Jordan Jewell, former research director at IDC and now analyst in residence for ecommerce platform VTEX, said in a press release: “Some brands now find it cheaper to acquire new customers by delivering personalized paper catalogs to their homes rather than acquire them via digital advertising. This would have been unthinkable just a few years ago, when marketing through digital channels was a bargain.”
What's going on? Ever-higher marketing costs continue to rise. According to SimplicityDX, a marketing "edge experience" company, in that same press release, e-commerce marketers now lose $29 for every new customer acquired. That is up from $9 in 2013.
More recently, customer acquisition costs are up 60% over the last five years.
So is any traditional/legacy media a better deal? Not if you read the tea leaves at the major TV networks --- who see average pricing -- the cost-per-thousand viewers (CPMs) continuing to rise by high single-digit percentages.
And if you are buying prime-time TV on Disney-owned networks, that number is seeing double-digit increases versus a year ago.
What about connected TV and all things OTT? Seems that limited ad inventory accompanied by scant third-party data when it comes to viewer segmentation might be in the same boat.
Some blame all these costs on growing privacy concerns that limit data flow and add to the weight of consumer acquisition costs -- especially when it comes to social media. Consumers now want to go around social-media messaging and head directly to marketers' websites, according to analysts.
Traditional TV has not experienced these privacy issues -- although now with the focus on streaming and CTV, much of that is changing. Not only does Netflix still want to know if I have finished watching “Grace and Frankie,” NBCU Peacock wonders if I would like to see more Tour de France coverage.
For the latter, does this matter to those sponsors for products I am still not interested in? Maybe they need to spend a bit more to get me.