Member Article

The move from raindancing to rational marketing

Glenn Granger, CEO of marketingQED, looks at how the move to rational marketing could be worth millions.

In certain parts of the world where drought ravages crops, people perform a ‘raindance’ to encourage rainfall – which would be a good idea, if only it worked.

Unfortunately, there’s no causal connection between what goes on at ground level and the rain that may or may not fall in the next few hours or days – the raindancing is in all in vain, endlessly repeated despite the absence of any evidence to suggest that it works.

To a much greater extent than anyone is prepared to admit, there’s a parallel to be drawn with marketing. Having worked in marketing effectiveness for over 20 years and provided analysis in more than 30 countries, I’ve seen first-hand just how many marketers are flying blind, launching campaigns without forecasting how effective they’re likely to be, nor carrying out any real analysis of how effective the campaign actually was, leaving them unable to assess whether a different strategy is necessary for future campaigns. As a result, businesses are wasting millions.

All too often, companies, rely on presumptions of the ‘older people don’t use Facebook’ variety or base decisions on a sort of hazy folklore without any fact-based grounding – which is why financial services companies so often overspend on direct mail, while consumer goods firms overspend on price promotions and pharmaceutical companies on their sales forces. These companies invest in these channels because ‘that’s what companies like us do’ without any real attempt to determine whether there could be a more effective allocation of their marketing budgets.

The truth is that not one company in ten has a scientific way of distinguishing the effects of its advertising campaigns from those of its competitors and not one in 50 can properly judge whether to cut, increase or reallocate budgets. The good news, however, is that it doesn’t have to be this way.

New tools and technology mean marketers don’t have to guess – marketers are now able to mathematically model marketing campaigns themselves, without the need to call upon external consultants.

This a step-change in the industry – the perception of modelling or ‘econometrics’ as a rarefied activity conducted by rocket scientists is the result of a historical truth – it used to be the case that complex data needed to be crunched by expensive external analysts who struggled to communicate their findings in language marketers could understand.

Furthermore, the sheer amount of time it would take for data to be crunched and interpreted by a chain of onshore and offshore experts meant the results couldn’t be used to make quick decisions.

New technology has comprehensively addressed all of these problems. Marketing effectiveness software enables marketers to model campaigns and understand the results themselves, in a matter of hours not months, while avoiding the significant costs associated with external consultancy firms.

The business case for making use of new desktop modelling software means a cultural shift within marketing should be inevitable. Those companies that are first to realise the potential of desktop analytics will dramatically increase the efficiency and effectiveness of their marketing. Businesses need no longer miss out on millions – the revolution is now.

This Bdaily article presents a summary of some of the arguments contained within Glenn Granger’s new book, Raindancing: why rational beats ritual.

This was posted in Bdaily's Members' News section by marketingQED .