BE SMART WITH ADVERTISING: 3 TIPS TO GUARANTEE YOUR RETURN ON AD SPEND
Everybody loves the possible benefits of advertising but not the high cost and lack of guaranteed outcomes associated with it. Today’s standard advertising pricing model is the same: put money in, gather impressions, clicks, and engagements, and pray for sales.
Because it’s been the standard for so long, most marketers have become complacent with this model –– at our company, Klickly, we see a ton of good marketers with the same issue: you’re resigned that there is rarely a guarantee for actual revenue (or even good performance), let alone assurance that your return on ad spend (ROAS) will pay off. You’ve settled for paying money ‘up front,’ hoping the ads will get sales.
The top complaints we hear every day about advertising are as follows:
1. “Wasted a ton of money on advertising, got a bunch of clicks, but only a few sales.”
2. “Ads worked great, but my CPC is through the roof!
3. “My ads get people to my site, but the drop-off rate is crazy high!”
After listening to these gripes for over a year, we at Klickly set out on the giant task of creating an advertising platform that addressed ALL of the 3 issues above. So, obviously we’re hugely biased, but we wanted to tell you about why we think it’s so important to demand accountable advertising and how to make sure you get the most out of your ad spend. (If you’re feeling generous, we’d also love to get your take on the platform we built, called Klickly.)
We wanted to create a platform that has an incentive to work as hard as you for sales. Without having to pay up front for advertising, the money saved could be better spent elsewhere on your business. Or could have gone to your beach house fund ;).
If you’re tired of paying out on the traditional models above (we don’t blame you, everyone does it), take a look at these 3 ways you can take back control of your ads:
1. Only pay for ads that are performance-based (i.e. only pay when ads drive sales)
2. Find an advertising platform that can guarantee or “lock-in” your ROAS (return on ad spend)
3. Make your ad creative as efficient as possible
1. True performance-based advertising (hint: it’s not CPC)
The most common form of this payment model is affiliate marketing. Affiliate sites can be desirable options for a few reasons:
1. They can increase your revenue with little to no work
2. They can moderately increase your sales within days of going live
3. They have easy access to very specific niches
However, affiliate marketing has a natural limit: once affiliates reach their core audience, it’s hard to expand from there. That’s because affiliates do not actively advertise your products to best-match consumers across millions of sites; they’re simply showing your products on one site.
We believe an advertising platform should have all the qualities of the performance-based model brands love –– you only pay when we drive sales –– BUT while actively advertising your products on over 25 million sites (think ESPN, Vogue, Instyle, etc). And that’s what we’ve aimed to do with Klickly –– as a smart marketer you can grow your brand’s audience in a risk-free way, and pay only when you drive sales.
2. Demand some sort of guarantee on your ROAS
This is arguably the trickiest part of advertising. As stated earlier, when you’re paying on CPM, CPC, etc., you won’t have guarantees on what returns or revenue you get.
Traditionally, the only folks who can help you advertise for guaranteed results are performance marketing agencies. These are agencies that operate your campaigns and are sometimes paid based on a percentage of sales they drive.
These agencies take on a lot of risk with this model. So they only accept a few fast-trending brands (usually selling only 1 niche product with high margin). They also usually require brands to agree to stringent locked-in terms, without the ability to easily renegotiate changes. You may be required to work with the agency for 6 – 12 months and split the revenues at a set 30% or higher.
After studying this model, we essentially tried to build Klickly around the good parts of performance marketing agency. But with a key difference: Klickly lets you choose your terms and lock-in your returns. You can also A/B test different commission settings by running more than one campaign at no extra charge.
We’ve started to see that, since you have full control over your commission, smart marketers will use it to lock in your ROAS
– If you want a guaranteed 3x ROAS (or a 3:1 return), set a 33% commission.
– If you want a guaranteed 5x ROAS (or a 5:1 return), set a 20% commission.
3. Use efficient, cutting-edge ads
Creating effective ads that accurately showcase your products as well as get consumers’ attention is very difficult. People today have become relatively banner blind to word-heavy advertisements.
We, as a society, are bombarded with promotions. And even if consumers click on an ad, trying to navigate to the website (often on mobile) to purchase is a pain-in-the-you-know-what.
For a growing brand, this makes it really hard to scale your business.
We wanted to take a radically different approach to ad creative … We created the first-ever buyable ads, where consumers can buy your products directly within the ads.
This lets the consumer purchase on the spot, without ever leaving the page they’re reading. Now, your ads are basically functioning as millions of little “mini-sites” around the web, and customers can purchase faster and easier than ever before.
As an interesting fact, $5 trillion (yes, with a “t” 😉 of goods were abandoned in shopping carts in 2017 (eMarketer, Dec 2017). With Klickly ads, consumers don’t get the chance to abandon the cart, since they can impulse-purchase directly in the ad.
There are more online consumers today than in the entire history of the internet (read: a huge opportunity)! Unfortunately, we feel like a number of advertising options aren’t properly aligned with brands; platforms aren’t beholden to actually deliver anything to the folks doing the ad buying. Using technology (some machine-learning and cool buyable ads), we’re trying to change this –– by asking the hard questions and giving suggestions, we’re hoping we alter how brands think about buying advertising.
Hope you keep these 3 tips in mind when buying your future advertising. And if you ever do want to try a platform working really hard to innovate on the old traditional models in the industry … it takes 5 minutes no upfront spend to set up and we’d love to hear your thoughts on Klickly.