From performance marketing to attribution modeling, we’ve seen a rise in available data from marketing over the past several years which have shifted our focus to more lower-funnel activities. This is great when it comes to tracking the success of what’s working at the moment. However, as these low-funnel activities generate regular returns, are they helping to build your brand long-term?
According to IPA studies the answer is no. In fact, this study and many others have found that brand-building activities are most effective at helping companies grow over the long haul, as they eventually overshadow short-term performance marketing activities. So, why do we tend to get stuck on the short-term and overlook brand building?
The answer is simple: short-term campaigns are much easier to measure, and people have a habit of fixating on the certainty of short-term metrics over the uncertainty of long term brand impacts. We tend to do this as a result of a fluency bias in the way that we process information–we prioritize and remember information that is presented clearly, and we have a difficult time focusing on information that is more uncertain, complex, or abstract.
A classic case of the pitfalls of short-term thinking comes from eBay. The marketing team at eBay found incredible success in running search ads for the term “eBay,” or so they thought. Upon closer inspection, they realized that the people who clicked on their website would have clicked on it anyway, even if they didn’t run the ad. They were simply siphoning off their regular users and incorrectly attributing their clicks to their advertisement. This resulted in a cost-per-click rate that was a huge success on paper but a huge waste in reality.
The eBay story reminds us of an important insight for setting marketing goals: focus on effectiveness over efficiency. Put simply, efficiency refers to the ability to do a good job at obtaining an outcome, but effectiveness means that you’re targeting the right outcome that makes the overall impact that matters. When marketers focus on short-term metrics like short-term ROI, they often end up investing less in their advertising and they lose out on long-term profits. This is just one of many cases where the psychological pitfalls of easy data leads marketers in the wrong direction.
Overall, marketers should be aware of the biases that they bring to the table in their own marketing work. At Intermark Group, we apply psychological insights to help companies overcome their marketing challenges. Give us a call at 833-578-1314 or email us at firstname.lastname@example.org to discuss how we can help.