Circular Economy in Marketing 101

Andreea M.
Feb 13, 2020 · 6 min read
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I started my career distributing flyers and brochures to random people who just happened to cross paths with me in the supermarket or event venue I was working at. I handed over small pieces of paper with promotions or discounts on coffee shampoo or food products, all of them, probably, with a nice design and a great brand message. Probably, because I don’t really remember reading or actually being interested in the information presented.

The gig was like this: I was around 19 and, in need of a part-time or project-based job during college, I submitted my resume to an agency that helped brands with their below the line advertising needs. Probably it went something like this: brand contracts agency account manager who then takes the project to the project manager who briefs the contractors such as myself. I think at this point you kinda get that the brand message might be a bit diffused with so many layers.

Before actually hitting the venue, the other broke college kids and I got into a room with the project manager who briefed us for maybe a few minutes: this is what you have to say, this is the brand, this is the offer. I don’t really remember the notion of ‘target audience’, or anything similar.

It’s been a minute since I’ve been distributing flyers, but I do see the practice continuing, during trade shows or at supermarkets. So in the age of soon-to-be-defunct Google third party cookie that follows you everywhere and A.I., could it maybe be time to see how much this practice is actually costing the companies, the environment and if there’s actually some ROI buried deep in the layers of that 130–170 grams per square meter heavy flyer paper?

Did you hear about Target and the pregnant girl? Cripes!

Marketing activities have evolved exponentially along with the developments of technology and advertisers can now know things even our own families don’t. Target, the American supermarket chain, even figured it out that a teenager was pregnant before her father knew, an extraordinary or extraordinarily creepy story, depending on which side of customer service you find yourself, told by Charles Duhigg in his book, “The Power of Habit” and in a New York Times article.

According to the author, a statistician working for Target, Andrew Pole, assigned every shopper a Guest ID which was tied to their credit card info, demographics and their shopping purchase (and any other data they could buy from a third party) to understand consumption patterns and send tailored coupons, discounts and products info.

[Pole] ran test after test, analyzing the data, and before long some useful patterns emerged. Lotions, for example. Lots of people buy lotion, but one of Pole’s colleagues noticed that women on the baby registry were buying larger quantities of unscented lotion around the beginning of their second trimester. Another analyst noted that sometime in the first 20 weeks, pregnant women loaded up on supplements like calcium, magnesium and zinc. Many shoppers purchase soap and cotton balls, but when someone suddenly starts buying lots of scent-free soap and extra-big bags of cotton balls, in addition to hand sanitizers and washcloths, it signals they could be getting close to their delivery date. As Pole’s computers crawled through the data, he was able to identify about 25 products that, when analyzed together, allowed him to assign each shopper a “pregnancy prediction” score. More importantly, he could also estimate her due date within a small window, so Target could send coupons timed to very specific stages of her pregnancy.

Since data is working so well, then why do marketing departments of big and small companies insist on handing out flyers and printed brochures that, compared with the above, are more like shot in the dark activities than well-planned marketing strategies?

The return rate in marketing for a flyer is 1%

In 2017, companies were spending on average about 7,5% of their revenue on marketing activities, and, on average, 60% of that budget is attributed to ‘direct expenses of marketing, including trade promotions.

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Source: The CMO Survey and Deloitte Digital

In the B2B sector where I have been active for the past ten years, in various sub-industries such as software as a service (SaaS) or infrastructure as a service (IaaS), there was a common denominator: trade shows. Let’s take a look at a high level overview for trade-shows:

Average cost of event: 35,000 EUR (branded booth, event tickets for sales); Average number of leads gotten from event (business cards): 100; Average lead to customer conversion: >3%; Average monthly recurring revenue (MRR) from event leads: 800 EUR; Return of investment: 3 leads x 800 MRR = -17%; Loss: 6,200 EUR

Not only that, but offline activities have become a major source of waste for a company. At any given event, for a medium-sized company in the above industry, marketing invests, and prints, at least 2,000 flyers, for a two-day event. A super-fast Google search (or DuckDuckGo & the likes) tells me that 2,500 flyers are 100 EUR on average. The return rate for a flyer activity, in marketing, is around 1%, with most people taking them from the hands of the sales representative straight to the garbage can.

So let’s take a look at the true cost of a medium-sized, two-days, trade show, with about 200 companies exhibiting, each of them having the minimum hand-out of 2,000 flyers. At the end of the event, we’d have (1/100) x (200x2000) = 4,000 ‘successful’ flyers, which means a whopping 396,000 discarded flyers.

According to Stastista.com, in the United States, companies were planning on attending around 14.5 events in 2019, which roughly means over 5 and a half million discarded flyers in the US alone.

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Number of trade shows attended by business professionals in the United States from 2015 to 2019, by type.

The average weight of a single A4 sheet of paper is 4,5 grams (not taking into consideration that flyers mostly have a better quality paper and more often than not weight twice as much), putting the total wasted paper from trade shows in the US alone at almost 25 tonnes. According to the United States Environmental Protection Agency, about 63% of all discarded paper in the US is recycled, leaving the remaining 37% to waste. Trade shows are not only costing marketing departments their budgets, but they also contribute to an environmental crisis.

So how can marketing departments become more circular?

Given that they’re not the producers, marketing departments cannot control the supply chain, but they can eliminate waste on their end by optimizing activities and switching to virtualization, where possible.

For example, business cards are very popular at trade shows and, although they are not discarded at the same rate as flyers, they are sometimes misplaced and have a short lifespan. In marketing, all trade shows attendees take the business cards home then scan them or manually input the data in their own CRM (customer relationship manager) and then discard them. One way to virtualize the process is to use LinkedIn’s QR code scanner and automatically connect to a specific person. The professional platform has a user base of 660 million, with roughly half of them (47%) active every month.

And that’s just the tip of the iceberg. There are a lot of ways companies can become more circular and eliminate waste, but one good step in this direction is to really understand who the customer is and to find other ways of engaging rather than with a piece of paper. If that’s not a real possibility in the near future, then at least try to print the new campaign offer on recycled paper.

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