Marketing Thoughts by Domus, Inc.

Especially in down economic times, marketers need to get the most out of their advertising and other marketing dollars. In today’s world, more than ever though, the effectiveness of advertising is very dependent on the volume and general tone of consumers’ conversations (principally online) about your product and company.

The strength of effect is directly proportional to the volume of the chatter, and the direction of the effect (positive or negative) is correlated to the tone of the conversations (positive or negative). As the chart below illustrates, the lower the volume of activity, the less impact it will have on your marketing efforts, regardless of the tone. However, the greater the volume, the more it will affect your marketing efforts—if the tone is negative the effect will be negative and if the tone is positive the effect will be positive.

When consumers voice their opinions on the internet, they are broadcasting them to everyone who wants to read (or hear or see) – around the globe. People create their own blogs, post to others’ blogs, participate in online communities, write reviews for e-pinion and e-tailing sites, upload videos, etc. And those posts remain there for years to come. Therefore, any new person interested in finding out about your product will see the chatter—old and new—and will be influenced by it.

So, assuming a high enough level of online conversations (consumer “buzz”), how does the tonality of that buzz affect the effectiveness of your advertising? As the chart below shows, it has a significant impact.

It might at first seem counterintuitive, but increasing advertising expenditures and overall presence (reach and frequency) to combat negative buzz (bottom right quadrant above) can actually have the exact opposite effect – it can hurt both your long- and short-range sales efforts. Principally because of all of the online conversations over the internet, advertising today has very little effect on consumers’ positive or negative perception of your company or products. Rather, advertising spreads awareness of your message/positioning (just not the authenticity of it). Today, once people are aware of you, more and more of them will turn to the online conversations to assess the features and quality of your products and services. So, if an overall strong negative buzz exists about you, increasing advertising will just make more people aware of the market’s negative impressions about you.

Conversely, if there is a strong positive buzz, then the positive effect of strong advertising programs will be amplified. However, that’s not to say that you should limitlessly increase your advertising budget. As with most situations, there are diminishing returns to increased efforts, as illustrated below.

Therefore, a structured measurement and analysis feedback loop is critical in any advertising program to help marketers achieve their goals without overspending.

So, given all of the above, how should internal marketers and advertising agencies optimize their advertising efforts? One way that Domus, Inc., a Philadelphia-based advertising agency, does this is by incorporating an aggressive “Internet Presence Management” program as part of the overall strategic plan it develops and executes for its clients.

3/31/2009 04:57:00 PM
Categories: Strategic Consulting. Author: Marc - Strategic Consulting