February 2, 2015

Reach vs Algorithms

Industrial Marketing

Industrial Age marketing thinks in Reach – the number of people potentially exposed to your message.

Reach on TV was estimated by Neilson ratings based on a small population of survey participants. Reach on magazines and newspapers was based on the number of issues sold multiplied by a factor to take into account that a newspaper/magazine can be viewed by more than one person.

This Reach only counted the maximum potential eyeballs, but could never tell you:

  • How many people actually saw your message inside the TV show or magazine/newspaper
  • Of those who saw your message, how many chose to take action

Since Reach data was so vague, it makes sense that traditionally, the best chance of having your message seen is to maximise Reach.

Connection Marketing

The Connection Economy changed marketing when communication become interactive – two way.

Because of this dynamic, two new forces are at work:

1) Consumers can now vote with their mouse (or finger) whether to click, view, visit, like, comment or share a message they personally have seen.
2) Algorithms constantly measure these votes, using past results to determine future exposure.

What algorithms?

Every time you do a Google Search, two separate algorithms are activated and deliver both sets of results on the same search results page in milliseconds:

Similarly a Newsfeed and an Advertising algorithm activate every time you refresh Facebook, while a Display advertising algorithm activates every time you see a Banner ad.

In just 5 minutes, you could easily have had over 100 algorithmic decisions made to determine what content/messaging you see.

Each time such algorithms are activated, they are measuring your ‘votes’, as well as the potentially thousands of others ‘voting’ on the same content as you.

Over time, messages that people engage with will keep getting promoted and seen while messages that people ignore will keep getting penalised and eventually disappear.

The ‘rich’ will keep getting richer, while the ‘poor’ will keep getting poorer.

How is engagement counted?

Each algorithm is different but all of them have one major factor in common: Click Through Rate, or CTR.

CTR = Clicks divided by Reach

In other words, CTR is a measure of how many people clicked on a message compared to how many saw that message.

The higher the CTR, the more confident the ‘vote’ as measured by the algorithms.

The goal for every Connection Economy marketer, therefore, is not to maximise Reach, but to maximise Engagement so that our messages have the best chance to keep appearing as decided by the algorithms.

The way to maximise engagement, is to minimise Reach and maximise Clicks.

In the Industrial Economy, Reach works in your favour.

In the Connection Economy, Reach works against you.

The algorithms want us to provide good content, to fewer people who are more likely to click and if you do so, will reward you with maximum result.

Market The Best for the Least for the Most.

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About Adam Sugihto

Founder of Intentional - a specialist Pay Per Click Advertising Agency based in Melbourne, Australia. Member of Perry Marshall's Marketing Mastermind since 2011. Google Adwords Qualified Individual since 2010.

Category

Connection Economics