AdAge Points Out A Big Challenge For Broad-Reach Media

While certain media such as broadcast television still reaches a substantial audience, the question that needs to be asked: Is it worth it?” In many cases, that answer would appear to be “no” if you accept the results of an extensive, year-long study from the CMO Council and Catalina Marketing. That study shows that for package goods brands, on average, only 2.5 percent of shoppers account for 80 percent of a brand’s sales. That begs the question: “Wouldn’t it be more efficient to find a way to reach that 2.5 percent instead of paying valuable marketing dollars to also reach the other 97.5 percent that only account for the 20 percent of sales?”

Advertisers have usually been willing to pay more money for more reach, but if their additional outlay is buying an increasingly “inefficient” audience, many big brands may discount the value of a high-reach strategy. A mass media approach can still make sense when you are trying to create awareness of a brand, product or limited time promotion, but in these troubling economic times, most companies are going to be extremely cognizant of short term return on investment, and how they can get by for less budget. Already, there are warning signs of this as big brands are bailing on large upcoming advertising commitments to broad-reach programs such as the Olympics.

The CMO Council/Catalina study involved 1,300 brands and data from 54 million shoppers.