How Agile Media Optimization Helped HCF Boost its Marketing ROI

Agile marketing is being adopted by some of the biggest, most blue-chip brands around, and Jenny Williams, chief marketing officer of HCF, Australia’s largest not-for-profit health insurer, generously shared with Simple her approach to marketing agility and agile media optimization.

During its transition to a more agile marketing approach, HCF’s in-house marketing team has grown by more than 400%, return on marketing investment has risen, and HCF is developing agile marketing processes that will enable it to take full advantage of the switch to programmatic media buying in future years.

The background: Marketing restructure, brand transformation

With one eye on the disruption affecting the financial services industry, HCF has embarked on a business transformation driven by its leadership team aimed at staying ahead of similar disruption in health insurance. This is guided by HCF’s “2020 strategy”, a five-year plan focused on making healthcare affordable, understandable, customer-centric and high-quality.

As part of that transformation, the not-for-profit realised it needed to restructure, reinvent and ramp up its marketing efforts, in the process embarking on a brand and digital transformation that affects all facets of the business.

Eighteen months ago, HCF appointed Williams, who had spent most of her career in digital marketing, to build out the marketing elements of that transformation. In that time, she has overseen a 400% increase in the size of the marketing department, which has grown from six staff to 25.

“It’s very exciting actually because it’s the first time I’ve been part of a brand transformation that is actually an organizational transformation as opposed to the marketing department deciding that they want to come up with a new messaging and put it out to market,” Williams says.

“The 2020 strategy… is the most organized and consistent set of management structures that I’ve ever seen in an organization.  Anything we’re spending money on in the next five years needs to fit within delivering against that strategy.”

HCF's branch sales are analyzed as part of its agile media optimization cycle.

HCF’s branches are a strong sales channel for the rejuvenated brand.

The marketing team has been restructured into five pillars: advertising, brand, customer, digital and public relations. New functions have been built in-house, including customer relationship management, local area marketing, content, public relations and, recently, programmatic advertising strategy.

HCF has reviewed all of its advertising agency arrangements, which was a time-consuming process given it works with about 20 agencies.

The health fund also recently relaunched its brand with a new television campaign featuring the tagline, “Health is… Not-For-Profit”. That was developed under the overarching brand platform, ‘We’re for health, not for profit’, which explains HCF’s unique position in the market, and informs its advertising platform, ‘Your health comes first’.

Digital transformation

A new website, fed by a content management system HCF can update in-house, launched as part of the brand’s digital transformation.

“At one end it’s about how do we transform our website, our apps, the way that we deliver to our members at our branches,” Williams says.

HCF's digital transformation started with its website but extends to operations and internal systems, social media and a more personalised customer experience.

HCF’s digital transformation started with its website but extends to operations and internal systems, social media and a more personalised customer experience.

“I think the bigger transformational piece is how do we manage things operationally, how do our systems work together, how do we transform the platforms that we use in order to be quick to market, more responsive, more personalised.

“It also means how we leverage social channels, what we’re doing in digital media — at least from a marketing perspective, but also what happens in the branch.”

Prior experience of agile

Williams is experienced in agile ways of working, largely because of her background in digital marketing working at agencies, and with companies including Yellow Pages operator Sensis, Dell and consulting to Commonwealth Bank.

Agile marketing is a way of managing marketing in which teams work in short cycles to complete highly defined projects and measure their impact, with the aim of continuously improving results over time. The Agile approach values focusing on the customer, and responding to change based on tests and data, over executing a predetermined plan.

The most popular methodology in marketing is Lean, which focuses on launching small, trial campaigns and learning from the results to evolve campaigns, and which is commonplace in pure-play digital organisations. Other methodologies include Kanban, Scrumban and Scrum.

Dell operated on a weekly test-and-learn optimisation cycle, and digital strategy at Commonwealth Bank was developed using agile processes.

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“I did participate in a project with Sensis which was true agile development,” says Williams. “At the time Sensis was this big monolithic organization and we were struggling as an agency… to get work through the system.

“What we got via one of the divisions was agreement to take a whole group of people from IT, from the business and from the agency and they all went off-site into a different location.

“They were given a bucket of money and told they could work within an agile methodology in order to pull something off.

“The goal from a Sensis perspective at the time was to prove we could make stuff happen which we couldn’t have made happen in the traditional environment and I think that was quite an effective exercise for them.”

A ‘wagile’ approach to finance

Jenny Williams interviewed on agile marketing methodologies and agile media optimization at HCF

HCF is using a combination of agile marketing and traditional waterfall processes (where complete projects are planned in advance and executed in their entirety before results are reviewed) in marketing as well as in other areas of the organization, such as project management, technology and finance.

“When we look at project stuff, the Project Management Office has an agile-hybrid model which works within the Project Steering Group governance structure but enables agile development within that.

“There are big gates (that projects must pass) pre-concept and concept and implementation and post-implementation where financial sign-off is achieved and then there’s a steering group which oversees the governance (for) technology development.

“What we’ve been working on in terms of the marketing department is trying to develop agile methodologies in terms of briefing and how we develop ideas, but also in the way we’re starting to develop our optimization models around our existing customer experience and media spend, particularly during the peak times of year.

“There’s a lot of value to be extracted if you really look at what’s going on, on almost a daily or a weekly basis, and start to optimize what you’re doing.”

Corporate governance and agile process

A common conundrum in agile marketing is that corporate governance models relating to plans and budgets can work against the true iterative concept of agile, in which the final outcome is not necessarily known at the beginning of a project.

“Funding models and approval models often don’t lend themselves to agile,” says Williams.

“We have a culture where what we do and what we spend money on needs to be very well thought-out so it has to be delivering value for our members and can’t be seen as frivolously spending money just because we think it’s a good idea.

“So the requirement where you have to create a business case and you have to go through proper governance is from a business perspective completely and utterly responsible and to be expected, but that does sometimes get in the way of true agile, particularly when lots of dollars are involved.”

Iterative briefing

After years working in agencies, Williams says collaboration with outside agency partners is a “work in progress”.

One thing she struggles with is the ‘black box’ approach — which sees agencies work for a month on their own and then return to present creative concepts without any feedback from the client, or the ability to refine ideas over time.

HCF's breast cancer prevention campaign fits under its "Your health comes first" advertising platform.

HCF’s iterative briefing process ensures all agencies that work on a campaign, such as its new breast cancer awareness initiative, are on the same page as the creative idea is refined and improved.

Neither is the “not invented here” syndrome — in which agencies are constantly trying to change work they didn’t develop themselves — helpful.

So HCF is building a different way of working with its agencies built on iterative briefing.

“Internally and with the next campaign that we’re working that’s due to go live in January we’ve refined (the briefing process) to a whole new level so it’s very much iterative. We’re having incremental meetings with either internal stakeholders or agencies that we’re going to partner with on particular things.

“Every time we have a meeting, some new insight that we need to think about or refine or figure out comes up and we try to solve it then or we go away and solve it in the interim so we’re continuing to refine the thinking.

“As we have those meetings and the conversations, we’re updating the brief. When we get to the all-agency briefing, it’s going to be a fairly well-baked idea, plan, structure. There’s not a whole bunch of open questions.”

Maximising bang for the marketing buck

HCF's brand transformation coincides with an agile media and digital transformation.

HCF refreshed its brand with a TV-led campaign featuring the line “Health is… Not-For-Profit”.

Health insurance advertising is somewhat seasonal in that industry sales peak in March and again in June. HCF has established a weekly media optimization cycle to help make its media spend as efficient as possible during this time.

“I’m looking for the best bang for the marketing dollar, again in the context of being a NFP and delivering value for the members and making sure that we’re not spending money frivolously,” Williams says.

“The spikes in terms of media activity, search activity and acquisitions during those two periods eclipse the rest of the year,” she says.

“The difference in terms of what you pay for a brand term or a non-branded term in search in January compared to what you’re paying for it in March is thousands of per cents difference in terms of cost.

I’m looking for the best bang for the marketing dollar.

“And so establishing some efficiencies in that spend in March and June – efficiencies and conversion capabilities — is critically important to managing my entire annual budget.

“The ability to leverage digital technology to optimize that is quite significant.”

Among the things HCF is doing is eliminating wastage by qualifying out people with no interest in health insurance and existing customers.

It is also leveraging a comprehensive customer segmentation analysis and local area marketing to understand where potential customers live, which messages they respond to, and what drives people to call or come into a branch.

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Weekly media optimization cycle boosts efficiency

A monthly all-departments meeting to discuss customer sales and churn rates has been replaced by a weekly marketing and media optimization meeting from March to July. That involves the media agency, and representatives from HCF’s call centre, sales and customer experience teams, as well as advertising and analytics from marketing.

HCF’s media agency ingests branch, call centre and internet sales and reports share of voice and digital advertising activity.

“The analytics department will report back to us in terms of what they see that meaning, what’s working, what’s not working, and what do we need to change,” Williams says, “(as well as) what’s happening on the website, what pages are converting where, and where do we need to optimize particular pages on the website.

“That’s not a completely perfect conversation at the moment because I would say most times we spend at least 15 minutes talking about the data and whether the data’s right. But at the same time there are almost always insights that then may drive what we do next week.”

Our digital conversion rates have absolutely improved. The mix of our media has definitely improved. Our share of voice for the same marketing dollar has definitely improved.

Another interesting initiative is a media experiment team that has been established specifically to conduct the type of test-and-learn experiments that underpin agile marketing philosophy.

“On the media, we’re just commencing what we’re calling an experiment team for media so that will be a series of allocating small pockets of money to test out a theory in media buying,” Williams says.

Traditional metrics improve due to agile media optimization

So how does HCF measure the impact of its adoption of agile marketing? Williams says many of the traditional marketing metrics the business tracks relating to media effectiveness have improved as a result of the weekly media optimization process.

“Our digital conversion rates have absolutely improved,” she says. “The mix of our media has definitely improved. Our share of voice for the same marketing dollar has definitely improved.

HCF is adopting agile media optimization strategies in branches and online.

HCF is looking to engage with customers via content such as its relaunched Health Agenda magazine.

“The call centre’s a big channel for us and the branch is a big channel. Online could be a better channel for us, which is part of what we’re working on.”

One area still under review is how HCF works with individual teams divided by channel within media agencies.

“Media is still bought as digital and outdoor in different (silos) — digital display, performance, search — and that comes back to us to oversee and administer,” Williams says. “It’s all a path and an evolution but it’s a long way from where it was when I started.”

Business outcomes from agile marketing

Sales leads, conversion rates and churn, or lapse, rates are among the key business indicators for HCF that marketing tracks, along with return on marketing investment.

“The KPIs that we absolutely would be tracking are what are the leads that we’re getting through – hot, warm, cold leads — through each of the different channels and what’s the acquisition that comes through that,” Williams says.

“The longer-tail measurement is lapse rates. Looking at the quality of who we’re acquiring and when they lapse and what their profitability is, is a longer game but is also part of the strategy of where you acquire them.

We’re just commencing an experiment team for media that will allocate small pockets of money to test out a theory in media buying.

“You want to acquire people who are joining the fund for the right reasons not the wrong reasons. So that’s what we’re managing to improve.

“The other metric we would look at is longstanding members and what we can do to retain them. Often keeping the lapse rates down is about how you engage people.”

HCF is doing that through apps that allow people to engage with HCF in different ways, and a more focused content offering through its Health Agenda magazine.

“We’re working our way through how we reward loyalty,” Williams adds.

“At the end of the day there’s one big metric which is how much money do you spend in marketing — on media and all the money on salaries, media, creative — and how many total members are there in the fund, and that’s the big metric. That ratio’s looking good. That ratio is on target for me and it’s improving.”

HCF anticipates its digital agile media future

HCF’s media channel mix has changed due to its media optimization process, Williams says. The mix was reported as 40%-50% TV, 35% digital and the remainder on outdoor prior to the May relaunch.

“We used to be mostly on TV and because we don’t convert online, the perceived value of digital was quite low when I came in,” Williams says.

HCF's brand transformation and agile media optimization interview with CMO Jenny Williams

“What we’ve managed to do is create some visibility of the alignment between those two. We measure, for instance, search response rates when a TV ad is playing so we can tell how much interest an ad generates and what spots are working better for us than others.”

Williams says while that kind of insight has led to more responsiveness, the ability to optimize TV is limited because ad spots are bought 2 months in advance. But she’s betting that will change within a few years — creating a much bigger potential upside.

“We’re putting a lot of focus on how we can leverage this agile test, learn, optimize methodology on our digital channels because you can buy them in a much more responsive way programmatically,” Williams says.

“We want to get that model right because my belief is within 5 years we’ll be buying TV and probably outdoor digitally too so I want to be really baked in terms of that way of working by the time those opportunities exist for us.”

The internal impact of agile marketing

Internally, there’s been a marked change in the way the marketing team has been asked to work, moving away from long-term up-front planning to a more iterative planning and briefing approach.

We’re putting a lot of focus on how we can leverage this agile test, learn, optimise methodology on our digital channels. We want to get that model right because within five years we’ll be buying TV and probably outdoor digitally too.

But there has been a measurable, positive impact on morale despite big, transformational projects on which HCF’s marketing team has been working.

“It’s been a process,” Williams says. “I think the marketing team are incredibly enthusiastic. I don’t find any issues with my team in terms of getting on board.

“The brand launch which took place earlier in the year — that was a lot of work. In the 6-9 months leading up to that my team worked really hard and none of them seemed to have an issue with that.

“In fact, our employee opinion survey indicates that they were all really motivated by that process.”

An inclusive approach

Marketing has also moved away from a black-box internal attitude in marketing — in which work was unveiled to the rest of the business with little involvement in the lead-up — to a more inclusive, transparent approach.

“When we did the brand launch we rented out the top floor of the Museum of Contemporary Art. We actually flew every single member of staff in or asked them to walk down the street and took everybody through what we were doing.

“The feedback from the staff was very different. They were really pumped to have been involved in the process.

“From a brand perspective we’ve now got all these people that call themselves brand cops and they send brand crimes to the brand team when they see something happening, some off-brand poster in the lift or whatever… which is really, really nice.”

Not throwing the baby out with the bathwater

The team is developing a backlog of work requests from the rest of the business, from local area marketing to corporate and admits its agile processes are a work in progress.

“You go through this process where nobody in marketing’s talked to (other parts of the business) for forever,” Williams says.

“Now all of a sudden you say, well, we’ve got this toolkit and we can do this and then they get all excited and then we get overwhelmed with work.

Agile is not only what you do in marketing, it’s how you develop relationships. The expectation you can launch a new capability and have it work perfectly immediately is fundamentally flawed.

“We have to negotiate what the process is. We figure out how we’re going to work with other teams and we develop workflow agreements and we refine those. That is in itself an iterative process.”

“It takes time,” says Williams. “Agile is not only what you do in marketing, it’s also how you develop relationships. The expectation that you can launch a new capability and have it work perfectly immediately is fundamentally flawed.

“It’s going to take us a while to figure out how we’re going to work together so don’t throw the baby out with the bathwater if it doesn’t work from the get-go.”

For more about agile marketing, read Agile marketing: 101 things to know before you go agile.
Or subscribe to Simple’s marketing blog for more content like this.
Are you considering adopting agile marketing methodologies or practices? Were these insights useful? We’d love to hear about your own experience with agile marketing.

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