CE Sells CE1 Dec, 2012 By: Bridget McCrea Response
Major consumer electronics brands use creative DR mixes to hit their audiences from different angles utilizing varied CE products.
In today’s wired world, Santa Claus doesn’t have to look very far when filling holiday wish lists. Electronic equipment used for entertainment, communications and even office productivity — also known as consumer electronics or “CE” — claim high spots on the wish lists of everyone from 3-year-old toddlers to the GI Generation, and everybody in between.
The most popular picks for the 2012 holiday season include tablet computers, notebooks/laptops, televisions and cell phones, according to the Consumer Electronics Association (CEA), which expects overall spending on consumer electronics to increase by 11 percent this year versus 2011. The CEA expects average consumers to spend $242 of their total holiday gift budgets of $842 on tablets, laptops and phones. Three in four (76 percent) of gift-giving adults plan to purchase CE products as a gift this year.
Mobile devices that keep consumers “connected” even while away from home or office are in particularly high demand this year, the CEA reports, with tablet computers following in a close second. Smartphones likely will be the most popular CE device given as a gift this year, followed by tablets, notebook/laptop computers and DVD/Blu-ray players.
Smaller CE items are also in high demand, with headphones/earbuds, carrying cases and memory cards being among the most popular accessories given as a gift this year. Gift cards also will remain popular with more than three-quarters (77 percent) of U.S. adults planning to give a gift card to someone else this holiday. One in four consumers (26 percent) likely will give a gift card for digital music purchases, one in five (20 percent) for electronic book purchases, 16 percent for app purchases, and 15 percent for online gaming purchases, according to the CEA.
The organization also examined how consumers plan to shop for highly coveted electronic items. It found that product pricing remains the most important criteria among consumers deciding where to shop for CE gifts this year. Pricing will likely also influence how consumers find the best deals, with two-thirds of shoppers planning to compare prices of CE products online before making a purchase. Forty-one percent likely will use a mobile device to compare prices while they are in a store, and 28 percent plan to search for promotions on a social networking site.
Shawn DuBravac, CEA’s chief economist and senior director of research, says that while most CE manufacturers and distributors don’t speak openly about their advertising strategies, a number are clearly using direct response to reach their target audiences. He singles out Groupon-like “daily deal” sites and QR codes (placed in print advertising, for example) as two direct-sale mechanisms that CE manufacturers regularly use.
“The ‘Groupon effect’ continues to grow among consumers who pay attention to those flashy deals,” says DuBravac. “I think we’ll see a lot of those deals being offered this holiday season, especially by manufacturers who want to provide deals for a short period of time to drive sales.”
Consumer electronics brands are also taking more interest in DR’s tracking and accountability mechanisms, neither of which can be attained with traditional image spots. Whether they use a 1-800 number, dedicated landing pages, mobile sites or other mechanisms, marketers can track consumer behaviors and make more educated advertising decisions. “They are tracking store sales, online activity and other key metrics,” says DuBravac. “I think we’ll see even more retailers and manufacturers paying closer attention to these measures during the next 24 months.”
The Direct Approach
The consumer electronics industry’s use of DR isn’t always readily obvious, but take the time to peek under the covers and these companies’ use of multichannel direct response becomes much more apparent. “CE is a huge segment for us,” says Michelle Cardinal, CEO at Portland, Ore.-based R2C Group, which works with clients like Microsoft, Consumer Cellular and Web.com.
Direct response fills several roles within these companies’ advertising portfolios, which typically include DRTV, online search, display ads, CRM programs, YouTube videos and blogs. “You can’t do TV without a whole digital strategy these days,” says Cardinal. “We also continue to use both radio and print in client campaigns.”
Cardinal points to Microsoft’s Xbox 360 gaming console as a good example of how a CE manufacturer has developed a creative DR mix that produces results. The company is using its multichannel approach to not only drive direct Xbox sales, but also to drive foot traffic into their new crop of retail stores. Cardinal says DR makes sense for such manufacturers based on its media efficiency (reduced rates), the longer format that allows them to explain complicated products (which might otherwise languish untouched on store shelves), explicit CTAs that drive actions, and — of course — the medium’s trackability and analytics.
Getting CE manufacturers to wrap their arms around DR’s benefits isn’t always easy. Cardinal says siloing of marketing and media, and the fact that not all brand advertisers understand how attribution works, tend to get in the way when these firms try to add DR to their marketing mixes. “Many companies still separate their DR and brand advertising, and then further silo offline and online media,” Cardinal explains. “You can’t do effective DRTV without also having a well-thought-out digital strategy, especially in organic and paid search.”
This siloing is typically an old way of thinking and “frankly a legacy problem within many companies,” says Cardinal, that pits departments and individuals against each other for the highest amount of media efficiency.
“Instead of sharing information for the greater good,” says Cardinal, “information and data is sequestered and protected leading to ill-informed media investment decisions.”
At Atomic Direct, also in Portland, Doug Garnett, president and member of the Response Advisory Board, says the “echo chamber” tends to hold CE brands back from realizing the true benefits of multichannel DR campaigns. Never challenged by new ideas that exist outside of that chamber, and accustomed to the parameters of traditional image advertising, these firms have a “fundamental prejudice against any offline media — not just DRTV,” Garnett observes.
“A tremendous number of these companies could desperately use DR, but they literally exist in an echo chamber when it comes to changing media,” says Garnett. “As a result, there’s not as much DR activity among CE firms as I think there should be.”
Those companies that do make the leap into DR (instead of “firing the guy who suggests it,” says Garnett) quickly find themselves benefitting from one of the medium’s top benefits: lengthy demonstrations.
“Consumer electronics are intimidating for consumers,” says Garnett, who was a rocket scientist before launching his own marketing firm. As such, he knows firsthand the intricacies and technicalities that go into the design and manufacture of electronics. “Manufacturers run around packing their devices with complicated technological features.” Later, sitting on the retail shelf, those products either need salespeople who are smart enough to demonstrate their features or consumers who are dedicated enough to learn them on their own. In today’s world, neither is guaranteed.
“That’s where DR comes in and fills a very important void,” says Garnett, who expects more CE manufacturers to catch onto that fact in the future, albeit at a slower rate than he’d like to see. “Echo chambers just don’t disappear, but as technology continues to evolve and becomes even more consumerized — rather than being focused on how devices are encoded and connected — DR will be the right platform for it.”
Opening New Doors
When you look beyond the gaming consoles, tablets and devices that help people connect with one other in a wireless world, there are solid examples of consumer electronics manufacturers using creative DR mixes to get their products out to the masses. At Koeppel Direct in Dallas, for example, Peter Koeppel, president and member of the Response Advisory Board, says his firm has been working with a robotic vacuum product that’s successfully leveraging DRTV, social media and SEO to market its innovative item.
“They have been using short-form DRTV to drive people to their site to educate them about the product and convert them into sales,” says Koeppel. “Since it’s a higher price point product, we have found the Web to be an effective extension of the short-form campaign, in terms of reinforcing the product benefits, providing additional demonstrations and testimonials, and ultimately driving sales.”
Social media also played an important role in the vacuum’s direct response approach. According to Koeppel, social media pages were used mainly for building brand awareness, loyalty and customer service. “Our content focused on educating the consumer about the product, while our monitoring efforts (via a social content management system) assisted customers with their product questions, complaints, praises, and so forth,” he explains. “Customer service really became a large part of the social media efforts.”
The campaign’s SEO strategies consisted of infographic creation, a custom survey (via SurveyMonkey), guest blogging, Web 2.0 technologies, SEO diagnostics review, SEO keyword map review, custom SEO reporting, and social platforms like Pinterest and Google+. Other campaign elements included a photo contest that Koeppel says served as an “entertaining and engaging campaign that contributed to the overall results.”
“We are also exploring doing a video campaign, since it’s a great way to generate buzz on places like YouTube, Facebook, Reddit and other platforms,” says Koeppel, who adds that the company is in the early stages of developing an E-mail marketing system to round out its media mix.
In assessing the broader CE category’s use of DR, Koeppel says it’s a sector that can benefit greatly from DRTV, mobile and Web advertising. And because the CE manufacturer’s target consumer tends to be more technologically-savvy, he says using a combination of short-form DRTV to drive prospects to the Web to educate them further about a product is a “great formula” for CE marketers to employ.
“Incorporating a mobile strategy is also important, because consumers might access information about a product through their smartphones or tablets after viewing a TV spot,” says Koeppel. In addition, he points out that he’s observed fewer CE marketers utilizing TV as part of their marketing mix, “except for the mobile phone carriers, but they definitely are using sophisticated online campaigns and are also using mobile advertising.”
With long-time DR user Bose as a client, Toronto-based Northern Lights Direct knows the ins and outs of working with CE manufacturers that want to leverage multifaceted direct campaigns. Pippa Nutt, senior vice president for Northern Lights’ online and Canadian media, says she’s seeing more consumer electronics firms assessing the DR space and seeking the benefits of cross-channel strategies.
“Companies are combining other mediums — especially online ones — to control overall efficiency,” Nutt says. “They’re buying media in the DR context and then looking at the overall metrics and what’s delivering in terms of response and ROI.”
They are also integrating mobile into the mix, although most of that activity is focused on localized marketing, says Nutt. “Consumers are using mobile to search for specific CE products at retail locations,” she adds, “but mobile is still more of a brand tactic at this point.”
In some cases, the consumer electronics themselves are helping to drive direct response across various platforms. The introduction of the second screen (the computer) and third screen (mobile phone) into consumers’ everyday lives has opened the door for even more direct contacts by advertisers. “A lot is going on with the multiple screens right now,” says Nutt, “but just how that develops and impacts the DR space is still up for debate.”
Regardless of which direct mechanisms actually push consumers to reach into their wallets and purses this season to shell out money for that shiny, new gadget, the creative DR mix that incorporates myriad approaches will surely win out. Expect to see the current “experimental” phase to continue well into 2013 as more CE manufacturers test the waters of DR and come up with innovative ways of leveraging this consumer-facing medium to their advantage.
“Given the extremely competitive nature of the CE industry right now, and due to the downturn and subsequent recovery, it’s a good environment for testing out new strategies and implementing those that produce good results,” says DuBravac. “DR’s measurable, accountable, typically less expensive qualities are pretty clear motivations for these companies right now.” ■