Forbes recently had an article entitled “Why Pragmatic Marketing isn’t A Silver Bullet” that makes the case for continued investment in traditional media that drives “awareness” vs. pragmatic marketing (digital media) that drives specific clicks and online actions. For hard core online B2B CMOs, an article like this would be met with eye rolls (mine did). For more traditional B2B CMO’s, the response is probably “of course”, traditional media has a play. In WebMarketing 123’s recent state of digital marketing report,it states that only 25% of marketing spending is online which would lead one to consider that the traditional B2B CMOs are dominating. For Forbes to publish this article is probably not surprising given they are a traditional media publisher.
But beyond personal preference, feelings, experience, or the opinion of Forbes, how do you balance pragmatic marketing spend vs. more traditional media? What is the mix?
For B2B marketers that can reach their target audience online with advertising and must generate daily leads for sales, I think the answer is simple. Before spending on awareness or traditional media, the online, pragmatic, lead generation channels that successfully convert to opportunities must first be exhausted.
Notice my caveat – you must be able to each your audience through online advertising. Not all B2B products work with online advertising due to the nature of the product, the sales cycle or the buyer. But if you can target your buyer online, exhausting digital media prior to general “awareness” spending seems logical.
Said another way, if you could spend $1 to generate a lead that creates $10,000 of opportunity using online channels, you would do this all day long. With $1000/day budget, sending sales 1,000 leads a day that generated $10M pipeline will make the sales team happy while perhaps making the publishers of traditional media not so happy.
Why not spend on traditional media in this scenario? Here is why.
Assume you were happily spending 100% of your budget on pragmatic marketing until you read the Forbes article and you realized that you needed to spend more money on awareness. So you approach the VP of Sales and say that although the pragmatic program generates $10M in pipeline daily, you think you need to spend more money on awareness and you refer the VP of Sales to the Forbes article. For the foreseeable future you tell the VP of Sales, they will only get 500 leads per day, while you spend the other $500 per day on magazine ads.
Now theoretically, that ad spend will drive increased awareness and cause your direct traffic to go up. AND, if your direct goes up enough, with a high enough site conversion rate in place, you could replace those lost 500 leads a day from the digital spend, with 500 leads from the awareness spending that manifests itself as direct traffic. To do this, you would need 5,000 more visitors a day assuming a 10% conversion rate. That is a lot of new daily traffic and the number of traditional media impressions required to generate that traffic – I am not sure how to even calculate. From the chart below, basically you would need a full page ad in AARP magazine and a very high impression to traffic conversion rate to make this happen.
So the strategy of taking leads from the VP of Sales and shifting to traditional media on the hope that the overall traffic is higher is probably not a winning strategy for success. I haven’t seen economics for traditional advertising work out this way, but if Forbes will provide me a full page ad for StoryMETRIX, we can test it.
So diverting spending from pragmatic programs that drive opportunities to awareness spending just doesn’t seem like a good strategy. Contrary to the Forbe’s article, while the supply of pragmatic advertising is close to unlimited, the extent of advertising that delivers an ROI is not. In fact, smart marketers know they can’t spend their way to success online for this very reason and are always looking to find the point of poor investment return for their online spend. So once the point of poor ROI is reached for pragmatic marketing, does this mean it is time to spend money on awareness? Well, maybe not.
If I can spend $100K on a magazine ad spread or $10K over 10 months on high quality content written by industry influencers that gets posted in key locations, which channel do you think I will pick? Unlike the magazine ad that provides an impression that ultimately ends up in the recycling bin, my high quality, well placed content will be the gift that keeps on giving year after year in the form of referral traffic to my site. Even in the case of a prospect base that doesn’t respond to online advertising, they may respond to well written online content. So once again, I would probably rank content spending above awareness spending even when my prospect won’t make purchase decisions based on online advertising.
Of course there are always exceptions, and every good marketer is always experimenting. Might I run a traditional media side bet in a highly targeted publication to see if I can drive direct traffic to a specific landing page? Yes I would. But this is the skunk works exception rather than any kind of rule. In a later posting, we will talk about measuring direct mail in this manner.
What is the conclusion?
For marketers whose audience is online, at some point, the online advertising and content development opportunities could get exhausted. The key is to understand this data point and to shift the marketing mix before the point of poor ROI is reached. But spending on traditional media for vague goals of awareness at some fixed percentage that doesn’t drive lead generation in a measurable fashion squanders program spend that could be used to generate this quarters revenue.