How to do 'Moneyball' Marketing - aCommerce Tech in Asia Jakarta 2015

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PAGE 1 Moneyball Marketing Sheji Ho, Group CMO | November 2015 Tech in Asia Jakarta 2015

Transcript of How to do 'Moneyball' Marketing - aCommerce Tech in Asia Jakarta 2015

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Moneyball Marketing

Sheji Ho, Group CMO | November 2015

Tech in Asia Jakarta 2015

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Source: http://marketergraham.com/pmcam-product-market-fit-is-not-enough

Before growth… taking a step back

01 Product-Market Fit

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Product-Market Fit (Ellis, Blank, Andreessen, Ries)

Source: http://www.startup-marketing.com/the-startup-pyramid

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• $400m VC investment (Benchmark, Sequoia, Softbank, GS, Yahoo, etc.)

• Raised $375m in IPO, valued at $4.8b USD

• Cumulative revenues of $395k; losses of $50m at IPO time

• $1bn order for high-tech warehouses

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“Instacart and Postmates are both avoiding the infrastructure model mistakes. They are leveraging the existing infrastructure of grocery stores, not building their own infrastructure.

They focus on two areas, delivery and customer service, and concentrate their resources on excelling in those departments.”

http://techcrunch.com/2013/09/27/why-webvan-failed-and-how-home-delivery-2-0-is-addressing-the-problems

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https://medium.com/backchannel/why-homejoy-failed-bb0ab39d901a

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https://medium.com/backchannel/why-homejoy-failed-bb0ab39d901a

“We were spending a lot of money to acquire them, but not really retaining them.”

“By the time the founders began to explore strategies for improving service and alternatives to Facebook ads and Groupon bargains to yield higher retention rates, it was already too late.”

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https://medium.com/@dunn/start-up-drugs-922fdc3a57c8

“Spending a lot of money on paid marketing is a great way to scale a bad business.”

– Andy Rachleff, Co-Founder, Benchmark Capital, WealthFront(Ironically also invested in Webvan)

Start-Up Drugs

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https://medium.com/@dunn/start-up-drugs-922fdc3a57c8

“Once the dust settles, as you look more closely, you will find you are acquiring worse and worse cohorts of customers. In many cases, to make the advertising really sing, you are running promotions and deals that erode your margin and your brand.”

– Andy Dunn, Founder and CEO, Bonobos

Start-Up Drugs

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http://avc.com/2015/07/growth-vs-retention

Growth vs. Retention (Fred Wilson)

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Ashley Madison – 80% annual churn

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Monthly churn rates by cohort

Credits: https://twitter.com/pat_pwt

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“Product-Market Fit” for Ecommerce

1. Price

2. Product offering (range, depth, exclusivity, proprietary)

3. Payment options

4. Delivery – options, speed, price/free

5. User experience

6. Customer service

7. Brand

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Which one will you buy?*

02 Ecosystem

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“We are not fit to lead an army on the march unless we are familiar with the face of the country–its mountains and forests, its pitfalls and precipices, its marshes and swamps.”

– Sun Tzu

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Web 1.0 – “Homepages”

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Web 1.5 – “Self-publishing/blogging/UGC”

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Web 2.0 – “Social Media”

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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

US Thailand Indonesia

SEA skipped Web 1.0/1.5

Web 1.0 – “Homepages”

US: 30.1%TH: 1.1%ID: 0.3%

US: 61.7%TH: 9.3%ID: 2.4%

US: 75%TH: 20%ID: 5.8%

Web 1.5 – “Self-Publishing/Blogging/UGC”

Web 2.0 – “Social Media”

Source: World Bank

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Long Tail (Chris Anderson)

• E-commerce (Amazon)

• Advertising (Google Adwords, Adsense)

• Publishing (blogs, crowdsourcing, YouTube, etc.)

• New: Logistics (Uber, GoJek, Postmates)

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Long Tail / Pareto distribution in Publishing

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Source: http://gapingvoid.com

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“No Tail” in SEA because it skipped Web 1.0/1.5

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Chicken and Egg Issue

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No-Tail implications on ecosystem in SEA

• Relatively simple ad tech environment

• Affiliate marketing still nascent

• Demand-side platform (DSP) market still nascent

• Accelerated development and proliferance of e-commerce and other non-ad based business models

• “Traditional” digital agencies’ scope reduced to executing global contracts and buying offline media (in US, these agencies still have a role to play due to complicated ad tech environment)

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“Running programmatic display advertising in most of Southeast Asia is like buying a Lamborghini but driving it in the traffic jams of Jakarta”

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Reading Tea Leaves

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1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

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China skipped Web 1.0/1.5 too!

Web 1.0 – “Homepages”

US: 30.1%TH: 1.1%ID: 0.3%

US: 61.7%TH: 9.3%ID: 2.4%

US: 75%TH: 20%ID: 5.8%

Web 1.5 – “Self-Publishing/Blogging/UGC”

Web 2.0 – “Social Media”

Source: World Bank

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Accelerated development and proliferance ofe-commerce and other non-ad based business models

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Accelerated development and proliferance ofe-commerce and other non-ad based business models

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Accelerated development and proliferance ofe-commerce and other non-ad based business models

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Limits to monetization through ads in Southeast Asia

Launched sticker set, after one week:• 5M followers• Block rate = 41%• Open rate = 0.2%

03 Product-Channel Fit

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Shiny Object Syndrome (Traditional Agencies)

http://creativity-online.com/work/dominos-emoji-ordering/42507

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Some terminology

• Digital marketing (agencies, brands)

• Internet marketing (old schoolers, e.g. eBay)

• Demand generation (fortune 500 retailers, e.g. Amazon, Apple, Dell)

• Customer acquisition / acquisition marketing (SaaS and daily deals/flash sale sites, e.g. Dropbox, Mint, Groupon, Gilt)

• Growth marketing (new schoolers, e.g. Facebook, Uber)

• Growth hacking (pretentious douchebags)

• Moneyball marketing (the shit)

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The CMO as Billy Beane

“Enter the Moneyballer CMO.

Today’s Moneyballer CMO plans her marketing initiatives the way Billy Beane built the Oakland A’s. She leverages granular data on customer actions to expand beyond the traditional CMO role, influencing product strategy, customer service, and optimized sales pitches.

The Moneyballer CMO still uses smart agencies and consultants, but insources the core marketing strategy using the increased visibility her technology allows. She also insources her company’s data, employing it across multiple platforms and applications. Silos are the enemy of the Moneyballer CMO, because connected data means more holistic and measurable results.”

– Auren Hoffman

http://qr.ae/6CGer

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“The new job title of “Growth Hacker” is integrating itself into Silicon Valley’s culture, emphasizing that coding and technical chops are now an essential part of being a great marketer… The role of the VP of Marketing, long thought to be a non-technical role, is rapidly fading and in its place, a new breed of marketer/coder hybrids have emerged.”

– Andrew Chen

http://andrewchen.co/how-to-be-a-growth-hacker-an-airbnbcraigslist-case-study

AKA Growth Hacker (Andrew Chen)

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http://www.urbandictionary.com

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AARRR Framework (Dave McClure)

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1. Conversion Funnel

2. Channel/Portfolio Management

3. Optimization

4. Email

5. Analytics

6. User Quality

7. People (AKA Moneyballers)

7 Core Pillars of Acquisition Marketing

Snow White and the Seven Dwarfs Framework (yours truly)

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Pillar 1: Conversion Funnel

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Pillar 2: Channel / Portfolio Management

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Pillar 3: Optimization

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Pillar 4: Email

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Pillar 5: Analytics

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Pillar 6: User Quality

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Cohort Analysis… by channel

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“What they don’t do is the more nuanced (hard) work of looking at how the marginal cohorts are declining in value. What they don’t look at is the detailed impact on the quality of that growth, aka the margins and repeat transactions attached to it.”

“Why don’t they do this? Part of it is the systems to look at the data are rarely very good in a start-up. Part of it is you’ll need really talented analysts, a precious resource and often a luxury at the early stage where most people are zapped just keeping the trains running on time. Part of it is even if the systems are pristine and the data is rapidly returned by ready analysts to business (which I’ve not seen three for three at any start-up), it can take twelve to eighteen to twenty-four months to have confidence in where the cohorts are going.”

Pillar 7: People (Andy Dunn again)

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http://www.coelevate.com/essays/customer-acquisition

Shape yourself like a “T” (Brian Balfour)

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Good luck and stay in touch!

Sheji HoGroup CMO, aCommerce

E: [email protected]: +66 (0) 9 2596 5656Skype: sheji_ho

Address:946 Dusit Thani Building, 4th fl., Rama IV Rd. Bangrak, Bangkok,10500 Thailand