Herd mentality highly fraught
6 min read.
This article was originally published in Marketing magazine.
Queues; our new world order. Last Friday, I found myself waiting, somewhat impatiently in line in one such queue. It got me thinking of the parallels of marketing and how in times of recession, how much comfort is derived by rowing in the same direction.
A recent survey* proclaimed that 22% is what many advertisers are thinking of cutting their marketing budgets by. Why is it always a twenty-something figure? Is it because it sounds right? Or perhaps it is because it is an even number, or quite possibly, there may be no science at all behind the number?
What is typical in recessionary times, is a speedy retreat to a perceived safe and familiar option. Psychologists call it the herd mentality and is based on human traits of mirroring each other and seeking out what is comfortable.
Collective fear stifles independent thinking and while renowned marketeers the world over talk a good game, it is almost like they are subconsciously telling people not to follow. Be brave they say. I don’t know about you, but when I hear the word brave, it comes just before a fall and evokes memories of a dentist’s chair, or worse.
So, what can marketers do to make the right decisions and find new and higher ground, without eroding their profits and hard-earned work that went before this pandemic took hold?
Challenge the status quo
Gather the data and seek out less obvious opportunities. If there was an empty queue in the supermarket would you join, or would you prefer to stay in the long queue?
Recently my mother, who is in her seventies, was in the market for an iPad. According to TGI, 370,000 people over the age of 60 own a tablet, representing 19% of the total tablet ownership and yet this audience is largely ignored in advertising terms.
Often when budgets are cut, there is an assumption that we can target our way to safety. Whilst segmentation can play a valuable role to identify growth opportunities; widening instead of narrowing your target audience may drive better outcomes. As many marketers will know, recruiting light users, or people who consume your product less, is generally accepted as a better way to grow your base, as oppose to recruiting loyal users.
Be aware of the Hippo effect
Hippo is the acronym for the Highest Paid Person’s Opinion. One of the most famous examples of this was JC Penney who recruited Apple’s former VP of retail operations; Ron Johnson for the princely annual package of $52 million, to breathe life into the giant retail dinosaur. Johnson, rather than listen to his employees and the data presented to him, trusted his gut and previous successes. By the time Johnson exited the company, he had burned through nearly 1 billion dollars in less than 17 months. JC Penney recently announced it is closing its doors for good.
The same is true of brands, where many companies adopt a follow-the-market-leader strategy rather than study the data, listen to employees and customers and make more informed and ultimately better decisions.
The cost-efficiency media trap
Media buyers analyse value by measuring what is commonly known as a cost-per-thousand (CPT), or what we call the cost of reaching a thousand people, relative to your target audience. The lower the CPT the better. Often, when budgets are under pressure, invariably only the most cost-efficient media make the final cut in a media plan.
This strategy whilst based on sound media planning principles, omits a critically important fact. If the medium or indeed the media owner is more cost competitive than another, then the chances are that more of your competitors will also be advertising with the same media owner. Analysing how many direct competitors are fishing in the same pond, will provide valuable insight to drive efficiency and effectiveness.
Focus on media changes and leverage mass media to maximise the impact
Some media are infinitely more measurable than others in terms of effectiveness. It does not mean traditional media does not work as effectively; it just means their performance cannot be measured as easily. In the last number of months, traditional media has come out strongly, with large increases in consumption. In a time with increased supply and less demand, this represents an opportunity to drive overall marketing efficiency.
Following the flock right now might seem like the easiest option but thinking like a start-up is what is needed to emerge from this pandemic with a stronger brand, on surer ground.
And remember the word brave means; endure or face unpleasant conditions or behaviour, without showing fear. So, let us not be brave; instead, let’s be smart and leave the sheep up the mountain where they belong.
*Source: Ebiquity Marsh