Casper revolutionized the mattress industry in just five short years, and rapidly acquired 1.5 million customers that love their brand.

They’ve built a business on the premise of transparency and sophisticated branding in an industry that is known to trick and cheat its customers.

The premise of the direct-to-consumer business model sounds great in theory:

Make a quality product, cut out the middleman, and sell it from a sleek website at a lower price.

Problem is…

… In theory, theory and practice are the same. In practice, they are not.

While the premise is incredible for consumers (awesome product, great price), it’s absolutely horrible for their investors and business model.

(Also, you’ll learn in a second that Casper is neither direct-to-consumer or e-commerce).

First, for the record: I think we can all agree that it’s damn impressive to build a $400,000,000 revenue (2019 prediction) consumer brand that attracts 1.5 million customers in just a few short years – with a 31% aided awareness, 80% positive brand sentiment and 60 in net promoter score. Very few people can (and have historically) been able to pull that off.

But… the recent Casper S-1 filing (preparing the company to go public), tells us the second half of that story: Casper is losing $157, on average, for each mattress that they sell.

That’s a deeply troubling premise. When Casper first launched their company, they entered the market with a unique positioning:

1. Make it easy to buy a mattress online (no cost for retail space)
2. No retail partners (no markup)
3. Rely on word of mouth to drive organic growth rather than traditional advertising.
4. Use the money they save from 1+2+3 to offer a high-quality product at a low price.
5. Finally, for the lack of a better term: Be cool. And just slightly different. Don’t talk like the other players in your market. Create better content, association, storytelling, customer service, and generous guarantees.

This ☝is an awesome playbook.

Hundreds of direct to consumer brands have built rapidly growing brands, that consumers love, with the same formula.

Venture Capital loves this too. They love disruption. The problem is– they’re not only disrupting the industry itself… but the fundamentals of running an actual business.

See‚ there’s something else that Venture Capital loves more than anything else: Hockey-stick growth. Growth at all costs, screw short-term profits.

This does, inevitably, force direct-to-consumer brands like Casper into a different kind of flywheel:

Word of mouth is great, but we’ll attract customers even faster if we advertise! Let’s expand to new sales channels, like traditional retail. And… let’s find partners! Target, Amazon, Costco!

Fast-forward… and the DTC brand now operates 60 stores, retail partners and has spent more than $400,000,000 on advertising.

How’s that then different from a traditional mattress company?

There’s a huge difference:

See– Casper has never been profitable.

And they probably never will.

A wakeup call( 😴), and an important lesson, for both direct-to-consumer brands, entrepreneurs and investors that look up to companies like Casper.

A treasure-trove of insights

My favorite part of any company filing to going public is the second they open up their books and show the world what their entire business model looks like.

An absolute treasure-trove of insights.

The Casper S-1 filing is a 300+ page beast, and I spent the better half of the weekend digging into their financials and metrics (How ironic that a mattress company kept me up all night.)

Verdict? They’re screwed.

This is not a technology company (lol, say hi to WeWork for me.)

Or a “sleep company” (wtf does that even mean? Got that one from “camera company” snap didn’t you?)

Casper is neither a “direct-to-consumer” brand or even an e-commerce business.

This is a mattress company. With fancy branding, poor unit economics… and a marketing team with deep pockets.

Granted, I’m a marketer, not a financial analyst. And… I’m getting ahead of myself.

To fully understand the financials of this company, you need to understand consumer marketing. Casper is a company that lives and dies by its ability to succeed with their marketing. This isn’t a secret… in fact, the word marketing is mentioned in their S-1 document a full 170 times (Brand is mentioned 201 times.).

And hey — I’m not writing this to hate on Casper. I’ve bought several of their products, I’m just never buying their stock.

I’ve uncovered a total of 19 insights from the Casper S-1 documents that can be extremely valuable if you’re an entrepreneur, marketer, and business operator – especially if you’re working for, or building, a direct-to-consumer brand.

Enjoy! 👇

19 marketing insights from the Casper S-1 filing.

Financials and math based on reported financials from Jan-Sep 2019.

1. Casper is not a “direct-to-consumer” business.

Their fastest-growing sales channel is third-party retail, up +74% year-over-year, and now accounts for 17% of their overall revenue. Their direct-to-consumer sales revenue grew by only +20% over the same period.

The total reported revenue for the 9 month period was $312 million, or around $35 million per month, i.e. $420,000,000 for the entire year.

2. Casper is not a technology company or even an e-commerce business.

While not directly disclosed in their S-1 filing (they’ve obscured how much of their revenue is from online vs. their stores), the split is likely around 35% retail and 65% online. Rather, Casper is a hybrid e-commerce/retail business (like most retailers in 2020).

They do pretty well in retail ($1,600 in sales per sq ft per year) and plan to open a total of 200 stores in the next few years.

3. The average order for Casper is $754 ($710 for e-commerce, and $820 for retail).

The difference is significant, building on the previous point; that Casper is more of a retail business than e-commerce or a “technology company”.

4. Hundreds of thousands of customers.

Based on the above, we conclude that Casper generated a total of 413,000 orders in the first nine months of 2019, or 343,000 orders through their direct-to-consumer channels ($258,600,000/$754).

5. During the same time, they spent a total of $104,687,000 on direct advertising.

I’d assume that all of this was to drive traffic to their own stores and website (rather than their retail partners) — which translates to a $305 in acquisition costs per sale. We’ll return to this later.

6. Mo’ money, mo’ problems.

Because of the rapid expansion of their retail stores, it’s a bit tricky to make an apples-to-apples comparison of 2018/2019, but they managed to increase average order value (up roughly +8% year over year) while increasing their advertising spend by 23.0% and increasing the revenue in their direct-to-consumer channels by +20%.

Conclusion: Each customer spent more money, but they also spent more money to get those customers through the door.

7. 20% of direct-to-consumer orders in 2019 came from repeat buyers.

Building on the previous conclusion: Casper increased their average customer acquisition cost even though they increased their retention rate.

Refined conclusion: Their customer acquisition costs (to acquire a first-time customer) have increased EVEN more than it first seems. A.K.A: Why increase your advertising spend to acquire customers if they return by themselves?

8. We’ll have to wait 10 years to see if consumers come back.

According to several mattress industry reports, a “residential user” (i.e. a consumer) change their mattresses every 9–10 years (It’s 5–6 years in the hospitality industry). I’ll return to this point, but that would mean that Casper is yet to complete a full cycle (their first customers are from 2015). With this in mind, it’s unlikely (and highly speculative) to assume the average order value of a repeat customer. Okay… moving on…

9. Gross profit per sale is $377, a 50% gross margin.

This is up from 44% in the same previous period, which is a notable improvement for Casper's bottom line.

10. A marketing team with deep pockets.

Based on all previous numbers, the math breaks down as follows: The marketing team at Casper invests $305 to acquire a customer that spends $754.

It costs $377 to manufacture the products they sell, so they’re left with $377. Deduct $305, and Casper have $72 left to run the other aspects of their business.

This would be pretty good if the marketing team was operating in isolation, but they’re not. (side note: One could argue that Casper is not a mattress company, but a marketing agency: perhaps they should pivot and just help VC-funded DTC brands with their marketing?).

11. On an aggregated level (including their retail partners), the math comes down to an average acquisition cost of $253.

But remember, they have to share revenue with their retail partners (exact details not disclosed, but noted in the S-1 that financials are less favorable).

12. So, Casper spends $104 million on advertising to generate $312 million in sales with a 50% margin. They’re now left with $51,313,000 to cover the costs of running their business.

Let’s look at the other costs. There’s an additional $9.3 million in Sales & Marketing costs (i.e. not direct advertising spend) and another $106 million in general & administrative costs.

Congrats! You’re running a venture capital-funded business that generates a loss of -$65,000,000 (over a 9 month). Or, phrased differently: For each mattress you sell, you lose $157.

13. This previous point is what I dislike about venture capital-funded consumer products that “disrupt” traditional industries.

They’re not sustainable. They only thing they’ve disrupted is how to run a company (where it’s perfectly fine to lose $157 to acquire a customer that MIGHT return to buy a second high-ticket product in … 10 years from now!).

OK, *end of rant*…

14. In order for Casper to break even, they could to cut their advertising spend in half (or double its efficiency).

They’ll tell you this in their S-1 (not that they’ll cut it in half, but that they’ll be more efficient with their marketing spend), but this has not proven to be true in the short history of their business. In fact, it’s the opposite.

They’ve increased their advertising spend more than they’ve increased their revenue.

Secondly. Anyone with skin in the game will confirm that digital advertising will get MORE expensive in the next few years. Trust me, or ask anyone who spends money on Google, Facebook or influencer marketing (all channels important to Casper).

My bet — The cost to acquire a customer for Casper will INCREASE over time.

That’s a huge liability: They spend almost as much money on advertising as manufacturing their mattresses. They spend more money on advertising than all their General & Administrative costs. A +20% increase in advertising rates on Facebook/Google and they’re hit HARD.

Casper also relies on referral traffic from websites like sleepopolis.com, SleepAdvisor.org, verywellhealth.com, mattressfirm.com, mattressclarity.com, myslumberyard.com and sleephelp.org.

If any of their direct competitors would acquire just those seven websites, Casper will, as they say, shit the bed and have to increase their advertising spend in other, potentially more expensive, channels.

15. The other thing Casper can do is increase their average order value (assuming they sell products with a 50% gross margin), by another $314, or +40%.

Their average order value was $495 in 2017, $700 in 2018, and $754 in 2019.

It seems like a stretch that they’d be able to go from $754 to $1,068 without any additional investment in marketing or operations. Remember — this all assumes that they maintain their existing operating costs and nothing else happens to their business.

16. Third, they can increase their gross margins.

It seems unlike, impossible even, to lower the cost from $377 to $220. If they could, they would. Again, this would have to happen without any additional costs. But, it’s certainly a possibility (with low probability in the short term). On the other side of that same coin, they could simply increase their prices. But, that would potentially be at the cost of reduced conversion rates.

17. They could fire half of their staff, give or take. Sounds harsh, but that’s the $106M in General & Administrative cost.

A total of 829 full-time and part-time staff. 597 of which are employed full-time. It’s unlikely to happen in the near-time though, given that Casper is currently hiring for around 145 roles across retail and corporate.

It’s also noteworthy that a majority of their full-time employees work with sales, operations, and marketing, followed by a long-tail across HR, accounting, finance, administration, design and product development (gotta love LinkedIn and their insights!).

18. Finally, a few other things that crossed my mind. First; brand. Casper will tell you (and they’d be right!) that they’ve built an incredible brand over the last five years.

The word ‘brand’ is mentioned over 200+ times in their S-1 filing. They have a 31% aided brand awareness, 80% positive brand sentiment and 60 in Net Promoter Score.

They’re selling a story to investors: No, we haven’t figured out how to run a profitable business, but hey, our customers love us! And, because they love us, they’ll come back and spend more money and buy more stuff from us.

This is brand equity at play: Casper is aiming to convince its (future) investors that their brand holds a lot of value. This could be true, but it’s a dangerous assumption. Here’s why:

Betting on brand loyalty is dangerous when the brand in question is just a few years old.

Those that bought a Casper mattress is 2016 will perceive the brand very differently in 2026 when it’s time to buy a new mattress.

Think Uber 2010 versus Uber 2020. The brand, experience, reputation, perception, association, word of mouth have changed radically.

Shit could happen. It always does. Look at Uber and the many things they’ve done to screw up their brand equity.

Customers that bought a Casper mattress in 2016 appreciated the fact that they were the underdog that challenged traditional retail stores.

They’d never seen anything like it, and between 2015–2018, Casper built its brand and storytelling on challenging those big bad mattress stores. It worked incredibly well.

To quote Melia Robinson, a writer for Business Insider, on June 9, 2015. “I just bought a bed from the ‘Warby Parker of mattresses’ and I will never buy one in stores again.”.

Fast-forward 3 years, to Aug 8 (2018), and the narrative has changed to “Casper to open 200 stores across the US”.

It does, indeed, seem like Melia Robinson will be buying her next mattress in a store :-)

Or, to quote Casper COO Neil Parikh in 2015: “Most of our customers still come from people telling one another…”. Fast-forward to 2020: “We have invested significantly in our sophisticated, integrated marketing strategy, with $422.8 million in total marketing expenditure from 2016 to September 30, 2019.”

Bottom line:

There’s no way to know if any of the 1.5 million customers that bought a Casper mattress between 2015–2019 will return (organically at that, without aggressive marketing), to buy a new mattress in 2025–2029 because of their affinity for the loyalty or affinity for the Casper brand.

Crazy talk. Fact is – there are HUNDREDS of brands (like Leesa, Tuft & Needle, Saatva, Nectar, Bear, Winkbed, Layla, helix, Brooklyn bedding and purple to mention a few) are fighting, aggressively, for those customers.

19. Second; sleep economy. Casper will tell you that they’ll expand their product line to increase average order value. “Mattresses are just the beginning.”, etc.

Classic investor play. Like when Uber says that they’ll eventually get rid of their drivers and operate all their vehicles autonomously. Or flying cars. Or expand to other verticals, like food delivery (only then, they can’t even deliver a frickin’ chicken tikka masala in time).

Nah… this is a mattress company.

Here’s their search traffic to casper.com:

Mattress, mattress, bed, pillow, and more mattress.

In order to expand into new categories, they’ll have to invest in R&D, sales, operations, marketing and several areas across their business that will increase their General & Administrative costs further. And if they end up, say, building an app that improves your sleep, they’re suddenly up against Sleep Cycle, Spotify, Calm and Headspace. Right back to square one.

I’d love to hear what you think about the Casper IPO, the direct-to-consumer brand landscape or the future of e-commerce!

Leave a comment below and let’s connect on LinkedIn.

If you like my writing, you might want to check out my latest book: Influencer Marketing For Brands

Aron Levin is the co-founder and Chief Marketing Officer at the global leading influencer marketing company Relatable. He’s worked with advertising operations at gaming company King and growth at Spotify.

Casper, Poster-Child of DTC Death was originally published in Entrepreneurship Handbook on Medium, where people are continuing the conversation by highlighting and responding to this story.

Four ways Disney+ will shake up the streaming industry in 2020

Disney+ is launching its much-anticipated streaming service on Nov 12, 2019. The launch excites me on several levels: As a marketer, parent and quasi-professional futurist.

Professionally, I spent five years at Spotify and had an unparalleled opportunity to watch up-close as the company went from a misunderstood troublemaker to transforming an entire industry. Naturally, any news related to media streaming (or the subscription economy in general), and what it means for consumers and the industry, I’m all ears.

On a personal level, I grew up with both Disney and Pixar, and am now a father of two. When a new Pixar film is announced– I’m probably more excited than the rest of the family combined.

Finally, we (my company, not my family) have spent the last 6 months or so obsessing over what early adopters and influential trendsetters are excited about for next year, to help brands shape their strategies and stay ahead of the game. The 2020 Influencer Wellness Report was published in September (link), and we’ll shortly announce our take on Parenting in 2020– the results of a 79-question deep-dive interview with over 500 influential millennial parents (keep reading for their take on Disney+).

With these things in mind… these are my four predictions of what Disney+ will mean for the subscription economy and the streaming industry.

There will be winners and losers. And a few alliances along the way. In short — The streaming wars are heating up.

Prediction 1: Traction from day one

In October-November 2019, our company initiated a research project to understand parenting trends in 2020. A deep-dive survey with more than 500 participating influential parents. The results are yet to be published (I’ll add a link when the full report is available), but the interest for Disney+ (keeping in mind that the service is yet to be launched and doesn’t actually have any “users”), blew my mind.

A full 9.1% of survey respondents (being social media influencers, each with an average follower base of 65,000 people), have already signed up for the streaming service ahead of launch. Granted, a full 83.6% of the same respondents are currently using Netflix, and 42.3% on Spotify, but these are existing services that has been around for years.

The number is impressive, in particular, when compared to Apple Music (14.8%) and Pandora (8.1%)– services that have been around for years versus something that is neither launched or with any real incentive to be first in line (it’s not like they’ll run out of subscriptions 🤣).

To get a better sense of the future state of the streaming industry, we asked a different question:

“Which NEW streaming services are you considering trying for your household in the coming 12–18 months?”

Disney+ topped the chart, with 27% of all respondents. That’s an incredibly strong number, compared to 16% interest for the second-place runner-up Apple TV+ (also launched right around the time the survey was conducted). By the way– 19% of respondents answered “none at all” to the question.

It’s to be noted that these numbers doesn’t, necessarily, reflect the average population, but rather what a specific sub-segment of the market (that being early adopters, trendsetters and influencers), think. Those groups, however, are known to shape the rest of the addressable market… so their behaviors, beliefs, and attitudes are worth paying attention to.

Either way– I read into this as follows: Compared to Apple Music (The Hunchback of Cupertino) Disney has done an incredible job of building anticipation and buzz amongst early adopters and innovators… Indicating that they’ll have a really successful launch this week with strong subscription growth from day one.

Prediction #2: Netflix will be fine!

At $69.99 a year, or $6.99 a month, the Disney+ pricing strategy is simple, yet ingenious.

The annual cost is less than half of Netflix ($12.99 standard plan)– and no sane parent would trade OITNB, Money Heist or Stranger Things with Mickey Mouse or Moana. In fact, the opposite is more likely to happen as millennial parents go all nostalgic over the Disney classics (even the questionable remakes) that we watched growing up. Not to mention that Pixar nailed storytelling for the whole family from day one.

Strong anchor value, loss aversion and switching cost means Netflix will be fine. There won’t be any subscriber cannibalization. Instead, consumers will spend even more money on video streaming services, which inevitably is bad news cable TV providers (61% of the parents we surveyed said that they have cable TV… and 22.4% of that group are planning to cut the cord.)

Prediction #3: A Bundle of Joy For The Whole Family

Incredible anchor value and low cannibalization (i.e. consumers will keep paying for Netflix rather than jump ship and cancel their subscription) open up for an incredible opportunity for services like Spotify.

I don’t own enough Spotify stock to get a vote on this, but they better damn bundle the Spotify Family Plan with Disney+ (or Apple, aka The Hunchback of Cupertino, will).

Disney has announced that there’s a $12.99 Disney+ Hulu + ESPN bundle (Shots directly fired at Netflix I suppose) and Spotify bundled their service with Hulu last year.

I left Spotify four years ago and have no intel, but it makes perfect damn sense even from an outsider point of view:

1/ Spotify would secure unparalleled distribution for Disney to 100+ million subscribers,

2/ Spotify and Disney are both making sweet love to Hulu,

3/ There’s an incredible Disney+ anchor value that would help Spotify compete with Apple and drive even more subscribers to its family plan, and

4/ If they don’t: Apple might.

Prediction #4: Let the streaming wars begin!

Regardless of prediction #3 and the likelihood of a family bundle between Spotify and Disney Plus, Disney will pose a direct threat to both Apple and Amazon in the short term. That’s where parents rent and buy their Disney, Pixar, and Star Wars classics today.

Amazon and Apple will double down on their original content to differentiate their media streaming offerings and have large enough war chests to threaten its indirect competitors (with their core business for the time being in ecommerce and hardware). Let the streaming wars begin!

The word… “Influencer”.

I don’t like it.

It’s misunderstood and can set you up to go down the wrong path.

Because… Influence is an outcome, not a profession.

When you accept this to be true, you’ll ask better questions. You’ll replace “How do I find the right influencers?” with:

“How do I influence?”

(In the context of working with content creators on YouTube and Instagram, of course.).

Over the last three years, we’ve developed a pretty good formula that we apply to all campaigns to increase the chances of having that outcome.

There are three parts to the formula:

Influence = Audience Reach x Brand Affinity (Expertise, Credibility) x Strength of Relationship with Audience (Engagement).

Let’s break it down.

1. Audience Reach is the size of the audience and who they are. Subscribers, Followers, Friends, etc.

2. Brand Affinity (Expertise, Credibility) is making sure that there’s an affinity (“natural liking or sympathy for your brand”), and equally about expertise (“knowledge in a particular field”) and credibility (“the quality of being trusted and believed in.”)

3. Strength of Relationship with Audience (Engagement) is about how close the audience is. If the relationship is weak, the audience isn’t paying attention and the message will have low attention and low impact.

When you set yourself up to achieve all three, you’ll be more likely to build influencer marketing campaigns with a better outcome.

We’ve translated these three variables ☝into three actionable strategies👇 (that will help you with your next campaign).

1. Audience First
Make sure that the creator you’re working with has an audience that overlaps with your audience. Make sure that you understand how many creators there are in a specific follower range and your market. This overview will help.
Ask yourself: Who is our target audience? Who has an audience that can help us reach this audience? How large audience should each person we’re working with have?

2. Talent independent
There are more than 2 million YouTube channels with 500+ subscribers.
There are more than 10 million creators on Instagram with 1,000 followers.
Work with a partner that can tap into this entire group of potential creators and help you find those that have an affinity for your brand, expertise, and credibility.

Ask yourself:
Is there a natural liking for my brand or sympathy for the marketing message? (Affinity)
Is this person knowledgeable in my particular field? (Expertise)
Why is this person trusted or believed by their audience, and what’s the “reason to believe” in the marketing message or your promise? (Credibility)

3. Optimized for engagement
Engagement is a great proxy for how strong a relationship is. It’s also a great way to objectively assess if the audience is paying attention to your message.
Aim to work with creators that have an exceptional level of engagement. You can reference this document for some engagement benchmark numbers.
Ask yourself: What target engagement rate should we aim for? Is this number reasonable with the former two strategies in mind?

That’s it.

You optimize these three variables by applying these three strategies, and you’ll be more likely to create marketing with more influence.

Do you want help implementing these strategies in your next campaign?

They’re based on the framework and process we use when we build custom influencer marketing programs for our clients.

If you’re intrigued to learn more, Head over to this page and pick a time that works for you.

If it’s the first time we speak, we’ll evaluate if you’re in a position where we think we can help, and you’ll obviously get a chance to ask any question you might have.

– David Ogilvy

I love movies that make me cry, because they’re tapping into a real emotion in me, and I always think afterwards: how did they do that?

– John Lasseter, Chief Creative Officer @ Disney Pixar

The best mentorship program in the world

There’s something intriguing and magical about non-fiction books.

First, somebody spent years –sometimes a lifetime even– on learning and mastering their craft.

Mistakes were made. Lessons learned. Then, they decided to be of service to others and share what they’ve uncovered with the world.

They took their time to distill that experience, knowledge, wisdom, and insights in a format available and accessible to all.

Then, you and I get to have all that value for $27.95 or so.

49,500 pages of insights

I’ve got 174 books on my Kindle.

That’s a lot of books I guess… but Amazon has made it too damn easy not to.

Most of them on marketing, sales or business.

At 285 pages per book, it adds up to 49,500 pages of insights.

Not only a lot of books, but also a lot of reading.

Some of them were pretty bad. But…

…if you learn just ONE thing from each one that can help move you in the right direction… it’s time well spent (for me, anyway.)

Some of those books were exceptional. The top 10%.

They’ve helped me shape the way I think about copywriting (#7 on the list), storytelling (#15), brand-building (#17), advertising (#1), culture (#16), psychology (#6, #11), consumer insights (#4), salesmanship (#13), influence (#11), PR (#2) and entrepreneurship (#7, #15)…

They’re weird (#5), full of inspiration (#9), classics (#1), ruins the fun of going to the movies (#15), and will help you write better email copy (#8).

Enjoy:

17 Underrated Books On Marketing, Sales & Business

(In no particular order).

1. Ogilvy on Advertising
   A must-read if you’re in advertising.
2. Trust Me, I’m Lying: Confessions of a Media Manipulator
   An interesting take on the modern media landscape of digital PR. Just halfway through, this book literally saved me $13,000 in a little less than 48 hours (A story for another time).
3. Grinding It Out: The Making of McDonald’s
   In 2016, it was estimated that the McDonalds brand was worth more than $88 billion. This book is how it all started. Later turned into the movie “The founder” (On Netflix if you haven’t seen it.)
4. Ask.
   Lots of tactical step-by-step advice on understanding who your customers are and what they want to buy from you.
5. Making Them Believe.
   A quite bizarre tale to be honest, but never the less a really fun and entertaining read. Dr. John Brinkley, was, at one time, the wealthiest doctor of his time and undeniably the most Barnum-esque promoter in medicine that the world has ever seen.
6. Pre-Suasion
   A sequel to the classic “Influence” by Robert Cialdini.
7. The Entrepreneur’s Guide to getting your shit together.
   John Carlton started out as a freelance copywriter that snuck through the back doors of Los Angeles advertising agencies to do the hard-core sales jobs their staff writers couldn’t pull off (because they didn’t understand street-level salesmanship)… and this book is a collection of his best (and most recent) lesson-dense private articles to insider colleagues.
8. The Boron Letters
   A series of letters by history’s greatest direct-response copywriter Gary C. Halbert, explaining insider tactics and sage wisdom to his youngest son.
9. Creativity, Inc.
   Few have mastered the art of storytelling like Pixar. This is the inside story of how they run their business, told by its founder Ed Catmull. A great read for anyone in the business of creativity.
10. Launch
    Understand how the product launch tactics of Apple and the likes can be applied to any business. Very tactical and hands-on advice.
11. Influence: Science and Practice
    The psychology of why people say “yes”. A classic must-read if you’re in marketing or sales. Also by Robert Cialdini.
12. Contagious
    Why are some products and ideas talked about more than others? Why do some articles make the most emailed list?
13. Way of the Wolf
    The ”real“ Jordan Belfort from motion picture Wolf Of Wall Street wrote a book on mastering sales and psychology. I dislike the title, but the content is fantastic if you work with sales or marketing.
14. Save the Cat! The Last Book on Screenwriting You’ll Ever Need
    One of my favorite books. Once you’ve read this you’ll know how any Hollywood movie will play out minute by minute. (Heads up — It will ruin some of the fun of going to the movies.).
15. Lost and Founder: A Painfully Honest Field Guide to the Startup World
    Rand Fishkin, the founder and former CEO of Moz, reveals how traditional Silicon Valley “wisdom” leads far too many startups astray, with radical transparency (and a whole lot of humor).
16. Hit Makers: How to succeed in an Age of Distraction
    The chapter on how data scientists proved that “going viral” is a myth is worth the entire book alone. Atlantic senior editor Derek Thompson uncovers the hidden psychology of why we like what we like and reveals the economics of cultural markets that invisibly shape our lives. A magical mystery tour through the last century of pop culture blockbusters and the most valuable currency of the twenty-first century — people’s attention.
17. Building a StoryBrand: Clarify Your Message So Customers Will Listen
    Storytelling works. It’s also misunderstood by most marketing professionals. The story — or the hero in the story– isn’t you or your brand. It’s the customer. The StoryBrand Framework teaches you to stop playing the hero in the story, and instead, invite customers into a story that is centered around them.

What are your favorite books on marketing, sales, and business?

Two years ago, I worked with a global client in the fitness and nutrition industry.

Influencer marketing worked really well for them on YouTube. Their main goal was to create traffic to the App Store and installs for their app.

We had sophisticated end-to-end tracking in place to know exactly what happened to someone that watched a video, clicked on a link, and installed their app.

But they (and consequently my team and I) had a problem.

We didn’t know what the organic uptake from these efforts was.

Like, how many people would watch a video and install the app without clicking on any tracking links?

A common problem, of course. Across other media channels as well.

You’d watch a commercial on TV and buy the product in the store the next week.

And as such — attribution modeling (and the cause/effect of advertising) is something that marketers have struggled with since the dawn of time.

But if you’re investing in a media channel, you’d want to know.

Makes a big difference if you get ONE more customer or FIVE, doesn’t it?

That number will make, or break, your entire return on investment.

To help our fitness/nutrition client with their challenge, we built a model that looked at normalized average traffic, uptake, correlation to video views, etc. etc. etc. and finally established a number and attribution model we felt comfortable with.

For every install we could directly attribute, we’d get between 3 and 4 additional installs organically.

A multiplier of +300% to +400% in organic uptake.

Isn’t that crazy?

I had my doubts. We looked at different markets, different dates, cohorts, videos, but couldn’t get to any other conclusion.

But as they say:

When you have eliminated the impossible, whatever remains, however improbable, must be the truth. — Sir Arthur Conan Doyle, stated by Sherlock Holmes.

Makes more sense when you think about it. You’re less likely to stop in your tracks, interrupt what you’re watching and follow a direct call to action.

A. You’d watch a video, someone recommends a product and you’ll check it out later (rather than abandon what you’re watching)

B. You’re watching the video on your computer and you pull up your phone to get the app because… well… it’s for your phone.

In either scenario, the direct attribution would be lost.

But still – when your vendor or agency is telling you that things are +400% better than the numbers you see in your dashboard, you better make sure that they’re in the right ballpark.

(And Impostors Syndrome naturally makes me a skeptic 😂 )

Don’t get me wrong.

I had full confidence in my team and our ability to build these models, but the datasets are limited, and there will always be a margin of error.

In order to have a truly bulletproof attribution model, you’d have to analyze exactly who watched the video and who went to the App Store.

But we don’t have that data.

Because we’re not Apple, Google or Facebook.

Thinking about it… not even Facebook or Apple would have that data because they’re not on YouTube.

But…

Google owns YouTube. And the Play Store.

They know what we watch, and what apps we install.

And you’re about to find out what they have to say about all of this.

Fast forward two years and Google recently published a comprehensive study on how they built their own attribution model for influencer marketing on YouTube.

They’ve worked directly with their app publishers and analyzed 250 videos with 60 million views.

It’s a 15-minute read and I don’t expect you to read the entire thing, but I’ll leave you with the highlights:

We looked at games in different stages of their lifecycle, and at videos from both small and large influencers.

We then piloted our measurement model: did the users who watched an influencer video actually download the game on Google Play afterwards? And is the number possibly higher than the developers used to measure via a tracking link? Or in other words: is there an incremental upside nobody could prove so far?

There is.

After investigating the post-watch user journey of more than 250 game videos with over 60 million views, we compared notes with the tracking efforts of the respective developers.

Et voila: for every person who is clicking on the tracking link of an influencer video on YouTube, there are 4 more people who are not clicking but still download the game within four days after watching.

We are calling this large group of users the ‘non-tracked majority’. The multiplier of 4x is good news to all marketers who want to prove the value of working with influencers to their CFO.”

Turns out that the improbable was true 👇.

Et voila: for every person who is clicking on the tracking link of an influencer video on YouTube, there are 4 more people who are not clicking but still download the game within four days after watching.

We are calling this large group of users the ‘non-tracked majority’. The multiplier of 4x is good news to all marketers who want to prove the value of working with influencers to their CFO.”

Total game changer for my case of Impostors Syndrome, and more importantly the way we help clients understand the impact influencer marketing on YouTube can have on the growth.

It’s to be noted that this isn’t a one-size-fits-all metric.

The organic uptake will likely be different for your business (I’ve seen it range anywhere from +25% to +1250%) and it’s, as such, important that you measure and understand your own attribution model.

Regardless of what your numbers look like, you’ve now seen the huge upside that “the non-tracked majority” will have on your business, specifically, if you’re driving installs to an app or sales in e-commerce.

Scaling your influencer marketing?

If you’d like to book some time with my team and chat about how we can help you build high-performing influencer marketing campaigns on YouTube (or Instagram), you can head over to our website and fill out this short form.

About the author

Aron Levin is the co-founder and Chief Marketing Officer at the global leading influencer marketing company Relatable. He’s worked with advertising operations at gaming company King and growth at Spotify.

You can connect with Aron on LinkedIn or over aron@relatable.me

And I have this theory:

The music part of the festival is dead.

And… all it took was a 27-year-old woman with 4 friends and $1,345. But let’s rewind…

With 250,000 festival attendees over two weekends, Coachella is one of the largest music festivals in the world.

Some of the biggest artists in the world have headlined the festival…

… and brands like Revolve, Heineken, BMW, Absolut, Bondi Sands, and others line up to leverage the cultural relevance of the festival — Known for attracting consumers, creators, influencers and celebrities from across the globe.

But…

… I’ve just made an interesting discovery.

The influencers and creators that are attending the festival…

… couldn’t care less about the actual music.

In fact…

We’ve surveyed 821 influencers that are attending Coachella and other festivals this year.

A full 93.7% cite that they attend Coachella and other festivals for reasons other than the music.

33% are not even attending the actual festival.

They just go to Palm Springs and Party @ #Nochella.

By the way — I’ll go on the record and admit that I really dislike the term influencer. Influence is an outcome, not a profession. It’s like “authenticity”. (A great outcome, but not really for you to decide.)

Totally guilty of using both the I-word and the A-word, though. Guess you have to talk the talk.

Anyway, to finish my point:

When you have hundreds of thousands of wildly engaged followers that know, like and trust the story you tell…

… you have the power to influence the perception of what a cultural happening like Coachella actually is.

Because a brand is no longer what you tell your customers… It’s what they tell each other.

And they’re not talking about the music.

Heck, I don’t think I’ve seen a single creator share a photo or story from an actual artist performance.

And so…

The music is no longer a part of the story.

It’s dead.

So, what’s the story about, then?

97% (!) say that style and fashion are key elements in their festival experience.

And this isn’t your average Jane.

The average survey participant had 345,000 followers and traveled to the festival with 4 friends.

She (86%) is 27 years old (on average), stays at a hotel (40%) or Airbnb (33%)… and will spend $1,345 (on average) on her festival experience.

Those are some REALLY appealing facts.

A talented and creative individual with a large social circle, money and AND power to influence and shape culture (and perception of relevancy).

And guess what…?

… 99.7% (like… everyone) expressed an interest in working with brands while attending festivals!

Massive opportunity @ Way Out West, Ultra, Lollapalooza, etc (Full list of festivals here).

Now imagine for a second that your target audience is a woman in her 20s-30s with spending power and a loyal group of friends…

That’s the greatest marketing opportunity ever, isn’t it? Sure could be… and we’d love to help.

But… I get it.

You might be like…

“I sell dishwashers! How would this possibly apply to me?”

You’re right. This specific opportunity is likely not for you.

But you know what? There are other equally relevant opportunities out there. Our clients use similar strategies to build influencer marketing campaigns for both dishwashers (Whirpool), bananas (Chiquita) and financial services (Klarna).

It’s all about executing on the right moment, with a creative angle and big idea. Head over here and tell us what your challenge is, and we’ll set up some time to chat.

The bottom line? A brand, product – or in this case, a festival – is no longer what you tell your customers, it’s what they tell each other.

Coachella (and other festivals alike) have always been about the experience– and the music doesn’t seem to play an important role in the festival narrative anymore.

What moving across the globe with my family can teach you about modern marketing, backed up by data from 2,989 consumers.

Buying more things in the last 30 days than the previous 30 years, I realized that the idea of a traditional marketing funnel isn’t real. Turns out that the Research Team at Google came to the same conclusion.

It’s been a while since I published an article, but then the reason for finally sitting down to type up my thoughts was triggered by the very same thing that’s been stressing me out and keeping me busy for the last few weeks.

See, about a month ago me, my wife and our two kids fully relocated from Stockholm, Sweden to Venice, CA.

And… I’m not sure if this was a genius or stupid idea, but in the big move (which you’ll learn in a second really wasn’t that big of a move) we decided to leave all our stuff behind.

Now — having to buy everything from scratch is an incredibly interesting experience and holds several invaluable lessons for anyone who works with marketing.

(What this eventually will segway into… if you just hang in there for a minute 😉)

In fact, I’ve gone through more “customer journeys” and “marketing funnels” and made more buying decisions in the last 30 days than the previous 30 years.

From coffee beans to home insurance the list extends to cars, banking, kitchen equipment, furniture, schools, nanny and gardening.

And in the proccess, I’ve had this big revelation (which I’ll back up with less anecdotal data in a minute)…

Perhaps thought-provoking at first, but throughout the proccess, I started to think about how I went through the sales cycle for each “item”.

And I began to realize that both the idea of a ”marketing funnel” and ”customer journey”, actually aren’t real.

As marketers, we’re taught to build and plan campaigns that funnel potential consumers through a pre-determined sequence: The average ideal path for your unique product where each consumer goes through stages of awareness, interest, desire, consideration, and preference before ultimately making a purchase.

From an academical point of view, these things could probably be qualified as “real”, but the big revelation to me is that they really can’t be applied to modern marketing.

To build on the idea, I thought about four specific buying decisions I’ve made in the last 30 days:

PURCHASE #1: PEER PRESSURE

I spent two weeks searching for the perfect coffee maker. I figured I’d find the best one, and spent a lot of time reading reviews, browsing Amazon and talking with friends. But then, one morning — My wife had finally had enough of instant coffee (boiled over the stove) and snapped at what quickly turned into a “call to action”. No retargeting, brand preference, consideration, Facebook Ads, email marketing or in-store visit — I pulled out my phone and ordered the coffee maker that was in my Amazon shopping cart.

PURCHASE #2: SO MUCH FOR DESIRE

Secondly, I bought a car I’d never even seen in real life. The make/model is new and doesn’t even exist outside of North America (for the record — It’s not a Camero or Dodge Viper 😂).

The trigger that led me down the path to purchase? A random conversation I had with someone three months ago. I spent 4 hours on YouTube watching video reviews before buying the car over email without talking to anyone in-person. Stress, not desire, was the purchase driver.

PURCHASE #3: SCARCITY OVER FRIEND REFERRAL

Someone referred me to one of the best elementary schools in LA. I was sold. Hours of research, talking with friends and reading reviews. But — In a turn of events of no less than 24 hours we not only found another school but also went there for a tour, made a decision on the spot and enrolled my daughter to start the very next day (That I found with a quick online by pure luck the day before.). The “buying decision” was made on the spot and scarcity combined with the right gut feeling disrupted the entire “customer journey” I thought I was on.

PURCHASE #4: LAST IMPRESSIONS

After having seen a gazillion Geico commercials I drew a blank when it was time to get home insurance. Instead of reviewing my options (like I had done when buying a coffee maker), talking with any of my friends (which I had done when searching for a school) or spending even a split second on comparing options online I googled “state farm home insurance” and made a purchase in less than a minute. In hindsight, I realized that I had seen the State Farm logo on an envelope just 15 minutes earlier and that last impression had preference over years of brand building, unaided awareness and frequency.

Here’s what I’m getting at: There’s no clear pattern and there’s no consistency.

Some of these purchases had hundreds of touchpoints throughout the path to purchase. Others? Close to none. Correlation between price, importance, and consideration? Random.

It’s the kind of behavior that would drive any marketing scholar or academic completely nuts.

In concluding their research, they’d probably have me labeled an outlier. Or crazy person. Or… more likely that a sample size of one person isn’t enough but that patterns would emerge in a large enough data set.

But that’s where they’d be wrong.

See, right in the middle of this whole experience, my co-founder Peter shared this must-read article:

https://www.thinkwithgoogle.com/feature/search-intent-marketing-funnel/#/

Turns out that the research team at Google have thought long and hard about this as well.

And rather than relying on anecdotes from a crazy person (or sample size of one), they enrolled 2,989 individuals in their study.

With the permission of each individual, Google tracked cross-device shopping behaviors over a period of 6 months to properly segment what their different consumer journeys looked like.

Their conclusion? No two journeys are exactly alike, and in fact, most journeys don’t resemble a funnel at all. They look more like pyramids, diamonds, hourglasses, or what my 5-year old would draw in her unicorn notebook.

So what does that mean for brands? Simply, as outlined by Google in their research and this great follow up article, that marketers no longer can build their campaigns around the idea of a linear journey.

Today, consumer choice heavily influences reach and frequency and they choose to engage with brands that are relevant, helpful, and personal.

You have to create touchpoints that engage, entertain and have meaning to consumers regardless of where they are in “the funnel”. I’d extend their reasoning and argue that there even isn’t such a thing as “brand marketing” or “performance marketing”. There’s only marketing with good or bad performance. (deserves a separate article though.)

The best brands in the world get this and that’s how they get to stick around, regardless of how big or small they are.

The influencer marketing campaigns we’ve built with our clients over the last three years have proven that you can create effective marketing that is both relevant, helpful and personal (to draw a parallel to the research from Google) — and I’m looking forward to having the opportunity to help you and your brand in Q4 and throughout 2019.

Regardless, I strongly recommend both articles and their insights — all highly actionable as you’re planning out your final quarter of 2018 and 2019 (and beyond).

From: Aron Levin <aron@relatable.me>
To: The Inner Circle [List]
Date: Aug 15, 2018, 1:29 PM
Subject: Merry Xmas 🎅

Ho, Ho, Ho… The audacity of a Merry Christmas email in the middle of August!

But stay with me for a minute… Because if there ever was an opportunity to use a countdown timer to evoke a sense of urgency, that time would be right now:

See, we’re now less than 100 days away from Black Friday — The arguably most important day for consumer brands in e-commerce and retail.

The Four-day Black Friday Weekend kicks off the holiday season in many parts of the world and the period between Black Friday and Christmas accounts for roughly 30% of annual retail sales.

In other words — The busiest shopping days of the year, both online and offline. And there are 700 billion dollar reasons to pay attention:

In the United States alone, an estimated 137 million people went to stores over the four-day Black Friday weekend last year. On average, each shopper will spend $1,000 on consumer goods over the holidays.

Here’s why I’m telling you this:

The majority of the brands that are out there will allocate a large proportion of their annual marketing spend over this period, to fight for the attention of these hundreds of millions of consumers.

But getting the attention of your target audience is already a challenge (maybe the biggest one there ever was), and in this increasingly competitive world of getting the attention of your audience, I don’t think the traditional channels will be that effective. (Did you know that 67% of 18–24-year-olds use ad blockers?).

Add to the fact that traditional media is getting more and more expensive and we have this huge challenge, coupled of course with an equally massive opportunity. In fact (and I was promised to leave out their names), some of the big media buyers are bulk-buying advertising inventory on Facebook and Google through their account managers to secure the best possible rates ahead of everyone else.

So in exactly 100 days from now, it’ll likely be very competitive.

YouTube Santa to the Rescue! 📺 🤶

With Influencer Marketing on the rise, YouTube and Instagram will play an important role for brands and consumers this Holiday Season.

But what triggered me to write you this article wasn’t the 100-day mark to Black Friday, but rather because Santa decided to show up early this year (With a camera crew, down by the fishing pier in Venice Beach).

A popular Vlogger (with a camera crew and everything) all dressed up like Santa — shooting content in time for this Holiday.

Crazy right? But going back to our timelines and planning I realized that it makes a ton of sense, for two reasons:

1. Planning and Production
2. Commitment and exclusivity (Supply and Demand)

What you and your team can do to get ahead

With talented influencers and individuals on both YouTube and Instagram, you’ll win big by getting ahead of the competition when you secure talent for your influencer marketing campaigns that are coming up this Holiday Season ahead of everybody else.

I’d go even further and leverage the power of influencer marketing to create “What I’m buying this black Friday” YouTube Videos and Instagram Stories/Feed Posts that you launch ahead of the official start of the holiday season.

With that said, there’s roughly a 30 to 60-day lead time (our proxy based on over 5,000 collaborations we’ve done, depending of course on the complexity of the project) for executing such a campaign with high quality and the right number of people to truly make the right impact.

With a 60-Day production timeline in mind, in about 30 days from now, lots of the brands that are doubling down on their influencer marketing efforts will start going after the same talent and influencers in these channels.

Secondly, if you wait too long there’s an increased risk that the talent you want to get onboard for your campaign will be unavailable due to exclusive collaborations with other brands — or simply that they already have too much on their plates to take on an additional project (I just heard from someone we’re working with that “Unfortunately, their promotional schedule is booked until January of 2019.”).

Three actions you can take starting now

1. Launch your Influencer Marketing campaign ahead of the 100-Day mark. An example would be the previously mentioned “What I’m buying this Black Friday…” but your brand, marketing objective and target audience and how you plan to integrate influencer marketing with your overall marketing strategy should be what dictate the direction (We’d can help you develop a more detailed creative direction.)
2. Have at least a 60-Day lead time for production. (Hit me up at aron@relatable.me if you’d like a detailed production timeline framework you can use in your planning.).
3. Leverage the head start to avoid a scenario where your participation rate drops too low (i.e. when demand outweighs supply). Aim for 20% participation rate, but be wary that it will be lower the longer you wait.

Finally — Having worked with over 80 consumer brands across 40 different markets, we’d love to be your Influencer Marketing Partner this Holiday and beyond. You can learn more about what we do and schedule some time to chat with our team over at https://www.relatable.me

Happy Holidays, I guess ;-)
Aron Levin — Founder @ Relatable

This article was first published as a bonus chapter in The 2018 Influencer Marketing Handbook. You can claim a free copy of the book (I’ve paid for the book, you cover the shipping :-) here.

What does Space X, Bitcoin, Spotify, Uber, Slack, Flappy Bird (You do remember Flappy Bird, right?) and Amazon Prime all have in common?

Incredible growth — Driven primarily by word of mouth.

Their users, customers, loyal fans and their brand ambassadors can’t seem to keep the mouths shut — and that’s a good thing! But what is it, specifically, that makes a product or service like those aforementioned talk-worthy? Are there commonly shared attributes amongst these examples that make them more likely to be successful?

And if that would be the case– can we, as marketers, break down the elements and incorporate their principles into our creative development (and even product development) to be more likely to succeed?

Do you remember when your friends told you about the app where you could press a button and have a private driver arrive within minutes?

The music streaming service that would have you play any song on demand, for free, instantaneously?

The annoyingly simple yet addictive little mobile game with the flapping bird?

Flappy Bird conquered the world, its Vietnamese founder Dong Nguyen lost his mind, and took the app off the App Store — But do you remember when it first exploded all over Twitter and then blew up in the news?

These things, seemingly random, are not.

Having spent more than five years at Spotify, working specifically with user growth (and prior to Spotify at King Digital Entertainment, the maker of Candy Crush — another great example that could fit into the previously mentioned list of successful products), I had the unfair advantage of getting to study these things first hand, as they were taking place, with access to all the relevant data and insights that an outsider wouldn’t have.

Uncovering The 7 Principles of Word of Mouth

When I began to break down what caused certain products and services to be more talked about than others I found that the more of the following principles you could apply, the more likely your brand, product or service (or marketing campaign) would be to gain traction through word of mouth.

See, the best marketing in the world (specifically influencer marketing) doesn’t have to be overly creative to drive exceptional buzz or word of mouth. Instead, it can be dressed down to a point where you’re amplifying a message that is already out there in the market that resonates with the audience you’re aiming to reach.

It sure isn’t a one-size-fits-all solution, nor is it always easy, but can be extremely powerful when appropriately applied.

Speaking of applied insights, what does this have to do with influencer marketing, and the context and contents of this book, you may ask. Well, if the core message in your campaign can tick these boxes, then the engagement in your campaign, the earned media aspect and the amplified word of mouth, will improve dramatically.

Without further ado, let’s jump into the 7 Principles of Word of Mouth that you should ask yourself when planning out a launch, positioning or creative idea.

1. Does it solve a problem?
2. Is it easy to talk about?
3. Does it feel good to share?
4. Does it evoke a sense that the world is an amazing place?
5. Does it start a conversation?
6. Is it relevant to our core target audience?
7. Once experienced, does it exceed your expectations?

Now, going back to the list of Space X, Spotify, Uber, Bitcoin, Slack, Flappy Bird and Amazon Prime you’ll begin to see how the answer more often than not is yes.

How about commercial messages and advertising? Head over to Google and type in “Top Ad Campaign Of The 21st Century” (link to save you the trouble) and you’ll see that the list by AdAge is featuring campaigns like:

• Dumb Ways to Die
• Apple — Get a Mac
• Red Bull: Stratos
• Dove: Campaign for Real Beauty.
• Old Spice: The Man Your Man Could Smell Like

Check them out, go back to the list, and you’ll see that these principles can be applied to some of the most iconic adverts ever produced (they seem to be the ones most frequently shared, as well).

So what problem does the Old Spice commercial solve? It spoke to women without alienating men.

Just like the Red Bull Stratos campaign did indeed evoke a sense that the world is an amazing place. Does it feel good to share the Dumb Ways to Die video? In fact, it’s so entertaining that they turned into not one but two mobile games. Did the iconic Get a Mac campaign start a conversation relevant to its core target segment?

They solve problems, are easy to talk about, feel good to share, evokes a sense that the world is an amazing place, start a conversation, are relevant to a core target segment of customers and exceed our expectations as consumers.

It’s to be noted that there’s naturally a varying degree of problem-solving, conversation-starting and feel-good involved in each of these examples– What’s important is to have your messaging and creative idea align with as many of these principles as possible to the greatest extent that you can.

Let’s dig deeper and break them down:

1. Solving a problem

Products and services that solve problems better than anything else will naturally have an organic intake of new users. Uber is an amazing example, Slack is another. Space X is solving the problem of saving humanity while Spotify is making the world’s music accessible to everyone.

But this can also be in the form of entertainment (Flappy Bird, Candy Crush) or your way of communicating an issue or culturally relevant topic (Old Spice: The Man Your Man Could Smell Like, Dove: Campaign for Real Beauty).

For influencer marketing specifically we’ve got a few examples to share:

One of our clients has produced more than a hundred videos on YouTube where each video, made by the influencer, is highlighting a specific feature that they really like about the mobile app and how it solves a problem for them.

We recently created and distributed a series of 60-second videos (“Coffee Break Tutorials”) for Adobe with a behind the scenes look at how some of the most talented photographers in the world edit their photos.

In fact, we’ve produced several campaigns for Adobe centered around the idea that people that follow talented photographers on Instagram are eager to learn how they create their content (Behind the scenes).

2. Making it easy to talk about

Half of the work we do is often to encapsulate and simplify an idea to a point where it’s easy to talk about from both a content creator and content consumer point of view.

Keep it simple, and it will be easy and more likely to talk about. In short — If you can’t share the core idea in less than a few sentences around the dinner table, it’s likely not going to get passed around amongst people.

The other benefit of an easy-to-talk-about concept, idea, product or experience is how it ultimately shortens the viral cycle time. Much has been written about virality so I won’t go into great depth on the subject, but “viral cycle time” is essentially the time it takes from the second your message is received by somebody until that person spreads the word to the next person.

The shorter the viral cycle time, the quicker it spreads.

3. Feel good to share

I recently discovered an article from 1966 in the Harvard Business Review by Ernest Dichter. In the 52 year old article, titled “How Word-of-Mouth Advertising Works”, the American psychologist and marketing expert known as the father of motivational research, outlined the findings from his research uncovering that a person is more likely to talk about a brand if he “gets something out of it”.

But how does this connect to why we’re sharing what feels good to share?

His research revealed that we receive self-satisfaction from spreading what feels good to share specifically from a point of view of confirming our ownership and joy of the product, service or experience — and more specifically our discovery of it.

Think no further than back to a recent experience at restaurant, concert or vacation that made you feel really good and how you came back from said experience and told your friends about it. It helped you relive and receive the lovely feeling you felt at that time, and it made the other person feel good, too.

4. Evoke a sense that the world is an amazing place

There are a lot of negative things in the world — a lot of terrible things happening all the time, lots of problems that need to get solved — but life cannot just be about solving one miserable problem after another. There needs to be things that inspire you, that make you glad to wake up in the morning and be part of humanity…” ––Elon Musk

Ideas that successfully evoke the sense that the world is an amazing place — especially brands, services and products that are doing well — tend to evoke precisely these feelings. This also extends to people on both small and grand scale.

JFK evoked the sense that the world is an amazing place by declaring that he’d put a man on the moon and Elon Musk walked in his footsteps and decided that he’d put a man on Mars.

Noteworthy is that the principle of evoking a sense that the world is an amazing place isn’t just for those that are going to space — the idea also can also be applied at microscale from both a person, brand, or storytelling perspective. Look no further than for instance @peopleareamazing on Instagram and you’ll see how millions of people engage, relate, and share stories that are built around the 4th principle.

5. Starting a conversation

The best word of mouth is the kind you overhear on your morning commute. They start discussions, conversations, and provoke debates.

There are countless examples of products, services and creative advertising campaigns that are all built around the idea of starting a conversation to amplify its earned media and word of mouth — but what came to mind as I thought about this 5th principle was a rather unusual example from one of clients that we worked with back in 2016.

The conversation starter, and question, was:

“Could a long jump suit made of condom material make athletes perform better?”

In time for the 2016 Olympic Games, the condom brand SKYN turned to the creative community on Instagram in the fitness niche to launch a big campaign amplified by influencer marketing. It wasn’t a campaign directly promoting their core product; their condoms, but rather centered around an experimental long jump suit made of condom material. What blew us away beyond the incredible level of engagement in the activation was the conversations it started amongst hundreds of thousands of consumers that interacted with the campaign.

The campaign, designed to turn up the discussion around alternative material design, quickly ignited a wildly engaging conversation in its key target audience and successfully started a relevant discussion (and even debate) amongst the millions of consumers that they reached with their campaign.

6. Relevance to your core target audience

Sometimes overlooked, what’s often more important than having a message or idea that will travel around — is if it’s relevant to your core target segment. More than a revolutionary concept or idea this is a reminder, albeit arguably the most important one, that you craft your core idea around your core target audience.

7. Exceeding your expectations

When products exceed your expectations, you can’t keep your mouth shut. This is single-handedly the primary reason –in my own opinion– to why Spotify took off back in 2008 in Sweden (and later conquered the world.)

“It can’t be THAT good…Oh… Wait…What just happened?”

I felt the same way about the iPad, but not the Apple Watch. My Apple Watch doesn’t solve any problems and once experienced exceeded no expectations at all. All I had to do was charge it all the time. Sorry, Apple.

My iPad on the other hand, I thought would be a rather useless (albeit fun) toy, but quickly became a product I simply couldn’t live without (And later became indispensable in the modern parenting toolbox.)

If you can nail the 7TH PRINCIPLE, the growth of your brand, product and its services will explode.

It doesn’t matter if it’s your local bar, a music-streaming service, free 2-day delivery or a company building rockets that will take us to Mars. Elon Musk keeps exceeding everybody’s expectations — but remember that he’s playing by the same rules as your local favorite bartender.

See, we don’t tell our friends about the products and services we like or even love — We talk about what’s greater than we could possibly imagine.

“Did you see”, “Have you heard”, “You won’t believe”, “check this out” and “Can you imagine” is what will make it to the dinner table. That’s what matters because 90% of all word of mouth happens offline.

If you can turn your campaign, brand, product, or service (and often just ONE aspect of the aforementioned) into a dinner table topic because it exceeds expectations, you’ll see explosive growth through word of mouth.

And here’s how you do exactly that:

Amplifying a dialog that’s already taking place

The key to exceeding the expectation of your customers–at its very core– comes down to figuring out exactly what it is that your consumers are saying about you (that their friends, in turn, are sharing with their friends) and amplify that message.

Once you understand the word of mouth loop, you’ll understand the where, how, and why of how you can turn product marketing into word of mouth.

Pepsi Max applied this principle in one of their influencer marketing campaigns in 2017 where each participant shared the surprisingly great combination of Pepsi and Ginger — and how it exceeded their expectations. A bold promise that turned out to resonate well (Principle #7) with those fond of Pepsi Max and the taste of ginger (Principle #6).

We also — as human beings — tend to share the really bad news. The widely controversial, the things we truly dislike, are annoyed by or what pisses us off — But that’s a separate topic that isn’t useful in the context of modern marketing, in my opinion.

Going back to my first-hand experience at Spotify, I’d like to share a method I used to reverse-engineer the 7th principle.

Now, it should be noted that there are certain things I can disclose, and others that I can’t, but it should come to little surprise that both the growth of a subscription business like Spotify or a game publishing company like King Digital Entertainment ain’t exactly random.

What’s incredibly powerful though, and what I urge you to do for your brand, product or service, is to dive into the qualitative and quantitative aspect of what drives word of mouth to understand how it can be applied for either your core product, service or brand or to the development of a specific campaign, product launch, re-positioning or when tapping into a new target segment or market.

Back in 2014 for instance, a large proportion of the user growth at Spotify was driven by word of mouth — and while it’s possible to track referrals and traffic sources, it’s even more powerful to ask your users why they bought your product, subscribed to your service or downloaded your app.

You’ll want to go beyond where the users or customers are coming from and understand the how and the why.

How to pinpoint what’s driving your organic growth

Get yourself set up with a service like SurveyMonkey or Typeform and send out an email to users or customers that bought your product less than 30 days from now.

The email should be short and to the point and answer why you’re running the survey and what the benefit it holds for the survey taker (e.g. improve their experience or make it more relevant and aligned with their expectations.).

Your first step is to figure out where your customers are coming from. It’s likely that you already know these numbers– but follow along anyway.

Three examples of the first question:

1. “What made you sign up for our service?”
2. “What made you purchase our product?”
3. “What made you download our app?”

List the most common referral sources, and have the survey respondents pick a primary one. A few examples (adjust to fit your product):

1. I saw an ad for your product.
2. A friend recommended your product.
3. I found you on Google.
4. I read about you in the news
5. Other (short-form answer)

You’ll want to include the 5th option here if this is the first time you’re running this kind of survey to learn if there’s a referral source you’re missing (or phrasing your options in a different way than how they are perceived in the mind of the consumer).

Don’t worry though, this isn’t meant to be a scientifically reliable way to model attribution — This is highly effective yet somewhat ghetto marketing research.

Now, what you’ll want to do is take all users that picked Option #2 (Friend recommendation) and follow up with questions that will get you to understand the how and the why.

You’ll ask three questions (phrase them so that they make sense for your specific business):

1. What did your friend/or friends say that made you buy our product / Install our app / Visit our store (etc)?
2. On a scale of 1–10, how likely are you to recommend our service/product/brand to someone you know?
3. How would you describe our service to your friends?

What you’ll discover when you run this type of survey to your customers is absolutely mind-blowing.

The first question is the most powerful of all, as it will reveal exactly how your product is perceived in the market.

You’ll have to analyze each response individually and look for reoccurring themes and keywords. Pay attention to the answers. This can get time-consuming but take the time and you’ll instantly know more about your customers than anyone on the planet.

You’ll discover what promises your customers are making to their friends, and by following up with Question #2, you’ll see if the promise is fulfilled or not.

These are the conversations that are taking place around dinner tables, in emails, over coffee, at schools, workplaces and on the morning commute — whether you like it or not.

If you’re seeing a large proportion of your growth coming from friend referrals and many of the referrals are expressing that they’d recommend your service to their friends, you’re on the right track. Following up with Question #3 you’ll see what parts of your service they are impressed by.

You’ll also learn that there will be multiple clusters and segments representing different needs, problems and solutions. This is what I did at Spotify (and more recently for several other clients) to uncover exactly what customers in different segments, age-groups, countries and cohorts were saying about the service, product or experience they’re selling.

Incorporate these commonly occurring themes into your next marketing campaign (it work’s incredibly well for influencer marketing), and you’ll amplify your existing word of mouth. As a bonus, it will help your existing customers distinctly express what you know will resonate with the way they already talk about your brand or services.

Enjoyed reading this article?

It was first published in The 2018 Influencer Marketing Handbook as a bonus chapter. The book is available on Amazon and Kindle but I’ve also had a number of books printed and shipped to our office that we’re giving away for free if you cover shipping and handling. Head over here to check if it’s still available and claim your free copy.

sooo does anyone else not open Snapchat anymore? Or is it just me... ugh this is so sad.

The other week, Kylie Jenner tweeted that she doesn’t use Snapchat anymore, which caused shares of the app’s parent company to fall more than 8%.

With the recent spectacle unfolding as a result of the Kylie Jenner tweet combined with the recent re-design of Snapchat and rising popularity of Instagram Stories it made me wonder if we’re dealing with an anomaly … or if perhaps other social media stars, influencers and content creators are leaving Snapchat as well?

Turns out that 52% of influencers on Instagram have replaced Snapchat with Instagram Stories. Here’s the full scoop:

THE STATE OF THE INFLUENCER MARKETING LANDSCAPE

Relatable is a tech marketing company specialised in influencer marketing with offices in Stockholm, London and Los Angeles. Our company have worked with more than 4,000 content creators in 30+ countries over the last two years.

To uncover the state of the influencer marketing landscape in 2018, I ran a survey last week to learn more about how influencers across several markets and verticals –with a varying degree of followers– use different platforms and engage with their audiences.

Disclaimer: These numbers doesn’t necessarily represent the broader user base of Snapchat or Instagram. It could be heavily biased to the specific group we’ve surveyed.

97% PUBLISH INSTAGRAM STORIES

Mark Zuckerberg announced the launch of Instagram Stories in August 2016. A year later, in August 2017, we surveyed a selection of influencers on the platform to learn that 97% of them have published Instagram Stories.

Instagram have launched several features since, and the number of monthly active users on the platform hit the 800 million monthly active user mark in September 2017, with roughly 62% daily active users.

They will likely hit a billion monthly active users sometime this spring if growth doesn’t decline, and my back of the envelop math puzzling these metrics together puts the number of daily active users on Instagram Stories specifically at around 70%, i.e. 350 million daily active users.

Meanwhile, Snapchat grew from 173 million daily active users (Q2, 2017) to 187 million daily active users (Q4, 2017).

The survey I ran last week revealed that the number of influencers that are actively publishing to Instagram Stories is still at 97% and we also learned that 30% of influencers have streamed video through Instagram Live to their followers. (Relatable Creator Survey, 2018).

KYLIE JENNER IS NOT ALONE

The insight that surprised me more than anything else was the one uncovered from asking the following question:

Do you use Snapchat?

Both platforms are popular amongst its users, but I wanted to verify if influencers are in fact leaving one platform for another.

It turns out that the most common answer to the question was “I’ve replaced Snapchat with Instagram Stories” — representing a full 52% of respondents.

More than half says the’ve replaced Snapchat with Instagram Stories. Meaning, they’ve used Snapchat before but have now abandoned the platform for its more popular alternative.

27% answered that they use Snapchat and 21% replied “Never have, probably never will”.

Kylie Jenner may be one of a kind with her 100,000,000+ followers on Instagram, but the fact that a long-tail of social media influencers across various categories have already followed her footsteps, paints a picture far from pretty for the faith and future of Snapchat as a creator-friendly platform.

Aron Levin is the co-founder of Relatable and former Director Growth at Spotify. Head over to relatable.me to learn more about our data-driven approach to influencer marketing.