Commentary
Fools Rush In -- In Search of Magic ROI
- by Pat LaPointe , Op-Ed Contributor, December 12, 2008
Implication: you will be moving into an increasingly cluttered marketplace, where broad reach options will continue to lose effectiveness and highly targeted delivery will come at a higher price as demand outstrips the supply of good inventory and good people to execute. Consumers, too, will become increasingly savvy with respect to their digital media usage patterns, and harder to "impress" with incrementally new ideas or executions.
I know I'll get lots of letters about this post "educating" me on the infinite scalability of the digital media, and reminding me that true creativity is likewise boundless. I'm sure many of you have research that shows how the returns to digital marketing programs just keep growing as the audience of users grows across more and more platforms. Fair enough. But the laws of marketing physics suggest that more marketers and marketing dollars will rush in to the arena than proven executional avenues can accommodate in the short term. And most of them will NOT bring breakthrough new creativity with them. That will create lots of failure and un-delivered expectations, which in turn may slow adoption of otherwise valuable marketing options.
Here's a simple suggestion as you contemplate the great digital shift toward the promise of better ROI: set your expectations based on poorer results than you may have experienced in the past, and/or ratchet-down vendor claims of look-alike results presented in "case studies."
Before committing to the "me too" plan of going digital, ask yourself if your planned online campaigns would be a good investment if they were 10% less effective than originally anticipated. Would your new social networking programs still provide good payback if they had a 20% less impact on potential customers? These may very well be the new reality when everyone rushes in.
In stark contrast, a friend who's CMO of a packaged goods company tells me that while he is continuing to shift the balance of his total spend towards digital media, he's doing so in a measured way built on careful experimentation. He's working on a cycle of plan>execute>learn>expand>plan again. So he's spending 20% more on digital media in 2009 than in 2008, but not moving huge chunks of his total budget all in one big push for magic returns. Nope. His philosophy is "hit 'em where they ain't." He's buying more radio and magazines -- media he's developed clear success cases with in the past, and places where he can more accurately predict the impact on his business.
He may find himself all alone there. But I suspect that's part of the appeal.
If you want to escape the herd move some of your budget into social media engagement. Get a monitoring solution and assign or hire a community manager to start participating in brand conversations. Don't think about it in terms of broadcast or contextual- these models don't fit.
There is a great untapped opportunity and the ability to target is unprecedented- but it requires a complete change in what we know about marketing.
And don't underestimate Twitter- it may be the greatest targeted marketing tool since the advent of PPC.
If you look at this shift in terms of supply and demand; the supply of space left online will get smaller as the demand increases. Depending on your business it still makes sense to look into traditional channels of marketing like events, radio and print. To Martin's point social media is a good tactic if done properly, but the problem is that you've got some many snakeoil salesman out there selling $99/mo packages that it's tainting the space. Social Media is one tactic out of the many you need to consider and to many marketers, you've got to build a plan and integrate everything. If you're pinholed into one area, good luck. As a former CMO, we utilized multiple channels because it makes sense and it allowed us to engage our community at various points in the day, various times a month, etc. It's going to be interesting to see how things pan out in 2009. Great post Pat.
Terrific and unexpected post -- since "online" is right there in the title. Thanks!
Reality checks are so refreshing. You are so right. Not everything on the same level fits for everybody at the same time.
Contrarian strategies only go so far. Likewise, running with the pack carries the risk of not being in "big enough". The success of any investment is tied into its engagement with your target which is readily measured by (among other things) time-spent with that media. Social media time-spent is unquestionablty growing while (terrestial) radio is certainly not. If magazines are talking about intentional circulation cuts and releasing staff writers, what might that say? But in all these, simply going where "they ain't" is risky too. There's a lot of real estate out there that remains empty for good reason. While expectations should certainly be reigned in across the board, maybe in all the options (including the previously mentioned radio/magazines), simply stay where you've been. Media habits didn't change overnite, the economy did. The same media that you've been using likely has much greater flexibility at this point and in many cases you could be just throwing away valuable branding levels that another medium might take months/years to build back. Don't be so quick to toss what might have been a productive relationship with both the medium and/or its seller. If the medium has been failing you is one thing, but don't blame it for something clearly tied to the economic collapse.
That basically leaves us with a product I am sure you are familiar with - "RAMP" by YCD Multimedia as you can see on their site www.ycdmultimedia.com under offering-products-ramp.
It certainly seems to provide exactly the needed glove to this crisis ridden retail hand, especially that of the large food chains market and the fast food market, and provide them with the needed advertising, at the most important place - the point of sale - provide them with on line results to their ads from the registers, thereby assisting tremendously in inventory control and adding directly to the bottom line. On top of all that their other products are all geared to make the purchasing experience a more relaxed one, as well as the running of the store/chain much more effective and less costly, and all digital. Since YCD is already proving ROI here in the U.S., as well as elsewhere in the World, I think they are worth looking into.