One of the most overlooked insights of the short-lived Internet boom is the power of highly-refined targeting. In the spirit of not throwing away the baby with the bathwater, CMOs should harness the stimulus for improved targeting to accelerate brand growth.
 Consumer targeting is a horribly crippled function at most companies. The reason is a hangover from what A.G. Laffley at P&G calls the "Big Bang theory of marketing" (which he said, in his next sentence, is now dead).
The Big Bang theory was an artifact of the 1950s: mass marketing, network television, TV advertising centric; develop a superior product; and offer it to everyone via mass marketing, mostly network TV advertising.
In this construct, targets were groups such as "mothers," or "women 18-49," or "families with children." Sadly, we haven't come much farther since then. It's amazing to see how many brand marketing plans continue thoughtlessly to delineate such bloated and undifferentiated groups as targets. Worse still is the number of media plans and media planners who succumb cravenly to the "gross tonnage" school of media buying that keeps them in thrall to the network TV dinosaur.
At the other end of the spectrum, it's still pretty hard to build a significant business on the flawed concept of "one-to-one" marketing. Direct mail response rates for consumer financial services are at an all-time low because of the category's abuse of the medium, and only a handful of major brands (like Dell and Amazon) have demonstrated the appropriate understanding of the business model to develop the customized selling capability of the Internet to the point of achieving critical mass.
But in between these extremes there are a host of businesses and opportunities to increase the efficiency and effectiveness of brand building by eschewing the empty calories of mass marketing and substituting the protein-and-fitness regimen of sophisticated, scientific targeting.
Here are some principles that will help you lose pounds of ugly fat from your target audience and make your business more agile and responsive.
Every targeting statement should include an attitudinal component.
Customer loyalty to brands has a major attitudinal or emotional component. Customers bond to brands because of how brands make them feel (confident, better looking, fulfilled, indulged, etc.) not because of their demographics. Every target audience definition must include an attitudinal statement, such as "Men 21-40 with household incomes over $100,000 whose self image is enhanced by the brand of car they own."
Eschew the empty calories of mass marketing and substitute the protein-and-fitness regimen of sophisticated, scientific targeting.
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Some media buyers push back and complain: "You can't buy media to hit an attitudinal group." Or: "You can't buy a mailing list with the addresses of an attitudinal group." This is baloney. The target audience definition is designed to make the brand more successful by more accurately identifying the exact make-up of the target audience.
Putting targeting in the "too-hard" pile because of the inadequately programmed software (or, more precisely, inadequately rigorous thinking) of a media-buying agency is a dereliction of duty. Some CMOs have addressed this issue by giving the media buying agency primacy over the creative agency, on the grounds that working hard to define the target audience and the media plan best attuned to reach them is a more influential act in growing the brand than the advertising used to communicate to the audience once it is identified.
Understand the heavy users and quantify their contributions.
Marketers often talk about heavy users and super-loyal consumers, but they don't always do the hard work necessary to understand their influence on brand economics and performance. Some small- and even medium-sized brands are so dependent on heavy-user households that a very few of these households deliver the vast majority of the volume. Think, for example, of brands in categories like mayonnaise, where the heavy user group is becoming more and more isolated. Any broad reach media plan is wasted in a category like that.
Leading companies have developed complex research monitors and calculators to understand not only the nature of the heavy user, but also the volume effect of adding to the heavy user group and the economic value of doing so. Heavy users tend to have both more usage occasions and more units of consumption per occasion, so their influence is multiplicative not just additive.
Changing a brand's usage profile by moving just a few users from frequent to heavy can make an enormous difference. Study the brands in your category that have more top-weighted user profiles (i.e. more users in the "heavy and frequent" versus "occasional and infrequent" groups) and try to understand (a) why that is the case and (b) how you can reproduce that profile for your brand. Time spent studying heavy users can be the most productive time you will ever spend.
Use the Internet as aggressively as possible.
The Internet is an increasingly useful targeting tool, in at least two ways. One, of course, is the development of a database of users and potential users who are attracted to your brand, its Internet content and its Internet offers. A brand that takes a disciplined, profit-oriented view of Internet marketing activity (i.e., revenue dollars generated, not eyeballs), can quickly become more and more sophisticated at using the Internet as a genuine and valuable marketing tool. By becoming skilled at managing this activity, you can gain a competitive advantage over brands that are less aggressive in this medium, and as the Internet becomes more and more important (both in the U.S. and globally), the skill set you have built up will become more and more valuable.
Time spent studying heavy users can be the most productive time you will ever spend.
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The other use of the Internet that's important in targeting is its role as a research and testing tool. Brands can execute research on the Internet that delivers rich targeting nuances that would otherwise go unrealized. One contemporary tooth-whitening brand, for example, found a huge over-indexing of purchase interest from readers of men's health magazines. In retrospect, it stands to reason : men whose vanity extends to body building would want to have super-white teeth. But conventional media analysis did not reveal the opportunity. The insight came via a research tool that was capable of rotating varied messages against varied targets at varied websites, ultimately isolating highly-effective combinations.
Another benefit of Internet research is the "definitely did buy" score (DDB). Most conventional research can only deliver a "definitely would buy" score -- an opinion expressed at a moment in time under unreal conditions that may or may not be projectable. By offering your test product or service for sale over the Internet, you can get a much more projectable "DDB" score from much more identifiable buyers, without the cost of a brick-and-mortar test market.
Be choiceful in every targeted dollar you spend.
Amazingly, we still buy media, and especially TV media, by the ton. We do so purely for cost-per-thousand reasons. Often, the corporate media buy is doled out to brands in the portfolio, with little regard to how well it fits that brand's target audience profile. Katie Couric was cheap this season so we bought a lot -- even though your male head of household target never watches her.
Even the simplest of disciplines that formerly were applied seem to be falling by the wayside. One example is daypart adjusted recall. Agencies used to go to the trouble of acknowledging that ads in some dayparts are recalled at different rates by different viewer types, and adjusted their calculated values accordingly. Nowadays, such careful discipline seems to have been lost. CMOs should bring the discipline back.
Targeting is an element of marketing strategy that, too often, is paid mere lip service today. A little thoughtfulness and analysis would go a long way to making your media, promotion and PR dollars significantly more effective and efficient.
Hunter Hastings is managing partner of EMM Consulting Group, which advises companies on how to implement Enterprise Marketing Management, a multi-faceted system for global brand management combining marketing knowledge, best practice processes and training with collaborative software, marketing tools and infrastructure. He can be reached at HunterHastings@EMMConsulting.net
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