Can you effectively and efficiently pay to grow your business, without wasting your money, or annoying your prospects? Yep …
In this episode Chris and Tony reveal:
- Why paid advertising is powerful, but with that great power comes great responsibility
- How to get a good return on your investment of hard earned cash
- The one social network that’s become the advertising platform to watch
- Ways that clever advertising features can be used for smart customer retention
Attracting and Retaining Customers and Subscribers with Paid Advertising
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Tony Clark: This is The Mainframe. Welcome back, everybody, to the ARC Reactor series. These are our attraction, retention, and conversion strategies, with the reactor piece being how to automate all of this. How are you doing, Chris?
Chris Garrett: I’m doing great. I’ve just got back from vacation. It was an epic road trip, and we saw some very pretty scenery, but I’m glad to be home.
Tony Clark: Yeah. A lot of times you need a vacation when you get back from vacation. We do that all the time when we go to Disney. We end up really needing a rest when we get back because it’s go, go, go all the time. It energizes you, but you still feel like you haven’t really rested.
Chris Garrett: Yeah, it’s mind-expanding. It’s good. I did actually take a sketch pad and some pens and paints, and I didn’t do any of that all. So I’ll have to try and bring it back up in memory and sketch what I remember. It was great. I did actually book tomorrow as a vacation, but it doesn’t look like I’m going to get it, so we’ll see. I’ll semi-work.
Why Paid Advertising Is Powerful, but with That Great Power Comes Great Responsibility
Tony Clark: This is episode 18. We’re talking about attracting and retaining customers and prospects with paid advertising. This is another part of that attraction strategy we’ve covered. In the other episodes, we talked about social, and we talked about traffic and SEO, and this is paid advertising.
This is another attraction strategy, but as usual, and as everybody’s seen as we’ve gone through this series, attraction leads right into retention, which also leads into conversion. Though they’re not separate, this is a lot of times thought of as more of an attraction strategy. You have to have that retention piece or that conversion piece ready — one or the other. Otherwise, the paid advertising doesn’t do any good, right?
Chris Garrett: Yeah. You’ve got to know what’s going to work for your specific audience. You’ve got to know what’s working in your funnels. You’ve got to know your numbers. Really, this is a warning: don’t automate too soon, and also, don’t use advertising too soon, because you’ll accelerate your leaks. You’ll accelerate your loss of income if you put the pedal down before you’re ready.
I had a really good Google AdWords campaign running quite a few years ago. It was promoting magazine subscriptions. We went away around Christmas thinking, “This is going to be the best year ever. I’m going to make lots of money. These magazine subscriptions are selling like hotcakes.” I didn’t realize at the end of November, beginning of December, people look at magazine subscriptions, but they stop buying them.
My AdWords was still running, and it was one of those things we talk about. When you take your eye off, when you’re away from the wheel, automation just keeps plowing ahead into that brick wall. Fortunately, I got back in time to break even, but it could have cost me a fortune, because people were clicking, and people were going through to the offer, and they were saying ‘no.’ I was still paying for the clicks. It was still a well-optimized, well-built campaign, but it had gone from super-profitable to the absolute opposite of that.
Tony Clark: That’s a great example, because one of the things I say all the time is that if you look at a funnel in the real world, at the bottom of that funnel is just a hole. If you don’t have anything under that funnel to catch stuff coming through, the purpose of the funnel is useless.
People go into this mindset of setting up a funnel, especially with paid advertising, without having any mechanism, any container, underneath that funnel to catch the people as they come flooding through the funnel. That’s why you end up with people that spend a ton of money on advertising and actually don’t convert very well. Because advertising really is an accelerant for what you’re already doing in most cases, right?
Chris Garrett: Yeah. That’s why Copyblogger actually doesn’t do much advertising. We don’t really need it, and a lot of our experiments are around attraction, as the series implies. We use content to get attention. We use content to reward people for their attention and to bring them deeper into the funnel. We could accelerate that with advertising, and we have done the odd experiment here and there just to keep our hand in, but 99.999 percent of what Copyblogger is has been built organically through content. We haven’t felt a need to accelerate it.
Now, not everybody is going to be in that position. If you are going to use paid advertising, and it’s something to test, know your numbers. You need to know how much a subscriber or a customer is worth to you. That average subscriber value is basically how much you can afford to pay for a new subscriber, but you can take into account lifetime value. Think long-term.
In the direct mail world, where I lived for quite a while when I was doing database marketing — if you remember that term — we used to say, “If you are making money on that campaign, you’re actually not trying hard enough,” because that campaign is to get a customer or to get a really, really good warm prospect. You make the money back over time.
That makes it even more important that you know your numbers. You’re really going to get your numbers from doing the organic stuff or by saying, “Okay, I can afford to lose this thousand-dollar budget just to learn. I’m not going to try to get a profit this time. I’m just going to learn what works and what doesn’t work, do some tests.”
Tony Clark: That’s a really good point. Sean Jackson, our CFO, and I were talking about this just yesterday, about the BS metrics that people use and terms like ‘churn’ and these words that people use. But they don’t actually mean anything when it comes down to how it affects your balance sheet and how it affects your profit and loss statement.
One of the things we’ve always focused on, our main metrics — we joke about it, but it’s actually true — are profit, revenue, and lifetime value. Those are things that actually affect the day-to-day running of the business, growing of the business, and making the business successful, versus just numbers and metrics that don’t do anything. That’s what it really means about keeping your eye on the numbers, right?
How to Get a Good Return on Your Investment of Hard-Earned Cash
Chris Garrett: Yeah. It’s being able to make business decisions. It’s not the vanity metrics. You don’t really care how many people saw an ad. As I said, I’ve got a background in advertising. Awareness is good, and being able to brand through exposure is good. It’s hard to measure. It’s hard to say, “Okay, this is the impact you had on my bottom line,” even though we used to convince customers of the advertising agency that these branding campaigns were adding to the bottom line. We did that because we needed to pay bills.
For your own business, that exposure could be really cool, but it’s hard to make a business decision based on it. Actually, you can be overexposed and annoy the people you’re trying to attract, so don’t do that either. You need to know your numbers. You need to know the right numbers. It really comes down to how much can you afford to spend and how much is going toward return on investment and how much is wasted. The old thing with advertising used to be, “I know half of it is wasted. I don’t know which half.”
You do know now if you track, measure, and test.
Tony Clark: Yeah. This goes back to old Uncle Claude’s book, Scientific Advertising, which is one of my favorite business books of all time. This was back in the late ’20s, so when they discovered that there is a formula to track scientifically what is working with your advertising. That hasn’t changed. It’s just gotten better.
You are spending money, so you need to know what that return on investment is. If you’re not tracking and you’re not seeing what these campaigns are doing and how effective they are, you’re really just throwing money into a hole. That is not something you want to be doing, especially early on.
Chris Garrett: It’s a process of incremental improvement, being aware of what’s going on, and being aware of what works, and trying different things. I guess it’s kind of like going to Vegas. Take the money that you can afford to lose, and don’t spend any more.
The way you get good return on investment is to use proper targeting and to use good measurement, and each service will have its own features and facilities that allow you to do that. It used to be Google AdWords was the king of advertising, and it still is ultra-powerful, because your ad is an answer to a question somebody is putting into Google. They are looking for you or somebody like you who can help them.
Use keywords so that your ad displays based on the keywords somebody puts in. But you could also do things like exact match, so it’s an exact phrase. That will trim out all the fat. Then use negative keywords so that you don’t get people seeing and clicking that are completely wrong for you.
I’ll give you an example. People do a search in Google for even your brand and then a word like ‘warez’ or ‘free’ or ‘download’ because they’re trying to pirate from you. If you use those negative keywords, you’re not going to be paying to be displayed to those people, to get clicks from those people.
The One Social Network That’s Become the Advertising Platform to Watch
Chris Garrett: With Facebook, it’s really cool now, and it really shows what Facebook is as a business model. They know so much about us. From an advertising perspective, that’s really good, because we can ultra-target. So you can base it on interest. They’re interested in Dungeons & Dragons. They’re interested in Marvel. They’re interested in hiking. You can do it on geography. You can do it on demographics. You can even target mobile users. You can target mobile users in a certain geographic area who are online at a specific time.
You can upload custom audiences, and that is super, super powerful. You can build a custom audience through the tracking pixels that Facebook gives you, so you can track people who visit your site and who convert. You can also upload email lists, and that’s amazing. You can come down to college-educated homeowners who earn six figures in a certain postal code who go fishing. It’s amazing.
Tony Clark: It’s a very powerful platform, both of those. I think that people tend to get overwhelmed. The one thing I always tell people is that both Google and Facebook want you to be successful with their ads.
Their educational tools that are just right there on the site, the things that Google provides about learning how to use AdWords and how to use their Analytics to track, and the same with Facebook and how to use their latest tools and how to use them effectively, they actually do a really good job of educating on how to use this system effectively, because here’s the thing. The more effectively you use it, the more money you’re going to spend with them. So it’s in their best interest to educate you about how to do this properly.
People always ask me, “Where do I go to learn this stuff?” There’s tons of books and resources out there, but start with Google and with Facebook, and use their educational sources, because they really want you to be successful at this.
Chris Garrett: Yeah, and don’t go using the external third-party tools until you’ve really got the hang of their built-in tools. It’s like I said. You don’t want to be asleep at the wheel. You do need to be driving this, and you need to know how it works and how the decisions you make affect the success and behavior of your customers, your audience, because it’s going to be different to anybody else’s. It’s a feedback loop. What you do causes different people to enter the funnel and to behave differently and have a different opinion of you. That’s really important.
It’s also important to use your tools with the Facebook tools in the right way. A good example of that is to have a different landing page for each ad group in your Google AdWords and also a different landing page for each campaign in your Facebook. That landing page, when paired with your Google Analytics and with your tracking pixels, will tell you a lot of information. You can actually find out from Facebook what those people look like, the people who land on those pages, the people who transact because of those pages. You can glean a lot from it, and it’s a learning process all along. You’ll never stop learning when you’re using these.
Tony Clark: Yeah. This is a really important piece of this, because the attraction part is great, but just like everything else we’ve talked about in this series and will continue to talk about, the retention and conversion are just as important. Now we’re talking about retention and conversion once people click on your ad.
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Ways That Clever Advertising Features Can Be Used for Smart Customer Retention
Chris Garrett: So retention is the end goal of this, and it may be a long, winding road to get there, but really, the end point you want out of this is a subscriber. And then from a subscriber, you convert them to a customer. There are various ways you can use retargeting and custom audiences to achieve that. The number one way you’re going to actually retain is through a landing page that gets people onto an opt-in, right?
Tony Clark: When we talk about attraction, the idea is to drive them forward through the process, right? We’ve talked about that through the whole series. What’s the next step? A great way to do that is sending them to a landing page that allows them to get more information and allows you to communicate with them more. That’s why opt-ins work well for this.
I’m not saying this doesn’t work, because people are effective at sending people to a customer purchase page and having them buy immediately, but one of the things we’ve found to be more effective is to help use the paid advertising to drive the customer further into the funnel and then turn them into a customer later on. That’s why opt-ins are a great way to use that. It’s a great tool and a strategy to bring them into the fold and move them from cold to warm to an actual, true prospect.
Chris Garrett: Also, think about every page of your site as being a potential landing page. Your content, your articles — think of it as a landing page as well as a page of content, of how would somebody convert if they landed on this page, so that you do have the option of testing sending people to content as well as specific landing pages.
I know, Tony, you have some great ideas about how to pair advertising with your landing pages to keep that scent, that end goal for them, in mind.
Tony Clark: Yeah, the idea is to make sure that you never lose track of that scent. Think of it as somebody tracking through the woods. You have a ranger, and you’re tracking, or you have Daryl from Walking Dead, and he’s able to track so well. The way that happens is there are clear markers along the way to allow the person to know that they’re still on the right track, that you’re following a walker or you’re following a live person, you’re tracking Beth down.
To do that, you need to make sure that you make it as obvious as possible that they’ve taken the right track. Things like headlines, making sure that the words that you use and the headlines you use on the ad match the headlines on the page. The types of content — if you’re asking questions in the ad, answer the question on the landing page.
You need to make it clear that this is the next step, that you are on the right track, because people lose track of that scent really easily. People are busy. They don’t have time to take their precious time to analyze if, “Oh, is this really what I look for?” You want to make it as easy as possible so that they become a buyer or an educated prospect. You do that by making sure that what they see in an ad is the same thing or expanded, answering what they saw in the ad, on the landing page itself.
Chris Garrett: Yeah, that’s really important. The imagery, the colors, the text — it all goes into that. Just remember, everybody else is a click away. Your competitors are probably trying to attract the same attention, so don’t overlook it. You’ll be wasting your money if you’re paying for advertising and you’re not doing this.
That is the main goal, getting people to add their email address into your form, and then they’re on the list, and you don’t have to pay for their attention anymore. But what about the people who you don’t capture straightaway? The retargeting and custom audiences work very well.
Remember, the retargeting and custom audiences are based on either a tracking pixel or uploading a list. It goes back to the power of your email list again. You can target visitors who did not buy. You can target visitors who were going to buy and then abandoned their shopping cart. You can upsell people who did buy so that they get in with a low-cost product.
You can say, “If they did this, they landed on this page and they converted. I want to promote this bigger upgrade for what they’ve already purchased.” You can target people who landed on certain landing pages or visited certain categories on your site. You’ll know their interests. You know what they’re interested in, what they were looking for, so you could give them associated or related content. You can target them and say, “You’re interested in this. How about this other thing?”
Then old customers who haven’t bought for quite a while, the recency of their monetary value isn’t quite there. You can bring them back and offer them a discount, because you could upload a list of people who purchased at a certain time and haven’t purchased since. That’s another reason that you need to be measuring and recording all these things, because if you can export a list of people who purchased last year and haven’t purchased in this year, that’s a powerful audience that you can target very, very specifically and get good return on investment with.
Tony Clark: Exactly. You think about this as part of a larger strategy, because I think that people tend to think of these as individual pieces. One of the reasons we talked about doing this series is that all of this works together as one big digital commerce, digital marketing strategy. It allows you to move people along the path to ultimately becoming a customer and then a repeat customer.
If you’re doing that effectively, you’re using these tools effectively. But if you’re just using the tools without really understanding the strategy behind it, you’re not doing it effectively.
That’s basically what we were just talking about. So you have a list: these are customers who have purchased but they have not been back, and here’s a new product or an updated product. That’s a great way to look at how you can automate that process, but also you want to make sure that you’re tracking what that’s doing. Otherwise, you might be annoying customers, your existing customers, or people that may not be right fit for the new product, right?
Chris Garrett: Yeah. That annoyance factor is huge, because remember, on Facebook, people are there for entertainment or to just waste their time or socialize or keep in contact with their family and friends. You’re basically interrupting that with your ad, which can be overlooked the first 10 times, but if you keep seeing that ad and it’s irrelevant to them and it’s constantly there, then they’re going to block it as spam. They’re going to rant and rave. They’re going to complain. You’re not going to get return on investment necessarily. You’re actually going to damage your brand.
Remember on average, there’s a 0.02 percent conversion rate or something like that on click-throughs on Facebook ads, which don’t perform particularly well anyway. So you do need to have a certain level of audience volume unless you do that ultra-specific targeting. Don’t be marketing to people who will not care, who will not be interested in what you’re doing. Cycle through your ads so you’re not always showing the same creative. You’re not always showing the same images and text. Make them short-lived, so that they’re not overstaying their welcome.
Just to see the negative side of this, keep your eyes open for any ads that you see, and see the negative comments. A lot of the time, the comment will be, “Why am I seeing this? I’m not interested in this. Why are you spamming me?” It’s just because of bad targeting usually.
Tony Clark: Right. Making this part of an overall strategy helps you track that, because too much in-your-face advertising doesn’t work well for most things that you’re trying to do as part of your digital commerce strategy. But one of the things that you’ll see larger brands do, they’ll do that.
I talk about the Blade Runner-type advertising. In Blade Runner, there’s the billboards that are constantly all over the place. You see that a lot in the real world now. But the problem is that the brands that are doing that are just trying to keep their brand at the forefront of your mind, and they have the money to spend and waste on that.
For a smaller company, a smaller brand, and especially somebody who has a very targeted audience, you need to make sure that your advertising and your retention and conversion strategy using that advertising is very focused and not more of a shotgun approach.
Chris Garrett: Exactly. You can’t waste your money by carpet bombing ads all over the place. Really, the bottom line with retention all the way through this series has been, “What’s in it for me?” on behalf of the audience It’s not about, “Please click my thing. Please like my page. Please buy my stuff.” You’re not begging. You’re trying to do a service. You’re trying to create value.
I know it’s a horrible marketing term, but you are trying to be valuable to the people you’re trying to attract. They have to be able to see straight away and all through the scent, as Tony was explaining earlier, what they’re going to get out of it. What is going to be good for them? What is the outcome going to be for them? Whenever that is maintained and it’s relevant and it’s timely, you’re going to get good retention.
Tony Clark: Exactly. That’s the real takeaway of this episode, is that advertising is designed to accelerate your digital strategy. It needs to be part of a larger strategy, and it needs to be used very specifically. It may not be something you need right now, and you need to look at where that fits in to accelerate an existing campaign.
The second thing to take away from this is make sure that you’re targeting and measuring properly, because if you’re spending money, you want to make sure that you’re getting a good ROI. Then finally, the main goal of this is retention. The whole idea is to get people further into the funnel so that they become prospects and customers and repeat customers. If your advertising’s not doing that, it’s not doing any good.
Chris Garrett: Next time, we’re going to look at measurement, and that’s going to tie very much in with this episode. Look out for the next episode, and please do give us a rating on iTunes.