As we ALL know, the 3 most important considerations when buying a house are location, location and location. We might say the same about advertising with respect to reach. Or rather, reach, reach and reach.

What is reach?

We might explain it as the % of the target audience we have seeing 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, younger people consume more digital media and men of a certain type read Steam Engine Monthly (#MeToo).

Isn’t she a beauty? Meet Steam Engine Monthly’s ‘Miss July 1886’

Why is reach important?

Marketing is a numbers game. No, I hear you say, it’s all about loyalty surely?

No, not really. Unfortunately, the 80:20 Pareto rule often trotted out (80% of sales come from 20% of your customers), whilst convenient and memorable, is generally incorrect when applied to marketing in the 21st century (well it would be, it was used to describe land ownership in Italy in the 19th century).

In 19th Century Italy, 80% of the land was owned by 20% of the people. But, to be fair, a lot of it was water-logged and the owners often fell in

It is, however, snappy and who wouldn’t prefer snappy to accurate? Well me for one. Empirical evidence shows that it is the far less snappy 50:20 rule that tends to apply. 50% of your sales come from 20% of your users. Hmmm so 50% comes from all the others? Not quite so worth ignoring then? Don’t take my word for it, have a look.

“But how can this be?” I hear you ask. We have to come back to the good old loyalty pyramid. Most brands have a few devout loyalists, slightly more positively committed customers and a mass of people who frankly aren’t that bothered.

Dogs: known for their loyalty. Your customers: not so much

If we think in FMCG terms, for a moment, they are the people who buy you once a year. They are polygamously loyal to several brands. “Well if they don’t care about me, I won’t care about them,” you say, somewhat huffily. But hold that huff. Because those loyal polygamists account for 50% of your sales. That once a year purchase really matters. To you, not to them especially.

So, we need to reach them. To remind them to buy us. How many of them? As many as we can. How often? Often enough. “What’s often enough?” Well, we often talk of effective reach. This is how many people we reach an effective number of times. In TV this is often 3. If they see our ad once it’s probably not enough, if they see it 30 times it’s probably more than enough. If they see it about 3 times econometric modelling shows it’s probably like one of the three bear’s (I forget which one) porridge: just right.

In other words, we need to maximise our effective reach and choose the channels that do this most efficiently cost wise.

And here’s the rub. TV channels deliver reach, Radio delivers reach, Facebook delivers reach, Instagram delivers reach, bloggers deliver reach. The difference is that for your target audience some media deliver loads of reach better than others and some are more efficient than others. When we measure the impact of these channels using econometrics we expect to see the overall sales needle move. And that generally means reaching a lot of our audience. If we are selling steam engines, then stick an ad in Steam Engine Monthly and job done. Perfect targeting, 100% of the audience covered and no need for TV. If only.

Yes, we made it ourselves

Ah, but quality and environment matters, right? My immersive blog is waaay more engaging than a boring old press ad. Possibly yes, but how many people read it? So, whilst environment matters, we must not fall into the trap of spending our media budget on reaching a very small number of people who really “got it”. Because most people don’t need to “get it”, they just need to buy us once. And them that gets it are probably going to buy it anyway.

So, we need to look at all our communications channels in the cold light of day and ask ourselves:

  • What % of my target audience is it reaching at an effective frequency and at what cost?
  • And then what % of my target audience am I reaching with my campaign overall?

It might be that using social media is the right way to do this for a specific youth market (and we have found this to be true in some econometric studies). Or it might not. Especially, for an older target audience, where – surprise! – TV might be the most cost-efficient way to effectively reach as large a share as possible.

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

Tom Lloyd

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