Media Strategies Editor Jim Meskauskas explains the differences between online and offline promotions, and how they can and should work together.

Promotions have long been an advertiser’s favored method of driving short-term marketing goals. Got a new product you want to get into consumers’ hands? Offer them a cents-off coupon or package samples with other established brands. You want to drive some sales in the immediate future? Run a contest (details to be found when you buy Brand X, “no purchase necessary”).

But conducting promotions offline can be arduous and expensive when you take into consideration cost of product distributed as part of the promotion (if it includes samples), the loss of revenue (if it includes pricing incentives), the cost of the prize (if it involves a contest or sweepstakes) and the cost of producing all of the material necessary to support the promotion (packaging, signage, additional media support).

Conducting promotional efforts online can be very cost effective versus offline. The production and distribution of assets can be done much more quickly and easily than they can in the terrestrial realm. And the medium and the technology it relies on can be used to simplify fulfillment. 

Promotions can be, and should be, executed online in much the same way that many online ad campaigns are done when they are built around an objective requiring quantifiable results.

It’s the same, but different

Most promotions online have a specific goal. The marketing objectives can be more long-view, but the media objectives are more or less those of a direct-response marketing campaign.

Frequently, a promotion will have a specific objective -- e.g. 500,000 email captures from contest entries -- but given the efficiency requirements borne of the cost-per-acquisition mandate that accompanies this kind of effort and the self-selectivity of the audience yielded as a function of the promotion itself, a relatively broad online media strategy can work well.

The principles that preside over the promotion planning and optimization process should be similar or the same as those that govern a direct-response campaign.

A low-cost ‘ubiquity’ buy strategy can be employed with emphasis on those media properties that skew to your target audience (taking a mass-reach, low-cost strategy) combined with pay-for-performance (CPC and CPA) components. Upon the read of initial test data, more specifically targeted properties can eventually be included depending on the life of the promotion.

Low CPM media will help lower cost per acquisition, and cost-per-action buys can mitigate potentially low-performing creative or media purchased on a CPM basis. Depending on the length of the promotion (one month? two months? two weeks?), results data can be read and quickly incorporated into the media plan through optimization, ensuring that those placements and the assets in those placements yielding the greatest return on investment are given priority in rotation.

It may be asked why an advertiser would purchase inventory based on a CPM price structure when inventory might be available based on a pay-for-performance price structure. The reason is that sometimes, depending on performance, CPM-based buys can actually yield lower costs-per-action than CPC buys. 

With a CPC (cost-per-click) or CPA (cost-per-acquisition) buy, an advertiser is locked to a cost-per-response regardless of whether or not response rates rise or fall. By fixing this variable, one manages the downside risk of possible poor performance (e.g. weak creative or poorly targeted placements). But if response is good or improves, the advertiser is still beholden to that cost-per-response.

Like diversifying an investment portfolio, an advertiser can minimize inefficient exposure by employing several different buying tactics like the aforementioned until enough testing has taken place where learning can be applied to better predict performance based on creative and placement refinements.

The shorter the promotion, the more difficult it is to subject the campaign to easy optimization. Buys have to be made in much shorter increments and data reads have to be performed with greater frequency. But the principles of practice are the same as they are for any direct-response effort.

Promotions allow for a real point of contact with a consumer or potential consumer. Offline promotions provide the advertiser with a singular point of contact and a limited opportunity for data capture. It is often-times expensive to deploy, particularly if there is any significant data capture component. Online, an advertiser can elicit trial, gauge for interest and make contact of the sort that can be used regularly to maintain communication with the consumer (namely, email). This can be done for a relatively low cost when compared with offline promotion.

Conducting promotional efforts online may also give the agency a “kitchen entrance” into clients and access to budgets that are otherwise unavailable when trying to lure dollars away from traditional media efforts and put them against efforts online.

Integrate, integrate, integrate

The most successful promotions online are those that are part of a comprehensive communications package.

One of the more compelling features of online in relation to promotional activities and sweepstakes is that it can serve as an easy extension of an already existing offline promotion.

Although the promotion online is less expensive and far more efficient than executing 100 percent offline for products like packaged goods that have traditional retailers as their primary point of purchase, it’s difficult to meaningfully ‘move the needle’ with an exclusively online promotion. An online promotion should be coordinated with offline support communications, including other media and packaging and shelf-driven components.

Savvy marketers are learning that taking a traditional marketing device like a promotion and letting the online medium serve as a hub for where that promotion makes contact with all the other media in use, the strengths of all of those media can be greater than any one component alone. 

Popular, but tricky

Online promotions continue to grow in popularity. And they are taking to heart the need for integration. For example, Sony recently partnered with McDonald’s in support of the PSP (PlayStation Portable).

Over the summer, people who bought a Big Mac or large fries at McDonald’s got a code that they could enter online at a website where they could enter to win a PSP, or take the opportunity to send a message about the promotion to friends along with a $5 off coupon for Best Buy.

Other advertisers are happy with less integrated activities, such as pharmaceuticals offering samples of their over-the-counter products in exchange for basic registration data on their websites while still distributing samples by such methods as polybagging them with the Sunday newspaper.

But clients considering promotions online should be cautious. Promotions are highly regulated. There are all manner of legal issues to be aware of, such as bonding and registration with the attorney generals office in different states, affidavits to prove compliance and 1099s for prizes. This is where promotion specialist services come in handy. Companies like ePrize or SiteSystems can manage all the elements of an online contest including design and creation, hosting, rules drafting, winner selection and prize fulfillment.

Online promotions are quite possibly the most efficient kind of promotion an advertiser can run. The cost of entry is low and the cost of production is limited to assets and media that can be turned around quickly.

The best ways for advertisers to connect with a consumer are what they've always been, with compelling benefits and compelling offers. Most of the same things that have been done in offline media by marketers can certainly be done with online media. Branding efforts, support-level media, and online couponing... all of these things can work online the same way they do offline. However, if the promotion in mind ties in to a more “earthbound” marketing communication effort, the online needs to be planned well enough in advance to take advantage of multi-media cross-referencing (copy in offline ads directing users online; packaging sniped with URL of promotion) and remain consistent with the rest of the media run in support.

Jim Meskauskas is media strategies editor for iMedia Connection.