Gave a donation to turtle sanctionary. They hatch hundreds of turtle every other day to save them from poaching. They have to swim 70 miles to safety.
This is some top advice from one of the best media buying ninjas in the world of paid traffic and media buying. His identity has been made anonymous, but it is credible.
Read, digest and employ.
A friend of mine was in the tire business in the xxxx Area. He’s a tire guy, and a damn good one at that. XXXX bought his 17 stores back in 2001. $70M <gulp>. 1 other partner, no debt. Sometimes it just takes stories like that to remind myself that despite convincing myself that I’m a cool online marketing dude, I’m not that cool. (he won the 24 hours of Lemanes race just to rub salt in).
Anywho, He’s gone on to start two new business (laptop repair and verizon stores) and recently asked me about online advertising. You’d be surprised what massively a lot of massively successful people *don’t* know about buying online advertising.
I sent him an email today outlining some basics, and i’m posting it here (in all its basic and rather simple format) in the hopes that some of you might glean a nugget or two.. Hope you enjoy..
Hey there xxxx -
Here are some ideas and thoughts regarding scaling your current online ad budget profitably. I’ll first say that all online ad spend should be accountable and to the extent possible, have an ROI attached to it. Most everything can be measured. It’s just knowing what to measure and how to make changes. It’s easy to convince business owners to expand online ad budgets if they can prove to themselves and everybody else that it makes money. This requires a few key items:
1. Have ways to measure online cost, and revenue generated (even if its estimated for now)
2. Start by breaking up cost per ad group in Google (assuming you broke them out)
3. You mentioned that you recently created 18 new landing pages. If you spend $10k per month on these campaigns, make sure you can come up with a cost figure per landing page.
4. Next you’ll want to develop some early metrics which will help us ascertain ad performance.
5. Each landing page should have some call to action (call this number, enter your information <—for an extra 20% off). We then need to assign a cost per action. For example. Say on landing page 15, its costs us $1k, with an average cost per click of $.50. That should generate 2,000 clicks on that landing page. Say that we get 124 actions (someone who fills out a form). We can now say that our cost per action is $8.06. Hope that makes sense.
6. Now we need to understand how many of those 124 actually convert into real customers. We may need to guess at first, but you should look at developing ways to track this. Let’s just say that we convert 20% of those leads into customers. That leaves us 24.8 (round up to 25 new
customers). <—work relentlessly with your sales staff to always be improving both new customer conversion and lifetime value of customer). Now we know that it will cost $40 to generate an actual customer.
7. Then you’ll need to assign a value (day 1 and lifetime value of customer). Let’s just say that each customer generates on average $80 is gross profit. We need to have your guys always be selling them new stuff. That’s actually where ongoing email marketing can get involved. An active effort here will bring repeat customers back in and generate more profit per customer and
allow them to refer friends and family, etc. <- lots more here.
8. Now we’ll know that by spending $1k, we generate $2k in gross profit. So we are ahead $1k.
Now the fight becomes:
1. Isolate those ad groups that generate the highest ROI and look to expand
2. Kill unprofitable campaigns
3. Always be trying to improve Click Through Rates (better ad creative and targeting)
4. Always be trying to improve conversion rates on the landing pages (high impact headlines,
easy calls to action, ethical bribes <- tell us who you are and get an immediate 10% off coupon)
5. Always be selling them more (higher Lifetime Value)
6. Take profitable ad campaigns elsewhere for additional distribution and/or increase ad budgets and/or cost per click prices in existing campaigns. Bing, Facebook, etc. etc.
7. Begin Retargeting Campaigns (a whole other topic unto itself)
8. Rinse and Repeat
ryannhutchison asked: What things did you do as far a research to decide on what industry to go after with idea extraction? Also, what criteria did you follow to know it was a good industry to go into? I don't think you have a post about it. I have some industries in mind but I don't know what to do to verify they have the right criteria to move forward on. I am ordering my headset for my computer, paying for a Skype subscription, and buying a Skype recorder today. Thanks for your help, Ryan Hutchison
Hi Ryan -
I chose a few markets at first, and settled on Spas because there are a lot of them, in general, the owners are friendly and easy to reach. Also, I don’t really bother with one man shops, or working owners because they are too busy to run, learn or use software. I prefer working with businesses that have 3-20 employees, because this means they make at least $250, 000 a year, and can afford to pay for SaaS.
Here are some resources to find a market. Let me know if you still have questions.