MC&C How a Smart Media Strategy Accelerates Growth

HOW A SMART MEDIA STRATEGY ACCELERATES GROWTH

CONTENTSCONTENTS

1 INTRODUCTION 3

2 THE CHALLENGE PRESENTED BY MODERN MEDIA CONSUMPTION

4

3 FIVE TRUTHS FOR AN EFFECTIVE MEDIA STRATEGY 6

i) Why Start-Ups Benefit From A Lean Digital Footprint 6

ii) The Importance of Brand Marketing To Feed The Business Funnel 6

iii) The Case For Offline Advertising 7

iv) Sweat Your Budget - Know Your Audience 8

v) More Channels Mean a Higher Cost Per Acquisition (CPA) 8

4 EMBRACING THE NEW MEDIA MODEL 9

5 CASE STUDY— THE BRILLIANCE OF A BRAND RESPONSE PERFORMANCE MODEL

12

6 CHOOSING THE RIGHT DANCE PARTNER 13

7 CONCLUSION 14

SMEs have a combined annual turnover of £1.8 trillion–47% of all private sector turnover in the UK, according to latest available accurate figures1. However, the pipeline of start-ups that become healthy small businesses and then scale-up is narrowing. Fewer than 1% of British businesses registered since 2012 have managed to scale-up.

The biggest challenge and top priority for entrepreneurs across the globe is finding new customers and generating new business. Almost half of respondents to a global EY survey 2 said that identifying, attracting and serving new customers is a priority and more than a quarter stated it was their top priority, with 30% saying it’s a challenge for growth.

Marketing is essential for companies to build a customer base, drive repeat purchase and find new prospects. Enterprise level companies have huge teams devoted to marketing and media buying, overseen by a Chief Marketing Officer or similar.

SMEs cannot afford this luxury and those with responsibility for marketing may not be up to date with the latest thinking and tools in media planning and buying.

There is no lack of confidence in the power of marketing to drive business. An exclusive poll of SMEs with an ecommerce focus shows that more than two thirds of respondents plan to increase their

marketing budget in the next financial year 3. This figure rises to 84% for respondents in companies with 100-249 employees and 90% in companies with 50-99 employees. Note the poll was commissioned after the UK’s EU Referendum vote.

Marketing investment is vital to business growth, so it is imperative that decision-makers have a clear media strategy and can find impartial, expert advice. The fact that nearly 60% of the polled decision-makers make all the media buying decisions on their own means the right choice of media partner is essential.

This White Paper outlines the challenges for growth facing SMEs with a business based on ecommerce. It provides guidelines for a successful media strategy, insights from marketers on how they have built campaigns and advice for choosing a suitable agency partner.

It also includes findings on the current media practices and attitudes of ecommerce-focused SMEs based on the aforementioned poll of 250 decision-makers.

Small and Medium-sized Enterprises (SMEs) are the backbone of the UK economy but they face tough challenges to transform into sizeable businesses.

1INTRODUCTION

MCAND.CO.UK 3HOW A SM ART MEDIA STRATEGY ACCELERATES GROW TH

1 http://www.fsb.org.uk/media-centre/small-business-statistics2 EY Global Job Creation Survey 2016 3 Censuswide poll of 250 SME ecommerce decision-makers in UK companies of less than 250

employees and turnover of less than £50 million. Study conducted July 7th – July 18th

2THE CHALLENGE PRESENTED BY MODERN MEDIA CONSUMPTION

The marketer’s job has become more complex as channels and platforms proliferate. However, the essential aim remains the same – to reach the right audience with the right message at the right time.

The traditional business funnel model was dramatically transformed by the development of digital channels but its basic principles still hold true, whereby potential customers migrate from being prospects to converts, nudged along the way by appropriate messages and content at each stage of the journey.

However, consumers now move between online and offline brand touchpoints more frequently as they look for inspiration,

information and entertainment. They may snack on a video clip on their mobile on their way to the office, look up holiday recommendations or how to get a mortgage on their work desktop, and then lean back to watch their favourite sport or cookery show on television in the evening after checking a few emails.

Each of these media touchpoints offers an opportunity to deliver an ad or content to a consumer and move them along to the funnel to conversion. However, consumers experience more and more ‘ad clutter’ on a daily basis and businesses must find the optimum media mix to land their message and prompt an action.

4 HOW A SM ART MEDIA STRATEGY ACCELERATES GROW TH MCAND.CO.UK

Figure 1: Digital Business Funnel

Marketers can move prospects along the path to conversion with a number of online channels/tools.

RETAIN

Display ProspectingVOD

Paid Social

Content promotionSocial media Generic PPC

SEO & Social SEO

DisplayRetargetingBrand PPC

SEO

EmailSocial CRM

RESEARCH

DECISION

DISCOVERY

Marketers are offered an ever-growing amount of choice as to where to allocate their ad spend. Ad tech vendors, traditional media owners and trade bodies all offer a tsunami of conflicting advice and arguments to support various channels. Media fragmentation means greater complexity and a greater imperative to understand and negotiate with individual channel and platform owners.

However, SMEs only have a limited marketing budget and amount of time to focus on marketing; time which could be spent improving products and identifying new markets. Every pound needs to deliver a return on investment and contribute to the task of both brand-building and delivering sales.

Without a clear, integrated media plan businesses will waste time, money and effort. Pitfalls for the inexperienced marketer include:

i) Over-investing in the frequency of ad delivery, with the result that they are repeated unnecessarily at extra cost and with a risk of annoying potential customers.

ii) Spending on a channel with too broad an audience and so paying for messages that are irrelevant to the bulk of the audience.

iii) Poor understanding of metrics resulting in errors such as measuring the wrong outcomes or misattributing results.

Just looking at the challenge of measurement, SMEs have a widely-varying approach - and more than 22% of SME decision-makers say they “do not use anything to measure the effectiveness of a channel”. Just over a third (35%) measure effectiveness by attribution.

Claudia Nicholls, Director of Marketing at consumer champion and social enterprise, Which? says the charity has worked hard to develop its attribution modelling and adds: “We have spent considerable time and effort in the past 12 months to develop a full attribution model. In the first instance we have focused on the online only channels to give a more holistic view of the value of display and PPC ads, with offline to follow. It’s important not to base your online media budgets on a last click basis, because that would give a very distorted picture. People come to us online multiple times before becoming a member.”

Ecommerce start-ups looking to grow at speed need a better understanding of the role of different channels, how they can work together and how to navigate the complexity of modern media. The goal should be the creation of an effective campaign strategy that overlays all the offline and online channels.


Figure 2: Effectiveness of media channel

Over 2 in 5 respondents measure the effectiveness of a media channel by ROI.

43% of respondents measure the effectiveness of a media channel by consumer dwell time.

Over 35% of respondents measure the effectiveness of a media channel by attribution.

Almost a quarter do not use anything to measure the effectiveness of a media channel.

Nearly a quarter of respondents do not measure the effectiveness of their media channels (note percentages total more than 100% because respondents use more than one of the options listed).

3FIVE TRUTHS FOR AN EFFECTIVE MEDIA PLAN

Businesses looking for their first customers should start with digital activity. The majority of businesses retailing products or services, be they financial advisors, estate agents or catering suppliers, will drive their first tranche of traffic and sales through digital-only channels. Digital is both affordable and cost efficient and the tools, which include email, affiliate marketing and search terms, will be easy to understand.

Solus digital marketing also means a company can test its website, traffic flow and optimisation in a live environment without having to worry about developing complex attribution models. The business can therefore establish a base level of traffic, a conversion percentage and the parameters of its digital footprint by using tools such as tagging and site analytics.

Search will deliver your first wave of customers but digital spend eventually becomes subject to the law of diminishing returns and growth becomes much harder. Using generic search terms like ‘car insurance’ for ads may attract clicks from window-shoppers but conversions will be few. If a business keeps investing in generic search it will be diluting its targeting.

This is the point when a small business needs to get serious about building a brand and needs to shift its marketing focus away from pure acquisition. Potential new customers need to have trust in your products or service and an established brand generates this credibility. Brand awareness will put a company top of mind when consumers are beginning to move to a consideration mind-set. They will then search for the brand directly online – a metric known as “brand search” for KPIs.

The rise of the online aggregator has also made the need for a recognised brand an imperative. Aggregators now exist for sectors from travel and leisure to local builders. Presented with a long list of options consumers will default to looking at recognisable brands.

Which? is not a new brand and has a long heritage. However, Director of Marketing Claudia Nicholls realised that it needed to bolster brand awareness to help drive consumer engagement with its online content, tools and services. In this way it could lead people on the path towards taking out fully-paid membership.

The balance of direct marketing and TV investment has to be finely tuned and MC&C advised sponsorship as the appropriate vehicle to drive effective engagement.

Nicholls says: “Which? as a brand and as a marketing team is a highly sophisticated direct marketing machine but we’re perhaps less strong as brand builders. We wanted more people to see the brand and to tell them how we make consumers more powerful. We are slowly weaning ourselves off the drug of direct marketing and overlaying onto that more brand building activity. If you want to move your brand towards a mix of DM and brand marketing you have to do so carefully, and an interim step for us has been sponsorship of programming on Channel 4, ITV and UKTV channels.”

There are fundamental truths about media planning and buying that can guide a business in making the right choices for their budget. Marketers who understand these principles will be more confident in discussing plans with an agency partner and in conversations with media owners.

I) WHY START-UPS BENEFIT FROM A LEAN DIGITAL FOOTPRINT

II) THE IMPORTANCE OF BRAND MARKETING TO FEED THE BUSINESS FUNNEL


The only way a business can grow orders is by moving to a broader media mix - and understanding in detail the efficiency of each channel and its contribution to the overall efficiency of the media plan.

But first an SME has to create a brand and that will mean investing in traditional, offline media – including television. This is the best way to build a brand at speed and scale. TV advertising may sound daunting, expensive and potentially wasteful but it is none of these things if smart thinking and the right media partner are involved.

Many of the biggest online only businesses have turned to TV advertising, including Facebook and Google. It is still the best way to build a brand quickly and this is important because there will always be ‘me too’ copycat businesses entering the market and fighting for share.

A combination of offline media and a lean digital footprint will always produce a cheaper CPA than trying to buy that volume of prospects through generic search. It’s better for business growth to move budget from generic search to other channels.

The study shows that SMEs in companies with 2-9 employees allocate on average 40% of their advertising spend to

digital, while larger companies of 100 – 249 employees spend 28% of their advertising spend on digital. As a company grows, it will need to broaden its communications mix beyond digital to include channels like TV and outdoor.

Online estate agent Tepilo advertised on television early in its existence because one of its strategic investors was the then owner of Channel 5 (Northern & Shell) and it was able to leverage this partnership.

Head of Marketing Rebecca Glen says the company was lucky to be able to leverage TV so early on but it was very important because Tepilo was not just building its own brand but establishing a whole new sector - online home selling – in the mind of consumers.

It has now recalibrated its channel mix and Glen says: “TV can still be a dominant part of the mix but you cannot rely on having TV on 365 days a year. It’s about building a strategy with the right mix – we have been through a lot of testing and learning, trying different mixes of print, outdoor and constantly building PPC. We have refined the PPC approach so that our budget is a significant amount more this year and the ROI is phenomenal. TV and PPC as the majority of our mix works really well for us.”

III) THE CASE FOR OFFLINE ADVERTISING

Figure 3: What percentage of your advertising spend is allocated to digital channels?

2–9 Employees:

40%10–49 Employees:



28%


SMEs with 2–9 employees allocate the biggest proportion of their advertising budget to digital channels.

A key metric for a marketer is to set the optimum number of ad exposures per person. The pitfalls of miscalculating ad frequency and the danger of positive wastage (buying more ad exposures than necessary) have already been mentioned.

What smaller businesses need is maximum reach among the right audience. To be effective among this audience brands need to deliver TV exposure of more than once a month– 3-5 exposures per month is the recommendation to keep a brand front of mind.

To maximise budget on TV channels, marketers need to identify and thoroughly understand their market. Then they need to identify what media the audience consumes and what programmes they watch. For example, if Brand X wants to reach women aged 16-24 years then the most efficient use of budget would be to buy ads in ITV’s The Only Way Is Essex and Channel 4’s Made In Chelsea.

It’s important to understand that cost per acquisition will rise as a company seeks growth via a more expansive marketing strategy. This is simply a realistic assessment of the costs associated with widening the number of channels deployed to reach new customers. Invariably, wider advertising will attract the attention of people who have not signalled a propensity to buy and who may visit a website but not convert.

This is why an efficient media mix model needs to be developed to ensure a brand benefits from efficiencies and CPA is kept from spiralling out of control. The right channel mix and budget weighting can improve CPA for a small business as it begins to grow.


IV) SWEAT YOUR BUDGET– KNOW YOUR AUDIENCE

V) MORE CHANNELS MEAN A HIGHER COST PER ACQUISITION (CPA)

Rebecca Glen, Head of Marketing, Tepilo

“We tried combining TV, PPC and print, radio and outdoor and found that a mix of TV and paid search drives the most successful campaigns for us in terms of leads and sales. I think it’s the fact that TV builds the awareness and the consumer will then go online and carry out their research –but it’s critical to have the right frequency for TV to achieve that awareness in the first place. We have really refined our paid search strategy this year and it means we are able to be at the forefront of the consumer’s mind when they are making the decision regarding who to sell their property with.”


4EMBRACING THE NEW MEDIA MODEL

Businesses looking to scale-up need a media mix model that gives the appropriate weight to both brand-building and driving sales and brings together the effectiveness of both offline and online ad activity – a blended approach to produce an integrated brand response performance model.

The belief that digital channels will become all dominating is now giving way to a more considered approach about how ‘traditional’ media can work hand-in-hand with new tools and platforms.

However, there is still a reluctance to engage with TV among SMEs, with just over a third (37%) of the poll ranking TV as the least important traditional advertising channel to their business. This could be due to the perceived cost and complexity of TV buying with small businesses feeling TV only works for enterprise level companies.

Mat Finch, Marketing Director at Warner Leisure Hotels, says: “Digital is now maturing as a discipline, I think it is moving from a specialism to a generalist channel. Now we are thinking more about the customer journey across different media and different touchpoints, rather than becoming solely obsessed

that everything must be digital. Our awareness and understanding of its role is better. There’s a more mature attitude that not everything should be digital.”

Glen of Tepilo adds: “I still think traditional media has a role to play as part of the media mix. It just depends on the audience demographic you are targeting, your objectives and your overall budget. At the same time, digital works really well for us and we are a digital business – we want to be where our target customer is, which is online.”

Looking at digital channels, almost a third (32%) of SMEs ranked email as the most important channel to their business and a fifth ranked search most important. On average, search was ranked most important in the list of six options, while display for prospecting was ranked least important.

The role of offline media, from TV, out-of-home and direct mail, is being revaluated. The challenge of measuring the effectiveness of the media touchpoints across the whole customer journey is being addressed with marketers and agencies partnering on better attribution models.

Business do not have to be on TV ‘round-the-clock’ or famous to everybody – they only have to be famous for 15 minutes to the right audience. Carefully chosen, carefully timed and targeted TV activity will deliver. There will always be a ‘bullseye’ audience for a brand that has a propensity to buy and can be reached at the right moment thanks to careful planning and the use of the right technology.

KEY INSIGHT: FAMOUS FOR 15 MINUTES


“We have tested something in-between Direct Response and Brand Marketing called brand response. We’ve paid for 30 sec spots to promote a number of free tools we offer to give power to the consumer, such as a car reliability checker and a mortgage calculator. The ad drives the consumer to active engagement, the next step is how to move them to pay for products and services – to see the benefit of being a Which? member. I think we are on the cusp of proving a model that is DM plus, that is a combination of direct and content journeys that are longer but ultimately create a commitment from consumers that is more lasting.”

Figure 4: Digital advertising channels ranked in order of perceived importance (% respondents ranked as most important)

Email is seen as the most important digital advertising channel but mobile and search also rank high.

Claudia Nicholls, Director of Marketing, Which?

EMAIL

32%

MOBILE

26%

SEARCH

20%

DISPLAY PROSPECTING

13%

DISPLAY RETARGETING

11%


“As our marketing becomes increasingly data-led and more customer- led, we are using the customer data to inform our broader marketing mix. From an advertising point of view TV remains an important channel for us – it’s a good way to reach our target audience [55 plus looking for UK holiday-breaks] and we do not see this changing in the next couple of years. But TV plus digital is certainly the way things are moving. With the rise of tablets, a lot of our guests are sat on the sofa with the device while watching TV and we are seeing an increasing correlation between web usage and TV spots. TV is our primary awareness channel and web our primary research channel.”

Figure 5: Traditional advertising channels in order of perceived importance to your business (% respondents ranked as most important)

Mat Finch, Marketing Director, Warner Leisure Hotels

TV was ranked the most important traditional advertising channel when respondents were asked to rank a list of traditional media options.

18% 12% 9% 9%

TV NEWSPRINT/MAGAZINES

RADIO OUTDOOR

Client: Global cloud-based office solutions supplierThe Challenge: The company has a hot product that can help small businesses with their financial admin but is sandwiched between a dominant brand with high awareness and a challenger brand. The client needed to build market share and mass appeal among SMEs at speed but cost effectively.

The aim was to create a brand response performance model that could drive short-term sales for sustainable market growth and also create long-term market demand.

The Method:By adopting a B2C brand building strategy and using TV as the foundation of an integrated brand response performance model, the client exceeded its launch campaign goals.

It used a powerful TV creative to deliver rapid targeted reach and frequency across key channels and programming to drive direct response at scale. Repetition of messaging is vital for cut-through and building awareness.

Reach and frequency were bolstered by weekly weighting across all media channels based on up-to-the-minute data in order to deliver the most cost-effective volume of response. Buying decisions were made both to optimise response in the immediate short-term but also for the medium term (spanning days and weeks). This ensured the company earned revenue in the short term but also built a brand to help secure future market share.

The Results: • The buying and planning strategy

delivered 70% reach against the target audience of SMEs and a frequency to view of 4+ exposures during the campaign launch period.

• Sales over the launch period exceeded the original forecast by 69%.

• Brand awareness and brand consideration rose 7% and 5% respectively.

The company is now the second highest ranked brand in its market and is closing on the market leader.

CEO of Company X


“TV meant we had a clear public persona as a brand as opposed to normal B2B brands. Also the channel is unique in its ability to deliver brand building reach and frequency in addition to harvesting response in the market at scale.”

5 CASE STUDY— THE BRILLIANCE OF A BRAND RESPONSE PERFORMANCE MODEL

6CHOOSING THE RIGHT DANCE PARTNER

In a world of proliferating media channels, a growing company needs an agency partner capable of providing insightful and actionable advice that is affordable. The partner’s recommendations and solutions should be tailored for the specific client and margins and costs should be fully transparent.

When evaluating a potential agency partner a marketer should consider these questions.

• Is my marketing budget of a size to ensure regular attention from a senior director at the agency? Large networks may delegate the relationship to junior executives.

• Will there be a team available with the capability to work 24/7 on my behalf if necessary and that will be contactable throughout?

• Can the agency demonstrate experience in the relevant sector or similar?

• Has the agency worked with many businesses similar in size to my operation?

• Is there any limit on the agency’s ability and flexibility to trade in all media?

• What measurement tools does the agency have in place to deliver true and robust measurement of activity?

• Can the agency show a clear roadmap to help my business grow and hit targets?


The big challenge for SMEs is the need to scale-up and grab market share at speed before they are overtaken by a competitor – but also to be able to build a brand on which to base longer term growth.

This dual challenge requires a close understanding of the short, medium and long term impact of various channels on the consumer’s mind-set and how to make the most effective use of a limited budget.

The importance of an integrated approach to planning media is understood by most businesses but 40% of SMEs polled feel they could be doing it better.

The right partner will be able to demonstrate that the impact of a ‘branded response’ strategy will have a positive effect on sales and deliver cost savings across the short, medium and longer-term – and will give the best advice on developing an appropriate streamlined media model.

Mark Jackson, Managing Director of MC&C

7CONCLUSION


“Businesses may witness strong results from initial online media activity but for sustained growth and an effective use of marketing budget they have to be able to construct a media plan that delivers for the long-term. Here at MC&C we understand the concerns of businesses looking to make the jump from start-up to scale-up and we can show them how to get from where they currently reside to a robust position of delivering sustainable, profitable growth.”

Figure 6: Channel strategy to manage efficiency whilst delivering rapid growth.

Brands start with a low level digital footprint then invest in carefully targeted and manged brand building channels, such as TV. CPA will rise but so will the number of qualified leads and blended campaigns will prove their effectiveness over longer periods than a traditional TV spot ‘spike’ in attention.

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DIGITAL DR BRAND CPA

WHAT IS MC&C?MC&C is an award-winning independent performance media agency that uses consumer data and business understanding to find, target and then recruit a brand’s customers, providing accurate measurements from the beginning of the process to the end.

Cover image credit: https://www.flickr.com/photos/44846675@N04/28971382355/

MC&C MEDIA LTDStephen Buildings 30 Gresse Street London W1T 1QR

[email protected] 307 6100

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MC&C How a Smart Media Strategy Accelerates Growth