As a businessperson, it is natural to want to increase your sales and revenue. One way to do this is to get more customers by scaling your ad campaign.
However, there are many ways to start scaling the number of ads that you are running, but only a few of them will lead to conversions and thus more sales. In this post, you will find out how to successfully scale ad campaigns and what to do if you can’t scale your ads.
When to start scaling your ad campaign?
Before you start scaling, you need to ask yourself a fundamental question – Is this the right time to grow my business. Check out the following two criteria that you must meet to ensure you don’t end up losing more money after the whole process.
A Profitable Business
Generally scaling your ads requires you to invest more.
In other words, you need to have more money available to invest before you can reinvest this money into your business to acquire more customers.
To achieve this, it is vital that you are running a profitable business model. Experts suggest that you should be at least 30% profitable before you think of reinvesting in your company to increase the number of your ads.
You Have Ads that Work
Once you are sure you have the money, it is essential to see if you have ads that are working or not. There is no logic in increasing the number of ads when they are not working; that would be a complete waste of money.
To see if the ads are working or not, all you need to do is track your traffic. If your buyers have come to your site by clicking on one of your ads, then you know which ad was profitable. If you do not have any ads that are successful, you could try split testing to create one that is.
Problems Faced While Scaling
Scaling ad campaigns is not an easy task, and people often end up facing many challenges while they try to do so. Listed below are a few problems that you might encounter while trying to scale.
Maxing Out the Audience
The most common problem faced while scaling is running out of people who are interested in your niche. This problem occurs even more if your business is one that concentrates on a unique field.
For example, if you come up with a range of formula one racing merchandise, the number of potential buyers will be quite limited. If you try and target these fans on Twitter, that number will be even lower, and if you concentrate on only Ferrari fans, the number only drops more.
So, when you try and scale in such niche fields, you might run out of people who may want to buy your product. In this case, you need to come up with different ways to scale up.
Making Misguided Investments
People often make this mistake of thinking that more ads equal more conversions. As a result, to try and increase their sales, they post more ads to their current audience.
For example, imagine if you are spending $20 to advertise to your audience of 30,000. After a while, you decide to scale and pay more (maybe $50) on advertising to these same 30,000 people.
Unfortunately, the conversion rates remain more or less the same.
This investment does not lead to an increase in the number of sales; it mostly increases your costs, and reduces your profit margins for the same amount of sales.
Methods to Scale Up Your Ad Campaigns
Now that you know when you have to scale up it is time to check if you can. If you have determined that you have met the criteria and would like to increase your revenue then here are few ways you can do it.
The most obvious type of scaling there is to scale vertically. This means that you want to reach more people in the same field. So, Imagine you were targeting 2000 people earlier, now you can target 10,000 or more.
There are a few ways you can do this. One way is to invest in more advertisements so more people can see it. It works in the same way how placing banners on different streets (in two different areas) would end up attracting more customers.
Similarly, another option will be to start advertising nationally or internationally if you were initially only applying locally first. In vertical scaling, this would give you the highest increase possible.
Unfortunately, the previous methods require you to spend more money to get more customers. The way to keep your costs constant would be to relocate your advertisement. Imagine you are advertising in a Facebook group for sports car enthusiasts with 3,000 or so members. You can then stop advertising there and instead advertise to a group which has 30,000 or so members. Assuming you have a similar conversion ratio, your sales would go up with no increase in advertising costs.
Sadly, vertical scaling often has its limits, and you may have to switch to some of the other methods in this list once you reach those limits.
As you have seen, sometimes you might hit the maximum number of people who are interested in that particular niche.
For example, if you are selling fishing equipment, there are only so many fishermen available online who would be willing to purchase from you. When you reach that audience limit, you need to stop scaling vertically and start looking to your sides.
Your target customers don’t always need to be fishermen by profession. There are more than enough people who love to fish as a hobby. These people would often follow content about the great outdoors and may have even seen a few videos on how to fish correctly or how to make bait.
You can target these people and increase the number of people in your audience.
Switching To a Different Advertising Platform
Like vertical scaling, horizontal scaling also has its limits. You will start running out of people who relate to your business and are willing to buy from you. So what do you do when you can’t scale vertically or horizontally?
You change the site you are advertising on.
Say you were earlier advertising on Facebook and you have scaled as much as you could vertically and horizontally, you switch to a different site like Twitter, Instagram or even Tumblr. While you may find some of the same people on these sites, you will find new people who are interested in your products and haven’t seen your ads before.
Depending on your product, the number of new visitors will vary. This method will require you to spend more money since you don’t want to stop advertising on the other sites. You could hire some professionals who can suggest which sites are more likely to have higher concentrations of your target audience.
Scaling Ad Campaigns on Facebook
Facebook has over a billion users who are online at some point in the day. However, only a small percentage of these people can act as your target audience. The best part is that even a tiny percentage of a billion is still a few million and that is a lot of potential customers.
The way Facebook advertising works is that you tell Facebook what demographic to whom you want to sell your product. Thanks to its data collection methods, Facebook knows exactly who you are looking for. Then you suggest a time of the day when you want your ads to be displayed. Then, depending on the number of people who want to advertise at that same time to the same people, you may have to enter a bidding war to get that ad space.
Here is where advertising on Facebook can get ugly. You could end up paying a lot on ads which may or may not not convert that well. However, to compensate for that, Facebook has a lot of useful features to help you advertise more effectively and keep your advertising costs in check. Some of them are listed below.
One of the coolest features is called Facebook pixel where all you have to do for is add a small strip of code to your websites. This way, every time someone purchases something, Facebook begins tracking their web activity with the help of their ‘pixel.’
Facebook creates a profile of the buyers using this information and then finds out similar people on Facebook to advertise your business to. This tactic guarantees a very high success rate as Facebook is displaying the ads to people who are highly likely to buy your product since people like them already have.
Optimization of Ads
In the same way that Facebook creates a profile of your buyers, it also monitors how various users interact with your ads. This way they can start building a profile of everyone who is interested in your ads and wants to engage in business with you.
Once it finishes creating such a profile, it then starts using your ads more effectively and displaying them to people who will find your ads more interesting. As a result, people often see their conversion rates increasing over time. This process ultimately leads to an increase in sales if you have the patience to wait for it.
You can also tell Facebook how much you are willing to spend on your ad campaign – say $X.XX per customer acquired. You then feed in the details of the target demographic and Facebook takes care of the rest.
How to Profit Without Scaling Up
Sometimes, even the best-laid plans fail miserably. In some scenarios where you probably didn’t hire a professional, or you were just plain unlucky, it is possible that scaling up might not have worked for you.
When you can’t scale up, you might need to find other ways to increase your revenue for future products. We have listed some of these methods below for your reference.
Reduce Operating Costs
Reducing customer acquisition costs is just one way to increase profit margins. Trying out other methods like decreasing the production costs, lowering the transport costs and even using different materials can help you reduce the overall cost of your materials and increasing your profit margins.
Improve Retargeting Campaigns
One of the best ways of increasing conversion rates is to retarget your customers and remind them to buy something they were interested in previously. Reminding customers who visited your product pages can increase your chances of conversion which can boost your revenue as well.
Improve Your Offers
Another great way to reduce your costs is to improve the overall package that you are offering. You can combine multiple products or services together. While you may be lowering your profit margins with this method, you will be increasing the number of products that you sell, thus increasing your total revenue.
Wrapping It Up
Scaling ad campaigns can be a daunting experience if you have never done it before. There are many ways to scale but not doing them correctly will only lead to an increase in running costs. We recommend a sit down with our professional team which will help you find out what steps you can take now to start scaling your ad campaigns correctly to make more money.