By Shaune Jordaan, CEO of Hoorah Digital Consultancy
Anyone who’s ever worked in advertising has heard this saying by 19th Century US businessman John Wanamaker: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” In the nearly one hundred years since Wanamaker died, the advertising landscape has changed dramatically. One thing that hasn’t changed, however, is that vast amounts of money spent on advertising and marketing are wasted.
Fortunately, it doesn’t have to be that way. With a little understanding of where the wastage comes in, even CEOs with no experience of the advertising industry can make changes that’ll see their marketing teams bringing in real business results at a fraction of the cost.
A broken model
One major source of waste comes from the way the advertising industry works. Let’s say you’re a bank and you want to run a campaign for a new vehicle financing product aimed at young professionals. You might think it would be as simple as choosing an agency, approving the creative, and waiting for it to flight on whatever media are most relevant to your target audience.
In truth, it can be a lot more complicated than that. The agency you hire may produce the creative elements of your campaign, but that may not actually ensure that it appears on TV, or a billboard, or your favourite website.
For that, they’ll turn to a media-buying agency with the expertise needed to place those pieces of creative. Even if they didn’t tell you, your original agency always knew it was going to do this and charged you accordingly.
To ensure that the creative is seen by the right sets of eyes, that media buying agency may turn to a research agency, further escalating costs.
Even in groups that have all these capabilities under one roof, these silos remain in place, entrenching waste.
Missing the trick
Even if your marketing teams know this (and they probably do), they’ll likely tell you that it’s just the way things have always been and that there’s not much anyone can do about it.
It’s at this point that you can watch the worried looks spread across their faces as you tell them that they’re wrong.
You see, the traditional advertising model assumes that you need to go out there and find your target audience and that the data to help you do that exists somewhere out there, on Facebook, or Google, or the opaque world of TV and radio research. It also assumes that you must spend large amounts of money to get your hands on that data and do something with it.
Here’s the thing though: the average business already has incredibly powerful data at its disposal. That data comes in the shape of its customer databases and it costs nothing to gather. It’s already there, just waiting to be useful.
And believe me, it is incredibly useful. Think about everything you must disclose when you sign up for a new service or product. Most advertising agencies would kill to have that kind of information at their fingertips.
Importantly, you don’t have to run the agency gauntlet to take advantage of this data.
In fact, with a little training in the latest people-based marketing technologies, your marketing teams can use this data to execute incredible digital campaigns of their own. Rather than throwing money at third parties and hoping for the best, they can ensure that the right people get the right message at the right time.
Not only does this save the business money by avoiding wasted ad-spend, the advertising that does go out is far more likely to achieve real business results, impacting positively on its bottom line.
John Wannamaker might not have known which half of his advertising spend was wasted, but with the right changes, that doesn’t have to be your fate.