Last month CEO Ranjit Mulgaonkar and Director of Product and Marketing Nathan Grimm had the opportunity to present sessions at ERA D2C 2015 in Las Vegas, the Electronic Retailer Association’s annual DRTV industry conference that brings together thought leadership from influencers and the opportunity for direct response marketers, media agencies and product companies to build relationships.
Watch full session videos for Ranjit’s panel discussion, “Discover Your True Omni-Channel MER,” and Nathan’s seminar, “Optimize for the World’s Largest Search Engine – Amazon.com,” here.
While it was a privilege and honor to play a role in the ongoing conversation about direct response marketing, our week was punctuated with Ranjit receiving the Inaugural Mercury Wing Award at the 2015 ERA Moxie Awards presentation. Mercury Media presented the Wing Award to recognize marketing agencies, suppliers, technology companies and media agencies that are advancing the DRTV industry. Read more about it here.
We’d like to recap our experience and reflect on some of the key conference takeaways related to online marketplaces.
Direct Response Mixology
The conference theme, Direct Response Mixology, highlighted the need for DRTV companies to build product campaigns around the omni-channel consumer.
The longstanding formula of building campaigns around TV advertising and separate, independent conversion touchpoints like call centers and online landing pages simply fails acknowledge that separate channels no longer reach separate audiences. Because today’s consumers engage brands through multiple channels simultaneously like Amazon, mobile experiences, paid and unpaid search, online reviews, and social media, marketers need to ensure consistency between touchpoints and integrate data from each channel to better understand their customers.
As DR product marketers move towards unifying the brand experience, thought leaders in omni-channel marketing are beginning to place a growing emphasis on the Amazon.
Getting the Most Out of Omni-Channel DRTV Campaigns
The online marketplaces channel is a critical conversion path in omni-channel product campaigns, with Amazon alone accounting for 44 percent of product search share and 10 to 40 percent of a product’s overall DR campaign revenue. Product companies simply can’t ignore the channel, and DNA was invited to present two sessions on how DRTV companies can get the most out of the fastest growing segment in consumer retail, Amazon.com.
Ranjit’s Masters Series panel discussion addressed the role Amazon data plays in enhancing media attribution for DR campaigns, and Nathan Grimm’s Learning Lounge session equipped marketers with best practices to optimize search visibility for brands on Amazon.
Videos for Ranjit’s session, “Discover Your True Omni-Channel MER,” and Nathan’s session, “Optimize for the World’s Largest Product Search Engine – Amazon.com,” can be viewed in their entirety here.
Amazon Is the Next Brick to Add to the DRTV Campaign Foundation
DRTV campaigns have included basic elements such as creative, media buying and placement, IVR call centers and online landing pages, but in today’s digitally interconnected world, DRTV must evolve and incorporate new touchpoints like social media, search engine marketing, and online marketplaces to engage consumers effectively.
In Nathan’s Learning Lounge seminar, he presented reasons why marketplaces like Amazon are the next brick to add to the DRTV campaign foundation and laid out a checklist of best practices to optimize listings the world’s largest search engine. Did you know that Amazon has surpassed Google as the world’s most used search engine for consumer products? Read more here.
If You Aren’t Accounting for Amazon Sales, You Don’t Know Your True MER
Ranjit’s panel discussion addressed the evolution in DRTV media monitoring that is being driven by omni-channel marketing. As marketers integrate sales channels to create a seamless customer experience, obtaining data from each touchpoint is critical to know who your customers are and how to reach them. Here’s why marketplaces are so difficult to account for in omni-channel:
Because marketplaces like Amazon are open for any seller to list a branded product, product companies can’t get the data from each seller. Considering that Amazon can account for between 10 and 40% of a products revenue (source: discussion panelist Andrew Farrar), not having access to data from Amazon can drastically impact the accuracy of media campaign evaluation.
Ranjit’s panelists discussed how media product companies can leverage Amazon data, and presented real life examples of how the data from Amazon impacts media campaign performance. The panel featured Jeff White – Media Analytics, Tim Pearson – Direct Holdings Global/Time-Life, Tricia Ruddy – Diray TV, and Andrew Farrar – HandsOn Consulting.
Price Control: The Biggest Threat and Opportunity in Retail
In Ranjit’s discussion, panelists pointed out that controlling pricing on marketplaces is key to the longevity of the retail product lifecycle. Because of the open nature of marketplaces where anyone can open an account and sell a product for whatever price they choose, competitive pricing wars ensue that negatively impact traditional retailers through downward pricing pressure.
In order for retailers to compete, lower wholesale prices are often negotiated to compete with Amazon, resulting in a cycle of quickly reduced margins for the manufacturer as they are forced to renegotiate wholesale pricing. Reduced margins hurt everyone, and the longevity of product lifecycles hinges on the ability to enforce pricing policy on marketplaces and maintain transparent relationships with distributors to know who is selling your product on Amazon.
Does Amazon Cannibalize Sales From Other Channels?
“The only time you’re cannibalizing sales is by not selling on Amazon” – Jeff White, CEO, Media Analytics.
Jeff’s comment during the panel discussion succinctly answers a question that DNA is often asked by product companies.
While some of the panelists said brands may see a small amount of cannibalization, the consensus was that the sales uplift by incorporating Amazon far outweighs the potential small amount of cannibalization that may result. As an example, Tim Pearson of Time-Life indicated that while he sees a 1 to 2 percent decrease in sales from owned channels when products go live on Amazon, the 10 to 40 percent incremental lift from Amazon and access to Amazon data more than make up for lost sales.
Launch on Marketplaces During the Media Test Phase
Discussion panelists agreed across the board that Amazon onboarding should be done during the test phase of media campaigns. When a channel like Amazon can account for 10 to 40 percent of a product’s overall revenue, the data from Amazon could mean all the difference when media companies test products to separate winning products from the losers.
“One of my clients asked me ‘Why wouldn’t I want to test in front of 240 million potential customers?” – Ranjit
“There is access to data you just couldn’t have access to before now – Amazon’s data collection is way better [than Google’s] and always ahead of the curve because they’re selling it.” – Andrew Farrar, HandsOn Consulting, LLC
Manage the Amazon Channel Exclusively to Maximize the Channel
Maximizing performance on marketplaces begins with managing the channel exclusively as the only seller representing your product brand.
If product companies allow 3rd party distributors and downstream retailers to sell on Amazon, they lose control over pricing across channels and don’t have the ability to get accurate data since any number of sellers could be listing their products. Additionally, having exclusive control over product listings enables product companies to protect their brand image in the channel and control listing content to optimize for search visibility.
If you’re a product company, how healthy is your Amazon channel? Reach out to us to find out – we’d like to share how you can take control of your marketplaces presence with DNA and maximize the largest opportunity in retail.