Using the 70/20/10 Rule and AI to Fuel Growth

Most CMOs I know have heard about the 70/20/10 rule of marketing. This time-honored rule suggests that executives invest 70 percent of their marketing budgets into mainstream activities that generate revenue growth and are core to one’s day-to-day business competency, 20 percent into a new yet unproven innovation, and 10 percent into pure experimentation. When I bring up the 70/20/10 rule in conversations with clients, I get a look of recognition, some head nodding, and agreement that the philosophy makes perfect sense for every kind of marketing endeavor ranging from product development to marketing tactics.

So why do so many CMOs ignore the rule?

At a time when innovations such as artificial intelligence and voice assistants are rapidly changing marketing, too many CMOs are mired in the mud of managing day-to-day tried-and-true marketing tactics while their competitors prepare themselves to adapt to changing consumer behavior by investing into emerging technologies and experimenting with new business models. It’s not that investing into tried-and-true tactics such as performance media is wrong — quite the contrary, the 70/20/10 rule says you should invest most of your budget into the activities that you can prove are delivering results. But at some point sticking to your knitting delivers, at best, incremental returns, or, at worst, wasted budgets (which is why Procter & Gamble intends to slash its ad spend by $2 billion). And perhaps worst of all, you’ll fall behind savvier businesses when those emerging technologies become mainstream.

I help companies grow (to learn more: www.delage.biz), dad of 2 teens, and husband of 1 very patient woman... Additional musings can be found on Twitter @Sauld