Jonathan Becker: recommendation

Transcript context

…Performance marketing. [inaudible 00:13:35]- ... you can call it, can be seen as a drug, I suppose, when you are entirely reliant on it to fuel the revenue of your business. The analogy that I try and use here is that it would be very dangerous if I was advising you with your life savings and I told you to put it all in a single stock in the stock market. Stocks can be volatile. And as a result of that, your net worth would fluctuate quite a bit in the short-term and the long-term based on a lot of things that you don't control, like the external markets, or things that are happening within the performance of that particular company that you invested in. When I think about all of the marketing mix, so email, direct mail, linear television, performance, marketing, whatever it is, I think about it as investing capital with the expectation of a return. And in the same manner that I would not take all of your life savings and dump it into a single stock, I don't recommend putting all of your money into a single performance marketing channel, and then somewhat exposing you to the volatility of fluctuating CPCs or changing market conditions. I would agree with you that it is a drug, in a sense, if you have all of your eggs in one basket, and that basket takes you on a very intense rollercoaster in terms of performance. But when I think about the fact that Thrive manages $500 million a year, I think of myself to a extent as a fund manager, we are managing people's money with the expectation of a return. And part of the strategy is to diversify across channels. And so we decrease the reliance of any individual project on a singular channel and its performance. And similarly, I always say to people that the first rule of performance marketing is not to forget about offline marketing and the classic marketing that works for organizations. In other words, direct mail can really work, email marketing works beautifully, SEO can really work. There's all of these wonderful things at your disposal. The real crash and burn scenarios that I've seen are these, not fly by night brands, but brands that figured out... Just like with Uber, I figured out this weird tie-in where I could make free money from their referral system. Sometimes people find shortcuts, hacks if you will, to scale rapidly because of one specific nuance of the Facebook ad platform, or something like that. And what they fail to see is that those loopholes come and go. And so if they scale massively and their entire business is predicated on the performance of this one loophole that they found, or investing everything in a single channel, and then the conditions change, they're not going to be very happy and the business will suffer dramatically. And so when I think about this, it's a responsible channel mix, diversity, and understanding that you can't be overly reliant on performance marketing for the success or failure of your business. What about the second part of that question of when you think about when companies come to you. What do you look for to help you understand this is going to be a really good fit for performance marketing and this is going to give them a lot of opportunity to growth, versus maybe not, maybe it'll be a small sliver but it's not going to be a massive success for them?…

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