The marketing world is buzzing about P&G’s announcement last month that they’re moving away from Facebook ads that target specific consumers.
As CMO Marc Pritchard described the move, “We targeted too much, and we went too narrow. And now we’re looking at: What is the best way to get the most reach but also the right precision.”
Coming from the world’s biggest ad buyer, this seems to question the steady march toward hyper-targeting we’ve seen the last few years, particularly for big brands.
Some of this is a simple media expense equation. Targeted media costs a lot more than mass media. As Peter Daboll from Ace Metrix put it: “If you could run an ad and reach a million people or run a targeted ad to reach 5,000, you have to have pretty impressive returns on that 5,000 to make it worth it.”
But I wonder if some of this may relate to what Byron Sharp describes as “the Heavy Buyer Fallacy.” Marketers frequently orient their marketing plan around targeting heavy buyers:
“It seems obvious, a brand’s currently heaviest buyers generate more sales and profits (per customer) so they should be the primary target for marketing…
“But if our aim is to grow sales then our efforts should be directed at those most likely to increase their buying as a result of our attention. It takes only a moment of thought to realise that customers who already buy our brand frequently are going to be difficult to nudge even higher.”
Marketers often refer to the 80:20 rule to justify targeting the heaviest 20% of buyers (assuming these activities this will impact 80% of sales). But the heaviest 20% of buyers actually only impact 50 – 60% of sales in consumer products categories. And swaying the larger pool of light buyers can might a bigger impact on sales than trying to get your heaviest buyers to buy even more.
As marketers continue to learn from the new digital tools at their disposal, it will be interesting to see what emerges as the right balance of relevance and scale.
I’d love to hear your thoughts.