Binet & Field: How to get more effect from your marketing investments
Binet & Field: How to get more effect from your marketing investments2019-10-09
How you get more effect from your marketing investments: Four points of advice extracted from Peter Field and Les Binet’s report ”Marketing effectiveness in the digital era”:
- Reach is still important
Reach is still extremely important if you want to get to new customers and drive growth. The challenge in today’s media landscape is that the major channels lose reach and simultaneously there is a much larger selection of channels to choose from. Yet, with the right combination of channels you can still reach large parts of the population. However, targeted marketing cannot replace broader brand communication. You need both. Recently, this has become particularly obvious when the traditional reach-oriented channels are dominated by advertising from digital players with aggressive growth targets.
- The right balance between brand and tactical
Currently, many companies have become far too tactical in their marketing. Depending on industry, Binet and Field advocate that 60-70% of the marketing budget should be allocated to brand marketing. Our experience indicates however, that very few companies even reach up to spending 50% of their marketing budgets on long-term asset building brand marketing. Most of the time, companies are not even aware of the spending balance at all.
- Continuous presence and relevance
To focus on the moment of purchase rather than just on the customer is a good way to increase advertising relevance without having to tailor for each individual prospect. At the end of the day, advertising and communication has its highest relevance the moment when there is a specific customer need. In addition, since not all customers are in the market at the same time, regular and frequent presence is required. There is an increased need to be “always-on”. This may of course require a great deal of resources and could make this approach seem unprofitable in the short term. But not to forget, in addition to producing short term sales, these efforts build the company’s long-term “ad-stock” and thus support increased base sales over time.
- ROI is a tricky issue
When it comes to marketing communication, ROI is a tricky issue. The main task of marketing is to increase basic sales and to promote the customer’s willingness to spend money over time. The greatest risk of targeted marketing is that you optimize your investments to cater for those customers that already have a buying intention. In practice this means you achieve a very positive ROI that is inflated by linking your marketing efforts to basic sales that you already have. However, if you focus too much on short term sales you risk losing the important long-term effects. We have seen many companies that show a positive ROI for their individual investments but still lose out on basic sales.
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