Replacing reactive work with clearer systems

Deciding what advertising was supposed to accomplish

The company’s advertising presented a different version of the same underlying problem.

Increased investment in social media advertising had produced some initial gains in 2021, but performance plateaued around the middle of the year. Returns then declined quarter after quarter. By mid-2022, social spending had been reduced to a minimal level.

Google advertising was also stagnant. YMT’s external agency was executing requests, but the work was not grounded in a clear strategy or objective. The company had around 120 tours but no clear direction on which ones should be prioritized. As a result, the advertising budget became diluted. Money was spread across dozens of campaigns without any one campaign receiving enough support to make a difference.

The company first needed to decide what advertising was supposed to accomplish. Was the goal to give every tour some level of visibility, or was it to focus resources on the tours most likely to generate a return?

That decision also shaped the search for a new advertising agency: one expected to challenge assumptions and ask strategic questions before recommending tactics.

Advertising should change an outcome

A common way to evaluate advertising is to ask how many people clicked, responded, or eventually purchased. But those numbers do not necessarily show whether the advertising changed anyone’s behavior.

We wrote an article on this topic, but the basic idea is: advertising creates value when it reaches someone who would not otherwise have taken the action. That distinction became the basis for deciding which tours should receive support.

The company’s strongest tours were excluded from the priority advertising group. They already sold out or came close to selling out without substantial promotion. Advertising them might have produced impressive-looking conversion numbers, but those metrics would have been taking credit for purchases that were already likely to happen.

Instead, the analysis focused on moderately popular tours that reliably attracted enough customers to operate but still had unsold seats. Additional bookings on those tours could improve margins without requiring the company to create another departure or take on significant additional operating costs.

The second priority was new tours. These needed time to generate interest, attract their first customers, collect testimonials, and begin developing the word of mouth and organic visibility that established tours already had.

Just as importantly, some tours were placed in a do-not-promote category. These were often tours with consistently weaker customer reviews, particularly when the experience relied on less dependable third-party operators. Promoting an experience that is likely to disappoint only increases the number of dissatisfied customers. Investing resources to drive demand toward those experiences did not make business sense.

Replacing reactive spending with a plan

The work culminated in a report outlining recommendations for a $1 million marketing budget and a 12-month plan. Its central recommendation was to move away from reactive spending.

The company had spent much of the previous two years responding to immediate pressure. When sales declined, the natural response was to launch another campaign, test another platform, or increase promotion. But continuing to spend on channels with declining returns did not solve the underlying problem.

The proposed digital advertising budget was divided between two objectives: awareness and revenue.

Approximately 65-70% would support campaigns expected to generate measurable revenue. These campaigns would concentrate on selected tours where additional demand could change the financial outcome. Performance would be reviewed with the agency at least monthly. Weak campaigns would be adjusted, and tours that continued to underperform would be replaced rather than allowed to consume budget indefinitely.

The remaining 30-35% would focus on reaching new audiences and building awareness. This portion was expected to produce a lower return on investment because immediate revenue was not its primary purpose. It was an investment in introducing the company to people who were not already searching for its tours and building a larger audience for the future.

Each part of the budget needed a defined purpose, an appropriate measure of success, and a process for deciding what happened next.