Brett Curry is the CEO of OMG Commerce, a digital marketing agency and Google Premier Partner. He is also the host of the Ecommerce Evolution Podcast highlighting what’s new and what’s next in eCommerce.
He and his team manage Google, Amazon, and YouTube ad campaigns for growing eCommerce brands. His insights into Google and Amazon Advertising have been featured on top industry stages as well as top industry publications.
In This Conversation We Discuss:
- [0:00] Intro
- [0:36] Sponsor: Gorgias gorgias.grsm.io/honest
- [1:53] Chase and Brett talking a bit about their quarantine
- [2:32] A quick background of what OMG Commerce does
- [3:43] Getting started in YouTube ads
- [7:20] Determining your goal with YouTube ads
- [12:38] YouTube for remarketing using Trueview for shopping
- [17:21] Sponsor: Klaviyo klaviyo.com/honest
- [18:34] Information and tips for your YouTube audiences
- [24:31] Are custom audiences easy to set up and sync with Shopify?
- [26:15] Sponsor: Postscript postscript.io/install
- [26:44] Why you should be interested in Amazon for advertising
- [28:51] Consider Amazon, but very carefully
- [33:20] Weighing the costs in Amazon
- [36:21] You really have to know your numbers before taking any step further
- [37:52] Cost of acquisition vs Customer Lifetime Value
- [40:14] The “Halo Effect” in attribution and marketing
- [42:28] A 5X ROAS is only possible with tons of effort
- Brett’s LinkedIn page: linkedin.com/in/thebrettcurry
- OMG Commerce’s website omgcommerce.com
- eCommerce Evolution Podcast omgcommerce.com/ecommerce-evolution-podcast
- Chase’s guest episode on eCommerce Evolution: Episode 106 - Navigating the Shopify App Ecosystem in 2020: ecommerce-evolution-podcast/episode-106-navigating-shopify-app-ecosystem-2020-chase-clymer-honest-ecommerce
- Visit gorgias.grsm.io/honest to get your second month free.
- Visit klaviyo.com/honest to schedule a demo!
- Visit postscript.io/install for a free 30-day trial!
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Leverage some of the audience and behavioral data that Google has to make all of your campaigns better.
Welcome to Honest Ecommerce, where we're dedicated to cutting through the BS and finding actionable advice for online store owners.
I'm your host Chase Clymer, and I believe running an online business does not have to be complicated or a guessing game.
If you're struggling with scaling your sales, Electric Eye is here to help. To apply to work with us visit electriceye.io/connect to learn more. Now let's get on with the show.
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Hey everybody, welcome back to another episode of Honest Ecommerce. I'm your host Chase Clymer and today returning the favor... I guess maybe that's not the right phrase for it.
But I'm welcoming to the show, Brett Curry. Brett is the CEO of OMG Commerce, a digital marketing agency and the host of the eCommerce Evolution Podcast , which featured me in Episode 106 if you want to go check that out.
And we're going to talk about what's new and what's exciting in Ecommerce today. Welcome to the show.
What's up, Chase? How are you?
I'm doing great. We're recording this in week 5 or 6 of quarantine so my house is very clean and at this point, I already remodeled one bathroom and now I'm thinking about the other.
That's amazing. So you're keeping your house clean in all of this. I am thoroughly impressed.
As I say that, I look to my right where yesterday I elbowed a water --a glass of water-- off my desk into the wall, shattering it and putting water on paper, and it's just all on the floor to dry out.
(laughs) Yeah, so it's been a mix of both productivity and, "Eh, we've done enough laundry for a while..." So it's been interesting.
Yeah. I gotta go through the clothes and get rid of them and donate them. Awesome. So let's dive in here. So you want to tell... Let everyone know what OMG Commerce does most of the time for their clients to give a little bit of background?
Absolutely. So we're a digital marketing agency. We focus on Ecommerce. And we really have 2 primary areas of focus. We have the Google Ads ecosystem as an area of focus, which includes Google Search, Shopping, Google Display Network, and YouTube. And then Amazon ads.
And so on the Amazon side, it's sponsored products and sponsored brands. We also do sponsored brand video, and then Amazon display through Amazon DSP.. And so our goal is we want to work with successful Ecommerce companies and help them accelerate their growth.
And so we're big believers in measuring results and putting together strategic campaigns that work together to help brands grow.
Awesome. And then I think one of the cool things about what you guys offer over there is stuff that we don't touch at Electric Eye. So I'm definitely a little more noob so I have a lot of fun questions, when we dive in the weeds about it so...
The first thing that we wanted to cover here is YouTube ads for growing an Ecommerce brand. So [that's the] first question off the rip. Now is that a part of the Google Ads platform or is it something...
It is. Yeah, yeah. YouTube is... You manage YouTube campaigns inside the Google Ads interface. YouTube is owned by Google and so the campaigns are managed n the same platform as Google ads, Search, Shopping, Display Ads... Things like that.
Okay, so not to ask for the playbook. But what is usually the first step when getting your campaign ready on YouTube? Are you producing a video or can you dynamically generate some stuff? What's going on?
Yeah. And so it's a great question. I think the first thing to do is to step back, take a look at the YouTube landscape and how you might be able to best reach people there for your business.
And so a couple things to keep in mind about YouTube that are really fascinating: One, it is the2nd largest search engine. So just behind Google itself, more searches are done on YouTube than on any other search engine besides Google. And it's also the #2 most visited website --again, behind Google--. So tons of scale.
People are actively searching for things. So there's all kinds of opportunities to find people actively researching, shopping, collecting information for your product or service.
And so looking at how do we... "One of my favorite quotes ever when it comes to marketing, and I think I first heard this from Dan Kennedy, but I don't know the... I don't know if he originally said it or somebody else.
But our job as marketers is to enter the conversation taking place in our customers minds. So your customer, they already have fears and concerns and hopes and wants and needs and all these things that are going on right now.
And in the midst of quarantine --which we're recording this-- the needs are maybe different than they will be in 2 or 3 months. But understanding what those needs are and what the frame is, and then speaking directly to that.
And YouTube allows us to do that because we can do things like keyword targeting, so we know what people are actively looking for and searching for it and a variety of other ways to target. So I think that's the first step.
You gotta understand, how can we reach people on YouTube? What frame of mind are they going to be in? Who are we trying to reach? Things like that.
But to answer your question you know, YouTube definitely does hinge on a great video ad and I think that's the thing that intimidates some people or keeps people off the platform; They don't know how to create a great YouTube ad and it is a little bit different.
It's a little bit nuanced from, say a Facebook ad. We're seeing it on the Facebook site... I don't manage Facebook so I don't really know it. I'm just speaking from what I've learned and heard, not speaking from experience.
But I know shorter videos, 15 seconds, 30 seconds, or whatever. [It's] shorter on Facebook work. On YouTube, you have to tell more of the story. So there's not a lot of text that goes...
There's not the post above the video like there is on Facebook, so the video has to do the heavy lifting. So it has to tell the story and really convince someone enough to take that, make that first click, and then hopefully take action.
So I think it begins with understanding what are we trying to do, who are we trying to reach, when do we try to reach them? And then we have to craft a great video ad. And so I'll leave it there. There's lots of things we can dive into related to those things. But that's where I would begin, at least the thought process.
Yeah. I'm so curious about this. So let's take a pretty generic example approach. So we're going to say that we're selling... I don't want to use facemask, because that's super top of mind now. It's the only thing that's coming into mind. So we're just gonna call them widgets.
All right. So we got a brand. Obviously, we got proven product-market fit. And the next channel that we're going to look to try is YouTube. So we've identified the audience on YouTube. We go out and craft a couple videos, how do we get...
Do you target them by keywords? And then what are the next steps? I guess one, one very specific question is how does the investment level look compared to other platforms in the marketplace.
Yeah. So the investment level thing is sort of a nuanced question. There's lots of ways you can approach YouTube and it also depends again on what your primary objective is, are you okay with just getting views and getting visitors and building a remarketing list because one of the things we've seen is that now a third of all shoppers have purchased something that they discovered first on on YouTube.
And a lot of people go to YouTube, searching for things like which widget to buy, or widget reviews or widget demonstrations, whatever. "Best whitening toothpaste" or "best travel pillow". Although that's not being searched a whole lot right now. But people searching on YouTube for some of those things, that has definitely increased.
And so understanding, what people are searching for and then getting your message there. So are you... The other thing that I want to share is that 80% of people that say they discovered something on YouTube, about a product-- specifically about a product-- say they did so at the beginning of their shopping journey.
So not at the very end when they're trying to make their final decision but usually at the beginning when they're trying to make... Trying to get informed and decide what they want to buy. And so that leaves a great opportunity, but also some issues.
So YouTube, what that typically means is that people aren't going to click and buy the same day. Not if they've just learned that. If it's cold traffic, I've just learned about your product and your offer.
And so what are our objectives here with YouTube? Are we okay with getting views and getting clicks, and then closing the deal with search and shopping and remarketing and organic and things like that? Or do we need to see an immediate direct return on our money with YouTube. And actually, both answers are fine. We structure both ways.
Most of our clients are in the direct response game so they want to say "Hey, for every dollar we spent on YouTube we need X as a return. I think that... The thing though that we talk about with our clients is you can't view YouTube as a standalone.
And really, you can't view any campaign as a standalone because how often is it... Just think about your own experience. How often is it that you click on one ad for the first time, learning about a product, and then buy immediately? Usually, you don't do that.
You click on that ad, you look at it, you think about it, you maybe see 2 or 3 other videos, you click on other ads, you search for it later, and then you buy it. So, stringing that all together. So what we talk about with our clients is a portfolio approach where we're getting our campaigns to work together.
So YouTube, Search, Shopping, remarketing, they'll work together. And if you measure each campaign... Maybe search and shopping create a 300% or 400% return on ad spend, remarketing is maybe 600 or 700% return on ad spend... YouTube is only like 100% return on ad spend or maybe less.
But running YouTube makes everything else bigger. It feeds our brand and search campaigns as it feeds our shopping campaigns. So anyway, it's a difficult answer because to compare costs of YouTube and other platforms, you have to decide how you're using it and then how it's going to serve your business.
But to talk about a direct comparison, looking at cost per acquisition on YouTube versus Facebook, they're pretty comparable in some cases. So we work exclusively with Ecommerce brands. We have some skincare brands, some apparel brands and a lot of different Ecommerce brands.
And so, usually the CPAs are fairly comparable. Sometimes they're higher than Facebook, sometimes they're lower. Right now, we're seeing costs on the YouTube platform down considerably. And Ecommerce conversion rates are still doing pretty good.
So right now, it's a very efficient time to be on YouTube for sure. So does that answer the question? I know that's a bit long-winded, potentially.
No, it answers it very well. And I just want to go back to... You said something in there that I want to highlight: That YouTube is really good at the prospecting part of the game, the top of the funnel, building awareness. So that's just good to know and keep in your back pocket, I guess, as probably a lucrative channel to...
...build exposure for your products.
Yeah. We can also use it for remarketing. So I don't want to shortchange that.
So as we have someone that visits our product detail page or even adds to cart and they don't check out, you can certainly run YouTube remarketing.
And that's very effective, too. I think, just understanding if someone is looking for something new, the time they go to YouTube is probably a little bit earlier in the process.
But we're all on YouTube for various reasons. Listen to music videos, or watching cat videos or whatever. And so you can still reach someone as that final reminder to get them to purchase as well. But yeah, lots of opportunity for that early stage shopper on YouTube.
And now, how dynamic can you get with these remarketing efforts? Is it product-to-product, one-for-one? Or can you set up some campaigns that are a little more dynamic?
Yeah. So, you can create audiences using Google ads or using Google Analytics, and this is based on specific pages, someone who has visited. You can also run a type of YouTube ad that's called TrueView for shopping.
So the type of ads that we run on YouTube are all called TrueView. They're the pre-roll videos, the video ads that play. Usually, you didn't ask for these videos to play, they just play before the video you're trying to watch. And so you can skip them after 5 seconds.
If someone watches to the 30 second point if it's a long video, or the whole video if it's less than 30 seconds, then you're charged for that. That's what's called TrueView. But there's an ad type called TrueView for shopping. And the way that works is...
Think about your Google Shopping ads or product listing ads. So if you're searching for a widget... We'll just go with noise cancelling headphones.
That's been probably a staple for parents, especially recently. "Give me some noise cancelling headphones, please." So noise cancelling headphones, you search for that on Google, usually at the top, --almost always at the top. Sometimes the top right-- you get the product listing ads, Google Shopping ads.
So, the picture of the product, title reviews, if they have some and then the price, that's Google Shopping. There's an ad type in YouTube called TrueView for shopping where you have those Google Shopping ads right next to the video.
So I'm on YouTube, I'm watching the latest cat video and hey, I just shopped for noise cancelling headphones at "chasesaudio.com" and below the video I see the product listing ads of some of the products I shopped for.
So that's where you'd have to have dynamic remarketing turned on and connected to Google Merchant Center, which is a little bit technical but not all that hard to do, really. And then you choose TrueView for shopping. And so that means it's that TrueView video ad, but there's Google Shopping next to it.
What's interesting about that is that when I first heard about that ad format --probably 3 years ago or something like that-- I was just out-of-my-mind excited about it, because I'd done some video in the past. [I] actually did some TV way back in the day. Really, the first thing I did in Ecommerce was Google Shopping.
I wrote the Ultimate Guide to Google Shopping and Shopify published it and so [I] really have this affinity to Google Shopping.
When I saw these 2 things being married together, I was like "Wow, this is going to be a complete game changer, going to be blow-your-mind awesome." We found actually this ad format is good for remarketing. It's not great for cold traffic.
But yeah, so you'd be pretty dynamic with remarketing. So one of the things we also look at...
And this is something you can do with YouTube quite easily... And this is an idea that I got from my buddy Ezra Firestone at Boom by Cindy Joseph and Smart Marketer, he talks about a Bought X, Not Y campaign.
And so that's where you look at, "Hey, who are my customers who bought one of my products, but not another one of my products that may be complimentary."
And so the idea there is "Hey, what if someone bought this skin cream, but not a night mask if you're selling skincare." Because if someone has purchased in the past, they're more likely to buy again, but they just haven't purchased this other thing.
And so in those cases, we would take someone who's purchased the Boom Bilk, but not Boom Scrub --as an example-- and then show them an ad for Boom Scrub. Just give that as an example.
So that's a type of... Really, that would fall into a loyalty bucket but part of the remarketing side of things. And so yeah, you can be pretty robust in your remarketing efforts on YouTube for sure.
Yeah, that's that's awesome. You're blowing my mind over here, making me want to go down a rabbit hole and learn some cool stuff.
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So in regards to YouTube, and Google Shopping, and that whole realm, is there anything that I didn't ask you in regards to that that you think is kind of worthwhile bringing up now? This is gonna come out 2 months from the pandemics peak. So, anything that, I guess, that might be more prevalent at the end of this?
Yeah, it's a great question. And sorry, you're asking specifically about Google Shopping or about YouTube or about both?
Well, I guess I'm being a generalist. And that's not good. Sounds like they're pretty vastly different. So the balls in your court, where do you think that some knowledge that you want to share that I didn't specifically ask about?
Yeah, I think we could dive into audiences a little more, potentially. If you think that'd be interesting, we just touch on that. There's quite a bit of nuance there on what audiences to choose and market audiences and some other behavioral things.
I think so. Just because... Honestly, when I'm out and about, I love content. I read way too much and it annoys my business partner because I'm like, "Look at this idea. Look at this idea."
So one thing I know that you can do with audiences on Google, but I think that a lot of merchants don't know that it's not as straightforward as I think you can do on Facebook.
But when people talk about audiences, the conversation tends to lean towards Facebook. So maybe just break that down and educate a bit around that.
Yeah. So in terms of audiences both YouTube... But also utilizing audiences for search and shopping, we'll talk about that in a minute. Really, nobody knows more about you than Google. Facebook's probably right up there.
Both of those companies know everything you do online pretty much. And so you can build all kinds of really interesting audiences on YouTube. I'll talk about the audiences we like to start with. So if you're just getting started with YouTube... I get the opportunity to speak about YouTube in a lot of events.
I got invited to the YouTube LA offices, just prior to all the lockdowns happening, and talked to about 140 ecommerce brands about utilizing YouTube ads for Ecommerce.
And it's interesting. Still, probably like 10% to 20% of all the audiences I speak to are using YouTube ads. So almost nobody does them. There's a huge opportunity still. I believe it's best to start with what we would call intent-based audiences on YouTube.
So that's one advantage YouTube and Google have over anybody else. Because they get to see all the search behavior, what you're actively looking for, they know what mode you're in.
You can figure out and make some pretty solid guesses and understanding based on someone's intent.
So, 2 options. I mentioned the first one a little bit before. But looking at keywords in YouTube. So things like you know best noise cancelling headphones or best pillow for back pain or best washable memory foam pillow or things like that. People are searching for that on YouTube, believe it or not.
There's a ton of product searches on YouTube now. So that would just be a keyword campaign or keyword audience on YouTube.
I don't know about you, Chase but for me, I don't do a ton of product research on YouTube. I just don't. That's just not the way I shop. I don't know why I don't. So when I'm on YouTube, I'm looking at how-to videos or I'm watching sports videos, or ESPN or something.
So what you can also do is what's called a custom intent audience. And what this means is you're able to build an audience of people based on what they're searching for on Google. And then you can target them the next time they're on YouTube.
So maybe just recently, I've been doing all kinds of searches on Google for noise cancelling headphones. I've been visiting sites, I've been looking at reviews, I've been doing all this stuff. But now going to YouTube, I'm just gonna mess around.
I'm gonna watch a video about the Last Dance documentary and I am a huge Chicago Bulls fan. But now, I could see an ad for noise cancelling headphones before that info about the documentary.
And so you can build audiences based on what people do on Google and target them on YouTube. Super, super powerful.
So I'd like to start there. There's also audiences where Google pre-packages these audiences and says, "Hey, this is a group of people that are in the market for hair care products, or they're in the market for dietary supplements or they're in the market for financial services or travel or whatever."
So they'll pre-package these audiences. We found those to work very well, also. And so then you get really huge with audiences and do topics and interests and affinities and things like that. But starting with those intent-based audiences, is usually the way to go.
Then the other thing that I'll just throw out there really quickly is with search and shopping, that those are query-based or search-based ad types, so you're only served an ad if you make a search.
But if you think about it, let's just say that I typed in “leather sofa” as an example. Well, am I looking for an $800 leather sofa or am I looking for a $5,000 leather sofa? It's hard to tell just by knowing that I just typed in “leather sofa”.
You can now layer in audience data, audience information to your search and shopping campaigns. So now you can tell Google, "Hey, yes. We want to target people that are searching for this, but also, if they're in these affinity groups, or if they're in these in market audiences, things like that."
So you can now really leverage some of the audience and behavioral data that Google has to make all of your campaigns better.
So I could essentially not show my luxury $5,000 couch to people that probably can't afford it?
Yeah. There's a process there. We utilize Google’s Smart Bidding options. So target return on ad spend target CPA or cost per acquisition.
And with that, --this is the same way that the Facebook algorithm works right over time-- the algorithm begins to see patterns and say, "Ah, these are the ideal... It's these people who are actually purchasing." And so the algorithm will get better and better over time anyway. But if you can layer in some of that audience data in the beginning...
Or one of the easiest things... One of the best things we've done is just your email list --if you've got customers-- remarketing lists, layering those into your search and shopping campaigns just to show Google that, "Hey, these are our buyers.
These are the ideal customers. And yes, we want to target people that are searching for these keywords." So yeah, that there are ways to help narrow the focus of Google and the Smart Bidding algorithm to --in the end-- get you much better results.
That's super cool. And with the remarketing audiences through the emails, is it easy to set that up to sync from say a Shopify store or you have to build these audiences on a particular cadence?
Yeah. Regrettably, it's not. At the time of this recording, there's not an easy way to sync. So I've heard that Google is working on this. So you have direct integrations with platforms like Klaviyo and Listrak, things like that. I think there is one integration with one ESP, one email service provider but I think that's it.
So right now, most likely, you're going to have to just download that list on a weekly or monthly basis or whatever, and then upload it to Google. But eventually, I'm sure they'll be synced. And I know it's been possible on Facebook for a long time. Not sure...
...what the hang up is with Google. But yeah, that's very, very limited options now. So it's probably gonna be manual for the time being.
Here's the thing. I'm sure that that audience is well worth the 4 minutes of effort.
Absolutely. And what's interesting is that even that little hurdle of having to download the email list, upload it to Google, which takes no time at all. It's annoying that it takes some time at all. Your competitors probably aren't doing it.
So they're the people that are... They're finding reasons to not do it. And so if you add more of these little things to make your campaigns better, it totally gives you an edge.
Absolutely. Yeah. You got me jazzercised about YouTube ads...
...and Google and all the audiences and stuff.
I just pictured you with a headband and sweats. And that was a really interesting picture there.
I am in sweats. No headband, though.
I'm almost there.
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Let's pivot the conversation a little bit now to your other area of expertise to round out the podcast here and chat a bit about Amazon.
We don't really talk about too much on the podcast and let's give it a little bit of love. So first and foremost, you're great at it. That's a terrible introduction to the topic, though.
(laughs) Thanks. Appreciate that. Yeah. It's an interesting platform. And one really fascinating thing that I think will help frame this, even for people that are not on Amazon right now.
So something you need to be aware of, Amazon is now the 3rd largest ad platform. So Google is #1 by quite a long shot, then there's Facebook, and then Amazon. So even though Amazon is a retailer, their ads business is a multi-billion dollar business. I think it's in the teens of billions of dollars each year in just ad revenue for Amazon.
And I think the projections are within the next couple years, it'll be like a $23 to $25 billion a year business, which is the size Facebook was just a few years ago. That's just Amazon's ad business.
So it's definitely something you got to be aware of. They're gaining more and more of the ad dollars, and they're really forcing Google and Facebook to try to pivot and compete in some way. So it's really interesting to watch that. So yeah, just wanted to throw that out there.
Yeah. And so we talked a little bit in the pre show about... There was a big push. And maybe this was just the audience that I follow on Twitter. But I did notice that a lot of people were pulling all their products from Amazon, they didn't like paying Amazon the fee.
And that was that was their prerogative. And then there's a lot of younger brands that want to get their products into Amazon because the marketplace is just so insane. There's so much more intent there.
I think that there is definitely a place for Amazon within your business model. It just depends on what your end goals are and what you want to do. I guess I should go on record here and I’m saying that I'm not against Amazon at all. A lot of people think I am. It's just not something that we service at Electric Eye so I'm not super smart with it, I guess.
Yeah. I think when you're looking at "Should we be on Amazon? What should our strategy be on Amazon?" I'm convinced that it's way better to be diversified.
So over the years, we've had a lot of people come to us that were 90% - 98% Amazon sales and they're just trying to get started with a Shopify store, a Bigcommerce store or something. I think that's potentially a dangerous place to be. Amazon is so big you can't ignore it. I don't think you have to be there. We have several brands.
And I mentioned Boom by Cindy Joseph a few minutes ago. [They are a] multimillion dollar a year seller, not on Amazon. They did that by choice. There's not like this clear, straightforward answer with Amazon in my opinion.
You can't just say "Oh, you're a moron if you're not on Amazon. It's too big to ignore." Well, it's not that simple. The math becomes tricky, and competition is insane, and you've got things like knockoffs.
And so while I do like Amazon, because it's so good for shoppers and because I see Amazon continuing to grow, I think you can't ignore it. But what you do with it, that's gonna vary, I think, from person to person. I think one thing to keep in mind... You mentioned the fees, right?
So Amazon charges anywhere from a 15% commission or maybe sends a single digits depending on your category. I remember when I first got into marketing, actually, was when I was in college.
I was selling radio. So I was 20 years old, walking around, trying to sell people on buying radio. So it was actually a great, great experience. One of the things that...
I had a manager talk about at the time, was if you have to almost think about for a retail store, you have to think about location as part of the marketing expense. So if I'm at the intersection of 2 really busy roads where there's tons of traffic, tons of eyeballs, people are there, they're gonna be able to pull in easily.
I can consider that part of my marketing. But if I'm way off the beaten path, and nobody sees me, nobody comes down my street, then I'm going to have to spend more on advertising. Because if I don't, people aren't gonna see me. Right?
So, I think you make the same case that's a good picture comparing the physical world to the digital world. Amazon's got people, man. That's where so many people begin their shopping journey is on Amazon that you have to consider it. And so their fee that they charge is because they have the traffic that, the shoppers, the infrastructure, all of that.
Yeah, you can't argue with that.
Yep, yep. But just because of that doesn't mean that it's the best option for your business, I think. So, I think in an ideal situation, you have your full product line, obviously, on your store, you prioritize your store as you're running, ads to cold traffic like YouTube or Facebook or anything on the display network.
So cold traffic, send that to your store. Build that store, build that audience, have control of your own remarketing audiences, things like that, but definitely have some products on Amazon, maybe some of your top-sellers.
But what we like to see is, maybe you've got all the options on your site, and you have a limited assortment on Amazon. So you're at least there to capture the people that are only going to buy on Amazon. And I know a lot of those people. People like my family is like "Oh. Let's buy that on Amazon." That's all they do. You want to capture those people if you can.
But then new products, customized products, different colors, different options, things like that, make that available on your site. And so I think there's there's a lot of ways to succeed on Amazon and off Amazon. But one thing I'll mention is... And this is what happened with Google a few years ago. You almost have to consider ads if you're on Amazon.
If you don't, you're gonna have a hard time really gaining and keeping momentum. And so because Amazon's making so much money from ads, they're prioritizing ads.
So when you make a search on Amazon for products, ads have a lot of prominence. So you have to consider ads when you're launching a product, but also to kind of keep sales velocity up for products to keep your rankings up.
So lots to be considered there. But I think there, usually, is a path to utilize Amazon in some ways. And if you are on Amazon, you probably need to be running Amazon ads, at least in some capacity.
Yeah. And I wanted to bring up the whole ads element of "It's pay to play over there." And "I owe them a fee." So let's just look at a generic example. Say you got a $50 pair of headphones that you're selling on Amazon. And there's your price matching to your own website.
Now, going out and acquiring a new customer through maybe some YouTube ads at the top of the funnel and maybe some remarketing on Facebook and your cost of acquisition is like $15 to do this to your traditional store.
Whereas if you're on Amazon, their velocity is a lot higher. They've got so many more shoppers there.
With the fee and paying to play a little bit, as well, with the ads over there, where do you think that you're gonna end up at as far as cost of acquisition with this terrible, generic, no-data-to-back-me-up example?
(laughs) That's great. No. I will mention if you're doing... If you're really trying to scale on on YouTube then then probably like a $15 cost per acquisition is a little low.
But be that as it may, we can still run with that math? So then on Amazon, you really just have to look at it. And we've done this where we evaluated there's a business in the food space we're looking at maybe investing in.
And I love this product, we've actually almost considered buying the business. But as we started running the numbers and looking at "Okay, we got the cost of goods.
Then we've got the FBA fees: The storage fees pick-pack-and-ship fees, the FBA fees, and the shipping [fees]. And then you got the commission, and then you got ad costs." So it's like "Alright, when we do all of that, the margins become really, really slim."
So you have to look at that. And some products have the margin to absorb that and you can still be aggressive with Amazon ads. Other products don't.
So then you have to sit and look at those numbers and then decide "Okay. Is Amazon just going to be where I put product and I'm going to be doing all my Facebook, my YouTube, my Google ads, all those things to generate interest and awareness and to get shoppers?"
And then "I'm just gonna have Amazon there for bleed over. So I'm not gonna promote it. It's just going to be if someone is there searching for me, I'm there. I don't want to lose a sale to a competitor."
Or are we going to be aggressive on Amazon and try to grow it? And I think that that's just going to depend on every client.
But one of the things we do and this is what Amazon clients demand is "Hey, I want to know my advertising cost of sale. I want to know what percentage of my total sales am I investing in ads so we can do the math and see how everything's working together."
And so, the actual cost per acquisition often is going to be lower on Amazon than it is on Google or somewhere or something else. But you do have that commission you pay to Amazon as well.
So you really just have to look at the numbers for your specific business and then decide what strategy you want to use there with Amazon. And do Amazon ads make sense? Or do they not?
Yeah, you're preaching to the choir. You got to know your numbers. You got to know your margin.
Gotta know. Yeah.
Yeah. Kurt Bullock, I just interviewed him the other day. And he was just saying the same exact stuff as far as the Facebook perspective goes. It's like, you need to know what your margin is. And then we can tell you how you can scale. You can't do it the other way around.
Yes, yes. Exactly. And we do the same thing. As we're looking at YouTube, as an example, if someone says, "Hey, we can only spend $15 to acquire a new customer." Well, you probably still have some opportunities on YouTube.
But if you're thinking about the fact that the cost of media is relatively constant. You can maybe get a view for... A penny a view or something like that, you usually can't go much below that, right.
And if you think that conversion rates are relatively consistent, between 1% and 3% as an example for Ecommerce, so like that's the world we're living in.
You then can't be super aggressive and compete with big advertisers if you can only afford a $15 CPA. Companies that really scale on YouTube are able to invest, $50+ usually in terms of CPA. Now, we have lots of clients that are in that $20 to pay range.
You just have to be more limited. You have to focus on those intent-based audiences, people that are actively shopping. To expand into some of the broader audiences where there's lots of opportunity, you have to have a different math in your favor to do that, if that makes sense.
Yeah. Different math in your favor is a good way of saying "Do you care about losing money on acquiring a customer or not? Is the lifetime value there to support taking a hit on the first sale, but you're going to make it up throughout the lifetime of that customer?"
A lot of people look at advertising as a one-for-one expense, and the first part of that is terrible. It's not an expensive investment if you're doing it the right way.
That's the only way you're gonna grow. But if you're limited by the belief that it's got to be a direct response and it's got to be like "I put $1 in, I have to make $2 back." There are many business models where that is not possible.
Yep, it's very true. Yes. So sometimes, that's not possible. You'd have to consider, do we get a lot of repeat orders in doing that? We have some clients.. We have a client in the watch space. [They] are amazing watches.
But [customers at] max were gonna buy maybe 2 of these watches, but most people only buy 1. So then, okay, then it really is about "We have to be somewhat profitable on that first purchase." But what happens is interesting. We always talk about the halo effect.
So you run an ad... And we saw this with our own business. We started because we're not going to trade shows and stuff right now. We started running our own YouTube ads for OMG Commerce.
And as soon as we turn on these YouTube ads, we start getting leads. So, as soon as we try these YouTube ads, people start requesting guides, they start clicking on our site, and it's crickets before we do that. Maybe not quite crickets, but almost.
So it's very noticeable when we turn on these ads. Well, if you look in the ad dashboard, it doesn't record any conversions for those first several days. But someone saw the video, then maybe they came back on another device.
So they searched organically and then they found the site. So there's, there's also this halo effect of "Okay. Yeah, we're only seeing a 50% return on ad spend on the platform, or 100% return on ad spend on the platform.
But what is the halo effect?" What are all the other people that saw the ad that didn't take action, but now they're buying later? And even you have not been in this game for 10 years... We started OMG in 2010.
I've talked to some really smart people in terms of attribution, and conversion tracking, and stuff like that. There's no perfect solution There just isn't. There's no way to fully connect the dots every time. And so the halo effect is real. And you have to consider that too.
I cannot tell you how many times I am on my computer, on YouTube... Or on my TV and on YouTube and I see an ad or see something interesting that I immediately Google on my phone.
Yeah. Yeah. And so that depending on... So say you're signed in with your wife's YouTube account or something and you search on your phone or say... There's just all kinds of...
Even though Google's pretty good at connecting the dots and Facebook is pretty good at connecting the dots too, there's still going to be these cases where you can't fully connect it. And that's okay.
We have to live in this world of imperfect data. But that should lead us to believe, like you said, how much you believe in your product, how much you believe in your message.
And you're going to have to push with imperfect data and know that if you don't advertise in some capacity, --and it was gonna sound self-serving somehow. I'm an advertising guy-- But do it on your own, do it with another agency.
Don't do any of the platforms we're on. You still have to advertise in some capacity, or else you're not going to get anywhere.
Yeah. And then just another thing, I want to go back to understanding the numbers. We had a client at one point in a very, very competitive niche.
They had an amazing product, they had a really loyal fan base, but they had a limiting belief on their growth that they needed a 5X on everything or it wasn't going to work for them.
And they couldn't, they couldn't afford the investment. And that was a 5X to direct response. And I was like "You're not going to see this. You're in one of --if not-- the most competitive space out there. It literally is expensive to acquire these customers but look at your lifetime value."
And they're like... They wouldn't consider lifetime value as part of the equation. So it goes back to you saying like, you have to look at the math and the whole picture to understand where you can start to set your investments.
Yeah. Yeah. So if you say we have to get a 5X return on every channel, on every campaign, then you're really going to limit yourself. Cold traffic on Facebook, cold traffic on YouTube, out of the question. You're not going to hit that kind of return on ad spend, not to a broad audience anyway.
And this was 3 years ago when Facebook was just inventing money for people, too.
Yeah. So it's like okay, maybe... Maybe you do have to get a 5X return, globally. Although man, that's still gonna limit you.But you may be able to get away with... We can get a 2X return on YouTube and a 6X return on Google Shopping and still the portfolio of Google Ads is going to hit that 5X return.
5x return is really... That's really high. So my thought on that is if you've got a return on ad spend goal that high, you're going to be doing something else to stack the deck in your favor. Ads are gonna be tricky for you, because ad costs are going to continue to go up.
Ad costs at the time of this recording are actually down a decent amount about 20% to 50% in some cases, but they'll go back up.
So if you have that aggressive goal for return on ad spend, then you better be driving some organic traffic. You better be doing some offline stuff. You better be networking.
You better be doing some other things to push people to your site because advertising is going to be harder for you if you have to have that kind of return that's visible in the platform. So, yeah.
Yeah. The only way to do that consistently it would just just stop prospecting and that's going to ruin your customer base after a couple months
Yep. Yep. And I think one of the ways [where] you can really see this in action you shut off all... As you think ads aren't working, you shut them off and then see what happens.
Then see "Oh, my organic traffic is down. That's weird. My branded search campaigns are on. That's bizarre, too." Well, it's because they... A little fact... Because these other campaigns were feeding those campaigns. That's why you're seeing the decrease. So...
Awesome. I love the end of this conversation. That came out of no[where]. I knew this was gonna happen. We're just gonna get really nerdy with it.
(laughs) Yeah. Exactly. Hopefully we didn't lose anybody. But yeah, good stuff.
I hope not. Is there anything I forgot to ask you before we end the podcast here?
No, I think it was good. I think one of the final things I'll say when it comes to ads is I do recommend you build out your remarketing campaigns first. Get that solid bottom of the funnel built first before you go higher in the funnel.
Because then if you have good remarketing campaigns and good remarketing lists built, then everything you do that's more aggressive --that's to cold traffic, that's awareness type campaigns-- they're gonna be a lot more effective if you have remarketing in place.
And I would say that's true whether you're running Facebook ads or YouTube ads or Google search and Shopping. Start with remarketing in the branded stuff first and then work your way higher in the funnel.
And I'm sure that I'll have you back in another couple of months.
Thank you so much.
I cannot thank our guests enough for coming on the show and sharing their journey and knowledge with us today. We've got a lot to think about and potentially add to our businesses. Links and more information will be available in the show notes as well.
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