Operational Efficiency in a Downturn
It shouldn’t take an economic downturn for us all to be thinking about operational efficiencies and how to get more of them, but sometimes it’s just the kick in the butt we need. There isn’t a day that goes by lately when we aren’t being warned of an economic downturn in 2023. Almost every Fortune 100 CEO believes one is coming, Walmart, Microsoft, and Gap have already had massive layoffs, and interest rates are expected to rise .75 basis points again in a couple of weeks. We should all look at these trends as a warning to our own businesses and prepare.
Finding operational efficiencies should be something that we are always looking to improve, even in a good economy. When we can find ways to do more with less, it frees up our employees to focus on strategic initiatives or other tasks that can help grow our business. It doesn’t mean that you are putting yourself out of a job. If you don’t find ways to be more efficient, others will find a way to, after the company downsizes or worse. Given that our business and our readers businesses live within Marketing and eCommerce, we wanted to share some ways brands and agencies can create operational efficiencies to free up time to do more, to grow their businesses even in a downturn. If you’re the decision maker responsible for the P&L, these solutions will be good for your bottom line while allowing your business to grow. If you are the person doing the work being addressed, having these solutions in place will show leadership and open you up to show the company even more value, especially if times get tough. None of us can control the economy so let’s control what we can and get better at what we do.
1.) This first solution will help Marketers find and target content more cost efficiently than a DSP and provide more transparency in your media efforts so you can learn and optimize better. ProfitWheel is a Saas business that offers a platform to discover URL’s, Video ID’s, and additional keywords that are relevant to your business, products, competitors, and anything else you want to target against. The advantage to leveraging this type of targeting over what DSP’s provide is cost, scale, and transparency. It will add a simple step to your process but it will be well worth it downstream. Financially speaking, if you buy 200M contextually targeted impressions per year via a DSP at a $2 CPM premium, you will pay $400k for the targeting. With ProfitWheel, you would get contextually relevant URL’s, Video ID’s and KW’s for a fraction of that cost. Once you factor in transparency and optimization, you are driving real value to your businesses bottom line.
2.) Let’s discuss Marketplaces now. The majority of advertisers sell their products on one or more of Amazon’s MP and or Instacart. To succeed on these platforms, it’s almost imperative that brands spend money on advertising, sponsorships, or listings. Each MP has unique strategies and technologies to consider. The platforms themselves don’t do much to help brands succeed. Most of the 3rd party tech companies do a little bit to help drive incremental sales via minor optimizations. But only Nimble Ads was created by an Amazon engineer and leverages API’s to get updates from the platforms every 30 minutes. This allows them to learn and optimize continuously throughout the day so their customers can be the most competitive, drive the highest ROAS, and find incremental sales opportunities to grow their business. Consider Bimbo Bakeries. You know them as Thomas’s English Muffins, Ball Park Franks, and Entenmann’s to name a few of their their brands. They had been working with the most well-known 3rd party platform before testing out Nimble. You can read the entire case study but the results provided them with a 62% reduction in COS and a 42% increase in sales revenue. To top things off, Nimble charges about half what the others charge. This epitomizes operational efficiency because Nimble does all that they do as a managed service so you or your team can focus on additional ways to grow the business.
3.) The next one is for advertisers that know how valuable audio advertising can be. When done right, audio can target individuals and audiences that have the highest propensity to buy your products. Podcasting is the hottest right now and rightfully so. You can hyper-target specific interests and leverage hosts to create trust. The only downsides to podcast advertising is scale and executional efficiency. However, we are starting to see more dynamically placed ads within podcasts which will help the industry grow next year. Now brands can have one common strategy for podcast, streaming, and even broadcast. The challenge to scale has been the lack of a common ad server, much like Doubleclick did for display. Enter Frequency, a creative workflow management platform that also serves ads to every network from one location. With Frequency, you can take one ad and personalize/contextualize it for every audience, geography, or content. You can serve it, track it, and optimize it from the same platform. With Frequency, you can 10x your audio efforts while decreasing your efforts by 90%. If you factor in these efficiencies to every campaign, your ROAS can increase ten fold.
4.) Social Media Advertising has been a staple for brands over the last several years because it could be highly targeted, it performed better than most channels, and there was massive scale. The last year or so has been challenging though, due to signal loss and privacy regulation. Brands know they need to leverage these walled garden but in order to compete, they need to be aggressive with creative refreshes, personalization, and targeting. The most successful brands leverage hundreds or thousands of creative each month but this can be expensive and challenging if you don’t have the right tools. Hunch is a DCO platform that also provides operational efficiency. Hunch can automate the creation of a brands ads from a single spreadsheet that you manage. All a brand needs to do is provide the creative elements and a spreadsheet that details all the different audiences and messaging desired. The spreadsheet constantly syncs with the Hunch platform and updates campaigns on the fly. This ensures that every user sees the right ad and constantly gets a fresh message. This will help with win rates and conversions. They have API connections into all the walled gardens and the creative can be exported for your DSP, YouTube, or other platforms. The largest social media advertiser in Europe uses hunch to target ads at a neighborhood level with just 2 people managing their efforts with Hunch. Before Hunch, this would have taken at least 2 people for every country or metro. If you aren’t using a platform like Hunch, you aren’t being efficient.
5.) Merchandising is often overlooked as a way to create efficiency and growth within a business. Most Merchandisers can only merchandise 10% of a catalog because there is only so many hours in the day. If a brand wants to scale these efforts, they need more Merchandisers. But even then, it’s difficult to do all that FindMine can do for a brand. The core verticals for FindMine are currently fashion, furniture/home decor, and cosmetics. FindMine learns from your Merchandisers, social media, and website so that their AI understands the brands voice. In other words, they learn how a brands wants their products to be leveraged together. Brands typically go from 10% of PDP’s having “Complete the Look” type solutions to 95% in a just a few months. The benefits include higher AOV, greater shopper engagement, and brand loyalty that leads to repeat purchase. The elements that FindMine creates can be used for more than PDP’s. They can be leveraged for landing pages, advertising, and email. They help create synergy across departments and channels for a fraction of the cost of humans but in reality, even with more humans, brands can’t execute the way FindMine’s AI can.
There are many ways to create operation efficiencies and it’s a focus for Cogent. We are helping our members every day think through these concepts and discover new ways to achieve more with less. If you want to discuss some ideas, just let us know.