Build Brand Growth Without Sacrificing Performance

In the past ten years, the work of TRA, Nielsen NCS, Kantar Shopcom, Datalogix and ultimately thousands of companies continued the drumbeat of short-term ROI performance. This was also a decade in which Google went from $10B to $140B and the bulk of adspend shifted to digital. In digital the application of the advertising ROI lens turned into more like promotion, focused on direct response and discounts. The effects on brand building were more pernicious, as they always are during periods of excessive promotion (as in the 1980s when the first effects of supermarket scanners were felt).

Several important researchers stood out against this backdrop, cautioning the need for bringing in new customers, echoing classic advice from Peter Drucker. The most famous of these is of course Byron Sharp, less well known is Michael Von Gonten. The work of such careful analysts reveals the boomerang effect of not concentrating enough on bringing in new users. Invariably when one begins to study longer-term effects, one realizes the value of reach, penetration gain and the dangers of excessive targeting.

Some saw this coming. One was TRA's biggest client and expert at targeting HSPs. Nonetheless they also used our data to examine "new to brand" and "new to category" ROIs. These TRA-based campaigns continued to bring in new users, but the ROIs on new users were extremely low. One needed to look at Consumer Lifetime Value (CLV or nowadays LV will do) in order to justify actually trying to target such people.

Another effect of digital was addressability. The failure of the cable industry to hearken to the Next Century Media alert in the 1990s left addressability, measurability and interactivity open to plucking by digital, hence the seismic shift of billions of dollars out of other media to digital in the past ten years. Because of addressability, the first pioneers like Dave Morgan, TRA, Datalogix, IRI and others emphasized deterministic targeting, but then Datalogix, Experian/Simmons and others taught the use of lookalike modeling. Simmons later recanted by publishing the finding that the demographics and geographics which drive 95% of lookalike modeling today have weak results because those attributes aggregately are only able to explain an average of 6% of brand adoption. In this way the effects of addressability have been severely blunted in practice for too long.

Enter Les Binet and Peter Field, whose work leverages the huge database of the UK's Institute for Practitioners of Advertising (IPA) to prove that brand building deserves as much concentration as short-term ROI. The findings of these two giants informed the marketplace strongly in the past few years. CMOs have hearkened to brand building because they always have, however CEOs and CFOs have gone all-out on ROI. And most importantly, quarterly earnings reports are what drive bonuses in C suites. The latter fact has always been at the root of over-use of promotion and now also over-use of ad tactics to maximize short-term sales rather than building long-term brand love.

Both of these outcomes can be achieved together, but only by transcending the use of oversimplified techniques to get at the subconscious roots of behavior. Demography and geography do not determine the brands people buy more than about 6% on average. The other 94% happens deep inside people. Gerald Zaltman taught the world the same lesson by his books which indicate that 95% of brand choice is subconscious – even the person involved is barely aware of the reasons for the buying action. The similarity between the two statistics – coming from widely divergent research methods – is not accidental. It's consilience, because the facts are truth.

A recent study by Audi and PHD powered by Semasio showed that lookalikes based on content consumption perform +59% better than demogeo-based lookalikes. And a recent Neustar study for a major retail chain show that deterministic RMT/Semasio audiences based on motivationally-informed content consumption out-perform lookalikes by +95%. And for "new to brand" these IDs targeted based on motivational resonance to the ad being used increased ROI +115%.

RMT/Semasio can do the same thing in context-based media such as linear TV, and in privacy-driven use of digital contexts rather than IDs.

In both applications, it is the ad itself that is responsible for the work being done on the subconscious of the recipients. RMT/Semasio merely give the specific ad its best chance of working, by sending it to people and to contexts that line up motivationally with the subconscious motivational drivers in the ad itself.

What this means is that here is a new technique already proven to be better than demogeo lookalikes which is not biased toward existing users, and in fact gains new users because the targeting does not restrict impressions from reaching non-users.

It's hard to gain a new user. A friend's recommendation can do it, but an ad, obviously self-serving, usually bounces off. An ad needs as much help as it can get. By sending the ad to people who are already deeply motivated by the memes in the ad, and doing this through a context which is also strongly aligned thematically with the ad, the chances of success are greatly improved to bring on a new user. In a study conducted by 605 for a major CPG advertiser, even a single exposure at an ad-alignment of 30% or higher in the RMT system had five times the effect of the same ad never given the boost of such a context.

The moral of the story: you can have your cake and eat it too – new users as well as short-term performance driving C suite bonuses and stock prices. You just have to break old bad habits of reducing your view of what a person is to simple demographics and geographics. We're all much more complicated than that. Reductionism is itself a form of disrespect and does not jibe with the refreshing "new" ideas such as brand purpose, DEI, etc.

You can have it all. It centers on the ad itself. Let the ad do its best work, set it up to succeed by targeting that reflects the ad, through contexts that reflect the ad. We've long known in brand advertising that the creative is 65% (some research finds it slightly lower or higher) of the ROI, yet we've been concentrating for decades on optimizing the media and acting as if the creative and the media have nothing to do with one another.

Switching horses now to a deeper understanding of people can increase marketing productivity to the degree of improving the economy. Can bring back the fun of agencies and the desire to work there. It's a new year, and time to consider new things.

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