Everybody talks about how fantastic SEO is, but ads are probably the best traffic source for ecommerce stores. SEO relies on a lot of algorithms, and it takes time to work, but ads are something that will begin to work quickly and are much easier to scale. The money will quickly reach your merchant account and you will have a bigger budget to quickly spend to grow your business.
However, running ads has become very competitive now. As every ecommerce store is running them these days. It’s becoming harder to scale than ever. This is why we have put this simple guide on how to scale your ecommerce ad strategy…
Test out
In order to scale ads, you need to have well-working creatives and a funnel for the rest of your ecommerce site in place. If you already have this in place, you can skip to the scale section part of this article. If not, please continue reading the rest of the article. Even if you have well-running creatives and funnels, I recommend that you read the rest, as you might learn some new ad management techniques you didn’t hear about before.
A successful ad has a click-through rate between .75 and 1%. Some outliers perform even better. Along with achieving this CTR, they also generate a positive ROAS and have a low CPA. If your ads have a low CTR, high CPA, and the ROAS is low, then you need to go through the testing phase to experiment and come up with a winning ad that works.
For this, I recommend that you come up with 10 to 20 versions of your ad. You should try a combination of images and videos. You can then come up with copy for the ads. Again, create 10 to 20 versions. You can then match the images and videos with the text and launch the ads.
I recommend that you categorize the ads into different ad sets and also experiment with your targeting. You want to target mobile vs desktop users, interests, locations, and other data sets. This can seem very complicated, but ad platforms have a lot of automation features that make it easy for you. There are also several third-party tools that can make it significantly easier.
While testing, you can just set each ad at $5 to $10 per day and run them for a week. During this week, don’t touch the ads. Even if an ad is tanking, don’t meddle with it. Your goal is to only get the data here.
Once you run the ads for a week, you can go and take a look at the data. Usually, only about 10 to 20% of the ads will succeed. It is very similar to the Pareto principle.
Confirm test
Ads are all about data. Ad platforms are actually machine learning platforms, and your role is to feed these platforms with the best data so that they can help you reach the ideal customers. When you run those experiments, you get back the data, and then you feed this data back into the platform. This helps you reach better people.
When you run the ads for a week you will have plenty of data, mainly if you use a lot of versions of the creative like I mentioned above.
You can then take that 10 - 20 % of the winners and increase the budget by 20%. Don’t increase the budget drastically all of a sudden, as ad creatives need to be warmed up. Suddenly increasing the budget can have adverse effects not only on the ads, but also on your ad accounts. You can increase the budget this way every 3 to 7 days for a month.
Doing this for a month will help confirm that the ads are working. Your goal is to make sure that the best-performing ads generate .75 to 1% CTR while generating a good ROAS.
Note: While you confirm the test, you should pause the ads that are failing. What’s the point of wasting your budget on those ads?
Improve funnel
Once you have a winning ad, it is time to improve the funnel. You can do this by looking at metrics like the squeeze page conversion rate, landing page conversion rate, email open rates, email CTR, cart abandonment rate, etc. If you find that any of the metrics are below industry standards, you can make modifications till the conversions go up.
You could also add things like offer bumps, upsells, and cross-sells to increase conversions further.
Having a good funnel, along with the ad, will ensure that you won’t waste any budget while you scale.
Scale
For scaling, you need to create multiple versions of the same ad, distribute the budget among them, and then increase the budget on each one. This way, you won’t put all your eggs in one basket.
Another good scaling strategy is to take advantage of other networks. This is commonly known as the everywhere strategy. Distributing your ads on more networks with a smaller budget is much better than just relying on one. The best way to do this is to start with Facebook and Google ads and then move on to other platforms like TikTok, YouTube, Bing, and Pinterest.
This is because it is much easier to get the creative right on Facebook and Google than the other platforms. Also, these two networks have massive audiences.
As you launch these ads constantly monitor the data to make sure you continue to generate the same or better ROAS. Sometimes algorithms change, or the audience interests change, and the ad that worked before won’t work anymore or won’t work as well as it did.
Constantly test ads and funnel
Another vital point to keep in mind is to constantly test out new ads. Even a .02% lift in conversions will matter if your ad budget is massive. This is why you should create new images, videos, and copy based on the data you get back from your current ads and then experiment with them. You can use the testing strategy I shared above, where you launch multiple ads with a $ 5-a-day budget and then pick the winners and confirm the test.
If they continue to do well, you can scale their budget as well. It is much better to have multiple creatives that do well instead of one or two. This is especially necessary for ad networks like Facebook, where ad fatigue is a common problem.