I’m sorry, I might have exaggerated. I’m sure you’re not an idiot. But, since you’re reading this, the catchy title worked, didn’t it?
Actually, this post should have been titled something along the lines of “The advantages of being an early adopter in advertising,” but then someone made me change my mind, summarizing in a few words the core idea of this post. It was Mark Cuban on Shark Tank.
Talking with an entrepreneur, he said: “First come the innovators. Then come the imitators. Last come the idiots” (probably a Warren Buffet quote). In the advertising and online marketing space, there are countless proofs of this natural progression where new, good ideas can go badly wrong. Whenever you read or think about a new, exciting, marketing strategy, you should understand where in the progression you are.
The lifecycle of advertising channels
A picture is worth more than a thousand words:
This picture (slide by Stan Chudovsky, picture by Gleb Budman) shows the effectiveness of advertising channels in the last decade. As you can see, there is a pretty quick warm-up period for each channel.
This is where the innovators are: Discovering new channels and figuring out how to make them work. At first, the ROI is not great, but this is quickly made up for by the significant cost effectiveness obtained when one becomes more proficient and the new platform improves. This warm-up period has become shorter and shorter over the past few years. Have a look at how steep the curve is for Facebook Ads.
Shortly after the imitators arrive, they figure out the strategy used by innovators and replicate it, sometimes improving it. They have missed out on the period of maximum cost effectiveness, but they are still likely to get a pretty good ROI for a decent amount of time. However, as more and more imitators come on board, the channel starts to get too crowded (and sometimes it even collapses, such as with MySpace), prices go up, competition is fierce, and requires high-level skills to achieve results. The channel will then stabilize with a slow, but continuous loss in cost effectiveness.
And here come the idiots, late in the game because big money has already been made by others. Most of the time, they just waste money trying to replicate others’ success they heard about on blogs — and they usually fail. Even if they don’t, the time and effort involved is massive, often requiring external consultants and, in the end, the return is limited.
Human Curiosity and Banner Blindness
It’s not just competition or market size that influences the effectiveness of an advertising channel over time. It’s also the human brain. We’re curious creatures by design. When something new comes out, we are curious about it. But, as soon as the new cool thing becomes well-known, Banner Blindness kicks in.
This is a phenomenon where a website visitor consciously or unconsciously ignores banners and anything banner-like. Their brain totally filters out banners and what used to be a killer marketing tactic quickly become a money waster. Let’s see some history:
This is considered the first banner ever. It was published in October 1994 to promote AT&T on HotWired.com. Guess what the Click Through Rate was? An astonishing 44%. No one had seen a banner before and everyone clicked on it! AT&T was so skeptical about this new kind of advertising, they didn’t want to insert their logo in it!
Today’s average Click Through Rate for a display ad is around 0.1% … go figure out the cost effectiveness for innovators and imitators back in 1994. That day in October 1994 began a never-ending cat and mouse game between advertisers and users, a game that generated huge revenues and some of the most ugly creatives in computer history. Let me refresh your memory:
Good old times! They look ridiculous nowadays, but when they were first used, these banners had crazy Click Through Rates. People genuinely believed that the first banner was a Windows’ alert and clicked on it.
Then, once everyone and their mom started using these creatives, users realized it was just “spam” and stopped clicking the ads.
This games continues today on Facebook, Twitter, and many other advertising channels. Just think at your News Feed. Until a couple of months ago, everyone was using memes to create engagement or publishing things like “SHARE if you agree, LIKE if you disagree,” driving thousands of social actions to totally useless, crappy posts. Jon Loomer, recently wrote a very good post on this subject.
Then, users developed blindness to these tactics and Facebook reacted by identifying and penalizing them. Of course, idiots are still using them, while innovators are already testing new tactics to catch the users’ attention.
How To Be an Innovator, Not an Idiot
Ah… that’s tough, but let’s try. A few tips may not make you an innovator, but you may become a good (and profitable) imitator.
1) Be curious
The common trait of all the innovators is curiosity. Keep asking yourself questions like “What would happen if I did this?” Don’t assume anything, always test everything. Invest a little budget, but keep trying new things. Most of the time you’ll fail, but sooner or later you’ll get it right and open a new unbeaten road.
2) Be data driven
Curiosity is the spark that will make you test new, amazing advertising strategies, allowing you to succeed and be able to quickly identify dead end streets from fast, scalable highways. With every experiment, set your goals and pick the key metrics that you’ll use to define success.
And if you don’t think you can be an innovator yet, at least try to be a great imitator!
3) Be a good observer
Check out new trends and spot them as they start to happen. You don’t need to know hidden information or be part of elite, secret groups. Advertising and marketing are all around you, every day at any time. Just look carefully and take actions immediately. Remember when you first thought, “Wow, this ad is for the same exact product I was checking out 10 minutes ago“? It was probably in the early days of retargeting. If you started using it back then, you’d have made a pretty good deal.
4) Follow the right people
We all have too little time in our days and there are way too many wannabe-gurus out there to follow them. The article with a “great” marketing idea you just read 10 minutes ago was probably written in 10 minutes, copying another post that was copied by another post from a real innovator. In the process it lost 80% of its value. Use tools like BuzzSumo to identify the few genuine sources for the hundreds of blog posts that are written every day on every single topic.
Here are some good indicators to understand who’s worth following:
- Their contents are data rich. This means they actually researched the topic and ran experiments — they’re not just writing about something a friend told them
- Great Twitter followers/following ratio. They have thousands of followers but they only follow few hundreds people (a.k.a. they didn’t use scripts just to inflate their followers base).
- They’re not famous because they’re famous. They’ve built or are building successful online businesses (think of Rand Fishkin with Moz, Sean Ellis with Qualaroo, Neil Patel with KissMetrics & Crazy Egg)
- They don’t blog every single day. Quality takes time, and there’s a limited amount of great topics you can think of at any time. Beware of people posting every single day.
Oh wait, one more things, they’re all bearded:
Well actually Jon Loomer is not, and yet he’s a great Facebook Ads blogger anyway 🙂
5) Watch out for the flood of ebooks and courses
When you see that every “guru” on the planet is starting to sell an ebook or an online course on a topic, chances are the tactic has already been over-abused and all the innovators and imitators are now making more money teaching it to idiots rather than using the tactic to make money themselves.
6) Stop reading about it and f***ing test it!
Reading another article about whatever marketing tactics you would like to try won’t add that much value and will make you loose precious time. Stop reading the thousandth article about landing page optimization explaining how a dog food company increased its conversion by 200% and start actually testing the landing page of your high-tech, SaaS startup!
And finally, some data (so I don’t look like an idiot)
Well, after what I just wrote, I couldn’t avoid throwing some data on the table!
Just a little more than one month ago, we told you to keep an eye on Facebook’s right column ads as they were going to change the design with bigger images and would have likely caused a spike in performances. Want to know how it played out? Here’s a quick analysis on right columns ads created with AdEspresso in United States:
|June 1st – June 20th (old format)||2,376,400,767||2,015,754||0.084%||–|
|July 1st – July 20th (new format)||1,590,837,482||2,039,426||0.128%||+52%|
The new format defeated banner blindness and in a matter of days the CTR of those banners had a 52% increase. I’m pretty sure that fast forward a year from now the new format will be back to performances comparable to the old right column ads. But those who immediately jumped on board and started using the new format as it was introduced are benefiting from it, right now!
Facebook mobile app install ads are another great example. They were introduced before we launched AdEspresso so I don’t have internal data to show you. However just look at this old Quora thread. Lots of advertisers are claiming Costs per Install around $0.30 and $0.50. Today, the average price for a mobile app install is often north of $2. It’s still an effective channel, but it has become more expensive on average and awesome results require really high-level skills.
What about you? Did you have similar experiences? Share that time you were an innovator and had amazing results in the comments below!