Show 'n Tell with Blair de Jong | The Commons Calgary, Calgary, Alberta | November 30, 2016
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If it don’t make dollars, it don’t make sense
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Transcript of Show 'n Tell with Blair de Jong | The Commons Calgary, Calgary, Alberta | November 30, 2016
If it don’t make dollars,it don’t make sense
Agenda
• My Story
• Canada Advertising Trends
• The Advertising Layer Cake
• How To: Calculate Your Digital Advertising Budget
• Q&A
My Story
A-Town
We help peoplesell stuff online
Canada Advertising Trends
Canada’sInternet Population
Desktop28m
Mobile19.9m
Total 30.5m
Mobile only 2.3m
Source: IAB Canada, 2015
Mobile User Demographics
41%36%
23%
18-34 35-54 55+
Age
M, 55%
F, 45%
Gender
EN, 78%
FR, 22%
Language
Source: comScore, 2015
Advertising Spend
• Digital advertising spend up +21% from 2014 to 2015
• Digital spend +43% more than TV spend
• Mobile spend +79% and now 1 in 3 ad dollars spent on mobile
Desktop
Mobile$3.2
$4.6
TV Digital
$ billions
Source: IAB Canada, 2015
Where Does Ad Spend Go?
Google and Facebook account for 82%+ of ad spend in Canada
Source: comScore, 2015
CA11% US/ROW
89%82%
What is Digital Marketing?
A. Promoting your product online
B. Ads that show on your desktop, mobile, tablet or internet connected device
C. Paid, organic or earned online media
D. Quantitative, trackable activity where you can measure actual return on investment
E. All of the above
The Advertising Layer Cake
Awareness
Consideration
Conversion
Loyalty
The Advertising Layer Cake
Awareness
AwarenessInterest / Behaviour / Demographics Brand or Generic Keywords
Lookalike or Affinity Audiences
Audience
Lookalike Audience
Lookalike Audiences are a way to reach new people who are likely to be interested in your business because they're similar to customers you care about. You can base your Lookalike Audience on a variety of sources (ex: people who like your Page, or visited your website).
Source: Facebook
Lookalike
Awareness
AwarenessInterest / Behaviour / Demographics Brand or Generic Keywords
Look-a-like affinity
Your Brand Story
Value Proposition
Email Subscriber
Visit WebsiteLead Submission
Audience
Message
Goals
Awareness
Awareness
Awareness
Awareness
• Facebook Ad
ConsiderationInterests / Behaviours / Demographics
Research Keywords
Website Visitors & Subscribers
Shopping Feature & Benefits
Social Proof
View Product
Add to Cart
Audience
Message
Goals
Consideration
Consideration
• Facebook Ad
Consideration
Cookie
Cookies are small files that a web server automatically sends to your computer’s web browser (think Firefox, Safari, Internet Explorer) when you browse certain websites. Cookies are stored as text files on your hard drive, and servers access them when you return to web sites you’ve visited before.
Source: AdRoll
Consideration
Conversion
Buy Keywords
Intent to Buy (View Product, Add
to Cart)
Prices
Recommend Product
Risk Free Experience
Customer
Audience
Message
Goals
Conversion
Conversion
Conversion
Loyalty
CurrentCustomers
Cross sell & Upsell
Replace product
Repeat
Purchases
Audience
Message
GoalsLoyalty
Loyalty
Loyalty
Awareness
Consideration
Conversion
Loyalty
Audience Message Goals
Broadtargeting,Interest/Behaviours,
Lookalike
BrandStory,ValueProposition
NewsletterSignUp,Homepage,
ProductCatalog
EmailSubscribers,Homepage,
ProductCatalog
ShoppingFeature/Benefits,CustomerReviews
ViewProduct,AddtoCart
ViewedProduct,AddedtoCart
Dynamic ProductAds:Product, ShoppingCartAbandon
Customer
CurrentCustomers
Replacement,Cross sell,Upsell
RepeatPurchases
How To:Calculate YourAdvertising Budget
Method 1:Customer Centric Model
Method 1
1. Revenue Target
2. Customers = Revenue Target / Customer Lifetime Value
Customer Lifetime Value (CLV)
Customer Lifetime Value is a prediction of all the value a business will derive from their entire relationship with a customer. Because we don't know how long each relationship will be, we make a good estimate and state CLV as a periodic value — that is, we usually say “this customer's 12-month (or 24-month, etc) CLV is $x”
Source: Custora
𝐂𝐋𝐕 = TotalRevenueCustomers =
$100,000200 = $𝟓𝟎𝟎
Method 1
1. Revenue Target
2. Customers = Revenue Target / Lifetime Value
3. Budget = Customers x Customer Acquisition Cost
Customer Acquisition Cost (CAC)
• The cost of customer acquisition (CAC) means the price you pay to acquire a new customer. In its simplest form, it can be worked out by:• Dividing the total costs associated with acquisition by total
new customers, within a specific time period
𝐂𝐀𝐂 = TotalAdSpendCustomers =
$20,000200 = $𝟏𝟎𝟎
Method 1
1. Revenue Target = $100,000
2. Customers = $100,000 / $500 = 200
3. Budget = 200 x $100 = $20,000
Method 2: Traffic Centric Model
Method 2
1. Revenue Target
2. Budget = Revenue x Gross Margin or % of Revenue
Gross Margin vs % of RevenueGross Marginvs% of Revenue
Method 2
1. Revenue Target
2. Budget = Revenue x Gross Margin (or % of Revenue)
3. Orders = Revenue / Average Order Value
𝐀𝐎𝐕 =TotalRevenue
Orders = $100,000400 = $𝟐𝟓𝟎
Method 2
1. Revenue Target
2. Budget = Revenue Target x Gross Margin
3. Orders = Revenue / Average Order Value
4. Visits = Orders / Conversion Rate
𝐂𝐕𝐑 = OrdersVisits =
40020,000 = 𝟐%
Method 2
1. Revenue Target
2. Budget = Revenue Target x Gross Margin
3. Orders = Revenue / Average Order Value
4. Visits = Orders / Conversion Rate
5. Cost per Visit = Budget / Visit
6. Cost per Order = Budget / Orders
Method 2
1. Revenue Target = $100,000
2. Budget = $100,000 x 20% = $20,000
3. Orders = $100,000 / $250 = 400
4. Visits = 400 / 2% = 20,000
5. Cost per Visit = $20,000 / 20,000 = $1.00
6. Cost per Order = $20,000 / 400 = $50.00
Key Take Aways
• Online advertising is GROWING in Canada
• Think layer cake, not a silver bullet
• You don’t have to break the bank
• Go Advertise!
We help you sell stuff online
GrowthStrategy
Ecommerce Platforms
OnlineAdvertising
ConversionOptimization
Blair de [email protected]@blairdejong
