Let’s admit it – we’ve all been lured into spending time, resources and cash on shiny new marketing initiatives that have bombed. We marketers are curious by nature and with an ever-expanding plethora of marketing opportunities and new technologies it’s all too easy to get caught up and lose sight of the larger goals (even if we don’t want to admit it).
How then can you arrange your budget (and your time, for that matter) so that takes account of the things that make the money for the company but also allow you to explore new and exciting opportunities?
When talking to clients we’re consulting with we often talk about one particular strategy for this – the 70:20:10 Model.
Its (somewhat unlikely) origins are in behavioural research that started in the 1960s, but before you dismiss it completely you should know that the Centre for Creative Leadership has been writing about it as a business and marketing model for almost 20 years. Today the 70:20:10 Model is used by companies across the world, from startups to large organisations, including KPMG, PwC, Nike, Coca Cola, Mars, L’Oréal, and many more besides.
This isn’t a history lesson, it’s how to better use your marketing budget – so here’s how the model theoretically works (and it’s worth pointing out the obvious here that it’s a model, not a prescribed and exacting recipe):
70% – This is your core marketing efforts, the safe, standard techniques that appeal to a broad audience – your core market. It gets the lion’s share of your budget as it brings the most back in return.
20% – This is your moderately risky section; the upcoming technologies or channels that are not going to bring huge returns immediately but will pay off longer term. It will likely appeal to a new audience.
10% – If what you are doing here doesn’t scare you even a little then you’re doing this category wrong. This is where you take risks and experiment. It shouldn’t be tied to ROI or specific metrics and some of these efforts will fail, but if it succeeds you will have a hit.
The last part is the hardest to sell to senior management – pumping money and resources into something that is not necessarily going to bring results it not something they are used to, but that is why is kept to a small proportion of budget.
When it looks like a glaring black hole it’s often more helpful to market the idea better to them, so here’s a timely analogy to bring it to life a little. Take the commissioning of shows at the BBC. A lot of shows that get commissioned (or recommissioned) are programmes that they know people will watch – the big sporting events like Wimbledon or the Olympics, shows like Strictly Come Dancing or EastEnders – this is the 70%. The 20% category is filled with shows that feature people known from other shows that appeal to new audiences – like taking Russell Howard from Mock the Week and giving him a show on BBC Three, it’s a known person doing something like to appeal to a new audience. Then there are risky new commissions some of which don’t return after one series but others become hits – a televised competition where people bake in a tent or a drama set in 18th Century Cornwall are risky, but the Great British Bake Off was the UK’s most watched entertainment show in 2014 (even before you get to the gardening and sewing spin offs) and very few would consider Poldark anything but a success.
A Practical Example
So we have the model and we’ve sold it to the marketing director, but what could this look like in reality?
Let’s use mythical travel company Lux Travel – they’re a medium sized luxury travel outfit and this year’s digital marketing budget, based on last year’s successes, has just been raised to £100,000. How should they spend it?
In this category we’re going to put the channels that really drive results – of this £70,000 we’re going to put £40,000 into Paid Advertising and Remarketing which targets those looking to book the core holiday offering (in this case luxury, long-haul hotel resort and spa stays). £15,000 is going to go towards ‘Organic Search’ (here that’s expanding the content around core destinations to get more organic traffic, and ensuring the site is well optimised as a whole). The remaining £5,000 is going to go towards creative (videos, photography, design) for the company’s blog and social media channels, as the audience is highly engaged through Facebook and Twitter.
Key metrics: Bookings and enquiries (especially repeat bookings), increasing organic reach, time on site, and getting them signed up to receive destination information by email and post.
We’re going a bit more risky here, trying areas our competitors are doing well in and those that will attract a new audience. The budget is going to be split almost equally between 4 aspects: 1. Improving their presence on YouTube (using different lengths of video and other content) including optimising videos for YouTube search and utilising them more on the website. 2. More destination blog content – the Lux Travel audience are getting progressively older, so they need to attract new audiences; research has shown that luxury destinations in southern and east Africa, Central America and China appeal more to these audiences, so does sustainable travel – more content around holidays offered here (onsite, blog and social) will be used to draw this audience in. 3. Social advertising (Facebook, Twitter, YouTube) – competitors have been seen doing social advertising and it is an area Lux interesting in trying. Much of this will be promoting seasonal sales, but trials on promoting Africa, China and sustainable holidays will also be carried out, targeting the new audience. 4. New channels – Instagram and Pinterest are potential new channels Lux Travel want to look at, as well as building a new destination-led email newsletter; the remaining budget will be used on these channels.
Key metrics: New names being added to the database, especially from the new audience and those destinations mentioned. Other metrics will be increased traffic to those destinations and blog content from social channels, views on videos and subscribers to the new destination newsletter.
This is a limited part of the budget and resource, but £10,000 is still a reasonable budget. These ideas are much riskier (in terms of ROI), but we want to explore. Lux Travel want to partner with destination-specific bloggers in order to build a quarterly digital magazine. It will be experts writing about destinations, photography and video (and potentially audio) – not mentioning Lux’s holidays at all.
Key metrics: Nothing definitive. We want to see the reaction from the audience, so reach and social engagement will be measured but no hard targets set.
Naturally this is just a model and a hypothetical example – how in fact you spend your marketing budget is likely to involve other factors, legacies and business related changes – but what is important here is thinking about what you need to get from your marketing efforts whilst still allowing some time and resource for being experimental. Make the most of the budget you have, but on top of the solid results you should take some risks.