When to Ditch a Marketing Strategy

No promotional gambit lasts forever. That’s why it’s essential to recognize when your investment is no longer paying off

 
Written by Roger Hardy

Most great marketers are always on the lookout for the next big thing. Sometimes, if they’re lucky, they’ll discover a “glitch in the matrix”—a marketing investment that generates disproportionate returns compared with what it should. Some people also call this type of return an “arb” (short for arbitrage) while others call it “growth hacking.” Whatever the terminology, it can be game-changing if you find it at the right time.

We identified a major “glitch” in the early days of Hotmail. At the time, very few marketers were paying attention to the web-based email platform, which was surging in popularity. After discussions with Microsoft, we agreed to buy any unsold Hotmail ad space at a bulk price. This generated billions of ad impressions (that’s billions with a B!) and millions of clicks to our website—all at a discounted rate. Essentially, we were paying wholesale while others were paying retail. This resulted in some explosive growth.

Most marketing channels have a predictable and diminishing return over time that ultimately will dwindle to zero. That situation eventually happened with our Hotmail ads—but by then we had already created and grown a business; we had thousands of customers and were generating millions in revenue. We succeeded because we identified a glitch early, exploited it and prepared ourselves to move on to other things when the channel was no longer effective for us.

Read: 4 Marketing Terms to Stop Using

Great marketers know when the decline is coming, and are always looking for a new way to reduce their cost of acquisition of customers through new avenues (and/or better application of existing channels). If they don’t watch for signs that their campaigns are losing their lustre, they can end up in big trouble.

Take this example: the recent uptick in marketers arranging for product placement in music videos and lyrics.

It shouldn’t come as a surprise to anyone that many of the songs we hear and the videos we watch are filled with mini-commercials for different products. Savvy marketers choose this venue because they’re looking to associate the high level of emotion in the song with the experience of their product. We’ve all seen the effects of getting the right group of influencers on board; just ask Dr. Dre and his billion-dollar Beats headphone empire whether celebrity endorsements pay off.

Read: How to Land a Star’s Endorsement

I learned a valuable lesson recently about the efficacy of this type of investment—and it came from my 12-year-old daughter. As she was listening to one of her favourite artists, Macklemore, she had a few poignant questions for me.

“Dad, you know how you were telling me that marketers now pay artist to have products put in videos?” she asked. “Do you think they would ever pay to have the lyrics in a song named after the product?”

“Yes, I’m sure they would,” I replied.

“Hmmm,” she said, her voice oozing disappointment. “Well, that explains it.”

“That explains what?” I asked.

“Dad, all four of my favourite songs”—which, I should point out, happened to be the top four songs on the charts—”all have the word €˜Cadillac’ in them. One Macklemore and Ryan Lewis song even spells the name of that car out, letter for letter,” she explained. She paused, then added, “I don’t like that they would pay for that.”

Wow, imagine how surprised I was to hear a 12-year-old pick up on this. Something I, as a veteran marketer, hadn’t clued in to. (Granted, I really have heard only one of the songs.) Even more spectacular to me was that she was disappointed at being marketed to in this way.

The yield from all marketing eventually diminishes to zero. In this case, I think the yield for Cadillac might disappear faster than the brand thinks—at least, if decision-makers aren’t careful. When preteens are turned off by the approach you’ve chosen, I think that’s a good indicator that your approach is on the way out. It’s just one way to tell that it’s time to ditch the glitch.

Roger Hardy is the founder and CEO of ClearlyContacts.ca, Canada’s largest online retailer of contact lenses and eyeglasses.

More columns by Roger Hardy

How do you recognize when a marketing strategy is losing its effectiveness? Do you agree that specific marketing channels always have diminishing returns? Share your thoughts by commenting below.

Originally appeared on PROFITguide.com

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