Squeeze More Savings or Make More Money?

The proliferation of useful data expedited by digital systems has convinced marketers to place at least as much value on strategic planning as on buying.&#160; When you think about it, that makes sense.&#160; If you have $100 in sales, chances are (depending upon the category) you are spending somewhere around $2.50 on advertising and fees for a typical brand.&#160; Logically speaking there is more to be gained from a strategy that increases the $100 than from squeezing the $2.50 with efficient buying and negotiating fees.As my old business partner Mike Drexler used to say, &#8220;You can&#8217;t save your way into prosperity.&#8221;And as ARF Lifetime Achievement Award-winner Erwin Ephron once said, &#8220;The biggest cost of advertising is paying for ineffective campaigns. My estimate is that's 35% of media dollars is wasted due to mis-targeted, mis-scheduled advertising.&#8221;Put another way, if you have the wrong strategy, it doesn&#8217;t matter how efficiently you buy media.&#160; It will simply be misdirected.&#160; Yet we audit media buying -- but not media planning!&#160; It&#8217;s time to change that and audit strategies for their return on investment.Here is just one example of how we can be lulled into doing the same less effective thing over and over again.As a rule, advertisers generally aim their messages at a very discreet target -- users.&#160; This is understandable and very seductive.&#160; However, that might not be the most productive strategy.Several years ago Catalina Marketing, Pointer Media Networks and the CMO Council issued their Core Consumer Study, which received some favorable press at the time and then faded.&#160; We think their findings are still very useful.After studying 1364 CPG brands, in 23,000 stores and 54 million homes, they found that for the average brand 80% of its volume is consumed by just 2&#189;% of consumers.&#160; I like to call it the 80:2 Rule.&#160; Sure, there were variations by brand, but generally speaking one out of every 40 consumers bought most of a brand&#8217;s inventory.If that is the case and many marketers keep targeting those who will buy anyway, that seems to be the wrong strategy for growth.&#160; At some point we become oversaturated.&#160; However, it does help explain why we are bombarded with the same commercials over and over again, especially on cable where clients can more easily try to micro-target with television.Shouldn&#8217;t a more effective growth strategy reach beyond the core consumer into at least the next circle of influence?&#160; A strategic planning audit would determine the most effective strategy.Click the social buttons above or below to share this content with your friends and colleagues.The opinions and points of view expressed in this content are exclusively the views of the author and/or subject(s) and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated writers.&#160;

SUBMIT YOUR RESUME. ADVANCE YOUR CAREER. ADVANCING DIVERSITY WEEK SEPT. 20-23. REGISTER NOW.

Squeeze More Savings or Make More Money?

Author

Publish date

Channel

Steve Fajen

Candid Conversation with Jack Myers and Matrix Solutions' Brenda Hetrick - By Jeff Minsky

More Videos:

SUBMIT YOUR RESUME. ADVANCE YOUR CAREER. ADVANCING DIVERSITY WEEK SEPT. 20-23. REGISTER NOW.

Squeeze More Savings or Make More Money?

Enjoying This Commentary? There's More to Love

Steve Fajen

Candid Conversation with Jack Myers and Matrix Solutions' Brenda Hetrick - By Jeff Minsky