Fear-mongering around the end of Facebook and Google ads is, in essence, the “boy who cried wolf” of the ecommerce world. For every guru’s declaration that the Facebook/Google ad arbitrage is over, there’s an equally influential voice yelling about multi-million dollar ecommerce exits fuelled exclusively through traditional search and social ads. As with most things, however, the answer to efficient customer acquisition lies somewhere in between these two poles; Facebook and Google definitely aren’t obsolete, but they also aren’t the panacea for ecommerce growth that they once were. In most cases, traditional search and social ads are still the most efficient tools to begin customer acquisition. But as Shopify continues to democratise access to DTC ecommerce, auctions for CPMs get more expensive, and the landscape for consumer attention gets increasingly noisy, the most successful operators are realising that efficient scale comes from a diversified growth engine – not blindly scaling ad spend. You need to efficiently acquire customers across a variety of channels. If ad spend on Facebook and Google is the “new rent”, where do operators turn when they want to do more than just keep their doors open?
Diversify to other paid channels
The easiest way to wean off Facebook/Google as your sole source of traffic is by first diversifying to other paid acquisition channels. Although this is a short-term solution that doesn’t solve the broader concern of increasingly competitive ad space, it’s surprising how many ecommerce operators aren’t experimenting with other paid channels like Snapchat Ads, Pinterest Ads, or Bing Ads. None of these platforms are as comprehensive as Facebook or Google, but each can be incredibly effective (and cost-efficient) in certain niches. Beyond these options, although TikTok’s ad platform is still in a closed beta state, one tool to generate and scale the UGC (user-generated content) style of content typically found on TikTok is through “Hashtag Paid”. This idea of “whitelisting ads” allows you to work with an influencer to create a UGC style ad, then run the ad to your chosen landing page through the influencers’ account – allowing you to get the warmth of an influencer post, but the scale of traditional paid ads.
Become a media company in your niche
In the same way that Shopify is democratising the ability to create an ecommerce store, the internet itself has democratised the ability to create a content platform. It’s a classic Catch-22: right now, any aspiring creator can blend together Twitter, a blog, and a podcast, and with a few lucky bounces become a top content creator. But, as it gets easier to distribute content and more and more aspiring creators do it – you enter a landscape where even though it’s easier than ever to begin creating content, it’s more difficult than ever to scale it. To paraphrase the famously contradictory announcement of a new monarch: content is dead, long live content! So in this sea of dime-a-dozen content – especially when there are far fewer barriers to paid acquisition – it’s natural for an ecommerce operator to hesitate prioritising an organic traffic strategy.
To justify beginning an organic traffic strategy today, as a thought experiment, let’s fast forward a few years into the future of ecommerce. It’s not a stretch to imagine a world where similar to content creation today, the barriers to ecommerce have diminished to a point where it’s incredibly easy to begin running paid ads, but more difficult than ever to scale them. It could be argued that we’re there already. So what then? As a consumer, if you’re faced with several seemingly equivalent paid offers, how’re you able to decide which to choose? Barring easily copied conversion tactics like free trials or free returns, the great equaliser is trust. Given multiple seemingly equal options, the brand that a consumer is able to trust is likely the one that will capture the share of their wallet. That’s why your content strategy is invaluable: creating valuable, tailored, free content today is your onramp to creating trust years from now, in a world of even more intense competition.
Our specific assertion is that effective ecommerce operators need to niche down and create a media strategy – not a content strategy. The terms “content” and “media” sound synonymous, but for the sake of this article we define the former as individual pieces of output (i.e. a prospective customer sees your viral TikTok video), whereas the latter is a cohesive collection of output (ie. a prospective customer wants to learn about a topic, and you’re the thought leader that they always turn to). The most successful organic traffic machines are companies that become a media company within their niche.
In order to create a media company around your niche, you first need to understand what’s important to various ideal customer profiles. But remember, the objective is to become a source of truth that they continue to turn to for a very specific need. Are there particular problems they’re looking to solve? A good example of this is GoChirp – they create media in the form of a weekly newsletter and an ebook that specifically tackles tips and tricks to defeat back pain. Once a customer has exhausted all of their free content, the next logical step is to use one of their back-relief Chirp wheels. Alternatively, is there a specific idea that your customers want to learn more about? Remy Sleep, for example, sends out weekly “Sleep Well Wednesday” emails that overview sleep studies, sleep resources, and tangible tips to fall asleep. Once a reader has absorbed all the sleep-related value they can from the newsletter, the next logical step is to try Remy’s weighted blanket. After you’ve understood what content your prospective buyers are searching for, you can then choose the distribution channels that suit your brand the best – a podcast, a newsletter, a blog, guest posting, etc.
Ultimately, the objective here is to attract traffic by consistently create free media that current and prospective customers choose to consume. If implemented correctly, the impact of this free media multiplies through word of mouth, ranks you for specific search terms, and builds long-term trust in an industry that has – so far – over-relied on impulse purchases.
Monetise the back-half of your customer life cycle
As it becomes increasingly expensive to turn cold traffic into paying customers, effective ecommerce operators need to offer and extract value in the back half of their customer journey. People often forget that one of the reasons that direct-to-consumer ecommerce is such a transformative distribution channel is because, as the namesake suggests, the business directly owns a communication medium to the customer. If you sell products on shelves at a big box retailer, you don’t usually have the luxury of capturing the email or a phone number of your purchaser. Long-term lifetime value of your customer is created on the back-end of the customer journey: you’re leaving significant money on the table if you’re not spending time on retention and repurchasing after the initial sale. The classic DTC email marketing playbook: weekly product updates, sales updates, and new product releases are still incredibly effective here. However, as email inboxes get noisier and noisier, brands need to find creative ways to create new, relevant offers and deliver those offers via effective distribution channels. It’s difficult to offer advice on creating new offers because that is largely contingent on your niche, but there are several back-half distribution channels that are criminally under used: Facebook groups, Facebook Messenger marketing, affiliate programs, Discord channels, and SMS marketing all come to mind.
Explore b2b channels
With all the (well-deserved) euphoria around ecommerce as of late, it’s important to remember that direct-to-consumer is still only a single channel of growth in the life cycle of a retail business. Although admittedly, it’s a channel of growth that allows you to connect with consumers quicker and more efficiently than ever before, ultimately it’s still just a fraction of a far larger market: B2B ecommerce. Some estimates place B2B ecommerce as 6x the size of the B2C space, as of 2019. Historically, B2B ecommerce has proven an incredibly difficult channel of growth to tap into due to a perfect storm of legacy technology, cumbersome purchasing processes, and slow-moving buyers. But as barriers to B2C ecommerce continue to diminish, B2B channels are being forced to evolve so that they don’t miss opportunities as more and more B2C brands innovate on legacy product categories. You can explore technology partners like Convictional Commerce or Stedi – both will allow you to speed up the process of connecting with B2B buyers, and ultimately stock your products in retail locations that typically aren’t available to digitally native consumer brands.
In an industry that’s moving as fast as direct-to-consumer e-commerce the only constant is change. The tactics that are effective today such as Facebook and Google won’t necessarily be effective as buying patterns continue to evolve. This article isn’t meant to be a prescription, nor is it an exhaustive list of growth channels. Instead, the intent is to get ecommerce operators thinking about the next phase of direct-to-consumer e-commerce. As brands like Outdoor Voices and Brandless have demonstrated, over-relying on paid acquisition with broken unit economics just doesn’t cut it anymore! Whether your goal is to pivot towards an exit, scale into a lifestyle business that you can run on autopilot, or build into the next 100-year brand, every possible end goal is damaged by over-relying on a single source of growth. Even if you’re profitable on your paid acquisition channels today, there’s no excuse to not build a diverse growth engine that’s ready for a tomorrow where that’s no longer the case.