Do you know that people globally spend around 151 minutes daily on social media? It’s not surprising that social media ads have become a go-to strategy for brands of all sizes to promote their products.
While social media might be one of the highest revenue generators for brands, it’s impossible for brands to track the revenue earned from it accurately. A recent report by SimplicityDX mentions that social commerce revenue is underreported by approximately 245%.
This can be attributed to several reasons like:
- Consumers head directly to the brand’s website to purchase the product rather than clicking through the social media ad
- In-app shopping
- Most importantly, consumers don't convert in one go. Our research shows that customers may need at least seven touches before they convert
So, that brings us to the next question: how many ad touches does it take for an ecommerce brand to make a sale? We will try to find an answer to this question in this blog post. But before that, let’s understand the ad funnel for ecommerce brands.
Ad funnel for ecommerce brands
A funnel in marketing is a journey that a customer goes through, from discovering a brand to making their first purchase.
An advertising funnel is similar to a marketing funnel, where marketers create targeted ad campaigns for each stage of the funnel.
An ecommerce ad funnel can be divided into four stages:
1. Awareness stage
Social media platforms like Facebook and Instagram offer paid ads and pages that you can leverage to grow brand awareness. Remember, at this stage, your ad should be great to make the first impression, educate the customer, and make them aware of your offerings.
The customer might not be ready to buy from you yet, but they should get familiar with your brand and your offerings so that they will remember you when they have a need.
2. Consideration stage
Now that your potential customers know what you offer and they have identified their needs, they might be considering buying your product. Create ads that are targeted to solve the customer’s need/requirement.
In this mid-funnel stage, you need to go further and showcase previous customer feedback and product descriptions through ads that click with the potential customer. Customers like to see at least six good-quality images and product videos. So consider having them in your ads and product pages.
3. Purchase stage
At this stage, the customer is willing to buy but still unsure if they want it from you. Use ads carefully to help them make decisions and purchase. Reduce friction that delays the checkout process.
For example, you may include a link in the ad that can take the buyer directly to the checkout page. Offering a discount code is also a good idea to boost conversion.
4. Retention stage
The sales and the ad funnel don't end with the first purchase. In fact, ecommerce brands need to retain customers to have a thriving business. Offer upsells, cross-sells, and add-ons to your existing customers through targeted ads.
Now that we understand the ads sales funnel and how ads work at every stage of the customer journey, it is time to understand how many ads it takes to make a sale. Sadly, this question has no direct answer, although experts believe 6-8 is a good number.
That’s because although it seems to be easy to track digital conversion, it's easier said than done. Changes in privacy cookies for user data have made it extremely difficult for ecommerce brands to track behavior post-click. Thus, optimization and reporting on campaigns have not remained the same.
Plus, there are other parameters that need to be considered. For example, the website authority, interest, price, policy, quality, post-purchase service, etc, all contribute to the number of touches needed to make a sale. A well-established brand might need fewer touches than a startup to make the first sale.
But, above all, the most important deciding factor is the quality of leads generated. For example, say, 100 people have clicked on your ad. But they have no intent to buy the product, so although your ad generated 100 potential buyers, they are not of ‘good quality,’ and you don't make sales.
On the other hand, say your ad has generated 50 leads with high intent. Most likely, you will make more sales, although the ad didn't generate a large number of leads.
That’s why generating high-quality leads is super important for sales to happen. So, brands should focus on their lead quality rather than the number of ad touches.
And to generate high-quality leads, it's important to consider all the advertising models available around you. This will also help you understand the cost and generate good quality leads. For example, if you set up Google shopping ads and generate high-quality leads at a very high cost, it may not be viable for your business.
So, set your budget and try out different social media platforms with your ads. But remember to have enough flexibility to change or tweak if it's not yielding the expected results for you.
Doing market research and taking note of what your competitors are doing are good ways to get about it.
Here are a few points to consider:
- If your ad has generated some sales, identify those people and try to find what’s common between all of them. What are their demographics? What kind of buying behavior do they have? Once you know your audience, demographics, buying behavior, and the kind of ads generating results for you, double down on them.
- Create a list of buyers and make targeted ads for them. Showing love with loyalty points, discount coupons, and personalized messages will increase your chance of repeat sales.
- One mistake many marketers make is looking at each ad platform individually based on the direct return they receive from that particular platform. However, we need to remember that each ad platform doesn't function individually but as a team of elements.
- When a customer thinks of your brand, they don't think of you because they saw an ad campaign on Facebook or Instagram. They remember you because they have seen your ads across multiple platforms, including Facebook and Instagram.
So, if you’re seeing no returns on Google searches and thinking to shut it down and instead focus on Instagram, think again. What if the customer saw your ad on Instagram, and then one week later, they searched for the product on Google? If your ad does not appear on Google searches, they might end up buying from your competitor.
How do I know if my ad is working?
Experts suggest having one high-level metric to check if a particular ad is working for you. The best way to do this is to have an ad-to-sales ratio.
Simply calculate how much you spend on an ad and how many leads you generate from it.
For example, if your ecommerce store saw $10,000 in sales from one ad this month and you spent $200, then the sales to advertising percentage is 50%.
For a D2C brand, 35-55% is a good number to be at.
Alternatively, if you’re using SimplicityDX AI Campaign Stores to offer a shopping experience to your targeted audience, attribution becomes even easier. Instead of redirecting social traffic to your brand site, these Campaign Stores enable you to turn all your campaign content shoppable, and make it much easier for the interested consumer to explore all the products of their interest.
In fact, brands like ModCloth are now able to attribute sales to their social media ad campaigns better. With the ability to take shopping experiences to social, ModCloth has been able to drive higher conversions from campaigns, and has also experienced a 50% decrease in their customer acquisition costs. Read about it here.
Remember, customer journeys are not linear.
A customer may see your ad on a social media platform, read the reviews on another platform, search for you on Google, and then purchase directly from your website.
So, it's important for brands to learn to keep it simple. Instead of hyper-focusing on each ad platform and touchpoints, look at how much you are spending on ads and what your monthly ROAS. Your ads should work holistically across platforms as members of one team to boost your sales.
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