The Top Performing Marketing Channels Are Largely Underfunded.October 31, 2022
As we all prepare for 2023, the stakes are incredibly high. Coming out of the pandemic, I believe everyone had copious amounts of pent up energy to get back to “normal.” Then the Ukraine conflict coupled with lingering supply chain problems, inflation, high interest rates and negative consumer sentiment reared their ugly heads, throwing heaping buckets of cold water onto plans for a swift recovery.
As marketers, the looming recession – if you continue to believe we are not actually in one – makes taking any sort of risk in developing more innovative marketing plans for 2023 that much more challenging if not impossible. Risk tolerance in the C-Suite is low. Getting funding for activities that have vague attachments to performance is just not in the cards.
I’ve been through these times before. And while I generally agree in the marketer’s dream that a market downturn is often the best time to amp up marketing, the realist in me knows how hard it is to pull that lever. I think if CMOs were fully in charge of their own destinies, they would be much more aggressive than their counterparts in leadership, with the CFO being front and center. But that’s just not how it works in the real world.
So, marketers are left to make choices and compromises. Chief among these choices is when and where to invest in broader brand awareness, knowing full well that these awareness channels generally cost much more than lower funnel channels while being less measured simultaneously. To some extent, this theme is a holdover from the last century, and many leaders outside of marketing continue to hold those perspectives on awareness marketing in general. Linear television, out of home, events and so on can be incredibly successful but come with a price that is often completely out of touch with reality in the current economic environment.
Most of us are not P&G that sell relatively recession-proof consumer staples. Under current economic climates, the vast majority of marketers need to be incredibly intelligent about our investment strategies or we could be toast.
There are ways out of this mess, and I see three key areas that are suffering from underinvestment in relation to their ability to create positive ROI outcomes: Consumer advocacy, email and marketing automation, and surgical use of first-party data. I’m going to make the case for all three. I also recognize that, for some, these tactics may be considered innovative! And that’s a-ok.
You ask any marketer, but especially B2B marketers, where the best source of qualified leads or sales come from, and they’ll say referrals from existing customers. Even in the B2C space, consumer advocacy ranks incredibly high in terms of sales that require the least amount of friction or marketing dollars. We all know it. Lots of people sharing their positive experiences through very direct means with others like them is the golden ticket. Yet, how many brands have proactive consumer advocacy programs in place? The answer is not many because I believe many marketers either don’t know that that technology is available to scale brand advocacy or they simply believe it is a purely organic outcome. This doesn’t need to be the case. Marketers have ready access to most customer data that they need to deploy a consistent and measurable advocacy program—allowing consumers to freely share brand stories across their own personal networks. The network effect is real in our interconnected world. Sometimes the solution is as simple as asking people to share, refer, and tell their stories, using measurement and engagement platforms that already exist. This is about putting predictability and processes around brand advocacy that doesn’t rely solely upon hopes and dreams. When executed concertedly, advocacy programs are long-term, fruitful investments that drive low-funnel conversion behaviors.
Email and Marketing Automation
Every year since roughly 2000, email marketing and the automation technologies behind it ranks at or near the very top of performance marketers lists for techniques that yield the highest ROI. In most cases, it’s not even close. Email marketing is also probably the most boring technique in a marketer’s mix. (I will add SMS to this mix because any ESP worth their salt has SMS baked into their offering.) But that’s a shallow point of view. Making money for your brand is sexy, and nothing makes the Street or your board happier than low-cost, high-performance marketing. Email marketing is highly personalized, permission-based, shareable and direct. It has all the qualities of performance attached to it. Deploying a robust email marketing operation requires hands-on-keyboards, a deep understanding of consumer preferences, great but not expensive technology, and an empathetic attitude towards people’s inboxes and time. When executed well, nothing delivers like direct messaging. You may not win fancy awards, but your pipeline and commerce goals will be achieved more efficiently at a lower cost than having to attach more expensive and less personalized media investments to each transaction.
Surgical Precision with Media Investments
Here’s one you didn’t see coming: you may want to cut your media budgets. Better put, if your budgets get cut for you, then that may not be a bad thing. Scarcity spawns innovation and there’s no better place for innovation than the precise targeting of media investments through data. There are very few if any marketing channels that haven’t been digitized, from television (through connected TV) to out-of-home. All of it. All can and should be powered by your data, delivering content and messaging to only those people you can actually serve with your products and services. Once again, there’s an old timey sentiment out there that television, radio, OOH and other traditional media require that you base your buying decisions solely off the provider’s data. It’s just not true. You start with your data, model it through third-party data sets for new audiences, and deliver advertising and marketing only to those people who can and should be your customers. As consumers, we can both be watching the same content but receive entirely different advertising based upon our individual preferences. The cheese moved and it’s on your plate. Eat it.
As an agency owner, I would love to talk to you about all the Big and Sexy, from virtual reality to cryptocurrencies. And of course, I’m always ready and willing to jump into the deep end with a client who wishes to do so. But the economic headwinds are real, and performance, accountability and scarcity is what’s up. Pivoting attention towards proven channels that have unquestionable ROI is where we’re at. Lean into them, get the spoils and keep moving forward.