Download The future of multichannel marketing: marketer and consumer

The future of
multichannel marketing:
marketer and consumer
perspectives
Foreword
Hong Kong is on the cusp of a multichannel marketing revolution, with investment in mobile
marketing about to take off and more companies realising the importance of using analytics
and data to drive their multichannel marketing approaches.
The revolution is near – but it’s not here yet.
Experian’s work with marketers in Hong Kong shows the
marketing landscape is very much shaped – or potentially
inhibited – by two factors: competition and e-commerce.
In the first instance, there is less competition among
business and brands, particularly when compared with
larger markets such as the UK and the US. This can
discourage companies from taking risks and pushing
the marketing boundaries and, as a result, we tend to
see Hong Kong marketers taking a safer approach in
the uptake of new marketing channels.
Secondly, e-commerce enablement has been hindered
in Hong Kong due to the lifestyle of local consumers. The
people of Hong Kong love to get out and about to shop and
are spending more time pounding the pavement and visiting
precincts like Causeway Bay than they do online. As such,
e-commerce is not as advanced in Hong Kong as it is in other
economies and shopping is still very much a leisure pursuit.
These two factors have hindered the development of some
channels in the marketer’s arsenal. Yet, paradoxically, it seems
consumers are ready to embrace these newer channels.
There is an almost palpable desire among consumers to use
and interact with technology, with people using their phones
to scan QR (quick response) codes, check websites or use
a company’s app. The need is there, but how far have Hong
Kong marketers come in delivering the marketing services
that consumers demand?
Hong Kong digital trends
The ADMA Digital Marketing Yearbook 2011 paints a clear
picture of Hong Kong online usage and supports Experian’s
observations about the state of play in the local market.
Most tellingly, Hong Kong citizens are clearly heavy users
of the mobile phone. ADMA found that Hong Kong has one
of the highest mobile service penetration rates in the world,
at around 184% (close to two phones per person).
Furthermore, the study shows that while smartphones
currently have a global penetration rate of 23%, in Hong
Kong the penetration of users is nearer to 48% and more
than half (52%) of these smartphone users access the
mobile internet via them.
2
The future of multichannel marketing: marketer and consumer perspectives
Marketers are starting to embrace this mobile phone culture,
with SMS marketing coming to the fore as a key channel for
companies. This trend is being accompanied by a decline in
email marketing and it is likely that the main mechanism for
reaching Hong Kong consumers in the future will be via the
phone in their pocket.
Online activity
The ADMA report shows that, in 2010, Hong Kong
consumers spent an average of 16.1 hours per person
per month online. This is well behind Japan (27.8 hours)
and China (30.7 hours) but similar to Australia (18.5 hours).
In addition, consumers in Hong Kong spend far less of their
time online searching on retail sites – just 1.5% of their total
online time, far behind Japan (5.7%) or China (4.5%) and
below the global average (2.6% of total online time spent
on retail sites).
However, data from Experian Hitwise, suggests this trend
for e-commerce is starting to change. During the year to
December 2011, the share of all online visits to shopping
and commerce websites increased from 2.5% to 3.5% of
all internet visits.
While Hong Kong may lag behind some markets in its
uptake of online retail, it does have one of the highest
penetrations of online banking in the region. Experian’s
own market experience suggested marketers from financial
services are a step ahead in their adoption of multichannel
marketing and effective digital integration. This growing
appetite for consumers to be online is likely to increase
the volume of online retail over the next 12 months.
The ADMA findings show how Hong Kong consumers’
changing behaviours are the driving force behind the
growing diversity – and increasing digitalisation – in
marketing communications.
What’s next?
As Hong Kong consumers start to spend more time online,
marketers are looking to better engage their target audiences.
Companies are looking to increase their advertising allocation
on social media and mobile apps in response to consumers
interacting with brands across these channels.
Foreword
Yet, in spite of the increasing popularity of these online tools,
the lack of measurable ROI is still a challenge to marketers.
Hong Kong’s love affair with the mobile opens a raft of
new opportunities for marketers – and throws up a range
of challenges, too. Marketers need new and clear insights
into consumer preferences and behaviours when it comes
to mobile websites and apps. They need to know how
consumer mindsets and expectations around brand
engagement are changing.
Critically, they need the analytics and insights to measure
the work they are doing in the digital space. With consumers
readily adopting new technologies, marketers need to develop
clear strategies around the use of data and analysis to deliver
insights that, in turn, drive more effective use of technology
in the future.
The next 12 months will be interesting to watch in the Hong
Kong market. Will marketers finally let go of their ‘email blast’
mentality and truly embrace customer segmentation and
lifecycle marketing? Will the true value of mobile marketing
be realised? And will multichannel marketing, with all of
its potential and power, permanently alter the Hong Kong
marketing landscape?
This whitepaper draws upon recent research conducted by
Experian Marketing Services among Hong Kong marketers
and consumers to answer these and other questions. You can
use the insights within this report to support key decisions
about how the multichannel marketing world fits within your
organisation and identify ways to increase the efficiency of
marketing communications.
The current trend of sending undifferentiated email and SMS
campaigns to consumers is no longer generating the impact
that marketers desire. In response, marketers must start using
data to drive responsive campaigns, to test and learn, and
provide more one-to-one marketing communications. Those
organisations that are more sophisticated in this space are
experiencing the greatest advantage.
With the shift to multichannel marketing, marketers require clear insights into how the
channels they invest in are being used – and perceived – by consumers. They also need
the confidence that any investment in new channels will deliver measurable results.
About the study
To paint a clear picture of the current state of play in consumer marketing, Experian Marketing Services commissioned
independent research with 300 Hong Kong marketing professionals across the retail, financial services, government,
technology, digital and travel industries; and a representative sample of 1,046 consumers across all demographics.
The independent research documented in this whitepaper reveals how well marketers’ and consumers’ interests are
aligned. On the marketing side, the research demonstrates where marketers in Hong Kong are investing their dollars
and which channels they value most highly in their communication. From a consumer perspective, it explores how
effectively the general population in Hong Kong responds to and engages with marketing efforts.
The findings shed light on the marketing strategies which are already used effectively, but also identify opportunities
for marketers to work smarter and align with customer expectations. By taking consumer perspectives into consideration,
marketers will be in a stronger position to leverage the benefits of multichannel marketing and ensure that their
adoption of this approach delivers long-term results.
3
The future of multichannel marketing: marketer and consumer perspectives
Executive Summary
John Merakovsky
Director, Experian Marketing Services, Asia Pacific
Multichannel marketing:
the way of the future
With new channels emerging across the globe on a
monthly basis, marketers are under pressure to connect
with their customers across multiple channels and in
more meaningful ways. At the same time, as consumers
become exposed to an increasing number of marketing
touchpoints, marketers must measure these
multichannel marketing activities, gauge consumer
reactions and refine their activities accordingly.
Already, multichannel marketing is delivering success
in a number of industry sectors in Hong Kong. Financial
services organisations and large retailers, on the whole,
have embraced the lifecycle marketing approach and
are leveraging multichannel marketing to great success.
These organisations have multichannel strategies
mapped out for the entire customer lifecycle –
from customer acquisition and welcome programs,
to targeted communications based on customer
purchases /enquiries. From these campaigns,
marketers can develop more sophisticated programs
that tap into cross-sell and up-sell opportunities.
Yet other marketers are lagging behind and need
to adopt a considered approach that boosts the
sophistication of their marketing programs. They
need to become smart about their use of technology
so that, instead of sending out mass emails and SMS’,
they use data more effectively to drive responsive
campaigns and one-to-one marketing.
Key findings
Overall, the Experian Marketing Services research
shows that marketers are working hard to understand
their customers, and use this understanding to provide
tailored communications wherever possible. They are
confident about customer segmentation strategies,
the consistency of their brand message, and their
ability to select the right channels.
Yet there are some disconnects that reveal that
marketers are perhaps not as in touch with their
customers’ needs as they would like to think.
Marketers undervalue the importance and trust that
consumers place in more traditional channels. While
they rightly identify the company website as a trusted
source of information, marketers neglect a traditional
source – print media – as a valued channel at the
expense of new channels such as mobile apps.
Contrary to marketers’ beliefs, consumers are telling
us that print media and direct mail are more valuable
sources of company information than some of the
digital channels that marketers are turning to. That
said, consumers are very receptive to social media
and marketers are rightly allocating future budget
to this area.
Consumers also tell us that they are frustrated
by the feeling of being inundated by marketing
communications; and many consumers are feeling
overwhelmed by the volume of brand communications
they are receiving. As a result, the majority of consumers
are becoming more selective about the level of personal
information they share and the types of communication
they sign up to.
There is a lot that marketers are doing well. However,
this whitepaper shows that they should not assume
they have all the answers about how to best engage
with consumers, which is a constant process of
listening and adapting communication approaches.
There is still a long road to travel in order for marketers
to get closer to their customers and fulfill the
requirements of today’s discerning consumers
in a multichannel marketing world.
4
The future of multichannel marketing: marketer and consumer perspectives
Research
Results
Market confidence: Marketers say ‘we’ve got it right’
The Experian Marketing Services research shows that, overall, Hong Kong marketers believe their
marketing strategies are effective at engaging with consumers and delivering business benefit.
The travel/leisure and online/digital industries are least
confident about the efficacy of their segmentation strategies.
In the travel/leisure industry, 20 per cent of respondents say
their strategy is ‘evolving’ (compared to an all-industry
average of just 9 per cent); while in the digital sector,
12 per cent of respondents say their strategy is ‘evolving’.
From the implementation of customer segmentation
strategies to the overall alignment of the brand message
across all channels, marketers are generally positive about
the performance of the various marketing strategies they
have in place.
Customer segmentation works
Recognising that a one-size-fits-all approach no longer
applies in marketing circles, 85 cent of marketers have a
customer segmentation strategy in place. Of these, 94 per
cent are actually using the strategy day-to-day to deliver
tailored and personalised communications to their audiences.
Experian’s experience in Hong Kong shows that some
organisations, particularly in banking and finance, are
sophisticated in their customer segmentation, analytics
and targeting. Yet we see little evidence of such approaches
being used effectively in other sectors like retail and travel
and there are few published case studies of effective
best practice.
Customer segmentation is perceived to be ‘highly effective’
for 27 per cent of marketers that use it. These marketers
run targeted campaigns that segment according to specific
characteristics such as consumer sentiment, behaviour
or preferences.
An additional 64 per cent of marketers believe they have an
‘effective’ segmentation strategy and are able to categorise
customers to a more basic level, using demographics such
as age or location.
How effective is your marketing customer segmentation strategy?
Effectiveness
Total
Retail
Financial
Services
Government
Technology
Online
& Digital
Travel
& Leisure
Highly effective – we run highly targeted customer segmented
campaigns and we personalise communications accordingly
e.g. sentiment, behaviour and customer preference
27%
20%
31%
21%
45%
15%
-
Effective – we can segment to a basic level e.g. location
and age, but we need to regularly update it to ensure we
are not mis-targeting our customer base
64%
65%
62%
74%
53%
73%
80%
Evolving – we are still trying to find the most effective
solution to enhance our marketing efforts / or we use
our customer segmentation strategy on an ad-hoc basis
9%
15%
7%
5%
2%
12%
20%
We do not segment our customers
-
-
-
-
-
-
-
5
The future of multichannel marketing: marketer and consumer perspectives
Research
Results
Consistency of brand message
Choosing channels carefully
The vast majority (83 per cent) of Hong Kong marketers
are confident that their brand message never deviates,
no matter which channels they use. Be it online, via a
call centre, in direct mail, over-the-counter or any other
touchpoint, marketers generally agree that the customer
experience and brand is consistent across all channels.
In government organisations this confidence about the
consistency of brand message is highest, at 90 per cent.
It is certainly getting harder for marketers’ messages to
cut through the clutter and get heard by the right people,
with just over half (52 per cent) of marketers saying it has
become more difficult. There is a marked difference across
industries, with the travel/leisure industry most likely to find
it difficult for messages to be heard (75 per cent), and the
financial services and online/digital industries far less likely
to think it is difficult (48 per cent).
Yet, when consumers are asked how well a brand integrates
their communications, only 57 per cent think that companies
achieved this well. This points to a significant disconnect
between marketer perceptions and the real experience
of everyday customers, and reveals opportunities for
marketers to close the gap.
To overcome this challenge and ensure that marketers
stay on track with their strategies – while not overwhelming
consumers with an excess of communication – 77 per cent of
marketers say they are becoming more selective in choosing
channels that most effectively engage with customers.
Our experience suggests this ‘disconnect’ is based on
changing consumer expectations. In recent years most
organisations have made their messaging more consistent,
but now consumers are looking for something more.
Consumers are looking to be engaged in dialogue that seeks
their opinion, values their view and provides an intelligent
and timely response via their preferred channel. To help close
the gap, marketers should think about their ‘cross channel’
strategy and how they can create and stimulate a dialogue
that engages consumers and encourages them to convert.
An effective approach to get closer to customers is to identify
the key ‘personas’ of a brand’s most important customer
types, and evaluate how these groups interact with a brand
across multiple channels (outdoor, E-DM, TV, print, online
etc). By mapping this interaction, it is possible to identify
if a disconnect exists, and where the inconsistency lies.
The vast majority (83 per cent) of Hong Kong
marketers are confident that their brand
message never deviates, no matter which
channels they use. Be it online, via a call
centre, in direct mail, over-the-counter or any
other touchpoint, marketers generally agree
that the customer experience and brand is
consistent across all channels.
6
The future of multichannel marketing: marketer and consumer perspectives
These results are consistent with what Experian is seeing
in the market. A multichannel marketing approach is not
a one-size-fits-all solution. For organisations to successfully
select the right channels for the right audiences, a
consultative culture must be fostered both within the
marketing department and beyond, with specialists across
the creative, digital and technology industries. Specific
capabilities and delivery platforms must be handpicked –
giving organisations the ability to lead consumers down
the right channel at the right time, and in doing so deliver
a significant boost to loyalty and, over time, revenue.
Research
Results
Consumer views: Wanting brand messages but feeling overwhelmed
Marketers think they have struck the right balance when it comes to connecting with customers.
But consumer views and attitudes must align with those of marketers for real business benefit.
Information overload
Consumer frustrations
Despite efforts from marketers to streamline and tailor
their communication, 38 per cent of consumers feel
overwhelmed by the sheer volume of communication
they receive from a brand.
Other frustrations which consumers voiced about
communication materials, included the ‘inability to unsubscribe
from unwanted communication (email, newsletters, direct
mail, SMS alerts, social media messages)’. This was named
by 23 per cent of consumers as their number one frustration.
Consumers simply aren’t responding to blanket marketing
and it is having a marked impact on their engagement.
Almost half (47 per cent) of consumers have stopped
engaging with four or more brands as a result of poorly
targeted communications. Another impact of this marketing
information overload is that four out of ten respondents
(41 per cent) now ignore the emails, direct mail and social
media messages they are sent by brands.
Two other issues that caused frustration among consumers
include ‘receiving content that isn’t relevant or helpful’ (19
per cent) and ‘receiving content that comes through at the
wrong time of day’ (17 per cent).
Approximately how many brands or companies have you
stopped engaging with (sharing personal details, signing
up to email newsletters, SMS texts, following on social
media) as a result of poorly targeted communications?
3%
1%
3%
13%
53%
27%
Number of brands customers stopped engaging with:
1 to 3
4 to 6
7 to 10
11 to 15
16 to 20
20+
Some consumers actively take the upper hand when it
comes to managing the consumer-marketer relationship,
with 35 per cent of consumers creating a separate email
address to avoid being personally targeted by brands.
In addition, 55 per cent of consumers state that they are
very selective about what opt-ins, newsletters or updates
they now sign up for, as they only want to receive
messages that are relevant to their particular interests.
7
The future of multichannel marketing: marketer and consumer perspectives
Despite efforts from marketers to streamline
and tailor their communication, 38 per cent
of consumers feel overwhelmed by the sheer
volume of communication they receive from
a brand.
Research
Results
Relevancy over timing
In terms of the timing of marketing communications, almost
half (46 per cent) of consumers believe the ideal frequency
of brand communication is once a month. 26 per cent are
happy to receive it as often as once a week, while 13 per cent
said they wanted to hear from organisations as little as once
a quarter. The same proportion (13 per cent) think that
frequency is not an issue, as long as the communication
is relevant.
What is the ideal frequency of communications you
would like to receive from a brand or company?
Once a week
26%
Once a month
46%
Once a quarter
13%
Once a year
2%
I don’t mind the frequency, just as long as it’s relevant
13%
The importance of relevancy is further reinforced by the
finding that almost two-thirds (63 per cent) of consumers
only actually read targeted communications that are
personally relevant – with everything else being deleted
or thrown away.
This sends a clear message to marketers that the content
of messages needs to be highly targeted and relevant to
be effective.
8
The future of multichannel marketing: marketer and consumer perspectives
Research
Results
Sources of information: Where do consumers look?
As the multichannel marketing world continues to expand, consumers are spoilt
for choice when it comes to seeking information about a product or company.
Unsurprisingly, given this focus on the website, the second
most important source is search engines, with 63 per cent
of marketers rating it as one of the top three most important
information sources. Social media comes in third
(at 56 per cent).
The challenge for marketers is to align their investment
in marketing channels with consumer preferences –
so that those channels preferred by consumers are
given adequate attention.
At the other end of the spectrum, the least important ways
that marketers see consumers gathering information about
their brand include via print publications (39 per cent) and
friends’ recommendations (with 26 per cent listing it as
the least important).
Marketers’ perceptions
For marketers, the company website is undisputedly the
most important source that customers use to find out about
a brand or product. When asked where they think that
customers and prospective customers go to seek information
about their brand or product, seven out of ten marketers
(71 per cent) rate the website as one of the top three most
important sources.
Top channels according to marketers
19
38
Company website
14
14
5
3 3
4
Most important (01)
02
Search engine
20
28
15
13
11
7
4 2
03
04
05
Official social media channels
14
16
14
26
12
8
7
3
06
07
Least important (08)
Online news sites
9
Blogs / review sites / discussion forums
6
3
5
Email friend to ask for a recommendation
3
4
Print publication
7
0%
12
12
Download branded application
9
13
12
8
3
7
7
13
10
6
20%
15
18
11
5
19
23
10
14
40%
The future of multichannel marketing: marketer and consumer perspectives
17
5
15
30
10
6
10
19
26
15
11
16
26
39
60%
80%
100%
Research
Results
Consumer preferences
Yet, while print has been demoted by marketers to the bottom
of the ladder, some 68 per cent of consumers rate print media
as a relevant or very relevant channel, making it the second
most valued channel among consumers.
While marketers are accurate in thinking that consumers
turn to the corporate website for information about their
brand or product, there are some discrepancies when it
comes to other channels.
In the consumers’ eyes, the least important channels for
obtaining brand or company information include mobile
apps (48 per cent) and LinkedIn (26 per cent). The perception
of mobile apps may indeed be a reflection of the immaturity
of the Hong Kong mobile market, which is predicted to grow
in the coming 12 months. As more marketers embrace
mobile technology consumers’ views about its value will
no doubt change.
Overall, consumers agree that a company website is the
most valuable source of information they use to find out
information about a brand, with 78 per cent stating that
it is a relevant or very relevant source. Similar to marketers’
perceptions, search engines (62 per cent) and social media
(61 per cent) are also valued sources of information.
Most relevant channels according to consumers
Brand or company website
34
44
20
2
Relevant
Sponsored search engine results /
Search engine advertising
22
40
30
8
Indifferent
Of no value
Information on social media channel
e.g. Facebook, Twitter, YouTube
19
Print media
e.g. Newspapers and magazines
18
Blogs / discussion forums / review sites
42
35
50
15
4
29
45
3
35
5
Email newsletters from the brand
13
41
39
7
Direct mail from the brand
13
41
38
8
Information on Wikipedia
11
Mobile application
11
Information on LinkedIn
6
0%
41
40
37
8
40
20
12
47
20%
40%
The challenge for marketers is to align
their investment in marketing channels
with consumer preferences – so that
those channels preferred by consumers
are given adequate attention.
10
Very relevant
The future of multichannel marketing: marketer and consumer perspectives
27
60%
80%
100%
Research
Results
Brand engagement: Consumers want experiences and offers
Consumers face a daily barrage of marketing messages from many different directions
– their mailbox, their inbox, the television, the internet, signage, events and more.
Of all these different forms of engagement, consumers are saying that the channel
they receive information through does not matter as much as the content.
A distant second was communication via brand experiences,
stunts and interactive content, which 18 per cent of consumers
prefer. This was closely followed by social media, named the
favourite means of engagement by 15 per cent; and email
newsletters, named by 9 per cent.
The medium is not the message
In 1964, Marshall McLuhan coined the phrase, “The medium
is the message”, to reflect the notion that a message can be
partly interpreted by the medium – or channel – via which it
is sent. Using this framework, a piece of communication sent
by email may be interpreted in a different way to the same
message being sent via a print ad.
In terms of the least preferred modes of engagement, events
– which can be so similar to brand experiences – were one of
the least popular methods. This was deemed the favourite
approach by just 5 per cent of consumers. Rounding out the
bottom three were apps (3 per cent) and telephone marketing
(1 per cent).
For today’s consumers, the medium is just as critical as the
message. Marketers must strike a balance and use the right
channel, with the right message, at the right time, for the
right audience.
By a large majority, the number one way that consumers
would like brands to engage is via giveaways and incentives.
39 per cent of consumers named this as the top way for
brands to communicate with them.
Most preferred ways for companies to engage with consumers
Telephone
11 2 3 3
5
7
13
65
Most preferred (01)
02
Direct mail
4
6
8
10
8
12
17
27
03
8
04
Advertising
6
6
9
11
13
13
21
15
05
6
06
07
Apps
3
6
7
15
10
19
16
17
7
08
Least preferred (09)
Email newsletters
Customer Events
9
11
5
13
18
Giveaways / incentives to purchase
18
19
18
Social media
15
0%
20%
14
22
22
10
16
17
39
Brand or company experiences,
e.g. stunts, promotions, etc.
11
13
13
14
40%
The future of multichannel marketing: marketer and consumer perspectives
11
15
15
13
11
60%
12
8
11
11
8
7
9
10
80%
4
5
10
6
2
6
2
3 11
5
2
6
100%
Research
Results
Budget allocations: Channels must prove ROI to gain support
The allocation of marketing budget is driven by performance, and the channels
that deliver the greatest return on investment (ROI) are likely to receive the largest
budget increases over the next 12 months.
Online delivers the best return
Measuring digital ROI
According to the research, social media marketing and
advertising are the channels which marketers believe to
be most effective at delivering ROI. 85 per cent of marketers
believe social media marketing is ‘highly effective’ (25 per
cent) or ‘effective’ (60 per cent) at achieving ROI.
Marketers clearly value the ROI measure, relying on it to
justify marketing spend. With the increased role of digital
in the multichannel marketing mix, Hong Kong marketers
are now very cognisant of the benefits of evaluating their
online strategy. Some 16 per cent of marketers evaluate the
channel on a weekly basis or more often, while 51 per cent
evaluate their online strategy either monthly or bi-monthly.
Just 4 per cent of marketers measured the success of their
strategy less frequently than once a year or not at all.
Hot on the heels of social media marketing is online
advertising, with 81 per cent of marketers stating that it
effectively delivers ROI. Brand experiences such as stunts
and promotions are deemed the third most effective channel,
with 78 per cent of marketers rating it as effective or highly
effective at delivering ROI.
Despite this faith in digital channels, 75 per cent of marketers
report that they have previously invested in a new online or
digital approach that did not deliver the anticipated ROI. This
is highest among government (81 per cent) and technology
companies (80 per cent of marketers). Across all industries,
the primary reason for a new channel failing was ‘a poor
understanding of the channel’ (30 per cent). An additional
22 per cent claimed that ‘little or no budget was invested’,
while 20 per cent said it was due to a ‘lack of long
term strategy’.
In Experian’s view, with a small e-commerce market,
the challenge of measuring digital ROI is largely due to
attribution to the marketing channel. Marketers need to
ensure that the foot traffic generated from digital marketing
is attributed to the right source to provide ROI. Greater use
of technologies such as QR codes, and mobile couponing
for in-store redemption, is a great way of doing this.
12
The future of multichannel marketing: marketer and consumer perspectives
Despite the findings, Experian’s observations of the market
show that there is still a challenge to effectively measure
digital ROI. Many organisations struggle with the process
of monitoring and measuring the success of digital channels,
and fall back on the ‘last click wins’ measure – which sees
the whole of a sale attributed to the last click on a website.
This measure is not truly representative of the purchase
process, given there could be a number of clicks or responses
across multiple channels before a sale is achieved.
Research
Results
Future areas of investment
Looking to 2012 and beyond, social media advertising and
channel development is far and away the most important
area for investment. 65 per cent of marketers plan to increase
their spend over the coming year in this channel.
Other channels that look set to receive a budget boost in
the next 12 months include online advertising (49 per cent
of marketers are planning to increase budget), apps
(46 per cent) and events (44 per cent).
Yet it is not all doom and gloom for more traditional
channels. Despite some print media experiencing declines
in advertising sales in recent years, it seems that more stable
times are ahead for print ads. 41 per cent of marketers plan
to increase their spend in this channel, 38 per cent plan to
allocate the same budget, and 21 per cent plan to decrease
their print advertising budget. Similarly, in TV and radio,
35 per cent plan to increase spend, 35 per cent plan to keep
the same budget and 30 per cent plan to decrease budget
in this area.
Over the next 12 months, how do you anticipate the proportion of marketing budget that you allocate
for the following areas will change?
Budget
Social
media
ads and
channel
dvlpmnt
Email
marketing
Sponsored
search
engine/
PPC
SEO
Online
advertising
Online
video
advertising
Direct mail
TV or radio
advertising
Print
advertising
Apps
Events
Other
Increase
65%
43%
40%
42%
49%
41%
31%
35%
41%
46%
44%
24%
Decrease
11%
26%
26%
25%
19%
24%
37%
30%
21%
21%
22%
23%
Stay the
same
24%
31%
34%
33%
32%
35%
32%
35%
38%
33%
34%
53%
Looking to 2012 and beyond, social media
advertising and channel development is
far and away the most important area for
investment. 65 per cent of marketers plan
to increase spend over the coming year
in this channel.
13
The future of multichannel marketing: marketer and consumer perspectives
Research
Results
Major influences: Choosing new online channels
Although digital budgets are on the increase, marketers are typically cautious when
it comes to the adoption of new digital channels. Wary of the unique local conditions
which can constrain e-commerce activities, they don’t want to get stung by throwing
money at channels that are yet to prove themselves.
As the growth of technology accelerates and new channels
become instantaneously available, marketers are adopting
a ‘go-slow’ approach that lets them find their feet before
launching new marketing programs. Yet most marketers
see the investment in digital channels as a non-negotiable
necessity. As the previous section showed, non-traditional
channels such as social media, online advertising and apps
are the way of the future and marketers rely on a range of
factors to help them make their investment decisions in
these channels.
Influencing factors on
when and where to invest
When deciding whether to invest in new digital marketing
channels, the most common influence on whether budget
gets allocated is monitoring how competitors use the
channel first. Over half (54 per cent) of marketers state
that they observe how competitors use the channel
before investing in it themselves.
This is closely followed by 52 per cent of marketers who say
they ‘experiment by trial and error’, and 49 per cent who ‘read
reviews from expert commentators and analysts’. Only 28 per
cent would seek advice from within the organisation.
Notably, just over half of marketers (55 per cent) say it is
harder to get budget approval to invest in new marketing
channels such as social media. This suggests that some
budget holders are open to new ideas and opportunities,
while others are more cautious and prefer to maintain
a more traditional approach.
When deciding whether to invest in new
digital marketing channels, the most common
influence on whether budget gets allocated
is monitoring how competitors use the
channel first.
14
The future of multichannel marketing: marketer and consumer perspectives
Making new channels work
As multichannel marketing gains traction and pressure
to deliver ROI increases – marketers need to implement
proven strategies to accurately assess the huge amounts
of data being collected across all channels. As a starting
point, it’s important to measure and monitor the huge
amount of human activity interacting with their brand,
and attribute responses to each channel. As yet, there
are few organisations that can successfully access and
interpret all this data.
Given its strategic importance in driving marketing
decisions, organisations need to outsource the process
of data measurement and analysis if they cannot do it
themselves. It’s important to develop processes that will
facilitate the accurate analysis of consumer behaviour;
methods to gather insights and produce meaningful,
actionable information; and then implement approaches
to act on that information.
Summary
The Experian Marketing Services research sought to reveal the discrepancies and
consistencies between marketing strategy and consumer behaviour in Hong Kong.
It has produced some fascinating insights for marketers to consider as they move
further into an era of multichannel marketing.
Looking back to the ADMA Digital Marketing Yearbook 2011,
Hong Kong is ready for a true multichannel approach to
marketing. The report states that online markets in Asia
Pacific “have reached a size and scale at which consumer
and B2B marketers can achieve significant business
results… Marketers can now actively influence and enable
purchases. Measuring impressions, ‘likes’, click-throughs,
costs per click, and email open rates are still useful metrics,
but marketers can increasingly also drive e-commerce and
offline retail sales revenue, create sales leads, increase
a brand’s net promoter scores, and make a significant
contribution to CRM.”
The Experian research shows that there is still some work
to be done. But the good news is that there is a lot which
Hong Kong marketers are getting right. Clearly committed
to customer segmentation strategies, and measuring the
effectiveness of their traditional and digital marketing
strategies, marketers are listening to their customers and
striving to deliver relevant, timely communications that
deliver strong ROI.
They are planning to increase their investment in new,
popular channels such as social media and apps.
Yet marketers must tread carefully. A large proportion of
consumers indicate that they are reaching brand saturation,
with many ignoring communication materials and
disengaging from brands.
2012 and beyond
In 2012, we expect to see mobile come to the fore as a
significant channel for commerce in Hong Kong. No longer
marginalised as an offshoot of the corporate website, mobile
will gain ground as a cost-effective way to engage with
consumers. We are likely to see companies investing in
mobile-only websites to keep up with the growth in mobile
usage. Going hand in hand with this investment, ‘measurability’
will become a critical factor for marketers, and mobile
advertising measures such as reach, unique visitors and
share of traffic are needed for advertisers to start using the
medium to its full potential.
We also expect to see the competitive marketing landscape
grow, as marketers realise the importance of customer data to
drive lifecycle marketing. Analytics will become a central tenet
of any savvy marketer’s platform, and the data extracted from
campaign analysis will start to be used at every point in the
customer journey – from acquisition through to conversion,
retention optimisation, through to share of wallet.
However, marketers must be cognisant that the move into
a truly data driven, multichannel arena requires a significant
investment that goes beyond delving into one channel in
isolation. A quantum shift in data quality management will
see data from email, mobile and direct mail lists brought
together for strategic analysis and action.
Buoyed by the knowledge that most consumers still want to
hear from brands in some form or other, marketers need to
work harder to overcome the apathy towards some forms of
marketing and advertising. Whether it be through free offers,
loyalty schemes, redeemable codes or other marketing ploys
– the trick is delivering marketing messages that have
perceived value to the consumer.
Experian is seeing many financial services organisations and
large, multinational retailers taking this leap, and some local
organisations in the travel and accommodation sectors preparing to do so, too. As they do, the channel mix will change –
perhaps at the detriment of direct mail and outbound telephony
– and organisations will start implementing multichannel
marketing in intelligent and sophisticated ways that see a
real exchange of value between the marketer and consumer.
Get real-time multichannel marketing right,
and organisations can expect to see a ten,
twenty or even thirty-fold increase in revenue.
Get real-time multichannel marketing right, and organisations
can expect to see a ten, twenty or even thirty-fold increase in
revenue. These huge increases can be simply attributed to
getting the right message to the right customer at the right time.
But the challenge lies in ‘getting it right’ – and leaves a lot for
marketers to consider for 2012 and beyond. They must evaluate
their existing strategies and budget allocations and tailor their
marketing programs to create meaning and value for specific
audiences – and to help them stand out from the masses.
15
The future of multichannel marketing: marketer and consumer perspectives
Summary
Five-step plan:
What marketers should be doing now
1 Become data-savvy with
enhanced analytics
Collect, measure and analyse data from all channels
and interactions with customers so that more targeted,
one-to-one marketing programs can be initiated. If the
resources are lacking in-house, then look to outsource
this process to achieve higher cut through with
marketing campaigns.
2 Build a mobile website
Mobile has come to the fore as a significant channel for
commerce, yet too many websites are still not designed
for mobile devices. With more and more consumers
looking for business information on their mobile, it is a
crucial area for marketers to address. The brands that
invest in mobile sites and provide an enhanced user
experience will be a step ahead.
3 Build mobile measurability
Hand-in-hand with the creation of mobile websites,
it is critical to achieve measurability of ROI in this
space, both from mobile websites and mobile
advertising. Customer conversion in the mobile
space needs to be measured in order to achieve
strategic success.
16
The future of multichannel marketing: marketer and consumer perspectives
4 Embrace social media
Acquire new customers in this space. Social media
provides a great opportunity for customer engagement
and retention, and as a two-way customer service
environment to hear the voice of your customers.
5 Lifecycle marketing
In an increasingly competitive landscape, it is important
to drive lifecycle marketing programs – right through
from acquisition and conversion to ongoing share of
wallet. Effective lifecycle marketing enables relevant,
automated communications to be sent out in response
to certain dates or activities. For example, if we know
a household is buying diapers, an automated response
can be triggered to send communications for toddler
toys in 12-18 months time.
Marketers need to continually monitor customer
engagement, and when a drop-off in purchasing,
browsing and/or click through behaviour is seen,
marketers can re-engage the consumer with an
incentive before they are lost as a customer.
Research Methodology
Experian Marketing Services commissioned independent
research with 300 Hong Kong marketing professionals across
the retail, financial services, government, technology, digital
and travel industries; and 1,046 consumers aged 18+ across
all geographic regions in Hong Kong. The findings were used
to develop this industry whitepaper on the Future of
Multichannel Marketing.
The content of this whitepaper is the intellectual property of Experian.
This paper can not be reproduced in full or in part without the written permission of Experian.
17
The future of multichannel marketing: marketer and consumer perspectives