Following a tumultuous year, brands are ready to get back to growth. For many, this means expanding into new markets to seize the opportunity of a more connected world, where geographical lines are no longer a barrier. And while the thought of entering a new patch may be daunting for marketers, performance marketing is a brilliant tool to test and scale up quickly.
Of course, performance by itself is no silver bullet for winning in new markets. Considerations for different cultural and behavioral traits are also critical to success. Making data-led decisions on market expansion has never been more important – or accessible, with more tools available to marketers. By following a simple trio of principles, your brand can not only launch effectively but, most importantly, grow sustainably in those new markets.
Phase one: explore
Successful market expansion must be powered by highly relevant, focused insight – all of which comes after a phase of extensive research. The Explore phase is how brands understand which markets to go into, what the potential performance is, and, importantly, what key blockers there are to overcome.
There are a couple of key questions to consider: how can we use local knowledge to validate assumptions? How can we learn quickly at launch to help validate some of those assumptions we’ve already made? These questions can initially be answered with comprehensive qualitative and quantitative analysis prior to launch.
Fortunately, there are a plethora of tools and media providers that can help with this research. Simple keyword research and Facebook audiences, for example, can assess the volume of demand in a new market, which is a great place to start. SimilarWeb, by comparison, can help brands understand where a competitor’s traffic is coming from. It’s important to get a range of quantitative insights outside of just what your own brand is doing. When it comes to qualitative insights, go directly to the source and ask people in the new market.
This is where the importance of local insights is key, and brands should utilize partners with local knowledge of the new market to help. We’ve seen plenty of examples when this critical step is not taken or not prioritized, and usually it results in a marketing or advertising faux pas. For example, in 2019 McDonald’s had to apologize for using the slogan ‘Sundae Bloody Sundae’ in a Portuguese Halloween campaign, an insensitive (albeit unintended) reference to the Northern Irish Bloody Sunday massacre in 1972.
Without proper localization, category assumptions can be made and can prove disastrous. In McDonald’s case, the brand was able to move pretty swiftly past the controversy and it didn’t greatly impact the overall business – but the same can’t be said for other brands that don’t have the same global backing as the fast food chain. Poor decisions made whilst canvassing market intelligence can also lead to inaccurate assessments of the size of the market or derailing how to talk about your product or services.
The ultimate goal of this first Explore phase is forecasting performance. At the end of the process, brands should be able to confidently say: “Based on all of our market knowledge, this is what we would expect to get as we launch into that market.”
Phase two: launch
Using key insights from the Explore phase, brands are then ready to launch or roll out to a new market, with the help of performance marketing.
The key benefit of testing with performance marketing is the speed of feedback and learnings to improve activity quickly. For example, we worked with a luxury fashion retailer to break into 22 international markets through 75 new campaign launches in three languages. Using our three-step approach we did so in record time and achieved year-on-year growth of over twice the initial targets.
The Launch phase should validate the initial exploration work a brand has done and validate the decision that it’s thinking about making, allowing for course correction.
A successful launch isn’t just going live with a new product or service and thinking ‘job done’. Launch is about evolving from the stage of validating initial assumptions to applying new learnings in real time. It’s about applying more sophistication, validating key products, business signs or messages, and refining those as a brand looks to become more established in the new market.
Market rollout during launch must also be governed by an established process for growth: land, validate and course-correct as performance data becomes available, leading us to the next phase: expand.
Phase three: expand
Expand is how a brand turns a nascent market into a mature one. As more and more data is collected and the understanding of how the local market operates becomes more thorough, the media mix can be optimized. And thus triggers a process of constant and rigorous testing and learning.
In this phase, brands can ask, “where can we move different channels and adjust spend?” based on past activity and data insights, all of which can inform the current task at hand. This then in turn builds up real measurement sophistication, allowing brands to get a true picture of the value of each channel, and helping them continue to benchmark and prove effectiveness.
Another key outcome of the Expand phase is a brand’s ability to generate its own data. There comes a point at which the reliance on third-party-acquired market data becomes less pronounced, and will give way to a brand’s first-party data, which shows how people are actually behaving around its site, how people are responding to its messaging, and how people are engaging with its various products.
As a brand grows and develops, so should its ability to make accurate decisions about what to do next, which they can do with the help of performance marketing. Using this three-phase approach, brands will be able to spot opportunities, move quickly to take advantage of them, and double down on success that can be sustained.
Andy Cooney, commercial director at Croud.