Painful Experiences with Social and CPC ads
If you've tried a few of the most popular forms of paid digital advertising:
A: Social Ads
Facebook, Instagram, Twitter, LinkedIn, Pinterest, etc.
B: CPC Ads
Cost Per Click (CPC), also known as Pay-Per-Click.
Then there is a good chance that at one point you ended up frustrated and feeling like:
And your site feels like:
Or, you got attention, but it was from the wrong people (creepers and trolls):
Spending money on it was probably insult on injury.
The Strategic Flaws in Most Ad Campaigns
The truth is, most social and paid ads are a waste of money because you must:
A: Interrupt the user, hoping they will be interested enough to buy.
The problem with 'A': these people are cold leads, meaning they have no active intent to purchase at the time they see your ad. This strategy says: just maybe, our offering will be more compelling than what they are already doing.
B: Pay for clicks to your site with no idea how likely they are to result in a sale.
The problem with 'B': you must pay for these clicks but you don't know what they are worth. These campaigns are not held accountable to the results, by design.
What Would the Perfect Advertising Solution Look Like?
If we could put together our criteria for the perfect system, I bet it would look like this:
Only target warm leads.
That is, people currently interested in making a purchase.
Only pay for conversions.
Pay only when there is a conversion from a warm lead to an actual, verified sale.
Pay what you want per conversion.
By setting your own price per conversion, you protect profitability on a unit basis.
This Solution DOES Exist, IF You Leverage eCommerce
As it turns out, these criteria describe a REAL system, IF you are running an eCommerce site. (Or, run your site as if it was one.)
If you process transactions on your site, that means there is verifiable proof that a conversion resulted from an ad. This verification can be used to signal to the advertising platform that a conversion occurred, and therefore the ad that drove traffic can be attributed. This allows for a campaign bidding process called Cost Per Acquisition, or CPA, and the type of ad campaign to use with it is SEARCH.
What's better, when paired with analytics running on your site, the algorithm can continue to learn and become better at finding people that are likely to convert, and the ad platform is held accountable to produce results. This is the virtuous cycle of Ads, eCommerce, and Analytics:
How Do You Make It Happen?
Here's the process:
Ads Account Setup
Set up a digital ads account (if you don't have one already).
Link ads tracking to analytics on the back end of your site.
Run CPC Ads to allow Machine Learning
Start a CPC ad campaign so the system can learn. (It takes a brief investment period for the algorithm to learn about who will click on ads, but once this phase is complete, all campaigns can be switched over to CPA campaigns.)
Convert to CPA Ads and Set Bids
Once the system has seen 15 clicks per month, the account will be eligible for CPA ads, and you can switch them over. Going forward you'll bid only as much as you are comfortable, and this bid amount will be the average cost paid per sale conversion at the end of the month. Effectively, only clicks that resulted in actual sales conversions will be billed to your ads account.
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Valuable ideas for makers and marketers.
In creating solutions for clients, we are constantly coming across eCommerce strategies that are useful to makers and doers, and we're happy to share.