Unpopular Opinion: Media diversification is overrated for most advertisers.

This mostly comes down to opportunity cost.

If you want to diversify, you need to actually invest a proper amount of time, money and resources to see success. Most advertisers just want to check the box to try and diversify because of Facebook’s platform instability and/or don't want to be reliant on one platform.

But there’s nothing wrong with continuing to invest more in what’s working vs trying a new platform because you feel a need to diversify (FOMO).

New platforms can be complicated & a lot of work. They require new creative, additional media mgmt, & measurement is different. W/ more channels in the mix, it becomes more difficult to attribute who primarily drove a sale and who is taking more credit than deserved.

The opportunity cost just might not be worth it. That is, if you're getting the results you want on Facebook already, would your time and money drive greater incremental value investing more there vs in a new channel?

For most advertisers the answer is probably no.

While people boast about how much success they're seeing on Snap and how it's beating Facebook or how they're seeing such promising early success on TikTok, context is important.

For example: How much are you spending on Snap vs Facebook? If you're seeing such great efficiency, why aren't you spending more? How does attribution compare to what you're seeing on Facebook?

That's not to say diversification shouldn't happen, but the opportunity cost needs to make sense.

As an example, this was TechStyle's (fabletics, savagexfenty, justfab, shoedazzle, fabkids) paid-social marketing mix over the last three years.

In 3 years, they reduced their reliance on Facebook from 94.1% of total social budgets to 90.3%.

Ironically, the title of this webinar about how Techstyle moved less than 4 percentage points away from Facebook was called "Diversify Your Social Advertising: You Can't Afford Not to Take a Multiplatform Approach."

In the case of TechStyle, diversification makes a lot of sense but for other advertisers, that might not be the case. Why is that?

Based on TechStyle's public marketing budget and some back of the envelope math, they spent about $87.25M on digital in 2017:
- $66.25M on Facebook
- $1.83M on Snap
- $2.25M on Pinterest
- $17.5M on non-Social

On average, that would mean Techstyle was spending about $1.1M per month per brand on Facebook. At those levels of investment, you might be hitting a point of audience saturation and inefficient CPM's. https://twitter.com/mrahmey/status/1326599600711626755

It naturally makes sense to look elsewhere to drive incremental sales. Your next dollar would drive greater incremental value investing in a new channel vs investing in Facebook.

If you feel that you're hitting your natural performance cap on Facebook, it might make sense to look for a new channel.

(although you need to remember that scale is the name of the game on Facebook and you probably have a lot of runway) https://twitter.com/mrahmey/status/1326599583154245633

Additionally, the dollars being spent outside of Facebook would need to be significant enough that it's worth the time to try and prove out results.

In TechStyle's case, while they only spent 3.2% on Pinterest ads, that translated to about $38K per month per brand initially on the platform. While small in comparison to Facebook, these budgets were still meaningful enough to try and develop a new sales channel.

Beyond the $38K/month/brand on PIN, TechStyle also re-evaluated their multi-touch attribution to understand the impact of the channel on the consumer path to purchase, set up lift tests to measure for incrementality, and built new creative tailored to the platform.

If you're going to invest in a new channel, the goal shouldn't be to just check the box, but to actually invest the time, money and resources into making it work.

Spending a $1K ad coupon isn't going to prove anything. You need to put a meaningful budget against your efforts.

e.g. if it will take 50 conversions in 7 days to get Snapchat to start optimizing & your typical CPA is $100, you should be investing at least $5,000/wk initially.

Lastly, you need to put in the time and effort to make a new platform work.

e.g. if you wanted to start using Snap, do you have the additional time, resources & appetite to:
- Make creative conducive to the platform?
- Manage campaigns in a new platform and analyze results?
- Have a way to reconcile double counting b/w FB & SNAP for same purchase?

If you do feel that media diversification is still important but you don’t reach the criteria of meeting the opportunity cost required to diversify, one solution is to have an experimental budget.

This budget should be meaningful enough to actually drive results. i.e. how much $ do I need to put into a new channel to make it work? Will that investment be enough that I will put my time & energy into ensuring it works? What’s the amount I am willing to lose testing?

Additionally, any experimental budgets should be ruthlessly prioritized. It will be more effective to really put your time and effort into one new channel and spend as many months as you need to prove it out.

On the flip side, if you feel as though those experimental dollars proved fruitful, you might decide to either keep your marketing budget there and carve out additional experimental dollars or shift dollars away from your primary channel.

Lastly, this doesn’t mean you shouldn’t test Snap or Pinterest or TikTok or any new platform, but to potentially wait until the opportunity cost makes more sense for you based on developments in technology.

i.e. in the same way that Facebook’s auction became more sophisticated and the barrier to entry became lower, there’s nothing wrong with waiting until these platforms become more sophisticated as well.

e.g. you might not be willing to part with $5000/week to unlock Snap’s 50 conversion requirement, but, when the systems become more effective and that requirement disappears, your risk tolerance to test out the channel might be more palatable.

Discipline is important when building out a media strategy. It’s important to know when and why to say no and be focused vs say yes and try to do everything.

While being first to a new channel or diversifying your media mix might sound great on paper, there’s nothing wrong with waiting for the opportunity cost to be a net positive for your business.