𝗠𝗼𝗿𝗲 𝗠𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴 𝗟𝗮𝗴! Some facts seem to break people's brains...usually people who won't just think things through. A few big ones are: 👉 Sales Velocity is nothing but a guess about future events that have never happened (it's strictly a forecast) 👉 A metric cannot be BOTH a forecast and a "performance metric" at the same time! 👉 You can't DOUBLE your profits by slightly decreasing your rate of account loss by 5% 🤣 And now it seems the concept of 𝗠𝗮𝗿𝗸𝗲𝘁𝗶𝗻𝗴 𝗟𝗮𝗴 has to be added to the list! --- It turns out there are people who claim to have once done some marketing who think that "marketing lag" means that your campaign is like an egg that the mother bird has to sit on for a few months while nothing happens before it suddenly hatches a bunch of leads. 🤦♂️ Their thinking seems to be that since their campaign produced a lead or two right away, then it can't be like an egg waiting to "hatch," and therefore, there can't be any such thing as "marketing lag" This is a serious failure to understand one of the oldest and most established Marketing concepts! --- Here are a few random quotes: 😂 "Marketing lag theory confuses people into thinking if they just wait 12 months, the investments will start 'working'" 😂 "Most B2B Marketing programs are the same as 4-8 quarters ago. Meaning the “time lag” has already passed" 😂 "The time lag has passed & results (ROI) are still going down. Have you waited long enough yet?" 😂 "You don’t need to wait 6-12 months for the “time lag” to know it’s ineffective" This is in addition to ZERO grasp of the fact that most revenue only comes after a Sales Cycle of weeks to months – long after the marketing expenditure has occurred and generated a sales lead. --- So, to clarify what "marketing lag" actually means, here's a simple example: Let's say you run just a SINGLE campaign once – you email a list of 100 names about your product. And this happens next: 1️⃣ 3 people are already in-market and immediately sign up and buy 2️⃣ A couple of weeks later – 4 more finally read the email and signs up 3️⃣ Next month – 3 more people come in-market for the first time in a few years, and they remember the email, look up the website, and sign up 4️⃣ Month 3 – one more person who remembers the offer finally comes in-market and signs up 5️⃣ By the 4th month, most people have no active memory of what they saw in the email 6️⃣ But in month 6 – someone is doing a Google search for your product category, and your Google Ad triggers an "aided recall" of your brand, and they click through to your Landing Page So after SIX MONTHS, you get a dozen signups. Some quickly, and some after a longer delay (aka "a lag")...with many never being influenced to buy at all. Exactly as we see in the graph from the DreamData study shown below 👇 So no...your marketing is not like an egg that has to incubate a while before it hatches a bunch of revenue. That's not how "marketing lag" works! 🤣🤣🤣
This really made something click in my head, but I think you're absolutely right about this. It's the naiive belief that good marketing is binary - it either convinces people or it doesn't. So if it didn't work right away, what would be different in a few quarters to make it "start" working. But of course "works" is where the issue lies. If you launched a campaign today that effectively told a whole bunch of people who you are in a way they'll remember, then it worked. Full stop. The impact of that effort is what takes time to realize its value, provided you can keep that memory from fading from memory until it needs to be recalled. But of course, that would involve understanding that marketers don't have incredible powers to shape the will of the market through their genius levels of persuasion 😂
This is essentially how long term brand building works. Successful brand advertising creates persistent base shifting effects - which then wear in over time (as a consequence of the 95:5 rule). This is completely different from the declining lag structures of a standard adstock which is mean reverting (stationary) and only suitable for capturing short/medium term transitory effects.
And if what you're trying to do with some marketing tactics is to increase the rate at which you are included on consideration sets, then that can take a while to show up. If you have a segment of potential buyers that are not in market, and you successfully get yourself included in more buying cycles, the bump in pipeline results of that in much of B2B will not be seen for 3-6 months or longer. For B2B companies with 6+ month buying cycles, your efforts to be included in more cycles probably cannot help you within the same quarter, because those buying processes are locked to newcomers. Those birds have flown.
I haven’t met a CEO/COO that understands this at all. To be fair, they struggle with the concept of time. 😇 It’s entertaining to observe them try to push quick lead generation activities once the lead count has dropped. Depending on the business, this usually happens 3-6 months after marketing budgets are cut. The main issue happens when they return the marketing budget and expect immediate results. Naturally, you can get some instant results as you mentioned, but the overall lag rules still apply.
Great post Dale. I think your breakdown of WHO engages during different time periods post your campaign also showcases how our understanding of how markets behave should drastically change the weight we give common marketing metrics. Using your same example, just look at how a typical business would reflect on those results: - Immediate results: 3/100? Our campaign was a failure - A couple weeks later: we see direct attribution for our email and give it credit (now 7/100) - Next Month: Organic sign-ups are rising, we credit our SEO efforts - Month 3: Goes unnoticed, and shows up in organic inbound - Months 4&5: We've forgotten we even did an email campaign and don't do a post-mortem on how it went - Month 6: Paid Search for the win! Marketing time-lag is quite intuitive when you read it, but from the businesses PoV it's hard to see the effects of this time-lag when you're in the weeds, especially if all you view are the common internal marketing metrics that make it on to scorecards.
Dale W. Harrison Thanks for sharing this insightful concept of marketing lag. I am curious about two things: 1. Does this predictive model of marketing lag apply to new product launches supported with marketing initiatives like pre-orders?. My wild guess is that such initiatives may have a higher earlier revenue bump more that what's predicted in the model. 2. Is there a correlation between the phase of a product on the product life cycle and the impact of marketing lag on its campaigns?
This one hit a [positive] nerve for me 😂 and addresses two issues I’ve been trying to translate to explaining lead gen measuring to clients: 1. That you can’t measure revenue impact of marketing activities as we ran x and “only got y leads”. Because there is a nature lifecycle to brand consideration —> purchase. 2. That this reinforced why building brand through relevancy, recency and repetition is so important. That you need to continue retargeting for when that 95% eventually becomes 5%. So thank you 🙌
Isn't this more commonly understood as "ad stock".
slow and steady wins the race. hard sell. requires wise thinkers and truth seekers.
Commercial Strategy & Marketing Effectiveness
1dIf anyone is interested in hearing a deeper discussion on this topic and how it complicates ever being able to accurately measure Marketing ROI, then sign up for our LinkedIn Live that happens tomorrow. https://www.linkedin.com/events/7290014520645742593/