Lesson: Scaling User Growth with Maud Pasturaud

Step #8 Paid Channels: Using SEM and display ads

I would say try to prioritize channels that are pull against push, and the difference between the two is pull, users, you are trying to catch users who are actively looking for your product. And the definition of pull is Google and SEM. And so again, if a person is looking for flash sales on Google.com, I want Gilt Groupe to be number one, the number one ad before then, because you're looking for it. And same thing if I'm selling the Marc Jacobs bag, every time they search "Marc Jacobs bag," I want to be their first. So it's worth putting the money, because your return is always going to be great.

People are in the mindset to buy, they are in the mindset to do what you want them to do or they are even just looking for a brand. So that's a minimum for me, and that's SEM and usually have good to greatest return on investment on that pull paid marketing.

And then we have push, which is that you are sending out information about your product to people who are not necessarily looking for it. An example is display ad, push can be either be normal display, so on websites whether they be mobile or desktop websites or they can be displaced through social. So typically again what I mentioned, Twitter, Facebook, those are actually very efficient right now. They are probably the most efficient parts of display ads because through Twitter and through Facebook, you have so many information about the users that you are able to really narrow down the targeting to exactly the audience you want.

So even if you're pushing them some information, they are still somewhat relevant to see it. It's not that you are sending this ad out there and you don t know who is going to see it. You know that whoever you are targeting has a high likelihood to engage with it and it's going to be relevant to them. So that's what I call the push marketing.

It's not recommended as what do you have in mind. An example is Mercari is another company I was involved with and is the [inaudible 00:02:21] for mobile, and thy are the largest one in Japan. For a little while, they just acquired users and they were not monetizing, but they had plan to monetize from day one. So that was a plan for them to acquire new users. They were saying, "Hey, you are using this other service that takes 20% cut out of what you sell, how about you came check us out. We are free." It was a very compelling value proposition, but they knew that from the moment they would get to critical math, they would start charging, granted they would charge less than the other competing platforms.

So that justified, and they did customer acquisition that made sense within that philosophy. Otherwise, yeah, if you don't have other plans to monetize and Snapchat didn't acquire users. They just grew virally, and it's a social platform. So it needs to make sense. Still it's only relevant for certain industries, but the principle of affiliates is, I am Marc Jacobs, and your little blog that wants to feature my bag and it turns out your users end up buying that bag through my blog, and so I'm going to get a cut of that. So this is what affiliate is, is you allow other people to sell products on your behalf and you are giving them a cut when the sale happens. So that's huge. There are so many blogs that are out there, and it's what we call the long tail of marketing. So it's a lot of little sites that show your products and some of them have made a business out of it.

You can also do coupons. You need to have a brand for people too and something compelling for people to click on it from third-party sites and it only makes sense. You can scale it to an extent, and it's also not the best use of your dollars because you give a cut to those people, give a cut on the sales. So I would say it's often last on sort of the marketing media plan.

The last one, which is by essence is it's still insanely efficient, is TV, and TV still drives a lot of, when you look at the Super Bowl example, there has been a lot of articles written about those even to market apps were insanely efficient, so it's big, big, big budgets, obviously. You have to factor in creation and then put the budget to put your TV ad live, but they are still efficient. But it's only reserved for brands who have the large budget to do it.

There is one that I didn't mention, it's video ads. It's the same thing as push marketing or display or it's just a different type of content. Turns out that content is working really well today, so that's one thing to consider.

The way to set up the right budget for those channels is, again, I try to think about obviously you are going to prioritize what's not costing you anything, so you need to make that a top priority, and then second if you go to paid, go for pull marketing SEM before you go to push marketing. So what is the right budget to allocate to those channels? It will very much depend on the channel by channel basis. I think the objective when you test a channel is to make sure that you are getting a learnings on your creatives and learnings on the creatives that you are putting out there and you are getting users into the door that are of value.

So those are the two learnings and those need to be the two objectives when you go out and do a test. So if you want to have those learnings and you are really serious about it, on Facebook it's going to be between 5k to 10k. On Search, it's going to be a bit less, because you are able to be even more targeted. So it depends on the channels, and so you just need to research a bit and make sure that you have enough learnings from those. So you can't allocate a too little budget because maybe it's because your ads didn't get actually delivered on Facebook. That's the big problem when you set really minimum budget, no one sees your ads. So it's not that you failed and users were not interested in your products. It's that they didn't see the ads or it turns out you didn't use the right creative, so people were not clicking on the ad. So you need to make sure that you A/B test the ads. So things like that, the minimum budget and the way to go about testing, that's important to keep in mind.