Crafting a Digital Marketing Plan

We will learn to:

• Understand key strategic considerations for creating a digital marketing plan
• Set relevant, obtainable, and measurable marketing goals
• Determine target audiences and understand their important characteristics
• Craft a compelling value proposition
• Understand the role metrics play within a marketing plan

The Importance of a Plan

Let’s begin by introducing the approach we will take to building an effective marketing plan.

We explored how the practice of marketing has evolved in the digital era. However, there are certain aspects of marketing that remain true no matter how technology changes. One of them is the importance of developing a plan to effectively use your marketing resources.

We will examine the building blocks of a successful digital marketing plan. You will learn how to set relevant marketing objectives, define your audience, and determine your brand's value proposition. You'll also develop an understanding of the critical role that metrics play in a marketing plan. Finally, you'll learn why it is so crucial for companies to take the time to create a detailed marketing plan.

As you continue, you will follow the path of a small footwear company named OOFOS to better understand how to develop a digital marketing plan. Founded in 2011 in Massachusetts, OOFOS has a unique focus. Its shoes use a proprietary foam technology that absorbs impact to provide relief from foot pain. OOFOS wants to grow and expand its reach and sales. To achieve this, it needs to determine how to use its digital marketing budget effectively.

The term “value proposition” refers to the unique value or benefits that your product or service provides to customers and distinguishes you from the competition. You will learn more about this concept shortly.

OOFOS was originally founded by footwear industry veterans Lou Panaccione, Juan Diaz, Paul Brown, and Steve Liggett in 2011. Let’s meet two of those co-founders, Lou Panaccione, the current CEO, and Paul Brown, as they discuss OOFOS’s unique foam technology, and how they turned it into a business.

Lou Panaccione, OOFOS, CEO and Co-Founder:

The unique thing about OOFOS is it starts with the foam technology. So we call it OOfoam. That foam technology does the opposite of what is in athletic shoes. The athletic footwear industry, the reason for being is really performance. So the foams that go into those shoes have resilient properties. So it's very springy. Our foam is the opposite. It has an impact-absorbing slow rebound property. So you step on it and you don't get that springiness back, you sink in, but it's absorbing more impact.

The testing that we've done in labs over the years shows at least 37% more impact-absorbing than any other athletic foams that we've tested it against. The benefit to that impact-absorbing foam is it's relieving the stress on your knees, your feet, your joints, your whole body basically, especially stepping on hard, unnatural surfaces. So there's a benefit that you can't get in athletic shoes. It's a proprietary technology. Basically, it's protected through a trade secret. So it's not patented. Because if you patent a compound, you have to disclose the ingredients. And eventually, even though someone can't copy those ingredients, they've got a good idea of how to come pretty close to that. Right now there's nobody that has anything close to what we've got.

Paul Brown, OOFOS, Co-Founder:

We call it the "OOriginal" because it's our first shoe. And it actually is a shoe that anchors the brand, because whenever we're doing new product, we all evaluate that product from this shoe. This is in its purest form which is just OOfoam technology. So this platform here goes in every product that we make.

Lou Panaccione:

All of our product names start with a double O– OOriginal, OOahh, OOlala. Our tagline is "feel the OO." So the OO is integrated into everything in our brand. And it all came out of people saying, ooh. And to this day, I listen to it when people try on our product for the first time. Most of the time, that's what comes out of their mouth.

Having created a unique product with proprietary technology, OOFOS turned to determining where it would focus its marketing efforts.

Lou Panaccione:

Within about three months, we decided let's focus on one specialty as our primary channel. And the reason for that was we did the Boston Marathon Expo. That was in April of 2012. December of 2011 was when our first shipment came in. We had about 15 stores we shipped to. So we were about maybe four months of just trying to learn at this point. But at that Boston Marathon Expo, we had a booth. And we were there for three days. And it was amazing how the running community understood and appreciated this technology.

We were having to run the booth ourselves, so we were talking to these people. And I remember trying to explain about the technology and seeing blank stares on people's faces. But as soon as I got them to put it on and then step on it, everything that you just told them made sense. And they were buying it. We were charging 40 bucks. They'd just pull out their wallet, and they'd want to buy it. That was the majority of people. And we just said, boy, we've got something here. Let's focus on this community.

And it made sense, because when you think about runners, especially a marathoner, you're putting a lot of stress on your body as you're running. The impact absorption that you're going through even in your running shoes and so forth is great on your joints and your feet, so they really felt our technology. They really understood it. So that's what got us into really focusing on running. And then once we did that, the running stores started telling us should really position this as "recovery," because that's what people are buying it for.

They're coming into our store looking for a pair of running shoes and leaving with a pair of running shoes and a pair of OOFOS, because when they try on your product, they want it for the recovery benefits. We talked a lot about direct-to-consumer, because we wanted to tell our story directly to the consumer as well, too. We felt, number one, we've got an experiential product, so people really did need to try it on. That's what we felt. But eventually, over the course of time, the company expanded into other channels, including international. We set up OOFOS.com, so we could tell our story directly and sell direct-to-consumer and Amazon.

OOFOS showed early signs of success. While it initially partnered with specialty retailers, over time it expanded to other channels, particularly its own direct-to-consumer or DTC channel OOFOS.com, and e-commerce sites such as Amazon. Sales from its DTC channel (OOFOS.com) increased from $2.4m in 2017 to $31.3m in 2021.

In 2021, about 40% of OOFOS’s sales came from its DTC channel, OOFOS.com. The company expected its DTC sales to continue to grow to 50% by 2024. This channel was supported by a concurrent growth in the marketing budget.

Examine the data from OOFOS for 2017-2021. Note that the numbers have been disguised for confidentiality.

ROAS or return on ad spend is revenue divided by ad spend. For example, in 2021, OOFOS spent $10.7m in digital marketing and generated $31.3m in DTC revenue, so its ROAS is 31.3/10.7 or 2.93.

Put yourself in the shoes of the OOFOS team in 2022. In order to meet your sales and revenue targets and increase ROAS, you will need to think carefully about the fundamentals of your marketing plan in order to ensure that you have the most effective strategy in place.

As a company grows, it often becomes harder and more expensive for it to acquire new customers. This means that the cost to acquire a new customer (CAC) goes up. Put another way, the return that OOFOS was getting for each dollar spent on advertising (or ROAS, return on ad spend) has gone down.

There are multiple reasons that could explain why ROAS is going down. It is possible that OOFOS might not be spending its marketing budget efficiently. Finally, ROAS may be decreasing due to increasing competition. We will address all of these, but let’s start with the final point. 

OOFOS is feeling an urgency to get ahead as competition increases. Steve Gallo, President of OOFOS; Darren Brown, Head of Marketing; and Lou Panaccione, CEO, explain.

Steve Gallo, OOFOS, President:

My name is Steve Gallo. I'm the President here at OOFOS. They also like to call me the Wizard of OO. I'm one of the folks here that have helped grow this brand. There's more competition coming, no question. Some of the brands like Birkenstock, potentially Nike, HOKA, which is a running shoe brand, we welcome it, because they're going to bring more awareness to the overall category that we've pioneered called "recovery." At the same time, we want to make sure that people we are the go-to brand for "recovery." And we've got to make sure we continue to execute against our core consumer and continue to talk about our value proposition, which is providing that consumer with 37% more impact absorption, less usage of ankle power, and those type of things. We want to make sure that we keep telling people our differentiator versus the competition.

Darren Brown, OOFOS, Head of Marketing:

My name is Darren Brown. I'm the Head of Marketing at OOFOS. We've seen other competitor brands come in over the past few years, some very large brands, one just billion dollar brand that was young and kind of in our niche spaces. And HOKA not too long ago came in hard with a recovery slide and sandal to really target the space they saw us growing. What we have a lot of confidence in is that we have a product solely focused and built for this use case. We have a technology that is unmatched and undifferentiated. And we aren't trying to take something that has been used in an alternative method for decades and years like a HOKA or a Birkenstock or like EVA and PU foams that have been used for performance for years and years and years and just trying to rebrand them. This space is authentic to us. And it's our sole focus. And if we continue to focus on what we've done, what we continue to do, and the differentiating technology that we have we're confident that we will continue to win. But we have to move fast. And we have to make sure that we establish ourself in the most meaningful position for "recovery" where "recovery" is understood, because from there, it'll branch out.

Lou Panaccione:

The next three years, we just really want to amplify things. We're at the size now where we've created some awareness. We've created awareness of the OOFOS brand. We've created this "recovery" footwear market. We're not that big yet either. So we've got to get big, so that when competition does come in, we're as established and as well-known as we can be.

As Lou and Darren mention, OOFOS is seeing a lot of new competition entering the recovery shoe segment. In addition, remember that OOFOS has also been seeing a decline in its return on ad spend (ROAS) over time.

Therefore, the team at OOFOS needs to think deeply about the fundamentals of its marketing plan so that the company can make the most out of its marketing budget.

The Components of a Marketing Plan

Let’s take a moment to think carefully about OOFOS’s marketing plan.

It may be tempting to start by suggesting that OOFOS should spend its marketing dollars on a specific marketing channel like Facebook or Google. But before making any budget allocation decisions, it's important to step back and create a plan to identify what you want to accomplish and how you will get there.

An effective marketing plan consists of four key components.

First, you need to clearly articulate your goals or objectives. A company might have multiple goals such as sales, brand awareness, store traffic, and so on. And your challenge is to balance these multiple goals. The goals you set play a crucial role in your marketing plan and influence every other component that follows.

Next, you need to identify your target audience. Who are your key target customers? For example, should OOFOS focus on marketing to millennials, sports enthusiasts, professional athletes, or someone else? You can't spend your marketing dollars effectively without knowing who you are trying to persuade.

Third, you must be clear about your value proposition. What is the value or key differentiation of your product? Put differently, why would your target customers buy your product instead of a competing one?

The fourth and final component is the set of metrics you define to measure your success. Once you spend your marketing dollars, what key performance indicators, or KPIs, will you monitor to assess whether your plan has been successful? These metrics should be tied to the goals and objectives you set in the beginning.

We will discuss each of these four elements and how you can apply them to craft your own marketing plan.

Here are the building blocks that form the key elements of a marketing plan.

Let’s gain some additional insight on creating a marketing plan from Ben Kirshner, a digital marketer with decades of experience in the field. Ben is founder and former CEO of Tinuiti, one of the largest independent digital marketing agencies in the U.S. He will discuss a basic conceptual structure—a framework—for creating a marketing plan that he calls GAMMA. You will notice that his framework is similar to what we have just defined as the components of a marketing plan.

Ben Kirshner, Tinuiti, Founder and Former CEO:

A framework like GAMMA, or any framework for that matter, is really good to help the client and the agency deliver on the ultimate goal.

So the first G in GAMMA is goals and strategies. A lot of times, clients will come to us and say, my goal is to get orders at $10 an order. And that's not a goal. That's a metric. A lot of times, what we have to do is unpack what their goal and strategies are. A goal or a strategy might be, I want to double my sales in x amount of time. It might be, I'm looking for branding and awareness, or it might be, I need sales. And our goal might be to grow sales three times higher in the next 12 months. So we start with the goals and strategy as the first part of the framework.

The second part of the framework is audience and targeting. With audience and targeting, a lot of the times, we look at the client's data to see if there's any information we can glean about their customers to understand who their actual target market is, who their typical customers are. In some cases, they don't have that information. We have to help find that for them using third-party tools and research. The second part of the framework is to really help hone in on who their audience is.

The third part of the framework is messaging and creative. Building out the right messaging and creative in the right channel is key to success. For example, if our client's goal is to be a luxury brand, we're not going to have messaging that's very promotional. We're not going to say $10 off your order in our messaging. We're going to keep it very much along the lines of luxury brands. The reason that's important is because if things aren't working, clients might want to give a coupon or discount, but that could break the framework we agreed to in the beginning, which is to hit the certain goals they're looking for.

The next part of GAMMA is the measurement, testing, and learning. This is really important because many clients don't have measurement down. They might have last-click, analytics, or data from various sources like Facebook, Google, and data warehouses, but they might not be measuring phone calls. Measuring is crucial to ensure you have all the touchpoints.

The final piece of the framework is acceleration and optimization. This means if we get the right goal, messaging, targeting, and measurement in place, we step on the acceleration pedal for that particular campaign and spend as much money as possible because it's likely yielding a lot of money. This keeps the client interaction on point. Without a framework, issues arise when metrics change drastically without considering the impact on goals, messaging, or channels.

Using the GAMMA framework is essential in maintaining successful client-agency relationships. It ensures that everyone is aligned and can adapt effectively to changing circumstances.

Ben Kirshner’s GAMMA framework consists of:

• Goals and strategy
• Audience and Targeting
• Messaging and Creative (based on your value proposition)
• Measurement, Testing, and Learning
• Acceleration and Optimization

You might note that the first four components of Ben’s framework correspond to the ones that we introduced (goals, target audience, value proposition, and metrics), and the last part of his framework refers to the execution of the marketing plan.

To reinforce the concept of the marketing plan, let’s consider a hypothetical situation where a beverage company has created a new energy drink. The company has done research about the market and has created a plan for marketing the product.

The elements of its marketing plan are listed below:

• Goal/Objective - Increase revenue
• Target audience - Older millennials
• Value Proposition - Healthier, less sugary product compared to competition
• Metrics - Number of Sales