It's a longstanding debate for marketers: Reaching as many people as possible or targeting their best prospects, often identified as loyal customers.
For big-budget marketers, reach increasingly has won. Much of the credit goes to the thinking of Byron Sharp, professor of marketing science at the University of South Australia and director of the Ehrenberg-Bass Institute. He’s been arguing that by targeting loyalists and prior buyers, brands doom themselves to decline, because consumers inevitably get sick of products or otherwise stray, and brands need an endless stream of new buyers and rising household penetration to grow.
Now the marketing trade group MMA Global is trying to chart a third path that CEO Greg Stuart is billing as the future of media planning. Dubbed somewhat opaquely as Outcomes-Based Marketing, the idea is not to maximize reach or target loyalists and heavy buyers, but rather find the “moveable middle” of people who aren’t particularly loyal or heavy buyers now but have potential to increase their purchases in response to a brand’s advertising. Some major marketers like CVS and Kroger are now testing the theory.
The idea is to steer ads away both from people who are going to buy a brand no matter what and those who have little or no potential to become buyers, perhaps because they’re cat owners and it’s a dog food brand or they don’t live close to a retailer’s stores. Everyone else is the “moveable middle.” The MMA’s initial research shows targeting them delivers more than 50% higher return on ad spending than a purely reach-focused media plan.
Sharp brand switcher inspires effort
It’s a compromise that won’t end the debate. Sharp certainly isn’t moving off his position. “To me it’s old wine in new bottles,” he says. “When you grow, you have to win all types of customers.” Any kind of targeting system, he says, inevitably excludes enough people to make that harder.
But the moveable middle idea is changing some minds. Indeed, the impetus for the Outcomes-Based Marketing project came from CVS Chief Marketing Officer Norman de Greve, who says he’s counted himself as a Sharp adherent and even served on the Ehrenberg-Bass advisory board.
“I think the great need for many marketers is to have a framework for growth that they can use to evaluate all the offerings out there,” de Greve says, which led him to bring the idea of developing such a framework to the MMA board.
“What became pretty clear was that there was a lot of passion for a few different frameworks,” he says, including Sharp’s. “What we identified was this idea of focusing on the moveable middle,” which sounds like a compromise between loyalty and reach marketing, but “is really powerful and I think a way to drive ROI,” he says.
Currently 20 companies have tests targeting their brands’ moveable middles to see if the idea works, de Greve says. “We definitely see the lift as exactly what [Outcomes-Based Marketing] suggested,” he says. “The people who buy the most, it’s hard to get them to add additional purchases. And the people who have never used you are hard to move as well. But there is a group, and they could use you infrequently and use your competitors, and when we focus our marketing there, we just get a much higher return for the dollar.”
Kay Vizon, director of media for Kroger Co., was part of the marketer advisory board for the Outcome-Based Marketing project and also has been testing outreach to her retailer’s “moveable middle.” Like CVS, Kroger has an extensive loyalty card program. But Vizon’s focus has largely been on how to target the moveable middle in other media marketing.
“To me, it’s almost a bridge between the work we do that is very one-to-one with more the brand marketing side of the house, where traditionally we had been doing more of the reach plays,” Vizon says. “Now we’re at this interesting stage where we’re able to bridge those worlds, leverage our first-party data, but then expand beyond that to lookalikes of certain customer segments we have, and therein likes your moveable middle.”
That doesn’t necessarily require cookies or other personally identifiable information technology to work, she says. “A lot was already developed around building cohorts and finding lookalike audiences.”
MMA: Not ‘Mobile’ anymore
One caveat: MMA used to stand for Mobile Marketing Association. A prominent case study in the research paper behind Outcomes-Based Marketing, involving an unnamed frozen-pizza brand, shows the brand’s moveable-middle “outcome” media plan had a lot bigger allocation of mobile display (20%) and mobile video (28%) than the reach plan, with 10% mobile display and 15% mobile video. Big losers in the outcome plan vs. the reach plan shift were linear TV, which went from 45% to 20%, and desktop display, which went from 20% to 10%.
But Stuart points out two things. MMA doesn’t stand for Mobile Marketing Association anymore. Now it’s a marketing association focused on research broadly that, as Stuart says only half jokingly, aims to “save marketing from marketers.” And he notes that the group’s board is made up primarily of marketer executives, with a mix of others from a range of media and analytics companies, including from NBCUniversal, Verizon, Roku, Facebook, Salesforce and Walt Disney Co.
De Greve says CVS reaches its “moveable middle,” identified through its ExtraCare loyalty program data, primarily through digital media. Yes, it does have a “loyalty” program. But, no, the idea is not to target only loyal shoppers, but also those who come less frequently or divide their trips between CVS and competitors. And it’s not based entirely on matching those shopper IDs via cookies or other individual identifiers that are going away.
“Some of our advertising reaches people who haven’t used us but look like those who do,” he says. “When you do your targeting of the moveable middle, that also attracts new customers.”
Kroger, which uses TV extensively in some markets, likewise sees reaching the moveable middle as a combination of targeting people through its first-party shopper data and using modeling approaches to find them in other media.
“We realized there are portions of our media work where we could not see true one-to-one,” Vizon says. “So we will leverage one-to-one in our own channels, and we can do that quite efficiently. In our off-site media activations, we are happy to work in more segmented audiences, append it with those lookalikes, and use certain technology tools to further dimensionalize what we learn about our customers and just get smarter about how we actually message.”
Missing the target is part of the plan
Indeed, the moveable middle is a target that doesn’t need to be hit precisely to work, says Joel Rubinson, CEO of Rubinson Partners, who led the MMA research effort. MMA’s initial research found that targeting the moveable middle actually increased household penetration more than a reach-focused media plan, Rubinson says. That’s in part because it misses the exact individuals identified by past purchase behavior but reaches people who share many of their characteristics, he says.
One way of searching for moveable middle buyers is building models using survey data, such as that used by study participant Neustar, which estimates the relative concentration of a brand’s target in each of its 172 consumer segments.
“What you’re trying to get is relative density of people who are considering your brand,” Rubinson says. Even within linear TV, some shows might have a 30% concentration of your moveable middle, even though the general population is 15%. But the remaining 70% of the audience is also more likely to share characteristics that give them greater-than-average propensity to buy the brand.
The same idea applies to targeting retailers with advertising or promotion. One retailer might have more of your target than another–say Publix over Winn Dixie for a premium ice cream brand. And even if Publix shopper isn’t a past Haagen-Dasz buyer, they’re more likely to try it than a Winn-Dixie shopper.
“There’s a false equivalence” in the minds of many marketers that the only way to grow household penetration is through a plan that purely aims to maximize reach, Rubinson says. Narrowing the target a bit—not just to a brand’s previous buyers but to people like them—will deliver a bigger sales lift, he says. In turn, that will build more sales that generate bigger media budgets to reach more people in the future.
For most brands, the “moveable middle,” while a bigger target than heavy buyers or loyalists, is still only a single-digit percentage of the overall population, Stuart says. The biggest “moveable middle” for a brand in MMA’s research is Procter & Gamble Co.’s Tide, with 41% of the U.S. population falling into its readily persuadable camp between loyalists and those who never buy it.
P&G is looking for that group too in its own fairly similar way. The company declined to comment on exactly how it’s qualifying media targets these days. But after admitting years ago that it had targeted too tightly in the past and moving to maximize reach, P&G these days goes after “Smart Audiences” of likely prospects, says Chief Brand Officer Marc Prtichard, using what it calls “propensity modeling” that sounds very much like what the MMA is getting at.
Realistically, marketers with lots of high household-penetration brands, like P&G with Tide, can afford to go for maximum reach and be sloppier on targeting because they’re more likely to hit someone who’s in their “moveable middle” anyway. But for smaller brands with smaller budgets, finding the moveable middle is both harder and more crucial.
Targeting the creative, not media
While targeting responsive households in the “moveable middle” makes sense, research shows the audience that responds most to a brand’s ad is the one that finds the creative appealing, says NC Solutions Chief Research Officer Leslie Wood. So while the MMA is talking about it as a media planning concept, it needs to also figure into creative considerations, she says. And the approach carries risks, she says, should creative that appeals to new buyers turns off a loyalists.
“I say you should really start with the creative, find out who it’s speaking to, and then target the people it’s speaking to,” Wood says. “When a brand is advertising their message, that message is going to resonate with people who’ve heard it before and believed it hook line and sinker. Ads that are purely driving penetration are giving a different use case or expanding the personality of the brand. When you do that, you also run the risk of really pissing off your existing buyers.”
Realistically, that mentality may be a bigger problem for brands with strong personalities and affinities, like Apple, Birkenstock or Starbucks, whose loyalists may not appreciate newbies joining the club and changing their image of what it’s about. It may not drive many decisions about frozen pizza, laundry detergent or drug stores.