Marcomm Integration with Brand Community Media / Custom Publishing

How a brand community media program can incorporate multiple marcomm objectives

Marketing organizations use a mix of communications activities – such as advertising, direct mail, customer research, and P.R. – to pursue diverse objectives. A company might develop one marcomm program to keep “at risk” customers from switching to an upstart competitor, another to support a rebranding effort, and another to retain customers in a merger. With the variety of objectives and the diversity of media, these programs typically operate under separate budgets and managers. Because of this, marcomm managers can miss opportunities to work together to maximize effectiveness and achieve economies of scale. This is where a brand community media program can help, by providing a platform for integrating marcomm programs.

The Brand Community Media Platform

A brand community media program can consist of any combination of print publications, Web sites, e-newsletters, events, and other communications products. The main distinction between brand community media and other marketing communications is the use of content to engage consumers. By delivering content that consumers find useful and interesting, brand community media acts as a kind of carrier wave for multiple marcomm messages. If consumers find the primary content interesting and useful, they’ll accept other messages as well and respond accordingly.

A complete brand community media program may include a magazine mailed to 250,000 consumers, a content-oriented Web site, and a weekly or monthly email newsletter, all of which work together to create a kind of two-way marcomm channel: the magazine pushes messages out and drives Web response; the Web site provides interaction (both with and among consumers) and tracks interests. Other media such as opt-in email newsletters and events enable marketers to further segment customers by their interests and keep the entire communications cycle in motion.

With regular delivery and a high level of acceptance, a brand community media program also can deliver multiple marcomm messages. A print magazine can carry branding and product advertising, promotional inserts, and custom content such as customer service information or investor news. The Web component provides a back-end for managing inquiries and promotions fulfillment. It can also integrate shopping functions, turning a branded publication into a sales engine, while e-mail newsletters can include special offers, promotions, and customer surveys.

Brand Community Media Cost Structure

Brand community media programs can be complex, but they gain economies of scale and efficiency through integration. In delivering advertising, for example, the incremental cost-per-page of a branded magazine is minimal – and you pay no space charges as you would if you were to purchase an ad page elsewhere. Every marcomm objective that you can incorporate into the brand community media program – including advertising, direct marketing, P.R., corporate communications, investor relations and more – can save you money.

Expenses, Offsets, and Savings through Integration

To explore this savings, let’s look at the business structure of a brand community media program, including:

its direct and indirect expenses;
its revenue offsets, including revenue from advertising, co-marketing, merchandising, list rental, and commissions from direct sales;
direct savings from programs that are replaced, enhanced, or supplemented through integration into the brand community media program;

On the expense side, it’s easy to quantify direct production costs such as creative development, printing, Web development, postage, as well as the cost of outside management services. You get a price quote, contract the job, and pay the bill. It’s more challenging to quantify the indirect costs of internal management overhead – mainly time – for meetings, creative consultations, meetings, reviews, meetings about meetings, approvals, and more meetings. Without strong external management, turning a marcomm department into a media production department can divert attention and resources away from your core mission.

I discuss revenue here as part of the cost structure, as you should view it mainly as an offset against expenses and not as a profit center. You can sell advertising to partners (or to anyone who wants to reach your customers). You can provide shopping carts on your Web sites for event registration or catalog sales. And over time you can opt in customers to create revenue-generating direct marketing lists. You can also sell merchandise related to your publications, and more.

A brand community media program’s net cost also depends on the marcomm programs that it incorporates. As an example, let’s discuss nine typical marcomm objectives that can be combined into a single branded program comprised of a quarterly 68-page print magazine with distribution of 250,000, a publication Web site, and a quarterly email newsletter. If a magazine carries 55 percent advertising, we have 37 advertising pages quarterly for marketing messages and promotional content. If we sell half of the ad space to partners, we can use the other half for the in-house marcomm programs, as follows:

Branding: two pages: back cover and inside front cover.
Corporate or investor relations: four pages for corporate editorial content such as letters from executives, information about philanthropic programs, and management profiles.
Customer service: one page, back-of-book position, to answer common consumer questions, and provide company contacts and other customer service information intended to lower customer service and support costs.
Direct sales: up to three pages of direct response advertising (with either Web or toll free phone fulfillment), unlimited online advertising, and interactive forms (on the Web) for completing purchases.
Partner or channel comarketing, merchandising: up to four pages in solutions or partner listings, co-op display ads, or shared inserts or bind-in cards; the Web site can include partner run-of-site partner advertising as well as dedicated partner or channel sections, as well as sections reserved for new partner promotions.
Prospecting, new customer development, list development, and lead generation: two pages for inquiry-style advertising with a drive to the Web or an optional bind-in response card. A “pass-along” response card can allow other readers to sign up to receive the publication. The publication Web site can also offer e-mail newsletter subscriptions to capture email addresses and demographic information.
Product advertising and promotions: two pages in the run-of-book (ROB) with tie-ins to Web content.
Product feedback and customer research: one page with a call for readers to complete Web surveys; the publication Web site can include sign-ups for customer panels (offered to visitors on an nth select basis); the publication Web site can also include product forums or feedback forms.

These sample programs require 18 ad pages quarterly, plus two direct response bind-in cards, an advertising-enabled Web site, and an email newsletter. More importantly, these objectives integrate into the brand community media program without significant incremental cost. Using conservative estimates of what these programs would otherwise cost (for ad space, postage, and production), the brand community media project provides more than $2 million in marcomm value as described in Table 1. This is above and beyond the program’s basic branding and relationship-building value.

Table 1 — Typical marcomm objectives and estimates of annual costs to serve audience of 250,000 customers/prospects without brand community media. In most cases, costs can be expressed in cost per piece or cost per thousand (cpm) recipients or viewers, which includes production, ad rates, and shipping or postage. It’s worth noting that each of these programs would typically come from separate marketing budgets.

Marcomm Program	Description	Annual Cost
Branding	Typically via print or broadcast advertising. For the universe of 250,000, would involve eight pages annually (two pages quarterly), at low est. $25 cpm.	50,000
Corporate, Investor, Press, or Community Relations	Letter mail brochure three efforts at $.50 per piece including postage plus one effort with a 4C brochure at $.75 each	526,500
Customer Service	Postcard mail quarterly, with drive to Web and/or consumer FAQs at $.40 each quarterly	400,000
Direct Sales, Catalog, or Telesales	Cost of selling products, event registration, or other sales consisting of one catalog at $.75; one DM piece with 4C brochure at $.75, and postcard campaign at $.75 per recipient (3 mailings)	562,500
Partner or Channel Comarketing, Merchandising	Cost of fulfilling partner advertising program, four ad pages quarterly at $25 cpm	100,000
Prospecting, New Customer Dev., List Dev., Lead Generation	Direct mail and telemarketing to identify prospects, drive traffic to Web offers, drive customers to POS. $.50 per mail piece incl. postage for one effort quarterly	500,000
Product Advertising, Promotions	Same metrics as branding, with two ad pages quarterly, for $25 cpm. Cost of response vehicle is minimal.	50,0000
Product Feedback, Customer Research	Cost to solicit via postcards, letter mail, and telemarketing to 10,000 consumers (nth select); average cost per effort $.50 each quarter	20,000
		$2,245,000

Brand community media products offer great creative potential. By providing useful and enlightening content, you strengthen the ties with your brand community. Also, by addressing consumers’ interests and needs first, you create new channels for delivering marcomm messages to more receptive consumers. Finally, while you may be daunted by the seeming complexity and high cost of brand community media, the value of marcomm integration is compelling – every marcomm program that you can add to the brand community media mix has the potential to save you money. END

David M. Kalman is the president of Terrella Media, Inc. and editor of BrandMagnet.

Where's the Love? Sustaining Brand Value

November 15, 2008 by dmkalman in Brand Community Media Strategy, Custom Media, Custom Publishing, Dave Kalman Analysis, Publishing Strategy | Leave a comment

The challenge of sustaining brand value in the 21st century

In his film “Enter the Dragon,” martial arts master Bruce Lee critiques a student’s technically correct but lackluster kick. Lee remarks, “We need emotional content.” The student tries again, and the master intones, “Don’t think. Feeeeel. It is like a finger pointing away to the moon. Don’t concentrate on the finger, or you will miss all of the heavenly glory.”

Marketing isn’t so different. A marketer informs, inspires, and motivates consumers to act. Emotional content is essential, yet business conditions make it increasingly difficult to convey. Media consumption is fragmented. Consumers are bombarded with messages. And commerce itself is changing as businesses automate, consolidate, globalize, and outsource customer service to faraway lands.

Even though they know more than ever about their customers, sellers have fewer opportunities for meaningful interactions. Consumers share personal information when shopping online. e-tailers use profiling and data mining to discern individual and group behaviors. Traditional sellers use loyalty and membership programs to collect reams of data as well. Yet the customer experience is increasingly depersonalized, whether the customer buys online, uses self checkout, or shops at the big box. More importantly, while the seller may know everything about a customer, the customer may feel nothing in return. Emotional content is missing.

This is an obvious business risk, especially when the cost of switching to a competitor is low. A Web-savvy buyer can use the Internet to scour the globe for lower prices or better terms. But the risk runs deeper because when we talk about emotional content we’re really talking about brands and the brand experience. Without emotional content, a brand is just an expensive logo. Brand strength has a direct impact on a company’s ability to support higher margins, introduce new products, or break new categories. (Think Rio vs. iPod). Over time this depersonalization of customer interaction erodes brand value and ultimately corporate value.

Counteracting this effect takes time, both in the frequency and duration of customer interactions. With the pace of business accelerating and more customers served with fewer resources, it may seem impossible. A few keystrokes, a click of a button, and the customer is gone. Yet some companies manage to succeed, and they do it by focusing not just on their relationships with customers, but on the relationships among customers in their brand communities.

Starbucks is one such company. A coffee purchase takes just a minute, yet the customer may remain for hours chatting with friends while enveloped in “the Starbucks experience.” Apple is another. According to the NPD Group, iPod holds a 61 percent share of market versus 7 percent for #2 Rio. Apple achieved this dominance with the help of brand loyalists who amplified Apple’s emotional content throughout the population.

Starbucks and Apple use different techniques. Starbucks elevates mass customization to an art form. (That’ll be a Double Tall Low Fat Half-Caf Latte Extra Hot for Dave.) Apple infuses consumer electronics with equal parts high art, whimsy, rebellion, and desire. What both companies share is the recognition of the communal aspects of the customer experience. Starbucks satisfies its brand community’s desire for social interaction by providing a kind of urban oasis. Apple satisfies its brand community’s iconoclasm by including it in collective resistance to the status quo.

While marketers may know more than ever about customers, modern commerce demands the extra effort to restore the emotional content that sustains and increases brand value. A brand community framework, which considers the social interactions beyond the business transaction, provides the perfect place to start. END

David M. Kalman is the president of Terrella Media, Inc.

Brand-Focused vs. Customer-Focused Content

November 12, 2008 by dmkalman in Brand Community Media Process, Brand Community Media Strategy, Custom Media, Custom Publishing | Leave a comment

Extend your marcomm portfolio with consumer-focused media

Managing a brand requires focus: communicate the brand identity, rinse and repeat. And repeat. And repeat. As you accrue brand equity, you can then broaden the relationship with consumers by carefully extending your brand offerings. By “carefully,” I mean that you must assess whether a new product at least reflects – if not strengthens – your brand’s image and values. If you sell drain cleaner, you probably wouldn’t introduce a line of branded dessert toppings.

(“Gimme a cup of chocolate ice cream with whipped cream and Drano® Bits.” I think not.)

Conversely, if you market a prestigious sports car brand, your customers might welcome sleek, high performance home appliances that reflect the brand’s image. It doesn’t matter that you may know nothing about manufacturing or marketing vacuum cleaners. You’ll hire experts or you’ll learn to do those things yourself. What’s important is that you understand consumers’ perception of your brand and then, through your design, packaging, and communications, you reinforce the positive associations and minimize the dissonance.

(I can picture the TV spot now: “Porsche Vacuums Really Suck!”)

The sports car/vacuum cleaner example illustrates how a brand extension can reflect a brand’s image without depending on manufacturing or marketing core competencies. A successful brand manager is not constrained by core competency, but by brand alignment. If Saab had focused exclusively on its first product line, there would be no Saabs on the road. (The company began as – and remains – an aircraft manufacturer.) More recently, we can look at Richard Branson’s $7.2B Virgin mega-brand. Virgin began as a student magazine and mail-order record company and has grown to include entertainment, travel, soft drinks, and more. The brand identity – which happens to reflect Branson’s singular vision and values – is independent of product category.

We can also apply this notion of brand extensibility to marketing communications such as branded magazines, websites, and events. While marketers often think of branded content as strictly derivative of their products or services (for example, an SUV brand magazine for its SUV customers), it’s possible to serve consumers with content that’s brand-aligned without being about the brand. For example, in a bit of consumer research we might find that Jeep Cherokee customers enjoy hiking and other wilderness activities. We could envision Jeep Outdoors, a publication that conveys the brand’s image without being about the brand itself. With articles about camping gear and wilderness destinations, the publication could engage Jeep customers outside the context of a traditional seller-buyer interaction.

Brand-focused content has its place, and I won’t recite all of its well-known benefits here. But compared with consumer-focused content, it has significant shortcomings in producing marketing value.

First, brand-focused content by definition covers a narrow range of topics. It appeals to consumers who are already predisposed to it and falls short of attracting new consumers who were not looking for it in the first place.

Second, brand-focused content addresses consumers from a marketer’s perspective. Consumers perceive the content as a kind of advertising and perceive less value from it. The perception of value is critical because it’s this value that earns consumers’ attention and inspires them to share the content with others. The greater the value to the consumer, the more time the consumer spends reading/viewing and sharing. With this additional time and attention, you can then delivery multiple marketing messages including the top-line branding, brand and product advertising, customer service information, partner advertising, and corporate messaging.

Independent publishers and media companies focus almost exclusively on maximizing the consumer’s perception of value. (Subscription sales and ratings depend on it.) Using surveys, interviews, and other research methods, they gather information about their audiences’ interests and habits. They then use the data to maximize the value that they deliver. Marketers can apply this lesson by putting consumers’ interests first as well. By delivering useful and enlightening consumer-focused content, you can maximize both the time consumers spend with your brand and their receptiveness to your other messages. END

Custom Publishing Review: The CostCo Connection

Sidebar to Brand-Focused vs. Customer-Focused Content

As a long-time Costco member, I’m well-acquainted with The Costco Connection, Costco’s brand community publication with print distribution of more than 5 million (and a website).

Positioned as “a lifestyle magazine” for Costco’s business and executive members, The Costco Connection features a delightful goody bag of features and departments. The July 2005 issue featured wine, remodeling tips, popular books and more, along with monthly fixtures such as David Horowitz’s “Consumer Connection” and Suze Orman’s “Financial Connection.”

With a colorful, jam-packed format, The Costco Connection engages members with lively content while at the same time it unleashes a barrage of product placements, advertisements, and customer service pages (such as listings of Costco gas station locations). This approach certainly reflects the Costco brand, which exudes an enthusiastic but utilitarian consumerism that shouts: “Do NOT leave the warehouse without spending at least $200!”

The Costco Connection goes a long way in achieving the potential of brand community media. It’s a fine publication. But in the continuum from brand-focused to consumer-focused content, it falls somewhere in the middle and as such it leaves some marketing value on the table. Considering the vast number of copies it distributes, Costco selects its editorial content for broad appeal and easy reading. This makes it a quick read, and for me personally, less engaging than it could be. Still, I wouldn’t change a thing about The Costco Connection! As a flagship promotional vehicle, it works.

Instead of changing The Costco Connection, to engage members at a deeper level I would design new publications crafted for specific segments of the Costco “audience.” A Costco Small Business magazine could focus on productivity and office technology. A Costco Enterprise magazine could focus on management training and global commerce. Customer surveys may reveal other interests, such as health and fitness, environmental issues, and travel. For each of these topics, there’s a potential Costco-branded publication not to replace the Connection, but to supplement it. With greater consumer focus in the content, Costco could engage its members in deeper relationships. This would reinforce its brand image and provide opportunities to customize offers for higher value/higher margin sales.

The Costco Connection (external)

Sidebar: An Exchange of Value

Today’s consumers have a justifiable concern about their privacy. The ability to amass data, and then to target offers can both annoy and alienate the very people that marketers depend on for their success. We’re witnessing the effects in both response rates and in a regulatory backlash against email- and tele-marketing in particular. If you consider author James B. Twitchell’s claim that a consumer sees between 2,500 and 3,000 advertising messages every day, it becomes clear that marketers must work harder than ever to earn the consumer’s attention with an exchange of value. The power of brand community media is in delivering that value. In the Costco example, Costco commands a slice of the member’s attention in exchange for interesting articles in The Costco Connection. The marketer’s challenge is to increase the value and consequently the time that the consumer spends with the brand and its offers.-David M. Kalman

David M. Kalman is the president of Terrella Media, Inc.

Using "Engagement" as a Media Planning Metric

August 17, 2008 by dmkalman in Brand Community Media Strategy, Custom Media, Custom Publishing, Publishing Strategy | Leave a comment

Rules of Engagement

In selling advertising, publishers often promote as a key benefit the value of engagement. This term is understood to mean the quality of a consumer’s experience of a publication, with the clear implication that the greater the engagement, the greater the value to the advertiser in terms of ad performance.

AdAge.com recently reported on research that discounts this conventional wisdom (“Study Rebuts ‘Engagement’ Assumptions,” AdAge.com, May 22, 2006). The article cites a Starch Communications Research study that found no correlation between in the percentage of readers who remembered ads and a publication’s degree of engagement. The study categorized 25 different magazines as high-, low-, and medium-engagement based on the frequency with which they are read, the time spent with each issue, and how much of each issue gets finished.

This finding raises several important questions, not the least of which is whether recall alone indicates ad performance. Who remembers the ads? Are they qualified prospects? Do they buy? Do they have money? Does the recall translate into action?

The AdAge article quotes publishers and media buyers who say that “engagement is more complex than the study acknowledges” and also cites efforts by industry groups to validate engagement as a planning metric. I look forward to their results. In the meantime, I’ll offer my view of engagement, which I appraise not in terms of a static metric such as ad recall, but in terms of value delivered throughout a consumer conversion process. I segment this process into four steps:

Identification of the target consumer. Engagement begins with attracting likely buyers. Does a more engaging publication attract a more qualified consumer? Does it reach prospects who buy in categories related to the content? Are those prospects more active and more powerful buyers?
Acceptance by the consumer of the publication. After being identified as more likely buyers (by virtue of their interest in the content), consumers can accept or reject the publication. An engaging publication is one that responds to specific consumer needs in a substantive way. Does the target consumer open and read it or throw it in the trash (or click away)?
Reliance on the medium for a particular purpose. After accepting a publication, does the consumer use it to find products, improve productivity, or other specialized purpose? Does the content support purchase action in the relevant categories?
Frequency of ad impressions. Does the consumer spend more time reading a publication, refer back to it multiple times, and then more readily accept future delivery?

It seems to me that any study of the value of engagement must consider the entire conversion process as each step represents refinement and added value. A more engaging publication implies a better targeted and more qualified prospect, a higher percentage of issues opened and read, a more supportive editorial environment for purchasing in relevant categories, and greater frequency of ad impressions. Attempting to isolate the value of engagement at one step misses the forest for the trees.END

David M. Kalman is the president of Terrella Media, Inc. and editor of BrandMagnet.

Custom Publishing Review: Healthy Pet Magazine

August 9, 2008 by dmkalman in Brand Community Media Process, Brand Community Media Strategy, Custom Media, Custom Publishing, Custom Publishing Review | Leave a comment

A Perfect Balance

Have you seen Healthy Pet magazine, published by Zoasis of Huntington Beach, California? A 36-page full color magazine, Healthy Pet arrived with a personalized half-cover announcing that it’s time for Joey — my cat — to come in for a check-up. I assume I was placed on the Healthy Pet mail list by our veterinary clinic.

The magazine includes several colorful departments and five lively features, including a piece titled “Focus: Dental Health,” which not coincidentally ties in with a cover flap offer to receive “$120 OFF Dental Cleaning.” Other features cover animal behavior, holiday pet safety, and new medical technology for your animal companions.

Overall, healthy pet strikes a perfect balance by delivering useful and interesting content while purveying useful services and products. The editors of this magazine succeed in putting the readers’ interests first, in turn enhancing the magazine’s marketing effectiveness.

If I could change anything in Healthy Pet, it would be to create a Web tie-in. Healthy Pet curiously lacks any prominent mention of a Web site. I would want readers to be able to interact with the content online, which would create opportunities to collect data or generate leadsEND

David M. Kalman is President of Terrella Media, Inc.

Custom Publishing