Monday, November 2, 2009

Bi-Partisan Marketing

Wait, I'm not getting political! Nope, this post is about how marketers, not politicians, can benefit from 'crossing the aisle' once in a while.

In Response Marketing 101, we were told 'if you're not measuring it, don't do it'. In Brand Marketing 101, we were told 'not everything that matters can be measured, and not everything that can be measured matters.' From that moment, my colleagues split along Partisan lines - those drawn to the immediacy of generating customer activity ('response activity'), and those drawn to the business of changing customer sentiment ('brand activity').

But a Partisan focus on either leads to lost opportunity. In this example a response marketer forgot that '...not everything that matters can be measured'. As a result, he killed his own marketing effectiveness.

It's true that we shouldn't do what we cannot measure. But that does not mean discarding 'brand' activity, for example. It means we should be measuring it a heck of a lot more.

To be effective, we need to be Bi-Partisan - to invest and measure optimally between the 'brand' and 'direct' toolkits. Easy for me to say, you might be thinking. And you'd be right. Sophisticated budget optimization, a la P&G, can take a ton of PHDs, a few more tons of cash, and truckload of courage to explain it to your CFO.

But there are simpler approaches to budget planning that are within the reach of today's lean marketing operations. The simplest I use shows how 'direct' and 'brand'-oriented investments complement and amplify each other - and how they're stronger together than apart.

So here it is. Quick and Dirty.

1. Size up your investment focused on 'direct' objectives.

This is your media investment against prospects who are ready to buy. We'll call them 'low hanging fruit'. You'll measure this primarily on responses, actions, conversions etc. PPC search, organic search, affiliate marketing, and display are all in the toolkit.

What proportion of your budget should you invest in direct activity? The big temptation is to over-invest. Many do. 'Look, we're getting great numbers from this PPC test. It's proven. If a little's good, then a lot's better, right?'.

Wrong. Not for aspirin, and not for media investment. Just look at the example above. Your low-hanging-fruit opportunity is finite. Sooner or later you (and your competitors) have cleared all the branches within easy reach. Then your response rates decline. Fail to act, and your budget is soon eaten by a death-spiral of decreasing gains.

So plan your 'direct' investment against a realistic sizing of your ready-to-buy opportunity. It's a product of the 1) total market size, 2) how much of this market is truly available to you, and 3) your natural competitive market share. Invest below these levels and you're leaving business on the table. Invest too far above, and you're not only wasting money - you're losing precious resources you'll need for step 2.

2. Size up your investment focused on 'brand' objectives.

'Brand' investment has a specific role: To turn consumers who are not ready-to-buy your brand, into consumers that are. To use our analogy, it's like growing more low-hanging-fruit for you to harvest. You will interest, educate, and/or persuade your audience. You'll need to earn their attention too, which is another story.

Brand investment should be totally accountable: David Ogilvy said 'if it doesn't sell, it's not creative'. So measure uplift in brand image, but equally you measure uplift in your 'direct' response rates. Your toolkit can include movies, games, useful utilities, information feeds, newsletters, and a bunch more.

So how big should your brand investment be? A $64million question. Literally, in some cases. But we're keeping it down-and-dirty here. So here's an example. This analysis of the effectiveness of a PPC+Display campaign from Nick Drew, for Microsoft, will help us...
This shows that 'brand' activity, looking ineffectual when measured in the far-left column, DOUBLED the effectiveness of 'direct' activity. This suggests a business case for a 50/50 split between 'brand' and 'direct' investment; maximizing both the volume of low-hanging-fruit (brand) and the efficiency of harvesting it (response).

Without measuring this interaction of 'brand' and 'direct', hungry marketers have looked at the far-left column, discarded brand activity as less effective, then wondered where that good PPC ROI flew off to.

I've seen the color of effective marketing. And it's a distinct Bi-Partisan shade of Purple :)

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