Tipping the Iceberg
Missing the mark with messages is costly (and common)
Sometimes a number can be both frightening and liberating. Like this one from Don Schultz, a professor of integrated marketing communications at Northwestern: Only 4 to 5 percent of customers account for the preponderance of a consumer product's sales. Does that make the other 95 percent of a marketer's customers chopped liver? Maybe a little bit. Because not only does that 4 to 5 percent comprise most of your sales and your profits, the rest of your customers often cost you money to acquire.
"What that says is, I better figure out who those 5 percent are and pick them up in a car and drive them to the store and help them shop," says Schultz. That's why he is advocating a complete overhaul in the way media planners approach campaigns. Rather than focus on the distribution of a message, they should concentrate on finding the customers. By flipping their thinking around, they'll have a much better chance of reaching prospects with the right media mix and, in so doing, gain a bigger share of dollars for digital budgets.
"Most advertisers and marketers will have some clear definition of who they are trying to reach and it could be broad, like women ages 18 to 49, or it could be individual names and addresses. All I am suggesting is starting at the other end of media planning. Start with what media forms they consume as opposed to what [the marketer] wants to do," Schultz says.
In some ways that sounds elementary, but many shops are still married to old ways of thinking. "We have used averages and broad statistical analysis for so long that we have lost sight of what the marketplace is really like," Schultz adds.
Instead, media planners should consider four critical measures in media consumption: what media is accessed, how much time is spent with each media form, what media is used together and which media has the greatest influence on product purchase. Makes perfect sense, right? So obvious that all marketers must do this in their sleep?
Because, says Schultz, if you calculate cost weighted by the influence, then auto marketers overspent last year in TV by $3 billion, underspent in radio by $1.6 billion and underspent online by $1.5 billion.
Other marketers are misfiring, too. Computer marketers, as an example, should have been marketing online, in magazines and via email, while radio is much less relevant to prospective computer purchasers, Schultz says, citing data from June 2008.
The key to success is to study consumption. Most people consume multiple kinds of media at once. They read a magazine while talking on a cell phone or use Twitter while watching TV. Knowing the media consumption habits, preferences and combinations for your prospective customers is the proper way to plan a campaign. "It's what media combinations are most important to people and having a clue how to put media combinations together," says Schultz.
And that means reach isn't all it's cracked up to be. "It's not how many messages are distributed, it's how many are consumed. It's not what is most efficient, it's what is most effective. It's not how big your share of voice is, it's how important your customers think you are."
That 4 to 5 percent may seem small, but as the saying goes, good things come in small packages.