My 2 quickies here, I think there are some misunderstandings of how advertising works that are problematic in this.
First, I’d recommend you check out How Brands Grow by Byron Sharp and maybe some of the work by Avinash Kaushik for good measure. It’s some of the best research on the subject. You can run heavily conversion-oriented campaigns to current customers, but the incrementally for those campaigns are typically very low. So while your cost per conversion may look great, your cost per incremental conversion? Not so much. You can look at a bunch of companies that have moved away from conversion spend to a whole lot of success, Airbnb being the latest and most public about it.
All that to say, CRM-based advertising to current guests is an important tool, but it is only one tool in the tool belt. If it’s the only one you use, you will run into a wall eventually.
AND, the challenge, these tools are not easy and cheap to run effectively. You can try and do it internally, but if you’re saving say 10% by not using an expert, but running 40% less effective advertising because of the recent PR graduate you put at the wheel of your (very large) investment, that’s not a great deal.
I would put Super Bowl in the same camp. It is a tool for the right brand at the right time. For massive global brands that need massive global reach, it’s actually a pretty efficient buy for the amount of attention you get for it. These are typically also the companies spending gobs of money on marketing mix models as a check on the efficiency of the spend. There are companies that blow their budgets on the Super Bowl when they shouldn’t, but there is a reason why companies are there. What they do with that time and space, that’s a whole other story.
And last thing, if you think you’re getting reach “free” from Meta, etc. they quit giving away that for free more than a decade ago.
But generally, retention and acquisition is totally mismanaged at retail. Like I’ve literally watched brands tell us about having $20M marketing budgets and not care to measure it.
LOL definitely aware, and lots of opportunities to understand what tools are available and measure more effectively, but largely making the point that the answer isn’t just about conversion.
One other note on this comment –> “Instead, many rely on an agency to do mass digital ad spending without the tight focus needed to optimize results at a store level.”
That’s an indictment of the many truly crappy agencies that can only think in DMAs instead of trade areas and avoid optimizing by store. But there are agencies that are better than that. I can think of one in particular. Can’t remember the name…something French. Starts with a P. Sounds like an airline. I dunno, it’ll come to me.
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My 2 quickies here, I think there are some misunderstandings of how advertising works that are problematic in this.
First, I’d recommend you check out How Brands Grow by Byron Sharp and maybe some of the work by Avinash Kaushik for good measure. It’s some of the best research on the subject. You can run heavily conversion-oriented campaigns to current customers, but the incrementally for those campaigns are typically very low. So while your cost per conversion may look great, your cost per incremental conversion? Not so much. You can look at a bunch of companies that have moved away from conversion spend to a whole lot of success, Airbnb being the latest and most public about it.
All that to say, CRM-based advertising to current guests is an important tool, but it is only one tool in the tool belt. If it’s the only one you use, you will run into a wall eventually.
AND, the challenge, these tools are not easy and cheap to run effectively. You can try and do it internally, but if you’re saving say 10% by not using an expert, but running 40% less effective advertising because of the recent PR graduate you put at the wheel of your (very large) investment, that’s not a great deal.
I would put Super Bowl in the same camp. It is a tool for the right brand at the right time. For massive global brands that need massive global reach, it’s actually a pretty efficient buy for the amount of attention you get for it. These are typically also the companies spending gobs of money on marketing mix models as a check on the efficiency of the spend. There are companies that blow their budgets on the Super Bowl when they shouldn’t, but there is a reason why companies are there. What they do with that time and space, that’s a whole other story.
And last thing, if you think you’re getting reach “free” from Meta, etc. they quit giving away that for free more than a decade ago.
Pretty sure you wrote this to rile me up lol
Sometimes you gotta troll!
But generally, retention and acquisition is totally mismanaged at retail. Like I’ve literally watched brands tell us about having $20M marketing budgets and not care to measure it.
Like, dude: how do you have a job?
LOL definitely aware, and lots of opportunities to understand what tools are available and measure more effectively, but largely making the point that the answer isn’t just about conversion.
One other note on this comment –> “Instead, many rely on an agency to do mass digital ad spending without the tight focus needed to optimize results at a store level.”
That’s an indictment of the many truly crappy agencies that can only think in DMAs instead of trade areas and avoid optimizing by store. But there are agencies that are better than that. I can think of one in particular. Can’t remember the name…something French. Starts with a P. Sounds like an airline. I dunno, it’ll come to me.