MKT Key Concepts

Communication Mix, Three Buckets

Digital advertising, traditional advertising, “nontraditional” marketing

What is the largest bucket?

Digital advertising is the largest - 80% of total media ad spending

Banner Ads

Not related to page content, based on you

Content-linked ads

Match the content of the page you’re reading

How banner ads work… the world of 200ms

When you click a URL, in 200ms, publisher checks if it has data on you, sends info to ad server, bidders alghorithms, winning ad gets served

Search ads

Related to you search terms. 2 types: organic and paid

Organic Placement

Rank depends on relevance (keywords match) and influence (how many other sites link to yours)

Paid Placement

You bid on keywords, pay per click. Even at the same bid price, a more relevant/well known site ranks higher

Native Advertising

Paid advertising where the ad matches the form, feel, and function of the content it appears on. People engage without even intending too

CPM

Cost/Impressions

CTR

Clicks/Impressions

CPC

Cost per Click

CPA

Cost/Completed Action

Display vs Search

Display has more impressions but lower CTR, about broad awareness
Search has fewer impressions but much higher CTR, people searching are already deeper in the funnel (keep in mind ½ of clicks accidental)

Search = deeper in customer journey, Display = top of funnel awareness

Fluency Theory

Non-focal attention to a brand stimulus → brand seems familiar → brand is liked more. This is why companies spend money on ads you don’t “watch”

Mere Exposure Theory

The more you’re exposed to something, the more you like it - brand salience

Advertising Customers Journey

Stage 1: Aware - Create basic awareness, make people know you exist, name recognition
Stage 2: Consider - Provide information and articulate value proposition, give people a reason to care, communicate specific functional benefit
Stage 3: Purchase - Image/Positioning & Modify Behavior, telling customer why you’re the best fit. Link brand to what target customer values and call to action.
Stage 4: Repeat - Maintain awareness & Encourage Loyalty

Rating

TVs tuned to a program/Total households with TVs

Share

TVs tuned into a program/ Total TVs currently on

GRP (Gross rating points)

Reach (reach is a whole number of the %) x Frequency

CLV (Customer Social Value)

The effect of a customer’s social influencer on a firms profitability. WORD OF MOUTH - two strategies, closeless centrality and betweenness centrality

Why use multiple channels?

Higher bargaining power

Nike Case Study

Cut out Macy’s, cut out entry level channel. Key lesson: channel interdependencies, channels feed each other

Bank of America

Adding a new channel drives overall engagement, not substitution
Adding the online channel increased calls, branch visits, and ATM visitsT

Things that can happen when you add a channel…

Substitution, augmentation, nothing

Multichannel

Selling through multiple channels that operate independent of each other - Target/Ebay

Omnichannel

Selling through multiple channels that talk to each other - The Apple Store

The Attribution Problem

Last click gets credit, honey browser example

Glossier Case

Scaling authenticity, community is the biggest asset, focus on word of mouth, social media, community conversations feed back into product development, content to commerce, direct-to-consumer

Glossier invested 52 million primarily in tech, continued building social commerce platform, moved social content from In the Gloss to Glossier.com itself

Chateaux Margaux

Third more accessible tier under Chateaux Margaux name, 2 segments, connoisseurs and luxury buyers, codependent but push each other out - Luxury buyer enters market → scarcity and quality focus drives up prices → connoisseurs get priced out or lose interest → they stop producing the ratings that justify prices → luxury buyers lose their signal (the doom cycle)

How do you grow without diluting 200 years of prestige? Released Margaux du Chateau Margaux was launched, aimed at connoisseur segment via a restaurant experience, chose high parent-brand endorsement, “stepping stone” a diner who experiences it might one day buy a Grand Vin - Respect the brands DNA and choose the level of parent-brand endorsement carefully

Price & What Affects It

The value customers give p or exchange to obtain a desired product, affected by the 5Cs (Customers, company, competitors, collaborators, context)

Three types of pricing strategies…

Cost-based pricing (based on cost to make, margins), competitor-based pricing (based on competitors), demand-based pricing (based on willingness to pay)

How do you measure WTP?

Revealed preferences - observe behavior in real contents, test markets, histoircal data
Stated preferences - ask people directly, surveys, expert judgements, conjoint analysis
The BDM auction - measuring WTP in lab setting, show participants a product and ask them their WTP