Mark Ritson: Ditching targeting for mass marketing is going back to the dark ages

It is fashionable to believe marketers today should aim for mass market penetration and that segmenting, targeting and positioning are things of the past. For most brands that is a fallacy.

Mark_Ritson_contemplating

Bruce McColl, the Global CMO for Mars, was in no mood for prevarication last month at the Advertising Research Foundation’s annual ReThink conference in New York City. “I’m not a great believer in targeting,” he explained to the audience. “Our target is about seven billion people sitting on this planet”. He went on to define the challenge for Mars in equally unequivocal terms: “Our task is to reach as many people as we can; to get them to notice us and remember us; to nudge them; and, hopefully, get them to buy us once more this year.”

At first sight you might assume that McColl is lacking marketing expertise. After all marketing theory for the last half century has demonised mass marketing as the antithesis of marketing excellence. Millions of marketers have been indoctrinated into the ‘holy trinity’ of marketing strategy in which a market is first segmented, then a specific target segment is selected and finally the brand is positioned accordingly. How could McColl get it so wrong?

The answer is not so simple. McColl is a fine, very experienced marketer with an impressive track record. He is also not alone in his new found love for mass-marketing. Barely a month passes these days without a senior marketer from one big brand or another stepping up to decry the fallacy of targeting and favouring a mass approach instead. Targeting is in danger of becoming an outdated marketing concept.

Most of the blame/credit for this sea change can be traced back to the Ehrenberg Bass Institute and the remarkable success of Byron Sharp’s book, How Brands Grow. Sharp’s book is as radical as it is influential. Sharp has successfully reframed a wide range of marketing concepts with a potent mix of data, case study and a thinly disguised distaste for fluff.

I recommend the book but, of all the many claims contained within it, the broad rejection of targeting troubles me most. Certainly there is a strong case to be made for companies like Mars broadening their scope and aiming for mass household penetration. Indeed, many of our biggest consumer goods companies including Coca-Cola, Unilever and others are now following the Ehrenberg-Bass system and have reversed decades of STP – segmentation, targeting and positioning – and returned to a mass-marketing approach.

As much as this might make sense for some, I would caution marketers to consider the move carefully before jumping onto the anti-targeting band wagon. There are still many instances where a clearly identified target segment will make you more money than a mass marketing approach.

Smaller companies, for example, without the resources or scale of a Mars would do well to start by taking a smaller, segmented bite of the marketing apple and gradually building their presence. That’s especially compelling if the big boys you are up against are now all engaged in an Ehrenbergian attempt at mass marketing.

In markets where dynamics exist between segments, the case for targeting also remains strong. I worked last week for an American fashion brand that had aged with its client base and had suddenly discovered it’s once twenty-something customer was now forty-something. Nothing wrong with that customer or her sales, but without an explicit re-focus on a new generation of younger clients the brand in question was looking at a long, slow death.

Similarly, in the much less discussed world of B2B marketing, where the sales force forms an inextricable resource constraint, it would be suicide to try and apply such a mass marketing approach. While Ehrenberg-Bass is correct to challenge the applicability of Pareto’s principle that 80% of sales derive from 20% of the customers in categories like dog food and confectionery, I can assure them that the old Italian’s theorem applies beautifully in B2B settings. These consumer asymmetries combined with a tiny sales force impel an organisation to target tightly.

Clearly Mars think they have a sound strategy and who am I to suggest otherwise? But if targeting becomes a dirty word across the whole of our discipline we risk a return to the marketing dark ages. It is impossible to teach targeting to MBA students these days without extensive reference to Ehrenberg-Bass and its theories, but I still teach targeting as an explicit strategic choice. Do we target everyone like Mars? Do we target a couple of segments? Or do we make the leap of faith that says because of our size or the market’s dynamics we will only go after one segment?

Seen this way, targeting remains an essential strategic question for all marketers. But it becomes a question of who rather than if. I would argue Bruce McColl is mistaken to claim he is not a big believer in targeting. I think he has decided – in this instance – to target everyone.

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Comments
  • Zbiggy 13 Apr 2016 at 9:33 am

    Mark, for once reckon you are being too polite re your views. A mass market approach is simply people saying I have no idea or interest in who I sell to, which is always a recipe for disaster. How do you group a bunch of individuals into a mass, what motivates them, inspires them? Normally the answer is bland marketing and therefore bland results. Be interesting to see Mars results in a years time or will they focus on the 4th P that no quality marketer should ever require, dropping price?

    • LeShann 14 Apr 2016 at 9:32 am

      Your comment is precisely why I take issue with Mark’s take on the topic. Him and Sharp actually aim to do the same thing, but both of them are taking a rather black and white stance in the press, which trivializes the question. Mass marketing proponents precisely spend a lot of time trying to figure out who they sell to. It’s not about targeting everyone, but about targeting the market. It’s very complicated to achieve, much more than the pseudo segment targeting most marketers use. As for Mars, they’ve been following these principles for close to a decade, no need to wait another 4 years to see whether it works.

      • Nick Barthram 14 Apr 2016 at 11:16 am

        Hear hear! Think there may be some wilful misreading of HBG to get to the points in the article.

        • mark ritson 14 Apr 2016 at 9:47 pm

          First off, I do agree with 90% of the HBG thesis and think it is nothing short of first class marketing thinking. Easiest the most important marketing book in more than a decade.

          But Nick I am not going to let you get away with your “wilful misreading” point. Both Professor Sharp and many of the senior marketing clients he advises, intentionally or not, have let slip with a rhetoric that is explicitly and unambiguously mass-marketing based and anti-targeting.

          Am I mis-reading any of the following direct quotes:

          Professor Sharp on Mass-Marketing: ““The marketing textbooks have been saying for 40 years mass marketing is dead. It’s rubbish. It’s just not true”.

          Professor Sharp on Targeting: “In my book I speak out about the myth of target marketing”

          Professor Sharp’s 1st Rule of Brand Growth in HBG: “Continuously reach all buyers of the category”

          I don’t think its fair to accuse me of wilfully misreading anything! The growing influence that HBG and Professor Sharp are now enjoying mean that this is a debate of real importance and that, intended or not, there is a growing army of marketers out there who reject targeting completely and have opted for mass marketing.

          • Nick Barthram 15 Apr 2016 at 9:21 am

            Hey Mark

            First up; may have been a bit hasty on the ‘wilful misreading’ point, so apologies for that. However I do think the points you raise don’t really have anything to do with the ‘anti-targeting’ as you put it of Sharp/EBG.

            You make three refutations of Sharp/EBG points: Smaller brands, markets with ‘dynamics between segments’ and B2B.

            Smaller brands: The evidence overwhelmingly proves that smaller brands don’t have ‘niche’ buyers; they are the same as everyone else in the category. Should a small bike shop in Clapham run a national TV campaign? Obviously not and no one argues that. Should they target everyone that any other bike shop in the area targets? Yes. Target the whole category.

            Markets with ‘dynamics between segments’. You quote a fashion example and get mixed up in the difference between the creative execution (which Sharp avoids completely) and the media. Sharp would (probably) argue this brand should switch it’s creative but it shouldn’t literally stop talking to people who could buy from it, whatever age. They’re a clothing brand, target clothing buyers. Target the whole category.

            B2B. I guess this is where the wilful misreading thing came from – the whole HBG/Sharp set of theories is B2C. He doesn’t ever suggest it’s applicable in B2B.

            There’s an overwhelming amount of evidence that your brand’s buyers are not different to category buyers, so you should target the category. That’s still targeting, but it’s mass targeting. Sharp doesn’t argue that you should literally target everyone outside of FMCG – although I admit he doesn’t do himself favours with some of his interview soundbites.

            WARC’s ‘New models of marketing effectiveness’ and our very on IPA’s ‘Long and short of it’ both support the whole category targeting POV with separate data-sets. They are as excellent as HBG, if a little dryer.

            If you’re hearing people say they are literally going to target everyone (and they’re not an FMCG brand) then I agree with you that they’re making a mistake. But so would Byron Sharp.

      • Zbiggy 15 Apr 2016 at 8:29 am

        I just don’t see how you can target everyone and expect any kind of coherent and truly impactful approach. Perhaps the reason why so many ads are either blocked or ignored these days. For me the most powerful and pertinent model is the life cycle/tech adoption one. No doubt driven by the “bean counters” with an obsession that big is best, that for me is an absolute illusion, you build a market you don’t just create one. Yes, I fully accept you can hit a number of targets with one brand, but what that normally entails is a completely fragmented brand. Re Mars performance not an expert on the company but be interesting to see how much of their performance is driven via new activity and how much is the result of an incredibly strong legacy? Easy to ride a wave much more difficult to catch one.

  • Shaun Whatling 13 Apr 2016 at 10:15 am

    Thanks Mark. It’s a brave man these days to talk against the new orthodoxy of Ehrenberg Bass but it needs to be done. Byron Sharp has done us an enormous service to call out high level patterns of consumer behaviour which challenge established thinking – but there is intrinsic danger in the simplistic headline he is offering.

    I haven’t met anyone who doesn’t broadly agree with the book’s general direction, but who at the same time doesn’t harbour any number of reservations about the application. Are we all simply clinging onto old beliefs and resisting change? I don’t think so.

    The current brand eco-system surely shows, if nothing else, a landscape of mass brands whose market share is slowly being eroded by tightly-targeted new entrants. Coming from an action sports background, and having observed the rise and rise of brands like Quiksilver and O’Neill, or TNF or Nike for that matter, there is clear value in narrowly defining a brand against an aspirational audience. At some stage, these brands chose to target the mass consumer, and expand their relevance to people like me who spend more time paddling than standing – but this is just another example that doesn’t support the simple ‘mass marketing’ picture that Byron describes.

    The headline is great: but we need to move beyond the headline.

    • Nick Barthram 14 Apr 2016 at 11:18 am

      I think the subtext to this is that a lot of people think that knowing the headline without reading the content is knowing the content. I know a lot of people who quote HBG but I think I can count those who I know who have read it on one hand.

      • Shaun Whatling 14 Apr 2016 at 11:27 am

        Thanks Nick, absolutely agree.

  • Christy StewartSmith 13 Apr 2016 at 11:11 am

    As I understand it @profbyron doesn’t reject positioning, targeting or segmentation. He merely points out that brands with broad-based positionings grow bigger, faster than niche ones do (duh!) and that, in this respect, distinctiveness is usually more important than differentiation. He makes a related point that marketers’ fixation on segmentation *within* their own audience case has tended, in recent years, to result in a disproportionate emphasis on apparently important ‘loyal’ or ‘heavy’ users, when the marcomms. budget is divvied up. Reaching out to new users, refreshing a brand positioning as a user-base ages and defining a compelling offer with a specific target in mind, all cited by Mark here, are entirely consistent with the Ehrenberg-Bass thesis.

  • Louise Burgess 13 Apr 2016 at 12:57 pm

    Bruce McColl’s stance is sadly reflective of all that is bad about programmatic currently; it is all too often the approach taken by agencies and their programmatic partners, on behalf of clients. Agencies that fail to use a targeted, intelligent approach to campaign set up and rely too heavily on the algorithm for their brand clients are damaging programmatic’s reputation among marketers, and are perpetuating bad practice.

    Granted, taking Mars’ view is all well and good if you have deep pockets and endless revenue, and a mass appeal product to push in volumes. But for everyone else, the flaws inherent in this practice are endangering what should be an effective and commercially rewarding marketing channel that drives growth.

    The fundamental problem with a ‘no targeting’ approach is that it ignores how the right insight up-front should be used to inform campaign planning, set up and optimisation. Customer base segmenting and profiling, targeting your best prospects, and positioning the best message for each audience segment, are absolutely crucial to success.

  • marsattacks 16 Apr 2016 at 11:40 pm

    Nuanced warning Mark. Sharp et al focus overwhelmingly on supermarket products – where ‘targeting’ is often based on targeting imaginary consumer lifestyle/need ‘segments’ that exist only in the mind of the marketer, and bad thinking based on a bad interpretation of what Ries and Trout coined ‘positioning’. The problem with targeting in FMCG/CPG is not the activity itself, but marketing literacy.

  • Merric Mercer 18 Apr 2016 at 9:45 am

    Why is there always an assumption that mass marketing and targeted marketing are mutually exclusive? They don’t need to be. It is now entirely possible to simultaneously target millions of consumers whilst adjusting the message/offer for individual segments.

    Furthermore, systems are now available where brands can track the purchase activity of individual consumers, in their millions.

  • Sandra Pickering 19 Apr 2016 at 9:05 am

    How Brands Grow has done the marketing world a service by asking us all to focus on behaviour and by highlighting the importance of light buyers in delivering sales growth. It points to many powerful ‘laws of sales’.
    However, this does not counter the need for positioning – which, after all, is what distinctiveness is really about.
    Not does it rule out segmentation. In “How Brands Grow, part 2” you will see a clear description of one way to think about segmentation: Category Entry Points defined as ‘particular memory structures (that) will increase the chance the brand will come to mind in buying situations’.
    The suggested segmentation framework is Why? (=needs) When/Where/With whom/With what? (=context/situation).
    Incidentally, that cues my own memory structures for the frameworks that we used some years ago when I worked at Unilever and Mars.

  • EBIisNOTacademic 30 Apr 2016 at 6:47 am

    Mark’s comments are spot on.
    Some additional comments from me:
    1) @BruceMcColl: targeting 7bn people? I don’t think these would all be possible category buyers (fitness fans, diabetes etc). The EBI rule is to target all category buyers if I remember right. To find those, one would still need targeting, no? It’s just category targeting, but still targeting.
    2) Most EBI findings are based on large brands (FMCG, financial institutions). Products most of us must use and regularly (we need food and we need money transactions). And the rules seem to make sense here. However, would all of the rules of targeting and reach also apply to other product categories and smaller brands? Certainly not.
    3) The EBI uses extreme simplifications (dangerous), like “don’t shoot yourself with target marketing”. Consultants do this too. Academics would be more careful and not pretend to offer laws that are supposed to always apply (even though they don’t). Byron Sharpe himself provides well-working segmentation/targeting examples in his marketing textbook (e.g. women only gyms). So, he is contradicting himself. He should be more careful with his generalizations and rules. Seems to be headline grabbing.
    4) The rules are based on observations and very simple statistics. No explanations offered? No theory? This is not academic, but just consulting. They need to stop pretending they do rigorous academic work – doing a poor analysis 20 times does not make it high quality. BTW: most of their actual work is carried out by their most junior students (because it is so simple). I always wondered why companies pay the EBI so much for something every high-school grad can do.

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