Friday, Jan 28, 2022

7 Marketing Myths Busted

Marketing can do better. Half of ad campaigns and 80% of new products fail. Advertising ROI is nothing to write home about. Trackers tend to be..

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Ironing out your marketing strategy

Marketing can do better. Half of ad campaigns and 80% of new products fail. Advertising ROI is nothing to write home about. Trackers tend to be retrospective readouts, not predictive. Repeatedly getting these lackluster results, there must be marketing beliefs held by many that are plain wrong.

Seven marketing myths

That said, let us turn our attention to busting seven popular marketing myths:

1. Increases in penetration are what drives increases in brand share.

This is like thinking if you buy ice cream it will get sunny and warm. Repeat rates are just as correlated to share, maybe more so. Penetration is an outcome of the Beta distribution of consumers’ probability of buying your brand. Shift the curve to the right and you will see increases in repeat rates, share, shorter purchase cycles, and penetration. If you focus on penetration, it suggests you will underserve existing customers. This belief in penetration leads to the next myth, that of broad reach with advertising.

2. Buying the most reach is the best media strategy.

The MMA/Neustar research I helped to design proved this claim to be false. The best strategy is to target advertising to audiences that are rich in their concentration of Movable Middles. You can expect somewhat less reach, but 50% higher ROAS (return on ad spending) and even 13% higher conversion rate of non-buyers into buyers.

3. Targeting is a bad idea.

Related

Why Targeting Eats Reach-Based Media Strategies for Lunch

A Byron Sharp pronouncement that runs counter to every marketer’s practice in a world of addressable marketing. My research via the MMA, Viant, and NCS proved targeting can greatly improve advertising results; one segment we called “The Persuadables” consistently returned 16 times the ROAS of other consumers. Note that the great majority of non-buyers of your brand have no interest in it and never will. For them, your advertising is the gorilla in the video where kids are bounce-passing basketball – it is not even noticed. Only the subset of non-customers (20% at most) who share important profiling characteristics of customers are worth targeting. Old school marketing is top-down, broad-reach-based, and will institutionalize mediocre results.

4. ROI measurement is contrary to good marketing. 

The latest nonsense I read is that ads intended to build brands should not be judged by ROI metrics. Ample evidence proves if ads don’t work in the short term, they have no impact in the long term. Wrap yourself in the branding flag if you like, but it is a road to mediocrity. All ads have sales and brand effects that can be thought of as an (x,y) plot. Both x and y better be non-zero. And the world is moving in this direction as media companies are now competing on outcomes guarantees.

5. Shopper journeys always start with Google search (the zero moment of truth).

Not all journeys start this way, especially those that lead to purchases. Via DISQO behavioral tracking, we have found that the conditional probability of an add-to-cart event is much higher for brand-specific searches that begin inside an e-commerce environment and especially high if you get the consumer to your product page. While many marketers try to drive traffic to their brand.com page, I would shift focus to my product page and brand narrative inside Amazon, Walmart.com, BestBuy.com, etc.

6. There are no strong or weak brands, only big and small brands.

This is an Andrew Ehrenberg pronouncement that is not supported by the R&D I did, which led to a JAR article cited in over 1,100 papers. Brand tracker data, if collected and analyzed correctly, can be predictive of changes in share (so sorry, Andrew).

7. The best addressable marketing approach is to put your own customers on a suppression list and target non-buyers.

This means that programmatic advertising is never sent to your own customers. One QSR CMO told me this was their practice and I asked, “What do you think your share of wallet is among your own customers in your frequent shopper program?” He said, “Well I admit it is much lower than we would like it to be”. I replied, “That is why you are doing exactly the wrong thing… Increase ad frequency to your own customers as they will be most responsive to your advertising, driving short-term gains and longer-term retention!”

Closing thoughts

Let me close with some new ways to create value from your brand trackers. First, I would suggest that marketers do more with targeting and media tactic finetuning to drive up ROAS. If the counter-argument is that we are mortgaging the brand, great, let’s have two tentpoles on our KPI dashboard: (1) average ROAS and (2) measures of brand strength from trackers. If you are driving up ROI with no deterioration of brand, you are doing a good thing. Secondly, I believe trackers can be predictive and I have built a number of trackers that way. You must integrate attitudes and behaviors to measure brand strength and then create a metric I call strategic share (the market share your brand is entitled to given attitudes); using ARIMA methods, this was proven to be predictive of next quarter results.

I know challenging institutionalized beliefs can be lonely, but as Ted Lasso says, “Taking on a challenge is a lot like riding a horse, isn’t it? If you’re comfortable doing it, you’re probably doing it wrong”.

Header Image: Campaign Creators, Unsplash

The post Busting Seven Marketing Myths first appeared on GreenBook.

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By: Joel Rubinson
Title: Busting Seven Marketing Myths
Sourced From: www.greenbook.org/mr/levelup-your-research/busting-seven-marketing-myths/?utm_source=rss&utm_medium=rss&utm_campaign=busting-seven-marketing-myths
Published Date: Mon, 06 Dec 2021 12:00:54 +0000

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