Key Performance Indicators Online Ad Spend | Edmonton Business Consultant
So here’s the thing, when you look at top companies, they can continually, you know the, when you look at the apples and the Nike’s of the world and the big established brands, they actually spend more than advertising then their competitors.
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thanks for tuning in for another episode of ask [inaudible] CPA. Today we’re talking about key performance indicators. Is it specifically the key performance indicator online ad spent? I Have Tyson here with me again. Hello Tyson. Are you noticing how’s the CRA system treating us as your husband went down yet? No. Are, there was a one week at the NFL or March there. That was a little rough, but yeah, so that’s been nice. It’s been working. Okay. That’s good. We’ll keep our fingers crossed. It’s not going to crash in the last week this year. Edmonton Business Consultant, so the, the court that we have here today is Jim Collins quote, author of six business books and he says the good to great companies did not focus principally on what to do to become great. They focus equally on what not to do and what just stopped doing entirely. Edmonton Business Consultant, the statistic here that we’re trying to address is 50% of all Canadian small businesses go out of business and 42% of these failed companies will cite that their inability to attract enough customer was one of the reasons for their failure making it the top reason that business owners, uh, site for failing at their business.
And the story that we have here is, you know, we have a business owner and they’ve identified a revenue problem in their financial statement analysis and they’ve, they’ve moved beyond the fact that they, they can’t get their phones for free and their staff are free the day they had to have a revenue problem. They know it. They know they have to be on track and achieve a measurable key performance indicators in order to fall solve this problem. They’ve, they’ve accepted the fact that they, number one is they’re going to get 40 Google reviews and they’re going to get a one Google review per month thereafter. Uh, they know that they’re going to do 12 a content videos transcribed and put them on their website and they’re going to continue to do one video per week thereafter. Uh, they have the website up and running. You have the transcription, they have the content.
Uh, it’s starting to rank and now they, they want to jump straight to advertising to drive sales. Um, so, you know, what are the questions that these business owners should be asking? I said, oh, what do most companies spend on advertising? So statistically, I mean, this can vary from industry by industry wildly. Edmonton Business Consultant, but what we see in a lot of small businesses that tends to approximate to around the 2% number, you know, most businesses are, are, are, you know, spanning a, our own, that 2% number and a lot of small businesses. I would argue that the 2% that’s being spent is probably being spent on things that don’t matter a lot. The hockey tickets at the business owner use or just gave to their staff. You know, they, they sponsored a soccer team, uh, for their kids, which made them feel good. But it probably didn’t, you know, make the phone ring off the hook.
Um, so, but you know, it tends to approximately in and around that 2% a number. Again, it can fluctuate by industry to industry, but 2% is the best number I could throw at you for an approximation. Yes. Then advertisement. So here’s the thing, when you look at top companies, they continually, you know, the, when you look at the apples and the Nike’s of the world and the big established brands, they actually spend more than advertising then their competitors. So on average, you know, they have these, uh, average companies who are spending 2% and top companies who continually spending 5% and more on advertising and they continue to do so year after year after year. Edmonton Business Consultant, so business owners that say that they don’t have to advertise, it was like, well, yeah, I guess you don’t have to advertise to be okay, but to be great, you probably have to spend on advertising and probably spend more than your competitors.
Okay. And should most businesses then more of their advertising dollars on online? I think so. The, the, the metrics that are the, you can see on it, you know, how many people you can reach online versus how much that costs to do something like drop flyers. A is not that dropping flyers, it’d be bad. So sometimes we’ll recommend it as some marketing plans, but for the most part, online advertising is going to be at the top of the list of the things that we should do in terms of, you know, how cost effective and how impactful it is to reach people. So let’s say she definitely be considering some online spend, uh, in their business in 2019 if they want to continue to grow their business. What does the platform that most people use when they’re ready to buy? Yeah, so the, the platform that most people use is Google.
Uh, and you know, it can feel a little bit, uh, a little bit intimidating because a lot of people, you know, Facebook makes their advertising platform really easy to use it. Maybe even a little more friendly, but you got to remember when the basement is flooded, people don’t go on Facebook generally and search plumbers on Facebook. They go straight to Google and they call a, when the basement flooded, when they got to thick and there are truth is fall out and they need a dentist right now when they need glasses because they’re going on a trip right now. They go onto Google and they search optometrists right now. They want it right now. When they’re in that buying window, Google is going to be the most likely place that they’re going to go first. What does the advertising product that Google sells? So Google sells the product, it’s called ad-words.
Um, you know, and that’s the product that they sell. Edmonton Business Consultant, so basically when you do a Google search, those ad-words generally are at the top of the search results. So you see them before you even see the map results. And before you see the organic listing and that, you know, it’s Google ads or Google ad words, uh, just depending on whose terminology that you’re using. Um, but that’s effectively what they’re selling is just those ads at the top of the Google search results. All right. And how often do most people have to see an ad before they take action? So most people, you know, if they’re not the person with the flooded basement who’s going to hire a plumber right now, a lot of people will consider a using your business or purchasing from your business. And the average is they have to see your ad 4.3 times before they’re actually going to take any action on that ad.
So it’s not something that happens right away. They’re actually going to have to see that ad over and over on average 4.3 times before they’re actually even taken any action on it. Okay. Why does that number to make an important to not stop and start your ads? Because a lot of businesses think that, you know, they can start it. I any business, so I’m going to spend some money on ads and then they don’t need business, uh, the next week. So they stopped those ads. But the thing is, they haven’t gotten that one person all the way through the buying window. So they need to see that at 4.3 times. So they’re actually spending more money on marketing by not keeping those ads on a, because if you stop, you’re going to have to start all over again to get to 4.3, uh, as they need to see it four or five times on a regular basis.
So if you start it and they get to two and then you stop, well, you got to start with that same potential customer backup one all over again next time. That’s actually going to cost a lot more money than actually just, you know, having a consistent, uh, advertising networks generates leads, dealt with that is their advertising products to, to retarget visitors to your site 100%. So, you know, you can use the Google ad words to see that search, uh, that first search result of, but there’s other ways to re target, uh, specifically admiral a is a, you know, a great company. You can buy retargeting ads from admiral. So that person who saw your Google ad words, they clicked on your site but they didn’t take action at that time, uh, you can put the, the Adderal pixel on your site. So that person is going to continue to see or retargeting ads time and time again to get them to the four pre 4.3 times where they’re actually, you know, comfortable enough to call you if you’re using or youtube content strategy or youtube adds good value.
Yes you do. Ads are a fantastic value because it’s not nearly as much competition usually for local businesses on, on Youtube ads. Edmonton Business Consultant, you know, there’s a lot of competition for Google adverts of people that figured it out. It’s expensive. A lot of businesses, they’re going to pay, you know, a two, three, four, five, 10, $15 to get someone to click a, whereas those youtube ads are significantly cheaper and they can be used to, you know, re they can be used to find those ideal and likely buyers. So the, the way they they work is, you know, someone is searching for a new dentist, for example. Uh, they’re searching for a new dentist and then later that day they didn’t, they didn’t take action because remember, they’ve got to get the 4.3 times before they’re going to take action so that they searched a bunch of your competitors and you didn’t win on the, on the Google ad words, you weren’t there yet.
Uh, but then later that day they’re watching a video review on buying a new Tesla or they’re watching a, you know, how to barbecue video. Uh, and then they’ll get a youtube pre roll ad that’ll show you as so and so dentists and why has it been to come to your clinic? And they’ll show for up to 30 seconds before, uh, they watched the video that they are intended to watch. And it’s, you know, a really cost effective way. So there are people who are actually interested because they were searching out your service, but they likely haven’t taken action yet. And you, you can, you know, capture that person on youtube for Ugi pennies on the dollar these days compared to Google adwords, which is the prime real estate because they’re at a minimum weekly ad spend required to get enough traction and data. I would suggest that that minimum weekly debt adds fit as vote 250 bucks.
Uh, you know, you just need the data or else if you don’t have enough data points, all of your analytics are kind of out there. Hey, can look like he was a complete success or a complete disaster. Uh, but you just don’t have enough data. So I would suggest for most small businesses, they’re spending 1000 bucks a month on advertising and that will be the combination of, of ad ad words, Google ad words and ad roll and Youtube ads. Uh, at about a thousand bucks a month, you’re probably getting up data points to actually know if what you’re doing is effective or not. Edmonton Business Consultant, below that you could, you could just get skewed numbers for sure. Okay. Would you recommend that service companies start with Facebook ads instead? I don’t recommend that. You would start with Facebook. And like I said before, like Facebook can be, it’s a nice, easy to use user interface, but people aren’t necessarily in the buying window when they’re looking at Facebook.
When you need something, just thinking about your own behavior. Most people when you need something, you go and Google it first. Don’t use Facebook as a search engine, sorta speak. Edmonton Business Consultant, so although Facebook ads ads are a useful, I mean, we use Facebook as well. We use them for very particular things. You know, we use them for, uh, to promote our event rather than a, you know, promote our accounting firm. Edmonton Business Consultant, because Facebook ads tend to be more social, you know, if you’re selling a cool niche product, um, yeah, they work great. Or if, if you’re promoting some sort of event, people are going on to Facebook to be social, you get an event in front of them. They’re kind of in that mind space already. But when they need something and they need it, now, they’re going to Google most times to find it.
Uh, so I would say for most service companies, you know, if you’re a contractor, if you’re an electrician, if you’re a plumber, if your dentist or chiropractor veterinarian, uh, Facebook is not where you start. It might be something that you use to supplement, but I think you, you need to start with, uh, a Google based advertising campaign and then potentially you could use Facebook as Canada, an add on after the fact has not as your primary. Edmonton Business Consultant, so that’s what we have here today. Thanks so much for joining us. Um, as always, please hit the like and subscribe buttons so we can continue to deliver your tips on how to beat the odds of business. And please leave your comments below so while we can deliver you relevant content and our future videos, thanks very much.