(by Bob McCurdy) A friend in Sioux Falls forwarded an article from WARC (World Advertising Research Center) last week titled, Video Impact: The Value of Mass Marketing Compared to Targeting, which detailed an in-depth study conducted by SevenOne Media, one of Europe’s leading sales organizations for audiovisual media. The goal was to determine if dollar-for-dollar, “targeting” or “broadcasting” generated more revenue.
For this A/B test, SevenOne chose to compare broadcast TV and targeted online video. Each medium was allocated the same budget, identical creative and the same offer. Two products were chosen to test, a coffee drink which had been “dark” (not marketed) for some time and a newly introduced yogurt, which had no previous advertising history. While radio was not included in the study, the results still highlight the importance of generating broad reach, an area in which radio excels.
The results might surprise some. The net sales revenues of the coffee drink were twice as much in the marketing area exposed only to broadcast TV and 10x greater for the yogurt product. The takeaway was that broadcast builds broad reach beyond any defined target group, with these “outlier” consumers accounting for considerable sales. The article referenced that these findings are consistent with other research, citing Professor Raimund Wildner, analysis of the sales of 2,000 CPG brands using GfK consumer data.
This study and Wildner’s findings supported the writings of Byron Sharp author of “How Brands Grow” (If you haven’t read it, read it) and all of the work analyzing the IPA Databank by Binet and Field, with all agreeing that advertising is most effective when reaching all potential buyers in a product category, not only those currently buying the product or category, and that targeting too narrowly often results in lower revenues.
The bottom line is that there is no such thing as “waste” in marketing due to what’s known as the “Law of Moderation”, which states that over time, the current non-buyer becomes a buyer and vice versa, the current heavy buyer becomes a lighter buyer, the current light buyer becomes a heavier buyer. Think of your own purchasing habits.
Another term for this phenomenon is “regression to the mean” which simply states that over time extremes such as heavy and light buyers move closer to the average. Both “Moderation” and “Regression” are based upon the fact that consumer circumstances and purchasing behaviors evolve and are fluid, with the future economic value of any consumer differing from their current economic value. Consequently, it’s to an advertiser’s advantage to reach every consumer who has the wherewithal to purchase a product/service regardless of whether they currently purchase/use it or not. Advertising only to the “interested” caps revenue.
Broadcast advertising exposes us to options, options that we might never know about if a product is marketed too narrowly. It alerts us to products and services we never knew we wanted. It creates intent and consideration which is particularly critical for most products, including auto dealerships. Every one of us buy products today we would not be buying had we not been exposed to advertising to which we were not the intended target.
So when it comes to marketing, nothing is “famous” without a lot of people knowing about it. Fame requires reach, which today still requires broadcast. Radio, when bought properly, delivers that reach according to Nielsen’s Q1 2018 Total Audience report with 92% of all adults and 94% of all A25-54’s tuning in weekly. No other medium reaches more.
A balanced approach in marketing remains the best approach. “Targeting” is akin to salt in that some is good, too much is not.
Bob McCurdy is The Vice President of Sales for The Beasley Media Group and can be reached at [email protected]