It’s spring, and yes, the time of year where we’ve got to double down on Q4 marketing plans. Last holiday season proved to be a particularly tough one and Analytic Partners is committed to helping make this year a new chapter. Let’s look at some common marketing missteps and how to get back on track.
Mistake #1: Not Minding your CPMs and CPCs.
In Q4 2018 you had great ROIs on your digital activities. Your paid social campaign brought in new consumers and your digital video content gave you an extra high engagement touchpoint to boost your TV performance. You’ve got the green light to spend more on digital this year, and you’re getting pitched exciting new placements every day. If you’re not careful though, your costs per thousand impressions can double or even triple overnight, which could crater your once-great ROIs.
A good frame of reference for Q4 2019 is to ask yourself the following: “If this execution costs 2X more per click/impression, will it really deliver 2X better performance?” If the answer is “No” or “I’m not sure”, then you’ll want to rethink the level of investment. That might help you reconsider that costly homepage takeover or an untested digital partnership. If you don’t know what your CPMs are, start there.
Mistake #2: Buying TV Late.
If your approach to buying TV has been the Scatter marketplace, then 2019 is the year that you’re going to consider the Upfronts. Yes, in this digital age, we are advising to not cut back on television and lock in early. The data from Analytic Partners ROI Genome over the past 15 years is showing that the efficiency of online has actually declined (due to pricing, issues like fraud and others) while linear television has stayed constant.
As costs continue to increase annually, your TV performance needs to improve between 8-10% every year just to keep up with media inflation. If you’re buying in the Scatter market (a practice of buying advertising on a shorter-term basis), then you may be paying 20% – 30% more for the exact same GRP than you would in upfront.
Buying TV through the Upfronts can dramatically mitigate high costs, but you have to jump early at the lower cost option. To execute at the right time, you need to be coordinating with your media buyers now. 2019 is the year that you take control of your marketing planning horizon and take a longer view which leads us to mistake #1.
Mistake #3: Relying Too Much on Promotions.
Many brands have been increasing their spending behind promotions over time – especially for the crucial Q4 retail season. With that increased spend we see a decrease in efficiency. Consumers are inundated with more and deeper deals, and each one becomes less compelling. Essentially, we’re past the point of diminishing returns. This doesn’t mean promotions aren’t effective – they can be very strong sales drivers – but the ROI on each additional dollar spent to promote deeper or more frequently becomes less effective than the previous one. While increasing promotional spending has a positive impact on sales, it may be less efficient than alternative investment areas such as more spending behind TV advertising or innovation areas like online video or paid social.
One of the reasons why companies have been spending more on promotions is the belief that they can more easily measure the impact. It’s just a click or a coupon redemption, after all. I’m happy to say that this is changing as advanced analytics become more commonplace and embedded into more and more companies so that they are evaluating alternative investment areas. We’re currently in an era of the battle of budgets: it’s important senior management both understands and trusts the analytics, and also asks the tough questions to ensure both short term (driven by promotions) AND long-term sales growth is considered. Developing KPIs that represent both short and long term success, and trusting in agreed upon measurement are crucial for sustained growth.
Mistake #4: Not Setting Up a Holistic Measurement Framework Now.
The single most important question for any type of marketing is “did it work?” If you don’t already have a robust and systematic methodology for measuring ROI, that should be the top of your Q4 to do list. You could be executing perfectly – or making all the mistakes in the world – but you do not have a holistic measurement framework, you can never improve upon mistakes, or replicate success.
What does success in Q4 look like? Analytic Partners can provide the experience and insights to thrive. We’ve been measuring marketing performance and providing strategic guidance on planning since the year 2000. On average, our clients see a 30% improvement in marketing returns as a result of their work with us. We look forward to helping you achieve your goals in Q4 2019 and beyond.
– Ben Waters, Director at Analytic Partners