Setting Objectives for Digital Marketing Plan

Creating a Plan

All effective marketing plans must start by defining the objectives that you want to achieve. While sales and revenue goals are commonly used, brands may have other objectives as well. For example, a small unknown brand may want to create brand awareness. A market leader with dominant market share may want to expand a category by highlighting new usage occasions. An automobile company may want to drive traffic to its dealers to encourage test-driving. Companies often have multiple objectives. And you will need to prioritize and balance these multiple goals. Often these goals are tied to the overall strategy of the company.

As OOFOS approached its 2022 marketing plan, the company partnered with a digital marketing agency, Rain the Growth Agency. Rain is primarily responsible for driving OOFOS Direct-To-Consumer (DTC) sales. One of its key members, Bianca Reed, explains the goal that was communicated to them.

Bianca Reed, Rain The Growth Agency, Former VP Client Services and Inclusion Marketing:

I'm Bianca Reed. I'm Vice President of Client Service and Inclusion Marketing at Rain the Growth Agency. We are a fully integrated advertising agency that works across creative media and analytics to deliver growth for our clients.

I remember our first time meeting with OOFOS. We were actually connected from a consultant who really loved what we were doing in the space as an agency. And the first time I met with OOFOS, I got to try on a pair of shoes immediately. My job in new business is really to gauge, does this have growth potential? And as soon as I stepped into a pair of OOFOS, I'm, like, this has potential, like we can scale this.

With working with the team, they had really aggressive goals, which we see from a lot of startup brands. It was really getting to know their aggressive goals, getting to know the product, and working with their great people who really live by their core values. So it's amazing to partner with them.

In the fall of 2021, as we first started having our conversation with OOFOS about what their goals were for 2022, their goal was aggressive growth. When we say aggressive growth, we're talking 3x to 4x growth goals over the previous year.

While OOFOS’s primary goal is to increase revenue, it is also trying to establish itself in a new category: recovery footwear.

Marketing objectives are determined based on the business context and the challenges and opportunities that a brand faces.

As Steve Gallo and Darren Brown shared, OOFOS is trying to establish itself in a new category that is unfamiliar to most consumers. Also, competition is increasing for OOFOS as bigger brands come into the recovery footwear market. More than ever, OOFOS needs clear and focused goals.

E.l.f., a large cosmetics and beauty company, faced a similar situation. Early on as a small brand, it experienced fierce competition from bigger players. Tarang Amin, CEO, and Gayitri Budhraja, the company’s Chief Brand Officer, share how the challenges e.l.f. was facing led them to define the company’s marketing goals. Note that Tarang mentions the term CAGR, which stands for Compound Annual Growth Rate.

Hi. I'm Tarang Amin, the chairman and CEO of e.l.f. Beauty. Alan and Joey Shamah created this brand in 2004, and they really did it under a premise of selling cosmetics over the internet for $1. Back in 2004, people didn’t think you could sell cosmetics over the internet, let alone make money at a $1 price point.

I came to e.l.f. in 2014. The original founders, Alan and Joey Shamah, were going through a process to sell their company. They were terrific entrepreneurs who had already reached almost $100 million over 10 years. So, we knew there was something real in the company and the brand in terms of its staying power.

By the time I joined, e.l.f. was primarily a digital business and e-commerce business. It already had the number one mass e-commerce site in color cosmetics and had just started its expansion into retail distribution.

We had a period back in 2018 where we thought we had this great model. With "best of beauty accessible," we had taken up the quality of our products, expanded distribution, and were growing at a CAGR of over 20% a year consistently. It seemed like without too much effort—though it was obviously a lot of work.

But in 2018, for the first time, we hit a wall. Our business was down about 2% to 3%. For a high-growth brand, that seemed like death at the time. We couldn’t figure it out. We went back and looked at our quality ratings and consumer reviews, and we couldn’t see the issue.

What we realized was that we had assumed our value equation alone would carry us through. However, during this time frame, a number of major new influencer brands emerged—the Kylies, Fentys, and Huda Beautys of the world. At first, I thought they didn’t compete against us because they were at much higher price points. But they absolutely competed against us in terms of the share of mind of our core consumers. As a result, we found ourselves, as a digital disruptor, getting disrupted ourselves and losing relevance.

Gayitri Budhraja, e.l.f. Beauty, Former Chief Brand Officer:

Hi, everyone. I'm Gayitri Budhraja, the Chief Brand Officer at e.l.f. Beauty.

2018 hit, and that was the first down year we experienced as a company. A lot of that was because the trends within beauty caught up to us, and we had lost our voice as a brand. What we recognized at that moment was that we had to invest in the brand, which was very different from what our approach had been before.

So, there was a very intentional decision: we had to be able to invest in this brand to break through.

E.l.f. recognized its brand had lost its voice in the crowded beauty market and decided to invest primarily in brand building. “Brand building” is the longer-term process of building awareness and image for the brand and establishing connections and loyalty among consumers. The company set shorter-term sales as a secondary goal.

Tarang Amin:

There are a number of things we look at when we assess the objectives of our marketing.

First and foremost is to build the brand. We evaluate several attributes from a brand standpoint, such as our unaided awareness, equity attribute ratings from studies, and the level of engagement consumers have with us.

The second objective is to profitably grow sales. We receive very strong ROI data through the Nielsen marketing mix, which allows us to see the ROI against those dollars spent.

What we don’t do from a marketing standpoint is set retailer-specific objectives. Instead, we aim to build the brand overall and focus on building it digitally. What we’ve found is that our approach of building the brand digitally actually drives better results with all of our retail partners, as opposed to singling out any particular one.

Tarang mentions “unaided awareness”, this term refers to whether or not consumers mention your brand without being prompted.

E.l.f. chose some specific goals based on the challenges it was facing. Which of these do you think would also be helpful for OOFOS?

• Focus on brand building
• Increase unaided awareness
• Forgo retailer-specific objectives
• Make growing sales a secondary objective

There is not a single correct answer to this question. For OOFOS to determine whether any of these or some other option is the best way forward, it needs to understand its customers deeply. We’ll learn how the company can develop this understanding next.

The Marketing Funnel

How can marketers determine their objectives? It is helpful to examine this question from the perspective of a customer on the journey from becoming aware of a brand to purchasing, or “converting.”

The customer journey is often represented by a visual schematic known as a marketing funnel. Let’s learn more about the marketing funnel and how it works.

A common and useful framework that can help you formulate your marketing objectives is the marketing funnel, which describes the customer journey across three stages: awareness, consideration, and conversion. Understanding these stages will help you better focus your marketing efforts where they will matter the most.

The first stage at the top of the funnel is awareness. It is hard for a consumer to buy your product if they're not even aware of your brand. There are two types of awareness that companies often measure:

• Unaided awareness: Measures whether consumers mention your brand in a product category without any prompting. For example, do consumers mention OOFOS when asked to name footwear brands they know?
• Aided awareness: Measures awareness when the brand name is mentioned specifically. For example, OOFOS may ask consumers if they are aware of OOFOS footwear.

Unaided awareness is typically lower than aided awareness. For example, in 2022, while Nike and Adidas had very high unaided and aided awareness, OOFOS' unaided awareness was only 0.2% and its aided awareness was 9%. If OOFOS’ goal is to increase brand awareness, it may need to spend its marketing dollars on channels that reach a broad audience, such as television.

Some common brand awareness objectives might include doubling unaided awareness by the next year or increasing impressions or social media views. These objectives aim to bring in new customers at the top of the funnel, some of whom will eventually purchase the product. While large companies with well-known brands like Nike don’t need to invest much in awareness, smaller companies like OOFOS may need to spend more at the top of the funnel, though this approach may not lead to immediate sales.

The second stage in the funnel is consideration. At this stage, consumers who are aware of your brand evaluate it against competitors. They gather information about your brand, such as price, style, and reviews. A compelling value proposition is critical here. For example, athletes looking for high-performance shoes might overlook OOFOS unless the brand highlights the benefits of “recovery” footwear. Objectives at this stage might include website traffic, store visits, or test drives. Channels such as your website, Facebook, or Instagram might be effective at this stage.

The final stage of the funnel is conversion, where engaged consumers become buyers. At this stage, OOFOS’ consumers might be actively looking for “recovery” footwear. Search ads could be effective, but if consumers do not perceive a significant difference between OOFOS and its competitors, the conversion rate (the percentage of consumers making a purchase) might be lower. Objectives at this stage center around getting consumers over the final hurdle to buy, increasing sales and revenue.

After customers purchase, you should also focus on retaining them and turning them into brand advocates. With customer data like emails, email marketing campaigns might work well. Building brand communities is another way to engage loyal customers, which we’ll discuss later.

Where you focus within the funnel and how you allocate your budget depends on your brand’s specific context and the biggest barriers to growth. Should you allocate more resources to the top of the funnel to build awareness, potentially expanding the market in the long term? Or should you focus on the bottom of the funnel to drive short-term sales? These decisions also influence your choice of marketing channels, such as television, paid social, or search.

Here is the generalized marketing funnel mentioned:

In addition, here are the data that OOFOS collected as it analyzed the aided and unaided awareness of its brand:

The question of setting objectives according to the funnel stage and how to allocate budget appropriately is a theme that we will come back to multiple times. For now, let’s learn more about which funnel stages OOFOS wants to prioritize for its objectives.

OOFOS has been thinking deeply about its objectives. Steve Gallo and Darren Brown, whom you met earlier, and Kate Laliberte, Head of E-Commerce at OOFOS, discuss which marketing goals the company should prioritize, and how to allocate its digital marketing budget. Note that instead of “consideration,” Kate uses the word “engagement” for the middle of the funnel.

Steve Gallo: The things that we reached—we prioritize with our media agency, and they also do our creative—are number one, we want to drive the e-commerce business, first and foremost. And we build a business plan around that. There is a number, a revenue number. At the same time, with that is a ROAS, or Return On Ad Spend, number that they need to achieve as well. So we apply them on a monthly basis of what they need to achieve.

Darren Brown: When we break it down, we always have kind of our key pillars that we want to focus on. But from my standpoint and my perspective of focus, brand awareness is number one. We have to always recognize that as much as we're well known to us and our family and friends and neighbors, there's a lot of people in the world that don't know us. And if we're going to reach those top line and bottom-line targets and goals, then we have to have a lot more people learn about the brand. And you can't buy the brand if you don't know about the brand.

So awareness has been a number one objective for us for the past five years and beyond, even going back further. Below that, we then have certain targets that we want to hit through that brand awareness objective. And that requires us to focus not just on the awareness level of the funnel, but then to walk consumers through the funnel down through consideration and obviously conversion.

Being a profitable brand, since very early in our life cycle and self-funding through the majority of our time in existence, we keep a really close eye on what our spend-to-revenue levels look like. And looking at our bottom line and keeping consideration of that and having to adjust to that is always a part of the focus.

Kate Laliberte, OOFOS, Head of E-Commerce: So my name is Kate Laliberte, and I'm the head of e-commerce here at OOFOS. So when we're looking at where we're going to spend our dollars or how much, what we're really looking at is we want to make sure we're maximizing across every part of the funnel. So from awareness, engagement, conversion, and retention, we want to make sure that we're covered with our digital marketing dollars. So first and foremost, we're making sure we're fully funded within our conversion channels. And then as we build up in the funnel, making sure that we're covering our reach programs as well. So we really take that full funnel approach.

Steve, Darren, and Kate all have a slightly different perspective on the approach OOFOS should take. List some pros and cons of each approach.

Ultimately, OOFOS decided that it wanted to focus on hitting strong revenue goals. While this goal requires getting customers down through the funnel to conversion, it also means that OOFOS needs to generate enough awareness at the top of the funnel to get enough customers to meet that goal.