Unlock Your 'Movable Middles' to Boost ROAS and Reach
Your brand's most receptive consumers are not those who buy your products all of the time or none of the time, but those who buy it some of the time, also known as your movable middles.
In and of itself, that statement isn't much of a revelation, is it? Consumers at both extremes are pretty much set in their ways. If they're 100% loyal to your brand, you'll waste your money advertising to them—they'll buy your products anyway; And if your brand has been around for some time, and they've never bought from you before, you'll have to make a very compelling case (and spend a lot of money) to get them to budge. Better to spend your marketing budget where it can have the most impact: in segments with a high proportion of consumers you have a shot at convincing—the marketing equivalent of swing states.
The Mobile Marketing Association (MMA) and Neustar teamed up recently to identify those movable middle consumers and help marketers to fine-tune their media plans to target them most efficiently.
Download Outcome-Based Marketing v2.0: Profitable Growth by Targeting Consumers in the Movable Middle
The movable middles are not the same for every brand, but we found a way for any brand to reliably identify its movable middles. Our system is based on a mathematical model of purchase probability combined with a model of advertising response, and it's backed by robust academic research in the field of consumer behavior. We also validated it against real-life data for close to fifty brands across four CPG categories, and the results are very promising.
Here are some key highlights:
We simulated our new approach for the U.S. population using a brand of frozen pizza with a 10% market share. Over half of the brand's customers fit our definition of a movable middle, and they were responsible for two-thirds of the brand's sales: they're definitely not a fringe consumer group. We found that the movable middles for that brand were 5X more responsive to advertising than the rest of the population.
With such promising marketing responsiveness, we devised a media plan to target them. We refer to it as an outcome-based media plan because we optimized it to improve a business outcome (namely, return on ad spend, or ROAS). Overall, that plan outperformed a traditional reach media plan by more than 50%, and it reached more customers of all types than the reach plan did—including light buyers and new buyers.
Often, with targeting, brands sacrifice reach to improve performance by targeting small pockets of narrowly defined consumers who react more favorably to advertising. A number of brands in recent years have found themselves dialing back on targeting because it cost them too much in terms of reach.
Our outcome-based plan, on the other hand, was a winner on both fronts: reach and ROAS. Yes, you can have your cake and eat it too.
How does it work exactly?
The research is currently being presented at top industry conferences, and we invite you to read our whitepaper to dive into the findings and methodology, but here's a quick overview:
Selection criteria: The movable middles were defined by their probability to purchase the brand in question. If that probability for a consumer was anywhere between 20% and 80%, they qualified.
Population segmentation: We used the Neustar ElementOneTM customer scoring and audience segmentation system to create 172 distinct consumer groups—across the entire U.S. population—based on shared attributes like demographics, psychographics, or life stage values.
Segment scoring: For each segment, we computed the market share and repeat purchase rate for the brand. Those two variables alone can be used to draw a model of purchase probability for the whole segment. We scored all segments based on their return on ad spend, using a baseline media plan across TV, digital/mobile display, and digital/mobile video.
Outcome-based media allocation: We then fine-tuned our media plan to improve responsiveness and allocate more funds to the top-ranked consumer segments: that is, those with the best ROAS and a higher concentration of receptive movable middles.
Comparative analysis: We compared the performance of this outcome-based plan to a more traditional reach plan, using multiple evaluation criteria, and found that it was indeed superior on all fronts.
Uncovering new buyers in the process
One of the traditional ways to describe a brand's customers is to use their past behavior to classify them as non-buyers (0), light (L), medium (M), and heavy (H), based on some preset thresholds or tercile definitions. That's not what we're doing with this new approach: many movable middles are, it turns out, light or medium buyers of the brand. Some are even non-buyers. But it was revealing to cross-tabulate our results with that standard 0/L/M/H classification. We found that our outcome-based plan reached more consumers across each of the buyer groups (0/L/M/H) than even the reach plan did. Its success among light and non-buyers makes it a very attractive proposition for brands looking to grow their footprint without giving up performance.
We're very encouraged by these results and can't wait to validate them further and expand our approach to other product categories. We believe that as a whole, this new targeting framework can help you overcome the limitations of previous reach and targeting campaigns. You don't have to choose one over the other anymore.
The world of marketing is changing. Today, marketing teams everywhere are in the cross-hairs to engage more meaningfully with customers and deliver measurable performance against a wide variety of important business outcomes. Having a way to meet these business outcomes and at the same time improve brand reach can be a game-changer.