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Advertising to Future Buyers | the 95-5 Rule

Picture this: You come across an ad for a product you’ve never heard of before. You don’t need the product right now, but the ad catches your attention.

Fast forward a few months, and you find yourself in the market for a similar product. In more cases than not, the brand in the ad is the one you end up looking for.

This scenario highlights the power of brand advertising in reaching future buyers. Advertising to people who aren’t necessarily in the market for your product or service right now is crucial for building brand recognition and creating a lasting impression that will stick with them when they are ready to make a purchase.

Understanding the 95-5 Rule

The 95-5 Rule suggests that most buyers are not ready to buy today, especially in the B2B sector. They are considered “out-market” and will make a purchase sometime in the future. This rule is based on research that shows that 75% of companies buy computers once every 4 years, 80% of companies change banking services once every 5 years, and even in B2C, 90% of consumers buy new cars every 10 years. This means that most of the time, most category buyers are not “in-market.”

How many times have you watched an ad and made an immediate purchase? The answer is likely not very often. The truth is, most of the time, you need to be in the market and have a genuine need for the product before considering a purchase. This could take weeks, months, or even years. However, it’s essential to note that the ad does influence your purchasing decision. In many cases, the product featured in the advertisement becomes your primary consideration when you are ready to buy.

The Myth of Immediate Advertising

The problem is, many marketers believe that advertising only works when it’s targeting buyers who are “in-market” right now. This myth leads to a narrow focus on short-term sales and a lack of investment in long-term brand building.

But the truth is, the vast majority of potential buyers are not ready to buy today.

So, if you only focus your advertising efforts on those who are “in-market” right now, you’re missing out on a huge opportunity to reach the majority of your potential audience.

Why Advertising to Future Buyers Matters

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The goal of advertising is not just to move people down the sales funnel, but to create a lasting impression that will influence their buying decisions in the future. By building brand recognition and linking your brand to relevant buying situations, you can ensure that when a potential buyer does enter the market, your brand is the one they remember.

The best ads create long-lasting memories that influence buying decisions over time, especially for future buyers who are not yet in the market. By investing in brand advertising that resonates with future buyers, businesses can generate future cash flows. This is why it’s important to reach the 95% of the category that won’t buy today because those “out-market” buyers represent the future cash flows that underpin the stock price for every public company.

Optimizing Your Ads & Marketing Strategies

But how do you create an ad that will stick with someone for months or even years? It’s all about building memories. The best ads are those that leave a lasting impression and build a connection with the viewer. They tell a story, evoke emotions, and create a sense of familiarity with the brand – taglines, jingles, and consistent branding are some tools that help you achieve this.

It’s important to remember that the impact of advertising is not always immediate. Just because someone doesn’t buy your product or service right after seeing your ad, doesn’t mean the ad was a failure. Conversions may occur much later in time.

If you want to see long-term success from your advertising efforts, it’s important to invest in both short-term lead generation and long-term brand building. Don’t neglect the 95% of potential buyers who aren’t “in-market” right now. By reaching them with powerful, memorable ads, you can create a lasting impression that will pay off in the long run.