Small business digital advertising bakeoff

What’s working today for small budget advertising? For my book, the biggest social network of all: Facebook.

leading-innovation-cspenn-portrait-book-cover.pngOver the last week and a half, I’ve been busy launching my new book, Leading Innovation. In my normal duties at SHIFT Communications, I have access to budgets in the thousands of dollars or more for clients who have objectives other than pure direct-sales ROI.

When I’m doing my own work, I pay as I go; pre-orders fund the first round of advertising, and I only add budget as I earn it. Why? This methodology keeps me laser-focused on ROI. Neutral or negative ROI gets the ax; like many small businesses, I can’t pay for more advertising with money I don’t have. This is a key point: my strategy is to sell as many books as possible at the highest margins achievable. Not every author has the same strategy or goals, nor should they.

What did I do to launch my book? I had earned enough in pre-orders to sustain a week-long ad campaign on three different ad networks: Google’s AdWords, Twitter, and Facebook.

  • To maximize ROI, I focused my ad campaigns on all three networks to my existing audiences only.
  • I’ve had retargeting tracking bugs on my website for several years, tagging every visitor for inclusion in product launch campaigns.
  • I also used Customer Match on AdWords, Tailored Audiences on Twitter, and Custom Audiences on Facebook, using my email newsletter list as the data source.
  • I used the same copy and/or images for all three networks. Facebook’s campaign also included Instagram.
  • I also included email marketing for comparison, since I’m an avid user of WhatCounts Publicaster, still the greatest email marketing software on the planet.

How did the testing go? Which service did the best? The results:

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Of the ad networks, Facebook thus far has done the best – but still has negative ROI. Twitter did the worst by far, with incredibly high costs and lackluster performance.

Some caveats:

All campaigns capped their budgets daily. It’s entirely possible that they could have performed better with additional upfront investment; whenever an ad campaign caps its budget, you’ve left audience on the table. However, like any other small business, I could afford what I could afford.

Email isn’t an apples-to-apples comparison because it’s a monthly fee, rather than a media buy. Keep that in mind.

AdWords was search plus display retargeting only.

None of these campaigns did any kind of outreach or brand building to net new audiences. These campaigns only focused on monetizing existing audiences. For larger brands, net new audiences and brand building matters. For the small business / sole proprietor, we rely on organic methods to grow our audiences and paid methods to monetize them.

What should you take away from my testing?

The most important lesson you can take away is to run a similar test. My audience is unique to me. My results will be unique to me.

Set up a similar test for your own marketing with the budget you have, with the audience you have, with the copy and creative you have.

Find out what works best for you. Keep an eagle eye on ROI. Do more of what works, less of what doesn’t work.


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2016: Year of the Yang Fire Monkey

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Happy new year! No, not on the Gregorian calendar, but the Asian lunar calendar. 2016 is the year of the monkey, and in the five elements cycle, it’s a yang fire year. What does this mean for us? Buckle up!

No, really. Buckle up. It’s going to be a rough ride.

The monkey’s personality, as an animal, is lively, active, mischievous, energetic. If you’ve ever spent any time watching monkeys at the local zoo, monkey energy is self-evident. Compare this to the relatively docile, almost boring energy of last year’s animal, the goat, and we get a sense of how different this year will be.

Yin and yang refers to the overall energy of the year. Is it rising or falling, growing or shrinking? A yang year is rising energy, a time when energy builds and grows. A yin year is falling energy, energy in decline or energy contracting. 2016 will be characterized by rising, growing energy.

The fire refers to the cycle of elements, earth, water, wood, fire, and metal. In Chinese, this is known as the Wu Xing; in Japanese, the gogyo. A fire year feeds off the energy of the previous wood year. A yin fire is the dying campfire after a night of roasting marshmallows. This year, 2016, is a yang fire, the blaze of a newly roaring fire with fresh fuel added. Wood begets fire and is consumed in the process. Fire also has a destructive aspect; in the cycle, it destroys metal, an element associated with insight and intellect.

Put these components together. What does rising, explosive energy and a mischievous animal combined yield? Imagine giving a toddler a triple espresso and a candy bar. Hilarity might ensue – but so might incredible destruction.

On the positive side, groundwork and plans we laid in the year of the yin wood goat, when things were quiet and docile, will come to fruition in the year of the yang fire monkey. Old growth burns away, lighting the way forward. Wood feeds fire.

On the negative side, fire’s heat fuels passions and intensity at the expense of rationality and intellect (metal). Any environment which is already contentious and incendiary will almost literally explode. Like becomes love, and dislike becomes hate. Fire melts metal.

What should you prepare for this year? Wood and water.

We can grow the intensity of our fire through the judicious application of more fuel: ideals, curiosity, stories, art, emotion.

We can also tamp down our fire’s intensity with water: logic, intellect, data, precision, rationality.

Our greatest danger will be getting swept up in others’ fires, in others’ passions and conflagrations, not realizing their fires are not ours unless we permit them to be.

Our greatest opportunity? The environment is ripe for fires to spread, so if you have a cause, a passion, a mission you want to catch on, this is the time to do it.

May your new year bring you health, prosperity, and happiness! Akemashite omedeto gozaimasu!


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Is business slowing down?

Is business slowing down? A handful of leading indicators may warrant concern.

A theme I’ve heard repeated in many different business conversations is that business is slowing down. Customers aren’t buying as much. Executives aren’t signing contracts. Sales prospects are stalling in the pipeline. Are there economic indicators which could explain this phenomenon? Or are these just anecdotes without a basis in data?

Three leading economic indicators worth paying attention to are the Baltic Dry Index (BDI), Initial Jobless Claims, and the Producer Price Index (PPI). These leading indicators can hint of troubles to come.

BDI tells us the price of shipping containers. If the price goes up, more companies are competing for shipping space. In turn, that means companies are producing more. As a rule, companies don’t buy shipping space speculatively, only when needed. If the price goes down, companies are shipping less, which also means they’re making less.

Initial Jobless Claims are a consumer leading indicator and a business leading indicator. More people laid off means more companies scaling back jobs.

Finally, PPI tells us how much companies are paying for their raw materials. If prices are going up, companies are making more stuff (and thus competing for commodities needed to make stuff). Conversely, a decrease in PPI means companies are buying less stuff and therefore making less stuff.

Combined, these indicators give a sense of the economy with regard to businesses. If all indicators are moving up, businesses are likely growing. If all indicators are moving down, businesses are uncertain or shrinking.

When we examine these indicators, we look at two lines: resistance and support. These are stock market terms; resistance means the recent top levels of any metric, while support means the recent bottom levels. Technical stock traders use these guidelines to determine whether a given metric’s behavior is anomalous or not.

Let’s take a look at the charts. First, BDI:

Resistance_and_support_-_BDIY_Quote_-_Baltic_Dry_Index_-_Bloomberg_Markets.jpg

Above, we see BDI has fallen through its support level. Already depressed, BDI has gone below support to a 5 year low. Companies are shipping less stuff.

Next, Initial Jobless Claims:

Resistance_and_Support_-_4-Week_Moving_Average_of_Initial_Claims_-_FRED_-_St__Louis_Fed.jpg

We see Initial Jobless Claims have broken through their resistance level, signifying that the overall 5 year trend may be reversing. Companies might be paring back jobs.

Finally, we look at PPI:

Producer_Price_Index_for_All_Commodities_-_FRED_-_St__Louis_Fed.jpg

PPI broke through a multiyear support level last year, but has declined below its 5 year support level at the end of 2015.

Any one of these indicators could be due to interfering environmental conditions. All three indicators show business conditions eroding.

Is business slowing down? In a nutshell: yes.

We must prepare accordingly.

Adjust our expectations for marketing’s ability to generate leads.
Expect a decline sales’ ability to close in shorter-than-average sales cycles.
Plan to increase spend on advertising just to maintain current levels of activity.

Tougher economic conditions mean stepping up our game as marketers.


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