A view from Mark Jackson

Start-ups must go beyond digital performance to build their brands

Performance is getting conflated with digital, while digital is getting mixed up with value for money, says MC&C's managing director.

Brands can accelerate their growth with a smart media strategy, but it needs to go beyond performance.

That is the key finding from a white paper that we at MC&C have just published.

We pride ourselves on being a performance agency, so when we presented the research to a roomful of marketers, a friend of the agency quipped from the audience: "I’d love to know what a non-performance agency is."

Far from a throwaway comment, he had touched on a crucial point:

Media has to work really hard to help small to medium enterprises (SMEs) gain scale with the budget limitations they suffer. It’s a problem that performance agencies were born to solve.

But all too often performance is getting conflated with digital and digital is getting mixed up with value for money.

Done right digital media can have a hugely positive impact on a company’s cost per acquisition (CPA).

But what people seem to forget is that there’s a tricky media balance to strike to maximise that CPA, even if it is in digital.

Perhaps more importantly, digital’s positive influence on costs is finite. 

A non-performance agency is just what a lot of outfits peddling 100% digital would be.

And it affects the big guys as much as the small ones. Regardless of how big your budget is, wastage is never a positive.

It’s completely understandable that, at launch, any new company is going to plough the majority, if not all of spend, into digital.

It’s cheap, it’s immediate, it’s flexible and it’s measurable. Quick wins all over the shop.

On a cost per action basis, you see the clicks and the volumes. And it’s hugely accountable.

But its potential for brand building is limited, and often overstated.

Any business that has begun to establish itself – that has had a site up and running, used digital to get the first tranche of customers in, built on that and is suddenly starting to see growth in its customer base stalling – needs to wean itself off the instant high delivered by the digital dashboard, and start looking for some long-term gratification.

Digital isn’t irrelevant by any stretch of the imagination, but after a while you’re simply pouring money into the wrong bit of the funnel.

Collectively, we suffer from a myopic view of success.

It’s the standard long-term versus short-term view of the effects of marketing. If you can’t see immediately what the return is likely to be, you get nervous and try out other channels. 

The model all businesses want to be following, particularly in e-commerce, is investing in brand marketing offline to drive people online to search for you as a brand.

Going head to head in category search with leading market competitors is a fool’s errand.

The CPA will shoot up, and those with the biggest pockets will just pay to be top of the search results.

Making sure your customers search for you by name, after a concerted and predominantly offline brand-building campaign, means your clicks are 10p rather than £20, and conversion levels are 10% not 1%.

And for brands that think their cost per click (CPC) is somewhere in the middle, I’d start asking what your CPC is for branded search versus generic. You might be being billed for "blended search" which mixes the two costs, and disguises how much the generic search is draining your budget.

Of course it’s a journey. Most start-ups are 100 per cent digital for the first three to six months but that shift towards integrating an offline mix needs to move gradually to 10%, then 15% and then 20% for more established brands. And it’s not something to fear. The TV market is in a good place, and used intelligently – buying line by line, and not just ABC1 audiences – it’s in a strong position to boost the performance of brand websites.

None of this is any use without an implicit understanding of the audience though.

TV is a broadcast channel delivering broad audiences, but if you’re targeting 16-20 year olds who don’t watch TV, then you’re shouting into the void.

The lowest cost per reach for your audience is going to be wherever they consume their media. It sounds obvious. But you’d be surprised how many choose to ignore the obvious.

Mark Jackson is managing director of MC&C. Its white paper is called How a Smart Media Strategy Accelerates Growth