An article by The Daily Outdoor Retailer discussed the Solo Stove brand marketing campaign that went viral last year. The campaign was designed to raise brand awareness and expand reach that would benefit the brand over the long term. In the ad, rapper Snoop Dogg cryptically announced he was “giving up smoke,” only to later reveal it was an ad for Solo’s smokeless fire pits.
In the early days of the campaign, it was viewed as a success. Ad Age ranked the collaboration #18 on its list of the 40 best ads of 2023, they gained 60,000+ new followers on social media after the ad dropped and it raised brand awareness of Solo Stove to an expanded audience of consumers.
But, the metrics Solo Stove cared most about told a different story. Solo Stove claims it did not lead to a sales lift or a substantial increase in revenue. Additionally, their fourth quarter results came in below expectations and combined with their increased marketing investments, negatively impacted their EBITA. Ultimately, the company decided to change CEOs because the major marketing investments did not result in a substantial revenue increase.
Common mistakes made when planning a brand campaign
This is not the first time, and will likely not be the last time, a company made a sizable investment in a brand campaign that saw some immediate short term success but was viewed unfavorably by members of senior management. Although the campaign helped the brand expand to a new audience of consumers, the interim CFO claimed it did not lead to the sales lift or revenue increase it had hoped for.
One of the problems may be in the marketing metrics the team was using to indicate campaign success and business growth. In the case of a brand campaign, traditional ROI is not the marketing metric that teams should be using to indicate positive results. ROI usually refers to a historic, short-term ROI, one that takes spending on a program and divides it by total sales revenue generated, with success equal to an improvement over the previous, baseline ROI. Instead, marketers need to be looking at marginal ROI (mROI) which points to the future.
Why mROI measures the effectiveness of a brand campaign
mROI is firmly future-focused. And the future, after all, is what you’re looking to impact, especially in the case of a brand awareness campaign. mROI calculates response curves for each week into the future to predict a marketing channel’s expected return. These response curves account for interactivity among marketing channels, as well as the impact of such external factors as competition and seasonal effects.
mROI solves for the optimal spend based on a given financial objective. That could include maximizing the impact of a fixed budget, increasing long-term profit- or as in case with the Solo Brands Snoop Dogg campaign, hitting a specific revenue target.
With Keen, our software measures both short- and long-term ROI. In the case of brand building tactics such as television, it’s vital to set expectations upfront and show with model-supported data that the long-term (2+ years) ROI payback is significantly higher than what will actualize in the short-term (less than six months).
Closing thoughts
In the case of the Solo Stove campaign, we do not have all the details surrounding the CEOs exit after the campaign, but if if his exit was tied to the campaign not producing the revenue lift the CFO was expecting, then the team needed to align on goals and measurement of success prior. If the team looked at mROI, that would have ensured they were not overinvesting in any one single channel. An optimized plan could have told them which channels and when they should invest to take advantage of the interaction effects across those channels as well as the continuity of the messaging.
To learn more about how Keen can help your team measure success, take a tour of the platform here.
