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How The BCG Matrix Helps Advertising
By: Dwayne W. Waite Jr.
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It is clear that not many professionals in the advertising community are very well-versed in business theory. That fact has its advantages and disadvantages. The major advantage is that it allows creatives to think openly about any possibility without being reined in by their fleeting college memories about "diminishing returns" and other Debbie Downer talk.

Dream, you creatives, dream!

Unfortunately, the marketing and advertising strategists, those who must rein in the creatives in order to set them up for the most success possible, need to have some basis in business theory. The practices and scenarios discussed give strategists at least a framework for their equally inquisitive and creative minds. Note that we are not saying that certain thinking must fit a certain process. But it is much easier to create your own process after examining the processes that already exist.

So get your thinking caps on. We are discussing the BCG, or Growth-Share Matrix.

We wanted to discuss this with our BMA folks because we have harped time and again on the lack of trained professionals in our craft. Instead of moaning about it, we wanted to impart more knowledge about product management, and the BCG matrix does a great job at scratching the surface. 

First, the players.

Cash Cow. This product offering is known to have high market share, but low growth. This product isn't going anywhere, and it's making your business a lot of revenue with not much effort.
Advertising Importance: You want a war chest of advertising dollars dedicated to your Cash Cow. Your brand already has the market captured, and now all you are doing is preventing competitors from gobbling up market share and making sure your audience doesn't forget about you. Your Cash Cow is the friend that doesn't have the best stories, but always has your back. Therefore, you keep that friend happy.

Dog (a.k.a. Pets). This product is known to have both low market share and low growth. Truth be told, you're not too worried or impressed with this product. It may break even, but mostly it is used to create jobs, keep your consumers who hate change happy, and the like. If you look to scrap a product, a Dog would be one of the first considerations.
Advertising Importance: Opposite of a Cash Cow, Dogs require very few advertising dollars. Don't completely forget them, but a dedicated campaign with a large team may not be top priority.

Star. A star is an exciting product; the coming million-dollar idea for your business. This product is both high growth and high market share. Basically, you are blowing up! With the right management and marketing, this Star's mature stage could be your next Cash Cow.
Advertising Importance: Like your Cash Cow, a Star will require a dedicated advertising budget. However, the difference between a Cash Cow and a Star is the advertising message. With a Cash Cow, the product and brand is already proven, unlike the Star. Advertising the Star will focus on awareness, education, and getting consumers to try and use the product. Instead of worrying about competitors, Stars try to create ways to reduce the switching costs for consumers. Stars are exciting, and the advertising campaigns should match.

Questions Marks (Problem Children). This product has a lot of opportunity to grow, but it has low market share, or a low image that is attributed to its low market share. A perfect example is Google Glass; wearable tech is such a hot topic, but for some reason Glass is not catching the fire Google imagined.
Advertising Importance: Questions Marks are tough to predict, so for a marketing and advertising strategist, it is worth talking your decision over with the product manager or leadership board to determine if they are truly worth the risk. If they are, go for it; these Question Marks could be the next Stars. If not, they could turn into Dogs, which isn't necessarily a bad thing, depending on the size of your operations and the amount of money already invested.

Well, there you have it; the BCG matrix in a nutshell and how it can assist you in the marketing and advertising decisions you may need to make. We hope it was useful. Graphic is below.




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About the Author
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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