Does Reach-Based Planning Matter Anymore?

One of the more revolutionary concepts to emerge from the MMA’s Great Marketing Growth Debate series, an ongoing series of webinars examining and analyzing the leading marketing growth frameworks, came from Joel Rubinson’s contribution to the “how to maximize growth” debate. Just before end of 2020, Rubinson, the former Chief Research Officer of the ARF, presented the newly developed Outcome-Based Marketing 2.0, a major step forward in validating how marketing organizations can achieve more profitable growth by targeting a segment that we call the Movable Middle, those with a mid-range probability of choosing that particular brand. EVERY brand has a Movable Middle, and the science tells us that this strategy will improve profitable growth from advertising for every brand!

New Outcome-Based Marketing 2.0 research shows targeting the “movable middles” improves return on ad spend by 50%, attracts more non-buyers, and increases penetration across all brand buying groups

OBM2 is a real game-changer for marketing, since using this strategy enables marketers to outperform traditional reach-based marketing plans by more than +50% in return on ad spend (ROAS). Equally interesting, publishers and ad-tech firms can execute OBM2, with or without the involvement of marketers and improve the performance of their media for the marketers’ campaigns. In essence, OMB2 enables brands and their media partners to align on those consumers who are more likely to respond to a brand’s advertising. While this might seem obvious in the black & white of text, the truth is most marketers (maybe 100%) have not directed advertising to those consumers in the Movable Middle for their brand and, by so committing, media partners can create targeting strategies for brands based on a common understanding of who to target! It’s a win all around: marketers get more return for their money and the media company’s audience value is increased.

 The Movable Middles are proven mathematically to have five times the responsiveness to that brand’s advertising and are unique to each brand.

The OBM2 strategy calls for targeting the Movable Middle with extra media weight, funded by a modest reduction in spending towards other consumers, leading to improved short-term profitable advertising and better long-term growth. Note that we believe the size of each brand’s Movable Middle can even be predicted with 99% accuracy for each brand, regardless of industry vertical. This also reinforces that OBM2 might be the industry standard for planning.

Though Rubinson led the way in developing OBM2, based in part on research he’d done three years ago, I’m also grateful for the help and support of Neustar. They provided us their agent-based simulation models that incorporate media consumption and purchase behavior data from their targeting platform. And while Neustar’s ElementOne segmentation was effectively used here, there are a dozen other segmentations schema’s can be applied. The models ultimately helped uncover the individual consumer-level activities and market-level factors that led us to identify those Movable Middles.

While we used a frozen pizza brand as the sample brand for testing out OBM2, MMA plans to keep testing it on other brand categories such as detergents, margarine and nutrition bars. We’re collecting all this work under the umbrella effort “Brand As Performance,” and we’re raising funds to support further research.

If you want to dive deeper into what OBM2 can do for your brand, check out this white paper.

 Finally, we respect and love the insights that Pete Fader, Mike Hanssens, Byron Sharp Leslie Wood, and Jared Schreiber delivered in their Great Marketing Growth Debate presentations. But OBM2 has the potential to become a new industry standard, even replacing reach as the universal approach today. MMA has delivered a marketing growth framework in OBM2 that harnesses today’s and tomorrow’s tools to deliver the best results for brands. That’s why we’re here. 

I’d love to hear your thoughts, but based on what you see here, I’ll be curious to hear if you think that the decades-old reach-based planning should finally be killed off? Can OBM2 Become a New Industry Marketing Standard?