Ever wondered how to run ads for your online business without needing to go to an agency? Our guide explains in great depth how to maximise your ROI using paid advertising, so if you're interested in learning how you can get started, read on!
Table of Contents
Before You Do Anything - Run The Numbers.
I cannot stress enough how important this is.
The number 1 mistake I see with people running ads is they don’t understand the economics behind their advertising campaigns.
Even if you get the best click-through rates, conversion rates and flood your business with 1000’s of customers, if the numbers don’t stack up on each sale, you will lose money. Period.
Before you run ads, make sure you factor in all costs associated with acquiring a customer to figure out if you can scale.
Because let’s face it… if you’re not profitable on one customer, what makes you think you’ll be profitable on 10,000 customers a month?
Throwing more money into advertising is like putting a band-aid onto a gunshot wound.
It’s not going to fix anything because you’re internally bleeding…
You need to make sure everything stacks up economically and your business model is viable.
Too often business owners throw more money into advertising without realising they’re slowly digging their own graves into debt.
Open the document -> click “File” -> “Make a copy”.
Fill in the document to figure out if your campaign will be profitable after all advertising expenses and costs associated with your product/service.
Insert the numbers for the following:
Ad Spend (Your advertising budget for the month)
Gross profit margin (how much money you make after taking into account the money you pay for your product/service)
Cost per click (how much it costs to get a click)
Conversion rate (how many people out of 100 converts into a customer)
Average Order Value (how much the average customer pays you)
If you don’t know specifically the numbers, just add in a ballpark figure. The idea is to just get a forecast for the types of results you will get.
It’s also a great way to benchmark whether your advertising campaigns are performing to your or not.
If you run these forecasts and you realise your profit at the bottom is in the negatives, you need to pull a couple of levers to make it work.
Decrease costs associated to fulfill your product/service (improve gross profit margins)
Increase the price of your product/service to generate more per customer (AOV)
Increase stickiness to improve the return customers and generate more per customer (AOV)
Increase your conversion rate by optimising your funnel (conversion rate)
Improve your copy and creative to get cheaper traffic (cost per click).
A combination of all the above will improve your bottom line figure.
Play around with the numbers and if you see you’re in the positives after all the costs are factored in, that’s the first checkmark to proceed with paid advertising.
DO NOT RUN A PAID ADVERTISING CAMPAIGN BEFORE DOING THIS.
It’s actually crazy the amount of business owners I speak to that don’t do this.
This exercise alone will save you from losing a lot of money.
Market > Offer > Copy & Creative
Your advertising campaigns will greatly depend on the 3 factors:
The market segment you are targeting.
How attractive your offer is.
How engaging your advertising copy & creative is (messaging).
What people need to realise is there is a bit of a hierarchy in terms of how powerful each one is.
Market > Offer > Creative + Copy
A good target market will beat an amazing offer.
A good offer will beat even the most amazing creative + copy.
An amazing target market will always beat even the greatest copywriter of all time.
If you target an amazing market, your offer can be poor and your persuasion skills can be terrible, but you can still succeed.
E.g. Target market: Starving crowd → Offer: plain bread for $1,000 → Messaging: “I hate my customers and this bread absolutely sucks” → a starving crowd will still probably buy it assuming they could afford it.
The point being is that if you target a perfect market and they REALLY need your product/service, they would still buy regardless of how weak your offering is and messaging is.
You need to understand that marketing is about solving problems. And regardless of how good your product/service is, if there is no market to serve or there are no problems to solve, you cannot thrive.
Many "entrepreneurs" out here today are trying to solve problems that don't exist. And, no ad buying strategy or funnel hack is going to make a product work if there is no market to serve.
Think about your customers. What problems do they need solving that they would pay for?
Once you figure that out, you're on your way to building a healthy business. There's no point trying to sell meat to a market full of vegans.
Takeaway: No market to serve - don’t run ads.
Niche, Niche, Niche
In the words of Brian Chesky, Co-Founder & CEO of Airbnb
“Build something 100 people love, not something 1 million people kind of like.”
It’s not about blind faith, but it’s about if you’ve solved a problem or seen people love your product.
As long as there are more people like those 100 - then you have an idea that will spread around the world.
I get asked this question all the time: “How do I get EVERYONE to buy my product/service?”
The trick is -- you don't.
You find a small group of people that would absolutely love your product and ONLY target them.
When you talk to everyone, you talk to no one.
So find your niche. Focus on it. And ignore anyone that sits outside of that. Carve out a segment in the market and be the best in it.
If you run an activewear brand - position your business as the activewear brand for pregnant mums.
If you run a mobile mechanic service - position your business as the go-to-solution for Tesla cars.
If you run a fit out company - position your business as go-to for hospitality businesses.
Takeaway: Before you run ads online - figure out the specific target person you want to go after and position your product/service to serve only those people.
How to create an amazing offer
Once you’ve figured out your target market, now it’s time to make an amazing offer.
A great exercise to do when creating an amazing offer is to do some research into your competitors and identify everything they are doing.
Write down everything about them: the price, the features, benefits, how they deliver their product/service, how long it lasts etc.
Then, find out what their customers are saying about their products. Look at their reviews on Google, Facebook, Amazon etc. Try to identify common themes on why customers love them and hate them.
Create 2 lists - 1 for 5-star reviews and 1 for 1-star reviews.
Take everything from the 5-star reviews in terms of what customers love and make sure you offer the same. Now, take everything from the 1-star reviews in terms of what customers hate and turn it into a solution you provide.
You run an ecommerce store selling hats and you see a competitor who is doing really well. Your competitor has 200 5-star reviews and 50 1-star reviews. Looking at their 1-star reviews, you notice the following:
Competitors hat business (customer 1-star reviews):
Ordered it, didn’t fit and couldn’t return
Waited too long to receive the package
Hat is already deteriorating fabric after a few months
So, given these are the things that people hate about their product, we can simply tweak our offering to overcome these issues:
Our Solution With Amazing Offer:
Try our hats before you buy (90 day trial and free return if you’re not happy after 90 days)
Lower price for same quality hat OR 2 hats for same price
Same day delivery guaranteed or receive a full refund
Money back guarantee if the hat deteriorates within a year
And, just like that we’ve already differentiated our business from our competitor and made our offering more compelling.
Important: It’s great to offer something that you are somewhat scared to do, but make sure it’s something you can actually deliver.
The key is to establish long term relationships with your customers.
Overpromising and under-delivering is a great way to go out of business.
Turn Your Words Into Your Ultimate Sales Machine
By using just the right words, we can turn people who don’t know anything about you and turn them into high paying customers that absolutely love your product/service.
One well-written message can achieve exponential growth in your business. To craft the perfect message, we need to understand a few things about human psychology.
There are only two things people are ever buying: transformation or identity reinforcement.
People either want to solve a problem, or reinforce to the world the image they want to portray.
Transformation Example: Someone trying to lose weight
Identity reinforcement: Teenagers wearing Supreme to try and fit in with the cool kids
When looking at your product or service, understand what it is you are actually selling.
Is it a transformation or is it identity reinforcement?
Our goal as marketers is to understand our customers so intimately that we know exactly what it is they are buying, then craft the messaging and the resources to help get them there.
Every single word must help them get to where they want to be. Picture what their life is like before and after.
Before state = what their life is like before using your product/service
After state = what their life is like after using your product/service
Then, articulate it in such a way that they move closer to their goal. Lead in with the problem and agitate the problem and then provide a solution.
Takeaway: Identify what your product/service actually solves and then figure out what your target customer’s life looks like before and after. You can then articulate the transformation that people will go through after they use your product/service.
Right message to the right person at the right time.
Whenever you communicate with your target audience, there will always be people at different stages in their user journey.
Everyone you are targeting is at different stages in their customer journey. Some are more ready-to-buy than others.
In fact, only 3% of people are ready-to-buy at any given time. The remaining 97% aren’t.
This means different messages are required to really resonate with people at different stages of the funnel.
So, we need to alter the way we speak to people depending on where they are in the customer journey.
Here’s an awesome framework to know how to get people to actually engage with your messaging...
Use "Eugene Schwartz's Five Levels Of Awareness"
This allows you to come up with messaging based on what people will resonate with in their current situation.
Targeting someone who is completely unaware of your product/service?
Hit them with some stories and secrets about yourself.
Targeting someone who knows about your type of product/service but isn't completely convinced of your brand?
Hit them with some claims and social proof.
Remember - not everyone is ready to buy right now, so you need to segment your target audience into different stages and nurture them personally through your messaging to get them to that point.
No point in trying to tell people to buy if they aren’t ready yet.
Takeaway: When you advertise, segment your audiences into different buckets based on where you think they are in the customer journey and craft different messages for each of them. Use channels like Facebook/Instagram ads to remarket to people overtime using different messaging based on where they sit in the customer journey.
The slippery slope of copywriting
Joseph Sugarman (a famous copywriter) always said the job of a headline was to act like “A slippery slope” in which the person would be:
1st sucked in by the headline
…. then sucked in by the 2nd line
…….. then sucked in by the 3rd line
………… and so forth.
Every single word in your copy has its purpose...
Our job as marketers is to communicate in a way that leads people down a slippery slope of copy to then take action.
So, a litmus test when you write your copy is read your copy out loud.
If at any point, you get bored or you stop reading, re-write that line so it draws you to the next one.
Keep doing it until your copy is so intriguing and every single word entices you to read the whole text.
Takeaway: Use short sentences. Make it intriguing. Don’t just fill your ad copy with words for the sake of it. Every word must get you drawn into reading the next.
Bonus tip to writing high converting ad copy
Here's the process I personally use to craft high-converting ad copy for my clients:
1. Look up the business and its competitors on google and read all their reviews to find out what customers hate/love about the product/service
2. Copy and paste common phrases used by customers into a document to understand what is most important to them
3. Look at competitor's ads to get an idea of what others are doing in the marketplace
4. Go to the Facebook Ads Library and look up your competitor’s ads to get the creative juices flowing
5. Word vomit everything onto a spreadsheet containing 10-20 different ads
6. Take a break and come back a few hours later with a fresh mind to edit the ad copy
7. Send the ad copy to someone else in your team / a friend for review
8. Cull the ads to about 5 -10 winners
9. Test the ads and rinse and repeat.
In my experience, the best (and most profitable) ads I've ever written have never come out of thin air. They're always a by-product of research, looking for inspiration or literally using sentences said by customers.
Remember — if you're stuck writing ad copy, you just need to do more research.
If you would like to see a tried and true formula for copy we have written an article about the AIDA formula.
Creatives - The Art Of Thumbstopping
What’s the point of having a high converting ad copy if no one reads it?
Crafting a "thumb-stopping" or engaging ad is crucial to the success of your advertising campaigns.
Think about how much noise is out there and how busy people are.
Most people are on their phones on the way to work.
They’re on a train.
They’re listening to music and watching cat videos.
Then, they scroll on their news feed and see your ad.
Is your content good enough to stop them in their tracks and pay attention?
You have less than 3 seconds to capture someone’s attention.
Before you can sell your product/service, you need to get people to engage.
It doesn't matter how great your copy or your offering is if you can't grab somebody's attention.
Before you launch an ad, ask yourself "If I saw this on my news feed, would I stop and pay attention to it?