Early in our careers, marketers are taught the "laws of advertising," time-honored pearls of wisdom that help us make sense of a world filled with near-constant technological and cultural changes. The laws evolve and change, coming from innovators and business leaders like
Existing customers innately have more value than one that requires being won over.
We either have customers or prospects. They are committed to our brand or they aren't. Still, brands are dedicating more time and attention to the notion of winning new customers than ever before. The numbers don't lie. According to Invesp Consulting, 44% of companies admit they "have a greater focus" on acquisition, whereas 18% focus more on retention; the rest claim to have an equal focus. I can't seem to wrap my head around these numbers. We know better. We know customer acquisition costs five times more than customer retention. Jay Chiat, co-founder of Chiat/Day, once observed: "You start losing a client the moment you get it." So while the adage "newer is better" might apply to smartphones, tablets and TVs, it's far from true here.
It's been my personal experience that you have much more to gain by upselling and cross-selling existing, loyal customers than you do by pursuing brand new ones. Rewarding your loyal customers is the best way to keep them loyal.
Marketers need to know where their money is going.
Department store magnate John Wanamaker died nearly 100 years ago, and during that time, there have been so many technological advancements they cannot possibly be listed here. Why then, does the following seem as if it was printed in any number of recent industry round-ups? "Half the money I spend on advertising is wasted; the trouble is, I don't know which half," Wanamaker said.
The need to be accountable for the dollars you spend is Marketing 101. Yet, many seem to feel that ad fraud is something that can be tolerated – an acceptable loss because it's too complicated to combat. CMOs are essentially treating it like a tariff for advertising online. Truly understanding ad fraud – where it comes from and how it can be stopped - is a core responsibility. Fraud is well-established, and there are a ton of tools that exist to detect and prevent it, so CMOs have no excuse to let this continue.
Marketers need to gain a firm grasp of how their ad spend is working; we need to put a fully agreed upon set of measurement techniques into place.
Measurement of campaigns is non-negotiable, so why are marketers treating it like it is—accepting nonsensical reporting with little to no meaning? In order to understand the value of a campaign, we have to execute them with performance criteria through established KPIs.
"It's very important to have a feedback loop, where you're constantly thinking about what you've done and how you could be doing it better," remarked Elon Musk, co-founder of Tesla. It's time we take his comment, and the similar comments of countless others, to heart.
That means finally admitting that clicks do not inherently lead to an increase in revenue. They can be mimicked and manipulated by highly sophisticated bots, and bots don't buy. CMOs need to think about digital marketing the same way they think about traditional marketing. In both cases, there will be plenty of data that can be gleaned or measured, but ultimately, it's measuring the RIGHT data that will make the most successful CMOs.
These pillars, all generally understood, have evolved organically. Each is the fruit of countless hours of frustration and failure. And though Wanamaker wasn't dealing with technologies such as smartphones, AR or VR during his time, he was dealing with innovative changes that impacted his business just the same. His challenges are our challenges. They are all worth reminding ourselves of from time to time.
About the Author
Ric Elert is a recognized industry leader with 24 years of experience in high-scale technology, individualized data and operational development. As president at Conversant, he sets the company's vision and guides more than 900 U.S. employees to ensure brands can have personalized conversations with customers across every device and channel.
Prior to joining Conversant, he was executive VP of engineering at comScore. There, he oversaw the development and management of comScore's global enterprise technology.
About the Sponsor
Conversant is a leader in personalized digital marketing. Conversant helps the world's biggest companies grow by creating personalized experiences that deliver higher returns for brands and greater satisfaction for people. We offer a fully integrated personalization platform, personalized media programs and the world's largest affiliate marketing network—all fueled by a deep understanding of what motivates people to engage, connect and buy. For more information, please visit www.conversantmedia.com.