Posts Tagged "Strategy"
- Tony Quin
Midsize companies are waking up to new dangers.
During the recession, while consumers sharpened their digital buying skills and the Fortune 100 raced ahead, many midsize companies took advantage of the competitive lull and avoided the investments necessary to keep up with the digitally empowered consumer.
Cut to 2016: Consumers, both B2C and B2B, have become sophisticated buyers. They have the tools to make smart, fully informed buying decisions every time. They are demanding, digitally savvy and unforgiving of brands that do not serve them well, especially on social media. They expect easy, enjoyable experiences in store, online, and with the products and services they buy.
In a nutshell, they want it good, fast, and cheap, and if they don’t get it from you, they’ll find it somewhere else.
At the same time, competition is brewing even in the sleepiest of verticals. Companies are realizing that if they don’t superserve their consumers, one of their competitors will or already is. And the quality of such an experience has been set not by the sleepy competition, but by the world’s top brands, so the bar is very high.
While the big companies have used the recession years to shift their focus to connect with the modern consumer, midsize companies are only now waking up to the need to get their marketing and consumer experience up to speed. But time is running out. Nimble new brands are finding ways to disrupt almost every industry with product innovation and better consumer experiences, and big companies, like Amazon, are spreading their enormous wings with even more innovation, making it ever harder for laggards to get into the game.
With a relatively stable economy under our feet, we have entered the fat part of the snake, where many midsize companies are ready to catch up. That means acting now to shift to a consumer-centric orientation in which everything that touches consumers is designed with them in mind.
Midsize companies that have managed to slide by without more sophisticated marketing and just manufacture and distribute will have to become marketing companies now, which is a daunting prospect for many. But the alternative is worse. As a big-box retailer recently said to a longtime brand on its shelves: “What I want from you is a brand, and that means you have to get good at marketing. If I want a product, I’ll make it myself.”
The good news is that even though time is short, you can quickly build a modern marketing machine that will superserve your consumers and future-proof your brand. That’s what IQ’s forthcoming 10-part series, “Decoding Modern Marketing,” sets out to do. This monthly series is an executive guide for midsize brands ready to usher their marketing into the digital age. That said, “Decoding Modern Marketing” is applicable to brands of all sizes, large, midsize, and small.
View the overview of Decoding Modern Marketing here. We’ll be back with Part 1 next month.
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Having worked on both client side and agency side, I’ve experienced the end of year budgeting season from two perspectives. On the agency side, we work with clients to set goals for 2016 and then back out of that tactically to estimate (in terms of cost) what it’s going to take to reach those goals. In an agency, we get to dream about all the exciting things we could do to help move our clients’ businesses forward. We get to brainstorm and collaborate then present exciting ideas to our clients. But what many on our side don’t know is what you (our clients) go through during the final few months of the year – the planning, negotiating, revising, justifying, compromising, etc. Often it requires internal campaigning with adjacent departments to partner on initiatives so that budget can be shared. It’s a draining process and any data that might support your proposal for an increase in budget helps.
While the process will always be messy, taking a look at what others are doing helps provide context. Each year CMO Survey publishes a report with what companies spend in marketing and the percentage of revenue and the overall company budget that the marketing budget represents.
First the big numbers. Marketing budgets represent 11% of overall company budgets. This is further broken down by the type of company with B2C product (vs. service) companies getting the most budget at 17.5% and B2B product companies getting the least at 10.1%. Interestingly, the trend is on the upswing, with companies investing more on marketing than any report since 2012.
While marketing budgets continue to take a larger percentage of overall company budgets, the net investment, however, continues to decrease as company budgets overall continue to decrease. On average, marketing departments intend to invest 6.6% of company revenue, down from 8.3% in 2015. Again, B2C product companies are leading overall spend with 10.4% with B2C services companies taking the bottom at 5.3%.
It should be noted that these numbers are inclusive of all marketing department efforts including operations – that’s everything from the costs associated with your brand advertising campaigns to the salaries of all of your marketing employees. Looking at total budgets then might be of little value to those of you who are creating budgets that get submitted to a CMO for inclusion in the overall budget, so let’s break it down a bit to see where companies are investing.
One of the biggest gains for 2016 will continue to be in digital marketing spend with a 12.2% increase year over year. B2C services companies, who we saw previously were getting the least amount of marketing budget as a percentage of revenue, will have an average 20% increase in their digital marketing budget, while B2C product companies will see a 14% increase.. On the other hand, traditional advertising spend for 2016 will be down 2.1% marking a significant swing toward digital.
Mobile marketing is another large focus for companies. In the next 3 years, companies say they will increase mobile marketing spend by 15.6%.
Investment in CRM also continues to be prioritized, with an 8% increase in marketing spend in 2016. Brand building will see a 5.5% increase. New product introductions will see 8.3% increase. And new service introductions will see a 4% increase.
Gone are the days when companies could do the minimum and hope to slide by without seeing any impact on the bottom line, and this latest data underscores what it takes to compete in today’s increasingly active, competitive marketplace. While this won’t make your job over the next month or two any easier, hopefully it validates what you’re asking for. Here’s to a successful 2016!
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Most marketers are well into planning their 2016 budgets–an arduous process that runs the gauntlet of budget approvals. And even though it’s invariably about the numbers, at some point you know someone will be asking you, “What did you accomplish?”
With that in mind, here are a few questions to ask yourself about your 2016 marketing plan to ensure you have a great story to tell this time next year.
1. Does Your Plan Reflect The Way Your Target Audience Engages With Media?
You would be surprised by how many marketing plans still start with traditional media and then add digital. That doesn’t mirror the importance of digital media to your consumers, which is why it’s time for a digital-first plan. That doesn’t mean you cut out traditional marketing–it just means you start with digital at the center of your plan. Consumers form their buying decisions through digital influences so much that to approach consumers in any other way is foolhardy.
2. Have You Done Your Strategic Homework?
The path to purchase is now so complex that you have to map it as the Consumer Decision Journey. This is a channel-agnostic process, which maps the journey for each of your target audience segments so you can see where the critical interaction points are. When combined with other audience research and competitive analysis, you get an accurate picture of when and where it’s most effective to influence your prospects.
3. Do You Have A Content Plan?
How you communicate with prospects when they are exploring your category is different than when they are evaluating options. So whether it’s the copy in an ad or a video on your Web site, you have to know exactly what to say to each audience segment, at every stage in the journey. The only way to know for sure is by doing the work of a content strategy, which acts as the messaging guide for all of your communications.
4. Does Your Plan Prioritize Owned, Earned, And Paid Media Intelligently?
The good news is many opportunities for exposure exist today that do not require you to buy media. This exposure saves you money, but has more influence on consumers than paid advertising. Therefore, your plan should start with owned and earned media before jumping to paid media. If your agency suggests otherwise, then it’s probably making money by spending yours.
5. Do You Have An Integrated Measurement Plan?
Marketers have correctly come to expect detailed metrics and analytics for everything they do. This not only allows you to optimize as you go, but also to measure your performance against goals and plan ahead. In order to really get the value of all this data, you need to plan with clear goals and KPIs, an integrated view of data from all media (both digital and traditional), and a really good analyst to tell you what it all means.
6. Is Your Digital Infrastructure In Place?
The basic idea of an integrated marketing plan is to tie together your marketing touch points into one unified system across all forms of media. This requires some basic pieces of digital infrastructure, which you can’t do without.
This includes probably the most important piece: a mobile-friendly Web site. According to Nielsen, consumers trust brand Web sites more than any other marketing, so your Web site has to be designed for mobile devices.
But technology is not enough.
The Web site is where you must cultivate that trust and convert general interest into sales. This requires state-of-the-art strategy and user experience design. Remember, it’s up to your site to convert interest into action, so make sure yours is best-in-class. Other areas that are often part of digital marketing infrastructure are your social presence across social touch points, search engine optimization (SEO), and search engine marketing (SEM), email, ratings and reviews, mobile Web sites or apps, and marketing automation.
7. Is Content A Priority?
Perhaps the biggest problem with most plans is a lack of focus on content. The word “content,” of course, is a catch-all that includes everything from banner ads and TV spots to videos and interactive tools. All of your planning, media, and infrastructure are there to deliver content. That’s because content is the part of the equation that influences the consumer.
Brands that commit to creating an ongoing stream of high quality, original, compelling content in all forms win hearts and minds. Brands that don’t, regardless of the rest of their marketing investment, cannot win.
Of course if you’re only now getting around to asking these questions, it’s getting late. But go for it anyway, because it’s never too late to start adapting to the realities of the new consumer.
According to Recode Twitter is releasing a new product that will allow users and brands to publish content that exceed the current 140 character limit of the native Twitter timeline.
Most of the Internet including yours truly originally took this news to mean the Twitter timeline we love would become a bloated mess. And from a user perspective we expected this feature would drive us away. The current Twitter timeline isn’t built or designed for long form. It would take forever to scroll through someone’s late-night alcohol-fueled post-breakup novella. Let alone a verbose poorly written brand statement about their most recent social media gaff.
But this is not the case according to that article. This will be a new product possibly akin to the recently released Moments. We are betting this new feature, like Moments, will be accessible via Twitter’s mobile apps and desktop.
But long form on Twitter is exciting to think about from a marketing point of view. When your strategic research is founded in proven best practices, long form Twitter could be a marketer’s and brand’s dream come true. We will have a new and exciting way to reach users, fans, and followers that is less limiting; allowing us to craft more engaging stories and inspire deeper consumer actions.
You might be asking, “But why is Twitter doing this?”
The 1985 Global System for Mobile Communication set the character limits on text messages at 160 characters. When Twitter launched in 2006, they set the limit at 140 leaving 20 characters for the username. This allowed the tweet to be delivered in one complete text message rather than multiple messages.
But the mobile technology we use every day has evolved far past those early days and Twitter needs to grow to help people (and advertisers) tell their story and share more information. For example, Twitter made a play on native texting earlier this year when they removed the character limitations in Direct Messages.
At the end of the day Twitter is a publically traded company with shareholders to please. Twitter has a highly vested interest in making its platforms and products are more engaging to stimulate its lagging growth and increase use to turn a profit for their investors.
So here is the 140 million dollar question. Will long form Twitter increase engagement and the user base? Probably. At least when the feature is first launched. But we have to also remember that other social platforms like Facebook and LinkedIn have had the long form corner of the social web locked up for a long time.
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Recently IQ CEO Tony Quin made a pilgrimage to the Cannes Lions festival, representing both the agency and the Society of Digital Agencies (SoDA) as the Chairman. While at the festival he participated in the Executive Perspectives interview series and shared his thoughts on advertising trends, the benefits of having talented, driven employees and how data drives strategy and creative to produce exceptional work at IQ.
Here are a few notable excerpts from the interview:
KR: How would you define success in your role?
TQ: The most important job that I have as CEO is to have a sense of where we need to be as an agency 24 months from now so that I can be making sure that the agency is moving toward that. That’s the most important. Because if you don’t get that right, you’re not in business.
KR: What do you do to help your team be successful and help keep them in line with your goals for the company?
TQ: My job is to make sure that I have the smartest people on the bus, and not necessarily in the right seats, and listen to them and empower them. What I’ve learned is that if you just collect really smart people who have the right character for the work, then they are going to tell you the right place to go.
KR: In a world so driven by data today, why do you think creative still matters?
TQ: Creative is the business of connecting emotionally to people. Creative is not about data. Creative itself is really not measurable. Data helps to tell you where to point creative. The strategy that comes out of data – because data itself means nothing; it produces insights and strategy – tells you how to pick the places where you want to spend your money and those places are where you’re going to apply your creative. That last mile is informed by data but it’s always takes some magic which is inspiration and an understanding of the psychology of the people. It’s really hard to make that a science.
KR: Do you feel like creative always needs to be measured?
TQ: You can measure the end result of whether something happens or not. There is some testing you can do around creative. It’s the whole Steve Jobs approach to doing new things. You can’t base it on what’s happened in the past so at some point somebody is taking a leap of faith or just having a creative idea and you just have to go with it or not. You don’t really know what’s going to happen.
KR: How do you motivate your team on a day-to-day basis?
TQ: Every company, whether it’s a big company or a small company, has to have a vision of tomorrow. It’s kind of what we’re selling to our brands. Any kind of branding is a promise for tomorrow. That promise is, in some way, “tomorrow is going to be better.” It’s the same thing with a team. The reason you’re doing this work, other than getting a paycheck, is to create some better thing and you have to define that a little bit for people and make them excited.
KR: Can you describe the attributes of one of your top performers?
TQ: What I look for is people who are self-motivated, have an entrepreneurial spirit, are not about doing the mechanics of their job. They are about achieving the goals of their job. It’s not really about how they do it; it’s about how they get there, which is very entrepreneurial. I look for people who are sufficiently confident in themselves and aren’t afraid of taking risks.
KR: How would you describe the difference between an idea and a solution?
TQ: Ideas are bigger than solutions. Solutions, you have a problem and some parameters around a problem and you want to find something that solves that problem. An idea can be much bigger than that. An idea might solve a problem but it might have many more ramifications to it. Ideas are about what capture the imagination of people. They can drive companies. They can change the marketplace. They can create movements. Whereas a solution is just, “I’m really glad we solved that problem.”
KR: What are you looking to take away from Cannes?
TQ: I wear two hats. I have my agency, IQ, and it’s always interesting to hear what’s going on and I always get ideas. With my primary job being what’s going to happen 18 to 24 months in the future and “are we on the right path for that?”, it’s great to come to these places where people are talking about those things, about what’s next. The other hat I wear is as the founder and chairman of the board of SoDA. SoDA is a wonderful organization where I get a chance to give back to my community and to have great relationships with people who are in the same boat that I’m in, running agencies around the world, so that’s very fulfilling.
Noah Echols Rejoins IQ as Director of Strategy
It’s different for everybody, but I’ve learned over the past couple years what it is that makes me happy at work.
I worked for a large agency several years ago and I got to work with some really big, exciting clients on projects that make careers. Prior to that I worked for a journalism start up that focused on the niche topic of juvenile justice. I went home each day feeling as if I was doing something beneficial for society – helping to shed light on a topic that is under covered by mainstream media outlets. And just recently I led digital marketing for a large, very stable, well-respected company. I had the privilege of having the trust of leadership to do a lot of big projects in a relatively short amount of time that separated the company from its competition in terms of its digital marketing sophistication.
While all great jobs, none of them fulfilled me professionally.
For me, it’s the people and the environment we create together that matter. I don’t mean that I just need to like the people I work with – at each of the places I’ve worked, the people have been fantastic. It’s the culture that we cultivate that matters – one where you work hard together and at the end of the day feel like you accomplished something great AND grew personally in the process.
The reason I came back to IQ is because I craved the indirect opportunities to learn and grow by just being surrounded by so many brilliant people approaching a similar problem from different perspectives. IQ is especially unique because egos are non-existent, the people are fun and friendly, and the culture is one of support and collaboration unlike anywhere I’ve ever seen. It truly is a hub of innovative thinking for our clients because we all love what we do and thoroughly enjoy doing it everyday with each other.
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- Tony Quin
In this digitally enabled world consumers have been trained by search and the internet to think they can make the best, most balanced choice for every purchase every time. However, as all of us know, it is not so easy and there lies the opportunity for brands.
The problem with selling stuff is getting people to buy on your schedule vs. theirs. As a business you need sales sooner, not later, so the solution has always been discounts and promotions to motivate people to act now. Discounts and promotions, however, assume the consumer is already sold. They pre-suppose that the only thing standing in the way of the sale is timing and cost. But what if the prospect is actually in tire-kicking mode? I’ve heard that the rule of thumb is that only 1-2% of prospects are ready-to-buy at any particular moment. If true, and it seems reasonable, that would mean that 98-99% of the target audience you are going after, are not actively interested in buying.
I am amazed how many times brands are still hunting for that 1-2% of ready-to-buy people and hoping that the sales they get make up for the inefficiency of wasted exposure to the rest. It used to be that the sales generated justified the cost, and the silent majority didn’t matter. But the silent majority of consumers today, while perhaps not ready to buy, are far from idle. They are doing their due diligence, digital style, and ads, as we have learned, may not be the best way to approach them.
Trusted Knowledge Sources
Search has trained us to presume we can gather all the knowledge we need to always make the best buying decisions online. And according to the Nielsen Trust in Advertising Report, people get a lot of that knowledge from brand websites because they trust them second only to recommendations from friends. This underscores the importance of a good website at the heart of a smart marketing ecosystem. But what it really reveals is that consumers are looking for trusted knowledge sources that will help make the process of getting to that perfect decision easier, faster and more reliable.
If you think about your own online research, invariably it’s hard to find a credible, apparently objective source of information. In most categories there are sites that purport to offer objective reviews, but are really just shills for paid sponsors. Then there is a plethora of articles and opinions, social and otherwise, that pop up in a general search. Poring through them all on a quest for fast and easy truth can be frustrating and time-consuming. The result is a wide divergence between what the web actually delivers and consumer expectations of being able to make the perfect choice every time. As Barry Schwartz described in “the Paradox of Choice” lots of choices overwhelm people quickly, and since we all want to make the best, most informed choice, it’s never as easy as we want it to be. This lays bare the opportunity for brands to leverage the goodwill that consumers already feel for them even further, by becoming the go-to trusted knowledge source in their category.
Driven by the two consumer objectives of “making the best choice” and “making it easy”, the true battle is to be among the handful of brands that get a trusted source spot on the consumer’s mental shelf, which is the modern version of Reis & Trout’s Positioning. These are brands that can be relied upon to not only deliver content that is relevant and valuable, but also to operate with perceived transparency and objectivity. This is not something that brands can fake, and has to be a commitment to actually deliver on consumer expectations.
Simplify the Process
Most consumers don’t know much about many of the product categories they explore, like buying light bulbs or a digital camera, and in their quest to make quick, informed decisions, they jump to search. This usually starts with wading through the body of knowledge associated with the category that has built up over time, across many companies, and is sitting in the archives of lots of brand websites. Invariably it’s an overwhelming, complex mountain of knowledge, hard to sift through and often impossible to find what you are looking for. Making this process easy is clearly the first opportunity that brands should be looking for in their category. The objective is to simplify the process of evaluating and buying, by doing the heavy lifting for the consumer. That means developing tools and systems to make the buying process easy and intuitive, delivering exactly the right information at the right time, and answering questions. For those consumers who have an interest in the category beyond just getting a purchase made, it also means developing content to feed those interests.
Many people may have an active interest or passion in a category long before, they become ready-to-buy or even start their digital due diligence. Figuring out what the associated interests and passions of a category are, however, can be tricky. If you are lucky enough to be in a category like pet food, for example, the passions are easy to see. But what if you sell generators? A brand might assume there are no passions and give up on staying connected to prospects through content. But that’s when you have to dig, talk to consumers and maybe get a little creative. We actually went through the generator exercise and came up with intense interest in the relationship of weather patterns to power outages, which led to an idea for a service to help predict outages. If we could keep an open, regular line of communication to cultivate qualified prospects, the thinking went, we would be top of mind when they became ready-to-buy, without the cost of finding them again through advertising.
The digitally empowered consumer has made the cultivation part of the sales cycle more important than it ever was. As a result figuring out what content it’s going to take to keep them connected has become critical. But even with the right content strategy and compelling content, the challenge is how to keep your brand front and center until prospects become ready-to-buy. Of course you could go old school and just buy non-stop paid advertising, but the better way is to let your content work for you with SEO, SEM and social, with a little email thrown in for good measure. There is still nothing better than having a qualified prospect in an email database.
Good old-fashioned email is still a golden goose that’s worth its weight. Despite the ever-growing volume of spam, permission email has lost none of its luster. It’s the perfect channel when done right; cheap, personal and two-way. The problem comes in what brands tend to do with it. All too often people sign up to get something that’s important to them, and end up being given something that’s important to the brand. Unfortunately because it’s so cheap and misunderstood, brands often end up spamming their best prospects, sending too many offers too frequently, and not investing in content. As a result the people they worked so hard to get to sign up in the first place, stop opening their emails, and the cost of acquiring them, and the opportunity to cultivate them, goes down the drain.
How to win hearts and minds varies in each category, but it takes a commitment to the unfamiliar and very different business of creating engaging, valuable content and using it to carefully cultivate consumers, while resisting the urge to badger them for sales. Most companies, by now, are at least paying lip service to this idea, but few really get it. The result is a lot of noise that neither differentiates nor positions brands. Becoming a trusted knowledge source doesn’t just happen, and consumers armed with their digital devices and high expectations will anoint only the few that genuinely serve them.
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This is one of my favorite quotes from Winston Churchill, and what Facebook might be thinking as it tries to ram a new ad model down the throats of brands and consumers alike. Having already vented in my last post about this, I thought the greater implications of their actions on social media worthy of further comment.
A Giant Step Back
When Facebook decided to make brands pay to post content to their own fans, they took a giant step back into the old ad world. Faced with ROI pressure brands can’t afford the luxury of content oriented posting, instead they have to turn to fast pay-off tactics like promotions, coupons etc. This puts us back in the old world of interruptive advertising, where you’d be watching TV or reading a magazine and an ad would interrupt you. Consumers put up with this model in the pre-digital years because it seemed like a reasonable exchange; get the content in exchange for watching the ads. That was before we retrained them.
We Are Not a Captive Audience
Fast forward to today and digital consumers. We don’t like interruptions, we don’t like delays and we don’t like ads. We have been schooled to find and use the most efficient ways to answer questions, solve problems, research solutions and evaluate options. Digital consumers are not a captive audience, so if ads interrupt our flow and slow our productivity we won’t put up with it. That’s why it’s more likely you will survive a plane crash or win the lottery than click a banner ad.
The Post-Advertising Age
Facebook just wants to make money, which is fair enough. But just because advertising is about the only business model that might work for them, doesn’t mean it will. The problem is that we live in the post-advertising age. We still need to tell brand stories; we just can’t do it effectively with conventional ads anymore; at least in digital channels. Even armed with all the creativity in the world the only way to consistently get the attention of the digitally empowered consumer is with relevance and timing.
Changing Hearts & Minds
So if marketers can’t use ads to get their message across, what’s a brand to do? The way to the digital consumer’s heart and mind is by serving up the right content at exactly the right time. The right kind of content is that which is appropriate for the context. So if someone has clicked to watch a video about planting a lawn, don’t have a pre-roll ad for Home Depot, have lawn care tips courtesy of Home Depot. The big difference is that one supports the consumer’s journey, while the other interrupts it. Seems simple enough, but the complexity comes in planning where and when to connect with each consumer segment, and developing just the right content for each situation.
The Magic Algorithm
The temptation today is to think that marketing has become a predictable machine. All you have to do is crunch some media numbers, apply an algorithm and magically consumers will come flocking to your brand. Of course this is what the purveyors of all manner of media ad wizardry would have you believe. This ignores, however, the need to connect the dots; all the touch points that have to become one consistent story, personalized as narrowly as possible. Everything a brand does, therefore needs to be built on a foundation of consumer insights. This includes the critical exercises of mapping the Consumer Decision Journey* and developing a Content Strategy. Together they tell a brand when and where to connect with each target segment, plus what to say and how to say it at that critical moment. At the same time this work lets brands see, understand and design the cumulative effect of all the interaction points together. Inevitably this leads brands to shift their thinking from a product oriented, advertising approach to a content oriented, consumer approach.
The Training Wheels Come off
Facebook is trying lots of things (a few pretty out there), looking for ways to cash-in on their huge audience. Some may work, but this shift to making brands pay to reach their own communities isn’t probably one of them, because consumers, let alone brands, won’t stand for having the content they came for taken away.
The good news is that social media marketing is not over; it’s actually shifting to a more mature model where brands have much more control and influence. What we are seeing with social media is the same kind of shift that we saw when users graduated from AOL’s training wheels to managing their own online experience. That’s happening now as consumers are becoming more experienced, and Facebook’s move is only going to accelerate it.
So it’s time for brands to strike out on their own and connect directly with their consumers without going through the gatekeepers anymore. That means starting with the foundational work to discover the when, where, what and how, which will drive their new social media, marketing plan.
* Mckinsey & Co
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This deck presents a simple to consume and communicate vision for how to approach the complex new marketing environment. Of course many experienced marketers will know much of what is contained here, but they may not have a simple way to connect the pieces and think about it holistically, or more importantly to communicate to those less sophisticated than themselves. With that in mind our Connect, Cultivate and Convert method outlines a new model for marketing.
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