Nothing beats the efficiency of a well-executed digital marketing campaign. The right message, to the right person, at the right time, for the right price. I’ve seen this formula produce countless business breakthroughs in our work with clients over the past 15+ years.
It’s easy to understand why marketers often choose to invest almost exclusively in digital.
There’s immediate gratification in ROI, which can be quickly declared through a multitude of eminently measurable data points. With ongoing smart optimizations, digital campaigns become concentrated rocket fuel, launching brands to increasing levels of revenue.
But inevitably, it happens. A reliance on digital proves to be overreliance as incremental customer acquisition costs begin to soar.
Roy Williams described this phenomenon in one his recent Monday Morning Memo newsletters:
Logic among advertising professionals says, “Always target the right customer.” But if you embrace that premise,
1. you will gravitate to online marketing because it allows you to reach specific types of people, track results, gather data, and hold your ad budget accountable.
2. you will spend too much money to reach too few people.
3. you will see your advertising efficiency decrease, not increase, as you grow.
4. you will fail to become widely known.
You can’t become a market leader by sticking exclusively to digital advertising.
Quick-win digital campaigns can only take you so far. Untapped potential awaits beyond the thrashing digital sea of blood-thirsty competitors. Roy Williams again makes the point with great insight…
…you can reach thousands of untargeted people for the price of one, targeted person. And among those thousands of untargeted influencers will be not just one, but several of the people you would have targeted. The familiarity you win and the reputation you gain and the word-of-mouth you trigger by reaching all those untargeted influencers will be yours at no extra charge.
But if you leverage [your budget into] mass media,
1. you will feel certain that you’ve made a mistake during the early months when you’re not seeing significant results.
2. you will experience a time when your rocket ship finally begins accelerating, if you don’t chicken out. We call this window “breakthrough.”
3. you will see your advertising efficiency increase, year after year, as you grow.
4. you will become widely known.
Pioneering D2C mattress brand Casper demonstrates this well. While digital media campaigns have driven much of Casper’s growth, their $439M in revenue last year also included market-expanding initiatives such as direct mail, television, and even physical stores.
Every additional channel increases the flywheel of momentum.
In their S-1 IPO filing, Casper reveals that direct-to-consumer sales have grown 100% faster in cities where they’ve opened retail stores.
It should be noted that Casper has relied heavily on venture capital to fund their expansion into brick & mortar. Because of this, they ended 2019 in the red.
Don’t let this dissuade you. Certain strategies may take longer to pay off, but losing money isn’t a requirement for growth. Purple, one of Casper’s primary competitors, enjoyed eight-figure EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) last year on top-line revenue on par with Casper. Purple may not have physical stores (yet), but their marketing mix includes radio, television, and video.
Though digital is essential, we’ve seen what else works for growing brands. We’d love to help point you in the right direction.