Ep.5 Marketing Arbitrage: Finding Underpriced Media Channels

November 3, 2017

Video Transcript

Mike:

Hi my name is Mike Bird, I’m the CEO and co-founder at Social Garden, here with my business partner and COO, George Glover

George:

Hey Guys.

Mike:

And today we’re talking about identifying and capitalising on arbitrage on digital media. So at Social Garden obviously we do a lot in the digital media space and one of the key things we’re always looking for is where is there mispriced media.

And you look back 20 – 30 years ago and we saw that email marketing was incredibly effective with 80 – 90% click through rates and google AdWords was 1 cent per click. Obviously, that’s not the case now, because both of those channels have really been capitalised by marketers all around the world, so the markets kind of balances itself out.

So what we’re thinking about now is where do those opportunities exist today? Do they still exist on Facebook and what else is their kind of availability.

George:

Yeah I mean you only have to kind of look at our data and I mean the cost for us and our CPM’s over the past 12 months have doubled. So for us to kind of keep our efficiencies, and you know, we’ve managed to kind of continue to reduce the cost per lead for our clients and for us to do that we have to look at other mediums inside Facebook and outside Facebook that we can tack onto our strategies.

And a really good example of that is video. And you know, a large part of the reason we’re doing video today, other than it’s a great format, is that really Facebook is rewarding customers who are basically promoting video content and they’re doing that because they wanna keep the users inside the Facebook platform.

For them, they want their users to be able to do everything on the platform, so they’re making it cheaper for customers to reach a larger audience through the use of video.

So an arbitrage exists within video, its a lot cheaper to kinda reach a large audience versus if you were kind of using written content or a blog. So there’s a big arbitrage that leaves us just there.

Mike:

I think the way that content needs to be produced also reduces and slows down the adoption of new ad units within Facebook. So traditional media agencies are used to really high budget productions suited for TV and what we’re seeing, is that video content on Facebook doesn’t need to be have that kind of high level production, it just needs to be a little more raw, a little more organic and at a much higher level of frequency.

And so because of that delay of big agencies entering the market, that’s creating opportunities for people like ourselves we’re able to produce low-cost videos, get them into market quickly, look at the analytics and then optimise and keep reiterating as we would with a kind of Facebook ad.

George:

So some other examples of arbitrage that exists today is particularly inside Facebook, paid messenger advertising is a really effective way to reach customers and engage and have conversations with potential customers. Instagram stories, promoted stories, are another really effective and cheap way to reach your audience.

Mike:

I think where that’s going as well and where this arbitrage is going to exist not in 2017 but kind of in 2018 and beyond, is really looking at things like how we’re leveraging Alexa and these in home assistance that utilises voice recognition to buy products and services directly from people’s own home.

So thinking about how we can integrate voice more into our off-room, how we can utilise podcast, so that thinking about the way human media consumption is changing and thinking about how that relates to arbitrage within that kind of digital media environment.

George:

And so just to really summarise at Social Garden we are always looking for more effective and efficient ways to reach our customers audiences and to kind of generate new customers and you know looking for arbitrages, and kind of, new and existing channels is a great way to do that.