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Where should I spend my marketing dollars?

We get asked this everyday, actually almost every strategy session with our clients.  This is the elusive, subjectively answered question that has almost all marketing professionals stumped when trying to answer it as a blanket statement across all verticals.  We need to look at every business and market as its own challenge before we can confidently say which type of media is the most effective.

What I like about digital marketing, is it allows business owners to efficiently target their ideal demographic, and only their target demographic.  This allows your investment to work smarter for you.

Let's compare tactics for a minute

When deciding whether this investment worked, it’s important that we understand the alternatives available to business owners.

Tactics that meet our objective: Raise Brand Awareness and Ad Recall

• Radio
• Television
• Billboard
• Digital Display Advertising

Radio

This is almost a staple for Home Service businesses: buying local radio ads or sponsorships.  I actually think this a great way to advertise. Even better when you secure an exclusive sponsorship like the Morning Show - Sponsored by ABC Plumbing or the Weather Report brought to you by ABC Plumbing.  This type of advertising allows a higher frequency because the same people will tune in everyday to the same segment. At least when the segment is worth tuning into. If you’re interested in finding out more about Radio advertising, see our case study on this website.  The price point is better than TV, however, it’s impossible to measure how many people are listening at any given time. Also, if they have the radio on, they aren’t intently viewing anything, it’s often background noise to fill the silence. You also need to purchase multiple stations in order to reach all of your demographics.  As a Home Service business the only demographic that actually matters is whether they own their home or not.

Television

We get it, it’s sexy to see your brand on a television set, sandwiched between a football game or the local weather report.  No one is going to say that Television advertising doesn’t work. If you believe this, we should talk. It does work.  That’s not the issue.  The issue is the price and the wasted investment on people who will never be your customer or who won’t be your customer anytime soon.

Billboard

This is another very sexy type of marketing.  Seeing your logo on a 10x20 billboard on the exact street you drive on everyday is definitely a great feeling.  It’s tangible. It allows you to see your marketing at all times. How do you know who’s driving by? How do you know who actually see it?  What are people doing when they drive by - driving. In fact, they’re probably also talking on their bluetooth, with a screaming kid in the back seat and someone in front of them trying to merge.  It’s overwhelming. However, I really like the fact that your brand doesn’t move. It doesn’t stay on the screen for 15 seconds and then disappears. I also like that most people on their way to work tend to take the exact same route.  So you get the frequency out of it.

Digital Display Branding

These are the ads that follow you around or appear on a website beside the article you’re trying to read.  This is amazing and has similar benefits as YouTube advertising. You can target your exact demographic, in the city you service, and you only pay when someone who should be your customer clicks an ad and visits your website.  It’s cost-effective and we’ve been seeing conversions come directly from Display Advertising. Someone clicks your ad, goes to your website, reads about what you do, and then they call you to book a quote. It’s awesome.

We ran an experiment on YouTube

I wanted to see if running pre-roll ads on YouTube really helped increase brand awareness and ad recall.  I was hoping to gain confidence, without bias, which type of traditional branding platform or medium was the best to recommend to my Home Service clients.

Parameters of the experiment

The Brand: We worked with a residential HVAC company in a large Canadian City.  When we ran the experiment, they were doing about $12M in annual revenue with a digital marketing budget of around $800,000, with very little being spent on YouTube.  They also invested in Radio & Direct Mail.

• The Objective: Raise Brand Awareness and Ad Recall for a Canadian HVAC business.
• Campaign Run Date: 10/6/2015 - 10/12/2015
• Budget Spent: $9,465
• Total Impressions: 416,326
• Total Video Views: 84,279
• Average Frequency: 1.9
• Average Cost Per View: $0.11

We ran the experiment for 6 days.  Google (who owns YouTube) helped us run an experiment using two randomized groups.  We split the group into two. Group 1 (the exposed group) we played the advertisement to, Group 2 was our control group who never saw the advertisement.

1. Robust research design
• Google technology creates 2 randomized groups
1. Exposed group (the group that sees the video ad)
2. Control group (the group that doesn’t see the video ad)
2. Tagless Implementation
• Surveys get served to both groups
1. They measure the efficacy of the video ads by asking people from both groups if they’ve heard of the brand in question
2. They measured 2 factors: brand lift and ad recall
3. Fast and Inexpensive reporting
• They gather the responses and compute the results within 2 weeks

The results were very informative for our team

We saw an increase in brand lift by 30% and an ad recall lift by 11.6% throughout this experiment.  This is great news. Especially with such a short campaign time frame (6 days in market). We typically don’t see these results with branding tactics for at least 3 months.  So why the difference?

Review the full case study here

We know that duration isn’t the only factor when purchasing media, however it surprised us how much of a difference 6 days and $9,000 would make for this company.  I would deduct from this experiment that we need to serve the ads to each user at least 3 times (3 frequency) in order for the campaign to have it’s full affect.

Learnings we took away

We ended up with a 1.7 frequency throughout the campaign.  This means that the average person saw the video between 1-2 times.  We would have seen a much larger increase in the results if we were able to accomplish a 3 frequency, meaning that the average person sees the ad 3 times throughout the campaign.

When benchmarking the success of the campaign, we ended up with a “below average” score in Ad Recall lift.  We were classified as “Best in Class” in brand awareness. I am contributing the Brand Awareness score to the offline advertising we had been running for the previous 3 years combined with the temporary interaction on YouTube.

Moving Forward

YouTube has since become an integral component to this company’s advertising program and we have found the sweet spot.  We ensure we’re targeting a small enough demographic that the frequency is always hitting a 3. This allows us to stay on budget while getting the benefits you normally see from traditional advertising.  Ultimately, YouTube advertising is far more effective than TV, especially because it’s measurable. We can target different creative to specific user groups as opposed to creating advertisements that “speak to everyone”.  We’re now able to create ads that speak to women, for example, and only show them to women. Alternatively, and most importantly, we can target Home Owners, and only Home Owners by using Google's demographic targeting settings.