Performance Branding: Making Branding Accountable

Digitally Centric

Performance

Marketing

John Nardone

Chairman & CEO, [x+1]

April 23, 2009

Proprietary & Confidential

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.


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


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.


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.


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


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.

With digital at is center, all marketing

can be response marketing…


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


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.


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

Let’s talk cheese…


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.


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.


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”.

Make Performance Marketing

Work for You


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


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.


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?

Use new technology to enable

one-to-one marketing


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.


Are you talking to the right audience?


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.


Website Traffic, Clicks

and View-throughs

Direct Traffic

(URL input)

Search

Velocity

Are they responding?


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!


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

Business

Performance Branding: Making Branding Accountable