Chapter Seven Marketing Services

1. Chapter SevenMarketing Services Making Your Mark in MarCom.

2. Marketing Services • Most Marketing Services relate to Marketing Communications • “MarCom” for short • Umbrella term for all promotional activities other than advertising. • MarCom services are growing • New ways to market brands, and… • New sources of career opportunities

3. Marketing Services • Sales Promotion • Direct Marketing • Public Relations • Marketing Research • Event Marketing & Sponsorship • Promotional Products

4. Who Performs Marketing Services? • Client Marketing Department • Divisions of mega-agencies • Specialized Agencies • Division within “IMC” agency • Specialized Agencies or suppliers

5. Who Supervises Marketing Services? • At the Marketer, many options • Director of Marketing • Brand Management • Specialized Manager (Promotion, etc.) • MarCom Manager • At Specialized Agencies… • Account Managers, Account Executives • Project Managers

6. The World of Sales Promotion • How Big is the World of Sales Promotion? • Measured Volume (Fees, etc.) over $100 Billion! • It breaks out this way… Other 5.5% Trade Promotion 18.4% Advertising 52.7% Consumer Promotion 23.4%

7. The World of Sales Promotion • It’s actually larger… • The biggest categories • Trade discounts • Consumer Savings • …are not included! • Overall, the Volume is HUGE!!! • How Big is the World of Sales Promotion? • Measured Volume (Fees, etc.) over $100 Billion! • It breaks out this way… Other 5.5% Trade Promotion 18.4% Advertising 52.7% Consumer Promotion 23.4%

8. The World of Sales Promotion • Some Top Sales Promotion Agencies • DraftFCB (Interpublic) • EA, Taco Bell, Dow • Epsilon (Alliance Data Systems) • P&G, Ford, Pepsico • Leo Burnett/Arc Worldwide (Publicis) • McDonald’s, Comcast, CocaCola • Wunderman (WPP) • Johnson&Johsnon, Unilever, Ford • Digitas (Publicis) • American Express, Kraft, eBay

9. The World of Sales Promotion • Two Types of Sales Promotion • Trade Promotion (“Push” ) • Consumer Promotion (“Pull” ) • Both emphasize Short-Term Sales • Two Types of Incentives • Less = Savings • More = “Added Value” • More Product (Bonus Pack, BOGO*, etc.) • A Prize (Sweepstakes) • Something else (A Premium, or…)

10. Trade Promotions • Point-of-sale

11. Trade Promotions • Point-of-sale • Dealer contests • Merchandising the advertising • Deals and allowances • Co-op advertising • and then there’s…

12. Consumer Promotions • Coupons/ FSIs (Free Standing Inserts) • Contests, sweepstakes & games • Gift with Purchase • Premiums • Sampling/ Tastings • Rebates • Cents-off promotions

13. Consumer Promotions/ Entertainment Brands • 7-Eleven becomes a Kwik-E-Mart • Promoting “The Simpsons Movie” • 3 weeks prior to release date 7-11 transformed 12 of its convenience stores into Kwik-E-Mart’s, featured in the Simpson’s fictious town. • Sales doubled in the 12 Kwick-E-Mart stores.

14. The World of Direct Marketing • Simply put, direct marketing occurs when you buy direct from a marketer • By returning a coupon • By calling an 800# • By responding to a mail solicitation • By shopping on the Internet • By responding to a telemarketer who called you during dinner

15. The World of Direct Marketing • Sales from Direct Marketing Efforts • 8.7% of total US GDP • 1.3 million direct marketing employees $1.96 trillion! • add up to… Source: DMA Economic Impact Statement 2003

16. The World of Direct Marketing • Sales from Direct Marketing Efforts • 163 billion in expenditures. Estimated (by the DMA) to be52.1% of all advertising expenditures. • Whatever the exact amount… It’s BIG! Source: DMA Economic Impact Statement 2008

17. The World of Direct Marketing • Types of Direct Marketing Companies • Direct Marketers • Examples: American Express, Land’s End • Direct Marketing Agencies • Example: DraftFCB (Interpublic) • Support Services • Examples: Call Centers, Catalog Printers, List Management Services, the Post Office

18. The World of Direct Marketing • CRM = Customer Relationship Marketing • LTV = Lifetime Value • Direct Marketers work to maximize the value of the relationship with their customers, to get the most LTV (Lifetime Value) • Doing all those things is “CRM” • Increased valuation of current customers is a driving force in marketing today

19. Some Key Reasons for Direct Marketing’s Growth • Changing consumer lifestyles • Shopping opportunity for “time-poor” consumers • More consumer credit • Now it’s easy to buy from a direct marketer • Better “Direct Marketing technology” • More and better lists of potential customers • Better technology for “massaging the database” • Big Changes in Media • More cost-efficient media opportunities • The Internet makes direct response easy

20. Consumer Complaints About Direct Marketing Some Current Issues: • Annoyance • List removal option of DMA • Privacy issues • Who owns your information? • Data technology raises new concerns • Unscrupulous practices • Example: Negative option • Major Result – The “Do Not Call” List.

21. The Key to Success inDirect Marketing • List Quality is Key • Internal lists • Compiled by organization itself • External lists • Purchased from • List brokers • List compilers

22. Improving Performance • Improve the List • Improve the Offer/Incentive • Improve the Messaging • “List Enhancement” • Add more information about households on current list • Cleaning the list: the “merge-purge” function when combining different lists • Continual testing against previous success • Improve results and knowledge

23. The World of Public Relations • Marketing PR (MPR) • Supports marketing efforts • Corporate PR (CPR) • Deals with broader range of issues, from investor relations to employee communications

24. Marketing PR: Product Publicity • The Basics: • The Objective - obtaining free time or space in the media that represents favorable mention

25. Marketing PR: Product Publicity • The Basics: • The Objective - obtaining free time or space in the media that represents favorable mention • The Strategy - product publicity, like all PR, must be newsworthy • The Benefit - the value of “implied” or “third-party” endorsement by the media

26. Product Publicity Activities • Press Releases (immediate news) • Technical and Case History stories • Feature stories • Press Tours • Press to Company • Company to Press

27. Corporate PR Activities(Non-Marketing Related PR) • Investor Relations • Employee Communications • Government Relations (lobbying) • Crisis Management (oil spills, etc.) • Community Relations • Advocacy Advertising (corporate point of view on public issues)

28. PR Agency Ownership • PR Agencies now part of mega-agency groups • Ad Organizations by PR Revenue (2012) • WPP $1.49 billion • Omnicom $1.29 billion • Interpublic $1.21 billion • Publicis $0.53 billion • Havas $0.22 billion • Mergers Continue • Y&R now included in WPP totals • Omnicom and Publicis combine for top spot at $1.82 billion.

29. PR Agency Ownership • PR Agencies now part of mega-agency groups • Top Ten PR Agencies in 2012 2012 Net Fees • Edelman $655,900,289 • APCO Worldwide $121,800,000 • Waggener Edstrom Worldwide $118,426,000 • W2O Group $62,005,000 • Ruder Finn $56,148,000 • Text 100 Global PR $50,930,028 • MWW Group $42,875,000 • ICR $36,554,283 • DKC $32,896,560 • Finn Partners $32,293,000 • O’Dwyer’s Magazine, May 2013

30. Integration & Amplification! Look What Happens When It All Works Together!

31. Integration & Amplification!

32. The World of Marketing Research • The Business of Evaluation • FEEDBACK is critical nourishment formarketers • The Product is FACT, not opinion • Accurate information gathering is alsocritical. • Research reputations depend on the dependability of their data

33. The World of Marketing Research • Two types of entities provide this critical marketing information: • Internal Marketing Research Departments • At the marketer • At a full-service agency • Outside Marketing Research Firms • Ongoing services (Nielsen) • Projects (Surveys, focus groups, etc.)

34. Role of Internal Marketing Research Department • Analyze company sales data • Provide short-term and long-term sales and industry projections • Determine what primary research studies need to be carried out • Select and hire outside research firms to conduct surveys and provide other information

35. Types of Outside Marketing Research Firms • Limited-service Research Suppliers • These supply a specific type of data, often to all major marketers. • Syndicated Research (Nielsen TVratings) • Standardized Research (Gallup & Robinson ad recall pre-testing studies) • Full-service Research Suppliers • Focus Groups and Surveys • “Starting from scratch” research projects

36. The World of Event Marketing • How big is the World of Event Marketing? • Sports sponsorship $13.01 billion

37. The World of Event Marketing • How big is the World of Event Marketing? • Sports sponsorship $13.01 billion • Entertainment, tours, attractions $1.93 billion

38. The World of Event Marketing • How big is the World of Event Marketing? • Sports sponsorship $13.01 billion • Entertainment, tours, attractions $1.93 billion • Causes $1.70 billion • Festivals, fairs and annual events $825 million

39. The World of Event Marketing • How big is the World of Event Marketing? • Sports sponsorship $13.01 billion • Entertainment, tours, attractions $1.93 billion • Causes $1.70 billion • The Arts $891 million • Festivals, fairs and annual events $825 million • Associations and Memberships $550 million $18.9 billion! • That all adds up to... 2012 Sponsorship Spending, Sponsorship.com

40. The World of Event Marketing

41. The World of Event Marketing • Provides opportunities for: • Sampling of product • Widespread publicity in media • Unique connection w. target market • Cause marketing: • A special type of event marketing • Example: Children’s Miracle Network

42. The World of Promotional Products • A $16 billion business • Company Brand or Logo • Pens, hats, key rings, etc • “Business Gifts” • Higher priced items • Many uses: • Sales lead generation, trade shows, awareness building, employeemorale, etc.

43. Who isThe Person Who Helps Pull All of This Together?

44. The MarCom Manager • Relatively new position - result of “IMC.” • Title/function more common on West Coast • Evolving as marketers’ needs evolve • Need to understand all forms of “IMC” • “Jack-of-all-trades” promotional skills • Emphasis will vary by industry • High-tech = PR emphasis • Packaged goods = Sales promotion emphasis • Beverages = event and sports marketing emphasis

45. The Future of Marketing Services • Increased pressure for short-term revenue • Dynamic growth in most areas • Sales Promotion - up 20% • Direct Marketing - up 15% • Increased focus on existing customer “LTV” • More loyalty programs • More targeted programs • MoreCustomer Relationship Management

46. The Future of Marketing Services • New Technologies • Interactive and Information Technology • The Internet affects everybody! • Virtually everyone will practice some form of direct or highly targeted marketing with Internet response. • New Companies • Start-ups - need IMC from ground up • Start-ups will be internal as well as external • Example: Tadcast, a new startup company • Create product placement for online videos • Sponsors contest for best video about (Coca-Cola’s) new Honest Tea - get the most hits on YouTube. MediaPost News, Jan. 15, 2009

47. The Future of Marketing Services • Economics of Scale • Large Mega-agencies will have more resources • Large marketers will want more programs • Competition • All marketing services activity will increase • Competition between services will also increase • More Diversity • Not just in population, but marketing approach • Managing all of this will be a huge challenge!

48. In Conclusion… You Can Make Your Mark in MarCom.

49. Questions & Discussion • Sales Promotion • Direct Marketing • Public Relations • Marketing Research • Event Marketing • Promotional Products

50. The World of Media Buying Services • Independent companies that buy media time and space for advertisers • Originally, an alternative to the media department of a full-service ad agency • Evolved as media choices proliferated and media buying became more complicated • Now mega-agencies have “unbundled” their media departments to create competing media buying services