What You Should Do If Your Paid Ads Aren't Profitable

Today, we're going to talk about what you should do if your paid ads aren't profitable.

Most people, they start paid ads and man, it doesn't work. It's too expensive for me. Keep this in mind. Google and Facebook make billions, if not hundreds of billions of dollars or some crazy amount like that. And the reason being is because paid ads do work. If you can't make them profitable, it doesn't mean that paid ads aren't profitable. It just means that you need to adjust your approach. The— and Eric and I are going to give a few tips on what you can do to start making your paid ads profitable. The first, and I'm going to focus on the conversion end, Eric will focus on the campaign end. On the conversion end, the first thing you can do is add upsells and downsells. If people are checking out, they're buying one product, whether it's for $5, $10, $20, $100. If you can add more upsells and downsells, you can increase your average cart size or your order value or the lifetime value of your customer. which can increase how much you're willing to pay for a paid ad spot, a CPM, or per click. And you'll also increase the likelihood that your campaigns will be more profitable as well.

All right. So on my end, the first thing I'm going to talk about is from a campaign perspective, it's your creative. And a lot of times I think when I used to work in tech, we used to think that we can just put up one ad and we're good to go. And then you realize that the creative has a lot to do with it. So Using a Facebook ad library, you can look at your competitors or look at people that you like, or even just scroll through your feed on Instagram or Facebook and save the stuff that you like, create what we call a swipe file. And then you can draw inspiration from that. And that's what creative is. A lot of times it's iterating on what other people have done already. And so you can use a tool like Adbeat, that's A-D-B-E-A-T, to look at other YouTube ads, other display ads that are out there, but you have to constantly be iterating on your creative because if your creative is getting, let's say a 1% click-through rate, which is not bad, but if you can get up to 3%, you're gonna get a lot more traffic. Coming in, that's going to affect all your down funnel metrics, right? Your CPA, all the other stuff that's down there. And just keep in mind too, from a macro perspective, we think, we expect paid ads to happen, that the results happen immediately. Just yesterday I was, I met up with someone and then she was saying how she just needs the ads to work for her business. But it's like, how long have you been doing it for? Oh, like 2 weeks. It's like, no, like it can take 5 to 6 months at times. It can take a long time to get this stuff working. It's a lot of iterations. And if it were easy, everyone would be doing it. It's just that all the case studies that you see out there, people are like, oh, look at this result I got, look at this result I got, as if it's really easy and you can get that the next day. And then they just blame it on the paid ads or they blame it on the agency.

Yeah, no, totally. And then the other thing that I always tell businesses is they want to sell right away instead of helping people. If you help people, you can drastically increase your conversions. There's a case study that Google released with Olay, the skincare company, and Olay used to run ads when people typed in keywords like dark circles under eyes. Olay would have an ad that says Olay eye concern treatment products for around the eye. And then they decided, hey, let's change things up and let's create an article that educates and helps people remove the dark circles under eyes and also talks about our products. So when someone Googled dark circles under eyes, the same keyword, they started changing up their ad copy to be what causes under eye circles, easy lifestyle tips from Olay. And the landing page had tips and information. It also sold their product, but it first educated. And that caused an 87% increase in click-through rate, a 30% decrease in the average cost per click, and 100% increase in site conversions. So not only are they getting better click-through rates, cheaper cost per clicks, they're also getting more conversions. So overall, their campaigns became more profitable because they started helping people first instead of just saying, sell and buy from me. They're like, let me help you out. And then if you like what I have to say, then buy from me. And it was authentic and it worked extremely well.

Yeah. And so look, because this is a short podcast, there's so much that you can do from a— we can get really granular. We can talk about the targeting that you're using, that the frequency capping, all that type of stuff, that stuff that is going to require more work from your end. And I really recommend looking at, there's some great paid ads podcasts that are out there. There's some great paid ads resources that are out there, but what I would say from a, also from a macro level as well. We just talked about the creative, but we had Billy Gene on this podcast before from Billy Gene Is Marketing. Love him or hate him, one really important thing he said, which I think everyone should agree with here, is it's your offer that matters even more than the creative. Because if your offer is a no-brainer, let's say Single Grain or Neil Patel Digital, we're saying, hey, you know what? We'll run your ads for you and you don't pay us until we perform. So we will front all the ad costs, right? That is a no-brainer offer versus what someone says, hey, we're going to charge you a $5,000 a month retainer on 15% of ad spend, whatever it is exactly. So if your offer is a no-brainer, that's going to affect your creatives and that's going to affect all your down funnel metrics. And you're going to perform a lot better. Obviously you want to make sure that you're optimizing, you're making all the right tweaks. I believe that's more table stakes now. And a lot of people know how to run paid ads. So all that stuff you can figure out later, but we want to talk about the macro stuff that you should be looking at. Neil, anything else?

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