Main Reason Your Paid Ads Failed
Pouring money into a paid ad campaign that's destined to fail isn't a sound growth strategy. Time and again, companies breaking into online ads don't see success due to the same issue: they aren't known to their audiences. There's no trust, no name recognition, and so the cost-per-click (CPC) remains high and rising. In this post, we identify the cycle many brands get trapped in and explain how to see a return on investment with paid ads.
The scenario
Often paid ad campaigns, especially from new companies or new products or new ventures or new audiences they're addressing, fail. This scenario plays out so many times, especially in the startup and entrepreneurial world but also across the entire marketing landscape.
Here's how it usually goes: The CEO or CMO or business owner says, "We have this great new product. Let's spread the word." So they talk to a marketer (agency, contractor, or someone in-house). The marketer say, "Sure! I'll buy online ads to get the word out and get traffic and conversions." Then a few months later… "How's that paid ad campaign going?" "Well, not good. I have bad news."
The cycle
Almost always, this is the result of a cycle that looks like this: You have a new company's campaign. The campaign is to sell something or get exposure for something, to drive visits back to a website, and get conversions out of it. Your marketer buys Facebook ads, Instagram ads, and maybe LinkedIn and Twitter ads. You probably use the Google Display Network or AdWords. All of these sources are trying to drive traffic to your website and get a conversion that turns into money.
Now, what happens is that these get a high CPC. They start out with a high CPC because it's a new campaign. So none of these platforms have experience with your campaign or your company. You're naturally going to get a higher-than-normal CPC until you prove to them that you get high engagement, at which point they bring the CPC down. But instead of proving to them you get high engagement, you end up getting low engagement, low click-through rate, low conversion rate. Why is that?
The #1 reason paid ads fail
When no one engages with your Facebook ads, etc, the cost to show your ad to more people goes up, and, as a result, these campaigns are much harder to make profitable and they're shown to far fewer people. Your exposure to the audience you want to reach is smaller and the cost to reach each next person and to drive each next action goes up. This is because:
The audience that you're trying to reach hasn't heard of you before. They don't know who you are.
They don't know, trust, or like you or your product, and so, they don't like. They don't click. They don't buy. They don't share.
They don't do all the engagement things that would drive this high cost per click down, and, because of that, your campaigns suffer and struggle.
Many marketers start with an advertising-first approach. To be clear, there are some exceptions to the rule. Some brand new companies fit a certain mold and do very well with Instagram advertising for certain types of products that appeal to audiences that don't need a previously existing brand association. Some people in the Google AdWords market do okay with this, some local businesses, etc. It's not the case always that this fails, but often enough that it’s the number one reason paid ads fail.
Two solutions
You have to get known to your audience before you pour money into advertising. This means you need to invest in organic channels—content or SEO or press and PR or sponsorships or events, anything that can get your brand name and the names of your product out there.
Brand advertising, in fact, can work for this. Television brand advertising often drives the cost per click down, and drives engagement and click-through rates up, because people have heard of you and they know who you are. Magazine and offline advertising and even display advertising can work as well.
The second option is to advertise primarily or exclusively to an audience that already has experience with you. The way you can do this is through systems like Google's retargeting and remarketing platforms. You can do the same thing with Facebook, through custom audiences of email addresses that you upload, same with Instagram and Twitter. You can target people who specifically only follow the accounts that you already own and control. Through these, you can get better engagement, better click-through rate, better conversion rate, and drive down that cost per click and reach a broader audience.
If you don't do these things first, a lot of times these types of investments fall flat on their face. That’s why your marketing needs a strategy! This is a marathon, not a sprint. If you need help building your strategy, contact us today.
