Audience Growth Requires Constant Testing and Focusing on Quality

Andrew Grove, the first employee at Intel and its CEO for a decade in the late 80s and 90s, had a unique perspective on business, likely due to his upbringing in Hungary in the 1930s-50s. He argued that long-standing employees at companies risked suffering from “the inertia of success,” which described how employees would hold onto the old way of doing things.

He went on to say that “business success contains the seeds of its own destruction” and that “Success breeds complacency. Complacency breeds failure. Only the paranoid survive.” That last sentence became the title of his book.

But in the media business, we can see this constantly. Look at the many media companies that became so fundamentally dependent on social traffic for their livelihood. And when Facebook changed its algorithms, look at how so many of them went on to struggle. They were not paranoid. Instead, they had incredible inertia because they were doing so well.

Audience growth is a great example of this inertia. Things work and operators become comfortable with them. That could be anything from social, paid acquisition, SEO, direct mail, etc. Unfortunately, what works one day might not work tomorrow.

At CoinDesk, an early, big success was the Bitcoin Price Index. This drove so much traffic to the site whenever the price moved. But in many respects, we were overly dependent on it. Upstarts began competing with us on this keyword and many other price-related keywords. Losing that #1 spot would have been a significant hit.

Or what about the various direct-to-consumer commerce companies? The cost of Facebook ads has skyrocketed since Apple released its App Tracking Transparency framework and made it harder for Facebook to track users with as much specificity. As a result, DTC companies are spending more to acquire customers, and since they haven’t invested in their brands, they are struggling.

I was thinking about the recent podcast episode with Workweek’s Adam Ryan. We talked about the incredible success that The Hustle and Morning Brew (disclosure: I work there) have had. And I asked if he thought anyone could ever launch a competitor to either newsletter in 2022. He didn’t think so, in part because newsletters were relatively unknown at the time. But he also said this about acquiring users:

But also, on the flip side, paid acquisition and referral programs were the number 1 and 2 ways both companies grew, and I remember at one point, we had taped a dollar to the person who led our growth and said this is how much we want to acquire an email address for. In 2022, that isn’t possible to do that, except maybe on TikTok. And then referral programs, it’s not like they don’t work today, but they have lost their luster because of saturation in a way, just like gamification can only work if people are excited to play the game, but that game has been played, and it hasn’t been adapted. If launching a newsletter business in 2022, you better have different ways to grow than the two ways The Hustle and Morning Brew did.

I tend to agree. Morning Brew’s referral program has been such an incredible success, we’ve had some people refer over 1,000 new subscribers. But I’ve heard from people that their referral programs don’t work as well as they thought.

What worked over the past few years simply won’t work in 2022. Think about paid acquisition. When ads on Instagram Stories, for example, were first released, you could acquire a newsletter subscriber for less than $1. And these were good subscribers. But fast forward, the rates are more expensive, and the amount of money you have to spend on a subscriber is higher.

That’s just natural. If we go back deep into the podcast library, I’m reminded of something that Industry Dive’s CEO, Sean Griffey, said:

What worked one day doesn’t necessarily work the next day, and part of that is because circumstances, platforms, and technology change. Other parts of it is because when marketers figure something out they hammer it until they have destroyed every ounce of value out of it, which is kind of how digital marketers work.

This is the attitude you have to take with these sorts of tactics. If you assume that other marketers will compete for the same channel as you use, you have a scorched earth strategy. You take as much as you can for as long as you can because it will stop working at some point. And then you’ll have to pivot and find a new strategy.

But sometimes, that’s not because marketers do anything wrong; instead, the platforms change their priorities. As Griffey explained on the podcast:

We built LinkedIn groups and got into LinkedIn Groups quite a bit in 2012/2013 and they drove really targeted audiences then and they don’t now just because of how LinkedIn has prioritized groups versus other parts of their platform.

Ultimately, the secret to success with audience growth is to spread your arms as wide as possible and experiment with various channels. Then, when something does work, commit resources to it because you don’t know how long it will last.

In Ryan’s quote, he hinted at TikTok. It’s unbelievably easy to build a following on TikTok, and the ads are still reasonably priced for paid acquisition. But I’ve heard from some marketers that the quality of the users is not as high as other sources. Either they’re not engaged, or the targeting is not as tight as some marketers initially thought.

But you still have to try. Because what if it is, actually, an excellent source for your media company? How long will it take for it to become saturated with marketers? If you can acquire users for a few weeks or months, is that not better than not trying at all?

Each source is different. When Instagram Stories ads were released, the cheap ads only last a few weeks before other marketers got into it. Marketers on the very cutting edge are already onto their next traffic source by this time. But you still have to try.

All of what I’ve said is only half of the discussion, and, frankly, it’s the easier half. Facebook, LinkedIn Groups, influencers, paid social ads, etc., are all tactics for acquiring people to your site. However, it’s all traffic.

What makes our media properties valuable is how efficiently we turn that traffic into an audience. And this, I think, is where most operators don’t spend a lot of time. Look at BuzzFeed. It got really good at driving traffic, but that traffic was just random people. There was no owned audience that BuzzFeed had nurtured and built deep brand loyalty.

When we think about advertising or subscriptions, we have to ask a straightforward question: why would someone pay? An advertiser comes to you because they believe your audience is valuable to them. On the other hand, if your site just has flyby traffic, are you really worth doing business with? And no flyby traffic is going to become a paid subscriber.

This is why you have to not only test out a ton of different channels but also have to work on converting those visitors to loyal users. This earned audience that connects with your brand is why advertisers come work with you. This is also why I’ve soured on programmatic advertising over the years. By disconnecting the user from the site, user quality doesn’t matter to the advertiser. They just need eyeballs.

Be fast to test new channels, always pivot and experiment, and when something does work, go in on it fast. But be prepared for it to stop working after a while. And, along the way, focus on converting those users into an audience. That audience growth strategy never gets old.

Thanks for reading today’s newsletter. If you have thoughts, please let me know or join the AMO Slack channel. Have a great weekend!