Being a media buyer or planner is a little bit different than most advertising. A lot of people are dreaming up experiential or innovative ideas, but I’m just worried about one thing.
What is arbitrage though? Truthfully, it’s a word more at home on Wall St. than Madison Ave, but as advertisers become more and more metrics driven it’s slowly entering the vernacular. In the world of securities and commodities, it essentially means that it’s taking advantage of price differentials in different markets and exploiting them for short term gain. An example would be if I was selling gum for $1 a pack and someone 2 blocks away was selling them for $3 a pack. You would buy my gum and sell it 2 blocks away making money on the “arbitrage”.
Now when this comes to advertising this is incredibly interesting. There’s tens of thousands of different media products sold by millions of different publishers. While most aren’t perfectly transferable, many are on some level. Utilizing things like MMM (Market Media Mix, which is a multivariate regression analysis of your media buys) you can being to put together patterns of what media properties, on average, have what impact on your sales and assign dollar value to them.
Now from the perspective of media planning and buying this is a unique chance to set ourselves apart. If we can utilize analytics and past performance data, we can identify opportunities for clients and help them make more money than the average. For instance, if a $1000 a month billboard in Breckenridge is as effective as $2000 a month in Facebook ads, it only make sense to buy the billboard. What gets really interesting, is when you measure the various combinations of these tactics in congress. At the end of the day, my job looks a lot more like hedge fund manager than marketer, but the future looks more like a combination of stock broker + artist rather than one general “marketer”.
One of the more curious problems in digital media is that there really isn’t a great way to match up the numbers you get from an audience targeting tool to the real world people you count on reaching. Relying on the wrong numbers can mean that you very quickly end up looking at skewed landscape.
We were working on a project a few weeks ago where our team was trying to spread awareness about a topic that would have only appealed to a very select group of people. It wasn’t that the topic wasn’t interesting. We were helping to spread the word about an initiative that had the potential to make a real impact. While many people express tacit interest in “doing good,” there isn’t a great way to break through the noise in a category so broad. The trouble was, to really appreciate the aims of this particular project, you were likely to be in a fairly select group of people.
This is a common problem.
We meet with a whole host of teams who have been relying on one or two clever targeting gimmicks. When we meet with them, they express some form of “my marketing broke.”
The reasons are always varied.
Maybe they’ve been using a pop-under to collect email addresses, and then using those email addresses to drive the targeting schema they use to promote their posts. Maybe they’ve been focusing on developing relationships with a list of people who have publicly engaged with their content. Maybe they’ve been relying on transactional techniques like retargeting ads and wonder if they can every break out of the traffic trap.
It doesn’t really matter how you got here.
We’ve found that in every one of these situations, the process for getting out is the same.
Take Some Time To Identify Where You Really Are
Digital marketers are horrible about tunnel vision.
It’s only natural. After you’ve spent hours crafting a message and researching an audience. After you’ve obsessed about the placement of each pixel and finessed your insertion order as well as you can, there’s an all too real temptation to become a little bit obsessed with execution.
You won’t be able solve a problem you can’t understand.
If your ad costs are going up, start by isolating each data point you’re targeting.
Are you hitting too narrow an area? Try an ad without those limitations and see what happens. Is the response rate low? Try a different piece of creative.
This is a lot like the advertising version of unplugging your modem. These are just examples.
The truth is, you’ve got to find a way to work through each part. While this isn’t fun, it’s the only way you can develop an accurate understanding of where your work is falling short.
Understand Why You Failed To Reach Your Goal
It’s not easy to embrace failure — many of us are conditioned to avoid it at all costs. When it comes to developing a program on the basis of small consistent wins delivered over time, however, it’s important to recognize opportunities to do better.
Perhaps you’ll find that you neglected one or two elements of platform specific best practice that you can easily change to get your ads back up to spec.
You might find that you’ve been reaching the wrong customer segment. With a few tweaks you could be well on your way to finding a new more profitable niche than you’d ever addressed before.
Bad news isn’t bad news forever. It’s important to learn to think about bad news as the signal that you’ve stumbled into a genuine problem.
When You Find A Real Problem, Fix It
Easier said than done, I’m sure.
One of the advantages of isolating each part of your marketing funnel, is that you can quickly identify which levers impact which results. If you’re only getting 1 click for every 100 people who see your content and you know you need 100 clicks, you also know that you can either increase the number of clicks you get per 100 people or increase the number of people who see your content.
You won’t ever be able to rely on this approach to find anything but “ideal” solutions. That doesn’t mean that these steps won’t help you — on the contrary, they should prove quite illuminating. You won’t know what you find in your marketing data until you take a step back and look. We’ve always found this approach to work well for us, and we’re betting it’ll work for your team, too.
There’s a troubling trend I see in startup marketing plans. It’s almost solely focused on user acquisition, with absolutely 0 plan to activate, retain, fight churn, or leverage their customers for word of mouth. It’s a sad state of affairs.
It’s essentially the marketing equivalent of thinking “That Iceberg isn’t so big”, ignoring that 90% of the importance in marketing comes after you acquire a user.
I don’t think it’s any one person’s fault. I think that there’s a few startup “memes” that get traded around enough that it’s finally done real lasting damage to marketers ability to do their jobs effectively.
“Move fast and break things” aka let’s torch brand equity.
The obsession over top line numbers to appease investors is incredibly harmful. Who cares if you’re getting $0.10 cost per installs if your customer lifetime value is $0.05 or you have 99% churn.
The general need to be “killing it” all the time that’s translated only into easily understood top-line metrics rather than creating meaningful, long term relationships with your customers.
Frankly, just plain not giving a shit and being lazy.
This notion that you should ignore your competition.
Want to get in on a little secret? Your competition is poaching your customers constantly. I do it all day every day. Nice little Twitter audience you’ve built up. Would be a shame if someone scraped it, made a custom audience, and messaged your customers based on your biggest weaknesses. Your customer churn is my gain, and there’s dozens of me going after you every single day. The only way to win is to be constantly selling to your customers and continuing to grow the relationship. In the world of business, and specifically marketing, you are never “done”. You grow, or you die.
I’m currently traveling abroad to Europe for work. One of the perks and curses of the job. Luckily I’m in a lovely little country called Iceland that I’ve never been to before and am danger of falling in love with far too deeply and far too quickly for my own good.
As I had the chance to fly Icelandic air over I noticed something quite interesting. The entire magazine, television selection, perks, etc. all revolved around local products and services. Seriously, the airline was almost a flying, and very comfortable, billboard, but likely not to the highest bidder but rather another local.
At first I thought it must be a mistake, or perhaps there was low demand to a place like Iceland for points. Thinking quickly on the captive audience as well as ads for high end foreign fashion, I concluded this must not be true. No, I think the Icelandic people have remembered something that most of us have forgotten.
No product is an island. We all do better when we all do better.
Think about this for a moment. It’s in the best interest of each and every one of these companies to help one another create a great experience for me. Why?
If I have a good time, and come back, I’ll surely be spending more money.
This simple fact of putting customer experience above short term gain is a powerful one, that I believe many companies could stand to remember.