Three things matter in an ad campaign:

  1. The offer
  2. The creative
  3. The targeting

Since 2006, I’ve been spending a few million of my own money on ads, and I managed not to go bankrupt! :)

Joke aside, I know a thing or two about the feeling of consciously burning money on ads.

So, here’s my take on the subject:

Few eCommerce companies really understand the power of human psychology and habit forming. They think they’re in the game of reason and better prices, while they’re in the game of changing consumer behavior.

So, they keep investing money in ads to acquire new customers that never come back.

I think this is a waste of money.

Here’s the reality: average agencies get the budget and run their campaigns to acquire new customers and frustrate existing customers.

They ask you about your products and margin, audit your current campaigns, and then create “better” campaigns. They focus on #2: The creative!

And that’s great.
Some are pretty good at it.

You’re adjusting here and there; you see orders appear, and you initially think it is all good.

But there’s one thing that doesn’t happen: the ROAS is not skyrocketing.

You’re familiar with this, right?
You know how it feels.
It’s frustrating.

You try to optimize the cost, but eventually, you decide it is just the way it is.
It doesn’t have to be that way.

Here’s the problem: these agencies have studied Facebook and Google ads, and they know what they’re doing with their bidding, CPCs, reach, and cost per conversion.

Some are good at it.

BUT very few of them are great at it.

Those are the ones that genuinely get HOW to change customer behavior.

Hint: in business, you can’t improve something that you don’t understand.
Yes, that works in romantic endeavors, but not in business.

So, what’s the first thing you need to improve ads?

Start with the targeting.

Understand who you’re selling to:

  • Who are your best customers?
  • What do they buy?
  • Why do they buy? 
  • What kind of struggle triggers their buying decision AND habit to buy from your store?

RFM segmentation allows you to do precisely this.

It is not about acquiring only the best customers but acquiring the right-fit customers.

It’s about scoring customers by recency, frequency, and monetary value allows you to segment customers so you can level up your ads game.

Targeting – Creative – Offer.
That’s the holy trinity in eCommerce ads.

Respect this, and your prayers will be heard! :)

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