(By Bob McCurdy) Over the Christmas holiday I went back and reviewed notes from the previous 12 months. What immediately stood out was the widespread recognition of the critical role “reach” plays in marketing success. Here are some of highlights from last year’s notes…
The article, Reach vs. Frequency in the ROI stakes, suggested that heavy frequency reduces ROI, as the 4th, 5th, 10th exposure costs the same as the first but the ROI from those additional exposures is considerably less. Commercials do have a lingering effect, so any repeat exposure within a short time frame is less efficient than reaching an entirely new potential customer.
The article, Reach Is the New Black: Advertising’s Mass Reawakening, stressed that it takes big reach to generate big sales, concluding that narrow targeting has its uses, but radio and TV offer greater impact.
A WARC article titled ROI in 2017: Effectiveness in the Digital Age, discussed how to strike the right balance between close targeting and mass reach.
Another WARC article, titled Marketing in the Digital Age: Binet and Field On How Media Choices Impact Effectiveness, explained that penetration and reach is a far more important driver of effectiveness than loyalty, and that mass reach channels still deliver much bigger business results than newer digital channels.
Rance Crain, former Editor-in Chief of Ad Age, wrote in Ad Age, that casual or indifferent buyers are ignored. The point is marketers, to grow in a non-growth environment, need to become more aggressive in building their brands by reaching out to once-in-a-while churchgoers rather than preaching to the choir over and over again.
In the article How to Grow Brands by Targeting the Masses, Gordon Euchler, Head of Planning at BBDO, noted that, “Targeting people with a high propensity to purchase has a tendency of emptying the pool of people in the market without refilling it.”
At an Advertising Research Foundation conference, Nielsen Catalina unveiled a study which concluded that reach was an important sales driver, accounting for 22% of sales growth; the only factor listed above it was ad creative, with 47%. Targeting (9%), Recency (5%) and Context (2%) brought up the rear.
Nielsen published the State of the Media — Audio today 2017, highlighting that radio reaches more Americans each week than any other platform.
Mark Fratrik, Senior VP and Chief Economist BIA/Kelsey: “When retailers, car dealers and local restaurants want to reach a large audience announcing a particular promotion or sale, they often turn to radio as part of their advertising mix.”
At WARC’s How to Be a Smart Marketer session in Cannes, Ehrenberg-Bass Institute’s Professor Rachel Kennedy argued that targeting should prioritize the buyers a brand hasn’t reached before. Brands grow when they bring new people into their brand who have not bought from them in the past. If you’re using targeting to get to people you haven’t got to in the past, fantastic. If you’re using targeting in any way that’s limiting who you’re talking to, you are limiting your potential for growth.”
The Ad Age article P&G’S $140 Million Lesson on Transparency, touched on P&G’s slashing of $140 million of digital spend without experiencing any negative impact on their business results. Marc Pritchard, P&G’s CMO said, “We targeted too much, and we went too narrow.”
The article Is Efficiency Killing Brands concluded that the key to brand success is penetration. Loyalty plays a role, but a small one. It is penetration that divides the winners and the also-rans — attracting new people requires “wastage.” You have to reach those who aren’t currently interested.
The article Target Broadens Beyond Hispanics, Families With Kids For The Holidays, highlighted how Target missed out on revenue by not tailoring its messaging to reach a broader audience.
At an ANA conference, Clorox’s CMO Eric Reynolds called for new focus on building brands: “We were targeting the kinds of people who already loved us … and kept pushing our investments down to them. We sold stuff. The ROI went up. But guess what? We forgot the golden rule of brand building: Brands are built through penetration. There’s only so many bottles of Clorox our biggest fans will buy.”
Ad Age article, Five Reasons Brands Have Never Been More Challenged, referenced data from Millward Brown’s BrandZ report which concluded that one of the main reasons is that “targeting is not a substitute for mass reach.”
The article 3 New Year’s resolutions for CMOs has resolution No.1 as simplifying everything, referencing Byron Sharp’s “How Brands Grow” (Parts 1 and 2) in which the author simplified marketing success down to driving awareness and increasing penetration.
Some pretty smart marketing professionals came to similar conclusions in 2017, that reach is a major driver of sales. Twenty-five years ago Erwin Ephron said, “Reaching many is better than preaching to a few.” It seems that advice still holds true.
Low reach unquestionably makes it harder to maintain the same sales level, let alone grow, and in 2018 there’s no medium that delivers greater reach when budgeted, planned, and scheduled properly, than radio.
Bob McCurdy is The Vice President of Sales for the Beasley Media Group and can be reached at [email protected]