Business leaders hoping to improve the return on paid advertising will be disappointed with new research – revenue growth just got harder.
70% of UK consumers actively hide their data when browsing online by masking or blocking their online appearance.
The impact is that many of the digital paid marketing tool kits no longer work as well as before.
Attribution, retargeting, and performance measures have gone dark.
Your potential buyers (UK results may be similar across Western world economies)are now off the digital grid:
Potential buyers are taking multiple steps to remain off the grid. These include
- browsing in incognito or private mode,
- clearing cookie caches,
- opting out of cookies altogether,
And the trend is accelerating: 29% say they spend more time browsing privately than last year.
What is the sudden need for increasing privacy consciousness?
- Ad tracking (42%).
- The increasing rate of data breaches (31%).
- Increased targeted by online scammers and criminals (31%).
Potential buyer behaviour has changed for good – but sellers are in catchup mode.
63% of potential buyers believe advertisers must find better ways to make relevant paid advertising that does not include data collection.
A higher purpose: More than half of potential buyers say they’d change brands if the new brand never collected or used personal information for advertising purposes.
The research results drive marketers and revenue operations teams to improve performance and return to traditional tools.
1) Word of mouth and referral marketing. Uber delights their users: In some markets, they provide a free ride for users who refer a new user to the Uber app. What does it cost Uber?
Assuming the driver keeps 80% of the ride revenue with an average fee of $20: that is a $16 acquisition cost.
HelloFresh: Operate a Refer a Friend campaign. The offer: save $40 off their food order. The acquisition cost calculation is this – a retail value of $40 less the cost of goods sold with a GP of 25%, the acquisition cost is likely $30.
LuluLemon: referral marketing campaign for fitness trainers. They get a 10-20% reduction when shopping at Lululemon. The benefit – of influencer marketing – fitness instructors wear only LuluLemon when working. The acquisition cost assuming an average sale value of $200 at 20% lost margin = acquisition cost $40
What are your business’s referral and word-of-mouth campaigns’ costs and return on investment?
Successful referrals, reviews and word-of-mouth campaigns have three elements in common. They rely on trust – a trusted friend who gives them a tip and reach – that many potential buyers can be offered the campaign at scale. Impact – the offer and the financial results have significant wins for all stakeholders.
- Reach: is primarily driven by organic social media campaigns on multiple platforms (Twitter, Facebook and many others). The Market size: In 2020, the global social media advertising market was $98.3 billion.
- It will accelerate to $197.6 billion by 2028, growing at a CAGR of 9.3%.
Demand generation is accelerated when referral programs and word of mouth are operational.
Neilson Research: found conversion rates – CVR – potential buyers from a referral channel were 4x more likely to convert (CVR measures in-app advertising –the percentage of users who saw an app-install ad, clicked on it and converted through some pre-specified action). It is a significant accelerator of demand generation.
How can you start a referral program today?
Find the intersection: brand + buyer + recommender’s ROIs. The arrow point is the cost of the discount to win a referral and a purchase.
Help is here: Particl.com maximises your ROI with an AI Platform that uses the world’s largest e-commerce database for lightning-fast trend identification, data-driven product launches, and price modelling designed to help you maximise returns.
- Particl predicts your business’s sell-through based on the data it has from comparing it to similar companies. You can also predict the potential ROI for referral marketing and the cost to profitability.
As markets tighten and recessions loom – how is your business planning to accelerate its demand generation strategies? What tactics are providing your best return on investment?
More newsletters that may help accelerate your revenue growth
Regards
David
PS – it’s market research time.
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