Shopper Marketing’s RoI
By Manita Khuller, OgilvyAction, 2013
A new norm of protracted economic recession in the developed markets of the world combined with volatile consumer demand in developing markets has placed new emphasis on value in marketing investment. Every CEO is seeking greater RoI. Unilever’s CFO has announced a worldwide drive on RoI. Jean- Marc Huet said: “Our efforts are focused on a programme we call ‘Return on Marketing Investment’.” A frequent refrain, we will hear more of as markets and companies struggle back to growth. However, sound investment in Shopper Marketing can help here.
Measurement of marketing investments has always been a challenge. Traditionally, brand marketing has targeted the consumer masses, and proving direct causal relationships has been difficult, while Shopper Marketing, as the newest addition to the marketing family of investments, has some different challenges, as we explore here.
Investment in Shopper Marketing programmes is often seen as a ‘rob from Peter to pay Paul’ story. This prevents programmes from achieving a scale that can deliver real bottom-line impact. As budgets have typically been held in either a marketing or sales bucket, siphoning off large scale funds from either to invest in other newer types of activity programmes gets mixed support – a common casualty of a lack of integration in marketing.
A fear of uncharted waters also plays into this, leading to too little and too late in the funding of Shopper Marketing initiatives. Hence, though Shopper Marketing promises much in terms of driving demand at the point of purchase, it often fails to deliver because Measuring the effectiveness of Shopper Marketing requires collaboration between brand and retailer to exploit the mass of transactional and consumer behavioural data available, writes OgilvyAction’s Manita Khuller of small budgets. And any new movement meets organisational inertia to change existing behaviour until proven metrics are deployed. Which is a bit chicken and egg, you might say. A total brand investment model is something we should see more of in the future that targets the brands’ consumers and shoppers – who are often not the same people – through their path to purchase.
Historically, brands and retailers have had different and conflicting agendas. Unlike brand marketing activities, Shopper Marketing is most effective when done in collaboration with retailers. The best Shopper Marketing programmes that benefit from scale adoption and implementation have been engineered with retailer strategies and objectives in mind, not a purely brand focus. Retailers engage with programmes that drive shoppers to their stores, to spend more and more often than their competitors.
The metrics of that strategy are very quantifiable and transparent, sometimes disconnected, with brand-centric and often soft measures, such as brand awareness, equity enhancement or brand market share. Shopper Marketing presents an opportunity for a common meeting ground of the two camps and a common measurement. Really successful shopper programmes demonstrate increased brand sales and superior shopper satisfaction, together with increased sales and profits for the retailer. Hence, growth is driven by collaboration between brands and retailers towards common goals and not conflict.
Typically, mass marketing has meant broadcast media and large-scale brand marketing programmes measured by macro measures, such as awareness, reach, frequency and brand equity enhancement. The units of measurement are in millions reached, % of total adults aged 18-55 and so on. Measurement in Shopper Marketing is a major departure from the marketing measurement norm. There is a whole new framework on what, how and where we measure for effectiveness. The DNA of shopper marketing offers great scope for measurability. This is because it is ‘micro-marketing’ not mass, executed much closer to the point of purchase, and within retail. In fact, it is micro-marketing done on a large scale. Large scale is important if we are to significantly impact the bottom line and revenues. If something huge happens in one store on one day, it may be amazing, but will hardly impact the overall result for a brand.
Originally published in Admap (March 2013)