Originally published on Multichannel Merchant on May 13, 2015
The old four P’s of marketing — price, product, promotion and place — worked as well as they could for retailers using traditional media to influence customer purchase behavior and drive shoppers to stores. However, the time and distance between when an ad, coupon or promotion was placed and when retailers could measure customer preference was large. And the effort? Complex and labor-intensive.
Digital media completely changed the retail game. Real-time ad placement that is cross format, enabled through data, and captures actions and feedback from consumers has ushered in a new era of urgency in advertising: the age of preference and relevancy. Because of the diversity of media and audience fragmentation across many different channels, the traditional shotgun approach of messaging everywhere has proven to be impractical and ineffective for retailers — and something your customers don’t want.
Today’s retail marketers have the opportunity to use data and technology to leverage all available digital formats (from beacons to social to mobile to video), focus messages and promotions in on the right potential customers, and measure results beyond delivery-focused metrics. Thus, I’m proposing four new Ps — preference, programmatic, pervasiveness and post-impression activity — to outline the new, necessary levers of control retailers need to ensure digital ad dollars are being used effectively and actually driving sales.
The first, and perhaps most important, of those Ps is preference. Modern marketing practices are founded on the idea that what the customer cares about matters — but how exactly can retailers capitalize on personalized advertising to enhance preference for their brand?
Let’s face it: consumers are generally skeptical and weary of marketing messages. They don’t want to be maneuvered into purchase decisions and will actively rebel against messages taking that appearance. And with overwhelming access to information and alternatives, rebellious consumers are bad for any business (think: price comparison apps).
The good news? Retailers that are connected to and resonate with their customers in form and function are healthy and grow. That connection is the essence of consumer preference — and it’s easier than ever for retailers to execute in today’s digital world.
The focus over the past five years in retail advertising has been on piping and infrastructure — developing the nuts and bolts needed to take advantage of all that digital has to offer. The focus over the next five years and beyond needs to be on using that piping and infrastructure well. Gaining top-of-mind awareness with consumers or bottom-of-the-funnel conversion results is not enough for a retailer to build ongoing, recurring business with customers.
To become preferred, retailers cannot simply push out messages to “advertising audiences”. They need to communicate a message that inserts itself into communities of interest. This idea is exactly what makes the era of personalized advertising so important.
Messages must be customized to educate, inform and entertain in a way that aligns the retailer with communities that support their business. For example, college students on a tight budget will react to certain promotions differently than a working mother looking to buy her husband a Father’s Day gift. Consumer communities coexist with the brand and have aligned their own values with the retailer’s value proposition. The way that alignment happens is when consumers interact with the brand’s products and services, they hear word of mouth messages from their community and they receive relevant advertising directly from the brand.
Relevant and personalized advertising is when the art and poetry of a message is delivered with technology to a consumer or community at the right time and place to influence their feeling about a retailer — keeping the store front and center in their purchase consideration cycle. This resonance is the essence of brand preference.
For today’s retailers, a focus on developing brand preference will ensure campaigns take full advantage of the capabilities of digital media — influencing measurement and optimizing ad spend. The traditional four Ps had an implicit assumption built in: the planning and beginning of the campaign were critical elements to measuring success. In digital, however, constant optimization during the campaign with the near-constant stream of data and customer feedback is what drives outcomes — and will ultimately bring retailers to the top.
