This post will bust digital marketing myths that have been plaguing the industry for more than a decade. It’s time for marketers to fight back.
Stop me if you’ve heard this one before…
It’s 1pm on the second-biggest sales day of the year and you are not on track to make plan for the day…not even close. So management starts to shake every tree, vigorously, until something falls out.
This typically means pulling up Google Analytics and running a channel by channel audit of the day’s sales to find the under-performers. And then laying the smackdown on whatever unlucky souls happen to manage the underperforming channels.
A few culprits are identified. Email traffic is down significantly from yesterday. Off to the email manager to confirm that all of the day’s emails deployed as expected and there were no deliverability issues.
Demand from Facebook ads is soft. Time to call up the agency and grill them mercilessly, even though channel performance and demand naturally fluctuates because the channel is a multi-part auction.
I won’t call this approach of business management wrong, but I will call it ineffective. Sure, it makes the VP of eCommerce look proactive and “in control”. But it also disrupts and demoralizes the unfortunate channel managers on the receiving end, usually to no net benefit.
I’m going to bust some of the biggest myths in digital marketing, and then explain how the relationship between marketing and the rest of the business should work.
Digital Marketing Myth: The performance marketing team can and should take whatever product we give them and MAKE IT WORK.
Fact: Back in 2010-2015, when eCommerce adoption was growing rapidly and competition in digital marketing channels was low, this might have been true…kind of. The influx of cheap traffic was strong enough to mask many issues with product-market fit.
In the current era, this is absolutely not the case. Traffic is hard to come by so there is no room for error. That’s what this website is about, by the way. How to succeed in an environment with a low margin for error.
The relationship between performance marketing and brand/product/merchandising needs to be a negotiation. Not a dialogue, not a monologue, a negotiation.
If a performance marketing team is good, they have valuable insight on product/channel fit and how different customer segments are likely to respond to a product.
This is priceless information, and it MUST inform your overall strategy if you want to grow profitably.
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Digital Marketing Myth: Your eCommerce business is made up of channels (email, Facebook ads, etc.)
Fact: This is also kind of true. Your business is made up of channels, but–Inception moment–your channels are made up of customers.
There are two layers to this.
The first layer: sometimes channel performance falters because of channel-level tactics, like bid strategies or email send times. And sometimes channel performance falters because there is not enough of the right type of customer in the channel.
The second layer: Customers and prospects show up to use different digital marketing channels for different reasons. Demographic composition will vary by channel. This means that each channel has its own product “sweet spot”. To put it simply: certain products will drive higher clickthrough and conversion rates in certain channels, all else equal.
Digital Marketing Myth: We have always budgeted 10% of revenue for digital marketing. If the eCom or Performance Marketing team can’t make that work this year, it is THEIR FAULT.
Fact: The P&L exists for a reason–to ensure the business is actually profitable. I get it! But your budgeting strategy needs to flex to meet the market. Otherwise, those numbers are just a wish.
In case you haven’t noticed, the eCommerce market is becoming increasingly competitive. Everyone in the digital space is becoming increasingly savvy about the value of the eyeballs they can garner.
In 2012, people blogged about things they loved just for the heck of it, as a hobby. In 2021, everyone with 500 followers is an “influencer”.
All else equal, you’re getting much less for your dollar in 2021 than in 2012. So you need to be flexible in all areas of your business–design, merchandising, creative, go to market strategy–if you want to reduce costs and increase the return on your spend.
Digital Marketing Myth: Insert any claim a digital marketing agency makes here.
Fact: I’m not saying this to dunk on digital marketing agencies. Many of them absolutely mean well, and approach a prospective client with the objective of doing their very best.
But that doesn’t mean their “very best” is good enough for you. Agencies are typically channel specialists. They don’t have a solid grasp of the customer lifecycle behavior behind the channel, and they almost never understand the unique dynamics of your business or product category.
That doesn’t mean that “all agencies are bad”. Access to channel specialists and aggregate knowledge from a broad range of clients can be a huge advantage. But if an agency claims they can increase your channel or business performance by a specific number without auditing your transactional or customer data, take it with a HUGE grain of salt.
Digital Marketing Myths, Busted: How Things Should Work
When a business fails to meet its sales plan by a wide margin, there are really only four reasons why that happens:
- Not enough conversions and revenue from new customers
- Not enough conversions and revenue from existing customers
- Merchandise is received much more poorly than expected by both customer types (aka the product bombs)
- Catastrophic technical failure (website down, email fails to go out)
The first three reasons come down to bad planning–some poor decisions or inaction from weeks, months or years ago. If you try to manage business demand based solely on today’s performance, you’re going to wind up in a lot of “fire drill” situations with no real solution. And that isn’t good for anyone.
This is how the relationship between customer planning and digital marketing channel planning SHOULD work:
An initial annual sales goal is set. The number is reasonable given resources and recent business performance. Example of a non-reasonable goal: “we’re growing 15% this year after three years of declining sales because I want to buy a boat”.
Marketing creates a forecast of how many new customers will return to the business next year, and how much they are expected to spend. This forecast comes with some conditions, including data on the merchandise categories and price points preferred by those customers.
Marketing shares this forecast with finance and then makes a request for next year’s marketing budget, based on the number of new customers the business will need to acquire to hit the sales forecast.
Marketing, merchandising and finance determine if the initial forecast is reasonable and work towards a final number that everyone can agree upon. Each department walks away from the table with a general idea of what they will need to do to hit the number.
Because of that agreement, there are fewer mid-year surprises. Each team has an understanding of how their actions will influence their peers, and the entire business. Everyone feels set up for success.
Digital marketing isn’t a set of levers you can crank to make any desired business outcome magically appear, but managing the business from a Google Analytics channel dashboard sure makes it seem that way.
GA won’t tell you that email revenue is down because a decision you made three months ago churned the most valuable subscribers out of your email list. And GA won’t tell you that your conversion rate is down across the site because you decided to kill your most popular product this season.
This is what I mean when I draw the line between managing channels and managing the business. Out of the box tools simply do not help you manage the business for a variety of reasons. And that’s why you need Modern Lifecycle Marketing.
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