We've become spoiled.  Before the Internet, marketers had a very hard time quantifying the ROI they got from their advertising efforts.  In fact, a famous marketer of the past named John Wanamaker is credited with coining the phrase "Half the money I spend on advertising is wasted; the trouble is I don't know which half."  

But they still did it.  They knew that advertising worked, they just didn't feel like they had a solid grasp on how, why, when, and where it worked.  roi of branding

There wasn't much that was highly measurable in those days. You knew where your target market hung out.  You could strategically place your brand and messages in those places.  But directly tying ROI to marketing spend with any level of significant confidence was hard.  While not totally in the dark, we were more apt to make guesses with where marketing budgets should be allocated.   

 

Marketing Budgets


What's the ROI on that?


Enter digital.  It's the wonderful land of accountability.  Now, we can (for the most part) know exactly how many of what action comes from what channel or what campaign or what website; and we can match that up with how much was spent on that channel.  It's glorious.  So, this is how we match up our marketing budgets:  


 

Online Marketing Budgets


But I fear many have swung too far in the opposite direction.  More than ever before, we hear the question asked "What's the ROI on that?" (social media anyone?!), and if we can't provide a solid answer, we usually aren't provided a solid budget for it. 

This kind of thinking tells me that someone may have lost sight of the fact that relationships aren't formed on one night stands - romantic or businessRelationships are formed over time as people have experiences.  Those experiences work on them consciously and unconsciously to form beliefs, associations, and emotional responses.  Want proof?  I thought so...

 

Where purchasing decisions start


Remember the Pepsi Challenge?  In the book Brainfluence, author Roger Dooley gives us an example of just how powerful a person's experiences with a brand can be.  For those that need a refresher, Pepsi set up blind taste tests where they asked people to taste both Pepsi and Coke without knowing which was which.  People consistently chose Pepsi over Coke.  In fact, a brain scientist performed the challenge while scanning people's brains.  He found the reward centers of brains showed five times more activity with Pepsi than Coke. 

So that's it right?  Everyone switched over, Pepsi took over the soft drink world, and they are now the default name used by billions of people when ordering a soft drink?  Of course we know that's not true. 

Here's why . . . .When the challenge was done with people seeing which brand they were drinking, nearly all people said they preferred Coke.  Also, their brain activity changed.  Areas associated with self-identification lit up more for Coke than Pepsi.  I'm sure the same thing would be true with the Bing It On campaign as well. 

In these cases, the branding overpowered the senses.  The branding creates beliefs, associations, and emotional responses in people that are stronger than their taste buds.  This is where purchasing decisions start.

 

What makes a strong brand


Remember how we learned about classical conditioning through Pavlov's dog in middle school or high school science?  Basically, the scientist rang a bell every time he fed his dog.  When the dog would eat, he would salivate.  Soon enough, the dog would salivate not because he was eating, but when he would hear the bell ring.  It turns out we humans act the same way with brands. 

 As we encounter brands in the experiences in which we encounter them, our brains change our thoughts and feelings about them.  Strong brands tend to be ones that have managed to create positive experiences, while weaker brands tend to create weaker experiences. 

 Why is this important?  Because as we can see with the Pepsi Challenge, the subconscious effects that brand associations have on us is super strong.  And it's underrated.

 

No marketing channel stands alone


When we look at our results, we tend to want to tie channels to conversions directly (one-night stands).  We jump in our analytics tool and see that Organic Search drove 1,000 sales for us this month, but Social Media drove 10.  So, Organic Search deserves way more attention and budget than Social Media.  Really?  Is that how it works?  Not really. 

 Why did they pick your site in the search results to begin with?  If your brand was stronger, would you have landed double the sales in the same ranking positions? If it was weaker, would you have landed half of the sales in the same ranking positions?  Although we still have difficulty answering this question, the Pepsi Challenge teaches us that no marketing channel stands alone.  I guess all those SEOs are right about social media performance affecting SEO performance.  But it's even bigger than most of them think it is.  It goes beyond rankings and their nerdy little algorithm :). (Note: I love SEOs!)

 

How to create positive experiences (and ROI)


If the ROI of branding goes beyond what can be directly measured, how can you gain an advantage and create positive experiences that will influence your target market's purchasing decisions?  Here are a few of the easiest ways. . .
 
  1. Frequent brand exposure.  You need more than good rankings to succeed long-term online.  You need to be recognized.  You need to be encountered frequently.  If all you do is rank well for target keywords, the only time a target customer is going to encounter you is when they are thinking about purchasing.  That website that's ranking right alongside you that is known much better by your target audience?  It's likely that no matter how sweet your offer is, they're getting the clicks just like Coke sells more cans of soda pop.  You've got to be recognized.
  2. Positive brand placement.  It's not just the frequency of your exposure but the context as well.  Does your target audience feel like you stalk them around the internet with ads (remarketing anyone?)?  Do your ads show next to disturbing content?  Do you use social media to try to sell them something?  You're creating negative associations.  Are you sponsoring an event they love?  Are you contributing valuable information to the online conversation about your industry?  You're creating positive associations. You've got to be careful to control what your brand is associated with.  Again, the goal is to create good feelings about your brand with your audience.  You've got to make sure your brand placement is strategic.
  3. Brand impression efficiency.  The more positive exposure you can get for your money, the better.  Therefore, you want to be creative in gaining as many inexpensive brand impressions as possible.
  4. Create a tribe.  People have a tendency to want to categorize themselves into groups.  Brands that can make their customers feel like part of a group will find their efforts to be exponentially more effective.  Whole books are written on this subject.  You should pick one up.
If you're creating positive brand experiences with your target audience, there's ROI in that.  Here's the type of graph you want to see from your marketing efforts . . .


Branding and Budget


Notice how your budgets align with how channels influence your customers to convert, not with where they actually convert.  With the growth of multi-channel analytics, we're creeping closer and closer to being able to show this type of graph with increasing confidence.  It's helping us to be much smarter marketers by thinking beyond one-night stands to how relationships are developed with customers.  It's the brands that embrace this type of strategy that will have the advantage moving forward in their industries.

January 28, 2015





Mike Fleming specializes in Analytics and Paid Search for Pole Position Marketing, a leading search engine optimization and marketing firm helping businesses grow since 1998. You can follow Mike on Twitter at @SEMFlem. Mike enjoys playing, writing and recording music along with playing basketball to get his workout in. He resides in Canton, Ohio with a girl who threw a snowball at him one day…then married him.

Mike and the team at Pole Position are available to help clients expand their online presence and grow their businesses. Contact them via their site or by phone at 866-685-3374.



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