Traditional marketing stalwarts CDW and Ikea both made considerable commitments to digital recently, reflecting that consumer attention to the vertical is forcing even old school brands to move marketing spend to the Web.
CDW will reduce print’s share of its overall marketing spend and take a hard look at TV as it shifts its focus onto emerging media, where IT buyers are doing research and engaging in discussions about technology, said Mark Gambill, CMO at the IT products and services direct seller.
“We’ve done a lot of work understanding our target market and how they want to consume media, specifically advertising, marketing and promotions,” he said.
The shifted strategy and creative is being developed by Ogilvy & Mather North America, which was named CDW’s advertising agency of record last week with responsibility for traditional advertising, direct marketing and digital. Ogilvy & Mather Chicago, is the lead agency, aided by Ogilvy & Mather New York for advertising, Ogilvy One for direct marketing, Neo@Ogilvy for digital marketing and Leopard in Denver for sales support. Ogilvy will also work in partnership with MindShare Chicago for CDW media planning and buying.
Ogilvy was chosen after a formal review process during which CDW sent RFPs to 10 companies and got submissions back from nine. The company narrowed these down to four finalists before choosing Ogilvy. Account work begins immediately. The initial efforts are expected to make their debut in the first quarter of next year.
“Ogilvy did a very good job in terms of building the right strategic foundation,” said Gambill, adding that CDW was looking for an agency that truly understood the brand’s value proposition. Ogilvy’s Soho Square division has worked with CDW for the past year-and-a-half to build direct marketing strategy for its medium- and large-size business segment.
CDW’s shift to digital doesn’t mean the company is entirely writing off traditional direct marketing strategies, however. Direct mail will continue to play a role in CDW’s marketing efforts, but with some enhancements. The company will focus on making its direct mail “more targeted,” said Gambill.
“We want to make sure that when we do direct mail, it is impactful and tied into other vehicles,” he said.
Meanwhile, home furnishings retailer Ikea, which has largely focused on TV advertising in the past, is launching its first major digital advertising effort this month via a partnership with AOL for display advertising, custom content and a microsite. The effort will focus on three design themes: bedrooms, living rooms and kitchens.
The brands are not entirely new to digital. Both had Web sites and engaged in digital marketing activities in the past. But now they are making a significant new commitment to digital marketing, reflecting an understanding of the channel’s importance in reaching customers. Industry experts say more traditional marketers will do likewise in coming months.
Currently, there is a sizeable distance between the amount of digital media consumed by Americans and the relatively low digital spend by marketers, said Patrick Cartmel, managing director at MEC Interaction. However, he indicated that for many marketers, “It’s no longer about whether we should do digital or how much budget we should have in digital. Instead, people are talking about how do they get on top of the trends in terms of the emerging aspects of digital.”
Holdouts remain: Many traditional brands still want to better measure digital ROI, and they have much more familiarity with traditional marketing, say industry experts.
“While marketers are taking money out of traditional media and putting it into digital, it takes a long time to turn the Queen Mary,” said Lisa Bradner, principal analyst at Forrester Research. “A lot of bigger brands are cautious about digital because they know what to expect from traditional media, even if they can’t measure every dollar.”
A major difference from just months ago is that marketers are no longer hoping that consumers will forget about digital and turn back to traditional sources.
“People are no longer burying their heads in the sand and hoping it will go away,” said Bradner. “Now, they’re saying, ‘This is where the world is and I need to get with it.'”
For CDW, part of Ogilvy’s plans are to use digital to create a more unified marketing statement for the brand, said John Seifert, chairman of Ogilvy & Mather North America. He added that he hopes a result is increased synergy with sales.
“We want to form the brand more single-mindedly by leveraging the evolving digital landscape, marketing agenda and new platforms of audience engagement to help knit everything together better than CDW has ever done before,” he said. “What you will see is marketing and sales coming much more closely together, because the digital channels require a much more collaborative process.”
Added Gambill: “We want to make sure that Ogilvy, working with us, really takes advantage of the different types of media out there to do a better job of connecting our traditional media with online activities.”
However, Gambill does not expect a significant shift in the look of CDW’s creative.
“We love our red,” he said, adding that the company will instead try to make its brand distinctive. l
