Integrated Strategic Marketing - What are the Ramifications?

By Dan Sweeney

In its broadest sense, when a company formulates an Integrated Strategic Marketing plan, to promote its business, it means the organization is focusing its energies and resources on a course of action that will bring its strengths to bear in ways that will lead to increased sales in one or more market niches.  Hence, implementing an integrated strategic marketing plan becomes the essence of product research and development, advertising and promotion, distribution, pricing, relationship management and ancillary marketing communications elements to dovetail with the firm's marketing goals.  Ideally an organization can create and implement the necessary activities for how success can be achieved, and have an idea of when the company expects to achieve it. 

Determining an actual marketing strategy depends on the choice of target markets, positioning, marketing mix, and allocation of resources. This strategy is most effective when it’s an integral component of the overall firm strategy that defines how the organization will successfully engage customers, prospects, and competitors in the market arena. The nature and extent of a marketing strategy invariably evolves from the corporate mission, as well as economic factors that might affect the company and its performance.  In this context, the more the customer determines the company's revenue, the more marketing strategy becomes closely linked with sales.

The logic of an integrated marketing program has been described as the management of three interconnected business drivers. 

First, identifying and maintaining the organization’s image or its known brand identity becomes a reflection of the way the company is organized and operated to provide different value to the audiences it serves. This can be described as the organization’s “makeup,” or Influential characteristics that might be difficult to wrap your arms around like the business model, core competencies, positioning, product designs, and brand, as well as the culture and strengths of the organization. To a greater or lesser degree the business success of a company comes from its ability to create discernible values for its customers.  This is because the internal characteristics of a firm often lead to external actions that become the basis of the brand, brand equity and market positioning. 

Second, employees must embrace this identity, with value-focused creativity and by applying appropriate resources toward that end.  It is ultimately the company that becomes who its management and employees are and what they stand for.   It is the reputation the company will inevitably earn, good or bad.  Along the way, one of the major challenges for the company is to implement ideas guided by appropriate performance management to achieve the necessary integration, adherence and high levels of performance throughout the company.  In marketing speak, this is sometimes thought of as not just “talking the talk” but “walking the walk."  Integrated marketing involves all branches of the organization because it draws on the contributions of HR, operations, manufacturing, research and development, finance and other key groups as well.  

Third, contact management is the technique of using a variety of communications vehicles to create valuable experiences for its “publics.” Contact management is perhaps the most important function for the marketing team because it involves the process of disseminating information about itself, competitors, technologies, markets, shareholders – anyone interested in the posture and marketing strategy of the company.  This positioning is so crucial that very often a marketing operation will seek external assistance from an agency or consulting firm that specializes in one or more aspects of the marketing communications or branding process.  A good consulting firm should be able to clearly and objectively delineate a company’s objectives. They should also be able to assimilate what the company is and what it wants to be so that that image can be reflected in internal and external materials, such as ads, brochures, trade shows and other public relations activities that reach outside groups the company wants to influence (i.e. shareholders, trade press and other target audiences).  The business of “contact management” nets down to the various ways of engaging these target audiences.  With the advent of the internet as a “pull through” marketing and sales function, there became a need to more clearly define how a company wanted to manage its contacting.  Seth Godin, a Tufts University graduate, established a set of guidelines that helped refine that process.  He called it inbound and outbound marketing.      

Inbound/Outbound Marketing Comparison

Some might say inbound marketing is a soft-sell type of marketing that essentially focuses on the brand getting “discovered” by customers.  In a sense, this is akin to managing the customer experience with the company from first contact to last.   In this manner, a customer is “pulled” toward the company through a series of feel-good, hand-holding activities that create a marketing bond between customer and company.   Inbound marketing is analogous to advertising’s “institutional advertising” of 30 or 40 years ago, which utilized a technique to sell the company and its image through positive awareness. 

These days, Godin defines “inbound” as permission-based or opt-in marketing, a concession to the Can-Spam Act, which evolved from early-internet days where it was common practice to spam unwanted advertising messages over the internet to large lists of email addresses of people who didn’t care about and had no interest in such advertising.   So then, inbound marketing, as we see it implemented today, is the technique of enabling marketers to "earn the respect or acknowledgement" of a customer’s top-of-mind awareness via blogs, newsletters, web seminars or other non-invasive activities without trying to “hard-sell” a product or service.

By contrast, outbound marketing can be thought of as force-feeding messages via paid advertisements, press releases and collateral materials hoping their products or services get seen and acted upon by specifically targeted audiences.  In other words, “outbound” might be the hard-sell approach using traditional marketing means to focus on getting customers to buy a product or service through product and brand advertising and collateral promotion of that brand.  Netted down to its simplest denominator, outbound marketing has created a “cost-per-thousand” mindset for advertisers.    With “outbound,” the company plants a seed that forces one of three decisions by those in its marketplace:  to accept, reject or be ambivalent to its message. 

Inbound marketing proponents are quick to point out that outbound marketing is rapidly becoming less effective -- witness diminishing newspaper circulations, magazines going out of business or merging; television and cable losing its dominance to other media; the advent of newer media forms and content sources (i.e. social media outlets such as Facebook, Twitter, LinkedIn, etc. or content providers such as OnDemand, Netflix and others).   They’ll point to other examples like traditional terrestrial radio stations losing their listeners to personal MP3 devices, satellite radio listeners, Pandora and the rest.  Inbound proponents say consumers will always tune out an intrusive ad whenever possible – like a scoreboard advertisement at a sports event, a taxi top, a billboard, an airport display, or an elevator advertisement.  Anything that invades mind space when the audience is attentive to doing something that’s a priority is construed as “invasive.”  More and more we see examples of technological innovation being applied to thwart these invasions … fast forwarding through TIVO-recorded shows to avoid the commercials, popup blockers on web browsers, email filters depositing unwanted mail into a “junk folder”, and many more. 

With all these detractors to outbound marketing, you’d think these seemingly would spell the demise of traditional advertising.  Well, don’t be misled.  Among most heavy advertisers like auto makers, giant retailers, financial services, fashion and travel, “outbound” is still strong.  It is said the average person receives 3,000 or more advertising messages daily.  Major advertisers will spend big bucks to take a chance at penetrating this consumer mindshare.   While outbound slowed significantly during the economic downturn today it shows signs of picking up.   There are a few key reasons why: 

• First, large ad agencies will never jeopardize their account relationships by recommending that internet advertising replace any of its mainline budget activities.
• Second, agencies contend clients feel more comfortable with outbound because they understand what it can and cannot do. 
• Third, clients become very sensory about their own advertising.  They like to absorb and critique messages at their own pace … to feel , see, hear … blue pencil … resize or reshape, add to, delete from, change colors and, in general, pick apart advertising materials.   They feel it’s their job.

On the other hand, advertising on the internet is ubiquitous, somewhat unbridled but more importantly, is a technical medium that uses, for all but the most seasoned marketers/technology savvy, little understood terms such as banners, skyscrapers, square buttons, measured in pixel sizes and charged for on the basis of CPI (cost per inquiry) or CPC (cost per click).  From a production standpoint, source codes, hyperlinks, analytics, optimization, java, shockwave and flash techniques are used to deliver internet advertising’s message.  Perhaps not surprisingly, still in this day and age, many agency execs and client marketing staffs feel somewhat uncomfortable about the internet.  If they don’t understand what these terms mean, they’ll never try to influence clients to use internet advertising.

This scenario is very reminiscent of when cable TV advertising began in earnest some 20-25 years ago.  Though the television medium in the US was well established at that time, selling advertising was difficult at best.  With all its local systems, targeted networks and household demographics to take into consideration, agencies flat out didn’t want to be bogged down with a deluge of statistics and the complexity of buying space.   For example to buy 3 top-tier networks like ESPN, Lifetime and MSNBC in 25 systems throughout a region each with staggered weekday/weekend schedules and at various price points for prime or nonprime day-parts, proposals became ½ -inch thick and it boggled minds.  Truth is, media buyers preferred to talk about what they understood not what they didn’t or couldn’t understand.  Cable TV buys became a nightmare, way too confusing for clients to absorb.  Cable became a tough sell.  The result was agency buyers bought network or local spot flights and dumped cable. They’d rather not be embarrassed trying to explain something they didn’t know to someone who couldn’t understand.  Well, we’re seeing some of that mind-boggling confusion going on today in determining what to buy and what not to buy in inbound marketing.  

Hubspot.com, which prepared the chart shown here, is trying to sift through the confusion and recently, surveyed about 170 professionals; all familiar with marketing strategy and 71% of them working in b-to-b marketing capacities with their companies.  This report was compiled from those interviewed and is intended to help business marketers understand the use and importance of inbound versus outbound channels of marketing.  Admittedly, it presents a rather skewed perception in favor of inbound vs. outbound, but reading between the lines we see the channel strategy is making some inroads.

Respondents said they spend 37% of lead generation budgets on inbound; whereas, 30% is spent on outbound i.e. trade shows, direct mail and telemarketing.  Since email can be slotted either way, it’s not measured.  The operative words in this chart are “lead generation.” That type of advertising does not account for branding or product advertising, which by far accounts for the lion’s share of overall marketing budget spend.   That’s why the results shown here must be viewed at face value of just 10% of overall budget spend and not a much larger percentage.

 Since this inbound chart does not include brand and product advertising but rather only that associated with “lead generation,” of significance is that of the respondents who self-reported their cost/lead, those who spent 50% or more of their lead generation budget on inbound marketing averaged $84; whereas businesses spending 50% or more on outbound marketing averaged $220 cost/lead.  Extrapolating from that, it would seem inbound marketing is far more efficient in terms of advertising spend than outbound and it is a fair assumption that inbound is deserving of an increase in spend percentage to yield an increased payoff for dollars spent. 

Direct marketing, which here accounts for 8% of inbound spend, is a distinct form of advertising that reaches its audience without using traditional formal channels of advertising, such as magazine, TV, newspapers or radio.  Businesses communicate straight to the consumer with advertising techniques like flyers, catalog distribution, promotional letters, and outdoor advertising.  Direct Advertising is a sub-discipline of direct marketing. Two key definitional characteristics distinguish it from other types of marketing. The first is that it sends its message directly to consumers, without the use of intervening commercial communication media. The second characteristic is it drives a specific "call-to-action." This means measurable, positive responses from consumers (known simply as "response" in the industry) can be tracked, regardless of medium. If the advertisement asks the prospect to take a specific action, for instance call a free phone number or visit a website, then the effort is considered to be direct response advertising.  This activity accounts for approximately 8% of lead generating budgets, Hubspot says.

Tradeshows, which account for 11% of lead generation budgets, often involve a considerable front-end marketing investment. Costs for space and furniture rental, design and construction of displays, telecommunications and networking, travel, accommodations, promotional literature and giveaway items to attendees, all make for an expensive program. In addition, costs are incurred at the show for trade services such as electrical, booth cleaning, internet services, and drayage (material handling).  Exhibitors are required to use approved tradesmen to order their required services and complete any necessary paperwork such as health and safety declarations.   Another significant expense involves the handout materials such as brochures, giveaways, business meals for both the company’s exhibitor staff and for prospects, if appropriate.   Because of these expenses, an increasing number of trade fairs are happening online, and called virtual tradeshows. They are increasing in popularity due to their relatively low cost and because there is no need to travel whether you are attending or exhibiting. Trade shows on location are considered outbound and the virtual shows, webinars or video conferences are clearly an inbound activity. 

Telemarketing, combined with Mobile Marketing, accounts for 9% of lead generation spend.  The telemarketing sales activities usually involves a salesperson soliciting prospective customers to buy products or services, either over the phone or through a subsequent face-to-face meeting, web chat conference or video conference.  The objective is to schedule an appointment during the call. Telemarketing can also include pre-recorded sales pitches programmed to be played over the phone via automatic dialing.

Telemarketing has come under considerable criticism in recent years, because it is viewed as an annoyance by many, so much so that the Federal government has established a “do not call” registry whereby personal phone numbers can be removed from contact lists or omitted from telemarketing contact.   Since 1998, when cell phone providers began using text to notify customers of services, marketers initiated the use of mobile marketing as a means to further engage their customers. More than 54 million users regularly access the mobile phone. Up to now, mobile marketing has been mostly focused for mass campaigns, considering each campaign as a discrete component of the overall marketing mix, rather than as a tool for learning more about customers and prospects.  Mobile is not a destination in and of itself.  Rather, it is considered an integrated component that marketers need to consider to reach an engaged, satisfied customer.  Successfully executing marketing campaigns across communications channels can oftentimes be challenging and bringing mobile into the marketing mix certainly adds another layer of complexity. But that said, mobile should gain in popularity especially as the technology platforms innovate to support the explosive growth of phone apps envisioned by the likes of RIM, Apple, AT&T and others. 

While the mobile channel of marketing has matured in the past several years, for many it remains experimental, and is where marketing theory and execution often part ways.  But that is changing for some.  For example, a Ford Dealer Ad Group offered a Free Oil change; Home Depot coupons provide discounts on building supplies, Sears uses mobile for appliances and clothes, and financial services companies use the channel as an invaluable touch-point to engage customers and opt-in consumers about stock alerts.  Each of these efforts goes beyond simple campaigns and coupons. The advertisers are creating greater customer acceptance and trust for the channel as it continues to become an increasingly valuable, effective component of a company’s overall cross-channel mix.

Social Media: Rousing the Sleeping Giant

The sheer volume of members of Social Media companies such as LinkedIn, Facebook, MySpace, Twitter and others, has proven to be an incredible way to demographically categorize their members.  Campaigns can now reach a potential 240 million consumers.  But because of the relative newness of social media and the fact it is construed largely as a community of people where advertising is a no-no, it has taken a while to determine how these social media companies can use this enormous user base to generate revenue. While today social media companies account for just 10% of the “lead generation” channel inbound activity, advertisers and the social media companies themselves will continue to develop more surreptitious ways of reaching this vast marketplace, this percentage should increase dramatically.    

Hubspot says, 48% of the companies publish blogs with nearly three quarters of them changing information weekly, but apparently the biggest frustration is finding the time to change it.  While blogging is clearly an inbound channel, one asks the question of how effective is it?  Companies need to ask “How do our customers make buy decisions?” and “What’s the best way to influence them?” to find out whether or not blogging is worth the time, energy and resources to get involved.  It’s a lot like drawing a parallel with product news releases.  How important are they?  Although, this technique to “get the specs out” has been used for years as bingo-numbered trade magazine fillers, there is no factual proof of how effective these stories are.  It’s a fact some people don’t read ads but will read new stories.  The same probably holds true for blogs.  If the subject matter is interesting, it gets read; if not, it won’t.   The mystery is finding out how important blogs are in shaping public opinion thereby increasing their motivation to buy. 

Search Engine Optimization (SEO) considers how search engines– like Google, Bing and Yahoo – actually work in a contextual way and what people search for.  Optimizing a website primarily involves editing its content and HTML along with the associated coding to increase its relevance to specific keywords and to remove barriers to the rating activities of search engines.  SEO then becomes the process of improving the volume or quality of traffic to a website or “landing” page (such as a blog) from search engines via "natural" or "organic" unpaid searching,  as opposed to other forms of search engine marketing (SEM) which may deal with paid ads such as Google Adwords. The theory is that the earlier (or higher) a site appears in the search results list, the more visitors it will receive from the search engine.  SEO can target different kinds of search, including image search, video search and industry-specific vertical search.  This gives a website web presence and as an inbound channel accounts for up to 12% of the lead generation budgets.  Companies continue to spend these dollars because they deem their website as sort of a capabilities brochure and a crucial mechanism that brings “top of mind” awareness to customers and prospects.

Forrester’s Research, which conducted a study of “paid search ads” in May, 2009 among 1,575 respondents, advises advertisers to plan for short- and long-term business goals. Interactive marketers love instant gratification. But immediate returns should not be prioritized over long term. Results show:

• 52% respond actively to online advertising…31% actually click on the ad itself
• 27% perform a search – this shows a symbiotic relationship with both channels.
• 33% will respond to an ad and buy if they recognize the company brand.
•  4 in 10 (38%) learn about a brand for the first time when responding to an online advertisement.
• 49% of respondents after seeing an online ad will do a search on the product, service or company.  This shows a relationship between an online display ad and power of purchasing.  i.e. companies make a mistake if they don’t back up online ads with SEO
• The 27% of the consumers who do a search without having seen an online ad are less likely than the 49% number of consumers who will purchase after they’ve seen an online display.

Forrester says, the key take-away is that online advertising is powerful as a sales channel but when combined with SEO marketing, it is significantly more powerful as a sales vehicle.

Email Marketing shows up at 10% of lead generation dollar share but one mail house told us confidentially only .91% of targeted emails even get opened! – Why?  Useful opt-in lists are not abundant.  Companies don’t collect emails. The Can-Spam Act and mail houses have inhibited this channel.  Recipients are worried about viruses and will not open unrecognized emails and company IT departments have implemented stringent mail filters to restrict “forwards” or mail with unacceptable keywords from entering their system.

Some tips in emailing to help increase its open rate: Use your company name as the sender. Remind recipients to add your e-mail address to their address books.  Use a table of contents.  Include multiple ways for readers to get in touch with your brand.  Offer a prominent link to a web version of the e-mail. Be sure an image does not take up the top portion of your message. Include a “forward to a friend” link. Make it easy for people to unsubscribe but don’t make it a banner headline!  These typical “assurances” greatly increase the chances of getting an email opened from a stranger or unrecognized party. 

The PR function in the marketing game has changed as a facet of the integrated communications plan.   It used to be that the PR department formulated a proactive plan that mostly involved ways of gaining positive publicity and recognition for the company.  Much of it focused on news release generation about products, community activity and do-good contributions, shareholder and financial relations, speaker platforms, and public affairs lobbying both at the state and federal level.  These activities were assimilated into an “integrated communications plan” along with the traditional advertising functions we think of today as “outbound” channels.

Some of the more sophisticated agencies, such as, Carl Byoir & Associates, which in its heyday during the 1950s through the ‘70s was a worldwide PR firm headquartered in mid-town New York that served many Fortune 500 clients.  They merged with Ketchum McLeod, an advertising agency in the ‘80s and therefore its brand as a pre-eminent PR firm all but vanished.  Byoir was a powerful shop with departments staffed by well-connected ex-journalists and radio/TV production professionals and copywriters.  They served as a valued resource for clients when it was important to get face time on TV, a sound bite on the radio, a take-out in a newsmagazine or wire service; or even to get a book published.  They seemingly had all the connections to make anything happen.   Its chairman, George Hammond, was hand-picked by Byoir himself, when the founder retired.  Hammond preached a straightforward message about what public relations was all about – neutralize negatives … emphasize positives and everything else will take care of itself.  We wonder if this philosophy could stand the acid test of today’s inbound sphere of influence where “news” cannot easily be managed but rather can go “worldwide” in an instant through a Google search and a YouTube video covering the whole story in graphic detail.

The arrival of internet news and the dynamic communications channels spawned by it, coupled with an insatiable desire by the consumer for content provided by the likes of Google and Wikipedia, have forced company PR and Advertising departments to reassess their mission.  Instead of being separate and independent, they are being asked to integrate activities.  Formerly, publicity releases, had no such thing as internet newsletters specifically targeted to a niche audience; there were no such things as blogs to create additional visibility for a story; there were no such things as publicity analytics, from companies like Vocus,  where editor lists could be sliced and diced and receive an emailed news story with a photo attached at the press of a “send” button.  And once it went viral, the source could receive a comprehensive analytics report the following day on where the story appeared.   There was no such thing as an online version of the WSJ or the NYTimes or any smaller newspaper’s dot com  to get the word out. 

The ability to actually create and execute together within the ever-elusive and expanded framework of an integrated communications strategy has caused major re-thinking at the corporate level.  No longer is a two-martini lunch on Madison Avenue necessary to get a story into print.  The sophistication of Wikipedia-type information and instant-like video/audio communication has made library research a thing of the past.  It has spoiled us to the extent that we’ve gotten accustomed to an “I want it and I want it NOW” mindset.    

Who’s In Charge … And of What?

We are on the cusp of an information explosion the likes of which will challenge the scope and nature of every aspect of what we know as “traditional market planning.”  There are so many new and different ways to promote, defend, discuss, advertise , reference, dissect and create a brand that all must be considered as part of a company’s overall "integrated communications strategy.“

However, becoming “integrated” begs even larger questions of: What does it mean?; and Who is responsible for the tactics or disciplines?; Who should be in charge of implementing it and more importantly Who should assume ownership of which aspects?;  and as we assess and affix those organizational responsibilities, who should be the one who asks and determines, “How is it all working out?”  “What can be improved?  What can be deleted? What needs to be tweaked? What’s efficient?  What’s too costly?  

On the inbound side, the fact is, there aren’t a lot of internet “experts” who can say with conviction that their way is the best way to integrate in order to make money, sell product, or establish a brand.  Right now, online advertising only accounts for 10% of the company’s advertising spend, yet down the road, pundits say it will probably represent significantly more.  This certainly places already-tight marketing budgets under more scrutiny and there’s every expectation that outbound budgets will be cannibalized to make room for “online” spending.   

In “integrating,” just about every aspect of a company’s organizational structure will be infiltrated and affected.  The peril is that internal fiefdoms and sacred cows will come under attack. Budgets will be re-allocated and along the way, companies will see internal politics rearing its ugly head while political correctness and team playing gets severely tested. It would seem companies are on the horns of a dilemma.  Inbound? Outbound? … Online? Traditional?  You be the judge!  Or more appropriately we should say “Who will be the judge?”  Good question.   

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Dan Sweeney is CEO and founder of IKON Communications Consultants, Inc.  He has been in the PR/Advertising business for 47 years.  He can be reached at dan.sweeney@ikoncommunications.com