The 5 laws of Marketing

👋 Hey, it’s Sundar! Welcome to a 🔐 paid 🔐 article of experiMENTAL: a weekly newsletter on B2C Marketing & data science how-to guides, frameworks, and stories from 15 years including early Uber.

The 5 laws of Marketing

Over my decade+ long career, I’ve collectively measured and observed upwards of $1Bn in spend. Whether I was doing the analysis myself or managing a team of analysts, I have seen every type of Marketing from “Brand” to “Performance” marketing to Lifecycle marketing.

From all of this experience, I’ve observed 5 immutable laws of Marketing (although technically these are “theories” and not “laws” based on how science defines them, but I didn’t think the 5 theories of Marketing sounded as cool).

Here they are:

1. It always gets more expensive

2. Consistency beats creativity

3. Pick 2: speed, volume, cost

4. Attribution is always wrong

5. Virality always fades

It always gets more expensive

For everyone that’s spent more than a minute in Marketing, you’ll have experienced the answer of “Yeah CPMs have just gone up YoY”. While it might sound like a cop out , the reality is that it’s the truth. Everything gets more expensive over time.

That happens for 4 reasons:

1. More competition → every year more brands want to advertise on platforms . Even if you’re a newer ad platform like Reddit, your CPMs will continue to go up. In fact, it’s the bet that most platforms that move towards Ads are banking on . They’ll use some hand wavy magic to show how performance has been amazing and then you keep spending more

2. More reliance → Let’s be real. Performance Marketing, which is what almost every platform focuses on, is a drug and what happens with people and drugs? They get addicted. And then Meta and Google introduce new campaign types where you have to think even less. Because it becomes a drug, the natural tendency of a product that has stronger demand than supply is for prices to go up

3. Diminishing returns → As you spend more, you begin to hit diminishing returns simply because of the quality of people you are buying goes down. In every business journey, you first find the early adopters. They are risk takers, and are willing to try your product out. They have low barriers to entry. Over time though, you will catch all those fish. Then you must begin going to deeper waters and spending more time finding the fish. That adds cost.

4. Greed → Every major ads platform is public which means it has shareholders. Although every platform operates under an auction model, the reality is that it’s a blackbox auction where you have very little access to data. This means that Meta and Google can (and probably do) increase CPMs every so slightly and that forces everyone in the auction to recalibrate. Why is it that CPMs rarely ever go down?!

It always gets more expensive.

Consistency beats creativity

Marketers love focusing on the creative side of Marketing. Of course it’s important, but the reality is that consistency beats creativity every. single. time.

The chart about shows sales change after stopping advertising. Now, what this chart down’s show is the quality of the creative or the length the creative was running. The reason I call that out is because every creative and campaign has a half life. It will eventually stop having impact. But, if you continue to invest in advertising then that half life extends.

Here’s a fun story that I’m going to be writing more about soon: At Uber, we were about to launch a massive campaign in the UK. Part of our measurement strategy was to run a Brand Lift Study on Meta to understand the baseline. The beauty here is that it’s relatively cheap and effective, but it tells you where your Brand Awareness stands before the campaign. Whether that awareness metric is 100% accurate doesn’t matter. You have a baseline. Let’s say it was at 50.

Then we ran the campaign for 2 months and during the campaign we ran another brand lift study that brought our awareness up to 60.

For whatever reason, we had to pause the campaign and for the sake of it, we measured the Brand Awareness 1 month after the campaign ended. And guess what?

The Brand Awareness was right back to 50. It’s like we didn’t even spend hundreds of thousands of dollars (or pounds) and months of effort. It went right back!

Consistency beats creativity.

Pick 2: volume, speed, cost

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