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How To Advertise Your Business Profitably: 15 Critical Elements You Must Fix To Increase ROI

How To Advertise Your Business Profitably

Over the past three years, we’ve been working with almost 400 businesses in 19 different countries and in many different industries. 

Some of them failed again and again, and many of them succeeded substantially.

In this article, I’ll reveal 15 critical elements I’ve seen in every business, regardless of what industry they were in, whether health, SaaS or hardware, consultancies or restaurants, that made them succeed OR fail with their ads.

This article is about how you can make every single advertising dollar count more. So that you will stop overpaying for unprofitable ads for good, but rather increase your ROI!

Let’s get started.

Getting The Basics Right

It’s very important that you go through the basic questions in this section. I call this the “The Advertising Hygiene Test” because if you pass this test, you’ll make your advertising much more profitable.

Element #1: Do you have Product/Market-Fit?

This question applies first and foremost to new startups that either have not taken the product to market yet, or just recently have done a product launch for the first time ever. If you run an established business that are already getting customers, then you can skip to the next question..

If you’re a startup, then read this… 

Marc Andreessen, co-founder and general partner at the venture capital firm Andreessen Horowitz, defines product/market fit like this:

“The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can.”

Marc Andreessen

If you’re not there yet, then you should advertise moderately to slowly acquire customers, listen to the customer feedback, get back to the drawing board and continue to build. Repeat.

Element #2: Who is your customer?

Your customers don’t care about you. They care about themselves. They’re going to care about you only when they know how much you care about them. Understand your customers at a deep level.

Identify your customers’ common traits and answer the following questions;

Background
Job and title
Industry
Family
Demographics
Gender
Age
Income
Location
Psychographics:
Favorite movies and TV shows?
Where do they go to get information?
Potential search phrases or keywords.
Top 3 challenges and/or problems.
Top 3 goals and desires.
Resources:
https://answerthepublic.com/
https://www.quora.com/
Customer Avatar Sheet [Copy This Google Docs]

Add the insights in the Customer Avatar Sheet listed in “Resources” above.

Element #3: Do you have a compelling offer?

Without a great offer that neither gives value nor solves the customers’ bleeding neck (pain point), it’s going to be hard to do advertising. This is why your offer is the second most important element of your advertising strategy. The better the offer, the better the advertising performance.

Sometimes when a product or service just isn’t selling, the problem isn’t with the product itself, but your offer. You need to frame your product as part of an irresistible offer. 

Here’s how to position your product as an irresistible offer. Try to include some of these elements on your landing page or in your material:

  • Write down the name of your product (e.g. not “Adline” but “Advertising & Analytics Platform).
  • State your original price.
  • Add payment terms (e.g. three monthly payments, 30% discount when buying annual license). This will make it easier to buy.
  • Add a discount (limited-time 30% discount). This creates urgency.
  • Create a bonus or a premium (Buy the Growth License & Get A Free Advertising Strategy As A Bonus).
  • Eliminate risk by offering a money-back guarantee or a return policy.

Here’s an example from a software company:

  • PRODUCT: Easy-To-Use Invoicing Software
  • PAYMENT TERMS: Pay Yearly License For 30% Discount
  • BONUS: Get Time Tracking Software As A Bonus If You Register Today!
  • RISK REVERSAL: 30-Day Free Trial

Element #4: Does your unit economics make sense?

Unit economics refers to a company’s revenues and costs related to an individual unit of production.

Unit economics – in marketing and advertising – is used to closely monitor and track your marketing efforts relative to your business model.

Important units in marketing are CAC, LTV and ROI.

Here’s what each of them mean;

  • CAC stands for Customer Acquisition Cost.
  • LTV stands for Lifetime Value of a customer.
  • ROI stands for Return on Investment.

When you understand the fundamentals of CAC, LTV, and ROI, and the metrics that are moving these individual units, then you know how to manage a million dollar ad budget and grow your business profitably.

If your Lifetime Value per customer (i.e. total revenue they bring in over their lifetime) exceeds the cost of acquiring the customer, you can safely scale your advertising. A rule of thumb, is to aim for an LTV:CAC ratio of 3. Meaning, you earn $3 for every $1 dollar you spend.

Below is the high-level KPIs (in bold) you need to keep track of as well as the metrics that impacts them. It’s okey if you don’t have track of them all right now, but the point is to get started and get control of one metric after another;

  • Customer Acquisition Cost ($CAC)
    • Total Sales & Marketing Costs divided by New Customers Acquired
  • Click Through Rate (CTR)
  • Ad Clicks
  • Website Visitors
  • Website Conversion Rate
  • New Customers
  • Lifetime Value ($LTV)
    • 1) Total Net Revenue divided by New Customers in the same period = Average Revenue Per User (ARPU).
    • 2) ARPU * Lifetime months = LTV.
  • Lifetime Months is calculated using the Churn %.

Example:

  • CAC = $100
  • LTV = $300
  • LTV:CAC Ratio = 3 or 300% ROI

Free Resource: Monte-Carlo Marketing Simulation Model [Copy Sheet]

Element #5: Do you sell something that is slightly shady?

If your business sell something that is even slightly shady, illegal, scammy or dangerous, or in anyway touches the “gray zone” of business, you’ll find it very hard and difficult to advertise on Google and Facebook. Your ads will frequently become disapproved and your ad account might become banned in the near future.

Both the Google Ad Policy and the Facebook Ad Policy is very strict, and their machine-learning algorithms will often even trigger on words and phrases that you just mention unintentionally in your ad copy. This is just to emphasize the importance of paying attention to the details.

Certain industries have their own policies. As a business owner, you should at least get a high-level overview of their policies because it might impact your advertising performance negatively if you don’t comply with it 100%.

Now, when we have the basics right, we can start focusing on the advertising part.

Strategies For Targeting The Right Audience

When it comes to reaching the right audience, we’re going to be focusing on Facebook and Google because those are the platforms that still account for over 80% of all internet traffic.

First off, Facebook and Google are two very different channels that require different inputs to make it work successfully.

Element #6: Profitable Google Ads Targeting

Google Ads consists of three different channels;

  1. Google Search (which is primarily based on keywords).
  2. Google Display Network (which is based on contextual targeting, interest groups and remarketing audiences).
    1. Contextual targeting allows you to be visible on relevant websites by targeting keywords or phrases they might mention in news articles and blog posts etc.
  3. Youtube Ads (which is based on keyword topics and remarketing audiences).

Google Search is the most commonly used channels, so we’ll focus on that one here.

People that are going to Google have a higher buying intent because they’re actively searching for a solution they need, or a question they need answered now.

In any given market, there are always going to be prospects that are ready to buy your product or service right NOW. Google Search is the channel where you easily can reach this part of the market. Just remember, though, that this is also the most competitive advertising environment.

The more competition there is for a certain keyword, the higher the CPC (Cost Per Click) will be and the more expensive it is to advertise.

Fortunately, there are several ways to tackle competition on Google;

By targeting long-tail keywords instead of broad keywords, you’ll reach a cheaper and even more buying-ready audience. Two flies in one stone.

Broad keywords are more general phrases such as “restaurant london”.

Long-tail keywords are specific phrases like “italian pizza restaurant london“, and they usually generate a lot more conversions than “restaurant london” because it is more specific.

The majority of the competitors in this niche are going to bid for keywords like “restaurant london”. This is a red ocean, and it’s a lot more expensive because the people that are searching for these general keywords don’t quite know what they want.

The Money Is In The Long-Tails

On the other hand, when you advertise for a specific keyword such as “italian pizza restaurant london”, and that is exactly what you offer, the conversion rates will increase dramatically because of the relevancy.

In addition, you’ll find that there are less competition and more profitable to advertise because of the specificity.

In other words, and here’s the big secret; while your competitors waste their budgets on broader, expensive keywords that lead to few conversions, you will make your ads a lot more profitable by advertising for more specific, cheaper keywords that have a substantially higher conversion rate.

Here’s a chart that nicely summarizes the principle of “long-tail keywords”;


Tools & Takeaways:

1. Add a minimum of 4-10 specific, long-tail keywords relevant to your offer.
2. Use broader keywords only if you serve a very small niche with few competitors.
3. Use broader keywords only if your location is limited with few competitors.
4. Your messaging, ads and landing pages should match the keywords.
5. Keyword Research Tool: AnswerThePublic.com.
6. Adline Target Groups Tool. Adline.com.

Element #7: Profitable Facebook Ads Targeting

You’re not only competing against competitiors on Facebook/Instagram, but also against every single user that frequently post content on Facebook and Instagram.

That is why it is important to create relevant ads that “natively” fit into the channel with entertaining, educational or informative content. 

With a limited ad budget you can’t afford irrelevance. 

Relevant targeting on Facebook starts with creating relevant and useful ad content.

The Facebook algorithm will place your ads in an environment where it thinks it’s going to succeed. That’s why the goal with Facebook targeting is to ensure that your ads is placed in the best environment as possible.

The different targeting methods you can use on Facebook are; Lookalike audiences, custom audiences, interest groups and Facebook pages.

If you’re just starting out, and haven’t made Facebook that successful yet, I’d recommend to start with interests and Facebook Pages.

Let’s take a look at how you can use this targeting method profitably.

Start Targeting Facebook “Interest Groups” & “Page Likes” (Go deeper)

Facebook uses many data points to assign interests such as what Pages users like, the content they engage with (like and comment) both on Facebook and off the platform. Off the platform because the Facebook tracking pixel is embedded on millions of websites.

You’ll get assigned an interest group because you followed a specific Facebook page. 

You might also get tagged with an interest when you comment on your friend’s post about a certain topic. As you can see, interest groups contain bigger audiences in general because it combines a lot of activity.

Let’s use a tennis brand as an example.

Mike recently launched an online store selling professional Tennis gear.

You might think it would be a good idea to target the interest group “Tennis”, because you would then reach everyone interested in tennis. Smart, right? In reality, topics like these are very often too broad because you’ll reach a lot of people who actually don’t play tennis at all.

What you should do instead is targeting people that are liking different Facebook Pages. This way, you’ll reach people that are actually “into” tennis.

Mike goes on to target the Facebook Page, “Roger Federer” instead. Roger is one of the best tennis players in the world and has a following of 18M, at the time of writing.

Again, that page might actually be a bit too big. Since Roger is one of the best players in the world, he is also world-famous and a lot of non-players is following him. So by advertising to Roger Federer’s audience, you will spend a lot of money advertising to people that will never actually buy tennis gear.

Therefore, we want to go even deeper. More specific.

Andy Murray, on the other hand, is also a famous tennis player but with only 3.4M followers on Facebook.

The people following Andy Murray are more likely to play tennis themselves. He has a smaller and more relevant audience. Hence, this would be a very good audience to target for Mike’s tennis brand.

Tools & Takeaways:

  • Only add very specific interest groups.
  • Find relevant Facebook Pages you think your audience follows/likes. Depending on your product or service, the computer brand “Apple” might have a too big audience, whereas “IBM” might be more niche-specific.

Writing Effective Ad Copy

Your target audience is now on point, but what about your ad copy?

The best targeting in the world won’t cut through the noise unless you have compelling copy that convinces your audience to click. Appealing to your audience’s pain point and self-interest combined with a strong CTA will go a long way in increasing your click-through rate.

Element #8: The Basic Ad Structure

Ad copy is the text used in your ad, whether it stands alone or accompanies a creative, whose main objective is to prompt the reader to take action. It has the following components:

  1. A headline
  2. The body of the ad (usually the description field)
  3. A CTA

Headline: The headline’s role is to draw the attention of your audience. They may be googling a specific term, or casually scrolling through their social media feed. If your ad headline is compelling enough, they’ll stop what they’re doing and read your ad. The headline is no doubt the single most important element of your ad. If the headline isn’t compelling enough, your prospect will never read the body copy. 

Body: The objective with the body copy is to lead the customer through the description, line by line until the prospect clicks on the ad. The main body of the ad, depending on the ad channel, might state the benefits of your product or service, and include a testimonial from a happy customer.

CTA: After that, a persuasive CTA can seal the deal. CTA is short for “call to action” and prompts the reader to take action by using words like “buy”, “get started”, “learn more”, etc.

Businesses that don’t put enough effort into writing a compelling ad copy will fail with their advertising at this stage. 

If you haven’t written an ad before, I’ll make it easier for you by featuring my favorite copywriting formula. I urge you to make it a “muscle memory”. If you know your audience’s bleeding neck, your selling points and the benefits with your product or service, writing the ad copy will be a breeze with the formula later in this chapter.

We’ll start with the headline because it is the single most important element of your ad.

Element #9: Effective Headline Formulas

Because your body copy won’t be read without a good headline, we’ll start with the headline. The most important element of your ad.

Legendary copywriter, David Ogilvy, said this about the importance of writing good advertising headlines;

– On the average, five times as many people read the headline as read the body copy. When you have written your headline, you have spent eighty cents out of your dollar.

David Ogilvy

The headline has the power to make or break your ad. A good headline appeals to your prospects’ self-interest, it triggers curiosity, introduces something new, and suggests something quick and easy.

In the book “Tested Advertising Methods”, which I highly recommend any business owner to read, the author & copywriter John Caples, lists 9 common desires we as human beings trigger on.

Here are the common appeals;

  • Make more money
  • Save money
  • Retirement security
  • Better health now
  • Advance in profession or trade
  • Enjoyment
  • Gain more leisure
  • Comfort
  • Freedom from worry

If you don’t know the best appeal for your product or service, you need to start out by selecting multiple appeals and test them in order to find out what works best for you, and then cash in on the appeals that works the best for your business.

After you’ve written your headlines, see if your headline(s) passes the following criteria;

  1. Does the headline contain curiosity?
  2. Does the headline come with new?
  3. Does the headline appeal to the self-interest?
  4. Is it cheerful / positive?
  5. Does it suggest something quick and easy?

BONUS:

There’s no need to reinvent the wheel when it comes to creating headlines. I’ve personally compiled a list of John Caples best-performing headline formulas of all times in a swipe file sheet. You can access it here.

What is a swipe file?

– “A swipe file is a collection of tested and proven advertising and sales letters and headlines. Keeping a swipe file is a common practice used by advertising copywriters and marketers as a reference of ideas for headlines, ad copies, methods and strategies.”

Element #10: The Powerful PAS Formula (Problem, Agitate, Solve)

The famous PAS formula is short for: Pain, Agitate, Solve. It’s effective because it addresses the reader’s pain point immediately, then makes it unbearable by rubbing salt on the wound, and finally – offers a solution (… your product or service.)

Say you’re advertising an anatomic pillow. You may start with a question you know your audience is struggling with:

Tired of waking up with that annoying neck pain every morning?

Chances are, your audience will start nodding immediately as they keep reading the ad.

Then you continue:

You never get quality sleep and your job performance has started to suffer – you can’t focus and you feel grumpy all day long.

This is the “agitate” part, where you “rub in the salt”. After that you present your anatomic pillow as the ideal solution to your audience’s pain.

Simple as that! But let’s see another example:

Struggling to manage your time efficiently?

You’re busy all the time, yet it seems like you can’t get anything done. You’re panicking for the third time in two hours because you’ve realized there’s another deadline you won’t meet. You feel like giving up and just going to sleep.

We get it – we’ve all been there. But what if we told you there’s a simple, all-in-one solution?

This time management tool enables you to create to-do lists, schedule meetings, and track projects in a streamlined and efficient way.

Here, you first ask a question that resonates with your reader’s pain point. Then you describe exactly how they feel as it’ll show them you understand them well. You press the pain point a bit more just before you offer your solution.

Element #11: Easy Ways To Make Attention-Grabbing Creatives

An eye-catching creative in combination with a compelling headline and body copy will make your prospect’s grab their wallets.

So, how do you make a stunning creative that stands out in a noisy news feed?

Here’s the truth; It doesn’t have to be “stunning”.

Contrary to popular belief, you don’t need a fancy, professional photoshoot or video promotion to create an eye-catching creative.

The images and the videos that actually are attention-grabbing are the ones that fit into the channel’s look and feel. Content that is genuine and original, entertaining and educational.

In the following screenshot is an experiment we’ve done several times. We tested the exact same ad copy with three different images. The image to the left is taken with an iPhone without any filter, and the two others with professional camera and editing. The iPhone picture was 1,000% better than the others!

Whenever you enter a new channel, whether it is TikTok, Snapchat or Twitter, you need to create ads that fit into the look and feel. Not only visually, but also content-wise.

For instance, TikTok can work well if you create engaging or tutorial/educational-like videoes.

Here’s a few creatives that works;

  • Real-life pictures and video shots of your product or service in action.
  • Screenrecording of your offering using Loom.com or any other software.
  • Infographics that tell a story or reveal interesting facts.
  • Caste study images or customer testimonials.

Tools & Takeaways:

  • At all cost – Avoid using stock photos in ads. People will think it’s an ad, and it will decrease CTR and increase your Cost Per Click.
  • Studies have shown that the less your ad looks like an ad, the more clicks and attention you will generate.
  • Screenrecording with Loom.com.
  • Design infographics/creatives with Canva.com.
  • Inspiration from Adline Template Library.

Element #12: The Optimal Multichannel Campaign

Time and time again we see businesses creating one, or at best, two different ads in a campaign. Both Facebook, Google and Adline have algorithms that need enough content to make the optimization effective. The more ad variants, the more likely you are to identify the winning campaigns and the winning ads.

When you first start out, create two different campaigns to get the most out of your advertising. Here’s what I would do if I were creating my first campaign: 

1. Set up a cold campaign that targets your main keywords and interest groups/pages.

  • Create 2-4 FB/IG Ads.
    • Test multiple creatives with the same ad copy, or vice versa.
    • This way, you’ll know what works.
  • Create 1 Google Responsive Search Ad.
    • A responsive search ad contains multiple headlines and descriptions. Write a minimum of 4 different headlines and descriptions.
    • Google will then automatically test the different combinations.
  • Select 5-10 long-tail keywords.
  • Select a couple of relevant interest groups or FB pages.
  • Choose a sufficient daily budget.
    • A sufficient, multichannel testing budget is min. $20/day.
  • Let the campaign run for a minimum of 14 days (testing period).

Screenshot from Adline: 1 Responsive Search, 4 FB Ads (different images, same copy). 

2. Set up a remarketing campaign that targets all your website visitors.

Would you ask a person to marry you on your very first date? I hope not – the anwer will most likely disappoint you… You need to nurture the relationship first.

Same applies in business; know, like and trust are often the driving forces behind a purchase.

It’s not common to purchase or register on the very first visit. That is why, you need to follow up your customers with remarketing ads and be visible on a continous basis across not only one channel, but multiple channels.

  • Create 2-4 FB/IG Ads.
  • Create 1 Google Responsive Display Ad.
    • A display ad is a banner ad that is placed on relevant websites and/or websites that your prospects visits. 
  • Target all website visitors.

Element #13: Apply Force Multiplication

Are you “omnipresent” in your market? Omnipresence is about having a strong presence wherever your customers are, across multiple channels. Also called, “omnichannel”.

When your customers go to Facebook, you’re there. When your customer’s go to Instagram and Google, you’re also there. Now they even see you on a popular news site like Business Insider. Basically, you’re everywhere.

It sounds expensive, but it isn’t. It’s quite simple, and it’s not only very effective, but it’s necessary for today’s competitive digital landscape.

Perry Marshall, legendary Marketing expert and author of 80/20 Sales & Marketing, calls this “Force Multiplication”.

Force Multiplication is about being in multiple channels at once; Google search, Facebook news feed, YouTube, retargeting etc. The number of channels you’re present in works as a “force multiplier” and will together give you a 10x better effect. Here’s why.

The term “force multiplication” comes from the 17th-18th century military theorist, Carl Von Clausewitz in his book On War…

To paraphrase Von Clausewitz, if I’ve got infantry and navy (fighting the battle on two fronts), and my enemy has infantry, navy, special forces, and air force (fighting on four fronts), then the enemy’s advantage is not 4:2, it’s 4² + 2² – He’s got a 12:1 advantage over me.

This is true in advertising too.

I.e. if you only have Google Search ads, it’s very difficult to attract and convince your audience in competitive markets. You most likely need to spend big amounts of cash to acquire customers in these markets, and that means a higher CAC.

In local markets, however, that are not very competitive, Google Search ads might be enough. 

But when you add remarketing ads on Facebook & Instagram as well as Google Responsive Ads and YouTube, suddenly you’re leveraging 90/10. Perry Marshall refer this to Force multiplication.

Now, you’re spending 90% of your ad budget on the 10% of the visitors that are most likely to convert to business. 

By using remarketing ads, you’re able to saturate even a tiny market because you’re “everywhere”. You have an omnipresent visibility across multiple channels. They Google your solution but don’t buy immediately, then they see your ads on Facebook and then Instagram until they actually buy from you.

You’ll experience that the conversion rate will increase. And when the conversion rate increase, you’ll get a lot more out of your existing ad budget.

If you only have $1,500 a month to spend on advertising, you should spend a minimum of $500 of it on remarketing ads. This way, you’ll retarget all the prospects coming from relevant Google search ads again and again until convert.

I’d do it like this; $1,000 to attract relevant prospects with buying intent, and $500 to stay “top of mind”.

Element #14: 11-Point Landing Page Checklist That Increases Conversion Rate

If you’ve nailed every element in this guide so far, but you’ve only got 4 out of these 11 landing page components covered, your advertising will most likely not be profitable. 

Here’s an 11-point landing page checklist that will increase your conversion rates;

  • 1. Primary Headline (USP focused).
  • 2. Subheadline (to back up your USP).
  • 3. Include a hero shot (primary image or creative).
  • 4. Include 3-4 clear bullet points focused on the benefits.
  • 5. Include customer testimonials (social proof).
  • 6. Include client logos (social proof).
  • 7. Do you have a clear Call-To-Action (CTA)?
  • 8. Do you have a CTA above-the-fold (near the top)?
  • 9. Is your landing page readable?
  • 10. Is it creating a sense of urgency? (urgency; limited spots etc.)
  • 11. Are you linking to Privacy Policy and Terms in the footer? FB and Google require these documents to run ads.

Element #15: Ad Metrics You Must Monitor, What They Mean & How To Improve Them

What should you do if your ads are not performing or not even driving any traffic to your website at all? Here’s where we need to start troubleshooting your campaign by methodically going through the following ad metrics.

  • Impressions (#): # of people who have seen your ad.
  • CTR (% Click-Through Rate):  # of people who saw your ad divided by the # of people who actually clicked your ad. 
  • Clicks (#): # of people who clicked your ad.
  • Conversion rate (%): # of people who clicked divided by the number of people who converted.
  • Conversions (#):

The objective is to find out where the bottleneck is. You start on the top by looking at the # of impressions and work your way down to clicks and conversions… 

1) Impressions: Generating few to no impressions?

  • If you have few to no impressions, there’s something wrong with the ad delivery. You should answer the following questions;
  • Has your ads been disapproved by FB or Google?
  • Is your ad budget over $10 dollars a day?
  • Check if you’ve added interest groups and keywords
  • Check if locations and demographics look good

2) CTR: Getting lots of impressions but no clicks?

  • There’s a high chance that your ad didn’t evoke any response from the audience you’re targeting.
  • If that is the case, you need to test new angles and new messages.
  • Chances are that the message/offer is not aligned with your target audience.
  • Recreate a campaign with new ads and test new messaging and new creatives.

3) Conversion Rate: Getting lots of clicks but no conversions?

  • If your ads are receiving many clicks, it’s a very positive signal of market interest!
  • But if these people are abandoning when they hit your landing page this means they are no longer interested.
  • This is probably due to a mismatch or crash between your ads and your landing page.
  • Make sure the messaging and the look/feel is consistent between your ads and your landing page and then test again, and again, and again until conversions start to drip in.
  • Last thing; Do not change anything until you’ve got 100 clicks to your site, anything less than that is too little.

Advertising is more science than it is art. Create and publish new tests and monitor the metrics and tweak until you get impressions, clicks, and conversions. Begin with impressions, then clicks and then conversions.

Summary

Great! If you’ve come this far, you’re already ahead of the majority of your competitors. Many business owners don’t take these things seriously. 

To make this, even more, easier for you, I’ve compiled this guide into a comprehensive PDF ebook which you can download here for free. It includes all the things you need to do to make your advertising successful!

If you’ve implemented just 3 of these elements, and you don’t see any increase in results after 30 days, I’ll personally give you a full-year starter subscription to Adline totally for free.