creating and budgeting an effective digital marketing plan

1Chemeketa Wine Studies

Presented by:

Ron Scharman

Creating and Budgeting an

Effective Digital Marketing Plan

February 13th, 2016

Wine e-Marketing

Chemeketa Valley


• Currently CEO Astra Digital Marketing Services and

FlyWithWine.com

• Instructor, SSU Wine Business Institute – 4 Years

• Previously COO of Chatterbox Wine Marketing/VinoVisit.com

• Previously President/Owner of eWinery Solutions(Granbury)

• Previously COO of New Vine Logistics (Now Wine Direct)

• Previously CEO of Morrell Wine Group

• 15 years as a specialty retailer

• MBA Cornell University Johnson School of Management

• Lover of all things food & wine

• Passionate about direct to consumer wine marketing

• More info on LinkedIn at http://bit.ly/2cRRL5C

Who am I and Why am I here?


Where are We Going Today?

• Overview of Technology Landscape

• Review of Customer Acquisition Channels

• Digital Marketing Planning Checklist/Components of a Digital Marketing Plan

• Pricing Theory in Practice

• Budgeting and Risk/Reward Checklist

• Digital Campaign Metrics

• Cost/Benefit Analysis of Email Acquisition


Got Wine?


QUESTION FOR THE SESSION:

How do we sell a 3-dimensional

story in a 2-dimensional world?


THE TRUTH IS, ITS HARD. VERY HARD….

AND IT TAKES A

GOOD TO GREAT MARKETING PLAN


Tell your story + tell it well

(the magic 15%)


“ The notion of connecting a luxury

wine brand with its wider digital and

cultural ecosystem is now a matter

of survival.”

Ron Scharman

Wine Consumer Advocate


A discipline within marketing that makes use of electronic

devices to engage with audiences, applying technologies like

websites, e-mail, mobile devices, apps and social networks.

Digital Marketing defined.


The evolution from early 2000’s to present day, “personal computing” has changed 10 fold.

What’s changed? Bigger, More Complex Sites

20032015

2007

2016

Amazon Dash/Echo Dot


Digital Experiences are Increasingly Important


Digital Trends For Wineries

Mobile First>50% Mobile

Think Mobile &

WiFi

The Top Mobile

Search/Social

Apps

Key Customer

GroupsMillennials 18-34

Gen X 35-50

Boomers 51-69

12


Looked at Another Way

The faithful gather in 2005 near St. Peter's to witness Pope John Paul II's body being carried into the Basilica for public viewing.

St. Peter's Basilica at the Vatican, on March 13, 2013


THE WEB HAS BEEN GROWING FASTER THAN STORES….

*Source: UPS 2016 Annual Survey


MOBILE COMMERCE SOARS


MORE PC’S GATHER DUST

*Source: U.S. Commerce Dept., Internet Retailer

44%

11%

45%

Percentage of time on retail web sites

Smartphone

Tablet

PC


LOOKED AT ANOTHER WAY


MY PHONE IS MY LIFE

NOT MOBILE-ONLY, BUT MOBILE-FIRST


People have transformed

how they live, work,

shop, and buy.

Businesses need to

adapt…….


It’s All About the Customer:

Omni-Channel Marketing


Omni-Channel Marketing

Transforming the

customer

journey

across all channels


Remember That the Journey is Non-Linear

Find the customer where they want to be found…


DTC Engagement: 360 Degree Customer View

eCommerce

Wine Club

Allocations

Tasting Room

Recipe Engine

Social Media (Social Commerce)

Mobile

Telesales (inbound & outbound)

SMS (Text)

Email Marketing

Visitor Reservations

Newsletter

Mobile POS

Search Engine Optimization (SEO)

Retail LocatorWinery

commerce

ecosystem


Customer Acquisition Channels

• Wine club signup

– Most traditional tasting room business model

• Digital and Social Marketing

• Email Campaigns

• Telesales

• Direct Mail, Catalog

– Can still be effective; can drive ecommerce conversions

• Social media, events, other


MAYBE………


THE DIGITAL MARKETING PLANNING

CHECKLIST & THOUGHT PROCESS


Why Do Digital Experiences Matter?


HOW TO KICKSTART

YOUR PLANNING

PROCESS


NOW WHAT.

LET’S TALK ABOUT THE ACTUAL

COMPONENTS OF A DIGITAL

MARKETING PLAN


WHAT MAKES UP A DIGITAL MARKETING PLAN

1. OBJECTIVE 2. STRATEGY 3. TACTICS 4. SCHEDULE


WHAT MAKES UP A DIGITAL MARKETING PLAN (4 CORE THINGS)

1. OBJECTIVE

2. STRATEGY

3. TACTICS

4. SCHEDULE

(*Why*) The over-arching business problem you

were tasked with solving

(*What*) Your approach, the layer between the

business problem, and how exactly you did it.

(*How*) The means you took to satisfy your

strategy, the actual details of how you executed

(*How Much*) Which partners, for how much, and

how long.



1. OBJECTIVE(*Why*) The over-arching business problem

you were tasked with solving

Your objective should be:

• Come from a company-wide KPI

• Clear

• Actionable

• Map directly to a company-wide KPI



EXAMPLES OF OBJECTIVES:

1. OBJECTIVE(*Why*) The over-arching business problem

you were tasked with solving

Increase the number of website visitors and/or conversions

Increase the # of email addresses we have in our database

Increase visitor traffic/wine club signups at the winery

tasting room



2. STRATEGY

Your strategies should be:

• Clear

• Actionable

• Map directly to your objective (how are they solving your biz problem?)

• The hardest part of a digital media plan.

(*What*) Your approach, the layer between the

business problem, and how exactly you did it.


LETS MARRY THEM TOGETHER

Target your demographic audience on the

social networks they visit most with best

selling wines, or other special offers

Encourage new site visitors to redeem an

introductory offer in exchange for their

email address

Drive traffic by promoting off-site tasting

events and community-oriented events,

focusing on Portland Area residents

1. OBJECTIVE 2. STRATEGY

Increase the number of website

visitors/conversions

Increase the # of email addresses

we have in our database

Increase visitor traffic to the

winery tasting room


5. PRICING 6. COSTING7. PARTNER

SELECTION




PRICING

THEORY

IN PRACTICE



WHAT DOES $1 DO FOR THE DIGITAL MARKETER

TRAFFIC

WEBSITETASTING

ROOMAPP 3-Tier PRINT/WEB


ONCE TRAFFIC IS IN THE DOOR IT CAN DO MANY THINGS (DIGITALLY-FOCUSED)

BOOK A TASTING

BUY WINE

JOIN A WINE CLUB

POST A REVIEW

DOWNLOAD RECIPES

RE-ENGAGEMENT

SHARES

BROWSE - TIME ON

SITE

VIDEO PLAYS

ENTRIES/VOTES



SELECTION





HOW MUCH

DO THINGS

COST?


BACKGROUND ON HOW AD PRICING WORKS

CPM

(cost per thousand)

CPC

(cost per click)

Publishers charge you every time:

CPL

(cost per lead)

MOST COMMON

(EARLIEST FORM OF PRICING,

LEAST RISKY FOR PUBLISHER)

INCREASINGLY COMMON

(MORE RISK TAKEN ON BY PUBLISHER)

RAREST

(MOST RISKY FOR PUBLISHER, GENERALLY

WILL OWN THE SIGNUP EXPERIENCE)

Display/WebsitesPaid Search

Paid Social

Lead Gen

companies

(Lead Genius)


WHAT DOES THE AD PRICING MARKET LOOK LIKE

InexpensiveAverage

Expensive

CPM$1.25 $3.50 $5-$15+

CPC$0.25 $0.50-$0.75 $1.50+

CPL$25 $50 $100+

All these prices completely depend on your site, pricing, and business


AVERAGE CPC GUIDELINES + OBJECTIVES

Base Additions (each is an incremental cost)

Avg. Untargeted

CPC Gender Age Interest Occupation Education Geo

$0.35 +$0.25 +$0.25 +$0.30 +$0.25 +$0.15 +$0.45

In other words, a fully loaded CPC would be $2.00


+ OPTIMIZATION



SELECTION




BUDGETING:

HOW MUCH SHOULD I SPEND ON

ADVERTISING?



KNOWING HOW MUCH YOU ARE WILLING

TO SPEND (WITH WHO)

HAS TO DO WITH

YOUR RISK TOLERANCE.


?: HOW

RISKY ARE

WE?


CHECK YOUR SPEEDOMETER:

AGGRESSIVE OR CONSERVATIVE DRIVER?

IDENTIFYING YOUR APPETITE FOR RISK


AGGRESSIVE

WHEN AN AGGRESSIVE STRATEGY IS RIGHT FOR YOU

ROI

VOLUME

• You are looking to acquire as many new

customers as possible in an effort to

gain traction and grow wine brand

awareness.

• Or you are have fewer metric constraints

(spending our budget is more important

than measuring it!)

• This strategy means being comfortable

with a higher cost per acquisition in

exchange.


AGGRESSIVE OR CONSERVATIVE?

CONSERVATIVE

ROI

VOLUME

• Looking to maintain the best profit

margin possible,

• You are much more metrics-driven, or

potentially cash-strapped.

• This strategy comfortable with simply

acquiring less new customers.


Are you comfortable acquiring new users at a loss? (spend $10, make $5)

Are comfortable acquiring new users & breaking even? (spend $10, make $10)

If we break even or lose money now, can we monetize these users in 3,

6, 12 months?

How good were we this month at getting our existing customers to come

back and spend time on our site?

How many new users do you want to acquire, and in what time frame?

HINT: “As many as possible ASAP” is not good enough. Be specific.

YOUR CHECKLIST FOR RISK & COSTING



SELECTION




FOR YOUR 1ST DIGITAL PLAN, KEEP YOUR PARTNERS SIMPLE

Fee’s

Social Search B2BDisplay


WHAT ARE THE VEHICLES RELEVANT IN THE

WINE INDUSTRY?


BEFORE COMPLETING A DIGITAL

MARKETING PLAN YOU HAVE

TO PROJECT WHAT YOUR

EFFORTS WILL DELIVER


Customer Acquisition




• Email Campaigns

• Telesales





LET’S SAY YOU RUN A WINERY THAT HAS THE FOLLOWING CRITERIA:

EXAMPLE

WORLD’S GREATEST WINES

Price $100

Goal ROI 200%

Goal New Customers 1,000

Average Conversion

Rate

2.00%

Expected Cost Per Click $1.00


Winery Digital Metrics

Key Metric Benchmarks Test Campaign

Online Sales 1 100

Avg Online Sale $100 $10,000

Sale Conversion Rate 2% 2%

Visits Required 50 5,000

Cost per Click (CPC) $1 $1

Cost per Sale $50 $5,000

Click thru Rate (CTR) 1% 1%

Impressions Required 5,000 500,000

Cost per Thousand (CPM) $10 $10

66


FINAL WORD

ON SOCIAL

MARKETING


If You Do Not Pay to Advertise on

Facebook, It Is Estimated That You Only

Reach 3-5% of Your Fan BaseForbes.com


LAST BUT NOT LEAST,

BEFORE DOING ANY ADVERTISING

THINK:

HOW GOOD ARE WE DOING THINGS

NOW BEFORE WE PAY FOR TRAFFIC?


What is the Conversion Rate, Average Order Value, and Time Spent for:

Our best traffic source

Our worst traffic source (with the most visits)

Our highest traffic source

Do we have appropriate landing pages to make our desired action as simple &

easy as possible

Are we confident that paid traffic is going to help us do more of the desired action

we want

Are we maximizing what we are getting out of our organic/free traffic (existing

partnerships, search, etc.)

YOUR CHECKLIST FOR HOW GOOD WE ARE


Customer Acquisition




• Email Campaigns

• Telesales





Email Still Rules

EMAIL MARKETING ROI

According to Exact Target and HubSpot:

• Companies view email marketing as a better return on investment

than PPC, content marketing, social media, offline direct

marketing, affiliate marketing, online display advertising, and

mobile marketing.

• Email Marketing has an ROI of 4,300% (Based on marginal cost).

• 66% of in-house marketers rate email as having “excellent” or

“good” ROI


How Money is Spent vs. ROI

*Source: Direct Marketing Association 2015


Please read my blog

from October 2016

http://bit.ly/2fdzyQG

WHAT’S THE VALUE OF AN EMAIL?

HERE’S HOW TO CALCULATE THE $ VALUE


Loyalty Coefficient


Winery Email ROI

Key Metric Benchmarks Annual Campaign

2X Emails per Month

Emails Sent 1,000 24,000

Delivery Rate >95%

Emails Delivered(Assume) 1,000 24,000

Open Rate >30%

Opens 300 7,200

Click To Open Rate >20%

Clicks 60 1,440

Conversion Rate >5%

Orders 3 72

1,440 clicks

x 5% conversion

= 72 sales

x $200 avg. sale

= $14,400 sales

= $14.40 per email

annual value


Let’s Summarize

• Your net revenue for the year equals $14,400/1,000 emails, or

$14.40 per email subscriber.

• Assuming an average 3 year tenure for an email subscriber (LTV),

net revenue jumps to $42.40.

• Discount LTV by weighted average of Loyalty Coefficient.

• Does not include value of email for promoting winery and offsite

tasting events, etc.


There is a difference between knowing what

stats mean and knowing which stats are

meaningful.

It all comes down to one thing: Does the metric

help you make decisions?

Final Word on Analytics


Final Thoughts

Things to consider in your DTC marketing strategy:

• What makes you different or your story compelling?

• How do you deliver the message to visitors in person or digital?

• Why should they care?

• What is your plan for building and maintaining customer loyalty?


Tell your story + tell it well

(the magic 15%)


Questions?


Contact Info

Ron Scharman

CEO/Astra Digital Marketing Services

[email protected]

707-681- 5392

Find Me on LinkedIn at http://bit.ly/1WyFHpA

mailto:[email protected]