Marketing Channel or Marketing Campaign: What's the Difference?

A few years ago I spent a few days in Amsterdam when flying between Rome, Italy and Calgary, Canada. I had been to Amsterdam before and I loved it - the art, the canals and the people. It is a wonderful place to visit. Don't miss it if you are ever traveling to Europe.

Amsterdam has many ways for getting around including cars, walking, bicycles, trolleys, and boats. Not every city uses boats as a mode of transportation but Amsterdam has lots of canals and water channels. I took the picture above on a boat tour down one of the many canals. As you can see, the water comes right up to the doors of the houses. In Amsterdam this is called "convenience". In Calgary, we call this a "flood" - as we had in June 2013.

This brings me to the topic of differentiating between a marketing channel and a marketing campaign. Most likely the idea of comparing a channel from a campaign is elementary for most marketers. However, not everyone is familiar with all the terms that we sling around in marketing meetings. So I thought I would elaborate....

A marketing channel is a method or path that a marketer chooses to reach a target audience. In Amsterdam, a person can choose to bike, ride the trolley or take a boat. Each mode of transportation uses a different channel to get from A to B. Similarly, a marketing campaign is the vehicle that contains the message - similar to a boat that goes down the canal or channel of water. Another way of looking at this is that a channel continually flows; it keeps on moving whether or not you are using the channel. A campaign, on the other hand, has a start and a finish. A marketer may plan campaigns in the Spring and in the Summer but the channels they choose may be different or the same each time. 

Marketers often talk about using different types of channels to deliver a campaign for a specific message. Broadly, there are two groups of channels: traditional and digital. Traditional marketing channels include print, radio, TV, out-of-home (billboards), and trade shows. Examples of digital channels are listed in the image below. Google Analytics typically shows eight digital marketing channels, assuming all are used in a given time frame.

A "campaign" often involves the creative side of marketing and advertising. The objective of a campaign is to develop an attractive, engaging message that captures the attention and participation of the target audience.

Since we are a digital marketing agency, many of our clients engage our services to run campaigns on a variety of channels. We may do a product promotion on AdWords (Paid Search). Or use search engine optimization techniques to increase the profile of a company on Organic Search. Or we may increase the awareness of an event or improve customer engagement by using various campaigns on Facebook, Twitter and YouTube (Social).

Target Markets: Audience, Listeners, Followers and Buyers

As technology changes, so does the way we look at and interact with target markets. It’s not that buyers and segments of buyers have changed - those are still the same. What has changed is how we send out messages, how customers find us and how we interact with our Audience.

In the days of mass marketing and marketers had two broad choices: media advertising and direct marketing. Both forms of marketing rely on interrupting a person’s attention with a commercial, a phone call or a letter - all of which are annoying. As technology changed the techniques for advertising changed but not the process of annoying interruptions. So we ended up with pop-up windows, interrupt pages, telemarketers and email spam.

With recent developments in search engines and social media, however, buyers are able to look for information when they want and filter information that they don’t want. Consequently, how marketing is done is changing. In recent years the acceptance of interruption based advertising is tolerated less and content base marketing is accepted more.

With this trend in mind, I have changed my language and the models I use during discussions about marketing strategy with clients and students. I changed because marketing technology and techniques have changed. I am now using the diagram below to help explain the changing landscape of advertising and marketing. My clients and students have found the diagram and the related discussions valuable. Let’s look at the model in more detail.

This group includes anyone who is not yet aware of your brand, your company or the products that you offer - but they should be aware. The Audience is your target market - people who need or want what you have to offer. Somehow, as marketers, you have to reach this group with your message (Outbound Marketing) or help them find you (Inbound Marketing). In an earlier post I outlined the Acquisition Funnel that we use at Mx3 Metrics. You can reach your Audience by creating Impressions from advertising and publishing interesting and relevant content (articles, pictures, videos). Eventually, a subset of this group will be Buyers – assuming they like what you have to offer.

This group includes anyone who is paying attention to the messages that you are sending and the content you are developing. Although this group is listening and paying attention they have not identified themselves to your organization and as a result you don’t have a way to communicate or interact with them. But they will interact if you make an effort to engage them.

Followers are people who are interacting with you and your brand. Followers are easy to identify - they have liked your Facebook page, followed you on Twitter, subscribed to your channel on YouTube, subscribed to your blog or connected with you on LinkedIn. You know these people. You can communicate with them directly. This is your community - the people who support you and are committed to your brand. In this group you will find Prospects, Referrers and Buyers.

These are your customers. They purchase your products and services. They love you.

But there is a catch. Creating blog posts, status updates, tweets, and pins is not enough. As marketers and advertisers, we still have to create Impressions in order to reach our Audience, find Listeners, get Followers and secure Buyers. But how we create those Impressions has changed. 

On a search engine like Google we can use techniques like keyword marketing: Search Engine Optimization and Pay-per-Click advertising. On a social media platform like Facebook we need to combine status updates with advertising like Promote Page and Boost Post. You start by creating posts that link back to stories, events, pictures, promotions and videos. But in order to get an adequate volume of Impressions you have to do more than just post or tweet. It is now standard practice to set-up an account on Facebook, add your credit card and pay for advertising. Same thing with Twitter. And LinkedIn. And in a few months, Pinterest.

What is Your Marketing/Sales Funnel?

As mentioned in previous posts, Joanne O'Connell and I ventured into the field of marketing metrics a few years ago, only to find that there are so many funnels for marketing and sales that it made our heads spin. 

A simple image search on Google will give you hundreds of results. All of them have value and are trying to make a point. But for the metrics that we were looking to develop we couldn't find a funnel that illustrated the concepts that we wanted to capture. So we made our own marketing funnel.

Our marketing funnel, or was we like to call it "Customer Acquisition Funnel", has 5 levels starting with Impressions and ending with Outcomes (see earlier post).

First, let's look at each level of the funnel and then examine some of the metrics that can be developed using the measures at each level.

Impressions is the number of times an advertisement or other image that represents the company is shown to a viewer For online (or digital) marketing, an “impression” usually means the number times the ad was loaded. For traditional advertising, “impression” usually means the number of times the ad was shown to members of the target group. Note: “Impressions” means the audience was exposed to the ad; it does not imply that members of the audience saw the ad.

Visits is the number of times contact was established. For websites, a visit means a person came to a page on a website. For a trade show, a “visit” means the number of persons stopping at a booth. For a retail outlet, “visit” means actual visits to a store location.

Prospects is the number of times that interest is expressed and contact information is recorded. For a website, a prospect may come from a sign-up for a newsletter. For a trade show, a prospect may sign up to request a future call from a sales rep. For a consulting firm, a prospect may request a white paper. 

Offers is the number of times that a proposal, estimate or price is given. For an e-commerce website, an offer can be a product page that has a price listed. For a consulting firm, a proposal would be the offer given to the prospective client.

Outcomes is the number of times the Prospects accept the Offers presented. The Ultimate Outcome of a business is the behavior that you want members of the target market to do. For most commercial enterprises, this is usually to purchase a product or service. For non-profit enterprises, the outcome might be attendance to an event or donating to a cause. Click here for previous post on Outcomes

Outcomes by Funnel Level
The first area that we can look at is what measures are being achieved by each level of the funnel.

One method is to sum the total of Impressions (or Visits...) for each marketing channel such as pay-per-click, Organic Search, Banner ads, eNewsletters, radio, out-of-home, etc. Or you can look at each channel separately.

Once you have the measures collected you can use a ratio between each level to calculate the rate of transfer. All of these are expresses as a percentage (%).

Using language made popular by Google AdWords we first calculate the Click Through Rate (CTR). This world be the percentage (ratio) of Visits to Impressions. In other words, if there was 100,000 impressions and 1,000 clicked through to the website, then the CTR is 1%.

The Conversion Rate is the number of Prospects that are developed as a result of the Visits to the website (or event or physical location). For example, if 100 people expressed an interested in a product from the 1,000 visits, then the Conversion Rate is 10%. Note that in some situations like an ecommerce website, there may not be any Prospects. Our requirement for a Prospect is that we need to have enough information from them to be able to communicate with them. We need an email address, Twitter handle, connection on LinkedIn or a phone number. If a company doesn't have any Prospects, then the solution is drop this level of the funnel and just use 4 levels.

If we divide the number of Offers by the number of Prospects we have the Offer Rate. In our example, of 100 Prospects, we might persuade 30 to accept an Offer. In this case, the Offer Rate is 30%. As mentioned earlier, an Offer has to include a price. A web page with a price can be an "offer". There are some situations where an offer can be made without a true Prospect. An advertisement to a consumer target market that includes a price would be an example. In this case, there is not Prospect as per our definition.

Take Rate is the number of Sales as a ratio of the number of Offers. If we made 30 Offers and 15 were accepted then the Take Rate is 50%. For some companies this would be exceptional, yet for other companies this rate would be dismal and a note for concern.

The final metric in this section is Test Drive. There are a variety of things that can be considered a "test drive" including test driving a car, downloading a software trial, tasting a sample of liquor, or getting a tiny bottle of new shampoo in your mail box. To calculate this metric you need to know the number of "test drives" or samples given and the number of sales that resulted from the experience.

If we know all the costs related to marketing, we can calculate the Cost per Funnel Level.

For each of these metrics you divide the cost by the number of Impressions, Visits... or Offers. In theory these ratios are easy to calculate. Typically, the difficulty is getting the measures (data) out of the various data bases in a company. We can look at over coming this barrier in a future post.

In summary, for this post we have examined the Customer Acquisition Funnel that Joanne and I developed. And we looked are a variety of conversion metrics and cost per... metrics.

What marketing/sales funnel are you using?


Marketing or Sales: What to Do?

Most companies have limited cash available to invest in growing revenue. A typical choice is between investing in marketing or sales efforts. The obvious answer is that most companies need both but the figuring how much to invest can be daunting. You need marketing to improve the strength of the brand and improve awareness. And most companies (except eCommerce enabled sites) need a person to "close the deal".

Let's look at each area in detail. 

Generally, marketing activities have a broad scope. Although advertising can be targeted to a certain audience, the main objective is to reach as many people as possible with your message. Sales on the other hand is focused. Most sales people concentrate their efforts on prospects (synonymous with leads) who will spend the most and are the most likely to buy.

Sales is always focused on the short term - closing deals, quickly. Getting a commissions cheque as soon as possible is what motivates most sales people. Marketing on the other hand has a longer term objectives over the following 6 months to a year.

In broad terms there are two marketing strategies: push and pull. A push strategy involves taking the product to the buyer and ensuring that the buyer is aware of the features and benefits of the product. For example, a sales person will do a demo for a prospective buyer. Or a company will provide product samples at a trade show. These are push techniques.

In contrast, advertising, referrals, promotions, and discounts are used to pull prospects to a location where they can buy the product. Here is a good article on the difference between push and pull

Acquisition Funnel
In the work that Joanne O'Connell and I are doing in the area of marketing metrics we talk about the concept of an Acquisition Funnel.

As you can see in this funnel, we have combined marketing functions (increasing Impressions, Visits and Prospects) with sales functions (increasing Offers and Outcomes - I wrote about our unique concept of Outcomes previously). 

One issue that often arises between marketing and sales departments is the number and quality of sales prospects. Clearly it is the responsibility of marketing to generate prospects; why else does marketing exist. But if marketing doesn't generate the right type of sales leads then they are not doing their function as effectively as they should. The fix in this case is making sure that marketing efforts are getting to the right audience and that the creative portion is strong enough to attract attention. The video, Battle at F-Stop Ridge, created by The Camera Store, a company in Calgary, is an excellent example of excellent creative.

Similarly, marketing may be generating qualified leads but sales may have a low Take Rate (sales/offers). In this case, the sales team needs training, motivation, better tools, better processes and potentially restructuring. 

Where to Invest - Marketing or Sales?
Clearly a company has to invest in both marketing and sales. Both need the other. Both live and die by the effectiveness of the other. Sales needs marketing to improve the company's brand strength, increase product awareness and generate sales leads. Marketing needs sales to close deals, increase revenue and generate cash for pay cheques and future marketing investments.