This is like a minimal knowledge kit which might come in handy if you’re bootstrapping in the digital space.
Note : Please don’t hasten through this all in 5 minutes. Take it in small chunks.
In native advertising, all efforts are bifurcated under two broad categories based on the way consumers are approached. – Push/Pull, Similarly in the digital space, all products either try to pull a consumer through an existing demand pattern or the product tries to push sales to early adopters showcasing it’s X factors. Eg. – Opening a clothing marketplace website is a PULL product, you are trying to pull through an existing demand. Opening India’s first technology induced t shirt brand is a PUSH product.
Whether it’s Pull/Push, if it’s not unique, it’s useless. Seth Godin, a genius marketer, explains this through a really cool theory called the Purple Cow, watch here.
“In a crowded marketplace, fitting in is failing. In a busy marketplace, not standing out is the same as being invisible.” – SethGodin
Magic Tools for Market Size
Google Search Volume
Very few marketers will tell you this – Google’s search volume data is open to public not just to mkt. agencies (Yes you can find out how many people are searching for what you’re selling). If you’re trying to pull consumers, it is one of the most authentic ways to estimate demand.
Step 1: Log in at adwords.google.com
Step 2: Find search volume tool under tools in top bar.
Step 3: Enter the keywords, select geography. (eg- “buy t shirt online”, Delhi- if you’re trying to estimate online t shirt demand in Delhi)
P.S – Think like a consumer, Type as many keywords as you can. To go even more fancy, try trends.google.com
Facebook Audience Size
(A little tricky, you need to be a Facebook page admin)
This tells you how many people are out there who you could sell to.
Step 1: After logging in your account, Select create ads from where you logout.
Step 2: Select an/any objective to move ahead.
Step 3: (Main Step) Select your audience (Facebook will ask for various filters from age to interest, profession etc; try and be specific here) Eg.- If you’re trying to sell the first ever pocket guitar; Select appropriate Age (maybe 16-30), Interest (maybe people who listen to rock/guitar music), profession (maybe musicians?)
Step 4: It’s done, look for a car speed-o-meter kind of thing in the right column with a tiny heading “Audience Size”.
P.S. – Facebook gives you extensive filters for targeting, everything Facebook users put in as info on Facebook + their reading/clicking habits, all of this can be used as filters to target ads. Facebook audience size comes in really handy if you’re trying to estimate the number of people who could be your probable early adopters.
“In God we trust, all others must bring data.”
Learn the basics of analytics and people will love you. If you don’t have time to measure, you don’t have time to improve.
Wait, there’s more (important stuff). If you take a deeper look, in most digital ventures, the revenue is basically a function of repetition rate and marketing budget. Understanding this, you might be able to project your breakeven and even your golden profit days.
1. CAC (Acquisition cost/user)
2. Average Ticket Size (Revenue per transaction)
3. Repetition Rate (How many consumers come back)
4. Average transaction per Existing User per Month (What kind of revenue do they bring in)
5. Churn (percentage of existing consumers who somehow decide not to come back again)
- Points 1, 2 and your marketing budget will give you an idea of revenue from new users.
- Points 3, 4, 5 and number of existing users will give you an idea of recurring revenue.
Adding both up will give you a very clear idea of where you’re heading, welcome.