This past weekend, I was at the Coachella music festival in southern California.

It’s a great time. Amazing music, warm weather, good food.

And EXPENSIVE beer.

Regular: $7 (12 oz)
Large: $9 (16 oz)

Yikes!

Might as well go for the big one, right? After all, it was a scorcher that weekend (over 100 every day).

So, I went for the large. And out of curiosity, I asked the bartender if they ever sell any “regular” $7 beers.

He said they only sell about one regular beer an hour.

Translation: probably only 1% of people were buying regular, with 99% were buying large.

Marketing lesson: Always offer premium options!

Adding upsells is part of the “optimization” process (Step 6) of building a profitable advertising campaign.

Recently, I was advising a potential client about their online advertising strategy.

As I started listing the steps we take to build a profitable campaign, I realized it would be helpful to share our methodology with other  people, so I’ve decided to post it here on the blog.

Step 1. Identify Your Ideal Customer

The first step is to identify whom you want to target. Who are your ideal customers, and how can you reach them online?

Ask such questions as:

• What keywords are they searching?
• What websites are they visiting?
• What are their demographics and psychographics (interests and beliefs)?
• What are their hopes, desires, fears?

Based on these questions, create a customer persona (or “avatar”) representing your ideal customer. If you are targeting multiple customer segments, then create multiple personas.

Imagine that you’ll be advertising to 1 person.

Step 2. Research Your Competition

Next, research your competition to find shortcuts to success, while minimizing risk of failure.

Ask questions, such as:

• What types of products are selling best, and at what price points?
• What traffic sources are competitors using to acquire customers?
• Are your competitors using paid advertising? And if so, what ad outlets?
• What keywords are they advertising on?
• What websites are they buying ads on?
• What are your competitors’ selling points?
• How are their marketing funnels structured?

Step 3. Know Your Numbers

Before you create your ad campaign, start with the end in mind. What’s your goal for the campaign? What metrics will you use to judge the success of your initial test?

Questions to ask include:

• What’s your target cost per sale?
• How much will traffic cost?
• What are reasonable conversion rates to expect?

Based on these questions, you’ll prepare your ad campaign.

Step 4. Prepare Your Campaign

Before you create the actual ad campaign, you’ll want to take a close look at your offer.

For example, let’s say you’re planning to advertise a product, and you learned that traffic is going to be more expensive than you expected. In that case, you’ll probably want to test a higher price point. And that means you’ll probably want to bulk up your offer to substantiate the higher selling price.

Then, once you’ve finalized your offer, it’s time to develop your advertising campaign, including ads and landing page copy.

(I realize I’m skipping over the process of developing copy. Copy the most critical part of an ad campaign, but I don’t have time to provide an in-depth copywriting lesson without making this a never-ending post…)

Step 5. Initial Testing

The next step is to do an initial test campaign. During this step, you’re trying to figure out whether people will buy your product (or take whatever action you want them to take). Refer back to the metrics you laid out in Step 3.

Our favorite place to test offers is Google AdWords search advertising, assuming there’s search volume for your category of product. But if people aren’t searching for what you’re offering, that’s OK — you’ll test with display advertising, either on Google Display Network, Facebook, or other ad outlets.

I recommend you focus on testing 1 traffic source at a time.

How much money do you need to allocate to the test ad budget?  The answer varies, but as a rule of thumb we like to get a few hundred clicks from each keyword or placement before declaring it a loser.  But even that is a pretty small sample.

If your test bombs, go back to the drawing table and either re-work your offer, your sales copy, or test new traffic. If your test shows some signs of life, move on to Step 6.

Step 6. Optimization

Sometimes a campaign is profitable right out of the gate. But more often than not, you’ll need to do continual testing to get to profitability.

In order to reach profitability,  you’ll want to focus on 2 things:

1) Improving conversion rates by testing your pricing, offer, social proof, guarantee, headlines, adding email follow up, etc

2) Increasing your average customer value by testing adding upsells and  offering additional products and services to your new customers

Your overall goal during the optimization phase is to increase your most important metric, your Earnings Per Click (EPC).

Step 7. Scaling It Up

At this stage, your campaign is profitable. Congratulations!

Now it’s time to expand and scale it up.

One way to expand is to get as much traffic as you can from the original source. In addition, you’ll want to expand to other traffic sources, so you don’t become reliant on that 1 source.

By the way, you don’t really move from Step 6 to Step 7… instead, you’ll want to be continually focused on both Step 6 and Step 7.  That’s because the higher you can increase your EPC, the more traffic you’ll be able to buy. When you double your EPC,  you’re often able to buy much more than double the traffic.

This is the 7-step process we’ve used to create several profitable ad campaigns over the years.  Use it — it works!

P.S. We’re considering creating a report, webinar or course that goes into more detail about these concepts, and I’d love to get your feedback. If you have a question, post it below and I’ll reply as soon as I can.

Last week, I was creating a new Google AdWords campaign for a client of ours, a very large (multi-billion) medical device company.

As I was brainstorming hooks for the ads, I was reminded of  Eugene Schwartz’s book Breakthrough Advertising – one of the best books ever written on the topic of copywriting, in my opinion.

One of the smartest pieces of advice Schwartz gives is to tailor the headline of your advertisement based on the stage of your customer’s awareness of your product.

The headline is the most important part of your ad because it either succeeds or fails in attracting your prospect’s attention. And without your prospect’s attention, you have nothing.

Below, I’ve paraphrased Schwartz’s concept of awareness and how I use this concept when writing headlines.

What Stage Is Your Prospect In?

1. Pre-Need.

In the earliest stages of awareness, your prospect does not even know he has a need for your product.

An example of pre-need awareness is when you are advertising a brand new product in a brand new category with no direct competitors.

When it comes to online advertising, you’ll typically reach these prospects via Display advertising, such as the Google display network or Facebook advertising. And you’d target your advertising based on the type of customer you’d like to attract.

The job of these ads is, first and foremost, to make the case for the need for your product. This is the most challenging type of advertising because you have to educate your prospects before you can present an effective sales pitch.

2. Need

The next stage is where the prospect is aware of a particular problem or need, but isn’t sure how he’s going to solve the problem. He is likely already looking for a solution.

In this case, you are usually advertising a product in a market with several existing competitors.

When it comes to online advertising, the easiest place to reach these prospects is when they are searching in Google for keywords related to the need. You can also reach them when they are surfing on websites related to the need, such as keyword-targeted advertising on Google’s display network.

The job of these ads is to present your product as superior to your competitors. Your ads should focus on your Unique Selling Proposition – why buy from you, versus the other guys?

3. Desire

The final stage is where your customer is aware of your product and has a desire to purchase your product — but has not purchased yet.

You can reach these prospects when they are searching on your brand name. You can also reach them with remarketing advertising, where you display ads to prospects who have already visited your website but did not buy.

In this case, because your audience has already demonstrated an awareness of your products, you’ll usually want to lead with your offer to nudge them off the fence and buy. The simplest form of offer is to provide a discount, although there are other options.

Back to the example… Our client is a very large company, with a ton of brand awareness. For that reason, I decided NOT to focus on the benefits or USP of their product; instead, the ad headline focuses on making an offer.

Entering the Conversation

Another advertising genius, Robert Collier, famously wrote that ads should enter the conversation already going on in the prospect’s mind.  Schwartz picks up where Collier left off and takes it a step further by explaining how to tailor your ad based on your prospect’s awareness of your product and the need it fulfills.

Here are the questions I consider before writing headlines:

• What conversation is going on inside the prospect’s mind, related to the product, the product category, or the need the product fulfills?

• What stage of awareness does the prospect have when it comes to the product: pre-need, need, or desire?

• What headline would best connect with the prospect at that stage of awareness?

You should always test multiple headlines because you never know what message is going to connect best until you test, but if you first answer these questions, you’ll have a much greater chance of connecting with your prospect and making the sale.

Get the Book

Breakthrough Advertising has been in and out of print… I bought my copy on Amazon used for about $100. If you’re serious about creating effective advertising, you should definitely get it.

If you’re new to online advertising or if you’re running an ad campaign without proper conversion tracking, then this article will help you get started.

What is Conversion Tracking?

Let’s start by defining a conversion.

A conversion is really any action on your website that you deem valuable.  For example, you may want to track the following conversions on your website:

• when a customer completes an order
• when a prospect adds a product to the shopping cart
• when a prospect submits a contact form
• when a prospect submits a form to access a free report
• when a prospect submits a form to schedule a free demo
• when a prospect calls you

All of the examples above are online conversions except for the last one.  A phone call would be an “offline” conversion because the action is performed off of the internet.  Offline conversions are outside the scope of this article so I’m only going to focus on online conversions.

Online conversion tracking is therefore the method by which you will track all of your conversions.  More specifically, AdWords conversion tracking is how you will measure the conversions generated directly from your AdWords advertising campaigns.

Why You Need Conversion Tracking

So why go through the trouble of setting up conversion tracking?

Well without some form of conversion tracking you will have absolutely NO idea how your AdWords campaign is performing.

You may have an excellent click through rate on your ads and therefore you’re driving tons of traffic, but you do not know if the traffic is converting to leads and sales.  Visitors do NOT equal revenue and your goal with any online ad campaign is to generate sales, not traffic.

So you need conversion tracking in order to calculate the return on investment (ROI) of your campaigns.

In addition to simply measuring ROI, you need conversion tracking in order to optimize and improve your ROI. Without conversion tracking, there’s simply no way to systematically improve your ad campaign because you’re flying blind.

In every search campaign, some keywords and ads will generate leads and sales while other keywords and ads do not convert and waste your money.  So the key is to use conversion tracking to determine which keywords you want to keep and which keywords to pause to improve your ROI.

How AdWords Conversion Tracking Works

Online conversion tracking is fairly simple and doesn’t require too much technical know-how.

Here’s a diagram to illustrate how this works when you’re tracking a web form or an order form:

First, your prospect searches for your product or service in Google.  Then the prospect clicks on your ad…

Your prospect reads your landing page and eventually completes a web form or an order form on your website.  Then she clicks submit and gets redirected to your “thank you” page.

The “thank you” page is where all the magic happens :)

The “thank you” page includes the conversion tracking code.  This code is provided by AdWords and either you or your webmaster will have to add it to your webpage.

As soon as your visitor loads your “thank you” page, the conversion code is triggered and it sends all the information automatically back to Google AdWords.

AdWords then collects the information about which keyword was searched, which ad was clicked, what time of day, and the geographic location of the visitor.  All of this info is displayed in your AdWords account typically within 24-48hrs after the conversion occurs.

5 Steps to Set up AdWords Conversion Tracking

Here are the 5 steps to set up your conversion tracking in AdWords:

1. Identify what you need to track in order to measure the effectiveness of your ad campaign
2. Log into your AdWords account and go to “Tools and Analysis” and then click on the “Conversions” link
3. Follow the setup wizard
4. Send code to your webmaster or add the code yourself to the “thank you” pages you are tracking
5. Repeat the process for every online conversion you want to track

That’s it! You’ll start to see conversion data in your AdWords account within 24-48hrs of your next conversion.  Keep in mind this only tracks conversions directly from your AdWords campaign so you’ll have to complete this process for all other ad outlets you are using.

If you have any questions, post a comment below.