We wrote a blog post a while back about reach, but recent conversations with various clients have made it more relevant than ever. If you read many a modern marketing textbook it’s clear that reach is critical to driving brand growth (and maintaining brand size in fact). It’s one of the key points Byron Sharp makes in his influential work, How Brands Grow.

To recap briefly:

What is reach?

We might explain it as the percentage of our target audience who sees our ad. The target audience bit here is important. Just splurging money willus-nillus gets us nowhere unless we are reaching our target audience and that will mean that different media channels and different media titles will be more or less aligned to that audience. We know that older people watch more TV and younger people consume more digital media.

I won’t go too much into why reach is important (Byron does it better) but a few points are key:

  • Infrequent brand buyers are important and need constant reminding that you exist.
  • Whilst digital channels allow good targeting of specific “close in” audiences, any brand that is trying to grow its category will need to literally “reach out” (ugh, I said it) to people who are not in the immediate core target audience.
  • Certain channels deliver reach better than others, either because it’s more cost effective or they just have the scale that other channels don’t.

So that’s all fine.

But, as Colombo says, there’s just one thing… Well, two things, actually.

1. The cost of the primary reach medium (TV) is going up, and up. And up

This is a consequence of many things: pent up demand post-Covid, Mars rising in Sagittarius, and the rest. And this year things will only get worse because of the November World Cup.

MetaMetrics Blog - Reach: Out?
Source: Industry estimates/MetaMetrics

To put it technically, ouch.

The issue here is amplified as we pointed out in our Christmas blog. It’s not just that higher costs mean you can buy fewer ratings, but those ratings themselves are often less efficient as they don’t allow you to achieve cut through in the market. So, the key this year will be to plan to ratings, not to spend and to ask some serious questions about whether your plan will deliver an efficient level of TV in market, or if it’s just not worth doing at all at that level of budget. The good news is, having an econometric model will tell you that. I don’t say this to try and sound wise after the event, but this is one reason why having an econometric model up your sleeve helps plan when unexpected events such as this happen.

2. The cost of the primary reach medium (TV) is going up, and up. And up

Targeted channels of course drive more short-term sales. The longer-term reach objective is a slower burn and tends to bring in lighter category users. The same is true if we call these “upper funnel” or “lower funnel” channels. Consequently, spending more on things that convert to sale, such as Paid Search and Display Retargeting will often drive better short-term ROI than things that affect measures such as awareness and consideration. The risk is that if we chase ROI as a KPI, we risk over investing in lower-funnel tactics, especially if inflation in scale media is making those lower-funnel media seem doubly attractive.

So where does that leave us?

  • If you have an econometric model in place, use it to make some sensible decisions about investment. Is it worth doing TV at all this year? It’s possibly better not to do it than do it very inefficiently.
  • Start planning for 2023 to rebalance the plan, using projected costs.
  • If you don’t have an econometric model, then maybe the current situation has shown you that perhaps you should.

If we’ve stimulated some interesting thoughts in your mind, feel free to REACH out. Damn, did it again.

Tom Lloyd