This post is based on our podcast episode with Erik Modig. You can watch the entire conversation here.
Erik is an author, speaker, entrepreneur, and assistant professor at the Department of Marketing and Strategy at Stockholm School of Economics.
1. Watch out for programmatic and “cheap” impressions
Ad impressions are not created equal, and the difference in quality is gigantic.
Based on eye-tracking data, Erik says that low-cost programmatic banner ads will typically have a fixation rate of 2-5%. This means that only 2-5% of the impressions that you pay for are actually seen by potential customers.
If you run ads on a high-quality news site you may have a fixation rate of 40%, and these people will also view the ad for longer. High-quality impressions are more expensive, but in the end, you often get much more value.
Never optimize for cheap impressions when you’re choosing digital media. And always make sure to get a full list of which sites and devices your ads are being shown.
2. Data doesn’t solve your problems
Erik sees two main risks with being too “data-driven” in your marketing.
First, studies have shown that companies that rely too much on data become reactive instead of proactive. They assume that customers always know best and that their goal is to just react to their needs and preferences.
But great marketing also needs to educate customers and change perceptions. There is no data on the future, and marketing is as much about creating the future as it is about adapting to the present.
“You think that staring at the data will solve the problem, but it won’t.”
Second, there is a risk that companies start focusing on collecting and analyzing data in the hopes that it will reveal the “secret sauce”. It won’t.
We can use data to improve the efficiency of our marketing programs, and Erik shared an example from Starbucks’ loyalty program. But no amount of data will replace the need for consistent effort and hard work.
At the end of the day, it’s about sending those emails, writing those blog posts, or creating those ads.
3. Think bigger
“In smaller markets we are not used to the budget that’s needed to capture a new market.”
In Erik’s experience, Nordic companies (and perhaps especially Finnish companies) are not aggressive enough when it comes to expansion and investing in marketing. They invest too little and therefore get too little in return.
As a counter-example, Klarna spent around 400 million euros on their global brand campaign with Snoop Dogg. The campaign helped add billions to the valuation of the company.
The Nordic market is relatively small. And many Nordic companies do not realize how expensive it is to expand to a new and foreign market. For example, succeeding in Germany is more likely to cost 100 million than 10 million euros.
By investing too little in marketing the risk of failure will increase.