07brands

Chapter SevenMarketing Services

Making Your Mark in MarCom.

Making Your Mark in MarCom.

Marketing Services• Most Marketing Services relate to Marketing

Communications • “MarCom” for short– Umbrella term for all promotional activities

other than advertising.• As marketers grow, virtually all MarCom

services are growing – New ways to market brands, and…– New sources of career opportunities

Marketing Services• Sales Promotion• Direct Marketing• Public Relations• Media Buying Services• Marketing Research• Event Marketing• Promotional Products

Who Performs Marketing Services?

• Client Marketing Department• Divisions of mega-agencies– Specialized Agencies– Division within “IMC” agency

• Specialized Agencies or suppliers

Who Supervises Marketing Services?

• At the Marketer, many options– Director of Marketing – Brand Management– Specialized Manager (Promotion, etc.)– MarCom Manager

• At Specialized Agencies… – Account Managers, Account Executives– Project Managers

The World of Sales Promotion

The World of Sales Promotion

• How Big is the World of Sales Promotion?– Measured Volume (Fees, etc.) over $100 Billion!– To put it in perspective…

Advertising 52.7%

Advertising 52.7%Consumer

Promotion 23.4%

Consumer Promotion

23.4%

Trade Promotion

18.4%

Trade Promotion

18.4%

The World of Sales Promotion

The World of Sales Promotion

– It’s actually larger…– The biggest categories • Trade discounts• Consumer Savings

– …are not included!– Overall, the Volume

is HUGE!!!

Advertising 52.7%

Advertising 52.7%Consumer

Promotion 23.4%

Consumer Promotion

23.4%

Trade Promotion

18.4%

Trade Promotion

18.4%

Other5.5%Other5.5%

How Big is the World of Sales Promotion? Measured Volume (Fees, etc.) over $100 Billion! To put it in perspective…

How Big is the World of Sales Promotion? Measured Volume (Fees, etc.) over $100 Billion! To put it in perspective…

The World of Sales Promotion

The World of Sales Promotion

• Some Top Sales Promotion Agencies Draft Worldwide (Interpublic)

Burger King, Kellogg’s GMR Marketing (Omnicom)

Microsoft, Miller, Visa Frankel (Publicis)

Frito-Lay, McDonald’s, Nestle Momentum (Interpublic)

American Express, Anheuser-Busch, GM Impiric (WPP)

AT&T, Mastercard, Mattell, Xerox

Draft Worldwide (Interpublic) Burger King, Kellogg’s

GMR Marketing (Omnicom) Microsoft, Miller, Visa

Frankel (Publicis) Frito-Lay, McDonald’s, Nestle

Momentum (Interpublic) American Express, Anheuser-Busch, GM

Impiric (WPP) AT&T, Mastercard, Mattell, Xerox

The World of Sales Promotion

The World of Sales Promotion

• Two Types of Sales Promotion– “Push” Trade Promotion – “Pull” Consumer Promotion

• Both emphasize Short-Term Sales• Two Types of Incentives– Less - Savings– More - “Added Value”

• More Product (Bonus Pack)• A Prize (Sweepstakes)• Something else (A Premium)

Trade Promotions Point-of-sale Point-of-sale

Trade Promotions

• Dealer contests Point-of-sale Point-of-sale

Merchandising the advertising

Deals and allowances Co-op advertising

Merchandising the advertising

Deals and allowances Co-op advertising

Consumer Promotions• Coupons/FSIs (Free Standing Inserts) Contests, sweepstakes & games Contests, sweepstakes & games

Consumer Promotions• Coupons/FSIs (Free Standing Inserts) Contests, sweepstakes & games Contests, sweepstakes & games Cents-off promotions Cents-off promotions

Consumer Promotions• Coupons/FSIs (Free Standing Inserts) Contests, sweepstakes & games Contests, sweepstakes & games Cents-off promotions Cents-off promotions Premiums Premiums

Consumer Promotions• Coupons/FSIs (Free Standing Inserts) Contests, sweepstakes & games Contests, sweepstakes & games Cents-off promotions Cents-off promotions Premiums Premiums Sampling Sampling

Consumer Promotions• Coupons/FSIs (Free Standing Inserts) Contests, sweepstakes & games Contests, sweepstakes & games Cents-off promotions Cents-off promotions Premiums Premiums Sampling Sampling Rebates Rebates

Consumer Promotions• Coupons/FSIs (Free Standing Inserts) Contests, sweepstakes & games Contests, sweepstakes & games Cents-off promotions Cents-off promotions Premiums Premiums Sampling Sampling Rebates Rebates Continuity

programs Continuity

programs

Consumer Promotions• Coupons/FSIs (Free Standing Inserts) Contests, sweepstakes & games Contests, sweepstakes & games Cents-off promotions Cents-off promotions Premiums Premiums Sampling Sampling Rebates Rebates Continuity

programs Continuity

programs

The World of Direct Marketing

The World of Direct Marketing

• Simply put, direct marketing occurs when you buy direct from a marketer– By returning a coupon– By calling an 800#– By responding to a mail solicitation– By shopping on the Internet– By responding to a telemarketer

who called you during dinner

The World of Direct Marketing

The World of Direct Marketing

• Sales from Direct Marketing Efforts

$1.7 trillion! $1.7 trillion!

From Lead Generation $904 billion

From Traffic Generation $212 billion Direct Order Sales $635 billion

From Catalogs - $133 billion From Direct Response Ads - $203 billion From the Internet - $41 billion

That adds up to…

From Lead Generation $904 billion

From Traffic Generation $212 billion Direct Order Sales $635 billion

From Catalogs - $133 billion From Direct Response Ads - $203 billion From the Internet - $41 billion

That adds up to…Source: DMA Economic Impact Statement 2003Source: DMA Economic Impact Statement 2003

The World of Direct Marketing

The World of Direct Marketing

• Types of Direct Marketing Companies Direct Marketers

Examples: American Express, Land’s End Direct Marketing Agencies

Example: Draft Worldwide (Interpublic) Support Services

Examples: Call Centers, Catalog Printers, List Management Services, the

Post Office

Direct Marketers Examples: American Express, Land’s End

Direct Marketing Agencies Example: Draft Worldwide (Interpublic)

Support Services Examples: Call Centers, Catalog Printers,

List Management Services, the Post Office

The World of Direct Marketing

The World of Direct Marketing

• CRM = Customer Relationship Marketing• LTV = Lifetime Value – Direct Marketers work to maximize the value of the

relationship with their customers, to get the most LTV (Lifetime Value)

• Doing all those things is “CRM”• Increased valuation of current customers is a

driving force in marketing today

Some Key Reasons for Direct Marketing’s Growth

Some Key Reasons for Direct Marketing’s Growth

• Changing consumer lifestyles – Shopping opportunity for “time-poor” consumers

• More consumer credit– Now it’s easy to buy from a direct marketer

• Better “Direct Marketing technology”– More and better lists of potential customers– Better and less expensive technology for “massaging

the database”• Media fragmentation– More cost-efficient media opportunities

Consumer Complaints About Direct Marketing

• Here are some of the current issues:• Annoyance– List removal option of DMA

• Privacy issues– Who owns your information?– Data technology raises new concerns

• Unscrupulous practices– Example: Negative option

• Major Result – The “Do Not Call” List.

The Key to Success inDirect Marketing • List Quality is Key Internal lists

Compiled by organization itself

Internal lists Compiled by

organization itself External lists

Purchased from List brokers List compilers

External lists Purchased from

List brokers List compilers

Improving Performance• Keys to improving performance are:– Improving the list– Improving the offer/incentive– Improving the messaging

• “List Enhancement” is key– Adding more “pieces” of information about

households on current list– Cleaning the list: the “merge-purge” function when

combining different lists• Continual testing against previous success to

improve results and knowledge

The World of Public Relations

The World of Public Relations

• Marketing PR (MPR)– Supports marketing efforts

Corporate PR (CPR) Deals with broader range of

issues, from investor relations to employee communications

Corporate PR (CPR) Deals with broader range of

issues, from investor relations to employee communications

Marketing PR: Product Publicity

• The Basics: The Objective - obtaining free

time or space in the media that represents favorable mention

The Objective - obtaining free time or space in the media that represents favorable mention

Marketing PR: Product Publicity

• The Basics: The Objective - obtaining free

time or space in the media that represents favorable mention

The Strategy - product publicity, like all PR, must be newsworthy

The Objective - obtaining free time or space in the media that represents favorable mention

The Strategy - product publicity, like all PR, must be newsworthy

The Benefit - the value of “implied” or “third-party” endorsement by the media

The Benefit - the value of “implied” or “third-party” endorsement by the media

Product Publicity Activities

• Press Releases (immediate news)• Technical and Case History stories• Feature stories• Press Tours– Press to Company– Company to Press

Corporate PR Activities(Non-Marketing Related PR)Corporate PR Activities(Non-Marketing Related PR)• Investor Relations• Employee Communications• Government Relations (lobbying)• Crisis Management (oil spills, etc.)• Community Relations• Advocacy Advertising (corporate point

of view on public issues)

PR Agency Ownership

PR Agency Ownership

• Top Ten PR Agencies (and ownership) PR Agencies now part of mega-agency groups PR Agencies now part of mega-agency groups

Burson-Marstellar (Y&R/WPP) Burson-Marstellar (Y&R/WPP) Fleishman-Hillard (Omnicom) Hill & Knowlton (WPP) Edelman Public Relations Worldwide (Independent) Ketchum (Omnicom) Porter Novelli International (Omnicom) Shandwick (Interpublic) BSMG Worldwide (True North/Interpublic) Weber PR Worldwide (Interpublic) Ogilvy Public Relations Worldwide (WPP)

Fleishman-Hillard (Omnicom) Hill & Knowlton (WPP) Edelman Public Relations Worldwide (Independent) Ketchum (Omnicom) Porter Novelli International (Omnicom) Shandwick (Interpublic) BSMG Worldwide (True North/Interpublic) Weber PR Worldwide (Interpublic) Ogilvy Public Relations Worldwide (WPP)

PR Agency Ownership

PR Agency Ownership

• PR Agencies now part of mega-agency groups Ad Organizations by PR Fees Ad Organizations by PR Fees

Omnicom $490.1 million Omnicom $490.1 million Interpublic $316.5 million WPP Group $230.4 million Y&R Inc. $196.4 million True North $120.3 million

Mergers Continue Y&R will be added to WPP totals True North will be added to Omnicom totals.

Interpublic $316.5 million WPP Group $230.4 million Y&R Inc. $196.4 million True North $120.3 million

Mergers Continue Y&R will be added to WPP totals True North will be added to Omnicom totals.

The World of Media Buying Services

The World of Media Buying Services• Independent companies that buy media time

and space for advertisers• Originally, an alternative to the media

department of a full-service ad agency• Evolved as media choices proliferated and

media buying became more complicated• Now mega-agencies have “unbundled” their

media departments to create competing media buying services

The World of Media Buying Services

The World of Media Buying Services• The Pioneer: Dennis Holt builds Western into #1

Bought by Interpublic Merged with Initiative Becomes model for all agencies

Bought by Interpublic Merged with Initiative Becomes model for all agencies

The World of Media Agencies

The World of Media Agencies

WPP combines Ogilvy and JWT Media Departments to form MindShare

Leo Burnett turns their Media Department into StarCom

Unbundling continues…

WPP combines Ogilvy and JWT Media Departments to form MindShare

Leo Burnett turns their Media Department into StarCom

Unbundling continues…

The World of Marketing Research

The World of Marketing Research• The Business of Evaluation– FEEDBACK is critical nourishment for marketers

• The Product is FACT, not opinion– Accurate information gathering is also critical.– Research reputations depend on the dependability

of their data

The World of Marketing Research

The World of Marketing Research• Two types of entities provide this critical

marketing information:– Internal Marketing Research Departments • At the marketer• At a full-service agency

– Outside Marketing Research Firms

Role of Internal Marketing Research Department

• Analyze company sales data• Provide short-term and long-term sales and

industry projections• Determine what primary research studies

need to be carried out• Select and hire outside research firms to

conduct surveys and provide other information

Types of Outside Marketing Research Firms• Limited-service Research Suppliers– These supply a specific type of data, often to

all major marketers. – Syndicated Research (Nielsen TV ratings)– Standardized Research (Gallup & Robinson ad

recall pre-testing studies)• Full-service Research Suppliers– Focus Groups and Surveys– “Starting from scratch” research projects

The World of Event Marketing

The World of Event Marketing

• How big is the World of Event Marketing? Sports sponsorship $5.92 billion Sports sponsorship $5.92 billion

The World of Event Marketing

The World of Event Marketing

• How big is the World of Event Marketing?

Entertainment, tours, attractions $817 million Entertainment, tours, attractions $817 million

Sports sponsorship $5.92 billion Sports sponsorship $5.92 billion

The World of Event Marketing

The World of Event Marketing

• How big is the World of Event Marketing?

Festivals, fairs, annual events $740 million Festivals, fairs, annual events $740 million Causes $700 million Causes $700 million

Entertainment, tours, attractions $817 million Entertainment, tours, attractions $817 million

Sports sponsorship $5.92 billion Sports sponsorship $5.92 billion

The World of Event Marketing

The World of Event Marketing

• How big is the World of Event Marketing?

Festivals, fairs, annual events $740 million Festivals, fairs, annual events $740 million

$8.7 billion!

Causes $700 million Causes $700 million

Entertainment, tours, attractions $817 million Entertainment, tours, attractions $817 million

That all adds up to... That all adds up to...

Sports sponsorship $5.92 billion Sports sponsorship $5.92 billion

The Arts $548 million The Arts $548 million

The World of Event Marketing

The World of Event Marketing

• Provides opportunities for:– Sampling of product– Widespread publicity in media– Unique connection w. target market

• Cause marketing: – A special type of event marketing– Example: Children’s Miracle Network

The World of Promotional Products

The World of Promotional Products

• A $16 billion business• Items with company brand or

logo on it (pens, hats, key rings)

• Higher priced items called “business gifts”

• Many uses: – Sales lead generation, trade

shows, awareness building, employee morale, etc.

Who isThe Person

Who Helps Pull All of This Together?

Who isThe Person

Who Helps Pull All of This Together?

The MarCom Manager

• Relatively new position - result of “IMC.”– Title/function more common on West Coast– Evolving as marketers’ needs evolve

• Requires “jack-of-all-trades” promotional skills and understanding of all forms of “IMC”

• Emphasis will vary by industry– High-tech - PR emphasis– Packaged goods - sales promotion emphasis – Beverages - event and sports marketing emphasis

The Future of Marketing Services

The Future of Marketing Services• With increased pressure for short-term revenue,

the need will keep growing• There will be dynamic growth in most areas– Sales Promotion - up 20%– Direct Marketing - up 15%

• Increased focus on existing customer “LTV”– More loyalty programs– More targeted programs– More Customer Relationship Management

The Future of Marketing Services

The Future of Marketing Services• New Technologies– Interactive and Information Technology – The Internet will affect everybody! – Virtually everyone will practice some form of direct

or highly targeted marketing • New Companies– Start-ups - need IMC from ground up– Start-ups will be internal as well as external

• Example: Nike buys Converseand suddenly Will Smith is wearing them in “iRobot”

The Future of Marketing Services

The Future of Marketing Services• Economics of Scale– Large Mega-agencies will have more resources – Large marketers will want more programs

• Competition– All marketing services activity will increase– Competition between services will also increase

• More Diversity– Not just in population, but marketing approach– Managing all of this will be a huge challenge!

In Conclusion…

Can Make Your Mark in MarCom.

Can Make Your Mark in MarCom.

YouYou

Questions & Discussion• Sales Promotion• Direct Marketing• Public Relations• Media Buying Services• Marketing Research• Event Marketing• Promotional Products