Hi Katherine
You ask some good questions. As you know from your Leo Burnett days there are no hard and fast guidelines for 'what works'. Individual CMOs have their own marketing mix preferences based on their experience and marketing metrics. Response rates such as conversion, quotes and sales are important, but so are a whole host of other measures. Although CMOs are often swamped with response data they often have a relatively poor understanding of customers, competitors and (complex adaptive) market dynamics. The net result is they go with the marketing mix they know works and test new mix components to learn what works, how well they work and how to operate them.
As marketers have moved from branded marketing in the 1950, to direct marketing in the 80s, to digital marketing in the 00s and now to contextual marketing, the volume and quality of data has significantly increased. Whereas branded marketers typically only had whole market data, contextual marketers increasingly have individual, real-time, location-based, behavioural data. Marketers are now more able to imply customer intent than at any time in the past and to act on it. Whereas branded marketers tried to create markets for new products, contextual marketers try to influence customers through highly personalised micro-marketing interactions (see Dan Saffer's new UX design book on 'Microinteractions' http://microinteractions.com to see where this is going) whilst they are in the middle of doing something.
The CMOs I have talked to about MeCommerce all share the same concerns. They recognise that customers telling them what they want is better than trying to work out what they want. That is the fundamental difference between sales and marketing. But they are not willing to trade-off any of their market-making, implied-content driven, marketing activities for speculative market-responding, directed-intent, MeCommerce activities. At least not at the moment and not for anything other than occasional, high-involvement categories. MeCommerce(-lite) may be viable for energy, insurance and credit-card categories, but largely because intermediaries have facilitated the complicated purchasing process. But it is facilitation not true MeCommerce. It might even work for complicated, event-driven categories such as foreign family holidays, where travel portals can now be used to facilitate some of the end-to-end travel experience. But I don't see it working for the majority of continuous, low-involvment categories that make up the majority of average household spending (http://www.ons.gov.uk/ons/rel/family-spending/family-spending/2013-edition/sum-headlines.html). An RFP for your weekly groceries? I don't think so.
As the line in the Dirty Harry film goes, "a man's gotta know his limitations!". The same applies for MeCommerce.
Best regards from Edinburgh, Graham
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Dr. Graham Hill
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Senior Associate
Nyras Capital
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Gesendet: Mittwoch, 21. Mai 2014 um 21:54 Uhr
Von: "Katherine Kern" <
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An: "Graham Reginald Hill" <
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Cc: "ProjectVRM list" <
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Betreff: [projectvrm] What is speculative marketing budget "worthy"?
"That generally involves a lot of the marketing they know works”
What is the benchmark for “works” – response rate of 1%, 5%, 10% ?
"plus a small amount of speculative marketing development.”
How much is a small amount?
"As the speculative developments show their worth,”
What does it take to “show their worth?” - payout the investment, return profits after marketing investment?
"CMOs invest in them further until they become part of the marketing they know works. This is what happened to direct marketing in the 90s, content marketing in the 00s and is happening to contextual marketing now. Each new type of marketing is based on order of magnitude increases in the amount of information collected about customers and increased accuracy of implied customer intention.”
What about increasing accuracy by aiming for better that “implied customer intention”?
I’d bet, if we had a benchmark to beat, a budget amount, a financial goal, we could come up with an event specific VRM tactic for a specific market that delivers better than “implied customer intent” and proves to be worthy of additional investment and broader applications.
K-