Joined expla company as a Junior Marketing Manager and advanced to the position of CMO within 4 years. Launched two of the company's largest units.
LinkedInHello everyone! I’m Ihor Svietlichnyi, a CMO at expla. In this blog post, I continue to share stories about the work of an online marketer. This time, I’ve gathered tips that will help you conduct marketing investigation (also known as research).
There’ll be many handy tools that you can use in practice. Let’s go!
Imagine you are an online marketer looking for new niches and opportunities to expand your business. Where would you start?
To avoid operating blindly, it’s crucial to conduct thorough research on the market, target audience, competitors, pricing features, and more. All of these elements collectively constitute what is known as marketing research.
Research helps us to understand our market position, strengths, potential opportunities, ways of development, and also – risks.
The stages of research are usually as follows:
Research is always about trying to understand the market in depth and then: data, again data, and lots of data.
The main task of research is to assess the financial potential within the market, compare our capabilities with the challenges in the business, and draw conclusions about our interest and the probability of success upon launch.
There are a lot of opportunities to make money in online business. You need to cut off the layers.
First, we assess whether we know how to work in a niche at all. For example, we know how to buy high-quality Facebook ads, but the niche we are considering is mainly about Snapchat ads. If we don’t know how to work with Snapchat, it’s another unknown for us, which will reduce the likelihood of success. We also consider whether a certain niche is even legal or prohibited. And we work only with the legal ones.
Next, we need to understand how much money we can make here. For example, the financial market of all African countries will be smaller than the financial market of Texas (USA). The question arises: are we ready to spend our resources on small markets? I don’t think so.
According to the size of the company, we determine the minimum threshold for the size of the niche we are ready to consider. Launching a new niche in the US or Pakistan will be as easy/as difficult, but the profits can vary by several or even dozens of times. If it’s five thousand dollars a month, we’re not interested.
Usually I do research on the US: it’s a big country, with 330 million people. And from my experience, no matter what niche you take, America covers 40-60% of the market. Even by capturing just 0.5% of the market there, you can potentially earn much more than if you were to become the number one service in Africa.
In our company, there is a position called Business Associate. His task is to analyze growth areas for us. We are a profitable company, and to remain so, we need to constantly invest in R&D. Companies around the world invest 5-20% of their revenue in R&D.
Now let’s talk about the stages in more detail:
I’ll tell you about an interesting case that we’ve recently investigated.
We once considered the mattress niche in the United States. Yes, literally the mattresses we sleep on. It turned out that Americans change their home location very often – they are a kind of a nomadic nation. It’s normal for them to live in New York today, and in three years – in Texas, building a career.
Very often, houses are rented in a “wall and floor” format: you need something to sleep on. That’s why, by the way, transportation services are also popular there (across the state and the country overall).The average cost of a mattress is $1200. And the average check can be more than $3000 for one purchase, because you also need bedding, pillows, etc. On the one hand, you might think that the niche is monetary, with a large market size and high LTV. But in this market, with high LTV comes high CAC. The potential profit here is small because the competition is fierce. The average cost of user acquisition can be 700-800 dollars.
Another metric for us is the budget for a test. Only after evaluating all of these factors together do we conclude whether it is worth entering the niche at all.
We rather not use Chat GPT, because it is a language model that is not adapted to research.
Target audience research is the analysis of demographic, psychographic, and behavioral characteristics of potential customers. First, we collect basic information: age, gender, education. But this is not that important. It is very valuable to learn about the key characteristics of the target audience: hobbies, interests, and consumer habits.
Based on the obtained data, we create an image of the target audience. We study how people interact with the product or service. We use the results to adapt marketing strategies and personalize advertising campaigns.
We follow a strategy of launching niches where there are at least two growing direct competitors. The presence of at least one market increases the likelihood of our success. In this case, we will both expand the market and “bite off” market share from existing players.
Launching something new where there is no market is always more difficult and risky. We always analyze our competitors and their advertising approaches. This allows us to understand the target audience better.
There are several tools:
Screenshots of several interesting niches from the Meta library:
For example, the VPN niche. We can check how competitors work with the target audience, what creations they use, what messages they promote. Then, we put it all together and analyze it.
I’ll tell you about the niches that we researched and didn’t choose.
A situation in which the market is highly competitive, with nimble and smart competitors, is called the Red Ocean. We try not to go there.
Every niche has a window of opportunity where you can achieve leadership positions at the right cost. This window is possible when the market is still being formed and there is no clear leader, plus the market itself is growing at >20% per year.
In an established market that is stagnant or growing slowly, there are almost always strong players who can operate at low margins. Dislodging them from their leadership position requires investments that are disproportionate to the potential profit.
The main problem is a misunderstanding and misjudgment of the size and competitiveness of the market. There is also a factor that we informally call “corruption,” where one or more players have strong ties to the advertiser. These connections cannot be replicated. As a rule, it is a strong historical/financial connection between the owners of the companies, or the companies are in the same holding, or the companies were created by one on the capital/resources/expertise of the other.
A misunderstanding of these aspects can lead to errors in conclusions and business strategies.
Research is an integral part of the work of any online marketer, whether in a classic or in a performance agency. I’ll give you the basic rules for successful research.
I would also advise you to keep a so-called “beginner’s mind” – to be open to new things, to be interested, to strive to delve into the essence.
Thanks for your time! I wish you all fruitful research that will lead your companies to success.
