What business owners need to know before developing a creative strategy
Digital advertising is a perfect match for direct-to-consumer companies trying to scale, especially when it comes to video advertising on social media. As the CEO of a marketing agency that specializes in creating eye-catching social videos, I've found that pairing entertaining content with targeting, tracking and retargeting gives you a formula for your campaign to excel beyond your wildest dreams.
Ready to take off? Before you begin crafting your digital advertising strategy, there are four things you need to know. Then, you can buckle up for success:
Know your math.
Digital advertising has an unparalleled amount of data, but it doesn’t unlock growth on its own. D2C owners and marketers must translate the data to fit their specific business models and uncover the metrics that matter most, including:
• Cost per acquisition: Do you know what it is and what it should be?
• Lifetime value: Do you understand its relation to CPA?
While a brand with a small customer base can maintain a low CPA, the brands that successfully scale typically do so on lifetime value, even if it means accepting a higher initial cost to acquire a customer in order to cast a wider net.
You can mitigate a rise in CPA by increasing your average order value, which in turn increases lifetime value. Some ways to do this is by offering bundles and breaks on shipping based on the amount of product purchased.
Before you invest in creative and commit to ad spend, step back and grasp the math. Nothing works without it.
If you choose to work with an agency, trust it.
Effective leaders understand when to drive and when to let someone else take the wheel. The latter doesn’t put you in the backseat, but rather, the passenger seat.
If you hire an agency to develop your advertising strategy, make sure you trust it. You are 100% part of the process and navigation, but you are paying the agency to apply its expertise to your business and steer toward your goals. A great relationship with your agency makes success all the more rewarding. And just like you might have a natural tendency to always want more, your agency wants the same for you.
Know your mentality.
There are two types of business growth: managed growth and aggressive growth. It is very important to know which mentality you have and communicate it to your team and partners.
D2C owners seeking managed growth want to grow in increments or to specified numbers while keeping the business orderly and comfortable throughout the journey. In my experience, leaders aiming for managed growth typically focus on getting the highest return on investment possible and ensuring the quality of the overall customer experience.
Other owners want aggressive growth. In other words, they want as much growth as they can as fast as possible. They are willing to ride out swings in customer acquisition costs and perhaps even a period where they are losing money in pursuit of eventual exponents.
Either mindset is viable, as long as you recognize where you stand. For example, an owner who prefers managed growth simply won’t be able to stomach a temporary swing from 15% profit to 15% loss on the premise of eventually coming out ahead. Meanwhile, the owner seeking rapid growth has a higher tolerance for that same level of risk and investment based on hitting specific gross sales numbers.
Understand what can happen.
There is a potential downside of growing and scaling fast. With the reach of digital advertising, success can be inundating. If your product is desirable, your creative is engaging and your targeting is accurate, it’s possible that you could overstrain any one or a combination of your key business functions — whether it be your website, supply chain, stock, customer service or shipping — and come to a full stop.
Believe in your brand and plan in advance for high demand. Think about what might break if your business were suddenly doing five to 10 times the sales volume it is doing now.
Putting it all together
Are you ready to be an astronaut?
Scaling a business quickly online can feel a lot like getting on board a rocket ship: You are hurtling toward new levels of your business at what feels like the fastest rate anyone has ever seen. And in my experience, crafting an impactful digital ad campaign can make a big difference. So before you take off, consider this checklist to help you avoid common mistakes made along the way.
Buckle up, and enjoy the journey.