In a recent feature, Targeting is the key to battling the Brexit Bite, our Commercial Director, Nick McConnell discusses how better targeted marketing can help companies deal with Brexit related challenges.
Better targeted marketing can help companies deal with Brexit related challenges.
The waves stemming from Brexit are rippling far beyond the political world. With the latest growth figures hot off the press showing GDP falling to 0.3% in the first quarter of 2017, and the devalued pound driving up the cost of imports and fuelling inflation, businesses are also starting to feel the Brexit bite.
Marmite was one of the first victims, post-referendum, with Unilever suffering a temporary delist from Tesco as it tried to hike prices, and other brands such as Weetabix and Nescafé have subsequently hit the news regarding price rises resulting from the sterling slump. Also earlier this year, a study from the Advertising Association found that 22% of 200 companies surveyed lost business due to the Brexit vote. As the flow of news about economic uncertainty and rising costs increases, marketing budgets are inevitably under pressure. How can marketers make the most of their spend as their belts tighten?
Unless you’re a new marketer, the likelihood is that you’ve seen economic uncertainty before – and if so you may be familiar with the ‘advertising reflex’. When times are hard, marketers automatically shift their money where it is ‘safe’ – typically consolidating spend into more traditional forms of advertising. CEOs seem to take comfort in seeing where their marketing teams are spending budget – and you can’t get much more visible than a page in The Sun or a slot in the middle of Corrie.
However, visible does not necessarily mean effective. Twenty years ago these big ad spots were a fairly safe bet. Today, with only one in five people now watching TV live, and consumer attention being divided across a myriad of different media channels and devices, this is no longer the case.
While TV and press advertising can still play a role in providing a background hum in order to maintain awareness and brand credibility, its reach is considerably diminished and there is significant wastage. Targeting tends to be at a very topline level and the majority of people will not be in the market for their product. And yet, in today’s data-driven, digital world it doesn’t need to be this way.
‘Intelligent targeting’ should be the new focus for savvy marketers. When money is tight, reaching the right person at the right time through careful segmentation is a far more effective way to go than channelling money into big awareness campaigns. Yes, the potential audience will be smaller, but it is one that is far more likely to respond.
Traditional direct marketing channels such as direct mail and email are perhaps less sexy than TV and press but, with the addition of today’s newer digital direct channels such as digital advertising and social media, marketers now have a variety of powerful ways in which to reach specific target audiences with highly personalised, relevant communications.
What is also new for many marketers is the data they can use to target people through these channels. In particular, more are finding opportunities from using life event data – i.e. data that identifies people going through a big life event such as moving home, having a baby, children leaving home and retirement. All of these have a huge impact on purchasing behaviour and, far from being one day events, tend to last for months (or even years) of planning and the ripples of change can continue for a long time afterwards. Life event data adds a layer of detail to demographic and behavioural data that qualifies why someone is behaving in a certain way.
For example, if a female aged 30 starts searching for a sofa that is interesting for a furniture company and an Ad Words campaign will raise the profile of their brand. However, if the same woman has sold her house subject to contract this qualifies that sofa purchasing is high on her agenda, rather than a passing interest. Not only that, they will also know that she is likely to be in the market for a number of other furniture items too – and can adapt their messaging and promotions accordingly. In fact, working with furniture retailers ourselves we have seen that this intelligent targeting approach can provide a Return on Investment of £25 to £1.
So if any marketer out there is challenged to drive traffic or footfall, it’s important that they don’t allow themselves to be drawn into big-budget, ego-boosting broadcast campaigns. The better approach is to make a case for intelligent targeting – and the numbers will speak for themselves.
Read the original article published on FreshBusinessThinking.com, check out some of our work to understand how brands are implementing this approach or contact our team to discuss further.