One lever, two promises

There is a line in most fourth-quarter plans that promises two things at once. Revenue up, and the media efficiency ratio up with it, in the same quarter, from the same budget.

From the in-house seat, running several brands at once, I have learned to read that line as a wish.

Media spend behaves like a stack of riyals, and every riyal in the stack is a little worse than the one beneath it. The first money goes to the people most likely to buy. The last money goes to the people least likely to buy, at the highest price, because everyone easy has already been bought.

Better efficiency comes from cutting the top of the stack. The worst riyals go first, the ratio improves, and the volume they were buying goes with them. That is the price of efficiency: the customers only the expensive money could reach.

More volume comes from adding to the top of the stack. The marginal customer is bought last and paid for most, so the ratio falls as the number grows. There is no version of growth that buys the expensive customer cheaply.

The exception is an account that has been wasting money, where cutting the waste improves both. That happens once, and it is a correction rather than a plan.

A plan that promises both in the same quarter is asking one lever to move in two directions. The team pulls it one way in October and the other in November, and arrives in January having done neither well.

The honest plan picks. This quarter is for volume, and efficiency may slip to here. Or this quarter is for efficiency, and volume may hold. Written down before October, with the number allowed to get worse sitting next to the one meant to get better.

The quarter is for one promise. Left unchosen, it chooses for itself, and calls the result a miss.