Proving broad reach marketing is never the optimal answer

Are you relying on broad reach media plans for your brand campaigns? You might be leaving a lot on the table.

As I work with leading marketers, I see two types of media plans. Performance plans can often be highly targeted and follow the principles of Movable Middle targeting. Brand campaigns (aka upper funnel) tend to go for broad reach.

Is Movable Middle-based targeting only best for performance? I had to test that!

Using an audience optimizer, the results were clear: Movable Middle based media plans provide superior allocations of an advertising budget even for brand campaigns (see example below). Furthermore, I could not find a scenario where a broad reach media plan was optimal.

I know it seems counterintuitive to not go as broad as possible when you are trying to get new buyers, so permit me to walk you through the analysis.

To start, a brief refresher about the Movable Middle. Consumers are placed into that segment if it is estimated that their probability of choosing your brand (vs. a competitor) is between 20-80%. In contrast, those with choice probabilities less than 20% are considered “Low Loyals”. Through case studies, Movable Middles are shown to have up to 23 TIMES the advertising responsiveness (incremental sales) vs. Low Loyals. So far, Movable Middles have never failed to out-perform in terms of sales lift. (MMA white paper here.)

But why does targeting audiences rich in Movable Middles more efficiently convert non-buyers into buyers? Aren’t they already buyers?

Here are three principles that provide the explanation.

Principle #1: High Movable Middle audiences still contain many non-buyers. For a typical 10% share brand about 16% of category buyers will be Movable Middles. Even if a given audience has an index of 200, that means that 2/3rds of that audience are not Movable Middles so there are still plenty of non-buyers in that audience!

Principle #2: In audiences where your Movable Middle is higher than average, so is your market share. The distribution of brand choice probabilities is a direct function of market share and repeat rate. Where you have a higher Movable Middle, you must have a bigger market share. Every small share brand punches above its weight within its high Movable Middle audiences.

Principle #3: In audiences where a brand has a larger share, non-buyers are more in play. For example, in audiences where your brand has a 30% share vs. a 3% share, the probability that low loyals respond to your advertising can be up to 6 times greater. So targeting audiences rich in Movable Middles gives you a huge edge at winning new buyers. (This was a big surprise to even me, the mad scientist creator, until I dug deeper into the validated math of the Movable Middle system.)

Are there any exceptions to targeting high Movable Middle audiences for buyer growth? Yes, a few. If you have an audience fully based on first party lists of customers or one where your market share exceeds 50%, that audience will be great for delivering ROAS but not for increasing buyers. This can all be handled within an optimizer.

How different can the advertising allocations be? Here is a hypothetical CPG brand with $500MM in annual sales and a $50MM annual ad budget, spent fairly traditionally (heavy TV, not using frequent shopper lists, using broad reach for digital, TV, and social advertising). The brand has 27MM buyers annually. There are seven audiences, some that index high for Movable Middles and some that are average to low. This chart compares the media weight that should optimally go to high Movable Middle audiences vs. what a reach plan would suggest, for the objective of winning more buyers. The optimal media spend per ID/consumer varied by 10X across audiences (they would not vary using reach-based planning). The optimal plan led to a predicted increase of 1MM buyers vs. the reach-based plan.

Allocating your ad budget in practice. First enumerate audiences that you will advertise to. They might align to media channels or be channel independent (e.g. a list of IDs pushed for activation across CTV, online video, programmatic display.) Once you have profiled audiences in terms of Movable Middle concentration and their scale, do you put all your ad dollars into the highest Movable Middle audience? No, of course not. There are diminishing returns to factor into the equations and somewhat different results for sales vs. buyer optimization. But that is what an optimizer does. It balances the greater inherent yield of a high Movable Middle audience, its scale, with diminishing returns such that the optimized solution means you could not move a dollar from one audience to another and expect to be better off against your chosen goal.

In conclusion…and an offer

Reach based media thinking is based on a false equivalence…that the goal of maximizing brand penetration means your media plans should solve for the highest reach you can afford. It is much better to sacrifice some reach to place extra media weight where it belongs…on high Movable Middle audiences.

I’d be happy to help you explore how Movable Middle targeting can benefit you. For marketer organizations who are already MMA members, there is no charge for the consultation…it’s included in membership. Please contact me ([email protected]) if interested.