The Commoditization-to-Risk Decision Rule
Increase experimentation as proven marketing strategies lose differentiation
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 4
- Confidence
- 96%
Treat commoditization as a trigger for changing the portfolio's risk level. First determine whether a strategy remains highly differentiated or is becoming standardized, crowded, and predictable. As commoditization increases, preserve the fundamentals that still generate dependable returns but raise the share of effort devoted to new channels, formats, and incentive structures. Search for opportunities that senior competitors dismiss, that lack complete tooling, or that are difficult to measure. Those disadvantages can indicate that the advantage has not yet been competed away. The rule is not to chase novelty indiscriminately; it is to take controlled bets before certainty arrives, because widespread measurement and obvious economics invite competitors and compress returns.
Origin
Kip Bodner articulated the decision rule on Marketing Against The Grain in response to falling search click-through rates and increasing advertising costs.
Core principles
- 01Channel maturity reduces extraordinary returns
- 02Commoditization makes performance more predictable
- 03Predictability attracts competitors and raises costs
- 04Emerging opportunities appear before measurement becomes easy
- 05Risk appetite should rise as differentiation declines
How to run it
- 1
Diagnose commoditization
Evaluate whether competitors use the same tactics, results are becoming predictable, costs are increasing, or platform access is shrinking.
Pro tip Compare the channel's current economics with its own historical performance.
Watch out Do not mistake one weak campaign for structural commoditization.
- 2
Protect productive fundamentals
Keep mature programs that still support the business, but stop assuming they can deliver the same exponential gains as before.
Pro tip Manage mature channels for efficiency and cash generation.
Watch out The rule calls for diversification, not reflexive abandonment.
- 3
Raise controlled risk
Allocate more effort to new channels, creative formats, communities, and incentive models as the established strategy loses differentiation.
Pro tip Favor opportunities that competitors avoid because they feel unfamiliar or hard to scale.
Watch out Cap each experiment's downside so novelty does not threaten core operations.
- 4
Bet before certainty
Look for qualitative traction and learning before complete attribution tools exist. Expand bets that produce meaningful audience response or strategic advantage.
Pro tip Document assumptions and leading indicators before launching.
Watch out Waiting for universal measurement often means waiting until the opportunity has commoditized.
In the wild
A brand sees organic click-through rates falling even though rankings remain stable. It continues maintaining high-value search pages but increases investment in a newsletter, creator partnerships, and a community where it can own the audience relationship.
→ The brand reduces dependence on a commoditizing discovery channel while preserving its existing search contribution.
Senior competitors dismiss an emerging video platform because production feels unfamiliar and attribution is weak. A smaller marketer runs bounded tests, learns the native creative language, and develops a following before standard playbooks appear.
→ The company gains an early distribution advantage unavailable once the channel becomes crowded.
Common mistakes
Waiting for complete attribution
By the time measurement is easy and certainty is widespread, competitors can copy the play and compress the return.
Chasing every novelty
Higher risk appetite still requires hypotheses, downside limits, and evidence of audience or strategic value.
Stopping the fundamentals
Commoditization does not mean a channel has stopped working; it means its returns are less likely to remain extraordinary.
Is it for you?
Best for
It is best for teams seeing declining organic reach, higher paid costs, or competitors converging on the same tactics.
Not ideal for
It is not ideal as justification for abandoning profitable fundamentals without evidence or bounded experiments.
From the transcript
“And you have to say, cool, is are my strategies marching to commoditization, or are they still firmly in highly differentiated mode? And if they…”
“there is a direct correlation between how hard something is to measure in the early days and how much opportunity there is.”
“Are you willing to take a bet before you have all that information? That is where people's careers and brands are gonna get made or…”
From the episode
Be The Most Interesting Brand In Your Market with Ross Simmonds
Ross Simmonds