The Value of Volume


A fascinating story in the New York Times takes us inside a planning session between Facebook and a major consumer products marketer, Reckitt Benckiser (RB). RB wants to market its fish oil nutritional supplement via Facebook. After listening to Facebook executives pitch a large and broad marketing campaign, the RB marketing manager stops the conversation to note that he’s interested in using Facebook because of its targeting capabilities, not because of its massive reach. He suggests that perhaps RB would be better served by targeting known fish oil buyers as well as buyers of other products that are suggestive of the consumer having an interest in heart health – a key benefit of taking fish oil.

The representatives from Facebook, rather than embracing a targeted approach, instead pushed back. It wasn’t that Facebook couldn’t deliver this highly targeted audience – it could. The primary objection of the Facebook team was that a highly targeted marketing campaign like this would be “too expensive.” And keep in mind that RB is a major global marketer, with annual sales pushing $15 billion.

If you find it odd that Facebook is pushing marketers to broadly-based marketing campaigns, the underlying logic is even more intriguing. The Facebook “advertising strategist” in the meeting explains the company’s view by saying that advertising on Facebook was like firing a shotgun. My early education in the world of direct marketing taught me that the goal was to use information to move away from sloppy, imprecise shotgun marketing, to precise rifle-like marketing. Perhaps this strategist simply butchered this well-known metaphor. But as you read deeper into this article, you start to see that Facebook really wants to sell big, volume campaigns with only minimal targeting.

You probably see where I am going with this. Facebook develops this truly massive and engaged audience. On top of this, it has unbelievably detailed and accurate information about this audience, and can target against these data. Yet when a large and sophisticated consumer marketer wants to take full advantage of this deep targeting capability, Facebook proposes a mass media solution instead. Sure, Facebook is happy to tweak this huge campaign once it rolled out, but Facebook clearly wants you to start big and whittle your campaign down over time.

Why is Facebook seemingly disavowing the precision targeting that is ostensibly its greatest asset and differentiator? While the article doesn’t provide any numbers, the likely answer is this: money. You make more money selling volume than precision.

I saw this many years ago in the direct marketing world. Everyone there preached the gospel of targeting – rifle precision over shotgun sloppiness. I listened to endless presentations by clever people showing how you could use data to identify and reach the exact best prospects for your product. But try to actually purchase these highly targeted names, and you got the exact same tap dance now being performed by Facebook. The reality is that nobody with a ten million name database wanted to sell you just 500 of those names – your absolutely best prospects. Direct marketing was a volume-based business: you made your money selling big lists, not precisely targeted lists (which truth be told were kind of a hassle to produce anyway). It was a business where you talked targeting and sold saturation.

And lest you think I am pointing a finger only at media companies, be assured that marketers need to sign up for their fair share of the blame. For example, I see B2B media companies working so hard to deliver fresh, hot, highly qualified sales leads to marketers who in many cases won’ t buy them unless the media company can guarantee a minimum volume each month. Quantity trumps quality – again.

Like it or not, there’s an important lesson here for those of who run media and data companies. Precision and targeting are great – but only to a point. Marketing and sales activities are inherently sloppy and imprecise activities, and that’s why they depend on volume. And we also now must acknowledge that in a digital world, mass marketing is cheap and can often yield powerful market research insights. That’s why, despite all the advances that have been made in increasing precision, there will be continuing value in volume.

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