the hub magazine - mars advertising

When Advertising Age took its latest look at “What the Media Agency of the Future Will Look Like,” 11 industry leaders shared their visions. Not surprisingly, none mention the words shopper, retailer or path-to-purchase. Instead we got visions such as the following:

“It’s always been about the talent. And in the future, that will be even more critical as agencies will be staffed with a new breed of listeners — students of the human condition, data interpreters and idea nurturers.”

“The media agency of the future will understand the power of igniting communities by harnessing people’s collective purpose and voice with human experiences that drive brand results.”

This begs the question: Is it ethereal thinking like this that is best equipped to lead one’s business into the future, or is it the grasp of hard, everyday realities that will best service the needs of marketers whose challenge is to integrate brand with retailer objectives?

Our contention is that the shopper-marketing agency is the best equipped to be the lead agency in the marketing mix — for any client whose products are sold at retail. This is because shopper marketing has permanently changed the DNA of consumer product marketing with the result that the traditional approach to brand-building no longer suffices.

What changes? Consider the following:

Consumer as Shopper. One can no longer be effective in packaged-goods marketing by only looking at “the consumer.” Leading marketers have learned to view and market to their consumers through two lenses — as “consumer” and as “consumer as shopper.”

For many, this has meant breaking down the traditional silos and cross-pollinating marketing with salespeople and sales with marketing. To effect this, companies have upgraded their personnel and skill sets and populated their shopper-marketing centers of excellence with what they consider to be the “best of the best.”

As a result, as these investments continue to prove out, one can expect an accelerated emphasis. In other words, many companies are at last “catching on” to the strategic potential of marketing beyond the couch.

As these companies have made these changes — and have integrated the objectives and strategies of their key retailers into their brand planning processes — marketing has become inherently more sophisticated and demanding. To keep pace with this, the shopper-marketing agency has literally had to transform itself from delivering “big idea” one-offs to developing strategically-driven annual plans that encompass the interests and objectives of both brand and retailer.

To be successful at this, shopper-marketing agencies now have to do the same level of research as traditional advertising agencies — only more detailed. For example, shopper segmentations are not just for the brand, but must also meld brand with key retailer segments. In addition, to convert shoppers into buyers, the scope of the agency’s research must also encompass understanding shopper need-states, overcoming purchase barriers and identifying the activation triggers most suitable in each retailer.

Path-to-Purchase Approach. Initially, many companies made the mistake of positioning shopper marketing as an add-on — an in-store exercise to add another arrow to the quiver of sales tactics. However, as leading practitioners gained experience with shopper marketing, they learned quickly that to “win” at the point-of-sale, marketing cannot stop at the door of the store.

In fact, marketers discovered that there is a virtual path-to-purchase that every consumer travels and that this path is comprised of distinct phases where the marketer can positively influence the consumer-turned-shopper’s decision process.

What does this path look like? There are those who think it’s linear, those who think it’s puddles and those who think it’s clouds. No matter which visual one chooses, the art of the possible is to “touch” one’s target shopper at every stage of the path.

Given this objective, one of the most important things to understand about shopper marketing is that it is not just about promotion. That’s why best practitioners have adopted language that talks to shopper strategies and shopper initiatives — the latter defined as any activity or vehicle that one can use to influence shoppers effectively along the path. For example, this might mean being on a retailer’s website to influence the shopper’s list, developing an app which facilitates instant menu suggestions, downloading coupons or QR codes on a smart phone, or digital messaging at any point along the path.

While there are infinite variations of the methodologies, strategies, tactics and vehicles one can use to “touch” the target consumers on their journeys, the bottom line is that path-to-purchase marketing is now foundational and that all communications strategies and plans must understand and be able to excavate its nuances to achieve the client’s objectives.

Retailer as Gatekeeper. For most packaged-goods marketers, 10-15 retailers now control 70-80 percent of their volume. The first thing every shopper-marketing agency must understand is that to be successful, every consumer/shopper-based strategy and initiative must benefit these retailers and their shoppers as well as their clients.

Doing this requires in-depth knowledge of each retailer, their growth strategies, their shopper segments and their day-to-day “hot buttons.” From an agency standpoint, the lesson is simple: To stay current with these requirements means collaborative representation at each retailer’s headquarters, focused on the issues of the retailer.

To make this even more challenging, today’s retailers have rapidly stepped up their game to become formidable marketers in their own right — not just merchandisers and distribution depots. Retailers now have all the tools of their suppliers.

To make these tools work for them, they are not only hiring top-flight packaged-goods executives but also top-flight shopper-marketing agencies. It should come as no surprise, therefore, that Walgreens and 7-11 are both finalists for this year’s PMA Reggie awards, an honor normally reserved for brand marketers.

In fact, retailers have become so important to the overall marketing mix that in the latest Hub Shopper Marketing Update survey, the three most important functions expected by marketers of their shopper-marketing agencies are: 1) identifying in-store opportunities (purchase barriers, shopper needs, communications points, etc.); 2) shopper-insight development; and 3) account-specific strategy development.

Clearly, these marketers recognize that winning retailer support on the back-end has evolved to become as important as building consumer awareness and desire on the front-end.

Value Beyond Price. All surveys indicate that the impression left on the consumer by the prolonged recession that started in 2007 is indelible. The most recent, by Booz & Company, finds that for 83 percent of respondents, the most influential factor in today’s purchase decision is price.

However, as Booz is quick to note: “Manufacturers can utilize shopper marketing to manage the price pressures that are sure to continue … The true promise of shopper marketing is getting beyond price to activate brand equity along the full path-to-purchase.”

This challenges the shopper-marketing agency with two crucial roles. First, they must coordinate in-store trade and shopper initiatives, the synergy of which typically produces an ROI improvement exceeding 50 percent.

Second, messaging — defined as capitalizing on the predisposition to buy and leveraging equity at each touchpoint. The brand’s message needs to be adapted to communicate effectively to time-pressured shoppers in a retail environment — no longer lifted from slide 47 of the national spot. This is an art still in development, but it is definitely in the providence of the shopper-marketing agency.

Demand for ROI/Accountability. Industry experts contend that the single greatest weakness with shopper marketing today is the lack of a uniform set of metrics that have credibility with all stakeholders. Our experience is that this is a work in progress. The ideal, of course, is measurement that is so encompassing and so precise as to yield predictive results on a retailer-by-retailer basis and that these measurements can be devised in ways that allow valid comparisons to all other forms of marketing investment.

Consequently, one of the key capabilities that marketers now expect from their shopper-marketing agency is measurement. In fact, the same Hub survey noted earlier reports that more than 47 percent of respondents expect their agencies to do recordkeeping and post-initiative evaluations — defined as return-on-investment, brand health and share impact — not only for the supplier but also for the retailer.

Given the fundamental nature of these changes, we think it is now legitimate to question whether the traditional agency or the new shopper-marketing agency is in the best position to meet these challenges and be the lead agency of the future.

While the role of the traditional agency will always obviously be indispensible to building broad-scale awareness and desire, continued fragmentation, retailer consolidation and irrevocable changes in shopper media consumption have progressively and permanently diminished this role.

In fact, we would argue that because of the proliferation of the different types of media to which consumers-turned-shoppers are exposed on their virtual path-to-purchase — and because most of them are still undecided when they get in their cars to go shopping — the most important challenge facing product marketers today is no longer how to build and sustain awareness on the front end but how to effectively capitalize on this predisposition on the back end.

A common — and, unfortunately persistent — mistake is to wave-off the latter part of this challenge as “tactical.” If one pauses to think about what is involved in developing an approach that effectively “touches” one’s target consumer/shopper at each key point along the path-to-purchase, it doesn’t take but a minute to understand that the only way to “win” at this, consistently and predictably, is via a carefully developed strategy designed to achieve both brand and retailer objectives.

In this new scenario, everything starts with a strategy: to be maximally effective, data and insights drive the agenda, not the big idea. One-offs are becoming obsolete — and so are virtually all approaches that fail to integrate marketing and sales.

This brings us to one of the biggest stumbling blocks of current approaches — the need to adjust all planning and campaign timing to align with the schedules of one’s leading retailers. Lead times at retail demand planning timetables at least 12 months out. Traditional brand planning has typically operated six months out.

When traditional lead agencies lack retail perspective and understanding, this disconnect is unfortunately allowed to persist. As a result, the greatest creative, copy and communications plans in the world will always be sub-optimized without key retailer support.

It has been the need to adapt to and incorporate these considerations that qualify the shopper-marketing agency to be the lead agency of the future. It is the well-trained, best practice, well-equipped shopper-marketing agency that is already in the thick of dealing with all of these changes on a day-to-day basis.

It is the shopper-marketing agency that operates on a 12-month timetable as a matter of course. It is the shopper-marketing agency that controls most of the touchpoints on the path-to-purchase and the shopper-marketing agency that is expected to integrate retailer with brand objectives.

As a result, it is the shopper-marketing agency that is quickly becoming uniquely positioned and qualified to help clients plan and implement the type of integrated-marketing campaigns that marketers will need to drive brand growth and win at the point-of-sale.

If this sounds far-out, consider where the digital agency business was only five years ago. Then looked down upon as tactical, execution houses, many of these shops have since elevated their games to become regarded as the trusted advisors for best-in-class marketers. I submit that shopper-marketing agencies will soon follow the same path.



	MAY / JUNE 2011 \| PDF \| Subscribe \| Home


	Future Shock

	*The new shopper-marketing agency is ready to lead the way.*

	When Advertising Age took its latest look at “What the Media Agency of the Future Will Look Like,” 11 industry leaders shared their visions. Not surprisingly, none mention the words shopper, retailer or path-to-purchase. Instead we got visions such as the following: “It’s always been about the talent. And in the future, that will be even more critical as agencies will be staffed with a new breed of listeners — students of the human condition, data interpreters and idea nurturers.” “The media agency of the future will understand the power of igniting communities by harnessing people’s collective purpose and voice with human experiences that drive brand results.” This begs the question: Is it ethereal thinking like this that is best equipped to lead one’s business into the future, or is it the grasp of hard, everyday realities that will best service the needs of marketers whose challenge is to integrate brand with retailer objectives? Our contention is that the shopper-marketing agency is the best equipped to be the lead agency in the marketing mix — for any client whose products are sold at retail. This is because shopper marketing has permanently changed the DNA of consumer product marketing with the result that the traditional approach to brand-building no longer suffices. What changes? Consider the following: Consumer as Shopper. One can no longer be effective in packaged-goods marketing by only looking at “the consumer.” Leading marketers have learned to view and market to their consumers through two lenses — as “consumer” and as “consumer as shopper.” For many, this has meant breaking down the traditional silos and cross-pollinating marketing with salespeople and sales with marketing. To effect this, companies have upgraded their personnel and skill sets and populated their shopper-marketing centers of excellence with what they consider to be the “best of the best.” As a result, as these investments continue to prove out, one can expect an accelerated emphasis. In other words, many companies are at last “catching on” to the strategic potential of marketing beyond the couch. As these companies have made these changes — and have integrated the objectives and strategies of their key retailers into their brand planning processes — marketing has become inherently more sophisticated and demanding. To keep pace with this, the shopper-marketing agency has literally had to transform itself from delivering “big idea” one-offs to developing strategically-driven annual plans that encompass the interests and objectives of both brand and retailer. To be successful at this, shopper-marketing agencies now have to do the same level of research as traditional advertising agencies — only more detailed. For example, shopper segmentations are not just for the brand, but must also meld brand with key retailer segments. In addition, to convert shoppers into buyers, the scope of the agency’s research must also encompass understanding shopper need-states, overcoming purchase barriers and identifying the activation triggers most suitable in each retailer. Path-to-Purchase Approach. Initially, many companies made the mistake of positioning shopper marketing as an add-on — an in-store exercise to add another arrow to the quiver of sales tactics. However, as leading practitioners gained experience with shopper marketing, they learned quickly that to “win” at the point-of-sale, marketing cannot stop at the door of the store. In fact, marketers discovered that there is a virtual path-to-purchase that every consumer travels and that this path is comprised of distinct phases where the marketer can positively influence the consumer-turned-shopper’s decision process. What does this path look like? There are those who think it’s linear, those who think it’s puddles and those who think it’s clouds. No matter which visual one chooses, the art of the possible is to “touch” one’s target shopper at every stage of the path. Given this objective, one of the most important things to understand about shopper marketing is that it is not just about promotion. That’s why best practitioners have adopted language that talks to shopper strategies and shopper initiatives — the latter defined as any activity or vehicle that one can use to influence shoppers effectively along the path. For example, this might mean being on a retailer’s website to influence the shopper’s list, developing an app which facilitates instant menu suggestions, downloading coupons or QR codes on a smart phone, or digital messaging at any point along the path. While there are infinite variations of the methodologies, strategies, tactics and vehicles one can use to “touch” the target consumers on their journeys, the bottom line is that path-to-purchase marketing is now foundational and that all communications strategies and plans must understand and be able to excavate its nuances to achieve the client’s objectives. Retailer as Gatekeeper. For most packaged-goods marketers, 10-15 retailers now control 70-80 percent of their volume. The first thing every shopper-marketing agency must understand is that to be successful, every consumer/shopper-based strategy and initiative must benefit these retailers and their shoppers as well as their clients. Doing this requires in-depth knowledge of each retailer, their growth strategies, their shopper segments and their day-to-day “hot buttons.” From an agency standpoint, the lesson is simple: To stay current with these requirements means collaborative representation at each retailer’s headquarters, focused on the issues of the retailer. To make this even more challenging, today’s retailers have rapidly stepped up their game to become formidable marketers in their own right — not just merchandisers and distribution depots. Retailers now have all the tools of their suppliers. To make these tools work for them, they are not only hiring top-flight packaged-goods executives but also top-flight shopper-marketing agencies. It should come as no surprise, therefore, that Walgreens and 7-11 are both finalists for this year’s PMA Reggie awards, an honor normally reserved for brand marketers. In fact, retailers have become so important to the overall marketing mix that in the latest Hub Shopper Marketing Update survey, the three most important functions expected by marketers of their shopper-marketing agencies are: 1) identifying in-store opportunities (purchase barriers, shopper needs, communications points, etc.); 2) shopper-insight development; and 3) account-specific strategy development. Clearly, these marketers recognize that winning retailer support on the back-end has evolved to become as important as building consumer awareness and desire on the front-end. Value Beyond Price. All surveys indicate that the impression left on the consumer by the prolonged recession that started in 2007 is indelible. The most recent, by Booz & Company, finds that for 83 percent of respondents, the most influential factor in today’s purchase decision is price. However, as Booz is quick to note: “Manufacturers can utilize shopper marketing to manage the price pressures that are sure to continue … The true promise of shopper marketing is getting beyond price to activate brand equity along the full path-to-purchase.” This challenges the shopper-marketing agency with two crucial roles. First, they must coordinate in-store trade and shopper initiatives, the synergy of which typically produces an ROI improvement exceeding 50 percent. Second, messaging — defined as capitalizing on the predisposition to buy and leveraging equity at each touchpoint. The brand’s message needs to be adapted to communicate effectively to time-pressured shoppers in a retail environment — no longer lifted from slide 47 of the national spot. This is an art still in development, but it is definitely in the providence of the shopper-marketing agency. Demand for ROI/Accountability. Industry experts contend that the single greatest weakness with shopper marketing today is the lack of a uniform set of metrics that have credibility with all stakeholders. Our experience is that this is a work in progress. The ideal, of course, is measurement that is so encompassing and so precise as to yield predictive results on a retailer-by-retailer basis and that these measurements can be devised in ways that allow valid comparisons to all other forms of marketing investment. Consequently, one of the key capabilities that marketers now expect from their shopper-marketing agency is measurement. In fact, the same Hub survey noted earlier reports that more than 47 percent of respondents expect their agencies to do recordkeeping and post-initiative evaluations — defined as return-on-investment, brand health and share impact — not only for the supplier but also for the retailer. Given the fundamental nature of these changes, we think it is now legitimate to question whether the traditional agency or the new shopper-marketing agency is in the best position to meet these challenges and be the lead agency of the future. While the role of the traditional agency will always obviously be indispensible to building broad-scale awareness and desire, continued fragmentation, retailer consolidation and irrevocable changes in shopper media consumption have progressively and permanently diminished this role. In fact, we would argue that because of the proliferation of the different types of media to which consumers-turned-shoppers are exposed on their virtual path-to-purchase — and because most of them are still undecided when they get in their cars to go shopping — the most important challenge facing product marketers today is no longer how to build and sustain awareness on the front end but how to effectively capitalize on this predisposition on the back end. A common — and, unfortunately persistent — mistake is to wave-off the latter part of this challenge as “tactical.” If one pauses to think about what is involved in developing an approach that effectively “touches” one’s target consumer/shopper at each key point along the path-to-purchase, it doesn’t take but a minute to understand that the only way to “win” at this, consistently and predictably, is via a carefully developed strategy designed to achieve both brand and retailer objectives. In this new scenario, everything starts with a strategy: to be maximally effective, data and insights drive the agenda, not the big idea. One-offs are becoming obsolete — and so are virtually all approaches that fail to integrate marketing and sales. This brings us to one of the biggest stumbling blocks of current approaches — the need to adjust all planning and campaign timing to align with the schedules of one’s leading retailers. Lead times at retail demand planning timetables at least 12 months out. Traditional brand planning has typically operated six months out. When traditional lead agencies lack retail perspective and understanding, this disconnect is unfortunately allowed to persist. As a result, the greatest creative, copy and communications plans in the world will always be sub-optimized without key retailer support. It has been the need to adapt to and incorporate these considerations that qualify the shopper-marketing agency to be the lead agency of the future. It is the well-trained, best practice, well-equipped shopper-marketing agency that is already in the thick of dealing with all of these changes on a day-to-day basis. It is the shopper-marketing agency that operates on a 12-month timetable as a matter of course. It is the shopper-marketing agency that controls most of the touchpoints on the path-to-purchase and the shopper-marketing agency that is expected to integrate retailer with brand objectives. As a result, it is the shopper-marketing agency that is quickly becoming uniquely positioned and qualified to help clients plan and implement the type of integrated-marketing campaigns that marketers will need to drive brand growth and win at the point-of-sale. If this sounds far-out, consider where the digital agency business was only five years ago. Then looked down upon as tactical, execution houses, many of these shops have since elevated their games to become regarded as the trusted advisors for best-in-class marketers. I submit that shopper-marketing agencies will soon follow the same path.


	KEN BARNETT is global CEO of Mars Advertising, a leading agency that for 35 years has offered brand-building strategies through key account knowledge, from shopper insights through program activation.

	MAY / JUNE 2011 \| PDF \| Subscribe \| Home