Welcome to Growth Interviews!
Welcome to Growth Interviews, the fun, stimulating and engaging series of conversations driven by digital business growth.
Our mission is to provide insights and ideas from world-class professionals on the topic of growth and to cut through the noise of so-called marketing tips and tricks, revealing the money-making strategies behind e-commerce.
Each episode is an intriguing challenge involving an insightful expert who reveals some of their best-kept secrets, which you can use right away to boost your business.
In this week’s episode of Growth Interviews, we invite you to join our conversation with Patrick Wind, the Managing Director of AdsAccelerator.com, a platform that provides online training, tools, and support for entrepreneurs who want to grow their business using Facebook and Instagram Ads.
Patrick learned the hard way that performance marketing requires more than just bringing lots of traffic to your website. It requires the right retargeting funnel, proven methods for attracting new audiences, and compelling ad design and copywriting.
Based on more than 10,000 AB tests, Patrick has created the unique Full-Funnel Strategy, which helps marketers lower the cost per conversion and increase their return on investment. His strategy has been successfully implemented by international brands such as ASICS, DiamondSupplyCo., and Bioderma, as well as some of Europe’s highest-valued startups like 21Buttons, HolaLuz, and Meller.
During the interview with Patrick, we discussed about the most common mistakes e-commerce marketers make, some alternative paid social media channels that online shops can use, as well as strategies they could use to keep up with all the technological changes.
We’re sure you’re eager to jump right in, so free up your next X minutes and watch the video below. If you’re afraid you’re going to miss something, don’t worry — we’ve got you covered! You’ll find the full transcript as well as a few more pieces of advice below!
Going deep into paid social media
Who are you and what do you do?
Patrick: Thank you very much for having me. My name is Patrick. I’m originally from Vienna, Austria. Now I live here in Barcelona, Spain. What I do professionally is that I help marketers and entrepreneurs to get better results from Facebook and Instagram ads.
What particularly frustrates you about the digital landscape?
Patrick: First of all, the CPM (cost per mille impressions) are drastically going up. If, for example, you just compare January 2018 to January 2019 in the United States according to a recent study the CPM for Facebook and Instagram has gone up 96 percent, which basically means that it costs twice what it cost last year to reach the same amount of people, which is not good.
If we maintain the same conversion rates all throughout their customer journey, then our return on ad spend would lower by 50 percent.
Facebook & Instagram ad statistics every e-commerce marketers should know:
? More than 25% of active users say that Facebook ads influence their online shopping;
? You can increase engagement threefold by using video ads instead of single-photo ads on Instagram;
? The average CTR on Facebook across all industries is approx 0.1%;
? 7% of Instagram users take action on an ad.
You can find more statistics here.
Two mistakes and two lessons in paid social media
Tell us about some mistakes you’ve seen with e-commerce marketers.
Patrick: Let me give two answers to that. First, my personal one and the second one that I just read in a super interesting article, like five minutes ago.
Let’s start with the personal one. I think that many e-commerce marketers nowadays target the wrong people with the wrong message with boring and static ads in the wrong format. However, that’s my personal opinion that they don’t even know how to set up a proper retargeting funnel, that they’re doing the retargeting in a static way instead of playing dynamic and product ads, collection ads and all of these things, and they do all of this in the wrong format.
The second answer is something that I just read right now which just super interesting. It says you should not focus anymore on CPC (cost per click), you should not focus on CPM, which is going up, and you should also not focus on relevance score, these three KPIs that everyone nowadays focuses on. ‘My traffic is more expensive!’ and I also say, ‘Wow! The CPMs are doubling!’
I think that article is from Adweek and it’s a very good one because it says you shouldn’t care about the price of traffic, you should care about the quality of the traffic and therefore it doesn’t matter whether it’s more expensive or not if the lower funnel KPIs remain stable or even improve. Therefore, he (author of article) says the only three KPIs that you should focus on are the number of purchases (purchase conversion, value or anything related to purchase), and then – and this is a good insight – unique add-to-carts and unique initial checkouts.
If I take a look at the dashboards for my clients, they typically work with absolute numbers. They take all the add-to-carts, all the initial checkouts, but just think about it! We all know the problem with few contents. If I personally go through your e-commerce page and I take a look at five products, I count these five few contents and, typically, you see that I would just add to the shopping cart once, which is also not true. People initiate the checkout process only after shopping two or three times, then their card gets declined, and then the algorithm on the pixel counts two or three times, which is not good.
What I would like to give you as advice is, to focus more on the unique initial checkouts, unique add-to-carts, so it would be just counted as one in the whole process. Then, focus on the number of purchases and the value you get, on the volume and the value of the purchases. Forget about the upper-funnel KPIs that everyone focuses on nowadays! Okay, the traffic gets more expensive, but if it converts properly, the Quality Score is good and I don’t care about the price of the traffic.
Give us a few insights from your expertise in Facebook.
Patrick: My secret sauce, on the one hand, is targeting the right people in prospecting. So really, it’s finding people who are likely to convert. On the other hand, properly retarget them, not just with boring ads all day long, but by implement something like an ad sequence – like a sequential retargeting funnel.
So, from Day 1 to Day 3, I reimpact you with a dynamic product ad, for example. If you haven’t purchased by then, from Day 4 to Day 7, I’ll come up with some testimonials, product reviews, or an influencer. I’ll show you a different message and I’m not boring you all through the next 14 days or 30 days. I’m going to try to be relevant, I’m going to tell you a story, I’ll do ad sequencing, and that makes a big difference.
A sales funnel is crucial to any e-commerce business, because it illustrates the ideal journey prospects go through on their way to becoming customers. While an online shop may market its products to thousands of people, only a small percentage will become leads. Of those leads, only a fraction will become clients.
As a result, optimizing your sales funnel goes hand in hand with optimizing your conversion rate. Here are three ways you can design your sales funnel for a maximum number of conversions:
1. The AIDA model: this model will help you determine what you need to do to make people Aware of your products, Interested in purchasing your products, Desire your products, and Act by purchasing your products;
2. The Enhanced E-commerce model: this model allows you to focus on general trends at the first look and it also provides insights on individual segments or products.
3. A funnel oriented on metrics: take a look at your pages and their value or potential for improvement, monitor the key metrics that will help you visualize how you do against your objectives, and think of ways you can prevent leakage.
Are you a funnel-oriented marketer? Take our quiz and find out!
The magic of Pinterest
What kind of changes in marketers’ behavior do you propose in order for them to grow?
Patrick: It’s not an easy question, but I personally have two answers to that. One is a more marketing-related answer, the other one a more business perspective answer. Let’s start with the smaller perspective, the marketing-related one.
There is one channel – there are actually two channels – where I personally see a lot of growth potential now, this year and probably also next year. One of them is YouTube, where they’ve just incorporated this function to combine Google Shopping with YouTube, which is a pretty cool thing! Imagine that you see a YouTube video from Nike or just from a soccer player who is sponsored by Nike, and below it you see all the featured products that you saw on the video – shoppable content. I think it’s going to be a huge thing this year and probably also next year.
The second thing, when you’re in the e-commerce industry, something that many companies here in Europe are neglecting still, is Pinterest. It depends a lot on your audience, the add-to-cart group, and the product. For example, one of the e-commerce companies I work with sells jewelry for women and the target audience of Pinterest is 80 percent female and everyone between 25 and 40. It’s a high-purchasing-power, very savvy, female audience.
On Pinterest, for them, it’s a smart idea because Pinterest has just launched the possibility to run ads in the same way you do them on Facebook and Instagram – it’s very simple – but the CPMs are lower, which we know is not the most important KPI, but it is still an indicator.
So, just from a marketing perspective, do not just tap into the red sea markets and fight for the fish where everyone fishes, but rather try new channels where the big companies are not yet there. This would be my marketing answer.
From a business perspective… I come from a startup, and the majority of the e-commerce companies I work with started small and became bigger, some with seven or eight digits in turnover per year. All of them right now still do business offline. Just focusing 100 percent on the digital world is a very risky idea, and all the big companies I’ve worked with – especially the eight-digit ones – all of them have an offline strategy and – especially the one with the female jewelry – they are already making half their turnover offline.
7 reasons e-commerce marketers should use Pinterest to drive traffic to their websites:
1. Pinterest reaches 83% of US women aged 25-54
2. 50% of new sign-ups in 2018 were men
3. High-income and educated US households are twice as likely to use
4. Pinterest as low-income and less-educated US households
5. 85% of women users use Pinterest to plan ‘life moments’
6. 59% of millennials have discovered products on Pinterest
7. 90% of weekly users use Pinterest to make purchase decisions
8. 55% of ‘Pinners’ are looking specifically for products
Do you need more reasons to add Pinterest onto your list of must-use marketing channels? Learn how you can use Pinterest for your business.
Push Marketing vs Pull Marketing
What should an e-commerce business do in order not to fail in selecting the right partner?
Patrick: From my perspective, it really depends a lot on the agency that has the potential to properly understand your product and your audience. The key thing, especially when it comes to push marketing,like Facebook and Instagram ads, is that you properly understand which of your potential customers’ needs are really satisfied or fulfilled by your product.
If you don’t have the feeling that the agency really gets what the market wants, if they don’t really get what your USP is, then your campaigns are not going to be successful.
When do you know you need to change your channel? If, for example, you have invested 5,000 Euro in Facebook ads but you don’t see the needle moving, when should you start investing in other channels?
Patrick: It depends a lot on your price point. If you’re in the real-estate business and you’ve just invested 5k and you sell properties for a million, I don’t care about the 5k, right? But, if you sell sunglasses for 30 euros and you’ve invested 5k, and your return on ad spend is heavily below one (thousand), you’re really losing a lot of money. In that case, I would think about my acquisition process. I would really reconsider whether I’m truly in a push-marketing environment, or if I’m in the pull-marketing environment where I cannot really create the demand, where I’d rather just need to be on the spot of the customer journey where someone is actually looking.
For example, we’re here in Barcelona. Imagine that someone searches for a hotel in Barcelona and wants to come here, I need to be there when a person in Google, for instance, types in “hotel Barcelona June” or whatever. I have to be there when they search for me. That’s a typical pull-marketing environment and I cannot really create the demand for that if the person is not about to come to Barcelona – that’s typical pull-marketing versus push-marketing.
If my results are really that bad, I would first question whether I’m in a pull- or push-marketing environment. Second, I would try to refine my offer because that’s typically the problem: people don’t get at least one or two of the 4Ps (product, price, place, promotion). Even so, if you then just tackle the promotion although you’ve properly decided whether you’re in the push- or pull-marketing environment, if your product sucks and you sell it three times more expensively than your competitors, and your website takes 30 seconds to load, then the problem is in another spot.
That’s what I typically would suggest. And then, it’s also about going into more detail and analysis: are your creatives set up properly, are your copies optimized, and – most importantly – is your audience the right one for your product?
Although your products might appeal to a large group of people (let’s say you’re selling clothes — everyone needs to get dressed, right?), it doesn’t make sense to use paid social media channels to market to everyone.
You need to have a ‘target market’. Audience analysis allows brands to gain a deeper understanding of their current and potential customers in oder to improve marketing strategy, customer experience, and brand perception.
Facebook and Google’s massive growth stems from their ability to sell hyper-targeted advertising. With tools being readily available, targeting the audience of your choice is the easy part.
Among the more difficult business questions to answer are: Who should you be targeting? What kind of messaging and content should you use for specific groups? What type of campaign will generate the most engagement with this audience?
Engage with both your customer and yourself
What should an e-commerce business do in order to keep pace with all the technological changes?
Patrick: That’s a very broad answer. I’ll try to answer from my own experience and my expertise, which is the marketing industry. What is definitely changing from a marketing point of view is that we are going to stop just doing a monologue towards our customer and we’re going to enter a dialogue with them in a more interactive way. This is going to happen. It’s going to take place via conversational marketing.
That’s also something that the Facebook headquarters in Dublin, and also Menlo Park, told me several times. One of the big things that they’re looking into is what Facebook Messenger, WhatsApp and WeChat is doing, in order to really understand how we can engage with our customer in a dialogue, integrating them into our entire marketing strategy and not just spamming them with our one-way messages.
What advice would you give to your younger self?
Patrick: Last night I had a wonderful dinner with a very, very smart person. That person told me that…their advice would probably be, ‘don’t work so much, stupid Patrick’. It’s based on the philosophy that when you’re working so much you’re basically just borrowing time from your future self, instead of investing it now and enjoying life, doing things you love, spending it with the people you love. That would actually be my number one advice to myself.
Keep on working hard. That’s all good, but at least be conscious about what you’re doing, because if you work 80 hours per week, you are basically just stealing these 40 additional hours from your future self, and you’re wasting them now.
Do you have any message you want to share with our audience?
Patrick: As I said, my expertise is social media marketing, Facebook, Instagram ads, and the only three things you really have to care about are not the ones that all the experts tell you. All the experts need to get the right bid strategy, the right optimization events, and the right campaign set up.
That’s okay-ish, but this will give you the five or ten percent of additional push and it’s not the root cause of whether your campaigns work or not. The root cause is the 4Ps, the marketing mix: product, price, place and promotion. That’s the most important thing!
If you have the right product in the right place, with the right price points, then the promotion is just a tiny additional part. That’s one thing. Then, if you really want to focus on the fourth P, the promotional part, try to keep, assure and impact your customer and the right audience with the right creatives and convince them with the right copy. These are the three things I would like to share with your audience.
About the four Ps of marketing: Product, Price, Place, and Promotion:
An effective marketing strategy combines the 4Ps of the marketing mix and is designed to meet a company’s marketing objectives by providing its customers with value.
But the 4Ps also have some weaknesses in that they omit or underemphasize some important marketing activities. For example, services are not explicitly mentioned, although they can be categorized as products (that is, service products). In addition, other important marketing activities (such as packaging) are not specifically addressed but are placed within one of the 4P groups.
Another key problem is that the 4Ps focus on the seller’s view of the market. The buyer’s view should be marketing’s main concern. Thus, the 4Ps can be reinterpreted as the 4Cs:
? Customer solutions, not products;
? Cost, not price;
? Convenience, not place;
? Communication, not promotion.
Whatever your paid social media budget is, we’re sure you want to get the most bang for your buck. Choosing the right marketing channels will help you get that ROI, but how do you know which marketing channels are the right ones to get you the most for your ad spend and your time?
We hope our interview with Patrick gave you an idea on how to improve your marketing strategy and what new marketing channels you should pay more attention to. Until next time!
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