purchase• Usually non-exclusive

· Categorization effects are powerful sense makers

What marketing from the other end of the funnel means to meWhat marketing from the other end of the funnel means to me

· Learn how to guide sense-making at point of purchase

– Packaging– Signage– Mobile– Thematic display– Samples– Shelf layout

· Activate in meaningful ways along the path to purchase

– Make your brand easy to find and recognize

– Create “plus” choice factors

· Understand shopper heuristics and align marketing strategy to how people (could) shop

· Integrate into broader plan· The need for new research

protocols

Heuristics and shopping styles

activation

meaning

• Messaging• Categorization and association• Can occur spontaneously at point

of purchase• Usually non-exclusive

Next stepsNext steps• Different products will have different path to purchase

profiles and should have different media strategies. • While it makes sense that path to purchase should

be a powerful framework for business growth, this has yet to be validated

• ARF shopper insights council has formed a “path to purchase” working committee

• Provide the framework• Identify business issues• Enumerate appropriate research protocols

• The industry needs to conduct experiments to PROVE the connection.