Those who know me know I have long loved horse racing. A friend of mine got me into the sport some 3 decades ago and, over the years, I’ve stayed with it. Together with the amazing Kenan Pollack (also a “Marketing Nice Guy”), I wrote an article about the state of the industry for U.S. News & World Report magazine in 1996. How big of a fan am I? I’ve been to the Kentucky Derby twice, the Preakness 3 times, the Belmont once, and probably more than 10 Breeders Cup races in person in that period. I even once went took my wife to Longchamp in Paris for the races. (Perhaps the only individual who has done that and has still managed to stay married.)
So, it was probably inevitable that I would write something like this. Perhaps some of you are even thinking: “It took you this long?” One other reason to talk about this now is that we still run into many businesses that don’t quite understand marketing fully, how it works, what it does, or how to do it to give yourself the best chances of success. And we thought this horse-betting metaphor could help!
OK here goes. The 5 reasons marketing is like betting on horses…
Reason No. 1: Marketing Is a Risk. (And Luck Is Often Involved)
Did you know that, in horse racing, the favorite – the one the public picks as the most likely to win a race based on the odds – only wins 1/3rd of the time? Yes, the horse everyone thinks is the “lock” loses the majority of races. Why is that? Well, horses (like humans) have bad days. They might start slow out of the gate, get shuffled back, get a poor ride from a jockey who makes a bad split-second decision, or get blocked in the stretch (see competition and other factors below). They might also be injured or have some issues that can’t be detected at the start of the race. In other words, luck plays a big role.
How It’s Like Marketing: We’ve written extensively about how there are no “locks” or guarantees in marketing. And any firm that does offer you a guarantee or says they will generate X without having done it for you before is likely lying to you. Marketing is a risk. Period. Why are there no guarantees? Because similar to horses, luck is most certainly involved with marketing. Think about this scenario: A big influencer in your industry happens to be on their phone at 2 a.m. and sees an ad for your company on a social media platform. The influencer tries your product and then shouts about it to the world. Suddenly, your product takes off. There was no intent to reach that specific influencer, but you did. Perhaps you put out your particular advertisement widely but who it connected with was most certainly a matter of chance. That’s luck. And it happens every day. Word-of-mouth? You happen to be top of mind to someone in your network who shares something about you with his or her friend you don’t know. Luck again. Now, that doesn’t mean you can’t increase your chances of getting lucky. You can, but that’s part of the art of marketing as well.
Reason No. 2: Past Performance Data Is a Pretty Good Indicator of Future Success but It’s Not the Only One
Some people I know go to the track and they bet horse names, numbers, or specific colors (gray horses especially!) And that can certainly work out on occasion (see luck above). But the best way to bet on horses is to look at who has done well in the past, especially against a certain level of competition. That can include not just the horse itself but also the trainer, the jockey, and, in some cases (especially at the highest level of racing), the ownership (see No. 5 below). One reason people buy the Daily Racing Form (DRF) is that it provides really valuable insights into how horses have performed in the past and keeps a record of not just winning and losing, but other data as well including how a race was run (including the speed ratings), the conditions of the track, surface changes (turf or dirt), medication or physical changes of the horse, and more. There’s a lot of data to consider. And often, not a single way to analyze it every time that will work. You’ll find that the best way to bet horses is to take in all the data you have, evaluate it, and choose what you think is the most telling evidence for this particular race.
How It’s Like Marketing: We’ve often said, there’s no real handbook or guide on how to implement a data-based marketing approach for a company. That may be due to the fact that there’s so much data to take a look at! Every new campaign or marketing activity will require that a marketer look at a lot data in order to gauge what to do next. In some cases, a campaign that has performed well in the past will indeed do so again, if the conditions of the new campaign are similar. But there are other factors to that can impact how well your marketing does, maybe it’s a change in the audience, the competition (and what they’re doing), or even a slight change in your funnel strategy and approach. If you think about it, there are actually 5 types of data that you need to take in to be truly a data-driven marketer. Which ones do you weight most highly? Like betting on horses, you have to evaluate all of it and then decide.
Reason No. 3: It’s Harder to Bet the Same Horse to Win as Competition Gets Stiffer
Nearly all horses start their careers in what are known as maiden races[1], basically events for horses that have never won a race before. Assuming a horse wins at some point, depending on the level their connections believe they can run at, it can progress into claiming races (where it can be up for purchase by others ahead of the race) or if it is seen as more valuable, move into allowance or stakes races. Each race type has its own unique conditions that can affect the level of competition. For example, some stakes races might be restricted by gender or age. Or some are limited to only those horses that are bred in the state. In general, though, the more prize money, the higher the competition level. And against a better level of competition, horses that may run well against a weaker group can often be overmatched just moving up one class against more sophisticated runners. So how do some of them manage to move up and compete? The ones that do often have a trainer that is able to tap into the unique nature of the horse (whether it’s a particular talent or lean into something about the horse that makes it special).
However, the sad truth for most is that once a horse finds its level, it tends not to move much. For example, it’s rare for horses that start in the claiming ranks to win consistently in stakes races (though it certainly does happen). Charismatic, for example, was bought as a claiming horse and went on to win the Kentucky Derby in 1999. But that is definitely more the exception rather than the rule.
How It’s Like Marketing: Unless they are funded heavily early on as a startup (which very, very few are in the relative sense), most companies start as small entities (you might say in the maiden ranks). They work their networks, and get friends of friends to try their products and services. They get their feet wet by getting their first few sales, not really competing against the wider market until they start getting more serious. A lot of companies start out local too so competition is often restricted to those rivals in the immediate area. If successful, they may start to branch out to other places. And as they generate more sales, the companies often come under pressure to grow even more, which means their marketing has to become much more sophisticated in order to compete. Just relying on the network or a local neighborhood won’t cut it anymore. They might have to invest in more sophisticated advertising, more email marketing automation, content development, or social video ads. And like the trainers that tap into something special about the horses, companies need to tap into that unique narrative and brand that will allow them to grow and compete in a much more competitive arena.
Reason No. 4: In Order to Win, You Need a Strategy (But Also Adapt)
What the average layperson perhaps doesn’t realize about betting horses is that there are a variety of bets – not just the classic win, place, and show wagers (betting a horse to finish first, second, or third respectively). Indeed, there are a multitude of ways you can try to maximize your return. Some people just like to bet a single horse “across the board” – to win, place, and show. Others might wager horizontally (across different races), such as the Daily Double, the Pick 3, the Pick 4, the Pick 5, or the Pick 6, picking winners of consecutive races.
You can do wagers that are “vertical” – such as an exacta (picking the runners, in order, that finish first and second), trifecta (picking the runners, in order, that finish first, second, and third), superfecta (picking the runners, in order, that finish first, second, third and fourth), or even a Super High 5 (picking the runners, in order, that finish first, second, third, fourth and fifth).
And then there are ways to key certain horses or do what are known as wheels or part-wheels (often using the field or several horses against a key horse or two in one of the positions). You can also box several horses for an exacta, trifecta or superfecta, or Super High 5. The list of bet types can go on and on.
The point is, there’s no one way to make money. And the goal of any betting is to maximize returns. So, any good horseplayer needs to not just pick a horse, but have a betting strategy. A lot of this can be based on the data you’ve used before but much may depend on other circumstantial factors such as pool sizes, odds, and any number of other things that can vary race by race. In other words, good bettors always adapt strategies to the conditions of what they’re presented with. For example, let’s say I like a horse that has morning-line odds of 3-1, which I think is a good gamble for a win bet. But what often happens is that 3-1 goes to down to 1-1 at post-time (or less). For a win bet, that’s not a great return. (In this case if I bet $20 to win and the horse comes in, I get only $40 back, doubling my money). So here, what if I did a Daily Double instead? Yes, I still have this particular horse to win in this race and I give myself options in the next one, say 2 horses in the subsequent race. I can do a $10 double pairing my horse in this race with 2 other options (a $20 bet) and each likely will pay more than the $40 I got back. I have to be right in the subsequent race, but in this case, I can take my pick, use the same amount of money to make more potentially.
How It’s Like Marketing: First if you try to market without a strategy, you’ll probably fail. That’s because you haven’t given time to think through:
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- Audience targeting
- Your brand narrative and brand projection
- Your budgeting and resource allocation (and priorities)
- Your marketing channels
- Your measures of success
Companies that do these steps create marketing campaigns that are much more focused and effective. That’s why marketing plans are a critical part of a business’ success. But great companies and marketers don’t stop there. Like the bettors we referenced earlier, they have to make adjustments to their strategy as circumstances merit. For example, let’s say you’re advertising to different audience segments that you’ve established as part of a strategy. What if targeting one segment isn’t working but another is? Well, in many cases, it would make sense to switch more money into the campaign that is performing so you can maximize your revenue/outcomes. That’s a simple example but that should be happening every day in every channel as you monitor performance on both a strategic and tactical level. In other words, just because you have an original strategy doesn’t mean you stick with it if circumstances change. Like horse betting, the goal is always to optimize on the fly to maximize returns.
Reason No. 5: You’ll Often Win Betting the ‘Connections’
There’s a term in horse racing known as the “connections” – the people behind a particular horse, such as the owner, trainer, and jockey especially. When it comes to betting, many people will default to those who tend to win more often. For example, as a bettor, I have to consider a horse anytime a leading rider jumps on or anytime a great trainer enters a horse in a particular race. Similarly, especially in big races, you can’t rule out horses owned by, say, Godolphin, the Dubai-based, Maktoum family private Thoroughbred horseracing stable. It wins graded stakes around the world and its horses are consistently ranked among the best in the world.
How It’s Like Marketing: Similar to betting, the “connections” matter – in this case, the people behind your marketing. That’s why you should choose a firm such as Marketing Nice Guys, with a demonstrated track record of helping small business win consistently in the marketplace. 😊 If you’re ready to bet on us, contact us today for a free consultation.
[1] In some parts of the world, like Australia, you might see some horses start out in stakes races but this is not as common in the U.S, Europe or Japan.