If I were to encourage you to gamble with your marketing budget, you’d probably tell me to take a long walk off a short pier. Because gambling has a bad reputation. It’s seen as risky, dangerous, degenerate even.
But if I were to suggest that you invest in marketing, you might want to learn how. Because investing is smart business. It's when you risk money in order to make more—
Wait, when you put it that way, isn't investing just a gentrified form of gambling? Whether it's penny stocks, venture capital, or poker, the pros know that you have to take calculated risks and play the odds if you want to win.
How marketing is like gambling
There are no guarantees in marketing.
Despite all the fancy automation, machine learning, and Big Data we have at our disposal, companies still spend money on marketing campaigns that fail. With a smaller budget and less experience you're even more likely than your larger competitors to suffer campaigns with a negative ROI (return on investment).
Why does this happen?
Marketing requires you to get the right message in front of the right people at the right time. It takes a certain amount of luck to hit all three at once.
That’s not to say there’s no skill or strategy involved. On the contrary, strategy is vital to your marketing success. But no marketer has a 100% win rate. Understanding that losses are a part of the game can help you make better decisions.
Tips for investing in marketing like a pro
1. Move the marketing odds in your favor
From counting cards to buying points, professional gamblers are always looking for an edge.
In marketing, you get that edge by doing your homework.
Get to know who your ideal audience is, where you can find them, and what they care about.
Know where you stand in the marketplace, how you stack up against your competition, and what your unique selling proposition is.
The better you understand your market, the higher your probability of achieving a positive ROI.
2. Diversify your marketing portfolio
Hedge fund managers never put all their assets into a single stock (at least I hope they don’t). They know the best way to reduce risk is to spread it across a broad portfolio.
Never rely on a single source for your business leads. I don’t care how good that channel is performing today, it could dry up tomorrow.
Diversify your marketing by using a combination of owned, earned, and paid media.
- Owned media are marketing channels you control, like your website, your email list, or your social profiles.
- Earned media (a.k.a. public relations) are uncompensated mentions of your business by third-parties like journalists, bloggers, or your customers.
- Paid media is any advertising you pay for directly, like Google Ads, influencer campaigns, or billboards.
Focus on the marketing channels that can get you the greatest exposure to your best prospects in the shortest amount of time.
3. Learn from your marketing losses
Just because a team won the championship last year doesn’t mean you should bet on them this year.
It’s way more fun to review campaigns that earned money than those that lost, but if you don’t examine both, you’re only getting half the information. It’s called survivorship bias and it can lead you to draw the wrong conclusions.
Win or lose, review your analytics and look for patterns that give you better insight into what your target audience responds to...or doesn’t.
4. Don’t bet money you can’t afford to lose
The reason gambling has such a bad reputation is that people (often desperate people) bet money they don’t have hoping to win big and turn things around.
When they lose, bad things happen.
Marketing campaigns can and do fail. If someone is encouraging you to spend money you don’t have on some grandiose marketing scheme because “you gotta spend money to make money,” then tell them to take a hike.
Take time to learn marketing skills for yourself, build your audience, and network with people who can help your business grow.