The Best/Worst Mistake

Or with incomplete data

As a marketing and advertising consultant, I'm frequently asked for my opinion on spends by medium, or to put things in a less jargon-intensive way, how a client should best spend their money. (Independent of my fees, of course. That expense is always defensible. Moving on.)

This comes from a good place: the desire to spend every dime as if it were your own is a virtue that I applaud. Marketers and advertisers can and should always look for ways to optimize their spend, because the cash you save can help the business in any number of ways, some of which multiply quite nicely. So I'm in favor of the instinct... but sometimes, very leery of the approach.

The simple fact of the matter is that ad mediums are like tools. You may have one that you like more than others, but if you only ever use one, you probably aren't terribly crafty, or able to complete a number of different projects to optimal conclusions. What's even more telling and basic of a mistake is when a client wants to turn off a medium entirely, usually because they've got data that shows one approach is wildly more effective than others. "(Medium X) just doesn't work for us." Hmm.

The most common target in the current environment? Ad banners in the digital space. Especially when the client has been doing lowest cost work with programmatic approaches, and find themselves disappointed with low click rates. Or even worse, clicks that didn't translate to sales in e-commerce plays, where the client might feel that the traffic was fraudulent.

To be clear about this, banners have issues. Dynamic work with a retargeting component are historically your best bet for higher response, but those can easily get into issues of retraining your audience to abandon shopping carts for a better price. Banners that appear on questionable sites from run-of-network buys don't do much for your brand, and many marketing and ad pros aren't thrilled with bankrolling bad actors like click fraudsters, fake news sites. or dark web tricksters, which is a sizable percentage of digital advertising right now. With all of that in play, it's a hard sell to spend more, not less, on the channel, mostly by switching up to premium sites, and away from remnant inventory.

But here's the not so dirty and not so secret point that old-school marketers always knew, and new-school folks miss because they are being misled by incomplete data... very few consumers come to a purchase decision from a single channel. Even a customer that buys from a clear attribution stream can have that data polluted by offline messaging, or have their decision making impacted by ways that the data never catches. For instance, a reminder email that brings a customer back to the site after a banner got them there in the first place, or a click on a banner after search engine work for the previous visit. Just because a channel took the consumer for the last mile, does not mean that all of the previous miles were worthless.

In a time before digital, marketers knew that a diverse messaging plan was optimal. Consumers would see a television spot, a print media piece, hear a radio mention, and maybe even see a billboard, possibly all in the same buying cycle... and that buying cycle might last years. Since we had no data that claimed to isolate channel effectiveness, a diverse plan was protected, because you didn't "know" what didn't work. Even call center or direct mail data was inherently suspect, and you rarely, if ever, made a decision from a single set of data. (More often, you just used that data to try to negotiate a better price.)

But until we have true multi-channel attribution, possibly from technology that doesn't even exist yet or a consolidation to everyone using and consuming through a single device (best bet: smartphones, and even that seems unlikely for a good long while, given how problematic it is to make some purchases that way), what we have is the worst of both worlds. Uncertainty, with the illusion of certainty.

If you are the kind of person who can't tolerate that level of vagueness in your day to day, or just have a jones to kill channels with certainty in your heart, there is a way out. Pure old-school A/B testing, where you split your audience in separate but equal groups, then expose them to different advertising mixes. The trouble is that it's usually slow, not helpful unless you have enough data to achieve statistical significance (and if that comes back to relatively rare events like sales tracked by digital channel, that can be *really* slow), and still prone to cross-channel pollution, so your significance levels have to be quite high. You also have to have the discipline to leave short-term money on the table, since the less effective method will have to play out. If your managerial situation is more shoot the messenger than learn from deviations from the norm, all of this can be quite uncomfortable, in a social and professional sense.

Or you can do what I usually wind up recommending instead, and to consider the following point.

Think about the best in class advertising players of the age, or even the best players in your space, and ask yourself the following question.

Do they turn off entire channels of communication with consumers?

(Probably not.)

And if they don't, and have you outspent or outgunned in experience and exposure...

What do you know that they don't, and how confident are you in that knowledge?

* * * * *

Feel free to comment, as well as like or share this column, connect with me on LinkedIn, or email me at davidlmountain at gmail dot com, or hit the RFP boxes at top right. RFPs are always free, and we hope to hear from you soon.