By Greg Paull, Co-founder and Principal, R3
How much should be invested in brand building and performance is a common discussion point for marketers developing e-commerce marketing strategies.
For bigger, more mature brands, the argument is often settled with the funnel model and its numerous variations. However, the emergence of e-commerce conglomerates has tipped the balance and brought new complexity to this debate.
With internet penetration reaching almost every mobile phone, sophisticated data technology platforms and models, and an ever-growing variety of media and content options, consumer brands are investing more budget into e-commerce performance-based campaigns.
Brand strategies are also being heavily influenced by, if not based on, performance goals and actual sales data.
Brand and performance are not a contradiction
Brand branding and performance don’t contradict each other but are the ‘dual engine’ of growth. The integration comes when marketers can observe changes in performance, reflect on what it means for the brand, and devise brand strategies that grow the brand asset and make the job easier for the performance engine.
Brands that follow the dual engine paradigm are able to be agile in decision-making around budget allocation, and also approach organizational structure and agency ecosystems more holistically.
Any brand looking to enhance its e-commerce capability on both fronts must start with knowledge of their business strategy and existing talent capability.
Only then can they determine the scope of work and goals before assigning brand building and performance tasks to either internal teams, a 4A’s agency, or other identified service providers.
Build a high-performing e-commerce marketing team
E-commerce leaders must be deliberate in their efforts to define each marketing task. Doing this will help clarify roles and responsibilities, facilitate effective communication and collaboration, and pave the way for efficient vendor management.
Each task should be categorized by degrees of responsibility (internally or outsourced) and defined by outcomes, authority, and rewards.
A common mistake made by marketers when developing e-commerce teams is attempting to hire talent that is too versatile. A job description that includes both e-commerce operations and branded content will not produce many qualified candidates.
From martech, experiential, VR/AR, co-promotions, IP collaborations, and celebrities, there are too many developments in this space to keep track of.
The onus is on agencies, media partners, and consultants to provide training in these areas; a practice encouraged by market leaders such as Haier and Procter & Gamble.
Design an agency ecosystem based on needs analysis
To establish the right agency ecosystem to support e-commerce initiatives, marketers need to understand the overall impact that e-commerce has on their business.
A simple way of categorizing the significance of e-commerce is to define what level of commitment is needed. This can be an incredibly nuanced exercise. It concerns the current contribution of online sales and requires a systematic and forward-looking corporate strategy.
For example, in a fully integrated e-commerce system, resources across the entire business are pooled together to increase online sales. Changes in e-commerce would feedback to and affect the whole company.
All top-selling brands on e-commerce platforms are brands that have entered this level of integration, including Uniqlo, Adidas, Zara, and L’Oréal.
Choose the right service partners
Most 4A’s agency groups have their own e-commerce and performance-focused teams. These specialized groups can provide marketing services that utilize the complete arsenal of a brand’s media resource to simultaneously build brand assets and achieve e-commerce success.
However, their store operations tend to be outsourced, keeping them distant from the day-to-day management of the e-commerce business.
There are some important distinctions to make when deciding to work with 4A’s agencies or other e-commerce services providers. The main difference is in their development pathway, their core business philosophy, and team composition.
With partners that do not have an anchor in marketing, the difference is so significant that the meaning behind the term ‘brand strategy’ can refer to different things. Ways of working can also be significantly different.
Their strategy and media capability may also be limited to the scope of specific e-commerce platforms and lack high-level and long-term vision.
Greg Paull is Principal and Co-founder of R3, a global independent consultancy focused on driving transformation for marketers and their agencies.