With rising ad costs, starting an online business today isn’t the same as it was 10 years ago.
Even compared to last year, the landscape has changed significantly.
It used to be that “coding up” your website and figuring out how to create a functional sales page was the hardest part. Once you got everything live, traffic was cheap – and you could make a fortune selling products like ebooks.
Today, we have “drag and drop” technology that mobile optimizes, processes payments, and delivers your products with minimal setup (that’s so easy your Grandma could do it).
And nowadays, you can barely give away ebooks – never mind pay for ads and sell enough to run a successful business.
There’s no doubt – the challenges we face today as online business owners are different – and arguably more difficult than in the past.
Rising ad costs will destroy most online business owners in the next 3-5 years.
Entrepreneurs will be forced to either grow, adapt, and improve… or fold.
But there is good news. You can rise to the top, win the game, and create your ideal life and business.
Opportunities are everywhere. Many more will be coming.
So what are the major factors in play that will affect every single online business owner from today forward? And how can you beat them and win the game?
How Much Are Ad Costs Rising?
It used to be easy to get people to notice you and your business online.
Advertising was cheap.
It’s much different now. According to an article on “Recode”, the cost of a thousand Facebook ad impressions was up 122% year over year in January, 2018, and 77% in February.
“It’s also worth noting that this trend — fewer impressions, higher ad prices — has been ongoing for the past few quarters. Facebook also said in the past that it’s running out of places to put ads in News Feed, which means impressions should theoretically plateau over time as Facebook reaches peak “ad load.”
All the while, Facebook’s ad revenue is still going up.
What does that mean for you?
Well, advertisers are still able to spend money, and make money, on the major social platforms.
It’s just getting more expensive.
I’ll share more about how to combat this and build a sustainable business online in a moment. First, let’s take a little trip to the past and…
Put Ad Costs in Perspective With a Return to Marketing’s “Old Days”
To put this in context, let’s take a look back into the colorful past of what all of us internet marketers actually do… “direct response marketing”.
In contrast to “branding”, where the goal is to remind customers and prospects about your business… (which is very expensive and predominantly used by major corporations)
Direct response marketing is measurable, specific, more cost-effective, and demands a “response”. When someone clicks your ad to take your free quiz, enter a contest, or watch your mini-course, that’s direct response marketing.
You’re able to measure the cost of the ad, the lead, and most importantly… the cost to acquire a customer.
Now, back in the day… before the internet…
Direct response marketing was born and mastered by the few copywriters who could write a sales letter, package it in an envelope, mail it to prospects… and generate sales.
Think about what’s involved in that process for a second.
First, you have to get people to open their mail.
Next, you have to catch their attention enough to avoid the garbage basket, and get them to read a few lines.
And if your sales letter was compelling enough… you could inspire someone to pull out their checkbook, write you a check, and mail it back to you.
Then you have to cash that check, and mail the customer their new product (and hope they don’t want a refund).
Sounds difficult, doesn’t it.
There was HUGE financial risk, and a lot of work. As a result, if you wrote a letter that didn’t pull sales, you lost big time.
Could Advertising Online Ever Become That Expensive and Difficult?
Now, with advertising costs rising, we’re seeing a trend towards a version of direct response marketing that’s closer to its origins.
Thankfully, technology will only continue to improve. So it will never be as difficult as it was to reach and serve our prospects and customers.
And advertising online will never be as slow, bulky, and expensive to test and optimize as the mail-order days.
However, with continually rising ad costs, the online marketing world has changed from a place where almost anyone could turn on an ad and make sales (a low barrier to entry)…
To a world where the best marketers and entrepreneurs will be the only ones able to profitably run ads (a higher barrier to entry).
How Do You Grow Your Business Despite Rising Ad Costs?
Simple. You need a real business.
Real businesses have a few key marketing and sales pieces in place, such as:
- More than 1 product or service to offer. I call this your “product grid”.
- Lead generation and sales processes that allow you to “breakeven” on the first sale, and profit from additional sales.
- A deep understanding of your “ideal customer”, and messaging that is clear, targeted, and persuasive.
Obviously, there’s much more to business than just these 3 things.
However, when you have these 3 marketing and sales pieces, you have the foundation needed to grow your business… regardless of how much ad costs rise.
You will be able to grow, adapt, and improve as the market changes.
Want to improve these 3 things in your new or existing online business?
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Thanks for reading, and have an awesome day!
To Your Success,