- Think Z
- Posts
- How to Measure the Unmeasurable
The TL;DR:
Let’s Chat D2C: The Halo Effect and How to Measure the Unmeasurable.
What I’m Thinking about this Week: How to Build a Cold Email Outbound Strategy on Autopilot.
The D2Z Podcast: In this week’s episode, I sat down with Mateo Velayos, a Klaviyo Account Executive focused exclusively on the Latin American market.
App Updates & Highlights: Prescient AI - Media/Marketing Mix Modeling Platform.
Upcoming Events: ChargeX in San Diego 4/29-5/1!
Let’s Chat D2C - The Halo Effect and How to Measure the Unmeasurable
In the context of measuring the effectiveness of advertising spend, the halo effect refers to the broader, often indirect, benefits of advertising campaigns that extend beyond the immediate, measurable impact on sales of the specific product being advertised.
This concept challenges traditional ROI (Return on Investment) calculation methods by suggesting that advertising's value cannot be fully captured by looking solely at direct sales metrics.
Here are several ways the halo effect influences the assessment of advertising spending effectiveness:
Overall Brand Sales Lift: Advertising a particular product might not only boost its sales but can also increase sales for other products under the same brand. This overall sales lift can be attributed to the enhanced brand awareness and positive brand perception generated by the ad.
Long-term Brand Equity: While immediate sales are a common measure of advertising effectiveness, the halo effect also encompasses the long-term benefits of increased brand equity. This includes improved brand recognition and reputation, which can lead to sustained business growth over time. For example, if someone saw your ad 6 months ago and had a positive experience with your website but didn’t purchase, they will be more likely to buy from you when they see another ad today.
Online Social Advertising Impacts SEO: People see your ad on YouTube/Facebook/Reddit and search for your brand name on Google later, thereby increasing your organic traffic. A 2021 study showed that advertising on YouTube can increase regular Google searches for your brand name by a whopping 420%.
Google Search Ads Impact Organic Traffic: If you have 1 paid result, followed by 1 organic result on Search Engine Results Page (SERP), it increases the likelihood of a person clicking on the organic result.
Customer Lifetime Value (CLV): Advertising can attract new customers and enhance the loyalty of existing customers. The halo effect can be observed in the increased customer lifetime value, as customers continue to engage with the brand and make more purchases in the future beyond the initially advertised product.
Cross-channel Impact: Advertising in one channel can improve performance in others. For example, a strong online advertising campaign might boost in-store traffic and sales, demonstrating the interconnected benefits of a multi-channel advertising strategy. Currently, the most pressing issue for many Shopify brands is measuring the impact an advertising campaign to their Shopify storefront has on sales via Amazon.
Attribution Modeling Complexity: The halo effect complicates attribution modeling because it spreads the impact of a single ad across multiple products and over time. Traditional models that attribute sales directly to the last ad interaction may underestimate the full impact of advertising spend.
By taking the halo effect into account, businesses can develop a more holistic understanding of advertising effectiveness, recognizing that the value of advertising extends beyond direct and immediate sales data to include broader impacts on brand health and customer relationships. This perspective encourages a more comprehensive approach to budget allocation, campaign planning, and performance assessment in advertising strategies.
Measuring the Halo Effect?
Until recently, advertisers have been left to their own creativity to quantify their campaigns' halo effect. For example, try answering the question, “How much impact did your Facebook ad for a promotion on your Shopify store have on the total revenue you generated on Amazon?”
Surveys and best guesses have dominated this realm until recent advances in media mix modeling powered by AI have us closer than ever to quantifying the impact our advertising spend has on channels beyond the direct platform.
I’ve partnered with Prescient AI to take the guesswork out of our media mix optimization efforts and start to truly understand the halo effect and how that trickles through to increased ROIs.
What I’m Thinking About This Week - How to Build a Cold Email Outbound Strategy on Autopilot
Cold email is how I got Electriq’s first 15 clients, and you DO NOT need a team of salespeople to start your own outbound sales motion. Here’s how:
1) Mailreach
Warm up your IP with Mailreach. Do NOT use your main domain for this. For example, instead of [email protected], the email is [email protected]. This takes about 1-2 weeks before you should start sending.
2) Store Leads
Store leads allow you to automatically pull together a list of domains based on a specific set of criteria. In my case, I wanted all domains generating an estimated $100K/mo in sales or more on two specific platform competitors of Shopify Plus.
3) Apollo.io
Apollo takes the domains from Store Leads and matches them to verified email addresses that are limited to those that only match a contact persona we've specified (i.e., "in the marketing department" and "Manager or hire" roles).
4) ChatGPT
Ask ChatGPT to write you a 5-email cold outreach sequence to get the recipient to book a meeting with you. Make minor tweaks and add some personalization tags for better results.
5) Apollo.io Sequences
You can use HubSpot sequences for this, but I prefer to use Apollo’s because it’s significantly cheaper.
Load your 5 emails into Apollo’s sequence tool and schedule delays between them. Contacts created in steps 2 and 3 will automatically enroll in this email sequence based on the timing criteria you set.
6) HubSpot
As soon as a contact books a meeting, track them in HubSpot’s sales CRM all the way through close.
This Week’s The D2Z Podcast
#101 – Klaviyo & Latin America’s Ecommerce Landscape
🎧 Listen Now 🎧
In this week’s episode, I sat down with Mateo Velayos, a Klaviyo Account Executive focused exclusively on the Latin American market. Specifically, we explored the following:
💰 The differences in tech stack selection and spending in Latin America versus the US.
📲 Unique regulatory hurdles that can either help or hinder US-based technology companies in Latin America.
😎 The cultural differences of selling in Latin America.
🚀 The importance of strategic partners in business expansion in new markets.
App Updates & Highlights - Prescient AI: Media/Marketing Mix Modeling Platform.
What is it: Measurement/Attribution, Budget Optimization, Forecasting AI
Differentiator: Unlike other MMMs that measure high-level channels and take longer to implement and update, we’ve been impressed that Prescient’s onboarding takes less than 36 hours, updates daily, and provides predicted ROAS and CAC on the campaign level. A core part of their value includes saturation plots highlighting which campaigns to reduce or scale spend based on confidence in future performance. On the attribution front, we leverage their “halo-effects'' that redistribute credit from paid/organic search and direct traffic to top-of-funnel campaigns. This gives us confidence in the true performance of our spending that goes beyond clicks. Their Media Optimizer tool lets us run various scenarios in less than 45 seconds on where to redistribute and scale spend across campaigns. This is all made possible using their proprietary AI/ML models that work off compliant first-party data. Better yet, they recently released the ability to measure non-Amazon media spending's impact on Amazon, a game-changer for our omnichannel brands.
Price: Entry-level MMM starts at $1000 monthly based on your last twelve months of e-comm revenue. Pricing varies depending on the selection of AI models.
How We Use It: We measure ROAS and CAC in top-of-funnel campaigns impacting both DTC and Amazon. We’ve especially found this useful for applying statistically significant math and triangulation to measurement areas that can be prone to error, such as MTA, post-purchase surveys, and in-platform results. We have also started to run automatic campaign-level optimizations based on confidence scores for directing and scaling our daily media spending.
Upcoming Events
I’ll be at ChargeX in San Diego from 4/29-5/1, where Electriq is nominated for an award!
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