New Data: Groupon Slashing Online Ad Spending in Q3

This post is the first in our AdWatch series. At MixRank, we’ve built the world’s largest database of display and contextual ads, tracking over 600,000 advertisers advertising on 100,000 publishers. We’ll be bringing you interesting insights into advertisers’ strategies and industry trends based on this data through MixRank AdWatch posts.

Is Groupon pivoting away from daily deals?

New ad data from MixRank shows that Groupon, Inc is dramatically slashing US online ad spending for its flagship daily deals product.

For every advertiser we monitor, we compute an Ad Performance score based on sampling ad impressions and other metrics. Our Ad Performance Score is an internal metric we use to estimate how much traffic an advertiser’s ads are getting. The actual number is arbitrary, but can be used to compare advertisers and correlates very strongly with impressions, clicks, and spend. A higher performance score means an advertiser’s ads are getting more traffic (generally because the advertiser is spending more).

Our ad performance data shows that Groupon (NASDAQ:GRPN) has cut spending on US-targeted display and contextual ads more than 80% in the past few months- a staggering cut for a company spending $100 million a month on advertising.

Here’s a chart of the MixRank Ad Performance Score for groupon.com’s contextual and display ads for the past two quarters of 2012. This data only reflects ads geotargeted at consumers in the United States.

Groupon ad performance

View more detailed data about Groupon’s ads.

The massive, rapid drop occurs on July 1, the first day of the third quarter, and Groupon’s ad spend has not recovered since. The fact that this drop occurred exactly at the start of Q3 implies this was a major strategic decision with budgeting for the third quarter rather than a tactical tweak in allocating spend.

Much has been written about Groupon’s mounting customer acquisition costs standing in the way of profitability, and as data from their latest quarterly report shows, Groupon has been making deep cuts to marketing spending for a while.

Groupon ad performance

But Q3 2012 marks the biggest drop by far in Groupon’s online advertising spending for daily deals since we’ve started tracking their ads over a year ago.

This data is just one signal, and it could have several explanations. Maybe Groupon has saturated the daily deals market in the United States and is shifting spending overseas. Or maybe Groupon’s revenues for the next quarter are lower than the market’s expectations, and executives made the decision to cut marketing spending further to reach profitability.

Or maybe Groupon just isn’t that interested in daily deals anymore.

So what does this change mean? Groupon has just announced that they’re taking on Square and offering a payments and credit card processing solution to its merchants. Groupon CEO Andrew Mason has defined the company’s vision as an “operating system for small business”.

Is the shift in marketing strategy a sign Groupon is on its way to abandoning the maturing daily deals industry it created and transitioning to a B2B company? 

Such a rapid, dramatic pivot would be unprecedented for a multi billion dollar publicly traded company. Then again, Groupon has never been one for convention.

 

Come Meet Us at AdTech!

We’re proud to announce that MixRank has been selected as a finalist for AdTech’s Startup Spotlight in the Data & Targeting category.

We’ll be presenting the product at a special session as well as exhibiting in the Innovation Alley at AdTech San Francisco, April 3 and April 4, 2012. If you’re planning on attending the conference, please get in touch with us – it would be great to talk and discuss possible partnership opportunities.

Cut Your Costs 90% by Scaling Laterally Across Audiences

Say you have a campaign that’s been moderately successful for some time. Your creatives and targeting are relevant to your audience, and you’re getting a steady flow of conversions profitably. But, after some time, your campaign will invariably being to saturate the market. You’ll see conversion rates begin to drop and costs slowly rise, while traffic remains flat. This happens to everyone. Online marketing wouldn’t be much fun if we could just throw up a single successful campaign and sit on our asses collecting checks for the rest of our dats.

How do you scale the campaign up to more traffic and stop the regression to lower profits?

One way might be to expand your ad groups or targeting and find more keywords that will do as well as your existing ad groups.

Finding lateral keywords(keywords that describe the same term in a different way)  has been a well documented and successful strategy, especially in the early days of search marketing, when a marketer armed with a thesaurus and a good imagination could build massive campaigns.

But adding more keywords to a campaign is merely a band-aid, a short term fix that won’t solve the core problem of an audience that has gotten tired of what you’re selling.

I’d like to describe a new strategy that I have used very successfully to grow new campaigns as well as breathe new life into stagnant old ones. I call this strategy scaling to lateral audiences.

Just as lateral keywords are closely semantically related to the original keyword (i.e “meet single women” and “online dating sites”), lateral audiences are closely related based on their core attributes- their fundamental needs, desires, and problems.

In other words, if your product solves a problem for a specific group of people, thinking in terms of laterally related audiences would help you find more people like them, that also have a need for your product.

To illustrate the power of lateral audiences, we’re going to walk through an example using a free MixRank account.

Just to take a random example I made up, let’s pretend we’re a company selling gold coins- a growing industry in this economy. This is a very competitive space with lots of advertisers, so we’re going to have to get creative if we want to take some of their traffic for ourselves.

Google’s Traffic Estimator shows that the keyword “buy gold coins” has a very high average CPC for position 1 of $10.10. To get this data, I set the average CPC in the Traffic Estimator to an absurdly high number like $1000 to make sure I get the absolute highest bid for this keyword.

Let’s find a way to get a similar audience, one who’s interested in buying gold, less expensively. All we have to do to start is initiate a search from the MixRank home page and find a relevant advertiser whose strategies we can study. Let’s just search for our keyword and click on the first suggestion:

Lateral-1

The search results will show us a few ads that are highly relevant to the keyword we searched for. I can already see one lateral audience here- several of the ads say “Buy silver coins”.

It’s important to be mindful of the distinction between keywords and audiences here. Lateral keywords for this theme would be phrases like “buy gold bullion” or “buy gold bars”. In other words, they describe the same product in a different way. “Buy silver coins” describes a different product but targets a lateral audience that has similar fundamental desires- in this case the desire to own precious metal. This desire could further be reduced to a core drive for security, financial stability, greed, etc.

The keyword “buy silver coins” has an average CPC of $4.92. Still high, but a significant improvement in targeting the same audience.

Let’s find out which core desire it is based on the current advertising strategies of the market’s leaders. From the search results page, I’m going to pick what looks to be the current leader in this space, “goldine.com”. I can see more data about them by clicking on that domain in the “Advertiser” column on the far right.

The Advertiser Report for goldine.com will show me their highest performing ads and traffic sources. You can also reach this report simply by typing their domain, “goldline.com” into any search box.

Looking through their text ads, I’m noticing a common phrase that’s consistent across all of their split tests: “Free Investor Kit”:

Lateral-2

They’ve probably tested many different positioning strategies and found that presenting gold as an investment is the strongest appeal. Here’s another lateral niche audience: people who are looking to buy gold as an investment (as opposed to collectors seeking gold for numismatic purposes, etc). Google Traffic Estimator shows that the keyword “invest in gold” has a max CPC of $8.87. This high number is encouraging, because it means that this is a valuable, high converting audience.

$8.87 is a bit rich for us- if we were running a campaign targeting this theme, I would probably see my margins plummet as I get squeezed out by competitors with bigger budgets.

But remember our other, related audience of silver buyers? “buy silver coins” was significantly cheaper than “buy gold coins”, so I would expect this pattern to hold across other, related keywords centered around buying silver.

Indeed, “invest in silver” has a maximum CPC of $3.71, which is a huge 58% discount from the gold keyword, yet targeting an audience that’s closely related to the original keyword, and one we can be reasonably sure will convert just as well, because they’re interested in buying precious metals as an investment.

But let’s keep going and see if we can cut our traffic costs even further using MixRank’s database of millions of ads.

MixRank’s ad search uses sophisticated matching algorithms that go beyond simply looking for the appearance of keywords in ad copy or landing pages and identifies campaigns that are thematically relevant to the query. For a great example of this, let’s search for our new keyword that we derived from the ad copy we saw goldline.com running- “investing in gold”.

Our goal with these searches is to identify keywords and audiences that don’t match our search query exactly, but are somehow related.

There’s one result that jumps out at me immediately.

Lateral-4

Of course! Some people that are interested in investing in gold are part of the small, but lucrative niche audience of people stocking up for an impending economic collapse. The Ron Paul audience, if you will. Analyzing the ads of advertisers like this one will give us great insight into this market. Let’s make the assumption that people anticipating an economic collapse are highly motivated to turn their paper dollars into gold, which we will be happy to sell to them.

The keyword “economic collapse”, which features prominently in these ads, has a suggested max CPC of $1.02, a 90% discount on our original keyword of “buy gold coins”, which cost over $10 a click.

An inexperienced marketer will suggest that “economic collapse” is a bad keyword to target, because it doesn’t show intent and is not a “buying keyword”, so it will not convert as well. But remember, we’re getting this traffic 10 times cheaper!

Let’s say you have a stagnant campaign based around the “buy gold coins” theme that’s barely breaking even. If you target the “economic collapse” keyword, all you have to do is achieve 1/10th your current conversion rate from this audience to get a huge bump in traffic and profits.

“Prepare for impending economic collapse- buy gold!”. The ads practically write themselves.

No thesaurus or keyword tool will tell us that new main keyword, “economic collapse”, is strongly correlated with the keyword we started with, “buy gold coins”. But by using MixRank to pull relevant keywords out of ad copy and searching for thematically relevant ads matching those new keywords, we can quickly identify pockets of opportunity that advertisers without the benefit of this data will miss.

In a later post, I’ll show you how to delve even deeper to identify even less expensive, high converting audiences and leveraging them for a flood of massive traffic. But following the strategy outlined above should be enough to get you started scaling your campaigns across lateral audiences very quickly.

You’re Not Failing Enough

I was asked to give a talk about paid traffic sources at 500 Startups last week. The presentation is embedded below.

Although I couldn’t resist diving into deep, specific, tactical stuff near the end, the three most important points I wanted to impress upon my audience were:

  1. Most online ad campaigns (even those created by professionals) fail
  2. The only foolproof way to succeed is to try (and fail) enough to exhaust every other option except the successful one
  3. Therefore, your objective should be to fail as quickly and cheaply as possible

It’s become common knowledge among the lean startup movement that you should launch quickly, iterate, pivot, etc. But I want to take this one step further as applied to traffic (and startups as a whole):

When you launch a campaign, your objective should be to make it fail.

When you launch an advertising experiment, it will most likely fail. The null hypothesis is that it fails. This is a good thing, because it creates defensible barriers to entry for your business.In other words, once you have a successful campaign, a novice with a $100 AdWords coupon won’t be able to disrupt your acquisition channels.

If chances are that your campaign fails, you might as well do it quickly and painlessly.

I know it seems crazy to set a goal of losing money. But just give it a try. Because here’s what happens when a campaign fails:

  1. The campaign failed because it spent money without bringing in enough conversions or revenue to pay for itself.
  2. If the campaign is spending money, it’s generating traffic.
  3. If the campaign is generating traffic, it’s also generating data: click costs, conversion rates, ad copy and landing page split test results, etc.

And as any good marketer will tell you, data is everything. He who has the most data wins.

Don’t aim for launching a campaign that’s instantly successful/viral/profitable. That’s a fool’s errand, and it can only lead to disappointment.

Your only objective with a new campaign should be to collect enough data to validate or disprove your assumptions.

Then go back to the drawing board, use what you’ve learned to create a new campaign that fails slightly less than the last one, and try again.

Don’t worry about the conversion rate or CPC with a new campaign. Just get the data, so you have a baseline you can optimize from.

If you get an additional data point about what works and what doesn’t you win, no matter the result.

Pickup artists call this mindset outcome independence, defined as “The mindset of not focusing on a specific result, or growing attached to any outcome.”

If you’re not attached to the outcome of a split test, you’ll never get demoralized by its inevitable failure. And you’ll never risk giving up on a traffic source or acquisition strategy too quickly because your first few campaigns failed.

This can be an incredibly powerful mindset. Embrace failure. Never stop testing. And the successes will come in time.

The high rate of failure for most ad campaigns is the reason we started MixRank. We built our startup to catalog and analyze millions of split tests and campaigns  so you can learn from your competitors’ mistakes rather than making them all over again.

I don’t post that frequently, so your best bet to get notified about new posts like this one is to subscribe by RSS.

How to Hire a Great Marketer for Your Company

A lot of people have been asking me for help with hiring marketing people for their company. I keep repeating the same advice, so I thought I would lay it out here. 

My usual disclaimer: This advice is mostly targeted towards startups and lead gen companies who are interested in significantly increasing their traffic and conversions. In other words, performance marketing. If you’re more interested in branding or social media marketing (whatever that is), then this post probably isn’t for you.

There are five key questions you should ask yourself about any potential marketing hire.

Anyone with a good answer to all five is worth his weight in gold- hire him immediately. Hitting three or four of these points can make for a very good hire, as long as you have support staff in place and are willing to spend some time training and getting this person up to speed. And unless you already have a very strong marketing system in place and are bringing this person in at a junior level, I would be careful about expecting much out of someone possessing two or less of these qualities.

Does he have a strong track record of driving traffic?

This is probably the biggest predictor of success in internet marketing. If there’s any way for you to snag someone with deep operational experience, who has the experience of getting his hands dirty and actually building effective campaigns from the ground up, do it.

A low-level, detailed understanding of things like SEO factors and AdWords Quality Score means that you’ll be able to get properly structured campaigns up and running very quickly.

Ideally, your hire has experience driving traffic to his own startup or marketing business, or has managed campaigns for a large e-commerce advertiser.

Is he obsessive and meticulous about metrics?

Internet marketing in 2011 is a lot more about analytics than creativity. You can’t afford to hire someone who will be sloppy about metrics or optimization.

Ask your prospective hire to build a small sample campaign or marketing plan. Is he tracking everything throughout the funnel down to the specific traffic source or creative? Is he going to write four versions of every ad and landing page and split test relentlessly? 

Some of the most effective marketers I know are not Mad-Men style hustlers but rather quiet analytics nerds who love digging around in spreadsheets and building mathematical models.

Is he a strong and prolific communicator?

After targeting, the most important factor in any campaign’s success is the strength of the copy. A good writer, even without specific copywriting experience will eventually be able to produce good copy, but a great salesman who can’t write well will be bogged down by the process.

Your marketer is in charge of every point at which you interact with customers, from the headline on your landing page to registration emails. Someone who can quickly produce compelling and well-written content will have a direct and material impact on your conversion rate. 

A good proxy for identifying a good writer is finding a good reader. Ask everyone you interview about the last book they read.

Does he have experience managing both small and large budgets?

A small marketing budget demands certain constraints that a large budget does not. Specifically, every dollar has to return results, and you can’t afford to bid against large national or go on too many branding adventures.

“Scrappy” is the word that comes to mind here. Again, someone with experience spending his own money on marketing campaigns is most valuable here.

You should find someone who knows how to work within the constraints of a startup budget but also has experience quickly scaling campaigns once you find product-market fit.

Does he have the makings of a competent salesman?

Claude Hopkins famously said that marketing is salesmanship in print, and that couldn’t be more true today. Many sales tactics, like identifying a customer’s deepest needs and desires, addressing objections, and closing the sale are directly relevant for one-to-many marketing campaigns. 

Your marketing hire doesn’t necessarily need the same aggressive, outgoing personality as a top tier sales guy. But he should be able to develop a deep understanding of the customer and know how to build a relationship with customers.

I’ll admit I based this list at least in part on myself and successful marketers I know well, so it’s far from comprehensive. Are there any other qualities a great marketer possesses? Leave a comment!

By the way, we built MixRank to automate many of the research and analytics tasks you would need to hire a marketer for. We think anyone can use MixRank to build successful campaigns. Try it out today (we have a free version).

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Google Hack Lets You Include Images in Search Ads

One of the most overlooked features of Apple’s recent OS X 10.7 Lion release is support for emoji characters. Emoji is an obscure set of emoticons that’s quite popular in Japan. In Lion, you can insert Emoji characters like smiley faces into any text field, much like the Wingdings font on Windows.

My experience with these special characters has been a little different. The tactic of inserting special characters in an ad to draw attention to is and make it stand out from the rest has been used very effectively by advertisers in the early days of Google, Facebook Ads, and pretty much every advertising platform out there.

I’ve seen firsthand what a difference including a special character in an ad headline makes. A single arrow pictogram used in a small text ad can double, or even triple CTR.

Google has of course long since wised up to this practice. Any ad that contains a character from a predefined blacklist of special characters is automatically flagged for manual review and promptly denied by Google’s approvals department.

But what about the newfangled emoji? Are those blacklisted as well? To test this, I submitted two ads- one using an older special characters font and one using emoji.

See the difference:

Ad2

The ad with plain old special characters is promptly flagged for manual review on it way to be approved for denial.

But the ad with new emoji characters sails right through automated review, and is instantly eligible for release on an unsuspecting public.

Imagine how much an ad containing graphic icons will stand out on a search results page containing only drab text ads… I bet any such ad would completely obliterate and outrank any text ads it’s competing against.

Of course these images will only render on operating systems that natively support emoji. Right now, that’s limited to Mac OS X Lion and iOS on iPhone and iPad.

So, if you launch a standard search campaign, ~5-10% of the traffic that has OS X Lion will see the Emoji icons in your ad, which may or may not be enough to give a significant boost to your CTR.

But there’s another popular operating system made by Apple that supports rendering emoji. I’m talking, of course, about iOS, and the millions of people searching on their iPhones and iPads. And, conveniently enough, Google lets us target iOS users only when setting up a new AdWords campaign:

Target-mobile-devices

The homogeneity of that platform means that you’re virtually guaranteed that 100% of searchers will see your ads and will click, if only out of curiousity at this new ad format. The intrinsically low cost of traffic and dearth of advertisers on mobile mean that, using the emoji trick with broad targeting, you can get massive volume at pennies a click.

The amount of extremely cheap traffic you could get with this method is staggering.

Now…say for some reason your ad is subjected to manual review(for example, if you use this trick on the Google Content Network). No need to be concerned. What browser do you think the Google reviewers are using? It’s a lot more likely that they’re using Chrome than Safari, isn’t it?

To Chrome users, even on OS X 10.7, an emoji emoticon appears as an inconspicious blank space. Move along Google reviewer, nothing to see here…

Inserting emoji into any text field on OS X Lion is easy- just click Edit ->Special Characters and select Emoji in the left sidebar.

My guess is that this hole won’t remain open for long- so make the best of it while you can.

Props to Panic for taking this to the next level with an emoji domain. I wonder if this domain can be used as an AdWords display URL…

We are officially launching

After many months of development, we’re finally launching MixRank, our competitor intelligence tool for contextual display ads(AdSense). We just got covered in TechCrunch, and the new users are pouring in.

For some ways you can use MixRank to make more money, check out this article. Please give MixRank a try and let us know what you think…your feedback will be really useful as we improve the software to automate and scale every aspect of marketing research.

 

 

Traffic Triage

Chasing down profitable traffic sources can be a black hole consuming all of your time and money. The problem is that almost all paid traffic campaigns start off losing money; to build a campaign, you need to spend money collecting data on what works, and then optimize towards profitability from there.But not all campaigns end up profitable either, no matter how much you optimize them. So, one of the marketer’s biggest challenges is figuring out which traffic sources are actually worth pursuing, and which ones will never become profitable and will only consume your time and money. You have a limited budget, and you need to make sure you’re making it count and not spending it on a wild goose chase. Here’s how.

How to Allocate Marketing Spend

The trick to allocating your marketing effectively is implementing some kind of traffic source triage system. When encountering a new traffic source, you want to be able to quickly and consistently categorize it into a low, medium, or high priority group, before spending any time or money testing it. You don’t have to be 100% correct for this process. After all, you never know how something is going to work until you test it. You just have to be good enough to set priorities and build up a bankroll from stable, profitable traffic sources that you can use to offset your losses from testing riskier, lower priority ones.A lot of the skills needed to accurately identify traffic sources will only come with experience. But you can get 80% of the way there and avoid the more egregious mistakes by following a few simple rules.

Three Questions You Need to Ask Yourself About Any Traffic Source

When evaluating a potential traffic source, I always ask three questions that let me easily determine how much time and money I want to apply towards mastering it.

  1. Is there enough volume?
  2. Is the traffic cheap enough?
  3. Does the traffic convert well enough?

It’s important to remember that the answers to these questions are not binary. They fall on a continuum. They’re intentionally vague. There are no hard and fast rules until you test, just guesses. Let’s look at each one of them in more detail.

Is there enough volume?

This question is fairly straightforward to answer. Your rep at the ad network should be able to tell you how much daily traffic you can expect from the average campaign. But you should always do your own research too.Look at the Alexa/Quantcast/Compete rank of both their homepage and their tracking URLs to get a sense how much traffic passes through the network. Do the same for any domains you see advertised on the network. Are there mostly new, low traffic advertisers(bad) or established, successful advertisers(good) on this network?If you’re evaluating an ad network, take a look at some of the publishers running with this ad network. Are this ad network’s banners the only ads on the page(good), or are you competing for attention with a cluttered field of many different ads(bad)? What’s the traffic volume of some of the publishers that seem most relevant to your product?Remember, you’re only looking to estimate volume for traffic that has at least some chance of converting for you. So if you only sell to the US, inquire about US traffic volume only.

Is the traffic cheap enough?

This question is a bit more fluid, but in general some traffic sources, keywords, and verticals are much less expensive than others.Take a look at who’s buying traffic on this network currently. What are they selling? Low margin products like commodity physical goods, or high margin financial products? How much do you think they can afford to pay for traffic? Put their domains into the Google Keyword Tool and take a look at the bids they would need to pay on search to get this kind of traffic.How competitive is this traffic source? That may mean this traffic is higher converting and more desirable, but also more expensive.

Does the traffic convert well enough?

This is the big one. If the traffic converts well enough, it really doesn’t matter how expensive it is(as long as you’re paying less per click than your CLV). Even the volume doesn’t matter as much, because you can use a very relevant, highly profitable but low volume traffic source as a laboratory to test new ideas for creatives and landing pages without fear of losing money. You can then replicate the successes to higher volume but lower margin traffic sources.You may think that it’s impossible to answer this question without actually spending money testing, but it’s actually easier than you think. You can’t answer it precisely without significant data, but you can make some pretty good guesses based on experience and past performance. Think of this a comprehensive due diligence process. To answer this question, you need to start from a broad overview and move to specific details about the competitive landscape.Have you advertised on this traffic source before? What is this ad network’s reputation on blogs and forums? Has anyone written a case study about this traffic source? Does the majority of their traffic come from wealthy countries(good) or third world countries(bad)? How do they get their traffic? Are their users incentivized to view ads(bad) or click on them(VERY bad) or do they have other quality content(good)?Then you can move to studying specifics. Who is advertising here currently, big brands(bad) or direct response advertisers(good)? Is the same advertiser buying traffic on here consistently(good) or are new advertisers constantly showing up and disappearing(bad)? Do you see the same creatives used consistently(good), or are advertisers constantly trying new creatives because they aren’t getting clicks(bad)?Check the demographics of the ad network and advertisers’ domains. Do they match the demographics of your customers? Are there any advertisers with the same business model as you(e.g. sale of physical goods, freemium, etc) running on this network? Any advertisers in the same industry? Any direct competitors?

Decide Fast

This may seem like an unnecessarily lengthy process when the key to traffic triage is making snap decisions. But spending a couple hours studying a traffic source is well worth it compared to the months of pain chasing low quality traffic will cause you. Besides, with experience, you will come to internalize this process, and it will become second nature. That’s when you can start raking in the big bucks as a marketing consultant 🙂By the way, we’re working on software to automate answering many of the questions above. Leave your email below and you’ll be the first to get an invite to our private beta.

Blackhat Tactic: How to Use Trusted Heuristics to Get Clicks

I saw a brilliant banner ad today, using a technique to get clicks I haven’t seen before:

Media_httpinsightiobl_uobhp

Yes, that giant “Like” button is a part of the ad, and I bet it boosts CTR like crazy. It’s also probably infringing on some Facebook trademark. As the title of this post says, blackhat.The reason this ad works is that it takes advantage of a heuristic – a mental shortcut – shared by most visitors to this site. Through constant, repeated exposure, they have been conditioned to seek out and click on the Like button across the web. This ad might benefit from the Facebook brand by including its logo, saying subconsciously “Look, Facebook trusts us!”. But it also benefits less directly from the tremendous power of that little thumbs up on the Like button.Think about it. The real Facebook Like button takes up a tiny percent of available screen real estate on any article, and yet gets a disproportionately high number of clicks. We see it enough, and we feel strangely compelled to seek it out and click it. Just like the Youtubesque play button used effectively in social ad images, certain icons and symbols have tremendous magnetic power, drawing the eye in almost instantly.They bypass traditional, rational processing and tap into heuristics buried deep inside our base, reptilian brain.And they work very, very well.Use them carefully.By the way, there is another, even more powerful(and less blackhat) heuristic trick that this ad(and many others) use. Can you spot it?Update: Facebook is so prevalent that its semiotics are used frequently by lazy advertisers as a cheap way to get clicks. Here’s another ad I just saw in Yahoo mail:

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Reading this Book Cost Me $15,000

If you’ve been following this blog you know I am a huge fan of learning marketing from the classics. Indeed, the fundamentals of human psychology and persuasion collected in these books offer tremendous insight that will help you make more money.But, as I learned with a campaign I ran in the halcyon early days of my affiliate marketing career, you can’t follow everything in the textbooks too closely.I was building a campaign for an education(scholarship grant) offer. I had done a little traffic in this vertical before, and I knew it had potential to be a huge campaign. So I was going to do this right, just like the old masters of direct response.Every old marketing book will tell you that 80% of marketing is research. And research I did. I spent weeks learning everything I could about my target market, trying to think like the people visiting my landing pages, finding and analyzing every single advertiser in that space, and so on. I searched all of the keywords I thought would be relevant and made huge spreadsheets of all of the headlines used in the ads and landing pages, what kind of images those landing pages used, meticulously documenting every little detail down to the color scheme they used.And that was before I had written a single word for my landing page. That consumed the next month. I think I wrote over 300 different headlines before finally settling on one I liked, in addition to the thousands of words of copy I kept writing, editing, rewriting, scrapping, and rewriting again, until it was as perfect as I could make it.I figured that it would be better to spend the time to create a high converting landing page than to waste money driving traffic to a worse landing page that might not convert.I was wrong.To say this was a lot of work was an understatement. It was a grind, a relentless slog. But the copywriting books promised that engaging in this process of relentless editing and refinement was worth it all. This, according to them, was what separated the good from the great.Meanwhile, while I was laboring on my landing pages, my competitors had thrown together quick landing pages in a few hours, launched their campaigns, and were testing and optimizing based on actual click and conversion data from their traffic.I was eventually able to launch my campaign, and it was profitable very quickly, to the tune of about $250 a day. Unfortunately, I was only profitable about about a week before conversions started dropping off. My competitors has saturated the market, and the campaign died quickly. If, instead of waiting two months to launch, I had launched this campaign right away, I could have been making $250/day for 9 weeks instead of 1 week.Although I had not spent much money, I had given up $15,000 in lost revenue. The opportunity cost of launching this campaign late was greater than any amount I was afraid of losing from launching with an imperfect landing page.All of the seminal copywriting literature, from Claude Hopkins to Gary Halbert was written in a very different time, when launching a marketing campaign was a slow, expensive endeavor. Back then, in the days of direct mail(that’s snail mail in case it’s not clear) you only had one shot to make a campaign work. If your copy didn’t convert the first time around, after paying for printing, postage, and list rental, you just couldn’t afford to try again.Internet marketing changed all of that. Now, it’s possible to test a campaign for only a few hundred dollars. If it fails, no big deal; most campaigns fail. The goal isn’t to craft the most brilliant campaign ever, it’s to test lots of different things and iterate quickly in response to the data the market gives you.When you’re building a business, any business, you need be cognizant of opportunity costs at all times. This is difficult and does not come naturally or intuitively, and it’s something I still struggle with every day. But you only have to look at how wealthy people manage their time and money to see that mastering the calculus of opportunity cost is a big coefficient, if not a precursor, of creating wealth.I think one of the most important things any businessman does is figure out how to allocate his time and resources most efficiently. You may miss out on a few sales initially because of suboptimal landing pages, but the opportunity cost of delaying launching by even a few days will dwarf those missed sales. Every day spent tweaking your landing pages is another day of missed traffic and revenue, and it is costing you money right now.So don’t waste time tweaking and refining your campaigns before the market has had a chance to validate their potential. Quit fucking around and just launch already.