Who Gets Credit for the Last Mile?
In all my years of selling advertising, the most often debated topic is about which medium is ultimately responsible for the success of a business. In the day and age when there are more choices and tactics than ever, most are desperately trying to justify their tactical expenses by tying the cost centers back to profit centers. But this microscope of decision-making fails to take into account the cumulative impact messaging has on the human brain. And it is because of this everything- must-produce-immediate-results thought process that credit gets misaligned and misassigned. It has been happening since the caveman advertised the first wheel. And the second advertisement was sold.
The first advertisement was singular in nature. So there was no confusion about the point of origin. Its goal was for more cave-dwellers to understand where they heard or saw about the wheel. It was from the hieroglyphics on cave number seven. And Cyrus, the Cro-Magnon, paid two pterodactyl wings to have it drawn. People wandering the stone age saw this new invention, the wheel, via advertisement. And made a beeline for Cyrus’s wheel outlet in cave number five. Given the success of the first billboard, other cave-dwelling hieroglyphic sellers called on Cy. They offered him similar deals. Until one day, he had so many cave-art signs up, he couldn’t tell which ones were working and which ones were not. But the net impact on his wheel business was tremendous. He was selling more wheels than ever. He could manufacture more wheels and buy more cave signs.
While nonsensical and hypothetical in nature, this story illustrates the customer journey. And it illustrates the customer journey in advertising. In the beginning, it is easy. Single-source outlets produce measurable and often predictable results. When many outlets are used it becomes harder to pinpoint the direct, impactful point of origin for the sale. It is often because there is not a single source. It is the cumulative impact of all impressions. That, combined with a decision catalyst or impact event, is the main cause for success. It wasn’t one single source that made this happen. It was all of them. It was a strategy to make the business name open and available to those in need. This is an investment in mind shelf space that must be part of the overall plan for long-term success. It can’t be a two-week blitz strategy and hope for the best. And unfortunately, this is what most do.
This leads us to smack dab into the middle of the digital age. With so many more digital offerings available, which one is the right one for business professionals? As businesses analyze these decisions, they often misassign success and failure based on the last point of impact. When truth be told, the decision-making for most purchases, starts months or even years before the actual point of impact. Unless it is an impulse buy. Most are not. Most need some kind of decision timeline. The impact of time and frequency moves companies to the forefront of the consumer’s mind. Without these two elements, the business community would be left with chance and price as the determining factors. Can you imagine chance and price being the sole arbiters of success? I don’t know about you, but if those are my two choices, I am going to find another line of work.
The beauty of mass media advertising is the first word, mass. Mass is defined as a large group of people. It helps businesses scale their communication strategy. Unfortunately, the world of the Internet has been assigned the role of mass media. But it is not. The tactics employed online are resigned to bottom-of-the-funnel messaging tactics. Everything with the price and an offer, trying to out tactic the other guy. And forget the top of the funnel. While this where many purchasing decisions are forged, that area is most often ignored by the online world. It is almost impossible to create an emotional bond with the price and item tactics employed at the bottom of the funnel. I don’t know too many people who bond with 10% off.
When we get to commodity items, this tactic gets even harder. In the commodity world, the margins are razor thin. Every promotion, every discount, and every offer cuts into the business profit margin. It is hard to have a sustainable business when you rely on promotional efforts. These promotion efforts are checked on every side and boxed in by competitors. Often, these are weekly or monthly repeat purchases. They are not necessities but they’re very, very close. Any move in any direction that is not fixed could cause a loss of market share. Take fast food, this is an arena where choices are multiplying. How many hamburger joints do you have in your marketplace? And what is the point of differentiation between them, if any? It could come down to chance, price, or what side of the street they happen to be on at the time of need.
Think about what I like to call grudge purchases. Something people are forced to buy but don’t want to. Auto insurance, gasoline, and groceries all fall into this category. You would prefer not to spend money on them, but you kind of have to. How do these products create their own point of differentiation? Bottom-of-the-funnel tactics often don’t work here, as much as the businesses would like to think so. Would the grocery store still sell groceries without the Wednesday FSI stuffed into my mailbox? I would venture to guess yes because it is one of those grudge purchases. Everyone has to eat. Yet, the grocery store category assigns last-mile credit to the Wednesday FSI. It is one of the reasons why they will not give this platform up. Even though my mailroom is littered with these unread circulars every week. The other obvious reason is these are paid for by the food manufacturers and distributors.
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But is that the reason grocery stores had record years over the last three? Was it because of the Wednesday advertisement in my mailbox? Or was it the sheer fact that we all have to eat, and we go to the place we are most comfortable to do our shopping? At least one that makes us feel that way. The last mile misassignment gives the FSIs an unfair, undeserved credit for not doing a whole lot. Yet, the entire industry is petrified to not be there each week, because the competitor is. These promotional sales have little to do with growing market share. It has more do to with the top of the funnel activity than the bottom. If you look at your market, I will venture to guess that the stores doing the best have full mass media campaigns. They enjoy name recognition, trust, and customer service as competitive advantages. While the ones who struggle have no top-of-the-funnel activity. They rely on the weekly specials to drive traffic, which is spotty at best.
Last mile credit gets misassigned based on purchaser preference. If a business owner likes a particular medium, program, show, or social platform, it will get a disproportionate assignment of success. This choice supportive bias will always be titled toward the buyers favorite. It is like parents who have a favorite child. Or bosses that have a favorite employee. One can always do no wrong, while the other can do no right. I have long maintained that a disproportionate amount of advertising dollars gets appropriated to certain channels based on the age and preference of the buyer. Now, I don’t have any empirical data to back up this theory. I have only my personal experience with buyers of all ages, their preferences (because I ask), and what they end up buying as my data sets. While traditional forms of mass media advertising may be the best thing for their clients or their business, most end up doing something else because that is what they do.
We have gone so far as to ask the customer to tell us how they got to us. This is the most unscientific method. We are asking for unaided recall in an uncontrolled environment. People have trouble remembering what they had for lunch. Let alone which messaging method caused them to arrive at a business that day. We should realize full well that it could be any number of message methods, from the first contact to the purchase catalyst. Or it could be completely unrelated. But shouldn’t the best measure of success be sales? And not sales tied to a specific message or event? If we are slicing the hair so thin, we may be forgetting the mission in the first place, which is why we are advertising. This is the strategy conversation. We are trying to measure the impact of a specific strategy at a ten-foot view. Instead of looking at the act and process as a whole from a ten-thousand-foot view of the world.
Advertising in itself is about winning the hearts and minds of your best customers. Winning them and keeping them. And then converting a percentage of that middle tier of undecideds to the top tier. That can hardly be done with tactical sale items. It requires an investment in top-of-the-funnel, emotion-producing mass media advertising. This is the method impacting the largest group of people possible. The breadth of such movement cannot be assigned by event but must be measured with a calendar. It is time and repetition that impacts the consumer’s mind. And all that must line up with a qualifying event. The consumer has to have a need before item-specific advertisements will impact their life. Yet, brand messages about feeling and emotion can make deposits into the equity bank at any time, regardless of need.
Take the automobile industry. Many of the OEMs have recommended brands abandoned decades-old mass media strategies. They, instead, should focus on newer, digital tactics to capture the active market. Since the onset of these digital-only mandates, brand loyalty in the automobile sector has decreased. This decrease has played out year over year for the last ten. This could be an odd coincidence, but I am sure it is not. When brands abandon the top of the funnel it is akin to salespeople who stop prospecting. If we do that long enough, we wind up with no one to call on. And then price and chance become the only points of differentiation. Companies have to realize abandoning the brand build process commoditizes their own products. It reduces them to only a negotiation and cuts margins to the bone. This plan will send us down the road to extinction.
Promotional sales tactics employed online often look like lead generation. They are aided by persuasive messages that impact only those with a triggering event. Meanwhile, brand-building activity, which is centered on mass media, works on tapping into the emotional side of sales. Thus creating internal feelings and memories. These can have long-lasting impact beyond the current quarter. This investment in the future will make brands more impactful and long-lasting. It will increase brand trust and brand choice. It can reverse the trend taking place, when brands only try to mine the bottom of the sales funnel. As you know, that funnel will run dry when there is nothing going in the top. Top-of-the-funnel activity is akin to sales prospecting. Understanding the conversion rate for those who enter would be a better strategy.
When we assign last-mile credit to the wrong efforts, we will make the mistake of not filling the top of the business funnel. The internet is full of tools. But that is all they are, tools. They are not a substitute for basic human relations. Advertising, in itself, is the fine art of persuasion. And persuasion works best when it taps into human emotion. Programmatic online tactics are devoid of emotions. Sure, they have proven to have a place in the marketing funnel, but they create no action at the top. They exert no impact on the art of influence. Make sure we are assigning the proper weight to what happens at the top of the funnel. Otherwise, we may find ourselves drinking from the funnel to drown our sorrows after a colossal failure.
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Originally published at https://chrisfleming.substack.com.
