How we decide what to buy

Hi Again!

I've been writing a series of blog posts about my experiences as a new CEO in the digital marketing space. As discussed in earlier articles, the first thing I set out to do was to get beyond the hype to find out where people really are spending their money and what is actually working. A mind-blowing $325 Billion was spent on digital marketing in 2019. I wanted to know where it went and what the actual, measurable impact was.

First, I looked at two big spending categories: 

First off, and perhaps most shocking, paid digital ads, which represent around $200B of the $325 annual spend but delivered virtually no measurable return on investment.  Whether they were delivered programmatically, or the old fashioned way, I couldn't find a single reliable source that connected this spend to actual product sales or revenue. Maybe this approach worked years ago but ad saturation progressively and conclusively killed it. Consider this: for every 1000 display ads served, just SIX of them get clicked on (.06% CTR). Sixty percent of THOSE clicks are done by mistake (fat fingers) - so now we’re down to .036% of display ads that are intentionally clicked on. Here's the article I wrote that covers paid display ads.

Another popular spending category, influencer marketing, has a similar problem. That market has been growing at about 50% year over year with 2021 spending forecasted to top $14B. However, while there seems to be some correlation to sales in a few "aspirational" sectors (fashion, makeup), it turns out that paying famous people to say nice things about your product isn't convincing anyone.  75% of marketers currently employ influencer marketing activities, but only 36% consider those efforts effective and 19% actually admit they are ineffective. It seems the standard of measure for influencer marketing (engagement) says more about the audience connecting with, and reacting to, the paid media star rather than whatever product they happen to be holding in their Instagram selfie. Better than display ads, but certainly not good - especially for product/services where people are trying to make a decision based on features, functions, and value (rather than simply what is "cool".) You can read all the gory details here. 

So, where does this lead us? One has to ask: "What's going on here? If we're not seeing demonstrable results, why do we, as marketers, keep spending?" 

It would be helpful to try to view this from the point of view of our target. As a consumer I have infinite choices available to me at any moment, night or day. I'm also bombarded with unending attempts and strategies to direct my eyeballs to this or that product. I'm feeling harassed, overwhelmed, and spied on, so I just tune out.

This is where I ended up at after my review of the market - a bit of a "dark night of the soul." If consumers are choking on infinite choices, and marketing seems only to be making the problem worse, where do we, as a marketing tech company, go?

We held an emergency offsite to sort it out. I pulled the company, the board of directors, the investors, and a few trusted allies together to brainstorm what to do next and out of that meeting came a direction forward.

We asked ourselves, "How do WE make decisions?  How do we know what movies we might like, or which restaurants we might want to visit? Or where we should vacation next? Or which internet providers we should use? Or how we might find a new UX designer? Or who makes the best tequila?"

The answer was obvious and it's been under our nose all along. We ask our friends. 

When overwhelmed with options, we all agreed that we listen to the people we know and who know us. They act as both a filter and a bullshit detector.  

Back to my role as a CEO. As part of this meeting we asked ourselves: If we use our friends and the people we trust to navigate our buying choices, what could we do, as a company, to facilitate and amplify this?

What if we made it easier for brands and companies to connect to the real people who actually use their products. We could provide a platform that would help them recruit and develop communities of brand sponsors - real people who love their products and could promote them via social media content.

So that's our new focus. We shifted our company away from traditional professional influencer marketing to brand advocacy. Specifically, we want to help companies recruit and develop relationships with the following types of people:

• First and foremost, they need to be regular people (rather than celebrity spokespersons).
• With a previous and positive real-world experience with the company and/or product.
• They need to be active on social media. Maybe not at the "media star" level but they regularly create content and interact with their friends online.
• They'd need to have an authentic voice. They'd to be able to explain what they liked about the product in simple, honest terms.
• Rather than just a one-off engagement, they'd need to be willing to build a long-term, multi-campaign relationship with the companies they are working with.
• They'd be excited to work with a brand as a content-creating spokesperson in exchange for discounts, free products, access to special company events, or compensation.
• We are calling these people Advocates (but we could also use terms like Fan, Sponsor, or Micro Influencer).

Will it work? We don't know yet. 

We are just starting down this path. We have a few companies/brands that we piloting the approach with us. The first step has been to build the participating company's advocate community. So far, the advocate response has been great. It turns out that there are tons of people out there that both love their product(s) AND are excited to try their hand in creating promotional content.

As we start to see the results I'll report back. We'll be evaluating success based on the ability of these advocates to motivate actual real-world results: things like unit sales, and sign ups, and dollars spent rather than more traditional metrics like reach and engagement.

These are exciting times. I feel like we're really on to something. Stay tuned. I'll be posting results as they come in. If you're interested in trying out this approach with your company or brand, drop me a line.

Thanks,

Andy Kieffer

CEO,

VoxFeed