Tracking & Data in Modern Marketing
These are some notes I made after reading Bob Hoffman's book 'Advertising for Skeptics'. For those who are not aware of Hoffman's work, he is a significant voice in the marketing industry, known for being rather critical of much of what makes up "modern marketing". While I do not agree with everything he writes, I do agree with most of what he has to say about data and tracking. This entry from my marketing journal.
Positives of Tracking
The rise of tracking and analysis of customer data has led to an era of unparalleled targeting. Ads can be more specific than ever, allowing you to show ads to exactly the people you want - with the assumption that this will lead to the best chance of a consumer converting. The theory is that greater targeting leads to greater efficiency and ROI. However, given that marketers are rarely the ones applying this data in any direct way, it also puts a great deal of trust in the advertising platforms we use. It remains to be seen whether this is a good idea - though I do have my suspicions about blindly trusting any ad platform, especially ones with ulterior motives.
Negatives of Tracking
Given my upcoming arguments against tracking, it would be easy to assume that I think it's a bad thing; this is not strictly true. My concern for tracking comes from the ever-growing over-reliance we have on it in modern marketing. It has its place in marketing and can be incredibly useful when used correctly, but I fail to see a compelling reason to live and die by the data.
In my opinion, the problem with data and tracking is that it actually promotes the exact opposite of what made many of the "poster-boy" brands so successful and what many new brands want to achieve. Take Disney, Apple, or any household name brand. What makes them a household name? Everyone knows about them - at least to some degree. Even people who don't own an iPhone know what one is.
Let's take a brand like Rolex, people know who Rolex is and what they sell, and people also know Rolex is a luxury brand. Many people buy a Rolex watch because of the signals this sends about you as a person - successful, wealthy, etc. Now let's say Rolex started as a brand today and followed the prevalent strategy for modern marketing in the data age. They'd still have their fantastic, high-quality product. However, they'd now only be showing ads of that product most likely to buy it. This could be people already interested in watches or other luxury status symbols like supercars or yachts. Are Rolex going to reach the same level of success with this strategy? Probably not. Because they're missing the key ingredient in making a status symbol, no one knows who you are. Since they only target people with specific interests, the general population has no clue who they are or how much it costs. A similar logic can be applied to almost every household name brand you can think of. They're not all status symbols, but the vast majority of brands would not be as successful as they are if a large portion of the population were completely unaware of their existence.
The advertising that many of these brands did was mostly untargeted (besides some surface-level choices like which newspaper to be in, where to put a billboard, or which channel to have your TV ad on). Looking at TV ads as an example, these adverts worked because everyone who was watching that channel at that time saw the same ad you did - which for a prime-time slot can be a lot of people. This creates a confirmation bias of sorts, as when you then buy the product you saw on TV, it would be reasonable to assume a lot of people know what it is. This kind of confirmation bias has all but gone in modern marketing. The exact ad you see on Instagram might only be seen by a million people, but when we're comparing that to a population in the billions, it's a drop in the bucket.
When Should You Rely on Data for Marketing?
I'm going to use the concept of a marketing funnel to articulate this point, if you'd like to know more about marketing funnels, you can read about it here.
For brand building and top-of-funnel activity, I'd keep data and targeting as far away from it as possible. Marketers love to think we know exactly who our target customer is, but are we going to be that big-headed as to assume we're exactly right all the time? I'm sure not. Target everyone and anyone within the geographical area you operate, at this stage of the funnel you want everyone to see your ads regardless of whether they're going to buy it or not. This absolutely will not be as efficient in the short term, but it's a long-term investment that will surely pay dividends in the coming years.
Where modern marketing will dominate more traditional marketing is when you travel further down the funnel. Middle and especially bottom-of-funnel activity is the perfect place to use data and targeting to shape your advertising efforts. The reason it's perfect here is you can precisely target consumers who have engaged with your top-of-funnel activity.
Cast your net as wide as possible at the top of the funnel and then cherry-pick out the most likely to convert from there. This really is the best of both worlds, yet we are seeing fewer and fewer brands do this as consumers are reduced to a list of interests.
