About 48 hours before photoshoots, fitness models would start dehydrating themselves for more muscle definition. Some speed up the process by drinking only alcohol. It does wonders for bringing the abs out, but fitness models never forget their regular gym sessions.
In marketing, many companies focus on short-term marketing while neglecting long-term growth. That’s like trying to get a magazine cover six-pack with only dehydration.
If you’re intending to sell your company in a year’s time, this article won’t be relevant for you. But if you’re looking to grow your business over the next few years, let’s talk about long-term mass advertising the gym sessions that make dehydration work.
Its most misunderstood role is that it should convert eyeballs into some sort of acquisition right there and then. Conversion is a job for short-term marketing, e.g. optimised landing pages, promotions, point-of-purchase activation, etc. You need these tactics to maximise conversion, but they need to be balanced with the long-term.
In fact, the more you optimise for short-term without investing in the long-term, the less effective your conversion becomes. Simply because there will be less for your short-term tactics to work with. If you intend to grow your business, it needs to build awareness and relevant associations in the consumers’ minds. That’s a job for long-term mass advertising.
Market share effects of short vs. long-term marketing
In a meticulous study of 966 advertising campaigns from more than 700 brands from over 80 categories, Les Binet and Peter Field found that campaigns which emphasised the short-term (e.g. immediate sales) simply don’t do as well on longer-term metrics, including market share growth.
As you can see above, 14% of short-term objective campaigns that run for one to two years, compared to 22% of long-term objective campaigns of the same duration, achieved significant market share growth. The proportion of short-term campaigns that run for more than three years and led to significant share growth remained at 14%, while 45% of long-term campaigns of the same duration went on to achieve that goal.
Yes, that means linking up several short-term objective tactics doesn’t achieve the same market share growth as a long-term objective advertising campaign.
Of course, if measured in the six-month timeframe, short-term objective campaigns are more effective and efficient because that’s what they were designed to do. But I suspect most of you are looking to grow your company beyond the next six months.
Promotions leave your customers (and competitors) wanting more
The most immediate example of a short-term objective campaign is the use of discounts or some sort of monetary incentive. Unfortunately, this leads to your customers placing more emphasis on price and promotions in their decision making, as evidenced by an 8-year-long study of the FMCG (non-food) market and a survey of 302 UK consumers. When price becomes your customers’ primary concern, competitors and entrepreneurs waiting in the wings will smell blood. They know they can challenge you with a stronger brand (i.e. mental positioning and associations) or a more efficient cost structure.
I know we’re focusing on market share growth at the moment, but consumers’ price sensitivity cannot be ignored. Lower price sensitivity = higher profitability. Or as Warren Buffett put it, “The single most important business decision in evaluating a business is pricing power…And if you [need] a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
Or as the pricing consultant Hermann Simon wrote, if companies can get away with increasing their prices by just 1%, they can save about 10-20% on their advertising budgets or 7-8% on their sales force.
But this doesn’t mean all promotions are bad for your company’s long-term health; non-monetary promotions such as competitions don’t damage consumer perceptions as much, while still being effective (less so than monetary promotions, of course) at increasing short-term sales. Again, balance them with long-term marketing.
Nobody wants to feel like they’re being manipulated
Maybe your company’s short-term techniques aren’t based on price. The insights gleaned from behavioural economics and various fields of psychology have proved to be tremendously useful. A common example is the use of scarcity by hotel booking sites (“1 room left!”) to increase conversion.
They work very well, but a 2019 survey in the UK found that 49% of its 2,012 respondents are likely to distrust a company because of such tactics, and 34% expressed contempt and disgust towards the usage of such tactics. Contempt and disgust are strong emotions usually reserved towards people who have offended community norms. It’s hard to be trusted if you evoke contempt and disgust.
Although I work with behavioural and psychological insights as much as any other practitioner, I’ve always stressed the importance of maintaining the target audiences’ belief in their own free will. Nobody wants to feel like they’re being manipulated. Growth hacks work, but part of the magic is knowing when not to use them.
Are you being considered by consumers?
Australia’s very own Byron Sharp has emerged as one of the most important marketing scholars of the decade and has been endorsed by the likes of Unilever and P&G. That doesn’t mean everything he says is a rule, but one of his proven key insights is this: Customer loyalty is overrated; the vast majority of consumers buy more than one brand.
EVEN Apple, with its brand and visibility, doesn’t command unerring devotion from its customers. Take a look at the charts below, Apple’s laptops have a repeat-purchase rate only slightly higher than its competitors. Apple sells more laptops than many other companies because it’s well known, has built significant brand equity, and is hence in more consideration sets. Not because of loyalty.
Dell has the largest market share because it’s in the most number of consideration sets. And because it’s in the most number of consideration sets, it enjoys the highest repeat-purchase rate.
Let’s talk about consideration sets. In addition to Apple, consumers may also consider Dell, Lenovo, Acer, etc. If you’re selling laptops, you need to be in that consideration set. Step one is awareness—your name and relevant associations (i.e. brand) need to be implanted in their minds.
A vital step two is refreshing your target market’s memories so when it’s time to buy (or to tell a friend about it), you’re still in their minds. These are the primary tasks of long-term mass advertising.
Memories erode over time. And brands aren’t something people think about most of the time. People like us often forget this, because caring about brands is our job. You need to work to stay in consumers’ minds. Yes, you’ll need to advertise. Yes, it can be expensive. Yes, you have to deal with the occasional bullshit artist from agencies. But advertising helps you gain prominence in consumers’ consideration sets. In many cases, advertising is necessary just to prevent your market share from shrinking.
If there’s one comforting piece of news, getting into people’s minds isn’t as difficult as the notion of “attention economy” implies (read more about it in my article about emotional advertising).
And you may argue that you sell high-involvement products; your customers report going through rational decision-making processes. Consumers certainly have more access to more information. But let’s not forget that we all rely on heuristics (mental shortcuts). Especially when we have many choices. Especially when we aren’t knowledgeable or enthusiastic about the product category. Especially because we’re social animals.
These are three conditions that your mainstream consumers will face; you cannot rely on them having perfect information, perfect processing of that information, and building the perception you want them to have. Get into their consideration sets and be responsible for what they think of you.
Growth means market penetration
Market share growth = market penetration = moving along the adoption curve. As Geoffrey Moore’s excellent Crossing the Chasm emphasises over and over again, the main challenge in growth is getting to the mainstream markets. While his book focuses on B2B marketing, the socio-psychological concept applies to B2C—mainstream consumers need assurance.
They’re not as knowledgeable as the enthusiasts, nor are they as motivated as the early adopters. The mainstream market, where the REAL money and growth is, wants to know that they’re not TAKING STEPS BACKWARDS by choosing you. The mainstream market for any product, political revolution or even religion is risk-averse.
In this context, it’s not too absurd comparing consumerism to taking part in a mass protest or changing your religious beliefs. These are all complex behaviours. Complex behaviour changes require multiple reinforcements. And multiple reinforcements help resolve risk aversion. An ad for a new laptop can never be more convincing than seeing your friends using one, but it certainly adds to the assurance.
One of the ways long-term mass advertising does this is by acting as a reliable signal of quality and commitment. The audience’s logic being: companies wouldn’t risk all that money on advertising if their products are crap, or if they plan on running away once they have my money.
Mass advertising also creates common knowledge—you know that other people know about the new laptop; this acts as another source of assurance.
Ads themselves are also involved in organic word-of-mouth spread, which is one of the major influences that lead to purchases. A year-long tracking study of 36,402 Americans who were each given a diary to keep track of their conversations found that 26% of conversations about technological products were influenced by advertising, 24% in the automobile category, 21% in travel services, 15% in health and healthcare.
Here’s the elephant in the modern hyper-targeted marketing room—must it really be MASS advertising? There are other methods of crossing into the mainstream market, which is somewhat outside the scope of this article, but mass advertising is the most accessible for most companies.
Binet and Field’s long-term study of 966 ad campaigns has produced a very clear conclusion: Broader reach = broader effects (e.g. increased market share, profitability, and somewhat counterintuitively, efficiency). 47% of campaigns with long-term customer acquisition objectives led to major increases in market penetration. They also found that the reach of studied campaigns from between 2008 to 2016 accounted for 91% of their media effectiveness.
It has to be mass advertising, or at least not hyper-targeted, because you need to target new customers as well as existing customers for growth. Not only do you need to stay prominent in your existing customers’ consideration sets, you also need to enter new customers’ consideration sets. And then your short-term tactics can come into play—by converting the existing and new customers’ awareness and attitudes into sales. This is how optimisation, promotions, and other short-term tactics achieve their sexy ROIs; they need a sufficient volume of awareness and favourable attitudes to work with. Remember, clickbait-worthy abs are formed by dehydration AND regular gym sessions.
When NOT to use long-term mass advertising
I don’t run an advertising agency, so I’m under no illusion or professional obligation to insist on mass advertising as the only tool available for achieving market growth, because it’s not. But as I mentioned, it’s the easiest one to deploy. At the same time, there are situations when mass advertising is not the right tool for the job. Here are some of them:
1. When your product isn’t ready for the mainstream market. Here’s the obligatory David Ogilvy quote, “Great marketing only makes a bad product fail faster.” The mainstream customer simply can’t appreciate a minimum viable product.
2. As Steve Blank pointed out, a startup (or a new product line) is making a mistake by mass advertising too early; they should only do so when the company has a “proven and repeatable sales roadmap”. In other words, mass advertising should only begin when there’s a viable market for your product.
3. Mass advertising isn’t needed yet when you’re still at working with the enthusiast/innovator segment. These folks know what they want. Mass advertising is unlikely to tell them anything they don’t already know. Besides, they’re a small segment and using mass advertising to reach them is simply not value for money. (Okay, maybe there are benefits in doing so, but that’s another topic for another day.)
4. In the best case scenario, your business may already have a virality mechanism built in and acquisition rates don’t seem to be slowing down at all. The famous examples of Hotmail, Facebook, and Tinder come to mind here. Their viral growth were so effective that by the time they needed to mass advertise, money wasn’t a problem.
Conclusion
The reason I wrote this is because of the general aversion
towards mass long-term advertising, which arose partly because of advancements
in targeted marketing. It’s perfectly understandable—short-term ROIs are
attractive in fast markets; the promise of targeted marketing just sounds so
sophisticated and efficient. But make no mistake: Fitness models dehydrate AND
stick to their gym routines.
Arthur Koh is
a mass behaviour consultant. He likes working with challenger brands because
it’s rarely great when the biggest guy gets too big.
