Will Pay-for-Performance (P4P) Marketing Work With a Low Price Product or Service?

Businesses regularly inquire about partnerering with Skyworks Marketing on a 100% or partial Pay-for-Performance (P4P) basis for leads or sales.

A number of variables are evaluated to determine the potential for a win-win partnership with such inquiries. One aspect that can work against a business seeking such a partnership is having a low priced product or service, especially without a productive upsell or continuity sale opportunity. You see, even with a high margin, particularly in a competitive market, such as weight loss, health, finance and insurance (as well as many others), there is not enough mutual opportunity.

Now, don’t get me wrong, competitive markets, per se, are not unattractive. In fact, the reason they’re competitive is because a lot of money is being made in that space. It simply takes more time and/or resources to compete in such an environment.

For example, a product that costs less than $20.00, even if it has a 90% profit margin, is not going to make enough profit, after the media buying and labor, to make an attractive partnership — at least from our perspective.

Of course, this does not suggest that low-cost products cannot be successful. The world is full of them. But they rarely warrant a full sales funnel, unless the product is a loss-leader, with a purpose to generate further sales for related products.

In my experience, to rise above the noise in a competitive market in a reasonable amount of time, ongoing media buying is what’s going to make it happen more predictably. (And even so — it’s still not guaranteed!)

A low-cost product or service means that advertising will eat up most or all of the profit, especially in the early phases. In fact, it will likely not be profitable until/unless a critical mass is reached whereby enough sales are being made on a big enough scale, which drives the media costs down and/or consumers are referring others en mass.

LOSING MONEY NOW TO MAKE MONEY LATER

To underscore how to make such a low-cost product profitable via advertising, it’s a best practice to offer another product that would also be purchased by the buyers as an immediate upsell, or later on. That’s a tried and true model to sustain the business via advertising.

In such a case, it’s important to calculate the value of a new customer or client to determine workability. For example, if 30% of your buyers purchase an additional product or service within a certain amount of time (say 90 days), then that additional 30% could potentially become the actual profit stream.

It’s not unusual for some companies (particularly in the infomercial world) to lose money on their upfront sales (the sales that directly result from the infomercial). They simply make their profit on the upsells and follow-up sales (backend).

Regardless, there’s still a testing evolution involved to establish proof of concept. And whose going to do the testing?

If you present the idea to a Venture Capital firm, or a Pay-For-Performance partner, like our company, the merits of your idea will be weighed against a number of variables, which boil down to risk vs. reward. The better a case can be made that your business is a low-risk, high-reward opportunity, the more likely you would be funded by a Venture Capitalist or that you might be deemed a desirable Pay-for-Performance partner, in which we would invest resources.

The reality is that in many cases, the great idea that you are proposing to gain support and resources for your business, is probably not as low-risk, high-reward as you might envision.

Even if you are interested in a “partial” Pay-for-Performance partnership, whereby you are putting up media money and paying a reduced fee for marketing services, it may still not be worth investing our resources to prove the validity of your entrepreneurial vision.

This article is not a suggestion that a low-cost product cannot be driven to produce big revenue in any other way than buying media. There are definitely other ways to achieve that. But it will take longer.

Wishing you much success!

4 Stages of P4P Lead Generation: The Virtuous Cycle

The following four stages represent the lead-generation progression for our pay-for-performance (P4P) services. These stages also parallel our P4P trial process, which includes a consultation, a 2-week trial and then a 90-day trial to determine an ongoing P4P partnership.

In brief, the following stages represent our internal lead generation operations and services.

Whereas, the P4P Partner Process is a qualification sequence to determine which potential partnerships demonstrate the most promise.

STAGE 1: BASIC CONSULTATION – WHERE ARE WE GOING?

Although our Basic Consultation is not as elaborate as our complete Strategic Consulting & Plan service, in this case, there is no cost. More importantly, it provides a keyword foundation and general marketing direction, specifically aligned with one of your products or services.

As part of this stage, and as outlined in our P4P Partner Process, we build a temporary mini-website to feature one of your products or services, which will serve as the location for landing-page testing. (In Stage 4, we can relocate the landing page testing to your own website, if you prefer).

In this stage, there is no remuneration for Skyworks Marketing.

STAGE 2: PPC SNEAK PEEK

This stage coincides with our 2-week trial. We use real-world advertising metrics, as well as actual leads and sales with your product/service, to inform the potential for a pay-for-performance (P4P) partnership. In this stage, we typically use Google PPC Search advertising (see below for Display PPC) to ascertain the most preliminary data. This not only establishes a foundational benchmark for return on ad spend (ROAS) but also provides a benchmark for your closing ratio of these leads.

The primary purpose of this trial is to determine whether we can graduate to a 90-day P4P trial, or not.

Furthermore, the resulting data also informs the lead cost for the 90-day trial, should we evolve to that stage.

In Stage 2, we are typically administering one PPC Search campaign for one of your products or services, which is sorted out during our basic client consultation and attendant research in Stage 1.

Although our Basic Consultation and research is intended to provide some insight into revenue potential, nothing compares to real-world data — and Stage 2 is our first glimpse of actual metrics.

STAGE 3: OPTIMIZATION LAUNCHED

Stage 3 coincides with our 90-day trial.

Stage 3 is where the optimization of the existing lead gen campaigns materialize in a more meaningful way.

Stage 3 is where we also start expanding the types of lead gen campaigns. So, if your business has more than one product or service, this is where we start testing new campaigns in addition to the one we began in Stage 2.

Hence, Stage 3, can be defined by two primary activities:

  • Optimizing and expanding upon the previously launched campaign
  • Launching new campaigns

Stage 3 is also where remarketing begins

Stage 3 is where the lead generation starts to take on a more productive and profitable shape.

Finally, at the end of Stage 3, we take a new look at the remuneration to ensure it’s workable for both sides of the partnership. If any adjustments are needed, we do so prior to the next stage.

STAGE 4: PROGRESSIVE EXPANSION

Stage 4 is where the real work begins.

Stage 4 is where the most productive lead gen initiatives and results materialize.

Stage 4 is the goal of our clients, as well ourselves.

Stage 4 is founded upon a long-term partnership.

The specific lead gen services of Stage 4 will vary for each partnership, depending upon the specifics of the products and services we are promoting, in addition to the dynamics of the metrics that are guiding our efforts.

In Stage 4 the entire scope of our lead gen activities expands and accelerates. We not only build upon all successful actions from Stage 2 and Stage 3, but in Stage 4 we are motivated by mutual self-interest to use every service and tool at our disposal to amplify lead generation.

Although this can include all manner of online and offline marketing and advertising, the fundamental driving philosophy is to go earlier in the sales funnel to create demand, instead of solely catering to demand-response.

As a comparison, in Stage 2 and Stage 3, our efforts are focused on demand-response advertising, which means getting in front of those online prospects who are already interested in your type of product or service. These prospects have defined their interest by the keywords they are using in real-time to conduct online searches. For example, if someone is searching for “how to build a spacecraft,” we want to present them with advertisements for your spacecraft-building services. As simple as this may be in theory, there is a considerable effort that can be — and needs to be — continuously exerted over time to optimize this type of lead gen operation. However, for many products and services, this is not where the greatest opportunities abound.

In other words, instead of solely focusing our lead gen efforts towards those who have identified themselves as seeking your product or service via their keyword searches, we are seeking out those who are earlier in the sales funnel and who have not even started searching for your solution, which is about creating demand, or demand-generation.

Sometimes these types of campaigns produce better results than demand-response marketing. Other times, they don’t work very well. Hence, demand-generation campaigns can be less predictable than demand-response marketing. However, overall, it’s where the greatest opportunities await since the volume of demand-response prospects is limited.

Demand-generation lead gen marketing and advertising can include:

  • Display advertising
    • Google
    • Bing
    • YouTube
    • Facebook
    • LinkedIn
    • Amazon
    • Newspapers
    • Trade Magazines
    • Consumer Magazines
    • TV
  • Radio
  • Direct Mail
  • Content Marketing
  • Email

Of special note, Stage 4 is where our Video Advertising services become significant.

Stage 4 represents a dynamic and multifaceted approach to lead generation. It’s a never-ending process. It’s where the win-win aspect of the P4P partnership and mutually beneficial virtuous cycle truly blossoms.

How to Hire a PPC Freelancer or Agency for the Most Value

Should you hire a PPC freelancer or a PPC agency?

PPC Freelancer vs PPC Agency

In brief, freelancers are usually less expensive than an agency. As well, often you could expect a larger commitment from a freelancer than an agency. On the other hand, you can anticipate more diversified experience from an agency, relative to a freelancer. However, such is not always the case with freelancers or agencies. Like anything else in life, buyer beware.

PPC Freelancers Based on Price

The rates that a PPC freelancer charges are not the only factors to consider when hiring. But generally speaking, a more expensive freelancer has more experience. It’s a good idea to check references. But even so, it’s important to ensure there’s communication compatibility. This is a position that is key to the very lifeblood of your existence: generating leads and sales for your business.

Here are some approaches to consider when evaluating pay rates.

a) Hiring an inexpensive and inexperienced PPC freelancer is the most unpredictable. It would be more acceptable if you, personally, are very experienced with PPC yourself and can therefore closely scrutinize the details of their work.

b) Hiring a PPC freelancer with mid-pricing is less risky than hiring the least expensive resource. You should expect they’ll be able to follow your instructions. Although you’ll still need to scrutinize their work to confirm the job is being done per your requirements. But it’s a good bet that any required modifications will be done swiftly and competently as your needs come more info focus, from their perspective. Hiring a mid-tier PPC freelancer can be most workable if you are trying to save money compared to more expensive resources. Nevertheless, later on, you may still want to try a more expensive PPC freelancer to see if your PPC performance can be further improved.

c) In an ideal world, hiring the most experienced PPC freelancer at the top of the price range will generate the best results — at least in terms of seeing how effective the PPC advertising will be. But an ineffective marketing and sales funnel will not be made profitable by PPC alone (more on that below). Also, hiring the most experienced/expensive freelancer is a particularly good idea if you are not sufficiently experienced with PPC advertising and can benefit from more informed guidance. In other words, the less you know, the more expertness and experience you should hire.

Having said all that, the focus of this article is not on whether you should hire a freelancer versus an agency, or what approach to use when making hiring decisions; this is about how to make the overall experience more valuable and profitable after you’ve made the hire.

Marketing and Sales Funnel

In this article, when referring to Marketing and Sales Funnel, I mean the online evolution of:

  • Raising awareness in the minds of potential buyers that your product or service exists
  • Becoming a candidate in their decision process
  • Closing the sale

PPC Search vs PPC Display

There’s a lot one can learn about PPC advertising. For the purpose of this presentation, I’m going to overly simplify PPC into two general categories of “Search” and “Display.”

Search PPC is getting your ads in front of people who are searching for your product or service right now. If someone is searching for “red shoes” and they click on your ad about “red shoes,” then your PPC ad did a good of targeting the right prospects. Now, of course, just because they clicked your ad and went to your website, does not mean they will buy your red shoes. But the point is that with this kind of search PPC ad, you are able to get in front of potential buyers right now.

Display PPC is a different animal altogether and it’s what most of us are already familiar with because we see them almost every time we go online — whether we want to or not. We may ‘not’ be searching for red shoes. Instead, we might be reading a sports article or a new recipe. However, we may also see an ad for red shoes. In this case, the display ad is hoping to take us away from the content we are consuming to visit their shoes. Display PPC is not as effective as Search PPC. There’s also a substantially larger pool of placements for an advertiser to get their message out to a broad public via display than search. For both these reasons, display ads are less expensive than search ads.

Both search and display advertising have their respective merits. Your business might benefit from one more than the other, but many businesses benefit from using both, particularly for different parts of the marketing funnel (more on that below).

About Retargeting and Remarketing

Retargeting, also known as remarketing, is a form of online advertising that can help you keep your product or service in front of visitors after they leave your website. For the majority of websites, only 2% of web traffic converts on the first visit. Retargeting is designed to help businesses reach the 98% of users who did not convert right away. Retargeting allows you to strategically position your ads in front of these audiences on other websites they visit later to remind those past visitors about your brand and/or to make a purchase.

PPC Marketing and Sales Funnel Advertising

PPC advertising is often only one part of an overall marketing funnel. But different PPC campaigns can target different parts of the funnel. For example:

  • “Top of the Funnel” campaigns are about introducing potential buyers to your products or services. Although display PPC or search PPC can be used here, if there’s not enough search ad volume, you can find more robust volume via display ads. And “what” is being advertised might be content that is relevant to the type of prospects who would buy your product. For example, if you sell financial services, you might promote financial “How to” guides to get in front of potential prospects.
  • “Middle of the Funnel” campaigns are intended to insinuate your offering into the potential buyers’ decision process. Depending upon the product or service and market, these types of ads might be directed to more detailed descriptions of your product or service. To continue the above example, if you are promoting financial services, you might direct retargeted ads to those who got your “How to” guides to direct those prospects to detailed information about your financial services.
  • “Bottom of the Funnel” campaigns (often remarketing and retargeting) are intended to generate sales. These have a call to action and often some type of special “Buy Now” offer. And just like ads for the other parts of the funnel, you’ll want to test many variations to find better-performing messages.

Many business owners want to focus on bottom-of-the-funnel advertising. If that works for your product or service, by all means, do it. On the other hand, unless you have an inexpensive product and known brand, many prospects will need to see your ads multiple times before they’ll buy from you. Hence, the whole idea of providing different PPC ads to different types of prospects is to make your PPC advertising more effective and provide more value for the same expenditures.

PPC Freelancers vs Marketing and Sales Funnels

For some businesses, PPC may be the primary means of generating traffic and sales. Nevertheless, it’s still only a part of the entire marketing and sales funnel.

PPC freelancers are generally not hired to inform your overall marketing strategy. They focus on the platforms themselves, whether that be Google Ads, Facebook Ads, YouTube Ads, Amazon Ads, LinkedIn Ads, etc.  There’s nothing wrong with that.  In fact, that’s the industry norm.

To underscore the obvious, a PPC freelancer or agency is only one part of a solution towards making your sales funnel more effective. What this boils down to is if you are hiring someone to administer your PPC, ideally you would also be savvy enough with PPC and marketing yourself to maximize the value of the partnership.

If your marketing and sales funnel is already well-optimized, then the PPC advertising will amplify your sales, as long as the cost-per-conversion is profitable. But if you don’t have an efficient funnel and offer, then the PPC will result in more traffic but the conversion costs will run in the red. (Even so, the PPC may still be desirable in a number of businesses, since the financial loss on the initial conversion may be surpassed by the percentage of buyers who make further purchases after they become a customer).

PPC Opportunity – Use the Data!

It’s a wasted opportunity if a business owner or marketing manager is not using the PPC platform data to inform improvements in the overall marketing strategy and sales funnel (not just the PPC strategy). Yet, in most cases, it’s not the freelancer’s role to consult the business owner about overall strategy or the business sales funnel, even if/when the freelancer or agency is aware of such.

As a simple example in another field, if you were hiring a company to execute your direct mail campaign, in most cases, you wouldn’t expect them to also inform your strategy or even your copywriting. Their job is to print the letters, stuff and stamp the envelopes and get the mail to the post office. In many cases, they aren’t even qualified to discuss strategy or copywriting — that’s simply not their job.

As a comparison, any PPC freelancer or agency should, of course, be technically qualified to interact with the details of their respective platforms. But that does not suggest their expertise extends outside the platform itself. For example, a common suggestion PPC freelancers or agencies may make when asked about increasing ad performance is to “spend more money.” Although that may generate more traffic and sales, it may also be contrary to the best interests of your business if it’s not going to increase ROAS (return on ad spend).

A more meaningful suggestion would be “Look, we’re spending 30% of your PPC budget on a product that is only generating about an 8% response. If we move that budget to the higher converting products, we’ll see a better ROAS.”

As a business owner, you may say, “Thanks. Let’s do that right away.” Or, on the other hand, “Yes, I see, but that 8% response is for our highest-profit product.” In the latter case, dedicating 30% of the budget to a lower PPC performing product may be a perfectly valid business decision. In certain cases, it might even be worth increasing that part of the budget, regardless of the lower response, if it’s making more money.

Additionally, significant data is available from the PPC advertising that can inform your overall marketing: such as demographics, geographic locations and keywords used by those who engage with the ads. For example, what if you’re selling motorcycle jackets and you find that 20% of your buyers are women but all your messaging is targeted to men? Or what if you are marketing consulting services to divorced parents and the PPC data reveals a significant percentage of respondents are also using legal keywords as a basis of their search and you barely mention this part of your service on your landing page? These represent important opportunities to change your marketing strategy and sales funnel. In the former, you would be wise to set up special landing pages for women with photos of women wearing the jackets. In the latter, you would be wise to expand the messaging of your legal-related services and test specific ad campaigns and landing pages targeted to those visitors.

Greatest PPC ROAS

The greatest ROAS re PPC expenditures can be derived from adjusting the overall strategy and sales funnel, not merely optimizing the logistics and details of the ad platform. (Although, of course, optimizing the on-platform PPC performance is mandatory).

The strategy and sales funnel (as well as PPC) may be best viewed as a living, dynamic entity that needs continual maintenance, evaluation and optimization, as opposed to something that is left on automatic.

For example, the best PPC technicians are worth their weight in gold because they may be able to generate a few percentage points better ROAS than someone who is competently experienced but not at the highest echelon of PPC performance.

Companies spending enough advertising money recognize it almost doesn’t matter what the high-level freelancer charges because the improved performance surpasses the money the advertiser would save on someone less experienced.

Regardless, the biggest gains are on the over-arching advertising/marketing strategy and funnel, not the PPC logistics. 

Hence, you can hire the best PPC expert in the world and lose money if the PPC expert is only focused on maximizing the platform value of driving traffic to the funnel rather than leveraging the data to optimize the funnel. (Again the former is typically all they are expected to do. It’s YOUR responsibility to strategically leverage the data). 

In other words, the existing funnel may simply not provide enough opportunity. Furthermore, the PPC expert is typically not getting paid to consult the business owner on sales funnel points, even when the PPC freelancer is aware of them.

You can derive much greater value and ROAS when hiring a PPC expert if you personally are:

1) Experienced enough to provide optimal instructions and know when the instructions are being followed, or not.

2) And most importantly, able to evaluate the ongoing PPC data yourself. 

Unfortunately, that’s not practical or real for many business owners and it’s an understood fact by the freelancers.  Hence, the overall value of the partnership with your PPC provider may be lower.

Bottom Line

You need a well-conceived marketing and sales funnel and it needs continual optimization. And the PPC metrics are a source of important data that can inform the sales funnel and strategy, not just the advertising on the specific platform.

Whether the PPC advertising is successful or not is relative to how much it costs to keep a stream of traffic flowing through your funnel profitably, while continuing to revise and optimize the ads and funnel before consumer response begins to lag while going through natural longer-term performance cycles.

A PPC freelancer or agency represents a partnership between the PPC platform and your own website and strategy. But the PPC platform can provide more value than just the PPC itself if you harness the data that it’s aggregating each and every day while you’re paying for advertising.

For Google Ads, this means you should have access to the online Google account controlling your ads so you can regularly analyze the data. For Facebook advertising, the Facebook Ad Manager is where you will gain the available info. For every other PPC platform, there is a respective interface to monitor analytics.

Log into them.

Look at them.

Ask questions.

Get answers.

If you use the metrics, your marketing and business will benefit from more than just the PPC advertising itself. It’s part of what you are paying for on a PPC platform, so take advantage of it. Furthermore, it will provide more value in your relationship with whoever is managing your PPC.

Practical Advertising Goals when Competing in the Current PPC Arena

PPC IN THE PAST

Pay-per-Click (PPC) advertising used to be relatively easy. 15 years ago you didn’t need to know much about the technology, because it was vastly simpler and required a fraction of the choices (and decisions) that are available nowadays. There was also much less PPC competition, so your ads (whether good or bad) had a higher probability of driving sales because consumer expectations were much lower. Nowadays, if your entire marketing process is not as smooth and intuitive as consumers have come to expect, they move on to a competitor.

But the biggest advantage of PPC of the past compared to today is cost. Back in the early days, some (many) people scoffed at the notion of paying a few pennies or a nickel a click. Particularly if you had effective SEO generating clicks for no cost (other than the labor necessary to gain higher rankings). However, new guys to the PPC game can’t even imagine that clicks could ever have been that inexpensive.

Nowadays, the cost per click in all industries has skyrocketed. Furthermore, the strategies to make PPC more productive (more sales with less cost than when starting a new campaign) have gotten considerably more sophisticated.

The net result is that some number of average small businesses became disenchanted with PPC stating that “It doesn’t work anymore” or that “It’s too expensive.” Well, it’s certainly true that it’s no longer working for the person expressing the statement that it’s not working and it’s quite true that it’s more expensive. But what’s missing from such complaints are “Why” did the costs go up? And the short answer is simple: PPC works.

PPC does increase sales for those that know how to use it. In fact, it’s increased sales so substantially for so many businesses that they’ve been moving record amounts of money into digital advertising for years. But the guys who are winning with PPC are not doing the same type of advertising that was done 15 years ago, or 10 years ago, or 5 years ago or in many cases, what a number of advertisers were doing last year. In fact, the amount of ever-increasing ad choices and opportunities that Google has provided to better serve sophisticated players has had a dampening effect on their biggest potential market: small and medium-sized businesses.

OVER-SIMPLIFICATION OF PPC VS. REALITY

In response to becoming somewhat out-of-touch with small to medium-sized businesses, Google has been attempting to woo more of them back through educational videos, such as the one above. At just over 8 minutes, it does pack a lot of information into a relatively short amount of time.

Personally, I think these videos are a valuable contribution to the marketing and advertising landscape. However, valid criticism points to the tendency (or necessity) for these types of videos to over-simplify concepts to such an extent — for the purpose of attracting new Google ad buyers — that they don’t alert these same new ad buyers to the reality that in many competitive industries, new players may start out losing money. And if these new advertisers don’t step up their game quickly, their experience will be disappointing.

In my opinion, the first thing any business owner or advertiser should confront when entering into the current PPC arena, is that it requires work. If you think all you need to do is post some well-worded ads online and people will come flocking to your website to buy stuff in sufficient volume that it will surpass the cost of advertising right away — well, you may also be a Google Ads complainer-in-the-making.

The reality is traffic can be generated immediately. Make no mistake about it, you can post ads today and start seeing website visitors right away.

But the cost of turning that traffic into sales may be unprofitable at first. And for businesses that sell lower-cost products or services, the cost for every first sale may never be profitable. Hence, the marketing game becomes one of balancing the cost of new customer acquisition vs the lifetime value of each customer, so that the business can make real profits on the latter sales.

REALISTIC PPC ADVERTISING GOALS

When we contemplate advertising goals for a business, we already presume the high-level objective of increasing revenue and reducing costs over time.

Sort of like when many of us buy a car, we take for granted that we want it to be able to transport us from point A to point B. Since all cars that are in operating condition support that objective, we focus on more specific car purchase goals. Perhaps we want a car that’s economical. Or, maybe we want a car that’s highly rated for safety. Or, maybe we need a car that has the most storage capacity. Or maybe we consider environmental factors. Or maybe how it looks is the primary objective. Or luxury and status may be the prime determinants. These are just a few examples of specific yet real decisions unique to someone contemplating goals related to making a car purchase.

In the realm of business, when we contemplate advertising to increase revenue and reduce the cost of leads and sales, there are fundamental measurements that are monitored for all ad accounts to reflect basic ad performance, often referred to as “Key Performance Indicators” (KPIs).

Although KPIs vary per business, they can include things such as:

  • Time Periods (Example: How many leads or sales per week or month?)
  • Geography (Example: What area is generating the greatest profit?)
  • Audience (Example: Which demographic is driving the most revenue?)

After considering such basics as above, your specific advertising goals can be informed by additional fundamentals such as:

  • Your industry (Long sales cycle? Short sales cycle?)
  • Your competitive positioning (Are you a market leader? Or a new business?)

Some more specific basic goals might be to:

  • Grow profits
  • Expand Market Share
  • Increase the lifetime value of customers
  • Build brand equity

Note that “grow profits” in this sense is not identical to the highest-level objective of “Increasing revenue and reducing costs over time.” That higher objective is already presumed and is part of a strategy that contemplates a longer time frame because there’s a natural dynamic tension between growing business and reducing cost. For example, any business that wants to boost revenue as fast as possible can just spend more money on a new and non-optimized ad campaign. This can be executed with the goal of driving as many new sales as possible, regardless of Return on Ad Spend (ROAS).

But such an approach would be in a natural state of conflict with reducing ad cost and increasing ad efficiency since that takes time. And the more time the better.

Hence, you can’t have both in the beginning.

In fact, in a normal state of professional PPC application, the ad costs at the beginning of a new campaign are going to be the most expensive. The question then becomes, “How much can we bring that cost down and how fast?”

PPC COMPETITORS

If you’re newly advertising in an established market against competitors who have been optimizing their PPC campaigns for years, you’re going to be at a disadvantage. They’re going to be paying less for their online ads and generating more results.

  • On the other hand, what if you’re competing against less sophisticated advertisers in your industry?
  • What if your PPC competitors are doing minimal ad testing and minimal ad optimization?
  • What if your competitors are complacent with their current PPC results, regardless that their costs are going up, because they are still making money?
  • Or better yet, what if they made the decision to reduce PPC labor by “not” optimizing their advertising because it’s “good enough”?

Any of those types of PPC competitors represents a much greater opportunity to surpass them in a shorter time frame because their competitive guard is down. And if they are rather lax about monitoring their own performance, they may not be watching competitor performance. This means that by the time they get surpassed by a more sophisticated and/or aggressive competitor, they may not be able to catch up because they’re the one that is now at a disadvantage and may also be resistant to learning and/or investing in the most modern ways to make PPC advertising productive.

PPC GOALS TO DRIVE MORE SALES

The ultimate goal is to sell stuff.

And selling more stuff naturally begs the questions:

1) How can I get more leads?
2) How can I get higher quality leads?
3) How can I increase the number of non-converting leads to converting leads?
4) How can I get leads to convert faster?

Unless you have a low-cost product that consumers can purchase with minimal evaluation, a more fundamental goal is to move people from low purchase intent to high purchase intent. Or, moving even earlier in the marketing process, which means moving cold traffic through a funnel that turns some of them into warm traffic and some of those into customers.

In other words, PPC goals need to be defined along the consumer decision path, or through a marketing funnel; not just the end result of new sales.

Although you never want to lose sight of the ultimate goal of selling stuff, if your focus is always on converting only the people who are mostly like to buy today, then your PPC strategy will be more expensive and less effective because for most businesses, there are fewer people ready to buy now when they first learn about you then there are prospects who would be willing to buy from you a little later if they became more aware of your services and benefits over a time period. (And that time period can vary with each individual).

So, to emphasize the obvious, a goal of developing more prospects early in the sales process, also known as “top of the funnel,” is just as important as the bottom of the funnel which emphasizes “buy now” PPC ads. Stated another way, there will be more willing “warm” buyers today if you started developing them earlier.

Otherwise, your sales volume and revenue may become stagnant and in fact, may actually decrease, since the nature of business and particularly advertising is that the costs are slowly rising and industries are getting more competitive.

The key takeaway here is that if you focus only on sales as your primary KPI, then you may not be paying enough attention to the earlier part of the process which cultivates prospects and drives them toward sales.

PRACTICAL PPC EXAMPLE

As a practical example — and one that you are likely familiar with — is advertising a lead magnet or some informational content to find prospects interested in your general product or service. Depending upon what you are selling, you might choose a lower-cost PPC strategy such as YouTube ads or Display ads targeted to an appropriate demographic to find prospects who are in an exploratory process. A tried and true goal here would be to get them onto your email list so you can build a relationship with them by providing value to them related to their purchase journey.

But regardless of whether they opt-in to your email list or not, you can use PPC retargeting ads to get in front of them again as many times as necessary to solicit their further interest. And if they’ve already learned something about your business, then they’ve already graduated from being a cold prospect to a warmer prospect.

Whether your average prospect needs to see your brand 3 times or 10 times or even more before they consider your brand relevant and on their radar screen for a purchase decision, you will find your “Buy Now” offers will be more meaningful at that point then if they hadn’t touched your brand at all.

PPC GOALS SUMMARY

Anything you can do to foster growth in the early part of the sales funnel will ultimately result in more sales. That’s not to suggest that the end of the funnel should not be continually optimized. It’s just that too heavy an emphasis on the last part of the marketing funnel at the expense of the earlier phase of the sales process can mean that your leads and sales may be more expensive and less plentiful.

In brief, it’s to your benefit to have clearly defined PPC goals for each part of your funnel.

National Geographic

60sec VIDEO EXAMPLE. Social media promo video. Created with stock video, custom accent matte, custom music composition and motion graphics. High impact titles for viewers who do not have sound enabled.

How Robots Made This Food Commercial Look Effortless

Many moons ago I was shooting still photos for advertising in magazines, corporate brochures, annual reports, etc. The amount of work that can go into making something look simple can be intriguing to folks unaccustomed to what it takes to achieve such.

For example, I’m reminded of another past “simple” looking ad. A racquetball club wanted to promote its new healthy cafe they had just built. They conceived the idea of creating an advertisement that featured a guy and girl having lunch around a cafe table inside a racquetball court. So when my team and I created that, it did indeed look quite simple in magazines. However, if you were to visit the behind-the-scene set, you would think it was a construction zone. We used scaffolding on two sides of the court to raise numerous lights closer to the ceiling to create a cheery, bright look in the racquetball court. The scaffolding was woven with lots of power lines connecting to all the lights, in addition to the focused lights on the models around the table, so they would pop out more from the background.

And yet, all of that was quite rudimentary compared to what can occur to some simple looking product shots, such as featured above. In the above video, robotic cameras and devices are used to create an unreality that nevertheless seems somewhat natural when viewed.

In the above commercial, the whole camera and setting are built on a rig to rapidly rotate around the drink so that when a slice of lime is dropped into the glass, the resulting splash will show an exaggerated wave of the beverage cresting all around the top of the glass due to centrifugal force. In other words, you can’t tell that there is any rotating motion by looking at it, that’s intended to be hidden. All the viewer is expected to notice is that the drink seems to have more life. This is a sophisticated (and expensive) way to add some energy to a product shot.

As the video presents, creating this commercial required a lot of work sorting out numerous details. Even the final platform for the drink was the result of numerous tests of different materials that would stay stable and resist warping while spinning. Furthermore, how do you power and shoot a camera while it’s spinning? How fast should the robotic camera and set spin? How do you drop a slice of lime in a spinning drink in an exact location at the right time? Those are some of the challenges that needed to be solved to make this simple-looking commercial.

Having said all that, not all businesses have the budget to craft such types of visual messages. Hence, all ideas need to be tempered by the reality of budgeting. The good news is that nowadays much more production quality can be achieved for less cost than ever before.

How to Create Successful Facebook Video Ads: A 3-Step Formula

Sales and marketing funnels are similar, although not identical. The number of steps and naming of the steps can vary from presenter to presenter. But the idea of moving cold traffic to warm prospects and ultimately to paid customers is an apt depiction for the purpose of any funnel. In the above video, the funnel steps are only 3 in number and the naming of the steps are as follows:

  • Awareness
  • Consideration
  • Conversion

In this presentation, the 3-step funnel is further correlated with basic sales and relationship building such as “know, like and trust.”

  • Awareness = Know
  • Consideration = Like
  • Conversion = Trust

Extending the concept of this funnel even further, this presenter (Dennis Yu of BlitzMetrics) also appends the following: “why, how and what.” These latter concepts are intended to inform a storytelling framework in conjunction with the funnel.

  • Awareness = Know = Why
  • Consideration = Like = How
  • Conversion = Trust = What

In terms of promoting on Facebook, the gist of the presentation here is to be authentic, more story-driven and less overtly promotional.

A fundamental idea is that people want to learn, be moved or entertained; so once again, the idea is to tell a story that will resonate with the audience, rather than being purely self-promotional.

Although much of this presentation is common marketing and advertising knowledge, my favorite part is the emphasis on low-cost message testing by strategically boosting short posts on Facebook (a form of pay-per-click advertising). Once a test shows that your video is productive towards your marketing goals, then it’s time to increase your investment with that message, since Facebook will show the video more frequently for lower cost and you may even benefit from social sharing.

The above presentation also touches upon the reality of Facebook advertising by noting that the majority of your video ads may not work, as well as what would actually constitute being effective (“hitting a home run”).

Although the “formula” itself is informative and useful, personally, I would emphasize the testing over and above the funnel, since you can do the steps upside down and backward and still get results if you prioritize the testing. But if you do the steps perfectly without an emphasis on testing, there’s still no guarantee that you’re going to be successful.

In short, if you want to get your message out effectively via video, then tell stories, build relationships and test, test and test. And most importantly, never stop testing.

Should You Create an Infomercial for Your Product?

eCommerce

After 1984, when the Federal Communications Commission (FCC) eliminated regulations to govern the commercial content of television, infomercials began to proliferate the late-night airwaves because they were cheap to make and proved to be a highly profitable media, selling anything that could be easily shipped.

In fact, infomercials became so profitable that more and more money poured into the industry and by the dawn of the 21st century, big brands were pumping money into the infomercial profit party in a much bigger way. This raised the profile of the infomercial industry as a whole, and furthered the acceleration of rising rates.

Having been involved with some of the most successful infomercials, I have observed that infomercials, as an advertising media, have matured in a way somewhat analogous (although not nearly as fast), as what has happened in the Pay Per Click advertising channel. As PPC became a successful advertising model, over the years advertisers have driven up PPC costs.

Further, the level of sophistication in PPC strategies to stay profitable has also increased.

In a similar way, the costs and risks associated with creating and testing infomercials have skyrocketed since their humble beginnings.

And yet, the investment to test for sales and profit potential via PPC is less than TV.

So, when someone asks me if they should produce an infomercial, rather than delve into the relative merits of their product or service and how broad the demographics are for the market that buys it, I simply ask “How much testing has been done through less expensive media?”

When that has been refined and scaled up to optimize the response and profits, enough marketing data will have been gained to determine the best keywords and messages that underlie this product’s success. And all that data will be very important as a research basis for scripting and producing an infomercial TV “test,” to see how it would do on a limited trial basis as a TV advertisement.

There is much more to know about creating infomercials, but the simple answer about whether you should create an infomercial for your product would be based upon how well it’s selling on the internet and using the supporting data to help evaluate a translation to TV.

Stated another way, for most business persons, the question about whether a product would be successful as a national infomercial shouldn’t even be considered until it’s been tested online and then tested in smaller geographical regions on TV.

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Gorjana

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