Future of Advertising and Its Research Paper
- Length: 9 pages
- Sources: 6
- Subject: Business - Advertising
- Type: Research Paper
- Paper: #31911290
Excerpt from Research Paper :
Behavioral analytics are making it possible for companies to combine personas and social networks, gaining invaluable insights into the performance of promotional programs in real-time. In addition to all of these benefits, analytics will make it possible for marketers to fine-tune each element, offer and even digital channel used in the presentation of a promotional offer to a specific audience. By combining all available sources of analytics, marketers will be able to have a 360-degree view of customers while also aligning their promotional strategies to each phase of the buying process with much greater precision than has ever been possible before (Acker, Grone, Blockus, Bange, 2011).
Impact of the Internet on Advertising
In strategic terms the Internet has made digital marketing, promotion and advertising strategies more precise and measurable. The proliferation of analytics applications, many of them Cloud-based, are revolutionizing how marketers plan and execute their promotional, advertising, and services strategies. The Internet has also completely re-ordered the economics of advertising, reducing the costs of tactical and strategic campaigns (Bernoff, Li, 2008). This is evident in how the Internet in general and company websites specifically are being used as the landing pages or destination point for offline and traditional marketing strategies and platforms. A major part of the economic re-ordering of advertising and IMC strategies is the heavy emphasis marketers put on Search Engine Optimization (SEO). This is a technique to boost relative levels products and services appear in Google, when searches are initiated by prospective customers looking for a given product. Google's algorithms for ranking content rely on specific approaches to organizing keywords within websites, and this area of marketing, called SEO, is gaining in importance and spending over time (Bernoff, Li, 2008). Organic search results are consistently more trusted and acted on compared to paid search. Google has created their AdWords program specifically for enabling the paid search areas of their search engine. AdWords generates on average $300M in any given quarter for Google and is one of their most profitable businesses as marketers are willing to pay for a premium location on the popular search engines' site (Selcuk, Ozluk, 2013).
The role of traditional marketing techniques and methods including brochures, flyers, direct mail, advertising in newspapers and magazines, television and radio are increasingly being orchestrated in IMC strategies that drive prospective customers to the company's website. These traditional forms of marketing have long proven effective in moving prospective customers through the buying process and toward trying a given product or service. The Internet is acting as a consolidator of these traditional marketing methodologies, driving the prospective customer to personalized landing pages and specific offers they show a high probability of accepting and taking action on. The many examples of how analytics is being successfully used for marketing mentioned earlier in this analysis are also used in many companies for measuring the relative contributions of each specific offline, traditional marketing method or strategy (Hair, 2007). Marketers are able to track the relative effectiveness of a given flyer or brochure and its contribution to the buying process. In addition, advanced marketing automation applications including Eloqua and Marketo are being used to track and predict the combinatorial effects of flyers, brochures, direct mail, advertisements on television and radio, and the many forms of external advertising as well. In conclusion, the Internet has made it possible for marketers to precisely understand the contributions of every aspect of their advertising, promotion and public relations strategy to the buying process. And has been shown in the audience and segmentation analysis of Walmart's Price Value Shopper, very precise customer segmentation can also be achieved and measured with analytics that provide insights into psychographics of the audience segment (WalMart Investor Relations, 2012).
The relationship between market share and promotion has also been more clearly defined through the analytics and platforms available online as well. The Internet has made the correlation of promotional spending and market share more predictable for commodity-like products by measuring the impact of price and availability on demand. This has significantly reduce the uncertainly regarding just which promotional strategies to use, when, and what amount of marketing funds needs to be invested in them. The more complex and multifaceted a given product becomes however the greater the corresponding complexity of measuring the effects of promotion on market share. Often with highly complex products that must be tailored for a given customers needs, for example an air conditioning system for a home or the addition of a new room or section of a house. Promotional strategies played a critical role for the air conditioning company in getting the customer, and given the highly tailored nature of their needs, helped to create trust. The same holds true for the contractor given the job of adding a new room or section to a house. Both used promotional strategies to gain trust and eventually a sale. These promotional strategies however were just one of many. The greater the commoditization of a given product the more likely promotional strategies will have a direct effect on market share.
Measuring IMC Strategies' Effectiveness
The most effective marketers using IMC strategies today concentrate on a series of metrics and key performance indicators (KPIs) that span the entire purchasing process for their products and services. The more complex the selling process, the more precise the metrics and KPIs chosen are, with specific attention of providing feedback from a customer experience management standpoint. Measuring IMC strategies often begins with a program analyzed and dashboard that shows the relative contribution of each component or section of the IMC strategy. Marketo is a leader on this area and has created a Program Analyzer which is used for evaluating the performance of each component of an IMC strategy. The following is an example of the Marketo Program Analyzer, specifically designed to measure the relative sales and profit contributions of each element of an IMC strategy.
Figure 3: Measuring IMC Effectiveness and Sales Contribution Using a Program Analyzer
Once an initial analysis of each specific component of an IMC strategy has been completed, the most valuable metrics and KPIs are organized into a dashboard. This is often the type of dashboard marketers use to evaluate the effectiveness of an IMC strategy on a daily basis. The one shown in Figure 4 is based on the Marketo marketing automation system.
Figure 4: Marketing Dashboard measuring the effectiveness of an IMC Strategy
Nike's IMC Framework and Excellence of Execution
The breadth of Nike's product line combined with the exceptionally high brand value lead to unique challenges for the marketing management groups responsible for launching new products and optimizing sales. Nike uses a product portfolio approach to managing its brands, as is shown in the Boston Consulting Group (BCG) matrix below in Figure 4. Based on a longitudinal analysis of Nike sales and market growth relative to market share, the following analysis has been completed. Nike uses this approach to also define the sequence of new product introductions and how they will align their supply chain, pricing and options selections across each of the product categories. This is also the approach that initially led the company to create a unique mass customization strategy called NikeID (Broekhuizen, Alsem 2002).
Portfolio Analysis of Nike's Brands: The Foundation of their IMC Strategies
Source: (Nike Investor Relations, 2012) (Broekhuizen, Alsem 2002).
Nike's marketing managers realized that there was significant upside potential for creating a mass customized, high-end athletic shoe line based on their analysis of their existing product portfolio (Broekhuizen, Alsem 2002). . To effectively launch the NikeID product family however, Nike's marketing executives realizes they would also have to combine the benefits of mass customization and a well-orchestrated IMC strategy. The initial goal of the NikeID strategy was to ensure the successful launch of mass customized shows and later add in apparel and gear. Today the IMC strategy for all three categories of products is live, and viewable on their website shown here: nikeid.nike.com/.
Nike's approach to this began at the supply chain level, ensuring their suppliers would be able to manage the wide variation in product requirements (Doorey, 2011). Nike also began to define specific promotional and public relations strategies as well, looking to create a unique value proposition that would resonate throughout the academic community. All digital components of the IMC were designed to point back to nikeid.nike.com / and specific promotional elements were coded and keyed so the marketing management teams would know in real-time what the performance of their specific initiative's were.
Next the Nike marketing management team created a framework to evaluate how each of the mass customization components was performing on conjunction with the key elements of the IMC strategy (Stonehouse, Minocha, 2008). This provided the management teams with real-time visibility into whether their supply chain, production and fulfillment systems were keeping up with the IMC strategy and its leading demand indicators. While Nike keeps this framework…