In the midst of the global economic impact of the COVID-19 pandemic, it’s perhaps more important than ever to know where and how to focus your marketing budget in regards to paid channels. Whether your business has been personally impacted by our current climate or not, marketing teams everywhere are prioritizing smart advertising investments right now over ones that don’t establish a clear return. And with some traditional marketing opportunities, such as events and trade shows, out of the picture for the foreseeable future, now’s the time to direct your budget towards channels that you know are going to convert.
Paid advertising strategy is not a one-size-fits-all approach, however. How do you find the channels that are right for your business? In this post, we’ll explore some strategies for how to determine where to focus your marketing budget right now.
Understand your unique opportunities for growth
First and foremost, to figure out where you can prioritize, you want to understand what your business’s unique opportunities are for growth. If only we all had limitless funds, we could invest in every advertising channel available. But the reality is that not every channel is going to deliver amazing results for your business, so it is a good practice to focus your budget on channels that find success—even if you’re still left wishing for more dollars to play with. For reference, most businesses tend to dedicate around 7% of their gross revenue to marketing, with half of that budget now going to digital advertising. To give you a sense of scale, for a business that makes $2 million in annual revenue, if 7% of their budget is allocated to marketing, they would have $140,000 total to work with. At least half of that would need to go to digital channels, leaving them with $70,000, or just shy of $6,000 a month, to dedicate to paid advertising.
$6,000 may sound like a lot to you or like nothing, depending on your industry and what you’re used to spending, but more likely than not $6,000 is a tight budget to compete for top keywords on search engines. According to Wordstream, the average cost per click (CPC) in Google Ads is between $1 and $2 on the search network — and can go way up from there. The most expensive keywords in Google Ads and Bing Ads can cost upwards of $50 or more per click. These are generally highly competitive keywords in industries that have high customer lifetime values, like law and insurance. And while giant retailers could spend up to $50 million per year on paid search, the average small business using Google Ads spends between $9,000 and $10,000 per month on their Google paid search campaigns (source).
Let’s say our sample business that has $2 million in revenue dedicated their $6,000 to Google Ads and generated 100 leads in a month — only for none of them to turn out to be qualified. They would have spent all their money on a channel that really wasn’t performing for them, unless they perhaps had opportunities to optimize with better audience lists, updated copy, more targeted landing pages, etc. This is where tools like call tracking can be immensely helpful in terms of understanding what type of leads your ads are generating and the quality of conversations, especially over time or by campaign as you tweak your method.
On the other hand, you might find that another campaign that you wouldn’t have expected generated a much higher conversion rate. Being able to pivot quickly in terms of how you target and adjust your campaigns for conversions is crucial to get the most “bang” for your buck. You may find that channels or strategies you hadn’t considered can deliver the highest return on your investment and present a unique opportunity for your business to find a niche and grow. Fortunately, there are tools and techniques that can help you determine how to prioritize your investment.
Evaluate your current strategy
Knowing you can’t be everywhere with limitless funds, how do you know where to be? A good first step is to take an inventory of your current advertising efforts. Some questions to ask yourself:
- Where are you finding effective use of your budget?
- What’s not driving results?
- How many channels are in your marketing mix?
- Would you benefit from diversifying or consolidating?
Take full stock of what your team has invested in over the past year (or more) and tie what results — leads, conversions — you can to each in order to understand how each channel contributed to your efforts.
Determine how you’ll measure success
Next, take measures to define what success looks like for your business so you know which channels are effective. This may turn out to be different than what you had initially anticipated, or unique right now as related to the pandemic and changes in the market. Set realistic expectations that are aligned with your previous performance so you’re not setting yourself up for failure with unreasonable goals, and so you have a benchmark to understand how any changes moving forward are making an impact. Some tips for setting goals:
- Perform market research around industry benchmarks for conversion rates and other metrics to establish your own KPIs (key performance indicators).
- Implement numbers around the qualified lead counts, cost per acquisition, time to conversion, overall site conversion rates, etc. that you want to hit so that you have a specific strategy in place to measure which of your campaigns are working well and which are underperforming.
- Feel free to get creative with this too. For example, even if a call that was generated from a Google Ad didn’t convert in a sale, if it lasted over two minutes, that could still be indicative of a quality lead and valuable for retargeting data in the future.
Get the right tracking tools
Make sure you also have tools in place to accurately report on and measure those results, such as Google Analytics and Google Tag Manager. Combining GA’s forces with Tag Manager, which allows you to easily add tags — or snippets of code used to collect information about how people use and navigate your site — means you can monitor and create goals around activities like downloading a file, clicking certain links, or adding or removing items from a shopping cart.
In Google Analytics, set up event tracking and goals in order to measure how often users complete specific actions. Event tracking lets you monitor just about any action that doesn’t trigger a new page to load, such as watching a video or clicking on an outbound link. This data can be invaluable in improving your site and understanding what inspires people to purchase.
Tracking data can be invaluable in improving your site and understanding what inspires people to purchase.
The final piece? Capturing offline conversions: the ones happening over the phone, or in person at your store or office. Importing offline conversion events from CallTrackingMetrics into a platform like Google Ads gives you a more comprehensive look at which keywords and targeting criteria are providing the best ROI on your campaigns.
Choosing your advertising channels
When choosing where to focus your campaigns, you want to think about implementing a full funnel approach. At the top of the funnel, you’re building awareness for your brand and casting a wide net to capture as many leads as possible. Moving down the funnel towards the bottom, your efforts become more targeted and focused on qualified leads who are getting ready to convert.
Reaching the right people at the right stage with the right message is key. And there are no shortage of advertising channels to choose from, including:
- Google Ads — the most popular PPC (pay per click) platform.
- Microsoft Advertising — Bing is the second most popular search engine, with 33.5% market share.
- Facebook — the most popular social media platform, with sophisticated targeting options for ads.
- Instagram — easily extend your Facebook ads onto Instagram for broader reach.
- Twitter — promote individual tweets or entire campaigns dedicated to specific objectives.
- YouTube — only pay when someone chooses to watch at least 30 seconds or clicks on your ad.
- LinkedIn — target professionals and B2B buyers.
- Pinterest — compared to other platforms, Pinterest only has 1.5 million brands connecting with users every month, offering the opportunity to get in front of more people with less competition.
- Forums (Reddit, Quora) — influence targeted content communities with engaged audiences.
- Display networks — use banner ads, native ad formats, and audio and video ads to promote your brand on over 2 million websites, 650,000 mobile apps, connected TV, and streaming audio.
This isn’t an exhaustive list, and each channel has its own benefits and downsides, whether related to cost, reach, or competition. While providing customers with multiple mediums and channels to interact with your business offers you a tremendous advantage, there are some drawbacks. Namely, it’s more moving parts to manage, and increases time and expense. That’s why it’s so essential to isolate the ones that are working and focus your attention on those. But you’ll need to experiment first, so don’t hesitate to explore new options and pause other opportunities until you get there.
In considering where different channels fit within the funnel, know that an advertising awareness campaign would focus on educating people or building awareness around what you offer. This could include online display advertising, info video, or content downloads that describe more about your product or what problems your business can solve or help with—without necessarily pushing that hard sell yet.
As buyers move into the consideration phase, paid search and social advertising become more important to ensure brand visibility and discovery as buyers research competitors and compare products or services. Targeted ads around competitor keywords are a natural fit for the consideration stage of the funnel as buyers evaluate their options.
In the last phase, the conversion stage, you want to reinforce and encourage action from your prospective buyers, and tactics like retargeting come into play where you can hit them with very specific, personalized messaging to inspire them to purchase.
Think of display/video/social advertising as a “push” method: you are trying to push out your brand and message out to people and target them at the right place and at the right time, no matter where else they are on the web. Paid search would be the “pull” method: the user is already searching for what your business offers, so you want to be there when they do, and pull them in.
Now it’s up to you to decide where you want to grow your business in the latter half of the year, and where it makes sense based on your unique circumstances to invest. As mentioned, it’s wise to take that full funnel approach so that buyers are exposed to your brand throughout stages of the buying funnel, so make sure not to lose ground in any particular stage. Revisit what’s worked for you in the past and what a benchmark for growth would be moving forward, then set goals and track performance along the way. Be open to pivoting, too, especially as we all navigate the unique circumstances and challenges due to COVID-19. With the right approach, you’ll be able to weather this transition with confidence and build a strong pipeline for the future.