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What's new in online marketing capabilities

13 December 2016, 19:56 CET

The growth of firms' use of big data has made it easier and easier for firms to be able to track their marketing spend, and their campaign's effectiveness. Rather than looking at more second or third hand data, companies are now able to see directly what has led to the success, or failure of a specific campaign. There are various methods that companies have at their disposal utilising big data.

One such technique that already has a strong foothold in the UK and is forging its way through Europe is cashback marketing. Evidence for this comes from the Maple Syrup Media Group, the UK's leading cashback and rewards network, which has been operating successfully in Germany since 2010 and this year began operations in France. Their UK business, Quidco, has led the way gathering 7 million members and handing back over £370 million to consumers to date.

The way cashback marketing works is simple. Unlike sites like Groupon and Wowcher which offer reduced prices on products and services, money is given back after the purchase has been made – giving the consumer the sensation that they are actually being rewarded for their purchasing decision.

Already, it's easy to see that its sheer simplicity will have a broad pan-European appeal, but how does it measure up against marketing theory?

Looking at both internal strengths positives, and negatives, a SWOT analysis stands for Strengths, Weaknesses, Opportunities and Threats. Running a standard SWOT analysis helps provide some of the clear benefits of this marketing activity. Providing cashback helps alleviate the Threats of substitute products. It helps build the brand loyalty, and provides an additional reason for consumers not to look for cheaper alternatives. Why look elsewhere when you're already getting a saving? With broad, European markets now available for individuals, the threat of substitutions is higher, with the reduced barriers of entry between nations. Being able to benefit from greater economies of scale, and also Opportunities in other countries for cheaper manufacturing, it provides additional benefits that utilise the Strengths of those firms able to take part in Cashback Marketing.

In Europe competition is sure to be fierce, not just from native suppliers but from international ones too so cashback marketing also needs to be considered for its role to influence elements of Porter's Five Forces Analysis. This looks at the external pressures that marketers can face and, in the European context, Threat of Substitutes could be key. But by offering the advantage of cashback on purchases when others do not it should be enough to see off at least some of the competition.

Last but not least, with many products being common across Europe, and with the consequently high stakes involved in correctly judging their natural life cycle, boosting their longevity by offering cashback on selected lines can also be of great benefit to their makers.

So, with all these points in mind, cashback marketing would be something any pan- European company would do well to consider. After all if it works for consumers everywhere from London to Leeds, it's sure to be as popular in Barcelona or Berlin.

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