Iâve learned a lot since I started marketing online in 2004. But there have been a few core lessons that have made the biggest difference in how I approach online marketing, and the results I’ve been able to achieve. Here are the top 10 lessons I’ve learned over the years…
1. Never pay for impressions
The old school method of advertising was paying for your ad to appear in front of your prospectsÂ (think magazines, newspapers, radio and TV). Itâs how online advertising started out as well, before search engine advertising came onto the scene. Youâd place aÂ banner on websites your prospects visited, and youâd pay a fee every time your ad appeared. You can stillÂ advertise this way.
The problem is, only a small percentage of people who see the ad are interested enough in what youâre advertising to actually respond to it, which means that youâre throwing away money advertising to people who arenât interested at all. And when you waste advertising dollars like that, your return-on-investment isÂ a fraction of what it could be.
One of the reasons that Google is so successful today is because they changed the way advertising was sold. Rather than paying every time somebody sawÂ your ad, now you only paid when somebody clicked your ad. ThatÂ meant that youâd only payÂ for people who were actively interested in what you were selling. And that meant a far better return on investment because your advertising dollars wereÂ only spent on people whoÂ were so interested that they clicked on your ad.
Most other advertising networks have since followed suit, as Google captured an increasingly greater share of the advertising market.
What most people forget is thatÂ even withÂ a pay-per-click model, you still have the side benefit of âfreeâ impressions because people see your ad even though they havenât clicked on it. It’s just that the primary focus is on conversions, and secondary on impressions.
2. Your conversion rate defines your success online
Iâm still often surprised at how few business owners know what a website conversion rate is, and how it relates to your success online. Often times you might hear someone say âIâve tried Adwords… it doesnât work for my businessâ, when often times itâs that their website conversion rate wasnât high enough to make advertising profitable.
Letâs take a quick look at the numbers to see why…
Youâre advertising on Google Adwords. The cost for one of your top keywords is $5 per click. If your website converts 1% of those clicks into sales, your cost per sale is $500 (ie 100 clicks x $5 per click).
The problem is that if you donât earn at least $500 profit from that sale, you wonât be able to continue advertising. On the other hand, if your website converts 5% of those same clicks into sales, your cost per sale has been brought down to $100 (ie 20 clicks x $5 per click). Or in other words, 5x more sales for the same ad spend.
One of the best ways of dominating your competition online is to convert clicks at a higher rate than your competition, because it means you can outspend them on advertising and still make more profit (allowing you to capture the lionâs share of the market).
For example, Â if youâre converting clicks at 5% and your competition is converting them at 1%, you can spend 5x as much per click and still make the same amount of profit.
See the power?
3. CPA is more important than conversion rate
Even though Iâve just spoken about the importance of your conversion rate, itâs not the most important metric you should be measuring. Far more important is your CPA (Cost-Per-ÂAcquisition) of a new lead or sale.
Your CPA is the amount you pay for a lead or a sale, and itâs dependent on the amount you pay for traffic.
For example, letâs say youâre advertising on Adwords and youâre paying $5 per click with a 10% conversion rate. That means your CPA is $50 (ie $5 x 10 visits). Facebook advertising costs less than Google but also usually converts at a lower rate than Google. If Facebook Ads cost $1 per click, you only need a 2% conversion rate to achieve the same CPA as Google Adwords (ie 50 visits x $1 per click). So even though the cost-per-click and conversion rate are both lower, the CPA is the same.
As you increaseÂ the number of places you advertise your business, the cost and quality of the traffic changes, but you can always compare ad network performanceÂ by comparingÂ your CPA.
As long as you know the maximum amount you can afford to pay for your CPA, and youâre converting traffic at a lower rate than that, you can advertise your business wherever thereâs the possibility of quality traffic (and there are more places than you know).
4. The more you pay per click, the higher the conversion rate
This one is counter-intuitive. Often times it seems that to achieve a better return on investment (ie lower CPA) you need to reduce the amount you pay per click, but the inverse is often true.
By paying more per click than your competitors, your ad appears higher up in the ad rotation (whether it’s Adwords, Facebook or Display) and you get the highest quality traffic, which usuallyÂ converts higher.
If you have the right targeting for your ads but the CPA is too high (ie they arenât converting high enough for you to make a profit), you might be better off increasing how much youâre paying per click so your ad appears higher than your competition.
For example, if youâre advertising on Google Adwords and youâre not in the top 3 positions, you might be getting the price shoppers who go through all of the advertisers to find the best price. Whereas if you were in the top 3, you are more likely to get those serious about making a decision now, and have a bigger budget to invest.
The same goes for Facebook advertising and other cost-per-click advertising where the advertiser that pays the most gets positioned in the highest value locations, and displayed to the highest quality traffic.
Â 5. Generating a volume of conversions is hard… and itâs ALL about volume
Itâs easy to have a good CPA when all you need is one conversion per month. Itâs a lot harder to do when you want 100 or 1000 conversions per month.
Because when you only need a small volume of leads, you can focus your budget on the most targeted advertising you can â advertising that is so specific that only an actual buyer would fit into the targeting.
The problem is that there isnât a lot of traffic at this level of targeting, which means that if you want to increase the volume of conversions you need to start âwidening the netâ and broadening how you target your advertising.
And the broader you go, the harder it is to convert traffic because people are all at different stages of the buying cycle.
To drive volume you need to have a multi-step conversion strategy with different funnels for prospects at different stages of the buying cycle. Which leads me to my next lesson…
6. Advertising on Google Adwords doesnât make you a good marketer
Itâs easy to think youâre marketing your business well online because youâre generating new business through Google Adwords. But itâs actually a false reality.
Because people who find your business from a Google search are already very far down the conversion funnel (ie close to a sale), and the search is usually one of the final steps in the process.
They donât need to be sold on your service (as theyâre already searching for it), theyâre ready to talk price, and they actually want to hear about your company. This is one of the main reasons why Google is as successful as it is today.
With Google Adwords (and any search engine advertising for that matter), most of your job has been done for you. All you need to do is have your business appear when prospects areÂ searching for what you sell, have a landing page that effectively communicates your offering, and youâll get a steady stream of new business coming your way.
So why is this a false reality?
Because youâre quickly limited by the traffic available on Google, and youâre only able to convert people who are actively looking for what you sell. You canât make any other source of traffic profitable because you can’t convert people that aren’t actively searching for what you sell. Youâre stuck with Google Adwords, youâre at their mercy, and youâll be quickly limited in the amount you can grow.
The other problem is that most of your competition also relies on Googleâs high-converting traffic to grow their business, which means the click-costs are steadily being pushed higher until it will soon become very difficult to advertise on Google and make a profit.
A solid online marketing strategy is a multi-channel strategy that incorporates social media advertising, search engine advertising, display advertising, mobile advertising, native advertising, email marketing, remarketing, SEO, conversion funnels, and constant experimentation.
When you rollout an effective online marketing strategy, youâll never be limited by one traffic source and youâll be able to grow your business faster than you ever thought possible. Plus it ensures that youâre easily able to adapt your advertising to the rapid changing online world.
7. Donât rely on just one traffic source
In the last lesson I talked about Google Adwords. In this lesson I am talking about any traffic source that you currently rely on for all of your new business.
Maybe itâs SEO, maybe itâs Adwords, maybe itâs social. It doesnât matter what it is. If you rely on one traffic source for your new business you are putting all of your âgrowthâ eggs in one basket. And if that traffic source happens to dry up one day, then youâll be left scrambling to figure out a way to replace that traffic source.
Donât think this can happen to you?
Here are a few examples of where this has happened in the past…
Thousands of business owners relied on top Google rankings as their main source of new business. They grew their business, hired staff and built their company around the new business coming in from their SEO. Then when Google made a number of massive updates to their ranking formula (Penguin and Panda), many of those same business owners saw their new business dry up overnight.
Back in the day, Google Adwords used to cost 5c per click. Then they introduced Quality Score and click costs shot up to more than $1 overnight. You can image what that did to their CPA.
Or popups, that used to work really well (even though they were super frustrating) until all Internet browsers (like Firefox, Chrome and Internet Explorer) blocked popups by default.
The one certainty with online marketing is everything that works today will change.
The other is that as long as there are free services online (eg social networks, search engines, media sites etc) there will be advertising funding it. And if you can pay for traffic and convert it, regardless of the source, youâll be unstoppable for years to come.
With that in mind you should have the aim of having at least 2 differentÂ advertising channels that driveÂ new business at any one time, 3 would be better. That way, if one dries up (for whatever reason) you can increase your spend on the others so your business isn’t affected.
Need a competitive advantage? A multi-channel marketing strategy is one of the best competitive advantages you can have.
8. Email marketing is the ultimate force multiplier
A force multiplier is a military term that describes the increased effectiveness of a particular tactic when combined with one or more other tactics. For example, if by using GPS, a force can achieve the same results as a force 5x the size without GPS, then the force multiplier of GPS is 5.
Email marketing is like the GPS force multiplier in the example provided above. When combined with any form of online marketing, email marketing multiplies the results you achieve.
For example, if you were getting 10 leads per month from a particular traffic source without email marketing, you could generateÂ 20 leads per month from the same budget if you use email marketing effectively.
When you really start to take full advantage of email marketing, the performance improvements youâll achieve from your online marketing can be significant.
9. Be the market educator
If you really want to differentiate your company from your competition, you need to position yourself as the market educator.
By educating your prospects on how to solve problems theyâre facing, how to buy better, or how to understand your industry better, you position yourself as their trusted adviser. And that is a position that’s hard to compete against.
And you canât fake this one. You canât share two-bit ideas to just tick a box. You really need to figure out the biggest challenges your prospects are facing and then help them for free. The more value to give them up front (without asking for anything in return), the strongerÂ your positioning in the market.
The biggest piece of advice I can give you is to not hold anything back. Donât let fear stop you from sharing your very best information â share it with your prospects and see what comes back.
10. Never be satisfied with your results
Itâs really easy to get complacent with average results, never knowing how much more you could achieve.
I remember one campaign I launched where the conversion rate on the first version of the landing page wasÂ 10%. I was happy with the results but wanted more.
In a period of about 4 weeks of testing various changes to the landing page, I was able to increase the conversion rate to 50%, or 5x as many conversions from the same advertising budget.
If I had stopped at the first landing page (which was converting okay), I would have had one fifth of the leads instead… and that made a massive difference to the success of the campaign overall.
This is an example of just one part of one campaign. There are literally dozens of areas you can focus on improving. From the targeting of your ads, to the ad text, to the landing page, the source of traffic, the offer you make, the emails you send… the list goes on.
As long as you’re continually looking for new and better ways to convert traffic at a higher and more profitable rate, youâll achieve results most people would never dream of.
It’s about methodology…
Most of the lessons Iâve just shared are more about methodology than they are about tactics. The reason being that methodology will stay with you forever while tactics will change all the time (especially in the online marketing world).
Iâve learnt these lessons over the last 10 years, spending millions of dollars in online marketing and conversion optimisation. They work and they work well.
If you can integrate these lessons into how you approach your online marketing, youâll grow your company faster than you ever thought possible.