2. 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.
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3. 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
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4. 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.
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5. The Traditional Purchase Funnel is wrong
• In the traditional
awareness
purchase funnel,
there was a bright-line
distinction between consideration
“awareness” and
“conversion” and the
corresponding “brand intent
marketing” and “direct
marketing” budgets,
strategies and tactics
employed.
purchase
Search marketing has changed the consumer’s buying process forever.
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6. A New Purchase Cycle*
• As control has shifted awareness
toward the consumer, a need or desire & investigation
“cycle” has replaced the
funnel
• Need is immediately
researched search
• Search both drives
awareness and establishes
consideration sets
ranking and
• Options are instantly conversion & purchase refinement
ranked and refined
*Thanks to Ed See, Principal, Ed See and Associates
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7. 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.
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8. With digital at is center, all marketing
can be response marketing…
9. It is only prospect recognition and expected timing of
response that differentiate our marketing disciplines
Unknown prospect
Promotional Classic Brand
Marketing Marketing
Purchase now Purchase later
Direct Relationship
Marketing Marketing
Known prospect
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10. 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.
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11. 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
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13. 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.
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14. 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.
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15. 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”.
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17. Companies need a roadmap to help them build
marketing performance capability
Digital Performance-Based Marketing Maturity Model
Use a maturity model to set
priorities and articulate value
5 Channel Champions
• What are your current capabilities
to manage marketing
4 Value Validators
performance?
3 Personalization Pros
• Where do you want to get to,
what is the business value of
2 A/B Advocates
getting there?
• Implementing a plan: 1 Broadcast Marketers
Required capabilities, programs,
and skills to deliver on the vision Benefits / Characteristics
• Improved Digital Performance
• Increasingly Dynamic
• Greater Prospect Knowledge
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18. 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.
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19. 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?
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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.
21
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22. Are you talking to the right audience?
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23. Are you giving them the right offer or experience?
Visitor A:
Visitor B:
• Frequent flier
• New to Delta.com
• Skymiles Member
• Searched for a flight to Des Moines
• Weekend trips to Colorado during the
winter months
VAR 1
VAR 2A VAR 2
VAR 4
VAR 3
VAR 5
Close the deal when you have the chance, with just the right offer.
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24. Are they responding?
Direct Traffic
(URL input)
Search
Velocity
Website Traffic, Clicks
and View-throughs
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25. 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!
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26. To learn more about
performance marketing, please
x+1] provides tools and predictive response models
[
for advertisers and agencies to optimize response
contactTitle landing pages and
from display media, search
Section
websites.
MikeVisit www.xplusone.com/lessismore to review John
Dillon at
Nardone’s keynote presentation and find how you
mdillon@xplusone.com or call
can do more with less.
(203) 984-2403
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