In their quest to find large numbers of new paying customers, most growth-orientated brands will turn to the same one or two digital advertising channels.
Facebook and Google have rightly earned their status as the go-to channels for fast growth. With their ease of use, low financial barrier to entry, rich targeting tools, and massive audiences, they have proven their ability to help businesses tightly focused on scale.
But at some stage, all growing businesses will get to the point where performance on these two channels starts to slow and plateau. As the person in charge of your customer acquisition you need to know:
1. Why does performance slow down?
Performance from Facebook and Google is likely to get harder at some point. Growth in new users will flatten out, your ROI will drop, and your cost per acquisition will increase.
This happens because there is a finite pool of users who are interested in downloading your app or buying your product. Once Facebook’s and Google’s highly trained algorithms have exhausted that audience they are forced to look elsewhere to find people who are simply less likely to be interested in your offer. This makes acquiring any new user more expensive, reducing the number of people you can convert for that budget – and lowering your ROI.
The answer therefore is clearly not to simply increase spend in the same tactics in these channels to chase more users.
2. Why a multi-channel advertising strategy works
To get your growth back on track, digital marketers need to feel comfortable in adding other channels to their media mix. In one study, multi-channel campaigns were found to multiply profit by 2.5x. Another study found that campaigns that invest in 5 or more channels earn 35% more ROI than a single channel campaign.
Brands grow best by increasing penetration – by reaching as many people considered to be category buyers as possible. Increasing your channels allows yourself to target more category buyers.
You are creating more awareness of your brand or app. Especially in those people currently not in-market. Now, increasing awareness in people not in-market might not sound like the smartest thing to do if you want to increase ROI and growth. And it isn’t if you are looking at a very short term picture of performance. But if you want to grow in the long-term (and you should) then increase the size of your audience across the entire marketing funnel.
The benefit of this will be seen in your bottom of funnel activity. Your targeted ads on Facebook and Google will now have a sustainably large pool of users to target, and because those people are more familiar with you, your acquisition costs will lower.
3. How to incorporate more channels successfully
Broadening your media mix isn’t as simple as turning on new channels. Like anything, it requires sound strategy and planning to get right.
The first question to ask is: are your objectives even best served by diversifying your media mix? I have heard multiple marketers saying they want to increase their number of channels too soon. If you are spending upto 50k a month you can probably scale your Facebook and Google spend further. It is better to focus spend, rather than dilute it too early. Diluting spend will take data away from these platforms’ algorithms and hinder their ability to learn. Instead, expand your targetable audiences in your existing channels. And invest heavily in better and more frequently updated creative.
But for the brands that are ready to scale, where next?
Scaling ad spend as you grow comes with many challenges. And knowing when to add more channels to your media mix is a big one. The key is to work within your marketing strategy and align everything behind one overall business goal.
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