In this guest post, Partnerize’s VP customer success APAC, Alix Simpson (pictured below) offers some handy tips to better handle your media expenses…
When it comes to digital ad costs, Australia is consistently near the top of the chart. With the world’s fourth highest CPC, some of the world’s highest ad expenditures per digital user, and continued increases in overall spending expected in 2019, that unfortunate top ranking shows no sign of disappearing any time soon.
There are lots of reasons why. There are fewer Australians than there are Americans or Brits, and a shortage of high quality content in the market means advertisers bid up quality inventory. Plus Australians strongly rely on mobile devices, where ads are more expensive. So high costs are a fact of life. Fortunately, there are a number of strategies you can use to take more control of your ad costs, even while capitalising on the effectiveness and accountability of digital. Consider these approaches for your brand:
Get more aggressive with natural search (SEO)
In my experience, marketers have binary attitudes about SEO. They’ve either had great experience with it and love it, or spent a bundle on employees or agencies that got no results, and hate it. It you are an SEO lover, work with your team and industry to find out what could take your efforts to the next level. That might be getting more aggressive with content, or investment in new tech to improve your visibility.
If you don’t currently invest in SEO, reconsider. Don’t let a bad past experience convince you that SEO won’t work. Do a little digging to find good people or providers. Ask for recommendations from colleagues. After all, for commercial, product-oriented searches, more than a third of clicks go to natural results. There’s no reason not to try and get your fair share of that big a pool.
Create CPA deals with mainstream media companies
The Australian Competition and Consumer Commission’s 2018 Report on digital advertising showed that 68 cents of every digital ad dollar went to just two companies, with all other media outlets competing for the remaining third. That squeeze is making many “mainstream” media companies more receptive to buying models like Cost Per Acquisition (CPA) – something many of them would have turned down flat just a few years ago.
By engaging these companies as partners and getting them to share the risk, advertisers can better control their costs, ensuring that they generate revenue from media before they have to pay for it.
Rebalance Your Investment in Customer Acquisition
Lots of companies “overspend” on customer acquisition when it would be more effective and efficient for them to focus resources and attention on driving incremental purchases from existing customers. While most businesses want to be generating a constant stream of new users, many brands underspend on their loyalists and in so doing reduce their customer lifetime value.
Talk to your team about how you can do more to monetise your existing users. Then test a number of approaches to discover the best ways to monetise them better. Retargeting site visitors, for example, is often a far more efficient way to advertise than new-to-file customer acquisition.
Double down on email and affiliate marketing
Study after study have shown that email programs and affiliate marketing out deliver paid search on ROI. Analyse your efforts in these areas to ensure you are investing what you should, and task your team with finding better ways to use these channels for growth.
Email benefits because of the tiny cost to send an email to a member of your house lists. Plus, these are usually people who have sought a relationship with your brand, or made a past purchase. Low cost plus high affinity almost always delivers.
Affiliate delivers great ROI because if leverages the credibility and expertise of partners, and uses a pay-for-performance buying model that spreads the ad risk to more parties. Recent research shows that more than 15 per cent of total ecommerce sales now come from the affiliate channel.
Explore long tail search opportunities
“Long tail” comes in two flavors here: lower trafficked niche terms and smaller market share search engines. Let’s start with terms. Many advertisers, especially less sophisticated advertisers, buy only the most popular, heavily trafficked terms. That pushes the prices up on those terms considerably. By getting more specific in term selection, you can often find more passionate target segments that respond and convert at higher rates. Sometimes you can also find term bargains if your category has a range of terminology.
And then there are long tail search engines. We all know that one provider dominates in search, but there are other providers that may be able to more cost effectively drive traffic and sales to your business. After all, many companies put all their investment into the dominant provider. Test with smaller players to see how much volume you can get and spread your investment wider.
Fix your store
Finally, here’s a strategy that won’t affect your media costs, but can instead boost the revenue you derive from that advertising. After all, media costs only become a true barrier to growth if the revenue you earn is insufficient to pay out the investment. Work with your ecommerce and development teams to identify the bottlenecks in your online shopping experience, and fix them. Research and invest in new tech that can speed up pages, boost conversion rates, drive up order values during the buying process, and better merchandise your goods.
Rising media costs are probably inevitable in Australia for the foreseeable future. But with these ideas and a focus on testing and learning, you can reduce their impact on your business performance.