Recently, I spoke to the owner of a marketing agency who asked me how I approach a new digital advertising assignment. I later realized my response to her would also work for newbies — that is, anyone wanting advice on getting started with paid advertising.
Below are the questions I ask myself when embarking on a new online advertising project. Whether you’re trying to convince your team to pursue digital marketing or are already interviewing consultants, the following questions will get you in the frame of mind necessary to pursue a revenue-maximizing strategy.
1. Customer lifetime value
Do you know how much revenue a customer contributes throughout the duration of their relationship with your business? I’m only exaggerating slightly when I say this: If you don’t know, drop everything in order to figure it out (or ask your marketing team or consultant to do so).
You need to know a handful of things to calculate your customer lifetime value: Average monthly transactions, average order value, average customer lifespan and average gross margin. Without these inputs, you are on the path to sub-optimal, inefficient advertising. Or to put it another way, “faith-based” advertising that relies on guesses and good luck. And who has the time or money for that?
To learn more about customer lifetime value, check out these excellent resources:
- Avinash Kaushik and David Hughes on calculating CLV
- Kissmetrics’ infographic on CLV, using Starbucks as an example (because who can’t learn some useful marketing techniques from Starbucks?)
- “Non-Geek” guide to CLV
- Historic versus predictive CLV
What segments of your audience are you targeting during the course of the campaign? Is the audience local, national or global? Is the campaign B2B or B2C?
3. Key performance indicators
What outcome do you expect your campaigns to produce — sales, traffic, downloads, awareness raising, email sign-ups or something else?
4. Time frame and budget
What is the time frame for the campaign? What is the overall budget?
5. Platforms and number of campaigns
How many advertising platforms do you wish to use (Adwords, Facebook, Twitter, LinkedIn, Instagram, Pinterest, etc.)? Approximately how many campaigns do you wish to run? Do these choices reflect your customers’ online habits and social media preferences?
Do you have a graphic designer on staff, or do you expect your consultant to generate creatives?
Do you wish to use more sophisticated marketing methods like remarketing, Customer Match, Dynamic Ads, etc.? Do you understand how these tools can dramatically support your marketing efforts?
8. Landing pages
Have you created, identified and/or optimized the landing pages for your prospective ad campaigns? In other words, where on your website do you want viewers of your ads to go?
Who on your marketing or web development team will implement the necessary tracking codes (“pixels”) for each campaign across your web pages?
Do you have a Google Analytics Account, or do you need your marketing team to set one up? (Same for Google AdWords, Google Merchant Center, Google Tag Manager, etc.)
How often do you need to receive reports on the effectiveness of your campaigns, and what metrics are meaningful for your business?
It’s okay if you don’t have the answers to these questions — the point is to discuss them at the outset with your marketing team. Also keep in mind that success is not predicated on simply answering these questions one-by-one. It’s more complicated than that — for example, your answer to the budget and platform questions will very likely depend on your customer lifetime value calculation in question 1. And your question to the question 11, about reporting, may be highly abstract if you haven’t set up effective landing pages that allow you to track user behavior effectively. And so on.