Transcript from the "Ad Campaigns" Lesson
>> So let's move on from sort of the organic side of SEO and talk a little bit about Ads. So Ads have gotten better and better and better over time. This is a huge business, online Ads. And the reason it's a huge business is because by and large, it's pretty effective when used in certain ways.
[00:00:24] The thing that makes it most effective is targeting for Ads is getting better and better and better. So when I was working at Yahoo, we would be able to kind of take all of this audience that was coming to like Yahoo related properties. And we could allow people to market to a 25 to 35 year old male or female in the Minneapolis metro area.
[00:00:49] Who's likely to have a college education and own a Mercedes Benz. Like we could get that specific and come up with 40,000 people, that statistically meet that criteria. They have some likelihood of meeting that criteria. And this has to do with all of the data that is used in your free apps like Gmail and Yahoo mail in all of your searches.
[00:01:16] All of that is sort of anonymously aggregated over time, right? So, it's not associated with your name, it's associated with a unique ID. And all of these companies are very careful to keep a wall between the personal data, and sort of the advertising, tracking stuff, right? So even as like someone that could deploy a version of Yahoo's ad platform on my own wholesale, I could never get access to the personal data.
[00:01:46] If there was just, I would need like a hand scan access and to be like inside the data center. Just the security there is crazy, for good reason to keep customers safe. But more and more targeting is really, really powerful in terms of interests, in terms of demographic, in terms of location.
[00:02:07] So, for example, when I have public workshops, in person workshops, I want it to be near an international airport. In a place where there is a pretty vibrant tech community, where English is a reasonably prominent language there. And I can really target my advertising dollars, in little tiny islands all over the world.
[00:02:32] Skip over countries where maybe the average income of a developer, is a little bit lower than what I would be asking for a ticket price. It makes it not sort of a feasible cost for them to pay, and so on. So this is getting better and better and better year over year.
[00:02:53] Advertising it's reasonably cost effective, it depends what your business is, But if you can get your keywords right. There's sort of a, it's one of these things where there's an expert can do much better than someone who puts no effort into it. Meaning, if you do your research and you find your keywords, and we go and look for those longtail keyword phrases.
[00:03:16] You will be able to deploy your advertising dollars, twice as well as you would if you just tried to have asset. You can deploy a marketing budget when it matters. So if you're gearing up for an acquisition, or maybe you have a holiday sale and you wanna just drive a whole bunch of traffic.
[00:03:34] Because it's important to get a certain number of customers at a particular time. Or if you have an in person event, if you're running a trade show and you wanna like. Get out there and advertising dollars leading up to that matter a lot and the day after we can just not advertise at all.
[00:03:50] So, it's a spigot that you can turn on and off, really easily compared to. If you bought a billboard they don't wanna put your billboard up for three days and then take it down. No other business works that way where you can sort of, have that really fast on off switch that's totally up to you.
[00:04:09] You get a really short feedback loop. So when we think about advertising, oftentimes you'll have a campaign. Which is that is your overall effort towards this goal of bringing in new customers. And within the campaign you'll have line items. And line items are usually picking out particular segments of people, they might be particular sets of keywords.
[00:05:18] And you're gonna get a signal, one way or the other, it'll wash out and then you've spent $50 to get your answer. Or you'll figure out that hey, this is really doing well, let's put some more budget in here. And nowhere else, do I see a short feedback loop like this.
[00:05:35] Not even Google analytics where you're writing, a nice blog post and then seeing who hits it. Then you have to wait for all the readers to find your link, you have to wait for that to spread. That might be on the scale of a month that it takes, for you to look at your traffic and to see like.
[00:05:51] All right, this is really resonating with this new group, let's act on that. You have control over risk, which in the next slide when we talk about pricing, we can talk about. How they're different options for paying for Ads, ranging from taking on all the risk that someone who sees your message, sees your business.
[00:06:14] You have taken on all the risk that they might not act, versus asking the advertising platform to take on all the risk. And you only pay when someone acts. And I'd like to run this out by saying, despite the fact that, it is cost effective most of the time, that the short feedback loop exists.
[00:06:36] You have to really stay on it, and this doesn't work for every business, right? And in fact, I have turned my advertising budget down quite a bit, because I found that for in person trainings, right? Which is my business, going to conferences and meeting people face to face there.
[00:06:56] That is by large the best way for me to get new customers, right? Online Ads just people don't search and they don't engage with a trainer by searching for them online. So I would say if it turns out to not work, and maybe you've tried two or three different approaches.
[00:07:15] Don't keep pumping money into this blindly, assuming that this is a part of every business strategy. For some businesses, it's just not. So let's look at the way Ad campaigns are typically priced. This is ranging from taking on all of the risks that someone might not convert and having the cheapest Ads.
[00:07:38] Ranging towards only paying for guaranteed conversion for the most expensive Ads. So we begin with CPM pricing. So this is cost per 1000 impressions, and ad platforms are happy to sell as much of this as you're willing to buy, right? Cuz this is just like if they think that this is someone that matches the criteria you've specified.
[00:08:03] They'll put your ad on the screen, they'll actually hook into the some of the browser functions that monitor whether that image actually gets painted on the screen. So as you scroll the page up, this actually makes sure that your ad was in the viewport, and is counted as an impression.
[00:08:19] Oftentimes, it has to get like fully into the viewport above the fold. And you get 1000 of those for a fixed amount of money, right? And this can also be done by bidding, where you know there's gonna when people that match your criteria, their browsing may need to fill in an ad.
[00:08:37] There will be a little mini bidding war, to see who gets it and then after 10 milliseconds, someone's won the bidding war and your ad gets served. So but again, you could show your Ads to 100,000 people and none of them could click, and you'll still get built.
[00:08:55] So if you wanna offset some of that risk, pay a little more for a little more certainty. You would go to cost per click, and here you're paying for someone to actually follow that ad, click on it and land on your site, right? And this is where, it's on you with to have a great landing page, that has a clear call to action.
[00:09:17] And it's really, totally clear how you should proceed from there on because this is sort of your first signal of intent, right? They've clicked on it, they're interested, go for it. You have to be careful with cost per click, because the ad platforms goal is to make as much money as they can.
[00:09:38] And if it turns out that no one's clicking on your ad, at the end of the month. You'll have said like, I'm willing to spend $1,000 on this ad and they'll say, very good, sir. You ended up spending $3 of your advertising budget. We showed it to a bunch of people, no one bit on the hook.
[00:09:56] And so we decided to show other people's Ads, so that we could make money off of their clicks. So, bidding too low on cost per click, will result in not all of your advertising budget being deployed. So this is the kind of thing that you wanna tune properly and typically, it's almost like this price is right rules or something?
[00:10:22] No, it's not prices right rule? So you ended up paying it's eBay rules, that's it. So you can bid $10, maximum bid of $10 for cost per click. And more often than not, the policy is like you will pay one cent more than the person you barely edged out.
[00:10:38] So if your competitor was only willing to pay $2, you'll pay 201 for that click. So you don't end up like your maximum bid is not what you're paying on a per click basis, but it's where you're out of the running. You say like that's, it's too rich for my blood.
[00:10:53] So going one step deeper, like let's say, okay, well, I wanna offset even more risk. People are clicking, they're not converting. They're not filling in my sign up form. So then we'd have what's called cost per action. Some people call this cost per conversion, don't be confused, CPC always means cost per click.
[00:11:15] And the idea here, this is more common when you're dealing with a referral kind of relationship. So, if there's a business that sort of upstream from yours, maybe like Mark, would have a relationship with a coding bootcamp. Where like after they complete the coding bootcamp, they get like a coupon code and a signup form for front end masters.
[00:11:38] And that is a directed path where it's like highly qualified people that are likely to convert. What would happen is Mark, would put what's called a pixel at the end of some signup flow. And loading that pixel represents having reached the end of the signup flow. This is literally a one pixel by one pixel transparent image.
[00:12:00] And it just serves to be proof that someone reached that location, and they had this cookie in their browser. And that constitutes them having gone from one site through the other flow and reaching the end, and that would be a conversion. So you'll pay pretty dearly for this.
[00:12:20] Definitely, on the order of $15 to $100, something like this. But the idea is now you've got someone that's actually filled something in, they're on your mailing list. And you would look at this, this would be a big part of your customer acquisition cost in business terms, right?
[00:12:39] There's a variant of this that exists in Ad platforms, called cost per install that is unique to mobile apps. And this is where you're trying to get someone to install this game and whatnot. And when the install completes, there's a little callback URL, you can place in the App Store link.
[00:12:56] Which will kind of serve the same purpose of the pixel, in that it'll notify the party who is paying for this. That the install has completed and you have one more install and we're billing you for one more