Mass Marketing vs. Target Marketing: An ROI Examination

Marketers are tasked with important decisions when it comes to what strategies, techniques, tools, and platforms to use to achieve their marketing goals. So much of business growth is dependent on high-quality, thorough marketing, and the way marketers can scale their success. Marketing success is hugely dependent on choosing the most profitable and appropriate marketing strategies for your specific business model and target audience.

The Return on Investment or ROI is an important element in choosing marketing strategies and approaches that best fit your marketing goals. Your marketing efforts will be greatly influenced by how seriously you take ROI and how well you implement it as a means of ensuring high return on sales and business growth through marketing.

As of late, marketers are choosing between mass marketing or target marketing as their preferred strategy for connecting with their potential and current customers. Let's take a deeper look into the ROI in mass marketing and target marketing and each strategy’s effectiveness in lead generation. But first, a general overview of each strategy.

Mass Marketing vs. Target Marketing: A Concise Overview  

You want to make sure you’re generally knowledgeable in both mass marketing and target marketing to ensure you’re making the best choice for your marketing goals. One of the first choices you’ll make is whether marketing to the masses or marketing to smaller, targeted groups is best for achieving your marketing goals.

Whether you’re creating a mass marketing or target marketing campaign, you must have a clear vision for what indicates success for each marketing project. Use these success indicators when creating a marketing campaign to effectively reach the masses or your target group. Aside from ROI, success criteria could include:

• Time spent working on the project.
• The satisfaction of stakeholders and business leaders.
• Perceived benefits of the project.

We will assess which strategy is better based on the ROI after we tackle some important questions that will help you better understand each marketing strategy and further aid you in making the right choice for your specific marketing goals.

What is mass marketing?

Mass marketing is defined as advertising or promoting to a wide variety of audiences to appeal to as many people as possible. This marketing strategy focuses on volume.

What are the main pros and cons of mass marketing?

Main pros of mass marketing include:

• Effectively executing marketing campaigns that are relevant to a wide audience can increase conversions.
• Your word-of-mouth marketing grows as you connect with more people.
• Can optimize time spent on your marketing strategy.

Main cons of mass marketing include:

• Expenses can pile up due to using multiple platforms and techniques.
• You’re forced to stick to a generic approach to connecting with your audience.
• An abundance of low quality-leads that only make it to the top of your sales funnel.

How effective is mass marketing in lead generation?

Trying to garner quality leads from a mass marketing strategy is challenging. Yes, you’re able to reach a lot of people, but most of them won’t take any action with your business because they simply aren’t your ideal customer. You essentially roll the dice when it comes to connecting with the customers that need your product or service and spend too much time sifting through low-quality leads.

What platforms are best for mass marketing?

The best platforms for mass marketing are:

Email — Email is the most used platform for sending out mass communications. Platforms like Mailchimp and HubSpot are set up to seamlessly send mass email communications as well as track the interactions with each email in your campaign.

Direct mail — Direct mail marketing is also a highly effective way to communicate with the masses. You can reach thousands of people in a reasonable amount of time without too many constraints.

What is target marketing?

Target marketing is defined as a strategy that segments your target market into smaller groups based on things like needs, hobbies, demographics, professional interests, and other behaviors. This customer-driven strategy focuses on prioritizing each customer’s interaction with your brand, and in turn, a deeper relationship develops.

What are the main pros and cons of target marketing?

Main pros of target marketing include:

• Extremely cost-effective because you’re spending only on what works.
• Fills your funnel with high-quality leads ready to take action with your business.
• Gives you flexibility in personalizing content.

Main cons of target marketing include:

• Can be time-consuming with the amount of research and strategizing necessary to target effectively.
• Potentially neglectful to your pool of inactive customers.
• Isn’t ideal for a one-man or one-woman marketing team.

How effective is target marketing in lead generation?

Target marketing is extremely effective in lead generation because you connect with the right audience at the right time. You’re able to engage your customers with personalized content and that approach helps to move ideal customers through the entire marketing and sales funnel with ease. You can specifically target people who fit your high-quality lead criteria.

What platforms are best for target marketing?

The best platforms for target marketing are:

Social media platforms — Social media is the top option for connecting with your target market. Platforms like Facebook, Instagram, and Twitter are intentional about helping you build a specific tribe for the products and services of your brand.

Media sharing platforms — Media sharing platforms are also a highly effective way to interact with your target market. With visual content becoming increasingly popular, platforms like Youtube and Vimeo are exhibiting extreme potential in connecting with your ideal customers.

Next, we’ll examine how considering ROI in addition to the above information gives you a holistic approach to choosing which marketing strategy serves your needs best.

An ROI Examination of Mass Marketing and Target Marketing

It is important to take a deeper look into the ROI of mass marketing and target marketing because this metric is the top indicator for a successful marketing strategy for most marketers. Your ROI essentially answers the question: Are my marketing efforts helping the business? Let’s examine ROI basics and how it relates to mass marketing and target marketing.

What is an ROI and how is it calculated?

Return on investment, or ROI, refers to the amount of money you generate after investing in something. A basic calculation for ROI is as follows:

(Revenue-Investment) / Investment

You then multiply this answer by 100 to get your ROI.

How does ROI in marketing differ and how is it calculated?

Your marketing ROI measures revenue growth through the success of your marketing initiatives. Your marketing ROI is used in part to justify your marketing budget and allows for expansion should your initiatives prove helpful to your company.

When calculating your marketing ROI, you want to be sure to account for organic sales growth. Use the following calculation for the most accurate results:

(Sales Growth-Organic Sales Growth-Marketing Cost) / Marketing Cost = Marketing ROI

Mass marketing ROI

Your specific mass marketing ROI is dependent on the specific goals of your overall marketing strategy and the goals of specific campaigns.

Achieving the highest mass marketing ROI depends on:

• How many platforms you’re using for your marketing efforts.
• What exact techniques you’re using on these platforms and their costs.
• Factoring in organic sales growth.
• Keeping track of revenue from your marketing efforts.
• The length of time you set for each campaign.
• Your specific indicators of success for your marketing campaign- is it purchases? Booked consultations? Website visits?

The ROI on mass marketing isn’t as high as target marketing because you’re not able to maximize your marketing efforts as they relate to connecting only with those who are interested in your products or services. You spend more time on leads that go nowhere, which ultimately reduces your ROI.

Bigger businesses tend to have a high ROI with mass marketing if they have the right team in place and ample financial resources to experiment and find the perfect mass marketing approach to achieve their goals.

Target marketing ROI

Your specific target marketing ROI is also dependent on the specific goals of your overall marketing strategy and the goals of specific campaigns.

Achieving the highest target marketing ROI depends on:

• The marketing channels you use.
• The marketing techniques you’re using on these channels and their cost.
• The metric you’re using to gauge effectiveness.
• Pivoting your techniques to hit the goal you set for this metric.
• The revenue you make from your target marketing efforts.
• How much time you spend on your marketing efforts.

The ROI on target marketing has an edge over mass marketing because you create quality, long-lasting customer relationships at a quicker pace. This is due to specifically targeting ideal customers more likely to convert into actual customers.

Small businesses tend to have a high ROI with target marketing because they’re closer to their customers. People are moving away from brands that use blanket content to connect with them and closer to brands that tailor their content specifically to them. The investment in quality over quantity seems to be working as the personalization trend is becoming more popular each day.

Although the ROI isn’t the only deciding factor in whether you go with mass marketing or target marketing, it’s proven itself as a top metric to consider in whichever strategy you choose. It’s best practice to go with the marketing strategy that promises the best ROI and that aligns well with your overall brand and marketing goals.