Chapter Two

What we Know About IMC

Learning Objective

• AN EARLY DEFINITION OF INTEGRATED MARKETING

COMMUNICATIONS (IMC)

• A MORE CURRENT DEFINITION OF INTEGRATED MARKETING

COMMUNICATIONS (IMC)

• Why has IMC become more important?

• THE FOUR STAGES MODEL OF INTEGRATED MARKETING

COMMUNICATIONS (IMC)

AN EARLY DEFINITION OF INTEGRATED MARKETING

COMMUNICATIONS (IMC)

The following definition is from 1989 and it was developed by the American Association of Advertising Agencies:

Integrated marketing communications is a concept of marketing communications planning that

recognizes the added value of a comprehensive plan that evaluates the strategic roles of variety of

communication disciplines – for example, general advertising, direct response, sales promotion, and public relations – and combines these disciplines to

deliver clarity, consistency, and maximum communications impact.

Let’s explore this definition a little further. Firstly, it lists the maincommunication tools are available at that time (obviously beforethe time of online marketing and social media). At the end of itsdefinition, it highlights that the goal of IMC is to act effectively ina synergetic manner and deliver consistency and maximumimpact. This is consistent with the first stage of IMCdevelopment, which is discussed in a separate note.

It assesses the strategic impact of IMC, as highlighted in the firstpart of the definition, by stating “evaluates the strategic roles ofvariety of communication disciplines” – while this soundsstrategic, and is really suggesting that each communication toolhas a different role to play in an overall communications plan.

A MORE CURRENT DEFINITION OF INTEGRATED

MARKETING COMMUNICATIONS (IMC)

Here is an IMC definition provided by Don Schultz, whichmore accurately reflects the current understanding ofintegrated marketing communications:

Integrated marketing communication is a strategic business process used to plan, develop, execute and evaluate coordinated,

measurable, persuasive brand communications programs over time with consumers, customers, prospects, employees,

associates and other targeted relevant external and internal audiences. The goal is to generate both short-term financial

returns and build long-term brand and shareholder value.

Learning Objective

How has the concept of integrated marketing communication evolved?

Broader than just consumers

The audience is much broader than just consumers. Whilecommunicating to consumers obviously remains very importantand probably the focus of communication for most firms – firmsalso need to consider

internal marketing communication (employees),

current and potential strategic partners,

influencers,

financiers,

the media,

lobby groups, and so on.

A more strategic process

• It operates at top level and is now considered a key strategic process.

• The goal of being “integrated” refers to much more than just a tactical coordination of various communication tools, but essentially becoming an organization that integrates marketing into its core operations and central strategy.

Data-driven, measured and provides a financial return

Marketing communication strategy, which is obviously asubset of the overall marketing strategy for theorganization, needs to be

• more analytical,

• data driven,

• utilizing marketing experiments – to enable cleardecisions to be made (in regards to the media andmessage strategies) that are based on real consumerbehavior.

Online shopping Behaviors

Long and short-term goals

The end goal of IMC activities is to build both short and long-term value in primarily in terms of ongoing profitability, growth and brand equity.

How has the concept of integrated marketing communication evolved?

Therefore, we see the need to trade off short-term and long-term objectives (which can sometimes be in conflict) and we seethe basis of profitability and growth stemming from a strongbrand equity – where brand equity delivers high brandawareness, price premium, greater market share, strongercustomer loyalty and so on.

Why has integrated marketing communications (IMC) become more important?

A WIDER CHOICE OF COMMUNICATION TOOLS

With the advent and adoptionof the Internet and socialmedia, business organizationshave a much broader range ofcommunication tools that canbe effective. It is possible intoday’s world to build a strongbrand using online meanswithout the aid of advertisingsupport – and Google wouldbe a good example of thisphenomenon.

This means that firms need

• to have a greater understanding of the array of communication tools available to them,

• understand their individual roles,

• understand how they can work together in synergy, and

• structure them together appropriately.

A WIDER CHOICE OF COMMUNICATION TOOLS

With the advent and adoptionof the Internet and socialmedia, business organizationshave a much broader range ofcommunication tools that canbe effective. It is possible intoday’s world to build a strongbrand using online meanswithout the aid of advertisingsupport – and Google wouldbe a good example of thisphenomenon.

This means that firms need

• to have a greater understanding of the array of communication tools available to them,

• understand their individual roles,

• understand how they can work together in synergy, and

• structure them together appropriately.

LESS EFFECTIVE MASS MEDIA

Along with the shift towardsother media andcommunication choices, theoverall impact of mass media(primarily TV advertising) hasreduced. In the old days, it waspossible to have a TVcommercial exposed to a largeproportion of the overallpopulation through TVadvertising alone.

media consumption has fragmented and people are consuming a greater diversity of media, this is no longer as effective and requires the use of additional communication tools.

SMALLER MARKET SEGMENTS

The traditional family structure has given way to a greater diversity of household and family structures – in addition, there are greater variations in lifestyles and consumer needs. This means that the average brand needs to more selectively target small market segments. This obviously creates the need to use more specialized media and communication tools to more directly target the end consumer.

CUSTOMER DATABASES AND MARKETING

INSIGHTS

CUSTOMER DATABASES AND MARKETING

INSIGHTS

Technology is not only provided people with broader access to information and alternatives to shopping behavior, but it has provided companies with an enormous amount of information and

data about consumers, their behavior, and their responsiveness to marketing mix changes.

This means that the communication strategy can be more based on research and database analysis, than a creative big idea as would have been the case in the past.

TWO-WAY MESSAGES WITH CUSTOMERS

INFLUENCING BRAND EQUITY

• communication messages are essentially a two wayinteractive media in the current world. In the past, brandswould push out appropriate communication messages to tryand persuade consumers to buy and like their products.

• But in today’s world of social media, bloggers, forums andlobby groups – much of the forming of the brand has passedto consumers and influencers. Therefore, it is vital companiesunderstand this and consider this new market structure whendeveloping an integrated marketing communications plan.

• Mommy Bloggers

THE FOUR STAGES MODEL OF INTEGRATED

MARKETING COMMUNICATIONS (IMC)

Stages of development

Tactical coordination of marketing communications

The organization is primarily focused on using IMC to achieve

“one sight, one sound, one voice”

• To delivery message more effectively

• To apply the strength of each communication discipline.

Tactical coordination of marketing communications

• The first stage in the progression towards integrated marketing communications approach inside a company is a simple coordination across specialist areas, where they agree upon the use of a standard logo, a company slogan, corporate colors, and a general message.

Tactical coordination of marketing communications

It is likely that various areas of marketing communication –

advertising,

direct marketing,

sales,

online and social media, and

public relations – still act quite independently, yet a similar look and feel and message.

Tactical coordination of marketing communications

Each of these functional areas would have their own goals and targets to achieve.

For example,

• the advertising function might seek to improve brand awareness,

• the direct marketing area may be focused upon sales conversion rates,

• the public relations area might be measured upon earned media, and so on.

Despite these areas using a similar approach of message and brand elements, they still generally act independently and are not strategically integrated to achieve an overall goal.

Redefining the scope of marketing communications

• the company starts to consider a broader set oftouch points than its main communication tools(several of which were mentioned above).

• In the first stage, the company is mainlyconcentrating upon the main communication tools.Second phase is when the company considers howand where a potential or current customer canbecome exposed or engaged with the brand.

Redefining the scope of marketing communications

• to effectively understand brand contact or brand touch points,the company tries to look at the brand through the eyes of aconsumer. So in this stage, the company might consider

email contact,

interaction with staff,

sponsorships,

unplanned media attention,

competitive comparisons,

Information and comparison websites,

retail sales people,

after sales service contacts,

signage on buildings,

staff uniforms,

word-of-mouth, and so on.

Application of information technology

• The third stage is really trying to integrate the overallcommunications approach, as achieved in stages one and two,across the knowledge and practices of the organization. To dothis, greater use of data and information is generated andshared across their distribution channels, even extending totheir retailer and supplier partners.

• Probably the best example of this would be in the bankingsector, where the banking customer databases allow them totrack each customer’s progression – either towards or awayfrom using the company and certain products.

Application of information technology

• Therefore, over time, with the use of information, a company can get very effective about understanding and even predicting the customer’s behavior when they come into contact with various marketing communications.

• Part of this knowledge is built through market testing and experiments, where different communication mediums and messages and combinations are tested on a small scale before being ramped up and exposed to larger numbers of customers. Therefore, we end up with a relatively scientific approach to marketing communications.

Financial and strategic integration

• The final stage really reflects that the overall marketingfunction inside a large company becomes strategically andfinancially integrated. The starting point for all marketingcommunications is essentially driven by the top-level strategicplan, which then feeds down to the marketing strategy andplan, which is then effectively executed through themarketing mix elements, including marketingcommunications.

• Contrast this to the first stage listed above, there are variousmarketing communication specialists act relativelyindependently to achieve their own targets and KPI’s.

Some renown KPI

• Return on Investment (ROI)

• Incremental Sales

• Traffic Sources

• Purchase Funnel

• Goal Completion Rate

• Cost Per Lead

• Email Marketing Engagement Score

• Social Interactions

Return on Investment (ROI)

• Measure the ability of marketing campaigns to generatenew revenue.

• o calculate ROI, you will need to track the number of leadsgenerated through each of your marketing campaigns, suchas a banner ad or AdWords campaign. Next, you will needto determine the opportunity value of each lead. Tocalculate this, find your average value per win and dividethat value by your average lead to win ratio.

• For example, if you know that the average value of a win is$20, and your lead to win ratio is 10:1, then you can saythat the average value of a lead is $2. This number willprovide an approximate value to help you assess theperformance of your campaign as you bring in each newlead.

Success Indicator: Incremental sales are greater than campaign investment.

Incremental Sales

• Demonstrate how your marketing campaigns are resulting inincreased sales revenue.

• For example, a banner campaign with a large volume ofimpressions may encourage people to complete what is calleda "view through conversion." This means that a visitor maysee an ad, visit the website in a separate browser tab orwindow, and then complete a goal without actually clicking onthe banner ad. The result is the same, but the path and creditfor the completion are very different.

Success indicators: a. Incremental sales that exceed the initial marketing investment. b. Indirect increase in sales that can be attributed to a marketing campaign.

Traffic Sources

• Understand which traffic sources are driving visitors to yourwebsite.

• The Traffic Sources metric measures which traffic sources aredriving visitors to your website, and provides a comparison ofeach of those sources. The three main traffic sources aredirect, referral, and search.

• a high volume of referral traffic shows that your brand orwebsite is being talked about frequently by 3rd party websitesor on social media sites.

Success indicators

• An increase in volume from any traffic source, while maintaining consistent traffic from other channels.

• A high or improving goal conversion rate related to any traffic source.

Purchase Funnel

• Understand your customer acquisition process fromawareness to purchase.

• he Purchase Funnel analyzes your customer acquisitionprocess to help you understand how potential customersdiscover your product or brand and, more importantly, howthey eventually become a loyal customer.

• The purchase funnel (alternatively called the marketingfunnel) is typically broken down into five stages: awareness,interest, consideration, preference, and purchase.

Success indicators

• A high conversion rate through all stages of the funnel.

• High volume through each stage of the funnel.

• Improving conversion rates for stages performing poorly.

Goal Completion Rate

• The Goal Completion Rate (GCR) metric measures thenumber of people that complete a specified marketing goal,such as signing up for a trial or subscribing to a mailing list.

• Marketing metrics like GCR are an important part ofthe purchase funnel as it typically demonstrates yourconversion rates from the awareness stage to theconsideration stage.

• Similarly, GCR should be paired with sales KPIs such as yourlead to win rate to provide an indicator as to the quality ofleads your marketing efforts are attracting.

Success indicators

• A high goal GCR shows that your campaign is encouraging your target audience to act.

• A high lead to win rate shows that your campaign is generating highly qualified leads for your sales team.

Cost Per Lead

• Measure the cost-effectiveness of marketing campaigns.

• The Cost per Lead metric measures how cost-effective yourmarketing campaigns are when it comes to generating newleads for your sales team. This metric is closely related toother key business metrics such as the cost to acquire newcustomers.

• The purpose of this metric is to provide your marketing teamwith a tangible dollar figure so they understand how muchmoney is appropriate to spend on acquiring new leads.

Success indicators

• A low cost per lead with a high volume of quality leads.

Email Marketing Engagement Score

• Measure how effective email marketing campaigns are atengaging your audience.

• The Email Marketing Engagement Score metric measureshow effective your campaigns are at engaging your audienceby tracking key metrics like open and click rates.

• Each of these metrics represents a different type ofengagement which will help you assess the performance ofyour campaign.

• Open rates are linked to subject line performance, thecredibility of the sender, and the time the campaign was sent;click rates, on the other hand, are indicative of how well thecontent resonates with the audience and the relevance of themessage.

Success indicators

• A high and/or improving open rate.

• A high and/or improving click rate.

Social Interactions

• Measure the engagement levels of your social mediacampaigns.

• For example, one could argue that a "retweet" is morevaluable than a "favourite" on Twitter because a retweetensures the content stays in circulation longer. Similarly,different social media sites will have varying importance toyour brand. One brand may find that Facebook is a hotbed ofpositive engagement, while another brand really hits its strideon Pinterest. As you can see, each social platform allows youto interact with your audience in a number of different ways.

Success indicators

• A high level of engagement that corresponds to the completion of key marketing objectives.

• Viral posts that require little or no nurturing on your behalf.

• Sustained engagement over a long period of time.

Financial and strategic integration

• At this level of the final stage, not only are all theimprovements from the previous three stages beingimplemented, but the organization becomes very financiallyand marketing metric driven in terms of its overall marketingcommunications. This would mean it would look at the ROI,for example, of increasing brand awareness by 5 percentagepoints – and work out what impact that has over time trialrates and brand loyalty and therefore bottom line impact.

• This becomes increasingly challenging when companies havemultiple target markets to pursue the need to consider arange of strategic initiatives. As pointed out earlier in thearticle, only explore percentage of organizations truly operateat the fourth stage of the model.

• Question?

• CT?

• Presentation?