Can retailers hope to compete this holiday season with standard digital marketing?


The good news for digital marketing this holiday season? Digital ad spend has surpassed TV ad spend, topping $72 billion in 2016. The bad news? For the most part, digital advertising produces abysmal results. Industry-wide, click-through rates are below one percent, and response rates for display ads are just 0.09 percent. Worse, digital ads have become so annoying and intrusive that more than 25 percent of consumers are actively blocking them.
So does ramping up digital ad spend even further this holiday season for traditional email and display advertising campaigns make sense, or are retailers simply throwing good money after bad? Like so many marketing questions, the answer is: That depends.
If your plan is to simply book additional space for traditional display ads, then there’s nothing in the data to suggest you’re not spending frivolously.
But despite its shortcomings, digital media gives marketers access to a lot of very useful data. If you plan to use your “big data” trove to inform an integrated, cross-channel approach that connects with your customers in a meaningful way, then there’s reason to believe your brand can be competitive. This approach can run the gamut from programmatic direct mail to “pay it forward” social media campaigns like J. C. Penney’s “Jingle More Bells.”
One recent example of successful holiday digital marketing was outdoor retailer REI’s #OptOutside campaign. In each of the last two years, REI competed with Black Friday’s retail madness by not completing. Instead, REI closed its doors that day and encouraged its customers (and its employees) to enjoy the outdoors rather than stress out at a strip mall. As Ad Age noted, “REI’s much-lauded decision is an example of what happens when a brand has a truly empathetic understanding of its customers and uses that understanding to create experiences that customers value.”
Obviously, not every retailer can succeed by closing on Black Friday. But the point is not to copy REI’s campaign — it’s to adopt their thought process.
Now, to repeat the question posed in our headline: Can retailers hope to compete this holiday season with standard digital marketing?
No. But the operative word there is standard. Successful digital marketing, like every other kind of successful marketing, requires innovative ideas and a cross-pollination of approaches, anchored in a bedrock of respect for customers.
- Bringing Programmatic Home – PebblePost
- J.C. Penney Wants to Show Customers It’s ‘Heart and Wallet Responsible’ — Advertising Age
- Why REI’s #OptOutside Is a Model for the Future of Marketing — Advertising Age
DISCUSSION QUESTIONS: How should retail marketers gear their thinking to compete effectively with their digital efforts this holiday season? What should be on their “do” and “don’t do” lists?
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18 Comments on "Can retailers hope to compete this holiday season with standard digital marketing?"
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President, Max Goldberg & Associates
To be successful in digital marketing, retailers need to take both macro and micro approaches. Macro: Create a compelling brand story that is more than simply shopping and buying. It could be a cause or an experience (think REI). Micro: Use data to target specifically relevant messages to specific consumers. Generic ads won’t cut it with ad-weary consumers.
Founder and CEO, CrunchGrowth Revenue Acceleration Agency
Managing Director, StoreStream Metrics, LLC
Ms. Giampetro makes a great point. There is no black-and-white for success. Digital marketing success is to be found in the infinite shades of gray. Given the amazing statistics cited regarding digital ad spends and their conversion one can certainly recommend NOT simply spending more money through DoubleClick. Brands and retailers need to find the appropriate mix that remains honest to their brand and, most importantly, their customers and shoppers. Based upon numerous statistics it would seem to make sense to focus on your existing customers as opposed to randomly scattering a message into the digital ether.
President, Global Collaborations, Inc.
Retailers need to understand their customers, where they view ads and what motivates them to shop when and where. Then they need to try to influence consumers to come to their site based upon what is important to the customers. Not only is the location of advertising (online vs. traditional advertising) important, but so is the appeal of the ad and the style of presentation. That is why REI’s campaign was so effective.
Chief Executive Officer, The TSi Company
I’m old-fashioned on this one, but to me it’s not as much of “where do I spend my ad money” but more of “what am I going to say with creativity.”
There are so many ads on TV and digital media and most of those ads are not effective. There’s too much of the same “me-me” approach with nothing unique about how to attract the customer to watch and hopefully pay attention. Great campaigns are the ones that stand out, get people talking about them and most importantly responding. Once you create the right campaign, then you can decide on how to deliver it through broadcast media — both TV and radio and absolutely digital. Also make sure that when the customer logs on to the company website there is representation there as well along with representation in-store. Campaigns need to be everywhere in every medium and every place a shopper will see them.
Director, Solutions Marketing with Alteryx
Gearing your thought process around the consumer’s shopping journey and how both acquisition and engagement programs support these is a good place to begin. Then consider the current source of first-party data and insights about your customers. Progressive marketers in many industries are breaking down the barriers between paid media and advertising, and direct consumer engagement through email, mobile and social channels. Developing creative marketing approaches like those cited here and enabling them based on a single source of consumer insights to power owned, earned and paid media programs is a best practice.
Principal Writer & Content Strategist, Jasmine Glasheen & Associates
Young customers have an internal filter that screens out pop-ups and banner ads. Mind you, standard digital marketing doesn’t even register. Instead, marketers should focus on UGC campaigns, a seamless mobile site and work with management to make sure their in-store staff is fully trained and friendly. Creating a positive brand experience will go a lot further than interrupting customers’ daily browsing with pop-up ads.
Strategy Architect – Digital Place-based Media
Do tell your story, sell your story and make customers part of that story. Do define “value” by presenting features and benefits. Do use one media device to drive engagement among others. Do acknowledge and empower associates as part of the marketing plan. Do target audiences and deploy messages to make your profile relevant to their lifestyle. Do focus on traffic and conversion.
Don’t think that your stale, static messaging is going to move any needle. Don’t underestimate the importance consumers place on in-store experience. Don’t waste your prospects’ or customers’ time on anything they deem to be of little benefit for the time and attention they gave you.
Principal, Cassarco Strategy & Analytic Consultants
We shouldn’t paint digital marketing with too broad a brush, and we need to be careful that we don’t oversimplify our metrics. Digital marketing is about MUCH more than email and display ads — search results (on Google, but more importantly on Amazon) are far more important for brands than display ads, and tend to see strong returns. And click-through rate is a terrible measure of success for a display ad: Work that we did at Nielsen five-or-so years ago, where we looked at the impact of display advertising, revealed a negative correlation between campaign impact and click-through rate.
I was in Tokyo a month ago where I encountered an apparel retailer with columns of digital signage outside their store. The digital signage slideshow was actually Instagram photos with product name, price and a QR to scan at the lower-third whitespace to follow their Instagram.
While this sounds simplistic, this retailer was able to generate subscribers and obtain measurable two-way social media and leverage digital assets through one channel using a simple slideshow and flat panel screens. I do not know if there is a standard but this is just one example of how retailers can be creative with digital marketing to get the best bang for the buck this holiday season.
Chief Amazement Officer, Shepard Presentations, LLC
If there is a way to personalize a digital marketing ad based on the customer’s last purchases, frequency of purchases, etc., the success rate will be higher. That’s the beauty of digital. You can play, tweak, experiment, etc. And you can create several different “personas” of customers and market appropriately to them. Content is another powerful way to compete. It’s not ad content. It’s useful, interesting and relevant content.
Global Retail & CPG Sales Strategist, IBM
President EndGame Marketing Solutions
Retailers and brands have handcuffed themselves by either not having enough granular data about individual customers or are wallowing in so much Big Data that they cannot see their customers in the marketplace forest. Either or both of these conditions lead to poorly-conceived campaigns that are not personal or relevant. And then management wonders why the results are so poor. John Wannamaker is still correct in his assessment of not only advertising but, today, marketing as a whole. We have only ourselves in marketing to blame because we let the techies set our agendas.
Owner, Tony O's Supermarket and Catering
sales management consultant
President, Protonik
Founder and CEO, project44
Customers in today’s market have high expectations in terms of delivery times. Marketing should express a quick, accurate delivery window, especially in the final weeks before the holidays. That being said, this tactic is only effective if retailers can put their money where their mouths are, and deliver these items on time. That means effect supply chain management. Customer experience is crucial to return customers, and the holiday season is a great time to absorb new business into your loop.
Retail Transformation Thought Leader, Advisor, & Strategist
The key is relevance — both to your customers and to your corporate brand identity. Taking the REI #OptOutside campaign as an example, this works because it speaks to the core nature of their customers — being outdoors. It also is clearly connected to REI’s corporate culture of promoting an outdoor lifestyle and sense of adventure that doesn’t always follow the trends of everyday life. Not every brand can do this as effectively as REI, but that’s the point. That’s why it stands out to all of us. Other brands need to be equally creative but ensure they’re being core to their culture and brand identity in the process. Otherwise the campaign loses relevance to potential customers and then is simply ignored.