Do you spend your marketing budget on digital advertising?
If you do you'll have seen the cost of those ads going up, factor in circa 50-70% of that budget is probably going into the pockets of ad tech fraud then the cost of you trying to recover the upfront customer acquisition cost are getting to near unsustainable levels.
Digital advertising exists as an open marketplace in which any digitally-fluent player can launch a far-reaching campaign – and do so relatively cheaply. Digitally-native vertical brands (DNVBs), in particular, revel in the instant gratification of marketing direct-to-consumer through online channels – and for good reason. These brands can own the entire funnel (and a goldmine of data!) to track every consumer detail – down to the exact cost it took to capture the customer.
This approach is driven by a fixed mindset, because this is what we have always done, when the internet came along companies simply shifted their 'advertise and promote' thinking into the digital landscape, something they are now doing in even greater numbers than ever across social media channels.
With the influx of D2C brands (and their inevitable competitors) playing fast and loose in the digital ad space, more dollars are needed to compete for the same impressions. As a result, CAC has reached a point where it’s outpacing customer lifetime value (LTV). This means the total amount a customer spends with a brand is less than the cost it took to acquire them, when calculating the marketing resource costs (effort and ad spend).
Social media isn't really designed for those intrusive ads, why, because when were on 'social', we just want to be social, but from what we can evidence it seems that brands are happy to have circa $100 Billion of those ad dollars going into the pockets of ad fraud.
There is an alternative - ask me how?
For those digital brands with direct-to-consumer (D2C) sales models, online marketing is the lifeblood of growth. From targeted social to paid search, digital campaigns have proven an efficient and measurable way to build direct relationships with customers. But at what cost?