As uncertainty builds in the world following what seems like a relentless series of unexpected events, there is concern within many businesses around spending, with the desire often leaning towards cutting budgets and reducing marketing spend in order to shore up existing business.
Research following the COVID-19 global pandemic shows that in most cases, these decisions were ineffective and often led to reductions in brand awareness and, subsequently, a need to invest more heavily to build back to a pre-pandemic position.
However, rather than cutting all spending at one extreme, or carrying on as if nothing’s changed at the other extreme, what if there’s a healthier alternative? What if the real solution lies in an area which should be Business-As-Usual regardless of world events; the efficient use of marketing budgets and the reduction of waste to get the best results from our spend.
Making the most of your budget
Much recent focus within our work with clients has surrounded the optimal mix of brand versus performance marketing activities to build back the strength of client brands. However, underpinning the strategy in both of these areas needs to be a robust, data-driven approach in terms of who and how we are targeting with marketing activities.
This approach gives us more value for the budget we have available, and reduces wastage, by avoiding marketing to users that we know will have little or no interest in the content. It allows us to ensure the people we target are those who are likely to actually act on the advertising we show them. It also ensures that the people who land on our site and within our sales processes are those who are likely to already be well enough informed to complete purchases and ensure a high conversion rate for our transactional pages.
Consider performance marketing spend under this approach. We analysed data collected into our Cubed platform to understand the Conditions and Segments that visitors to a site from different channels belonged to when they clicked through from performance-led paid ads (data from numerous eCommerce sites). We looked at some fairly simple indicators, specifically:
Had the user seen a paid ad from this channel previously?
Had the user visited the site directly previously?
These simple segment ideas give a view on the effectiveness of the performance marketing itself, with the first showing effectiveness within a channel and the second giving some measure of existing brand awareness. Looking at spend across the segments, we found the following:
|% spend to previous Direct visitors||5.98%|
|% spend to previous Channel visitors||21.38%|
|% spend with previous branded ad spend||7.25%|
In this regard, we can see that some of the spend was poorly targeted at customers who perhaps did not need to be targeted with performance ads. Moreover, this basic approach meant that there was significant spend (as high as ~£40k for one business in a single month) on performance marketing targeted at customers who were already at least fairly brand aware, having either visited the site direct, or having seen previous branded ads and clicked through to site.
Digging even deeper
In addition, we know that there is more that could be done to target the generic performance marketing spend. Whilst we have considered a basic level of brand awareness in the data above, numerous other data points exist which would allow us to build a complex-but-robust segmentation strategy and target our marketing spend much more effectively based on this collected data.
Whilst we have mainly talked about performance marketing spend so far, the same is broadly true of brand advertising. Whilst some of the typical channels used for brand advertising are more difficult to target, there are numerous systems where brand advertising messages could be focused which allow for the use of audiences and more targeted spend opportunities.
As such, the entire marketing strategy must be built to ensure the most efficient use of budget; and as such, the most likely recipe for succeeding with customers is understanding their likely place in the sales lifecycle. What’s more, the tools are now widely available to businesses to make the most of this opportunity.
Numerous CDP tools exist in the marketplace, tools which allow the delivery of audiences or segments to technology vendors to provide the data needed for this level of marketing automation. In addition, our work on the Cubed platform has allowed us to use numerous advanced data points to create these segments; think historic click-based data, coupled with propensity modelling, likelihood to buy and next-best action recommendations, creating a very advanced set of segments, audiences and cohorts.
This article may have focused specifically on the use of this approach within the marketing landscape. However, the same principles are equally applicable to a website, online presence, messaging strategy and product strategy. It is in this (dare we call it the digital holy grail?) that we can ensure our entire business strategy matches the needs of our customer groups.
And in that, their success is our success.