Author: Jonathan Reeve, General Manager - ANZ at Eagle Eye Solutions
Eagle Eye CEO Tim Mason recently visited Australia and New Zealand to meet with retailers and brands considering a personalised digital marketing program. The highlight of the trip was a breakfast briefing to FMCG leaders where Tim reflected on the future of “Brand promotions in the digital age”. Many FMCG brands are struggling to respond to the technology-driven changes affecting all our lives and Tim highlighted the opportunity to use digital technology to connect directly with end-consumers. His thoughts struck a chord with members of the Australian and New Zealand Food and Grocery Councils.
Tim’s position is founded on the surprising fact that whilst the majority of ad spend is now digital, promotional spend by retailers and brands has not followed. An obvious example is the paper catalogue placed by retailers each week in the nation’s mailboxes. At Eagle Eye we estimate retailers spend 40% of their marketing budget on paper catalogues, much of it funded by FMCG brands who pay the retailer for more prominent product placement. The waste driven by the catalogue is not only financial and environmental. There is also a hidden cost of billions of dollars of lost margin because store-wide offers are the tried and trusted technique used to generate interest in the catalogue. The downside is that every customer pays the lower price when a product is on store-wide promotion - even those who would have happily paid full price.
Around the world, Eagle Eye is seeing increasing activity from early adopter retailers and brands who are collaborating on “through the line” digital campaigns. In this new method of opt-in advertising, consumers browsing social media who express interest in a promotion are issued with a personalised coupon redeemable in the partner retailer. The drinks sector is leading the way here, but other categories are starting to follow. The successful “Sun’s Out Rum’s Out” collaboration between Bacardi and Slug & Lettuce bars highlights the opportunity for retailers to reap a direct benefit from the billions of dollars FMCG brands invest in above-the-line marketing.
So, interesting times ahead, not only for retailers and brands but also for other players in the retail ecosystem. One example is the role played by advertising agencies. Advertising professionals who want to be in demand will increasingly need to devote their creative energies to digital campaigns that directly engage consumers, with less time spent on finding ways to grab consumers’ attention through mass media campaigns. A shift to radically different success metrics, for example ROI on performance marketing spend, will require completely different skills to those traditionally valued and rewarded in advertising.
At Eagle Eye we are subject matter experts in the area of brand-funded digital promotions, thanks to our work with the likes of Asda Walmart, Coca-Cola, Diageo, Loblaw, Pernod Ricard and Sainsbury’s. We’d love to hear from forward-thinking retailers and brands keen to take an early-mover advantage in the Australian and New Zealand market.
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