Small Business Series #3: Choosing a Paid Advertising Channel
By Joe Kim, Founder of Frontside Consulting
In this third installment of the Frontside Small Business Series we explore an important and potentially game-changing aspect of launching a small business: choosing a paid advertising channel. There are many channels out there (Google, Meta, Amazon, Pinterest, LinkedIn, Bing, and the list goes on…) each with their benefits, shortcomings, and idiosyncrasies. However, we chose to focus on the two most common and in our opinion most effective for small businesses—Google and Meta. Below we explore these channels through the lens of the different types of campaigns we commonly run in each noting their benefits and potential drawbacks.
For those of you who want to get straight to the bottom line here’s the TL;DR:
If your product or service is something that’s known, existing and people are already looking for it advertise your business on Google Search.
If your product or service is brand new, highly visual or style oriented advertise on Meta (Facebook / Instagram).
For anyone who prefers a bit more context and explanation, read on!
GETTING STARTED IS HARD—WE’RE HERE TO HELP
You’re a small business owner, not a multi-million dollar ad agency or a billion-dollar market cap corporation with an effectively unlimited budget. Fortunately for you, we’ve done this long enough to learn what works for small businesses and what doesn’t. Of course, there’s no 100% cookie-cutter approach as every business is a little bit different, but here are the broad strokes to get you pointed in the right direction.
SHOULD YOU ADVERTISE WITH GOOGLE ADS?
Paid search is an often misunderstood channel. The big difference with paid search is that you’re responding to existing demand, rather than pushing your message in front of people passing by. Essentially, you’re responding to someone’s search intent. Think of it as an army of digital robots sitting in a confessional booth, waiting for someone to come in and ask for a solution to their problems and you’re responding to their deepest desires. Search can perform amazingly in terms of engagement and performance because the search query communicates deep user intent. As such, it allows you to zero in on a customer who needs exactly what you’re selling.
Now here’s the catch: someone has to search a specific and targeted query for your ad to serve. If you’ve just come up with a new product or service that no one knows about, no one knows to look for it, so there won’t be search queries for you to match to.
Paid Search can be thought of in 4 main campaign types:
1. Search - Brand
Brand search terms are search queries for your business name. If you’re Nike, then it’s a query like “nike shoes” or if you’re Jimbo’s Reptile Emporium, “jimbo’s reptiles” or “jimbo’s lizards”. You can make the assumption that because they’re searching for your brand name, they’re already somewhat familiar with your brand, so the expectation of return here should be high. Take these revenue and sales figures with a grain of salt, especially directly in the Google Ads platform. Because the person searching for your brand name is already very familiar with your brand, they would likely find you anyway and a paid ad here is just greasing the skids to remove some friction in the customer finding you.
2. Search - Non-Brand
Non-brand search terms are the opposite of brand terms - these are generic search queries like “athletic shoes”, “basketball shoes”, or “pet reptiles for sale near me”.
Since the user searching for these terms is likely unfamiliar with your brand, it’s going to be harder to get the sale. However, when you do get the sale, it’s much more likely that the user is a new customer. Incremental sales and customer lifetime value are much higher in these instances, so don’t let the lower return on ad spend figures scare you away from a longer-term customer acquisition strategy.
3. Shopping / Performance Max
These campaign types are much more data-driven and require some data output from your website platform. The data will deliver the product information, pricing and inventory to Google who will then do their algorithm magic to target search queries.
Performance Max is similar (and the only way to get into the Google shopping placements now), but it combines some display retargeting and search ads to create an all-in-one campaign type that will hit all placements. These campaign types are great for smaller advertisers who want to keep their campaigns simple, however, the trade-off is a lack of optimization. The reporting is not nearly as granular as most other campaign types but can provide good performance in a single campaign setup.
Shopping is the main sales driver of Performance Max and it gets its ideas for search query matching from the titles and descriptions of your products. Make sure that your product titles describe what your product is and what it does as well as possible. If you’re a reseller of a product, make sure to include the UPC/GTIN in the data feed. Google can use this to match the product on the back end of their systems to better match search queries based on other advertisers’ data.
4. Display / YouTube
These campaign types are pretty self-explanatory. Display uses the Google Partner Network to show some graphic ads to passersby. YouTube ads simply play video ads before, during or after the video the user is viewing.
We generally recommend that smaller businesses avoid these campaign types as they generally are not conversion/sales oriented and the retargeting aspects are generally covered by Performance Max.
Summary and Recommendations for Google Ads
So to summarize and prioritize Google campaign types for small businesses:
Brand Campaigns
Use exact-match keywords so you don’t let Google waste your budget on similar-sounding queries.
Review your search results page. Does it look like your organic search results are ranking well? If so, you might not have to put an ad there.
If you see competitors serving ads on your brand terms or if you have other retailers/resellers of your product, you might have to make a strategic decision to run brand term campaigns somewhat regardless of performance to maintain your position on the search results page.
Performance Max
If you have a data feed and particularly if you use Shopify as a platform, go ahead and spool up this campaign type. It will cover most of your bases.
Non-Brand
If you have additional budget to spend after brand and performance max, go ahead and start spooling up a few non-brand campaigns targeting high-intent queries.
Start with exact and phrase-match keywords first, once you’ve maximized your sales and ROI with these, expand to broad-match in separate campaigns or ad groups so you can see how long of a leash you’re giving Google.
Display / YouTube
These don’t generally drive conversions so unless you have a strategic budget allocated strictly to letting people know that you exist, I’d avoid this.
Display network is so broad, you can easily blow your ad budget in junk placements that don't’ provide relevant context to the user’s intent at the time, so it can easily be wasted ad dollars.
SHOULD YOU ADVERTISE WITH META (FACEBOOK & INSTAGRAM) ADS?
Conceptually, ads on Meta are much more intuitive—pick the placement you want the ad to serve (Instagram and/or Facebook feed, stories, etc…), what you want to show the user (video ads, carousel ads or single image static ads), and who the user you want to target is (demographic, interest, age, gender, etc…) and buy the ads.
Campaign optimization here largely depends on the goal that you’re giving Facebook. For smaller businesses, this tends to be sales or leads.
The other large segmentation of account structure should be returning vs prospecting customers. Similar to brand/non-brand in search, your expectation of return and sales for a new customer (prospecting) vs a returning customer (retargeting) should be much lower.
Prospecting
For prospecting campaigns, we like to segment them into the following groups:
Interest - Building out audiences based on Meta targeting interests and demographics.
Customer File Look Alike - Meta will build an audience based on users that are similar to customer data supplied by your business. (i.e. email lists, client lists, etc…)
Socially Engaged Look Alike - Similar to customer file look alike audiences Meta will generate these audiences based on users similar to those who engage with your business’s Facebook or Instagram accounts.
Retargeting
For retargeting campaigns, we think of segmenting as follows:
Website Visitor - Users who have visited your website in a given lookback window.
Add-to-Cart Engaged - Users who have visited your website and have added items to their cart in a given lookback window.
Socially Engaged - Users who engage with your business’s Facebook or Instagram accounts in a given lookback window.
Advantage Plus
We generally avoid Advantage Plus campaigns. This is similar to Google’s Performance Max campaign as a one-stop shop for all targeting and placements. However, combining retargeting and prospecting audiences tends to muddy the waters in terms of overall account performance, and optimization can be difficult once these campaign types are running.
Summary & Recommendations for Meta
Retargeting
We always recommend running Retargeting campaigns to some degree. Budget so that your retargeting audiences reach roughly an ad frequency of 3 on a 7-day lookback.
Be cautious with ad spend on your retargeting audiences. There’s a good chance you’re just targeting users who are going to buy anyway, so similar to Google brand search campaigns, expect a higher ROI here.
Prospecting
Prospect aggressively with the remainder of your budget, or anywhere you can find a strong ROI.
Budget each audience so that you’re not exceeding an ad frequency of 2 on a 7-day lookback.
CONCLUSION
So there you have it. Conceptually, Meta is simpler to structure, but creative and copy messaging can be complex. Check out our blog post “The Battleship Method” for an in-depth look at our creative testing strategy and “Dunbar Creative Testing” for a more case study-oriented review on some ideas about how to test your messaging. As always, if you’d like some help, please reach out!
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