Effective strategy against wastage

The well-known saying "50 percent of the budget is just thrown out the window - I just don't know which half." has survived the greatest innovations of the last 100 years, even the Internet. Depending on the situation or source, the bon mot is sometimes attributed to the automobile magnate Henry Ford, sometimes to the department store king John Wanamaker. The fact that such a sentence still appears after dozens of years could indicate that the question is still red-hot and still unanswered.

Communication without wastage

It is a well-known fact that communication and coverage loss belong together like light and shadow. Statements such as "online advertising has no wastage" are therefore rather nonsense. It is all the more astonishing that wastage is almost exclusively associated with paid media and that owned and earned media are usually completely ignored.

Not surprisingly, a completely different understanding of the terms by the players involved also frequently leads to confusion. Ultimately, the crucial question is whether contemporary and relevant evaluation criteria are used at all to assess the loss of scatter.

One of the most widespread definitions on the Internet clarifies the problem: "Spreading loss is when a campaign does not exclusively reach the target group, but is also seen by people who do not belong to the target group." Just thinking out loud: How is this to be called if exactly those outside the defined target group demonstrably still buy in the end? Scattering profit? That is not possible at all! Two key words in the definition of scatter gain also at least make you think:

1. see

We all know that "seeing" (from the customer's perspective) or "being seen" (from the company's perspective) alone is not decisive for market success. In the customer journey, successful market cultivation still requires further steps such as customer activation, which leads to a purchase.

2. target group

Of course, you have to know your target group. However, the focus on socio-demographic target groups in marketing dates back to a time when, for example, age, gender and income could be equated with concrete buying and consumption habits. Nowadays, even millionaires enjoy "Schnäpplis." And so it is not surprising that socio-demographic characteristics are of little help in defining target groups.

How to avoid wastage

Companies try to keep expensive wastage to a minimum. The resulting minimization and optimization of strategies and campaigns harbors the danger that the advertising pressure quickly drops below the effectiveness threshold. The distribution of meager budgets over many individual measures or budget pots leads more and more frequently to total failure: Even advised target groups do not "see" the measures. Especially with classic offline media, too little advertising pressure is often generated due to underinvestment. In other words: the entire budget flies out the window, 100 percent. It is problematic when the wrong conclusions are drawn from this during the performance evaluation.

The main causes of this phenomenon are currently: unclear objectives, imprecise target group descriptions, use of too many media, inappropriate touchpoint combinations, campaign duration that is too short, and budgets that are too small. In order to ensure communication success even in times of declining reach, one can start at different points. On the one hand, budgets should be regularly reconsidered. On the other hand, it is necessary to focus on a few selected measures and to evaluate them cross-medially.

Establish impact transparency

In an ever more rapidly changing communications world, this is not as simple as it sounds, because as a rule there is simply a lack of key figures for efficient and effective management of market cultivation across the entire customer journey. Empirical measurement is therefore needed to generate the relevant key figures. This creates holistic impact transparency for owned, paid and earned touchpoints, which makes it possible to systematically and measurably tap the 50 percent potential of the esteemed Mr. Ford and Mr. Wanamaker.

The Author: Christoph Spengler is the founder and Managing Director of Accelerom, an internationally active consulting and research company based in Zurich. For more than ten years, Accelerom has been combining management practice and innovative research and supporting clients from analysis to implementation. Everything revolves around the customer's perspective and his customer journey in marketing, sales, communication and services - always holistic, always measurable, always with impact and profitability in focus. Christoph Spengler writes regularly in the print edition of Werbewoche. This article was already published in Werbewoche 15/2018, September 21, 2018.