Week 13 Lecture 1 Digital Advertising 1 Keywords, Permission Marketing
welcome back students we're at week 13
this week is a fun series of lectures because we're going to be talking about
digital advertising. this content isn't in your book or on the AMA
Dictionary website because it's moving so fast and changing so quickly that
publishers of textbooks just can't keep up with this stuff! this being a
principles of marketing course I'm not gonna get into the step-by-step details
of how to use say for example Facebook ad manager and all the individual steps
there there is a cornucopia of tutorials online a simple google search will give
you anything you need about how do I set up a LinkedIn page how do I use the new
snapchat features etc etc it's all out there so what I want to focus on in
these lectures is really giving you some kind of baseline strategy and
understanding of how the digital advertising piece works so this first
lecture is gonna cover the bullet points that you see above me in this slide
we're gonna talk about keywords and the bidding process and this concept of
permission marketing and how content drives that and then some of the common
digital advertising steps that you go through to determine the size of your
market and prepare your bids etc and then the last point is ROAS which stands
for return on ad spend so buckle up take good notes here we go so two primary
learning objectives this week I want you to understand how keyword strategy
impacts your selection of your target market as well as the size of the market
that you're going to be working with and how keyword selection meaning the words
that they're going to use to search for your products also impacts the digital
advertising costs that going to pay so that's the that's the first learning
objective and the second learning objective is going to be about some
common strategies for using content to get your target
market engaged with your content okay so when we talk about keywords what are
keywords keywords are simply the phrases or individual words that people use when
they're searching for your products online and when we talk about searching
online most commonly Google but this could also be if they're on a mobile
platform so there's two different types of keywords there's short tail and
there's long tail short tail are short like oftentimes single word or two-word
phrases like say mountain bikes would be a short tail a long tail free phrase
would be women women's mountain bike treks brand used right that's that's a
long tail that's a more specific phrase so short tail keywords are broad and
short and phrasing and long tail keywords are longer in phrase and more
specific in what they're going after so there's a strategy behind picking your
keyword because your keyword is going to determine the size of the market you're
going to be reaching and also the price you're going to be paying for reaching
that market and when we think about an online business you want to look for a
potentially very large market because the reach of online is endless it's
global right so you're not just limited to your domestic country people can look
for you and your products all over the world and if you have a very vast
potential target market pool to fish in then you don't need a whole lot of high
conversion rates meaning a lot of people purchasing off of your advertising
efforts small little percentages if you have a big enough market are still gonna
get you to a profitable zone so you want a large market and you want
keywords they're gonna deliver a large market like think of something like
weight loss weight loss is probably the most searched phrase on online but
there's thousands of competitors clamoring in that space and competing
for the weight loss keywords so even though it's a really big market it's
also a bit expensive to advertising because there's so many competitors so
you want a large market but also keywords that get you into that market
that perhaps other competitors aren't thinking of and bidding on those
keywords so this is where it gets to be a little bit of a game as far as picking
the keywords that are gonna get you your target market without you having to pay
too much money and the more niche you get the more specific the more longtail
the keywords are that you're bidding on the smaller the market becomes less
competitors but because there's less competitors there's not as many
customers to go after and you might run out of your customer base or your ad
costs are going to go up and when you think about your keywords think about
what do people what what are people's phrasing when they're looking for your
product and what are some of the key purchase attributes that they're gonna
consider when they're buying your pop your product price convenience so so
when people think about your product if it's a car they think about miles per
gallon and you know what's the longevity of the car and so they're gonna be
searching using those purchase attribute phrases like hi miles per gallon
hatchback sedans under $5,000 right that would be a very specific longtail
keyword so think about the purchase attributes and and the relevance to the
target audience when you're coming up with keywords so you get a long list of
keywords and then you're gonna go to the next step which is actually going in and
find out what the volume is on those keywords meaning how many people are
searching based on these different keywords and that'll give you an idea of
the market size for different keywords now above me
our two gentlemen from Google and I want you to watch that video now if this is
showing as a video within a video and it would be if if you're watching this in
YouTube then you may not be able to click on that video above me and have it
activates so above the two gentlemen in that video you'll see the URL to get you
to that YouTube video so please do watch that video because it gives you some
really good information about some of the things that Google considers when
you're going into the add bid process and competing for keywords so please
listen to that video thank you so we know that when we go to bid for
customers in the online environment there's a bid process meaning it's not
just a flat fee like it is with traditional media that we were looking
at in last week's lecture so based on how many people are vying for that
target audience at any given time in place is gonna drive how low or how high
the add cost is the cost per click or the pay per click for that target
audience so you're competing against other advertisers that are going after
that same target audience that target audience is defined by the keywords that
you use to determine that that target audience so we want high volume lots of
target audience with not a lot of competitors so the nuances in your
keywords are important to your ad pricing now I apologize for the bright
yellow links here I couldn't get PowerPoint to change these colors but if
you look on those last two bullet points there's some websites where you can go
and do keyword volume search so keyword volume is you'll type in something like
say mountain bikes and it'll say here's how many people are searching for this
term so there's SERPs se RPS and I've given
you their website there you can sign up for a free trial
there's also Google Trends which also has good information on what people are
searching for online so the goal in your first step and kind of defining before
you start your digital advertising and defining your target audience is you can
do a keyword search keyword volume search to find out how
many people are searching on these different keywords and then you're gonna
pick probably your top three or five keywords that you're gonna want to
advertise to this slide we're gonna hear from how Varian he is the chief
economist for Google and this is a good YouTube video explaining how their bid
process works now as advertisers we would probably assume that whoever is
willing to bid the highest price is going to win the bid and get to
advertise to that target audience those keywords but that is not the case and
that's what this video from how talks about so again if you can't get the
video – if you just click on the video itself if it won't run for you in the
YouTube format for these lecture slides then I put the URL above that video and
you can search for that video that way and watch it according so please do
watch this video but what's important to note here is that the actual price
you're willing to bid is not the main driver of if you get to advertise to
that target audience or not there's much more important other factors that Google
looks at what's the quality of your website and your advertisement what
format type of ad are you running because different folks are using
different formats and if they've got too many people competing for a banner ad
well that's gonna drive prices up so if you have a different type of ad format
and and how talks about some other factors in here same thing for Facebook
which isn't in this video but Facebook is more concerned about the engagement
of your content then who's willing to pay the most so why is it that both of
these social media slash search engine sites are less concerned about the bid
price is it because they're making so much money well they are but it's really
because they want to give advertising that to their customers the people who
use Google that is relevant and that is engaging to them if you go into Google
you don't want to be bombarded with a bunch of ads for products that you're
really not interested in right that's gonna give you a bad google experience
so they're aware of that so they want to make sure that the folks who the
advertisers that they're letting advertise to different target audiences
that their users the Google users are getting quality content and ads ads that
are relevant to them same for Facebook what's gonna drive
your Facebook advertising bid cost down well are people engaging with your
content are they liking it are they forwarding it or they reposting it so
that is more important to them engagement than who's willing to pay the
most same thing they don't want the Facebook
users to be bombarded with ads for products that aren't relative relevant
to them and that they're not interested in that's gonna give them a bad Facebook
experience so this this concept of relevance and engagement is really what
drives a big piece of the ad price that you're going to pay so please watch this
video and that'll give you even more on this so if we know that good engagement
is really going to drive our ad costs down we want to ask ourselves what
drives good engagement people liking our ads and our stuff well the quality of
your content is paramount so content is king in the online world so your content
has to have value with your target audience so this puts us in the realm of
influencer marketing so there's so many information sites out there and we're
all bombarded with tutorials on this and tutorials on that and folks are trying
to tell you how to get rich with online businesses so if the content is good
then people will keep coming back for more if your content is good
and updated in regular updates then people are going to continue to watch as
long as they're getting valued so what that tells us is is that we have to have
good content which means we have to have information that our target audience is
interested in it's not about necessarily trying to sell people first it's about
giving them good content first and then down the line they're gonna purchase
products for us once we get them hooked on our content so this is what we call
influencer marketing so first we we get your permission to market to you and you
like our content and you're interacting with it and then down the line at some
point we're gonna trade you up two or even better stuff and you're gonna
purchase that where do you get content content and the production of content
and regular posts can be really time consuming for online businesses it's a
lot of work to regularly shoot videos and have post and and and feed the
content beast if you will so I've listed down the bottom here one site that you
can look at which is mashable.com which is a content aggregator site and you can
get information there the challenge with online businesses is everybody's
grabbing everybody else's content right and so it's kind of tough to police that
and make sure that people aren't stealing your stuff
certainly that happens in international markets but keep in mind your content is
the linkbait your content is what you're gonna use to dangle in front of your
target audience to get them to sign up for your newsletter or to give you their
email to get that juicy tutorial video right so good content is linkbait good
content gives you permission to market directly to your target audience because
they've given you their contact information so not only does good
content help us get a large following on a social media platform
and it gives us increased chances that they're going to give us their email and
we can market to them directly but good content also drives engagement meaning
the customer potential customer is engaging with our brand and our
information and our content but it also drives our ad costs down so as you saw
with the Google chief economist video on how they determine ad ranking good
content and engagement in that content drives down ad costs regular posts of
good content that users are clicking and engaging with also improves your search
engine optimization so you know the Google ad rank system also looks at how
many folks are coming from outside links how many links are you to other sites
and they're measuring all of that so if you want to be on the first page of a
Google search for mountain bikes you know from an organic search not a paid
search versus buried on the fiftieth page and no one's gonna scroll down that
far that's in the realm of search engine optimization or SEO you've probably
heard that term but one of the things that drives SEO is how engaging is your
content and how often are you posting regular content to your website so you
could read the other stuff on the side but I want you to understand the link
between content and engagement and engagement drives down your ad costs and
with permission marketing again here's where the customer has given you their
email or followed you on a social media platform they're giving you their
permission for you to market to them directly that's what we mean so and they
do that by opting in here's my email I've opted in and I want I'm allowing
you to market to me now email response rates are getting lower and lower and
what I'm hearing from online advertisers is social media sites are working to
keep the customer directly in that social media platform say Facebook
for the entire experience so you can market to them directly and sell to them
directly they don't want you to provide an email to an advertiser and then that
advertiser pulls you out of Facebook and now they're marketing to you directly on
your email and the emails that we usually give for these types of ads to
get some free content we all do this we use our junky Gmail or an email that we
don't use very often so advertisers when they try to market to these email
addresses they get very low response rates so now they're working to try to
sell directly within that social media platform and we'll talk about that more
later so both through permission marketing you as a customer have opted
in and you've given them your email and from the online business side once
you've put customers on your content you can give them more content and you can
track and measure which type of content they follow most so they seem most
interested in these types of articles or they like to see video more than they
like to see straight text posts so you can tailor your content and offerings to
increase the chances of getting them to opt-in and hopefully also to buy
something here's an example of permission marketing so this is my gmail
but this is from ocean Robbins he runs a health and a healthy food blog and
website and has all types of recipes and tips and how to eat healthy and things
to avoid when shopping and if the name's Robin sounds familiar his name's Ocean
Robinson yes he's the son of one of the founders of Baskin Robbins so and he
went the other direction completely healthy so I signed up for his
newsletter and you can see here I get bombarded with emails on a regular basis
and he has a subscription model where he can sign up to his newsletter and
receive a lot of information but most of this content as you can see here with
these emails above me he's just giving him out for free
give them out for free in the hopes that I'm gonna sign up and buy a cookbook
or something you know some type of subscription model platform you give
before you get so bottom line good content drives engagement engagement
helps increase your search engine optimization results and also helps
drive down your advertising costs and one of the things we're seeing that's
driving engagement with social media platforms is the move to video and live
video so you may have heard about this but Facebook has Facebook live now where
as an advertiser you can broadcast directly so rather than posting you know
a text post or a post with a picture a static picture now you have the ability
if you're a business on Facebook with a lot of followers on your business
Facebook page that you can push live video out onto your Facebook page and
people will see that this example here shows the Facebook watch page where this
business has a live video so rather than a picture as the first thing you see
when you go to that Facebook page is you'll see an actual live video so again
if you can't click on that link I've put the link down at the bottom here for you
and you can click on that link and check out what a Facebook watch live page
looks like so celebrities and TV shows that have
their own Facebook page are moving in this direction so we're definitely
moving in the direction of video partly because the engagement numbers are so
much higher they're like 10 X 10 times more likely to engage and respond to a
video post than just a a straight up picture or or or text all right so now we've talked about
keywords and we've talked about content and how that helps drive engagement
let's look at the digital advertising steps so as you're preparing to put
together a digital advertising campaign the first thing you can do is keyword
research let's look at a bunch of different keywords using one of the
sites that I showed you in previous slides and determine what's the volume
for these different keyword options some of these keywords volume search sites if
you do if you do a Google search on keyword volume search you'll find
several sites that do that you should also put in free keyword volume search
because there's companies that make you pay for it but there's also free trials
out there and you can also add to that free keyword cost per click or free
keyword pay-per-click information and this will tell you not only the keywords
and the volume by putting in keywords you'll find the volume for those
keywords and also what is the average cost per click or what you'll pay per
click for those different keywords in other words how expensive is one keyword
versus another here's the volume for the keyword and here's what that keyword
costs on a cost per click basis so we understand the bidding process there's
other factors besides the ad the quality of your website and how engaging is your
content is gonna help drive what you're paying for your actual odd bit your ad
bid we know there's a link now between getting their permission for the users
to for us to advertise to them and there's an a we use attraction marketing
which means that they're pulled to our content and that our content has values
so we're providing value first and hopefully generating sales second
content drives the value of your product and then that digital traffic eventually
converts the sales so you're given before you get and eventually there's
sales on the back end one of the things that we're seeing nowadays is rather
than just sell straight products like information
products is most many companies are moving to a subscription model if you
think about it when's the last time you you bought a
new laptop and you had to upload some software for it upload like we do that
anymore but rather than pay for Microsoft Office and get a bunch of CDs
and load them on your computer you're gonna get a subscription right it's X
dollars a month to use Microsoft Office it's X dollars a month to have Netflix
everything's moving to a subscription model and they're trying to keep the
price points pretty low so that it's a reference price that we can afford and
it's not prohibitory to us too expensive and then they get us on a subscription
so lower price points bigger audience higher response right if we can charge
five dollars a month for a subscription and get a hundred thousand people a
month versus charge for a hundred dollar information product and only get you
know a hundred people a year the larger volume of the lower price point ie a
subscription is where lobby's businesses are starting to go this brings us to our
next key term out of this lecture which is return on adspend ROAS so if you've
taken any finance classes you know we've learned about return on investment so
this is basically the same thing but for digital advertising return on
advertising spend and there's a flow to how this works so the first thing you'll
see on the slide is those three those three bulleted adjective abbreviations
CPC Cpl and CP conversion so CPC is cost per click or pay per click and whenever
a user if they're on Facebook or Google when they when they click on your ad at
that moment that's when you have paid for that traffic so they click on that
ad and that's going to take them to a landing you know it's gonna take them
to an offer or a landing page and you're gonna try to get their contact
information their lead so when they click on your ad that's when you pay so
unlike traditional advertising if you you pay in advance for a print ad or a
TV ad and you hope that somebody sees it and you hope that somebody buys it
so with digital advertising you pay when they click so there's some level of
engagement of the ad and you pay when they click so let's say you're paying $1
per click your cost per click is $1 and you have an AB budget of $100 daily so
you set that up with your facebook ad manager and after your 100 click you've
spent your hundred dollars for that day so in this case your cost per click
would be a hundred dollars for that day your cost per lead is out of the people
that clicked and went to your landing page how many of them then looked at
your offer hey you get my free tutorial on how to use Google Adwords or hey
watch my video on how to lose weight just give me your email just give me
your email and I'll give you this this content for free again we give before we
get so let's say out of those hundred people who clicked and went to your
landing page ten of them actually gave you their contact information their
email then those are now what we call leads because now you have their direct
contact information and you can market to them directly outside of the social
media platform so that's a lead and now you have their information and you can
market to them to infinity just like the ocean Robbins emails that I was showing
you earlier I gave them my email at one point and he's been marketing to me ever
since but what I'm not is the third step I'm not a conversion he hasn't sold me
anything so clicks our traffic traffic converts to leads and leads convert to
sales so out of those hundred clicks we spend
dollars on getting clicks traffic and then we had we generated ten leads out
of that so in this case our cost per lead is ten dollars so we spent $100 and
we got ten leads so $100 divided by ten is ten dollars per lead that make sense
so then we get to actual the final piece which is what we're in in this whole
game for is the conversion which is really a term for a sale cost per sale
so let's assume that we had a hundred clicks we got ten leads and then we had
one sale so in this case our cost per conversion meaning our cost to sale was
$100 we spent $100 and we got one sale so our cost per sale was $100 now is
that good or is that bad well it depends on what you're selling and how much that
product costs if your product is being sold for $50 and you spend a hundred
dollars on advertising to get that $50 sale that's not good you're losing money
right so you know three-to-one is considered a good ratio for every dollar
of advertising you spend you get three dollars in sales so in this case we
spent $100 to get one sale we would hope that we made at least $300 in sales so
for that one sale that product should be $300 or more in price a three to one
ratio the yellow link there in the red URL beneath that will show you some
averages for your click-through rates your cost per clicks and your cost per
conversions for different industries so you can check that out and see which
ones are super expensive and which ones are not so but because we know that we
we're gonna spend a certain amount and we need to have a certain amount of
profit and if we're selling a product and having less margin than what it's
costing us to advertise to to gain a sale then we're
not gonna make any money so we need a high profit margin so we can spend more
on advertising so if we think of hard products like maybe you're trying to
sell I don't know a wireless speaker Bose speaker this is a product right so
somebody had to manufacture this and maybe this thing cost a hundred dollars
but your cost to produce it your cost of goods sold is fifty dollars so what that
means is each time you sell a bose portable wireless speaker that you're
making fifty dollars in profit right so but if I was selling a information
product that was about how to build a profitable website in a week or less and
it's just an online tutorial and all I'm really selling is information there's no
product then I don't have any manufacturing costs right I'm just
selling information just like this course you're taking I'm selling you
basically information so it's me talking there is no hard product that you're
purchasing I'm an information product information products because they don't
have any cost of goods sold they tend to have higher profit margins this is why
when we go online we see so many information products everybody's
clamoring trying to sell us some type of information get rich video tutorial type
of thing because those info products don't have the meant the cost associated
with their product of selling an actual hard product so their margins tend to be
higher and with higher margins you can spend more on advertising so let's walk
through each of those steps of that return on adspend
so in the first step we have a customer clicking on our ad so that puts us into
the cost per click or pay per click category and when they click on our ad
we're generating traffic to our website we're generating traffic but not
necessarily any leads or any sales yet so how do we determine our cost per
click well oftentimes when you're setting up your
your your campaign and your budget you're gonna have a preset budget I want
to spend either X amount a day or I won't don't want to spend a
cost-per-click above this amount so you have the
ability to set those parameters on whatever platform you're using Facebook
uses ad manager Google Google Adwords etc but you'll have an advertising
budget you can set a dollar amount or you can set a budgeted cost per click
amount I don't want to spend above X now in a subsequent lecture I'll get into a
break-even cost per click analysis you should know what your break-even cost
per click is I don't want to spend above X because if I do even if I'm selling
product I'll be losing money I'm spending more in advertising that I'm
getting back an actual profit that's a bad business decision so we'll get to
that later but you can set up an ad budget by total daily what you want to
spend or buy your maximum cost-per-click bid Facebook ad manager there's a link
there sorry again for the yellow but that's a tutorial on how to use Facebook
ad manager and we want to remember that engagement and relevance drives exposure
not the bid price that you're willing to pay or even how much you're selling of
your product the more engagement the more people are liking your content and
liking your product and the less expensive your your cost per click is
going to be so if you have less popular keywords those are less expensive if you
have a huge target audience and not a lot of competitors then last that's less
expensive so here we are at step one cost per click we've generated some
traffic okay so they clicked on your content bottom of your slide here but
did you get an actual lead let's go to step two cost per lead so step two is
when we have an actual lead so congratulations
they clicked on their stuff and they actually liked our content whatever free
offer we had our link bait stuff and they gave us their email so
and how we can actually market to them directly so the cost per lead is simply
your total ad cost which from the previous slide we know that we've spent
$100 total based on how many leads we actually receive so let's assume we had
10 leads and we spent a hundred bucks it's 10 bucks per lead this is an
important metric to know because you can use this number to compare against other
advertising options if my cost per lead is $10 on Facebook what does it cost me
per lead if I run a radio spot or if I do a print ad in this vehicle with a
coupon offer and people come in with the coupon offer or they mention some type
of promotional code on the radio spot so we know we can track that lead back to
that specific media vehicle when you have a cost per lead you can compare
that cost per lead against other advertising options and basically we
want we want the lowest cost per lead so whichever media vehicle is given us the
lowest cost per lead is the one we want to use the most so we determine our cost
per lead by the total ad cost hundred dollars in this case we spent $100 and
clicks at a buck apiece for the day divided by number of leads 10 and when
you look at cost per cost per click and cost per lead you can depending on the
size of your business and how much volume you can be looking at these daily
or weekly or monthly oftentimes they roll this up into looking at them on
monthly figures what was our average cost per click for this month versus
that month what was our average cost per lead this month versus that punt so when
somebody gives you a lead they typically go through this process they click on
your content and then there's an offer would you like my free video just give
me your email I'll give you this free video and they give you your email and
then at that point that puts them into a landing page where they can get that
free content and you've now captured the email so you know which offer they came
from there are some very complex behind-the-scenes software packages like
you and soft that track and measure all
these different ads and offers to see you know which ads which offers even the
colors thinks they call a split testing that you see on your last bullet point
on this slide like what if we do an offer with this language versus this
language which one has a higher response rate which color of the ad which
products all of that you can test all these things and see which things are
going to have the higher response rate the customers so a customer opts in with
their email they go to your website now and go to a landing page and we're
tracking that behind the scenes with Infusionsoft and we have a lead so but
we don't have yet is a sale so now we want to go to step three if we actually
get the sale so when we get the lead and they're getting our free stuff they
might interact with our brand and consume a lot of our free content for a
while before we actually get them to buy something so free free free and then
eventually hopefully they subscribe we get them hooked on the content and they
sign up for more we get them in what we call our funnel once we have the
information there on our funnel we can keep advertising to them to infinity so
we have a cost per lead in this case ten dollars then we get to the third step
cost per conversion hey we made a sale how do we determine our cost per
conversion again it goes back to that total ad cost divided by the number of
sales not the dollar value of the sales but the number of people who purchased
so in this case let's assume we had one sale and let's assume that the product
we sold them in cost a hundred dollars how what was our cost per conversion is
a hundred dollars so it costs a hundred dollars in advertising we spent a
hundred dollars and clicks and we had one sale so a hundred dollars divided by
one is 100 dollars per sale and our product cost us was sold at a hundred
dollars so did we make any money no we didn't
make any money that was the sale price of the product to the consumer now we
probably have some built-in costs you know some operating costs behind that
you know the cost to produce the materials and all that kind of stuff so
really if we spent a hundred dollars in advertising and sold it for $100
we've lost money so you know again what I was saying in previous slides is you
ideally a three to one ratio so for every dollar of advertising you spend
you get three dollars back in sales so but that's how those are some of the
baseline metrics in summary your your pay-per-click also known as cost per
click your cost per lead and your cost per conversion okay that's our first
digital advertising lecture I know that was a lot of material go back and look
at the overview slide where we talked about you know talking about keywords
and content and engagement and the bidding process and the steps involved
in digital advertising and the return on adspend metrics all right thanks for
listening bye bye
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