OMD MD | PHD Group for Adam Smith conference 2013

1. ROI driven communication
planning for Retail sector
Sergey Matveyuk
BrandScience, Analytics & Insights Director
March 21, 2013

2. Retail market from media point of view

3. Retail market from media point of view
Top category since 2006 with ~14% of Ad Market
CE
22%
Clothes
18%DIY
13%
Auto
11%
Food
9%
Shopping
Centres
7%
Cosmetics
5%
Internet-shops
4% Jewerly
4%
Sports Goods
3% Distant
Selling
2%
Children's
goods
1%
Drugstores
1%
36 299
17 683
10 152
Retail Auto Finances

4. Retail market from media point of view
Very diverse by subcategories and regions (Ad Spends)
Consumer Electronics

5. Retail market from media point of view
With different communication rules
Cinema
Radio
Press
Outdoor
TV Nat
TV Reg

6. Consumer needs in retail
 CONSUMER
 PRODUCT
 EMOTIONAL
BENEFITS
RATIONAL BENEFITS
Differentiation from competitors
Image
Smart consultants
Wide range of products / brands
Network
Price

7. Rules of communication for retail
Differentiation from competitors
Image
Smart consultants
Wide range of products / brands
Network
Price
Price / Product demonstration
Short term actions
Vendors co-promo
Differentiation from competitors
Seasonal peaks
New outlet opening

8. Russian consumers are very different
9 time zones
13 hours by plane…
6 days by train…
Impossible by car…

9. With different culture
18 250 GRP’s month
Average t= 9°C
25 800 GRP’s month
Average t= 2°C
31 600 GRP’s month
Average t= 6°C
14 850 GRP’s month
Average t= 3°C

10. And changing population structure
0
10
20
30
40
50
60
0-15 16-30 31-55 56+
Mln.
2007
2011
2015
0%
Ready
to retire
Kids /
Teens
Middle
aged
Economically
active
The population of Russia
is getting older, share of
the most active
audience is
decreasing but the
share of retirees is growing

11. At the same time new technologies are changing
world dramatically

12. At the same time new technologies are changing
world dramatically
TOP 5 countries by population
Everybody and everywhere can share the information
1 340 1 187 1 000
310
238

13. At the same time new technologies are changing
world dramatically
Monthly Reach of Internet achieved 70% in January 2013 (Russia
100К+ / 12+ y.o.), and about 95% for 18-35 TA
Broadband and 4G development
i-Choose generation want to get all here and now
Download series
Watch series on-line

14. At the same time new technologies are changing
world dramatically
Tablets growth +366% (volume) +256,7% (value). Average price
decrease 24% (15 600 RUR)
Smartphones growth +69% and +60% accordingly
Audience in control on-the-go 24/7

15. At the same time new technologies are changing
world dramatically
24.2 % of audience watch TV content via Internet (21.2 % previous
year)
0.8 mln never watching TV
Content is the king – consumer choose by himself where and when
to watch preferable programs
Source: Synovate Comcon (Russia 100К+ / 10+ y.o.)

16. New trends
appears each year
In 2014 in Russia will be sold
more than 2 miln Smart-TVs
Total Smart-TV market will
achieve 3,5 mln

17. New trends
appears each year
Google Glass is an augmented
reality wearable computer with a
head-mounted display

18. New trends
appears each year
Additive manufacturing or 3D printing
is a process of making a three-
dimensional solid object of virtually any
shape from a digital model.

19. Which influence media
Traditional
Media
“New Media &
Touchpoints
Weeklyreach,%
0
25
50
75
100
2007 2012
0
10
20
30
40
50
60
2000  2013
2012- 48%
19% 13%
5% 9% 5%
2000  2013
Share of Ad Market
Share of electronic media is growing while share of non-electronic decreases

20. Retail market
Private labels
Mobile applications
On-the-Go price comparison
E-Commerce

21. And consumer
Today a person is subjected to more new
information in a day than a person in
the middle ages in his entire life

22. And consumer

23. And consumer
became not just listener,
he starts to select and choose information

24. Decision making process not linear anymore
The consumer considers
an initial brands, based on
brand perceptions and
exposure to recent touch
points
Consumers add
subtract brands as they
evaluate what they want
After purchasing a product or service, the
consumer builds expectations based on
experience to inform the next decision journey
Ultimately, the
consumer select a
brand at the moment
of purchase

25. It’s different for different retail categories
Grocery Cosmetics Clothes DIY CE
Research
Previous
experience
Impulse
And even within
one category
SME WG AV

26. Communication has to reflect all this changes

27. Communication has to reflect all this changes
From Monologue To Dialogue
From direct advertising To ecosystem
From media plan To POE approach
From short term To long term
From promo / direct sales To environment building
From product oriented To consumer centric

28. Chosen strategy should meet business objectives
By focusing on needs of most
valuable customers based on
consumer segmentation

29. Chosen strategy should meet business objectives
By focusing on needs of most
valuable customers based on
consumer segmentation
By using relevant touch points for
chosen TA segments on each
stage of consumer journey
62% 60%
54%
59%
63%
72%
78% 82% 82%
84%
71%
66%
76% 72% 71%
69%
65% 64%
42% 41%
M
12-17
W
12-17
M
18-24
W
18-24
M
25-34
W
25-34
M
35-44
W
35-44
M
45-54
W
45-54
TV Internet
TV vs. Internet daily Reach (%) by TA segments

30. Chosen strategy should meet business objectives
By focusing on needs of most
valuable customers based on
consumer segmentation
By using relevant touch points for
chosen TA segments on each
stage of consumer journey
By combination of traditional and
special projects for strategy
activation

31. Chosen strategy should meet business objectives
By focusing on needs of most
valuable customers based on
consumer segmentation
By using relevant touch points for
chosen TA segments on each
stage of consumer journey
By combination of traditional and
special projects for strategy
activation
With ROI analysis of each
communication solution

32. Results forecasting is crucial

33. Results forecasting is crucial
As the marketplace becomes ever more complex and
competitive the need to maximise return on
investment through efficient and effective marketing
and advertising becomes increasingly critical.
4 departments support each stage of communication planning
 Strategy planning dpt.
 Market research
 Media research
 Econometric modeling
Set of tools
 Snapshot (Campaign analysis)
 Brand Navigator (Tracking & Econometric modeling)

34. Ad campaign effectiveness evaluation
Creative materials testing (concepts,
spots, layouts)
What is the impact of each communication
channel to ad campaign recognition?
Which ad materials are better working?
Is there enough branding in the add?
Our approach to marketing
effectiveness evaluation:
Key question?

35. Our approach to marketing
effectiveness evaluation: …
Brand Health Monitoring
 Brand KPIs Image Change of attitude
Ad Performance Monitoring
 Ad awareness Liking
What are the changes in brands’ positions?
Which brand is the most effective in work
with consumers?
What’s the effectiveness of the media
investments? (ROI Analysis)
Key question?

36. …
Our approach to marketing
effectiveness evaluation:

37. It’s very important who work with data
As the marketplace becomes ever more complex and
competitive the need to maximise return on
investment through efficient and effective marketing
and advertising becomes increasingly critical.
The BrandScience team has been developed to help
marketers solve this problem, from regional and
national markets through to global brands
Russian BrandScience team consist of 22 employees:
 6 have research background (4 COMCON, 2 TNS)
 2 from client side

38. Our beliefs
Use modern
Trends
Follow the
Consumer
Track Ad
investment
effectiveness
Modern Trends overview
Best cases presentations
Consumer segmentation