Common eCommerce Mistakes | Not investing in paid marketing channels – Part #6
Paid channel marketing is on fire and cannot be ignored. The online marketing environment is now almost entirely paid-to-play. Unfortunately, many ecommerce businesses are too scared to take the plunge and do not view online advertising (pay-per-click, search engine marketing, etc.) as an investment.
In 2016 digital marketing agencies reported that 44% of their clients were increasing budgets and 7% were decreasing their investment in paid channel marketing.
Forrester Research reports that by 2019, marketing leaders will spend more than $103 billion on search marketing, display advertising, social media marketing, and email marketing — more than they will on broadcast and cable television advertising combined.
In 2016, the average firm was expected to allocate 30% of their marketing budget to online. Nearly 60% of companies increased their expenditures on email marketing, social media marketing, online display marketing and mobile marketing. Conversely many companies have reduced allocations to print advertising, trade shows, radio and direct mail.
What is the #1 goal of paid channel advertising?
The number one objective of paid channel marketing is to drive traffic to your optimized landing page on your website. In order to gain conversions on your ecommerce website you need to broker attention in the form of page hits, also known as traffic. That traffic can come organically (they searched for you online), it can come directly (you gave out your website url during a speech) or you can pay digital media comes to drive their audience to you.
Common mistakes are derived from a lack of understanding
The most common mistake we see ecommerce websites make is that they view paid traffic as an unnecessary expense. Those who do invest in paid traffic are not investing enough in the channels that drive the most value to their business. Furthermore, most businesses that do invest in paid traffic do not give new channels a chance to deliver revenue growth.
A lack of trust can also breed contempt for paid marketing channels.
There are numerous factors that can undermine results. Competition for advertising budgets are tough. Managing those budgets is even more difficult. The skills needed are highly technical and change rapidly. Not unlike the days in the yellow pages, bids are being made for position, keyword(s) and the latest and greatest channel that claims to hold your buyer persona.
What should you do?
As with all marketing activities you are not likely to have new initiatives convert at a high rate in the early going. It takes time to accumulate enough data to know what is working and what is not. Testing of various channels and words will help you make decisions and limit your downside risk.
Typically your first exposure to paid traffic should be for lead generation. This will help you improve the quality of your admirers, before you ask them to buy from you.
Always be connecting. Build your network and contact lists. Replenish your list to account for those who no longer favor you. It is an endless cycle.
Learn the terminology. Paid marketing channels are things like social media advertising and banner ads. Shared media are things like your unpaid social media postings and referrals. Owned media are things like your website and blogs. Earned media are things like influencer relations, media relations, etc.
Once you determine your winning channel through testing that channel should receive two-thirds (65%) of your paid marketing channel budget. However a small portion (15%) of your budget should be allocated for testing newer platforms where your avatar hangs out but you have a smaller footprint. The remaining portion o your budget should be kept when it is appropriate to throw gas on the fire. This is when you have a paid channel or a specific offer receiving a higher conversion rate then normal.
In our next article we will discuss how a great SEO strategy must include the an in depth understanding of your competition.
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