HOW MESSAGE MONIES ARE SHIFTING
by David C. Aeschliman
Editor's Note: This is the second article of a three-part series. In the first, which appeared in the APS supplement in the July/August issue, the author provided a broad overview of the changing dynamics of this industry. In this installment, Agri Marketing magazine investigates how marketing money distribution is changing. In the next issue, we'll cover how media investments are viewed and how this affects where money is being spent.
When television was first invented, no one knew how to advertise via it. Today, history repeats. Powerful communication technologies are evolving with new ways to reach target markets. Those technologies keep changing, causing agencies to keep studying.
Additionally, the changing dynamics of the ag economy are making it challenging for agribusinesses. The "domino effect" impacts all those who serve the industry. The connectivity of the farm economy to the agribusiness industry has never been more abundantly clear.
Agricultural marketers, their agencies and the media pipelines that connect messages to audiences are faced with new and ever-changing opportunities. In fact, it could be argued that coping with the introduction of television was child's play compared to today's scenario.
The evolution of the Internet has followed the path of all new communication technologies. Thirty years ago, it could be argued that the program managers at CBS, NBC and ABC controlled what 90 percent of the people watched on television. Today, individuals determine not only what they watch on TV, but even if they watch it.
With all its hype at the outset, start-up Internet providers proclaimed massive farmer response, new sales via the Internet, digital retail stores and the displacement of traditional sales channels. The predictions weren't necessarily wrong, but the timing is optimistic. Some companies forgot farmers would have to participate in all of these plans.
Some agribusinesses adopted early and tried a number of Internet outlets. Media planners allocated small budgets for Internet banner ads, but not much happened at the farmer buying level. Today, that swing into and out of the Internet has calmed into a more realistic growth.
"Technology played a role for a while in media plans. But, there was no proof, no measurability, no reach ... so planners began backing off that approach," says Lori Strum, media director for Porter & Associates. "As Web media develop ways to prove how and who is using the site, it'll mature back into media plans."
Perhaps the bigger concern in the ag media mix is the same as always - sheer volume or clutter. Efforts to crack it are taking three forms: outstanding messaging, unique packaging and different media selections.
Outstanding messaging? Sure, brilliant creative is consumed more often than mediocrity, but it's hard to argue there is a new idea today.
Unique packaging? Sure, farmers are bound to open a box versus a letter. Maybe they're more likely to read a banner ad, cover wrap or a message in a bottle, but, at some point, popularity of uniqueness defies the meaning of the word.
So, what is happening today? Marketing response to the changing industry dynamics seems to be:
These trends are hammering at both the pocketbooks and the creative resolve of print publishers. They are resulting in fewer mass media dollars, more customer relationship management efforts and a blending of national brand messages with local messages.
Even though Syngenta still uses broad-based efforts with their major brands and new launches, Dan Thaden of Syngenta claims, "We've shifted from mass marketing to targeted approaches in order to reach segment markets. We're using direct mail, face-to-face marketing, e-mail and Web applications to market many different products with many different messages to many different specific groups."
Farm shows, customer seminars and other direct contact methods are also coming into many agency planning considerations as they work to fully integrate selling and marketing.
One of the biggest trends of late is customer relationship management, known as customer relationship marketing, direct mail, singular marketing and one-on-one marketing. The simplest form of this is the maintenance of a customer and prospect database and conducting specific direct marketing to those names.
After all, companies know the names, the addresses and possibly the expenditure levels. Why not groom that database? It's typically very measurable and, in this hectic grow-or-die agricultural era, accountability and measurable return on marketing investments are critical.
"We're investing more significant dollars into targeting products and services to specific markets," says Ron Wulfkuhle of J.C. Robinson/Golden Harvest Seeds. "Targeting customers with specific demographics is easier to do with direct mail than it is with media, although obviously, we incorporate both."
Savvy agencies are not only following suit; they're sometimes leading the charge. Loren Henry of Bader Rutter in Milwaukee says, "A blend of one-on-one direct marketing into the media plan enables us to stretch available dollars more than ever. This gives clients the reach to specific segments within a larger, traditional media reach, and more importantly, it generates direct response."
Patsy Comella of Rhea & Kaiser provides a different perspective on it. "Mass media certainly preconditions the market, but it doesn't turn a sale. Singular, one-on-one efforts get that done, so it's important that the agency integrate its efforts for a client so everyone knows what role each piece of the media plan is going to play in the purchase decision," Comella says.
"Our first priority every year is to retain and increase business with existing customers, while also using these local marketing tools to attract additional customers," says Chuck Cornelius of Cornelius Seed. "Growth starts there. We use direct mail, a significant series of local newspapers and state farm newspapers integrated with specific sales call timing."
The role of farm newspapers and weeklies in delivering localized, high-impact messages is being scrutinized much more these days. With the focus on customer relationship management, agrimarketers seem to be perking up with newspapers' promises of more localized editorial, more localized versions, more frequency and more response.
"The agricultural business has changed dramatically in the last 10 years," says Dave Althaus of Monsanto. "Some products require you to implement intense localization while others do not. Fewer end users are certainly a key element in developing media plans."
Regional companies obviously need localized media. Linda Brown of Pfister Hybrids in El Paso, Ill., says, "There's a difference between national magazines and local newspapers. The cost, the local circulation and the frequency all lean toward local messages."
This trend toward localization is also important to a company's sales force, notes Vicki Lee of Cramer-Krasselt. "Dealers like regional newspapers because they get better feedback from their customer base," Lee says. "Naturally, budgeting for newspapers is harder than for nationals because it's more extensive, but sometimes that extra effort is worth it."
Some organizations representing newspapers are making efforts at addressing that issue. "Some national magazines offer you segment buying, but some agencies have difficulty purchasing newspaper by newspaper," says Bruce Helling of CS&A Marketing. "But, for example, J.L. Farmakis Inc. puts together a national buy for its newspapers, so you can buy them as easily as a national magazine."
Laurie Christen of Colle-McVoy says, "There is an obvious difference between what newspapers and magazines can deliver. I'm a strong supporter of both, and media buys should reflect what the objectives are. But, I'll admit locality and frequency issues are getting bigger."
There isn't much doubt local messages, more direct response and measurability of advertising dollars are in the marketing headlines lately. Meanwhile, technology will continue to evolve, and e-marketing will make significant and steady strides into communication efforts.
Marketing trends come and go, but the battle to efficiently crack the clutter in changing times will continue to push agribusinesses and agencies to new and innovative ways of reaching the market. That will continue to affect every media member and plan in the industry. AM
David Aeschliman is the owner of Results Inc., Davenport, Iowa, a comprehensive sales and marketing strategic planning and execution firm. This series of articles is based on market research conducted with agencies and agribusinesses last fall. For more information, visit www.resultsimc.com.