Saying “Marketing made me do it!” is like saying “But I was drunk when I said that!”…it’s not really a valid excuse.
This content was originally published in the No Best Practices newsletter on 10.29.2023.
As marketers we talk a lot about how a campaign “made” a purchase happen. “Friday’s email campaign drove 10 conversions” and the like.
But does marketing really make anyone do anything? The answer is nuanced. Different types of marketing do different things to different customers. AKA “it depends”.
Understanding these distinctions is the key to maximizing the return on your marketing. I’m going to share the first principles that should guide your marketing investment. Before you plug in that attribution software or run that holdout test, read on.
There are four different marketing and/or media use cases you can pursue if you’re looking to acquire new customers:
#1 Creating Awareness
This is advertising and marketing that lets people know your brand exists.
Your goal is to reach a broad audience of people who are not necessarily ready to buy so that your brand is top of mind when/if they finally whip out the credit card. This is referred to as “mental availability” or sometimes “mindshare”.
You need three things to make this happen: creativity, relevancy and frequency. Think about the original Geico ads with the gecko. When those ads launched, home and auto insurance were bland and buttoned-up. It was also hard to differentiate based on product features–most insurers offered the same coverage and rates.
In this environment, a GCI gecko spouting non-sequiturs and bad puns was memorable. It made you stop and think “wtf are they doing?”. Somehow they always managed to tie the ads back to insurance, so they were relevant. And you saw them every day on TV, multiple times a day–frequency.
This type of ad doesn’t “make” someone do something. But it influences their decision when external factors nudge them in-market.
It’s also relatively expensive to do effectively. Imagine how much Geico spent to run ads on prime time TV every day for a year…in the 90s. For that reason, bootstrapped brands typically don’t run this type of advertising until they absolutely have to.
#2 Creating Demand
This is marketing that nudges consumers in-market aka it makes them want to shop immediately. This is usually marketing, not advertising. And it’s usually a temporary event, because it is hard to keep nudging people in-market over weeks and months–attention spans are short.
Two classic examples: running a sale and getting your product featured by the right mass influencer, like Oprah’s favorite things list back in the 90s or Alix Earle’s GRWM videos today.
Both of these tactics will get your sales to shoot up overnight because they immediately broaden your in-market, brand-aware audience. But the boost in sales will be temporary. In both cases, you untap some pent-up demand and direct it towards your brand, but the supply is not infinite.
This is the marketing that “makes” someone do something.
One caveat: running a sale can also cannibalize demand that would have happened at full price i.e. it’s not always “making” a conversion happen.
#3 Capturing In-Market Demand
This is why Meta and Google are billion dollar companies. When you’re capturing in-market demand you are inserting yourself in front of a prospect who already demonstrated high intent to purchase in a given category.
If you’ve ever looked at two or three different tie-dye sweatshirts online, only to have your Instagram feed explode with ads for even more tie-dye sweatshirts, you understand how this works.
This type of marketing is making a sale happen for your brand, but it isn’t taking the customer from zero to one. That means your upside potential is limited by the total in-market audience for whatever you’re selling.
When you start to reach the boundaries of that audience you can either work to nudge more people in-market or you can pull back on spend and wait for the audience to grow. You can also launch a new/different product (a story for another newsletter).
With this approach, you’re dropping in on a conversation that is already in progress. You need to adjust your approach to the prospect’s frame of reference, which was set by a brand or cultural influence completely separate from yours. You’re not going to be effective here blasting top-down brand messages.
When you nail a strategy here it can be one of the most cost-effective ways to drive incremental sales for your brand.
#4 Capturing Brand-Aware In-Market Demand
This is basically any channel where customers are searching for you by name. Some examples: branded Google search, affiliate coupon code sites, listing on 3rd party marketplaces like Lyst or Amazon*.
At its essence, this is toll collecting. If big tech rent seekers didn’t decide to throw up a barrier between you and your customers, you wouldn’t have to pay these fees.
Running this type of advertising will create some incremental demand. There are some folks who will abandon ship if they don’t see your site as the top paid result in a Google search. Or they may opt to buy your brand from a wholesale account who paid to be listed above you.
But a lot of folks will persevere, even if they don’t see your site at the top of the paid listing. The only way to know for sure is to run a holdout test. Several brands have done just that.
*Your non-brand search volume here will fall under capturing in-market demand.
How This Relates To Incrementality
When you are a small brand that is just starting out, almost every conversion you earn is going to be incremental. If Meta Ads are the only place people are learning about your brand at scale, almost 100% of that spend will be incremental.
Brands can reach high revenue numbers doing nothing but seeking out in-market demand i.e. running ads on Meta and Google. The broader your total addressable market, the bigger your pool of in-market demand is going to be.
You can probably scale a tooth whitening or back pain solution to nine figures in sales with Meta ads alone. The same can’t be said for luxury goods or products where you’re creating the category.
At a certain level of scale, brands will start to encounter the boundary of their current addressable market, or the pool of folks they can reach at the price they’re willing to pay. At this point, you have a few options:
- Try to go fishing in a different pool of in-market demand like TikTok, Youtube or Pinterest.
- Start investing in creating awareness to build up your in-market audience.
- Line up a number of attempts at creating demand and hope one works out.
The more people know about your brand, and the larger your customer base, the harder it is to understand if a given marketing activity was truly incremental.
The ultimate test of incrementality is: when I increase spend on activity X, do new customer sales go up? The challenge: when you’re doing nine figures in revenue per year, gains from one activity can be offset by losses from another, and sales read flat.
If you are a household name, you’re already in the consideration set of a large portion of the in-market audience. So Meta in-platform results will look fantastic, but you’ll need more advanced testing to know if those sales were truly incremental.
When you’re embarking on any new advertising campaign or channel, ask yourself: which of the four use cases am I covering here? Then ask yourself if that use case makes sense given your stage of growth and your goals. Finally, be sure to set KPIs accordingly.
You can’t evaluate a brand awareness campaign on the same metrics as your Meta prospecting ads. But you shouldn’t throw data to the wind because it’s “for the brand”. Effective brand awareness has more grounding in direct response than you might think.
What About Email?
An email impression often functions just like an ad impression–it’s intercepting a buying journey that is already in progress (#4), or it is reminding a customer that you exist (#1). Sometimes the proposition is so compelling that it pushes the reader in-market (#2).
Most email files are full of existing customers. Your existing customers have a baseline repurchase rate–a lot of them would buy from you, even in absence of marketing.
The existence of your email program drives incremental sales compared to a scenario when you are sending no email at all. Sending more email also drives incremental sales, up to a point. But it’s hard to measure the incremental impact of more granular tactics–subject line strategy, send times, content strategy, etc.
This is why (at least IMO) it doesn’t make sense to agonize over email tactics, especially for smaller brands. Agonize over your offer strategy. Agonize over your marketing calendar. But don’t build 12 different segments or waste time A/B testing your header image. Just sending 3-5 emails per week is 80% of the battle.