This might sound odd coming from a guy that runs an agency focused on search engine optimization and Google rankings, but anytime we launch a new venture within the agency, I aim to launch the business solely on the back of online advertising. In short, we pursue niches where we can buy traffic from search engines, convert leads or revenue, and make a reasonable profit at the same time - "free traffic" from Google rankings will come, but it will come later.
3 Reasons We Focus on Online Advertising
The short answer is because I'm impatient. Building up a large amount of traffic from SEO for a brand new online business can take 3-6 months or more, and that assumes that you're cranking and doing things right.
We build our initial traffic with online advertising, which can start flowing in a matter of hours (ie once you turn the ads on), and then get the benefit of lower cost traffic from search engine rankings over time which makes the website even more profitable.
Here's why we love online advertising:
Here's why we love online advertising:
It scales - FAST!
Depending on the market we're launching a business in, it's possible to get to 1,000's of website visitors per day within literally a few hours of launching. At the start of November, we launched a business we've been working on for a few months and got our first sale in 90 minutes - this happened solely because we built and launched the business on online advertising.
With online advertising traffic, you can tap into existing demand in the marketplace right away if you have the budget for paying for the traffic. And once you're in the market, getting traffic, and generating profitable revenue from that traffic (we'll talk about knowing your numbers in a second), the name of the game is to scale as quickly as possible while (a) maintaining your numbers (b) and maintaining the quality of product / service obviously.
But it's extremely important to know the numbers of the marketplace, or you'll loose a ton of money faster than you ever have before by jumping straight into an online advertising based growth model...it's a fast model, but that means you can scale profitably quickly or you can loose money quickly...
With online advertising traffic, you can tap into existing demand in the marketplace right away if you have the budget for paying for the traffic. And once you're in the market, getting traffic, and generating profitable revenue from that traffic (we'll talk about knowing your numbers in a second), the name of the game is to scale as quickly as possible while (a) maintaining your numbers (b) and maintaining the quality of product / service obviously.
But it's extremely important to know the numbers of the marketplace, or you'll loose a ton of money faster than you ever have before by jumping straight into an online advertising based growth model...it's a fast model, but that means you can scale profitably quickly or you can loose money quickly...
It is all about data - know your numbers, and you win
The most important part of building a business thru online advertising is also one of my favorite parts. The entire process is all about DATA!
Before you launch, it's all about data:
Granted, all of these numbers are predictions before you launch, but there are tools out there you can use to get a pretty darn good estimate.
Before you launch, it's all about data:
- You can see how many people are looking for your products and services, before even starting
- You can estimate the cost of getting those people to your website
- You can estimate the % of those people that will buy, thus knowing your cost per sale
Granted, all of these numbers are predictions before you launch, but there are tools out there you can use to get a pretty darn good estimate.
- SpyFu.com or Ispionage.com are tools (paid) that show you competitors' entire search engine advertising campaigns (i.e. Google Adwords pay per click campaigns). For example, you can see all of the keywords they're bidding on through search engine advertising, their ad copy, their landing pages connected with each ad, and much more. There's a few ninja tactics you can use to know for a fact which keywords in the marketplace are profitable for them, but that's a post for another day ; )
- WhatRunsWhere.com and MixRank.com allow you to see where your competitors are advertising across the internet and various metrics to know what's profitable for them. These are similar to SpyFu and Ispionage, but they're focused on online display / banner advertising rather than search engine advertising.
Select keywords Hudexchange.com is bidding on in Google Adwords. Note that the "CPC" (cost per click) in ispionage.com is not helpful for quite a few keywords (i.e. it's not $0.05 - that's the default shown if they don't know the CPC). The key metric here is the # of days this site has advertised on this keyword. If you're spending $100K/month on online ads and a keyword cost $5 per click, you're only going to advertising on that keywords for 100-200+ days if it's profitable....you can leverage this competitors data to know what's working for them and replicate it.
Once you launch the business, you monitor your numbers and focus on them day in and day out:
Every time we launch a new project, I monitor these numbers religiously until I know the ins and the outs of every single part of the campaign.
- How much traffic are you getting and what is the cost of this traffic on a per visit basis?
- What % of visits are converting to leads and sales which tells you the cost per sale
- Are you profitable based on all your numbers? Which parts of the process (# of visits, cost per visit, conversion rate, etc. etc. etc.) can you impact to gradually optimze your business over time.
Every time we launch a new project, I monitor these numbers religiously until I know the ins and the outs of every single part of the campaign.
you can win - and win big!
In many markets we go in to, the competitors are doing online advertising but are only doing it at an average or slightly above average skill level at best. That's not to say they aren't running solid businesses, doing well, and running successful online advertising campaigns - it just means that they don't have to run an extremely tight ship when it comes to online advertising to be the market leader.
These are the exact types of markets we look for, although there's other metrics we look at.
My goal is always to go into markets where we can apply all the lessons we've learned in client work over the past 7 years to decimate competitors through cut throat online advertising techniques. Knowing the data, living and dying by this data, and being able to make decisions and changes quickly based on this data allows us to do that - everyone loves a great battle.
This level of competition is common in some hyper-competitive industries, but there are plenty of industries out there where that level of competition hasn't been needed...when we go into those markets with advanced tactics, an OCD-level focus on our campaign data, and the internal skills and infrastructure to execute faster than competitors, we win. It's extremely exciting and fun!
These are the exact types of markets we look for, although there's other metrics we look at.
My goal is always to go into markets where we can apply all the lessons we've learned in client work over the past 7 years to decimate competitors through cut throat online advertising techniques. Knowing the data, living and dying by this data, and being able to make decisions and changes quickly based on this data allows us to do that - everyone loves a great battle.
This level of competition is common in some hyper-competitive industries, but there are plenty of industries out there where that level of competition hasn't been needed...when we go into those markets with advanced tactics, an OCD-level focus on our campaign data, and the internal skills and infrastructure to execute faster than competitors, we win. It's extremely exciting and fun!
is online advertising right for you?
That's really a decision to make internally with your team. If you know your numbers at a deep level and have the discipline to manage the entire business by these numbers, then online advertising can work incredibly well for you. The most common mistake people make is only partially knowing their numbers and making decisions based on their guy feeling - you either need to be all in on managing based on data, or not pursue online advertising at all.