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Edition 6: April 21, 2023

The shift to multi-ecosystem in media buying and marketing.

As more and more advanced algorithms and models present in our lives, the role of many functions are changing—one in particular is media buying.

Over the last 18 months, most major digital advertisers have launched ad buying formats that rely more on ML models and less on individual inputs from a media buyer.

These ‘AI’ tools aim to deliver one promise — trust us with your controls, and we’ll get you the best performance. Essentially, they deliver your media to the people they think will give you the best return - based on their wealth of data (which is a problem).

Sometimes, they work well — other times, they do things you don’t want, like over-index on branded spend (without you knowing). All in the name of maximizing immediate, short-term ROAS.

This means that the role of single-ecosystem functions, like Paid Search Buying, is changing because the amount of control on advertising platforms is decreasing.

And so here we are, seeing a rise in black-box decision making algorithms—all trained on their own platform data.

This means that the advertising landscape is becoming increasingly controlled by algorithms which operate within their own channel vacuums - operating as walled gardens that optimize for the best return inside their garden, never able to see beyond their walls.

These ecosystems don’t talk to each other because the incentive systems don’t allow for it. Every platform wants you to spend the most amount of money with them - so data models and attribution are all skewed to over-index on their individual results.

This means that the entire media buying function will need to shift upwards to solve new challenges — maximization of the multi-ecosystem.

The future lies with those who can orchestrate the symphony of channels the best.

And in order to do that, you need data.

Not platform data - because those are skewed to shout from the rooftops that they’re the best. But an actual data model that looks across these walled gardens to tell connected stories to your customer across all channels.

The multi-ecosystem orchestrator will thrive and their success will be underpinned by the data models that connect these walled gardens together.

As automation permeates through the media landscape, the human function moves upstream to bridge the gap between systems to build truth in advertising metrics, and ensure that the story stays coordinated, connected, and human.

Because the buyer journey still belongs with us.

Best,

Kenneth Shen

CEO, Half Past Nine

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Edition 5: March 23, 2023
Making the difficult leap from go-to-market to market relevant.

There’s a valley of death between early go-to-market (GTM) growth and a mainstream scale-up.

The ability to traverse it by building market relevance is how brands achieve real scale.

The GTM phase is often the first five years of a startup’s life. It’s the discovery stage of product-market fit. The phase of tweaking everything to find what clicks.

When your existing customers rave about you, engagement is super high, and you’ve gotten your product just right - then it’s time to focus on reaching the wider market.

In the GTM phase, you’ll hopefully achieve sizable penetration into the early adopters in your market. But then growth often reaches a ceiling. Pipeline value might be growing but conversion rates often slow.

If your business growth has reached this metaphorical valley of death, it’s time for a strategy overhaul.

Traversing The Valley of Growth Death

Many founders think they need to drive more top-of-funnel. That’s definitely part of it, but it’s not the whole story.

What’s more likely happening is that you’ve reached a certain level of penetration in your serviceable addressable market, and a point of diminishing returns on your GTM efforts.

In other words, you’ve reached saturation on the early adopters most open to trying your product.

The next step? Igniting the mainstream.

Here’s how.

Product-Market Fit

It’s time to take a look at your product.

Yes, you have product-market fit. But, how well does your product satisfy the needs of the mainstream market as opposed to your early adopters?

Hopefully you recognize that expanding into new markets involves product innovation too. Your product needs to evolve because your audience is evolving.

They’re going from the people interested in trying something new and exciting, to the mainstream realists that are much slower at moving. They would also likely prefer a more complete solution over a visionary point solution.

Product-centric companies have a direct line of communication with customers and prospects that your competitors never see. (Something that separates the best from the rest.)

Message-Market Fit

Rethink your message-market-fit for how well your brand and positioning resonates with your next segment of customers.

The mainstream customer will require more convincing than your early adopters. The mainstream is more hesitant. Counterbalance this by leveraging your successes to tell an incredible story.

One of the best ways to move the mass market is to convince them they’re already late. Switch from, “Here’s why our product is better,” to “Here’s why everyone else is using this, and you are missing out.”

Work consistently to stack your credibility layers with social proof. This might take shape in a variety of ways, from case studies, partnerships, testimonials, showreels, awards, or media hits.

Channel-Market Fit

Next is distribution. Or, what I call, channel-market fit.

Young brands often bias heavily towards measurable, bottom-of-the-funnel  channels like Search and Retargeting where revenue is directly attributable.

They’re super measurable, but they won’t win you the mainstream market. Why? They center around demand capture, over-indexing on the latter half of the buyer journey where people have already decided to buy something.

To really achieve relevance you need to scale reach strategically, because this is where missteps can waste millions. You’ll need to create demand, not just capture it. And most painfully, you’ll need to overhaul your measurement strategy to account for the ‘unmeasurable’.

Equipped with a product that's suited for mass market and a story that resonates, the only thing left is to cascade your story to the world. Break out of your brand echo chamber and start telling your story to a much broader audience.

It’s the difference between a Google Ad and an influencer sponsorship. Or a Facebook ad and a billboard in Times Square (A data partner, like us, can help you better understand how these types of investments are working).

Nail these three, and you’ll go from idea > ignited > iconic.

Best,
Kenneth Shen CEO,
Half Past Nine

Edition 4: February 21 2023
The Consumerization of B2B SaaS; Why B2B is Becoming More Like B2C

Over the last 5 years especially, we’ve seen a radical consumerization of B2B SaaS products. A trend that will continue to expand throughout other B2B markets.

As B2B SaaS products become more mature and players become ubiquitous, the power is shifting from the enterprise buyer to the end users. Buying power is becoming democratized over organizations' user bases.

The Old way? Customers are enterprise buyers:

• Buying decisions are made top-down.
• A small number of people following checklists make decisions for a larger number of end users.
• SaaS products are centered around the enterprise org, with required training, archaic UI, long + high-friction sales cycles.

New way? The power shifts toward the end user:

• Buying decisions are made bottoms-up.
• The demand and preference from internal users highly influences the decision.
• SaaS products are built for the end user, with modern UIs, freemium/self-serve models, and a focus on UX/CX.

The result?

UX + CX is the modern B2B brand’s secret weapon.

End users are more and more used to having a say in the enterprise tools they’re using AND simultaneously having less and less tolerance for poorly designed products with bad user experiences.

The young workforce has grown up in the Apple era of user experience and the baseline expectation for amazing experiences rises day by day.

For example, I have zero patience for DocuSign’s MFA requiring you to click on the text box in order to enter your code when it's the only thing on the screen. Or LastPass having 3 different settings menus. Wtf?

(Two SaaS products surviving entirely on inertia, if you ask me.)

Give me something that looks and feels like the products I’m used to in B2B SaaS (Slack, Notion, Miro) and B2C SaaS (Airbnb, Instagram, Amazon etc…).

This expands upstream into the buying experience too.

Your prospects don’t want to fill out gated forms for materials. Sometimes they are a necessary evil, but gating everything is extremely nonproductive. If the intent is there and your brand/content/marketing is good enough, 9 times out of 10 they’ll contact you first.

The focus needs to be on the prospect during the sales process, otherwise they’ll quickly lose patience and go somewhere else.

Your prospects want a demo on the first call (or the second only if you’re selling something customized) without being endlessly BANT qualified or waiting multiple days for a sales rep’s response.

It’s the same way Amazon Prime made 5-7 day shipping feel like an eternity. Expectations have changed. Sleek and user-centric B2B brands have made fresh, sexy experiences the norm.

And to legacy B2B products that don’t shift? Head’s up, new customer-centric B2B products are coming to eat your lunch.

Wrapping up:

• Influence is shifting from enterprise buyer groups to users.
• Focusing and prioritizing the end user is a non-negotiable in 2023.
• The new generation of users (myself included) are accustomed to Apple, Slack, Notion, Miro or Trello UX as default
• Remove friction from your sales process, damn it.

Best,
Kenneth Shen CEO,
Half Past Nine

Edition 3: February 24, 2023
What’s really going on with the Google Antitrust suit?

Last month, the DOJ launched a fresh antitrust suit against Google.

It accuses Google of monopolistic behavior in the digital AdTech market through anticompetitive acquisitions, forcing adoption of Google tools, and auction manipulation.

This suit only targets Google’s ad network business, which is ~12% of Google’s Revenue ($33B in 2022,) of which ~70% is passed on to publishers.

Simply speaking, Google’s AdTech business is a network of technologies that connects the supply and demand side of the digital display advertising space.

It comprises:

• Supply-Side Platform (AdSense), an
• Ad exchange (Google AdExchange), and
• Demand-Side Platforms (Google Ads + Display & Video 360).

To better understand what’s going on, the history is key…

In Google’s early days, its first business model (and arguably still the only successful one besides Cloud) was Search Ads.

However, the value of the display ads market couldn’t be ignored. It sold third-party website inventory to advertisers - aka those banner ads you see on websites. DoubleClick was a leading platform with expertise serving display ads, owning many key relationships with both publishers and advertisers.

Not capitalizing on this was viewed as an existential risk, so Google began aggressively acquiring their way into the market. The acquisition of DoubleClick (2007) was the most pivotal moment. The acquisition allowed Google to connect their network of advertisers (the largest at the time) with DoubleClick’s vast network of publishers.

Overnight, Google became the most powerful digital advertising intermediary and marketplace.

It then networked supply and demand through a real-time auction platform, allowing for advertisers to bid for ad placements on publishers' websites. The auction model was revolutionary, accomplishing two things:

• Improved access and pricing for publishers (through real-time advertiser competition at scale).
• Improved ad quality for users (ads ranked lower by quality metrics require a higher bid).

The end result is a market-leading Google AdTech stack spanning from demand to supply, with their own exchange in-between.

The key to Google’s success seems mostly attributable to:

• They pay publishers the most (~70%, compared to previous models of 50/50 or less).
• They’ve built the best applied data models to serve effective, quality advertising.

Although ultimately, publishers and advertisers do still have plenty of options elsewhere, including other ad exchanges.

So what’s the issue?

Google’s rampant success. It owns an estimated 90% market share in sell-side inventory, 50% in ad exchanges, 80% in demand side ad networks, and 40% market share in demand side platforms.

And the DoJ appears to see Google’s 10+ year old acquisitions as part of the problem.

What would happen if Google’s AdTech was broken up?

Two opposing scenarios:

• The DoJ’s hope // Reducing Google’s position would encourage more competition between exchanges and AdTech tools, incentivizing greater efficiencies through more innovation.
• Our take // Publishers will make less money, and user experience will drop. A break up would actually lead to a worse outcome for everyone. Google connects the most advertisers with the most publishers by providing the best network experience. And they maintain the position by providing the best cost model to publishers. Is this monopolistic behavior, or, is it just simply having a better product with better network effects?

And there's a secondary question here, of whether the DOJ should be able to rollback 15-year-old acquisitions?

Don’t get me wrong, I do think there’s plenty of antitrust regulation that needs to happen in the sector. For example:

• Anticompetitive practices from big tech involving bundling (and really, market dumping) of B2B SaaS clones (looking at you, MSFT).
• Apple's 30% app store fee perhaps being the definition of unfair monopolistic rents.

At any rate, Google currently faces challenges on multiple fronts.

An earlier DOJ suit against its all-important Search business is also still ongoing, and the explosion of ChatGPT creates pressure to keep up as Search is set to be revolutionized.

Interesting times ahead.

Best,
Kenneth Shen CEO,
Half Past Nine

Edition 2: February 9, 2023
A Problem With Aggregated Metrics

As a marketer in 2023, you likely spend a lot of time looking at data.

Here’s how to avoid a common analytics mistake; Simpson’s Paradox.

Simpson’s Paradox occurs when the trending direction of an aggregated metric is reversed if the supporting data is separated out into segments.

Here’s a simple example.

You check your website’s average session duration on your website in a month-over-month view. You see a +33% increase. Looking good!

However, you double-click to breakdown desktop vs. mobile as audience segments. When you compare the average session duration for February against January, both desktop and mobile engagement decreased. It’s the opposite of what the previous table showed. What happened?

Hidden variables, such as the sample size or quality of grouped data sets, can be distorting.

Pulling in session count as an additional dimension reveals that sessions reapportioned in February. This created a weighted-average distortion that’s easy to miss, especially since metrics like avg. session duration are not often viewed with volume metrics like session count.

This phenomenon highlights the importance of good data intuition; data is often simplified into dimensional representations of a much more complex situation.

Common reporting tools like the Google Analytics reports contain entirely aggregated data, and are susceptible to fallacies like this one.

The solution:

• Use your intuition, and double-click into your data-sets if something feels off.
• When running multi-variate tests, don’t stop a test until you have a high-degree of statistical confidence and a low margin of error.
• Don’t generalize a test result without first exploring the dynamics and audience segments affecting behavior.
• Build your own data systems that allow you to use event-level data and reduce situations like these.

Continue to get to know your data better, because mining it might hold the keys to your most pressing growth challenges.

Best,
Kenneth Shen CEO,
Half Past Nine

Foreword

Welcome to the first edition of Half Past Nine’s newsletter.

You’re receiving this because you’re either a client, a friend, or you subscribed on our website.

You’ll hear from us every other Tuesday at, you guessed it, 9:30am. We’ll be sharing a direct line to what’s top of mind for Half Past Nine at the intersection of growth marketing, paid media and data disciplines.

To loop you in on our process here, our north star KPI for the success of this newsletter is opens per open (total opens / unique opens). This metric shows that our emails are being reread, and more importantly, being forwarded on.

So, if you’d like to let us know you’re enjoying it, forward it to a friend!

Edition 1: January 10 ‘23
Recession: A Crucible Moment

Whatever 2023 has to bring, the future always belongs to brave, long-term thinkers. Knowing how to strategically navigate periods of challenge and uncertainty is a necessity.

Brands that grow through recession do so by innovative value creation at the intersection of improved profitability and deeper relationships with valuable customer segments.

Now is the time to double down on creativity, leveraging richer experiences to pivot appropriately and draw distance from your competition.

Our recommendations:

• Invest in retention – Have a churn problem? Now is the time to fix it. With demand contraction, it’s critical to maximize net revenue retention. It’s almost always cheaper to retain customers than it is to acquire new ones. Now is the time to really understand and double down on what drives loyalty and advocacy.
• Expand customer value – Extract more incremental customer revenue. Again, it’s cheaper than acquiring new customers. Invest in cross-sells and up-sell systems to connect more deeply to customers and maximize LTV.
• Invest in data and analytics – As capital becomes more expensive, it’s wise to harness technology that allows you to make better investment decisions. We’re talking omnichannel attribution, end-to-end analytics, experimentation platforms. When done right, the total ROI on your media and tech stack investments will be higher than just media alone.
• Improve your working-dollar efficiency – If you’re being pressured to scale back, trim the fat first. You may be spending in areas that matter less right now, like over-indexing branded campaigns. Or to the contrary, over-indexing top-of-funnel without the right nurture journeys to harvest a meaningful return. Align your working dollars to the new playbook.
• Cut advertising as a last resort – During a recession, advertising demand drops, resulting in cheaper ad supply. Brands that don’t divest get more bang for their buck, gaining share of voice and often more market share. Conversely, ground lost on brand recognition will cost more to rebuild later.

There’s more in our latest insight article on how to grow during a recession. But over the next few weeks, we’ll share more on how to sidestep recession rhetoric and smash growth expectations.

Cheers to success and happiness in 2023.

Best,
‍Kenneth Shen CEO,
Half Past Nine