At February's Summit, iMedia's Neil Perry led a top marketer discussion on how expanding channels influence paths of purchase.

This conversation took place in February at the iMedia Brand Summit in Florida.

Neil Perry: I thought to set the stage today I would provide a snapshot of my life at McDonald's, for the last three months, before I launched the consulting career. During those last couple of months, I had a relationship started with XM radio that included some sponsorships and some custom programming. We had three new print magazines that had to be evaluated, because they were matched to a new target. We had produced an advergame with Neopets, and then another one with Nick Jr. I had some concurrent negotiations going on with both EA, and then Activision, about integration into some video games. In fact, we contracted with SMG Play to help us figure out how to get integrated into video games. We were developing a wireless cell phone program with our good friends at AT&T Wireless, before they got bought. And, all of that was going on in addition to the usual stuff, like buying all sorts of websites, placing all sorts of ads, and developing all sorts of creative.

You know, all of these new channels came about, too, long before Larry Light, the Chief Marketing Officer of McDonald's, started his road show talking about, "McDonald's was no longer going to be a mass marketer." We were going to be a targeted marketer, and we were going to do things differently.

So, I did the only smart thing a good brand marketer could do: I got out. You know, actually, these were very exciting times to be a part of an organization like McDonald's; and, they are even more exciting now as we look forward. I have a quote from a Merrill Lynch industry analyst, and she points out that marketers have to find integrated ways to make ad spending more efficient. It raised the question as to whether advertisers have permanently substituted less expensive spending into the mix, like internet, local cable, and direct marketing. Well, what the heck are we going to do with these opportunities, all these changes, all of these new channels? And, how on earth are we ever going to evaluate them effectively? Well, damned if I know! That’s why I brought these two guys on stage, and hopefully they will be able to clarify some of it for all of us. 

Sitting on my right is Stephen Blumberg, who is Director of Global Media and New Channels at MasterCard International. For almost a decade, Stephen has worked with companies like McCann Erikson, Smith Barney, Kraft, Media.com, and Modem (you haven't been able to keep a lot of jobs, have you?) … and, he has been developing strategic advertising and marketing campaigns online for all of that time. At MasterCard, Stephen is managing several integrated campaigns that reach consumers, that reach businesses, and that reach C-level executives.

Next to Stephen, we have Erik Whiteford. He is Director of Marketing at Electronic Arts Sports Brand. Erik is in charge of the ongoing development of the EA Sports brand, handling advertising communications for incredibly popular games like Madden Football, NBA Live, NASCAR (my personal favorite), and Fight Night Boxing. Erik has been a part of EA for a while now, with roles in marketing, and branding and strategic research. He has been Director of Marketing, by the way, for EA franchises like Harry Potter and James Bond, which is my grandson's favorite game.

Well, gentlemen, keeping up with all of these new emerging technologies and all these new channels really is a full-time job. So Stephen, I am going to start with you. Talk to us a little bit about how the hell you get it all done.

Stephen Blumburg: That's not an easy thing to do. We are a very small, lean group at MasterCard. There are only three of us that handle all of the media for North America. We actually really spend a lot of our time coming up with the strategies and developing those, and then actually pushing a lot of it to our agencies. We don't have enough people on staff to listen to all of the great ideas, you know, that a lot of the people in this room have for us. So unfortunately, we do have to really lean on our agency.

Perry: Now Erik, you have a little bit of a different situation. It is more of a divide and conquer at EA. Would you talk a little bit about how you address all these new mediums? 

Erik Whiteford: Well, we really take a look at it from a variety of different angles and try and evaluate it, both with our agencies' partners, as well as by working with the product management teams. And, we have internal teams, both in the advertising group and product marketing group, as well as a research team. And, we really sit there and try to evaluate everything that comes to us, or as much as we can, and try to bake those into our plans when we're setting communication strategies.

Perry: Okay, good. Stephen, when you and I talked we got into an interesting conversation about media mixed modeling, the grand terminology for figuring out how we are going to manage to analyze all of these different mediums. This is a huge area of importance for all of the marketers and advertisers who are assembled here today. Can you talk to us a little bit about what your process is? And, then, also tell us what is working, and what is not.

Blumberg: Absolutely. We work with an internal group, as well as an external group (called the Hudson River Group), where we take all of our media impressions, both from purchased, as well as point of sale, promotional, sponsorships, including field boards, all sorts of things, and sort of throw it into a black box (for simplifying it); shake it around for about six weeks; and, out spits a pie chart. That pie chart shows us, from our overall gross dollar volume (which is how MasterCard makes money) where does advertising fall? Where does marketing fall? 

And, then that pie chart has a slice that gets pulled and there is an additional pie chart that is developed. It shows us that television was responsible for “x percent,” print was responsible for another percent. And then, the other media, since we don’t spend as much there. It has been difficult for us to really quantify how much additional growth volume came from our online marketing initiatives. Fortunately, for the first time in our ’03 marketing mix model, we were able to take the data, tease out the information in a way that actually shows that online was one of the most efficient mediums for us to thrive in dollar volume. 

To quantify it for you, print was responsible for about 9 percent of our incremental gross dollar volume; but online came in at 3 percent incremental gross dollar volume. And, when you look at the amount of money we spend in the different media, we are talking about 80-plus percent of our money is spent in television. And, when you look at the ROI for every dollar we have put in, we received about $40 in value both for MasterCard, as well as our issuers or member banks. And, we’re hoping that, as we continue to spend more money in the different mediums that are available for us to spend in, we will continue to see those types of great results.

Perry: So, in essence though, the model is really just starting to kick in now, now that you have been able to evaluate these other mediums, including online?

Blumberg: We have used the model for a couple of years now. The model, though, has just been able to start pulling out interactive media. We are hoping that as we start trying new things that we will be able to figure out a way to let that boil to the top, and actually be able to identify exactly how all media is helping drive gross dollar volume.

Perry: Erik, when you and I were talking about media mixed bottling, you rung home a point that I think is incredibly important to all of us, which is the project brief… starting a project correctly.

Whiteford: Sure, before we start any project, we like to look at the media and the creative very much as the same project. We think it is really important to have media and creative working closely together to try and come up with a strategy that is going to help us maximize our dollars, not only in terms of where we spend the dollars, but also in terms of the impact of where our media is spent and how it is spent and where it is placed. So, when we kick off an advertising project, it is really important that we have a tight brief that not only outlines what the communications objectives are, but also what the target is that we are going after. 

And, a lot of time it is not just about trying to reach males, 18 to 24. It is really about a specific segment of males, 18 to 24. And, maybe it is not even an age demographic; maybe it’s hardcore NBA basketball fans, or hardcore Madden football players. So, we try and bake those into every single one of our plans, so our media plans are very different on almost every single project because the objectives are very different depending on: where each game ranks within the hierarchy or gaming space. Or, what are the different objectives? Are we trying to go a little bit more mass market? Do we want to talk more to a core sports fan, or maybe more to a lifestyle-oriented consumer? And, that really all starts with the brief. So when we sit down with the media and creative teams at the beginning, we encourage them to ask us a lot of questions about what we are trying to achieve. Ideally we come up with both a media and a creative strategy that is going to maximize all of the effort and money we put into it.

We had a meeting recently with just marketers and we were talking about this "project brief," and how to design it and how to improve it over time. And, a lot of the dialogue was getting out of area where you have multiple creative briefs and start-up briefs. Sometimes you would have one for the online, you have a different one for the offline, some would be different for different markets. What a lot of the marketers are now evolving to is one single brief that clearly outlines all aspects of the program and everyone else has to fit underneath that umbrella. I think that is strategically a very sound way to go.

Tomorrow: New channels, and evaluation methods.