March 2009

Take on the recession with
rigor and relevant marketing
To survive the recession today and increase growth tomorrow, marketers need advertising mediums that are targeted, accountable and interactive – all of which are available in an online environment. By: Owen Sagness

The Canadian economy has significantly changed since its last downturn, and so have marketing strategies. Today’s consumer is exposed to more brands, more aggressive pricing and more points of sale – resulting in a highly competitive marketing environment that requires strategic advertising buys.

While consumer confidence is weakened, a recession is also an opportunity for brands to strengthen their market share. But, how do we navigate through the recession and emerge as stronger marketers, without lower prices and wide margins? The solution: leverage relevant marketing strategies that target your brand’s online audience.

Lessons from our past
While our current economic circumstances are discouraging, there are best practices from the last recession that will help shield brands from the proverbial storm. Many companies ask themselves whether they should invest in marketing, or decrease spending until the market stabilizes. Experience suggests the answer to this question is to absolutely invest. Our past has taught us that companies that continue to advertise during a recession outperform brands that decrease their marketing spends. Companies that maintained strong marketing efforts during the 1990-91 recession increased their market share by taking business away from brands that did not aggressively advertise. Additionally, brands that advertised more than the competition, effectively positioned themselves for growth once recovery occurred (McGraw-Hill Study).

Consistent branding is even more imperative during a downturn, since awareness levels and confidence fall quickly. While creative continues to play a significant role in strengthening brand awareness, buying advertising on measurable mediums ensures the message is targeted to your audience.

Gauging online behaviours
To survive the recession today and increase growth tomorrow, marketers need advertising mediums that are targeted, accountable and interactive – all of which are available in an online environment. One of the main benefits of online advertising is the ability to target consumers based on their online behaviours. Specifically, behavioural targeting (BT) allows marketers to target highly engaged online consumers who have a demonstrated interest in a particular product, service, or industry. Consumers are added to audience segments only after demonstrating online behaviours within a specific period of time.

Of course, like any product in market, there are high quality BT solutions, and there are low quality targeting products available to Canadian advertisers. It’s essential for marketers to understand what the ingredients are for high quality BT solutions and segments, and how the low quality segments maintain their rock bottom pricing. Armed with this knowledge, marketers can make intelligent and informed decisions for their clients and campaigns. In particular, the three main components for a high quality behavioural targeting segment are search behaviours, consumer browsing consumption, and time horizons.

Search behaviour
Determining search behaviour is the equivalent of locating the doorways your audience uses to enter the online environment. Essentially, this means that your BT provider is tracking what search tools your ideal audience uses, and then groups those behaviours into segments. For example, if a provider has a segment titled “Chinese food lovers,” then any searches for Chinese food restaurants or recipes will count as behaviours towards this segment. If the consumer performs enough online actions, they will eventually be included in the “Chinese food lovers” group. It’s necessary for BT providers to capture search behaviours, since search is closely tied to consumer intent and the conversion point in the sales cycle.

Consumer browsing consumption
The second component in a high quality BT campaign is the ability to observe consumer browsing consumption on the Web and apply that intelligence against a behavioural segment. Similar to search, it’s important to understand how a user’s browsing behaviour associates them with a specific online segment.

When a user visits a Web page, a BT provider can take that view and apply it against a behavioural segment. For example, when a consumer visits Sympatico / MSN Autos channel, we can take that behaviour and count it against the auto researcher segment. Not only can we count this as an auto segment characteristic, but by analyzing the keywords used on the page, we can tell if the consumer is interested in hybrid cars, or SUVs. This is a crucial distinction for digital marketers. Advanced audience intelligence results in hyper-tight BT segmentation, which ensures marketers only target, and pay for, the exact demographic of consumers they intend to reach.

Gauging the brand or product’s sales cycle
The third step to effective BT is gauging the brand or product’s sales cycle and the audience’s purchase decision behaviours. This essential information is determined by measuring the consumer’s time horizons online - specifically the number of times the user exhibits online behaviours within a period of time. Depending on the product or service, the consumer may need detailed information and pricing or only minimal brand exposure before making a purchase decision. For example, a local flower shop owner provides its audience with limited product, pricing and availability information, since flowers are often spontaneous purchases that don’t require a significant investment. The consumer likely searched online once or twice in one day before purchasing a bouquet. Most shoppers do not order bouquets 30 days in advance – so the flower shop shouldn’t monitor behaviours that occurred a month ago and instead, should assess inquiries and purchases that occurred within the last three days.

Now, consider that the same consumer is also shopping for a new hybrid vehicle. Given the required investment and competitive product offerings to assess when buying a new car, the consumer may research the vehicle multiple times before making a purchase. Moreover, the shopper may investigate other online sources of information outside of a specific auto brand’s Web site – such as auto portals and blogs – before stepping foot into the car dealership. Measuring the flower shopper’s and car browser’s vastly different online behaviours allows advertisers to determine the appropriate budget and Web sites needed to achieve ROI. Whether the product is purchased on the fly or researched for months, it is essential that marketers work with an online advertising platform that targets a vast audience and provides data that reveals the level of activity needed to attract the consumer to the checkout line.

Make an impression with ROI
Impressions are the cornerstone of any successful advertising campaign, however, this measurement plays an even more significant role online. One of the key benefits of online advertising is the ability to measure your audience’s every move. To obtain this level of insight, advertisers need to use Web properties that offer high impression volume and multiple behavioural targeting segments.

(For example, compared to six months ago, Microsoft Canada is serving up 68 per cent more BT impressions and have grown our BT segment portfolio 287 per cent, based on advertiser demand (statistic based on internal Microsoft Canada data). The significant growth in BT opportunities allows marketers to further fine tune their advertising efforts and achieve greater ROI.)

While we can’t change our history, we can learn from past recessions and leverage the new online marketing technologies available today. Despite consumers closing their wallets during this economic downturn, marketers need to continue to invest in relevant advertising to ensure their brand is not forgotten.

As general manager of Consumer and Online International for Microsoft Canada, Owen Sagness is responsible for driving the business strategy behind some of the country’s leading Web-based services under the MSN and Windows Live brands. These top ranked services in their respective categories include the Sympatico.MSN.ca portal, MSN Hotmail, Windows Live Messenger and Windows Live Spaces. He is also responsible for continuing to build on the success of the Live Search service and for introducing the Microsoft AdCenter advertising platform in Canada.