– Brands have a negative view of agencies and are experiencing challenges with paid ads.
– The solution lies in re-evaluating the ecommerce landscape and making data-backed decisions.
– Many ecommerce companies are facing tough times and may not survive without proper capital allocation and a customer-centric approach.Re-evaluate capital allocation and business fundamentals in the ecommerce landscape to avoid potential failure.”I’ve been reading your posts for a while, but your last post really hit me, so I decided to reach out. I love the way you call out agencies. Do you see the problem with this? Brands hate agencies. Brands hate false promises. Brands are feeling the massive pains of paid ads right now, and most agencies don’t have any solutions. The solution isn’t an agency; the solution is a change of view and a complete re-evaluation of the ecommerce landscape. I’ve been pointing out inherent flaws in the systems that we have willingly bought into for a while now. I’m not talking about complicated stuff here; I’m talking about common sense, logic, and data-backed approaches. Capital allocation. I’d venture that most companies in ecommerce are just terrible at proper capital allocation and unit economics. For everyone talking about ROI and ROAs, it’s always on a payback period that is entirely too small to make an informed decision. In the ecommerce mindset, through speed and constant testing, we’ve neglected that the customer is in charge of their journey, NOT the company. Yet we still love to make decisions that don’t take the timelines of a customer journey into consideration. These behaviors lead to the same mistakes often, and it’s playing out across all businesses, and it has nothing to do with how smart people are. You were able to get away with this when the cost of ads was reasonable and before privacy changes. That doesn’t work anymore. If you don’t have massive profit margins selling an ecommerce product or you don’t already have a brand or community, or a way of creating one super cheap or super fast, you’re not going to make it. Here comes the fun part: I’m going to give a timeline, and everyone is going to doubt me again… 3-6 months, that’s the runway most companies have right now before things become really, really tight. Last year, I told everyone that Q4 wasn’t going to be as good as people think and that Q1 is going to be the quarter where a lot of ecommerce companies find themselves in tough positions. We’re in Q1, and I’ve heard more chatter around brands that have been bragging about their businesses over the last few years becoming stalled out, looking for an exit, and not having a plan than ever before. The fact is a lot of ecommerce companies don’t belong in business; the business fundamentals don’t make sense given the current landscape, and the greenlighting of continual capital allocations to platforms with decreasing results is business suicide. Yet, the loudest voices in the room, the people that people have been trusting and relying on, simply don’t care because these agencies are all on retainer. The problem is a lot of businesses don’t want the answers because they don’t like hearing them. To all the brands I’ve talked to that are still trying to wing it.Good luck :)#marketing #strategyhttps://www.linkedin.com/in/jivanco