• by August 1, 2005

[X1+( (1-X1) (X2 x X3 x X4 x X5 x X6) (X7)] [X10] -- Honestly, we're not sure what all those Xs and numerals mean, but if it's what the future of marketing is all about, then we're pretty sure about one thing: We're screwed. We never did all that well in math, which probably explains why we're writing Riff columns and aren't billionaire software tycoons. So when Kevin Clancy, the head of Copernicus Marketing Consulting, and a man we have tremendous respect for, offered that equation as proof to a roomful of marketers that they've been doing a relatively poor job in targeting media, we began to break into a cold sweat. Actually, that was only half the formula Clancy used to illustrate how marketers should estimate how well they target consumers, the part that computes the "potential revenues" that would be generated by a target audience. By the time Clancy got to the second part of the formula - Profits = [ (potential revenues) - (X8 + X9) ] - a good deal of the audience attending the recent Association of National Advertisers' Marketing Accountability Forum were also beginning to sweat. Especially the ones who knew how to calculate it.

Understanding how to mathematically develop profitable targets is one thing. Actually targeting them is another thing entirely. And generally speaking, most marketers and ad agencies do a pretty poor job, according to Clancy's analysis. In fact, using the much sought-after target of so-called "heavy buyers" in the business-to-business sector, Clancy figured out that dream target would index at a paltry 40 on the basis of relative profitability. That means "heavy buyers" actually generate 60 percent less profit than the average target for B-to-B brands, making them one of the worst, not best ways of targeting.

Don't feel bad if at about this point you're feeling a little lost and overwhelmed. That's exactly how we were feeling before Clancy used a quote by Carat CEO David Verklin to put it in terms even we could grasp: "If you're on the wrong train, every stop is the wrong stop."

Unfortunately, Clancy's speech was an express train, and we were unable to disembark before he moved from targeting to "positioning," noting that most marketers do an even lousier job when it comes to this all-important marketing element. "If targeting is screwed up at most companies, the positioning decision is the victim of criminal negligence," asserted Clancy, adding, "Some marketers don't even believe positioning is a relevant marketing concept anymore."

Of course there are plenty of examples of great positioning. Some of the "great" examples offered by Clancy include:

BMW: "The Ultimate Driving Machine"
Charmin Tissue: Softness
Chunky Soup: "So thick you need a fork"
Coke: Authentic, real, original
Disney: Wholesome family entertainment
Visa: Accepted everywhere

And that led up to a formula that even we could understand:

"Dumb targeting and no positioning yields zero sigma results."

Sigma, of course, is the Latin term used by economists to measure the efficiency of business processes. Six sigma, as celebrated as near perfection in process control, or a defect of something like 99.999 percent. Zero sigma is about as inefficient as you can get, which is about where Clancy puts most marketing efforts.

While six sigma marketing results may be unachievable for all but one in a million campaigns, Clancy thinks it's reasonable to at least shoot for a three sigma, which coincidentally computes to the average number of defects in the average Riff column.