Does Advertising Actually Work?
Opinion and hand-scrawlings by Ryan Lock on 6th Dec 2020
This is the question asked by Stephen Dubner, of Freakonomics fame, on the podcast episodes “Does Advertising Actually Work” Part 1 and Part 2.
As a marketer, economist, and long term Dubner fan, I’ve often wondered the same question. How do we know if our hard-earned marketing budget is working? How do we know if it grows our bottom line?
The Marketing Economist, popular at weddings and bar mitzvahs
The Freakonomics Radio episodes cover many marketing tools, tactics, and Hail Mary pot-shots that are likely best relegated to the tomes of marketing’s dark ages.
TV takes the hardest hit in the sobering daylight of Dubner’s economic review. This comes as no surprise. The truth is, the age of the TV Ad Man is long behind us. Nowadays, ego and puffery have no place in a post-digital world.
The question at the core of whether The Advertising Emperor is wearing any clothes is this: Does marketing drive new incremental customer growth, or just claim existing customers who were already on the way to the store?
There are many ways to approach this problem, some complex, some as simple as excluding customers from awareness ads that have already visited your website (or any other way of tracking engagement, such as CRM records).
We can’t lay out every solution here… the best cover-all approach is to make educated decisions on marketing spend and, over time, measuring and improving those decisions at regular intervals.
Cheap, cop-out answer you say?
You want more than low-cost platitudes? *sweats profusely*
Okay, I hear you.
In lieu of a face to face conversation about a business’s unique marketing needs, here is my best general, yet tangible, advice on how to run advertising that works:
1. AN ATTRACTIVE OFFER
It’s often said that marketing a bad product or service will only accelerate its failure. If a business is newly established, or established but still struggling, I’d recommend starting with the brassiest of tacks; your brand positioning and customer value proposition (AKA what you do and what you offer). If unsure where you stand, check out the MarketingMASTERED workshop.
2. THOUGHTFUL TARGETING
Both traditional and digital media can be targeted, either through media planning or data segmentation. Target for your primary audiences, target for your excluded audiences, target for the customer journey, target for the campaign objective… just target it. Non-targeted advertising is a waste of budget.
3. END TO END CONVERSATION
Prospective customers need to hear different messages as they build a relationship with your organisation. From being blissfully unaware about you, to learning about how great you are, to being ready to part with cash and, finally, making it Facebook official by raving about how great you are online… Advertising that works moves customers along the full path to purchase.
4. THE NEW CREATIVITY
The unfortunate truth in marketing is that what works today is unlikely to work in the future. This is because we’re bidding in the attention economy. How does your ad stand out against the 5,000 others that a customer has seen today? Repetition breeds complacency. Be risky in design, make a video that goes against the grain, show an ad in a place that doesn’t normally show ads. Cut through the noise.
5. TRANSPARENT MEASUREMENT
The above four factors can lack direction without honest, transparent performance measurement to better understand what drove new incremental customers and sales. For example, the Advertising Shop runs quarterly marketing schedules which include a performance analysis, continually improving on a marketing budget’s effectiveness.
So, does advertising actually work?
I think that, if we endeavour to only run marketing that we know is working, using proven strategies and tactics while measuring its ongoing effectiveness, eventually, we shouldn’t have to ask that question.
We’ll just know that it’s working.
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