Internet-based ad sales are beating us for the lion’s share of advertisers’ budgets. It is nothing new; phone directories and newspapers also used to win the day. Radio survived. And unlike the past, we now all offer digital advertising to capture the NOW buyers that print and yellow pages used to own.
Cumulus Media has released its latest Audio Active Group Research and Insights led by Pierre Bouvard. It is worth reviewing so you can reposition radio with your buyers. Many buyers believe that advertising should lead to immediate sales, while the reality is that it can do much more than that. It can provide for the future. Our branding commercials, not price, and item or BUY NOW, generate memories influencing future purchase decisions.
This insight, supported by a significant global organization studying marketing effectiveness, the World Advertising Research Center, highlights the importance of creating future demand alongside converting existing demand. A great approach to take clients when selling schedules, building copy, and planning events. Here’s how you can leverage these insights to maximize your success.
THE TWO MOST IMPORTANT JOBS OF AN ADVERTISER
According to marketing expert James Hurman, who has extensively researched brand building and marketing effectiveness, advertisers have two primary jobs: converting existing demand and creating future demand. Converting existing demand is like picking ripe apples from a small number of trees, targeting the consumers buying now. On the other hand, creating future demand involves planting apple trees and nurturing them over time to get a larger group of consumers who will enter the market in the future.
DIFFERENT APPROACHES FOR CONVERTING EXISTING DEMAND AND CREATING FUTURE DEMAND
Converting existing demand requires targeting those already in the market with product and price information. It aims to persuade them to choose a specific client over competitors. But creating future demand involves broad audience targeting with emotional messaging designed to stand out and create positive memories of the brand. This approach builds familiarity and positive associations to influence future purchase decisions. Think funny, emotional, or spots worth listening to!
SHORT-TERM IMPACT VS. LONG-TERM BENEFIT
While converting existing demand can yield short-term sales, it has limited long-term benefits. Sales events and promotions may generate immediate sales, but they often lead to quick drop-offs and temporary spikes in revenue. On the other hand, creating future demand through brand-building advertising leads to sustained long-term sales and profit growth. It strengthens brand recognition, reduces price sensitivity, and allows businesses to sell more at every price point. Think sponsorships, feature adjacencies, and influencer marketing with jocks like how Chris Soechtig and staff execute at iHeart in Tampa.
THE PERFORMANCE MARKETING “VALLEY OF DEATH”
Relying solely on converting existing demand can lead to sales plateaus when you run out of in-market consumers aware of a brand. This is referred to as the “valley of death.” It highlights the importance of transitioning to create future demand. By investing in brand-building advertising and patiently waiting for future demand to build, businesses can escape this cycle and maintain sales growth.
CREATING FUTURE DEMAND CREATES MEMORIES, AND MEMORIES GENERATE SALES; CLICKS DON’T GENERATE SALES
Jon Lombardo, Global Head of Research at LinkedIn’s B2B Institute, says, “It’s your memory that got you to Google in the first place and your memory is going to pull strong brands. Strong brands are not built on clicks, but on memories. The other thing that’s very interesting is even when people go to Google and click for something, buyers show a bias for the brands they already know. It explains what’s important in marketing is not the bottom of funnel, lead generation clicks. It’s top of the funnel, brand-building memory.
Understanding the dynamics between converting existing demand with your price and item and google campaigns and creating future demand to drive revenue and profit growth is critical. While converting existing demand may yield short-term results, creating future demand through brand-building advertising is the key to long-term success. The Godfathers of Marketing effectiveness, Les Binet and Peter Field, advise you to tell your clients to spend 40% of their ad budget on immediate sales generation and 60% on creating future demand. We can maximize our impact by building positive memories, nurturing strong brands, balancing short-term tactics with long-term strategies, and generating sustained sales growth.
Jeff Caves is a sales columnist for BSM working in radio and digital sales for Cumulus Media in Dallas, Texas and Boise, Idaho. He is credited with helping launch, build, and develop Sports Radio The Ticket in Boise, into the market’s top sports radio station. During his 26 year stay at KTIK, Caves hosted drive time, programmed the station, and excelled as a top seller. You can reach him by email at jeffcaves54@gmail.com or find him on LinkedIn.
