When is the Right Time to Diversify Your Marketing?

There’s no question — Facebook and Google run the show for early stage B2C acquisition. Practically every DTC brand starts their marketing journey on these platforms, and once you start, it becomes very hard to wean yourself off. They have excellent analytical tools, strong demographic targeting, and great audience depth. These platforms are a good way to get your business going in the early days and to start ramping up growth.

The problem with these platform, however, is that they don’t scale efficiently beyond a certain point. They have sufficient depth to offer low CAC and efficient acquisition for months, and sometimes years. However, we’ve seen time and time again that once a brand enters 8-figure revenue range, audiences begin to saturate and CACs begin to rise.

Given this inevitable outcome on these platforms, a brand is smart to start diversifying channels earlier in its life before CAC hits the scale-wall. We’ve seen too many brands get hooked while things are working, and not think ahead to when the big two will inevitably sour. The result is rapidly rising CACs and nowhere else to put ad dollars, yielding unprofitable growth (or flattening) while founders scramble to find other channels with similar efficiency.

We typically advocate that a good time to start exploring experimental channels is when a brand crosses the $2M revenue runrate mark. Too far before this, new channels can be a distraction. Too far after this, brands get caught flatfooted if Facebook or Google hit a bump.

Once a brand crosses this point, it should start testing new channels with small budgets. It’s important to get a relative sense for CAC across different channels early and to start to catalogue everything religiously for future reference. If a new channel is working, lean into it slowly to get an ongoing sense for depth.

It takes a while for these new channels to yield returns like you might see off-the-bat on Facebook or Google. You have to be patient and meticulous, consistently A-B testing your copy across channels until you find the best strategy to make it work (or move on to another channel).

Here are some channels we’ve seen brands branch out to effectively starting at this stage:

• Influencer: It’s often more effective to pay micro-influencers with strong connectivity to your relevant sub-communities than paying up for a mega influencer.
• Content: Content marketing can be a very effective tool to drive eyeballs to your marketing sites. Good content starts with identifying a hole in topics related to your product, and then regularly publishing articles (with good SEO) to have your audience find you organically. A good content library takes a long time to build up, but can pay huge dividends down the road.
• Radio / Podcast: There used to be more of an arbitrage here, but a lot of startups caught on. You can still likely find some attractive CACs in your local market, or in content that relates to your particular audience.
• Out of Home: This channel has a ton of depth and takes many different forms — from billboards to subway stations. If you’re creative and patient, you can sometimes find remnant inventory and buy at a discount (particularly toward the end of each quarter). The biggest issue with this channel is lack of attribution. However, it can be very effective for building top of funnel and brand awareness.
• Affiliate: If you have a product that lends itself well to reviews, affiliate can be a good channel. Pay for a write-up in Business Insider or Forbes and your audience will view you as “credentialed.” These write-ups also provide great copy for future ads.
• Non-obvious Display Ads: Depending on your product and category, there can be cheap ad inventory on sites that resonate with your audience outside the mainstream. Find niche blogs, forums, and communities where your audience hangs out and spread the word there. These networks allow you to be a much bigger fish in a smaller pond.
• Television: TV is usually a channel that folks branch to later than others. It’s expensive to create good commercials, and it’s really expensive to get good inventory on mainstream channels. However, depending on the product, brands can sometimes get creative with local programming or more niche broadcasts to drive strong CACs. This channel has one of the deepest audiences, and it almost always takes time to build into.

The above are just a selection of some channels we’ve seen companies expand into effectively in the early days. Not every channel will work for every brand, and it’s the founder and CMO’s role to figure out what works best for each product. However, the benefits are massive if you start experimenting early and have a bench of options.