Richard van Hooijdonk

Accurate and careful planning leads to effective online campaigns

Smoothly spreading the advertising efforts of a particular marketing campaign can be very succesful for offline advertising. However, this isn't necessarily the case for online campaigns. Research agency MeMo2 and banner technology developer Hottraffic studied the effectiveness of marketing campaigns and found that online advertising requires a different approach.

 

In traditional advertising, campaign efforts are spread equally over the course of the campaign: advertising intensity remains at the same level. But when advertising online, MeMo2 and Hottraffic suggest the advertising intensity should not be so level throughout the campaign's lifespan. Instead, starting at a high intensity and letting that slow down over time appears much more effective. If need be, the campaign's intensity can be raised again at a later time.

 

Another important factor in campaign effectiveness is careful planning. MeMo2 found that when publishers are running behind schedule, advertisements are placed late, delaying and weakening the desired impact.

Spending a digital night at Habbo Hotel

If you're in online marketing (and even if you're not), chances are you're no stranger to Hyves, SecondLife or YouTube and what they mean to businesses. But perhaps you're not yet familiar with the new kid on the block, Habbo Hotel. Create an online account for the digital hotel, check in and get ready for the twist: to play along with the game, you have to purchase 'credits'.

 

Credits are bought by phone, after which they can be spent on all sorts of things that facilitate your stay at Habbo Hotel. Decorate your hotel room, enter digital activity rooms, dress up your character and make new friends at the hotel. Habbo's hyped little world has especially caught on among young visitors.

 

Early August 2007, Postbank launched a special room in the hotel: a Bizznizz Lounge. This comes as an addition to their already existing Bizznizz Trade Fair. Users compete with trade fair stalls to win furniture for their hotel rooms. The new Bizznizz Lounge is meant as a more private place, either for meetings or just general lounging – business or pleasure.

 

With the Bizznizz Lounge, Postbank is targeting the younger demographic. Habbo's young visitors are potential clients and through the hotel, Postbank is preparing these visitors for financial business. Kids can earn credits from Postbank by doing digital chores, such as watching over pets or starting their own little businesses. Postbank tries to actively support parents in teaching kids how to deal with money.

 

According to Postbank, the integrated rooms of Habbo are a big success. While SecondLife's all but forgotten, perhaps Habbo could prove a more interesting digital world.

Teens: Digital socializing valuable, but not preferable over offline socializing

Creating a profile on MySpace, Facebook or Hyves is popular, easy and free. Many companies consider it a very lucrative way to connect with consumers and increase brand awareness. But a recent study performed for Microsoft, MTV and Nickelodeon shows that teens prefer hanging out in person over socializing online. The study shows that companies should not rely on online contact alone to stimulate their relationship with customers.

As popular as social networks may be, they're not as fun as watching television, watching a DVD or listening to music. Although over 90% of all teens consider the internet and their online activities to be very valuable, most of them still prefer their offline social lives.

'Camel method' most effective for online advertising

Regulating the stream of content that flows from an advertising campaign is an important part of an advertiser's job. Managers need to have certain insight in the effects of a campaign and need to know when to intensify campaigns or when to let off a bit. Research agency MeMo2 and banner technology developer Hottraffic conducted an investigation to find out how to best spread online advertising campaigns.

 

The two concluded that the so-called 'Camel' method is the most effective method. Following the Camel method, a campaign peaks upon introduction and at the end of its lifespan. A less intensive period seperates the two peaks. Beside the Camel method, four others are described: the 'Burst and Drip', 'Drip and Burst', 'Equal' and 'Dromedary' methods of spreading campaign intensity.

 

The Burst and Drip method simply peaks upon introduction and then slows down towards the end. The Drip and Burst method is the exact opposite, building up intensity slowly before ending on a highpoint. The Equal method keeps campaign intensity level throughout the campaign's lifespan. Lastly, the Dromedary method starts calmly, then peaks, then settles down again before ending.

 

The Camel method, peaking twice with a less intensive period in between, proved the most effective one. MeMo2 and Hottraffic measured brand recognition and brand awareness as affected by contact frequency. The researchers used a new technique that measures individual pixels to register the effects of time, sequence and spreading of intensity in online advertising campaigns.

Buying clothes online more popular

More clothes are being sold online than computers. Market research company Forrester issued this surprising conclusion. It would seem that clothes are hard to sell online, but increasingly, websites like Timberland.com are convincing online shoppers to buy clothes on the internet. The secret to the e-tailers' success lies in their ability to remove the risks consumers may perceive. Detailed close-ups make it easier for consumers to choose from the webshop offerings. Also, return postage is usually free or at very low costs, meaning consumers can 'try before they buy', just like in brick-and-mortar stores.

Forecasts suggest that this year, 10% of all clothes will be bought online. Meanwhile, Dell's computers will also become available at Wal-Mart instead of just on Dell.com. Perhaps a move to compensate for decreasing online sales?

Creating a multichannel organisation

In order to reach more consumers, many businesses are rearranging their internal processes to better facilitate multichannel strategies. With multichannel strategies, different channels are being used simultaneously to communicate with consumers. The seperate channels are used parrallel to eachother.

The first step towards a successful multichannel business is to properly set up internal processes. It is important to recognize the distinction between a multichannel organisation and a multiple channel organisation. The latter uses multiple channels just like the former, but it doesn't create synergy between different channels. Without proper alignment, communication towards the consumer may vary and it becomes difficult for the company to organize its strategy.

 

To clearly seperate the two organisation styles, one could also refer to multichannel organisations as cross channel organisations. To set up such an organisation, it's important to keep these three steps in mind:

 

·          Analyze the status quo and identify strengths and weaknesses per channel. Use this information to decide how performance should be measured. Create a balanced score card for internal use.

·          Try to establish added value through the use of multiple channels. Have channels add content to eachother instead of repeating the same message across the board. For instance, if a client requests a post order catalogue, send an e-mail to confirm the request. Obviously, the trick is to communicate the right bits of content through the right channels.

·          Analyze consumer behavior and try to benefit from that information by adapting your use of channels.

Loyalty hard to find among multichannel buyers

According to research by Forrester, multichannel buyers spend 50% more than singlechannel buyers do. They also purchase more in the areas of electronics and computing. According to Gartner however, multichannel buyers are less loyal. Gartner poses two main reasons:

1. Multichannel buyers are influenced more by pricing, as internet offers them more tools to compare prices. 

2. Buyers have higher expectations from customer service. When service is found poor, multichannel buyers will switch companies more easily.

 

The battle for the multichannel buyer

Various retailers are working hard to gain multichannel buyers. A popular method to achieve this, is by letting shoppers purchase their products online and picking them up at local outlets. To make this possible, the channels within retail companies have to be tightly organised. Some companies which do this are Circuit City, Best Buy and Sears Roebuck and Co.

To let buyers know about this unique way of shopping, Sears launched a television campaign. Sears' success has since then been imitated by other retailers. Radio Shack started a similar shopping method late 2006, by launching a pilot in 1.300 outlets. Plans then emerged to increase the pilot to 3.400 Radio Shack outlets. According to Radio Shack vice president Jimmy Mansker, the multichannel shopping method has two goals:

·         When the product ordered online is picked up, the sales person can try to sell related accessories.

·         Offline stores are limited to 3.000 different products. Sales personnel can notify shoppers that even more products are available online.

 

To familiarize consumers with this way of shopping, several promotional activities were developed. Office Depot developed an e-mail campaign, sending customers coupons to be used in channels they weren't using a lot yet. This way, Office Depot stimulates customers to try out other, unknown channels as well. Another promotional activity would be to refer to an online shop when a product is sold out in the offline store.

 

Resistance to multichanneling

Many multichannel organisations do run into resistance. Store personnel for instance has great difficulties accepting the online channels. Famous Footware also suffered from this resistance and decided to launch a pilot in fifteen stores. A small kiosk was placed in these stores, which could be used to view up to a million shoes instead of just 15.000 like in regular stores. This sped up in-store acceptance of the multichannel strategy, which resulted in personnel more eagerly stimulating clients to use the online channel as well.

 

Summarizing, multichanneling appears a double edged sword. On the one hand, multichannel buyers buy more. However, stimulating multichannel buyers to shop online also means the risk they'll do so at the competitor's website. To control for this dilemma, it's important to gain insight in crosschannel buying behavior. Campaigns and promotional activities can be used to retain clients.

 

Lastly, five tips on keeping multichannel buyers:

·         Aspire to create consistant customer experiences across channels

·         Make sure clients can buy through one channel and return products through another if they're not satisfied

·         Integrate and manage channels as one business unit, so as to prevent crosschannel conflicts

·         Familiarize clients with your different channels

·         Analyse crosschannel customer behavior

Centralized management: the key to a successful multichannel strategy

Multichannel strategies are particularly successful when seperate channels are managed as part of one bigger operation. A good example is outdoor products retailer REI. REI uses both online and offline channels to reach consumers. When REI started selling products online, in-store sales rose. Consumers could order their products online and pick them up at a REI store in their area, without paying any additional fees for transport.

 

Often, sales goals don't match up between different departments within an organisation. Companies find it difficult to keep track of products shipped to clients or to seperate stores. In order to keep a functional overview of internal processes and financial data, REI's sales are credited to both online and offline channels. For REI, this approach was key to their multichannel success.

Web stores compromising to convince consumers

Some products just aren't easy to sell online. But web stores are quickly finding all sorts of ways to assist the client or to compromise in his favor, creating business where previously consumers preferred offline shopping. The risk of buying the wrong product is minimalized, making it safer to buy online. One particular kind of product made easier to buy online is clothing.

 

When ordering clothes online there's always the risk of it being the wrong size, wrong color or just not what you had in mind. Clothing companies are offering more and more helpful tools to stimulate online sales. Scan your foot at the store, and you'll never buy the wrong size shoe again. Zoom in on images to almost feel the fabric of a shirt, or ask the online coach what blouse mixes with which pants.

 

However, as many tools as companies can come up with online, when it comes to large amounts of money the average consumer still logs off and does his shopping offline.

Multichannel operations: mixing online and offline

It's no surprise to salesmen anymore: increasingly, consumers research products online before heading to an offline store to make a purchase. Research company 'Frank about Women' found out the average adult visits approximately four web pages to inform himself on a product, before deciding to buy. In their “Multichannel shopping transformation study”, 'the e-tailing group' poses that 37% of all consumers first do online research before buying in an offline environment.

 

So online information is used for offline purchasing. It also works the other way around. A post order catalogue (such as Wehkamp or Neckermann's catalogues) is the most important stimulator for consumers to visit the website online. In this case, a complete array of well-integrated channels is essential for the company's multichannel strategy to succeed. The consumer has come to expect any multichannel operation to at least contain excellent communication, helpful information, a wide range of options to choose from, products in stock and timely delivery. When running an integrated multichannel business, getting these things right is an absolute must.