In a perfect world of cause and effect, every advertising action creates an immediate reaction. Since Force (result) equals Mass (amount of input) times Acceleration (rate of change), marketers who know both inputs M*A should be able to predict F — and thus force the result. Decades ago, such analysis didn’t matter much in advertising, back when magazine copy and radio jingles were king, but since the rise of digital media, where every nuance can be measured to a microscopic level, marketers now are expected to map everything to cause and effect.
Did you spend $10,000 on sky-writing “I love you, customer” for 1,000 sales? Congrats. That’s a $10 cost per sale. She loves you. She loves you not.
However, this is wrong, at least in many areas of advertising. Consumers are not just trigger-response lovebirds, and not all marketing can be evaluated on a pure kiss-or-no-kiss basis.
The challenge for marketers is that consumers are not primed to respond like a teenage boy on prom night at the first stimulating impulse. To paraphrase the great Don Peppers, consumer desire is not a binary switch; instead, it is a volume dial.
The better metaphor for marketing response is interplanetary gravity. Customers circle your product or service at many distances, from the remote awareness out at Pluto’s orbit to the closer asteroid belt of consideration to Mercury’s rapid inner circle of intent to the inbound plunge of a comet making a purchase. The sun’s first tug on an object far outside our solar system creates a complex, slow journey inward, and if that object doesn’t immediately fall into our star, we should not say gravity has failed.
Our media agency is asked to solve this challenge all the time — does advertising work, will it work, if we spend $1,000,000 on advertising medium X what will the immediate response Y be? Many campaigns can be predicted at this level, and tracking each channel’s performance vs. its peers can lift results by 50% or more. Yes, advertising forecasting and measurement is critically important, and we do it with top-of-funnel direct-response tags to bottom-of-the-cycle CRM system integration.
But … a myopic focus solely on direct response ignores the need for consumer education, product illustration, message exposition, and relationship nurturing. Relationships, after all, have beginnings and middles before consummation, and the courtship between any two entities is typically a delicate affair.
Did you buy a car the first time you thought of an upgrade? No.
Did you grab the first smartphone you saw immediately after learning that phones could act as mini computers? No.
Have you ever bought anything several weeks after seeing the product ads, only after the gnawing hunger of desire worked its way through your consumption system? Of course, yes.
Pop quiz: Your vacuum cleaner breaks next Friday night, one day before you’re hosting a huge party. You rush out Saturday morning to buy a new vacuum. Are you interested in one of the newfangled bagless brands you’ve seen advertised months ago? Check. But any marketer measuring those print or TV Dyson ads from those many months ago likely was disappointed in the immediate sales results — if responses within the next week were expected then.
Linear modeling works in advertising. It is also only one type of modeling.
Linear modeling means drawing a line between two things, and it is a superbly simply math formula that fails on most levels. Let’s go back to love. If your spouse measured the ROI on you the night she went home after meeting you for the first time — perhaps with a smoldering glance of eyes and mild chemistry but you didn’t do a damned thing, no engagement ring, really? — she’d check off “zero” on a spreadsheet and cancel all future communications.
A better solution is to look beyond stimulus A and end point B, and map a series of intermediary milestones that your newfound love must reach — and be re-stimulated in. A simple scenario:
- If a customer lead is generated at $100 and you have a 10% conversion rate, you have a $1,000 cost per sale.
- If you spent another $20 on two additional marketing touches in an interim step on the same customer lead — say, an outbound phone call, and a nice direct mail piece with a product DVD — your cost per lead would rise to $120. But if those two additional touches boosted conversion rates from 10% to 15%, your cost per sale falls ($120 cost per lead / 15%) from $1,000 to $800.
With a little more effort, you’ve achieved a 20% improvement in advertising performance.
Consumers have modalities. Their urges are held in restraint. They learn about you long before they want you or need you.
You aren’t selling the customer. You are building a relationship with a customer, and even if that connection will be fleeting — climaxing in only one sale — in the early stages, love takes time.
Image: Pat McDonald