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The Periodic. Winter 2017.

What mix of Paid, Earned & Owned generates the most profit for brands?

by Hillary Miller, VP, Account Strategy

Clients and agencies are continually in pursuit of the golden mean of marketing: What mix of Paid (e.g. digital display, TV, print), Earned (e.g. organic search, social mentions, PR) and Owned (e.g. website, email) is best? What ratio of working dollars is most effective in growing a brand’s bottom line?

While many are testing into this to find the right answer for their own brand, the UK’s marketing industry organization, the Institute of Practitioners of Advertising, or IPA, has funded a longitudinal advertising effectiveness report that’s worth studying in the US.

While the full report won’t be released until 2018 (good data takes time!), a recent article from The Drum summarizes some of their findings so far. Here’s a topline of some key quotes:

“Paid online media is much more effective than unpaid”

The IPA report shows what many marketers understand instinctively, Paid online media reaches potential customers, and that’s who grows your business. Unpaid online media (either owned or earned) typically reaches the ‘already converted’. Face it, who’s more likely to follow your brand on social media—a current loyal customer, or someone who’s never shopped you before? You need prospective customers to continue topline growth.

The article goes on to quote marketing giant P&G’s confirmation of this finding. Mark Pritchard, Global CMO, said they are reevaluating their Facebook spend, stating “we targeted too much and went too narrow.”

The secret sauce is balance. Not an either/or scenario. The IPA shows “owned media typically increases the effectiveness of a paid campaign by 13% and earned media by 26%”. However, a campaign without paid media is a much weaker campaign overall.

“The vital ingredient marketers are overlooking: emotion”

In the quest for measurable ROI, many marketers are tipping the scales heavily toward digital channels, where every click, open or download can be counted. This gives clients a sense of security and a benchmark to compare to their corresponding spend in that channel. It also leaves traditional Paid media in the lurch. Few clients can afford the time or expense of a detailed regression analysis of their TV, print or other ‘offline’ channels.

However, in terms of channel effectiveness, the IPA study found that good old TV “increases effectiveness by 40%” and it’s also “best for generating top-line growth that drives profit, with a 2.6% market share point gained per year when using TV”. That’s because TV offers sight, sound and motion—and when used correctly it conveys emotion like no other channel. Add online video to the mix and the numbers get even better—“a 54% increase in the average number of business effects” when TV and online video are used in tandem in a campaign.

“Maintain the 60:40 Ratio”

The IPA has long stood by the recommended ratio of 60% long-term brand building tactics to 40% sales activation tactics. But few clients adhere to that these days. Due to the challenge of attributing a sale to a channel, many clients think either their website or email was the only channel that drove sales, because that’s where the last click came from.

True sales attribution models take into account all of the ‘non-clickable’ channels that generated and warmed the lead in the first place. Even in the absence of a detailed attribution model, smart marketers make educated assumptions on the importance of brand building first. If no one knows what your brand stands for and what sets it apart, why on earth would they go to your website or open your email?

In the UK, the IPA is seeing a “sub-optimal focus on short-term activation strategies at the expense of long-term brand building”. It’s easy to be pressured by your CFO to put more dollars into the channels that can be easily measured, instead of focusing on the channels that ultimately drive brand awareness and preference, but are harder to prove on a spreadsheet.

What does this mean for your brand? Do a quick self-assessment:

  • What percentage is spent on paid media vs. owned/earned?
  • What percentage of your marketing budget is spent on conveying what your brand stands for?
  • What percentage is spent on emotion?

If you’re out of line with the data generated from the IPA’s study, perhaps it’s time to reevaluate your budget ratios this year.

 



The Persuasive Power of Personality

by Mary Knight, Executive Creative Director

This month, Hydrogen celebrates The Polyclinic’s breadth of physicians and specialists in a new online and offline advertising campaign. The Polyclinic, one of the largest multi-specialty clinics in the Puget Sound area, has over 200 doctors and advanced practice clinicians throughout the greater Seattle area.

The problem:
The Polyclinic wasn’t alone in its desire to promote health care specialty areas. While some local competitors have heftier ad budgets to help them yell louder, our job was to help The Polyclinic stand out from the fray—by focusing on expertise with attitude instead of big ad budgets with “me too” messages.

The solution:
Reward the customer with messages designed to make them stop, smile and think. Rather than focus on one specialty such as orthopedics, Hydrogen’s campaign offers a gentle reminder of the expertise available at The Polyclinic. Bus sides and wraps, Pandora and TuneIn radio commercials and sponsorships, mobile and traditional digital advertising remind Seattleites that The Polyclinic offers expertise as well as a healthy respect for a patient’s intelligence. It’s a combination that is becoming increasingly rare in today’s health care world.

The work:
Click here to see the new 2017 campaign.

 


Fiercely Independent. Together.

by Mary Knight, Executive Creative Director

When 65 likeminded advertising agencies in 50 countries work together, clients win.
Jumbo shrimp. Hell’s Angels. Seriously funny. I love a good oxymoron, don’t you? But “Fiercely Independent. Together,” is much more—a rare combination of entrepreneurial and collaborative spirit. It’s the unique genetic code that’s shared by members of Hydrogen’s independent global network, Worldwide Partners (WPI).

With B2B, B2C, pharma, traditional, digital, social media and even event planning (think: Nike-level events here,) WPI’s network of specialists, resources, and on-the-ground local experts is Hydrogen’s secret sauce that we can apply, if and when needed, on behalf of your brand.

All of the good, none of the baggage.
As a former “Big Agency Animal,” I know there are benefits to global networks for many clients. The beauty of being a member of WPI is, we get to leverage the good stuff about a global network without piling on the politics, layers—and price tag—of a publically-held entity. Plus, there’s no “go big or go home” philosophy at Hydrogen or at our partner agencies. Even small and mid-sized clients can reap rewards typically reserved for larger brands. For example:

  • Hydrogen can leverage specialty areas or provide local media knowledge for our clients in the U.S. and 49 more countries. One example: We conducted a North American “pulse check” in a matter of days to test the strength of a strategic insight.
  • WPI searches for the most innovative resources to share with member agencies. At our last network meeting, Instagram shared their latest-breaking media diversification capabilities with us.
  • Hydrogen also benefits from hearing—in person—from cutting edge marketers. At the most recent North American WPI meeting, clients from Uber and T-Mobile shared simple things that agencies can do to help them succeed, and a senior client from HP shared his hard-earned lessons about working with paid influencers.
  • Through WPI, Hydrogen receives group discounts on things like syndicated research and stock photography. It feels good—and it’s good business—to be able to offer all clients resources that are often only accessible to larger brands with even larger pocketbooks.

I’m proud that Hydrogen is part of the fiercely independent Worldwide Partners network. WPI helps us bring you a global perspective and presence. It exposes us to innovative changes in marketing tools and platforms. And perhaps most important, through WPI, we get to hear from leading likeminded clients about what works. And what doesn’t.

Want to benefit from their experiences? Drop me an email. Or give me a ring. Same difference. (Last oxymoron. Promise.)

 



An interview with our own

by Matt Swecker, Copywriter and Sydney Fullerton, Project Manager

Lessons learned growing an Instagram following
Project Manager Sydney Fullerton is the force that keeps things running smoothly around Hydrogen, but when she’s not at the office keeping us all on deadline, she’s yoga-ing. As a way to further connect with the yoga community and grow her teaching opportunities, Sydney decided to turn to Instagram. Through trial and error, she learned a lot about the platform that just might apply to your business too.

  1. When did you start practicing yoga?
  2. Originally when I was about 9 or 10, I stole one of my mom’s Denise Austin Power Yoga VHS tapes. In 2012, I began a far more dedicated practice.

  3. Why did you start your yoga-themed instagram?
  4. It was mostly to be a part of a community, to keep myself honest, and to connect with like-minded individuals.

  5. What were three techniques you learned that increased engagement?
    1. Hashtagging
    2. Industry exploration, meaning spending time discovering new people and new yogis to connect with.
    3. Communicating with followers. Even if it was just a simple “wow that’s super cool!” When you respond and create a connection it does something different than just putting your content out there for people to see. It creates a dialogue that can lead to so many other places, whether it’s getting to try a new studio with someone, travelling to a faraway place and having somewhere to stay, getting tips on the best studios when you’re out of your own zip code, learning about new tips and tricks to further your practice, or getting insight on mental and physical ailments. It’s an incredible thing to open up to people who you know for the most part have your best interest at heart!

  6. How did you decide which hashtags to use?
  7. It was lots of different things – it wasn’t about always using the most popular hashtags, because with those, you get buried under all the other content that’s populating that hashtag. Sometimes it was better to use smaller and more unique hashtags. Like #flexibility versus #gainflexibility versus #gainsplitsflexibility. While the first hashtag has tons of content and tons of Instagram users who are searching for it, it’s difficult to be differentiated among lots of other photos. You become muddled amongst ballerinas, gymnasts and dancers. But as you refine your hashtag to, say, #gainsplitsflexibility, there may be less people looking, but those few people are more dedicated to what they’re looking for. So for me it was a mix of using the gigantic hashtags like #yoga and pairing them with smaller and more unique search terms like #hanumanasanahelp (Hanumanasana is splits pose in Sanskrit) to get visibility across a bevy of searches.

  8. Did you notice a difference when you started to use them?
  9. I saw a huge difference in my followers when I started using hashtags as a tool rather than seeing them as an aesthetic annoyance. Followers were gained and lost but my followers were refined, more interested and engaging, not to mention, the more I hashtagged relevant search terms, the more my follower count grew.

  10. What advice would you give to businesses interested in leveraging Instagram?
  11. I would say research and act on the hashtags that are relevant to your brand or company. Also, genuinely engage with your social community by contributing to conversations and interacting with influencers. And finally, look at the social behavior of other companies that have similar goals to glean what works and what doesn’t.

  12. What surprised you most about Instagram?
  13. The amount of genuine connections available to be made.