The rapid start-up of new businesses has led to oversaturation and excessive competition in media buying and digital traffic. In this overwhelming digital landscape, it seems like only ad empires like Google and Amazon are benefiting. Despite Facebook plateauing, and the worst spring for stocks since 2008, new platforms like TikTok are readily taking up market share and consolidating profits, and the ad industry is booming.

It’s no secret that digital advertising is an attention game. However, time spent on social media and on screens has not only peaked but has generally been plateauing since the pandemic. Unfortunately, the reduction of digital traffic isn’t reducing digital advertising, it is having the opposite effect. The digital ad space is becoming even more saturated.

Even though traffic is down, and saturation is up, there are three universal ways for brands to work with their audience, product, and business models to lead the market.

#1 Growing the community

The cheapest and the most effective way to improve your business performance.

Customer retention and loyalty should be primary areas of focus. Depending on the industry, acquiring a new customer may cost 5-25 times more than retaining an existing one. The solution is to retain current customers by building a community around your brand.

The community represents the core of customers who are most interested in your product, are brand ambassadors, and communicate with each other. Communities help foster repeat purchases, improve retention, fix product bugs in real time using direct feedback, distribute brand messages for free, and can offer even more:

  • Communities produce UGC, which may go viral.
  • New customers are more likely to make decisions based on feedback from other users versus marketing messages directly from a company.
  • Communities help people establish strong social bonds based on common interests.
  • Community makes customers feel good, social interaction produces dopamine.
  • Community members are generally very profitable for a company given that they usually have higher LTV (Lifetime Value).

Harley-Davidson and the British cycling brand Rapha are good examples of building a strong community around a product. Both brands have managed to create a club of dedicated and loyal members with a subscription model and benefits like club memberships, sharing experiences, organizing meetings with cycling and motorcycle enthusiasts using the app, drinking coffee at partner points, and even offering bike rentals from their stores.

#2 Integrating growth loops into your product and business model

Marketing tricks that help businesses grow organically.

Since the late 2000s, many innovative companies have been launched (Uber, Airbnb, Spotify, and many others) that soon became leaders in their niches. All of these companies utilized a non-standard marketing approach. They didn’t reject the traditional AARRR Pirate framework (Acquisition, Activation, Retention, Referral, and Revenue). In addition to this more traditional sales funnel, they incorporated growth loops into their business models.

The logic behind a growth loop is that the contribution of each new user should lead to a particular action that positively affects the likelihood of user acquisition. Thus, without additional marketing efforts, the client’s community constantly grows and each client brings in a new one.

The neo banking company Revolut claims to have acquired 4M users through viral growth loops, and the first 1.5 million users were reportedly acquired without spending on advertising. How? Revolut’s Head of Growth for UK/IE calls it an Offline → Online → Offline acquisition loop. Users receive their Revolut card delivery at home, they share the unboxing experience on social media, complete registration, and get rewarded for signing up new users. It is simple but effective.

#3 Analyzing and catching global trends ahead of the competition

It’s hard, but it works all the time.

Do you remember the first ad banner? In 1994, at the dawn of digital advertising a little rectangle purchased by AT&T on HotWired hit a record 44% click through rate. Today, the best banners boast much lower rates, generally from 0.39% in Tech to 1.08% in Real Estate for example.

Social media marketing indicators, which performed actively in the mid-2000s, are not representative today. Despite Apple’s iOS privacy changes, US advertisers are estimated to spend over $58B on Facebook advertising in 2022, up 15.5% from last year. But most web users find digital ads too intrusive and annoying.

To catch user attention, brands are hunting for their audience in places where people spend most of their time. According to State of Mobile 2022 data, people are still spending their time on social media with global time spent on social apps reaching 412 billion hours in 2021 (up to 35% from 2018).

In the last few years, advertisers have been using a mobile-first approach in which companies start product design from the mobile end, which is fitting, as mobile has become the priority.

TikTok remains the most downloaded app in the world, allowing users to scroll through a feed of short videos without tapping any buttons. The company has made a breakthrough in mobile consumption, allowing advertisers to get effective campaign results without taking users out of the app.

Trends run out of steam. What’s next?

Today, the web is becoming more interactive. Many tech experts believe we are smoothly moving into the Web 3 phase — the next Internet generation. In the 90s, we just “read” the Internet in its Web 1 form. With the rise of the first social networks in Web 2, users gained more online opportunities. Web 3 heralds the invention of new tools for interaction, and the Metaverse is one of its upcoming trends. A huge number of companies, big and small are now developing tools and technologies that will accelerate web decentralization and allow the introduction of more sales and distribution channels. The creator economy will reach the next level as soon as users, endowed with rights to content, get to the center of the new web infrastructure.

Thanks to new technologies, the Internet will change, as will advertising.

The full-scale penetration of Metaverse-like experiences and the massive rollout of AR/VR has not yet happened. Still, many tech companies are already working on creating ad opportunities in virtual environments, launching digital clothing brands, hosting virtual shows and exhibitions, and more. For example, this July, India’s largest Food Delivery presented a hyper-localized video campaign on YouTube. This ad featured an actor mentioning the name of the dish, restaurant, and city, which vary from viewer to viewer based on their phone’s GPS.

If there is one thing we can expect from the digital landscape, it is change. No one knows exactly what the future of the Internet will look like, but it will certainly be more immersive and personalized. The new web will affect the whole of advertising, but brands can continue to thrive if they build community, integrate growth loops and keep an eye on the next emergent trend.

Cover image source: Joe Yates