October 09, 2007

How to Get a Bigger Interactive Budget Approved by Management - Test Results & Tips From ConAgra

SUMMARY: Targeted email and Web site tests that got great ROI helped earn a bigger interactive budget for a large CPG firm’s marketing team.

In one test, they increased product conversions 34.25%. Includes four tips that will help you the next time you need to persuade company execs to increase your interactive marketing budget.
“You need to be spending money where consumers are spending their time,” says Kevin Doohan, Director Interactive Marketing & CRM, ConAgra Foods. With that as a mantra, Doohan and his team have focused on enewsletters and have built dedicated Web sites for 41 of their brands and 13 microsites that include games and activities.

Persuading execs holding the marketing budget purse strings to open them up for interactive has been a challenge, Doohan admits, but they’re now spending more on marketing and innovation than ever before.

Here are two big tests that helped Doohan and his team get more budget, as well as his top four tips for marketers who may be in the same boat:

-> Test #1. Email customers versus non-subscribers

The potential of ConAgra’s opt-in list wasn’t close to being realized, even though it was the largest piece in their database. Yet, Doohan didn’t want to be a direct marketer who went into the brand management office with a pitch for a redeemable email coupon. That wouldn’t catch consumers’ attention the way he needed to.

Luckily, just before he arrived in 2005, ConAgra had begun performing an email-as-branding-tool ROI test. They hired a retail research agency to compare the names on their list who had been buying ConAgra items in supermarkets against similar buyers who were not email subscribers.

Turns out that Doohan and his team loved the results. During the test period, consumers who subscribed to the email newsletters generated 34.25% more product sales. At that point, they were armed with some attractive data to take into their email/interactive budget meetings. “The ROI was compelling versus other media, and, so to speak, we shopped that information around. The volume increase was way beyond what we expected.”

After more tests, they have doubled their monthly newsletters from two to four, as well as send regular email messages that are better timed for effectiveness.

-> Test #2. Multi-brand platform

In another effort, Doohan and his team received the go-ahead to test a multi-brand microsite, but they truly needed the results, again, to win over company execs. After more in-house research that unearthed strong buying patterns, their work resulted in the ‘Simple and Delicious’ microsite. On the site, visitors were offered information on various recipes through a series of ads on the homepage.

If consumers clicked on an ad, they were taken to a recipe that included at least two company brands as ingredients. Two ingredients in ‘Chewy Popcorn Bars,’ for example, were Orville Redenbacher’s microwave popcorn and PAM no-stick cooking spray. Site users could add the item to ‘My Recipe Box,’ print the page or email the recipe to a friend, among other options.

“It has performed really well,” Doohan says. “It got us more funding for the “Simple and Delicious’ site, which has really become robust and good-looking.”

Then, for healthier-positioned foods, they created the ‘Start Making Choices’ microsite and included many of the same interactive tactics.

They also implemented the following user tools:
o Health calculators for measuring Body Mass Index, heart rates and ideal calorie intakes
o Food groups pyramid with daily recommended servings
o Section on reading nutrition labels that showed what the numbers actually mean for one’s health

-> 4 Tips to Navigate Choppy Budget Waters

Doohan shares these four tips for charting a path through the often tricky financial waters at a CPG so you can get the interactive budget you need:

Tip #1. Form an outer-niche network of peers

The most important piece of advice Doohan says he can give is to establish trustworthy friendships with a handful of other interactive marketers who work in noncompetitive sectors. Together, his peer group has swapped successful dos and don’ts while participating in roundtable-style brainstorming sessions on new trends.

He recommends regularly calling or meeting with peers after developing these relationships. “There’s a lot to learn from each other. They have some potholes we were able to avoid.”

Tip #2. Speak the right language

When Doohan arrived at ConAgra, he had to quickly learn the CPG lingo to effectively sell his interactive standpoint. For instance, he didn’t understand how incredibly important the *critical purchasing annex* was to the food brand marketer’s world. He soon realized that he had to start seeing things from other company managers’ point of view if he wanted to increase his interactive budget.

“You’re translating what you can do for the brand by getting into their language. Let’s say you decide on a promotional site. You need to go back to the brand manager and say, “Here are the elements of the experience that assure customers will use it, and this [critical purchasing] objective that we want to happen is going to happen.” They don’t care if it’s Java or if it’s Flash. Just relay your objectives and get it done.”

Tip #3. Hire a passionate team

Of course, Doohan wants his department to fare comparably in the organization. Hence, he tries to hire team members who are absolutely crazy about marketing and “always online.”

“When you have people who are just so passionate with the stakes at hand, other people catch fire with it. That fire-in-your-belly quality is really important to have.”

Doohan instructs his staffers to take two actions:
o Sign up for competitors’ newsletters and watch their tactics
o Register with and educate themselves about growing Web 2.0 opportunities, such as Twitter, Facebook, MySpace and Second Life

Tip #4. ROI is important, but don’t lose focus

When addressing the brand manager, there’s a danger in focusing too much on ROI at the exclusion of some other positive branding impacts that can occur. It’s important to remember that interactive is part of a multichannel mix and to sell it that way.

“I’ve seen folks concentrate on the ROI to the exclusion of the other things,” Doohan says. “You’re putting yourself in too narrow a space if you do that. You have to be conscious to not pigeonhole yourself strictly on ROI-focused activities with interactive, because it’s bigger than that.”

Kevin Doohan of ConAgra spoke at this summer’s ad:tech conference in Chicago. For details on upcoming conferences, go to http://www.ad-tech.com

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