This SVP, Media Director explains how marketers like REI use the Internet to capture lifetime customers, and predicts future measurements for such goals.
As SVP, Media Director for Sedgwick Road in Seattle, Sheryl Hudson is responsible for the media-planning team. The team's primary role is to evaluate all channels of communication and make recommendations as to where the messaging should appear. Additionally, the media planning team is responsible for all print, online, and out-of-home rate negotiations for such clients as Washington Mutual and REI. Sedgwick Road, which re-branded itself from McCann-Erickson Seattle a year ago, has gross media billings, (not including production), around $135 million. Here Hudson talks about some successful campaigns, and gives her thoughts for moving the industry forward.
Meet Sheryl at the iMedia Summit in New Mexico next week.
iMedia Connection: What's one of the most successful campaigns you've executed recently?
Hudson: New market launches for Washington Mutual with Atlanta being the most recent market launch. They've been successful in terms of awareness within the market using all channels of communication.
iMedia Connection: What measurements did you use in deeming them successful?
Hudson: We used both awareness goal measurements as well as individual product goal measurements. For example, how many free checking accounts people opened in the market during a set period of time.
iMedia Connection: What's the best integrated campaign you've seen this year?
Hudson: One that we've done is an anti-tobacco campaign for the state of Washington. We were assigned this work at the end of last summer and it has included traditional as well as online media. All indications - such as the amount of traffic it is driving to the quit lines (telephone lines people call if they have a desire to stop smoking) is that the campaign is working really well. And, again, we're using all channels - online, radio, TV, out of home.
Another campaign that comes to mind that we didn't do is the m-life campaign. That has been one I've noticed that has been extremely integrated, all channels, and is highly visible. I've noticed it in multiple markets - TV, radio, outdoor, Super Bowl, Academy Awards, online, and yesterday I just got a direct piece - so in terms of an integrated standpoint, it has been all encompassing. I don't know what their numbers are, but as far as hitting me as an individual, they've achieved that.
iMedia Connection: What sort of new models can we expect in the future?
Hudson: For many clients like an REI, the goal with online is to get to the lifetime value of a customer. I would hope that in the future we would be able to move closer to that. I still see most clients moving online very traditionally, from a cost-per-thousand or cost-per-click. Very few are able to go beyond and figure out conversions and which people return and purchase and what the lifetime value is of that customer. So I would say, I hope to see it move further along in terms of the ability to measure. The ability to measure is there, but a clients' ability in terms of staffing, data management and putting all the pieces together prohibits those answers.
I would also love to see the ability to capture a branding measurement with online. We do it with offline, with traditional media but there seems to be some reservation into acknowledging that online serves a goal with the brand. And I think it does. We need to look in the future to capturing what exactly it is doing for the brand, on an individual brand basis. I think we'll get there.
iMedia Connection: Is there a sane way to do CPA so everyone wins?
Hudson: I think there's a way to have cost-per-acquisition done across the board for those clients who are interested in capturing that data. I've worked on a piece of business for Alaska tourism in which it was very easy because the priority was getting a vacation planner into peoples' hands. We literally could say what the cost-per-acquisition was with online, of television, of radio, of newspaper, of consumer magazines, but it requires the client to consciously use the communication channel to solely first and foremost drive people to take an action. In that case, yes, we did it. For those clients who acknowledge that brand is important and not all communication needs to generate an action today and where maybe the toll-free number and the Web address and the phone number isn't going to be first and foremost the messaging, it's harder to get down to a cost-per-acquisition medium by medium. Different media works different ways and some have more of a higher branding potential than others, and some are more action oriented. So if the purpose is not to drive an action necessarily today and there's a longer-term viewpoint, then it's probably not possible to get down to an accurate CPA. You can do it, but not all clients want CPA to be the first thing to drive the messaging.
iMedia Connection: You've been talking about branding. Do you think there's enough branding research to satisfy clients? If not, what needs to be done?
Hudson: I think there's enough branding research in the generic, but what clients want us to help them do is define their unique brand. So I don't think any generic research out in the marketplace can do that. We need to do it customized, client-by-client. Most of our clients see the value of the brand and believe in it and we need to help bring that brand to life in our communication, which then ties back to your CPA question. For me, CPA is not always the first thing we want consumers to do when they see the messaging. We want them to take action but it might not be today, and we believe each client needs to differentiate its brand and the communication we use helps to do that - the visuals we use, the copy we use, where we place the ads. And frankly not everyone's in the market to purchase today. So most of our messaging is trying to do two things: brand and communicate product and services so when people are ready to take an action, they'll think about our client first.
iMedia Connection: What remains the industry's biggest stumbling block?
Hudson: There needs to be a common denominator between all channels of communication. In other words, a common denominator between online and all other channels of communication so it could be evaluated as another tool on an equal footing. That's one.
Two, online is held to a different standard. Clients expect to see measurable results with online campaigns that typically require action (clicking, registering, buying) they don't expect to see with any other single medium (e.g. TV).
Three, online continues to be extremely time consuming to plan and buy. On the one hand we want to see unique and different opportunities. On the other hand, we have a limited amount of time and resources. Many clients cannot afford to compensate agencies for the time it takes to get the most out of the medium.
Lastly, CPMs need to come in-line with other media choices in the marketplace. It's getting better, but not there yet.
iMedia Connection: How can the industry overcome these issues?
Hudson: The common denominator issue is being addressed by several industry organizations. It's going to take more time but we're getting there.
On the measurement front, it is a matter of educating clients. Clients need to understand the strengths and weaknesses of all media channels. They also need to understand that just because one medium can be measured in terms of clicks and actions versus another (e.g. TV with no call to action), that doesn't necessarily mean that online advertising is not effective.
In terms of making it easier for planners to plan and buy, it's got a long way to go. I'm skeptical that it is going to be an expeditious process in the near future. Every site is still operating very independently. There are standard banners but they are not very interesting. Planning and buying unique inventory and developing unique messaging takes time.
On the CPM issue, we are seeing CPMs coming down. Again, with time, I expect to see the market forces of supply and demand bring CPMs to a level that is competitive and attractive to planners and buyers.
iMedia Connection: What are your clients' reservations about spending more money for interactive media?
Hudson: Costs are one. Not just out-of-pocket costs, it is really wrapped-up costs: CPMs, cost to buy media and cost to produce the creative. Two is that clients still don't understand it, the space in general. They need to be educated. And the technology is still limited. What you can do in the online space still isn't there and how people can receive that information for the majority still isn't there. It's still pretty flat. It's pretty unemotional. The technology, again, is not the quality of sight, sound and motion that you get with your television set yet. Unfortunately, some of the unique things I've seen borders on annoyance, where you'll get something that disrupts.
iMedia Connection: Why is it better for a traditional marketer to go with an interactive agency than to advertise-direct with publishers OR take the entire workload in-house?
Hudson: Well, let me rephrase the question. I wouldn't buy into the fact that clients need to go to an "interactive" agency. I think that full-service advertising agencies can fill clients' needs in the interactive space. For example, we're not an interactive agency and we don't have a separate interactive department. We have a planning department that looks at all channels, can look at the whole picture. If you work with multiple agencies, then it can work but it's then up to the client to manage how each agency communicates its brand. In some cases clients have separate interactive agencies but the interactive agency, I would argue, doesn't necessarily understand the brand. So I'm at a viewpoint of the reason our clients come to us for full-service is they trust us to manage their brand and to evaluate all communications channels including online and to draw in the experts from outside the agency when we need to and to manage that for them on their behalf with people we trust and where the chemistry is right. You tend to not have the same collaboration when a client hires a separate interactive agency, separates their offline from their online. I would say you're at a similar disadvantage if a client goes direct with publisher and does it themselves. It's not as integrated as it could be.
iMedia Connection: How can agencies encourage their clients to increase their online advertising as consumers increase their usage of the medium?
Hudson: You convince them through showing them that it works. And it's back to measurement and finding a relevant unit of measurement that allows them to see based on the measurements that online if performing more effectively than other channels.