That's a gross simplification from a complex book, "SIRFs-Up --
Catching the Next Wave in Marketing," to be released May 29 by Mr.
Briggs, CEO of research and analytics firm Marketing Evolution.
(SIRF stands for Spend-to-Impact Response Functions.) A key
takeaway, however, is that despite six years of obsessive
investment in big data, marketing-mix models and other analytic
tools, marketers are getting worse, not better, at directing their
dollars.
"One big reason is that advertisers haven't changed from their
advertising-centric model yet, even though they've had a decade to
prepare," Mr. Briggs said.
Marketers still focus on driving awareness first and advocacy
second, when they should do it the other way around, he said.
Advocacy has always been important, Mr. Briggs said, with a nod to
Al Reis' decade-old theory that brands are built on PR first,
advertising second. But social media has only made prioritizing
advocacy that much more important, Mr. Briggs said.
Another reason for declining ad effectiveness may be the
analytical tools and processes themselves, according to Mr. Briggs.
He believes marketers have been misapplying marketing-mix models,
often further entrenching their longstanding reliance on TV and
price promotion. They or their agencies have clung to
reach-and-frequency media-planning models far too simplistic for a
complex marketing world, he said.
But perhaps the biggest revelation is that , despite all the
hype and rhetorical embrace from marketers about social media and
branded content, they're still significantly underinvesting in
both, according to Mr. Briggs.
He was himself a skeptic about the ROI of social media a year
ago when he launched his new analytical tool, TMR, for Telmar Media
Return on Investment. But after a year of number-crunching later,
he finds social media and the branded content it carries generally
produce strong returns.
That doesn't necessarily mean a big influx of ad dollars is
coming to Facebook or other social media. Big brands are likely to
max out their investment in advocacy via relatively low-cost social
media quickly and still have plenty left over to buy awareness
using other media, Mr. Briggs said. And when they do invest, they
often get the strategy wrong, using social media as an adjunct to
an awareness campaign rather than using social ads to amplify
advocacy, he said. For good examples, he points to tech brands that
use their Facebook ads to amplify favorable blog posts from
others.
The underinvestment he finds in social media doesn't broadly
extend to digital. Since 2006, return on investment from
branded-content efforts has skyrocketed, even as ROI from digital
advertising has been flat to slightly down, despite a steady drop
in digital ad prices. A big reason for the latter two trends has
been publishers placing more ads and clutter on web pages, which he
said has increased revenue per page but eroded impact and CPMs.
The rapid rise of ROI for branded content has come from the rise
of social media as a largely free distribution channel for it.
The basis of Mr. Briggs' new book is the previously mentioned
spend-to-impact response function. It's an algorithm that mines and
analyzes data from past campaigns to develop curves that plot the
impact, e.g. sales lift, for various levels of spending on each
part of the marketing mix. Ideally, a brand spends on each medium
and the media plan as a whole right up to the point that
incremental returns no longer justify an additional dollar of
investment.
Marketers and agencies have long known, at least intuitively,
these curves exist. But up to now, few have scientifically plotted
them in detail. Mr. Briggs is trying to do that , and believes such
analysis should become the basis for marketing and media plans in
the future.
