Method

The 21st Century is on fast forward, and never has there been a more important time to demonstrate the value of brands and marketing. Consumers are taking control and pushing back, touch points have exploded, control is lost and differentiation is tough in the face of new faster global competition where brands are organizing globally for social media and local interaction. Breakthrough innovation that customers will care about requires removing barriers between brands and the end user experience. Today’s article in the Harvard Business Review on “Branding in the Digital Age: You’re Spending Money in All the Wrong Places” succinctly explores the options for customer decision journey driven strategies.

Although the basic premise of the consumer decision journey may not seem radical, its implications for marketing are profound. Two in particular stand out.

First, instead of focusing on how to allocate spending across media—television, radio, online, and so forth—marketers should target stages in the decision journey. The research my colleagues and I have done shows a mismatch between most marketing allocations and the touch points at which consumers are best influenced. Our analysis of dozens of marketing budgets reveals that 70% to 90% of spend goes to advertising and retail promotions that hit consumers at the consider and buy stages. Yet consumers are often influenced more during the evaluate and enjoy-advocate-bond stages. In many categories the single most powerful impetus to buy is someone else’s advocacy. Yet many marketers focus on media spend (principally advertising) rather than on driving advocacy. The coolest banner ads, best search buys, and hottest viral videos may win consideration for a brand, but if the product gets weak reviews—or, worse, isn’t even discussed online—it’s unlikely to survive the winnowing process.

The second implication is that marketers’ budgets are constructed to meet the needs of a strategy that is outdated. When the funnel metaphor reigned, communication was one-way, and every interaction with consumers had a variable media cost that typically outweighed creative’s fixed costs. Management focused on “working media spend”—the portion of a marketing budget devoted to what are today known as paid media.

This no longer makes sense. Now marketers must also consider owned media (that is, the channels a brand controls, such as websites) and earned media (customer-created channels, such as communities of brand enthusiasts). And an increasing portion of the budget must go to “nonworking” spend—the people and technology required to create and manage content for a profusion of channels and to monitor or participate in them.

Read the full article on HBR.org.