By Grant Parker, Account Supervisor
I find it interesting how little you come across the patent application of basic economic principles in today’s e-marketing world. I realize that most marketing strategy involves an allusion to economic concepts and that we are usually considering the costs/benefits of different ideas; but I have rarely encountered the level of economic analysis I think would be beneficial in such a tough economy.
This is not meant to be a rant against the marketing community, because I have seen countless examples of great work and sophisticated analytics lately that have driven enormous value for companies. Rather, I would simply like to issue a wake-up call to e-marketers to increase the prominence of economics in their strategy planning and daily decision making. I believe we can all do a better job of evaluating everything we do in terms of cost vs. benefit, supply vs. demand, and ultimately firm profit.
Now I can imagine the obvious reaction to my column thus far is “No duh!” and the large ROI focus that is obvious in today’s e-marketing world is screaming it at me from the top of its lungs. But I honestly feel like as much as everyone knows it is all about ROI online, and about media spend accountability, we do not keep this thought prevalent in our minds as much as we should. Too often our goals become muddled by ad hoc requests, opinion based marketing, and political maneuvering. Every decision we make should be based on one sole question: how will this ultimately result in profit?
It starts with goals. The goals of any marketing campaign need to be based on economic principles. Furthermore, the marketing goals should be based on the goals of a for-profit firm: increase revenue and profitability. Even branding or awareness campaigns should be considered in such a light. You might not be able to track the impact of a large branding campaign in terms of direct attribution, but thought should be given to the projected impact in revenue vs. the potential cost. Economic forecasting principles can be applied even without a full data set based on regression analysis, but even without getting that mathematical, just keeping the economics of all decisions in the forefront of our minds is a start.
In the end, the point I am meandering to make is that marketing goals need to be aligned with business goals, and everything from an annual overarching campaign strategy to an individual CPC adjustment should be made with that business goal in mind. It is because of the current economy that an economic mindset for marketing has become even more paramount.
When Bill Clinton beat George Bush in the ’92 election, despite long odds against the popularity of G.W.’s foreign policy success, he attributed much of his win to a strong focus on a single mantra: “It’s the economy, stupid!” His campaign advisor, James Carville, printed out this single phrase and taped it up in their campaign room. Although the sagging economy was an obvious talking point against the elder Bush, forcing the concept to stay top-of-mind at all times allowed Clinton to focus on the key to winning.
I encourage e-marketers to now follow this formula, maybe even print out a sign and post it up. Two years ago we could afford to make decisions without thoroughly considering the cost-benefit-analysis, but in the current economy the shift in thinking is self-evident. Marketing goals must become business goals, and evaluations of success must focus solely on revenue growth. All other distractions will simply separate the winners from the losers at the end of these recessionary times.
By Grant Parker, Account Supervisor