3 new ways to think about how to spend your digital marketing budget today
Late Night With Larry: Volume 3
At Rise, we live by a philosophy that’s grounded in math.
The gist of it is this: We spend the most money on the best-performing tactic or strategy -- whether it’s a keyword or an audience segment -- until we squeeze every ounce of performance out of it. Only then do we move on to the next thing.
For companies to do this effectively, you need a solid grasp on how your media investments tie to your business goals. This isn’t an easy task in today’s digital landscape where countless channels and siloed data abound. But it is a big opportunity -- one that Rise seized on over a decade ago.
In fact, it’s what fueled the launch of Connex, Rise’s cross-channel media optimization platform. Put simply, it’s the tech that allows us to aggregate all of this siloed data, identify what is (or isn’t) performing and take action.
Today, Connex continues to lead the industry in enabling granular performance management at scale. And in 2020, a year of nonstop curveballs, it’s helping us successfully solve the many new challenges our clients now face -- from rapidly changing customer needs and behaviors to unpredictable inventory levels.
Amidst all of this, three key learnings stand out. I’m sharing them here because it’s likely these ideas could prove helpful as you think about how to improve performance and best allocate your digital marketing budgets.
1. Focus on incrementality. There are a number of major industry shifts happening right now that can’t be ignored. Web browsers are phasing out the usage of third-party cookies, Apple is rolling out new measures to protect user privacy, and platform walled gardens are growing taller. All of these changes are adding to the murkiness of attribution, which has always been an imprecise science. Rather than trying to retrofit attribution rules in this ever-changing environment, we believe that focusing on incrementality is a more actionable way to look at media performance.
Incrementality is about finding similar ways to compare variables -- like channels, geographies or audiences -- so we can identify what combination of efforts delivers on a desired business objective. This approach gives you confidence that you’re allocating budgets in the most effective way possible -- e.g., doing these three things drives more sales than these three things. To activate an incrementality strategy, you need analytical minds to design the right tests, and you also need a way to evaluate performance variables apples-to-apples, which gets back to why we built Connex.
For example, if you want to maximize top-of-funnel strategies across search, programmatic, and social, you can run different awareness campaigns across channels and track the performance of these tactics side-by-side. Then, you can look at the lift of a certain performance metric compared to the baseline to answer questions like: Which combination of campaigns led to the greatest increase in brand recall?
At Rise, we use Connex to collect and normalize campaign data, making it easy to see how various tactics perform. But however you execute incrementality testing, the benefits are similar: You can quickly identify the affected variable, assess its impact and make decisions.
2. Get granular with your audience strategy. A lot of companies claim they have unique or proprietary audience data. Sure, you can buy all this data, but you won’t be any smarter for it without a strategy around how to use it. Today, that strategy should focus on granularity, which means setting up an account to provide very specific insights from the get go in order to solve different challenges or needs, such as cannibalization, out of stock inventory or audience overlap.
Cosmetics brand (and client) ColourPop put this into practice, using an advanced audience strategy that increased revenue by 124 percent. When determining the targeting for a social campaign, understanding who to exclude is just as important as knowing who to include at various stages of the purchase funnel. We helped ColourPop identify and isolate specific audiences that were very close to purchasing and exclusively showed these individuals bottom-of-funnel creative designed to drive conversions. To do this, we excluded this highly valuable audience segment from any other campaigns that did not feature a strong call to purchase. (You can read more about the campaign here.)
When you start to put these granular strategies in place at scale, you need a strong foundation in data and technology to be successful.
3. Rethink how you retarget. Just about every brand does retargeting. (Also called remarketing, it allows you to serve ads only to people who have already interacted with your brand online.) But similar to the example above, doing this successfully starts with setting up the account to solve for a very specific need. Let’s take e-commerce businesses as an example: Online shopping has grown by more than 30 percent in 2020, leaving many online retailers managing frequent in-stock and out-of-stock changes.
Rather than lose a sale due to an out-of-stock product, you can retarget these shoppers with other similar products. This requires a sophisticated social tagging strategy, including tagging pages that feature products that are often out of stock and identifying appropriate alternate products. In addition to driving revenue, this strategy delivers a positive customer experience.
For me, each of these examples serves as an important reminder: Behind many of the challenges marketers face today lie even greater opportunities to increase revenue and customer loyalty. Uncovering these requires creativity and a data-driven mindset (qualities I’m proud to say every Riser possesses), along with a high degree of granularity.
Granularity, however, is difficult to implement and requires an enormous amount of time. All too often I see brands reach a certain level of sophistication with their campaign structure and then stop. But stopping means missing an opportunity to gain a competitive edge. If you’re ready to keep going and seize these opportunities we’re happy to help. Message me and let’s talk.