MAXIMIZE YOUR AD REVENUE BY PRIORITIZING ENGAGED LEADS
MAXIMIZE YOUR AD REVENUE BY PRIORITIZING ENGAGED LEADS
Engaged leads and lifetime value create more profitable conversions compared to trying to drive down your CPA (cost per acquisition) too early and relying solely on last-click metrics.
Lessons from 25 Years in Advertising
In my 25 years in the advertising industry, I’ve seen many campaigns go off the rails by focusing too narrowly on CPA from the start. On the flip side, I’ve seen amazing results from campaigns that defined and focused on the stages of the customer journey to a qualified sale.
What is a Qualified Sale?
A qualified sale is when you acquire a customer who provides a high ROI based on their lifetime value. This ensures the best rate of return on your marketing efforts.
The Pitfalls of Focusing Solely on CPA to Early
Unless you’re already a big, trusted brand, focusing entirely on CPA too early can lead to a race to the bottom. You may end up acquiring lower-value customers who don’t cover the cost to acquire them. This can trap you in a cycle of lowering your CPA and diminishing your returns.
Additionally, you end up focusing all your attention on the lower funnel instead of ensuring your entire funnel or Pipeline remains healthy and keeping growing. When you do this the well runs dry cause you have not been filling it and you could end up in a place that’s impossible to come back from before you realize what you have done.
Why Engagement Matters
Think about it: Have you ever clicked on an ad for a new product and bought it immediately? Probably not. Most consumers click on an ad multiple times before committing to a purchase or providing their information. This is why focusing on engagement is crucial. Here’s why:
- Qualified Customers: By focusing on those who show genuine interest, you build an audience of engaged leads. This is the quickest route to gathering quality data that you can optimize your campaign towards.
- Behavioral Insights: Identifying visitors who engage with your product or site helps you understand their interest. Scaling this first fills your funnel with potential customers you can continue to engage and eventually convert. This is a healthy Pipeline or Funnel.
- Scalable Data: This approach allows you to build robust models that you can optimize within channels like YouTube, Display, Video, and Social Media.
Optimizing for Engaged Leads
Optimizing for engaged leads ensures higher-quality customers with better long-term value. Engaged customers:
- Have higher lifetime value.
- Provide more meaningful feedback.
- Contribute to a more robust and profitable sales funnel.
Measuring Long-Term Value
For long-term success, focus on a combination of engagement, efficient CPA, and lifetime value:
- The Right CPA: For example, a $50 CPA for a customer who spends $1,000 has almost 10 times the ROI compared to a $10 CPA for a customer with a $100 lifetime spend. ROAS of $950 vs $90. Which customer would you rather acquire?
Beware of Last-Click Attribution
Using Google Analytics and only looking at the last click that drove the conversion can lead you astray. For instance, if you found users with great targeting solutions from Channel A but they converted through Channel B, Google Analytics might mislead you to cut out Channel A, which was actually crucial in the initial engagement and building a good lead pool.
Use Organic Lift as a Quality Measure
This is a great tool to measure the quality of conversions in the short term. By comparing lifts and dips in organic traffic, engagement, and conversions across different channels, you can gauge the quality of your traffic and whether your strategies will lead to long-term success and growth.
Final Thoughts
While CPA is a valuable metric, it shouldn’t be the sole focus of a campaign. By prioritizing engaged leads and using effective channel strategies and data across programmatic, social media, and video, you can drive more profitable sales and achieve long-term success.
