This Is Marketing: You Cant Be Seen Until You Learn to See

The sustainable direct marketing funnel
There’s a special case here, a funnel that is now sought after by the millions
who buy ads from Google and Facebook.
In 2017 these two companies took in more than a hundred billion dollars,
about half of all the money spent on online advertising worldwide. And just
about all of those ads were measured, and all of them involved the funnel.
Spend a thousand dollars on online ads that reach a million people.
Get twenty clicks.

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That means that each click cost fifty dollars.
Those clicks go to your website. One out of ten turns into an order.
Which means that each order cost you five hundred dollars.
If you’re fortunate, in this business we’re describing, the lifetime value
of a customer is more than five hundred dollars, which means you can turn
around and buy more ads to get more customers at the same cost. And do it
again, and again, with all the ads paying for themselves. Magic!
Of course, the vast majority of your profit is going straight from you to
the place you’re buying the ads, which is why those two companies are so
extraordinarily successful. They’re skimming the profit off the top of just
about all of their advertisers. Google might make a hundred dollars per sale
in profit, where you, the advertiser doing all the work, are making just ten
dollars.
But you can live with that, because the margin on that next sale is still
positive. Since you come out ahead, it’s easy to buy more ads.
And the funnel ratchets forward.
This is the direct marketer’s dream. It’s advertising that clearly pays for
itself. It lets you scale. You can measure what’s working, do it again and
again, and grow.
It’s worth noting that very few organizations do this math carefully.
They’re spending and praying, hoping it all comes out in the wash.
But if you’re careful and alert, you can begin to understand what putting
attention into the top of the funnel costs you, and you can work to improve
not only the quality of your leads but the efficiency of the process.
By all means, work to lower the cost of that first click. But if you do it
by making a ridiculous promise in the ad you run, it’ll backfire, because
once in the funnel, people will stop trusting you, the tension will evaporate,
and your yield will plummet.
Instead, consider focusing on which steps to shift or eliminate. Explore
what happens if people engage in your ideas or your community before you
ask them to send you money. Invest in the lifetime value of a customer,
building new things for your customers instead of racing around trying to
find new customers for your things.
When I started out in marketing, I’d guess that fewer than 5 percent of
all advertisers measured their results. It was just too difficult to do with TV,
radio, and print. Today, I’m guessing the number is closer to 60 percent,

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because the numbers are so clearly marked. What’s missing is a thoughtful
analysis of what those numbers mean.