Savvy shoppers wait in anticipation, while Australian retailers are gearing up for the onslaught. Amazon’s arrival is imminent.
Streaming video service provider, iflix, has added 1 million subscribers in six months and seen acquisition costs drop from US$25 to $3 following an iterative data-driven marketing program tapping consumer intent.
The business, which launched less than two years ago, aims to bring Internet TV to emerging markets for the price of a pirated DVD. It currently operates in 22 countries and boasts of 500 employees including 110 marketing staff globally.
Iflix co-founder and CEO, Mark Britt, told CMO its target market is rapidly growing middle class across emerging markets such as China, India, Thailand and Nigeria, where industries are leapfrogging generations of technology and where mobile connectivity is the primary way of connecting online. Industry forecasts indicate up to 3 billion consumers will join the world’s middle classes over the next 15 years, largely from emerging markets.
“The traditional TV business doesn’t really exist in these markets. People are moving to the Internet, YouTube, Facebook and piracy as entertainment forms,” Britt said. “iflix is about bringing the power of a Netflix, Stan or catch-up TV to these markets, but at a lower cost. For the price of a pirated DVD, consumers can get 10,000 to 15,000 hours of content including Western, Korean, Japanese and Chinese shows, all subtitled.”
Building a brand from scratch
The problem iflix faced upon launch was being able to identify a digitally literate audience of potential early adopters and consumers who would understand and be willing to pay for its content service. Iflix also made the decision early on to be a brand-led business.
“There were two challenges: The first was we needed to educate them around a new category, as many didn’t understand Netflix, and traditional or pay TV didn’t exist,” Britt said. “We had to educate them on the nature of video on-demand. The other challenge is we’re a new business with zero brand awareness. We had to find and reach a high propensity digital audience and educate them on us and a product that hasn’t existed before, but with no data.”
To help ensure media campaigns reached the consumers most likely to convert to paid subscribers, iflix partnered with programmatic ad tech player, RadiumOne. The vendor focuses on connecting consumer signals from a brand’s paid, earned, shared and owned channels in order to find high-value customers.
Britt said his team was attracted to RadiumOne’s first-party data insights, which can be augmented with third-party data sets, and the ability to test and learn campaigns against its own growing source of consumer intelligence.
The company deployed RadiumOne in May 2015 and began using the vendor’s analytics tools to capture real-time signals such as mobile analytics from in-app events, search history, social analytics including consumer sharing behaviours, campaign data and proprietary customer data.
For Britt, there are three buckets of digital media solutions available to brands today. The first is solutions from players such as Google, which offer technical capability and some access to data for buying and targeting advertising, but which don’t allow a brand to build any deep insights internally, he claimed.
“It’s more challenging to understand what the indicators of high-propensity customers are, other than in their ecosystems, and actively learn and develop campaigns for customers as you build early adopters in each market,” Britt said.
The second type of adtech partnership is with ad networks that provide “black box solutions” for acquisition that deliver customers but don’t provide “the why”, Britt said. “As a brand, we need to understand who we are speaking to and how those conversations are going,” he said.
“The third option is where RadiumOne comes in: Companies with rich sources of their own first-party data that can be augmented with third-party data, and that are open to testing, learning and building an understanding of the funnel.”
Using customer signals
The work with RadiumOne has allowed iflix to make predictions about consumer behaviours such as likelihood of conversion and churn, plus assign lifetime value scores to individual users. These insights are being used directly to inform paid media campaigns as well as customise creative, target specific consumer segments and optimise campaigns on the fly.
“We learn together, and augment that data with ours. So each new campaign and customer has become progressively cheaper and effective to acquire as we’ve gone on this journey,” Britt said.
To help, Britt said iflix built an ecosystem of local partners, tapping telcos and websites that have data sets in each target market.
“We established what I’d call a small premium exchange in each country, where we were able to firstly collect quality first-party data, use that to augment existing RadiumOne data, then run tests and trial campaigns optimised on premium inventory and trade with publishers as we evolved,” he explained.
Iflix optimised media activity against two factors: Campaign message and variables such as price, value, features, positioning and education; and the types of content its service offers. This could often result in 250 different combinations of campaign messaging being in circulation simultaneously, bolstered by the wealth of content available through its service. To assist, iflix has established an internal design and copywriting agency.
During the first six months of activity, iflix attracted 1 million subscribers, and grew brand awareness from zero to 25 per cent. The ability to connect with a consumer based on their particular movie or TV viewing behaviour during the free trial period also increased chances of conversion by 75 per cent. All this has seen the cost of new customer acquisition fall from more than US$25 to less than $3.
Having started out reliant on a partner’s insights and technology, Britt said iflix is now combining an increasingly deep understanding of its own customer base with insights through RadiumOne to improve its digital marketing. Today, the company has just under 2 million customers, each generating thousands of signals in terms of behaviour, preferences and interaction.
Over recent months, iflix has also rolled out the Adobe Marketing Cloud suite, which is integrated directly into Google and Facebook, allowing it to further target media buying.
“We tend to buy directly, and optimise using first-party data with existing proven campaign strategies,” Britt said. “RadiumOne then allows us to test and push the boundaries on new forms of campaign strategies.
“On any given day, we have our campaigns competing directly with RadiumOne, so they serve as a benchmark against each other.”
With the industry changing so rapidly, Britt said a marketing team’s core capability must be learning. “It’s your ability to test, fail and optimise over time that builds long-term success,”he claimed.
As a digital-only business, Britt said iflix’s ultimate goal is to speak to each customer on a one-to-one basis.
“The better we understand you, the more we can build a proxy of who you might be based on your historical behaviour on the Internet,” he said. “We want to optimise from the moment we first see you on the Internet, to the communications when you sign up, to the ads you see after you sign-up to educate you on features and content, then the ongoing experience.”