With the news that Google ad revenue is likely to drop for the first time in 2020 (5.3% according to WSJ), largely due to the pandemic that has engulfed the globe and the current boycott for Facebook ad spend, the world or advertising and marketing feels a little different.
This also raises the question of businesses that succeed and their approach to marketing. There is an argument that the linear measurability of acquisition marketing channels such as paid search and paid social are short term, return based approaches. Whereas modern, successful and high-growth brands look at a growth marketing approach.
What is Growth Marketing?
Growth Marketing has a number of definitions, that do in theory conflict or contradict each other in parts.
There’s Camp A, who were brought up on adwords and MVT that feel Growth Marketing is more in this camp. For example they take a look at the whole funnel of marketing and how the “traffic” navigates its way through the experience you provide and suggests that experiments should be made on steps within the process. This is still done in a relatively scientific or statistical way. A great option when the data is consistent, the sources are all reliable and attribution is 100% accurate and understood. This is compelling as the growth areas are targeted and controlled in a scientific way, with results analysed and then developed.
In my opinion there are two potential issues with this approach.
- How many organisations and teams have that data structured in a way that they can 100% rely on it, trust its integrity and have people that understand it
- If this isn’t implemented with military precision, it could actually slow you down rather than speed you up
Matt Cunliffe adds “It is vital that core journeys for core audiences are identified at the outset along with painpoints – these painpoints should relate to significant dips or low-performing metrics in the funnel that affect conversion, onboarding, retention volumes etc. It may sound obvious but I have seen distracting approaches on MVT where lots of micro-tests are identified that actually don’t have scale or impact upon roll-out. Whilst a rolling program of these smaller improvements could combine to uptick metrics, one often has bigger strategic challenges (e.g. what should our new commercial model be?) and you need to ‘clear the decks’ and get everyone (i.e. CRO, Product, UX, Dev etc) united behind solving and supporting that big issue. It relies on clear OKRs or strategic goals that filter down to teams so they are all laser-focused and don’t get diverted into baby-step, nice to have changes”
Whilst the science behind Camp A is completely entrenched in Camp B. Camp B is more pragmatic. They are likely to be more entrepreneurial and potentially take risks. Camp B Growth Marketing can be a nervous position for many traditional brands as they act without all the data. Their pragmatism allows for risks to be taken, either through personal experience, whats happened in their sector or more likely in a different sector. They will do tests and genuinely see the results, but they also appreciate the data stack is unlikely to be 100% accurate and as a consequence make allowances and accept the unknown.
Camp B are not reckless though. They will have as much of an eye on impact as Camp A. Neither camp of Growth Marketeers take non-success personally. They are part of the fail fast camp, take the risk, review and move on (either to build on success or stop an activity).
With both approaches however, they do look at the entire customer and impact on growing the business. Depending on your understanding of your customer and data, this is generally used for sustained growth as opposed to just gaining the immediate pound and then potentially having to reinvest to acquire a new customer or in theory the same customer again.
To make a Growth Marketing approach work, you will need to consider all of the following (sometimes referred to as pirate metrics):
One could argue, a Performance Marketing approach does consider the four four components, but in practice most performance marketing strategies at best look at steps 2, 3 and 4.
What are the biggest differences between a Growth Marketing led approach and a Performance Marketing led approach?
Remember all of the below are generalisations and most companies behave differently in both approaches to what the text books say, however here are the key differences as I see it
So everybody should drop what they are doing and move to growth marketing right?
Well all of the Growth Marketing experts would suggest this is the case, but it isn’t as simple as that. Some brands would require a massive change both short term and others more long-term and culturally. Many businesses have 1, 3, or even 5 year plans that will be difficult to deviate from. Particularly if outside investment or equity plays for the management team are in play
Even on a slightly less investment based backdrop, to turn a marketing plan on its head and suggest some elements of a marketing budget has no discernible and immediate tracked pay back is uncomfortable. Even some Growth Marketeers would have kittens if you suggested an activity that had little in terms of data to back it up and no data-based evidence to suggest it would work.
Also, in my opinion it isn’t really a choice. Good performance marketing people are good performance marketing people. They will be able to operate on any metrics you give them, they just need clarity and something that they can measure performance against to make good optimisation decisions.
The key factor for me that separates a performance led business, potentially somebody like The Hut Group and a good growth led business, somebody like boohoo Group, is fundamentally their willingness to take risks, build brands and not be tied rigidly to a plan. I know people in the Hut Group will be up in arms at that statement and its no reflection on them, they dominate relevant paid search terms and drive strong growth through paid channels. They will undoubtedly believe they are growth marketing people, however when you look at what we did at boohoo Group in my time there and what they continue to do. They first and foremost consider the customer, beyond that initial purchase. They build robust brands and communications that resonate with their customers. They build loyalty, advocacy and an army of customer based ambassadors that drive repeat purchase and behaviour.
The Data Issues
Whatever your views on Performance Marketing led or Growth Marketing Led, there are always going to be intrinsic data issues. Big Data, Data Scientists, Cloud Based insights, Econometrics, Attribution modelling etc etc can only answer some of the questions with 100% accuracy. Its down to the business to determine what investment it is happy to invest its in data and where it sees value. Its then the intelligence built around that data that matters. Which is a whole different topic.
Add to that the new EU regulations, which according to my sources has seen sites receive a large drop in traffic (most likely recorded traffic) but increase in the other metrics and you have another area of data confidence erosion. Added to the known ones of channel hopping, cookie expiration etc
Each business has to have its own strategy when it comes to data and do what’s right for them. This could in theory effect how it deals with its approaches.
Growth Marketing in action
Going back to really traditional terms. boohoo have built destination brand, where their target customer wants to shop. They have a strategy that ensures customers feel part of the brand pre, during and post purchase to encourage repeat purchase and layer in effective performance marketing, to ensure the brand is seen at the moment when purchase intent is there.
One cannot argue with that as an approach. The offer, matches the marketing and with a crowd-sourced ranging approach, they epitomise Growth Marketing, whether intentionally or not.
For me no matter what you call it, your marketing and business can thrive if you think customer first. Consider who they really are, or who they should be, not who you want them to be. Don’t deviate from that and serve them. Don’t just think about equity return or shareholder value, those things will come, if you build a brand and serve your customer effectively through each touchpoint.
I would really love to hear your views. Drop me a line or feel free to add a comment below.