Reach and CPM Guarantees Work Against Brand Growth

Thirty years later advertisers fire agencies for failing to produce yearoveryear brand sales growthYet the contracts still pay agencies for delivering guaranteed reach and CPM neither of which produces growth on its own The agency hits both numbers collects and keeps the account amp8212 and the brand can still go nowhere We are paying for the thing we can measure and firing over the thing we apparently think we canamp8217tChange comes slowly to marketing Possibly because the Csuite has long regarded it as taxdeductible gambling amp8212 a cost you book a bet you place and rarely a line you can trace to a returnMarketing Science never quite earned its name That is finally changing through neuroscience biometrics big data agentic AI data science RMTamp8217s findings on motivation clean rooms addressable advertising optimization better econometric modeling and identity graphs The tools to connect spend to outcome now exist The contracts have not caught upIn a previous article I drew on company annual reports to argue that brand growth over the past 15 years has become somewhat like teenage sex once was everyone talks about it very little of it goes onHere is the underlying data compiled by Dr Augustine Fou from earlier work he credits to Michael Farmer Fou notes that anything under 27 is not growth at all because inflation ran 27 across the periodOver 15 years real organic brand growth ought to run at least 5amp821177 in the table above once inflation is added backOnly two kinds of companies clear that bar Tech Meta Amazon Netflix Google Apple Intuit Microsoft Finance and insurance Capital One Discover Progressive Two categories out of sixty companies amp8212 and neither got there on the strength of a reach guaranteeWhyThe reasons are undoubtedly many Two seem central an overshift to digital and agency contracts that incentivize the wrong thingsThe first is a longer argument The second can be fixed nowStep One Remove the CPM guaranteesThe reach guarantee already functions as one Overpay on CPM and reach suffers Should an agency somehow pay higher CPMs and still hit its reach number what drops is frequency amp8212 and that may be a good thingWith a supertarget agreed to above the reach guarantee the agency optimizes for reach and for whatever else the client names Yearoveryear brand sales growth for instance Name the outcome and the agencyamp8217s best efforts follow itStep Two Put teeth in itThe advertiser pays a bonus scaled to growth delivered 01amp82111 11amp82112 and upward from there The better the growth the better the agency does Incentive and objective finally pointing the same wayCombine the two steps or take them a year apartEither way pay for the outcome you fire agencies for missingamp160Building HighPerforming TeamsUnderstanding the seasons of growth why contraction ampamp expansion are part of the process This podcast discusses how growth is not a linear path but a series of seasons from the 39winter39 of shedding old identities and habits to the 39summer39 of external expansion and aligned opportunities It also addresses the common tendency to resist these cycles explaining how fighting a contractive season only leads to further frustration and prolonged stagnation Learn more about the power of curiosity how asking questions can help pull you out of apathy and move you toward progress during difficult times the art of detachment Bill explains the hidden switch of letting go to better enjoy the process of living Podcast length 55 minutes Watch the VideoPosted at MediaVillage through the Thought Leadership selfpublishing platformClick the social buttons to share this story with colleagues and friendsThe opinions expressed here are the author39s views and do not necessarily represent the views of MediaVillageorgMyersBizNet

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Reach and CPM Guarantees Work Against Brand Growth

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Reach and CPM Guarantees Work Against Brand Growth

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