Paid advertising can be an excellent addition to your digital marketing efforts. When done correctly, paid advertising acts as fuel for the flame of everything else you’re doing. It can enhance your social reach, boost your SEO efforts, and significantly increase traffic to your site.
It is imperative that you know how to properly develop, display, and modify your paid advertising campaigns in order to make the most of your money. Done correctly, paid advertising will grow your business and increase your revenue.
Create Your Paid Advertising Budget
Creating your budget is the first thing you should do before you start creating any sort of advertisement.
Before we dive diving into the numbers, it’s worth mentioning that you will have to spend a significant amount of money to see results from any paid advertising initiative. Too many business owners invest $20 on Facebook ads, don’t see any conversions, and give up. Be prepared to make paid advertising a healthy portion of your marketing budget.
What is your goal with paid advertising? It’s not to get clicks, followers or likes (although those are nice). Your goal is to generate revenue for your business, plain and simple.
Begin creating your budget by calculating the lifetime value of a single customer. You can do this by taking the total revenue of the past 12 months and dividing it by how many customers you have. You’ll end up with a number that represents the average annual value of a single customer.
With this number in hand, divide it by ⅓ to determine how much you might typically spend to acquire another new customer. So, if your average customer value for 12 months is $3,000, you’ll benefit from spending $1,000 to acquire a single new customer. Multiply this number by how many customers you’d like to acquire, and that’s a good benchmark on how much you should consider budgeting on paid advertising.
As you can see, paid advertising can quickly become expensive. But, with a careful eye on ROI and with prudent strategies, you’ll be investing in the upward growth of your company.
Taking time to create effective ads is of the utmost importance. Low quality ads will fail to drive traffic to your website and increase your revenue.
An excellent advertisement conveys the main value proposition of your product or service briefly and effectively. It should contain copy and graphic design that highlights what you offer and appeals to your target audience.
Paid Ad Creation and Development
Strategies for Effective Paid Advertising
Simply throwing money at paid advertising without a thought out strategy won’t achieve the desired results of growing your revenue and earning a positive ROI. In order to get the most out of your paid advertising dollar, consider the following strategies:
- Focus on reaching your target audience. Not everyone on the planet wants or needs your product or service. Instead of going for a ‘shotgun’ approach with your paid advertising efforts, hone in on your target audience. If your business is already in motion, you can use historical data to determine who buys your product or service. Otherwise, you’ll need to start with an educated guess and refine your target audience as you proceed. You can target specific demographics on many advertising platforms, allowing you to reach precisely who is most likely to become a client or customer. Additionally, craft your ads so that they reflect the tone and diction of your target audience.
- Pay attention to conversion. If you’re going to dedicate the budget and time into paid advertising, make sure that when someone takes your desired action, (a click on your ad for example) they land in a place that has been optimized for conversion. What a shame it is spend the time and money on excellent advertisements that send prospects to pages that doesn’t close the deal.
- Measure and track your results. Too many business fail to adequately track and measure their results from paid advertising initiatives. Any form of online advertising will provide you with a plethora of statistics that will allow you to track and measure your results on those platforms. However, don’t keep all the data isolated. Create a master spreadsheet that shows the core metrics of your paid advertising efforts: amount spent, click throughs, leads generated and sales.
- Understand when to advertise. Many business owners advertise 24/7, 365 days per year. While this approach can work for some, it may be in your best interest to only invest in paid advertisements during certain times of the year. For example, if you sell toys, you’ll want to spend more on advertising in November and December than you would in June or July. You may also wish to spend more on advertising when you run sales or promotions as compared to everyday operations.
- Always keep your brand in mind. Everything you do online impacts your brand. Your ad copy, your color choices, and even your typeface all contribute your brand’s image. Your individual paid advertising campaigns do not exist in a bubble. Everything you do should be ‘on-brand’, which is to say that it reflects a consistent message and tone that is indicative of your brand.
- Be in the right places. Get to know your target customers thoroughly. Where do they go to hang out online? What blogs do they read? What podcasts do they enjoy? Understanding exactly where your customers go online will help you be exactly where they are. Otherwise, you’ll end up making guesses about where to advertise, and you may end up wasting your hard earned money advertising on a platform that simply doesn’t house your target market.
Your ads must engage to your target audience. They need to bring awareness to how your solutions directly solve their problems. When you create great adverting, you'll:
How do your ads currently align with your target audience? More importantly, are your advertisements converting traffic into leads? Our Paid Advertising services will help you create ads that engage your audience and turns them into revenue for your business!
What is a display ad? Sometimes referred to as banner ads, a display ad is a graphic that appears on another website that aims to attract visitors to your site. Display ads can be operated through a network that automatically places you on other websites, or you can seek out choice websites and ask to place display ads on them.
Many people simply ignore and avoid display ads these days. That means if you decide to go this route, you need a display ad that’s been professionally designed and contains stellar copy. Display ads are excellent at establishing your brand’s image since they’re primarily focused on graphics. Design them carefully so that they convey your logo, colors, typeface and message all within the square or rectangle space they occupy.
Everyone who has watched a video on the internet has almost certainly seen pre-roll advertisements. These are the ads that play before videos (and sometimes written content) throughout the Internet.
Pre-roll ads are effective because they allow you to reach a captive audience. People have grown accustomed to watching ads before videos. You can capitalize on this trend by investing in professional video production and running your own pre-roll campaign. You can advertise on any number of sites that will allow you to target exactly the right people with your advertisement.
An ideal pre-roll ad will immediately captivate the audience. Since many advertising platforms allow users to skip ads after five seconds, you should make the most of those five seconds. Quickly convey the benefits of your product or service, and do your best to capture their attention so that the audience watches the rest of the ad.
You’ll pay for these type of ads both on number of impressions and number of clicks, so pay close attention to the analytics so that you can optimize your efforts ensuring the highest conversion rates.
Retargeting and Remarketing
You’ve likely been a part of a retargeting and remarketing campaign as you’ve browsed the Internet. These two often confused terms are indicative of two distinct paid marketing strategies.
Retargeting uses a cookie placed on the visitor’s browser to track them throughout the Internet, showing them your ad multiple times throughout different blogs and social networks.
Remarketing, historically, is the use of customer data to market to them again, such as capturing an email address and then sending them special sales. However, Google has borrowed the term to describe their own retargeting program. Because of this, the two terms are often used interchangeably.
Running a retargeting campaign allows you to precisely target visitors from websites from all around the Internet. You’ll also increase your reach because your ads will follow visitors around the web. As people continue to see your ads, they are more likely to engage with them.
There are seemingly endless retargeting and remarketing services out there. Kissmetrics put together this blog post that compares most of the major retargeting and remarketing services.
Pay-per-click (PPC) Programs
Pay-per-click (PPC) programs are an excellent way to advertise your brand and attract extremely targeted traffic. Google, Bing, and Yahoo! all offer PPC programs to help business owners obtain highly valuable search engine traffic without having to organically rank in the results.
There are several attractive benefits to using PPC advertising:
- Boosts business goals. Whatever your business goals are at the moment, a PPC campaign is waiting to help you achieve them. Whether you’re looking to expose your brand to a wider audience, grow your revenue, or reach thought leaders, you can make it happen with PPC.
- Easily measurable and trackable. Every PPC program out there has an in depth analytics system built into it. Most of them will integrate themselves well with Google Analytics. You can use the multitude of data generated by your PPC campaigns to refine your efforts.
- Low barrier of entry. As long as you have an appropriate budget, you can start finding customers and clients through PPC programs. You don’t have to worry about organic search rankings or your social media following in order to start generating a revenue.
- Works well with other marketing initiatives. PPC programs work beautifully with every other marketing initiative that you have in the works. You can use PPC to boost specific blog posts, landing pages or social media profiles, driving traffic into the top of your marketing funnel.
- Highly targetable. Every PPC platform allows you to target incredibly precise demographics. Since most people who search using Google are signed into their Google Account, Google is able to serve them up ads based on their search history, age, and gender.
How to Calculate the ROI of Paid Advertising Initiatives
Calculating the ROI of paid advertising is relatively simple. It requires that you’ve kept track of all the data generated by your paid advertising campaigns.
The most straightforward way to calculate your ROI is to add up exactly how much money was spent on paid advertising during a given period, then add up revenue generated by those ads. Avoid using your total revenue for that period; you only want to track revenue generated by your paid advertising efforts. Subtract the amount spent from the revenue gained, and divide that by the amount spent. This will produce your ROI.
Now, you do have another option for calculating your ROI: you can assign a dollar number to other metrics that you may have targeted with your paid advertising campaigns. Instead of focusing strictly on revenue, you can track, for example, Facebook Page Likes. You can say that each Facebook Page Like is worth $1. You can do this with any metric, such as email subscribers, Twitter followers, or even website visitors. Once you’ve decided how much each of those metrics are worth, you can then use the formula discussed above to calculate your ROI.
Are you ready to launch your paid advertising initiative? We’d love to help you craft your ads, place them in the right places, and boost your revenue. Contact us today to receive a tailored paid advertising campaign and strategy.
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