Jonathan Martinez
More posts from Jonathan Martinez
It’s been a crazy year in growth marketing, what with the meteoric rise of TikTok, radical iOS privacy shifts and a staggering $240 billion poured into U.S. startups as of September 30.
All of this new money has meant heavier investments in growth marketing throughout 2021. The heavier investments have occurred during uncertain times, with startups scrambling to find ways to measure iOS conversions and unlock TikTok as a new channel.
Last year, I wrote a column on my predictions for 2021, which emphasized creativity being key, the inherent increase in attribution issues due to privacy changes and the power of leveraging influencers. While much has changed in this past year, there is a clear overlap from last year’s predictions with my growth marketing predictions for 2022. I’ll dive deeper on certain concepts like incrementality testing and continued growth in video engagement, while introducing a new prediction on the direction of ad platforms.
Incrementality 2.0
As we face industrywide degradation of data, marketers must become more comfortable with practicing incrementality testing — using controlled tests to understand the effectiveness of growth marketing efforts. As an example, if we wanted to test the impact of our Facebook efforts, we could pause the campaigns and measure the conversion deltas before and after making the change.
That’s incrementality testing at a macro level. But advertisers will need to be more sophisticated now. I like to call this the 2.0 age of incrementality testing. This new age will increase the precision and understanding of growth performance.
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Below is an example on the level of detail that can be achieved:
Multiple test levels
- Channel.
- Geography.
- Ad type.
- Ad format.
Instead of simply testing the incrementality for a channel (i.e., Facebook), imagine testing the incrementality of specific states/countries, ad types such as Facebook Feed or Instagram Stories or ad formats such as Static Images/Videos/Reels. You may see that the Facebook Feed is +20% more incremental than Instagram Stories, which changes the budget you’d want to allocate.
In the above incrementality test example for Facebook, California tops the list at 60% incremental, whereas Florida is a mere 10% incremental. This test tells us that 90% of conversions in Florida would have happened regardless of Facebook campaigns being turned on. Maybe we shut off Florida on our Facebook account in this case — unless it’s a market share play.
The influencer inflection point
While influencer marketing has been a hot topic for the past few years, I believe we’re just getting started and potentially hitting an inflection point. Platforms like TikTok are rolling out their own marketplaces to help connect advertisers with influencers. Many of these social channels are also funneling millions in funding to influencers (i.e., YouTube’s Shorts Fund) to promote the production of content. These are just a few examples of platforms doubling down on their creators with the goal of keeping people on their platform while continuing to generate advertiser money.
For startups getting off the ground and finding product-market-fit, investing in influencer marketing likely isn’t the best tactic. But as growth efforts ramp up, influencers should definitely be added into the mix. This doesn’t require a six-figure investment into large YouTube homepage takeovers, or sponsorships for creators with millions of followers. There are strategies that can be implemented on a smaller scale — investing in micro-influencers (<50,000 followers) — that can still pay huge dividends.
As channels continue to invest in their creators over the next year, it will inevitably create more growth opportunities for startups.
The year video ads scale
Native TikTok, Instagram Reels and YouTube Shorts all hint at increased user engagement with videos across social media platforms. According to App Annie, the average TikTok user spends an average of 24 hours per month on the platform. For growth marketers, this means more resources should be allocated for being creative and producing video assets.
One of the most effective video themes over the past year has been user-generated videos. Tactics such as “white-labeling” on Facebook/Instagram (a method of pushing ad spend via an influencer’s account handle) have made video testimonial ads look even more native.
In 2022, large companies will leverage user-generated videos in their portfolio of assets. The lines between UGC and brand assets will continue to blur, as companies make larger shifts to more organic and native-feeling ads. Opinions are polarizing on this subject because of fake sponsorships, but I see this as a way for creators to promote the products they like while getting paid.
Where channels are headed
Uncertain months of endless scrambling would likely be the best way to summarizing the past year for paid channels like Facebook. They’re all navigating new territory with the degradation of data being accelerated by Apple’s privacy changes, and the government and other bodies enforcing privacy restrictions against data sharing. The residual effects are pushing paid channels to keep users on their platforms so conversions can be tracked.
I believe we’ll start seeing heavy investments by Facebook and other social media platforms to keep users on their platforms, where they will still have access to first-party data. Think in-channel shopping experiences and integrations with Shopify, where you sign up on the channel itself. By doing this, channels will retain user-level insights that had been stripped away over the past year. This will provide growth marketers with the precision targeting and reporting capabilities they’re used to having.
Adtech x AI
Over the last year, there have been massive investments in the adtech space, which shows how much VCs understand the importance of this space for the future of growth marketing. According to a report by Luma, deals in adtech are increasing, and rose 174% in the second quarter of 2021 from a year earlier.
Of all the platforms being spawned, ones that use artificial intelligence is one I’m keeping a close eye on for the time-saving ability it provides growth marketers. A few examples I’ve come across recently include CopyAI, which generates marketing copy automatically, and Marpipe, which helps create thousands of creative variations for testing. I expect to see more platforms that help expedite testing and experimentation.
We’ve seen artificial intelligence benefit many industries, and it’s finally creeping its way into growth marketing.
Wrapping up
I managed to get through this entire column without mentioning the metaverse/web3 once, which is something I’m very curious about. I firmly believe my predictions over the next few years will include more on this subject.
The beauty in all of these new challenges is that they are forcing new growth marketing strategies and creating an elevated and separate space for those who do it right.
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