One of the biggest joys of my job is working with a wide variety of businesses to tackle a wide variety of problems. When walking through that clients door for for the first time you experience a flurry of excitement, exhilaration, enthusiasm and even the occasional glint of badassery (yes, I said that). Once you start working within a company, you start to see the cracks and issues that need to be fixed. While 90% of problems can be solved by making sure the company has a well oiled core strategy and workflow, you do start to see specific problems arise in advertising strategies that will make you wince, shudder and sometimes cry. The best part is I have stories. If you don’t like stories, skip to the photo of the haunted house.
The fall of the frequent flyer
I was brought into a company at one point to help establish their core marketing strategies and platforms. This sounds like great fun till you realize that some of your time is spent setting up twitter accounts and local citations. We go to the point where I was evaluating their ROI on current marketing spending to see where we could cut back and what we should push. I went to the VP and asked if he had data on his current ROI based on customer acquisition feedback. There was nada, zilch, zero. They had never taken data on new customer acquisition methods. CRAZY!!!!!!. We set up a system in their dashboard where employees were required to ask how the client heard about the company and let the new fancy “analytics” system fly. What we found astounded us. Over a month, off of a $45,000 flyer spend, they were getting about 23 new customers. Ok, ok, all you marketing dudes don’t get your panties in a bunch. I know that their is room for inaccurate feedback and encouraging returning customers but 23 new is still crazy. Even if you play around with the data and make a conservative estimate, that is over $1000 per aquisition. With that clients business model, that customer would not have brought profit for 10 more years as a loyal customer. Fortunately they had a few other platforms but that is crazy. The response I got from the VP was “We started our company with flyers so we just kept them”.
The mystery of the missing moula
When I was cutting my teeth as a consultant. I got a frantic call from a business owner one day.
“Google just stole $4000 from me and I need you to prove they stole from me”.
I went over to their office and discovered a brand new adwords campaign with a little under $4000 spend on a campaign for a product. I asked how many orders he got on that product and was shocked to discover only 3. Someone told him that this was a sure bet so he opened the account and just pushed a few random buttons.
After looking at the data, we quickly discovered that his problem was not fully with his CTR or ads, it was with his site. His average conversion to sale rate was .005% on all traffic. His site was horribly out of date and had the appearance of a scam.
The caper of the cooked CTR
One of our “gigs” (I have a secret yearning to be in a band) had us going over some strategy and ad placement for a company. We asked their CMO if they ever considered doing any form of online advertising. They not only were against it, we were treated like weirdos for suggesting such a terrible idea. After digging in a bit more, we discovered that they had previously ran a (bad) Facebook campaign and had lost a large amount of money. They were never touching online advertising again.
We finally grew a set of bullocks and put $100 of our own money into running a small adwords campaign. We had a great CTR and based on their site conversions, landed them a few customers. We took the data back to them and now adwords campaigns account for 60% of their customer acquisition.
When you look as your advertising as a part of your sales funnel, you realize that your ads a just a part of a larger system and if your budget is not spent wisely, you can hemorrhage money. All of these circumstances could have been solved by having a good grasp on how your marketing efforts directly effect your profits and returns. With a little more attention to detail, testing and finesse, you can create a great marketing strategy.
A recent article in Fast Company highlighted a business that started to see increased revenue after they left Facebook advertising. While I generally have a healthy dislike of Facebook (inquire within for more details), this article brings out questions that companies need to ask themselves. Some people were shocked and others were negative about the move but it brought out a really good point about a how effectively people use their money.
Are you being as effective as possible with the platforms you are using? If your answer is “I dont know” then you need to take a step back and get a good grasp on how you are performing.
If you’re not performing as well as you want, is it because of your strategy on that platform or is it simply a bad platform for you? Be honest with your profits and your profits will be honest with you