‘How do consumers find our product?’ has become ‘How do algorithms find it?’

Algorithms are key to consumer acquisition strategies

Many marketing and sales types — as well as high-level executives — often worry about how potential consumers will find their products, and rush around screaming about KPIs and ROI and deliverables and optimized lead generation programs, all of which is a little fraught. Let’s start with one major fact: there are more mobile phones on the Earth right now than people, as of February 2015. If you ever meet an executive who says that mobile is a ‘fad,’ (I have) kneecap them. Mobile is not a fad. In 2000, you used your phone to make calls. In 2015, many people — and especially in developing markets — use their phone to run their entire life. Don’t believe me? Consider this 60 Minutes piece on the future of money as shown in Kenya.


Alright, so mobile is important — a good chunk of world is finding information, and making purchases, via their phone. Got that part?

If you believe that to be true in many industries, well, what does that mean for consumer acquisition strategies?

In short, it means everything is completely different from even 10-15 years ago, as Wharton research lays out here:

For producers, our research shows that recommendations and similar algorithms drive consumer choice in a big way. Today, producers are used to thinking about, how does our product get discovered by consumers? They need to also ask, how does our product get discovered by algorithms?

The overall article is about whether ‘Recommended For You’ products actually work — as in, drive sales, etc. — and the findings are a little vague. They probably do, but it creates a ‘rich get richer’ situation on many websites. The same products show up based on recommendation algorithms, so people end up liking and recommending the same group of products. Hence, those ‘Recommended For You’ suggestions will almost never lead you to a niche product — they lead you to more of the same. You typically only find truly niche products through word-of-mouth or referral.

The important takeaway here is that algorithms are tremendously important in the modern age — heck, they may be shaping how our baseline beliefs are created!

Think about a situation like the Paris shootings. If you got info about that via Facebook or Google News, those are driven by algorithms in large part. What posts you see — and from whom — is based on (a) who your friends are, which is a self-selection process in and of itself, but also (b) what and who and how and when you’ve interacted before. An ‘algorithm bubble’ — described at the link above — basically refers to this idea that we’re not often exposed to new ideas or ways of thinking. Why? Because we find new ideas via search and social, and search and social are rooted in algorithms — and the goal of algorithms is to deliver us pleasant content that we like, so that we find it useful and come back.

(Ideally you’d be exposed to new ideas and ways of thinking by your parents, family, and friends, but that doesn’t happen perfectly either.)

This is where it becomes dangerous that most CMOs could care less about digital and would rather cling to 2002 revenue models. It’s impossible in 2015 to have a consumer acquisition strategy without thinking about digital and mobile as part of that equation. If you’re chasing any type of consumer, you think they won’t enter your website and learn about you via their souped-up phone? Um. They will. And you need to understand how they might reach you and what factors into that. If you’re operating according to 2000 sales funnel properties, well, that funnel died a long, long time ago.

The next time you ask about a consumer strategy, or a lead gen campaign, or a consumer acquisition model, or a go-to-market strategy, well … maybe you should stop, pause, and think about who on your team might be able to talk about an algorithm strategy too. It’s almost just as important.


Ted Bauer

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