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The Strategy of One
Starbucks: World Leaders of Word-of- Mouth Marketing Book Review: ‘The Revenge of Analogue’
The Death of Offline Media and the Accuracy of the News Media Have Both Been GREATLY EXAGGERATED
U.S. That’s right. The death of the physical store is a long way away, since the physical store still accounts for 91.7 percent of all U.S. sales. In addition to that, the pace at which online e-commerce is growing year after year is starting to slow a little. Of course, 8.3 percent of the entire U.S. market is still a massive chunk, so shouldn’t you get your piece of the pie? Yes, but don’t expect it to be a very big piece. The top 500 e-commerce sites made 84 percent of all total e-commerce sales, leaving you and I with a very small 1.3 percent piece of the pie. WHAT ABOUT ONLINE ADVERTISING? Online advertising is continuing to grow. With all the content begin published and consumed on mobile devices — and all the time people spend glued to a screen — it makes sense for it to grow. This year, for the first time, online ad spending will overtake TV ad spending. But that comparison is a bit misleading. ALL online ad spending for any U.S.-based/targeted sites will overtake the single offline media of TV advertising. That doesn’t sound like the death of TV. It sounds like hype to make online ad spending
appear to have this great victory over offline ad spending. There are, of course, other challenges in online advertising — mainly the shifting landscape and the ease at which people can skip your ad, block your ad, etc. and get to the content they really want to consume. You also have tons of money being wasted in online ads, as many businesses invest to try and figure out what works online today and not what will work online tomorrow. I recently had someone tell me they were getting these amazing lead costs through Facebook. I took a look at their numbers and asked if they were managing the campaigns themselves or had hired an outside vendor. They had hired an outside vendor, so I asked, “What does that vendor charge you?” When they told me, “$2,500 per month,” I redid the math on their lead cost to include the vendor’s fees, which unfortunately burst the client’s bubble a bit. Not adding the vendor fee would kind of be like doing direct mail and not adding postage as an expense.
If you go and look online right now at business news stories, the volume of stories about traditional media being dead, how great digital media is, how Amazon and e-commerce initiatives are talking over the world, and the second coming of the digital revolution … is staggering, frankly. It only gets worst if you attend a marketing conference. There, you’ll find a dozen or more speakers trying to sell you on the idea that the only marketing that matters is social media marketing. All other marketing is dead, and your path to quick profits is by advertising on Facebook — or whatever the newest social media flavor of the month is.
Do you want to know the truth?
They’re lying to you. No, I’m serious. It’s all a lie, and I’ll prove it to you.
Let’s look at e-commerce first.
As of the fourth quarter of 2016, total e-commerce sales were only 8.3 percent of all sales made in the
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