Marketing Math Is Fine, But Don’t Forget The Magic
Trouble comes when marketers mistake the algorithm for the person.
Forget Mad Men. Today’s marketers are more likely to be math men and women.
They plumb the depths of big data with advanced analytical tools. They buy and use dazzling new software. Some spend more on technology in a given year than their companies’ IT departments. They are hot on the trail of marketing’s Holy Grail, the ability to measure return on investment on every campaign.
These are laudable pursuits, up to a point. The trouble comes when marketers mistake the algorithm for the person. Great marketers tell compelling stories about their brands through memorable messages and indelible images. At its best, this kind of marketing pops and dazzles, like magic. Marketing that ignores the magic and relies on math and science alone will be marketing that doesn’t work.
Sometimes the magic is simple. The grocery chain Wegmans, for instance, created a mobile app that lets consumers select a recipe at home. The app then adds the ingredients to the customer’s shopping list and provides a route through the store layout.
Other companies have developed more complex digital-physical magic. The Chinese cosmetics company Jahwa provides reps on the sales floor with mobile devices that can tap into an integrated database. When the rep puts in the name of the customer she’s serving, the device provides data and recommendations tailored specifically to that customer—similar to the recommendation engine that consumers now experience on many digital sites.
Magic rarely can be outsourced. In a survey of marketers at 430 companies in the U.S. and Canada, we compared the leaders—those who were increasing sales and market share—to the laggards, who were losing sales and share. The leaders were three times as likely to use data for their decisions. At the same time, they were twice as likely to rely on their own creative capabilities, the ultimate source of great stories and memorable messages.
The leaders also recognize that it is just as important to experiment as it is to hold themselves to strict ROI requirements. Take an example from social media. In a 2014 Bain survey of more than 600 marketers who were spending on social media, we found that for those we identified as “dabblers”—companies spending less than 20% of their digital budgets on social media advertising—ROI was the most important criteria for deciding where to spend. As one respondent said, “Data, numbers, and ROI are not nearly as possible for us yet when it comes to social media—but a big part of my job is getting us to a place where we can measure everything.”
Marketers who had moved past the testing phase and were spending more than 20% of their digital budgets on paid ads in social media—the “believers”—took a different approach. Effectiveness of communication was still the most important criteria for this group, but they assessed effectiveness differently, by volume of leads and actions or reach of a targeted audience. One of these marketers told us, “The goal is to use all the different types of digital and social media to complement each other, but that’s only really possible if you have a great story to tell. You want a medium that is effective for communicating that story to the right and hopefully, large audience. Getting hung up on ROI doesn’t allow us to tell that story.”
In fact, the companies in this second group scored ROI next to last in importance. While these marketers also wanted to see the data and results that gave them confidence that their spending was productive, they were less focused on the calculation of true ROI. Looking at the full picture, including metrics other than ROI, made them comfortable with increased spending on emerging platforms. Dabblers, stuck in the data, tended to keep spending the same.
“Getting beyond ROI,” as it’s commonly known, remains a critical part of effective marketing. Most marketers can’t know all of the actions that customers take on their journey through a company’s marketing.
Even direct-response marketers don’t know for certain whether the response to an ad stemmed from the ad itself or from the fact that a friend happened to recommend the product earlier that day. While we understand the pressures on marketers—increased demand for spending efficiency, growing tech budgets, and an endless supply of data to analyze—the most effective marketers complement their quest for ROI with a similar commitment to marketing magic.