Don’t Burn Down the Forest

Don’t Burn the Forest: Why Adding Depth to Your Strategy through Omni-Channel Marketing Is Crucial

Key Takeaways:

• Despite the efficiency and popularity of a performance-heavy media strategy, focusing solely on it is generally shortsighted and harmful to brands.

  o   Adidas learned this the hard way and had diminished ability to drive long-term growth

  without brand-building according to a recent Marketing Week article.

• On its own, performance marketing fails to reach the right volume of audience necessary to build the brand awareness needed for sustainable growth.

• Increasing your tactical mix by adding even one additional marketing strategy can have a huge impact (19%–35%) and amplification effect (up to 100%) on your ability to engage with target customers.

• Omni-channel marketing, an approach where all media tactics are up for consideration and often multiple customer touchpoints are utilized in a plan, tells a story, speaks in a human way, resonates with audiences, and creates lasting brand awareness and affiliation.

Modern marketing strategies are almost entirely dominated by digital and performance approaches; this may seem like a great idea given the hype that digital is currently receiving. But the reality is that when marketers put all of their eggs in this one basket, they kill their future potential for greater prosperity – similar to what happens to those who practice slash-and-burn agriculture in the rainforests. Without realizing it, they are burning down their “customer forest” for a quick return, and in doing this, they lose the chance to engage deeper, more sustainably, and more profitably with their customers.

The Effects of a Slash-and Burn Mentality

Focusing solely on performance media, as many companies currently do, leaves a company without the sustainability necessary for long-term success. This occurs similar to the long-term effects of slash-and-burn deforestation, a method of illegal deforestation to create farmland, that is occurring on a massive global scale.

Initially, it seems like a good idea because the farmer or business owner can plant more crops, but the damage that is done in the process hurt the farmer and the community so much more in the long run. When a rainforest is cleared, the soil dries out and becomes fire-prone, which has contributed to recent large-scale fires that have had a global impact. Moreover, the nutrients in the soil are usually depleted after one harvest, which means the ground has lost its ability to produce crops and accommodate a forest that contributes to keeping the land sustainable. After this has been done, the land holds no value, and the farmer must move on and let the forest regrow, eventually using up all the resources available and destroying the ecosystem in the process.

Similar effects occur when you fail to strategically and sustainably build up your brand. You burn through your customer resources quickly with no plan for the long-term sustainability of your company via ongoing omni-channel media strategy.  This is, in our direct experience in the past few years, a common and troubling phenomenon with direct to consumer products and services that are struggling to “make their numbers” for VC backed funding, but it’s not limited to new entrants in the market. Even one of the largest companies on the planet recently fell victim to this mentality.

Adidas Case Study

In a recent Marketing Week article, Adidas’s marketing leadership bravely “admits that a focus on efficiency rather than effectiveness led it to over-focus on ROI and over-invest in performance and digital at the expense of brand building.” They focused solely on performance advertising due to its efficiency.

There were multiple effects:

• The company lost the ability to drive long-term growth.

• Greater efficiency led to an oversupply problem, which led to products being sold on promotion, creating price sensitivity.

• Multiple agencies led to inconsistent measurement, so the main divisions began competing with one another and creating friction.

• The company lost its fundamental ability to determine how much it should be investing in marketing.

Clearly, this is not a good scenario for any company. Fortunately, Adidas has spent the last four years moving toward an omnichannel strategy that emphasizes brand awareness and attractiveness. They have primarily accomplished this goal through their ability to track metrics related to their brand and customers. This knowledge has helped them craft a better strategy to retain customers and foster more meaningful and lasting customer relationships by leveraging the full power of multimedia engagement.

Digital Marketing Growth in Recent Years

Summary: Despite the efficiency and popularity of a performance-heavy media strategy, focusing on it is generally shortsighted and harmful to brands.

The trend toward increasing reliance on digital advertising makes sense leveraging the technological advances and data analysis tools available in the digital world can yield impressive results. But one their own, these strategies can never build up your brand and foster a loyal following as effectively as an omnichannel marketing plan.

Performance media strategies are often seemingly far more economical than traditional marketing tactics, which is frequently the most-cited reason for their heavy use. This trend shows no signs of slowing down. In fact, social media, search, and online video are currently rated by far as the most critical channels by many CMOs. As the data below indicates, the priority for many senior marketers is almost exclusively dominated by digital. But this mentality impacts the sustainability of the company’s brand.

What are the Side Effects of Relying too Heavily on Digital?

Summary: On its own, performance marketing fails to reach the right volume of audience necessary to build the brand awareness needed for sustainable growth.

The reliance on performance marketing strategies is currently so ingrained in the industry that it’s almost a knee-jerk reaction to throw more money and time into your digital strategy whenever you can and expect these tactics to convert. The danger lies in what happens when you neglect other channels. There are several effects.

Failure to Reach, Nurture, and Convert Audiences at Scale

One of the most significant drawbacks of a mostly-performance advertising strategy is that it fails to drive consideration and convert customer sustainability. Digital ads in a performance marketing context will reach those who are easily convinced to take immediate action, assuming the creative message is compelling and the offer is clear. Direct-to-consumer products, app-based services, and freemium models are seemingly the most susceptible. Why? They rely on early adopters too heavily since they represent the low-hanging fruit that is easily picked. Studies show that innovators and early adopters represent just 16% of the total marketplace. Companies with this strategy will exhaust all of the innovators and early adopters of their product or service without creating enough strategic brand awareness. This can be deadly for brand-building.

Failure to Build Brand Awareness

Brand awareness is crucial in building a targeted demand—a customer’s desire for the product or service—within certain audience segments for the product in later waves of customers. These later waves, such as the third and fourth, also referred to as the early majority and the late majority, can be far more voluminous than the early adopters and represent nearly 70% of the available audience. In many instances, a failure to create depth and layers in your advertising strategy likely means that you will never reach these potential customers.

Why isn’t a Performance Marketing-Only Strategy Optimal?

Summary: Increasing your tactical mix by adding even one additional marketing strategy can have a huge impact (19%–35%) and amplification effect (up to 100%) in your ability to engage with target customers.

Performance strategies often rely on data about their ROI and ROAS; that is what has made them so popular across all industries. But these strategies fail to account for the complexity of human nature. The science of advertising relies on consumer psychology, which embraces several core tenets.

First, the marketplace is generally crowded with multiple solutions to a particular problem or need. Second, consumers will receive effective communication about the unique selling propositions. And finally, the layered effect of communications about the selling proposition and the nature of the brain will make it impossible for consumers to identify one advertising tactic or strategy that led to conversion.

In short, humans respond better to layers of information received from multiple sources. Even something as simple as adding out-of-home (OOH) strategies can be highly effective since they can amplify the reach of other media by 100% or more.   E*TRADE’s Type E campaign saw a 34.5% net income increase in their post campaign quarter after an OOH activation which included targeting seven top US markets—NYC, DC, SF, Chicago, Miami, Philadelphia and Boston—including a domination of New York’s Penn Station, the #1 transit hub in the #1 US market.

Additionally, consumers are 48% more likely to click on a mobile ad after being exposed to the same ad on an OOH advertisement first. This data demonstrates the value of layering your messaging across many sources.  An example of a layered messaging strategy is a prominent women’s footwear brand which used location-based messaging for retargeting performance efforts to an online store. The results included a 25% email response increase and 1.5x projected sales goals.

Responses are complex

Individuals have unique responses to different messages coming from a variety of channels. They don’t merely respond to one strategy uniformly, even if it is a digital strategy. Failing to provide a variety of messaging strategies across a range of channels means you overlook many instances to connect better with a higher number of potential customers. It doesn’t account for the fact that people have many different preferences for how they would like to receive content from a brand. Data has shown that each additional platform added pays off significantly in terms of ROI.

Stories Are Preferable

 A performance marketing-only strategy is also one-dimensional. It allows your company to deliver snippets of information but prevents that information from ever coalescing into an ongoing brand story. Yet a brand story can transform your ability to connect with your customers and keep them coming back for years or even decades. Consider Airbnb; it has a killer brand story that is entirely fashioned from allowing their customers to give voice to their own stories. This brand story resonates incredibly well with their audience and forges connections between the company and its customers. Humans are hardwired for stories because stories allow us to comprehend more, achieve more profound emotional responses, and develop trust. This is something that can only be achieved when a brand layers communication through time and across different channels.

 It Minimizes the Power of Data

 Performance marketing is often equated to data, but the reality is that the data can tell us so much more. We have analytical tools that can help us achieve greater levels of personalization and identify the optimal timing of message delivery, among other things. But much of this data will support the usefulness of an omni-channel presence. If we aren’t looking at how all the data can fit into all our available options for marketing, we have gaping holes in our understanding of the customer journey.

What Can an Omnichannel Strategy Do for My Company?

Summary: Omni-channel marketing, an approach where all media tactics are up for consideration and often multiple customer touchpoints are utilized in a plan, tells individuals a story, speaks to consumers in a human way, resonates with audiences, and creates lasting brand awareness and affiliation.  

The most significant benefit that an omni-channel strategy can bring to the table is the ability to nurture the brand-building process at an appropriate pace and incrementally rather than burning through the customers you can reach easily through digital-only content.   In looking back at our analogy to the slash-and-burn agricultural techniques used in the Amazonian rainforests and elsewhere, the negative effects could be minimized or completely avoided with a different approach. If governments could recognize and prioritize the communities and the livelihoods of their residents (address the underlying problem), they could also develop a sustainable strategy that employs individuals and treasures the precious resources that are necessary for long-term survival.   An omni-channel strategy also leverages the knowledge we have about psychology and sales and can allow your brand to tell its story and, in the process, connect with your customers on a deeper level. It combines this story with data about customer preferences and all forms of technology available (digital or otherwise) to foster a comprehensive overarching story. This ability means that you will be able to reach individuals at all stages of adoption, including the early majority, the late majority, and the late adopters.   This approach requires more focus on long-term strategies and goals than short-term prospects. Currently, increasing sales and customers are the top priorities for digital market strategies. Increasing customer engagement and improving brand awareness are ranked lower.  

Clearly, marketers have been ignoring the fact that digital strategies should fall within the broader picture of creating a lasting brand image that will persist now and in the future. The only way to ensure success in a multi-faceted future dominated by many advertising opportunities is by leveraging all of the opportunities with a robust omni-channel marketing plan.

Final Thoughts

Companies as prominent as Adidas have learned the hard way the myriad of negative impacts a brand can experience when too much emphasis is placed on performance strategies. Yes, these approaches can demonstrate a great initial ROI, and they look good on paper, but they simply can’t achieve effective brand building all on their own. They certainly represent an essential piece of an omni-channel strategy, but this strategy also needs to encompass other channels and messaging options in order to effectively layer communication and tell the story you want to tell about your brand.

The allure of digital strategies has undoubtedly contributed to their rise in prominence, and as technology continues to evolve, marketers may demonstrate a tendency to over-rely on these new approaches as their capabilities and effectiveness may be exaggerated in our minds. But while the future of technology is uncertain and will likely advance rapidly, the underlying psychology of sales and preferences inherent in human nature will remain static in the foreseeable future. People prefer layered communication and stories. That won’t change, which requires that companies deliver complex and multi-faceted interactions in order to successfully connect with audiences.

Crafting an omni-channel strategy can also help people value advertising as something interesting and helpful rather than hate them by speaking more directly to what they want and need. Brands that do this effectively will create a much more sustainable and successful environment so their company can thrive in the coming years.