Issue:2
Online Supermarkets Digital marketing for supermarkets
Contents Page 3. Introduction 4. What Makes You Click 5. What Makes You Clock Cont. 6. What Makes You Clock Cont. 7. What’s Happening 8. What they Want 9. Analytics 10. Analytics 11. How To Mine For Data Gold 12. The Value Of Email 13. Don’t Spam Them 14. Don’t Spam Them 15. Email Marketing And integrating offline and online 16. The Growth Of Digital In The Past 5 Years 17. Keeping You Up To Date 18. Keeping You Up To Date 19. Display Yourself 20. Brands Are Betting Big On Social 21.Are You Liked 22. What Are They Tweeting About
23.Where To Go Next 24. Are You Linked Up 25. Online PR 26. Blogs 27. Window Shopping 28. Online Ad Networks 29. Is The Future Digital 30. Where Do Sainsbury’s Spend Money For Advertising? 31. Where Do Tesco Spend Money For Advertising 32. Where Do Asda Spend Money For Advertising 33. An overview look into digital marketing 34. Where The Experts Say 35. What The Consumers Say 36. Recommendations 37. Recommendations 38. References 39. References
Introduction In this report, the online marketing
Insight will also be drawn from primary
activities of various supermarkets will
research taken from consumers and also
be discussed and compared. They will be
evaluated
supermarkets
in perform
how
well
at
each
industry experts. A look into the future and potential new channels will also be represented. . It also gives an outline of the financial status of each
business
marketing element with good and bad
within
examples being given. All aspects of
Sainsbury’s, Tesco and Asda advertising
the online marketing for supermarkets are covered from web analytics to social media. This magazine hopes to inspire readers to learn to understand the best way to execute these techniques when operating in the supermarket industry..
the
report
by
looking
at
spend and looking into the different medias that are used. There will also be a overview of the retail market on how digital has changed
What Makes You Click? Successfully optimising keywords is potentially one of the most crucial online marketing activities for the supermarkets. The quality of data obtained through analytics tools will give each business a head start with deciding which keywords to optimise in search engine queries. Having a mix of short and long tail keywords/ phrases will provide a broad cover of potential site entries by new users as relevant content will appeal to consumers (Barnes, P., 2004).
Sainsbury’s is the only major UK supermarket to take a differentiated approach in regards to keyword choices. Selecting words like careers, opportunities and returns seems to be a waste of a useful marketing tool to the industry, considering transactional sites can generate up to half of new business (Chaffey, D., Smith, P. 2010). However they do make good links with other pages on the site which enables pages to gain optimum exposure to web crawlers for site indexing. Converting traffic into sales over the Christmas period was a huge success for Sainsbury’s, so optimising site pages with SEO keywords clearly had an impact on ranking and consumer clickthroughs.
Considering how efficient Sainsbury’s is
with building links to other areas of their website it would make sense for other competitors to monitor and become effective in the same area. Asda have failed in an attempt to build effective links to other pages as site design is uninspired and not compelling enough for multiple
consumers to pursue.
What Makes You Click? Cont. A higher market entrant like Waitrose has
also taken the alternative approach in regards to keyword deployment by selecting phrases that a wealthier target segment may appreciate, but this is in double effort alongside phrases similar to Tesco and Asda.
extremely competitive, and even though for the term ‘supermarkets online’ Asda came 6th in organic listings above Tesco, both are competing for paid advertising space on Google and are in relatively the same place. This increasing pressure to perform on search engines means that the supermarkets much truly give value online to the consumer through marketing initiatives
The other supermarkets utilise keyphrases like ‘home shopping online’ and ‘online supermarket’ which although are going to be the most suitable words considering the type of businesses these are, there is no differentiation between main competitors. This provides major weaknesses for Tesco and Asda as the only way for a consumer to decide between them will be possible marketing efforts or previously formed perceptions, leaving no room for competitor growth or improvement. Ranking is also extremely competitive, and even though for the term ‘supermarkets online’ Asda came
6th in organic listings above Tesco, both are competing for paid advertising space on Google and are in relatively the same place. This increasing pressure to perform on search engines means that the supermarkets much truly give value online
and sales promotion.
What Makes You Click? Cont. Alexa (2012) provides analytical insight into the effectiveness of each keyword used for search engine marketing, so optimum exposure can be selected for each brand. Percentages can be seen for each keyword usage levels by consumers in the UK, so bidding can be set accordingly for each pay per click (PPC) word in order to compete with other supermarkets
What’s happening? Situation Analysis
Increasing competition online has urged retailers to implement
strategies
that
favour
underlying
consumer behaviour and values (Jayawardhena, 2004).Grocery retailers, although providing different value to consumers in their own way, are essentially
competing for higher share of the same market. Therefore, directly and indirectly, each supermarkets online offering in terms of delivery, order time and quality of service determines performance for the consumer and ultimately whether or not a sale is made (Reynolds, J. Wilson, M. 2006). Brand perception remains the keystone of each company holding market share as all offer similar products, so offering a differentiated campaign like an Active Kids or Every Little Helps boosts consumer’s views.Tesco and Sainsbury’s maintain a much stronger approach in terms of E-business because of data integration with loyalty cards to online consumer activity, bringing together applications of online shopping and in-store purchases. This could also be described as a ‘right touch’ (Chaffey, D., 2008) whereby a multi communications strategy is customized through consumer lifestyle choices to present the value proposition
most
suited
to
each
individual.
Development in this area would be useful for a large
business like Asda, who currently do not have any integration methods with off and online databases.
What They Want
Each supermarket provides relatively the same
This tactic, considering Tesco are already
service for consumers, so objectives for each
nearing a 50% share of internet grocery
won’t vary a huge amount in terms of aiming for
shopping (Emap, 2011), is just maintaining
increased market share and higher penetration
market share for the brand, considering Tesco,
with target audiences. Objectives for marketing
compared
communications, however, will be varied as
supermarkets, is not growing overall
campaigns already in progress determine goals
The marketing activity for Tesco is integrated
that need to be met. Asda is still running the
throughout email and postal offers sent
slogan ‘Saving you money every day’ which keeps
directly to consumers. Sainsbury’s, as a brand,
the business in line with the proposition of a low
relies heavily on celebrity endorsement to
price grocer (Marketing Week, 2012), as well as
promote marketing strategies like ‘Live Well for
providing internal objectives such as maintaining
Less’ and by doing so attracts a slightly higher
a price comparison service for consumers (in the
end of the market. Objectives for Sainsbury’s
guise of the ‘10% cheaper’ promotion). Providing
focus a lot on consumer interaction and
coupons and money back initiatives in this way
increasing
maintain Asda’s online value proposition but also
endorsement of national events such as Sport
links
purchasing,
Relief and Jubilee Family Festival. Customer
strengthening the image of the brand, weight of
acquisition and satisfaction is clearly a primary
the campaign and overall increase market
goal for Sainsbury’s, and one that seems to be
penetration. Tesco on the other hand heavily
working well as they have been named as the
promote their slogan ‘Every Little Helps’ and tie in
second largest online grocer after Tesco
initiatives like ‘The New Price Drop’ to provide
(Lawson, A. 2012). Sales online have also
consumers with incentives to go in store or on the
increased by a fifth according to a financial
site in order to obtain brand new offers.
statement by the company (Rigby, C., 2011)
this
activity
to
offline
to
the
brand
other
three
awareness
major
through
which indicates further customer acquisition levels.
Analytics “Measuring, analysing and improving your customers’ experience at all stages of the buying process are the first steps on the journey towards deeper customer engagement.” (Douglas Stafford, 2012).
All of the major supermarkets (Tesco, Asda, and Sainsbury’s) use a third party data collection software as a service (SaaS) tool by Omniture, which currently use third party cookies to collect consumer data. These third
Figure 1
party cookies allow data to be ‘read’ and ‘carried over’ from certain sites to others, allowing collection of
This data analysis is vital for all competitors of
trends through user activity to be assessed, providing
the supermarket sector to regain effective
usable consumer insight (Kaushik, A., 2012). The
communications with consumers and deliver
advantage of having an outside company deal with data
campaigns and services that are most relevant
collection and monitoring for a large brand is that
to consumer needs.
practices can be seen as transparent, and more
Digital services have revolutionised accuracy of
trustworthy, especially when dealing with details and
marketing across the industry as consumers
tracking of consumers. The most likely tools that any of
benefit from vast availability of information to
these supermarkets would utilise would be Adobe
aid purchase decisions and business are given
Insight for Retail (previously Omniture) and Adobe
access to predictions of target market
AudienceResearch, which provide real time updates and
behaviours more cost effectively (Marshall, J.,
comprehensive statistics. Tesco on the other hand, have
Pringle, H., 2012). When Tesco first entered the
a secondary data collection source, Dunnhumby, who
online market only grocery products were
are a research company that pride themselves in putting
available, however through analysing data
the customer first and abide by key principles (Figure 1).
collected on consumer purchasing habits Tesco
were able to present a ‘Favourites List’ for returning online shoppers which was an effective method of consumer web segmentation (Rosenberger, L., et al. 2009).
Analytics Redemption rates for Tesco have improved dramatically thanks to direct marketing initiatives devised from analytics, and where the market average is 2%, Tesco’s has been driven up to 20% (Harvard Business Review, 2011). Recent research shows that 75% of shoppers abandon online baskets before checkout is completed (Figaro Digital, 2012), creating a dip in conversion rates that only analytical evaluation could evaluate. The most effective touch points on the website were utilised as catalysts, providing marketers at Sainsbury’s with insight that led to strategic segmentation of consumers with deployment
of
activity
driven
emails
after
consumers abandoned shopping baskets.
Analytics packages that relate to social media, customer relationship management and websites should be integrated for all supermarkets to create a ‘Triple A’ strategy that will effectively monitor and
analyse all data collected (Chartered Institute of Marketing, 2011). Emmett Cox (2012) also reaffirms this point and confirms that different levels of analytics are needed to support an organisation and also to issue a degree of control throughout all hierarchal levels.
How To Mine For Data Gold Alexa.com enables critics to compare effectiveness of all areas of supermarket online activity. This insight shows areas of
weakness for each company, yet also how competitors are performing in areas like traffic rank and consumer time on site. Here are two examples from Asda and Sainsbury’s, Sainsbury’s
clearly website
showing is
that
improving
on
performance substantially quicker that
Asda, perhaps due to online content and relevance of targeted marketing. The other image shows that Sainsbury’s bounce rate has decreased over the past 3 months, more so than Asda or Tesco, so effective use of data analysis has obviously shown weaknesses in the company’s
digital
strategy and they have sought to improve it.
The value of Email There are nearly three times as many email accounts as
The total number of all page views on the Internet
there are Facebook and Twitter accounts combined.
equals only 25% of the total emails sent
The total posts on Facebook and Twitter combined add up
Nearly 4 times as many emails are sent each day
to 0.2% of all email traffic
as the total number of Facebook/Twitter updates,
The total number of searches on Google, Yahoo and Bing
Google/Yahoo/Bing searches and page views on
combined equals just 1.1% of all email traffic
the Internet combined
Don’t Spam them The benefits of companies using email marketing is that it is relatively low cost to fulfilment, it is useful for customers to click through to the direct website, instead of having to find it on a website. Faster
Sainsbury’s use the Nectar card well as they inform the user if they purchase the product how many Nectar points they get and the value of money the points are worth, this
encourages people to shop with Sainsbury’s if
campaign deployment, even though only a couple of
they have a Nectar card as it makes it clear
supermarkets do it is easy to personalise the email to
for them to understand, plus the customer
the specific person needs , which makes the customer
knows the benefits of using it. Unlike Tesco’s
feel involved, options for testing it is relatively easy
where they don’t mention anything about the
and cost effective to test different email creative messaging and intergration (Chaffey, D 2011)
Tesco club card. But they do have direct links to there Facebook and Twitter pages which
will inform customers about the current promotions and other information for the
Sainsbury’s sticks to the colours that are associated
customer. Unlike Sainsbury’s that don’t
with Sainsbury’s (Orange) and address the customer by
mention anything about there social media
their name unlike competitors supermarkets like Asda
sites.
and Morison's. As they don’t address the email with the customers name, however they do use words like “you” this may make the customers not feel as
Asda try to encourage the user to show online as they are offering home deliveries from £2.50 which is normally double the
targeted to the product as other supermarkets do.
price, they use this a an incentive to purchase
Tesco are another supermarket that focuses on
something online.
addressing customers by there surnames.
Other supermarkets like Asda, Tesco, Morrison's and Waitrose also use the colours that they are associated with there supermarkets, this helps the customer formulate themselves with the supermarket. Email sent by Sainsbury’s
Don’t Spam Them The content of the Sainsbury’s email’s
Morrison's send emails out informing them the
tend to be based on different groceries
current offers. For example Morison's are
and products that are on offer at the
currently having spend £60 on fuel and get 15
moment. As Easter is also nearing they
pence off of every litre. Underneath the
focus on some of their Easter offers such as Easter eggs. Looking at there competitors Tesco and Asda are focusing on mothers day As mothers day is closer than Easter. Asda send people who are signed up for the emails, emails about the different options that you can get your mother for mothers day, whist
promotion on the website it includes more products that are on promotion. Below the promotions they try to use the refer a friend method to get more people to sign up for emails so they can inform more people of the
promotions that are currently going on within Morison's.
Tesco just focus on the one promotion. All the emails that the supermarkets have sent Tesco’s send emails informing the
out have a direct link to there website, which
readers that they have a magazine. With
makes it easier and more efficient for the
mention of the main topic that is
customers to get on to as they don’t have to
featuring in the magazine. This gives the
search around the supermarkets site trying to
reader an insight into there magazine
find the deal.
which may persuade more people to purchase it. Tesco also send emails out informing the customer on how to make the best of the website. This shows all the qualities that Tesco’s have, which the competitors don’t seem to do. This makes it user friendly for the customer.
Email from Tesco’s
Email Marketing And integrating offline and online The Tesco emails are very simple and stick to the colours that they are associated with (blue, white and red). The template of the emails are very
similar as you can see in the picture below. However it is very easy to use and clear to follow.
Asda send emails from different departments, which shows the latest deals that they currently have to offer. As they show that they don’t just focus on food products. However a lot of the other supermarkets such as Tesco’s do the same. However when Sainsbury’s send an email out they don’t make it specific as they also show the customer the different offers that are on at the moment.
Source: Fill 2009 “Marketing Communications” p.759
The growth of Digital in the past 5 years The growth of internet usage over the past
.Also
5 years has grown significantly compared
becomes new ways of targeting
to any other type of media. This means that
people using digital marketing tools
supermarkets can realise their campaigns
such
and advertisements on the internet using
marketing, social media and online
digital methods and reach a higher target
display.
audience
with
SEO,
the
viral
internet
videos,
their
Keeping You Up To Date The benefits of supermarkets using mobile technology is the fact that it is another way for people to purchase goods online. Therefore if the supermarket application
allows the user to purchase goods in a quick and simple way it will prove to be very popular. However users can only purchase products using there smart phones, which have different stores to get your
Mobile ad spend increased by 157% in 2011 to a record ÂŁ203.2m, With smartphone ownership now standing at 53% in the UK, the IAB attributes the growth to the rapid uptake of apps and social media, fuelled in part by cheaper tariffs.
applications from. However some supermarkets have only put there applications on one store, unlike putting it on 5 of the different stores. This makes the
application usability low . The mobile also allows for interactivity, which makes it easy for the consumer to respond,
personalisation
which
means
The top spenders were telecoms with 14.9% (14.3% in 2010), FMCGs 14.4% (11.8% in 2010), retail 12.3% (5.5% in 2010) and finance 10.3% (18.6% in 2010).
the
supermarket can customise and personalise their needs to the consumer. Ubiquity which means it reaches users at any location at any time and PERSONAL channel which enables direct, targeted and interactive communications at any time and place
Looking at where this budget is allocated, 54% of display advertising spend is on apps with 46% on browser inventory. Overall, display advertising on mobiles more than doubled year on year, increasing by 186% to ÂŁ68.9m compared to ÂŁ28.1m in 2010. (David Moth, 2012)
QR scanners on smart phones, which enables shoppers to compare the prices of the goods in the supermarket
Blippar is an application that turns things into
to find out what is the cheaper store. However if
reality. Waitrose put an advert in the Metro at
people are doing there weekly shop it will take too
Christmas time in 2011. The person with the
long to scan every product. But if they are looking for
IPhone as the application is only available on
one deal for example to buy a television the QR
IOS. The user would open the application and
scanner could come into use to find the best price.
scan the magazine, it will then pop up with a picture of the finished product. The product that they were advertising was Christmas cake. The advert has to have the blooper symbol that the consumer scans.
Hyperlink in Blue box which shows how Blippar works.
Keeping You Up To Date The Sainsbury’s application has a store
Morrison's only have an application on the
locater which displays opening times, shop
IOS store, which allows the customer to
online option, View the top deals in
make shopping lists, store locater and to
Sainsbury’s,
displayed
check the stock levels. However as it is only
information on how many nectar points the
on the IOS store, it is very limited for
user has. However Sainsbury’s don’t have an
customers compared to Tesco’s who have
application On RIM, or Microsoft. Unlike
an application on every app store. Another
recopies
and
Tesco’s who have an application on every smartphone market, however on RIM they only have a club card application which
downside of the Sainsbury’s application is that the user cannot purchase goods with
it.
allows the user to use there phone instead of the club card to scan and add points. However they don’t have an application allowing them to purchase goods online with it.
Supermarkets on Smartphones
Display Yourself “It gets a bad reputation for being an
“Banner ads are having a banner year. Analyst
underperformer. In reality, however, it is a
eMarketer this month had to double its online
secret marketing gem that has proven itself
ad spending projections for 2011 because
a team player helping to boost web traffic,
banners, a.k.a. display ads, are selling so well.
brand recognition, conversions, and sales.”
By 2015, eMarketer predicts, display will
(Jenniefer, 2009)
overtake search ads as the top online ad segment. Facebook is girding for a $100 billion
The purpose of online display advertising is
IPO and its business is mostly based on banner
for consumers to become more aware of the
ads.” (Wasserman T, 20110)
brand and there message. In order for the supermarkets to judge this it can be done
Sainsbury’s banner proved to be very successful
through click through, however there are
as Sainsbury’s saw an increase in sales for items
different ways to judge it such as lift in the
such as homeware and electricals, which
supermarket searches, search engine click-
assisted with Sainsbury’s taking the number
thru rates, direct visits and online/offline
two spot off of Asda in the market share of
purchasing. Sometimes this doesn’t happen
Supermarkets. The Sainsbury’s online banner is
immediately, but because the user now
successful as it doesn’t have much writing on it
recognises the supermarket, they are more
just the crucial bits which stand out clearly. But
likely to adapt to changing their search
also offers the consumer a direct link to there
behaviour. This may have not been likely
site where the offers are.
without the awareness provided by the
display ad.
Brands Are Betting Big On Social
Are You Liked? Social media is still a vehicle that is not truly understood by businesses yet in terms of how to generate ROI. However many businesses still believe they should own a page without knowing how to use it. The sites allow a two way conversation between the brands and the consumer, however brands are scared of this as they cannot control what the consumer say.
The image opposite is taken from Sainsbury’s Facebook site. It shows comments which contrast the positive and negative points of using social networks. Both a positive and negative comments are made here. Though Sainsbury’s are poor in the fact that they should address the negative comment before the positive to resolve the matter, they do perform increasingly better in terms of creating content for consumers to interact with. It is fair to say Tesco offer more engaging content on their page. Even though this is not a Tesco Project they support their staff and promote their charitable cause via the medium. This gives a positive vibe not just about the brand itself but also the staff who work for them. The Co-op use their Facebook in the same way and gain ideas and positive feed back from those on the page, the consumers who do so also seem to involve
themselves with less of a prompt.
What are they tweeting about? Twitter is still growing fast and is second in social media size to Facebook. Twitter allows a more direct dialogue between brand and consumer and although it is time consuming it is an efficient tool for CRM which can really enhance a relationship between brand and
consumer. Asda use their Twitter account very well. They have two accounts; their main page which is used to talk about what Asda are doing , they retweet positive quotes from consumers about the brand they also link their other page which informs consumers about their special offers. In addition to this Asda are one of the first to use the brand page on twitter (IAB, 2012). Marks and Spencer's use it in a similar way as Asda but they also use it as a customer services, answering any questions that are asked of them. By building a positive conversation with consumers from quick and positive communication it will build a better relationship with the consumer, potentially leading to a more loyal customer.
Morrison's also has a twitter however they only promote special offers. Lidl do not own a Twitter page for the UK, they have one for Ireland and other European countries.
Where to go next? Supermarkets should not just be looking at the now, more and more social sites are being created and growing within the market. Google plus is one of those however it has been slow to take off . There should be potential for it as a company such as Google will have the money; and should have the initiative to create an edge from the other competitors to give it a level of differentiation from
Facebook which it looks very similar to now. Although recently the plus 1 button has been added which allows a user to recommend search results, this could be very useful for super markets SEO.
Another site that is starting to take off fast is called Pinterest The site registered 7 million unique visitors
in December 2011(falls) which is incredibly impressive as they were only launched in 2010. Pinterest is very unique and there is no other major social media website that features the same functions. Pinterest is a site that works like an online notice board where users “pin� photos to pages and share them with others. BMI were the first to launch a campaign on
this medium who ran a lottery type campaign. Supermarkets could use the site to publicise new products they are launching or possibly images of special offers. It is a difficult medium for a business to enter and they will have to think hard on if they should use it and if so how.
Are you Linked up?
Linked in has always been a more b2b type social network which is mainly used for networking and meeting relevant people. So should the supermarkets be using it for marketing? consumers are able to follow brands on the site in a similar manner to Facebook but in terms of content that is uploaded Tesco are very much business talk and positive press. Sainsbury's and most of the other
supermarkets are the same in terms of content. The way they use the site and the content uploaded is in the same atmosphere as linked in and not commercial like the other social network sites are. The way that Linked In should be used for businesses is to market themselves to potential employees and in a business sense. They need to promote that it is a good business to work for and because of a lot of members use the site to find jobs and network this will appeal to them if appropriate. Which exactly how the supermarkets use it. Rather than trying to sell products and services they are almost trying to invest in their future by creating a demand for jobs with the company.
Online PR The role of online PR can be a very important and effective one. Sainsbury's
When searching for examples of online PR for
most recently launched a brilliant online
the other supermarkets very little was there to
PR campaign which stemmed from a
be found, which in itself means that they either
letter from a 3 year old child about Tiger
are not performing online or more likely that
bread. The letter and its response were
their campaigns aren't impacting and creating
put up on a blog site and then the social
the same effect that Sainsbury's have had.
media. The response from this was
Tesco’s do sponsor the race for life online which
immense with multiple news articles
integrates with their offline campaigns.
published. This generated so much coverage that the Tiger bread name was changed to Giraffe bread. This story created a large amount of word of mouth and has proved very effective for Sainsbury's, giving them a positive image to the brand.
Blogs Blogs are often under estimated in terms
Asda also offer a blog which is something
of effectiveness for businesses. They can
Sainsbury's and Waitrose do not. Unlike
be used to show of company knowledge
Tesco, Asda’s blog is on a site they own
on a subject, give company views in a
called Your Asda which offers behind the
more personal sense and attract
scenes of all areas of Asda in one place. It is
customers through search as they look for
beneficial to have all the blogs in one place
topics relevant to what the company has
as it means its users don't have to search.
blogged on (Chaffey &Smith, 2008).
They also divide the blogs depending on
Tesco offer a range of individual blogs
topics making it very easy to go between
which focus on different elements of
blogs of similar themes .
Tesco; such as their clothes range F&F and a book review blog. They also blog about the new technology that a staff member uses within the business for example the new click and collect service. Its strange that all of their blogs are found in different parts of the web rather than segmented on one site, so to find them they must be searched. When “Tesco blogs” is searched on Google an article from the guardian
appears with negative press about Tesco. the article details a blog about a woman who had a bad experience. This kind of press can have a negative impact on the business and Tesco’s need to perform offline service very well or it will spread like wild fire online.
Window shopping Ocado is the first supermarket in the UK to launch a “virtual store” in a bid to introduce a marketing strategy called “Window shopping”. The idea was created to get people exited about using its mobile app on the move. However Tesco’s also created a virtual store in a South Korea in a subway which proved to be very successful.
This is the first time the online only grocer has had a presence on the high street and could mark a new direction for the grocer.
Ocado’s marketing director Matt Knight says any future initiatives will depend on how people react to the London trial and explains how the company prides itself on innovation. Knight explained how this was a marketing strategy used to demonstrate Ocado’s mobile platforms but this was a trial and the main objective was to get people excited about their mobile platforms and remind them that it’s something they can use on the move, not just at home at their computer. “It’s a way of making Ocado physical in an unusual eye catching way. We want to be led by our customers and how they feel about it and will look in to other ways of using it.”
Video attached in photo
27
Online Ad networks When buying ad space online it is a common practise for a company to purchase through Ad networks. This means that instead of approaching a media owner as you would when buying TV space. To differ, when buying space online companies will approach ad networks who own space on a variety of websites and the company will pay for what they want, for example if they want display advertising they may pay per impression over various sites. The down
side of this is that sometimes they ads may be put onto sites that are not relevant to the consumer or sites that the brand may not want to be associated with. Morrison's are perceived as a more premium brand compared to its competitors and would not want to be associated with a cheaper low brand value. Some of the ad networks will only offer blind networks which means that the supermarkets will not be able to see any of the sites that their impressions will be put on and because of this the more premium brands such as Morrison's or Marks and Spencer will not even buy from these networks as to risk associating the brand with any negative websites that could damage their reputation.
Is the future digital? The cost of advertising on Facebook has risen recently by
The affiliate channel is the epitome of what
74%, this is because there is a high demand for
digital marketing promises. A wide variety of
companies to advertise on Facebook. Which has led to a
content, cash back and vouchers sites now
decrease in spend from the traditional marketing, such
run promotions and get paid on a cost-per-
as television and print.
acquisition
Growth of brand advertising campaigns grew by 104%
If there’s no sale, there’s no fee - and the
year on year as companies look to increase their amount
whole process is tracked by sophisticated
of Facebook fans. The use of Sponsored Stories ads
analytics, often provided by a third-party
proved to be one of the most effective forms of
affiliate network.
improving campaign performance, decreasing cost per acquisition by 32%.
This shows that click through, is working well if companies don’t charge unless the
The report claims that retail tends to get the best click
pay per click makes a sale. Which shows
through rates, growing to 36% of total ad impressions in
that there is a lot of confidence in digital
the second quarter of 2011. The second fastest growing
marketing is the way forward, which again is
sector was finance, driven by credit card campaigns.
steering companies away from spending as
( Lara O'Reilly 2011)
much on traditional marketing. (Sean Hargrave, 2011)
Uptake of digital signage among UK retailers has nearly quadrupled to 46,000 stores from 12,500 since 2007, according to new research commissioned by LG Electronics, a leading producer of digital signage products. And it is expected to rise to 58,000 by the end of 2011. However, penetration in supermarkets remains low with just 1,100 screens present in this channel. (BRIGGS, F 2011)
Where do Sainsbury’s spend money for advertising? Figure 2 shows how much was spent on the different elements of advertising for Sainsbury’s the
data is from 2008 to 2010. Sainsbury’s internet usage for advertising is growing for each year. However the main source that Sainsbury’s use for advertising is television closely followed by press. One of the reason’s why the internet spend is low is because television advertising spend is set as a higher price than internet.
Have Tesco’s Digital Spend Grown? The internet spend for Tesco’s is very small similar to Sainsbury’s and other supermarket retails, however Tesco’s advertising spend has shrunk since 2008 when the recession came in, as Tesco’s would be looking to save money so they don’t get as heavily effected by the recession by other supermarkets . similar to Sainsbury’s
the majority of the spend is on Television and Press. 2010.
Have Asda Digital Spend Grown? Asda’s, internet spend is also low similar to the other supermarkets. Asda don’t spend as much money
on their overall advertising like Sainsbury’s and Tesco’s do. Similar to Tesco’s Asda’s spend has shrunk a lot since the recession has taken place.
An overview look into digital marketing The recession had a huge affect on the advertising market in 2009, which experienced losses in market
Supermarket
Total ad spend in 2010
recession. This fact reflects industry sentiment that
Asda
£110.3 million
television advertising is no longer the best way to
Sainsbury’s
£73.2 million
Tesco
£132.1 million
value as a result. Despite this, the Internet advertising sector continued to perform well in 2008 and 2009, achieving a 5.7% increase in value at the height of the
advertise a new product or service. In terms of specific trends in the Internet advertising market, social media advertising experienced a boom in
figure 4, Sainsbury’s spent the least
the past couple of years, with a 200% rise in
money in 2010 compared to Asda and
expenditure observed in 2010. It seems that advertisers
Tesco’s.
are realising the potential of targeted advertising, for example, Facebook offers an advertising service that allows companies to target a specific demographic. Companies are also taking full advantage of free advertising by setting up company pages on social networking sites, where consumers can also ‘interact’ with the company.
UK Grocery Market Share Update - February 2011 Video
Search advertising still remains the main Internet advertising format in the UK by expenditure, although display advertising has experienced the highest levels of growth over the past few years. Search advertising accounts for 57.2% of Internet advertising expenditure in the UK, although this is set to shrink to around 50% over the next few years, mainly due to the growth of
display advertising.
Source: *Advertising Association 2008 ** IAB/PWC 2011
Figure 5
What the Expert thinks Mark Cudd is the brand advertising manager for Sainsbury's and he is in charge of campaign management incorporating all media channels.
1.
Which do you feel is the most effective forms of online marketing? Search and affiliates, display, Email and Social. All channels provide us with the opportunity to drive customer engagement with the Sainsbury’s brand, whilst some are designed to help drive sales. A lot of the channels provide us with the potential to target according to customer needs and this flexibility enables us to maximise the potential to communicate relevant messages.
2.
What do you feel Sainsbury's competitors do in terms of online marketing better and why? We believe within our immediate competitor set we’re at the top. The richness of our customer data we collect through our nectar scheme enables us to be highly targeted and relevant for our customers.
3.
What do you think Sainsbury's could/should do that their competitors currently do? Tesco have open API, which allows programmers to look at the coding on mobile and develop apps that could benefit the consumer.
4.
What do you see as the benefits of using social media? The Immediacy of communication, it gives a real two way temperature gauge for customers and Sainsbury’s to engage and build dialogue. Word of Mouth is a powerful tool and Social allows this.
5.
Do Sainsbury’s gain any form of ROI from their social media pages? We gain an ROI in the form of word of how word of mouth can spread a news story and instigate change. The story about Lily and the giraffe bread is evidence of this. There is an intrinsic value of subsequent editorial gain in newspapers and online
6.
What's the future for Sainsbury's in terms of online marketing? Mobile, apps, and future technology that's not even invented yet.
What the consumers say The graph to the right shows details about what consumers expect when following supermarkets, the higher the number the more that is expected. Consumers expect competitions the most from the supermarkets. Although the supermarkets do use them, they should consider the frequency of them as if they consumers want them they should provide as it increases engagement.
The Pie chart on the left simply shows out of those asked who actually follow supermarkets via social media which the majority was a no. This will not be truly reflective of all users as it was a small sample but it is interesting to note that this came from a majority age of 18-24 year olds. In this circumstance the supermarkets should try to appeal more
to this audience to get them engaged via social media.
Recommendations In terms of social media as a whole it is Asda who utilize it best, Although other supermarkets will produce similar content as each other with very little differentiation in that respect . It is that Asda are quicker to move on new opportunities like the twitter brand pages , but they also are far more
integrated, it is a lot of there social media is integrated together and easier to find and as supermarkets are about convenience this should translate online as well as in store.
Another aspect that Sainsbury’s stand out in is there email marketing as they display the amount of Nectar points you get if your purchase the item. This is a key way to get your customers to purchase goods from online as they know what rewards they are getting. They also address people by there last name which makes the email feel more personalised rather than being addressed by sir/madam. On the other hand Asda who don’t personalise there
With online PR Sainsbury's were just a lot smarter
emails send out emails giving the user the
in pushing the Giraffe bread story through
incentive to purchase goods by offering their
different mediums and this gained a lot of positive
delivery service by half price, which provides a
coverage and comments. The other supermarkets
good incentive for the shopper to purchase
need to make more of how they react to
their goods from Asda as they won’t have to
consumers or their staff. For example Tesco
pay the full amount on delivery.
Publish the fact that their staff are getting involved in charity work on the Facebook page but they
Mobile phone applications are becoming
should try and build a bigger campaign for all their
increasingly popular on smartphones as they
staff and customers to get involved as this will
are useful and convenient to use, however
gather positive coverage.
Morrisons, Asda and Waitrose’s only have put there applications with IOS (Iphone) and Android. Therefore it is very limited for customers who don’t have IOS or Android phones. Therefore the future plans for Asda, Morrison's and Waitrose is to put a full application on each app store as it will have a wider targeted audience.
Recommendations A recommendation that would benefit Asda in its digital marketing efforts would be to structure links internal on
Another digital idea that can be put into
the website in a more consumer centric way. The links
place is an application that the customer
currently provide no inspiration for a consumer to want
scans the barcode and it gives an insight
to click on throughout the menu, unlike linking being
about the product as what customers
utilised on the Sainsburys website. Is this was
think about it with a rating scale and
implemented then Asda could regain ranking on the
customers reviews. This could be for food
search engines by giving web crawlers more data
based products and electrical products.
content to link together throughout the entire website.
They could also link the link up to a video that gives information about product from
Another recommendation is that the all the
someone speaking. For example if Gordon
supermarkets could put RSS, therefore people on the
Ramsey spoke about one of his products
website could be displayed with all the information
and explains what differentiates it from
which they share on Facebook and Twitter. This would
other products . This links in with the free
be a good way to gain more followers, which will let the
Wifi as if they gave free Wifi the
consumer know all the latest deals and what customers
application would be free for people to
think of Tesco’s.
use in the store instead using there data.
If the supermarkets followed Tesco’s leaf and offered free Wifi in there stores if they signed up for a loyalty
card. However the problem with that is Morison’s and Asda both don’t have loyalty cards which would be a downful. But on the other hand if Sainsbury’s customers sign up for a Nectar card they will be given a wireless number. This will generate more people to sign up for a Nectar card which will give the supermarket more of an insight into there customers.
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