Telstra now spends 50% of its budget on digital, according to top marketer Mark Buckman. And OMD boss Peter Horgan said the rate is increasing.
Telstra presented a in-depth update of its strategy to analysts this week where Buckman, managing director of media and marketing, outlined how its marketing emphasis has shifted in digital's favour and the approach it takes to raise the value of the brand.
It has gone from spending up to 90% of its marketing budget on traditional above the line communications such as TV and outdoor three years ago, to putting half of its budget into direct digital.
Late last year, Telstra director of one-to-one marketing and digital Nick Adams, said the network planned to shift around 40% of its budget “below the line” activity to build better one to one relationships with customers.
Increasing the digital portion of the budget has meant Telstra is now better at cross-selling its products and services, said Buckman and the targeted marketing the network is running is delivering a greater return on investment.
Peter Horgan, CEO of Telstra's media agency OMD said that the amount of dollars put into digital channels is accelerating fast.
The agency has built a performance hub for Telstra that optimises channels and creative in-house, with creatives from DDB sitting inside the hub to work on the performance side of the business and on a bespoke trading desk built for Telstra.
“A lot of optimisation takes place across channels and creative. They are joined at the hip with creative around taglines and colours or whatever creative variation you want to test and evolve," said Horgan. "The creative aspect [within performance] is increasingly important."
But the big TV ad is far from dead – Telstra is currently running a barrage of ads on TV and outdoor including the campaign starring Jimmy Barnes and Magda Szubanski.
Behind those TV ads though is “some really detailed sophisticated marketing strategies to target our consumers. A very detailed CRM strategy, a very detailed catalogue and direct marketing communication strategy,” said Buckman.
Telstra is also doing more local marketing to support national campaigns, with tactical messaging that is specific to suburbs where its 4G network is going live. Vodafone is also ramping up local marketing to tell locals about its network improvements.
Efforts in digital and targeted marketing have helped drive up the brands value by $300 million in the last year, claimed Buckman, citing Brand Finance, which makes Telstra the second most valuable brand in the country.
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