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Category: Advertising / Marketing

Not Killing A Dying Product In E-Commerce

When scaling a dropshipping Facebook campaign, you will feel at some point that despite all your optimizations, your cost per purchase is now more than what you can afford to pay to run your ads profitably.

Most people at this point believe that the product has saturated. That the product has already been sold, profitably, to most potential buyers and reaching out more potential buyers will not happen profitably.

I believe that more than product saturation, the cause of higher CPP and decline in sales is ad fatigue. Hence, my first course of action in this situation is to create and try more creatives.

Before the buyer has received the product, the product is only as good as it’s creative. Hence changing creative can reduce some of the ad fatigue and may revive the life of your product. It’s not often product saturation, it’s the creative saturation.

The second course of section, after the first one stops working, is to scale down the campaigns and ad-sets. You might want to see what will happen if you consumed lesser budget, and hence lost more bids. By losing more bids, you can have a winning campaign.

Once the scale down stops working too, and you’re sure it’s time to kill your dying product, you can consider moving to manual bids with accelerated delivery.

You can set the maximum amount you’re willing to pay per purchase. If Facebook is unable to get you a sale under that price, no budget will be spent. By enabling accelerated delivery, you’re asking Facebook to spend your budget ASAP as long as it can do so by maintaining the manual bid. This ensures that as soon as there are cheap bids available in the auction, you want to spend all your budget to get them.

If you’re unable to spend any budget at all on manual bids either, you might consider killing your dying product.

I’m interested to know if there are other, smarter ways to delay the death of a dying product. Please let me know in the comments.

The Fast Moving World of Digital Marketing

As I mentioned earlier on this blog, our first e-commerce store was launched in 2016. Our primary customer acquisition strategy since then has been through Facebook ads.

While I had run Facebook ads a long time before, it wasn’t until 2016 that I spent a major budget. Since then, almost everything about the ads has changed. Many new strategies have been introduced and a lot of strategies that I learnt in 2016 are irrelevant.

Case in point, tech moves really really fast. Digital marketing moves even faster. And I’m curious what value could business schools add in your marketing career in this day and age.

It’s likely that my perspective is limited too, since I’ve never been to a business school. But help me understand, do business schools, including international, teach anything about this kind of marketing? If they do, how do the teachings stay relevant since the minimum length of a masters business degree is 1 year. Let’s not even talk about the bachelors degree here. In my opinion 1 year is a long enough time in digital marketing to unlearn everything and learn new things.

In my 15 years of career as digital marketer, I’ve changed my job roles 15 times. If I hadn’t, I would have found myself with no work. My primary source of revenue came from selling ads and our publishing company Socialoholic mastered that area. Only a few years later, we found ourselves buying ads instead. Now all of our revenue comes from buying ads.

In digital marketing, if you’re not pivoting every few months or even weeks, you’re being left behind.

So if you’re looking for a marketing school, let me tell you one. It’s where I went to. It’s called YouTube. The course length varies from 4 days to 4 weeks. And after that, you can get shit done.

Protecting Your Ad Campaigns From Yourself

Lately, I’m writing only about Facebook ads & e-commerce. That’s because since 1st January, we’re busy with the launch of our new store. We took a big part of 2019 off and planned to do some work from 1st January 2020. It has consumed us so far. But today is a good day because today we made it profitable.

In 12 hours, we have done $415 in sales. We’re projecting to close the day at $700.

Our ad spend for today is $154.81 which is about 37% of our gross sales. The net-margins are low right now but since we’re just getting started and the pixel is developing, we’ll see improvements with conversion rates over time. We also haven’t introduced any kind of lookalikes at this point in time.

These aren’t our desired results. We have to make up for the losses incurred with ads in the first 15 days. We need to optimize the ads after removing whatever segments aren’t converting to bring the costs down. We also then need to scale this campaign. If everything goes right, we should be able to do that in the next 7 days.

The reason why I’m not touching the ads right now despite that there’s room for improvement is because campaigns take time to optimize. Many people suggest not to touch your campaigns for 24 hours after you make them. While this could work if your campaign is completely off, I generally suggest 48 hours if there’s some sign of success. And so I’m going to let these go on for at least 48 hours and will not modify them.

After 48 hours, I’ll decide how to modify them by looking at breakdown data.

So if you want your campaigns to work, you need to protect them from yourself. Stay away for 48 hours, be patient. The cash might burn and it is going to hurt you, but the profit lies after that.

What to Realistically Expect From Your Drop Shipping Business

If you’ve read this blog before, you may have read some of the content that I’ve already written on dropshipping thus far. While e-commerce and dropshipping are very profitable in general, they are not as simple as most people market them to be.

I wanted to share my experiences with dropshipping so far to give you a more realistic overview of the journey, instead of the flashy end-result that you often see.

We launched our first store in Sept 2016. Our first sale happened in the first week. But it wasn’t until Feb 2017 that we were profitable. So it took us 5 months, 68 unique products in testing, and $10,000 in ad-spend before we figured out how this was going to work.

We targeted primarily english-native markets hence the competition was higher. It was also our first attempt with sales of any kind so we were inexperienced. But collectively we had over 10+ years of experience of running various internet businesses mostly related to content. So we weren’t completely inexperienced either.

From Feb 2017 till May 2017, we had achieved the flashy status that you often hear about. The margins were 40% initially but after scaling, came down to be about 23%.

Since then we’ve launched many stores targeting many different industries but drop shipping as a whole has gotten way more tougher. This is due to the obvious: more competition, higher ad costs, and lesser margins.

But it’s also because that in addition to ads getting more expensive, Facebook ads machine learning has gotten more advanced too. What it means is many marketers are now able to achieve results with little to no targeting options. Many times strategies have gotten as simple as running a broad ad with no targeting.

Since there’s lesser room available to outperform your competition with ad strategies, the competition now lies in creatives and product hunting. If you’re able to create better video ads than your competition, you stand a much higher chance of winning.

Over all, in the next few years, it’s going to be best product/creative takes all kind of game. Facebook ads are going to dumb down to just budgets and optimization goals.

What I’ve written above is related to my e-commerce experience in international and primarily english-speaking markets. Others may have had better or worse performances. In addition, e-commerce in developing and under-developed countries including Pakistan, has much lower competition and related ad-costs.

In summary, Pakistan is a much more potent market for early-stage entrepreneurs for e-commerce. We choose to work in global markets for a bigger scale although it comes with much larger set of challenges.

Facebook’s Super Lookalike Audiences Using Top Percentile

Super lookalikes isn’t officially a type of audience by Facebook. It’s just a term used by performance marketers to describe lookalikes made using top percentiles of the audience.

This kind of custom and lookalike audience is generally not publicly made available by Facebook but it’s kind of a hidden gem. If you don’t know about lookalike audiences, please check this out. And if you do, read ahead.

This is where you generally create or find your custom and lookalike audiences

But super lookalike audiences are created here.

Using the percentile option under activity in analytics section

You can create a filter to reflect the top percentile of your readers or buyers and save as custom audience

You can then use this custom audience to create lookalikes using the standard way. I call these super lookalikes.

Because results for super lookalikes speak for themselves.

Growth Risks With Facebook’s Machine Learning

Facebook has very advanced machine learning capabilities. More often than not, you’re better off reaching your customers for a cheaper cost by reaching a broader audience instead of a narrow targeted audience. But how is that possible? In theory, targeted audience should work better? But with strong ML, the broader audience delivers better and cheaper results provided that the initial customer dataset was correct.

But what happens if you get the initial data wrong? It puts their ML chase your customers in the wrong direction. Let me explain.

When building a Facebook page, growth is going to depend a lot on you first 100s or 1000s likes. Hence getting your first subscribers or customers wrong, can put you altogether in the wrong direction. I can think of 2 reasons why that could happen. Firstly, your upcoming page subscribers are likely to come from the network of your existing subscribers due to sharing and other engagement. And secondly, the engagement behavior of the first data set of subscribers with your content will define how engaging your page is and eventually define the placement of your page in the newsfeed and other Facebook algorithms.

So getting the initial dataset of subscribers/customers is extremely important. It is why I’m generally way more careful in the start when building a Facebook page or an e-commerce store through Facebook ads but later on take the liberty to test all kinds of traffic. It keeps my seed-data clean. The data that is going to be used to build the entire user-base later on.

If you have a question, please feel free to ask in comments.

Facebook LookAlike Marketing Hack That Will Save You Tons of Money

I have yet to meet a performance marketer who has not fallen in love with Facebook’s LookAlike audience feature. If you provide minimum data (100 users) to Facebook about your leads or customers, it can find more potential customers for you that lookalike your seed data.

It doesn’t just sound sexy. It works. It works wonders. It’s the most amazing feature I’ve seen on any ad platform thus far. But you can make it even more amazing by following a simple trick.

If you have worked for even a few weeks in the internet marketing industry, you’d be aware that the advertising marketplaces work on bidding and competition. Since more and more people are trying to reach customers in US, UK, Canada, Australia & Europe, advertising is generally more expensive in these geos compared to Pakistan, India, Philippines, Mexico, Brazil etc.

And to take advantage of this location arbitrage, all you have to do is begin your ad campaign by targeting customers or audience in a cheap geo-location like Pakistan or India. Once you have 100+ leads or customers from one country, you can use that data to create LookAlike audience for any country including the US. This saves you serious costs in data acquisition which is often done by losing money. And you end up with a valuable data for very little ad spend that allows you to scale your campaigns in any country.

To build LookAlike audience, you’ll need a customer file, engagement on your Facebook page including video views, or website data using pixel. To learn about pixels, watch this. To learn how to build custom audience, watch this. And to learn how to create LookAlike audience from your custom audience, watch this.

Losing Bids And Winning Campaigns

Every performance marketer has different techniques to run their ads. Most professional marketers use a wide range of techniques in order to scale depending on the goals of the campaign. Losing bids is one of the ways to run a profitable campaign.

Losing bid sounds like you’re losing something. But often that isn’t how it works. In fact, losing bid actually means you’re not willing to pay the top dollar for the eyeball. Instead you will bid on whatever audience is left after the auction competition.

This works particularly well for campaigns on a budget. This also works well for campaigns that are not led by the sense of urgency. But it can even work well for campaigns that you really want to scale quickly.

You can run these kind of campaigns by setting a very small daily budget if you are doing automatic bids. Sometimes I run ad-sets for as low as Rs 125 (less than $1) per day. As Facebook is going to evenly distribute your daily budget in a 24 hour period, you will automatically get a lower bid. You can also run such a campaign by setting a low manual-bid with a higher daily budget, which the ad-set may or may not consume.

It is true that you will be getting lesser impressions, clicks or sales compared to higher bids or budgets but at a lower cost which is great when you don’t have the urgency to get your lead or sale, and can wait a few days.

But you can even scale such kinds of campaigns using horizontal scaling methods. To scale, you can duplicate your ad-sets with different targeting for each ad-set while maintaining low budget per ad-set.

We’ve run campaigns with $1000/day budget by using 50 ad-sets spending $20/day each. We obviously avoided paying the premium for the bids as well as were able to spend a large amount of money daily on our campaign reaching the scale we intended.

This kind of strategy definitely works and I encourage you try it if you haven’t already.

How I Helped Sell $38,000 Worth of Biryani With $1,729 Ad Spend

It all started with friends complaining that you couldn’t get a decent biryani in Islamabad. While Socialoholic focuses on launching digital businesses as soon as possible with minimum viable product, I would see my friends planning features on top of features for a biryani delivery service which did not exist yet. And the discussion would always end with one big question.

Will it work? Is there enough market for this biryani delivery service we are planning to open? Are we going to lose all the money we are going to invest?

Sick of this continuous discussion with no end in sight, I wondered if an offline business can be launched like a digital MVP startup.  I downloaded a beautiful biryani creative from Google Images, created a facebook page with a logo I designed in 2 minutes and ran a Facebook ad with $5 budget. 

To ensure that people were actually going to order biryani instead of just liking and commenting on a beautiful biryani photo, I added a phone number in the Facebook ad and hoped to see the phone ring. Lo and behold, in about 10 minutes of my ad getting approved, the phone started ringing and everyone wanted to order the biryani which did not exist in real world. Being a growth hacker, I just told everyone that biryani is sold out which further hyped the biryani startup.

Keep in mind that there is no biryani to sell yet. We are just running a Facebook ad for a biryani restaurant while sitting in my bedroom.

Once we had the calls, everyone was confident that Biryani Express is going to work and Fasih, the CEO of Biryani Express got to work. But our focus still was that we have to test this with minimum possible investment.

Instead of hiring chefs, Fasih ordered biryani in bulk quantity and sold it on per serving pricing and hence pocketing the difference in revenue vs expenses. In earlier days, we were even doing deliveries ourselves just to prove that my thesis of running a small business with no money is true.

Once we had proven the idea, Fasih, started hiring chefs and created the logistics infrastructure for Biryani Express and today it is one of the most famous biryani delivery service in Islamabad.

What started with a $5 ad on Facebook is now a great small business which employees 8 people and has generated $38,000 against a life-time Facebook ad spend of $1,729.

This just shows that the concept of lean startup and MVP is as applicable in offline world as it is in digital world.

P.S I have anonymized the actual name of Biryani Express as my friend didn’t feel comfortable sharing revenue numbers with actual restaurant name.

About the writer: Saad is co-founder and CEO of Socialoholic. He can be reached on twitter.

Here’s How You Can Validate a Business Idea In Under $5

I see a lot of people waste tens of thousands of dollars trying to setup their businesses. In the end, I often hear that it didn’t work out as intended. I understand that. I more than appreciate their efforts. Failures happen whether you like them or not and I’ve failed plenty of times myself. But I’ve a fundamental problem with those who don’t do some pre-launch research.

Some just don’t know that its a thing; pre-launch market research. And others, just don’t know the right or cheap way to do it. As co-founder of multiple start ups, I have tried and tested hundreds of different business ideas and as a company, we have developed a very solid strategy for testing them before launch. I’m going to write about the easy and cheap part from our strategy below.

Often this strategy costs us $20 or less. Sometimes as little as $5 depending on the target market. And this strategy works for both online and offline businesses. Some of you might hate me for making you wait, because it’s pretty simple but I guarantee you it works. Even if you’re setting up a huge business, this will help.

Run an ad. Yes. Whether you want to sell a product or a service, run a Facebook ad before you create the product. Before you invest in your brand. Set up a dummy page. Call it a name using this tool. Create a free logo; head over to this tool, click click click, and you have your logo. Decide your target market. You can target different age groups, interests etc and spend $5 per ad-set, or more if you need more data or if your target market lives where ads are expensive.

In a day or two, you’ll have some sort of sales, leads, or whatever was your end-goal. Apologize to your customers because you’re out of stock and delete your dummy business. If it works, awesome. If not, either you don’t know your target market well enough, or your business product or service is not needed as you expected. Make changes, try again.

Let me know your thoughts if you think it’s a good idea, or if you think it’s just stupid! We’ve had great success using it. In fact, my co-founder built a large offline business using this strategy in addition to all the online businesses that we build, and I’m pursuing him to write about his experience. I think he’ll just do that very soon. It’s a very exciting story.