The Online Marketer’s Dilemma | Advertising vs Conversion Rate

By May 29, 2016 Knowledge Base

The Online Marketer’s Dilemma

No matter the size of your company, you have a budget to stick to. Whether that budget is a few hundred dollars or hundreds of thousands per month, you want to invest in your brand to increase sales. For most people, the first thought is “Let’s advertise!” well there are thousands of different channels or ways to advertise, but lets take a deeper look. What’s the real thought process behind this notion? We want more people to be aware that our product exists and solves their problem. If we take traditional advertising into web terms, you want more traffic.

Traffic equals sales right? Wrong.

While increased traffic can directly relate to increased sales, it’s not as simple as that. We want to have as many viewers become customers. This process is known as a conversion. If the end goal is more sales, then there are multiple paths to getting there.

Let’s go into an example:

Take two similarly performing companies, imagine they are both receiving the same amount of monthly traffic and converting the same amount of sales. They want to double their sales, but take two separate approaches. Company A wants to get more traffic while keeping the same conversion rate (disregarding the traffic quality) while Company B wants to keep the same flow of traffic and increase their conversion rate.

Disregarding budgets, which company would be better off after completing their goal?

If they were each to double their traffic and conversion rates respectively, they would still be equally performing. Let’s prove this mathematically.

Company A

1000 monthly views
 x   5% conversion rate   
50 sales

2000 monthly views
 x   5% conversion rate   
100 sales

Company B

1000 monthly views
 x   5% conversion rate   
50 sales

1000 monthly views
 x   10% conversion rate   
100 sales

As you can see, in both situations they have doubled their sales from 50 to 100 per month. So does this mean that either option is the right choice? In theory yes; however, we left out the most important factor – budget. If we had unlimited funds, why would we be in business to make more? This is where the term optimization comes it. We want to find the best solution within your budget.

Increased Traffic Approach

Typically it takes more to maintain and consistently increase traffic as traditional media advertising as well as PPC or SEM is expensive. They are expensive because you can reach a large, targeted audience instantly. Methods such as SEO take time and larger budgets to establish a baseline as large players in the industry can dominate top rankings. So unless you’re budget is large enough to position for maximum exposure, this may not be the best option for you.

A quick side note, a large budget is industry specific. We have helped companies get 10x increases in traffic on budgets of only $300/mo. Unless you have a trusted, top firm and expert team managing your campaign efficiently, it will take tens of thousands of dollars per month to run an effective campaign aimed to exponentially increase traffic.

If you’re dissatisfied with previous providers results or want to skip the agony of picking the wrong team, contact us and we will create a plan of action as well as give a free full analysis with insights on how to improve your current positioning.

Increasing Conversion Rate

If you want to attain the same results and double your sales, you can double your conversion rate. While this is significantly easier said and done, the right team can improve your conversion rate through CRO or Conversion Rate Optimization. The way we like to view it is this, you can spend thousands of dollars to get traffic to your page, but what happens when they get there? Are you measuring your metrics, constantly checking your analytics and optimizing to ensure you’re maximizing your sales?

While there are proper tactics and strategy to CRO, it’s typically on a site by site basis as a result of your target market. Think about it, if you are selling potted plants versus luxury watches, wouldn’t the audience actually viewing your site be drastically different?

The first step is to understand your current position. Check your analytics for bounce rate, average session duration, pages per session and number of visitors. It gets much more advanced that that, checking funnels, setting goals and constantly monitoring progress, but we are just going over the basics for now.

Look for anything that stands out, correcting issues is much more effective than applying advanced strategy on top of a “broken” site.

Red Flags – Check if your analytics are outside of the recommended range.

Bounce Rate:  If 70% or greater, you should take immediate action. The lower the better.

Average Session Duration: If lower than 1 minute, viewers are not absorbing or exploring your site.

Pages per Session: You want this to be between 2 and 7. It varies based on your funnel and path for users, but typically if users are viewing too few or too many pages, they aren’t converting.

Traffic: The higher the better, but take into account Traffic Quality.

We have created a formulaic approach to optimizing content distribution for your clients, contact us and we will analyze your current site for free and offer suggestions to increase your sales. Our business is helping others, and we are dedicated to improving your leads, sign ups and sales. Check back for more tactics, tips and tricks to improving your website and leave your comments below!

About the Author

James Cantoni Jr. - CEO and Founder of SmartR Site

Results driven visionary and leader focusing on execution, growth, customer value and long term impact of revolutionizing the current status quo of the web industry.

James Cantoni

Lover of Analytics and Optimization
CEO and Founder of SmartR Site

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