Vice President, Account Management

Performance Marketing Expert

The Importance of Marketing to Profitability

Marketing has made a massive transformation from the days of Mad Men to become a data driven, quantitative, and scientific endeavor. The accessible data landscape has allowed marketing teams to shift their goals from brand awareness at the top of the funnel, all the way to revenue, and even profit at the bottom. This enables marketing to truly and transparently impact the bottom line. The ability to drive both revenue and profit continues to blur the line between marketing goals and business goals, opening the door for a combined approach to success.
Let’s take a step back and look at this through the current lens of e-commerce. With retailers like Amazon and Walmart disrupting the marketplace, brands have had to dive deeper into their marketing strategy. The road to compete with Amazon has many obstacles for online retailers, one of the biggest being operating margin. Giants like Walmart are expanding their online operations and cutting prices, causing them to push for higher margin goods to boost profits.
As Walmart and others stop at nothing to solve their online profitability issues, one must ask the question: why is so much of digital marketing’s success judged on top-line revenue? The gap between a company’s top and bottom lines mirrors the disconnect between client business goals and high-level marketing goals. Luckily, technology and recent innovation provide a way to combine the two efforts and drive toward the same purpose. Clients who give their marketing teams access to upstream data will experience downstream impact.
Rise recently helped a major retailer to manage various product feeds and ingest gross margin forecast data by product category. This data was then leveraged as a variable within Rise’s recommendation engine. The result was a media activation strategy that enabled a much deeper understanding of what is working to drive ultimate business impact for the client. The strategy discovered which combinations of channels, tactics, and audiences were driving both revenue and profit.
For companies in today’s environment to ensure bottom-line success, they must attract the right customers. It also means they must sell the right balance of products because the value of each item sold is not the same.
Imagine the following:

Customer Profitability vs Product Profitability
Brands should focus their budget on the high profit sector of this grid and minimize spend in the “Spread Too Thin” area to truly impact their bottom line. Reach out to Rise to learn how.

07/31/2018 at 07:34