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Back to the Future: Acquisition Marketing Needs to Evolve

Five years ago, we proclaimed that by 2027 customer acquisition as we know it would be vanquished. Digital advertising’s ROI crisis has proven us right, but that doesn’t mean acquisition has to disappear completely. Learn what it needs to do to survive

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One of the biggest misconceptions about futures studies is that futurists are in the business of prediction. What futurists actually do is examine possible, plausible, probable, and preferable futures following scientific principles. 

Out of the four “classes” of potential futures, the class of preferable futures is the most influential, as it’s concerned with what we want to happen. Preferable futures may be so desirable that we actively try to move them from the realm of the merely possible into the realm of the highly probable. We can do that by creating the knowledge needed to eventually make one of them a reality. 

While we can’t call ourselves futurists just yet, this is pretty much what Optimove has done in the CRM marketing space. Back in 2017, at a customer event, we proclaimed that in the not-so-distant future – by 2027, to be exact – customer acquisition as we know it would be vanquished, and all marketing would become relationship marketing. 

Five years later, it seems like the (preferable) future is now. 

The cost of acquiring new customers is higher than ever; according to “The State of Fashion Technology,” a recent report by McKinsey & Company and The Business of Fashion, the global average CPM on Facebook has increased by almost 17% a year since 2018.  

In addition, the available data for acquisition is worse than ever – a result of very welcome changes in the privacy policies of the main players (Apple, Google, Facebook) and the rising walls of their gardens. This has caused online advertising’s efficiency to decrease significantly; last month, Forbes revealed that since Apple’s privacy changes on April 21’, the average mobile advertiser’s return on investment has been cut by 38%. 

Separating the wheat from the chaff 

How can marketers lead their companies through online advertising’s ROI crisis? The first order of business should be to separate the wheat from the chaff, i.e., to determine which customers are most valuable.    

Brands have known for ages that some customers are more valuable than others. A good rule of thumb is that 20% of your customer base generates 80% of the value of your business. And in some industries, the numbers are even more extreme; in the mobile gaming industry, for example, 98% of the value comes from 0.2% of the customers, on average. 

Under these circumstances, spreading acquisition budgets across all customers is throwing good money after bad. It makes much more sense to focus primarily on those that provide the most value while letting all the others arrive at your doorsteps organically.   

It doesn’t mean that acquisition marketing needs to disappear completely. But like everything else in the world, if it wants to survive – it needs to evolve. And marketers can do that by executing the following playbook:  

  1. Analyze your customers. If you’re using a smart/actionable customer data platform (CDP) or a multichannel marketing hub, you are sitting on loads of first-party data that can tell you which customers generate the most revenue, have the longest tenure, or in short – have the highest lifetime value. 
  1. Create lookalike audiences. The same first-party data can also tell you what your best customers have in common. Knowing that will allow you to create lookalike custom audiences that share multiple characteristics. 
  1. Target these audiences across multiple platforms. By focusing on customers with better CLTV potential, you’ll be able to spend more per customer, knowing the ROI will be higher.  

Following this playbook will help you cope with the main challenges acquisition marketers face today. And if you do it by using a multichannel marketing hub like Optimove, that automatically updates these audiences as your customer base changes, then all the better.   

The knowledge is out there. Welcome to 2027.  

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Rony Vexelman

Rony Vexelman is Optimove’s VP of Marketing. Rony leads Optimove’s marketing strategy across regions and industries. Previously, Rony was Optimove's Director of Product Marketing leading product releases, customer marketing efforts and analyst relations. Rony holds a BA in Business Administration and Sociology from Tel Aviv University and an MBA from UCLA Anderson School of Management.