Many marketing professionals may not know about John Wanamaker, but I am sure they have heard his famous statement regarding advertising spend. John Wanamaker (1838-1922) was a United States merchant, religious leader, civic and political figure, considered by some to be a proponent of advertising and a “pioneer in marketing”. Wanamaker was the first retailer to place a half-page newspaper ad (1874) and the first full-page ad (1879) (Wikipedia).
He is known as the person who made the famous statement, ‘half of my money on advertising is wasted, but I do not know which half.’ His assertion has been treated as a guiding law by the marketers for more than a century now. Has the time come now to revisit or even challenge the famous statement made by Wanamaker more than a century back? Probably yes, that’s what I feel and that’s what I would argue for in this article.
The statement illustrates the difficulties and the struggles marketers have been facing for ages. They spend huge budgets on advertising (and other aspects of marketing) but there is no direct way in which that can be justified (except for rule of thumb industry benchmarks and last year’s spend). It is difficult to establish a direct correlation between advertising and sales (considered as the ultimate measure of ad effectiveness). There are many other variables, which make this correlation complex to understand (e.g. brand salience, availability, point of sale promotions, retailers’ margins, pricing, competitive activities etc.). What aspects of the advertisement (and marketing) work, which does not and how do they impact the consumers’ behavior towards taking the final plunge? These are some of the questions, which generally do not have accurate answers.
Though the statement talks about advertising only, I believe that has been a problem with the entire marketing process. Can it be said instead that ‘half of my money on marketing is wasted, but I do not know which half’. Enormous efforts are taken by the marketers to justify the need for budgets through market research insights regarding interim variables like brand awareness, brand salience and ad effectiveness or through modelling the environmental, brand and outcome variables. In short, they try their best to understand marketing as an accurate process.
But then has marketing ever been an accurate process? Or is it more of a hunch and gut feel which is acted upon through the creative rendering of the advertisement, media planning (here there is data available even if contentious) and brand management? Well, market research helps to gauge consumer needs, brand (competitive) standing and other aspects, its limitations in terms of timely and accurate inputs has been widely questioned. So, will the marketer always work with double the budget as half of it’s going to be wasted? How does he continue to do that in an era of moderating growth, margin pressures and budget cuts?
The good news is that John Wanamaker’s statement can be revisited seriously in the realm of digital marketing. As a two way communication process, digital marketing allows a marketer to do a lot of things, which were earlier not possible, and can create a better visibility on the marketing process.
There are three broad accounts on which that can be done, making a marketing process more accurate and effective.
1. Tracking online visits, clicks, comments, time spent, multi-channel engagements and the final action to buy or not buy (that too across multiple channels). This is currently restricted to the online domain but the convergence between the online and the offline domain is fast emerging.
2. Create more and more personalized content, push it through multiple channels and create two way engagements. Unlike the traditional media options such as newspapers/ magazines, TV and radio, digital allows a two way content creation process. Not only do the consumers consume content, they are quite active in creating content.
3. Link the above two points in a recursive and real time manner so that the content consumption and user engagement is measured and that measurement further defines content creation and engagement strategy.
What was earlier done in a disjointed manner and with considerable time lag, can now be accomplished in an integrated manner and in real time.
“Customers/ consumers’ journey from content consumption to content creation to responding to promotions to active search among competitive brands to final purchase and to speaking about the product experience can all be tracked effectively using digital technologies (and compared against benchmarks or past performance)”
Analytics can both inform the marketer about the journey as well as it can be embedded in the marketing processes with options built in for various scenarios, thus allowing the process to take shape and form as per the scenario. Digital technologies can create both smart marketers and smart marketing processes.
In short, digital technologies can help a marketer make smart choices through real time consumer feedback, process level insights, program level metrics measurement and feeding all this into creating more and more personalized rendering of the marketing process. All these can help understand what aspects of the marketing process work, what does not and how, thus helping reduce the part which is wasted or enhancing the part which is effective.
The seven aspects, which build an effective digital marketing strategy, include the following.
- Social listening and analytics
- Digital advertising
- Content management
- Multi channel marketing
- Promotion effectiveness/ response management and analytics
- Targeting and testing
- Purchase analytics
There are digital technologies available for each of these seven processes, both as standalone and in a converged form. But let that be the subject of another article.
With the promises and possibilities made real by digital marketing technologies, is it the time to reconsider and rephrase John Wanamaker’s statement. Can we now say, ‘half of my money on marketing may be wasted, but now I can know which half’. And since one knows which half, one can act towards saving the wastage.
What do you think? Your comments are most welcome.