IT ALL STARTS WITH TRAFFIC...
It can be easy to dismiss website traffic as a "vanity metric". After all, most of the fun happens after your visitors hand over their names and emails.
But without high-quality website traffic, the rest of your funnel would dry up. The trick is figuring out how to actually drive this kind of traffic.
We've been helping eCommerce sellers driving traffic — and revenue — with paid media for decades. Here's what we think all brands can learn from their success.
Paid media has a few key advantages compared to other traffic-generation tactics like SEO and organic social:
Of course, if your ads are not set up correctly then you'll never see the results you want — regardless of how big your budget is. Some of the most common issues to watch out for include showing your ads in the wrong location, getting hit with a low ad quality score, and using keywords that are too broad. (Psst our handy PPC Guide walks you through how to fix all of these!)
Paid media encompasses many types of advertising, including sponsored content, video ads, and everything in between. While you can be successful with any of these formats, the following ad types have driven the most traffic for our eCommerce clients:
If you have the budget for it, deploying multiple ad types simultaneously can really compound your results.
To be successful with paid media, you need to figure out what "success" looks like for your bottom line. If you're just starting out with paid, your goal should be to break even with your return on ad spend (ROAS). Established brands should be looking to make a ROAS well above the breakeven point.
Here's how to calculate your breakeven ROAS:
Calculate your profit before advertising: The formula for this is selling price - cost of goods sold (COGS). We recommend keeping your COGS simple; no need to factor in your rent, utilities, or other tedious expenses. Manufacturing and material costs will suffice. Your answer is your breakeven point for advertising costs.
Calculate your breakeven ROAS: Divide your selling price by your breakeven point. This is your breakeven ROAS.
For example. if your selling price is $125 and your COGS is $75, then your breakeven point is $50. Dividing your selling price ($125) by your breakeven point ($50) results in a breakeven ROAS of $2.50. This means you would need to make at least $2.50 in revenue for every dollar spent on advertising in order for your ads to be profitable.
Remember that breakeven ROAS is just a starting point. To achieve profitability and growth, you ideally want a ROAS that is even higher. The more profitable your campaigns are, the more opportunity you have to reinvest these profits into your ad budget.
If you can't tell, we're pretty passionate about paid media over here. Over the past 15 years, we've solved practically every paid media challenge imaginable — and we want to help you learn from these mistakes!
Whether you're just getting started with paid or you think your campaigns could use a boost, check out our FREE PPC Guide. It has tutorials and video walkthroughs to help you solve 5 of the most common issues we see with PPC accounts. It could save you tons of wasted ad spend!
😉 TLDR: Paid media is great for driving traffic and sales if you use it correctly. Make sure you know your breakeven numbers and your campaigns are optimized for maximum performance.