How Sponsorship Increases Brand Awareness and Generates Good Will

 

Do you have a local sports club that you support? Sponsors help them operate through providing funding or support in other ways. Some of the events you attend probably also receive sponsorship.

The biggest sports teams in the world have sponsorship splashed across the uniforms. The NBA has even succumbed to the lure of extra money after decades of refusing to have sponsor branding on the uniforms.

This blog explores what sponsorship is, how it works and its benefits to businesses.

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What is Sponsorship?

Sponsorship involves a business relationship between two parties, where one party (sponsor) provides support in the form of funding, resources, or services to the other party (beneficiary), who in return provide access to the sponsor for rights and associations to be used for commercial advantage.

“(Sponsorship is) the provision of assistance either financial or in-kind to an activity by a commercial organisation, for the purpose of achieving commercial objectives.” (Meenaghan, 1983)

The sponsored party could be an event, organisation, or an individual; the involvement of this second party, distinguishing sponsorship from advertising.

Initial examples of sponsorship can be found over 100 years ago, but they are rare and on a small scale. Its use has exploded since the 1970s. 

According to Meenaghan (2001), in the UK, spending on sponsorship increased from £4 million to $1075 million between 1970 and 1997. In the US, spending increased from $850 million in 1985 to $8.7 billion in 2000.

“Sponsorship involves two main activities: (1) an exchange between a sponsor and a sponsee, whereby the latter receives a fee and the former obtains the right to associate itself with the activity sponsored and (2) the marketing of the association by the sponsor.” (Cornwell & Maignan, 1998)

A common form of sponsorship is of sports clubs. 

Your favourite sports teams are likely to have the logo of their key sponsor/s on their uniforms. This exposure on television, social media or other media holds value to the sponsor. 

The sponsor could also be provided access to players for their own events or PR and corporate hospitality at their events or games.

How does sponsorship work?

Through the affiliation with an entity people care about, sponsorship helps to enhance the public perception of the sponsors’ brand. This affiliation creates a ‘halo effect’ of goodwill, where positive associations with the beneficiary of the sponsorship are reflected onto the sponsor.

Because sponsorship provides a positive benefit to society through empowering the existence of entities consumers care about, sponsorship is typically more positively perceived than advertising’s sole focus on commercial goals.

Advertising’s only interest is the profitability of the firm, thereby having no obvious benefit to the greater society. Advertising can also be coercive, resulting in alerting consumers’ defence mechanisms. Sponsorship’s commercial intent is more subtle and indirect, lowering consumer defence mechanisms. 

Read more about persuasion knowledge for a better understanding of this process.

The table below shows a comparison between sponsorship and advertising characteristics.

Comparison between advertising and sponsorship (Meenaghan, 2001)

“Sponsorship works differently in relation to the consumer than do other forms of advertising and promotions in that it engages the consumer differently by bestowing benefit on an activity (e.g., sports or the arts) with which the consumer has an intense emotional relationship.” (Meenaghan, 2001)

 

Leveraging the partnership

To maximise the commercial result of their sponsorship, sponsors should focus their branding and marketing communications efforts on leveraging the association.

For example, along with displaying their branding on flags or banners at a sponsored event, social media posts promoting the event and the businesses’ role as sponsor.

Consumers can hold positive associations and deep loyalty towards sponsors of the sport, events, causes or other entities that they care deeply about. Sponsors proactively promoting their relationship enables these brands to leverage this emotional connection these consumers hold. The values of the sponsored activity or entity are then associated with the sponsor’s brand.

“Sponsorship appears to be another area of marketing, along with source effects, store atmospherics, brand extension, and brand alliances, where the consumer’s ability to see an association between marketing assets enhances the effectiveness of these assets.” (Cornwell, 1995)

 

Sponsorship fit

Sponsors invest in sponsorship to establish their credibility with their target market. For this practice to be effective, there needs to be an organic link in terms of similar goals, values, and vision, between the sponsor and the beneficiary of the sponsorship. One that makes sense to the public.

The sponsor’s target market should match the target market of the beneficiary they are sponsoring. Therefore, the right consumers have subjected the affiliation and the response is likely to be better if there is perceived to be a good fit between the two parties.

Also, passionate followers, fans or consumers of the sponsored entity judge the fit of the relationship and respond more (or less) positively than the typical consumer if the sponsor fits the same values. 

If there is a fit, the sponsorship is perceived to be more sincere. This is seen as more authentic.

“Events, activities, and venues have been fully recognized for their ability to target a particular demographic or psychographic segment.” (Cornwell, & Maignan, 1998)

 

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What are the benefits of sponsorship?

Sponsorship works in a way that it provides mutual benefits for the sponsor and the beneficiary. The beneficiary of the sponsorship receives funding or resources to operate. 

Sponsorship has replaced other forms of funding such as government support in some countries to the extent that some sponsored activities rely on corporate funding to exist.

For a business, some of the key motivations for investing in sponsorship are improving goodwill, enhancing public relations, increasing brand awareness, improving brand image. 

Improving profitability is obviously the end goal for any businesses’ strategic planning — these motivations contribute to enhancing the probability of this.

“The sponsor’s investment benefits the activity generates a goodwill effect among activity fans, which in turn influences their attitude and behaviour toward the sponsor’s brand.” (Meenaghan, 2001)

 

Goodwill

One of the key factors distinguishing sponsorship from advertising is the presence of goodwill. Goodwill from the sponsor in supporting the beneficiary and gratitude from consumers to the sponsor, grateful to them for helping out a favourite event, sport or organisation.

According to Meenaghan (2001), goodwill effects are mediated by the intensity of an individual’s involvement or connection with the sponsored entity. 

Highly involved fans/consumers connection with a sports team for example can be deeply felt, and their awareness of the sponsor’s brand is likely to be higher than a casual fan/consumer.

Therefore, the goodwill affects for the sponsor are likely to be greater and they are more likely to develop a favourable opinion of the sponsor. This can trigger a strong preference for a sponsor’s products or service, increasing their purchase intention.

Goodwill also exists at different levels depending on the type of entity being supported by the sponsor. For example, the sponsorship of social causes typically generating more goodwill toward the sponsor than sponsorship of the arts or a building.

Enhancing public relations

Through sponsoring entities such as sports clubs that consumers care for, this fosters a socially responsible reputation. Improving community relations is a common sponsorship objective for corporations, especially banks, as they often do not have the best reputation. 

As well as sponsoring well-known sports clubs, the organisation also sponsor local events or not for profit groups that benefit the local community where they are based. Other ways to benefit the community might be providing computers to a local school.

Sponsorship can be a relationship marketing tool. 

Relationship marketing is the marketing activities that attract, develop, maintain, and enhance customer satisfaction and fostering customer retention. This was discussed in week 14.

Sponsorship can be a vehicle for developing relationships with the target market through signalling to them that our business shares similar interests and supports the same causes.

In B2B, It also helps create bonds with businesses partners who share a common sponsorship or strengthen their relationship with current and potential clients, through the use perks of sponsorship such as a corporate box at events.

Increasing brand awareness

Awareness of the sponsor’s brand is increased through the publicity of the entity they are supporting. It could be through advertising, TV coverage or other media such as social media or news articles, or people attending and seeing branding of sponsors.

Local businesses can increase awareness of what they are doing in the local community through an article in a local newspaper, whereas large corporations or consumer brands can put their brand in front of thousands or even millions of people through sponsoring a high-profile sports team with an audience on a global scale. 

The All Blacks, Los Angeles Lakers or Manchester United, for example.

Sponsorship can provide a broader reach than advertising which will only reach a finite audience, depending on the platform.

“Activity followers, being most knowledgeable of the image values embodied in the activity, transfer these specific image values to the sponsor.” (Meenaghan, 2001)

 

Improving brand image

Cultivating positive and favourable brand associations (traits consumers attribute to a brand) and enhancing credibility is a benefit of sponsorship. Because of the goodwill factor, sponsors are viewed more favourably. This positively influences their brand equity.

Brand equity is the influence brand knowledge has on the consumer response to marketing. Brand equity strengthened when the consumer is familiar with the brand and holds strong and favourable associations with it. 

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Types of sponsorship

Sponsorship is typically associated with a sports team or event, but there are multiple forms of sponsorship. It can include concerts or the performing arts, and sports stars such as LeBron James are commonly sponsored by clothing companies such as Nike because of their global appeal.

Other sponsored entities include not for profit groups, charity or business events, associations, social media influencers and celebrities, buildings (often banks sponsor skyscrapers), and local government-funded venues such as stadiums.

One event could have multiple sponsors. Those sponsors might all contribute an equal amount for equal benefits, or there might be different tiers of sponsors. These have different levels of investment and sponsors receive individual benefits based on the value of their investment.

For an example of a business event — I run a networking event called Linkedin Local Hamilton, funded through sponsorship. It’s probably not what you expect — I wanted it to have an atmosphere more like a cocktail party.

Sponsors pay for the food and beverages of the people attending the event — usually around 150 people. Venues are offered for free, which is an in-kind sponsorship (discussed shortly). 

Tickets to attend the event are free or donation-based, which means there is little income. The events rely on sponsorship to exist. The benefit to sponsors is the exposure of their brand as a sponsor in social media promotion and with the people attending the event. 

It has worked well — I have run 13 events and counting.

Financial sponsor

There are two main types of sponsorship. Financial and in-kind sponsors.

A financial sponsor is also known as a cash sponsor and it is the most popular form of sponsorship. It is pretty simple — they give money to an entity in return for a promotion or other benefits outlined in their sponsorship agreement.

Some different types or levels of financial sponsorship are:

• Series sponsor — the highest status of sponsorship. the name and the logo of the sponsor are incorporated into the title of the series and other promotion, the rights to use teams, team members, players, coaches, and the series body in conducting joint promotions, right of presence at all official events.
• Title sponsor — similar to series sponsor, but for a one-off event. Many of the same benefits of a series sponsor mentioned above, another being branding placed around the stadium.
• General sponsor — also a large contributor (usually exist in the absence of a title sponsor), they receive the right to promote their association as a sponsor and often receive media coverage.
• Team sponsor — fund individual teams. They receive mention in media coverage of a team and often has on the uniforms and at their stadium. Special access to the team often provided.
• Official sponsor — is a sponsor that makes a certain part of raised funds (within 20–25%). Typically, the given status may be granted by category — for example, ‘official insurance partner’.
• Participating sponsor — is often one of the numerous sponsors and the benefits are not as extensive as the other sponsors. The size of their fee usually does not exceed 10% of total raised funds.

In-kind Sponsors

• Venue Partners — allows events to be hosted at their venue for a discounted or free rate. This allows the venue to gain exposure to a certain demographic.
• Prize Sponsors — donate items to be used as prizes at events such as spot prizes for doing activities or items to be included in a charity auction.
• Food Sponsors — at events, food sponsors offer free food to attendees. Catering can be a big expense for the organiser.
• Digital Sponsors — might provide a custom app for an event or live stream it to social media or a webpage.
• Media Sponsorship — marketing is provided on multiple communication platforms and PR, which can be valuable for not for profit/small businesses who do not have the budget or expertise themselves.
• Technical sponsor — provides goods or services, to a sports team for example in terms of medical skills or equipment or perhaps supplements.

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Summary

In sum, sponsorship is a marketing tactic involving a business relationship between two parties — one being the sponsor who provides support in the form of funding, resources, or services to the other party (beneficiary); who in return provide access to the sponsor for rights and associations to be used for commercial advantage.

This article has discussed how sponsorship works and its benefits, different types of sponsorship, and what needs happen in order for sponsorship to be an effective marketing tool.

Thank you for reading. 

I hope you enjoyed the content and learnt something new that you can apply to your business.

This article was originally posted on the BYB Marketing Blog: https://brandyourselfbetter.com/blog/post/208450/how-does-sponsorship-work

Social Selling: How it Works and 10 Tips to Optimize Your Strategy

Social media is a pretty big deal in 2020. It was a pretty big deal back in 2010! But now, even more so. 

Literally billions of people spend hours a week, sometimes hours a day, scrolling through their social media feeds, engaging in content that interests them.

Businesses came to realise pretty quickly that social media is a pretty useful tool to reach their potential customers. 

Social selling was born as a way to communicate with potential customers through social media, in a less obtrusive way than traditional marketing. 

So how do we do this?

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What is Social Selling?

Social selling is the use of social media to research, find, and understand sales prospects, to network and engage in conversations in online communities with them, to build and strengthen relationships.

“Social selling is taking out the pitching component of sales. You’re creating conversations about your product and services which organically can produce sales conversations.” (LinkedIn)

The aim is to provide value to prospective customers through answering questions, responding to comments and sharing content related to your area of expertise.

Prospect cans are anywhere throughout the buying process — from awareness to consideration. The idea is to consistently provide value, so you are the first person or brand a prospect thinks of when they are ready to buy.

Digital marketing principles can implement at an individual salesperson level or a firm level, but social selling requires an investment of time, effort, money and technology. It can be done on a shoestring budget, but to create quality content, we need to invest in our social selling strategy.

The popularity of social media makes it a perfect platform to build relationships with prospects. Through an emphasis on social interaction and content creation via digital platforms, social selling could be considered sales 2.0. The image below illustrates how it differs from the traditional sales model.

“Social selling is the identification, targeting and reaching out to prospective and existing customers through social media channels and social communities in an effort to engage them in conversations that result in a potentially mutually beneficial relationship.” (Belew, 2014)

According to Statista, around 3.6 million people are using social media in 2020. By 2016, approximately 71% of all sales professionals were social selling in some way or form, even if they did not know it.

Having a business page on Facebook or commenting on posts in groups on LinkedIn for example are social selling tactics. It is not about bombarding strangers with private messages selling something after you connect on LinkedIn.

That is spam and the opposite of what you should do.

Sales strategy has always revolved around building and strengthening relationships to establish rapport and credibility with prospects and customers, so you are the one they think about when they require a solution to their problem, that you provide.

Social selling uses this same methodology but does it online with social media instead of requiring cold or warm calling or sales demos.

It might not be a surprise to you to hear that not many people enjoy doing cold calling and that many people do not like to receive cold calls. According to the Harvard Business Review, 90 percent of decision-makers say they never respond to cold calls. This means it can take numerous cold calls to reach a potential client if you can reach them at all.

“The approach is not simply another sales channel for making sales pitches but a way to engage the informed, empowered, and social buyers during their purchasing journeys using digital and social channels.” (Ancillai, Terho, Cardinali, & Pascucci, 2019)

 

How Product Placement Puts Your Brand In Front of Your Target Customers

Have you ever noticed in the big movies how often you see major brands?

More often than not, the PC or mobile phone somebody is using is an Apple or perhaps a Samsung. All the vehicles could be Fords, or there might be several BMWs. 

Your favourite influencers on social media? Chances are that they are sponsored by brands to promote their products. 

This is called product placement, which is a form of advertising but attempts to persuade in a far less obvious way than traditional advertising.

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What is Product Placement?

Also known as embedded marketing, product placement is a multi-billion dollar industry.

Companies pay to have commercial content such as their brand, products or services incorporated into non-commercial content such as film, TV or other mainstream media. The idea is to use the placement whilst maintaining realism with context or plot.

The audience gets exposed a brand, product or service being consumed in its natural setting; positively influencing their perceptions and opinions of the brand. They are not meant to notice that it is advertising — that is the power of product placement.

“In its simplest form, product placement consists of an advertiser or company producing some engaging content in order to sell something.” (Falkow, 2010)

 

Product placements can be subtle or more obvious. Ranging from an unobtrusive appearance within the setting, or more prominent incorporation and acknowledgement of the brand as part of the plot.

The product itself does not have to be shown; it could be a logo, signage or brand name for example. More subtle product placement could avoid showing the brand itself but instead showing a distinct colour scheme or other feature synonymous with that brand.

Consumer products such as electronics (Apple products for example) or automobiles, as well as service placements (such as McDonald’s), that target ultimate household consumers are the most common placement, but business-to-business promotions are becoming more common.

The vast number of media that use product placements include films, television programs, celebrities/influencers via social media, video games, blogs, music videos, concerts, magazines, books, comics, musicals and plays, live sport, radio, the internet, and mobile phones.

Product placement on television has grown rapidly to try and combat people skipping traditional commercial breaks. According to Priceonomics, television accounts for just over 70 percent of all paid product placements, and approximately 75% of all broadcast-network shows feature some form of product placement.

Films can often use multiple brands as product placements, Superman: Man of Steel is reported to have used $160 million worth of product placements promotions with over 100 brands.

“Since Unilever’s deliberate insertion of Sunlight Soap into several early Lumière films of the late 1890s, the practice of placing branded products within films for commercial purposes has developed into a distinct promotional tool.” (De Gregorio & Sung, 2010)

 

A Brief History of Product Placement

Although the term product placement was only created to describe this practice as recently as the 1980s, it is not a new practice. Instead, dating back to the first appearance of brands in Lumière films in 1896.

Product placement was not always monetised — many of the product placement deals were cash-free; instead, the arrangement was often reciprocal, items were borrowed and used as props by studios and television networks, reducing the cost of production. Products could be moved as well as selling movie tickets.

Commercial product placements were integrated into the creation and marketing of mass media content as early as the 1920s. The first spurt of popularity came in the 1950s, where tobacco companies tried to glamorise smoking cigarettes in TV and film.

In the 1980s, product placements became widely used after E.T. followed a trail of Reese’s Pieces out of the woods, resulting in a reported 65% increase in profits for Hershey’s.

“In E.T. the Extra-Terrestrial, the alien followed a trail of Hershey’s Reese’s Pieces to his new home. The movie was a hit, sales of Reese’s Pieces increased dramatically, and to some the product placement industry was born.” (Newell, Salmon, & Chang, 2006)

 

The Benefits of Product Placement

This fusion of advertising and entertainment helps brands to reach and engage with many of their target audience.

Because many people find traditional ads are annoying or irrelevant, it is estimated that two-thirds of TV viewers mute or skip ads. A major benefit of product placement is they cannot be skipped — they are embedded into the TV program, movie or other media itself.

The brand is often associated with the characters or context of the placement, so they must match to create a compatible match, which usually achieves positive evaluations.

Brands placed with attractive characters or settings can often be more appealing to the audience/consumers. This can be attributed to the ‘halo effect’, where a positive association with a show or person creates a positive association with the corresponding product or brand.

Viewers can become emotionally invested in the storyline in which a brand is presented. Because of this, the placement can encourage purchase intent.

When a placement is integrated seamlessly into a piece of media, the brand is seen in context, so it markets to consumers less directly. This means consumers’ persuasion knowledge is less likely to be triggered; this is a barrier that consumers put up to resist persuasion attempts from marketing that is too obtrusive.

Product placements can also boost brand recognition — the audience is also more likely to be able to recognise and name a brand after seeing it in product placement.

A study by Williams, Petrosky, Hernandez, & Page Jr (2011) found that just over 57 percent of TV viewers recognized a brand in placement when the brand also was advertised during the show.

The final major benefit is that movies and TV programs can be watched many times over several years, so their value is not limited to when it is originally aired.

“Viewers are able to correctly recognize brands placed in films and consumers do not really mind seeing products placed in motion pictures.” (La Ferle & Edwards, 2006)

 

How Product Placement Works

Product placement is all about context. To present a product or service in a way that will produce positive feelings towards that brand and hopefully influence peoples’ buying behaviour to purchase the brand. This connects with the audience in a more natural way than advertising when consumers are marketed to directly.

Product placements can be initiated directly through the firm’s marketing team suggesting their products to a studio or producers of a TV/Movie, or it could go the other way. Some companies and agents work as an intermediary to match companies with product placement opportunities. The brands in placements should be matched as closely as possible with the projected target audience of that piece of media.

Because of this potential influence over an audience, product placement should be ethical. The placement of brands of tobacco or alcohol for example can be viewed as unacceptable by much of the audience, especially in content created for youth.

There are two main forms of product placements: visual and verbal.

A visual placement involves placing a brand into a piece of media, so it is viewed. It could be an advertising hoarding in the background of a shot, or it could be of more importance in a scene, such as a cast member eating a packet of branded potato chips.

A verbal placement refers to the brand being mentioned in dialogue. There are varying degrees of audio placement, depending on the context in which the product is mentioned, the frequency with which it is mentioned, and the emphasis placed on the product name. Purely verbal placement we are called script placement.

A plot placement that relies on placing the brand both on the screen and in the conversation provides an opportunity for both verbal and visual encoding, whereas the other situations would activate only one form of encoding.

If a brand’s product becomes part of the plot -playing a major place in the storyline of building the persona of a character, this is a plot placement. Where a brand is identified with a character, e.g. James Bond and his Aston Martin, this is high intensity. A brief mention and appearance on screen low intensity.

Based on the coding redundancy hypothesis (See Paivio 1971), “…memory increases directly with the number of alternative memory codes available for an item”. Visual and audio activate different codes, and therefore different combinations of screen and script placement vary in effectiveness and brand recall.

“Virtual product placement” has been used to insert products and/or advertisements into portions of a media stream, where the products and/or advertisements may not actually exist.” (Gajdos & Pettersson, 2011)

 

The Digital Age of Product Placements

Advances in digital editing technology allow producers to update existing placements or create new ones in post-production, sometimes changing items used in shows long after they were filmed.

In live sports broadcasted to viewers, an advertisement on a billboard can be created where the advertisement is different than what physically exists. It may be a different ad or there might not even be an advertisement there in the first place.

On TV and in movies, virtual product placements can be inserted after the movie has been produced. Examples of this could be an advertising sign inserted into the background of a scene advertise a brand, or a beverage a person is drinking being altered to display a specific brand.

With advances in AI, product placements can be inserted into a media stream based on information about the consumer watching it, meaning brands relevant to that individual can be used, becoming more targeted to their personal interests.

Product placement has exploded on social media in the form of influencer marketing. An influencer is a social media personality with a following, who are paid to include products in their content to boost that brand’s popularity with their following. If the following of an influencer matches the target market of a brand, then they are a good fit.

Influencer marketing can range from a small mention in a post to the topic of a piece of content. The more obvious the product placement, the more it is deemed to be considered too ‘commercial’ by the followers of that social media influencer and the less effective it is likely to be.

“The extent to which the placement is prominent, whereby more prominence seems to evoke more negative reactions.” (Ewers, 2017)

 

Product Placement in Retail Settings

Product placement not only applies to media — but it can also apply to physical retail shop space. Brands will pay top dollar for prime space on the retail floor and shelves. This includes large endcap (end of an aisle) displays, the area next to the register where you checkout, or having item at eye level on the shelves and limiting shelf space their competitors — known as a slotting or shelving fee.

Large brands pay good money for this premium shelving space, this makes it harder for small brands and new businesses to break into the commercial retail market.

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In summary, product placement is when a company pays to have commercial content such as their brand incorporated into a piece of media such as a film, or TV program, to expose it to the audience which is usually a good fit with their target market.

This aims to positively influence their perceptions and opinions of the brand in a less obtrusive way than traditional advertising. 

This article has explored product placement, how it works and the benefits of using it as a marketing strategy.

Thank you for reading.

I hope you enjoyed the content and learnt something new.

This was initially posted on the BYB Marketing Blog - https://brandyourselfbetter.com/blog/post/197065/how-product-placement-puts-your-brand-in-front-of-your-target-customers

How to Optimise Your Pay-Per-Click Advertising

The first place that many people go to search for information about a product, service or brand is an online search. Probably Google. 

From the convenience of our computers or mobile phones, we have access to all the information we will need. If a business wants customers to find them online, they must optimise their presence on these search engines so customers find them before their competitors. 

There are two ways to do this, SEO and Pay per click ads. 

This blog explores how Pay-per-click advertising works and gives recommendations on how a business can optimise their strategy.

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What is Pay-Per-Click (PPC) Advertising?

Pay-per-click advertising is a form of digital marketing, originally developed as a method of creating revenue for search engines. Along with organic (non-paid) search results, paid ads make up a second list of results.

Ads appear alongside the organic (non-paid) results on a search engine results page (SERP), companies paying to their links displayed in this sponsored section.

You can think of it like buying visits to your site instead of earning those visits organically through search engine optimisation (SEO). As the name suggests, businesses running the PPC ads are only charged when a user clicks on their ad.

There numerous PPC ads, the most common being search engine advertising, as explained above. Google ads are by far the most popular, Bing coming in a distant second. Google ads are the main subject of this article.

Other types of PPC advertising include display advertising (banner ads) and remarketing where people see an ad because they previously interacted with your company. With display ads, the owner of a webpage allows businesses to advertise on their website.

Also referred to as contextual advertising, keywords in the content of the webpage trigger what ads visitors are shown.

Businesses running ads are in an ongoing competition for popular keywords — ads are subjected to an ‘Ad Auction’. Based on competition, advertisers bid on certain keywords for ad placement and the search engine uses algorithmic calculations to determine which ads are displayed and in what order.

As well as the cost-per-click bid (the highest amount an advertiser is willing to spend), the other factor that determines the ad rank is the Quality Score assigned by Google. This will be discussed further later.

“As PPC suggests, advertisers also have to pay for every click they receive via that sponsored link.” (Kritzinger & Weideman, 2013)

 

The Benefits of PPC

Because businesses are only charged when a potential customer clicks on their ad, it is a pretty effective form of advertising. Imagine how many people would drive past a billboard and see it, but never act. Results can be more objectively measured.

Businesses also benefit by reaching potential customers at a price that fits the budget they set for the campaign.

There are far fewer PPC advertisements on a search result page than the organic results, so businesses better chance of being seen by internet searchers. It is also extremely hard to rank in the first few results organically — usually, it is a large investment in SEO over a period, that most businesses do not have the expertise to do themselves.

It is much easier to set up a Google ad and rank — if you have the budget for it. Users of PPC ads choose the geographic areas they want their ads to be shown in, so it is a powerful way to focus your advertising to locations you are trying to target.

There are three beneficiaries with PPC ads. First, the website or search engine displaying the ads get paid for the advertising space, the advertiser who attracts customers and the customer who is provided with relevant results for their search query. Keywords ensure the ad should be just as relevant as the organic results.

“Google makes 99% of its profit through the PPC model of Internet advertising.” (Kapoor, Dwivedi, & Piercy, 2016)

 

Creating a PPC Campaign

First, create logically organized Ad Groups. An ad group has one or more ads sharing similar target audiences — it organises ads by theme. Next, research, select and organise closely related keywords into these Ad Groups. Then, ads are created for these ad groups. Each Ad Group should consist of a minimum of two ad variations.

A campaign has one or more ad groups. Ad groups should be as specific as possible, to ensure they are relevant to customers

Campaigns need a start and finish date. Before getting started, work out your daily budget, based on the campaign length. Sometimes it can spill over budget slightly, so allow for around a 10% contingency — tell Google your budget is 10% less than it is, just in case.

Each keyword has an average cost per click depending on the competition, so based on your overall budget, calculate how much you to spend on your chosen keyword bids.

Analysing Your PPC Results

Spend money to test, learn from their results, and then refine your ads to optimise your campaign results. One of the advantages of digital marketing is the amount of data it creates, empowering businesses with information to improve their advertising. Continuously analysing your performance allowing you to make small adjustments at a time to optimize your campaigns.

Test your campaigns and ad groups. This is when you start spending money. Test variations of your keywords, ad copy and landing pages. Dedicate time and money into educating yourself what works best for your business. Start with more than one version of your ad — you do not know how it could be improved if you only run one ad. If it does not work, you blow your whole budget.

Learn by analysing the results of your ads. This provides valuable consumer feedback in terms of their behaviour when exposed to your ads. Objective data to improve your ads and gain a better understanding of the best keywords to use and how much to pay for each click.

When we understand our ROI for different keywords, we can find expensive and under-performing keywords which can be removed and those we want to bid higher on to achieve a higher Ad Rank and improve your Quality Score. You can also identify negative keywords that you do not want to trigger your ads.

By checking ‘see search terms’, you can see which terms triggered your ads. It also helps to discover new keywords to add to your existing campaigns.

An impression is when keywords trigger an ad to be shown in the results. Impression share is the percentage of times your ads were shown out of the total number in the market you were targeting.

Other key metrics to monitor are page views per visit, time on site and conversion rate.

Creating a UTM (Urchin Tracking Module) snippet tag for ads to help identify the link in Google Analytics. This allows you to identify what ad campaign was most successful. how visitors came to land on the landing page.

Optimise your ads by refining them to modify what is not working. Make changes to your keyword lists, ads and landing pages to find the formula and user experience that works best for your business.

“…allows advertisers to place bids on specific keywords or phrases and have their advertisements show up alongside the organic search engine results.” (Boughton, 2005)

 

Optimising Your Ads

To make sure we get the best return on investment from our PPC ads, we must optimise them to get the best result. This section discusses four ways to optimise your ads: Keyword relevance, Google’s quality score and creating more targeted ad copy and landing pages. There are tools available to analyse your ads, such as Wordstream’s free AdWords Performance Grader.

Keyword relevance

PPC campaigns are built around keywords. The Keywords within a search query trigger what results are shown. Therefore, businesses need to figure out what terms their target customers will be searching for.

Create tight keyword groups with a mixture of low-cost, highly relevant keywords and frequently searched terms relevant to your business.

Long-tail keywords should be included; these are more targeted search phrases that contain the more generic keywords (head) with modifiers that make it relevant to a more specific audience. For example, instead of just ‘marketing’, ‘digital marketing strategy in Hamilton’.

Once you learn more about what is working and what is not, you can add Negative Keywords. These are non-converting search terms that you can exclude from your campaigns, to become more targeted by improving campaign relevancy and reducing the wasted budget by focusing on your best-performing keywords.

Google Keyword Planner is a great tool to help with keyword research. It highlights the search volume and cost per click for keywords and suggests relevant terms. Wordstream also provides a free keyword tool to help you find the most relevant keywords to use for your business.

Quality score

The quality and relevance of your keywords, landing pages, and PPC campaigns. better Quality Scores mean more ad clicks at lower costs.

Assigned independently by Google, Quality Score includes:

• The historical clickthrough rate (CTR) measure of how convincing your ad is to your target audience. of the keyword and the matched ad
• The CTR of all the ads and keywords in your account
• Landing page quality
• Keyword relevance to the ads in its ad group
• Keyword relevance to the matched ad and search query
• Account performance in the geographical region where it is shown

Ad Copy

Your ad copy should be relevant to the landing page where you send them. If it is not, this will affect your quality score. To test your ads, run two or three variations per ad campaign to test different titles and descriptions.

To optimise your ads, your headline should not exceed 60 characters, and your description should not exceed 80 characters.

However, Google does prefer longer headlines as this is where information is most likely to be noticed. The most important keywords should also be communicated in your ad copy.

Landing page

The landing page is where a person goes after clicking on an ad. Do not make the mistake of sending every ad directly to your homepage.

Send people directly to a custom landing page matching the ad content, that is optimised to minimise bounce rates and increase conversion rates. 

The image above is an example of a landing page to sign up to receive a free eBook. This could be the focus of a PPC ad, to add relevant people to your database.

Content should be specifically tailored to the ad and have clear calls-to-action (CTAs) aligned with the search queries that would have triggered the ad.

Sending people to a general page means it might not be relevant to what they initially searched, and they probably will not be able to find the information they require easily. They are likely to hit the back button or close the window/tab. Users are unlikely to navigate through further pages to find what they need.

How to Create a Value Proposition for Your Business

 

As a business, we need to capture the attention of potential customers as quickly as possible by telling them how we provide a solution to their needs.

If customers understand exactly how our business provides them with a solution, they are more likely to become customers than if the value proposition leaves them confused as to what exactly we do. 

This blog explores the Value Proposition and strategy on how to create one for your own business or brand.

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What a Value Proposition?

A value proposition is a firm’s summary statement of why a customer would choose their product or service.

It is our promise to a group of customers, communicating our primary benefit and how we uniquely deliver value. It introduces our brand to consumers by communicating what our company stands for, what we do, and why we deserve the customer’s business.

We must clearly explain how the benefits of our brand’s products or services fit their need better than comparable products on the market.

Our benefits then become crystal clear to customers from the outset to persuade prospects to become paying customers. The number one reason a product or service is best suited to that customer must be communicated directly to consumers — through our website and other marketing materials.

The value proposition is an essential element of a firm’s overall marketing strategy. Unique to a firm, it becomes the foundation for our brand identity, branding strategy and position in the market.

However, it is not the same thing as a positioning statement. Positioning is just one component of our value proposition –communicating what makes our products or service unique from the competition.

“A clear and effective value proposition should be the basis of a firm’s functional, psychological and economic value.” (Hassan, 2012)

The Importance of a Value Proposition

The value proposition communicates a business/brand’s most important reason someone should do business with you and not the competition.

How do you provide the most value?

This can provide a competitive advantage if done well.

It becomes a focus in our marketing and should always be prominent on the website and other customer touchpoints such as social media.

For many consumers, your value proposition is the first thing they encounter — so it should differentiate you from the competition.

However, many firms do not have one. According to HubSpot, only around 60 percent of businesses do. But a lot of businesses do not do it well which becomes a problem if customers then do not immediately understand the value of what you offer.

Many customers will research several options before making the purchase. A value proposition can help your business to stand out amongst these alternatives, be noticed and remembered.

An excellent value proposition helps potential customers to quickly understand how you uniquely provide value. If it is not immediately clear what you offer, you will likely be disregarded. The value proposition should target your ideal customers/market segment by identifying why your solution best fits their needs.

“These days, an elevated level of competition and rapid changes in the market and technology make it complex for a company to sustain momentum without focusing on deliver the value that customers require.” (Hassan, 2012)

Creating a Value Proposition

When creating our value proposition, we must define what we offer and explain how we provide a unique solution or benefit, best suited to meet a specific need of a specific group of customers.

First, we must identify all the benefits of our products or services, and what makes us different from the alternative options from competitors. Be as specific as possible when describing how this provides value, in an easily digestible way for the reader.

Strive to be too straightforward and the point — focus on clarity and the conciseness of your message.

You want the customer to understand your message, so avoid hype, marketing buzzwords and industry jargon.

“Identify the elements that make their offer superior in order to demonstrate, document and communicate them clearly to the targeted customers.” (Hassan, 2012)

It is also not your slogan or catchphrase. It is more than that.

A value proposition should target customers’ strongest decision-making drivers. To do this, we need to define how consuming our products or services are going to make their lives better and how their experience makes them feel.

Customers can have several motivations, including wants which are emotional drivers, rational needs, and fears which are about avoiding undesirable outcomes.

Focus on how customers define value. By connecting our value to the challenges of our target customer, the value proposition becomes clearer.

Research

Before writing our value proposition, we need to be truly clear on what customers we are targeting with our products or services.

Different customers perceive value differently. More than one component of a product or service adds value, such as price, quality or location. Therefore, we need a deep understanding of the market we are in, to help identify our target customers’ expectations, to best address their needs.

Market research will help us understand what customers are looking for in the product or service that we offer and how they phrase their needs. A value proposition is written in our ideal clients/customer personas’ language, which can often be different to how we as the business would phrase it.

This helps us to determine the message that resonates best with our ideal customers and/or main buyer persona, so the right language is incorporated into the value

Some of the things we are trying to learn through market research are:

• Who our target customers are?
• What their values are
• What their needs are
• What their motivations are
• What your competitors are lacking
• What your product or service does better
• Why this difference matters to customers

“…Whether the value propositions of a company’s business model correlate with the actual needs of the customers it wishes to serve.” (Osterwalder, Pigneur, Bernarda, & Smith, 2014)

Formatting a value proposition

The value proposition must answer what we offer, who is it for and how it is useful. It will usually follow a particular format, using a headline, sub-headline, and a short paragraph of text, with a visual.

A value proposition must have a strong and clear headline to grab the attention of customers. It summarises your key benefit to the customer in one sentence, so needs to be both clear and instantly credible.

The format for this could be “We help (X) do (Y) by doing (Z).”

The sub-headline is a 2–3 sentence paragraph. It is a specific explanation of what we do/offer, for whom it is for, and why it is useful. The final paragraph explains this more in-depth by outlining more about what you offer and why it is superior.

Key benefits or features are listed, often as bullet points for ease of reading.

An image can communicate much faster than words, so a visual such as a photo or hero image is another key component of our value proposition. A hero image is an oversized banned image a webpage that services user is the first glimpse of the company.

“An entire set of experiences, including value for money that an organization brings to customers. Customers may perceive this set or combination of experiences to be superior, equal or inferior to alternatives.” (Lanning, 1998)

 

Testing your value proposition

After the research and writing our value proposition, we should test it. Research has shown that half of the businesses do not optimise their value proposition. 

So how do they know if theirs is any good? 

Testing the effectiveness of your value proposition helps objectify the process a little.

As well as surveying customers or using a focus group, you might consider running A/B tests. You can test two alternative value propositions by driving traffic to two different landing pages. Targeted Facebook ads, Google ads or email marketing are an effective way of driving relevant targeted traffic to these landing pages.

If one page performs better than the other by generating more engagement and conversions, then this gives an objective answer for which is a better fit.

This process can be used several times to further hone your value proposition to improve results.

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In summary, a value proposition is the summary statement of why a customer would choose a company’s product or service. It frames how they uniquely provide value to customers.

This article has discussed the importance of creating a value proposition and the steps a business can take to create their own, to differentiate themselves from the competitors.