4-page Case Study - Posted 11/20/2007
Views: 261
Rate This Evidence:
Microsoft Online Customer Story: 1-800-FLOWERS
“I make my own arrangements.”
The blossoming of a brand.
No two online shoppers are the same—even if they’re clicking on the same online ad at the same time. While a softly lit television commercial may prompt one person to buy flowers, a simple banner ad reading “Mother’s Day is May 13th” may prompt another. So how big of a role should Internet advertising play within today’s media mix? And when the right mix successfully brings in new customers, what’s the best way to keep them coming back?
Today, online businesses can do an hourly pulse-check using an endless array of sales metrics. The numbers offer important information about the marketplace, but a click-through rate just doesn't offer real insight into what makes their customers tick. That's why traditional direct marketers are seeing the need to look deeper at the role of online advertising—to see how it can be used to run their marketing campaigns more efficiently, and how it can earn long-term brand equity with their customers.
As a premier online floral distributor and traditional direct marketer, 1-800-FLOWERS.COM® was ready to face these questions head-on. So together with Microsoft® Digital Advertising Solutions and research-industry frontrunner Marketing Evolution, it conducted a groundbreaking study to determine the proper role of online within a media mix.
The Microsoft team wanted to take a sweeping look at all of the 1-800-FLOWERS.COM advertising to discover the impact on the company’s branding and sales metrics. From television ads to online display and banner ads to the millions of catalogs it drops every year, the company has a terrific presence in the marketplace. But by investigating the cost-efficiency differences across various media, Microsoft Digital Advertising Solutions planned to suggest the optimal mix for 1-800-FLOWERS.COM—and keep customer acquisition costs below seven percent.
To kick off the study, 1-800-FLOWERS.COM worked with Microsoft to roll out high-visibility display ads in two stages, based on optimal seasonal buying cycles—Christmas and Valentine’s Day. Then, to expand the scope of the research, e-mails were sent to help determine their impact on customer retention, sales, and ROI. Search advertising was included to investigate the relationship between search and display advertising.
 |
One of the big findings that’s a big ah-ha for me is to understand that online is a key contributor, if not the major contributor, of brand impact on brand equity |
 |
|
Monica Woo
President of Consumer Floral Brand at 1-800-FLOWERS.COM |
|
|
Using this combination of tracking and survey research, Microsoft Digital Advertising Solutions was able to see which media each of the individual buyers had been exposed to. They evaluated who came in online, who came in via search, who came in via telephone, and finally, which channels they used to buy.
So what were the conclusions? More than any other medium, online advertising worked as the “bridge” between sales effect and branding effect. It generated enough incremental sales to earn its keep, and when combined with other media, lowered the cost-per-order and added value by being the only medium in the study that produced the desired branding effect.
“One of the big findings that’s a big ah-ha for me is to understand that online is a key contributor, if not the major contributor, of brand impact on brand equity,” says Monica Woo, President of Consumer Floral Brand at 1-800-FLOWERS.COM.
And what do terms like “brand equity” and “desired branding effect” really mean to 1-800-FLOWERS.COM and to its customers? That emotional attributes are now associated with what has historically been all about selling and marketing. “This is where I see the big convergence between direct marketing and brand marketing...and [online] is actually the best medium for this convergence. It’s a little bit difficult to do that with TV advertising,” says Monica Woo.
One of the most interesting questions in the online marketplace right now is how traditional direct marketers should shift their media mix to create a full, branded experience between every channel. What Microsoft and 1-800-FLOWERS.COM have learned is that not only will the right mix drive incremental sales, it will also drive long-term brand health—giving customers the opportunity to understand what the company offers—and why they should buy it.
