EcommerceBytes-Update, Number 355 - March 16, 2014 - ISSN 1528-6703     3 of 6

Online Sellers See Positive Return with Paid Ads

By Greg Holden

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Getting attention for your online business is like selling peanuts in a big pro basketball arena. If you only offer your peanuts in the stadium's food court, sales will be limited. But if you pay a peanut vendor to go into the stands and yell out to the crowd that they are available, sales will go up. The vendors literally get right in each spectator's line of sight.

Once you've gone through the effort and expense of creating your online business, should you pay an advertiser to get in potential customers' line of site and "yell" that your products are available? I surveyed a number of sellers and present their tips and suggestions below. In this article I'm focusing on the venues where online merchants pay to advertise. In future article I'll examine how to measure ROI, whether or not to hire a consultant, and pitfalls to avoid.

It's worth noting at the outset that of the nearly 20 comments I received, only one said paid advertising through Google AdWords, Bing, Facebook, or other services is not worth the expense. The other businesspeople said that if you "spend smart," paid advertising does drive traffic and results in more purchases.

Google AdWords
Ann Marie Bauman, CEO/Owner of Ann Marie's, which sells European gifts and home decor, pays to advertise through Google AdWords and Facebook. She's also working on more exposure on Google Plus. She gets help with SEO from her site's host, 3D Cart, and uses eBay product listings to get organic product listings on Google.

"Google is driving at least half of the traffic to the site but of course we are paying dearly to compete in this arena," she comments. With Facebook, she says, "some ads seem to do well and some ads don't."

As far as tips, Bauman says: "If I were starting now I definitely would get on board with someone who knows what they are doing with online advertising. Dedicate a person in your organization - hopefully a marketing and advertising and definitely computer minded person or find a service that you can work with. My hit and miss approach definitely cost me a lot more money than needed."

Paula Scholfield of Naperville, IL, who started the online flower store QualityBlooms last October with her husband Dan Smith, uses Google AdWords, Bing, Facebook, Twitter, and Amazon to drive traffic to the store.

Scholfield advises merchants to be careful with Google's estimates before starting an AdWords campaign. "New advertisers should be very skeptical of the estimated click volume and CPC that the Google AdWords tool projects for your chosen keywords before you place your first campaign," she says. "We found that those estimates severely undervalued the cost per click needed to be anywhere near the first page of search results, and even then overestimated click volume. And if you're not on page one, you can expect very little volume."

She continued, "Of course, paying an exorbitant CPC to be there won't work in the long run either. We spent a lot more money on Google than we had planned for very little traffic and no revenue at all. We are in a very competitive space, so we've now elected to try other channels."

Lisa Chu, founder of children's formal wear store Black n Bianco, sells on eBay and Amazon and pays for Google AdWords. "What we learned from Google AdWords is if you don't know what you are doing you can end up spending a lot of money with very low conversions. My advice is to start off small, use around $20-$50 in your daily budget and target your specific niche keywords. Within a month you can see what keyword phrases are bringing you the highest conversions.

"Our Google AdWords campaigns now bring in 50 percent of our gross sales on our ecommerce site. With a very nice conversion rate of 10 percent with each conversion costing us around $5, which is cheaper than paying the Amazon or eBay fees."

Traditional Banner Ads
Tao Roung Wong of Vancouver, Canada, owner & CEO of PDB Sales Inc. which owns two online stores including board gaming site Starlit Citadel, paid to advertise on what he describes as the main social hub for board gaming, Board Game Geek. Targeting the banner ads (see sample shown) and making them attractive was key, he says.

"In October 2013, we updated our banner advertisements to include flash and bring it more in-line with our overall brand. We had a professional designer work on our ads and provide us multiple versions of both the flash animated banner and static banners which we then placed on the site. All the advertisements were geographically targeted and views were restricted to reduce over-exposure of the brand. The site would then automatically optimise our advertisements for the most click-throughs. What we saw was an overall increase in click-through rates of 42 percent from our previous banners as well as an increase in Conversion rates for visitors by 112 percent."
Although the jury's still out, Paula Scholfield says paid advertising on Amazon may be helping her sales there, she says. "Selling on Amazon started out really slow for us. We were about to take down our Amazon store, when a couple orders came in. We've been testing paid ads on Amazon for the last week or so with mixed but promising results. It makes sense: people are on Amazon to buy. That may not be true for people on Google or Facebook."

Bing Ads
Mario Acosta sells personal defense products (pepper sprays, stun guns, etc.) on eBay and his own online store "I run a pay-per-click (PPC) campaign on a daily basis on Bing Ads and I also use Google AdWords but usually only around major holidays," he says.

Acosta says he got started with online advertising by reading voraciously. After losing money with PPC ads initially, he now gets a positive ROI and his ads generate about 80 percent of the sales volume on his sites. He recommends running Google Analytics and running and analyzing report regularly.

"Make sure there are enough keyword searches for whatever keywords you choose," Acosta adds. "Be EXTREMELY careful with default PPC campaign settings with both Google and Bing. Make sure those settings are in your best financial interest. When you launch your first campaign ever, watch it on an HOURLY basis. The last thing you need is to blow your daily budget in one hour. Adjust your bids as required. Use Google Analytics."

Without analytics data, Acosta said, you are virtually running blind. "Analyze results daily, then weekly. Don't give up after day one. PPC is a numbers game, you may have zero sales one day and five the next. The longer you run a campaign, the more you'll understand the real numbers."

Jimmy Rodriguez, Chief Technical Officer of shopping cart provider 3dcart, said that among his company's merchants, "Bing search share is about 30 percent, but the share of advertising spend on Bing Ads is about 21 percent."

Google Product Listings
A few responses mentioned paying for exposure through Google Product Listings. Matt Lyttle, General Manager of home garden supply site Crimson Carrot, said, "Google Product Listings brings us customers who are looking to buy items we offer. If we are near the top of the listings, and we have a good picture and description, we have a really good shot at getting the order. The cost is minimal and scalable, which makes it great for a home-grown business."

Merchants love Facebook for building community and loyalty with their customers. But I didn't hear a lot of enthusiasm for Facebook ads. 3dcart's Rodriguez summed it up: "Facebook ads continue to be a great tool for building brand recognition and for infiltrating a lifestyle niche, but are not as effective as Adwords for our ecommerce clients looking for immediate impact on ROI."

About the author:

Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.

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