Justifying R O I For A Small Reach Campaign
I received a mail from Richard Gotlieb yesterday who has read Tomi Ahonen’s recent post about the Blyk model of engagement marketing. I asked Richard if I could mention him and his mail and he has agreed for me to answer his questions below. I hope this resonates with others too and feel free to leave comments as you wish. Here is his email:
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Here is my response:
Brands commonly want to ‘reach’ as many people as possible. This is to (at worst) raise awareness and consideration of their brand, by as many people as possible, and (at best) increase the chances of engagement and purchase.
In circumstances of extremely targeted campaigns to small numbers of people, it is understandable that the standard ‘reach and frequency’ model cannot easily be considered as, by nature, extreme targeting minimizes the pool of people in a campaign. This has an effect on the Agency commission model too which could arguably be a disincentive to target ‘too well’.
Due to this, it is my belief that the usage of a Blyk-like model would primarily manifest as a Direct Marketing platform with proportionally smaller campaign sizes than say, a banner campaign. I see it as a different discipline than the above-the-line media buyers, who need vast distribution.
In contrast, a company who is trying to acquire another 100k buyers of their product (with a strict cost-per-acquisition target) could perhaps more easily consider speaking with 300k people who have opted in to receive information about products similar to the companies offering.
Cost wise – and taking SMS as an example, in many cases, the production cost is essentially zero and if there were automated online booking tools, it would be easy to find cost efficiencies.
These media channels and uses are not mutually exclusive. I believe that digital is often best used in combination with traditional. After all, a full marketing mix of above and below the line, covers the bases better than only using one approach.
The figures of 8,000 people targeted from a 100,000 person base are always going to sound insignificant to mass reach buyers – so I would urge an open-minded approach to how a similar model could look when applied to a greater base. How about if 100 million people were in a base?
Also – and to quote Rory Sutherland:
One big problem the advertising industry has with mobile is that in general the advertising industry has been run on a CPM basis, where it defines an audience by their size, not by their purity. So the industry doesn’t distinguish between a vast lump of rock that may contain some gold compared to a nugget of pure 23 carat gold.
The point is that a self-selected mobile audience might be worth 1000 times more per person than a TV audience depending on the degree of specificity.
We need to mentally disconnect the niche MVNO part of Blyk with the undeniable proof that incentive based, permission and preference marketing, performs spectacularly in terms of cost-per-acquisition.
Personally, I am encouraged that more and more people are considering the Blyk model in terms of concept proof, as opposed to the number of members.
It is understandable the some may still write-off Blyk as ‘too small’ or ‘too niche’ without noticing what Blyk means. Others will see the significance of Blyk and think about what would happen if the model was applied in a scalable way. To summarize, some will get it and some wont – but that’s OK.
Whatever approach people take, the agency JMA (of which I am the Managing Director), is on hand to guide people along the path of new media innovation. Please get in touch if you feel we could be of any assistance.
