Retailers shift their ad spending from TV, radio and print ads to digital ads.
A panel of marketers weighs in on the future of online marketing efforts.
As marketing becomes more digital, retailers need to keep their eyes on social media and respect the cool factor of cutting-edge tactics, but they shouldn’t lose confidence in old-fashioned print circulars, either. And the value of a Facebook or Twitter fan base is far from settled.
Those were some of main points made this week in San Francisco during a rapid-fire discussion about the future of digital marketing that took place at the Innovate 2011 conference, sponsored by the National Retail Federation. In some cases, that future involves tactics that would seem to belong to the past.
While digital media can be extraordinarily targeted and efficient, and can boost sales among consumers with relatively high incomes, print ads can work for lower-earning shoppers and mundane items, said Lee Applbaum, executive vice president and chief marketing officer for RadioShack Corp., No. 240 in the Internet Retailer Top 500 Guide. He said that print circulars have driven traffic to the consumer electronic retailer’s stores in Harlem, for instance.
“When you drop a circular, traffic comes in. It absolutely drives the football,” he said. “I would like nothing more than to go to a complete digital circular, but are consumers ready for that?” He argued that some items are best sold via old-fashioned advertising. “Traditional media for traditional products,” he advised. “Batteries aren’t sexy.”
But even while acknowledging the power of print, retailers also need to realize that having a digital marketing presence matters for some consumers who might be responsive to the cool factor that accompanies cutting-edge online campaigns. “Cool should be an important part of everything we do,” said Brian Beitler, executive vice president and chief marketing officer of retail chain and web merchant David’s Bridal Inc., No. 321 in the Top 500 Guide. “We don’t want to chase things just because they are cool—cool isn’t enough—but it’s a great place to start.”
The cool factor has paid off for RadioShack, Applbaum said. As part of what he called a “holiday hero campaign,” Foursquare subscribers could use the mobile app to check into various places that a superhero might visit—for instance, a gym to get into superhero shape, a coffee shop to gain superhero energy. After checking into those places, consumers could visit RadioShack stores and check in to receive a 10% discount on purchases. Though the number of participants in last year’s program was small, he said, their average spend was 3.5 times higher than the average ticket for other consumers who took part in RadioShack Foursquare marketing efforts, and 5.5 times higher than the average ticket for all RadioShack store visitors.
Retailers also can build their brands via social media, said Anna Fieler, vice president of marketing for Tiny Prints Inc., No. 227 in the Top 500 Guide. She said the retailer of premium, personalized stationery has turned Facebook into a de facto dashboard, using the social network to track and respond to consumer complaints and comments, and to collect nearly real-time feedback about purchases and products. In fact, she added, the retailer’s Facebook friends made more purchases during the 2010 holiday season than did other customers, even though the retailer has only started toying around with Facebook ads, spending less on that channel than on most other forms of digital marketing. “Social media is where the soul of a brand can come alive,” she said.
Still, social media remains a challenging place for retailers. Not only is the return on investment unclear, but the panel at the conference could not even agree on the value of all those followers gained through Facebook and Twitter. The argument focused on quality versus quantity.
Applbaum was skeptical about retailers’ efforts to attract more fans on social networks. “It’s like the college exercise of collecting phone numbers at the bar,” he said, noting that those phone numbers didn’t always lead to future success, a point the sparked knowing laughter from the audience. He urged retailers to focus on what he called reciprocity—using social media to build a loyal base of fans by offering, say, discounts or the chance to share stories online that involve a retailer’s brands or products. “Give them meaningful reason to follow you and stay engaged,” he said.
Fieler did not dispute that a retailer’s social media fans need to be engaged and loyal. But she also struck a note for quantity, likening a Facebook fan base to a collection of e-mail addresses held by a retailer or marketer. “Quantity is important,” she said.
Kristen Celko, vice president of e-commerce for David's Bridal, will speak at Internet Retailer's Conference & Exhibition 2011 in a session entitled "Organizing your management for technology success."