‘It’s fundamental to our values’: Ocado on its pursuit of an effectiveness culture

Ask any marketer where they are with measuring effectiveness, and they’ll probably tell you it has been a journey. In the current economic climate the imperative to deliver impact, and measure it, is perhaps higher on marketers’ agendas than ever before.

For online supermarket Ocado, effectiveness is drilled into the business, its head of brand advertising Sarah Emerson tells Marketing Week.

“We have a really strong foundation of creative effectiveness within the business,” she says. “We work as a collective across the customer function to look at all areas, to make sure that actually, everything is pulling together and working as hard as it possibly can to achieve our commercial objectives.”

The stated aim of the business, announced at the end of last year, is increasing the rate of retention among customers. CEO Hannah Gibson said at the time that they wanted to build on what they had, which is the “strongest loyalty in market”, she claimed, by “driving marketing efficiencies to improve targeting and retention of customers”. This is one way it hopes to inch towards “marginal” profitability in 2023 and reverse the £500m annual loss reported in February. Ocado refocuses marketing efforts on acquiring long-term customersAnother is driving greater optimisation, says Emerson. Effectiveness capabilities and growing the function has “definitely been a journey”, she explains, and the business still has a lot to learn. “But the foundations are absolutely there, and it’s something the business takes incredibly seriously, and has invested a lot of time and effort in to,” she adds.

With each campaign the company puts out, the marketing team is “learning more and more”. This is particularly true for the last couple of years, says Emerson, as she describes how the business has measured its two-year long brand platform, ‘Just For You’.

“We’re still relatively new to the market. We only launched the new platform in 2021, so two years in, we’re still going a lot of testing and learning through the messaging and our channels,” she says. Tied into this is the business’s “really strong econometrics model”.

Plus, it has not been an easy few years for customers and brands. “The market conditions have been a bit bonkers in the last couple of years. But overall, marketing effectiveness is something we take really, really seriously – there’s a strong culture of it within Ocado.”

Hand in hand

Who is responsible for marketing effectiveness? Usually, the marketers. But as Emerson says, the culture of effectiveness is spread across the entire business. “Its absolutely fundamental to our values and our culture,” she says.

Many businesses will always look to short-term tactics to fuel immediate growth, particularly when in the earlier stages. This is something Ocado is familiar with, as Emerson tells Marketing Week: “Historically, before I joined the business, Ocado was very much performance focused.”

As Ocado looks to move away from short-term results towards long-term growth, it may be at odds with what other marketers are doing at their brands.

According to Marketing Week’s second annual Language of Effectiveness Survey, supported by Kantar, 11.8% of marketers are prioritising performance-driven marketing. This is a marked increase from last year’s figure of 8.6%, reflecting the environment marketers now find themselves operating in.

Yet despite this increased focus on performance marketing, nearly half (48.2%) of the marketers surveyed believe their campaigns are too focused on performance marketing.

We are still very much a business that has a lot of headroom to grow.

Sarah Emerson, Ocado

At the same time, the percentage of marketers exclusively working on brand marketing is slightly down, from 14.9% in 2022 to 14.2% today, according to the survey of 1,300 marketers. Meanwhile, a quarter (25%) focus on both but with a skew towards performance, up from 23.7% last year, while those who work on both but with a greater emphasis on brand increased by one percentage point from 27.6% to 28.6%.

The percentage of marketers dividing their focus between brand and performance equally decreased from 22.1% to 17.9%.

Emerson was brought in back in 2018 to bolster Ocado’s brand ambitions, working on more “experiments within brand advertising” and looking at how it could help fuel long-term growth.

“Obviously, a lot has changed with Covid, and the joint venture with M&S, but I think the fundamentals are still there, that we are still very much a business that has a lot of headroom to grow,” she adds.

Brand and performance marketing work “hand in hand” at Ocado, as Emerson says the two areas are “closely aligned in terms of how we bring messaging to life, and how our channels work together”.

The ambition for the year ahead, she says, is for the two to work “even more closely together”, particular to nudge up the brand’s awareness factor, as well across activations and entry points.

Marketing Week has published a series of content based on the Language of Effectiveness data, including a report. In the coming weeks we will be looking further at the role of market share as a metric.

Click here to read all our Language of Effectiveness content