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Our thesis
The Marketing Landscape
is Rapidly Changing...
The “Madison Ave” Model
(1950 — 2000)
Before, things were simpler.
The “golden age” of advertising saw the evolution of Madison Avenue, large agencies, and agency holding companies. Advertisers benefitted from a growing population, the increasing popularity of television, and an insatiable demand for products in the US market.
During this period, advertising was an art form that revolved around singular creative campaigns distributed via newspapers, magazines, billboards, radio, television and direct mail. This spanned decades, eventually evolving with banner ads, affiliates, and search. Ad agencies honed their focus on creative, using it as the main instrument to drive sales and market share for clients. Most of these creative ideas were loosely rooted in data, and this is the same way creative ideation is carried out within the holding companies to this day.
Slow distribution channel innovation, inefficient real-time attribution, and uncertain marketing spend allocation were defining features of the era. Once a marketing campaign began, it was difficult to determine which channel to attribute a purchase to, leading marketers to evaluate performance based on overall media spend rather than on a channel-by-channel basis. In modern day terms, this was the equivalent of putting ad spend behind Twitter, Meta and Tik Tok and not tracking which platforms led to conversions. Consequently, and perhaps more importantly, this allowed advertisers to trust their gut and go for the big creative ideas that brands became known for.
Advertising performance was measured by its impact on — did overall sales go up? Simple.
The “DTC” Era (2008-2020)
Social media advertising changed everything.
Facebook created the most efficient marketing platform in history. Billions of dollars poured into social and the venture-backed companies investing in it as a new acquisition channel. At the same time, the Shopify ecosystem made it easier than ever for brands to get to market.
Soon, measurable channel conversion became a normal part of the attribution equation. An entire generation of marketers became reliant on direct-response creative, deterministic attribution, and the belief that a dollar into Facebook generated an accurate channel-based return-on-ad-spend.
Shifting from larger creative campaigns to more platform-native content, this period of time saw exponential growth in the efficiency of ad spend.
The digital agency, single-channel agency, and freelance economy all carved out market share in the quickly developing digital marketing space, and the “Madison Avenue Era” players found themselves on their heels struggling to develop digital competencies.
However, this time was short lived. A confluence of factors resulted in decreasing ad efficiency and fewer arbitrage opportunities on social platforms. Namely, Apple Tracking Transparency, digital channel saturation, and slowing platform growth marked the end of the DTC Era.
The DTC Era precipitated the intense period of competition we find ourselves in today. Most brands are digitally native, community centric, and visually sophisticated.
It’s easier than ever to launch a brand, influencer brands are growing fast, and commoditization seems inevitable for most product categories. Since March 2020, over 2.5 million Shopify stores have been created, a 201% increase. Competing on sales channels like DTC, retail, and third party commerce is now common ground.
Digital advertising represents over 70% of total advertising spend, a statistic which continues to grow year-over-year. And while the customer journey has always been multi-touch, it’s harder than ever to measure or track, with little recourse for help. Agencies, both big and small, are failing clients. A lack of data infrastructure, creative know-how, and efficient team operating processes is prevalent in both options.
Marketers too have forgotten the tried and true advertising strategies that made the Madison Avenue Era companies and brands great.
Advertising on platforms has become more challenging, with the need for more sophisticated creative strategies, more in-tune customer journeys, and a modern approach to data analytics.
Legacy brands will struggle to maintain market share if their strategies do not adapt. It’s no longer sufficient to run the same playbook. But changing the playbook is easier said than done. It can be difficult to operate efficiently and make informed decisions when there are multiple sales channels, an extraordinary number of advertising mediums, increasingly complex customer journeys, and limited access and understanding of data.
We’ve entered into the Dark Attribution Era.
The New Approach
So, how do you gather information that’s truly relevant about your customer and then act on that information? Stop searching for hires or new agencies who blatantly overpromise results or solely focus on what’s trending right now. There are no silver bullets.
It’s time to start prioritizing systems-level thinking and a return to advertising fundamentals. This is how to unlock the new phases of growth over and over again.
Process: Equip your team with a framework that allows you to launch and scale sustainable marketing programs for your brand, with a view towards profitable incrementality.
Long-term oriented: Stakeholders need to be clear about what the ultimate business outcome for the company is, what a practical roadmap looks like, and which team members and partners they need to get there.
Integrated Tactics: Every single marketing program must consider acquisition and retention as two sides of the same coin. Focus on the tactics that will deliver the right mix for your business.
Measurement: Brands need on-the-pulse data that capture most of the relevant marketing metrics to paint a clear picture of what’s working across all sales and distribution channels at a single point in time. Today, this can be done with simple data and AI tools we’ve invested in and partnered with. Avoid over-complicating your data stack or decision-making process.
Creative: Do you have a “process” for deploying and improving how your creative resonates with customers over time, and how that’s applied to your entire customer journey? Every campaign should start small, be tested frequently, and scale in perpetuity. We focus on quality, volume, and organic content. We embed creative into every service at Darkroom.
Efficiency: Newer marketing programs do not deserve higher spend until they prove scalability. Look at overall MER and spend pragmatically based on revenue and profitability targets.
Our conversations start with discovery calls before proceeding to more formal diagnostics of the business, revenue, and marketing programs. We identify revenue maximizing opportunities before proceeding with any prospective engagement.