Mastering the marketing mix through diversification
Diversify to amplify results using these insights and framework
Diversify to amplify results using these insights and framework
The ecommerce industry has become more complex. It is now time to look at different channels for your marketing mix. The iOS14.5 update released by Apple in June 2021 caused significant impacts on the ecommerce marketing industry. It forced Facebook to limit the amount and quality of data provided in their Ad Manager, resulting in a need for businesses to introduce new marketing channels to reduce their reliance on Facebook.
Additionally, the update caused measurement problems in other digital ad platforms like Snap Inc. This led to a drop in customer confidence in their data and a 25 percent decrease in share price.
Senior marketers understand the importance of constantly adapting and evolving to stay ahead of the competition. One key aspect of this is diversifying your marketing mix. By spreading your efforts across multiple channels, you’re able to reach a wider audience, increase your brand’s visibility, and ultimately drive more sales.
But why is diversifying your marketing mix so important, and how to effectively implement it? In this article, I dive into the essentials of a marketing mix, benefits of diversifying, and how to implement a diversified strategy.
Our experience shows that brands with ad budgets of 100K-5m per month who bet on tested channels such as Meta and Google perform even better by extending their marketing activity to smaller channels at the same time.
A well-thought-out and diversified marketing strategy will give your brand an edge over competitors. Here are a few pointers on a good marketing strategy that can benefit brands in the long run:
By spreading your efforts across multiple channels, you’re less likely to suffer a significant loss if one particular channel doesn’t perform well.
By diversifying your mix, you can reach people across multiple platforms, increasing your chances of reaching your target audience.
With the rapid pace of technological change, consumer preferences and behavior can change quickly. By diversifying your mix, you can be nimbler in your approach and quickly adjust your strategy if you need to.
This strategy is straightforward. Observe what your competitors, peers, and industry models are doing and emulate their success.
Benefits: The power of social proof is significant, and if a brand is succeeding in using a specific channel, it could indicate success for you as well.
Drawbacks: Just because a particular channel works for one brand, it doesn’t guarantee success for others. Different brands with varying budgets, team sizes, product offerings, and business structures may have different experiences within the same marketing channel. Thus, it’s essential to conduct your own channel analysis and measurement, rather than solely relying on others’ successes.
Ad platform data is useful once you’ve established a presence in a channel, as the reporting is consistent. However, when starting out, it’s challenging to navigate the platform. While marketing channels use similar metrics, the attribution models used to calculate these metrics differ, leading to inconsistent results. For instance, YouTube may report 0.8X ROAS while Snapchat reports 12X ROAS, making it challenging to determine which campaign performed better.
Benefits: Ad platform reporting is convenient as the data is readily available.
Drawbacks: The ad platform’s data may not always be reliable, as the platform may not accurately reflect the actual performance of your campaigns.
Lift testing involves introducing a new aspect to your marketing mix and measuring its impact on your bottom line.
Benefits: Lift testing gives you a direct observation to determine the effectiveness of your campaigns in converting new customers. For example, if introducing a new channel results in a 10% increase in new customers, it’s a positive indicator that the channel is effective.
Drawbacks: Lift testing can be challenging in practice, as seasonality and consumer behavior, among other factors, can impact the results. Additionally, several factors such as promotions, product launches, and CPM changes in other channels can influence the results, making it challenging to trust the test’s validity.
With recent developments in machine learning and computing in the marketing industry, it is now possible to run refined versions of the processes listed above. This represents a fundamental shift in the way marketing channels are analyzed. By considering numerous variables on a daily basis and modeling their impact on revenue, these solutions provide a dependable, cross-channel understanding of your marketing performance with automation.
Benefits: We have listed some of the benefits of working with a third-party marketing measurement solution:
With multiple ad platforms claiming credit for revenue, a neutral, objective, and trustworthy measurement system can be obtained through an independent third party.
With constantly evolving technology, marketers are required to be knowledgeable in a variety of areas. Working with a third party allows for the outsourcing of updates and futureproofing against changes in the market.
With traditional methods, only one reliable test can be run at a time. Using a machine learning approach with a third party allows for the simultaneous fair testing of multiple channels.
Working with a reliable third-party provider can provide access to market intelligence, support, and benchmarks to guide investment decisions.
Drawbacks: This particular method is not suitable for everyone. There is a threshold where the top three methods discussed above are sufficient for a business’s needs. Investing in this approach is only worthwhile if you have a substantial media budget (in the millions per year).
As the business grows and budgets increase, the imperfections of the above methods can become a time-consuming burden because the marginal gains from working with these companies outweigh the costs.
Brands are diversifying their marketing channels to stay competitive in the fast-paced digital landscape. This leads to complex challenges in understanding sales and profits, making it crucial for brands to adopt independent measurement solutions. These solutions provide a reliable cross-channel understanding of marketing performance and make up for the costs with the marginal gains they bring. Implementing a diversified marketing strategy with the aid of measurement solutions will lead to a comprehensive and effective approach, helping the business thrive in the long run.
Are you looking for more insights into the DTC space? Join Fospha’s DTC Networking Club! The network helps marketers from top DTC brands meet up once a month to swap notes on ecommerce advertising strategies and the latest trends in the market. Sign up now and start making meaningful connections.
Jamie Bolton is a ClickZ Advisory Board Member and head of Growth at Fospha, a leading marketing measurement platform for ecommerce.
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