Thoughts on Growth — Feb 9, 2018


Thoughts on Growth is Reforge's weekly newsletter of must-known updates and perspectives in growth. By subscribing, you'll join a few thousand PMs, marketers, UX folks, engineers and analysts at today's top tech companies. Check out a recent sample below.


1. Content marketing CAC -- no longer cheap, and rising faster than paid

rising_cac (1).png

WHY IT MATTERS

Content marketing used to be the poor man's way to feed every part of our funnel, including retention after conversion. But just as we suspected, content marketing is getting more expensive and less effective.

CAC has gone up across the board almost 50% over the past five years, and CAC for content isn't an exception. Other sobering stats:

  • Content marketers are publishing over 300% more every month than before
  • The posts are longer (twice as long to be precise)
  • Content people are commanding higher salaries
  • Shares / amplification of content has dropped 90% in the last 2 years.

LEADER OPINION

Patrick Campbell at Price Intelligently is still bullish on content. To put it into perspective, he says, “If the cost for me to give you a dollar goes from $0.10 to $0.25, you'd be insane not to still pay me for the dollar. Content is getting mature, but the ROI is still amazing. CAC Ratio's for content still tends to be roughly 30% better than the paid side, because of the compounding nature of content.

READ MORE


Get Thoughts on Growth

Thoughts on Growth is Reforge's weekly newsletter with must-know updates and news in growth, along with growth leader opinions to give you more context.


2. Virality is decaying, too :-/

3560.Viral-Channel-Effectiveness (1).jpg

WHY IT MATTERS

We all like virality. At least, we like how it sounds — existing users doing the heavy lifting to bring us new users. But, virality has a few requirements:

  • A channel or platform that aggregates users
  • An existing social graph between those users
  • A built-in reason to collaborate or share

And, virality is on a downward trend. This is partly due to the inevitable decay of channels, and the upward swing of competition, but there's something else at play too. As Casey Winters explains in the podcast linked below, “Facebook used to be an amazing platform for virality. For Pinterest, every re-pin was getting shared to Facebook. And then it just went away, seemingly overnight. That was when Pinterest figured out that content was interesting for people to find on Google Search too.

But now you're starting to see Google act more like Facebook in the last few years. They're asking themselves, 'How do we on mobile, where people have less time, replace 10 blue links with just the answer to their problem?' In most cases, they're realizing they can just build that solution themselves, instead of sending that user to another site.”

LEADER OPINION

Andrew Chen was concerned about viral decay way back in 2012 when he wrote about the Law of Shitty Clickthroughs. Since then, it hasn't gotten better, but Andrew still sees some opportunities:

“Every channel, every platform, no matter what, has a decay in responsiveness. It happens because platform owners get more wary of spam issues, increased competition eats away at your advantages, and new platforms might not offer the same viral opportunity as the ones they're replacing. For example, mobile contact importers don't work as well as email importers used to. Mobile is much more personal, which creates a barrier to mass-invites, and we generally have fewer people in our mobile contacts than we do in our email.

But, there are still corners where viral growth has a shot, like in the workplace. The continued adoption of G Suite means that your calendar and Gmail and documents become collaborative spaces with lots of people attached. There's a built-in social graph, and there's a lot less noise.”

READ MORE

3. Netflix is moving "personalization-at-scale" up the funnel

Netflix personalization.001.jpeg

WHY IT MATTERS

It's relatively straightforward to see how personalization affects engagement and retention, but Netflix is applying personalization efforts further and further up funnel. Here's an incomplete list of their personalization experiments:

  • Trailers that feature the scene types and actors you prefer more/most
  • Title images (i.e., thumbnails) that skew towards the actors and genres you prefer
  • Using their deep data on users to inform highly sophisticated paid acquisition on Google and FB

They still aren't personalizing their non-logged in homepage that's shown to brand new users, but they're driving that top of funnel traffic by leveraging the robust personalization that GOOG and FB already provide.

At that point, there's minimal friction and decent incentive to sign up for their 30-day free trial. You could argue that that's where their real funnel begins.

And, that's where the personalization kicks in. Better trailers, images, and recommendations get people to watch more; watching more leads to subscription conversion. It's the same signal for free trial conversion as for overall retention, but here, personalization is specifically doing its work on not-yet converted users.

LEADER OPINION

Investor/author/blogger and longtime Microsoft strategy leader Tren Griffin says, “People tend to put a lot of emphasis on Netflix using machine learning to decide what video content to create and not enough emphasis on how it is used to more efficiently acquire customers and turn them into fans of its services. The use of machine learning to improve customer acquisition and marketing has resulted in significant improvements in customer unit economics in many industries but Netflix is one of the best examples.

Huge investments are now being made by businesses in systems which optimize every type and aspect of acquisition funnels. If one business does not use machine learning in this way and its competitors do so, that business is operating with a huge possibly fatal disadvantage.

READ MORE

4. Speaking of personalization, Quora just launched behavioral targeting for its ads

And finally, a very short snippet rounds our Thoughts on Growth today. Quora just rolled out some new features for its ad platform.

Here's what you need to know:

  • People Based Targeting - Lookalike Targeting, Website Retargeting, and Interest Based Targeting
  • Content Based Targeting - Question Targeting, Topic Targeting, Multi - Topic Targeting


WHY IT MATTERS

Paid on Quora is still an early channel, meaning fewer players and more white space — for now. The biggest issue we've heard from the Reforge alumni community is getting scale on Quora. The new targeting options may help with that (particularly lookalike targeting).

As people get into it, we'd love to hear about your results on this Reforge Discuss thread:

Has anyone used Quora ads? Likes / dislikes?

READ MORE


Get Thoughts on Growth

Thoughts on Growth is Reforge's weekly newsletter with must-know updates and news in growth, along with growth leader opinions to give you more context.


End of Async HubSpot Analytics Code -->