Newspapers are the fastest-moving consumer goods industry of them all. David Tymm of i-movo explores what brand owners can learn from how they drive loyalty and turn customers into subscribers

The online world has quietly ushered in the ‘Subscription Economy’. Similar to Louis XIV’S Finance Minister, Jean-Baptiste Colbert who declared that “the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing”, Spotify, Netflix, Amazon and many others have realised that getting customers to pay “little and often” is the best way of maintaining their loyalty.

Perishable, produced from scratch every day and almost obsolete by four o’clock the following afternoon, newspapers are the very definition of a fast-moving consumer product. Notwithstanding the difficulties the industry has experienced in the face of the competition of instant, up-to-date and free online news, there are lessons for brand owners to be learned from this beleaguered sector in terms of maintaining consumer loyalty.

Given the logistical challenges of producing and distributing a new edition every day and the financial constraints imposed by a low product price, newspapers are sold through retailers rather than delivered direct.

Up until 20 years ago or even later, loyalty was forged as a result of tribal support to the editorial line. But, as with many other sectors, the internet ‘changed everything’ – including, for many former loyal readers, the habit of buying and reading a particular title every day.

The response from publishers was to launch subscription schemes, getting readers to commit to buying the paper for a set time – usually a year – in return for a discount on the cover price.

Four times annually, readers are sent books of 90 or so paper vouchers and use these to pay for the paper. The retailers than claim the value of these vouchers back from the publishers. The original theory was that if readers paid in advance, they would be certain to read the paper every day. For the publisher, the sale and associated advertising revenue would therefore be protected.

It’s a strategy that has proven to be partially successful in arresting the decline in sales. By way of a single example, the Daily Telegraph had 796,000 readers in 2007, of which 327,000 were subscribers. Over the next decade, subscribers fell to 223,000, a 32% drop – but that against a 53% fall in overall average daily sales to 377,000.

Paper is pricy

But paper vouchers are expensive to distribute, expensive to process and vulnerable to various ‘practices’ that can result in considerable, avoidable expense for the publishers. In addition, high fixed costs inherent in the production process result in publishers adopting ‘a one or two sizes fit all’ approach to product strategy. Fixed-term contracts with no escape route are also the norm. Both traits are somewhat at odds with consumer expectations of mass-customisation and a belief that subscriptions should be for their convenience, not to predict the revenue of suppliers.

Digital voucher systems dispense with these operational deficiencies and also provide added benefits. Digital provides insight on subscriber behaviour right down to who is using their subscription (or not), at which retailers, on which days of the week and at what time of day. Critical information for customer retention and product development that is lost in the ether with paper vouchers!

As a result, the Financial Times and Guardian Media Group have been the first to move away from paper fulfilment for subscription services to digital

Other fast-moving product categories face a similar challenge to those faced by publishers two decades ago – and they can learn from the experience of the newspaper publishers.

With consumer decisions often made within 30 seconds or 12 feet of purchase, according to some shopper marketing experts, relying on habit for loyalty and constant investment in marketing programs to influence the consumer at point of selection is, I would argue, economically unsustainable.

Also questionable are the considerable sums spent on digital media when the impact of online promotion is difficult to measure in the context of offline sales. Recent media coverage suggests that the party is over and brand managers are beginning to wise up to the state of the current online advertising market. Texans refer to such arrangements as a ‘Goat Rodeo’…a system rigged in favour of the organisers.

Generation Subscription

With financial innovators such as Zuora and GoCardless democratising the recurring payments market for credit/debit cards and Direct Debit respectively, any business can now collect payments easily and inexpensively from consumers on a regular basis and so sell their wares on a subscription basis.

Dollar Shave Club is probably the most famous example of this model. The disposable razors they sell have a predictable consumption pattern and are easy to ship. The less well-known Batch Brew distillery in Burnley makes fabulous but quite pricy gin. If you sign up as a subscriber, they send you a bottle of whatever they’ve decided to brew up that month for a direct debit payment of £30 a month, just below the price/value consciousness threshold of their target customer, I would guess.

Both examples have the advantage that direct payment and direct fulfilment are viable options. But, as with newspapers, direct fulfilment is not feasible for brand owners where such products are frequently purchased across a range of retailers. Brands will also be aware that retail partners will continue to represent the majority of sales and a direct-fulfilment strategy would effectively dis-intermediate them and damage commercial relationships.

Turning consumers into subscribers is not only good for brands in terms of securing loyalty and stabilising revenues. Consumers welcome it too. The Economist reported in 2014 that 80% favour subscription for preferred brands providing it signifies convenience and is not at the expense of flexibility.

For example, an energy drink manufacturer could pre-sell 20 bottles online and deliver a mobile voucher to let the customer collect at a retailer anytime they want one, but without any commitment to consume all 20 by a certain date. Consumers who have already made their purchase decision and paid are unlikely to buy a competitor product.

Alternatively, firms such as Klarna will extend credit to consumers based on their email address. This means consumers would not always need to pay up front – just settle a monthly invoice for what they have consumed. Purchases can also be added to mobile phone bills using services such as ‘Payforit’, which is supported by all the UK’s major mobile phone operators.

Although the options are many and various and set to evolve further, two truths are inescapable: The ‘Subscription Economy’ is here to stay – and brand owners that cannot supply direct need a method for remote fulfilment of their products if they are to take advantage of this generational shift in consumer behaviour.

David Tymm is founder and CEO of i-movo, one of the largest Secure Digital Voucher networks in the world. i-movo works with over 60,000 participating retailers and has delivered over 300 successful campaigns, processing over 20 million vouchers worth over £400m.

Photo by Peter Bond on Unsplash

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Cult Japanese confectionary brand Hi-CHEW has launched in the UK, backed with a social media promotion which allows London-based consumers to claim a free sample pack.

The promotion was put together by Hi-CHEW’s UK marketing agency, tbk, with the digital vouchers being delivered by i-movo.

The social media campaign launched at the beginning of March, with thousands of consumers clicking through to the i-movo service to request the voucher. All of the initially available vouchers were claimed within 24 hours; Hi-CHEW now plans to extend the online campaign shortly, and will also be running a series of experiential campaigns in the Greater London area.

Targeted advertising on social media sites has been driving relevant consumers through to a promotional site where they can claim their vouchers, which are sent to their mobile phones, as well as find their nearest participating retailer. Consumers can then redeem their vouchers at participating stores – the initial campaign ran with around 700 convenience stores in the Greater London area.

Hi-CHEW is a chewable soft candy, described as a cross between chewing gum and sweets like Starburst, which has been sold in Japan for decades. Made by Japanese company Morinaga & Co, the brand was launched in the US in 2008, and is also available in various Asian countries.

tbk is an award-winning independent creative marketing agency that also includes Carlsberg, Pringles, Lucozade, Krispy Kreme, Boots and Wickes amongst its clients.

i-movo is one of the largest Secure Digital Voucher networks in the world, advising agencies and brands on initial creative concept, planning and execution, and post-campaign analysis, as well as providing systems and skills to minimise the risk and maximise the return on investment. It works with over 60,000 participating retailers, has delivered over 300 successful campaigns and has processed over 10 million vouchers worth over £100 million.

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David Tymm of secure digital voucher provider i-movo suggests a new approach to bridging the gap between online marketing activity and what consumers actually do… SPONSORED FEATURE

The term ‘The Three Rs’ – referring to Reading, Writing and Arithmetic – were first proposed as the basis for a solid Victorian education by Sir William Curtis in 1825, to much derision. His contribution to education theory was quickly satirised as ’Reading, ’Riting and ’Rithmetic, and became a wry comment on educational standards, or the lack of them.

However, the idea of alliterating the Rs remains popular to this day — the environmental lobby, for example, has recently adopted the format, adding a fourth R to create ‘Reduce, Reuse, Recycle & Recover’.

So, in this tradition, we at i-movo have developed our own 4Rs to cover the four stages marketers should go through when running online promotional campaigns.

R1 = Reach

This represents the total audience volume exposed to a campaign. Digital channels have a distinct advantage over broadcast or out-of-home media in this regard, as many digital platforms (Facebook and Twitter for example) allow precise targeting by demographic profile, time-of-day, or day-of-week, together with lifestyle and interest.

Other digital channels such as a brand’s own website or organic search terms are less targeted but have the advantage that visitors are likely to be positively predisposed to a brand given they have arrived at a brand site or searched for it without prompting.

Non-digital channels such as out-of-home and instore have a less quantifiable audience figure; in these instances, footfall figures can be used to arrive at an educated estimate.

In all cases, i-movo believes the best practice is to encourage consumers to engage with the offer by clicking through to a branded microsite, or by texting a keyword to a shortcode, triggering a reply of a digital voucher.

R2 = Response

The preceding process results in a figure representing the number of consumers engaging with the instructions of the promotion, and arriving at the microsite. Through Google Analytics we can measure how many consumers from the initial group (the Reach) have taken this next step.

Brands should be aware that this step represents the single largest percentage in reduction in volumes between the various steps of the 4R i-movo model. Consumers lost at this stage in the process cannot be easily re-contacted so particular care is required in the selection and buying of online campaigns, to ensure the reduction is minimised. Bear in mind that even the most successful of online campaigns rarely exceed a 5% response rate.

R3 = Request

The third step in the 4R process is the Voucher Request. This is the number of consumers that successfully request a voucher by supplying their email or mobile phone number as the means of receiving the voucher together with any other information the brand wishes to collect such as post code, or must collect such as date-of-birth in the case of promotions including alcoholic drinks.

Completion of this step results in the consumer being sent a unique voucher using their preferred channel. Best practice is to issue all vouchers with an expiry date and time expressed as a number of days and/or hours from the point of issue.

Combining this control in conjunction with scaling back on media spend to reduce the ‘Reach’ of the campaign can therefore provide effective financial control of a campaign, without the need for promotional insurance, but only if all relevant data is available in real-time – which it is with i-movo’s approach and method.

R4 = Redemption

The final R represents Redemption: the secure validation of the voucher in-store. This is the number of consumers that have completed all four steps of the consumer journey, from seeing the promotion to availing themselves of it in-store at any of the 65,000 stores that are able to process i-movo vouchers.

In terms of coverage, i-movo’s integration with the three payment networks who serve our selected retailers (epay, PayPoint and Payzone) means the service is currently available within one mile of 99.1% of the UK urban population and in rural areas to a similar percentage within five miles. We are now extending our reach further by integrating directly into the till systems used by retailers.

The final element of the process is the need to reimburse the retailer who accepted the voucher. At the time of writing and against a backdrop of changing and increased regulation, facilitating of some settlement payments is a regulated activity. Consequently, i-movo has been accredited as a ‘Small Payments Institution’ by the Financial Conduct Authority since 2012.

Through accurate measure of all elements of the process, the i-movo 4R process provides both visibility of campaign success and also enables transparent return-on-investment calculation. All aspects of a campaign, from the creative, the strategy, to the consumer store visit are visible, quantifiable, and ultimately accountable.

Conclusion

While marketers have plenty of tools to measure the impact of online marketing activity in the digital space, it is far less easy to achieve the same level of accountability for online marketing activity where the desired outcome is a consumer visiting a bricks-and-mortar store in order to purchase a promoted product.

This information gap between online marketing and the consumer’s subsequent experience of the promoted product requires filling if marketers are to better justify the return-on-investment of their marketing campaigns.

i-movo’s four-stage 4Rs model provides an approach to measuring and predicting results accurately and in real-time, to give an unprecedented perspective of campaign performance and accountability.

David Tymm is CEO and co-founder of secure digital voucher service i-movo. This comment piece has been extracted from a White Paper, ‘The Four Rs: Measuring the effectiveness of online marketing from screen to store’ which is available to download from the i-movo site.

i-movo is a sponsor of the IPM Awards 2017.

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LSI Netherlands BV – owner of the Peperami brand – and agencies TLC Marketing and Sense were crowned the big winners at The IPM Awards 2017, taking home the trophies for Brand Owner of the Year, Agency of the Year and the coveted Grand Prix Award respectively.

This year’s winners, which were announced at the IPM’s black-tie Awards Gala on Wednesday June 7 at the London Hilton Park Lane, showcased and celebrated the very best in creativity and effectiveness in the promotional marketing industry.

The evening commenced with opening addresses from Lord Black of Brentwood, President of the IPM, and John Sylvester, the IPM’s chairman and Chairman of Sodexo Benefits & Reward Services UK, while the host for the event was Strictly Come Dancing star, Claudia Winkleman.

LSI was named as Brand Owner of the Year, after collecting two Gold and two Silver trophies for its campaign linking Peperami mascot, the Animal, with the Angry Birds movie.

TLC took the Agency of the Year accolade, having picked up four Gold awards and a Silver for a range of different campaigns.

The Grand Prix went to ‘real world’ agency Sense for its #H2O activation, part of the ‘Discomfort Future’ campaign on behalf of The Economist. This saw potential subscribers offered free coffee apparently made from recycled water from a portable toilet, to highlight the issue of water scarcity around the world. It won two Golds and was selected by the IPM awards judges as the best of the best.

The picture above shows Sense collecting their award from Lord Black (left) and the evening’s host, Claudia Winkleman (right).

Other agencies celebrating multiple trophies at the IPM Awards 2017 included The Circle Agency, ZEAL Creative, Toucan and Brand & Deliver. Behaviour change experts 23red managed to pick up Gold, Silver and Bronze in the Not for Profit, Charities and Public Sector category, the second time the agency has achieved this impressive feat.

John Sylvester, Chairman of the IPM, said: “The IPM Awards celebrate outstanding promotional marketing from the very best UK agencies and underscore our commitment to supporting best practice, creativity, effectiveness and innovation. Our Awards are open to everyone in the marketing industry and this year it was great to see both some familiar faces and some newcomers amongst the winners and the audience.”

This year, winners of Gold, Silver and Bronze IPM Awards all qualify for entry into the IMC European Awards, and the IPM will be contacting agencies shortly to explain how to take advantage of this. John Sylvester observes: “The UK produces world-class promotional marketing campaigns, and we want as many of our winners as possible to enter the IMCs so we can underline our leadership in this vitally important sector of the marketing and advertising industry.”

Sponsors for the IPM Awards 2017 included headline sponsor Sodexo, Westfield Shoppingtowns, Sykes, Emirat, Whistl, Granby Marketing Services, Promotional Handling, i-movo, POD Staffing, Peazie and Pictures Experience.

A full list of this year’s winner can be found on the IPM website.

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The campaign will be encouraging people to ‘Shake Up’ the mundane as the antidote to all things boring and sensible and will be supported by the brand’s #ShakeItUp messaging.

An intense four-day sampling burst kicked off the campaign at the start of August, with brand ambassador teams handing out freed rinks at London’s Victoria and Liverpool St train stations, Westfield Stratford and Westfield London.

The activation, created by marketing agency Sense, is the experiential element of a wider brand repositioning campaign that will include a range of digital and social media activities.

Over the four-day activation, more than 45,000 400ml Yazoo samples were handed out along with a specially designed handout that compliments the overall look and feel of the campaign, where everyday monotonous situations are ‘Shaken Up’.

The aim of the campaign is to more clearly differentiate Yazoo from its rivals and to increase penetration among young adults – the brand’s ‘life’s too short to be serious; message will be central to this.

Alongside free and 50p-off Yazoo coupons, the handouts will feature quirky illustrated items (including a face, the bottom half of a mermaid and crocodile head) that can be easily popped out and then introduced into photos of everyday situations to “Shake them up”.

Digital advertising includes banner ads targeted at millennials on a number of pre-selected websites, with consumers being encouraged to either text shakeitup to 65009 to receive a secure digital voucher or click through to a microsite where they can opt to get their voucher delivered by SMS or email. Secure digital coupon services are being provided by i-movo.

Consumers will be encouraged to get creative and share their photographic results via social media using the hashtag #ShakeItUp.

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David Tymm of i-movo argues that digital coupons and vouchers can be the final link that completes online promotional campaigns

Like those wearing sandwich boards proclaiming ‘The End is Nigh’, commentators’ predictions on business and technology should be treated with extreme caution.

Shortly after the baseless mutterings about the fatal fallout of the ‘Millennial Bug’, ‘research’ from various quarters with a vested interest in creating doom and despondency suggested that shopping would be conducted entirely online in the near future.

Webvan would be delivering our groceries; boo.com would provide our wardrobe and buy.com would sell us everything else. All of this conspired to cause a stampede amongst traditional retailers to secure their online presence as quickly as possible.

At that time, 8% of all retail sales were online. The comparative figure is now 15.2% – a significant change for sure, but definitely not the end of the world as we knew it.

This change, however, obscures the underlying fact that while some traditional retail sectors have been decimated (electronics, books and music for example) and others, such as newspapers and magazines, are just about hanging on, other sectors have remained relatively stable: food, drink and grocery included.

But this, too, is overly simplistic. The seismic contractions caused by the 2008 financial crisis precipitated what the former boss of Waitrose hailed as a “once every 25 years” change in shopping behaviour.

Cash-strapped consumers developed a taste for frequent ‘top-up’ shops at convenience stores supplemented by occasional trips to supermarkets for better value staples. When factoring in huge improvements seen in ‘food to go’ offers at local stores and major market-share gain at the discounters, much of this sector remains intact – just not as we knew it and not as predicted.

Just as the meteorite did not kill the dinosaurs (the ensuing global winter did), the internet did not kill bricks-and-mortar retailing; instead, it gave rise to a multi-channel approach.

The most savvy retailers recognised that while most purchases are made in-store, those same purchases are often researched thoroughly online. Best practices allow observation of customer behaviour across whichever channel it takes place in. Retailers who mastered this have fared much better than those who did not – some have disappeared altogether.

Brand-owners of consumer products typically sold in a ‘traditional’ retail environment experience the problems of precisely identifying the brand’s consumer and determining how responsive they are to their influencing efforts.

Despite brand owners investing heavily in online marketing, unless a resultant sale is also made online, a return-on-investment figure for those campaigns has been fiendishly difficult to establish.

‘Closing the loop’ between a consumer’s digital fingerprint and their physical footprint is therefore the key for brand owners to realise value from their online media investments. There are examples emerging that show just how effective this can be.

The world’s largest soft drink manufacturer harnessed social media and other online tools to drive a sampling campaign across 60,000 UK supermarkets and convenience stores. Facebook allowed incredibly precise targeting across all standard demographics combined with lifestyle markers. In this case, a voucher for a free product was promoted to the target audience.

This same technique was used across eight further online channels, allowing the manufacturer to assess relative performance in real-time and adjust the media buy accordingly. The results speak for themselves, with a redemption rate of 37.5% in one channel and a 15.6% overall average. This is significantly better than the industry average of 2% for paper vouchers.

As an added bonus, the brand owner harvested a validated email or mobile phone number for each consumer that responded to the promotion.

Molson-Coors wanted to engage consumers and introduce them to Coors Light at the optimum temperature of 4°. Their TV campaign featured brand ambassador Jean-Claude Van Damme encouraging viewers to visit a website where they could sign up friends to receive a ‘Damme Cold Call’.

After selecting from a range of pre-recorded phrases‘, friends were then ‘phoned’ by the ‘Muscles from Brussels’ and told they would receive a digital voucher for a free four-pack when they had listened to the whole message. A 52% redemption rate suggests this message was received loud and clear, albeit with a guttural Flemish accent.

Walkers Crisps brought their famous ‘cash in the bag’ promotion bang up-to-date with Gary’s Great Ingredient Hunt. Consumers entered a competition to win cash prizes ranging up to £100 and millions of free packs of Walkers.

Consumers confirmed their entry by submitting a unique ‘on pack’ code either online or by text. Prizes were then distributed via a digital voucher redeemable at, in many cases, the nearest shop to the consumer’s home address, offering convenience and the level of instant gratification they expect. The brand gained vital real-time insight into campaign performance and consumer behaviour at a store level.

The ‘missing link’ between the online and offline experience in all these examples is the digital voucher that joins the dots. As with any chain, a broken or missing link reduces its value to being purely ornamental.

David Tymm is Chief Executive Officer of award-winning Secure Digital Voucher network i-movo. i-movo hold multiple patents for its innovative solution. It works with over 60,000 participating retailers, has delivered more than 300 successful campaigns and has processed over 17 million vouchers worth in excess of £250 million.

i-movo is a sponsor of the IPM Awards 2016.

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