Carrots, sticks, and sticky carrots: how consumer engagement is evolving

By November 1, 2016Uncategorized

Advertising today isn’t about what people want in their kitchen cupboard. (Or in their shower stall, or on their driveway.) It’s about whether they want you, the marketer, in their life or not.

That’s the reasoning behind consumer engagement. The rationale that marketing should focus less on what’s being sold, and more on the relationship between product and customer. On the basis that in a world of cutthroat competition and infinite consumer choice, that relationship is all you’ve got.

Of course, like most big ideas, it’s easier to say than do.

Advertising push does not equal consumer pull

So let’s cut it down to size—by exploring how the outbound push of mass advertising works with the inbound pull of customer attraction. And how much of each you need to become your customer’s BFF. Because let’s face it, what we’re really looking for in consumer engagement is to be our customer’s best friend forever. Someone who understands. Who listens as well as talks. Who’s there at 3 AM when you need them, but also knows the time for banter and the time to deliver home truths.

In other words, a balance between outbound and inbound communication. Between push and pull.

Let’s treat push for what it is: a stick. When you feel pushed, it’s a negative. Someone pushing you into something isn’t being very nice. Before the web, everything was push: the mass approach of outbound campaigning, rather than the appealing attraction of personalised inbound. (Largely because pre-1994 there was a distinct lack of websites to visit.) So don’t carrots, or “pulls”, sound much more fun? With today’s content marketing and social media, compelling content and offers lie in wait for consumers when they’re ready: it’s pull. The customer is choosing to engage, actively seeking a relationship with you.

So you’d think modern marketing would be all carrot. All about creating that irresistible urge. So your customer feels good about getting in the shower with you. Or going to bed with your smell on them. (And yes, we know that came out all wrong. Or did it?) That’s why even the most mass of mass-market advertisers, the fmcg sector, isn’t all push any more—and those guys created outbound advertising. Look inside Unilever or Coke, and you’ll find some of the world’s best marketers. But even as they up their adspend on pull marketing, they know it’s risky to be all pull. For every product that sold a million by word-of-mouth alone, there are ten thousand failures.

True consumer engagement isn’t push or pull. It’s how you blend them together.

So let’s put in some numbers: how much of each? The answer may surprise you.

How much push? How much pull?

Let’s look at two studies from the food and drink sector. (We do a lot of this back-of-envelope statistical analysis at Scorch. It’s not anything that’d impress a rocket scientist, but we find just a little hard research can spark an explosion of fresh thinking.)

Take three cans…

We looked at three brands with similar attributes: carbonated soft drinks (CSDs) marketed as energy boosters.

Lucozade, a long-established brand, spends most of its marketing budget on mass advertising—it’s a “push” marketer. Monster started as a stealth brand that built its reputation on social media, and the proportions are reversed; it spends little on mass media and is still perceived as a cult drink. The third brand, Red Bull, is known for its blend of savvy advertising, sports sponsorship, and social: it’s a mix of push and pull.

With these three short and sweet datasets, let’s plot each brand against two very different metrics over time (four years). The graph is a standard statistical model called a regression analysis. (A regression shows the relationship between two variables—answering questions like “Does a change in A correlate with a change in B?”)

The variables we’ve chosen are: proportion of total adspend per brand not spent on mass media advertising, including digital (the y-axis). On the x-axis, the scale is Social Media activity—Tweets, comments, Shares—per million cans sold. It’s our proxy for consumer engagement.

(What this statistical trickery does is cancel out differences in the sizes of the companies’ marketing budgets. The data sources are the companies’ own published numbers and industry reports.)

If these metrics sounds a bit juggled, don’t worry. The derivation lets us draw a clearer sketch of how effectively each brand’s total push and pull mix is engaging customers . . .  and find out whether there’s a point where effectiveness is at maximum.

All three datasets have been normalised to account for the different total adspends; the three companies are vastly different in market share. To account for the difficulty of gathering social activity across Tweets, Comments, and Shares month-by-month, Tweets were used as a a proxy for all social media actions.

consumer engagement graph lucozade

No surprises here. Normalised for scale, the marketer spending the biggest proportion of its budget on mass media has the lowest customer engagement across social media. For each percentage point of its budget spent on social, it wins a small increase in customer interactions per million cans sold, but from a low base; these customers just don’t think there’s much buzz around this brand.

Note that Lucozade is an old friend to many in its target market; perhaps it considers its customers are engaged enough.Note, though: you don’t see many young people drinking it.

consumer engagement graph monster

Wow. Monster is getting a lot of activity (Shares, Likes, Comments) for the huge proportion of marketing spend it throws social media’s way, but at what cost? There’s not enough variance in its data to tell—note how short the line of best fit is. This brand knows what it likes, and that’s Likes, Likes, Likes.

When you’re putting 90% of your budget into social media, you’d expect a lot of consumer engagement—but the flatness of this slope suggests they can’t go much further. Conversely, a bit more spend on traditional media might help drive useful awareness, since there’s barely any drop-off in social media activity at slightly lower spending levels! Is Monster simply spending too much of its budget on social?

consumer engagement graph red bull

Red Bull is getting most things right: its Shares correlate well with total adspend, and move up roughly in proportion to the amount spent. This suggests its strategy is well-thought-out and its budgets well-allocated. Its marketing department probably does the same sort of analysis we’re doing here in much more detail.

Red Bull isn’t as adrenalin-fuelled as Monster. (Let’s face it, nothing’s as action-packed in the social sphere as Monster.) But it has high unassisted recall among consumers: anecdotally, it’s the brand most people would associate with “energy drink”. And looking at the data again, it’s selling more cans of drink overall.

Goldilocks’ drink: not too much, not too little, just right.

So far, so simple. Now let’s take a deep breath and combine these graphs. What this’ll do is show whether there’s a “magic proportion” between push and pull marketing spend that gives most bang-per-buck.

consumer engagement graph

As we can clearly see from the graph, three rather different marketing strategies. And none of them is “wrong”. The line of best fit is the average for our dataset.

But there are some insights.

Monster is pumpin’ up the volume, and its customers reward it by talking it up online. But it’s spending a stunning proportion of its marketing budget to stay there; there’s basically no money for anything except social marketing. Red Bull spends proportionately a lot less on social, but gets below average returns for it; its customer engagements cluster below the line. So let’s look at Lucozade . . .

. . . well, there’s a surprise. It’s getting lower activity, but its costs are even lower. Drilling down into their data again, it’s the only dataset with a consistent upswing.

It looks like social spending offers its returns when combined with a hefty dose of awareness-building through “push” marketing. In other words, customer engagement on social media comes cheapest if you spend money on other media too.

And if Lucozade is anything to go by, those returns are greatest when your social spending is 17% of your total marketing budget. Yes, you’ll get more activity as proportion goes up, but the returns start to flatten out.

So from this anecdotal look at three companies: if you’re in the CSD sector, you might want to look askance at any social-only plans your marketing director throws your way. “Push” media—traditional advertising both online and offline—isn’t separate to consumer engagement; it contributes to the chance of engaging a customer.

(Of course, this hides lots of assumptions, like whether social Shares really measure brand engagement, but remember this is back-of-envelope stuff.)

As customer engagement has evolved, push and pull marketing have combined to work together. And for today’s multiskilled marketers, that’s a great thing to remember.

The sticky carrot hypothesis!

So there you have it. Modern inbound marketing methods are a terrific carrot—but they don’t engage customers in a vacuum. Mass media, the stick, actually makes them perform better.

Think of pull as like cheese on lasagne. It’s an essential ingredient, but you don’t want to overdo it. (By our estimates, rather a lot of marketers are.) Pull marketing is great. Push marketing is great. But the ideal sales process uses both.

So let’s call it our “sticky carrot hypothesis”. Because a carrot is a great incentive. But a sticky carrot is even better.

So, how much should you allocate to push and pull marketing?

17%: the minimum proportion you should be allocating to social media to make a difference if you’re starting out. For brands already established in the digital space 25% is a sensible rule of thumb which we fully endorse, because  once you pass 50% the incremental returns start fading away.

What you expected? Us neither. But that’s the point of our research thoughts: they reveal interesting things to talk about. And—as you’ll see from our appearance on the RAR Top 100 list, which celebrates agencies for their head for figures as well as their creativity—we like surprises. Especially when we surprise ourselves.

I’m Duncan Ramsay of Scorch London, and we’d like to share more of this thinking with you. So in Part 2 of this series, we’ll look at how different media affect the customer—but if you’re intrigued, why not chat to us today?

About Scorch London

Scorch London is an independent creative agency based in Soho. We create insanely brilliant campaigns that get results for our clients. We’re obsessed with engagement rates and return on investment, and we’re only interested in delivering the best and boldest strategic thinking and creative execution. We get real, actual, BIG RESULTS – the kind that slap you around the face and make you wonder what on earth you were doing before.

This piece, brought to you by our Chief Strategy Officer Duncan Ramsay, is the first in a series of four that delves into fresh thinking on consumer engagement.