Economics of sponsored content

rehan53
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rehan53
This happens all over the place but the Pulp MX Show is an easy example: a company sponsors a segment (or video, or instagram post, or whatever) and the advertisement says use coupon code XYZ to save 10% off your order. They’re paying to advertise, and then they’re offering a discount. It seems like they would have to move so much product to make that model worthwhile. Is the markup just that high?
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SEE ARE125 2/7/2020 3:25pm
2/7/2020 3:25pm
The promo code gives them the data to know where their advertising dollars are best spent. They motivate you to give them that data in the form of a discount.
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Zesiger 112
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Zesiger 112 2/7/2020 4:10pm
2/7/2020 4:10pm
Yes the mark up really is that high.
The company I work for sales at 300%
I calculated the markup on an iPhone and it's something like 600%
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Mucktub
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Mucktub 2/7/2020 4:30pm
2/7/2020 4:30pm
That's capitalism.
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sandtrack315
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sandtrack315 2/7/2020 4:54pm
2/7/2020 4:54pm
SEE ARE125 wrote:
The promo code gives them the data to know where their advertising dollars are best spent. They motivate you to give them that data in the...
The promo code gives them the data to know where their advertising dollars are best spent. They motivate you to give them that data in the form of a discount.
Yup, and then they cut advertising on platforms that don’t work, and they come out ahead of if they never gave the discount and kept running ads that don’t work.
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Zaugg
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Zaugg 2/7/2020 5:14pm
2/7/2020 5:14pm
This is a pretty old school solution, because the moto industry is light years behind other industries when it comes to marketing, advertising, and data science.

In the old days, companies like DeCal works (for example) would utilize different phone numbers to place an order depending on the magazine they used for advertising. (Keep in mind this is pre-internet.) This allowed them to determine which magazine was producing the most orders.

Now, discount codes are a way for advertisers to determine if their retail marketing strategy is working with that particular outlet.

I doubt most moto companies have the infrastructure or knowledge to leverage data, with the exception of online retailers. I would submit that most of the OEMs barely know how to do this.

Again, this is just a great way to track your advertising dollars when you don't have the staff, knowledge, or bandwidth.

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KDXGarage
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KDXGarage 2/7/2020 8:18pm
2/7/2020 8:18pm
Mucktub wrote:
That's capitalism.
Every other one of you Brits having a *&%$ed up grill is NOT capitalism.

And no, unlike you, I don't go on crappyukmx.com and start shi&.

Your turn.
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westeast
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westeast 2/7/2020 9:23pm
2/7/2020 9:23pm
Mucktub wrote:
That's capitalism.
What's your point? Companies have the freedom to advertise and offer discounts and consumers have the choice to take advantage of those discounts or say "no thanks"? Your comment comes across as a knock against capitalism, but I'm struggling to understand the logic behind it. Please help me understand.
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bryan
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bryan 2/7/2020 10:35pm
2/7/2020 10:35pm
Sometimes it works because a business might be used to having ~30%+ go to a distributors/dealer. If they're running an ad for direct-to-consumer sales, they keep that 30%+, can offer 10% off, and still make 20%+ more than they usually make.

Same goes for a lot of rider support programs.
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Mucktub
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Mucktub 2/8/2020 1:04am
2/8/2020 1:04am
KDXGarage wrote:
Every other one of you Brits having a *&%$ed up grill is NOT capitalism. And no, unlike you, I don't go on crappyukmx.com and start shi&...
Every other one of you Brits having a *&%$ed up grill is NOT capitalism.

And no, unlike you, I don't go on crappyukmx.com and start shi&.

Your turn.
If you read Zesiger 112's post before mine you'd understand that my post directly follows on from that, relating to mark-up. I run my own business so I understand there has to be profit on products, but we certainly can't run our business with anything like 300%-600%.

Incentives to buy certain products are nothing new, but it's generally up to the consumer to decide whether anything is actually worth the price tag.

The thing with items like phones is they've created a desire in some people for new product even though the old product still functions perfectly well.

But the OP's initial post has been answered well by others, on a general note relating to product promotions I don't think the niche sport of moto is big enough for major OEM driven promotions.
sandtrack315
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sandtrack315 2/8/2020 5:13am
2/8/2020 5:13am
bryan wrote:
Sometimes it works because a business might be used to having ~30%+ go to a distributors/dealer. If they're running an ad for direct-to-consumer sales, they keep...
Sometimes it works because a business might be used to having ~30%+ go to a distributors/dealer. If they're running an ad for direct-to-consumer sales, they keep that 30%+, can offer 10% off, and still make 20%+ more than they usually make.

Same goes for a lot of rider support programs.
I have thought about this a lot. My guess is “rider support programs” are a way around contracts companies have with retailers in order to sell direct to consumer. A company can give me a 35 percent off and sell the product directly to me, they make the same or more as selling to a retailer, and they have a loyal sponsored rider.
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bvm111
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bvm111 2/8/2020 5:46am
2/8/2020 5:46am
Oh the irony of the anti capitalist peeps posting on the internet with their iPhone and a Starbucks in their hands ... 🤦‍♂️
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