Advancing Trade Marketing in The Digital World

Advancing Trade
Marketing in the
Digital World
Connecting
Digital and Trade marketing is the exchange
Trade Marketing of value in manufacturer/retailer

trading agreements. Typically
manufacturers will ‘offer’ budget
New technology has always been to retailers to support sales. These
a central agent for retail industry budgets are often used to fund
change. special price deals,
in-store displays and other forms
The spread of car ownership in the 1920s
of promotions at point of sale.
allowed consumers to travel further and
carry more, resulting in the emergence of
large stores outside of cities. In the 1940s,
home refrigeration enabled the growth of
bulk food purchases. And in the 1990s,
the internet began to overcome the space
limitations of physical stores, generating
almost limitless variety in consumer choice.1
1. Josh Leibowitz, How Did We Get Here? A Short History Of Retail, LinkedIn, 7 June 2013.
When does online come up in your trade
marketing negotiations?
Retailer: “Ok, so we’ll take 200,000 units at $120 per unit.”
Manufacturer: “Hmm how about 250,000 units.”
Retailer: “I can stretch to 250,000 units at $100 per unit, but we’ll need a $200,000
contribution to ensure we can merchandise effectively to drive sales.”
Manufacturer: “Ok, so what am I getting for my $200,000?”
Retailer: “Don’t worry, we’ll feature your product in the front of store, on premium shelf
placements, in our magazine and marketing campaigns.”
While core retail has experienced countless

permutations, trade marketing has changed Manufacturer: “And what about online...a significant portion of our sales are from online?”
very little since it first emerged in the 1970s.
Retailer: “ Let us get back to you on that.”
First popularised by consumer packaged goods

manufacturers as a way of driving short-term sales
and market share in supermarkets, it now represents Just 13% of manufacturers have separate brick-and-mortar and When employed as a marketing channel, digital remains
a half-trillion 2 sub-industry within retail. But it hasn’t e-commerce budgets and 24% have no e-commerce budget at significantly underutilised. Although some retailers might traffic
kept pace with changes in consumer behaviour. While all.3 Given the significance of digital touchpoints in both research static messaging to all consumers, digital media is capable of
trade marketing practices are typically aimed at getting and purchase, recent reports suggest that falling returns on much more, from precise audience targeting to robust campaign
consumer attention at the point of sale, they haven’t traditional trade marketing are a function of budgets and measurement. Not playing to the strengths of digital is a missed
placements not diverting from physical to digital channels as opportunity to create more relevant online experiences for users
followed consumers in their shift to buying online.
quickly as the consumer. 4 and to drive sales.
2. The Boston Consulting Group,. Paying For Performance. 2012.

3. Golden, Brad and Kathy Weber. Confronting Trade Promotion Fragmentation. Kantar Retail, 2016.
4 The Goldman Sachs Group Inc, Trade Budgets At A Tipping Point, 2015.
The rise and Shopping gone mobile
rise of digital Research shows that 70% of customers make their initial product
discovery online versus 28% in-store, and 39% of customers
research online before purchase.
Trade marketing budgets continue to That figure is even stronger for big-ticket technology purchases
focus on influencing the consumer (55%) and for health, fitness and beauty items (58%).5
within the store and through
traditional media strategies. But
today’s consumer turns to the web
for research before online or offline
purchases.
Brand perceptions and purchase decisions are shaped in millions of Year over year the influence of digital Mobile influence on in-store sales
moments ahead of purchase, even more so for higher ticket offline – and especially mobile – on offline jumped to nearly $1 trillion (up
purchases and these are the moments that matter for both brands
purchases is growing faster than ever. from just $160 million in 2013),
and retailers alike.
Digital was responsible for representing
$1.7 trillion 28%

In this environment, it makes sense for brands and retailers to
increase the investment in digital trade marketing, where the
consumer is conducting research and completing purchases.
Digital is also both targetable and measurable, so applying
of offline sales in 2015, compared to of overall digital influence.6
digital targeting to trade campaigns and leveraging the power of
programmatic buying and selling will deliver a positive step change
only $330 million in 2013.
in profitability for both retailers and manufacturers.
5. ROBO: How Today’s Shoppers Research Online and Buy Offline, Marketing Tech Blog.
6. Navigating the New Digital Divide, Deloitte Digital.

“We understand the value of digital as both
in-store and Macys.com sales are influenced by
digital during the customer shopping journey.
We have recently consolidated our buying
organisations from stores and Macys.com to be a
single omnichannel buying organisation to cater
to our cusomers’ shopping behaviours.
We continue to invest in digital technologies to
drive greater ecommerce personalisation for
users, greater value for our suppliers and both
in-store and online sales.”
– Terry Lundgren, Chairman and CEO, Macy’s

What to do?
Tool up
Using an ad server – to manage
“Retailers and manufacturers need to ensure
and traffic supplier messages,
forecast and target audiences and that the digital customer journey is optimised
deliver transparent and accountable and personalised, particularly at the lower
campaigns – is quickly becoming a
end of the funnel. We are embracing this by
prerequisite. Manufacturers demand,
and get this from, their other digital programmatically buying retail banner display
media partners, so digital ‘retail media’ advertising tailored to our end user segments.”
should be no different. Frequency
capping, targeting, remarketing,
return on investment and in-flight – Darren Needham-Walker, Marketing Director, HP Australia
optimisations are just basic currency
in digital marketing. In short, those
manufacturers and retailers that
are ready to make basic use of
digital’s structural advantages over
offline, analogue predecessors face
enormous opportunity. At Google we’re starting to see the green shoots of this trade marketing (r)evolution
and are excited to share some recent highlights from the pioneers of the industry.
CASE STUDY
Hewlett Packard
Single view of the customer
boosts sales and ROI
Case Study Hewlett Packard
Goals
• Drive incremental sales of HP hardware
• Develop closer partnerships with key retail partners
• Understand return on investment (ROI) across marketing efforts
Approach
• Embedded conversion tracking on retail partners’ sites
• Used DoubleClick Bid Manager and Google AdWords to enable

HP and retail partners to share data
• Created a single view of the customer
• Targeted and retargeted consumers using a unified cookie list
Results
• Fourfold increase in ROI based on online sales
• Twofold increase in conversions

As a producer of hardware, software and related services for

businesses and consumers, HP wanted to drive sales among
millennials. The company conducted a study to uncover the
segment’s attitude towards the brand and found that
millennials didn’t believe HP products were relevant to them.
Instead, they associated HP with older users. This led HP to
realise it needed to do a better job of communicating with and
` targeting the millennial segment.
To achieve this aim, HP began by shifting marketing spend

from billboards, TV and print to targeted, accountable digital
media. This approach helped the brand reach millions of
engaged and in-market consumers, drive awareness of new
products and take consumers through the consideration
phase of the purchase funnel. The challenge then was to
guide these consumers through the lower funnel, from
evaluation to purchase.
HP worked in close cooperation with their retail partners and

resellers in Australia to create a campaign using Google AdWords,
YouTube, DoubleClick Bid Manager and the Google Display Network.
HP shared their first-party consumer data with Measured through incremental ecommerce sales,
retailers and worked to embed conversion tracking HP produced a fourfold improvement in return on
on the retail partner sites. In this way, HP and the investment, while traffic from programmatic
retail partners were able to share cookie lists and retargeting converted two times higher than the
create a single view of the customer. The unified non-targeted consumer. Ultimately this data-led
cookie list could then be used to target and retarget approach helped HP expose more of their millennial
consumers who had already shown an interest in target audience to their campaigns and drive
the brand’s products. incremental sales at a significantly lower investment
than previous marketing efforts.
These methods meant that HP was able to gain a
much better understanding of the full customer
journey than was possible before.
“Retailers and manufacturers need to

ensure that the digital customer journey is
optimised and personalised, particularly at
`
the lower end of the funnel. We are
embracing this by programmatically
buying retail banner display advertising
tailored to our end user segments.”
—Darren Needham-Walker, Marketing Director, HP Australia

Advancing Trade Marketing in The Digital World

Uploaded by

Copyright:

Available Formats

Advancing Trade Marketing in The Digital World

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Advancing Trade Marketing in The Digital World

Uploaded by

Copyright:

Available Formats

Advancing Trade

Trade Marketing of value in manufacturer/retailer

Manufacturer: “Hmm how about 250,000 units.”

Manufacturer: “Ok, so what am I getting for my $200,000?”

While core retail has experienced countless

First popularised by consumer packaged goods

2. The Boston Consulting Group,. Paying For Performance. 2012.

$1.7 trillion 28%

6. Navigating the New Digital Divide, Deloitte Digital.

– Terry Lundgren, Chairman and CEO, Macy’s

• Develop closer partnerships with key retail partners

• Understand return on investment (ROI) across marketing efforts

• Used DoubleClick Bid Manager and Google AdWords to enable

• Created a single view of the customer

• Targeted and retargeted consumers using a unified cookie list

• Fourfold increase in ROI based on online sales

• Twofold increase in conversions

As a producer of hardware, software and related services for

To achieve this aim, HP began by shifting marketing spend

HP worked in close cooperation with their retail partners and

“Retailers and manufacturers need to

—Darren Needham-Walker, Marketing Director, HP Australia

You might also like