by Bob Walker | Mar 15, 2023 | Marketing and strategy, Marketing research, Media Planning, Multi-touch Attribution
Companies that focus on buyers who have bought your brand – even at a minimal level – are significantly more likely to shift more of their total share of consumption to you. First you must find them, and then target them effectively with incremental ad spending.
A recent study by the Mobile Marketing Association focused on a common consumer category and showed that those with a 20%-80% propensity to buy a brand are much more responsive to incremental advertising. Those living in the “tails” of the buyer distribution are either (a) basically non-responsive because they buy so little from you, or (b) are already so loyal that additional ad spending has no incremental effect. Within this middle band of buyers, the power of your incremental targeted advertising is very strong. The bonus: ad campaigns built around the moveable middle also improved reach.
So who are these buyers in the so-called “moveable middle” of your brand’s overall profile of users? Unlike promotionally-driven “brand switchers”, the moveable middle segment represents buyers at many different levels of past purchase behavior who relate to your brand story. Their responsiveness to advertising grows as their share of category needs approaches the center of this distribution. Decreasing marginal returns occur at the tails. The movable middle holds many more attitudinally receptive, persuadable buyers as defined by their mid-range probability of buying your brand.
The result of this recent research shows that the moveable middle of a company’s product user base can be 5x-10x more responsive to advertising than buyers at the tails. This makes incremental advertising and marketing spending against this middle segment of buyers an incredibly fertile area to allocate incremental ad dollars because the return on ad spend (ROAS) is so high. There are several reasons why this is true:
- Those who are already buying your company’s products or services are not buying all of their category needs solely from you. This volume can be significant, but it is likely hidden from you. This implies that they have much larger volumetric needs than they are directly telling you as one manufacturer.
- There is a high probability that products in the category have not been effectively differentiated, and benefits or features that are important to buyers have not been captured by you. Additional ad spending highlights those differences and motivates additional purchases. Optimizing your messaging is clearly indicated here, too.
- Buyers who are already buying 20%-80% of their category needs from you are more receptive to your message. This forces them to exclude other alternatives once your message is received.
- The movable middle already has the advantage of familiarity with your brand or product. They know the things you can provide. Advertising doesn’t need to work as hard among people who have familiarity. It doesn’t have to generate awareness: rather it simply refreshes you in consumers’ minds.
Marketing and advertising plans focused on the moveable middle almost always yield better response curves to incremental media spend than dollars spent on reach and frequency. Recent academic research has attempted to dispel this notion. They believe that marketers should target broadly (i.e., to all buyers). It is true that buyers continuously enter and exit a category, hence on its face this makes some intuitive sense. However, this thought process (a) ignores that buyer entry and exit can be quite slow, and as a result (b) the ROAS of a reach-only based plan will be low. It takes significant amounts of time and ad spend to generate even small increases in awareness-to-trial conversion. A company may not have a 3-, 5-, or 10-year window to see if their strategy was effective at bringing in new buyers. By then, the company could be out of business!
Certainly, some ad spending must focus on long-term brand building, but with increased direct and digital relationships with customers (1st party data), it makes no sense to ignore your own ability to target those we know are receptive to your product story. Focusing on the movable middle is an “outcomes” or “performance-based” marketing concept that complements your longer-term brand building initiatives. Strategic brand marketing is needed to support the core product story and promote user differentiation, but properly targeted media delivery generates much higher reach-to-conversion, and therefore longer-term retention of the customer to the business. And it has the nice side effect of increasing reach, too.
Caveat: over-targeting or over-promoting can have negative longer-term consequences that can diminish responsiveness to additional media spending: there must be a balance. Exclusively focusing on the movable middle at the expense all other initiatives to build brand equity fails to recognize that new buyers do enter the category from sources other existing buyers. But the evidence that focusing on the moveable middle of your own brand’s buyer distribution is a smart and effective way to start..
At Surveys & Forecasts, LLC we have conducted numerous targeted media and research programs that focus on the movable middle, and proved the ROAS power of incremental spend. For more information, contact us info@safllc.com. We look forward to hearing from you!
by Bob Walker | Feb 25, 2020 | Marketing research, Marketing terms, Media Planning
The New-York based Advertising Research Foundation ARF has released a glossary of commonly used marketing research and creative testing terms, aiming to ‘bridge the gap’ between creatives and researchers, and to help professionals keep up with the ever-changing language of marketing. Robert Walker, CEO of Surveys & Forecasts, LLC was the editor, personally reviewing over 1,000 submissions. The glossary is featured in recent editions of Forbes, Media Village, and MR Web.
The ARF released this resource for free on its website to those in the industry, students, and the general public who might be interested in learning more about these marketing and advertising terms. An example for “ad recall” can be found here.
The ARF uses industry-level research to help its 400 members enhance their marketing advertising initiatives. The ARF describes this effort as ‘the world’s first, definitive glossary’, which will provide standardized terms, and serve as an initial set of guidelines for the industry around often confusing terminology. After one such study, the ARF found a lack of trust and misalignment of terms often fuels the ‘creative-researcher disconnect’, resulting in miscommunication and wasted effort.
ARF Chief Research Officer Paul Donato told Forbes: “Methods of creative testing are changing very rapidly. We have recently published a survey among creatives and researchers. Creatives tend to want to use traditional methods of focus groups and ethnographies. Researchers tend to want to use biometrics, facial coding and neuroscience. The glossary attempts to bridge that gap.”
For more about the research and consulting services of Surveys & Forecasts, please visit our site or contact us.
by Bob Walker | Jan 25, 2020 | Media Planning, Multi-touch Attribution, ROAS
Marketers in the programmatic digital ad space are no doubt familiar with the term “multi-touch attribution”, or MTA. When we speak of attribution in this context, we are speaking of a specific digital “touch” in the customer journey to which we can attribute more or less weight that leads to a “conversion”. A conversion is something measurable: it can be the click of a mouse, a visit to a website, a sale, or some other behavior desired by the marketer. The availability of data at the granular level (individual, behavior, time) has led to the field of analysis known as MTA modeling. Each touch along the attribution train may carry more or less weight depending on where it falls in the sequence of touches for each individual consumer.
Now enter the more recent notion of “walled gardens” (aka the ‘attribution apocalypse’). Major providers of digital data, e.g., Facebook, Google, Amazon, Apple, smart TV manufacturers such as Samsung, digital ad exchanges, first-party providers, and any other sources that monitor digital journeys (aka ‘digital exhaust’), are starting to say “we don’t want to play with you”. They are beginning to erect significant barriers to digital data access due to two key factors:
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Regulatory pressure about privacy (e.g., GDPR, California’s CCPA, and others), and;
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Enlightened self-interest: digital data owners (e.g., Facebook) are preventing outside access, and by implication now claim that they are the best choice for performing any analysis of their digital warehouse (a little like grading your own homework). This entirely freezes out independent companies from performing cross-platform/device analysis.
The sheer availability of addressable digital data identifiers (e.g., cookies) is also changing. Google is joining Safari and Firefox in blocking third-party cookies in its Chrome web browser (phased out over the next two years). They are happy to go slow: Google makes its money on search and the ability to target. So Alphabet and Chrome are a bit at odds with each other. While cookies were never intended to share as much information as they currently do, how we will replace them will be fascinating. One solution, written about here before, is blockchain. This is an emerging technology that depends upon decentralized identities (either a public blockchain, or a private/consortium-style blockchain) with data that can be acquired or shared by media measurement companies and attribution consultancies.
Ultimately, this is an economic decision that has to be made by the end user. How much information is a browser user willing to share in exchange for the convenience and power of the tools they now use for free? And how much of that information are browser developers willing to share with the media measurement companies that want their data?
Several important constructs in how advertising actually works are overlooked in the rush to leverage the massive volumes of digital data used in MTA modeling. Data scientists lack industry knowledge about building awareness, memory and message decay, decreasing marginal returns in advertising, and other dynamics that involve brand choice/evoked set, or for that matter, emotion. Three simple examples: context (i.e., environment in which an advertisement is delivered); creative (i.e., the ability of advertising to break through and persuade); and brand (i.e., salience and momentum) have been, more or less, neglected. I have written about the power of great creative in sales forecasting. This concept applies to MTA as well.
The objective of all delivered media/advertising, and especially for MTA, is to “get the right ad to the right consumer at the right time”. The hidden assumption is that the consumer is always in the mood to receive the message, and that the consumer fully understands the message. In a world of screen clutter and six second ads, some companies are beginning to change their media and messaging strategy.
For example, P&G has shifted its focus to brand penetration (i.e., reach). Excess frequency (which MTA delivers well) has been criticized as wasting media dollars (as I noted, data scientists simply aren’t familiar with decreasing marginal returns in advertising spend). With the savings, P&G is (re)investing in reach. P&G’s Chief Brand Officer, Marc Pritchard, stated “The best measurement is people who are searching. So when we see an increase in search, we see an increase in sales.” This is largely consistent with the overall message of the book “How Brands Grow” by Bryron Sharp, which emphasizes this point and provides many data-supported case studies. Arguably, targeting is perhaps less critical if a company’s products have few demographic or media consumption skews. For others, precision targeting is essential.
Up until this point, media and marketing measurement firms have enjoyed a good ride with MTA (such a pun). First-mover companies who are nimble, smart, and have deep pockets can implement big data projects like MTA. And they are achieving significant ROAS – often in the very high double-digit range. And, these companies are able to adjust their models in real time and can continue to reap significant rewards. But, as more competitors build MTA models (or the technology becomes less costly, or the tasks less daunting), a company’s relative advantage will diminish. Think of it as an “MTA trickle-down effect”.
I wonder, in 10 years, whether MTA will be thought of as simply a targeting strategy to deliver excessive frequency for the short-term. Or, alternatively, a tool that really helped to build lasting brands and businesses. No doubt, the models will “learn” and become more precise and more “brand conscious”. One of the thought leaders in this space, Joel Robinson, often talks about “brand” vs. “performance” marketing. This is a very useful and provocative discussion: MTA penetration is now at 45% of US marketers based on the 2019 Mobile Marketing Association marketer study.
Until then, I hope we do not lose sight of what brands are all about, and that some aspects of brands are simply not measurable. That is, after all, the essence of brands – and marketing.
