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Stealing Funds From Weak Channels

  |  February 19, 2009   |  Comments

Three places to scrape up funds for mobile marketing campaigns.

I like to steal. I've been stealing for quite a while. I steal budgets from weaker, underperforming channels and put them into a stronger, more successful one: mobile marketing spend. It's sort of Darwinian survival of the fittest for media.

With a few notable exceptions, marketers don't have budgets for mobile marketing and advertising. Often funding for mobile is derived from innovation budgets or line items for nontraditional media. Most often, mobile is a component of a digital budget that's already low compared to the increasing portion of audiences that interact with the brand through digital channels. Money finds its way into mobile when an ambitious planner or media owner makes a good case for trying out a mobile tactic, despite the fact that many marketers are well aware that mobile media and mobile audiences are growing rapidly.

So instead of waiting around idly for mobile budgets to materialize, I just steal 'em.

If a marketer or her agents really scrutinize their media investments, they often find irrational pockets of spending. Left unchallenged, that spending is continued quarter after quarter and fiscal year after fiscal year due to use-it-or-lose-it budgets. Unless there's a better alternative, dollars remain in channels even if they're unproductive. Not all of this automatically shows up in ROI (define) calculations. Often ROI is based on averaged results, and there is no further scrutiny to separate the underperforming dollars. The dollars aren't shifted elsewhere, either, usually because another channel belongs to another division and most media managers aren't in the practice of offering money to other groups.

But whenever I'm in a position to impact allocations, I like to challenge three key things to squeeze out budget dollars that could be better deployed in a growing channel like mobile: target underperforming dollars in viable media, shift dollars from media that have diminishing audiences, and splice some spend to complement media.

Target Underperforming Dollars in Viable Media

First, pockets of underperforming spend are often a matter of diminishing returns. A budget has some inefficient spend in it that, upon analysis, isn't actually producing results above and beyond a certain threshold. This spend is a good target for theft (or let's call it "borrowing" -- except without returning it, of course). Marketers don't miss it when it's gone. And the new results can often outweigh the benefits the added spend may have provided in its previous incarnation where it was keeping CPM (define) prices down because it added to the size of the buy.

Identify Media That Have Diminishing Audiences

Second, I look for channels at risk of underperforming in the macro, such as direct mail, e-mail, and terrestrial radio. For some of our clients, direct mail is suffering both lower open rates and social blowback caused by paper use and delivery costs. These direct marketers realize that aside from public perception, a percentage of their dollars aren't performing for them and they need to look elsewhere. Mobile is an answer. Through highly efficient, relevant, and user-directed opt-in programs, we have been reaching consumers through SMS (define), mobile search, and mobile display advertising; the engagement metrics are often in excess of 2 percent (in some cases as high as 8 to 10 percent CTRs (define) and page views).

Acquisition programs can be executed as CPA (define) deals, and there is more premium and long-tail mobile media than most people think to make the economics work.

When I see my clients' e-mail campaign performance diminishing, I try to steal the unproductive portion and redeploy it in contextually relevant SMS programs. We have continually seen better results than would have been achieved by the same dollars in an e-mail campaign.

Splice Budget to Complement Existing Channels

Third, I often like to steal just a bit from channels such as print and radio and redeploy it in mobile in support of that channel. A print buy can be bolstered with a mobile response mechanism, which creates some valuable accountable campaign results data that print generally doesn't generate. While print and radio aren't necessarily going away, they're certainly diminishing in reach and could use some help from communications that consumers are increasingly interacting with. Additionally, mobile delivers well on the local market reach that radio is used for and drives interactions.

While stealing money seems to have reached epidemic proportions if you pay attention to the latest business news, I think there's a healthy, productive way to steal in media that benefits everyone. Shifting underperforming spend from e-mail, direct mail, print, and radio to mobile to achieve higher interaction rates, better post-click page views, and high ROI on response metrics can secure dollars that will be cut unless they are reallocated to more productive media.

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ABOUT THE AUTHOR

Eric Bader

Eric Bader is a partner in BrandInHand, a full-service mobile marketing and media company that serves global brand marketers, partners with agencies, and assists emerging media companies. BrandInHand's clients span the consumer goods, financial services, technology, and retail industries.

Prior to forming BrandInHand, Bader served as managing director of digital at MediaVest Worldwide. A new media veteran, he was formerly the head of online enterprises at CSTV Networks (now CBSSports) and, prior to that, executive director of interactive marketing at Ogilvy.

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