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Ways in Which Arts Marketing Is Different Than Traditional Product Marketing?
A discussion with Rachel Zimmer (GM, Entrepreneur Offset) and Rob Palumbo, (CEO, OutPoint)
Introduction
Should high-growth companies treat Marketing as an Art or a Scientific discipline? Are traditional marketers or growth marketers more effective in their roles?
The role of Fine art vs. Scientific discipline in the field of Marketing is a classic contend, recently amplified by an ongoing barrage of new technology and the rising of 'growth hacking.' Flavors of this debate take many forms inside Marketing teams: from deciding whether to invest in brand marketing vs. functioning marketing activities, weighing quantitative information vs. qualitative insights, hiring some other growth marketer or a make-oriented marketer, and much more than.
Improving Marketing'south effectiveness is a multi-billion dollar opportunity, given the dollars in play. This year, global advertizement spending will jump x.2% to a record $651 billion in 2021 after falling four.1% in 2020 (source). But behind the record growth numbers lies a concerning problem effectually waste: according to data pulled from 70 studies, the median approximate is that forty% or $260 Billion of paid media spend will go to waste (source).
We call up the all-time mode to solve the effectiveness problem in marketing is to blend the best practices of traditional and growth marketing. This post features a discussion with Rachel Zimmer (GM of Entrepreneur First, and an experienced "traditional" brand marketer) andRob Palumbo (CEO of OutPoint, a growth marketing optimization platform).
As Rachel and Rob uncover, there is no scenario in Marketing that deviates from the cadre effectiveness outcomes that both Traditional and Growth Marketers want to attain: practise you lot empathise the human being on the other terminate of the message? Can you influence them to accept action? Tin can you maximize the efficiency and effectiveness of your marketing resources?
Marketing as Art (The Fundamentals)
Rachel Zimmer, General Manager at Entrepreneur First & former CPG Marketer
I kicked off my career in consumer appurtenances marketing at Johnson & Johnson, where I deployed well-established "traditional" Marketing frameworks, including Positioning Statements, Customer Insight, and Artistic Development.
Now working in applied science, I see many companies jumping right to data-driven "growth hacking" instead of doing the crucial heavy lifting required at the offset of Marketing. I recollect that core Marketing fundamentals are undervalued in the current "growth"-driven Marketing world. Adept consumer insight work, value proposition strategy, and discipline on brand creative are making a significant improvement.
Digging back to my consumer packaged goods roots, hither is a summary of those learnings:
Defining a Positioning Argument:
What is a positioning argument? A positioning statement is a concise definition of your competition, target market place, the problem that they confront, and the defensible solution your brand offers. Information technology Is also known equally a value proposition.
Every Marketing determination that a brand makes should marshal with a well-defined strategic framework.
Hubspot has an first-class overview of a variety of positioning statements from Tech to CPG here.
Customer Insight Generation:
The foundation of any constructive positioning statement is a rich customer insight. Brands can unlock insights through thorough client research using qualitative principles similar those found in The Mom Test or Talking to Humans.
A useful customer insight is a problem statement expressed by the customer contained of hearing a solution. For case:
Bad Insight: "we employ many internal tools, making it hard to keep track of what's going on."
Good Insight: "my number i frustration is working with external freelancers. When nosotros share large files (like video) with external team members, we struggle to capture feedback efficiently and clearly. This leads to misinterpreted feedback, boosted revision cycles, and ultimately a longer timeline to get our videos out in the marketplace. This leads to foregone revenue."
The Artistic Cursory
Once the client insight is identified and the positioning statement is defined, a brand now has the foundation for drafting a solid creative brief.
The creative brief is an asset to exist shared with the creator of their choosing (for instance, a designer, videographer, agency, etc.).
At that place are lots of brief templates, but below is one that I use most ofttimes:
one. Context
Provide an overview of your company and brand Details most your visitor & brand
Share an overview of what your projection is trying to reach, including business concern goals and KPIs
Include existing assets or facts that may be useful for the project such as the brand'southward positioning statement and of course, the underlying consumer insight
If it exists, include brand guidelines that particular how a make should communicate from tone of voice to font
2. Deliverable
Indicate exactly what y'all are looking to have created
Note the number of assets, file formats, method of file delivery
3. Timeline
Detail the fourth dimension and date for each iteration or deliverable in the projection. Here is an example listing of milestones for a simple projection:
Cursory Delivered
Projection Proposal
Projection Approval
First Cutting
Feedback
2d Cut
Feedback
Final Deliverable
4. Budget
Provide a range that you expect to spend on the project so that the ideas presented are affordable
Assessing Creative
From my experience in CPG marketing, effective creative accomplishes three things:
Information technology Breaks Through. Customers are inundated with thousands of letters everyday so any creative that you develop needs to stand up out from the residue. Expert creative catches the audition's attending in the medium that you are delivering the bulletin.
The Brand is Memorable. The creative does a good task of making sure the brand is prominent and memorable. If your customer sees the artistic but doesn't remember your make, what was the signal?
It Persuades Buy. Does the creative communicate a compelling bulletin to the audience that motivates them to purchase the product or service.
Allow's apply this framework, deconstructing ii examples:
Bubly
Does the creative breakthrough? Yes (though a chip of a crook) because of Michael Buble (let'southward exist honest, he can intermission through anything! Additionally, this ad was shown during the Superbowl which has extremely high viewership. Some may recollect that the Superbowl is only for big advertisers like PepsiCo, merely there are many tech players that have institute smart ways to follow accommodate, similar Wealthsimple.
Practise you remember the make? Yep! Bubly is mentioned in the creative for almost the entire duration of the ad. Additionally, the artistic idea of connecting to Michael Buble was tied closely to the make. If you lot recall or think of Buble, you lot now think of Bubly.
Does this creative persuade you to buy? This is probably the weakest of the 3 criteria. There isn't anything that would compel the client to buy, today. An example of what that could exist is a limited fourth dimension promotion, incentivizing urgency.
Another example, allow's deconstruct this out of home advert:
Kit Kat:
Does the creative quantum? YES! Given the Zoom fatigue that and then many are feeling in lockdown, this OOH (out of habitation) creative does a corking task relating to the target with their normal day. By placing the creative in a jitney shelter it stands out vs the setting. If this creative were to exist a digital ad unit, peradventure it would break through less. This shows how the medium and the bulletin work paw in manus.
Do yous remember the brand? Yes! KitKat has historically endemic the "break" moment in their target customer's day to mean solar day life. Past delivering a message that visually shows the interruption in a packed COVID-xix work from home day, the brand is memorable.
Does this creative persuade you to buy? Maybe? The creative is probably more than virtually brand think than incentivizing firsthand purchase.
While the applied science, tools, experiences, and data available accept evolved, the human being, 'art' components of Marketing take not, and likely will not, ever change:
Practice you know your audience?
Practise you have a message that meets them where they are,
... and drives them to take action or call back differently?
Over to you, Rob, to introduce the science side of the marketing debate.
Marketing every bit Science
Rob Palumbo, CEO at OutPoint & former Startup Growth Marketer
I agree with Rachel that modern, high-growth brands need to balance the strategic, human-centric fundamentals of Brand Marketing with the data-driven thinking of Growth Marketing. It tin't exist one or the other.
My background is in information-driven Growth Marketing. I cut my teeth leading Growth and Marketing for several loftier-growth consumer digital businesses, including Borrowell and Properly, working on initiatives across paid marketing, product expansion, and customer retentivity. I helped those companies grow products from 0-to-100k+ users and millions in revenue, with data-driven marketing serving as a principal growth lever.
A recurring trouble I've observed on my teams, and i I've been guilty of myself, is that Growth Marketers typically "remember" in siloed terms of information, conversion rates, growth loops, and funnels, and not enough in terms of qualitative human needs or make. Later all, the purpose of ad isn't to predict what will convert. It'southward to influence people to convert.
Allow'due south cover some common ground. Both the traditional 'Art' side of the coin and the data-driven 'Science' side of the coin concur that making constructive decisions to reach i) the right client with 2) the right message at three) the right time is crucial. Marketing Scientific discipline builds upon this foundation past leveraging experimentation, data, and technology to optimize typical Marketing objectives such as revenue growth or customer acquisition.
What is "Growth" vs. "Functioning Marketing"?
It's of import to make a clarification here. In technology companies, "Growth" is a multi-functional process of improving an objective/output (due east.1000. new customers, revenue) via experimentation of prioritized inputs (e.g. ad spend, retentiveness emails, pricing, product) across the customer journey. Notably, the field of "Growth" expands across the traditional domain of Paid Advertising into product, design, pricing, retention, and other fields. In tech companies, many engineers, product managers, designers and data scientists will work on Growth, in addition to Marketers.
Performance Marketing is a subset of the Growth domain, typically focused on using paid ads to direct grow the business. At its core, Operation Marketing (sometimes referred to as direct response advert) is a methodology that forces advertizement spend and Paid Marketing decision-making, such as aqueduct mix investment and customer targeting, into a system quantitatively mapped to business objectives.
For the purpose of this postal service, we will dig deeper into the scientific discipline behind Performance Marketing.
Principles of Functioning Marketing
The classification of Functioning Marketing every bit a Science started with the 1923 marketing classic "Scientific Advertisement," which argued for the importance of measurement and experimentation in advertizing. Notably, Scientific Advertising contains an original description of the procedure of dissever testing and coupon-based customer tracking (precursors to today's digital-based customer attribution and measurement tools).
"Almost any questions can be answered, cheaply, rapidly and finally, past a test campaign. That is the fashion to answer them — not by arguments around a table. Go to the court of last resort — the buyer of your product." - Scientific Advertising
Split Testing (A/B Testing)
A split test (besides referred to as an A/B test) is a technique that tests two (or more) elements of a marketing tactic against another to find out which combination of inputs delivers the best results for a desired output. In my experience, a successful split exam tin increase return on investment (ROI) by up to 10x! Just even "losing" tests are helpful for learning what works and what doesn't.
(Source)
Split testing applies to nearly all areas of Operation Marketing and the wider domain of Growth. Some examples of tactics Marketers can split-test include advertising creative, emails, product copy, landing pages, channel mix, and pricing.
Channel Mix
There are a lot of paid marketing channels to choose from. New channels are constantly emerging. Existing ones are evolving. Afterwards testing the nigh popular channels similar Facebook and Google, the question "What channel should I test next?" is a common ask.
Operation Marketers ought to think like investors when deciding upon channel mix, in search of winners that provide a favorable render. A showtime principles arroyo is to dig deep on the target audition (like how Rachel describes in the customer insights section), do enquiry on where they spend their time (online and off), and and so comport a aqueduct evaluation exercise:
The key attributes we consider at OutPoint when evaluating channels are:
i) input costs (how much will the aqueduct cost in learning time and money?),
ii) targeting (how well tin can nosotros target our desired customers?),
iii) context (can we reach customers in relevant buying moments?),
iv) scalability (how much of the target audition is within the channel?)
v) expected value (i.eastward. return; given all of the higher up, how will the economic science work?)
Combining the above mindset with the following fantabulous chart from RightPercent should provide a betoken in the correct direction:
(source)
It is essential to validate production-channel fit and measure consistent functioning earlier expanding advertizing spend against a given channel. Some quantifiable signs of production-channel fit include:
Customer Lifetime-Value (LTV) > Customer Conquering Price (CAC) – To have a sustainable business, the cost to get a client must be significantly less than the expected lifetime value of a client (3X is a typical benchmark). A related alternative metric is Return on Advertising Spend (ROAS).
Short payback menstruation (< 12 months) – This is the amount of time it takes for a customer's profit to "pay dorsum" CAC (a few months is 👍; shorter payback periods imply the biz won't need to be as reliant on venture capital to abound)
As a channel is validated, the Marketer should increase spend & diversify to new platforms. To measure functioning, an understanding of attribution is necessary.
Brand vs. Performance Marketing
Brand and Performance Marketing should not exist viewed in isolation. It'due south a false dichotomy. "Brand marketing" is not diametrically opposed to "Performance marketing" because all marketing investments should ultimately map to business organisation objectives and value cosmos.
A marketing leader's chore is to drive assisting revenue growth, not to win creative awards:
"When I write an advert, I don't want yous to tell me that you find it 'creative.' I want you to observe information technology so interesting that you lot purchase the product." - Ogilvy on Advertising (1982)
Performance Marketing is typically crafted to straight drive revenue and larn customers, which helps build make awareness as more people adopt the product. Similarly, Brand Marketing can bear upon performance marketing by providing measurable cross-aqueduct lift on click-through rates and conversion rates. They are 2 sides of the aforementioned money, with dissimilar attribution and measurement challenges.
Gaining an agreement of the various mathematical points where marketing channels hit diminishing returns, whether they are functioning or brand oriented, is key. But gaining confidence in achieving this requires a deeper understanding of attribution, incrementality, and forward-looking scenario modelling.
Attribution
In Marketing, Attribution covers the tools and systems by which Marketers map the value or ROI to the various tactics and channels that convert potential customers to the product. In other words, attribution explains the means by which the client came to know and buy the product.
Attribution information is used by Marketers to analyze past campaigns and sympathise which tactics were the about effective and influential as determined by metrics such as return on ad spend (ROAS) or customer conquering toll (CAC).
Additionally, many attribution tools rely on click-based methodologies, which may "over-attribute" click-based media such equally Google Search or Display Ads, and "under-attribute" fundamentally view-based media such equally sound or video-based channels like online video or traditional "offline" radio and TV.
Google Analytics Reporting
A common pitfall of many attribution systems is that they underreport the more than qualitative aspects of Brand Marketing, such equally make preference, trust, and consideration. To go around this, many Marketers invest in 'Brand Lift' studies to understand the lift of advertising on various brand attributes. For case, Facebook has popularized a'Make Lift' test methodology to help marketers understand how well campaigns perform independent of other marketing efforts.
Attribution reporting is often valid for historical reporting, but not as useful for forward-looking decision making and understanding cantankerous-channel impacts. To better understand the full channel mix and optimally plan for the future, data-driven Marketers are now turning back to a do known equally Marketing Mix Modelling.
Marketing Mix Modelling
Marketing Mix Modeling (MMM), besides known as Media Mix Modelling, is a subset of Econometrics and employs advanced statistical modelling to map increases and dips in revenue to actions and investments taken past Marketing teams (in addition to other factors).
The goal of MMM is to explain how much each marketing channel contributes to revenue and how much to spend on each marketing channel. It is the foundation for effectively optimizing a paid media upkeep across unlike channels, with an understanding of marginal returns and incrementality.
"Media Mix Modeling is a methodology that attempts to quantify the incremental business touch of spend on any given channel within the context of a multi-channel advertising surround… Media mix modeling allows advertisers to map spend to revenue on the basis of incremental value and diminishing returns: it sidesteps completely the complications caused past last-click attribution" - Eric Seufret, Mobile Dev Memo
Incrementality
To maximize operation, information technology is optimal to make forrad-looking ad spend decisions based on an agreement of incremental value, cross-channel impacts, and marginal returns. The "causal" effect of showing an advertizing to a potential audience or not, often referred to as "incrementality," is a key question related to advertising effectiveness and budgeting for performance outcomes. If you are curious to dig in on the science behind incrementality, all-time papers on this topic was authored by Randall A. Lewis, Managing director of Economics at Netflix.
(source)
Today, many Marketers make media allocation decisions without an agreement of incrementality. Many decisions are made using gut feel, and if data is involved, information technology lives in spreadsheets, biased attribution from leading ad platforms, and legacy analytics tools that are fine at historical measurement, but lack forward-looking incremental rigor. For case, advert spend decisions are typically made based on reported Boilerplate CAC vs. an understanding of incrementality and Marginal CAC. (See: Marginal vs. Average CAC).
A few companies that are known to use incrementality successfully include Booking.com, Stitch Fix, and Netflix:
(source)
It is now possible to leverage information and engineering science to model scenarios to reduce waste material and improve effectiveness of advert spend based on incrementality, but it is challenging, complicated piece of work.
At OutPoint, we think that Marketing is evolving its practices to adopt MMM, incrementality, and brand lift studies in conclusion making. OutPoint's engineering science builds upon attribution all-time practices to utilise MMM principles in real-fourth dimension, using advances in machine learning and causal inference to create a unified decision making organization for Functioning Marketing.
OutPoint's models are optimized to simulate brand and functioning channels alike to attain higher revenues, lower costs, or both. Ultimately, Marketers can brand reliable spend decisions based on the objective of maximizing return on ad spend (ROAS) beyond channels.
Putting it all together: The Marketing Budget + Plan
"The tendency of modern advertizement is to eliminate waste. Your object in all advertizement is to buy new customers at a price which pays a profit." - Scientific Marketing.
The Marketing Budget (and supporting Programme) is the highest-level controlling tool at a Marketer's disposal, and integrates all of the brand and performance decisions. The upkeep outlines all the money a business intends to spend on marketing-related initiatives over a predefined time. Marketing budgets can include costs such as paid marketing, agencies, sponsored content, creative design, new marketing hires, and marketing applied science software. The Plan provides the qualitative, tactical, and strategic backing for the upkeep.
A Performance Marketer aims to use whatsoever tools and information are available to maximize business organisation operation and eliminate inefficiency in the marketing budget, typically focusing on the Paid Marketing line item. At OutPoint, our definition of wasted spend is media dollars that practise non map to business organisation operation (including brand marketing) or are well past the bespeak of diminishing returns.
What's evolved in contempo years is the part of automation and data in the practise of setting the marketing budget: software that aids decisions and leverages massive datasets will practise more and more of the heavy lifting to maximize efficiency and effectiveness. To solve this effect and empower brands, OutPoint applies econometric and media mix modeling principles to the claiming of effective upkeep allocation.
Read about how OutPoint works
Conclusion
We retrieve the Marketing practice is best tackled with a foundation of understanding of marketing fundamentals (the art) paired with a data-driven, systematic rigor (science).
To maximize Marketing effectiveness in 2021 and beyond, high-growth companies demand to blast both the Art (qualitative fundamentals) and Scientific discipline (quantitative pursuit of performance) of Marketing.
