By Will Gould
It’s said that not taking a risk is the biggest risk of all. Let’s take a closer look at why that is especially true for a brand’s marketing strategy in today’s marketplace.
Turning Risks Into Marketing Strategy Rewards
We live in an age of instant, empowered critics. It only takes a minute on Twitter or Facebook to get a taste of those who willingly spend their precious time finding fault in almost anything a brand says or does.
Now, combine the power of social media with the 2008 financial crisis and a highly charged political environment, and it’s easy to see why many CMO’s choose to avoid risk at every turn.
But, by avoiding risks, are you also avoiding opportunity? The data and marketplace can help us find the answer.
For starters, let’s look at the brands that are historically willing to take risks as part of their marketing strategy. The list includes Nike, Taco Bell, Hyundai, Apple, Burger King, Old Spice, Starbucks, Budweiser, Dove, Dollar Shave Club, Geico, Dorritos, Patagonia, and Coca-Cola, to name a few. It’s no surprise that these are also some of the most iconic and profitable brands out there.
“I Can Excuse Everything But Boredom”
It’s been 80 or so years since Hollywood actress and genius inventor Hedy Lammar (look her up—she was anything but boring) uttered these words, but they ring as true now for brands as they did for the people Hedy used them to skewer.
Like friendships, brands emerge from desires, beliefs, choices, and even random encounters. Your brand is more than your product, website, logo, and tagline. It’s the entirety of every decision you make, from UX to product development, CSR to the people you hire and your company culture.
So, who of us wants to think we have boring, uninspiring friends?
You understand the purpose and importance of a good marketing strategy. You also understand the amount of noise there is out there. It’s crucial you consider this noise and look at types of marketing strategies that help you rise above it, including what levels of risk you’re comfortable taking.
Is There A Formula For Risk?
One CMO writer in Forbes suggests a 70/20/10 budgeting formula. This equation puts 70 percent of your marketing dollars towards bread-and-butter undertakings that require minimal risk-taking. The other 20 percent is for “quasi-radical” or “slow-roll” innovations and ideas that serve the 70 percent. And the final 10 percent is for your highest risk/reward undertakings.
But there’s also a risk in getting formulaic about how you budget risk.
One marketing strategy example is that of a startup with a small budget and category-changing product. A company like this might consider or idea might reverse the formula above, with the more substantial part of their marketing dollars going to riskier endeavors.
Having the courage to budget for riskier marketing is difficult, and it’s a decision that you can’t take lightly. As with any business move, information and experience help make the risks you take more calculated.
Living With The Algorithm
It’s easy to see the influence algorithms and ad tech are having on marketing with all the data and consumer tracking technology available today. Putting privacy issues aside, let’s look at how our digital world is affecting risk-taking in marketing.
On one side, you have those who will argue the future is personalized messaging, delivered via social media, is how brands will succeed.
On the other side, you find those who believe more traditional media—TV, radio, billboards, and even print ads—are still the most effective path to large-scale consumer influence.
As with most things, the sweet spot is likely found somewhere in the middle.
Whatever media choices you make, and a lot of this argument centers on media choices, remember that finding your audience is one thing. Creating powerful marketing strategies and messaging that connects with your audience is something altogether different.
And Then There Are The Algorithm Busters
We live in an unpredictable world, one where a teenager can program an app that changes a marketplace overnight. No algorithm can accurately predict what’s next in the chaos and constant change that define today’s media and marketing. But, there are things people are looking for that can help guide your brand as it explores the value of risk.
For those of us of a certain age, rock-and-roll gives us a great case study. Back in the late 1980s and early 1990s, two flannel-clad bands from Seattle stepped outside the Axl Rose-algorithm of the day to change music. Their sounds were unexpected, authentic, and genre-breaking.
Those bands were Nirvana and Pearl Jam, and they catapulted alternative music into the mainstream while changing culture itself.
But what do grunge rockers have to do with my brand, you ask?
For starters, they show the value of authenticity, creativity, and going outside of what’s expected in the marketplace. They show how the willingness to take a risk can make people care.
At its most basic level, giving people a reason to care is precisely what your brand strategy should be about.
And rise above the noise, your marketing strategy development should include projects that will make serious noise themselves.
With Risk, Easy Answers Are Often Wrong
There’s no easy way to define what is risky in marketing. For a certain category or brand, it’s one thing. For others, it’s just the opposite.
What we can know is that companies willing to take calculated risks, risks that fit their brand and its purpose in authentic ways, consistently land on lists of the world’s most respected and profitable brands.
And making our way on those lists is a risk all of us marketers should be willing to take.
5 takeaways on the rewards of risk:
- Market conditions and social media responses can frighten brands away from taking risks in their marketing.
- Today’s most respected and profitable brands aren’t afraid to take risks in their marketing.
- Budgeting for a certain element of risk in some of your marketing makes sense.
- While some suggest a formula for budgeting riskier marketing, there are many variables to consider, including adding more risk for startups and young brands.
- Stepping outside the algorithms is how something new can help change the world.