Advertising ManagementMarketing and Advertising

Are You Marketing By Vending Machine?

Avoid putting your Digital Marketing on Autopilot.

Improve your Digital Marketing business results. Recognize any of these common watch-outs?
Apply these 5 fix-it strategies to include broader and core Marketing competencies with your Digital Marketing performance metrics.

There are dangers in decision making using popular Digital Marketing metrics in a silo. Let’s call it Marketing By Vending Machine. Imagine a marketer standing in front of a media vending machine, ready for their afternoon ad purchase. They know if they put a certain amount of money in at the top, a specific number of people will be exposed to their ad. A percent of that audience will click on the ad to go to their website, where in turn a percent of the website traffic will click on the product, and a percent of the product clickers will buy the product. Multiply that final number by the unit price, and revenue falls out the bottom, just like a candy bar. Sweet, right? If you don’t get the revenue you want, just put more money in at the top. Really, a monkey could probably do it – and today’s very complex version of a monkey, which we call AI, can definitely do it.

Why CMOs should Worry

The danger of reliance on this view is wasting Marketing resources — time and money. But even beyond that, , the bedrock foundation of effective Marketing will be eroded: our core competency and collective passion in knowing the customer, figuring out what they are looking for, and determining how to talk to them about it.

Watch Out: Trying To Increase The Bottom Line By Looking At The Bottom Line

Marketing By Vending Machine can cause us to spend our valuable time trying to increase the impact of our marketing efforts by looking at the impact itself, which is inefficient at best and nonsensical at worst. If you just said “huh?” in your mind, you’re on the right track. There is a veritable flood of metrics available to track performance based Digital Marketing at each step on the customer journey. However, the flood generally trickles down to figuring out which combination of time, channel, product, message, and audience delivers the highest ROI. When we see a high ROI, we double down on that combination.

The unfortunate reality is that what was the highest ROI last week is often not the highest ROI the following week. In the short term, we flex our spending to the new high ROI combination. And the cycle goes on. If we don’t stop and ask why the ROI is what it is, we can end up going in circles, trying to improve the bottom number by focusing on the bottom number.

Watch Out: Unintentionally Eroding Your Brand Promise

Marketing By Vending Machine can obscure the long-term value of a truly relevant brand message. The most reliable path to short term revenue is usually to advertise a lower price for a limited time. This triggers a sense of urgency in the consumer to act at the bottom of the purchase funnel. So, no matter what your industry, the ad which offers the highest discount in the shortest time is likely one of your highest ROI ads.

However, we all appreciate that know price promotion can devalue our brand over time. Overuse of price promotion reduces the intangible brand promise to a simple price tag. Lower brand value leads to lower profit, which leads to lower shareholder return. Marketing By Vending Machine can keep us addicted to the bottom of the funnel, where we have the fewest number of options to truly change the consumer opinion and behavior towards our brand.

Watch Out: Talking Without Translating

Marketing has always had its own set of words. In fact, so has each function, and we have always needed to translate to each other to get to a common understanding of a particular issue. Marketing By Vending Machine has amplified the translation challenge by a thousand-fold. Sometimes, the message that the Digital Marketing team is intending to communicate to other functions gets lost inside the numbers, abbreviations, and acronyms.

The more cynical audience might even conclude that this is a deliberate behavior by Digital Marketers to keep the other functions at arm’s length. It can feel this way, as other functions get frustrated and withdraw from the conversation. Digital Marketers rarely communicate this way on purpose, but it happens in discussions every day, and the customer loses because of it.

Watch Out: Debating The Wrong Subject

Within the application of Marketing By Vending Machine, the conversation can meander off the most important topics. Because Digital Marketing is highly metric driven, our conversation can become about what we can measure more than why we want to measure that in the first place. Because nearly all performance measurement metrics are backward looking, we talk more about yesterday than tomorrow.

Most dangerous of all, because we target audiences using algorithms, who we are talking to can get reduced to a set of IP addresses. We may not have the critical discourse on which consumer insights we can use to create products people want and what compelling messages to use to drive loyalty to our brand. We may not spend time hypothesizing what we could offer to serve the customer better. In fact, we may not even be communicating at all with our peers, so we lose the ability to get everyone engaged in the effort to satisfy the customer.

The Way Forward

So, what are we to do? Here are five strategies:

1. Visit The Consumer Regularly

Physically put aside your screen and go to wherever and whenever your customers are purchasing and using your product or service. Get to know them as a person, not an IP address, and do it several times a year. There is an adage that customers cannot tell you about something they don’t know they need, they can only tell you what is wrong with your current product, but this is not true. They will tell you. They just won’t say it in words. Look for compensatory behaviors – how they are adjusting their own behavior to compensate for what the market doesn’t provide. Observational research is powerful.

Once my team did this exercise with Rubbermaid. We noticed that a consumer stored her wrapping paper vertically in a tall,thin box in her basement by the water heater. When we asked her why she did this, the customer answered that she didn’t have under-bed horizontal storage areas. Voila. The Vertical Wrap ‘n Craft was born. Almost 25 years and hundreds of millions of dollars later, it’s still a popular item.

2. Widen The Narrowest Point Of The Funnel

Certainly, find the highest ROI path. But don’t stop there. Take the extra ten minutes to look up the funnel of that purchase and see where the most significant customer drop off is happening. In other words, which part of the vending machine operation is limiting the revenue? Figure out how to open that funnel just a little wider so you increase the percent of people who make it from one step to another. Different tactics work at different stages of the funnel. Don’t just put more money into the highest ROI path. Change the highest ROI path to be even higher.

3. Keep Developing A Consumer-Relevant Brand Message

I have worked in industries from diamond rings to truck tires, and there is one person I always want to get to know: the one who spends the money. As a Marketing function, we must obsess over how to reach that person in the most persuasive way possible. But how to attack such a broad topic? Start by digging into the behavior of people who buy your product when it is at its most expensive. These are likely to be the most loyal and least price sensitive customers. They are your gold mine. Set up an ongoing consumer panel with them through which you can ask about motivations, behaviors, attitudes, test new ideas, and ask for suggestions.

4. Speak In Words Everyone Understands

At a dinner event I attended the other day, the guests spoke many different languages. Most of the guests had some understanding of the other languages, but English was the only language all the people had in common. During quick side conversations, such as one person asking their partner to pass the salt, they generally spoke in their native language. But for conversations in which all participated, we spoke English. It seems like a good model. When we are talking to our fellow Digital Marketers, it is faster to speak in the shorthand we know. When we are trying to bring in other functions, we must move to a more universal language.

5. Listen To Your Right Brain

Digital Marketing is all about metrics, but some things that can be measured don’t matter, and some things that do matter can’t be measured. Nevertheless, it is possible to identify the “unmeasurables” are so they can be discussed. Scientists have validated that while the entire brain works together, certain processes happen in specific brain hemispheres. The left brain receptors process numbers, logic, and the ability to speak. The right brain receptors process has intuition, connection, emotion, art, music, and so on.

We mostly use our right brain during the normal course of the day because it’s faster. For example, we see a red light and we stop. We don’t process it, talk about it, and then act on it, or we would probably have traffic gridlock more often. But during business conversations, our left brain functions are dominant, overshadowing the right brain, which unfortunately has fewer words. That doesn’t mean it’s not communicating with you, however. Pay more attention to how you feel. If something isn’t sitting well with you, stop and allow the thought to come to the surface.

Wrapping It Up

Use and become an expert in Digital Marketing. It’s measurable, targeted, and fast. The vending machine is powerful and evolving every day. Marketers without deep Digital Marketing acumen are operating at a deficient.

However, use Digital Marketing in tandem with the other foundational principles of Marketing to sharpen the focus on your customer. In other words, keep your Marketing diet balanced. Your business and brand will be healthier as a result.