When we are guided by principles, we can draw conclusions based off those first principles, defining the specifics of “how” later. Here is my dynamic list of principles in regards to advertising and marketing, which will be updated as I come across scenarios in every day life. I’m making these up as I go along my merry life.
1. Precision. is the most important concept in advertising.
The book ‘Breakthrough Advertising’ by Eugene Schwartz – who was basically a god of marketing at the time – defined 6 stages of the buyer cycle which are still used to this day: from problem unaware, to hot and ready to buy, and the multiple steps in between. Facebook Advertising and Google Ads have both been huge industries – the former because immense swathes of data meant we could target people like never before (with machine learning just improving precision moreso), and the latter because of Google’s ability to capture people’s intent by their searches.
So the most surefire way to improve profit from advertising is to improve precision. It goes beyond “send right message to right person at right time”, because right is a spectrum from most precise to not very precise. Andrew Foxwell, an extremely talented Facebook ad marketer, emphasises in his Facebook Ad lectures 1 that increased segmentation/fidelity of audiences we present our ads will yield better results.
Defining Age/Gender breakdowns on Facebook is how I’ve been doing it more recently. Note that audiences can be from unexpected places. How was I supposed to know that affluent 45-54 year olds was a very profitable group for tech accessories, rather than young people? …I wasn’t. The proof is in the data.
Ultimately, preciseness is the key to advertising. It’s like two overlapping pieces of cellophane, one yellow, one blue: the more they overlap, the more “green” you have (sales). But yellow is not necessarily a homogenous yellow and blue not a homogenous blue: their heterogeneously shaded pattern means that greens (sales ) can shine through more or less intensely when there is more yellow (audience precision) or more blue (product precision) or more light (messaging precision). This may be difficult to visualise using words to describe it alone, but fundamentally: the more precise those three things fit together, the more money that comes in.
2. The second most important concept is to understand that everyone is at different journeys.
This is widely known, but people have different “warmths” towards buying something. A cold audience needs to be warmed – for example, with extra information, social proof, or otherwise – before they buy. A warm audience needs something more enticing to push them over the edge. A hot audience just needs a small nudge. Messaging and creative, in particular, should be differently articulated depending on the stage of readiness. We once again allude to Eugene Schwartz here.
In addition, this principle also takes into account psychology, which is extremely important in sales (e.g. Cashvertising’s 8 human “Desires”). Getting rewards and avoiding loss are the two fundamental things here, though manifested in a vast number of ways.
TOFU = Top of Funnel. Have to prospect to find these guys.
MOFU = Middle of Funnel. They’ve engaged superficially. Use this for data to inform who you should target for your TOFU.
BOFU = Bottom of Funnel. Hottest. Retarget these guys.
Ryan Deiss says that marketing is articulating a message to get a customer from a BEFORE state to an AFTER state, with the perceived value being hinged on that articulation. The more aspects of this journey you articulate that resonate with the customer, the more likely the sale.
3. More scale usually means less precision. But, for obvious reasons, this may not be a bad thing.
Making a 1000% ROI on $10 of ad spend is nowhere near as good as making a 900% ROI on $1000 of ad spend.
4. Scale can be horizontal or vertical. Both are useful.
Horizontal scaling = target different but similiar interests to the profitable one, to expand your audience.
Vertical scaling = duplicate previous ads and then increase the budget e.g. by 50%.
5, An ROI negative campaign is useful IF you obtain sufficient amounts of information to take a swing at an ROI positive campaign.
If your campaign is ROI negative BUT you have more data points available to you that specifically help with increasing precision, then things still might work out.
6. WIth regards to creative, higher visualisation almost always wins.
Video is far superior to text/audio, which is widely known and from what I’ve seen from my data (in terms of ROI). As the saying goes: the first use of a product is in the buyer’s mind.
More to come as I figure out more…
- ’Failing to Scaling’ ones at Jon Loomer Digital) / Power Hitters Club ↩