According to the Chartered Institute of Marketing, Marketing is the management process for identifying, anticipating and satisfying customer requirements profitably. Historically, the consideration for marketing includes 4Ps (Product, Price, Place, Promotion), and the instituted added another 3, which are People, Process, and Physical evidence.
With the advance of internet and telecommunication, marketing activities are getting more easily measurable. The term “Performance Marketing” refers to marketing and advertising programs where advertisers & marketing companies are paid when a specific action is completed; such as a sales, lead, or click. An example of this is Google Ads, when Company A advertises with Google, Google shows Company A’s advertisement at Company B’s website. If this is a pay per click deal, when a user clicks on the advertisement, Company B and Google get paid by Company A. This way, “Performance Marketing” allows real time measurement of ROI, and advertisers only pay for successful actions by users, be it clicks, views, or even sales.
Promotion in marketing now occurs in 2 channels, offline and online. Performance Marketing is typically applied to online marketing where tracking is easy and there are a lot of companies offering the service such as Google AdSense and Criteo.
Offline channel can be treated as performance marketing. Although it is not as easy as online channel where there are various tools in measuring performance, there are ways offline marketing activities can be tracked and measured. The first case study will look at how attaching QR codes to offline marketing channels such as magazines can help track the performance of the campaign.
Case study 1 – Skiset, the European leader of ski and snowboard rentals
- Encourage Web2Store: Use mobile to generate internet reservations and consequently create in-store traffic
- Increase brand awareness at international level: Run an international campaign across France, Germany and the UK.
- Track the marketing campaign: Attribute a ROI on offline channels where performance is usually difficult to analyze, and expand knowledge of client base.
- Back cover of the TGV magazine in France: 350,000 distributed copies
- Back cover of EasyJet magazine in January and February on flights arriving from London: 300,000 distributed copies.
- Inserts in several daily newspapers and week-end supplements in the UK (banners, half pages, etc.)
- Bus back advertising in Germany: 50 buses carrying with the ad.
Use QR Codes to track the marketing campaign and the Eulerian Technologies suite to:
- Generate and track QR-code scans and the discount associated
- Distinguish the different acquisition sources
- Gather data from different devices
- Enhance client base knowledge
- Campaign run – more than a million units
- Traffic generation – around 3,000 scanned QR-codes
- Total scanning rate – 0.3%
- Bounce rate – 20% lower
- Revisit rate – 15% higher
- Transformation rate – Increased twofold compared to Skiset’s average rate
The example above shown how online and offline interaction can support each other. Kotler coined the term as Marketing 4.0, where companies combine online and offline interaction to deliver value to customers.
Other than using QR Codes, discount codes, or multiple website links for promotions, there is also a rise in statistical analysis to attribute advertising campaigns and result. An example of this is Google Attribution 360.
The next case study will look at another approach of performance assessment, which is through assessing online activity data as TV advertisement is running.
Case study 2 – Nest Labs, Google’s subsidiary focusing on smart home
Measure how TV ads impact activity relating to Nest online.
Use Google Attribution 360 to:
- Assess minute by minute Google search queries and site visits
- Track search and site visit spikes each time a Nest TV ad airs
- Determine how much of the increased activity is attributable to the TV ad airing
- 2.5x lift in search volumes from the best performing cable channel categories
- 5x more responses through mix of 4 channels
- Continuity between media plan and offline has potential to improve awareness
- Nest found additional ROI opportunities when segmenting by TV programming genre
From the 2 case studies above, we can see the approach is different from each other. The Skiset case study is an example of how we can directly track marketing activity result by attaching a specific attribute to the activity (in this case, QR Codes). Another possibility is using different discount codes, site links, etcetera for each marketing campaign. For example, having a discount code A only for advertisement released in Kompas newspaper, and having discount code B only for advertisement released in Tempo magazine.
The weakness of this method is the possible misinterpretation. For example, discount code A is only for advertisement released in Kompas newspaper, but because it got shared by people and got viral, we can misinterpret the effect that advertising in Kompas might have in the first place. There is a possibility that the direct impact from the Kompas advertising itself is less than the actual result.
While from the 2nd case study with Nest Labs, the analysis is inferred from online activities that happened. Companies boasted their ability to accurately track and measure these offline channel activities such as Convertro, and ConversionLogic. The strength of this method is the capability to measure all campaigns without the effort of separating each of those activities with an attribute in the first place. The weakness is the possibility of mistaking correlation with causality. Events that are correlated with each other just mean that those events often happen together, but it doesn’t mean that one causes the other. Some of the ridiculous examples are compiled in the book Spurrious Correlation, one of the example shown below.
It can be confidently said that there is a correlation between the number of people who drowned by falling into a pool with films Nicolas Cage appeared in, but it doesn’t mean Nicolas Cage appearing in a film encourages people to fall into a pool and drown!
With that said, a combination of direct and inferred method would be prudent to analyze the performance of an offline channel marketing. Although both have strengths and weaknesses, utilizing both can offer different perspectives to the campaign and can provide a more complete view of the campaign result. It also needs to be noted that utilizing both at the same time can mean that the cost incurred is higher, so careful study before choosing a method is necessary.
As an additional note, a framework is useful to start with, Optilyz provides a good framework:
- Define goals
- Leverage what you already know
- Figure out your targeting
- Use conversion-driven design
- Consider statistical significance
- Track everything
- Iterate & optimize
The framework above can be used for both online and offline marketing, and aims to optimize marketing campaign performance.
- Chartered Institute of Marketing, 2012. https://www.cim.co.uk/media/4772/7ps.pdf
- Performance Marketing Association. https://thepma.org/our-work/the-performance-marketing-industry/
- Eulerian Technologies, 2015. https://www.eulerian.com/wp-content/uploads/2015/09/Skiset_Eulerian_EN.pdf
- Markeeters, 2017. http://marketeers.com/mengenal-marketing-4-0-dalam-konteks-ekonomi-digital/
- Google. http://services.google.com/fh/files/misc/infographic-nest-tv-attriution-case-study.pdf
- Convertro. https://www.convertro.com/television-attribution/
- ConversionLogic. http://www.conversionlogic.com/a-brief-overview-of-our-statistical-approach-to-tv-attribution/
- Tyler Vigen. http://www.tylervigen.com/spurious-correlations
- Optilyz https://www.optilyz.com/en/Resources/Blog/how-to-run-offline-performance-marketing