Rand Fishkin, Co-Founder & CEO of SparkToro, joins our host, Camela Thompson, Go-To-Market Thought Leader and B2B Insights Expert, in this episode of the Revenue Marketing Report. Rand shares where B2B marketers should focus in 2024 and why “vanity” metrics are meaningful.
I am really excited to talk about digital advertising trends in 2024. Tell us what you see happening.
“I think it’s going to be a year where there’s an opportunity for many publishers to consider moving to an in-house model for sponsorship and advertising. This is especially true for podcasts, YouTube channels, and other sources for social influence like popular thread accounts or Instagram accounts, we’ve already seen this on Instagram pretty heavily. However, I think that in B2B, there are going to be more people doing this on LinkedIn, and more people are doing things on their email newsletters, which are huge in B2B and very under-monetized. I don’t think these individual creators and smaller publications are going to be as excited about using a big network.
“Whether that is Taboola, Outbrain, Google, or Amazon, if you’re an affiliate for a consumer product, or Apple who is trying to make their ad network a big thing mostly by blocking default access to tracking data for Google or Meta or Instagram threads. Therefore, that’s my big theory about what is going to happen this year. I already think there’s a tremendous amount of opportunity for brands that are willing to put in the work, to go and find the publications that their audience pays attention to, whether that is email newsletters, individual websites, social accounts, or YouTube channels, podcasts, etc and reach out to them directly, pitching as a sponsor. That is like the old world we were talking about yesterday about 20th-century marketing.
“Just like in the old world, you go figure out which conferences, events, magazines, publications, and mailers people get and then you sponsor those or you get into those or you pitch yourself as a speaker, as an expert, as a contributor and you contribute an editorial. All of these things are a huge opportunity in 2024. It’s super underinvested in. Almost no one does it. It doesn’t even have a name. You might call it digital PR, niche advertising and sponsorship, or one-on-one outreach, but it doesn’t have a formal name in marketing that people associate it with. And those are the tactics that always have the highest ROI because you’re an early adopter.”
Yeah. I’ve seen a lot with communities. Shout out to the RevOps Coop, if you can find an active one that’s very niche, go for it. Nevertheless, I’m curious to hear from Rand how you feel about those changes in third-party cookies and that kind of thing. People are so fatigued from the same old tactics of getting blasted with email sequences.
“So the effectiveness of email has not wavered that much. If you look at broad stats across the field. I like looking at, for example, MailChimp’s open rates, and click-through rates. I like looking at HubSpot, average conversion rates, and all that kind of stuff. Those numbers have been so consistent for seventeen years.
What is weird in B2B tech, we’re seeing response rates now as low as 1% to 3% on cold prospecting. I am not talking about newsletters, but sales outbound is a completely different game, but that’s B2B.
“I am shocked that that ever worked. That’s not what I’m talking about. I mean emails that are sent to people who have signed up to get emails from you. Yeah, those are super effective and continue to be effective. If you were to tell me I could only have one marketing channel, I would tell you I want it to be email.
Marketers used to do that back in the days when you could purchase a list and blast everybody and it didn’t work then. So do you think that this migration is a function of third-party cookies or are we just getting a little bit smarter about where our buyers are (hopefully getting smarter)?
“There is a combination of things, one is brought on by what’s called the end of cheap money. This big economic force globally has been fed by the United States. Unless Donald Trump is elected again, the US dollar will probably the currency that the world continues to rely on. If Trump wins the election, it will probably move to something else, maybe the Chinese Yuan or another currency might supplant it, but right now, the US dollar is that.
“So when the Fed raises its interest rate, for example, we did this at Spark Toro, we took a million dollars that we had in the bank from our investors and money we made from our customers and we put it in a treasury bond because we thought we could earn 5 ½ to 6% on this thing. That’s crazy. Then we paid that money back to our investors last year. It was a great thing. Tons and tons of people all around the world and banks and investors rather than throwing that money at venture capitalists to try and get big growth or throw it at small businesses, they’re putting it in high-yield savings accounts.
“So that’s a slowing economic force in the dollar and because of that, there’s this knock-on effect across all sorts of fields, which you can really see in 2023, particularly in the publishing world. Tons of brands shutting down. Tons of online magazines, e-commerce brands, and startups and there has been lots of consolidation in the media world. A good example in the consumer space would be something like Jezebel. It was a very popular online magazine. It had been going on for years and then they couldn’t make it work anymore. Private equity firms winding down a bunch of their investment since money is no longer cheap. When interest rates were close to zero, we decided we’ve got to spend in all these places to try and get growth anywhere we can.
“Now many are thinking let’s just do what Spark Toro did and put our money in a treasury bond. So that force is underlying a whole bunch of change that we’re seeing right now. Third-party cookies and ad blockers and all the tracking issues that we discussed yesterday – yes, those things are also having an effect, but I actually think that this is a big cause. Therefore, you don’t have as many opportunities. The ones that do exist are just expensive, too expensive to get coverage in the the ten publications that every B2B executive already reads. People are thinking God, I don’t want to sponsor Tech Crunch or whatever it is. There’s just no opportunity there. So the only opportunity is to find those niche players, sponsor them and reach your audience through them. That’s gold.”
Let us talk about how effective Google really is. I think we alluded to it quite a bit yesterday when talking about how they’re going to inflate numbers. This used to be something my executives where pushing me to put most of my budget into since that’s how you scale, isn’t it?
“So when I got started in digital marketing in B2B, which was before Google had a significant ad program and this was 2001. There were so few buyers of Google advertising products. This was also true when Facebook came out. This was true when LinkedIn was on the rise. It was also so when Reddit was on the rise. Advertising was relatively inexpensive compared to the exposure that you could get, and you could indeed throw dollars at these platforms and scale rapidly. It’s also true that there’s amnesia about attribution. Therefore, in the past twenty years as the world moved to digital everything, digital companies of all sorts took off.
“SaaS as a category took off. So everybody was looking for products in these spaces. Everybody was looking to move off their old school infrastructure toward the new SaaS-based product. That was also the time that their investors and their marketers were telling them to throw dollars at Google, Amazon, Apple, and Facebook. Therefore correlation and causation got mixed up. People wondered, oh look at these companies that are scaling rapidly. They’re spending a ton of money on these platforms. We should spend a ton of money on these platforms. Maybe in some cases this is true, probably those things added incrementally to their growth. On the flip side, you know what? Airbnb was going to take off whether they spent $100 million per quarter, $50 million, or $5 million. We talked about it yesterday, they proved that in 2021 when they cut their ad spend to nearly zero and they said we saw 95% of the same buyers. God! Why were we spending all that money?”
I’m almost that Rand was saying product-market fit is important along with timing.
“That is a bold claim.”
Well, what I get over these days is how many websites I see that the copy is obviously generative AI and we are putting a bunch of money into advertising directing people to these websites. The cart isn’t in front of the horse. It’s under it. Nobody‘s going anywhere, I don’t understand.
“I love it when I see that because I just think to myself, oh, thank you for shooting yourself in the foot. You have proved that you don’t know how to effectively build a business on the internet. And someone else is going to do a great job and it’s wonderful to have. I especially love it when venture-backed companies do it because I figure, oh great! Some India is going to eat your lunch and you’re going to shut down. And we’ve seen so many shutdowns over the last twelve months of venture-backed businesses. The Envision one that caught me by surprise. I was shocked that a $2 billion company with tens of millions of users and customers. They said well, we didn’t become the monopoly in this space so we‘ve thrown in the towel.”
Yeah. I’m confused. I think it’s not a bad thing that venture-backed companies are being encouraged to actually pay attention to efficiency now.
“I ran a venture-backed business for seventeen years and raised lots of money, more money than I should have. I found that experience to be both ludicrously stressful and all the incentives worked against the business’s true opportunity. And eventually, my company was surpassed by competitors who had not raised money. It’s always VCs who don’t like stories like that, but it happens more often than you would think. It’s a way to sort what you call product-market fit, which is a little bit of a misnomer, but it’s a fine shorthand. They raised money after they had already gotten all the way there. And most of that was just used to pay founders out to buy some of their shares and give them some liquidity. Therefore, anyway, the venture market, is a very strange space, with weird incentives, and strange structure, a lot of seesaw, back and forth about whether should I try and be profitable and survive or should I put my foot on the gas and try and hit a home run for you. They like to use a lot of metaphors.”
Yeah. Many people are nodding right now since they’re living that life.
“My heart goes out to them. I really do feel for them. The one thing I wish I had been told as a venture CEO or what I wished I had internalized is that you don’t have to follow that path. Even if you’ve already raised money, you can choose to act like a profitable, slower growth and sustainable business and then at some point decide, okay, now I think we’re on to something. Let’s go more aggressive, invest in whatever growth or these ad channels, or in hiring whoever you want see how that goes for a couple of quarters and then dial back if that doesn’t go well. This is something that sustainable and profitable businesses that are bootstrapped and privately owned do.
“You can behave that way even with venture money because once you’ve raised the money, it’s actually pretty hard for them to remove you also you as a CEO. So I would coach CEOs you don’t have to play it quite so aggressively. You can play it safer. You can have a much more chill and happy life. You can have a happier and more sustainable company. It works out pretty well.”
Let’s talk if we could for a moment about the offer we’re putting at the other end of our ads. I think what’s the other side of the equation that really struggles with what’s working out there and what isn’t.
“I don’t know how you feel about this, but my sense is any singular answer that you could give on this topic of what works to convert visitors into buyers is wrong for everybody except one person. Everywhere except one company. There are correlated things that there are types of messaging that tend to work better than others. Unfortunately, last year, there were many businesses who marketed themselves and branded themselves with AI since it was super hot. Just a few years earlier, some marketed themselves with blockchain. Even earlier, they marketed with mobile apps. Whatever the sort of hot thing at the time was. And those things aren’t very connected to how your customer sees themselves getting more value from your product. Sometimes people would tell me it worked and I had a hard time believing them, often people said, gosh that didn’t work at all for me. Why did I do that? Because everyone else in the market was telling you to do it.”
Yeah. I think the thing that frustrates and I agree there’s no easy button. However, what really frustrates me if I could pick one thing is the request demo since some ridiculous stats: 63% of buyers don’t feel like the seller understood their pains. The demos are so bad for the most part, and the products are getting so technical we need to start really rethinking that.
“Alright. This is anecdotal so I hesitate to say it will apply to everybody, but for the first six months of Spark Toro as a product, anyone who reached out to us, I would give them a demo and I probably did maybe 60 or 70 demos over those six months. So every week I would have a few scheduled and walked people through the product. This is despite the feeling that Spark Toro was forever free account. It’s a freemium SaaS product and I believe of somewhere between 60 to 70 people that I gave demos to, only two signed up. So we instituted a new policy which was we don’t offer demos. If you email us and you say I would like a demo. We will tell you sorry, we’re a tiny team of three. We don’t do demos, but you can check out these video resources. That seems to be just as, if not more effective so I’m not totally sure of the values of demos. I will absolutely do training for people who have already signed up. It’s like you bought an agency account. You want your agency to learn more about how to use the product and get the most from it. Of course, I’m jumping on the phone with you and walking your team through and hearing their feedback. I love that. But offering a demo to just people who reach out, honestly the free version of the product that you can play with yourself if that doesn’t convince you or if it’s too challenging for you to figure out, either you’re not the right customer or we’ve built a wrong product.
“So my advice to founders and product folks would be to make it so that if someone tries your product, they will say, I immediately get it. I was reflecting a little bit more on it. I don’t have an easy button like Camela mentioned for the conversion, landing pages, messaging, and all that kind of stuff. However, this works for almost everyone who does it and it’s a process which is to survey and interview your best customers, aggregate that and then mimic the language your customers use to describe your product in your marketing and messaging.”
I love that so much. And not enough people do that. I got onto every sales call I could. I was actually the sales engineer for a company and that worked out really well in a tiny startup because you get the same conversation language.
“Your customers know what convinced them to buy and use your product and love it. If you were to say, okay, I’m going to get two paragraphs of an endorsement from 50 customers, never mind it, 20 customers, 20 of my best customers, oh, my gosh, you know what? 16 of them all use this one phrase, use that phrase.”
“I’m laughing because it’s so simple and I rarely see it done.
“Spark Toro used to call ourselves audience intelligence. That is how we launched and marketed ourselves. Then, we started hearing our best customers describe us as we use Spark Toro to do audience research and we thought we were going to immediately pivot to that. Throw out audience intelligence. We took it out off our website entirely, we took it out of our marketing materials. I stopped saying it and now we describe it the way they describe it, which seems better, certainly performs better.”
It’s amazing because instead of throwing money on ads, why not do customer opportunity interviews and spend a lot of time listening to calls?
“In fairness, they don’t provide really pretty looking attribution reports that you can show to the CFO to get sign-off for the budget.
Funny story. Yes, we used attribution in this company but you know when they were really excited about a video of a customer saying how excited about the product they were, and that did it for them. It was fine. Therefore, just a few videos of people talking in front of them. It will be fine.
“I almost wonder, we’ve got a lot of nice people in our customer set who’ve said nice things over email or in a survey, but I was wondering if I should reach out and ask them, hey would you jump on a recorded video call for five minutes and just say something? Then, I wonder if we just clip those and put them together, I’ve never tried that. That will be interesting. I think it’s tough. There are two things. One is the technical thing. Does your customer have a high-quality video camera that can record a good thing and set it?”
Care less about video quality, get them to use their iPhone. Yeah. people are finicky about audio, video but don’t care about, if they just use their iPhone, it’s good enough. People love. I’ve done it a lot and it’s worked really well.
“No fooling around, this is great advice. I think you should leave this in. but I’m going to give that a spin. What a great tip.”
It’s easy for them to do if you write a quote for them. Rand said this thing earlier do you mind getting this on the phone and they can just read it off. It’s perfect.
“Dear customer would you hand your phone to your teenager and have them record you? They will get the lighting right. They will make you look good.”
I know. Does your child have an account on TikTok? If so, go stand in front of their ring camera.
Well, we’re going to have a separate episode about vanity metrics, but we’ve had so much fun talking about all this. Let’s just cover it really quickly. Vanity metrics, should they really be called that?
“There’s this interesting thing where what has been historically been called vanity metrics are things like visits or traffic page views. So we produced this blog post and it receives this much traffic. Well, that is not dollars. That is a vanity metric. Okay, fair enough. We’ve got this many followers on LinkedIn. We’ve got this many people subscribed to our email newsletter. Well, those are also vanity metrics because they don’t lead to dollars. They’re not conversions. They’re not customers. They’re not lifetime value. They’re not the amount of use per month, per customer by tier, or those kinds of things. I’m going to argue that in most cases, measuring those vanity metrics and seeing their growth rate (if you are making real investments in things like content or social media, community building email newsletter building, or subscribers to your podcast or your YouTube channel, all those kinds of things), if you’re making those investments on a regular basis and those channels are tied to your business pretty nicely I would argue that measuring and investing in the vanity metric of subscribers to that YouTube channel is very well correlated and has causality to the brand’s reaching growth and long-term success, is it one-to-one? No, absolutely not! Is it perfectly easy to show attribution? No, it’s not an attribution type of measurement. But it is a lift-based incrementality kind of measurement. You, in my opinion absolutely can see and feel in your metrics the value of having more people searching for your brand in Google every month or more people subscribing to your YouTube channel, your podcast, your email newsletter, your LinkedIn, and even looking at your LinkedIn posts and saying, gosh, this one performed poorly. I think we should do less things like that. All of these are measured with vanity metrics and all of them are more valuable, in my opinion, than trying to build a perfect attribution model.”
Right. I think what I would posit is that if marketing leaders are also religiously looking at pipeline and bookings, you can start to get a sense of which tactics are lower funnel and can bump those things. For example, when you do a really good campaign, if you’re watching those two stats regularly, in addition, you can start to realize, one when your sales team is behind with their pipeline goals. And two, what you can do to make a difference in a shorter period of time. But I think that you’re speaking to, not all of it’s probably going to make it into board deck, but it’s absolutely essential for marketers to just know so that they understand how their first-party data acquisition is going because like we’ve alluded to, that’s kind of an important thing these days.
“Yeah. I would go even further and say if you are incentivizing your team to hit what’s been history called vanity metrics type of goals, you can actually have a lot of long-term success with that. And your team can have quite a bit of fun with it. It’s very engaging and very rewarding for the marketing team to invest in whatever content or email newsletters, YouTube as a channel, podcast as a channel, or LinkedIn as a channel etc.
All these places, give you the metrics, right? They will tell you, oh, this post performed this well on LinkedIn. Here’s the job title of people it reached on LinkedIn and you can optimize your efforts around the data that you get from these vanity metrics that for years people like myself have been telling you to ignore in favor of dollar-based revenue-based numbers and win.
For more content on B2B marketing trends, listen to the full Revenue Marketing Report episode at the top of the article or anywhere you podcast.