How do we unlock the next big Growth opportunity?
I often speak to businesses that struggle to move beyond paid search. I understand their concern and how this can be challenging.
First of all I would like to say that I think Paid Search is a great marketing channel. Google is a platform that gives advertisers huge reach and relevancy, so when devising a marketing strategy, it should be one of the first channels to be considered/tested.
Being such a great channel it is also very competitive, margins tend to be smaller and it is very difficult to have an edge over competition in the long term. In order to leverage the channel effectively at scale, campaigns need to be executed to a high standard. If you are not sure this is the case for your campaign get in touch: I can either review your campaigns personally or refer you to a trusted agency, (I ask no referral fee on either side for this).
We mustn’t forget that any campaign/channel poorly executed will fail, so knowing what satisfactory execution looks like is not just important, it’s critical.
Once we know Adwords has reached diminishing returns, the key question is: what do we do next?
Be warned, moving beyond paid search and finding other channels that work at scale is, in most cases, extremely difficult. Few channels have the scale of Google and arguably none can operate with such low touch e.g. Google requires very little resources for creative assets. After all if growing customer acquisition by 50% was easy everyone would do it – it is NOT EASY.
The good news is that some opportunities are not so hard to reach. Here are some examples:
- Amazon ads: if you are in retail this is an obvious choice, it is arguably further down the channel than PPC. Conversion rate is high, scale is high and it is a reasonably low touch channel. (Amazon ads also increase your organic rankings on the platform)
- GDN (Google Display Network): this channel has reasonable scale and it can be managed directly from the adwords interface, (low set-up costs). There are some very interesting targeting capabilities and media can be bought on a cost per click basis. For certain products that rely more on discovery than on search the GDN can be a huge opportunity.
- Retargeting: this is not an actual channel but a tactic. It can be delivered through many different channels, including the GDN of course. The challenge here is having a good understanding of its incrementality. Implementing retargeting through Youtube can be extremely powerful. As a rule of thumb I say that retargeting can increase conversion rate for your other campaigns by up to 10%.
- App store ads (Apple and Android): if an app is relevant for your business, this channel can be kickstarted with relative ease of implementation. Reaching scale will depend on the quality of the implementation.
I believe the ones above are the easiest sizeable channels to implement for a team that has mastered Paid Search, because they require at their core similar skills, moving beyond those channels gets more challenging. The chart below highlights what are the key success factors for different channels.
We must also consider one key concept: that of scale vs efficiency. For example: ranking on google is easy, ranking on page 1 is hard, ranking on position 1 is harder, ranking in the top positions for hundred of terms across multiple languages and geographies requires top notch skills. The real challenge is delivering ROI positive campaigns at scale.
Different channels require different capabilities and that is why it’s often so difficult to move beyond a single or a couple of marketing channels. In order to scale marketing activity significantly a business needs to acquire not just a new skills but create a new competency.
A competency is a set of skills and resources that work together delivering an output that becomes difficult to replicate by competitors. This delivers a competitive advantage in the marketplace. Creating a competence is always difficult and can be done effectively in three ways:
- Learning through trial and error (can take years)
- Hiring talent (might not work as hiring technical talent without having the right expertise often leads to hiring poorly)
- Acquiring a business with that particular expertise (expensive)
Option 1 can take as little as a few months, but let’s be clear, for a start-up 4 months is a long time. Enterprises are generally slower, so it would take say 6 months, which is not an insignificant amount of time and this would be for an “easy competency”, more complex competencies would take much longer. The reason I stress this is because as I wrote above, any channel poorly implemented will fail to deliver – so thinking that within two months the team will own the skills to deliver effectively on a new platform will probably lead to a false negative result, (thus no real learnings will be accrued).
Option three is not a possibility for start-ups and it may sound like an absurd investment, but I am confident that if ten years ago some large retailers had bought, (not hired), niche quality digital agencies, today they wouldn’t be bankrupt.
Looking at other channels, what is it required to win? What competencies are easier to acquire?
In the chart above I have ranked channels in what I believe would be the easiest to the hardest, based on a business that is mastering Paid Search. Below I will expand on what are the key skills to perform well on the different areas.
Paid Search, Amazon, App stores, GDN
The key success factor to succeed in these channels are bid management sophistication, to ensure that each impression and each click is bought at the optimal rate and automation to facilitate operations at scale for speed (which enables for more granularity).
Affiliates, aggregators and partnerships
These channels require commercial acumen to strike the right deals and manage relationship. For partnerships business development is a key skill: unfortunately this is often not a core strengths of data driven marketing teams, who tend to be very analytical, technical but not very commercial, (all their “buying” happens through automated platforms where there is no need for negotiation).
Affiliates management can be outsourced with reasonable success, but for it to be world beating, it needs to be in-housed. This will require setting up a platform to attract, inform, onboard and manage affiliates. (This is the *Tech in the diagram above).
Setting up strong exclusive partnerships or a first class in-house affiliate program will lead to outperforming competitors.
Facebook and Youtube
Often these are grouped with other programmatic channels, but on these two platforms the key success factor is the creative asset (as much as data is important, it is secondary).
A strong competency here must include:
- The ability to unlock customer insight to create a trigger when there is no immediate intent from the users
- The ability to deliver that insight effectively through creative assets
- The ability to produce creative assets at scale and speed constantly
Creating truly valuable content is getting harder every year: having the ability to do this in a way that is in line with your customer needs and your commercial needs will deliver traffic and build trust.
On top of this large established sites, (which naturally tend to have an advantage thanks to existing traffic), need the right technical skills to manage a large property that is easily crawlable by Google and has no risk of being penalised for slow speed, no follow links and duplicate content. (This is the **Tech in the diagram above).
This is the best channel to deliver an emotional message, (Youtube too, but to a lesser extent as it’s more lean forward). As consumers today don’t believe corporates, emotions are a unique way to deliver a message that sticks in people mind. When empathy is created with consumers, the right message will reach the brain’s the emotional sphere (in Lehman’s terms), removing rational scepticism. To achieve this the following are needed:
- Brand building: a message needs to be genuine as a false promise won’t last. This requires aligning the whole company behind a set values. If a business wants to stand for something in consumer’s mind, it needs to reflect that in the way it operates.
- Storytelling skills: or the ability to craft a story that creates empathy and takes consumers through a rationale and emotional path
- Creative production: the ability to tell that story effectively in video format over 15 to 30 seconds
I have only touched lightly on the channels above, not with the aim of delivering a to-do list for implementation but more to build a framework to think strategically about how to tap into new Growth opportunities at scale. In different ways each channel requires different types of investment, the manager's task is to understand what opportunities are a better fit and which are most likely to have a successful implementation.
If you want to explore new growth opportunities that can truly impact your organisation at scale, happy to have a chat.
P.S. There are also other powerful ways to grow through social strategies, business model innovation and platform/product design, I find these very exciting and I will write about them in a different post.