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Statistical Proof that Marketing Web Stuff is Useless

Posted by Andy Singleton on Wed, Oct 17, 2007
  
  
According to the evidence that I have, the marketing that you do to attract users to Web applications and Web 2.0 sites does not make any difference in the rate of adoption. You can get more people to register, but you can’t get more of them to adopt.

Assembla recently became a sponsor on Techmeme as part of our new (and possibly useless) marketing efforts. How effective is the Techcrunch / Techmeme / Silicon Valley press machine? It generates traffic. Does it change the odds of success?

Here’s an Alexa chart showing Assembla (no marketing or megablog mentions) with two other services that were mentioned in Techcrunch and other blogs. I follow these services because we have “tools” in our workspaces that compete with them – our SVN/Ticket/Alert system competes with Unfuddle, and our new Images tool competes with Conceptshare. We have offer a lot of tools, and we try to learn by matching each of them up against some point solution. These graphs are typical. In the lines for Unfuddle and Conceptshare, you can see the big bumps early on from a Techcrunch mention, followed by a consistent decline in traffic. For Assembla, you see a classic exponential adoption curve.


I brought this up last year in Marketing in a Web 20 World:Why the Best Products Sometimes Win. To summarize: Traditionally, the job of marketing has been to get prospects to come and take a look at your products. If you have to drag them to the showroom, that’s a tough job, and a major contributor to success. On the Web, prospects just have to click a link. It’s easy. Too easy. But, getting them to come back a second time is much harder than it used to be. They have so many more places to go, and all that motion is equally weightless, and adopting a Web service requires time they don’t have. So the field of competition has shifted, from outbound marketing, which only needs to be barely adequate, to the product, which must be good, and the adoption process, which must be fast.

I wrote that article after working with a client to launch new Web 2.0 service for a certain class of professionals.  My client was good at marketing, and he engaged a big industry publisher to promote the service. We were registering a lot of new users, tens of thousands of them. However, these registrations didn’t translate to adoption. Hardly anybody was logging in and using the service on a regular basis. Bad news. When I looked closer at the usage patterns, I could see that there was a hard core of real users, and these users were inviting their colleagues, and the base was growing. Good news. The only problem was that this core was tiny, less than 100 people. They were people who had been engaged as beta testers early in the product development process. It was obvious that there were two different types of users: those who registered because of marketing, who did not adopt, and those who registered because of invitations and referrals, who did adopt.

The adoption of that intensively marketed service matched almost user-for-user with the adoption of Assembla.com, its polar opposite. At that time, a year ago, Assembla.com was a prototype-quality project, and the entire traffic generation strategy consisted of links on two related wikis. The total time invested in outbound marketing was about 30 minutes for posting those links. This halfhearted promotion resulted in an extremely limited stream of visitors, and only 10 to 15 registrations per day. But our rate of repeat usage was about the same as a service generating 100 times as many registrations.

Apparently, registrations grow from marketing, and adoption grows from referrals. Or, to put it another way, a user is much more likely to adopt after a referral or an invitation, than after seeing a link and clicking on it. I can’t explain it, but it is the underlying truth in the numbers.

I’ve seen this pattern several times now. For example, we started making an effort to market Assembla.com a few weeks ago, and we tripled the number of new people coming to the site. Growth in usage has been good. However, growth in usage was also good during September, when we did nothing. If you look at a chart counting people who logged in twice during the week, there isn’t even a blip in October. It’s a smooth curve, uninterrupted by marketing efforts.

Now that I am working on the blog and talking to bloggers, I can see that blogs face an adoption challenge that is similar to applications. It’s pretty easy to bring several thousand people to look at a decent article, if you give it an obnoxious title as demonstrated here. But, only a handful of those people will add an RSS subscription.

Maybe I’m just not a good marketer. My volumes are low. I’m not in Silicon Valley. I’ve never been mentioned in Techcrunch. I might be so far out, Pluto looks like “in” to me. So, look at the behavior of Google. They are the biggest, most successful Web company in the world. They are located in Silicon Valley. They don’t do marketing for their new online services either. They just put the features out there and let people try them. And, according to this report, Google doesn’t advertise, and spends little on marketing. Google grows by referral.

A service that grows by referral has the characteristic mathematical pattern of exponential growth. The growth rate is proportional to the number of users. Exponential growth doesn’t necessarily mean fast. When you have a lot of users, it’s fast, but when you have a small number of users, it’s really slow (see graph above).

You’ll lose your shirt if you bet big on the slow end of an exponential. Fortunately, if you wait long enough for an exponential, it will get to the fast part. Patience and longevity are important.

Our adoption curve is close to exponential because it is mostly from team member invitations – a type of referral. I like to think about it as a having a doubling time. If our growth rate is 21% per month, or .6% per day, then the doubling time is about 4 months, and we grow usage about 10 times during one year. That is almost exactly what happened in the year from August to August.

Is there a way to force the issue? In my observation, yes, but it’s not with marketing. It’s with small adjustments to the product quality and the adoption process. Why does one social network take off, and the other flop? Hard to say. It’s small things that make a difference in the daily exponential. From what I have seen, it’s not features that make the difference. We added and improved a lot of features on Assembla.com, without changing the basic 3 to 4 month doubling time. However, over the summer we made improvements to the design and reliability of Assembla.com. At the end of August, our daily increase moved to about 1% per day, which produces a doubling time of about 2 months (we just hit the first doubling after 8 weeks), and an expected usage increase of 30 to 60 times in a year.

Time is Money, and you can use Money to buy Time (the time to reach a certain level of adoption). However, if you spend the money on marketing, you will be spending a lot of money to buy a little time. According to the statistics, your odds are better if you spend money on the product

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COMMENTS

I think you are right and wrong. You are right that taking a traditional approach to marketing Web services does not guarantee adoption. However, you are very wrong that "marketing Web stuff is useless". First, it's GOOD marketing that'll get you the first wave of links/clicks. Without ANY marketing, where are they coming from? Second, it's GOOD marketing that makes sure the product itself is good enough to keep them coming back. Third it's GOOD marketing that engages the users to come back. Using the argument that "Google doesn't market" is a ridiculous way to approach marketing and building a company. GoDaddy has an enormous marketing effort, and they too are a Web service. Having a "If you build it they will come" philosophy to Web success is a surefire way to run yourself out of business. ps - intentional or not, the very title of this post IS marketing. just in case we aren't all clear on the terms...

posted @ Thursday, October 18, 2007 11:28 AM by Jeremy Toeman


Jeremy, I agree with you. My premise is obnoxious and not 100% true. The discussion is about what constitutes GOOD marketing. Is it traffic generation? Or good product management and community relations? The numbers tend to indicate that one is more effective than the other.

posted @ Thursday, October 18, 2007 11:53 AM by


Ah ha, you are a troublemaker aren't you? :) In my opinion it's both. If you don't generate traffic then the best product in the world still won't magically sell itself. For virtually every case of a "viral" success, there's a backstory of how they got there through marketing/outreach... That said, you certainly cannot have success marketing a bad product for the long term. You can get a short-term win/spike, but odds of longevity are fairly low. That's my $0.02.

posted @ Thursday, October 18, 2007 12:27 PM by Jeremy Toeman


BTW, have you tested comments from Safari (Mac)? I got "The word entered does not match. Please enter the word you see." several times. (Works in Firefox.)

posted @ Thursday, October 18, 2007 5:07 PM by Scott Lawton (Blogcosm)


Tyler this is an excellent post, though I think an actual study would need to define marketing clearly. Labor intensive personal referrals from dedicated groups are often a powerful form of marketing, expensive banner ads at low traffic websites are not.
Excellent points about Google - they have a globally respected brand and have done almost no typical "branding" on TV and print or even online. Why? Because the ROI of those silly "branding" efforts is usually marginal or negative as you note here. Most marketing firms are just pigs with lipstick, but people are too mathematically inept to measure the poor results.

posted @ Sunday, October 21, 2007 1:17 PM by Joe Duck


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