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I'm a partner in the advanced analytics group at Bain & Company, the global management consulting firm. My primary focus is on marketing analytics (bio). I've been writing here (views my own) about marketing, technology, e-business, and analytics since 2003 (blog name explained).

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January 22, 2010

Marketing Zeitgeist: Winter 2010 #amab

Call me Ishmael.  Wednesday night I was on the tip of Boston's Fish Pier, attending the AMA Boston chapter's first panel of the year at the Exchange Conference Center. The title of the event was "Marketing 2010: What CMOs Are Saying".   Panelists included Harpoon Brewery's EVP of Marketing Charles Storey, Dancing Deer Bakery's VP of Direct-to-Consumer Marketing Scott Miller, and Philips Healthcare VP of Global Communications Frank McGillin.  Collectively they represented a useful cross-section of the B2C-B2B spectrum.

Myles Bristowe, the chapter president and an old acquaintance from ArsDigita days, moderated.  Myles' first question was "How has the economy affected your marketing plans for the coming year?"  The consensus answer I heard, channeling Stephen Stills, was to "Love The One You're With."  Charlie talked about increasing purchasing frequency among folks who know Harpoon and are brew-istas.  Scott described plans to de-seasonalize their business by positioning DD products as gifts for occasions beyond end-of-year holidays, and to invest in database technology to do a better job of personalization ("It's worse to do personalization poorly than not at all.")  And Frank talked about how Philip's event-focused strategy would focus less on tallying leads and evaluating events as lead sources per se, and more on the quality of engagement of interactions (online and off), trusting that this will prove a better indication of the efficiency and effectiveness of their investment in pricey events.

In answer to where they are increasing and decreasing their spend, the panelists presented an interesting duality, combining a "going to the mattresses" reliance on channels they know and love (Harpoon and Philips both rely heavily on events) and a forward-looking focus on integrating the cross-channel experience.  Charlie talked about Harpoon's intent to "cut in new channels and go back to the core [events]", describing their marketing strategy as "experiential" (focused on music festivals, road races, bike races, and the like) with support for "enthusiast activities with a social component" where they could use social media to reinforce the investment in the event itself.  Further, Charlie talked about the importance of documenting these experiences -- storytelling -- to reinforce and extend the impact of the events themselves on brand affinity.  Frank talked about how Philips is working to ensure that they are trying to "get better synergy across channels, by understanding customer segments and their purchasing experiences."  Scott described how DD's D2C average order value and conversion rates are much higher in areas where thay have a presence in grocery stores, and how they are re-focusing on "harvesting cross-channel affinity" by targeting their outbound D2C investments into geographies where they have a wholesale presence / store distribution. 

More generally, Scott talked about how the ebbs and flows of supply and demand are also affecting where they put their marginal dollars.  He described how a couple of years ago, surging postage and printing costs had pushed them away from physical catalogs and toward email but also SEM in particular.  However, more recently, popular keywords have been bid up to the point where that channel has become less attractive on the margin.  Meanwhile, affiliates have matured to the point where they can be relied on more, and, related, Scott's seeing major ROI in their SEO investments -- every dollar invested there has
produced $95 in revenue.  Throughout, direct marketing generally and email specifically "still work".  As for social media, his experience so far has been that it's useful for supporting the brand, but it's not yet accountable enough to be looked to as a monetization mainstay.

Speaking of social media, Charlie and Frank echoed Scott's sentiment.  Charlie noted that Harpoon still relies primarily on a high-five figure house list for its email newsletter as the get-the-word-out cake, and its so-far-more-organic social media efforts as frosting.  Frank talked about how for Philips, their main investment so far in social media has been more focused on listening in established communities such as Sermo and Facebook's "Innovations In Health" group, rather than "trying to build the world's biggest online community of MRI enthusiasts."  In particular, he noted there's a genuineness of the feedback you get in these settings that the artificiality of focus groups and surveys tends to suppress.  And Scott talked about how DD is trying to "recycle" the listening it does through its call center's conversations with customers, where "everyone's got a cookie story -- 'I just want you to know that Grandma had one of your brownies just before she passed!'" to do online justice to this organic brand advocacy they're hearing everyday.

Another question concerned how measurable they find / are trying to make their marketing, and what that's meant to their business.  Scott described DD as very analytically driven, telling a story about how insights have transformed their business.  he described how they had observed that 92% of their orders were "ship-to-someone-other-than-buyer".  This helped them conclude that they weren't really a bakery, as the founders perceived, but a gift retailer.  So, they stopped taking pictures of the cakes, and started taking pictures of the packages for their catalogs! (Very memorable "data is the new creative" example, IMHO.)

The panelists were asked about the degree to which they are pursuing finer-grained measurement, and how much they are using testing.  Interestingly, they suggested that there were both cost and utility limits to what they could do.  Charlie noted that being two layers away from the customer made measurement beyond profit per case-equivalent a very expensive proposition for them. As for testing, Scott noted that with most of their sales concentrated in a very tight seasonal window, testing carried high risks that didn't rule it out, but made them more conservative about what to try.  Nonetheless, he noted that given the ease of fielding some tests they are now able to adjust what they do within this tight holiday window if they start very early -- right after Thanksgiving this year, for example.

I asked what campaigns by others they found memorable and gave them ideas for their own marketing.  All three panelists mentioned good ones. I liked Frank's best: he described how, before and during a major snowstorm, Volvo Boston had sent email weather advisories and reminders about topping up on windshield fluid.  Great example of indirect brand building through a useful service.

Afterward I chatted briefly with Paul Regensburg, President of Rain Castle Communications, which recently helped Unica re-launch its brand.  Paul noted a slightly less breathless tenor about "new channels" among the panelists than you'd expect if all you read were the trades.  We agreed that it's always different to hear directly from practitioners, especially when you ask them about everything they're grappling with rather than any particular channel effort or campaign.  The calibration was really useful.

(Finally, congratulations to Myles and his volunteer colleagues for the great work they've done building the Boston chapter to be the fourth largest of 78 in the country.  Last night's event drew well over 100 people, not bad for a frosty January weeknight.  Myles noted that 30% of ticket sales for the event
had come from their viral "Tweets For Seats" Program.)

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