The Secrets To Hitting Your Target Ecommerce Market And How To Future-Proof Your Market
Learn how to reach your target market! In this video, I'm going to break down some of the most important tips for understanding how your business can reach its targeted market effectively with Covid's E-Commerce solution. Of control! So you can get on top of things before they spiral out.
The future of e-commerce is bright. But if you want to make it in this space, you need to know who you're selling to and what matters most to them.
For many people, the idea of e-commerce is still quite puzzling. But it doesn't have to be so complicated! You need to understand and keep track of all these terms to be successful in this space.
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The Secrets To Hitting Your Target Ecommerce Market And How To Future-Proof Your Market
For our readers, what's your education? As you've started to get into the space, a lot of work has done to find a location. Maybe you could talk us through conventionally how retailers think about location and then how you guys or girls have thought about how to reach the target market here with the analysis, research, and metrics you look at.
I’ll give you an example. You start at the most macro level. If you are in multifamily, you might be looking at things like population growth and the diversity of applicants when it comes to the jobs that they hold. You look at the employment statistics and then zoom into each city from that, and then you'll zoom in to see the major industry here? What are the average rents like? There's a lot of work that goes into buying a property. You are looking at the cost side. It's a function and why because, in some ways, you are building a business if you are buying an existing multifamily building. How do retailers think about locations, and then on top of that, how do you think of your locations you would be in?
This is probably a good point, too, or time to introduce to the conversation our screen space and this concept of the top DMAs and the nation being our initial target. There are two major themes to highlight here. One is our machines have 32-inch prominent digital touchscreens that serve programmatic and direct advertising campaigns when not being used as a point of sale.
A large part of our business and value that we deliver to brands and as a company is in capturing high-value CPMs. We are a digital out-of-home inventory looking at driving towards growth in the markets that have the highest value audience for brands and the top brands who are seeking to reach those consumers. It’s driving our go-to-market and the market where we seek to have the network.
The second is comparing the density of a city. For instance, LA is a market that we will be in but is lower on our target list because it is a broad sprawling city versus a high density where the network effect can take place quicker. We have more access to a consumer experiencing our product multiple times in their day as opposed to one where there's potentially more distance, literally in mileage between machines. For us, as a brand and as a network, I would say those are two main drivers in terms of what we are seeking high density, top DMAs where we can have a network effect more quickly.
Could you define DMA and CPM for readers?
Designated Market Area. You are looking at New York City or Chicago. It's basically if you think of the top twenty largest cities in the United States, those are your top DMAs.
How about on the CPM side?
Cost-Per-Million. That's effectively the unit with which the value of an advertising screen is measured. You are looking at how many millions of eyeballs a single screen can capture. As an example, to differentiate between high and low-value CPMs, a billboard in Times Square is going to have a very high CPM value because it has access to millions upon millions of eyeballs. A digital sign in the middle of nowhere on the side of a highway conversely is going to have a very lower CPM value to it. It's a very crude example, but to give folks a sense of the difference.
Ecommerce is a space where we’ll see a lot of innovation and disruption.
There's often a correlation that the more valuable something is, the higher the CPM it will be to advertise on that platform. A Super Bowl ad is going to have a very high effective CPM. There are different metrics beyond CPM, but CPM is the easiest one to understand. You are on a website and below the fold is a very annoying banner.
Those CPMs can be cents, whereas CPM for premium top-tier targeted publications can be in the hundreds or thousands of dollars. It speaks to knowing your market and the lingo in this industry and I come from the marketing industry, so I appreciate it. Every industry has this lingo, but you nailed it. DMAs and CPMs are two functions of the core metrics. Are there any other core metrics you are looking at in this industry?
One of the things that our machines from the very beginning are equipped to do is collect aggregated data at more of a macro level around the demographic type in a space. Beyond eyeballs, we are able to understand are they men or women and roughly what their age is. That type of data helps us qualify the type of audience a brand or advertiser would have access to. As you can imagine for us, we lean towards a younger female audience but having the data to support that when speaking to our clients is very useful.
One of the things we found as a separate point but related was the machines that we had live in public access locations saw fairly balanced traffic between men and women. In those instances, brands that traditionally are looking for more of a male audience are interested in advertising on our screen because we have a balanced gender ratio. There is more data, as you know, once you get into these discussions that you can collect and provide, but I would say at the highest level, the two main drivers for our go-to-market are centered around that CPM and the DMA conversation.
We are a digital out-of-home inventory, but we are also retailer conversion. We are collecting all this data about who's passing by machine. Those impressions are valuable, whether they transact or not, which is great about our business. Those impressions take place if someone buys a face wipe or not because they have seen the advertising that's taking place on the screen.
Conversion is a metric that we are going to be monitoring closely. COVID, foot traffic and conversion was very low, and so we are on trending up conversion for the number of people and the number of people who are interested, excited, and engaging with our product and transacting and buying products at the machine. We would like to see across our portfolio of machines.
One thing there, and you've talked a little bit about how we compare or think about our business in the context of traditional retail. On the topic of conversion, if you walk by a brick-and-mortar store, as a human being in the 21st century, you know that if you walk into that store, you can buy things. One of the interesting entrepreneurial learnings we have had building this company and literally designing from scratch is a patented piece of hardware and invention. It’s the fact that a lot of people don't know when they first see the SOS machine that you can buy things from the machine.
We, as founders, have had to spend a lot of time thinking through our call to action or CTAs on the screen itself to help educate people and let them know that you can buy things on this device. People assume it's a piece of art, which is a compliment to the design process, but as a retailer, there are some learnings that we have ahead of us to ensure that people understand that they can buy products from our machines.
Advertising has been throwing spaghetti against the wall and see what sticks. Eventually, it turned into we are happy to spend money on advertising. We know some of it works. We don't know which part of it works, so we have to keep spending across the whole spectrum. This is why brands started out by trying to define the target audience.
The target audience means putting them into demographic profiles, and two of the biggest factors that are obviously going to be age and gender. There are more levels you can dig into there as well. It's traditionally been very hard to capture that type of data if you can provide certainty. You might not be able to do it. In traditional media, you might not be able to do it from a per-impression basis or per-user basis. We had a sample of a panel and then a sample of 100 or 1,000 people and this is how many people match your demographic audience.
This is one way that advertisers can prioritize, and advertisers also tend to allocate the highest CPMs. We define CPM as Cost-Per-Thousand or Cost-Per-Mill. Getting that data is going to be key to unlocking the brands. In your world, we are not even dealing with something like cookies or a mobile app. They are walking by a screen. The whole outdoor digital advertising space can be disrupted if you can prove who looked to that and who they were. How do you think about solving that demographic challenge?
If we go back to the founding story and where the business was born and a captivate network, so the elevator advertising, you've probably all seen those screens in elevators. They have some static data that are very valuable. Maybe some jokes, quotes, and also the advertising. I think the core of SOS being born in an office tower is that we have a very close read on exactly who's in that space. The firms, corporations, tenants, or gender breakdown.
We use that premise and the captivate model to say we have as a starting point in many of these locations a very quantifiable, valuable, some of the highest CPMs in the market for digital out-of-home base that we are building off of. This is a space that we'll see a lot of innovation and disruption because digital out-of-home faces this challenge everywhere. How do you quantify the impression and value the impression?
There are entrants into the marketplace who are using new technologies to capture fresh and sometimes with face recognition technology or beacon reading devices that some of which SOS is tapping into. We, as leaders are or hope to be leaders in this space continue to stay in lockstep with new entrants in that space so that we have the most valuable product in the market for brands to be working with that.
Let's talk about how to define your target audience in particular. What does it take to build a company that targets women? You are both female founders. You've nailed a problem that is not intuitive at all to men and men tend to be in the position of investing decisions, and even in real estate. Talk us through what it takes to build a company targeting women as an audience.
I would agree. It helps to be women. People assume we know a little bit about the problem that we are trying to solve. We have some authority when we go into meetings with men about it, but I would say that over the years that we have been building this company, building relationships with these decision-makers have come down to having very honest discussions. In some cases, we perform site walkthroughs and show them what women face now when they are out of the home in a public bathroom.
A lot of the men that end up joining us on those walkthroughs are embarrassed and apologize that they don't have a better solution. That creates an exciting group of stakeholders and folks rallying around us, supporting us, and introducing us to their peers at other locations to get these machines into all of the spaces Susanna outlined earlier.
One of the beautiful things of having a mission-driven company is people get excited about that. They want to be supporting and helping the cause. They want to make sure that their buildings are introducing this new standard as an amenity for their employees, clients, or patrons, depending on the space.
I would say it took some honest, in some cases, deprecating conversations at the onset, but we have built this incredible group of people that are now evangelizing what SOS is doing, which is exciting. It's breaking open a very authentic discussion about what women need when they leave the house. I will add to that and say that at the end of the day, money talks.
At SOS, we are doing great things for women and changing the way women will live, work, and play outside the home, but we are also introducing exciting commercial opportunities for these spaces and commercial properties to work with us on. Our network of machines is driving not just brand equity and value with female employees and customers but also commercial opportunities that these real estate owner-managers and corporate tenants can participate with SOS. I feel like incentivizing with a mission-based company is a great conversation to be having right now.
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Zain Jaffer is an accomplished executive, investor, and entrepreneur. He started his first company at the age of 14 and later moved to the US as an immigrant to found Vungle, after securing $25M from tech giants including Google & AOL in 2011. Vungle recently sold for $780M.
His achievements have garnered international recognition and acclaim; he is the recipient of prestigious awards such as “Forbes 30 Under 30,” “Inc. Magazine’s 35 Under 35” and the “SF Business Times Tech & Innovation Award”. He is regularly featured in major business & tech publications such as The Wall Street Journal, VentureBeat, and TechCrunch.
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