Share of Demand by Advertising Channel Detective

This one came up in the past year. I noticed a problem with a business.

Regardless of the attribution method (they're all wrong and yet they're called "truth" by so many in the industry), it's pretty easy to play detective and identify a business that is not healthy.

Healthy Business:

• 40% of Sales Happen Organically, Without Aid of Advertising.
• 20% of Sales Happen Via Email Marketing.
• 20% of Sales Happen Via Search Marketing.
• 10% of Sales Happen Via Social Media (Paid + Organic).
• 10% of Sales Happen Via Other Marketing Channels.

Unhealthy Business #1

• 10% of Sales Happen Organically, Without Aid of Advertising.
• 15% of Sales Happen Via Email Marketing.
• 35% of Sales Happen Via Search Marketing.
• 15% of Sales Happen Via Social Media (Paid + Organic).
• 25% of Sales Happen Via Other Marketing Channels.

Unhealthy Business #2

• 5% of Sales Happen Organically, Without Aid of Advertising.
• 65% of Sales Happen Via Catalog Marketing.
• 12% of Sales Happen Via Email Marketing.
• 15% of Sales Happen Via Search Marketing.
• 1% of Sales Happen Via Social Media (Paid + Organic).
• 2% of Sales Happen Via Other Marketing Channels.

Whether you are trying to rebuild your business or are looking to buy/sell a business, this is a good guideline for you to reference. Unhealthy businesses generate very little demand/sales organically (without the aid of marketing). Healthy businesses did the marketing years ago, earned trust via the merchandise they sell and consistently good customer service, resulting in ongoing sales that do not require marketing.

Unhealthy businesses possess two key attributes.

1. Marketing is required to generate sales. Less marketing, less sales.
2. One marketing channel is responsible for more than half of annual demand.

Again, most of you are not looking to buy/sell a brand (if you are, I'm the person to evaluate the health of the business ... kevinh@minethatdata.com). Most of you are looking to rebuild your business or maintain it. Use what you've read this week to rebuild/build your business.