Digital Lab

How to Scale Your Advertising

Advertising can be nerve-racking for businesses early on…

You don’t know what you don’t know.

First, you have to figure out how to get customers from your ads, then you have to figure out how to make sure it’s profitable, then how do you scale from there?

Each of these stages presents its challenges.

For this newsletter, we will assume you have customers coming from your ads and that it’s profitable. Now how do you scale?

Understanding Your Baseline

Before you even consider increasing your ad spend, you need to understand where you’re starting from.

Meaning not just the cost and revenue of your ads, but every metric in between.

You should be measuring:

• Reach (how many people are seeing your ads)
• Click Rate (what percentage of people click your ads)
• Cost-per-Click (what are you paying for each click)
• Landing Page Conversion Rate (what percentage of people convert on your page)
• Cost-per-Lead (what are you paying for each page conversion)
• CAC (what are you paying for each revenue-producing customer)
• ROAS (what is your ad spend to revenue generated ratio)
• ROI (what is your total investment to revenue generated ratio)

These metrics will help you identify problems within your existing ad setup.

If your click rate is low then your ad might not be interesting enough.

If your landing page conversion rate is low then your landing page might not have the right information or design.

If your CAC is too high then you might not be charging enough or you’re not closing enough of your leads.

There are a lot of ways to evaluate limitations within your ad setup, but you can’t even begin to evaluate it if you aren’t tracking these metrics.

Learn your metrics and know your baseline, before you scale.

Know Your Levers

Now that you understand your baseline it’s time to evaluate your Levers.

ie. what you can influence to scale

Here are a few levers you have:

• Person (who are you targeting)
• Place (where are you targeting)
• Price (what price are you listed at)
• Budget (how much are you spending)
• Creative (what is the content of your ad)
• Promotion (what offers are you presenting)
• Page (what is the content of your landing page)
• Conversion (what is the structure of your funnel)

Not every lever can or should be influenced at the same time.

Generally speaking, you want to focus on a single lever at a time and experiment with changes.

Improvement on a single lever will have a ripple effect throughout the performance of the rest of the campaign.

For example: if I change the pricepoint of what I sell by $50 and all other campaign metrics stay the same, then the Revenue, ROI, and ROAS increase immediately by $50 per customer.

Small changes can have a big impact on the overall performance of your ads and are incredibly important for effective scaling.

Run Experiments

So if you know your baseline, and you know your levers…

All that’s left to do is run experiments.

An experiment is simply a test of a change to see how it impacts your campaign.

9/10 times this will yield no result or even a negative performance change.

But that 1/10 leads to a noticeable increase in your bottom line and opens up the opportunity for you to hit new peak revenue milestones.

When we run experiments with ad campaigns we generally want to do a few things.

1. Test only 1-2 lever changes at a time (updated landing page + updated ad creative)
2. Measure over the course of 30 days (you need a full ad cycle to get an accurate reading)
3. Keep a control campaign (leave an existing campaign running at the same time to compare)
4. Iterate (if it works, expand it across other campaigns)

When we find winning experiments the benefits generally affect the entire funnel.

This helps you avoid issues like diminishing returns, ad creative fatigue, profit margin liabilities, and overreliance on a single campaign.

Scaling your company’s advertising doesn’t mean you dump an extra $20k in ad spend and hope for the best.

It’s incremental improvements throughout the campaign to guarantee higher margins so that when you do increase your ad spend, there are no worries of diminishing returns.

Do you want more profit out of your ad campaigns?

We’ve been helping companies build & scale ad campaigns for almost 20 years. We can and will help you make more $$$ for every $ that you spend on advertising. Click the button below to get a free consultation from our team.