The long term value of advertising – The dark side

As I gather notes on the long term value of advertising one of the things that also needs to be considered is the negative value that advertising can have on the brand.  The biggest negative advertising effect is in email, but it can also apply to Facebook and other social media channels.

The negative value of email advertising is the unsubscribe and the junk/spam mail designation by prospective customers.  The problem with any of these is that the junk/spam/unsubscribe designation can last forever. 

Let’s take a simple example.  Let’s assume that a brand executes a monthly email to 100,000 prospects and has an 3.3%  junk/spam rate and a 3% unsubscribe rate for each mailing (See Center for Market Research ).  By the end of the year, after 12 emails, the list will have the following breakdown:

	Active recipients (from 100,000 after 12 drops)	45,801
	Unsubscribe’s (@ 3% per drop)	25,809
	Junk/Spam (@ 3.3% per drop)	28,390
	Total	100,000

The point is not to calculate the number of active recipients, but to show the loss in long term value that occurs due to advertising.  This takes place with email, but can also take place with other media, such as Facebook® fan page subscribes/unsubscribes, Twitter® followers and others.  And, especially with email, once the email lands in the junk/spam or unsubscribe list it can take a lot of effort to reverse the designation by the prospective customer.

Let me know if you have any comments.  I look forward to your feedback.

Comments

[Gianluigi Cuccureddu]

Interesting approach to retention.
Keeping this in mind will moderate actions.

Thanks.