The #1 Way to Combat Rising Ad Prices for Direct Response Marketers

Written by: Tom Murray | Managing Director, Agency

It has never been easier to both create a website and start selling products, or to launch ads across a variety of platforms. This has caused an increase in competition for advertisers over the past 2-3 years. While digital platforms have had a reputation for being “cheap”, they are starting to get increasingly expensive as more and more advertisers come onto the platforms. Facebook for example has over 6 million advertisers on the platform, and advertisers big and small are competing for the same ad space. While P&G and Samsung may have the largest ad budgets in the world, they still compete with mom & pop shops spending $10 a day for ad impressions locally.

This competition (as well as a variety of other factors such as data scandals, platform updates, algorithm changes, etc) has caused prices to skyrocket impacting many direct response advertisers cost-per-acquisition (CPA) metrics in a negative direction. In June, Digiday reported that many advertisers that built their business were moving to more traditional marketing campaignssuch as TV, print and even direct mail. It is easy to blame platforms for increase in CPAs and other metrics, but in reality, this happens to most advertising systems as adoption rises, as demand for ad space increases while the supply has not increased at the same rate.

Many marketers and brands have tried to pivot to other digital platforms, or even traditional methods like mentioned above. However, most of these brands are missing the #1 way to combat these rising prices and that is **Conversion Rate Optimization. **Many brands claim that they “do CRO,” but in reality testing a button color, or changing one thing on the landing page is not enough to drive results.

At Jump, we believe in what we call the “Performance Triangle”. In order to drive success for direct response marketers, all three of these pieces must be in sync in order to perform optimally.

Targeting tends to be the area most marketers focus on because it is the easiest thing to change immediately, but this often has the lowest impact. As the ad platform algorithms are getting smarter, broader targeting often is beating niche targeting, which means that the impact of changing targeting has never been smaller than it is today.

Creative is extremely important and should always be a main focus on your campaign. I often say “it doesn’t matter if you are giving away one million dollars away on the other side of your ad because if no one clicks on it, they would never know.” And the statement is 100% true – if your ad isn’t good, it doesn’t matter how good your landing page is.

With prices going up though, it is important that any traffic you do drive to your page you give it them the strongest chance of converting, which is done through conversion rate optimization. What marketers tend to forget is that if you can double your conversion rate from 1% to 2% or 2% to 4%, that is the same thing as dropping your CPA from $50 to $25 for example. Not only does CRO help paid ad performance, but also increases organic conversion rate as well, so it impacts all traffic on the site.

All brands should have someone 100% dedicated to CRO, placing tests on the page, constantly researching new tactics, and discovering potential issue areas based on conversion & site data. Trying to get by just by targeting, or creatives, or pricing is not going to be an easy pathway for success.

Here are three of the biggest areas to look at in terms of CRO that can help your site immediately if you can implement fixes:

A) Site Speed

B) Form Analysis (Lead / Checkout)

C)Clarity

Site Speed

Site speed is the most important piece because consumers expect pages to load in 2-3 seconds, but also because algorithms are taking that into pricing in the auction, which means you will pay more for ads if your sites are slow. Users may click, but not wait around for the page to load. Google estimates that 70% of users are on 3G type speeds in the US, which means pages can take an eternity to load. There are several studies that show after 3 seconds, you start losing 7% of your potential conversions each second extra of load time, or that users bounce rate goes up exponentially as the page takes longer to load. If your current site speed is over 3 seconds, you should devote all of your development resources towards fixing this, as this will likely have the biggest impact (by quite a wide margin).

Form Analysis

Form analysis is exactly what is sounds like, checking in on why users who are entering information into forms (such as on a lead generation page asking for an email, or the checkout form before purchasing). Often times, users drop off at a very specific point, and identifying that part is crucial. For example, asking for a phone number of physical address when it won’t be used is a piece of information that while may sound great to capture, can cause a lot of people to drop off of a lead gen page. For the checkout page, a common issue on forms is requiring an account to be created before buying, which is one of the top 3 reasons as to why consumers do not convert. Doing a thorough form analysis (with the help of your analytics tool), as well as a form analyzer such as Formisimo can help improve conversion rates significantly.

Clarity

Users need to know exactly what they are looking at, what you are selling and most importantly what your unique selling proposition (USP) or value proposition is. An easy way to test this is go to any site right now and spend only 5 seconds on it. You should be able to understand what the site’s purpose is in that time. If not, you need to be clearer with your USP. This also goes for your product and category pages as well. The more you can be concrete and concise instead of vague will increase your likelihood of capturing the user’s attention, drawing them down the funnel, and eventually convert.

Conversion Rate Optimization is something that you should never skimp on. Just like people who say you should never skimp on a bed since you spend ⅓ of your life on a bed, you shouldn’t skimp on CRO, as you are literally throwing money away from potential converting users if you just implemented a few changes.