The Equation for Effective and Efficient Marketing, According to Bond’s Internet Trends Report
The Meeker report has arrived; among tremendously detailed graphs and charts lies a simple equation for successful marketing.
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The definitive report has arrived. Mary Meeker, general partner at Bond Capital and referred to in some circles as “Queen of the Internet” delivered a stunningly comprehensive 333-slide report at Code Conference 2019.
In it, she shared key data points designed to uncover the state of the internet today. And within the report lay an equation for effective and efficient marketing. We’ve broken that equation down here, along with examples from the report and supporting stats. But don’t let this be a substitute- we still recommend exploring the full slide deck in all its stunning detail.
Who Are We Dealing With, Exactly?
First, a definition of scope. When we’re talking about internet users, as is often the case in Meeker’s deck, at its broadest point we’re talking about half the globe. “Some 51 percent of the world — 3.8 billion people — were internet users last year, up from 49 percent (3.6 billion) in 2017,” Vox shared in their summary of the deck. With that said, “growth slowed to about 6 percent in 2018 because so many people have come online that new users are harder to come by.”
This slow growth of internet users mirrors the slowing growth in internet advertising. Early in the report, Meeker and the report’s other authors share, “While E-Commerce continues to gain share vs. physical retail, growth rates are slowing. While Internet advertising growth is solid & innovation is healthy, there are areas where customer acquisition costs may be rising to unsustainable levels.”
For this reason, the report spends a good bit of time highlighting its equation for effective and efficient marketing—strategies that can mitigate the high cost of customer acquisition:
Effective and Efficient Marketing = One’s Own Product + Happy Customers + Recommendations
One’s Own Product
It should be no surprise to anyone that a solid product is key to effective and efficient marketing. Especially in a world so hyperconnected as ours, a poor product or a poor experience will be quickly exposed. Meeker bears this out with the help of a 2BrightCove and YouGov survey that indicated a free trial or tier for a product was the most commonly cited reason for trying a new service (42% of participants). Claims of excellence aren’t enough; they need to see it for themselves on a consistent and common-use basis.
And this model can bolster the rest of the business if deployed correctly. Spotify CEO Barry McCarthy, cited in the report, says of Spotify’s freemium tier, “Our freemium model accounts for about 60% of our gross added premium subscribers.” This combination of ad support and subscription has worked wonders for the leaders in streaming music: “the ad-supported service is a subsidy program that offsets the cost of new customer acquisition.” When people can see the product or service and incorporate it into their daily lives before paying, business can soar.
Another service with a freemium model, Zoom, has harnessed the power of creating an experience that users love so much, they’re happy to pay for it…and evangelize for it in the process. Videoconferencing’s occasionally shaky reputation means that people want to try a service and have a good experience before investing. Founder Eric Yuan understands this, and built the experience accordingly: “We really want to get our customers to test our product…it’s really hard to get customers to try Zoom without a freemium product.”
If Zoom’s valuation and subsequent debut as a publicly traded company is any indication, the strategy works. Says Yuan, “we make our freemium product work so well…if they like our product, very soon they are going to pay for the subscription.” He and his team understand the cost of generating new leads can be offset by ensuring existing customers are happy, and so they conduct themselves in a way that ensures this.
Another key element of Zoom’s happy customer strategy? Recommendations. People who had good experiences with the product, who then in turn evangelized about their experiences. Stitch Fix founder Katrina Lake was cited in this report about the power of recommendations to their business: “What’s really special for Stitch Fix is that 100% of what we sell [through the utilization of stylists] os based on recommendations.”
Even absent a system of professional consultants, recommendations have been key in the proliferation and success of subscription boxes; a McKinsey report on E-commerce consumers reveals that recommendations are the most popular way (23%) people opt-in to these experiences. What makes your product or service recommendable? Do you have mechanisms to make that process easy? Considering these questions as an integral part of your marketing strategy can make it more sustainable and less costly.
The Known Unknowns
And speaking of questions: despite the extraordinary wealth of information contained in Meeker’s substantial deck, the report acknowledges two variables that could impact the future of effective and efficient marketing. The first, which we’re talking about with increasing regularity, is the impact privacy changes will have on ad targeting. As high-profile data breaches make consumers wary about trusting companies with their data, and as legislation changes the level of access companies have to data, the ability to target may change. And yet, I sense that the ability to enact this formula will remain largely unchanged. Finding the customers who need what you’re making may be different from what we’ve grown accustomed to, but building a strong product for people who like it and are willing to share their experience will remain intact.
An additional question exists for Meeker and Bond about digital TV-based ads for smart televisions, and the impact of second-screen viewing, on ad targeting. Given that 88% of TV watchers are utilizing a phone or tablet to interact during their TV watching, and 71% are looking up things related to what they’re watching, how can marketers capitalize on this new reality? There’s clearly strong potential for adept brands and organizations to get their good products in front of people, forge connections that endear them to new customers, and drive recommendations. And with any luck, strong examples of these strategies will be within the slides of Meeker’s huge—and hugely influential—report next year.
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