In the second part of our chat with Executive Chairman Peter Kerr, he reflects on how the promotional marketing industry has matured, some favourite campaigns and where the next 25 years might take us.
In what way have brands changed how they use Sales Promotion, since MRM was formed back in 1993?
Sales Promotion (or Promotional Marketing as it has now become) as a highly specialist skill and effective marketing tool is used as much today as it ever has been, but is no longer the preserve of just FMCG businesses. Indeed, whilst there is considerable evidence that a number of traditional FMCG brands are using SP less, a wider diversity of industry sectors are embracing these techniques. They don’t drive volume in the way an on pack promotion would have done for a cereal manufacturer or a door to door coupon campaign covering millions of households but they are more creative in their execution and tend to be multi-territory due to their more standardised packaging.
So does this mean MRM is doing more promotional marketing as a result of ‘new’ market sectors using this as a technique to drive sales?
True ‘Promotional Marketing’ is only around 25% of what we do as a business and where we go from here will be hard fought because the volume end of the traditional sales promotion market has been replaced by tactical campaigns and higher degrees of targeting.
The diversity of marketing spend is what characterises today’s marketplace; 25 years ago you would use above the line for brand awareness & to build brand values whilst you would use sales promotion to accelerate purchase and that approach would work in perfect harmony. For brands such as Walkers Crisps they would use TV advertising purely to support the promotional campaign. Nowadays new digital channels have blown that simple harmony apart – if you think back, there were few commercial TV channels when we started MRM but now there’s probably 450 channels, which makes the challenge of achieving the reach & message of a brand significantly more complex.
What’s your view on digital techniques?
The exciting bit is that digital is nowhere near finished. It’s been disruptive but it’s still on the first rung of the promotional marketing ladder. What does digital mean in our market? It currently means either digital content or digital processes to support fulfilment. But what we as an industry aren’t yet doing is fully engaging the consumer using digital techniques – and certainly not on the scale that digital will eventually offer us.
The frustration is that in reality we (as a UK Promotional Marketing industry) haven’t moved on significantly in the last 20 years. MRM managed the first ‘internet only’ promotion back in 1998, delivering Coke Auction for Coca Cola. At that time we thought this was the beginning of a seismic change in promotional campaigns and everything beyond then would move to a digital platform (boy, were we ahead of the curve!) but only now are we seeing this more widely used. What’s got in the way is the analogue side of digital, so to speak, that everything is an application. The curve has been slow to accelerate but where it will finish could be beyond our imagination.
As a long-established Board member of the Institute of Promotional Marketing, what are the stand out promotions that stick in your memory – and why?
There are 3 (promotional marketing) campaigns that stand out for me over the years; Innocent ‘Woolly Hats’, ‘Eurostar & The Da Vinci Code’ and Andrex’s ‘Puppy in a Pack’ and each are memorable for completely different reasons as well as being IPM Grand Prix and European Grand Prix Winners.
The reason I love these campaigns is that they tell me very different things about promotional marketing and what can be achieved when it is applied in such a creative way. Innocent’s Woolly Hats (which was devised by the client not an agency!) was purely and simply about getting consumers to drink the product in winter. Those hats gave the product stand out at point of purchase, generated a donation to Age UK and the hats themselves were all knitted by consumers who wanted to supply the hats to make a 25p donation to Age UK. It was brilliantly simple, beautifully executed and was a great cause related campaign raising over £2m and more than anything, it really worked for the Innocent brand.
Eurostar’s ‘Da Vinci Code’ campaign was an absolute class act whilst Andrex’s ‘Puppy in a Pack’ (created by the genius that is SMP) was pure promotional genius. These case studies are all available online via www.theipm.org.uk and I would encourage anyone interested in Promotional Marketing to study them.
Looking to the future, where do you see the roadmap that is the evolution of Promotional Marketing, heading to on its next stop?
The biggest change that I predict is going to be powered by Block Chain technology. Today, most promotional applications used in the marketing environment are point to point. Thousands of brands using hundreds of individual digital techniques or applications and everyone working in individual campaign silos.
Brands are all continually competing for engagement and the marketing investment can be largely wasted if they miss the target or the offer isn’t relative to the consumer. By way of an obvious example, a loyalty promotion on a product with low frequency of purchase simply isn’t relevant to the consumer.
Similarly, if a provider offers an application that allows the consumer to scan a coupon and then get £1.50 off their purchase as a cash back, that is a point to point execution.
What will happen when Block Chain is more widely adopted is that the consumer will use the cloud to tie up all the things they want as an individual. They won’t have to sign up for ‘that app’ to get access to their £1.50 as Block Chain technology will allow the consumer to put their information and their profile out there in the Internet of Things, meaning all relevant marketing offers will be directed to them on an individual basis. We will have a liberated environment driven by consumer choice, not point to point engagements.
If a brand chooses to put a coupon out into the marketplace it will be found by interested consumers; the growth of intelligence based marketing will make consumers become almost like an API – a receiver plus a transmitter of data and this will deliver lots of opportunities for brands to deepen engagement on a one to one basis. This is potentially going to change the whole advertising space yet again!