Acquiring Customers Using Branded Content

The great news is that we’re seeing many more hilarious and effective videos as marketers are looking to branded content to generate awareness (and possibly sales) for their new products and services.  While there is no guaranteed formula to reach your target audience, it’s often a combination of tone, timing and luck.  The most effective examples of acquiring customers using branded content are short and sweet videos that achieve the right balance of light tone, edgy humor and product information.

Here are two of Savvy Marketing’s favorites and one sort of, well, see for yourself.

Ship My Pants

This video from Kmart generated 13 million views since launching on You Tube.  Thanks and hat tip to the always informed for highlighting this 30 second spot as part of ViralFriday.

Dollar Shave Club Video

This classic 1:30 minute spot, created by CEO and Upright Citizen’s Brigade alum Mike Dubin, generated 10 million views and 12,000 orders within 48 hours.

Dove Real Beauty

Dove’s focus on real beauty is authentic and amazing, so I want to love everything that they produce.  However, in this video, women describe themselves to FBI-trained forensic artist, who then creates composite sketches.  It’s pretty long at around 3 minutes and feels forced and heavy, especially compared to some of Dove’s past campaigns.   That said, it’s certainly popular; this video has already gotten 27 million views in 10 days.

3 Perspectives on Paywalls

English: A speech in The New York Times newsro...

Writers creating content worthy of a paywall.

The good news is that paywalls are actually working well for publications with considerable scale like the Wall Street Journal, The Economist and The New York Times (NYT).  At the NYT, digital subscriptions will generate $91 million for the paper in 2012 according to Douglas Arthur, an analyst with Evercore Partners. The paywall, by his estimate, will account for 12 percent of total subscription sales, which will top $768.3 million in 2013. Even more encouraging is that digital subscriptions generated $52.8 million more than advertising.

The growth in digital subscriptions represents a new version of the NYT’s business model that evolved from the traditional 80-20 ratio between ads and circulation.  Further, the business model is still growing; subscription sales are increasing faster than ad dollars are declining. During the 12 months after the paywall was implemented, the Times and the International Herald Tribune increased circulation dollars 7.1 percent compared with the previous 12-month period, while advertising fell 3.7 percent. Subscription sales more than compensated for the ad losses, surpassing them by $19.2 million in the first year they started charging readers online.

The Guardian is taking a more nuanced approach, according to Andrew Miller, CEO of the Guardian Media Group:

In some news organisations where growth in readership may not be so important and in particular where there is a strong existing print subscriber base to build on, a pure paywall may make excellent business sense. The Economist and perhaps the Times spring to mind here. It also makes sense in other publications which feature business-critical information – for example, the Financial Times and, in the Australian context, the AFR.

At the Guardian we will continue to look at, monitor and offer a blend of options, including paywalls, depending on the product we are offering. But at the same time we have to recognise that digital advertising is not yet able to fill the substantial gap between any paywall revenues and the cost of the operation — not least because advertising agencies have not yet fully aligned their spend with changing patterns in media consumption.

But how to get from where we are today to where we need to be?  The main thrust of our strategy is to invest in our digital audience and revenue growth, while optimising the newspaper’s contribution in terms of both format and pricing and, crucially, managing our cost base to a level that is sustainable in the long term

My guess is that the Guardian’s audience will pay a premium for clips from The Premier League, which could put the whole publication in the black.

While this is great for large, global publications with scale, the question remains how to apply paywalls to smaller niche publications like The New Republic.    The New Republic’s marketing combines an eager softsell with some sticky features: the website has a strong call to actions, with reminders in bright red and the option to signup versus subscribe.

After signing up, you get a charming note from EIC and Publisher Chris Hughes:

Dear friend of The New Republic,

At The New Republic we believe that our democracy needs thriving and serious journalism about politics, culture, and ideas to function well. Tailored for curious, socially aware people like you, The New Republic embodies these journalistic ideals by going deeper than the headlines in a timely, unbiased fashion.

The way we all read and consume content changes every day. In an age of unprecedented technological change, we look to find new ways to help our readers engage with our content in print, on the web, and on mobile. We place less emphasis on generating clicks or superficial page views and more on making it as easy and pleasurable to read, engage, and interact with our content and ideas, wherever you may be.

To get the most out of your New Republic experience please:
Sign up for The New Republic Daily
Follow us on Twitter
Become a fan on Facebook

Thank you again for being a part of this.


Chris Hughes
Publisher and Editor-in-Chief

P.S. Subscribers get access to 20 print issues, unlimited digital access, and tablet versions of our magazine for only $34.97/year. Become a subscriber today.

Today, The New Republic boasts less than 75,000 subscribers, down from it’s peak of 102,392 in 1993 according to the Alliance for Audited Media.  The magazine stopped auditing circulation in 2005.  Unsurprisingly, the magazine’s social media presence is very compelling and should drive a fair amount of referral traffic to the site.  However, it’s unclear what type of conversion rates they’re seeing and if digital subscriptions will increase substantially.

Step 1 in the ROI process: Calculating Acquistion Costs

The New Integration: The Traditional Funnel me...

The New Integration: The Traditional Funnel meets The Flipped Funnel (Photo credit: josephjaffe)

Dave McClure’s ‘Pirate” version of the customer life cycle: Acquisition, Activation, Retention, Referral, Revenue, is an excellent framework to use when calculating P&L contribution, payback period and ROI.  Mastering these metrics as part of the customer lifecycle enables marketers to create an optimized, easy to evolve strategy that evaluates ROIs across social media, search and direct response campaigns.

Let’s start with evaluating acquisition costs.


CPM stands for cost per 1000 impressions, which is the most common way to purchase display or banner ads.  For example, if you are purchasing ad space at a $10 CPM your ad will be shown 1000 times for $10.  To keep this simple, if your budget is $10,000 then mean your ad will be shown 1,000,000 times ($10,000 *(1000/$10)).

Total Impressions = (Total Cost or Budget) * (1000/CPM)

If you are trying to find out how much you will pay for a given number of impressions then you can use the following formula:

Total Cost = (Total Impressions * CPM)/1000)

You’re probably wondering how to translate impressions into people or how to estimate the number of clicks.  This is the right question!  However, it’s impossible to calculate this since CPM advertising is solely based on impressions.  Setting a frequency cap helps avoid the worst-case scenario of serving all the impression to one person only.


CPC stands for Cost Per Click.  In this type of advertising, you only pay for the number of clicks on your ads regardless of the number of impressions.  Google Adwords made this model popular and generally speaking, search and text advertising is sold by CPC model.

For example, if the CPC is $1.00 and your ad is shown 12,000 times but gets no clicks then you pay nothing. If you get 10 clicks on your ad then you pay $1.00X10 = $10.00.

CPC = Total Cost/Total Clicks

Total Cost = CPC * Total Clicks

Comparing CPM to CPC and vice versa

Choosing one model versus the other is really dependent on where you are in the customer life cycle.  If you are focused on driving brand awareness as a new brand or company, it makes sense to generate as many impressions as possible.  Facebook Ads is great for this: highly targeted and segmented customer base with A/B testing capabilities built in.

If you have great brand awareness already or are farther along in your customer lifecycle, CPC may make more sense.  The best approach is to compare two models to figure out where and how to spend your money effectively.  To do this, you need to convert CPM to CPC or CPC to CPM pricing.

CPM to CPC conversion

Here is a formula for doing this: CPC = ((Total Impression *CPM)/(1000 *Clicks).  Let’s take an example of a campaign that costs you $10 CPM and generates 50 clicks in 50,000 impressions.

CPM $10 Known variable
Impressions 50,000 Known variable
Click 100 Expected or Known
Total Cost $500 Impressions * (CPM/1000)
Cost Per Click $5 Total Cost/Clicks

The above $10 CPM campaign is equivalent to a $5 CPC campaign.   The difference is that the CPC approach brings the customer to your website versus just letting them know you have one.  This means that the customer has 1) seen an ad meaning you’ve already earned revenue or 2) is one step closer to purchasing a digital subscription.  The challenge is that (click through rates) CTRs are steadily declining.

CPC to CPM conversion

Here is a formula that you can use to calculate a CPM equivalent of a CPC model:

CPM = (CPC*clicks*1000)/Total Impressions

Let’s take an example of a campaign that costs $4 per click and generates 100 clicks, resulting in a total spend of $400. Let’s say it took 50,000 impressions to generate those 100 clicks.

CPC $4 Known variable
Clicks 100 Known variable
Total Cost $400 CPC*Clicks
Impressions 50,000 Impressions * CPM/1000
Cost per 1000 Impressions 8 Total Cost/(Total Impressions/1000)
CPM $8 Cost per 1000 Impressions


The CPM value you get when you convert CPC into CPM is also known as eCPM (effective CPM). eCPM is also shown in Adsense reports, in that case. Total Adsense Revenue /(Impressions/1000)

Contact Us



Leslie Ellwood


Lauren McGovern


Two Ways to Structure Social Media Teams

Social Media Week 2012 SP

Social Media Strategists at Work

As social media gets broader with more platforms (not just Facebook, Twitter, Tumblr, Instgram) the role of social media become more specialized.  Some media companies have developed separate marketing or audience development groups with others have opted to have editors and writers promote their own content.  Here are two ways to structure the team.

One VP/Head who is responsible for overall traffic growth across title(s) and multiple channels (email, partnerships, search, mobile and social).

Two social media strategists who cover all the platforms and evaluate the most effective approach to driving traffic for your titles.  The most popular platforms include Tumblr, Instagram, Facebook, Twitter, Pinterest.  Their responsibilities include collaborating with editorial to ensure that stories get out in a high quality, timely manner.  This usually involves creating and following monthly editorial calendars for social media based on the overall editorial calendar.  Social media strategists will adjust the story according to platform.  Like being more visual on Tumblr vs Twitter for example.  There are many tools that make distributing content very efficient, Hootsuite is very common.

One metrics/reporting person who tracks traffic based on source, page views, number of stories per session.  This person produces weekly/monthly and should be capable of coming up with a few actionable insights. For example, 85% of our retweets come from 10 followers.

Here is an example of editorial leading social media.

One General Manager who is responsible for all aspects of the title, from website functionality to traffic growth and page views.

One Digital editor who determines the content strategy across the title’s website (or .com) and all the content on tablet/mobile plus relevant social media platforms.  There may/may not be a print element to the content strategy, but that’s a different story

Three or four assistant editors who are responsible for creating and distributing content on the website and across social media.  I’ve seen editors who prefer to develop expertise in select platform, there’s often a divide between Pinterest or Twitter for example.  Assistant editors are responsible for tracking and measuring the results.


Leslie Talmadge Ellwood, Founder, is a marketer and general manager with experience delivering profitable user growth, developing and launching new products, and negotiating profitable partnerships. Her marketing career includes roles of increasing responsibilities at Fortune 100 companies, non-profit organizations and start-ups.

Results include increasing traffic and page views to Men’s Fitness and, creating new revenue models for The and launching countless marketing campaigns and product extensions for American Express in the OPEN, Consumer Card and Interactive Strategy groups.

Lauren McGovern, Social Media Strategist, specializes in viral content creation, engaging fan communities and increasing site referral traffic via social media channels. Her areas of expertise includes social media campaign development including content creation, sweepstakes and sponsorships as well as blogger outreach and management.

Her experience includes working with premium brands in fashion, entertainment and media to create memorable digital identities across Twitter, Pinterest, Google +, Instagram, Tumblr, Facebook, LinkedIn, YouTube and Vine.


Trying to Evaluate Market Fit? Here’s one Approach.

English: an incon to indicate that there is a ...

How does this product serve the marketplace?

Over the past few weeks, I’ve met with a bunch of very smart founders at early stage start-ups who need to evaluate market fit as part of a business plan for investors.  There are many approaches to assessing market fit, creating use cases and developing key product differentiators.  Here is approach that I developed over time, starting with a framework I used while leading a new product development team at American Express and then refined while evaluating brand extensions for The Economist and promoting digital subscriptions for other media clients.

For purposes of discussion, let’s imagine that we’re building an app designed to make people’s commute a little easier with live updates and seamless interaction from train to taxi.  We can call it ComUter.

Product: What it is and how does it add value?

ComUter helps people get around town easier with live updates across all transportation lines and provides easy access to taxis using Uber.

Marketplace: What is the size of this marketplace?

The MTA reports around 5.2m passengers per day during the workweek and 3.3m passengers on weekends. In London there are around 3.2 to 3.6m passengers.  A 1% penetration rate translates into 50,00o to 30,000 in NYC and 32,000 to 36,000 in London.
Note: In the beginning, it’s difficult to estimate penetration rates with any accuracy.   It’s fine to use 1% is a placeholder for market demand at a high level that you can revise once you’ve launched your product and seen the initial conversion rates.

Competition: Who else is doing this?

No one has created an application that combines both public transportation with taxi access.  There are apps on the marketplace that cover specific lines (Exit Strategy 1,000+ Google Play downloads @$2.50), or provide directions across lines of public transportation (Hop Stop with 500k+ downloads on Google Play) or that hail taxis (Uber 100,000+ Google Play downloads).

Use Cases: Who is the Customer?

Sample use cases include daily commuters in major cities, occasional commuters, people on vacationing in cities, transportation and train enthusiasts.  Facebook’s targeting capability is a great way to do market test your use cases by segmenting use cases and asking a few survey questions.

Product Differentiators: Why Would a Customer choose this Product?

This is where people usually get stuck.  The answer is must be based on how your product is better than anything else on the market, either because it’s available across mobile, tablet and web or has unique features or can provide a discount of some sort.  Ideally, this should be something that is difficult to replicate.   For the case of ComUter, let’s say that the GPS can sense when your train is rolling into the station and automatically orders an Uber car for example.  While this sounds great, it would likely be easy for a competitor to copy unless there is a patent.

Go to market plan: How will you launch the product and tell your Customers?

This is really a question about distribution and driving awareness using inbound marketing.  In the example of ComUter, it’s launching Google Play and Apple App store and negotiating with Apple and Google to promote your product.  That’s the distribution element.  In terms of driving awareness, the most effective approaches to drive inbound marketing are a combination of search, social and mobile.  It’s helpful to have a website as a destination point for search that can then point people to the App.

Resources Required: What do you need to build it?

How much money will it cost to build a bug-free app that customers can download and use immediately? It has to be flawless when you launch or it’s over before it even starts.  If you launch a buggy app in either of these stores, it will kill your business at that moment and forever in the future.  The reason is that dissatisfied customers can be vocal, which ends up as a negative product review that everyone sees.  So consider this scenario, you’ve done all the hard work creating the compelling inbound marketing required to get someone to come to an app store and they don’t purchase it because they see a negative review.  This is a crying shame from a marketing point of view.

Initial Forecast: How many Customers will you get in the First Three Months?

Based on the size of the market, we’re saying that the total universe of potential customers is around 30k to 50k in NYC and 32k to 36k in London.   You need to estimate the number of customers that you’ll get at launch (month 1) through the first three months.  In this case, estimate getting 1% (again) in the first month and likely .01% in the following month.  At the same time, realize that there will be some attrition and the volume of customers will be smaller in month 2 and 3 compared to the launch month.  Once you have customers in the door, the next marketing challenge is retention, which you can start in month 3. The retention element could be in the form of badges or discounts.

In Conclusion

This is a bare-bones outline for assessing market fit and identifying product differentiators.  The macro elements are understanding of the market size, competition and customer.   After the landscape becomes clear, the most important question to answer is why…why would a customer select this product over all the other ones on the market today?  Once you have a steady customer base and a really flawless app, the next question is figuring out the revenue model.  In the case of ComUter, the revenue model could come in a few forms as a paid app like Exit Strategy, support ads or take a referral fee when customers go to Uber.

Which media companies have excellent communities?

My communities

Communities (Photo credit: steven w)

The key factors to consider include title and brand, type of editorial content, audience and what role you want the community to play for your readers.  Typically, media groups use communities to encourage engagement as measured by time on site and page views.  Communities could also be used to acquire new readers if you add social sharing buttons.  Additionally, communities can be great for advertisers open to different types of sponsorship.

Here are two examples that will help to illustrate how two very different titles approached the idea of community.

The Economist has created an online community based on debates between users on a given topic.  One of their brand values is encouraging “intelligent debates” as a way of advancing ideas, expanding knowledge and combating ignorance.  The format is to have readers discuss a given topic with metrics about which was the audience is going and a guest speaker.  These debates are often sponsored, so a great source of revenue.

Economist Debates: Business and change

Runner’s World has a created several forums that focus on specific issues such as training, gear, tips for beginners.  Their brand is very straightforward, all about running at various levels.   The format is more basic and looks like something from 1995.  That said, the reader participation is not trivial, the beginners’ forum has more than 9m views.  Pretty impressive for a very targeted type of content.

Runner’s World Forum – Home

Will CPMs improve as native ads replace banner ads?

There seems to be a lot of talk about replacing underperforming banner ads (sample click throughs of .01%) with Native Ads.  The idea is to embed sponsored content within editorial, which sounds like a great idea.  Buzzfeed is leading the charge here and has convinced The Awl to try this as well.

The legacy publishing houses (Hearst, Conde, Time) are doing their best to transform the space themselves, with only a little bit of success as evidenced by eroding revenues due to lower CPMs moving from print to website to mobile and little if any profit from the aggregators (Pulse, Flipboard)

Here are a few examples of older titles partnering with start-ups:

  • Real Simple and have a content and ad sharing deal in the wedding space
  • Esquire and Byliner have an editorial/publishing relationship based surfacing new indie authors
  • Vogue and Moda Operandi on an ecommerce deal that enables users to pre-order fashionable clothes on Vogue Fashion, Features, and More on

There are a number of start-ups focused on optimizing CPMs for unsold inventory (AudienceFuel). Additionally, there are start-ups focused on increasing traffic and user engagement as measured by page views, time on site (Demand Media, Evolve Media, Taboola, SmartLink, WetPaint).

Finally, Chartbeat and Bitly are offering more robust tracking and reporting tools that enable editors, publishers, marketers and advertisers to understand user behavior more completely,

Thinking of Creating a Rewards Program?

One of Savvy Marketing’s clients is creating a rewards program to increase customer engagement across their product portfolio.  They are starting from a blank slate and need to determine branding, digital assets, market fit, pricing/rewards as well as a communications calendar.  As part of the project, I evaluated the benefits of multiple rewards programs and came up with the following framework.

The best rewards programs include the following:

  • Obvious value proposition with tangible benefits such as significant discounts and rebates or ability to earn points redeemable for services and products
  • Intuitive and straightforward user experience at acquisition and activation
  • Intangible, often unpublished benefits that can include preferential access to services
  • Frequent communication reinforcing the value proposition

First a quick history lesson. Do you know who launched one of the first rewards programs?  Betty Crocker, which started one of the first rewards program in 1930s along with a few grocery stores.  Betty Crocker’s target customers (housewives managing a budget) could earn rewards points and exchange them for household items at substantial savings.  General Mills closed the program in 2006 to focus on a new program: BoxTops for Education, which earned $74m for schools in 2012.

Today, consumers have many more choices, yet not all programs provide tangible benefits that improve the daily lives of their target customers.  As of 2011, US consumers belong to 2.1 billion different types of loyalty memberships ranging from travel to financial services and retail. The average US household joined 18.4 programs in 2011, up from 14.1 programs in 2009. Despite the increase in overall membership, households only actively participate in 8.4.  The challenge today is making sure that your loyalty program is among the 8.4 that people actively use.  Without active participation it’s difficult to generate a decent ROI.
Here are a few examples of successful loyalty programs that combine tangible benefits (rewards, discounts) with intangible benefits (access to events, VIP feel).
Barnes and Noble
  • Loyalty Card costs $25, customers sign up online or at stores
  • Free one- to three-day shipping; discount of 20% percent on hardcover books (40% percent on best sellers)
  • Additional perk of 10% at Starbucks cafes in B&N stores
  • Discounts are applied at the time of purchase
American Express Membership Rewards
  • Customers earn points based on spending
  • Points are redeemable for travel at participating airlines,  products part of Shop Amex or for gift certificates to restaurants and events
  • Point balances are included on monthly statements
  • Customers can accrue as many points as they want before redeeming
Amazon Prime
  • Membership to Prime is free the first year $79 the second year
  • Prime Members enjoy free two-day shipping
  • Free movies and TV
  • Instant access to Kindle titles
  • Prime members see “eligible for Prime” as a delivery option at check out
Museum of Modern Art
  • Family Membership is $175
  • Members receive 20% off retail prices
  • Members have access to “viewing hours” before the museum opens, Little Member Mornings  and Mother’s Day at the Museum
  • New benefits include access to the Digital Lounge an online community for members only
The key elements are to reward customers with tangible benefits that they can’t get elsewhere to acquire customers.  Then to make sure they stay active, remind customers of the value proposition as often as possible across all customer touchpoints.  Finally, recognize that intangible benefits cost nothing and make customers feel good about continuing to participate in the program.

Betty Crocker logo used until 2003

Betty Crocker logo used until 2003 (Photo credit: Wikipedia)

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