A new book and study from marketing-effectiveness experts are challenging the advertising industry’s emphasis on highly targeted campaigns, arguing that broad reach through traditional media can play a critical role in driving long-term sales and profit growth.
The findings are highlighted in a new Westwood One analysis by Pierre Bouvard, the company’s Chief Insights Officer. Bouvard cites James Hurman’s new book, “Future Demand: How Marketing to Tomorrow’s Customers Will Break Your Brand Out of the Performance Trap,” along with a study by Les Binet and Will Davis titled “Go Big or Go Home: How Small Thinking is Killing Advertising and What to Do About It.”
The central argument is based on the so-called 95/5 rule. At any given time, about 5% of consumers are actively in the market for a particular product or service, while the other 95% are not. Advertisers therefore have two jobs: convert existing demand among consumers who are ready to buy and create future demand among those who are not.
Westwood One says the first task can involve targeted promotions and sales events, while the second requires brand-building efforts aimed at a much broader audience. The analysis cites research from the Ehrenberg Bass Institute recommending that marketers devote roughly 40% of their budgets to consumers currently in market and 60% to creating future demand.
“Big media ads” — including AM/FM radio, television and outdoor advertising — are presented as particularly effective tools for the latter objective because of their reach and ability to build brand perceptions.
