Targeting or mass marketing? The answer is both

The ads for this year’s Festival of Marketing have sparked happy memories of last year’s event. The organisers asked me and my old arch nemesis Professor Byron Sharp from the Ehrenberg Bass Institute to close the conference with an animated debate about Sharp’s seismic impact on the field of marketing and, specifically, some of his more contentious evidence-based claims that I had taken exception to.

READ MORE: Ritson versus Sharp – Who won the clash of the marketing titans?

In the months preceding the event I planned to take some time out to review Sharp’s impressive corpus of work and build an impressive empirical case with key points and perhaps a few dress rehearsals. In the end I ran out of time, got massively pissed the night before the debate and ended up in Waterstones four hours before the debate with a gigantic hangover and an urgent need to speed-read both editions of How Brands Grow and write down my bullet points on the back of my Tube pass.

A short read and then a long Tube trip across London and, before I knew it, there was Byron and off we went into a massive conference hall featuring two lecterns and 3,000 assembled marketers. It might have been my imagination but even Professor Sharp’s infamously ice cold demeanour moistened for just a second as we entered the cavernous room.

I made sure I started by explaining just how good and how influential How Brands Grow is, and how much I agreed with so much of it. It is one of the great works of our marketing generation and has done much to pull the marketing discipline back to reality, towards empiricism and away from the corporate wankery that passes for branding so much of the time these days.

“But,” I observed half way through my speech, “you did not come to hear me make sweet academic love to Byron. You came here for blood.” The audience stiffened. My critique centered on the most contentious and debated conclusion from How Brands Grow – the focus on ‘sophisticated mass marketing’.

What segmentation really means

Sharp has been misquoted and misrepresented frequently on this point in the past. He is not necessarily opposed to segmentation and targeting but unfortunately his work has been used to make the case for ignoring segments and targeting everyone. That is not quite what Sharp says; what he actually claims – and I quote – is as follows.

“Sophisticated mass marketing doesn’t mean targeting everyone, nor does it mean treating everyone the same. It means understanding the heterogeneity in your market, and then catering for only the differences that matter in order to maximise reach while not eliminating the benefits of scale. This is hugely different from deciding that your brand can’t appeal to a large part of the market – a surprisingly defeatist strategy that hides under the title of ‘target marketing’, and results in many marketing briefs telling media agencies that the brand’s target audience is less than a fifth of the people who actually buy the brand and category.”

I disagree and agree with this point. It’s true that so much segmentation is arbitrary and built on differences that do not “matter”. The popular target segment of millennials is a case in point of a segment that fails almost every test of meaningful behavioural or attitudinal relevance.

But when segmentation is done well – with data and skill – it can and does reveal very different customer segments who want different things and see the world and your brand in different ways. Too often Sharp, willingly or not, has been used to argue down the classic and effective strategy of target marketing.

A great brand plan will deliver short-term results within the year and set up longer-term advantage from stronger brand equity.

I believe in segmentation. I believe in targeting some of the market. And I have – for many clients – built successful positioning strategies to specific segments that have worked to tremendous fiscal effect. When you target correctly you can and do make often limited resources return a much greater amount. In our debate I used Apple – a company that currently enjoys 87% of all the profits of the smartphone category despite only securing 18% of the total unit sales – as proof that going after fewer customers is not only possible, it is often preferable to mass marketing.

Sharp, as you might imagine, defended his thinking eloquently and with immense heft. He always does. He had the disadvantage of being on the back foot so I had emailed him a precis of the points I would make and he was quick and adept at refuting all my arguments.
And then, the audience voted. Modesty forbids me from telling you the outcome (I won) but it was a great way to end a fantastic conference.

The disparity of votes, which I don’t think it’s appropriate to crow about here (59% voted for me, 27% for Byron) reflect both the impact that Byron has had in changing the marketing mindset but also the reticence of many marketers to give up on the ‘holy trinity’ of marketing: segment, target and position.

Who is correct? Ritson or Sharp. Holy trinity? Or sophisticated mass marketing? Almost a year on from our debate and with a bit of retrospection I think I now know the correct answer. I think in the ultimate debate between Ritson and Sharp, the winner is…Field and Binet.

In their increasingly seminal book, The Long and the Short of It, Peter Field and Les Binet make a convincing, evidence-based argument that there is a decline in marketing effectiveness. Ignore all the cock at conferences about ‘marketing math’, AI, programmatic and the evolution of marketing science. The simple, unavoidable truth is that our marketing is less effective than it used to be.

Looking at thousands of campaigns over many years has enabled Field and Binet to conclude why this is the case. Marketers are increasingly short-term in their focus. They spend money on immediate activation rather than longer term brand building. They opt for bottom-of-the-funnel tactics because in a one-year time period that will always pay better.

But in the most important chart in this most influential of books, Field and Binet demonstrate that over the longer term this short-termism blunts the overall impact of marketing. Too much time spent picking the low-hanging fruit means less time watering the tree. Eventually the tree stops growing.

How does this insight make Field and Binet the ultimate winners of the targeting question? Unlike my binary debate with Sharp, Field and Binet hedge their tactical bets. They advise a 60/40 split for optimum impact. Across many different categories (and therefore there may be variance in this calculation from brand to brand, so take care) you want 60% of your budget invested in long-term brand building and 40% on more immediate activation.

What’s more, Field and Binet observe that when you embark on the 60% “long of it”, you should target everyone in the category for long-term impact. Their research indicates that this mass marketing approach garners a superior return. So, one nil to Byron. But they also observe that for the 40% “short” stuff the activation executions work best if you target specific groups of consumers. Ritson equalises in the second half with a half volley from the edge of the area.

The balance between long and short term

In my experience there are often two equally flawed senior marketers running most of the big brands in the UK. Long-term Leslie has a focus on brand and customer satisfaction and improving the overall perception of her product or service, and likes hanging out with agencies. Typically, she spends big on old-school above-the-line channels like TV and outdoor.

Then there is short-term Stuart who is a bottom-funnel feeder. He goes after immediate sales from specific sub-groups of customers, usually with very granular, digital campaigns, and likes his free trips to California. Leslie is usually fired within two years. Stuart gets his marching orders a year later. Both aren’t very good.

READ MORE: Is digital an effective mass market medium?

A great brand plan will deliver short-term results within the year and set up longer-term, enduring advantage from stronger brand equity and improved funnel conversions. A great brand plan manages to hit short-term sales targets while also funding longer-term brand objectives that focus on brand health metrics.

It will combine a mix of channels. Not just because there is clear evidence that the more channels we use the better the ROI. But also because my short-term activation works best with more targeted, immediate activation tools like sponsored posts on LinkedIn, while my longer-term objectives are usually better served with mass, atomic bomb-style media buying with radio, outdoor and TV.

Crucially, your plan will always have clear and SMART (specific, measurable, achievable, relevant and time-bound) objectives. But some will be short-term and based on a very specific segment and a very specific financial outcome. While others will go after all the consumers in the category with brand-based objectives that are measured with attribute metrics and funnel data from your brand tracking at the end of the year.

The short-term, targeted objectives will change from year to year. The longer-term brand objectives will be measured annually but likely remain in place for many years. Ideally 10. It’s an approach I am not just in favour of but which I am now using with several large client brands. Brand plans that allow targeted segments and mass marketing appear, at least at an early stage, to work very well.

And why wouldn’t they? It’s the best of both worlds. The long and the short. The targeted and the mass. The top and the bottom. Digital and traditional. Sharp and Ritson. Binet and Field. Over and out.

This year’s Festival of Marketing takes place at Tobacco Dock in London on 10 and 11 October. For more information and to book tickets head to www.festivalofmarketing.com