Editor’s note: This is the fourth part in a seven-part series on managing your marketing portfolio. Part 5 will publish next Friday. Check out Part 1, Part 2, and Part 3.
A media mix is like laddering bonds.
For those investors where bonds make up an important part of their portfolio, most financial advisers recommend a laddering strategy that spreads out maturity dates (and risk) within the bond portfolio. The idea being that when shorter duration bonds mature, they are replaced with newer issue bonds at hopefully higher rates of return. So the laddering enables the investor to spread interest rate risk.
The same principal of laddering can and should be applied to a brand’s media portfolio.
Let’s say you’re investing 30% of your media dollars in TV, 30% in radio, 10% in print, 10% in direct mail, and 20% in digital and social media. You don’t want all of your media running for 3-6 months and go dark for 3-6 months. You need to ladder your media buy so that your advertising is always visible in at least one or two channels at all times, thereby reducing your risk of being “out of sight, out of mind.”
For example, if you flight your TV for one week every month for two months and radio and print on the weeks with no TV, then ladder your print and direct mail on the weeks with no TV or radio, plus digital and social media every month for 12 months, then you have certain media “maturing” at different times throughout the year.
The result? The consumer doesn’t say to themselves, “Oh my, I never saw a TV commercial from Advertiser A for four weeks!” Laddering enables your target audience to always see something from you or engage in some media asset every week of every month, or every month of every year. It’s the same reason supermarkets have beans on the shelf every week of every month, because they never know who’s in the market at any given time for beans. Sure, during Thanksgiving the supermarket stocks more turkeys, stuffing, yams and cranberry sauce. And you can ladder your media portfolio seasonally as well.
For instance, if you run TV during election time you run a greater risk of being bumped because the demand for TV inventory is so high and politicians pay cash upfront, so stations view them as preferred customers and would rather place politicians into open slots than other advertisers. So ladder your TV during other times of the year and fill that vacancy with other “assets” that are not seasonally sensitive. This will increase the overall ROI of your marketing portfolio because you’ll be laddering your media to mature at different times.
Tactical marketing allocations in emerging channels should mirror those of emerging markets in your investment portfolio.
Harold Evensky employs tactical investing in the “satellite portion” of his equity allocation and assimilates economic forecasts into his portfolio-construction primarily as part of a longer-term strategic planning process. So if you want to invest in emerging markets, or take a bet on the comeback of Japan, only a very small “tactical” portion of your investments will be at risk.
The same “satellite strategy” should be deployed with emerging media in your marketing plan. While new digital platforms, new social media channels and the like are growing exponentially, many marketers are still trying to find a way to measure ROI in these emerging assets, leaving marketers with more risk.
If you think of your digital spend in emerging channels as a tactical investment — as many marketers should — allocate only a small portion of your marketing portfolio towards that asset class, like you would with emerging markets in your investment portfolio.
Takeaway: If you want to tactically invest some of your marketing dollars posting ads in a new social media channel or mobile platform, fine. Use the dollars in the satellite portion of your marketing allocation as part of a long term strategic planning process.
Check back next Friday for more insights on this topic.
Stuart Dornfield is an award-winning freelance creative director and copywriter with 40 years experience in marketing, strategy, advertising and production. A former senior vice president and creative director of Zimmerman Advertising (Omnicom), the 13th largest agency in the U.S., and the co-founder of Gold Coast Advertising, the third largest agency in South Florida, Stuart now offers his creative services and marketing insights as a freelancer with offices in New York and Miami.