Marketing is, in two words, legalized gambling.
When you look up the definition of gambling (v. n. ‘gam-bling’) you will find that it is described very similar to that of any advertising activity or public relations campaign taken on by business marketing professionals. It’s been described as ‘the act of playing for stakes in the hope of winning.’ Other definitions state gambling as ‘to bet on an uncertain outcome,’ or my personal favorite ‘doing something chancy.’
While I am not a gambler whatsoever and have only spent about ten dollars in slot machines, I am a professional marketing and public relations professional with years of experience. I have plenty of good and bad advertising and PR campaigns behind me. But, when I last visited Las Vegas for a seminar I began researching the rules and theory behind marketing and gambling and found some surprising similarities.
Let me be clear, while losing money is never good for companies I want it to be understood that it is never the goal of any professional marketing and public relations professionals to gamble a clients money. But, early on in my career, I came up with inexperienced, somewhat marginal ideas for growing the businesses I was consulting for. When I asked them for the money to implement my ideas, they often agreed. The business owner(s) knew the risks.
So, while I was young, inexperienced and had at the time only semi-engaging ideas, I was able to sell the owner(s) on the campaign and implement the advertising and PR campaign in the weeks to follow. It yielded adequate results. As many years and many other much more successful advertising campaigns and strategies have come and gone, I’ve realized that companies take a great risk on marketing and PR folks like me and there are ways in which we should appropriately ‘gamble’ their money.
There are basic gambler’s rules to follow before one engages to real wagering activities. Mentoring plus education divided by experience equals success.
The same is true with advertising and marketing. It is empirical that gamblers know the games they will be playing. For marketeering professionals it’s important to know the audience your advertising to. Since the game is played with different rules and professional mechanics, some campaigns require a marketers skills which can only be acquired with mentoring, education and thoughtful strategy in order to have a more favorable outcome.
Taking this into account, it is a wise gambling (and marketing) activity to carry out games (i.e. ad campaigns) that give you the best winning odds. In essence, as a marketing professional, you want to promote or sell a product or service to the audience that will have the best likelihood of buying. This helps marketers (and gamblers) carry out activities in campaigns that have the best ROI (i.e. ‘winning!)
Advertising campaigns (like casino games) offer no guarantee of winning all the time.
Gamblers, like marketers expect some amount of loss when they play. As all casino games are designed with a house advantage that earns casinos their profits from their player’s wagers one can assume that ad agencies are the new casino, but that’s not the case. It is the many vendors needed to appropriately execute a good campaign. Activities such as purchasing postage, ink, copy writing and in some cases, several graphic designers and strategist are the ones that hold the advantage. Hence a good marketer (and gambler) should learn to manage their bankroll wisely by setting a limit on their spending or ‘wagering’ activities. Discipline is a virtue in many respects irregardless of the breaking point of your budget and its vitally important to stay within your budgetary (i.e. gambling) limits.
Establish a marketing (i.e. gambling) budget.
In support to the wise management of a companies funds it is necessary to establish early on a reasonable budget to be spent for any particular marketing campaign. This is so important since marketers (like gamblers) have the tendency to ‘go-for-the-gusto’ and oftentimes go beyond their bankroll capacity to chase past losses.
Estimate your ROI low, budget accordingly and be pleasantly surprised when you exceed the forecasted ROI.
Just as wise gambling involves the element of chance hence advertising and marketing professionals should always be prepared to take some losing and winning moments when playing the odds with company money and reviewing ROI or return on investment. Typically, playing a game of chance or sending out a well-crafted advertisement to a specific audience will usually give unpredictable outcomes that will not guarantee that a gambler (i.e. company) will experience all of the winnings for their labor. While I’ve seen some advertising and PR campaigns yield consistent 30% ROI, I’ve also seen campaigns flat-line with less than 1 or 2 percent ROI.
Never spend ‘The Company’ money scared or with uncertainty.
It is a gambler’s rule of thumb never to play with scared money when gambling. The same is true in marketing. If you wouldn’t spend your own personal money on the campaign because you are so uncertain it won’t work, then don’t initiate the campaign. It is empirical to only spend the amount that a company can afford to risk and does not mind to lose since any marketing activities offers an opportunity for growth but have relatively uncertain outcomes.