Several factors come into play, making it incredibly difficult to know when to spend, where, and how to handle the delicate business environment
As an entrepreneur / marketer, there are so many conflicting perspectives presenting themselves.
“Should I take a break, now that the world is kind of on pause?”
“Should I go harder since everyone else is resting, and come out on-top when this is all over?”
As a company, we talk to about 100 companies per month through our sales and marketing funnels. Nearly every client and prospect asks, “Should I be spending on ads during COVID?”
A lot of businesses were forced to pause their marketing during this time, due to a few key things:
- Unprecedented uncertainty
- Budgets cut and frozen
- Social unrest
But customers haven’t stopped shopping online. Have you?
To accompany this blog post, I also made a short video explaining this.
In this video I go over impacts of COVID19 on the industry benchmarks and how key performance metrics like Cost per thousand (CPM), competitiveness, and conversion rate (CVR) are changing. Then prescribe three simple ad optimizations to help you get more out of every dollar invested during this challenging time.
For the majority of advertisers, turmoil equals opportunity.
Big brands like Pepsi and Starbucks have pulled their Facebook / Instagram ad budgets. This drove down ad costs across the board, in an already unstable advertising environment.
As a result, ROI is increasing for businesses that can still safely and ethically sell.
A few of our highest performing clients had to turn off ads, because of logistics and fulfillment issues – fresh ingredients not getting to the kitchen, shipping costs rising, delivery times increasing, customs crackdowns, and overall human resources issues affecting productivity.
Sadly, some of the most profitable ad campaigns K&J runs had to go on pause and clients lost out on huge revenue/profit opportunities.
However, the ones that stayed on have been dominating. I’ll show you a few screenshots below.
This online learning platform is making 9.7X Return on Ad Spend, and given their product is digital courses, it’s 90%+ profit.
On $17K investment, they’re clearing a healthy $80K+ in profit. If you found a stock that was guaranteeing 4.5X every month, would you invest?
Here’s another one. This is a dropshipping client selling bike helmet liners.
We built this store from scratch and are running it all off Facebook/Instagram Ads. It’s clearing about 35% profit. Went from $152 revenue days, to $4.2K, then $8.3K, and just today hit $14.1k/day in sales. That’s a run rate of $425,000 revenue per month, and $148K profit for this client who came to us with just an idea.
I think our perspective on running ads during COVID is pretty obvious.
With ad costs down, competition down, and online shopping booming, there couldn’t be a better time to sell online.
When others are panicking, that’s the time for you to bring in focus. When they’re holding cards close to their chest, that’s your time to strike and capitalize on opportunity.
The bottom line is this – business goes up and down. It’s not a consistent, smooth “up and to the right” graph.
You must trust your intuition when it comes to whether you and your team need a break or whether it’s time to go harder. But if you look at the competition and see them sleeping, then look at the dramatically reduced ad costs, you’ll realize you can make double your profit while the competition’s making half, and gain momentum that propels you into the future.
Don’t know where to go with your online advertising? Feel free to email us at [email protected] and we’ll do our best to help you out with advising and more free resources.
– Jonathan Maxim, Managing Director at K&J