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Budget Constraints, Lack Of Focus Hinder Online/Offline Efforts

Digital ad spend may be a too concentrated on brand-building instead of imparting relevant shopping info, according to Altimeter and Cofactor.

online and offline and mobile tabMarketers may have a clear goal of attracting consumers into their stores with their digital ad campaigns, but too often, the message, strategy, and budgeting are too unfocused and diffuse to make much difference, a report from interactive ad company Cofactor and marketing consultancy Altimeter Group concludes.

In Altimeter’s 2015 Digital Strategist Survey, 60 percent of consumer packaged goods marketers and retail brands asserted that they created digital messages to drive in-store purchases. Nevertheless, just 37 percent of the 500 respondents could claim a defined strategy around crafting a “holistic” customer journey encompassing a seamless path between online and offline marketing and purchasing channels.

Online/Offline Hurdles

Among the specific impediments cited by CPG and retailers toward building a fuller digital marketing program designed to drive in-store purchases in the Alimeter survey was:

  • “Lack of budget” (56 percent and 57 percent for CPG and retail, respectively)
  • “Not a priority right now” (53 percent and 54 percent)
  • “Lack of the right roles” (46 percent and 34 percent)
  • “Don’t understand the benefits” (29 percent and 30 percent)

Interestingly, very few of the survey participants pointed to the usual marketing hurdles such as scaling issues, measurement, and understanding how to achieve a particular goal.

Altimeter's Rebecca Lieb
Altimeter’s Rebecca Lieb

Too Much Awareness, Too Little Relevance

Instead, it seemed that the main challenge facing these companies was that there was too much concentration on traditional brand awareness methods and not enough focus on targeting consumers with timely, relevant, basic information on stores’ locations, inventory availability, and product pricing.

Considering that online advertising has generally been more associated with performance-based direct response ads — as measured primarily by clickthrough rates —it’s still something of a surprise that brands are struggling to combine digital marketing messages for the benefit of offline traffic and store sales.

“Digital marketing investments can and must build more than brand awareness,” writes the report’s author, Rebecca Lieb, Altimeter’s industry analyst (Full disclosure: Lieb is a personal friend). “They should be local, personal and contextually aware to engage omnichannel consumers. ‘Local’ must be redefined to include more than mere location. It now encompasses context and connectivity: Who, What, and When, in addition to Where.”

By focusing only on awareness, brands end up not taking the entirety of the offline/online customer journey into account when planning advertising experiences, Lieb adds.

“Today’s digitally empowered shopper doesn’t just need a brand message, or generic item and price; they need/expect/demand more robust and relevant information to make decisions.”

Siloes Remain Intact

For years, agencies and brands have consistently complained about the problem of siloed channels and functions around display, mobile, and social as the chief obstacle in the way of devising a complete marketing campaign that reaches consumers seamlessly and in the mindset and form in which they’re most receptive to a company’s messages.

“Although ‘digital’ is an all-encompassing term for all digital channels, in practice, most companies take a siloed, channel-specific approach to customer engagement,” writes Lieb, who will be co-hosting a webinar on How Digital Dollars Will Drive In-Store Traffic with Cofactor CMO Jeff Fagel this on Tuesday, Nov. 3rd. “The social, web, mobile and e-commerce teams all operate on their own terms, with their own creative content, budgets and strategies. However, customers want to be recognized as unique individuals across all touchpoints with a brand, and the only way to fulfill that demand is to coordinate the efforts of all channel silos with a single, unified strategy.”

Cofactor's Jeff Fagel
Cofactor’s Jeff Fagel

One-To-One vs. One-To-Many

When it comes to offering actionable solutions that could minimize the challenges brands face when it comes to generating in-store sales from online marketing and ads, personalization and targeting can do a lot of heavy lifting. And using mobile as a channel hub not only cuts through the siloes, but as consumers’ most “personal” and ever-present device, the smartphone is the ultimate bridge and gateway between marketers and their desired consumers.

“Until a customer walked into a store and bought an item, it was difficult to know who they were, not just in terms of demographics, but in terms of their interests, habits and responsiveness to content,” says Lieb. “All of that can now be measured by reaching customers at all the digital locations they visit before coming to the store. This includes the company website, search results, mobile, social media and email. Instead of building the store and waiting for them to come, marketers can engage customers where they already are.”

Ending Brands Internal Conflicts

Assessing the current situation, the Altimeter report quotes Ron Blevins, VP of digital strategy at Novus Media, as conceding that companies don’t do a great job bridging online with offline experiences.

The principal cause, in Blevins’ view, is due to ossified reporting structures that narrow accountability and pit specific marketing areas against other ones within an organization. (Incidentally, we spoke with Salesforce and its client, Room & Board, a few months ago about the value of erasing distinctions between online and offline sales as a solution for channel conflict.)

Novus Media's Ron Blevins
Novus Media’s Ron Blevins

“For example, the e-commerce group has a primary focus on driving sales revenue in that specific channel, which is sometimes at odds with the customer journey, since a lot of customers shop by using the website to do research before they purchase in-store,” Blevins says, of a realization that is starting to dawn on marketers.

As Amazon continues to make strides across all retail categories, Lieb emphasizes the advantages of merchants “being local” as well as finding ways to reflect, understand, and anticipate consumers’ shopping habits and interests via digital means.

“It’s necessary for both the offline teams and online teams to be able to see the same customer information, in real-time,” she writes. “More important, digital messages must function beyond brand awareness. Messaging might include information about product availability, specific promotions that can only be availed in-store, or knowledge of local events/conditions that make the message more compelling, and relevant to each customer.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.