Marketing Needs Growth Planning Not Media Planning
Marketing Now Means Growth
Evolution in data and technology has changed the world of marketing. Marketing’s impact is now quantified, measureable and attributable. It is not just impact top of the funnel brand awareness but the lower half as well driving performance – conversion, retention and GROWTH. Marketing can now leverage data to micro-target and bring selective users with relatively higher lifetime value through the funnel. It also uses a deep understanding of user expectations and behavior to influence user onboarding, activation and long term retention with contextual and personalized messaging and experiences through the journey. As brands build these user relationships and earn loyalty; marketing influences users to amplify and become advocates.
The KPIs for marketing’s own performance are no longer limited to NPS scores, brand awareness and/or affinity. Even the more quantitative measures like open rates, CTRs, unique visits are now deemed vanity KPIs. Instead, Marketing is now accountable for and hence measuring installs, registrations, subs, conversion rates, average order size, DAU (D1, WAU D14, D60 etc), MAU, LTV, reactivation rate or addressing churn rates and others. If you’re an eCommerce player, these could be conversion rates, sales/SKU, basket size, LTV, repeat purchases, cart abandonment by cohort etc. There is a fundamental shift from defining vanity success to real growth, well shared in this blog on kissmetrics. Marketing is now a critical component of getting to a Product-Market fit. It centers around the user; protects the user and thrives on user obsession.
Do you really care about the spike in site traffic without looking at what it did or did not do to your conversion rates or net sales? For all you know, it was a bot that drove the spike while your true conversions during that time are actually decelerating.
Any marketing function that does not drive growth will soon be replaced; with new people with the right skills and remit needed to drive growth. At times even if that means re-skinning the cat in case of Coke but more than the title it is the core mission of the function and accountability that drives sustainable breakthrough growth. Even for a traditional marketing giant like Coke, marketing now means innovation, data science, technology all coming together to growth the business. Isn’t every company a data and technology company now regardless of vertical?
Keeping it simple, I define growth in these 3 buckets:
- Grow the Brand
- Grow the User Base
- Grow Retention & LTV
Pivotal Role of Data in Marketing’s Transformation Towards a Growth Engine
Here are the 2 ways data has transformed marketing into Art X Science and brought it closer to tangible and measurable growth:
DATA AS AN INPUT has made marketing RELEVANT & CONTEXTUAL – For the longest time marketing had been plagued with traditional mass marketing; focused on reach than relevancy, being intrusive and not contextual or personalized. Data has changed that. Advanced research and behavioral science capabilities, predictive models, qual and quant analysis has enabled a holistic understanding of the user (probably 360 degree X 2). The advancement in data management platforms; data matching capabilities across known and anonymous data, across online and offline data, across devices and cookie IDs has shifted a segmented view of a user to an individual view of the user.
A big reason why users churn is when their Expectations do not match the Experience. Marketing now has the ability to understand “EXPECTATIONS” before it delivers the “EXPERIENCE” – a big shift forward.
A big caveat of course is how many marketing functions are able to transform data into insights and subsequently action on it. Acquiring and having data is only step 1 of many steps in the supply chain of growth marketing.
DATA AS AN OUTPUT has made marketing MEASURABLE & ATTRIUTABLE – Despite an extremely fragmented media and channel landscape; marketing has evolved into a measurable and attributable function. It is no longer an ROI black box. The advancement in measurement and analytics platforms has allowed for not only cross channel measurement, JIT if not Real Time Analysis but also multi-touch attribution (granted with certain caveats). Attribution is no longer limited to the last-click model; injecting new measurement and predictive algorithms in a typical multi-touch conversion funnel. Brands are now measuring the causal impact of their brand awareness efforts on tangible performance and user growth (acquisition, engagement & retention). This has brought an underlying shift from just measuring vanity KPIs like site visits, CTRs, CPM, Email Open Rates to growth KPIs like DAU (daily active users), MAU, Reg Rate by LTV, Cost Per Sub, Retention Rates etc. There is a quest to understand and identify the true North Star KPI and shifting marketing plans to address that.
Josh Elman, General Partner at Greylock shared a growth measurement and analytics framework that I thought was spot on. He defines a measurement framework with 3 key levers:
- Purpose – Understanding Core Value Proposition for your Product, without this your product will not exist
- Core Action – The one action you want your users to take as soon as possible
- Cycle – How often/frequently do you want them to take that action
If Marketing (of course in partnership with other parts of the organization especially Product) can help define these 3 core levers and re-pivot itself to optimize against them, it starts to operate like a “growth engine”. Josh’s example on Linkedin explains:
Marketing as a Sustainable Growth Engine is Still Not Mainstream. Why?
Despite all these possibilities; availability of data, technology and more converging talent (at the intersection of marketing, data and technology); many marketing functions still struggle to propel growth. Big reason – marketing is still fundamentally fragmented; most marketers and marketing functions on either side of the fence (agency or brand) are still orchestrated around “channels” and “media” and not the user or growth for that matter. The operating models, partnerships and engagement models, annual budgets and plans, incentivization structures; everything is still isolated by channel and media types. Each fragment likes to put the user at the center of its own myopic world; ultimately delivering a broken experience and slow incremental growth at best.
Shift from Media Planning to Growth Planning – Growth Orchestrators
The proliferation in the media and channel landscape has opened new touchpoints to engage users; ingest signals at each one of those touch-points to deliver more progressive and immersive experiences. On the flip side, this has led to further fragmentation of the marketing and advertiser ecosystem.
Marketing needs a fundamental shift from this channel obsession to “user obsession” that will lead to growth. It needs to evolve from Media Planners and Media Planning to “Growth Orchestrators and Growth Planning”. The growth orchestrators are measured, incentivized and held accountable for overarching brand and user growth agnostic of the channel, strategy, media type or platform. Growth becomes the glue that can tie the underlying channel ecosystem for a brand. Thoughts on how to bring the fundamental shift towards growth planning:
1. Shift the starting point, from channel budget to Growth Goal – From a media budget by channel to an overarching “growth goal and objective” that takes into account existing forecast, growth levers and a deep understanding of the user behavior, expectations, drivers and barriers.
Work backwards from the growth goal to breakdown the growth plans across:
- Quality Acquisition – Allocation across Paid, Owned & Earned media; Affinity, Viral Loops
- Always-On CRM for Long Term Retention & LTV – Measure user growth with retention rates D1, D14, D60; repeat purchase frequency, avg basket size
- Brand growth – Driving top of the funnel awareness & consideration, measure causality of brand growth to acquisition and retention
- New Market Launches & Internationalization
- … other initiatives
Instead of isolated plans with individual contributing KPIs, ladder all these efforts towards Annual, Quarterly, Monthly and Weekly Goals towards the North Star KPI. Focus efforts on understanding and measuring cross effort attribution, for instance the impact of brand awareness and consideration to acquisition rates; correlation between long term retention and acquisition channel. You may find higher engagement and lifetime value for users coming through organic search compared to paid search acquisition.
The channel initiatives are only levers to get to the macro growth goal. Build the ability to pull and push levers across channels and initiatives to optimize towards the macro goal.
2. Channel Obsession to User & Growth Obsession – Despite a strong intent to put the user at the center, most marketers still rally around channel tactics. The conversation is still about an “email campaign”, “social campaign”, “mobile push campaign” and so on. Channels are a means to an end. The focus needs to shift to driving growth across the brand, user base and retention; by leveraging data and insights to understand the user behavior, their expectations and barriers. Finally using the channels to engage with them in the most immersive and contextual way possible, using data and insights — this is the art and science of modern marketing.
3. From Annual Marketing Plans to Quarterly Growth Models
With the pace of disruption both internal and external to any organization, making annual plans is futile. As long as you have your budget and more importantly your macro goals defined, you should lean on more agile growth planning models. The marketing programs should be planned, optimized and adjusted at max on a quarterly basis; responding to your fluctuating growth rates. You may adjust your focus and investment from top of the funnel awareness to more tangible performance and conversion if your quality acquisition and retention rates are decelerating.
This level of growth orchestration and optimization is only possible when you align different functions within an organization on a SINGLE GROWTH GOAL which is measured, analyzed and reviewed agnostic of channel or media type or organizational silos. Build an operating model that pulls growth measures and performance across functions. While true attribution is often a bottleneck, it cannot be a show stopper.
4. Think Growth Segments, not just Attitudinal Segments
You cannot think growth without thinking data and insight. Many brands invest millions in persona creation, attitudinal segmentation but most often that analysis is not actionable. 2 most basic challenges media planners face today:
- Non Actionable Segments – Cannot translate the personas and attitudinal segments into actual users who are either viewing your ads, visiting and using your product. Ultimately, media is still targeted using high level levers like demographic, gender, age etc. Each channel ends up using a fraction of the segmentation based on the available data; losing cohesiveness across channels
- Segmentation not tied to Growth – While a lot of focus is put on understanding behaviors, attitudes, expectations, drivers and barriers; not enough emphasis is put during segmentation on lifetime value, cost of acquisition, propensity to retain and other indicators of user growth. Media planning should think about growth segments that move from deterministic to probabilistic cohorts of growth, identify high LTV users you have the right to win right away and you exactly know who they are. Gradually move outwards towards more probabilistic audiences.
5. Registration & Conversion as Success to Retention & LTV as Media Success KPI
With most media platforms especially social becoming a pure “pay for reach” play, getting in front of “a user” isn’t as much of a challenge. On top of that, giving them a free coupon or offer gets them through the door. But that’s not good enough. Media can no longer be measured through the number of impressions/eye balls, clicks and registrations. Success of media (paid, owned or earned) needs to be measured in terms of retention and lifetime value. Once you create cohorts using LTV and retention rates, your experiments and optimization should be driven by longitudinal retention, basket size, return rates etc.
7. Inverse The Funnel
Yes, there is no linear funnel from a user standpoint but there is a funnel from a priority and investment standpoint. If you re launching a new product or growing an established product-market fit, you need to identify where you put your next $100.
The funnel does not always need to flow from awareness, consideration to trial, conversion and retention. As Casey Winters, now a Growth Advisor in Residence at Greylock Partners, puts it especially for start-ups, the funnel is now inversed:
Even established products and brands should think media strategies and investment as a start-up. Don’t under estimate the power of organic; it is more work, takes more time but often higher quality and lasts longer.
8. Experimentation at Scale
The industry averages and benchmarks are often useless. The only aspect you can rely on is “experimentation”, you test and learn your audiences/segmentation, your creative, your messaging. Experimentation is the only sustainable lever in growth planning. Just buying and targeting programmatically is no longer enough, you need programmatic creative to test and learn what message works for what user at what time of day that drives higher conversion, engagement and retention.
At the end, I have come to realize that fragmentation within the marketing ecosystem in a digital world is only going to get worse. The diversification will happen exponentially while consolidation will be more algorithmic and slow. In that scenario, “growth obsession and planning” becomes a binder. A single growth goal that gets allocated to different parts of the machinery (organizational functions, marketing efforts, different channels – however you slide it) allows for a more coordinated, effective and efficient growth operating model.