5 ways to seize the opportunities created by recent chaos in ad tech

Every day, the advertising world faces new challenges and opportunities. New platforms, mediums, M&A activity, privacy rules and ever-changing consumer behavior can all wreak havoc on the digital landscape. However, companies that are prepared to seek out these moments of change will be well positioned to capitalize on the opportunities produced by dynamic shifts.

Most recently, media technology stocks have become highly volatile for a host of reasons. While many marketers are reallocating budget away from these platforms, and prioritizing more stable channels like Google Adwords and Amazon Marketing, there are always new opportunities born of shifts in the market.

For example, the dip in Meta’s customer acquisition performance has enabled ad sales on TikTok to be expected to triple to more than $11 billion in 2022, which exceeds the combined sales of Snapchat and Twitter.

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For CMOs and early-stage tech founders, all this upheaval may feel like a shock, but the truth is that the digital advertising world has always been evolving and changing, often in unpredictable ways. This constant change is an opportunity to create value, but only if you take calculated risks, stay agile and be prepared to act.

In the long run, this volatility is better for founders, because forced innovation makes for a more competitive environment.

As the major platforms are forced to innovate, advertisers who are willing to “be like water” and flow with change are going to come out ahead.

The short and long-term impact of stock price volatility

Stock price volatility applies pressure on publicly traded social media ad platforms, which motivates them to build new features, lower their rates to attract spend and experiment with new business models. For example, Twitter is contemplating a subscription model.

In the short term, this means that CMOs and tech founders will need to hustle hard, and experiment with many platforms in order to maximize return on ad spend.

In the long run, this volatility is better for founders, because forced innovation makes for a more competitive environment — one where everyone is committed to winning advertising dollars.

Here are five tactics for capitalizing on the turbulent advertising environment:

Get in early

Whenever new advertising platforms arise, they attract testing budgets because there is typically a lot of untapped media with minimal knowledge in navigating the channel. This provides a huge opportunity for early movers that are able to “hack the system” before the masses.

How to implement an effective chatbot program

Traditionally, sales and marketing teams have relied on tactics like lead capture forms, landing and generic web pages, and follow-up outreach to connect with and convert prospects to sales. This onerous process requires an average of eight touches to secure even a meeting or other conversion.

How can marketers speed this process up and drive growth? Chatbots and conversational marketing offer one avenue with a lot of potential.

Chatbots are quickly becoming an integral part of marketing strategies as brands prioritize personalization and orchestrate multi-channel experiences. Companies that sync digital ad campaigns to chat playbooks can engage leads with a high level of intent and at every stage of the funnel.

Take, for example, CRM software provider CRMNEXT. When the company paired conversational marketing (chat) with ABM, marketing’s influence on the sales pipeline increased from 45% to 92%. It also realized 1,900% ROI, an 80% increase in close rate, and a jump from 18% to 53% of marketing qualified leads to sales acceptance leads.

The ‘magic’ of ads+chat

What makes conversational marketing chatbots effective is their ability to incorporate data connected to an ABM platform into how their playbooks engage buyers, interact and personalize based upon their segment, cohort, intent and interest.

But first, chatbots must be crafted with intention. Situational awareness is important, as is a design offering a seamless customer experience that needs as few clicks as possible.

Companies that sync digital ad campaigns to chat playbooks can engage leads with a high level of intent and at every stage of the funnel.

In the B2B world, 75% of a chatbot’s function is to qualify leads. People seek instant gratification; they don’t want forms. By using marketing bots and conversational marketing effectively, you can offer a more pleasant and helpful experience to visitors, and protect reps from becoming inundated with routine responses by automating qualification on the front end.

Your chatbot should include a playbook that can:

  • Intelligently gather data from site visitors.
  • Trigger sales automation processes with both prospects and current customers.
  • Qualify inbound traffic in real time.
  • Build account lists.

The intuitive bot playbook

While chatbots are designed to make lives easier, most operate in either one of two paradigms: linear or visual (like a flow chart). While each has its place, independently, they leave much to be desired.

Playbooks that use both visual bot and linear bot builders, and dynamically sync them, enable marketing and sales to craft the right journey, creating more relevant, valuable experiences for prospects and customers. It also enables usability for go-to-market teams as they continue optimizing the experience to drive results.

How to improve retention, growth marketing’s golden metric

Imagine being able to acquire users for just a few cents. Sounds like a dream come true to any growth marketer, doesn’t it? Now, imagine the same scenario with the worst retention rate possible, and it quickly sounds like a nightmare.

Whether you’re a construction company, software startup, or Fortune 500 company, retention is a key metric across customers, employees and partners.

Growth marketing isn’t the silver bullet to solving retention, but there are definitely some tactics that can be implemented to help improve it.

Let’s dive in.

Growth and product

Within a company the growth and product teams should fit like a glove. While at Postmates, I saw first-hand how a well-oiled machine could work together to tackle customer conversion and retention. We used to hold weekly meetings between teams to address conversion rate trends and customer stickiness between growth media.

I believe the three key foci for growth and product should be:

  • Enhancing measurement capabilities
  • Channel-specific landing pages and/or flows
  • Testing new products and initiatives

A consistent issue and theme that I’ve seen cause countless headaches across startups is the lack of measurement capability. Measuring conversion volume accurately is paramount for all companies. Otherwise, efforts become inefficient.

It would also be naive to think that measurement is a set-it-and-forget type of task. Measurement should be approached as a constant work-in-progress, as channels and the privacy landscape are constantly evolving.

It’s imperative to constantly analyze the sources driving growth at a detailed and bottom-of-funnel level.

Working in step with the product team on specific growth campaigns will help you personalize initiatives, measure them accurately, and increases the chances of success. Imagine having a specific funnel for visitors who are net-new versus re-targeted. Or, how about having different landing pages just for influencers? These are just some of the examples of the tests that the growth and product teams should be performing.

Whenever a new product, feature or promotion is launched by the product team, the growth team should be the first ones to get their hands on it. All campaigns from the lifecycle and the paid acquisition teams will be the first touchpoint for customers, so ensuring there’s understanding between these two teams is crucial.

If the growth and product teams work in lockstep and prioritize the key foci mentioned above, you’ll see huge leaps in retention.

Channel effectiveness

When I was working on fleet (or driver) acquisition at Postmates, we went from budgeting using simple methodology to measuring channel effectiveness on an LTV and retention basis. How long did our drivers stay on the platform, if they were acquired from Google as opposed to Facebook?

After talking to marketing leaders for a year, here’s my advice for CEOs

Marketing makes or breaks a company. When I am asked what is the No. 1 thing that I would do to help a company scale massively, it is focusing on marketing. Period.

I learned long ago that the best product doesn’t always win. It’s often a “good enough” product paired with killer marketing powered by unique customer insights. As a VC, I have seen this play out time and time again. Many companies get stuck in “feature and functionality” marketing, meaning they miss the opportunity to create durable brands. That happens when you elevate messaging to higher-level needs that solve a pain point for the end consumer and delight them on an emotional level.

I’m passionate about helping companies uncover new channels or reinvent old channels in a way that moves the needle. Finding a new way to make established channels such as TV, direct mail and radio generate awareness around a brand can be a huge competitive moat and propel a company to exponential growth.

I’m not saying that it’s easy. The job of a marketer gets more complicated with every channel that emerges. Among the latest challenging trend lines:

  1. It’s noisier than ever. In the year ahead, marketers expect a 40% YoY increase in the number of data sources they use, according to Salesforce’s seventh edition of the annual State of Marketing report, for which they spoke to over 8,200 global marketers.
  2. Purses are tightening. According to Gartner, marketing budgets as a percentage of company revenue fell to 6.4% in 2021 from 11%. The firm reports that “this is the lowest proportion allocated to marketing in the history of Gartner’s Annual CMO Spend Survey.
  3. The ponds are overfished. A decade ago, only 17% of global ad spend went to the top five ad sellers (Google; Viacom and CBS; News Corp. and Fox; Comcast and Disney). Today, ad networks are much more crowded, with 46% of global ad spending taking place on the top five networks (Google, Facebook, Amazon, Alibaba and ByteDance).

With this downward pressure on the efficiency of marketing dollars, it’s important to listen to customers, stay curious and remain open to wild ideas that have the potential to break through. Over the past year, I’ve had dozens of conversations with leading marketers to ask them what’s actually working for them, and what crazy idea they tried that seemed ridiculous at the time.

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Here are some highlights of what I heard, and what I now share with all of the CEOs and marketing leads at our portfolio companies:

With developers, marketers need to be problem-solvers, not sellers

“Developers are very quick to sniff out any sort of marketing-speak or BS. They’re looking to get the answer to a problem they have and then move on. How can you get them to the right documentation as quickly as possible? How can you keep them up to speed on the products that are live today, not the ones that will be live two years from now?

Your job is to help them get their hands on the code as quickly as possible. Get them direct access to other developers in the community who think the same way and can help solve some of their problems in real-time.” — Sara Varni, former CMO at Twilio.

Avoid free trials at all costs

“Early on at Curology, we had a hypothesis that by not charging anything at all for a product trial, it was too easy for people to get it without having any kind of mental commitment. We began experimenting with having people pay the shipping cost, $4.95. [That price] was still a very low barrier for people, but we learned that it dramatically changed the perception of value and the mental commitment in the eyes of our customers.

5 growth marketing predictions for 2022

It’s been a crazy year in growth marketing, what with the meteoric rise of TikTok, radical iOS privacy shifts and a staggering $240 billion poured into U.S. startups as of September 30.

All of this new money has meant heavier investments in growth marketing throughout 2021. The heavier investments have occurred during uncertain times, with startups scrambling to find ways to measure iOS conversions and unlock TikTok as a new channel.

Last year, I wrote a column on my predictions for 2021, which emphasized creativity being key, the inherent increase in attribution issues due to privacy changes and the power of leveraging influencers. While much has changed in this past year, there is a clear overlap from last year’s predictions with my growth marketing predictions for 2022. I’ll dive deeper on certain concepts like incrementality testing and continued growth in video engagement, while introducing a new prediction on the direction of ad platforms.

Incrementality 2.0

Uncertain months of endless scrambling would likely be the best way to summarizing the past year for paid channels like Facebook.

As we face industrywide degradation of data, marketers must become more comfortable with practicing incrementality testing — using controlled tests to understand the effectiveness of growth marketing efforts. As an example, if we wanted to test the impact of our Facebook efforts, we could pause the campaigns and measure the conversion deltas before and after making the change.

That’s incrementality testing at a macro level. But advertisers will need to be more sophisticated now. I like to call this the 2.0 age of incrementality testing. This new age will increase the precision and understanding of growth performance.

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Below is an example on the level of detail that can be achieved:

Multiple test levels

  • Channel.
  • Geography.
  • Ad type.
  • Ad format.

Where will our data go when cookies disappear?

In January 2020, Google announced plans to eliminate third-party cookies, heralding a massive shake-up for digital advertising and the internet itself. The end of these cookies promises the golden age of digital marketing, where the internet becomes privacy-first.

At first glance, this update seems to be a step in the right direction, and in many ways, it is. That’s not to say Google’s motives are pure, though. Banning third-party cookies positions Google a step ahead and strips power from competitors, further solidifying its control over digital advertising. The company is essentially handicapping competitors by limiting access to data under the guise of a user-first, privacy-focused update.

Banning cookies will have a lasting effect on many publishers, although not all will be affected equally. Publishers relying on programmatic advertising served through third-party ad servers, like Google Ad Manager, will be impacted dramatically. Ad exchangers, demand-side platforms and advertisers can access cookie data in real time and then use that information to determine how much to bid on inventory. Without third-party data to augment the value of their inventory, traditional publishers can expect their programmatic eCPMs (expected revenue per thousand impressions) to decline, leading to a substantial drop in ad revenue.

So how can publishers win back their ad revenue? Whatever happens next, digital advertising won’t be as simple as it is now, and publishers will soon be forced to rethink their ad strategies and implement new solutions that will enable ad monetization.

First-party data is going to become immensely valuable, and publishers must start identifying how they can harness and monetize it.

Unified IDs are unsustainable in the long term

Publishers will need to be aware of this drastic shift in digital advertising and find alternatives in order to maintain their ad revenue. One potential path is a unified ID solution, where publishers pool together first-party data in an anonymized way, creating an ID that can identify users across the supply chain. This “cookie-less” solution, for example, could use anonymized email addresses to replace third-party data.

Many companies are already building unified ID programs, such as TradeDesk’s Unified ID 2.0. Prebid, an open source header bidding platform, has already announced it will support it. Unified ID 2.0 is just one of many on the market, each slightly different in terms of functionality, implementation and privacy.

Google recently announced its own form of unified ID, which helps publishers who use Google Ad Manager. Through publisher-provided identifiers (PPIDs), publishers can share first-party data in an anonymized way with outside bidders. This seems to be Google’s middle ground to protecting privacy while not alienating advertisers and publishers. The publishers will, of course, have to hand over their first-party data, so Google is once again left with an abundance of data it could potentially use.

Hope and hype: Avoiding ad fraud in the hot connected TV market

Advertising tends to work in hype cycles. Native ads, mobile targeting, social media — over the past decade, all of these channels have been touted as the long-sought miracle for marketers and advertisers to break through the noise.

Now, with at least one connected TV (CTV) in 80% of U.S. households, advertisers are ready to realign their hopes once more.

With seemingly high-quality content and a large reach, CTV — often powered by Google Chrome, Roku, Apple TV or other devices — seems like a good ad bet on its face. And with the looming possible obsolescence of third-party cookies triggering panic over ad targeting on desktop and mobile, CTV offers attractive inventory. But there may be a big downside for those not willing to perform due diligence: It can be easy to fall victim to bad actors exploiting the hype CTV is currently experiencing.

For ad buyers — especially those at startups and more agile organizations — CTV can be a viable and powerful channel to add to your advertising mix. But first, it’s imperative to know that CTV advertising can carry unique risks. Don’t get carried away by the hype, or taken advantage of by frauds. Investing the time and resources to get CTV advertising right before committing further is a smart strategy.

Knowing the risks of CTV environments

CTV can reach new and niche audiences, but transparency can be challenging. CTV ads don’t provide the technical visibility of ads on desktop and mobile — often, there’s no client-side tracking of when an ad is served.

This lack of transparency is just one of the risks uneducated CTV ad buying can bring. To get a more complete picture of the problem, we need to examine both the business and technical factors that make CTV unique:

  • High costs attract fraud. CTV inventory carries a higher price in cost per thousand impressions (CPM) than many other types of advertising. Fraudsters gravitate toward high CPM because it can maximize their return. If paired with a vulnerable ad ecosystem, there’s potential for big profits with little effort — a perfect recipe for opportunists and bad actors.
  • Scarcity drives low standards. CTV video inventory is inherently scarce. Making more requires building more CTV channels and either producing or licensing content. Under these conditions, a domino effect occurs. Ad platforms and networks become overeager to source enough inventory to keep business humming, leading to lax supply standards.

The death of identity: Knowing your customer in the age of data privacy

“Know your customer” is one of the foundational concepts of business. In the digital age, companies have learned much about their customers by forming individual profiles from third-party cookies, social content, purchased demographics, and more. But in the face of growing demands for privacy, businesses have the opportunity to overhaul their relationship with customer data to focus solely on first-party data and patterns of behavior.

Companies have employed digital analytics, advertising and marketing solutions to track customers and connect their behaviors across touchpoints. This enabled the creation of data profiles, which have been leveraged to deliver personalized experiences that resonate through relevance and context.

Now, however, this practice of profiling and identifying customers is increasingly coming under scrutiny. Regulators are adopting new data and consumer privacy legislation, most recently seen with the Colorado Privacy Act. Moreover, Apple’s privacy implementations in iOS 14.8 and iOS 15 have been adopted by an estimated 96% of users, who have opted to stop apps from tracking their activity for ad targeting. And Google has announced it will no longer support third-party cookies and will stop tracking on an individual basis altogether through its Chrome browser.

While these developments threaten to upend how digital marketing is performed today, they signal a necessary, and effective, shift in the ways brands will understand their customers in the future. Prioritizing individual profiles is far from the fastest or most effective way to understand and address customers’ intentions, needs and struggles. Brands don’t need to know who; they need to know what and why.

Thanks to rapid advances in artificial intelligence (AI) and machine learning (ML), companies can process and interpret first-party data in real time and develop actionable behavioral intelligence.

Pattern analysis as a way forward

The security industry, which I’ve been involved in for 35 years, provides a template for the path forward. Historically, security professionals have sought to pinpoint individuals’ signatures in order to identify, thwart or at least prosecute bad actors. However, the last few years have marked the rise of some incredibly promising companies and approaches that leverage patterns of signals to proactively surface and stop threats before they happen.

4 ways to leverage ROAS to triple lead generation

Businesses that don’t invest in their future may not have a future to look forward to.

Whether you’re investing in your human resources or in critical tech, some outlay in the short term is always needed for long-term success. That’s true when it comes to marketing as well — you can’t market your product or service without investing in advertising. But if that investment isn’t turning into leads and conversions, you’re in trouble.

A “good” ROAS score is different for each company and campaign. If your figure isn’t where you’d like it to be, you can leverage ROAS data to create targeted campaigns and personalized experiences.

It’s vital to identify and apply the most suitable metrics based on business goals, and there’s no one best practice or one-size-fits-all method.

However, smart use of the return on advertising spend (ROAS) data can triple lead generation, as I discovered when I joined Brightpearl to restructure the marketing campaigns. Let’s take a look at some of the ways Brightpearl used ROAS to improve campaigns and increase lead generation. The key is to work out what represents a healthy ROAS for your business so that you can optimize accordingly.

Use the right return metric

It is paramount to choose the right return metric to calculate your ROAS. This will depend partly on your sales cycle.

Brightpearl has a lengthy sales cycle. On average it’s two to three months, and sometimes up to six months, meaning we don’t have tons of data on a monthly basis if we want to use new customer’s revenue data as the return metric. A company with a shorter sales cycle could use revenue, but that doesn’t help us to optimize our campaigns.

We chose to use the sales accepted opportunity (SAO) value instead. It usually takes us about a month to measure, so we can get more ROAS data at the same time. It’s the last sales stage before a win, and it’s more in line with our company goal (to grow our recurring annual revenue), but takes less time to gather the data.

By the SAO stage, we know which leads are good quality­ — they have the budget, are a good fit, and our software can meet their requirements. We can use them to measure our campaign performance.

When you choose a return metric, you need to make sure it matches your company goal without taking ages to get the data. It also has to be measurable at the campaign level, because the aim of using ROAS or other metrics is to optimize your campaigns.

Accept that less is more

I’ve noticed that many companies harbor a fear of missing out on opportunities, which leads them to advertise on all available channels instead of concentrating resources on the most profitable areas.

Prospects usually do their research on multiple channels, so you might try to cover all the possible touch points. In theory, this could generate more leads, but only if you had an unlimited marketing budget and human resources.