We Have a Problem
The world has changed. There's something you haven't heard today . . . 100 times or more. It seems as if everyone and everything keep reminding us about the never-ending and accelerating forces of technology disruption, consumer changes, and innovation evolution in the marketing world.
Sounds exciting except for the fact that we're doing absolutely nothing about it. Zero. Well, that's not entirely true. Our budget setting is done using a zero-sum approach. We look at what we did last year and then use that as a proxy to determine—incrementally—what we should do next year. When it comes to spending our budget, we use it or lose it, preferring to add to the clutter in order not to detract from our media bank account. Optimization is all about robbing Peter to pay Paul, and the more adventurous of us are akin to Robin Hood, whereas the more conservative of us (the overwhelming majority) fall back on the adage “No one ever got fired for putting TV on the plan” (or these days, perhaps it should extend to Facebook as well).
That approach—and the 1990s crutch of marketing mix modeling—may determine how many incremental cents we get back from our marketing dollars but it doesn't factor in a whole host of variables such as wastage and the aforementioned forces of change. The legacy models simply cannot predict the value of an additional 100,000 Facebook likes, a Foursquare promotion, the production of original content for your brand's YouTube channel, ...