April 20, 2018
It’s all a question of awareness
If there’s one thing where all marketers worldwide have the same opinion on, then that it’s indispensable to reach your target group where their awareness is the hightest. The reason for that is easy. Before I can tell my potential customer how great my product is and how much it will change his life, I first need to create attention.
The problem. Digital marketing is in a constant change. Awareness shifts from one medium to the other faster today. Because of that, Marketers have a more difficult time to recognize the most effective channels to reach their audience.
This wasn’t always the case. When we look at the past, we see, that this challenge is new. Historically, companies didn’t have to deal with sales and marketing as intense as today. The demand was higher than the production capacity and markets were limited regionally. Everything produced could be sold easily.
Only since the economic boom of the post-war era this changed. Through industrialization and its rise in production capacity companies were able to produce more than they were able to sell. Sales and marketing got important.
Limited options were the reason for less complexity. The media consisted of only a few instances. The awareness of the population was shared on print media, radio and television.
The internet changed everything
Because of the comprehensive spread of the internet, this case changed dramatically. With the internet as a big opportunity and as a fountain of new channels within itself. People’s awareness distributes from the traditional three main channels to several channels:
- Television with its (unwanted) commercial breaks concurs with alternatives like YouTube, Netflix, Amazon Prime, etc.
- Newspaper concur against at all time up to date, available online news portals
- Radio concurs with individual playlists on smartphones, Spotify, …
- Books and encyclopedias are getting substituted as research medium by Google, Youtube (“How To’s”)
- Communication with friends and family happens in instant messaging services like Facebook Messenger and WhatsApp
The internet changes every part of life and provides more options in marketing. As a marketer you should ask yourself daily the following questions: 1. Where’s the attention of my customers really? 2. How do I make on these platforms relevant marketing? 3. What’s my input-output-relation on a certain platform? Where do I get the most output for my invested money? How do I invest my marketing budget most efficiently?
The four phases of awareness
From question one we can abstract an interesting pattern. When we look at society’s evolution of awareness regarding a certain channel, we actually can recognize something like a “channel-life-cycle”. This life cycle is separated into four phases:
- Upswing phase: the channel/experience is brand new – the number of users rises heavily. The awareness is extremely high. Consumption happens very focused and agog.
- Booming phase: the channel has evolved. The majority of people is using it. The awareness of users is still high.
- Downswing phase: the population got used to the channel. It got part of daily life, the channel starts to get boring. The awareness begins to decline and to shift to other channels. The consume does no longer happen focused, more like casually.
- Irrelevance phase: the channel got boring. The number of users decreases daily, the time spent reduces, awareness shifted to other channels.
Let’s bring the question of input-output-relation into perspective. This means in detail, that we compare how much money marketing in each phase costs. Spoiler alert. We’re spending way too long too much money for well-tried channels.
Phase 1: Marketing is available at very low cost. The output is because of high awareness very high. The price-performance ratio is absolutely great! Example: Facebook seven years ago, Google Adwords, email marketing in its beginning, when teleshopping was brand new and Messenger Marketing today.
Phase 2: More and more companies realize, that a channel has high marketing potential. Demand and prices rise. Despite higher prices, the price-performance ratio is alright. Example: Facebook Ads, Influence Marketing today.
Phase 3: Companies that used the channel in phases one and two successfully, deliver sensational results. Now, a lot of other companies want to jump on this trend. The demand rises rapidly, so does also the price. The awareness begins to slowly decline and shift to other channels. The price-performance ratio gets worse. Considering the alternatives, it is more or less recommended to invest your marketing budget in this channel. Example: Google Adwords
Phase 4: Society’s awareness shifted for the most parts to other channels. It is only possible to reach a small share of the channels past potential. Prices stay at a high level, when put in relation to their output too expensive. The reason for that is that companies often do a bad job in staying innovative and are spending too long too much money on old methods. Example: Television today, print ads today, radio today.
Going through the four phases based on television
Phase 1 (60s/70s/80s): Attention rises steadily. The TV device is a new invention, society is thrilled consuming this new channel and consumes it with excitement. The number of households having a device ascends rapidly. In terms of marketing, teleshopping was the way to go – teleshopping was often even free for companies in its beginning.
Phase 2 (80s/90s): The TV found its way in almost every household. During the TV program are set breaks only for ads in which companies can present their products. The number of channels is very limited. Since there’s no remote control, switching channels isn’t comfortable. Due to that, awareness is very high, ads are getting tolerated. The demand for TV commercials rises.
Phase 3 (2000 – 2015): People are getting more and more options to avoid commercials. The number of TV channels rises rapidly, viewers can switch channels easily with their remote control to avoid commercials. Even though the output decreases, the demand and price for ads ascends.
Phase 4 (2015 – today): The population changes gradually to alternative video channels like Netflix, Amazon Prime, YouTube, etc. People that still consume traditional TV, mute or switch channels whilst commercial breaks are running. Furthermore, they’re checking Social Media, emails or reading and replying to messages on their smartphone.
So, people are doing everything but watching concentrated commercials. This means commercials aren’t reaching their intended recipients. The price stays despite no real effect on a very high level.
You can see this pattern throughout all marketing channels:
- Email: Around year 2000, emails newsletters generated opening rates of 90 %. The channel was brand new and therefore interesting. Today’s world in email marketing is different, people got used to email newsletters, opening rates are at 20 % to 25 %.
- Google Adwords: At the beginning it was possible to buy certain keyword for just a few cents. Today important keywords cost multiple Euros.
- Facebook: From 2010 to 2012, Facebook was young and fresh, companies were able to gather a respectable community without investing any marketing budget. Basic posts reached all subscribers and even non-subscribers. Today it costs companies a ton of money to build their community and then again to reach them with postings.
We could go through other examples like print ads, influencer marketing, YouTube Ads and more – the pattern will always be the same. A channel generates attention. A cheap marketing chance with great outputs develops. After some time, the price adjusts to the market’s ascending demand.
Marketer influence the channel stronger. User are getting confronted with more and more ads. Awareness and marketing effect decrease. The channel reaches the point, where the price-performance ratio is still alright, but starting to hit the turning point. Then it’s time to observe the market for new opportunities to invest the marketing budget in the right channels.
What happens, when I use my marketing budget optimal?
Examples for companies, which use their marketing budget in the most important two to three channels:
- Facebook built on using Google Adwords, email and conversational viral marketing. No TV commercials, no print ads, or similar.
- Amazon built on using Google Adwords and later Facebook Ads
- The shopping app “Wish” will generate an estimated revenue of 3 – 5 billion USD. Their marketing solely consists of Facebook Ads. Wish was established 2011 (source: Gary Vaynerchuck)
Why Messenger Marketing “the next big thing” is
Now a new marketing opportunity in the above-mentioned phases 1 and 2 opens up: Messenger Marketing. Why is Messenger Marketing so interesting? 91 % of teenagers and 80 % of 19 – 65 y/o communicate daily with instant messaging services. (in Germany – source: http://meedia.de/2017/07/27/unaufhaltsamer-aufstieg-von-whatsapp-messenger-dienst-hat-schon-eine-milliarde-taegliche-nutzer/ and https://www.inside-handy.de/news/43735-facebook-messenger-whatsapp-instagram-nutzer-q1-2017)
„Messaging is the only thing people do more than social networking!” – Mark Zuckerberg.
The baseline is, that the society’s attention is unbelievably high on messaging channels and despite that they’re still untouched by marketers.
Why? Until now, there were no real solutions to use these channels effectively for marketing purposes. That changed in the past year – more and more companies (including Chatvisor) are providing tools to allow Messenger Marketing.
For future tips on how to integrate Messenger Marketing into your marketing-mix (and much more), just subscribe our Messenger news: