Home Newswire The day of reckoning has already arrived for brands that over-target

The day of reckoning has already arrived for brands that over-target

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There is a lot of recognition that the top of the marketing funnel – that legendary place where you build awareness for brands, often using mass-reach TV advertising – has not been adequately ‘served’, and brands who neglected this activity are already suffering. That was what Irwin Gotlieb, Global Chairman at GroupM, told an advertising conference in Canada a couple of months ago. “It is my view, as a general statement, that there has been a tendency to over-target,” he added.

“The day of reckoning is not coming; it has arrived. Many of the brands that over-target have gone or have been marginalised to the point where their relevance is in question. Dozens of brands have suffered that outcome and it is not good for the economy, for society. It is not good for the media business and it is not good for marketing.”

Speaking at Future TV Advertising Forum Canada in Toronto, Gotlieb observed: “When a client puts a gun to your head and says ‘I have to save 20% [advertising budget] next year, – what are you going to do?’, you narrow your target audience descriptor and focus on the lowest-hanging fruit and stop spending money on watering the tree.

“The good news is that it works for a few months and maybe even a year or two, but eventually if you have stopped watering the tree, there is no fruit that hangs on the limbs and then the tree dies. And to be clear, that is not a good result! If you want the low-hanging fruit, you have to start watering the tree; it is called a ‘marketing funnel’ for a reason.”

Gotlieb has previously urged brands to keep spending money on mass-awareness advertising at the same time that they look to exploit household-level addressable TV advertising. And he thinks the marketing industry has now acknowledged the danger of neglecting the top of the funnel. “A number of very big marketers have clarified their thinking on that point.”

GroupM is convinced there is new money that will come to TV thanks to addressable advertising, as brands use television both for awareness (at the top of the funnel) and lower funnel objectives like preference, consideration and even transaction. And Gotlieb urged inventory owners to look at the big picture opportunity.

“The typical CPG [consumer packaged goods brand] today spends less than 25 cents of every marketing dollar on paid media, with the rest going to promotion and trade support and things like that. You have a 25-75 split. It is a different split in automotive and financial, but I’ve been in conversations with media owners and they didn’t realise that someone else had already eaten their lunch, and what they were left with was the crumbs on the plate, and that they are busy trying to steal the crumbs off the other guy’s plate when the sandwich has already gone somewhere else!”

The message could not be clearer: don’t just fight for paid media budgets – start fighting for a share of the much bigger trade and promotions budget. GroupM believes that addressable TV advertising gives television inventory owners the chance to target that pot of money.

“I would suggest they [brand advertisers] are going to get a much better return by using a combination of [television] top-of-funnel broad targeting plus mid-funnel and bottom-of-funnel highly targeted media, and it is a no-brainer for that to come out of trade support and promotion.”

Like in other markets, GroupM has been increasing the pressure on the Canadian sell-side to make household-level addressable TV advertising available on broadcast infrastructure. Challenged about the costs involved, especially in a relatively small market, Gotlieb predicted it would cost “low tens of millions” [of dollars] to equip the market, so less than some might fear.

“Secondly, I don’t think the industry has a choice in the matter. We put our money where our mouth is [referring to GroupM investments in advanced advertising tech, including an early investment in INVIDI, a pioneer in enabling addressable ads on broadcast infrastructure]. If you put short-term profitability ahead of your long-term goals you are not serving the interests of your stakeholders.”

Using a quote that refers to business disruption more widely, he warned: “If it can be done, it will be done. The only question is will you be the ones doing it.”

Photo: Future TV Advertising Forum Canada 2017


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