A few weeks back a business acquantance wrote:

On May 5, 2011, at 7:17 PM, xxxxx xxxxxx wrote:

Hi Chris,

Hope you are well. Long time, but I have a request for you for some information, which may have some work attached to it. Still in development stages so nothing confirmed

We have a client that is looking for some comparison info for the ROI on Experiential to Above the Line advertising. Along the lines of what is the difference between $4m spent between experiential and traditional advertising. From this they may want to build this into the budget to track and report on the reach they are getting.

Let me know if you can help and I know the info is a bit thin on the ground but any questions give me a shout. If there is anything more to come out of this will definitely get in touch to get your expertise.

Look forward to hearing from you,

xxxxx

…

I wrote back:

On 06/05/2011, at 9:40 AM, Chris Clegg wrote:

Hi xxxxx -

Can you tell me the product or product category.

Thanks,

Chris Clegg

T: 207.619.2297
P.O. Box 15044
Portland, ME 04112-5044

(This message sent from a mobile device.)

…

The response…

On 5/5/2011 7:45 PM, xxxxx xxxxxx wrote:

Hi Chris,

Telco and broadband internet services.  Is that too broad?

Cheers
xxxxx

…

It wasn’t too braod at all. Here’s what I wrote back:

That make sense.

First off, it’s a hard question. Asking which marketing tactic will generate the greatest return is like asking which Stock you should buy to get the greatest return. It depends on a lot of factors and those factors can change overnight. And I believe the same conventional wisdom applies. The best answer lies in diversifying your “portfolio” of marketing tactics, measure them all in a similar way, and balance the portfolio as needed to minimize your risk and maximize the gain.

That said, Telco is a great industry for experiential. It has a high revenue point, especially with bundled packages, with reoccurring revenue. If you can get a household on a triple-play and get their loyalty to 2 years or more it’s not unheard of to bring in 1,000 plus in revenue from a single sale.

I’ve measured a lot of telco experiential and have seen a wide range of results. I’ve seen $350 small events deliver 109 household sales and I’ve seen $50,000/ month mall activations deliver 2 sales. So much depends on the market to message match, loop qualification, what the local competition is doing, time of year, and how well the agency is balancing where they apply the direct costs (on assets that generate traffic and sales or not).

You might need to be ready to expect experiential cost per acquisition at 90 to 135 per sale. Which on a sale that can generate several hundred a year in revenue is a great ROI. Your conversion rates are much higher for experiential. Sometimes three and four times higher. But this needs to be balanced with the challenge of reach. A free standing insert will reach hundreds of thousands of people but deliver only a 0.17% conversion if you’re lucky. A good experiential campaign might reach 10,000 people for the same cost but convert 7% to 8% of them. (This assumes you are properly managing the loop qualification issue and are choosing your venues carefully.)

I’d say this, Telco/ broadband is not a market for an agency who doesn’t know what they’re doing. There are a lot of ways to mess it up. Most Telco companies in the U.S. are very data driven firms and will know quickly when things aren’t working out. It’s a far more challenging execution than say a traditional event because it’s an information based short-sell and the staff need to be awesome. However, if the agency does know what they’re doing in this particular area, they can run circles around any other type of marketing and generate an ROI that far exceeds other marketing tactics.

I do a fair bit of work modeling out what specific marketing can be expected to deliver based on benchmarks. If you’d like to get into the specifics, we can look at tactics, budgets, and specific reach, GRP, and conversion estimates to see what the options look like.

Hope this helps,

Chris Clegg

Sr. Analyst | Client Services
Portland Marketing Analytics

T: 207.619.2297
cclegg@portma.com

http://portlandmarketinganalytics.com

…

What do you think?  Does this follow your understanding of things?  If you have similar questions or just want to chat about the data above, use the contact information below to reach out.

The goal is to provide insight that will lead to the successful launch of a new product. We organized the research objectives into three groupings:

• The size and value of the potential market
• The propensity of that market to buy the product
• The price range they’ll pay for the product

How To Size A Market

We size a market by first defining the target consumer and measuring the prevalence of that consumer group in the U.S. For example, if we were looking to measure the size of a market for car mustaches and we believed that male car owners ages 35 and older are the target market, we’d look to measure the prevalence of this group in the overall U.S. population.

That is the percent of men (49%) over the age of 35 (40%) who own a car (70%). In this hypothetical we’d be left with 13.7% of the overall U.S. population (49% * 40% * 70% = 13.7%). If we assumed there were 300 million people in the US, the car mustache market would be 41.1MM people strong.

How To Value A Market

To value this market, we’d want to know how much this target segment spent on novelty items related to their car last year. Let’s say the average spend was $35/ year (e.g., fuzzy dice, neon rims, etc.). This would value the target market at $143.5MM annually. Not bad.

Propensity To Buy

We then want to describe the product idea without revealing the product itself. We want to get a measure of the target market’s likelihood to buy the product solution. The marketing and ad copy will work to test different angels that actually motivate purchase of the product. We just want to get a measure of propensity to buy under a scenario where the marketing get’s it right.

This information will give us a sense of the revenue the product could generate. This becomes a critical measure when fine-tuning marketing plans or even judging when you’re effort will turn cash-flow positive.

How Much To Charge For A New Product

Finally, there is the question of how much they’ll pay. We’re a fan of the Van Westendrop Pricing Model. It’s four straight forward survey questions that end up giving you two price ranges. The first range tells you the amount you can charge to maximize profits. The second tells you the price you can charge that will maximize market share.

When you know the size of your market, who will buy, how often they will buy, and what you can charge them, you can clearly model out your product launch and clearly define a to-market strategy.

Okay… enough talk. It’s time for us to go crunch the numbers. We got 460 responses and the data looks great. Can’t wait to see what the final report says. Neither can the business owners we’ll be reporting to.

We know these give-aways draw crowds. And crowds allow brand ambassadors to deliver the speaking points; communicating brand messages that educate consumers. This education drives differentiation, purchase intent, and ultimately sales.

The Post-Event Impressions from Promotional Items

Primary research conducted in 2008 by the Advertising Specialty Institute (ASI) found that the impressions generated from premium distribution is best calculated, “based on the number of times items were worn or used per month and the average number of people that came in contact with the user.” (ASI, 2008)

The research found the following monthly uses for the following common premium categories:

• Branded Bags average 9.33 uses per month
• Branded Caps average 6.06 users per month
• Branded “Other Wearables” average 4.62 users per month

Furthermore, the research found that the number of people the user is in contact with when using the branded premium ranged from a low of 14 to a high of 111 (on average). Specifically for the three promotional item categories outlined above, the research found…

• Branded Bags were typically used when in contact with 111 people on average
• Branded caps were typically used when in contact with 79 people on average
• Branded “other wearables” were typically used when in contact with 14 people on average

Take together, the potential average unique impressions generated per month from these items ranged from a high of 1,036 for bags to 65 for “other wearables.” On average, branded caps or hats generate 479 impressions per month.

The average number of months someone holds on to a premium can be applied to generate a total potential impressions estimate for each individual premium distributed. The research had “other wearbles” lasting the longest with 8.7 months, followed by bags (8.6 months), then the catch-all “other non-wearables” (7.8 months).   Branded caps or hats tended to be used for 7.1 months on average.

Finally, before we can calculate the impressions generated by event marketing premiums, we’ll need to take into account the frequency by which someone who is around someone using a branded promotional item actually recognizes the brand being promoted. It turns out, people tend to recall the advertiser on a branded promotional item roughly 84% of the time. This varies by product type with Bags posting 90%, Caps at 89%, “Other Wearbles” at 94% and “Other Non-Wearabls” at 84%.

Therefore, we can estimate the following overall impressions generated for each branded bag, cap, or other wearable by multiplying monthly impressions by average months used and percent where the advertiser is recognized:

• Branded Bags generate 8,019 post-event impressions
• Branded Caps generate 3,027 post-event impressions
• Branded “Other Wearables” generate 532 post-event impressions

It’s interesting to note that “other non-wearables” were reported to generate around 1,387 lifetime post-event impressions.

Premium Impression Data Source:
The facts in this post were drawn from the Advertising Specialty Institute’s 2008 Study, “Advertising Specialties Impression Study: A Cost Analysis of Promotional Products Versus Other Advertising Media.”

The ASI’s study is based on primary research conducted in 3Q08 where 465 US business people were interviewed regarding the promotional products they had received. This research was supplemented with an online panel survey.

Respondents were asked if they had received any promotional products in the last 12 months. Most respondents were business/ professional people (84%) and were all age 21 or older.

Premium Impression Reference:
(ASI, 2008); Original source at http://portma.net/ASI2008

Also see:

• Marketing during Recession/Number of impressions
• Number of impressions
• Promotional Products Industry Report

(This was pulled from a Client email I just sent where we were discussing if linear regression was the best analysis technique for a banking brand’s awareness research. Use the comments area below to tell me if you agree.)

I wrote…

No matter what analysis you do, it’s all just a tool. There are very few statistics that are worth anything outside of basic human judgment and insight. So long as you follow the rules and don’t manipulate the data or the people reading it, you can’t really go wrong.

I try to design data that will allow a group’s wisdom to come to the surface, spark an educated debate, or deliver confidence to move in a direction that indicates progress. Sometimes I’ll take a strong position just to try and get people who know more than me to debate the conclusion.

This is where things happen. It’s the apathy and insecurity that kills me. There is too much mountainous reporting that no one reads other than the author.

I’ve long ago let go of “the book of truth.” Maybe it’s a lazy way out and I really just need to go to more conferences and read more of the trade journals.

What do you think?

You can get the same level of insights from your off-line marketing as you can your online marketing!

We’re here to talk if you’d like to brainstorm how you can get a hold of your off-line marketing performance.

(Originally posted by HubSpot and tagged under their Analytics and Cartoon archive.)

This short video provides an overview of a research methodology one can use to measure the possible annual revenue a telecommunications company might expect from an IPTV solution within a given market.

The video provides some background, two sample analyses that demonstrate actionable information, and an overview of the research methodology along with schedule and base costs.

If you are your team are trying to decide if now is the time for an IPTV solution, this might be the most important 5 minute video you can watch.

Download the Presentation (Right-Click & “Save As”; PDF; 1.05mb)
Download the Video (Right-Click & “Save As”; Zipped MP4; 6.03mb)

Video Highlights/ Speaking Points

• How to know how many current customers might switch to your service and what they might possibly pay.
• There are two key pieces of information required to make an informed IPTV decision: 1) knowing the size and value of your potential IPTV market, and 2) understanding what portion of that market would move their business to you.
• A three step solution: 1) Identify prevalence of pay-TV (i.e., cable) in your market, 2) Estimate current annual revenue generated from pay-TV services for current providers, and 3) Uncover the potential revenue that would be available for you.
• This is not a marketing strategy or retention research methodology.  It is an approach that will do two specific things very well.  It’ll tell you how big your potential IPTV market is and what it’s worth to you.
• In this example, a rural telecommunications provider’s market may have 3,358 household currently paying for television services at a rate of 2.23 million dollars per year.  A new IPTV offering in this this hypothetical market could expect upwards of $454,383 in annual incremental revenue.

You’ll find that  only some of the content on your or a Client’s site is delivering most of the traffic.  I haven’t tested it but I’d bet you that the 80/20 rule applies (that’s 80% of your traffic coming from 20% of your content).

That’s why there is one critical principal you must use with your content to maximize the impact.

Marketing success comes from maximizing your reach.

When I audit marketing programs (on-line or off) I look first for the data that indicates or will indicate the program reach.  You never know which part of the marketing will have the greatest impact.  But if your reach isn’t all it can be, it doesn’t matter.  A great bit of creative that no one sees is no better than a terrible bit of creative.

With on-line marketing, the secret to great reach is re-purposing your creative.

Blog Content Strategy

It starts with a good content strategy. Choose 12 monthly themes that flow with the seasons and work for your market niche. Then break those 12 themes into two primary topics that in and of themselves represent common problems people in the industry have that you can solve.

Next break each of those primary topics into six sub-topics that help define and resolve the problem. These six sub-topics represent your blog posts (three a week). Each sub-topic will need 300 to 400 words of original, jaw dropping valuable content (we’ll call each one a micro-article).

Maximizing Your On-Line Marketing Reach

Write these articles all at once or on an ongoing basis. Pull out three to four 120 character or less “sound bites” from each article and use them for Twitter/ LinkedIn updates.

Once a week, the micro-articles should be rolled-up and re-written into a single 600 to 1200 word article that can be submitted to the article sharing sites. This article should then be converted into a PowerPoint style presentation and posted to slide-sharing sites.

Every two weeks, the two PowerPoint presentations should be re-written and combined into slides to support a bi-weekly webinar. The webinar should be recorded , cleaned up, and converted into two video lengths: full (less than 10 minutes) and 2 to 3 minutes.

The two videos should be posted to a YouTube channel, other video sharing sites, and promoted through micro-blogging and social bookmarking. The full length version should have highlights and sound bites transcribed and serve as blog post. The sound-bites can also serve as micro-blogging updates.

Once a month, the four articles should be combined into a white-paper that can be made available for download from your website after registration and/ or posted to professional directories. The article can also be modified for professional off-line publication and /or press-release.

This strategy will allow you to generate a large presence on-line without building a large pool of content. When a car company creates an image of a car, they use that image in commercials, on billboards, in magazine print, and in web banner ads. They don’t create a new piece of content for each medium. Your written content should be no different.

At Portland Marketing Analytics we assist companies of all sizes develop an on-line marketing strategy that is based on sound marketing principals and supported by clear anlaytics. For a free 30 minute consultation on your website and how we can help you make the most of it, give us a call at 207.619.2297 or visit website auditing services for more information.

In this article, I read a quote I don’t entirely agree with.

“Sampling mitigates risks for brands,” says VP and gm Brian Pear. “It’s less risky for mom because she’s able to sample it for free.”

Having reviewed and analyzed the sales data for 100+ retail brands over the past four years I have to say that this simply is not true for all brands.  There is a lot that needs to be in place for an in-store sampling experience to directly create incremental sales.

Check Your In-Store Inventory

It may sound basic, but the first thing you need to assure is that you have the inventory to support any up-take in off-the-shelf sales.  It’s not uncommon for an in-store demo/ sampling program to stock the event set with inventory from the shelf, leaving the shelf itself bare.

More than once I’ve looked at sales volume data, subtracted what the demo staff bought, and found nothing left.  If the brand and store buyer are not organized before hand, there won’t be extra inventory and the whole thing will be a flop.

Don’t Ignore Product Use Cycles

Next, the consumer use cycle needs to be considered.  Household products tend to have a longer purchase cycle than food items.  A consumer is less likely to buy paper towels after a demo than frozen peas.  This doesn’t mean that there won’t be an up-tick, it just tends to be recognized after the demo has been completed.  Often on the next regular stocking-up trip for the consumer.

The tendency for a brand is to analyze the data immediately after a demo.  Sometimes you have to wait 30 or even 45 days to get a true measure of the impact.

Use cycle is also impacted by the volume of units typically sold and demonstrated.  If the demo is for a product that typically contains 30 items and average use is one item per day, sales may not increase for 15 to 30 days.

Watch For Product Hoarding

Finally, even if you do find an up-tick in sales, it’s not always a good thing.  There are three possible sources of incremental sales.  You either attracted new consumers to the category, won over customers from a competitor, or your current customers are hoarding.  The first two are what you want.  Bringing new customers to the category or winning over a competitor’s customers is great.  Hoarding can be a problem, but not always.

Hoarding is when a customer buys more of a product on sale yet avoids buying down the road because they’ve already “stocked-up”.  This is obviously more common for products that keep well (e.g., cleaners, dry food items, etc.) and less common for products that are bulky (e.g., diapers, paper products, etc.).

Juice is a great example of a product that is subject to increased use.  While someone isn’t likely to increase their use of butter (unless educated about new uses), many drink products like juice, milk, and even alcohol can look in the data as hoarding but really may represent an increase in short-term usage.  The consumer will return to normal (or slightly increased) consumption patterns once the discounted or sampled supply has been consumed.

So, yes.  Sampling and in-store demonstrations can be a great marketing tool for CPG brands.  However, if you don’t have the right analysis strategy in place you will never fully understand if what you did worked and why.

When compared to December (the previous month) we’d expect to see January retail sales down around 16.2%. Not as bad as you’d expect but driven by due giftcard spending. (It usually gets steadily worse and bottoms out in May then takes a U-turn in June with “Dads and Grads”).

The latest from MarketingDaily (http://bit.ly/5hst2W) reports on JD Power’s comments on January sales in the Auto industry. Things look down. We’ll see how much this is a bellwether for other sales sectors.

For marketers, any means of reaching out to a potential customer is done with two objectives in mind.  You are always trying to either change consumer behavior or change consumer attitude.  The rules of marketing haven’t changed.

The players have gotten smarter, the equipment has been greatly enhanced, the field has been radically reshaped.  But the purpose, objectives, and opportunity remains the same. So…

Let the games begin.  Marketing has been in transition for some time but as an industry, marketing analysts are just starting to figure it out. Have you?

This video is a riveting 4 minutes that defines the challenge and opportunity better than I’ve seen before.

If you’ve been sitting on the sidelines because you don’t know how to justify the spend it’s time to start figuring that out.   We can help.

If you’ve been diving in but haven’t a clue if the spend is worth your effort it’s time to get that straight.  We can help.