Why Your Paid Ads Don't Work
If you don't understand that advertising is an accelerator, not an initiator, then you're going to lose a ton of money, very quickly.
Key Takeaways:
Advertising can take a good offer a good product or a service that's already selling well in front of even more people, just like your best customers.
What advertising won’t do is take a new offer, a new idea, or a new product or service (something that hasn't been proven yet), and believe that when you launch it to the market, it will sell right away.
Marketing gurus like to shout from the mountaintop about how they helped Company XYZ make a million dollars on their very first launch, or how they were able to sell out their products in 24 hours, all thanks to a simple ad. Sure these things happen, but they're the exception, not the rule.
The reality is that advertising is like any other kind of marketing. Your ability to succeed with ads comes down to just a few simple factors.
Unfortunately, most people just start pumping money into the ad platforms hoping that they'll get lucky and something will just mysteriously click. But that's not marketing, that's gambling. And the odds are not in your favor. Especially, if you're new to the online advertising world.
Most online advertising is auction based. And the winner of the ad auction is determined by three things:
Bid. What the advertiser is willing to pay to achieve a desired outcome. The better you know your numbers, the more you're willing to pay, because you can be confident that you're going to make your money back
Estimated action rates. This is an estimate of the probability that someone who sees the ad will engage or interact with it. In other words, this is the ad platform making sure that you're putting the right message in front of the right people so they don't just block or unfollow or worse leave the platform altogether, and
Ad Quality. This measures things like feedback from people who view or hide the ad and a bunch of other algorithm based quality metrics that try to only show the highest quality as possible.
The scores from these three things are then added up and the winner is the one with the highest total value. This is why if you want your ads to work, you need to:
Spend enough money to outbid your competitors, as well as, make sure that you have enough budget to give your ads.
Have sufficient time to optimize and work out any kinks to create a highly targeted and relevant ad that speaks directly to your ideal target market.
Make sure that your ad is interesting and enticing and valuable.
Know your numbers like CLV or customer lifetime value, which is going to show you how much a customer is worth to your business over their lifetime. This will allow you to determine what you can and cannot afford to spend on ads.
It may seem overwhelming but getting all of these things right isn't impossible. However, it's also not as easy as you may have been led to believe. Especially, today as advertising costs have risen substantially. Tracking and the ability to pixel people with retargeting cookies has progressively gotten more difficult with The Cookie Law. In addition, competition is at an all-time high with more than enough people willing to step in and pay whatever the ad platforms are charging.
So, what should you do—What's the alternative if you want to reach more people make more sales and grow your business?
The solution is to use a combination approach known as PESO, which stands for paid, earned, shared and owned. So let me break those down for you:
Paid Media
Paid media is anything that you pay for. So think of advertising like banner ads, and display ads and social media ads, and basically anything with the word ad in it. Advertising will always exist in the marketing world in some way, shape, or form. And it's an amazing way to accelerate your reach and get in front of new people and new audiences by just buying ads. But there are some drawbacks. Namely, when you stop paying for ads, they stopped showing them so you need to constantly keep running your ads to keep traffic coming in. Plus, it's getting more competitive and therefore more expensive to keep using the big players like Facebook and Instagram and Google
Earned Media
Earned Media is made up of relationships. Send word of mouth and your network. This is where having a good product or service and building up goodwill in your market and investing in your brand can really pay off big. It's also something that's hard to do and harder to track, which is why so many digital marketers just ignore it. But don't be one of those people.
Shared Media
Shared media is organic social media, as well as any partnerships or community that you have shared media is valuable. But it's also a little bit sketchy kinda like building your house on rented land. And if your entire business is reliant on shared media, like say, through a single social media platform, well, all it takes is a few tweaks and changes to the algorithm to completely wipe you out. Which is why the next thing you want to focus on is owned media
Owned Media
Owned media are the things that you have complete control over. These will be things like your website, and your podcast and your email list. My goal with all of my marketing for myself and clients, is to try to build up my/ their owned media library as fast and efficiently as possible.
The one thing that all of these have in common and the main marketing strategy that I've been using, and suggesting for more than 10 years now, comes down to: content marketing.
Content marketing that I can use as shared media on social, earned media to get backlinks interviews, and other PR opportunities. I use owned media because I can share my own content on my own website and share even more specific and valuable insights with my email list.
And yes, I use my owned media for paid media. Because after creating content for website and social and podcasts and videos and more, you have a pretty good idea of what's going to work and what's going to connect with the target audience. And all of this changes advertising from being a risk into a calculated and strategic business decision—one that's likely to deliver a very tangible return on investment.
In conclusion, the money that you invest in advertising is actually going to deliver some positive results, if you:
Start by creating content that you think your audience would find valuable.
Leverage the best pieces across earned and shared and owned media.
Choose the very best from that and turn it into paid media like ads.
And the best thing, you can do to improve your content is making sure that you have a solid content marketing strategy in place.