When we started our careers in social marketing, Facebook had one ad unit - the right hand rail ad. Newsfeed ads didn't even exist. Bidding was all CPC based and oCPM was a big deal when it was rolled out.
Cut to 12 years later and Facebook is like an all-in-one printer for marketers. It gets the job done but you’ll be mad at it about once a quarter.
As such, nearly every business has a place on social but clearly the expectations should be different based on the offering. Inspired by nearly *every non-fiction book or business case study, dysrupt has built a helpful organizational model for social marketers.
We organize the world of 8 million advertisers based on two criteria, scale and feedback loop.
Let us provide a brief introduction to our four quadrants of marketers on Facebook.
These are the advertisers that grab headlines and are constantly referenced by your Facebook reps. Largely dominated by eCommerce and Gaming, these businesses have 8 figure plus marketing budgets on Facebook alone. Why? Because they are kings and queens of their first party data and can ensure their marketing is ROI positive on an hourly or worse, daily basis.
This is the hardest quadrant to exist in because everyone’s problems are slightly different and unique. Adherence to best practices get you into The Wild West but they don’t allow you break free. Competition is intense. Turning your marketing into a competitive advantage and pursuing growth hacks - including funding - will quicken your journey.
Businesses that exist in this space can be widely profitable and large or just starting out. To extend the analogy, the mansions or the starter homes of the area.
The defining principle of suburbia is that the Total Addressable Market, TAM, is relatively small. A small market does not mean that marketing on social isn’t worthwhile, it does mean that realistic expectations need to be understood.
Businesses in this quadrant are varied but share a characteristic that they are not vertically aligned. They have a 1st party data issue on tying their marketing to sales. The often quoted, “half the money I spend on advertising is wasted; the trouble is, I don't know which half” is actually relevant in this quadrant as feedback loops are cumbersome.
A unique feature of middlemenistan are the businesses that remove these middlemen become unicorns: Netflix, Glossier, Tesla, Cash App, etc. all identified middlemen in their industry and went direct-to-consumer with a product or service. E.g. Glossier could have sold via Sephora and Ulta like many in the Beauty space but went direct to consumer to increase the feedback loop and 1st part data of their business. Tesla removed the independent dealer layer in their business model. Netflix is now launching movies in theaters after amassing a huge 1st party data set of releasing content direct to consumer.
We will be doing a series of write ups around this break out in 2021. For a final thought exercise we mapped out some typical paths businesses take as they move through the chart.
*The authors have a theory that to publish a book for the business minded reader, a 2x2 grid is a necessity. They are aware that no 2x2 grid is 100% accurate. The goal of this exercise is to provide a short hand to the market that can explain 85% of circumstances. Because of some psychological bias, most readers will think they are in the 15% cohort.
**In Black Swan Nassim Nicholas Taleb constructs Extremistan and Mediocristan to help illustrate his points around different distributions. We were inspired but the names are subject to change 😃