Can retailers hope to compete this holiday season with standard digital marketing?

Discussion
Jul 14, 2017
Celeste C. Giampetro

The good news for digital marketing this holiday season? Digital ad spend has surpassed TV ad spend, topping $72 billion in 2016. The bad news? For the most part, digital advertising produces abysmal results. Industry-wide, click-through rates are below one percent, and response rates for display ads are just 0.09 percent. Worse, digital ads have become so annoying and intrusive that more than 25 percent of consumers are actively blocking them.

So does ramping up digital ad spend even further this holiday season for traditional email and display advertising campaigns make sense, or are retailers simply throwing good money after bad? Like so many marketing questions, the answer is: That depends.

If your plan is to simply book additional space for traditional display ads, then there’s nothing in the data to suggest you’re not spending frivolously.

But despite its shortcomings, digital media gives marketers access to a lot of very useful data. If you plan to use your “big data” trove to inform an integrated, cross-channel approach that connects with your customers in a meaningful way, then there’s reason to believe your brand can be competitive. This approach can run the gamut from programmatic direct mail to “pay it forward” social media campaigns like J. C. Penney’s “Jingle More Bells.”

One recent example of successful holiday digital marketing was outdoor retailer REI’s #OptOutside campaign. In each of the last two years, REI competed with Black Friday’s retail madness by not completing. Instead, REI closed its doors that day and encouraged its customers (and its employees) to enjoy the outdoors rather than stress out at a strip mall. As Ad Age noted, “REI’s much-lauded decision is an example of what happens when a brand has a truly empathetic understanding of its customers and uses that understanding to create experiences that customers value.”

Obviously, not every retailer can succeed by closing on Black Friday. But the point is not to copy REI’s campaign — it’s to adopt their thought process.

Now, to repeat the question posed in our headline: Can retailers hope to compete this holiday season with standard digital marketing?

No. But the operative word there is standard. Successful digital marketing, like every other kind of successful marketing, requires innovative ideas and a cross-pollination of approaches, anchored in a bedrock of respect for customers.

DISCUSSION QUESTIONS: How should retail marketers gear their thinking to compete effectively with their digital efforts this holiday season? What should be on their “do” and “don’t do” lists?

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"There is no black-and-white for success. Digital marketing success is to be found in the infinite shades of gray."

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18 Comments on "Can retailers hope to compete this holiday season with standard digital marketing?"

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Max Goldberg
BrainTrust

To be successful in digital marketing, retailers need to take both macro and micro approaches. Macro: Create a compelling brand story that is more than simply shopping and buying. It could be a cause or an experience (think REI). Micro: Use data to target specifically relevant messages to specific consumers. Generic ads won’t cut it with ad-weary consumers.

Phil Masiello
BrainTrust

I don’t think a business should ever use “standard digital marketing” because I am not sure what the standard is. There is a better chance of getting hit by a truck than clicking on a banner ad. Pay per click has no efficiency and gets more costly at the holidays as competition heats up. Content is great, if it is done correctly. SEO is something you do every day. Video, social and TV are all great mediums — if you have something to say.

All retail brands need to think differently to succeed. They need to think about one thing. Online and offline retailers need to think about their customers. They need to think about what that customer persona is and how to best engage with that customer.

There is no one-size-fits-all model for marketing. If a brand truly understands their customer, then they have no problem building effective marketing and advertising programs.

Ineffective marketing highlights the brands who do not understand their customers. And those are the brands using “standard digital marketing” that is not working. Those are also the brands struggling to survive.

Adrian Weidmann
BrainTrust

Ms. Giampetro makes a great point. There is no black-and-white for success. Digital marketing success is to be found in the infinite shades of gray. Given the amazing statistics cited regarding digital ad spends and their conversion one can certainly recommend NOT simply spending more money through DoubleClick. Brands and retailers need to find the appropriate mix that remains honest to their brand and, most importantly, their customers and shoppers. Based upon numerous statistics it would seem to make sense to focus on your existing customers as opposed to randomly scattering a message into the digital ether.

Camille P. Schuster, PhD.
BrainTrust

Retailers need to understand their customers, where they view ads and what motivates them to shop when and where. Then they need to try to influence consumers to come to their site based upon what is important to the customers. Not only is the location of advertising (online vs. traditional advertising) important, but so is the appeal of the ad and the style of presentation. That is why REI’s campaign was so effective.

Art Suriano
BrainTrust

I’m old-fashioned on this one, but to me it’s not as much of “where do I spend my ad money” but more of “what am I going to say with creativity.”

There are so many ads on TV and digital media and most of those ads are not effective. There’s too much of the same “me-me” approach with nothing unique about how to attract the customer to watch and hopefully pay attention. Great campaigns are the ones that stand out, get people talking about them and most importantly responding. Once you create the right campaign, then you can decide on how to deliver it through broadcast media — both TV and radio and absolutely digital. Also make sure that when the customer logs on to the company website there is representation there as well along with representation in-store. Campaigns need to be everywhere in every medium and every place a shopper will see them.

Gib Bassett
BrainTrust

Gearing your thought process around the consumer’s shopping journey and how both acquisition and engagement programs support these is a good place to begin. Then consider the current source of first-party data and insights about your customers. Progressive marketers in many industries are breaking down the barriers between paid media and advertising, and direct consumer engagement through email, mobile and social channels. Developing creative marketing approaches like those cited here and enabling them based on a single source of consumer insights to power owned, earned and paid media programs is a best practice.

Jasmine Glasheen
Staff

Young customers have an internal filter that screens out pop-ups and banner ads. Mind you, standard digital marketing doesn’t even register. Instead, marketers should focus on UGC campaigns, a seamless mobile site and work with management to make sure their in-store staff is fully trained and friendly. Creating a positive brand experience will go a lot further than interrupting customers’ daily browsing with pop-up ads.

Lyle Bunn (Ph.D. Hon)
BrainTrust

Do tell your story, sell your story and make customers part of that story. Do define “value” by presenting features and benefits. Do use one media device to drive engagement among others. Do acknowledge and empower associates as part of the marketing plan. Do target audiences and deploy messages to make your profile relevant to their lifestyle. Do focus on traffic and conversion.

Don’t think that your stale, static messaging is going to move any needle. Don’t underestimate the importance consumers place on in-store experience. Don’t waste your prospects’ or customers’ time on anything they deem to be of little benefit for the time and attention they gave you.

Ken Cassar
BrainTrust

We shouldn’t paint digital marketing with too broad a brush, and we need to be careful that we don’t oversimplify our metrics. Digital marketing is about MUCH more than email and display ads — search results (on Google, but more importantly on Amazon) are far more important for brands than display ads, and tend to see strong returns. And click-through rate is a terrible measure of success for a display ad: Work that we did at Nielsen five-or-so years ago, where we looked at the impact of display advertising, revealed a negative correlation between campaign impact and click-through rate.

Ed Dunn
Guest
2 months 5 days ago

I was in Tokyo a month ago where I encountered an apparel retailer with columns of digital signage outside their store. The digital signage slideshow was actually Instagram photos with product name, price and a QR to scan at the lower-third whitespace to follow their Instagram.

While this sounds simplistic, this retailer was able to generate subscribers and obtain measurable two-way social media and leverage digital assets through one channel using a simple slideshow and flat panel screens. I do not know if there is a standard but this is just one example of how retailers can be creative with digital marketing to get the best bang for the buck this holiday season.

Shep Hyken
BrainTrust

If there is a way to personalize a digital marketing ad based on the customer’s last purchases, frequency of purchases, etc., the success rate will be higher. That’s the beauty of digital. You can play, tweak, experiment, etc. And you can create several different “personas” of customers and market appropriately to them. Content is another powerful way to compete. It’s not ad content. It’s useful, interesting and relevant content.

Ralph Jacobson
BrainTrust

Part of the problem with digital marketing is the difficulty of hitting a moving target. Customer behaviors and preferences change so rapidly that it’s hard to keep up. That’s why personalized content, like live video, is becoming so important. Retailers should not rely on technologies that do not help create a differentiated shopping experience. And if the technologies do not provide useful, leading-edge metrics required for today’s marketplace, then a search should be done for enhanced campaign automation capabilities. For example, when you can actually recognize your customers by name, it’s much easier to keep them engaged and drive them to respond. But knowing their name is one thing. You also want to know who they are, what they like and what interests them. You need the data, insights and analytics that the latest technology can deliver. This is much easier said than done. I am seeing some innovative retailers leveraging some new tools that are dramatically changing their digital marketing strategies because of the findings these tools are providing. Old stuff just doesn’t do what it needs to do today in order to stay competitive. It takes money to make money!

Bart Foreman
Guest

Retailers and brands have handcuffed themselves by either not having enough granular data about individual customers or are wallowing in so much Big Data that they cannot see their customers in the marketplace forest. Either or both of these conditions lead to poorly-conceived campaigns that are not personal or relevant. And then management wonders why the results are so poor. John Wannamaker is still correct in his assessment of not only advertising but, today, marketing as a whole. We have only ourselves in marketing to blame because we let the techies set our agendas.

Tony Orlando
BrainTrust

Digital marketing has a wide spectrum. I use our Facebook page to advertise, and boost certain items for a few dollars, and it helps. The other advantage is I already have a captive audience, and those consumers will open up a Facebook post, as they love the in and out deals we bring in.

Institutional copy digital advertising I do not open, but if I like a certain retailer, and receive an e-mail blast, or Facebook post, I will look at it, since I am a fan of their products. Does this sound too simple? Maybe, but it can be an elaborate video, or a single red hot sale item, that brings them in, and we always try to keep it fresh. I am done with print advertising at the end of the year, and am seeking out digital companies, who can put together our 8 page tab strictly online, which will save us a huge amount of money. So far some of the proposals are well less than 1/2 of what I am paying, and we are not done searching out other avenues. Have a great weekend everyone.

gordon arnold
Guest
The larger part of digital advertising failure is marketing’s learned need for forced consumer media participation. The radio, television and printed media advertising spots were easily flooded with information used to stimulate interest and drive sales. Consumers no longer have to put up with advertising and more often than not choose any means available to bypass the messages. Companies of all sizes have sunk billions of dollars a month this century to create and support social media advertising with dismal failure as the only global result. Email is not doing much better and it too is on a declining effectiveness pattern. Add to this the increased potency and use of software filters, pop up removers and call block and the task is more daunting. So where do the opportunities lie for retail sales using digital advertising on any size budget? The answer might lie in spending more time to discover, on a personal level, who you need to talk to and how to prospect for them in a digital world. Even the largest retailers prefer to blame products over presentation for poor market results from inventory items and/or vendors. While this saves time, it also spends unrecoverable dollars instead of… Read more »
Doug Garnett
BrainTrust

Retailers will succeed with a mix of ad mediums. That said, one of the most destructive ideas that has come up in the past few years is “digital first.” To declare media approach prior to knowing what challenges you must overcome is incredibly short sighted.

This is made worse in that digital’s big payout is tactical. There are great digital options for driving very, very near term activity. However, digital lacks good options for achieving critical strategic goals — like long term brand health, shifting consumer attitudes, etc.

My primary concern about digital’s growth is a result of its tactical nature: Digital first focus has led retailers to abandon strategic advantage and get lost in the nuts and bolts. (Digital is incredibly nuts and bolts — usually consuming time and energy within a retailer at a far higher rate than it returns benefit.)

Smart retailers will balance their spending. Lead with TV — TV should be the engine of your marketing for the holiday. Then put together smart campaigns in digital formats (as well as radio, newspaper, and outdoor) that leverage the strength TV has built for you.

But above all, avoid the theory of digital first.

Jett McCandless
Guest
Jett McCandless
2 months 5 days ago

Customers in today’s market have high expectations in terms of delivery times. Marketing should express a quick, accurate delivery window, especially in the final weeks before the holidays. That being said, this tactic is only effective if retailers can put their money where their mouths are, and deliver these items on time. That means effect supply chain management. Customer experience is crucial to return customers, and the holiday season is a great time to absorb new business into your loop.

Ricardo Belmar
BrainTrust

The key is relevance — both to your customers and to your corporate brand identity. Taking the REI #OptOutside campaign as an example, this works because it speaks to the core nature of their customers — being outdoors. It also is clearly connected to REI’s corporate culture of promoting an outdoor lifestyle and sense of adventure that doesn’t always follow the trends of everyday life. Not every brand can do this as effectively as REI, but that’s the point. That’s why it stands out to all of us. Other brands need to be equally creative but ensure they’re being core to their culture and brand identity in the process. Otherwise the campaign loses relevance to potential customers and then is simply ignored.

wpDiscuz
Braintrust
"There is no black-and-white for success. Digital marketing success is to be found in the infinite shades of gray."

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