The conventional wisdom on Madison Avenue is that reach rules. In other words, in the digital realm you can't go wrong making a buy or launching a campaign on a site or social network that has scale. However, that's all going to change as money flows online, competition rises and marketers find they need to pay more to drive sales.
To cope, advertisers should adopt new digital media planning model. This one ignores common metrics like unique visitors, pageviews or even time spent in favor of more esoteric statistics like cost per action. We're entering the Moneyball Marketing Era - an age where some big online properties will suffer a slow death by a thousand cuts from tiny niche sites that deliver greater ROI.
Moneyball Marketing liberally borrows the concepts outlined in Michael Lewis' 2003 bestselling baseball book Moneyball: The Art of Winning an Unfair Game. In the book, Lewis chronicles how the Oakland A's and its general manager Billy Beane were able to build a successful team in a rather unconventional way, all with a significantly smaller budget than rivals like the Yankees have.
Beane and his team eschewed conventional wisdom that dominated baseball for decades. Rather than selecting and evaluating players based on common statistics like home runs and runs batted in, the A's switched to a model that favors on-base percentage (how often a batter makes it to first) and slugging percentage (a way to measure a hitter's power). The end result is an elegant, efficient model that enabled the A's to get better players for less money. The methodologies described in Moneyball have since been adopted by dozens of contending teams and in some industries as well.
Here are three ways you can apply Moneyball Marketer in your organization today:
1) Become a Super Cruncher - Look beyond the common methods for evaluating media and identify more meaningful, perhaps esoteric statistics. For example, make a buy based on a site's ability to drive consumers to complete high value tasks.
2) Skip Reach, Go Niche - As hard as it is, try forgoing some of the larger sites in favor of emerging niche ones that deliver a higher percentage of your target. Work with them to create measurable, outside-the-box programs. For example, consider Takkle - an emerging social network focusing on high school sports.
3) Think Relationships, Not Impressions - The most successful companies in business today recognize that relationships rule. Consider launching programs that allow you to hone your relationships with narrow segments of your audience. Go beyond impressions.
