Is growth getting harder?
Many existing channels have extended past their golden age and are reaching saturation points in their lifecycles for a variety of reasons.
Additionally, everyone's getting smarter about growth, including consumers. Now, most invite systems no longer have the same novelty value or efficacy today as they did 10 years ago, and consumers’ “banner blindness” extends far beyond actual display advertising to encompass referral systems and virality programs.
Finally, the proliferation of robust off-the-shelf tools like Mixpanel, Optimizely, and many others is closing the gap on being data-driven at companies, and makes all of us (including our peers and competitors) smarter and faster.
But, growth is not finished; it’s just changing. Today, increased competition has led more companies to emphasize paid acquisition as a core driver of growth.
About the Author
Special thanks to Andrew Krebs-Smith, Reforge Growth Series alum and CEO of Social Fulcrum, a social-focused digital marketing agency, for his insights and contributions to this post.
New Opportunities in the Paid Acquisition Age
Back in the spring we saw a burst of ad related launches from “up-and-coming” social products:
- Quora announced the public launch of its self-serve ad platform.
- Snap revealed its self-serve tools aimed at democratizing the platform's ad solutions beyond brand advertisers with 6-figure spends.
- LinkedIn rolled out Matched Audiences to allow advertisers to target people by email address.
- Pinterest upgraded its Promoted Videos offering to auto-play video ads (rather than click-to-play) for users of its mobile app.
What can new channels, or major improvements to existing channels, add to growth efforts?
Andrew Krebs-Smith, CEO of Social Fulcrum, weighs in:
“New channels almost always offer immense opportunity because the platform has scaled the supply side (i.e., users) for years while only recently launching the demand market, so there is an unknown period of underpriced inventory (i.e. impressions).
If brands are the first to test, optimize, and scale those platforms, they gain a ton of ground over their competition.”
Andrew also pointed out that new channels are also often making large changes to the mechanics of the platform. Those changes carry the potential to disrupt the platform — or at least temporarily make it harder to navigate — which represents a short-term arbitrage opportunity for those who understand paid acquisition well.
Paid Channels Aren’t Created Equal
But not all channels offer equally valuable opportunities, and it’s about more than just finding a good audience-platform match. Let’s take a look at how these options stack up against one another by looking at the 6 ways that paid channels differ.
If we apply the 6 attributes listed above to the self-serve offerings from Quora and Snap launched this spring, we see the following:
Quora has a smaller audience than most platforms at roughly 200 million monthly visitors, but higher intent as visitors land on the site via searches for specific topics on search engines or Quora itself that surface user generated content.
2. Audience Size
Snap has lower intent, and has, to date, been oriented around impressions and brand advertising, but at 178 million daily active users it has a large audience that shows high engagement (if low purchase intent).
3. Audience Composition
Although Snap's audience size is smaller than other social platforms, stats site App Annie claims that 35%-46% of its daily users aren’t reachable on Facebook or Instagram on a given day.
Both Quora and Snap are new channels so, in the short term, they'll have less competition and noise than some of the more mature alternatives.
It still remains to be seen how much overhead each option will entail.
The LinkedIn and Pinterest launches were improvements on an existing product, so those improvements streamlined the ads product and reduced overhead.
Quora functions like text ads on Google, except with a special emphasis on topic-based targeting. This puts it more in the “set-and-forget” camp.
Snap’s ad options seem to carry the highest overhead for their target audience of non-whale spenders. With its video ads offering, the onus is on advertisers to create ads that look great and fit well with Snap’s core content and use case.
6. Funnel Steps
Most of these new ad products offer a direct way for users to step into an advertiser’s core funnel — with the exception of Snap. Andrew added:
“My biggest unanswered question is how Snap will translate to direct response objectives as opposed to video views or media engagement. That said, we are excited to be testing it out.”
Have You Tested Any of These Solutions?
Has your team or company been experimenting with Quora ads, Snap ads, or LinkedIn Matched Audiences? What results have you seen?