The Shortcomings of a Broad Reach Approach
First, an underlying assumption of a broad reach approach is that advertising creative and messages appeal equally to all people. On the surface, this may seem unlikely, but we looked into the data to see if this was true. In our measurement of thousands of advertisements, covering billions of dollars of advertising spend, in multiple categories, we found it exceedingly rare for a particular ad to appeal equally to all people.
As illustrative, let's look at the results from an analysis of advertising from Warner Bros. Pictures for the movie "Creed."
Here are the SIRF curves for each of the ads run. Note that each of the ads produces its own SIRF.
It's clear when looking at the SIRFs side-by-side that not all ads are created equal. In this analysis, the ad named "Life" has an index of 369. The ad named "Destiny" has an index of 25. The data show that overall Life performed 15x better driving sales results than Destiny. Proponents of the broad reach strategy would run the most influential ad, Life, everywhere and eliminate the other, seemingly weaker ads from the mix.
However, digging a little deeper, that might not be the wisest strategy. Take a look at this heatmap which shows the performance of the message with different groups of people.
In this example, the columns are different ad executions, and the rows show what the analysis found to be "differentiating." Several profile dimensions show different ads resonate with different groups of people. The first row of the chart shows young people aged 13 to 17 years old. For this group, the best ad is Destiny. It indexes at 325 whereas the Life ad under-indexes, at 89. The Destiny ad works nearly 4x better than the Life ad for this critical demographic. If we followed the recommendations of a broad reach approach, we would have gotten rid of the Destiny ad altogether.
Another assumption built into a broad reach approach would be that all people will respond equally to an ad despite their location. Again, we dug into the data to see if this idea held true.
The movie Creed stars Michael B. Jordan and Sylvester Stallone. When mapped, the data suggests that, across the United States, the actors and characters appeal to different people in different measure and for various reasons.
Map: Fans of Sylvester Stallone & Michael B. Jordon
Not surprisingly, if you're at all familiar with the Rocky franchise, there are more fans in Rocky's hometown of Philadelphia than in Boise. There is enough of a difference to justify paying a small premium for local heavy-up advertising on top of a national media plan.
Our analysis further suggests that, for many consumers, proximity is a key consideration as well. The further someone has to drive; the less likely they are to covert.
This map below shows what may be called the "Gravity Effect." The green dots are the customers for a marketer's brick-and-mortar location shown in the center. The average amount of time it takes for a consumer to reach the location is ten minutes. If it takes someone more than 20 minutes to reach this location, the likelihood of them becoming a customer is 100x lower. In this scenario, geo-fenced ads, location-based marketing, direct mail and out-of-home billboards selected based on this gravity effect will probably perform better, given the right message, than mass reach untargeted advertising.
It appears weather, too, can affect conversion in many categories by 10 percent or more. When combined, these two factors present a strong economic rationale for local targeting.
In the final analysis, if one pays a 30% premium for targeting, and one manages frequency, then a marketer can more than double their marketing ROI compared to broad reach.
Sharp's theory about broad reach strategies may be gaining popularity just because too many marketing professionals lack useful data to identify and target the right audience with the right message at the right time in the right place. Marketing professionals looking to compete in today's highly competitive marketplace need the kind of decision-making power that comes from combining information about audience, creative, message, and location with data about cost, frequency, and other media dynamics. Furthermore, marketers need to demand that these insights be available in a timely fashion so that campaigns can be optimized while live.
The technology does exist for those that want to achieve a higher level of marketing impact. Granted, the in-campaign impact feedback leveraged by Warner Bros. for the movie Creed is new, and many may be unaware of its existence. But Warner Bros. recently won the Data Creativity Award for the Attribution Category at the I-COM Global Summit in London.
If after reading this article you're considering a more targeted, "right message to right person" approach here are five tips to help unlock a higher ROI for your marketing:
Start with person-level purchase propensity. If you sell through a physical location, calculate gravity effects, geo-fence appropriately.
Manage frequency. Media owners will sell as many impressions as they can, leading to marketers overspending and seeing diminishing returns. Make sure to set frequency pacing and caps to maintain a higher ROI.
Calculate the upcharge for targeting. Sometimes a broader reach's lower cost beats a high premium targeting approach. The best media planning algorithms will blend reach and targeting to build the best media plan.
Measure the impact of message. Critical for understanding the differential impact of different messages on different people. A useful optimization system will incorporate this data, and will adjust message targeting and media mix to maximize ROI.
Compare targeting to broad reach. The attribution and media planning tools should let you do a side-by-side comparison and what-ifs so you can determine the best approach.
In the end, our data suggests that marketing professionals need to consider both a broad reach and more targeted approaches. The key to successfully navigating to a higher ROI for your investment is an understanding of new tools that are available and a focus on business outcomes, like sales and revenue, that really matter to your business.