What’s the cost-per-click for your top-performing keyword? And do you remember what it was this time last year? If you’ve been in business long enough, you could probably go back further and share some even more dramatic rises.
In this way, ad spend is the petrol pump of ecommerce. Given the ongoing rise in costs — and the wider economic circumstances — it’s never been more important to get more miles per gallon from your online marketing budget.
To help you focus on maximising the outcomes from your marketing spend, we’ll take a look at:
Research from Nielsen shows that ROAS from TikTok paid media is 64% higher than the average across other digital paid channels for consumer packaged goods (CPG) brands in Europe. The same Nielsen research indicated that in-feed video is the most effective TikTok ad format.
Cosmetics brand Jones Road Beauty currently spends $7,000 a day on TikTok Ads and approximately $14,000 daily on Facebook Ads. Comparing the two platforms, director of ecommerce Cody Plofker notes:
Elsewhere, evidence suggests the old favourites still deliver the best results for retail brands. A Sidecar report says Google Ads leads the way for returns with a ROAS of 13.76. They're trailed by Facebook Ads (10.69), Instagram Ads (8.83), and Amazon Ads (7.95). TikTok puts its own ROAS at 2.6.
But 44% of respondents to research by Smartly.io and WBR Insights claimed Instagram delivers the best ROAS for their brand, followed by:
The same research found that 87% of respondents planned to increase Facebook spend in 2022. Instagram (73%) and Youtube (51%) were the other channels on which advertisers were doubling down.
While some broad trends are obvious — not least that CPC is increasing across the board — ad performance remains a mixed bag. Knowing what's working for other brands is useful, but you also need to dig into your analytics to see what’s working for you. So, which metrics should you focus on?
Return on ad spend is the obvious metric to consider. If you’re bringing in more in sales than you’re spending on ads, that’s good news. It makes sense to allocate the majority of your ad spend to the channels delivering the best ROAS.
Explore ncROAS (new customer return on ad spend) to see how effective each network is at bringing in new customers. Some channels might take a slice of sales to existing customers who were always going to buy, ad or no ad. Looking at ncROAS helps to guard against overspending on those channels.
The ideal scenario for any advertiser is: new customer clicks ad > buys product > becomes loyal customer. Measuring customer lifetime value (CLTV) will help you to see which ad channels deliver the best customers for long-term value.
The same idea as CLTV, but this time over the short term. What is the average order value (AOV) of sales from each channel? A channel that brings in customers who spend $90 on average is likely to be more beneficial than a channel that generates $5 baskets.
One way to get more from your marketing spend in the medium to long term is to focus on organic marketing. This could include:
Some ways of getting more from your spend here include:
Try to uncover keywords that have low competition but will still attract a steady stream of clicks. Write blog posts that use these long-tail keywords, then link to product categories and pages from them. You can use Amazon, Google Trends, Google Keyword Planner and specialist SEO tools to help you identify suitable search terms.
A quick way to boost ROI from your organic marketing spend is to write blog posts that answer your customers’ questions. Your long-tail keyword research should help you find some of these.
For search queries with informational intent — when the customer is asking a question — Google ranks blog posts that answer the questions over related products (whereas products rank better for queries with transactional intent). You can then direct customers to products from your blog posts.
The perfect scenario is that organic traffic is landing directly on your product pages with the intention of buying. To maximise the chances of this happening:
Although this is a highly effective way of driving traffic and sales without the increasing and ongoing costs of pay-per-click, it remains very competitive. In these circumstances, it may be a good idea to keep the chances of success and failure under greater control…
If you mobilise a group of loyal followers with an emotional connection to your brand, it won’t matter how much your competitors are spending on Google Ads or how many blog posts they’re publishing each month.
To create a brand community, you first need to lay the right foundations on which to build. To do this:
There are great reasons to invest in building a community around your brand. A key one is that it boosts the performance metrics we mentioned above. Things like:
These benefits are clear to see in brands already doing this well. Lego Ideas serves as a hub for a community of customers. They get to have direct involvement in product development by sharing ideas. Ideas that get 10,000 votes of support from the community are reviewed for production (and 1% royalties for the creator). The result is a perfect storm of conversation, engagement, friendly competition, and empowered customers.
Vegan-friendly meal replacement brand Huel has experienced 150% growth year on year and is expected to be valued at $1.25m by the end of this year. Community building has been key to that growth. It built a network of brand advocates — its Hueligans — in tech, fitness, and vegan online subcultures. Community stories showcasing Huel’s place within lives dedicated to busy startups, workout sessions, and cutting carbon footprints have proven irresistible to consumers.
The best way of getting more from your spend is to adopt hybrid marketing. Scaling your business requires both short and long-term growth. You need the immediate demand impact of paid media and the sustainable brand impact of organic campaigns.
These can be deployed — and measured — within a single hybrid campaign to maximise your results in all areas. To do this:
You can measure the impact of your hybrid campaigns with metrics covering both areas.
Track long-term brand impact with soft data such as:
Monitor immediate demand impact using hard data like:
You can take immediate action to offset rising ad costs and improve the effectiveness of your marketing spend. Do this by:
Taking all these things into account, our recommendation for getting more from your marketing spend is to split your budget between organic channels that deliver high ROI for your business and your highest-performing ad channels. This hybrid approach is more cost-effective, more sustainable, and better value than spreading your budget across an array of paid channels.
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